Really Reducing Emissions Would Mean Recession

In Australia we now have a carbon tax, to reduce emissions of carbon dioxide. But I bet if there really was an across the board reduction in carbon emissions by industry the government would be complaining. Back in late 2008, when the price of oil plummeted, there was no celebrating the reduced energy usage anticipated by the reduction in demand. Rather everyone was complaining about the global financial crisis.

Indeed if our industries really curbed emissions it would be a sign production was slowing and the economy was going into recession.

What does the Australian Treasury really want: energy consumption or a reduction in emissions of carbon dioxide? Given current technologies, economic growth necessarily means energy consumption and carbon dioxide emissions. The two are inextricably linked.

But go to the Australian Government’s Treasury website and look under carbon price and there is a message about how modelling shows that:

“The Australian economy and the global economy both continue to grow strongly at the same time as we cut pollution to reduce the risks of dangerous climate change”.

Look at Australia’s All Ordinaries index and it shows that the Australian share market has gone nowhere since August last year while some economists suggest that the recent sharp drop in the global base price of metals is a sign of a likely drop in global industrial production and the risk of recession – not economic growth.

It’s a strange business this preoccupation with climate change and desire to save the planet by way of a carbon tax. Carbon is the chemical element with symbol C and atomic number 6. Carbon is known to form almost ten million different compounds including the hardest naturally occurring substance the diamond. But more than this, carbon compounds form the basis of all known life on Earth. Carbon should not be equated with pollution – and neither should carbon dioxide that is the stuff trees breathe in.

The carbon tax is in fact a tax on energy imposed on several hundred of Australia’s most productive enterprises. Most of these enterprises will simply pass the additional cost onto the consumer. Meanwhile the Australian Treasury has already compensated many consumers by way of a one-off payment in anticipation of the carbon tax increasing their cost of living.

If the Treasurer, Wayne Swan, was really serious about us all reducing energy consumption he would surely provide no compensation for the increased costs associated with the tax. He would simply insist ordinary Australians pay more so they consume less.

Indeed if Mr Swan was serious about reducing emissions he would be wanting a global recession, or at least one in Australia so we could do our bit – show moral authority, lead the way in reducing emission etcetera.

41 Responses to Really Reducing Emissions Would Mean Recession

  1. Phil Spector July 1, 2012 at 11:59 am #

    Yes carbon is a much-maligned element. It is essential to life on the planet, and along with oxygen and hydogen are the key elements that are present in every living organism. Carbon is a very special element because an atom of carbon can bond to other atoms of carbon, as well as hydrogen and oxygen, and give us such a large diversity of molecular structures – carbohydrates, fats, the polymers cellulose, hemicellulose and lignin that make up the majority of all plant life. No carbon, no life.

    The idea that carbon is just a nasty pollutant is quite absurd. Most of these overpaid, self-mportant politicians and their entourages should go and learn some basic science before imposing their ignorance on the rest of us.

  2. cementafriend July 1, 2012 at 1:04 pm #

    Agree Jen & Phil,
    I was trying to make some similar points in my comment on the previous post by Peter Lang

  3. spangled drongo July 1, 2012 at 1:42 pm #

    Phil and cementa,

    Yeah but you can’t PROVE that it’s harmless. ☺ ☻

    So Julia can tax us off the face of the earth simply based on her assumptions.

    And besides, Gaia is simply beaming today with the intro of the double whammy.

  4. Lank sniffs a plan July 1, 2012 at 5:04 pm #

    Without plenty and affordable energy our economy will wither on the vine.
    Labour should change its name to the Economic Suicide party.

    I know, why don’t they also tax our most successful industry as well? If they can also batter the miners, destroy its low cost and competitiveness to make our country a third world state then they will deter illegal boat immigrants.
    It is a cunning and devious master plan!!

  5. Mike July 1, 2012 at 7:18 pm #

    The mafia-style methods used by Gillard to introduce carbon dioxide taxes in Australia would make any Cosa Nostra member proud.

    First off, she denied she was in the business of carbon taxes.
    Secondly, she reassured the electorate it would never come to pass under her watch.
    Thirdly, she introduces it with deliberate distraction by calling it anything but a carbon dioxide tax.
    Fourthly, she offered bribes to the electorate until the scam is up and running
    Fifthly, threatened to send around henchmen to businesses that told their customers the cost of goods and services went up as a result of the scam.

    Not only should she loose the next election, she should be stripped of her Australian citizenship and be sent back to live in Wales, where she can live out her life fighting Welsh global warming.

    Australian citizens need to grow up and say No to the the nanny state that OZ has become.

