Ben Eltham’s piece on the CPRS backflip largely sums up my thoughts.
One interesting question not yet addressed, however, is what the government might be offering instead. There are some hints in an article in today’s Fin (as usual, not online):
But Mr Swan did not rule ourt redirecting some CPRS funding to other climate programs. And Mr Rudd said his climate change commitment was unchanged but that the “pathway” to get there would be different.
“In the shorter term, the government will roll out the accelerated implementation of our renewable energy plan,” he said. “For example, very soon the government will be announcing short-listed projects from the $1.5 billion solar flagships program.”
“Secondly, the government will make announcements concerning two renewable energy projects to generate 53 megawatts of power. Third, the government will announce the successful proponent of the smart grid, smart city demonstration project, an investment of $100 million.”
While funding for these programs had already been announced, he emphasised there would be a “truckload of work” on renewable energy.
If this is the direction the government’s heading, the policy will be conceptually identical to the Abbott grab-bag that we had so much fun picking apart. From a purely party political point of view, the Greens must be having kittens – by sticking with the concept of charging for carbon, they can (rightfully) claim to be the party with the most economically sensible way of tackling climate change, as well as the party with the commitment to appropriate emissions targets.
If the government does have some big renewable energy announcements up its sleeve, I urge people to keep their eye on the big picture. Even a couple of extra billion dollars for any form of renewable energy project, desirable though it may be in isolation, is a drop in the bucket compared to what a properly-designed ETS or carbon tax will be able to do.
Spot-on Robert. A polluter-pays model is the only effective model.
I love how some people are all for “polluter pays”, but don’t realise it’s THEM. Are you paying to offset the carbon your life generates? No, of course not, you expect others to foot the bill. We don’t need a new tax to achieve this, we need the will to fix things.
I wonder if they are regretting not supporting the CPRS at all at the moment?
We could be arguing over improving a guaranteed-to-be-implemented ETS, instead of arguing over having one some time 3 years in the future.
By “they” I meant The Greens.
Mathew, are you new around here?
Not really, The Greens will have a difficult job getting media if health is the dominant issue (after the omnipresent primary issue of “the economy”). Shelving the CPRS is part of Labor’s holding pattern leading up to the election, this time aimed at reducing loses to The Greens. Just as the suspension of asylum seeker processing was aimed at shutting down that debate (primarily with the Coalition), not to mention shutting down the insulation program.
The amazing thing is that Labor have been so hurried and unsubtle about burning all this political capital, political capital which they could have used on much more meaningful things. These moves contribute to a creeping sentiment that this government has “done nothing”, however untrue that might be, and there may just be a tipping point (although I doubt it will come to that considering the alternative).
It should be expected that Labor will now focus even more on The Greens, as they are the party most likely to inflict long-term and potentially sizeable damage to the ALP base vote.
SCPritch: I very much doubt it. On the policy, they think the CPRS was worse than useless.
Sam: I can’t see how that shelving the CPRS can possibly help the ALP staunch bleeding to the Greens. Labor must have judged that it would help in the battle with the Libs, but Lindsay Tanner will just get ever so slightly more nervous.
Ben Eltham need not rehash that trite “broken promises” meme from the ABC/News LTD groupthink.
Also, those Lowy Institute polls should be put in the “just not credible” drawer.
I think the “two renewable energy projects” will be geothermal.
SC Pritch said:
Your reasoning is a-contextual. The CPRS was a polluter porkbarrell that would have locked in failure. It emerged in this form because the consensus of the major parties favoured the big polluters. As it turned out though the extra pork negaotated by McFarlane for the polluters was still not enough for the Minerals Council so by a narrow majority even this was rejected.
It is very clear that even if the senate numbers changed in favour of the ALP and Greens, the only weay the Greens could negotiate better terms than the retrograde CPRS proposed would be if the Liberals voted the government’s attempt to reintroduce the old schem down and dug in their heels forcing the ALP to negotiate with the Greens. That would seem unlikely.
If a DD were held the ALP could pass this at a joint sitting, again depriving the Greens of leverage, assuming the Liberals voted against.
I wondered how long it would take before a commenter said that the Greens should have supported the CPRS. The problem was that it would have been worse than useless, as it would delay the actual changes we need to be making. Apparently, the Grattan Institute concurs.
Robert,
Clearly putting a price on carbon is the best policy option, but it will always, always, be politically impossible in Australia. The “Great Big New Tax” scare will always be too tempting for the party in opposition, Coalition or Labor.
If we can’t use sticks then we have to use carrots. We should be using our resources bonanza to offer irresistible tax breaks and rebates to entice individuals and companies to reduce their emissions. The price signal is still pushing behaviour in the right direction, but its all gain, no pain* as far as the individual is concerned.
* well ok, the pain is felt as bigger budget deficits and/or smaller surpluses, but clearly this more politically palatable than a Great Big New Tax.
carbonsink,
Even if we do it that way, the broader and more uniform the “shadow carbon price” is, the better.
My strong guess is that, like Abbott, this is going to be a grab-bag of renewable energy stunts.
http://www.bandaid.com/
Do these come in the colour green?
Well I think the Greens should have supported the CPRS. I don’t think the CPRS would have been ‘worse than useless’. I think that it would have been a tiny step in the right direction. I don’t expect perfection, and I think you have to accept deals that heavily compromise you in order to get anything done.
Its obviously about finding the balance between pragmatism and idealism, and I would have liked something to happen now.
Instead, assuming Labor stays in power, does anyone really think the CPRS design is going to improve over time? I’m betting that we are going to end up with the same apparently “worse than useless” CPRS, but in 2013 or later instead of now. How is that a good result?
But maybe the Greens will have a percent or two more of the vote than they otherwise might have had they supported the CPRS first time round. Good for them, if that’s their main aim.
How is given foreign big coal $10 billion a good result?
SCPritch #14, we’ve discussed this at length on other threads, but in terms of how the politics of the issue is likely to pan out the most likely scenario is that after the next election we will still have a Labor government, and after 30 June 2011 there will be a combined Labor/Greens majority in the Senate. There will then be three possibilities for the Labor government:
1. Attempt to strike an agreement with the Greens on climate change policy (which will be on the basis of a policy stronger than the CPRS would have been).
2. Attempt to strike an agreement with the Coalition (which will be difficult if the Coalition persists with its current orientation, and which if at all possible will be on the basis of a policy at least as weak as the CPRS).
3. Do nothing (which will be increasingly difficult to justify over time given that option 1 exists).
SCPritch, Fran and Alister, do we really have to revisit the old Labor v Greens debate over the CPRS? We’ve all heard the talking points a thousand times. The CPRS, in its current form at least, now appears to be a dead letter.
OK, I’ve missed a few threads waiting for a new ADSL connection. Sorry bout that.
Back on topic then:
I guess I’m just frustrated, because we’ve really had the harmless, grab-bag, bucket o’ money climate programs from the Federal Government since the 1990s.
