OK, I had to admit I am getting confused. Up until yesterday, I thought that the Liberals had decided that they were not going to have an ETS or any form of carbon tax because, for many of them, they were unconvinced of the need to do anything with regard to climate change. Or at the very least, did not want to incur economic costs to do so.
But this morning I read this.
Mr Abbott greeted yesterday’s Senate vote by declaring it had saved Australia from “a great big, new tax” by rejecting the CPRS.
Pressed for an alternative, he said the Opposition remained committed to an unconditional target of reducing emissions by 5 per cent by 2020 but would not embrace an ETS or a carbon tax. He said there were “lots of things” that could be done to reduce emissions through other means, many not involving significant costs.
These included more energy-efficient buildings, better land management and biosequestration. NSW Nationals Senator John Williams claimed Australia could offset 100 per cent of its carbon emissions for 100 years by lifting soil carbon by 3 per cent.
Hang on a second? Every one of these seems like the most heavy-handed regulation imaginable. For from avoiding economic costs in climate change policy, these types of prescriptive actions are designed to maximise them. The reason why everyone else in the world has become convinced that the best way to deal with emissions is to price them is because the alternative, requiring people to emit less in very prescriptive ways, is likely to lead to grave inefficiencies. This includes biosequestration which, in the absence of a carbon price, will require a large scale publicly owned project. Not to mention the big compliance issue of measuring emissions reduction to conform with any international agreements that I thought were critical to the Coalition before doing anything.
So maybe I was wrong. Maybe they aren’t simply environment haters but market haters. Quite a combination.
Core Economics 
Joshua, I agree with your comments. The Liberals are a policy-free zone on climate change. They have backed themselves into a corner where they need to pursue Soviet-style, supply-driven reforms. They cannot admit any type of carbon charge since they have denounced the cost of auctioned permits as a big tax grab.
Environment-, market- and logic haters. It is crazy. In terms of thinking seriously about climate change they are nowhere.
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Joshua,
I’ll admit that I’m confused as well – for pretty much the same reasons as you. Barnaby’s rant on Lateline last night show’s that he has about as much idea on the costs of alternative actions as Abbott does.
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Well, there’s 3 possibilities: they don’t understand an ETS; they hate markets; or they’ll say absolutely anything that confuses the debate and puts off any action on carbon reduction.
Which do you think is most likely?
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This is sad an dangerous. The truth is, if most of the public realised that an ETS is a market-based solution, they probably wouldn’t support it. The government knows this, that’s why they’re not even trying to explain it. If we go to an election on this issue, the Coalition might actually win because it’s easier for a layman to believe that prescriptive action will to emission reductions. I’m worried about this country – we have too much regulation already – and I say this as a public servant.
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I used to trade energy futures – none of the politicians seem to be mentioning the fact that coal power is right now much cheaper, readily available and more reliable than any other power source. If that doesn’t change (and my impression is that the ETS was meant to effectively make it more expensive to pollute) then everything else is just stuffing around.
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So many contradictions. The right wing being opposed to a market based solution.
Josh I’m not convinced that the market based approach will work. Mostly because I hate investment bankers and their parasitic existence so much.
I’m not convinced that over-compensating the poor and various industires (via assumed electricity emissions intensity factors) is really the right way forward, since it means that someone has to pay for that compensation.
Plus a solution that is based on importing permits has none of the technological shift encouragement various or first-mover advantage since there will be no shift or movement, just a large outflow of cash for permits.
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I find it fascinating that a Liberal party membership – presumably believing in free-market allocation of scare resources according to price signals – don’t or can’t believe in a price-based mechanism for carbon reduction.
But then again, how many Liberal politicians have successfully managed or owned a business, pre- or post-career politics. Turnball would be an exception – maybe that’s why they distrust him as leader – it exposes their ignorance of anything but politics.
However, that excuses Barnaby Joyce and the Nationals since they are fundamentally bush socialists that haven’t left the glory days of the 50s and 60s.
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More Lib policy lunacy uncovered by Professor Quiggin here
http://johnquiggin.com/index.php/archives/2009/12/03/libs-left-with-chinese-model/
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I’m not particularly surprised, the Republicans have also been making similar proposals, with people like Lamar Alexander suggesting that instead of the Waxman-Markey/Boxer-Kerry ETS, they should build a bunch of nuclear power stations. Even conservative democrats like Dorgan state things like “I like the cap, but I don’t like the trade”.