  6. el gordo July 1, 2012 at 8:53 pm #

    We have lost the battle to stop this pathetic tax, but we’ll win the war.

  7. spangled drongo July 2, 2012 at 8:04 am #

    The boil has not been lanced [Andrew Bolt]

    “I kid you not: there was once a theory in Labor circles that the Queensland state election would lance the federal anti-Labor boil:

    According to the latest analysis of Newspoll surveys on a state-by-state basis, conducted exclusively for The Australian, Labor’s primary vote in Queensland is down to just 22 per cent.”

    Dying the death of a thousand cuts but worst of all we have to go through the agony too.

  8. Robert July 2, 2012 at 8:53 am #

    One of the weird arguments by those in favour of the tax is that the Australian economy will not collapse immediately. Basically, they’re saying we’re a hard country to wreck…so chill!

  9. John Sayers July 2, 2012 at 8:55 am #

    check out what GetUp have produced – makes you sick!

    I used to respect these people.

  10. Neville July 2, 2012 at 9:26 am #

    Gillard’s new toxic tax is going very well across OZ—– SARC. Primary vote OZ wide is 28% and just 22% in Qld.
    In fact total wipe out for these liars, fraudsters and con merchants in the sunshine state.

    Can we please have an election to rid us of this rubbish forever.

  11. George B July 2, 2012 at 10:07 am #

    I disagree that reducing CO2 emissions would inherently mean a reduction in GDP (recession) but a reduction in energy consumption certainly would. You could substitute nuclear electric for coal electric and recycle the fuel avoiding the waste disposal problem and reduce carbon emissions while increasing energy production and growing the economy. It takes the will of the people to do that. And one of the great success stories one can point to is Fukushima. That was a 1960’s design plant that experienced a worst case scenario with nobody dead and nobody injured. Coal mining and chemical plants are much more dangerous than nuclear. More people died in the Bhopal chemical plant disaster than died at Chernobyl. More died on the Deepwater Horizon oil rig explosion than died at Fukushima. And newer design plants would not have even survived without incident at Fukushima. In fact, they did at the Fukushima Di-ni facility on the other side of town. Furthermore, had the quake waited three weeks, there would have been no Fukushima disaster because the only reason units 2 and 3 went into melt was because the unit 1 explosion cut water and electrical lines keeping those units cool. Unit 1 was set to be shut down permanently for dismantling two weeks after the date the quake struck. Unit 1 was the only unit that used only electric pumps for moving cooling water. Units 2 and 3 (and all the plants at Di-ni) had steam turbine pumps where their own heat could be used to move the cooling water. Shutting down nuclear power because of the Unit 1 explosion is like seeing a 1960’s Corvair get into an accident and demanding that modern automotive production be stopped. Still, NOBODY DIED, nobody was injured, and nobody was sickened. Not a bad record for a “disaster”.

    Anyway, you can reduce emissions without harming the economy if you just generate power by means that don’t create those emissions but wind and solar won’t scale. You will have to use nuclear. But all that supposes there is a real reason to reduce CO2 in the first place.

  12. John Sayers July 2, 2012 at 10:19 am #

    Landline on Sunday had a Fukushima story regarding contaminated fish off the coast of Fukushima. They also pointed out that Tuna were caught off the Californian coast that registered Fukushima contamination.

    Of course they failed to mention that the Californian tuna were perfectly edible.

  13. spangled drongo July 2, 2012 at 10:44 am #

    Yeah John, they wet the bed over Fukishima but think this is the way to go:

    As George B, Peter Lang and all rational people say, there are good, green,[as in enviro friendly] economical solutions we could be working towards.

    If only we had a smart govt free of mindless “green” influence.

  14. Debbie July 2, 2012 at 10:56 am #

    That Getup link also horrifies me.
    It’s appealing to rugby fans.
    Have these imbeciles bothered to note who the major sponsors of rugby are?
    And seriously, how completely empty is the term ‘tackling climate change’???
    The whole video is just a conglomeration of ‘feel good’ but totally meaningless statements by people who undoubtedly ‘mean well’ but are just mouthing platitudes and cliches.
    And they’re asking for money.
    I wonder how much it cost to produce this video? How much did they pay their rugby star?

  15. spangled drongo July 2, 2012 at 11:08 am #

    Even so Deb, the sceptics are slowly winning in spite of the spin. The extra time will hopefully cement the foundations:

  16. MikeO July 2, 2012 at 11:12 am #

    Agreed Debbie but a pity all of them are totally ignorant of Australia’s climate history. They are arguing that pre the industrial age we had a perfect climate with no floods, droughts, storms etc. I may be wrong but that is hard to believe.