So Kevin Rudd’s climate policy won’t really be adopting Tony Abbott’s, it will be adopting John Howard’s. (Tony Abbott is also adopting John Howard’s approach)
SC Pritch said:
I have made the same point on a couple of occasions here, including yesterday. Yet there is a difference between a workable compromise and something that is purely retrograde. That is poor policy dressed up as compromise. Worse yet, the Greens, who, after all, would have been the moving force behind any attempt to improve the deal, would have been politically dfamaged so badly that their ability to improve the deal would have vanished. It would have been wrong all round.
It would be not so much a good result as a no worse off than we are now result. Big polluters would not have got a pork barrell. The world might change and embarrass us enough to do something. Perhaps being made to look dirty by China may change the political climate here. The Greens may look more salient in 2012 than now, with Fielding gone. It also makes it possible to argue for measures that would annoy the hell out of the filth merchants who prevented Australia having a robust deal on climate change. There’s always the possibility that nuclear power will be re-examined by then and can become part of a low cost transition to a clean energy economy.
In short, it keeps the game open and keeps the snouts of the Minerals Council, the AAC and the ACA out of the public trough. I would sooner Australia didn’t do anything until 2100 if the 2009 CPRS was all that we could manage. Until Garnaut becomes more than mere input, then I hope the CPRS never sees the light of day.
Apparently so Tim, because some either don’t get it or are recklessly repeating the ALP talking points without acknowledging that the debate has been had here.
SCPritch I’m with you. I don’t think anyone comes out shiny from this.
I wonder if those “new renewable energy projects” are wood-chip powered electricity plants?
I still think this is a sign that Rudd believes he can win the Balance of Power in the senate by wiping out the libs, and he is getting any distractions out of the way beforehand. He has his ducks in a row – the ETS forces the old-fashioned denialist libs to take over the party, they elect a useless leader who has no health policy, so then Rudd buries any embarrassing details related to climate (the insulation scheme, failure to pass the ETS) and from now until the election it’s wall-to-wall health, health, health! With occasional renewable energy announcements to stop voters leaking to the Greens.
The main possible outcomes are all a win for the ALP:
the libs burn out and replace their denialist leadership, in which case they negotiate to pass the ETS and sideline the Greens (and Rudd gets the credit for breaking the back of denialism in Oz);
or the Greens get the BoP, in which case he takes the ETS back to parliament in 2012 and uses it to get a DD election and try and get rid of the Greens (and Rudd gets credit within the ALP for finally getting rid of the Greens, and soon afterwards Bob Brown surely has to retire);
or things stay roughly as they are now, in which case he can use the ETS to trigger a DD election in 2012 (and Rudd gets the credit within the ALP for destroying the Greens and/or the Libs);
or he gets the BoP, and we welcome our new nerdy overlords (in which case, Rudd gets all our love all the time).
I’m thinking that in the last week or two he received some internal polling, and the internal polling was good.
“I would sooner Australia didn’t do anything until 2100 if the 2009 CPRS was all that we could manage.”
Fran, if everyone takes this attitude, then it’ll be tropical diseases in Tasmania by century’s end, among other things.
Of course I’ll be long dead by then, as will you, as will your children.
This is the nub of the problem. By the time the really bad stuff happens on a grand scale, it’ll be a problem for people we don’t know and never will know.
How’s that smoking habit going?
SCPritch @18, I agree that the new Labor policy approach sans CPRS looks pretty close to John Howard’s, i.e. the mandatory renewable energy scheme plus some grants.
sg, I also wonder if Rudd has some internal polling that is prompting these policy shifts. But I’m struggling to see how all this will lead to Rudd decimating the Greens.
The thing is, Sam, the 2009 CPRS was guaranteed to produce the same (or possibly a slightly worse, particularly financially) result as doing nothing until 2100.
You’re correct, there probably will be tropical diseases in Tasmania by the ned of the century, but it’s possible that something will happen before then which will focus people’s attention on the necessity for action.
Robert, thanks for the hat tip.
I’d also draw LP’ers attention to Marcus Westbury’s piece today on ABC’s The Drum.
Among other points I agree with, Marcus observes that his decision will make it that much harder for Lindsay Tanner and Tanya Plibersek to hold their seats. In Melbourne in particular, Adam Bandt looks like a serious threat to the sitting Finance Minster:
DI(NR), what the CPRS, bastard child of dirty politics that it was, would have delivered was a price on carbon emissions. There is no long term solution that doesn’t involve a price on carbon emissions.
The only people who think differently are a weird coalition of Trots and denialist Liberals.
Sam@29: but the price on emissions would have been negative for many major emitters. Viz, the more they polluted the more they would have got paid. And the package was explicit that the subsidies could only ever go up… That’s why The Greens were opposed.
Sam said:
Fran, if everyone takes this attitude, then it’ll be tropical diseases in Tasmania by century’s end, among other things.
We’re only talking about Australia. If the rest of the world does the right thing and we act like a bunch of self-serving laggards, then the planet won’t be much affected by utterly slack we have been.
I don’t want us to be slack but I’d like it even less if we added to the problem.
‘The main possible outcomes are all a win for the ALP …’ (sg @ 23).
And that of course is absolutely the only issue worth worrying about. Let’s hope the ALP hasn’t infringed the salary cap.
“If you voted for the ALP seeking meaningful action on climate change, a sensible asylum seekers policy free of dog whistling and scapegoating, or a reality based approach to the challenges of the internet”
Those voters don’t matter – they are
Greens 1
ALP 2
and have been for a decade.
I reckon Kevin Rudd is our modern-day Vicar of Bray.
Moz @ 30. The subsidies to the polluters were to phase out. Climate change is a long term game.
Fran @31, on your argument, since nothing we do affects the world’s climate, let’s do nothing and save ourselves the cost and hassle.
Ben @28, the argument that Tanner and others may be in trouble assumes that Liberal voters will preference the Greens ahead of Labor. That would be quite an ideological leap.
“Those are my principles, and if you don’t like them… well, I have others”
I know that there are a still a few marxists hiding quietly in the labor party but I didnt think that kevin was such a follower( of Groucho….not Karl)
I just cant believe the low level of analysis of the events of the last week. I know full well that I am not the only one out here that thinks that Kevin cant say 6 months ago that inaction on climate change is political cowardice and yet this week ditch it quietly and think that no one would mind…. I think most people have missed the point. This is no longer an argument about climate change policy but whether Kevin is actually fit enough to be prime minister. I cannot recall a greater demonstration of spinelessness, of cowardice, of cynicism. I thought that Labor was so far out in front it didnt matter….yet Kevin is behaving like he is the opposition leader fighting the last election not PM. -he doesn’t have the ticker to be PM to fight for what he believes in because he doesn’t believe in anything except that somehow he might be the cleverest one in the room when all of his actions show that he clearly is not.
Apart from Gary Johns article this morning where are the labor voices speaking out about this and all the policy retreats of the past few days. Kevin has made it clear this is a do nothing government. He is worse than Carr, worse than Beattie. I went to Canberra a few weeks back and saw the cavalcade of PM’s I can only remember back to Mc Mahon and I think Kevin is going to rank below Billy( I dont know that he actually did anything but at least his wife got noticed in Washington) Malcolm Fraser would rank higher even though he was a Liberal because at least he fought and won the argument in supporting asylum seekers. Kevin goes to water at the very thought. Being prepared to fight for what you believe is what people respect. The extreme cynicism and hypocrisy of this act will percolate out there into the consciousness of those who don’t follow politics and everyone will see it for what it is. PM’s don’t need to be loved they need to be respected. Kevin has just invalidated himself. Kevin could call a DD and after he won pass the ETS and health rebate bill in a joint sitting and not have to worry about negotiating with the greens…..of course he won’t because he is a coward and is guided by focus groups.
