“You can do a lot of damage with $10 billion. It can be used to build a lot of halls of fame and finance a lot of local community groups. In short, $10 billion can fund a lot of porkbarrelling in a lot of marginal seats.
Ten billion dollars is how much (on a conservative estimate) the federal government will make in 2010 from the sale of permits to emit greenhouse gases. Potentially double that amount could be collected – and if so federal government revenue would jump by 10 per cent. Anyone who believes that climate change is a gravy train only for lawyers, accountants and ‘‘environmental advisers’’ should think again. No politician has ever missed the chance to save the planet, especially if they can also garner a few billion dollars as a re-election war chest.
So far the government is not telling us what it will do with the embarrassment of riches it is about to receive.
In a speech last week to the Melbourne Institute, Labor’s climate change tsar, Ross Garnaut, said the additional revenue should be devoted to supporting ‘‘adjustment to a low-emissions economy’’. That sounds chillingly like code for a $10 billion ‘‘industry structural adjustment’’ program.
Garnaut said that whatever funding was provided to enable an adjustment to a low-emissions economy should be allocated ‘‘transparently’’. As someone experienced in the ways of government, Garnaut would appreciate that transparency is in the eye of the beholder. More transparency is better than less transparency, but of itself transparency doesn’t guarantee good policy outcomes. If the government funds the newest and trendiest low emissions technology, it can do so in an entirely transparent way; but that doesn’t change the fact that government is nonetheless picking winners.
One of the things Kevin Rudd could do with his windfall gains is cut taxes. The question is what taxes to cut. Priority should be given to reducing personal income tax as, ultimately, it is going to be individual consumers either directly or indirectly paying the costs of higher electricity prices. But cutting income taxes doesn’t compensate for the effect of raising industry costs on a country like Australia that’s dependent on cheap energy for its comparative advantage in international trading.
In his speech, Garnaut warned that ‘‘continuing disputation about parameters of the scheme, uncertainty, continuing politicisation of the ETS’s [emissions trading scheme’s] operations, would dissipate resources in unproductive activity, and seriously disrupt productivity growth’’.
An unkind person could translate this as ‘‘be quiet and leave it to the bureaucrats’’. The trouble is, bureaucrats don’t have a sparkling track record designing markets – ask anyone who’s had the misfortune of visiting a public hospital lately. Given the massive change that the introduction of an emissions trading scheme involves, it’s entirely appropriate that there be as much ‘‘disputation’’ as possible – particularly given that the scheme is going to begin within two years.
Climate change bureaucrats are going to be busy over the next few years as they invent an emissions trading scheme and scurry back and forth between Canberra and New York, because ultimately the scheme will be in the hands of the United Nations.
Labor has promised that Australia’s emissions trading scheme will be integrated into a global system. A few days ago the global head of carbon emissions for Merrill Lynch spelled out exactly what this means. ‘‘Every single carbon credit that comes in or out of Australia has to have a unique serial number, and that serial number is tracked by the United Nations.’’
The Department of Climate Change estimates that in the next few years this country’s greenhouse gas emissions will be about 600 million tonnes of carbon dioxide. Under the current European emissions scheme, one carbon credit is provided for every tonne of carbon dioxide. Even if only 10 per cent of Australia’s emissions are internationally traded, that still leaves 60 million carbon credits that must be given a serial number and reported to the UN.
There’s a certain irony that Kevin Rudd has pledged to cut red tape. His government is on the verge of imposing an emissions trading scheme with rules so complicated they will make the 8000 pages of tax laws look simple. Whatever complaints there are about the Australian Taxation Office, it is surely a paragon of efficiency compared with the UN.
Having the UN monitor and regulate Australia’s emissions trading almost sounds like an April’s fool’s joke – except that the first of April was three days ago.”
John Roskam is the Executive Director of the Institute of Public Affairs and this article has been republished from the Australian Financial Review with permission from the author.
Jennifer Marohasy BSc PhD is a critical thinker with expertise in the scientific method.
Emissions trading is simply a tax on energy, with what sounds like an incredibly complicated and expensive bureaucracy to go with it.
This will be highly inflationary, and will undermine one of the few natural advantages Australian manufacturers hold against overseas competitors.
Even worse, even the prospect of an emissions trading regime will heavily discourage anyone from investing in base load coal based power generation.
Look forward to massive power shortages in Australia in five years if this goes ahead.
Fortunately or unfortunately, depending on viewpoint, the world seems likely to have discovered by then that the planet has gone into a serious cooling phase. Bearing in mind the existing low worldwide stocks of wheat and rice, I suspect that starvation will beckon for a large chunk of the world’s population.
Oh dear, I could see this all coming 10 years ago, and hoped against all hope that sense would prevail. It hasn’t.
History shows us that all past great civilisations hav self- destructed from within. Deja Vue.
Yes, tax cuts would be great. But it will be the low income earners, (whom Labor supposedly represents), who will suffer most from this nonsense. Maybe, in the end, the only thing that will save us from this global warming stupidity, will be the ballot box. That is if its not too late.
If the Federal opposition had any grey matter at all, they would boldly oppose this nonsense, as Howard, with great valour tried to, against the tide.
Maybe at a forthcoming election they could resurrect their 1975 election motto. “Turn on the Lights Liberal”…With the same devestating effect!!
History shows us that all past great civilisations have self- destructed from within.
Yes, I’ve thought for some time that that is the answer to the Fermi Paradox.