    As for rugby I call on the government to ban all night time sport as being environmentally unfriendly. Sorry I should say all night time events.

  17. TonyfromOz July 2, 2012 at 11:55 am #

    Most of the electricity providers have announced their increases to the price of electricity, and so far, the average is around 3 cents per KWH.

    Not very much you say.

    Compare like with like. Take out you last electricity account, and most are for a 90 day period, and as your next account will be for the Winter cycle, get hold of last year’s Winter bill, from mid to late July.

    Look at your consumption for that period, and it’s on the second page usually.

    Divide that by the number of days in the billing period, and this gives you your daily consumption in KWH.

    The average will be around 30KWH, so there’s 90 cents a day, and now multiply that by the number of days 90 in most cases, and there’s the extra that your new bill will cost you, around $80, and then the last thing added to the bill, the GST impact, taking your next electricity account to an increase of around $90 more than it cost you last Winter.

    Greg Combet and other Government Ministers told us the increase would be from $3.60 a week, (and note the word from there, indicating the lowest price, as per standard advertising procedures) and at 3 cents per KWH, that equates to around 16KWH of consumption a day.

    The only place that low amount might apply is for homes that also have natural gas connected, be it town gas or bottled gas, and the supply of gas to residences also rises.

    Also keep in mind that for this first year, the Government is giving away credits to those large emitters (and the top 4 and 14 of the top 20) are electricity generating entities. They can only pass on the amount they actually have to pay for this new CO2 Tax, so the increase this year is only by that smaller amount.

    Next year, they will be giving away less credits and raising the price, so because of this CO2 Tax, electricity will rise by around the same amount again.

    The same happens at the start of the third year when they give away less credits again, and again raise the price.

    Then, with the introduction of the ETS, all credits will need to be passed on to electricity consumers.

    That;s not the end of it though, because keep in mind that CO2 is not the only target, and the image I have linked to is of the CO2 equivalent costing mechanism.

    As you can see from those 24 gases there, they have multipliers, the number in the last column, and for that price just multiply the CO2 price, (starting at $23 and rising each year) by that multiplier number.

    So for Methane, (Natural Gas) that is CO2 cost multiplied by 21.

    Of those other gases, some are refrigerants etc, and others are also used for electronics, across Industry, in medical procedures, and for other applications as well.

    So, when the Government says that this will have little impact, and we will get used to it, be very aware that it will be rising each year for the next 4 years.


  18. TonyfromOz July 2, 2012 at 11:59 am #

    My apologies. I forgot to add the link to the CO2 Equivalence chart from the current Australian Legislation.


  19. John Sayers July 2, 2012 at 12:05 pm #

    some one posted the following on Andrew Bolt’s blog

    I think I get it, but I might be wrong.

    From what I understand, the government proposes to collect tax from the carbon emitters who will pass the cost of the tax onto us, so it really won’t cost the emitters anything.

  20. TonyfromOz July 2, 2012 at 12:46 pm #

    As is the case in every application of this new tax on consumption, the emitters are only the middlemen.

    They are the ones who will pay all the costs of implementation, recording procedures, documentation, etc.

    The have to purchase the credits from the Government.

    They pass the total cost onto the providers, Ergon, Energex, Origin etc.

    They add a bit and then pass it onto consumers, the users of electricity.

    The people pay their bills to the provider who then forward the money to the generating entities, who then forward it on to the Government.

    The same with gas supplies, and for all those other gases on the list.


  21. Neville July 2, 2012 at 12:59 pm #

    No hockey stick from Antarctica study in this graph. Very good post from Steve McIntyre.

  22. John Sayers July 2, 2012 at 2:11 pm #

    The real deniers:

  23. gavin July 2, 2012 at 3:45 pm #

    Re; get it, its done!

  24. Robert July 2, 2012 at 3:57 pm #

    The government should exploit the unpopularity of Tony Abbott with doctors’ wives and Canberra Times readers – and call an election now! That should stop all the whining, Gav.

  25. Greg Digbert July 2, 2012 at 6:39 pm #

    Bye-bye Julia, bye-bye Greggy, bye-bye Department of Climate Change. You will be thrown out at the next election just like Anna Bligh and her climate “expert” hubby. Soon it will be bye-bye carbon tax. Time to sweep all these people away and have some sensible people running the show, if they have not all left.

  26. Neville July 2, 2012 at 6:41 pm #

    Can you believe the moronic behaviour of these labor idiots, what an embarrassment for Australia.
    This loopy nonsense from one of Juliar’s old boyfriends.