I remember Paul Keatings thoughts on Kevins advisors and they seem to apply to Kevin directly. Once again Paul has been proven right.
Yes Kevin will still probably win …but for what?
Love it Joe!
This is the Keating quote I meant from June 2007 about KIm Beazley’s advisors that Kevin inherited are even more applicable now “They’ll do him no good. Because in the end those kind of conservative tea-leaf-reading focus group driven polling types who I think led Kim into nothingness, he’s got his life to repent in leisure now at what they did to him. They’re back, they’re back. Gary Gray lost the ’96 election with me and then lost ’98. He’s been given Kim Beazley’s best seat in Western Australia.
The Labor Party is not going to profit from having these proven unsuccessful people around who are frightened of their own shadow and won’t get out of bed in the morning unless they’ve had a focus group report to tell them which side of bed to get out.”
Yay for progressive solidarity.
Sam, yes, the subsidies phase out. They’re also by no means the only problem with the CPRS. Indeed, they’re nowhere near the most serious problem with the CPRS.
Sam
I hate to break it to you Sam, but the principal reason for action here is not the extent of insolation at the lower troposphere consequent to Australian emissions of GHGs. It was, is and will ever be the extent to which Australian policy contributes to a comprehensive, robust and early agreement for the world as a whole to take the actions needed to stabilise atmospheric inventories of CO2 at as low a level as is needed to avert catastrophic warming.
The CPRS would have subverted that goal and brought all of us into disrepute.
Those who don’t think it’s important for Rudd to try to pulverise the Liberals in the election are obviously not old enough to remember the years of the dead hand of the Fraser government following the defeat of Whitlam, and the winding back of many of the Whitlam policies.
Also, Rudd has taken a quite consistent line on climate change – it looks as though he wants to establish a consensus position in favour of a price on carbon – hence trying to get the Libs to vote with him in a “grand coalition” that would be more resistant to future backsliding than a Greens-Labor deal, which might be abandoned by a future “conservative” government.
I suspect the bewilderment of many about Rudd is mainly due to Rudd being three steps ahead of most of the rest of us and running an elaborate strategy designed to achieve a number of interlocking objectives. This doesn’t fit well into the win/lose, good/bad, principled/spinner sort of thought pattern common in the MSM and even in “progressive” blogs.
“The CPRS would have subverted that goal and brought all of us into disrepute”
Izzat so? I must have missed all the international criticism of the CPRS. Have you got a link?
ajm, with respect, I think you’re giving Rudd too much credit.
He’s a smart guy, sure. But Occam’s Razor and the available evidence suggests that he doesn’t actually care all that much about climate change, saw it primarily as an opportunity to gain political advantage. I for one thought he’d achieve it, but events intervened as they have a funny habit of doing and he’s lost a lot of goodwill in the process.
Yes, he probably thinks he’s losing the goodwill of voters who’ve got nowhere to go except the Greens, and, well, they don’t matter much anyway. But if he’s really a strategic thinker he might understand that the long-term trends are increasing the proportion of the electorate from which the Greens draw their support. The Liberals are quickly running into a demographic nightmare. Rudd might think twice about whether he’s creating one for the ALP.
Sam, I agree (as do most other Greens) that the only way to get action on climate change is to put a price on carbon. (The govt’s CPRS didn’t, in any real sense.) My preferred option is a tax on CO2 starting at around $50/tonne, and climbing fast, but I realise that’s unlikely to get up until large parts of our cities are under water.
Why can’t you accept that the CPRS was, at best, completely fucking useless?
“Why can’t you accept that the CPRS was, at best, completely fucking useless?”
Because I reckon it was better than nothing, especially over the long haul.
And nothing is what we’ve got.
Robert, all fair points – but I would still differ with you on the depth of Rudd’s strategic insight and how much he cares about policy outcomes. He just doesn’t seem to me to be a “power for power’s sake” sort of person and if he isn’t it’s difficult to explain his political career and the sheer amount of effort he’s put into it (I live in his seat and have been able to observe that career at least since it entered the MP realm) in terms other than actually trying to make a positive difference.
I might be giving him too much credit but I think many people are giving him far too little – it seems to have slipped very quickly into the “just another venal pollie” mode.
That notion is always lurking under the surface of public opinion, it doesn’t take much to expose it.
Yesterday Professor Stephen Howes, who worked on the Garnaut Report, was interviewed by Mark Colvin. He made some useful points.
1. The 5% target is the equivalent of 28% in per capita terms. As such it’s not an easy target to achieve.
2. Starting later will make it more difficult and cost more.
3. There is not much point in having a target unless you have an instrument to achieve it.
4. The rest of the world will see us as walking away from our Copenhagen target. This increases the chance that others will do the same.
An since we are speaking of compromises, consider this.
The Rudd government is bringing in a couple of measures to further depress the rate at which people take up smoking — viz. they are bringing in plain and standardised packaging in 2012 and increasing excise by 25%. They are hypothecating funds to the health system.
Could more have been be done? Sure. They could have brought in the packaging measure immediately; increased excise by 100%; in concert with the states, icreased the number of inspectors visiting retail locations for tobacco.
Still, these things and more aren’t excluded and it will probably make some contribution. So the measures are supportable.
Robert @ 12:
Lets call it the negative carbon price, and lets make it as broad as possible. How about we pay households $100/tonne for every tonne they emit less than the national average? Start with household electricity, and then expand it to businesses. Do similar for transport. Ok, I know it sounds awkward, but the CPRS was awkward and full of holes as well. Surely the boffins in Treasury can design something workable?
Yep, both Abbott an Rudd will be offering more or less the same. Lots of opening “solar schools” and technology demonstration power plants. God its depressing. This is worse than Howard.
“3. There is not much point in having a target unless you have an instrument to achieve it.”
I think people perhaps underestimate just how difficult it is to get the instrument in place. The ETS has been analysed and discussed since at least 1997 (maybe longer, but my expertise doesn’t go back that far). Having an ETS – even with subsidies for the polluters and a piddling target – is a huge achievement in my view. Its a behemoth of a policy, and just getting it in place and getting everyone used to the accounting and processes is a big step forward. The next step would be to phase out the subsidies and increase the target.
Australia’s economy is built on the resources sector. For the foreseeable future they are going to have a lot of influence over how the country is run, whether we like it or not, because they contribute so much to our economy. There is never going to be a policy haymaker to properly regulate/reduce their emissions in one hit, only many incremental policy steps will get anywhere.
Compare lack of progress on a carbon price to the slow, incremental progress made in regulating home energy efficiency, despite resistance from the developer lobby. Progress is slow, but there is definite progress from many small policy steps over many years, which is more than we can say for broad national climate policy and a carbon price.
