Further reports today (as well as Stephen Mayne’s piece in Crikey) reinforce what was being said yesterday – that the polluters and the “skeptics” are making the running on the business response to the Carbon Pollution Reduction Scheme Green Paper. What looks like being the outcome is, in my view, a default back to the Howard position. Not only was the Green Paper based on the work done for the Howard Government by the Shergold Review, but it’s becoming increasingly clear that the business position, which is falling on at least some sympathetic ears within the government, is for a very low carbon price and a stack of free permits under the aegis of “adjustment”. In effect, it’s a “waiting on the world” strategy, with the BCA’s president Greig Gailey expected to make the familiar point about Australia only creating 1.5% of the world’s emissions in a speech to the Sydney Institute tonight. Gailey will also be calling for bipartisan support to create “certainty”, and given Kevin Rudd’s previous disdain for negotiating with The Greens, it would appear that there are powerful forces at work to create a policy outcome much more akin to the Malcolm Turnbull/Greg Hunt position than what Labor was actually suggesting might occur prior to the election.

If this is what’s going on, you have to wonder why they’re bothering at all. The outcome would mean that we’d be continuing to increase our emissions, not restraining them, at least in the immediate future.

I haven’t had time to go through the detail, but Bernard Keane from Crikey has. In a nutshell, the report makes three extremely dubious assumptions:

• trade-exposed businesses have no capacity to pass on any increased costs.

• Trade-exposed businesses will not be able to adjust their operations to reduce carbon emissions.
• Trade-exposed industries can seamlessly relocate to other jurisdictions where they don’t have this greenhouse abatement nonsense.

It seems that the BCA (aside from suggesting that targets should be so modest as to be essentially meaningless) is arguing for an emissions trading scheme where emissions-intensive, trade-exposed industries don’t have to do anything different, and any changes to their operations they do make come back to them as windfall profits.

Cunning lot, the BCA…

Update [dk.au via comments]: Ross Gittins in SMH:

The media have yet to twig that all modelling is only as good as the assumptions on which it rests. And you can get pretty much any result you want by choosing the right assumptions.

In the Business Council’s case, it seems to have reached its dire conclusions by assuming its businesses have no scope to pass to customers the cost of the emission permits they’ll need to buy, no scope to eliminate wastefulness in their present use of fossil fuels and no scope to reduce the need for permits by improving their technology.

In short, the Business Council seems to assume its members are completely lacking in enterprise…

See also Peter Wood on the Aluminium case