He just used an entire fin review column to say “UN is bad. If you work with the UN U R bad. Listen to me. Please listen to me! Don’t diss my disputation!”
And he opened up with “You can do a lot of damage with $10billion.”. I wonder if John Roskam is a glass-is-half-full or glass-is-half-empty kind of guy?
He and every other person, regardless of political persuasion who would like to contribute to emissions trading discussion has had many years to contribute ideas on how it should work. And now the deadline for implementation is set at 2010. And despite Garnaut’s frustration at the talkfest going on too long, dispute will continue, though decisions of course will have to be made to achive that timeline.
The battle between collective economy and private economy lasted from 1905 to 1990 and cost more than 80 million lives. It is only 2008 in the century that will be characterised by the battle between collective ecology and private ecology. And if the past is any guide it will last till 2090 and cost even more millions of lives before the proof of failure is obvious to all but a few tenured academics.
Get ready for entirely preventable mass starvation, climate wars targeting civilian populations, ideological cleansing, state coercion, multiple rewrites of history, scapegoating, the crushing of dissent disguised as the rooting out of ‘saboteurs’ and the primacy of ideological zeal over competence.
Plus ca change, plus c’est le meme chose.
Hey doug, did you know the energy industries (via the Energy Supply Association of Australia) are actually calling for emissions trading, clear targets, and clear climate policy?
The argument is that the lack of certainty is what is hurting investment in new power generation. So maybe emissions trading will help rather than hinder investment in new generation, because investors can analyse risks with greater certainty.
“…climate change is a gravy train only for lawyers, accountants and ‘‘environmental advisers’’
Accountants?! Really? Where have I missed the boat? Where’s my grant? I may be siding with Luke and SJT in the future. Consider me the green accountant, as long as I get paid a lot of green. I want in on this!
Ian keep up the anti-climate alarmism, its entertaining if nothing else.
Actually, I’m serious: I really like science fiction, and future/dystopia movies, and I think this would be a great place for people who are skeptical of climate science and paranoid about totalitarian green control to push their counter-culture.
That would be a fantastic setting for a big budget film: 80 years in the future, a green dystopia, the world is run by a single, all powerful, uber green government who tortures people for wasting electricity, where showers are mandated to be no more than 1 minute long, and lights are automatically switched off at 8pm. The only cars are driven by the highest level bureaucrats who “need” them for important govt business. Dissenters are rounded up and turned into bioenergy and soylent green.
The world has not actually warmed, but giant orbital nuclear powered heaters create the impression that things have warmed up, to keep everyone fearful and under control…. until our hero, Ian Mott, uncovers the truth and begins a one-man quest to sort it out. Who should play our hero? Keanu? or no wait, that british actor, clive owen, he’d be great.
Steve, the reason that industry is calling for clear targets and policy is that they need to know what they are up against ion the future, atm the uncertainty is hindering planning.
Agreed Rog, that’s what I said innit?
Dear Steve,
I think your description in your third post could be argued to largely fit North Korea in 2008, other than the preferred colour choice of the resident totalitarians ?
So perhaps we have defined the shape of absolutist, totalitarian regimes at least – and not as works of fiction ?
Rgds
Big trough. Big snouts.
Ross Garnaut’s role, carried in stories like this one http://business.smh.com.au/petrol-power-to-bear-emissions-burden/20080323-214f.html?sssdmh=dm16.307826 is a marketing one; to soften people up on behalf of the federal government. He floats, for example, then minimises the notion that electricity prices will double under Rudd’s emissions trading policy.
He is employing a cynical marketing technique, referred to in some circles as “prepping the suckers.” Garnaut is foreshadowing the government’s ambit log of claims against the public on carbon trading. The ambit strategy runs like this; the marketer introduces his target audience to a concept that something dire and unacceptable is about to happen. Later on he delivers an outcome which is a little less extreme. That outcome is then reported as if it was good news because although negative, it is less painful than originally suggested. Having gotten away with that, when the dust settles, the dose can be repeated as often as needed without fear of much complaint. Each time the public can be told they are being protected from an even worse outcome. Totalitarian governments, like the old Soviets, were masters of this technique.
I won’t reflect here upon the UN junkscience all this trading is predicated upon, but how long will ordinary working Australians continue to be duped into supporting a forced redistribution of their wealth and to allow sizeable chunks of Australia’s economic sovereignty to be handed over to UN bureaucrats who simply see us as a cash cow?
“Hey doug, did you know the energy industries (via the Energy Supply Association of Australia) are actually calling for emissions trading, clear targets, and clear climate policy?”
Who cares? Whats that got to do with anything? Big business are pussies and totally unreliable partners when it comes to the promotion of liberty. They also have little affinity with free enterprise as restrictions help them over their smaller competitors.
Do you have any evidence for this racket or are you just going to stand around looking like someone itching to do malicious damage?
Spot on, Kent. Steve likes to paint all this as some sort of fantasy, as if all the good honest people he knows would never accept such a scenario. But he forgets that stalinism grew out of the same high minded soil that produced Tolstoy and the enhanced sensitivity of Dostoyevski. He forgets that the train to Auscwitz was driven by loving family men who regarded it as a safer job than driving an amunition train to the Russian front. He forgets that when supposedly civilised europeans are given a choice between one group of homicidal maniacs killing farmers and priests, and another group killing money lenders and lawyers, they WILL support one or the other.
And if he doesn’t think it could happen again he should take trip to Bosnia, Zimbabwe, Gaza or Tibet.