I also think we should stick with an ETS and not switch to a carbon tax, because that would mean years of studies and analysis and argy bargy before we get to the point that any proposed legislation even gets tabled.
Sam #35:
I can comment on this on the basis of having scrutineered for Greens candidate Gemma Pinnell in the 2002 Victorian State election at a booth which lies within Tanner’s Federal electorate. As I recall about 70-75 per cent of Liberal preferences followed the official party ticket and preferenced Gemma ahead of the Labor incumbent, whilst 25-30 per cent did as Gerard Henderson would wish and preferenced Labor ahead of Greens, presumably on the basis of greater ideological antipathy to the Greens.
Most Liberal voters and many Liberal Party members are not ideological right-wingers of the kind we encounter in the commentariat. Further, even some of those that are might make the calculation that having a few Green cross-benchers in lower houses is an overhead cost worth paying for knocking off very capable left-wing Labor Ministers.
On the issues raised in the exchange between Robert and alexm, I think Rudd’s motivation is perhaps not the most important question. What I think is more important is Labor’s failure to develop and agree on a coherent social democratic narrative around sustainability, which means that Labor continues to be reactive and disunited and to have, as best, a shaky grasp on control of the agenda when challenged by issues of sustainability and by political actors which do make those issues front and centre of their thinking. Strange as this might sound to some people coming from a member of the Greens, I actually think it’s extremely desirable, from the point of view of making public policy for sustainability, that Labor gets its shit together on this score.
Make of this what you will LP’s. ABC Country Hour on Thursday had NSW Environment & Climate Change Minister Frank Sartor on talking about some agricultural aspect of his portfolio. But the interesting piece was his comment that the eastern states resurrect their ETS proposal, first put up by Bob Carr as premier in 2005.
Now I doubt Frank Sartor would flag this possibility without canvassing his conterparts in Vic, SA and Queensland. Also his leadership ambitions post 2011 NSW election won’t do him any harm in an electorate bordering the Greens threatened seat of Deputy Premier Tebbutt.
Paul, I think that’s a good point, and obviously with a party like the ALP, in the absence of a coherent narrative on the topic, they will always be prone to use it first and foremost as a political tool to destroy their enemies. I think if the libs had gone along with the ETS under Turnbull, the result would be a poor piece of policy passed on genuine sustainability grounds; but now that it’s been politicised, without a strong background narrative, the incentive for everyone from Labour “true believers” up is to use it as a political tool. Hence we see it being shelves as a distraction, accusations that it’s all the Greens’ fault, etc.
The apology to the Stolen Generation was probably politically much more contentious and higher risk, but the ALP has a fairly solid narrative on Aboriginal issues now, so they were willing to take the risk. But without a strong narrative on an issue, they will always keep a weather eye on the horizon, and adjust the policy to suit their own political interests.
To all the folks here who are stridently calling for the ETS to make the polluter pay, you have all entirely missed or misunderstood the reasoning behind a cap and trade program.
As background, I have spent 10 years working in emissions trading programs in the US and I have firsthand experience of how a well designed, implemented and monitored cap and trade program can work. Virtually all of the programs in the US featured the allocation of free allowances. (The one program that featured an auction has already seen the state governments raiding the coffers to fill gaps in their budgets)
The core goal of a cap and trade program is to achieve EMISSION REDUCTIONS at the LOWEST POSSIBLE COST. That is all.
A cap and trade program is an EMISSIONS REDUCTION program, NOT a social welfare program, or a job retention program or anything else for that matter. The most successful programs – SO2 and NOx in the US – keep their goals simple, and because of that they have achieved tremendous success. Reductions targets have been met well ahead of schedule, and at much lower costs than were forecast by regulators and emitters.
Someone mentioned the Grattan Institute Report in an earlier post. I attended the seminar on that report the other night, and I was astounded at the first conclusion that the report stated, namely: “Free permits mute the incentives for industries to reduce their carbon emissions.” This is patently and historically false.
An emitter that is allocated free allowances has a TREMENDOUS incentive to reduce its emissions well beyond its current requirement if they are able to do so, because it allows them to free up allowances to sell to other emitters. Having done so, it can then recoup some or all of the funds it has invested to create those reductions. This is a fundamental principle to cap and trade.
This is not conjecture, or a forecast outcome, unlike the statements being made by many, including the Grattan Institute; it has happened in the US programs and will continue to happen.
Free allocations are not the evil piece of the puzzle here – it is program design and regulation that is most important. Goals must be clearly and simply stated; baselines must be accurate and fair; penalties for non-compliance severe and oversight must be thorough, but as unobtrusive as possible. Only then can a cap and trade program be an effective tool for reducing emissions.
I was extremely disappointed in the Green Party for not supporting the government in its efforts to pass the ETS. In my view, all the Green senators should lose their jobs. They had a great opportunity to at least get SOMETHING under way, with a goal to improving and tightening requirements over time, but because of their stubbornness and inflexibility, that opportunity has been lost, maybe forever.
Not only that, by their actions, they have handed the Neanderthals like Abbott and Co. the victory they wanted, and have relegated Australia to the role of also-rans in the Climate Change debate, instead of potential world leaders that we should have been.
Shame on you all.
Carbonorama said:
It’s hard to see how this can follow. Te benefit you cite would flow regardless of whether the emitter has an allowance. The only difference is that the emitter with free allowances has a less urgent imperative and can, if he does reduce, transfer this benefit to others at reduced cost. As in other markets, supply and demand works. The first iteration of the Europena trading scheme took the Zimbabwe approach to handing out permits and got a Zimbabwe-like result — the cost of the permits fell and pitiful progress was made. Here recently, we had the problem RECs falling in price because of the way certificates were handed out.
It’s really very simple. You set a target for each year. Each year’s target represents part of a smooth and escalating curve that approaches your 2020, 2030, 2040 and 2050 target. You require everyone to have certificates to cover each years emissions on pain of a penalty not less than twice the emissions certificate price in the relevant audit period. Let’s call it “the cap”. You put all the significant emitters into the mix. You get them to bid for shares of those emissions and this creates a price. You use the funds to:
a) operate social programs that deliver means-tested in kind benefits to those disadvantaged by energy price-rises so that they can bear the price rises
b) run detailed compliance and benchmarking
c) provide low-interest loans made to qualified businesses for retrofitting conforming technology or building it anew
d) to compensate conforming superannuation funds for losses associated with stranded assets
e) build on a CTC basis, new low-emissions infrastructure in housing and transport
This keeps the cost of certificates from rising too quickly and shields low income earners and people with super from the fall out.
Of course, a low cap is important. Australia should have been aiming for at least 25% below 1990 (total emissions) by 2020 and 90% below 1990 (total emissions) by 2050.
I can see no plausible defence of the Greens passing the CPRS as it stood. It would have left the Greens utterly discredited had they done so and for no gain at all, since the bill would not have passed. Had it passed, all of the negative consequences for this policy failure would have fallen onto them because this was for them, a core issue.
A new party, committed to sustainability, would have to have been constructed in its place. That would be a huge setback for all of us who want a robust environmental perspective.
“the bill would not have passed.”
Greens + 2 Liberals + Labor = 39 votes = pass
Had the Greens been on side the two Liberals would not have defected. They knew they could get away with it.