  27. el gordo July 2, 2012 at 8:00 pm #

    ‘…get it, its done!’

    For now gav, but only the barrackers believe the watermelon coalition will be reelected. This atrocious tax will change the political landscape for a decade. Loser!

  28. Debbie July 3, 2012 at 7:53 am #

    What’s done Gav? 🙂
    Have we already been saved from ourselves by taxing thin air?
    I think maybe EG has explained what’s really been done.

  29. Debbie July 3, 2012 at 10:04 am #

    At least he’s not singing and dancing (well maybe I should add “attempting” to that sentence).
    But the logic is still totally unsound.
    What were we trying to achieve here?
    Tackling climate change or income redistribution?
    Whether the impact is modest or not….is completely not the issue!!!!
    Tony shows in a very sensible manner that all the political spin is lying about the impact….it will cost us….more than the current Govt says and less than the opposition says…..BUT IT WILL COST US ALL!!!!!
    The real issue is that this legislation was deliberately aimed at impacting Australian society….supposedly for some grand and noble challenge…..that we will never be able to adequately measure.
    All we’ll ever be told is that something MIGHT have happened?????? (Precautionary Principle)

  30. bazza July 3, 2012 at 12:10 pm #

    Deb, I loved the bit in the intro “Carbon is known to form almost ten million different compounds including the hardest naturally occurring substance the diamond.” Cant be all bad, eh?. As the miners say, dont mention the diamonds. When you think of the millions killed chasing diamonds, perhaps we need a tax on diamonds to internalise some of the costs of the African mine workers sent home to die when they get TB or HIV. Another thing I dont understand is how come the Australian economy has surged ahead the last couple of years as energy consumption has fallen.?

  31. Robert July 3, 2012 at 12:42 pm #

    Here’s a little Q&A, nicely laid out in the spirit of junk education exams.

    Q. “Another thing I dont understand is how come the Australian economy has surged ahead the last couple of years as energy consumption has fallen.?”

    A. Exports of C___n

    Re diamonds, Africans, TB and HIV: Nice exercise in factoid-flashing and free-floating indignation! Keep the blather as nonsensical and disconnected as possible, and nobody can argue. A kind of triumph, I guess.

  32. Debbie July 3, 2012 at 2:13 pm #

    Why have you directed that comment at me….completely failing to see the relevance Bazza.
    Except maybe…..
    So taxing carbon in Australia and redirecting or redistributing income from that taxing exercise (under the banner of tackling climate change) is going to somehow have a positive impact on the working conditions of diamond miners in South Africa???
    Sorry….that’s the best I can come up with.
    I can however help clear up your “another thing” misunderstanding.
    It’s called MINING BOOM!!!!
    Go ask the traditional retailers and many of our manufacturers how far their economies have ‘surged ahead’.
    Can I suggest you brush up on your economics and learn about an economic concept called a ‘2 speed economy’? 🙂
    It may surprise you to discover that you will find models that bear a remarkable similarity to other models that are often discussed at this blog.

  33. sp July 3, 2012 at 7:41 pm #

    us-co2-emissions-may-drop-to-1990-levels-this-year …… because of shalee gas

  34. gavin July 3, 2012 at 9:46 pm #

    Deb and Co; the speed of change (technology), is such that we have to stay at the head to keep up.

    Personally, I reached for another decade this weekend and it’s so good to just watch the younger gen steadily taking over.

    Regardless of what you (fellow old timers ) and the pollies say, it’s the smart thirty year olds that will grow the next crop of jobs.

  35. Debbie July 4, 2012 at 9:47 am #

    Only if their creativity and ingenuity is encouraged Gavin.
    I have the utmost faith in my children too.
    I’m unclear why you seem to be inferring that the carbon tax and an overbloated bureaucracy would be beneficial to our next generation?
    I even agree with your sentiment about technology but, once again, I fail to see the positive link to the current agenda?
    The results are providing the opposite to your aspirations. We have an ever increasing bureaucracy with a solution looking for a problem.
    That is counter productive Gavin.
    The top down approach is proving to be a backwards approach.