We’ve been around this circle-jerk about a million times, Sam. It’s not my fault you haven’t been paying attention.
If the Greens had voted for the ETS, which was guaranteed to be worse than useless, they would’ve lost about 95% of the 10% of the vote they have. It wouldv’e had exactly the same effect on us as allowing the GST had for the Democrats.
DI(NR), you may be right about the Greens losing support – who am I to peer into the psyche of the Green voter? – but my post was about Senate voting numbers. We’ll have to agree to disagree about the CPRS being worse than useless.
Which brings to me Fran’s amazing counter-factual assertion.
How do you know this? What I saw was two Turnbull supporting Liberals who wanted the honour the deal to which the Liberals had agreed. At least that is what they said they were doing.
Anyway, the deed is done. We’ve got no ETS, no carbon tax, no carbon price. What we have got is a rag tag list of expensive, ineffectual, wasteful projects that are designed for the gullible to be seen to be doing something about climate change. Plus ca change.
But we haven’t got the most expensive and ineffectual boondoggle of the lot which would have created a brand new property right of emitting CO2 which we’d later have to buy out. When the alternative is worse more of the same is good
I honestly cant say I mourn the CPRS – making CO2 property was a massive step backwards in dealing with this problem. Good riddance.
People arguing ‘it was better than nuttin’ really needed to examine what it proposed. There were no cuts – at all. Not ’5%’ – that was bollocks. It consisted entirely of OS permits. Their refusal to take a genuine stand: either for the environment or against it, meant they ultimatley has no one on side.
There’s really no one to blame but themselves for this schmozzle.
My wider concern is that Rudd is squandering his mandate in several areas – and even starting to blunder here and there, keeping Abbott in the game by pretending his incoherent brain farts might enjoy popular support, anywhere.
And now, tax cuts? Are you kidding me Rudd? Are we chanelling Costello’s low-rent braindead, half-price sale stunts as ‘policy ideas’ now?
Power generation on its own is responsible for about 50% of emissions. So there is no fundamental reason why Kevin could not easily reach the CPRS 2020 targets by concentrating on cleaning up electricity if he chose to do so. If he made this choice he could do so by lifting the MRET target to about 50% or taking the more direct route of issuing a series of contracts for the supply of cleaner electricity and insisting that this cleaner electricity be used in preference to dirty electricity.
Both MRET and the direct contract method have the advantage of only ramping up the average price of electricity as the percentage of clean electricity increases. By contrast, CPRS and other “put a price on carbon” strategies require that the average price of electricity rises high enough to justify investment in cleaner electricity. So even if Kevin decided to target the equivalent of 50% of electricity coming from clean sources by 2020, the increase in the average price of electricity would be only half of what it would have been under CPRS.
In reality, it would may make more sense for cleaning up electricity to be only part of the strategy used to meet the 2020 target. However, the point I am making is that neither CPRS or carbon taxes are essential for meeting these targets.
The real test will be the action Kevin comes up with for the period between now and the 2013 election. It has got to be serious stuff with clear emission reduction outcomes. Not lightweight stuff like a general call to “improve energy efficiency” or do some development work.
Between now and the election Kevin has also got to get investment in clean electricity back on track. Problems with MRET credits and uncertainty re the ETS have undermined investor confidence. I am optimistic that Kevin is still committed to climate action even if it is no longer based on some form of ETS.
carbonorama: I don’t know how long you’ve been reading this blog, but I would suggest there are arguments regarding free permits are slightly more subtle than you concede.
I take your point that free allocation of permits, in the short term, doesn’t matter all that much. I’ve personally drawn historical parallels with dairy deregulation, where farmers and the National Party got a huge bribe to go along with the process.
However, aside from issues of distributive fairness – which you can hardly expect a “left of centre” blog to ignore – there are real, substantive problems.
The first is that the schemes for awarding free permits are complicated, opaque, and as best I understand them contain perverse incentives to keep the ETS doing what it’s supposed to do and encourage the shutdown of inefficient carbon-intensive industries, thus pushing further costs back on to the rest of us.
The second is that killing off the free permits as time goes on may well only get harder, once a constituency that expects them is created. Again, to draw analogies from agriculture, efforts to wind down antle Europe’s CAP haven’t exactly gone quickly.
In any case, to characterize the Green objections to the current CPRS as simply about the free permits would be wrong. As I understand their position, they also object to locking in inadequate targets, and the ability to meet targets by purchasing permits of dubious provenance from the CDM mechanism while prohibiting the export of permits. To my view, these problems are the real biggies with the CPRS, not the free permits.
Fran Barlow:
It seems you missed an important point in my post: that free allocations are a tremendous incentive is a proven fact, not conjecture or a forecast. There is indisputable evidence that affected sources under the US Acid Rain program and the NOx Budget and SIP Call programs did precisely what they were supposed to do – make reductions and sell the surplus allowances to the rest of the market. And although the initial targets were modest, individual emitters took the opportunity to over-comply, and reduction targets were reached years in advance, and at costs far less than both regulators and emitters forecast.
Therefore I say that it should be easy to follow, because it has already occurred.
You are also misrepresenting the first period of the European Trading Scheme: it was never meant to be anything more than a trial run. The allowances that were allocated in that phase were always going to be worthless, because they could not be carried forward into Phase II. What Phase I did reveal was that most of the countries had largely overstated their emissions baselines, and they were adjusted down in many cases in Phase II. Phase II prices have been reasonably robust despite the GFC being responsible for a lowering of output.
I fully understand your description of the type of cap and trade program you would prefer. It is in fact close to the model used for the Regional Greenhouse Gas Initiative in the Northeastern US. And I certainly concur that all the benefits you list would be nice, but in reality they are unlikely to happen. I sat through many meetings during the lead up to RGGI being implemented, and many environmentalists and social groups were calling for exactly the same kinds of social programs in your list. But in reality, the State governments that were responsible for administering the funds couldn’t even keep the pretext up for a year! Many of them had large holes in their annual budgets due mainly to the GFC, which they plugged with funds from the pool of auctioned allowances! And during the design phase for RGGI, this very question was asked many times: how can we ensure that these funds are used for their intended purpose? The succinct and predictable answer was that we can’t.
I’m sorry but I do not trust politicians to keep their promises, and even if they do, I don’t trust them to be competent enough to get good value for their money. I don’t think I need to remind you of recent events that support that statement.
Once again, this is an immutable fact. It has happened and is the result of, in my opinion, a badly designed program.
With free allocations, businesses get to decide what’s best for them, and I have greater faith that they will make the right decisions on that basis.
As I said in my original post, you seem to have missed the point of a cap and trade program. They are designed for a specific purpose: in this case to reduce emissions at the lowest possible cost. It stands to reason that if you are forcing a business to pay to emit, even before they have to make an investment in an emission reduction project, then the program eliminates the “lowest possible cost” goal. Therefore, the benefit of recouping some or all of their investment could not possibly flow under an auction system.
These programs were never meant to be social justice programs or job retention programs or anything else. Particularly not a vehicle for bailing out super funds investing in the wrong type of asset! What are you thinking?! We’re now using auction funds to bail out investment companies? Give me a break!
You also mention “keeping the cost of permits from rising too quickly”. By implementing a cap and trade program, you are creating a MARKET based mechanism. Tampering with the fundamentals of any market is never good, so this type of action should be avoided. Remember, companies will be making investment decisions with 30 to 40 year time horizons, and I have seen first hand how outside intervention can severely impact these companies, to the tune of hundreds of millions of dollars.
Next: Here is a plausible defence for the Greens for accepting a 5% interim target. The actual target was 5% from Year 2000 emissions by 2020. An article today in the SMH shows that this would be a significant reduction in real terms. Something close to a 25% reduction from projected emissions for 2020. Not an insignificant outcome. Just the mere fact that a program was in place would have been the catalyst for a raft of action from many sectors of the economy. You can guarantee that very few companies would waste money on reduction technology that would only reduce their emissions by 5%, particularly bearing in mind that the target would likely increase a short time in the future if there was global action. As history has shown, companies will more likely make much larger reductions in order to take advantage of the ability to sell allowances to others.
If in the unlikely event that this didn’t happen, the Greens could then have used their influence to work to increasing reduction targets and eventually getting a program that was more in line with their original position. Yes, I said “WORK”. It would have been a hard slog, but it seems the Greens were unwilling to or too lazy to do the hard yards. And tell me what is being done now after Rudd dropped the ETS? Nothing till 2013 that’s what. Wow, great work Greens, talk about a “huge setback for all of us who want a robust environmental perspective”. How many hundreds of millions of tons of CO2 will be added to the atmosphere by happy Australian emitters in the next 2 ½ years?
History has already proven that the type of program that Rudd negotiated with the Libs works extremely well, so how do you know there would have been negative consequences? Fran, if you are typical of the folks in the Green party then you have shown by your post that you DON’T understand cap and trade, so how can you possibly make such a statement? And “it would have left the Greens utterly discredited”? Let me tell you loud and clear they are already utterly discredited, and will continue to be till they get the blinkers off and see the bigger picture.
Not to mention that Australia would have been in a position of leadership on such an important issue, instead of being relegated to the back of the class once other countries implement their own plans. Well played Greens, another notch in your bow.
Also, I’ve seen folks railing against offsets, which also shows a lack of understanding of the reasoning behind the Clean Development Mechanism. CO2 remains in the atmosphere for years, and a reduction ANYWHERE on the planet has the same effect on AGW, no matter where the reduction is made. Once again, strict monitoring and enforcement is required, but Fran, if CDM works well, you will get a lot of the things on your list in the developing countries where reduction projects are implemented.
I would encourage all of you who don’t understand cap and trade programs, and haven’t seen them in action, to do some research and you will see that they actually DO work, and they produce excellent outcomes, as long as they are well designed, simple and tightly administered.
Robert Merkel:
I will admit that I only read this blog for the first time yesterday, but I was prompted to post because of the massive amount of disinformation and misunderstanding by the posters here.
By your post, you also seem to misunderstand the fundamentals of cap and trade, I’m sorry to say.
Handing out free permits is NOT a bribe. This is the compliance mechanism for achieving the target reductions. They are based on a predetermined baseline, and an emitter is given less than they would actually need to continue to operate at that baseline. The allocations decrease over time, thereby achieving the reductions required by the program.
I’ll grant that calculating the baselines is tricky, but for certain industries it can be done with great accuracy. It is fairly simple to calculate baselines for the energy industry, which is handy given that they are probably the largest single sources of emissions. Other industries such as agriculture are more difficult, but methodologies are being developed that appear to be reasonably accurate. And please bear in mind that most of these calculations are done in a conservative way in order to factor in a margin for error.
The awarding of allowances is by no means complicated or opaque. Devices that measure emissions from a plant’s flue stack are in use all across the US, and they are extremely accurate. Even without those devices, it would not take long to make a fairly accurate calculation for a power plant, based on the amount and type of fuel used and the number of mwhs of electricity it produces annually. I’m sure the same principle can be applied to manufacturing industries as well.
I disagree with the statement that an ETS is supposed to encourage the shutdown of anything. Again, an ETS is designed to reduce emissions at the lowest possible cost. If that results in some operations shutting down then so be it. But how do you know that there isn’t some fantastic new technology waiting to be deployed which would keep some of these businesses operating, at the same time providing jobs, goods, and taxes to the economy. I have seen several very interesting technologies that are not yet commercially available, and won’t be till there are programs in place.
By making industries pay to operate (by buying permits at auction), you get the outcome that you are arguing against! An inefficient, carbon-intensive business only needs to increase the price of its product so it can buy the permits. They will pass that cost on to you. At the same time, as long as they can continue to afford to buy permits, they will not have to make a real reduction. If they receive free permits, they would be far more incentivized to shut down, because they would merely sell their permits as a form of compensation for shutting down. This has also happened in the US.
I don’t understand why you would consider killing off free permits at all. The Acid Rain program in the US allocated allowances for 30 years, in order to give sources the flexibility they need to make decisions in their usual investment time horizon. I believe this issue can be solved in the program design phase. Give emitters a clear picture of what will be required over a lengthy period of time, and let them get on with what they do. This means setting the allocations, clearly describing the reduction timelines and making penalties for non-compliance severe enough to hurt.
The CDM mechanism has had its problems, but I disagree that these permits are of dubious provenance. If you buy CERs, it is essential that you know the project from which they come, and can to a safe degree determine that the reductions are real. The UNFCCC had many issues related to lack of staff and the number of projects that were proposed initially, but I think that you will find, with a quick look at their CDM website, that their methodologies and criteria are strict and monitoring and verification practices sound.
And believe me, I am not trying to characterize the Green’s objections only in terms of free allocations. I view their entire understanding of cap and trade as fundamentally flawed and because of that they are hugely responsible for the death of the CPRS, even more so than Abbott and his Neanderthals.
“The first is that the schemes for awarding free permits are complicated, opaque, and as best I understand them contain perverse incentives to keep the ETS doing what it’s supposed to do and encourage the shutdown of inefficient carbon-intensive industries, thus pushing further costs back on to the rest of us.
The second is that killing off the free permits as time goes on may well only get harder, once a constituency that expects them is created. Again, to draw analogies from agriculture, efforts to wind down antle Europe’s CAP haven’t exactly gone quickly.
In any case, to characterize the Green objections to the current CPRS as simply about the free permits would be wrong. As I understand their position, they also object to locking in inadequate targets, and the ability to meet targets by purchasing permits of dubious provenance from the CDM mechanism while prohibiting the export of permits. To my view, these problems are the real biggies with the CPRS, not the free permits.”
These are arguments are a bit weak Robert.
1 – Formulae for free allocation aren’t that complicated or opaque.
2 – Even when permits are allocated for free, firms still broadly face the same incentives at the margin to reduce their emissions.
3 – While a small proportion of CDM credits may be of dubious quality, the majority are not. Offsets can be a highly effective tool for achieving least cost abatement.
4 – It is simply wrong to say that once free allocation is in place, it will be hard to get to full auctioning. The EU ETS began with free allocation in Phase 1 and for Phase 3 nearly all permits to the stationary energy sector will be auctioned.