  36. bazza July 4, 2012 at 12:52 pm #

    Jens headline reads “Really Reducing Emissions Would Mean Recession”. Part of the underwhelming evidence is “Look at Australia’s All Ordinaries index and it shows that the Australian share market has gone nowhere since August last year”. You have to be a highly motivated cherry picker to find any useful causal relationship other than an n=1 between GDP and share market growth or vice versa. We currently have both a high rate of economic growth and reductions in energy usage. Companies and communities have responded to relative price changes in electricity for example, well before carbon pricing. They have also been taking measures for years to reduce energy/unit output because they understand risk management and get on with it rather than bleat the blather of the blinkered . One example of rational response is Woolworths aim “40% reduction in carbon emissions on project growth levels by 2015, maintaining 2006 levels. Progress in 2010: We have managed a 13% reduction in emissions compared to 2010 projected growth levels. This is an estimate saving of about 500,000 tonnes of carbon dioxide”. And while we fiddle, hot temp records in the US continue to be broken at seven times the rate for cold.

  37. Robert July 4, 2012 at 2:03 pm #

    If I may “bleat the blather of the blinkered” for a moment, it does not surprise me that spiralling electricity costs would motivate a company, or anybody, to reduce consumption. Nor does it surprise me that a company would spin their reduction of consumption to make an acceptable political noise. I’d do the same. Words are free, especially if you are a large business with the time and resources to confect all the needed spin. (Heaven help you if you can’t afford your own spinners.)

    “While we fiddle”, as they say, our trading partners such as Japan, China and Korea are no doubt using all that black Australian coal for installation art. What else would they be doing with it?

    As to why a heat wave in one part of the world – or a cold wave – should be indicative of anything except normalcy – that is beyond me. The 1936 heat wave of North America remains one of that continent’s truly terrifying weather events, and it is even more amazing that it was preceded by one of the coldest known winters. What that heatwave proves is what the NSW heatwave of 1791-1792 proves: you will get heatwaves!

    How people can be so divorced from history and from the world all about them and live in a narrow cocoon of spun statistics and computer models is one of the tragedies of junk education.

    As for “bleat the blather of the blinkered”, I suppose after “No Whyalla Wipeout” no verbal flourish is too grotesque.

  38. Robert July 4, 2012 at 4:07 pm #

    Just to give one example of “emissions reductions” and “energy savings” involving supermarkets:

    I live near a truckin’ town, and have had much contact with those in the industry. One trick of a certain big supermarket chain is to store goods off premises – on trucks! The goods remain the responsibility of the transporters, the emissions are theirs, not the supermarket’s – who also save space, of course. (Tried arguing with the supermarket duopoly lately?) I have personally seen the refrigerated trucks parked overnight in a quiet industrial estate, their fridge motors running.

    That’s right! Much stock, including refrigerated stock, is in unofficial warehousing – all of it “emissions free” because it’s still on the road.

    Needless to say, bully-boy monopolies and duopolies will find “emissions reduction” and all kinds of “rational response” not just desirable, but an excellent way to squash small business. By and large, socialistic and regulatory governments find natural partners in big monopoly. Woolworths may not be Mother Russia, but it’ll do till Gillard and Milne make the real thing come along.

  39. Debbie July 4, 2012 at 4:37 pm #

    Blather of the blinkered 🙂
    Oh that is priceless.
    Yes Bazza, we do have a strong economy (albeit 2 speed).
    That does not necessarily justify anything other than the fact that our mining exports (including coal) is propping us up.
    We are indeed a very lucky country to have that mining sector propping us up.
    The current political agenda is not actually contributing to that. So far it has succesfully managed to ‘tick off’ the sectors which are producinga net positive GDP for Australia.
    Why is that do you suppose Bazza?
    The rest is basically ‘hot air’ 🙂
    Or ‘political spin’.
    Woolworths and Qantas etc all just know how to talk the talk. Watch how they walk, that’s what we need to know.
    I agree with Robert. Your idea of risk management or even what the risk actually is seems to ignore the bleeding obvious.
    These things have happened before and it’s not a revelation that they’re happening again.
    Taxes are not a good risk management strategy Bazza.
    They’re just taxes.
    Poor implementation of policy creates more risk, not less.
    If we aren’t even able to take risks and be allowed to manage risk because something MIGHT happen, we are going nowhere.
    I loathe that Precautionary Principle. Its basic assumption is we can’t change anything because something MIGHT happen.
    How come most of those MIGHTs have not or are not eventuating?
    How come the GBR is doing just fine?
    How come I am in full production as one of those evil ‘upstream irrigators’ and the inland wetlands have flourished right beside us

  40. Debbie July 4, 2012 at 4:43 pm #

    Sorry, technical hitch.
    How come the last 2 decades of real time global temp data does not correlate with the fears about what MIGHT have happened?
    How come the MDB has not been lost to salt and isn’t dead and dying? 🙂
    Did none of those things happen because we were taxed?
    Did the gummint save us?


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