5 – The 5% target is much more ambitious than it looks when you remember: a) what the baseline is, and b) think about the target in per capita terms.
Auctioning is superior to free allocation, don’t get me wrong. Firms allocated free permits will still pass their opportunity cost on to households if they operate in the non-traded goods sector. There is also some evidence that when efficiency is considered in dynamic and not just static terms, auctioning is superior. But as long as the intention is to auction permits after a transition phase, an initial allocation of free permits can be an effective way of dealing with the balance sheet impact for affected firms and will have only small efficiency implications.
Was the CPRS perfect? No. What is badly enough designed to warrant scrapping it? No. Australia has missed a great opportunity to get an ETS up and running. To demonstrate that they are effective and that the economic sky does not fall in following implementation. The scheme would have been improved over time, just as the EU ETS has. This is a long game, not a short-game. There is absolutely no guarantee that the whatever replaces the CPRS in the future, or even the CPRS that is eventually put in place, will be more optimal than the current one. Labor will still have their eye on protecting their core vote from a coalition scare campaign. They are simply not going to negotiate a Garnaut style scheme, or a carbon tax, with the Greens, even if the latter have the balance of power.
I don’t like The Australian any more than most do here, but after Mike Steketee does his obligatory tabloid Hail Mary on Rudd he isn’t far from the mark here citing Grattan.
@carbonorama
Perhaps that explains your serial flouting of this blog’s comments policy regarding the unacceptibility of excessively long comments that break up the give and take of discourse. Is it your usual practise to disregard the commenting norms in forums that are new to you?
Carbonorama proposed some “immutable facts” above which is almost always an indication that someone is introducing something specious … typically, a strongly held opinion based on dubious evidence or reasoning …
One of these ran as follows:
That sounds well short of an immutable fact to me. The sun appeared to rise on th horizon this morning sounds like an immutable fact to me. Whether and how competently politicians implement promises seems arguable.
If Carbonorama alludes here to insulation, then we’ve done that talk elsewhere. There are a range of opinions on the matter. It’s not immutable or a fact. It is fair to say though that Keynesian stimulus and environmental objectives ran afoul of each other. That’s not competence though. That’s politics.
Gosh. How immutable is greater faith? Carbonorama may well be right on that. Faith is pretty immutable. Facts aren’t really relevant here though are they?
This is genuflection at business rather than analysis.
This is spurious and specious. Nobody is forced to buy or even bid for permits. They simply need to stop emitting by investing in whatever they need to stop emissions. They would have some time to do that. They decide what the best balance is between emission cutting and emission covering with permits. So they are not being forced to pay to emit before they invest. They are being encouraged to invest before they pay to emit. They are given time to work that balance out and buy what they need. So what you say “stands to reason” is unreasonable.
I don’t know if you are familiar with how super funds work here, but they hold the retirement assets of millions of Australians. They are compulsory. If you want to see what a scare campaign looks like, having super funds cost millions their retirement assets, try leaving them with stranded assets. Equally, what we are trying to achieve here is to reconfigure investment away from emissions intensive industry at least cost to people at or below average income. We need political support for that and a path for those so invested to leave which cushions the blow. Here, the pay off is to people who would otherwise qualify for higher pension benefits, so this is revenue neutral. Conforming super funds are only one of a number of investors. It’s a one-time deal. The other investors get squat.
On the contrary, what would keep the cost of permits from rising too quickly is precisely the other stuff we were doing on the permit supply side. The jurisdictional cap reflects the actual quantum of emissions. If people retrofit low emissions technologies in industry, and if transport emissions decline because vehicle miles fall, then the value of permits that fall within the cap rises, negatively affecting price. In short, the burden is being shared, funded by money invested by emitters. That’s a perfectly legitimate way to operate the market. Those paying the most get a benefit associated with their payment purchased at the bulk rate. It’s surprising you don’t see this.
The rest of your political speculation on the Greens and what they might have done after being shown to have abandoned the key concern of their constituency is no better founded than you attempt at C&T analysis. They Greens would have a mere shadow of the leverage than they have now, and what they have now was plainly not enough.
LO @ 70
Hahahahahaha
Oh I see what you did there. No the formulae aint, but the politics is. Anyone remember the slide in governance between the Green and White Papers? Liz Jackson did a cracking 4 Corners on it. If that’s not some opaque decision-making, I’m not sure what is.
Yes but the problem with most of the polluting industries we’re trying to regulate is that they don’t operate like firms. The Aluminium Industry, for example, operates more like a mafioso operation. eg. when NSW regulators tried to impose Greenhouse benchmarks on them under GGAS they went crying straight to the Premier’s office. I think ‘ungovernable’ is the term we’re looking for.
Yes 60% is, strictly speaking, the majority. But not by much. Also, let’s keep in mind that most credits for the EU ETS came from HFC gas destruction projects. These should have been solved through regulation. Instead, emissions have actually increased during the 00s!!!
To say that the CDM demonstrates that international offsets achieve ‘least cost abatement’ is at best fanciful, and at worst just naive. The only thing that can be honestly said about the CDM is that’s it’s built up a whole community of consultants who are very good at telling stories. Mark Schapiro documented this well in Harpers.
From the very beginning, going back to the first JI pilot projects like the Norway-Poland domestic gas refit it’s been clear that the mechanism has been built up to provide avenues for nation-states to foist their technologies on barely willing project ‘partner’ countries.
Well good for the EU ETS. What a shame the CPRS doesn’t have the equivalent commitment to building strong governance like that.
The one aspect of the CPRS debate that has concerned me more than anything else is the democratic deficit between the idea of a national emissions trajectory supposedly representing public choice of what technologies are worth pursuing and the construction of that trajectory by an unelected group of economic modellers whose choices and assumptions are made with no reference to any form of consultation or even reference to democratic mandate.
Ed/bloggres. A plea for succinctness. Ok brevity. Journalism tells you that an opening par should sum up it all and not exceed 23 words. If I want to read essays…
A lot of the upthread stuff has been TL;DR.
dk.au, as I’m sure you realise, LO is a closet cornucopian (although his horn-of-plenty seems to be full of human ingenuity and general markety goodness rather than stuff).
DI (nr) – Indeed. we didn’t need Einsteinian physics to get us to the moon – Newton’s was fine. I sincerely doubt classical liberal economics will get us to a safe climate, and have decreasing time for those that do.
Slightly off the point (but germane), dk.au, I was listening to a transport planning expert on the radio earlier, and he reckons the only thing that will give us acceptable public transport is Stalinist central planning (just like they do it in the Peoples’ Paradises of Germany and Switzerland).
@ tigtog
I’m sorry if I wrote too many words for you to read. But I certainly thank you very much for your considered input to the debate.
You obviously don’t like my message because I see you didn’t mention some of the other posters here that have written lengthy pieces.
Unfortunately it is difficult to reduce this issue to a few simple paragraphs, given the amount of misinformation being posted here.
@carbonorama, I didn’t even read your screed (literally tl;dr), so I don’t know whether I would like your message or not. Also, I have been out all day. Also, this is not my thread to actively moderate.
Yes, there have been other tl;dr posts on this thread. You are the only person who posted two of them in a row.
If you want to address several different issues, please do them over separate comments. Then people who respond to you will stick to just addressing the issues you raise in a single comment, rather than adding their responses to all your other points as well making each subsequent comment longer and longer, so that you will end up in a stoush with just the 2 or 3 other people feeling like butting heads with you, and everybody else will just bugger off from the thread. Congratulations, you have stoush but no readers.
If you want to persuade people not already invested in one or the other side of the debate, keep it short and sweet and (this is to everybody) allow space for other voices in the discourse. If you just want to have the same old argument with the same old suspects, go and do it on your own blog.
I’ll try to keep this short so tigtog doesn’t get his knickers in a twist.
1. “Immutable facts”: please see my post where I mention state governments in RGGI are raiding auction proceeds to plug budget gaps. Just politicians being politicians. This is a fact, and is easily checked.
2. I’m not actually a religious person so my faith is based on facts. Businesses will do what is in their own interest. Are you disputing that this is what businesses do?
3. “Spurious and specious”: There are currently no “snap on” technologies to reduce CO2 emissions. So businesses will be forced to buy permits until they are developed. Once technologies are available, businesses will then decide whether to invest or not. That is making them pay twice.
4. “Super funds”: Sure they carry my retirement funds, but if I found out they were investing in coal-fired generation I’d be out like a shot. The discussion re carbon constraints has been occurring for a decade at least, so if a Super fund is still investing in emissions intensive assets, they really deserve all they get.
5. Why are we only concerned with people on low incomes? A program with free allocations keeps costs down for everybody!
6. “then the value of permits that fall within the cap rises, negatively affecting price” WTF does that mean? You can’t have it both ways, is the price going up or down? If you want a “spurious or specious” quote you’ve certainly got one right there!
7. “Those paying the most get a benefit” LOL. I’ll leave that one to the economic experts.
8. I’ll agree that my suggestions for the Greens justifying their support were speculative. But what is FACT is that we now have no program and nothing will be done for a couple of years at least, and perhaps not at all depending on the balance of power after the next election. And there is no justification for that.
@ tigtog
It seems to me that I am adding to the discourse here, not detracting from it. I have responded to posts that have contained several points… it’s difficult to do so in a few words.
It seems to me that the only one not on topic is you. My suggestion is that if you are not moderating this blog, and you don’t like my posts, maybe you should “go and do it on your own blog.”…
[Ah, but you see, I am a moderator on this blog. In general, authors moderate the discussion of their own posts, but any member of the collective can moderate any thread when required. People who are new to a blog and challenged about their commenting behaviour should perhaps take the short time required to read some of the About pages before putting their feet in their mouth. Abide by the Comments Policy from now on please. ~ tigtog]
Isn’t carbonorama a kind of pasta sauce?
Yes, Ken – bacon and eggs, iirc. And pretty damn tasty, too. I must make some this week, having scored a dozen eggs off my lady friend. (My hens are off the lay at the moment.)
@carbonarama, since you are unsure about my moderator status, I suggest that you now read the amended version of your earlier comment.
carbonorama, here’s a paragraph about tigtog.
You’ve got the gender wrong and, hint, she knows something about writing.
That’s carbonara Ken … a pasta sauce with bacon in it.
And let me (briefly) make clear that if the very worst thing that might have been said about the government’s proposed scheme was that the cap was too generous to drive significant reductions in emissions intensity per unit of GDP then I’d still have favoured it supporting it on the it’s better than nothing and you have to start somewhere rationale.
If for example, all commercial and industrial scale emitters were in and all permits were auctioned, the scheme was going to kick off no later than July 1 2011, and that in subsequent years the cap might be lowered on 12 months notice by regulatory discretion, then the fact that everyone who needed to could buy a permit for $5 per tonne in 2011-12 would not have justified opposing the bill, IMO.
Putting aside the mechanics of the scheme for a second and going back to the politics:
There was a local maximum in momentum for action on climate change in Australia in about 2005-6. Extended drought, a series of big bushfire events, high global temps (pre- “global warming stopped in 1998″ meme), An Inconvenient Truth, Hurricane Katrina, pre-climate gate, pre-Copenhagen, Stern Review time.
Since that local maximum, general sentiment for action on climate change in Australia has been trending down. I suggest that as dismal as the proposed CPRS was, nothing better or even close to the CPRS is going to be legislated in Australia any time soon (maybe 10 years?).
Before public sentiment for action on climate change again begins trending up, there will probably have to be several years of increasing temperatures, and a few extreme weather events, etc.
In the meantime, neither ALP or Libs are going to do anything that significant. If the Greens get the balance of power for an extended period of time, it won’t make much difference because the major party in government will find it more politically acceptable to negotiate with the opposition than the Greens while public sentiment is not peaking.
We had a window. We missed it. Wait for the next one.
If the ALP fails to get the CPRS up in the next little while and loses government, what will the Libs do? Probably grab-bag, and if they find themselves needing to do something further, they will proffer nuclear power rather than an ETS.
[Content declined for publication. Challenges to moderation decisions are discussed via email only. ~ tigtog]
SC Pritch, speaking of the Carbon Porkbarrell & Refunding Scheme (CPRS)
said:
A good thing too. May it ever be so. Those windows have only horrible thing behind them.
That’s quite possible. It’s the price one pays for having the playthings of extractive industry and the agricultural lobby in charge on both sides. Unless we get a government into power that wants to take the environment seriously, we will always be iterating poor or retrograde policy. I’d sooner such folk stayed away from trying to meddle in things in which they lack insight and interest and where they will map their own porkbarrelling into programs, tainting those of us who are interested.
This is how capitalist democracy normally operates. The interests of the privileged are a primary constraint, and those who want policy have to either show how policy can protect privilege (or at worst not threaten it) or outmanoeuvre them so that they become divided over where their true interests lie. This remains the case whether we have the ALP or the Coalition in control. This is also why, as you correctly note, the ALP would prefer to negotiate with the Coalition. It is their way of assuring the privileged classes of their primary say in policy and thus the ALP’s fitness to rule on behalf of the privileged.
It is also why we need not new parties in power, but a new system for empowering working people and allowing them to translate their needs into policy.
Actually Fran, I’d say it has more to do with short term versus long term interest than elite interest versus the population. Australians in general do benefit from the extractive and electricity generation industries – just ask a unionised coal miner. The problem is that those activites have a long term cost which no-one right now is interested in, because addressing it would involve short term costs. I very much doubt things would be particularly different if the system empowered working people, because the short term versus long term interest problem would remain.
Tim …
I don’t doubt that at least to some extent, the interests workingclass people perceive (and can secure) through participation extractive industry help explain the political problems we face.
I disagree though with your conclusion that even if the system empowered working people, the result would be much the same. Bona fide exercises in empowering people entail equipping them with security about their future, and a grasp of the connectedness of today with the medium and longterm future.
Right now the choice presents itself in stark terms — have a high paid job and retire early(ish) or take pot luck when the mine closes. It’s not quite Stockholm Syndrome, but it’s not far off. A society that looked after all of its people and ensured that everybody got a fair share of the burdens, risks and benefits of employment is one in which these sectional interests would not be so germane to discussion.