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It’s as if the massive debates and research all over the world on market based instruments just haven’t occurred. This is coming from an experienced politician! Last week we thought the coalition were just pro-compensation for polluters, a bit antsy about trade-exposed industries, and determined to exclude farmers from emissions trading. But it turns out Abbott wants to do it all with directive regulation, subsidies and direct government investment?
Let’s recall briefly how Tony got here – and how very quickly. (below are not exact quotes):
As a Howard Minister: “we’ll have an ETS – we’ve commissioned the studies, it’s the right thing to do”
Last Friday: “we need to study the ETS more, it would not be responsible to wave it through before Copenhagen”
Monday: “it’s not about Malcolm Turnbull: it’s about the way he’s pushing the ETS through”
Tuesday afternoon: (gets elected leader by 1 vote): “I won’t be announcing policy on the fly and telling the party to follow me.”
Tues night: “We don’t have an alternative policy on climate change” (don’t believe this?? watch lateline on abc iview) – yes that’s right – Tony had to get rid of Malcolm because of the ETS but hadn’t thought of an alternative policy! He only had the 5 years since the shergold report on emissions trading to think about it!
Wednesday: Announces on the fly that the party will not use carbon pricing in any form!: ‘ “The Coalition will not be going to the election with a new tax, whether it’s a stealth tax, the emissions trading scheme, whether it’s an upfront and straightforward tax like a carbon tax,” he said “We’ll have a strong and effective climate change policy, we’ll have it early in the new year,” he said.’ (quoted in the Age today).
It’s so incredible it makes my head hurt! My guess is that for Abbott, the market is an ideological construct to limit the role of government. His mindset is a manichean one that actions are either good or bad. Government should prohibit things that are wrong (eg abortion) and permit things that are right. It’s not about efficiency.
Literally overnight – that is, between Tuesday night the 1st of December 2009 and Wednesday the 2nd of December he completely tied the hands of the liberal party on the issue he wants to fight an election on.
So the party room wasn’t ready to pass the ETS – but were they ready to rule out the only two reliable policy instruments for emissions reduction? Don’t know! Didn’t ask them. Good thing he got rid of his non-consultative predecessor!
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I agree that making substantial, globally coordinated cuts to emissions will require a carbon price, but do we need to do this to meet less ambitious unconditional targets?
Many point to the ‘first mover’ advantages of setting up an ETS before a global agreement. But what if that agreement never eventuates? We are left with a costly, ineffective apparatus, which, because of inordinate amounts of successful rent-seeking, will be hard to dismantle.
I am not convinced that this is the best interim option.
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I agree to point, that being that the Libs policy seems to be all over the place.
But likewise, credit where due, because at least some of these polices would appear to have applications related to reducing our dependence on oil, and likewise on coal (not so much that we don’t have enough of it, but likewise that population growth isn’t being matched by the building of power stations, dams etc.)
Energy-efficient buildings isn’t a bad goal. Given the green menace means we’re not seeing new power stations to keep up with population growth, good.
Land management is a serious issue. I’m tired of hearing AGW supporters talk about the lack of water here as being related to AGW. It’s not, and it has everything to do with land management and natural flows, and in places like Melbourne, the lack of dam building. The Murray Darling isn’t dying due to AGW, but raping their flows. Not saying that there should be no agriculture, but likewise saying that the blame is wrongly attributed time and time again.
Biosequestration (which I’m guessing is something like geoequestration) isn’t a bad thing, and likewise if the pumping of carbon into soil helps the growth of plants, I’m all for it.
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Unfortunately, I dont have much faith in the Australian public. I think that Tony Abott may score political points here, because the Australian Public are a conservative lot.
Another issue is transport. My argument here is that we have an off the shelf ready to go technology, that is almost totally over- looked, that not only has zero carbon emmisions, produces negligable pollution, helps fight obesity and type two diabities, makes us more healthy, and in urban area’s has been shown to be faster and more efficient door to door than a car.
What is it you ask? Its our old friend we have forgotten about long ago, the humble bicycle. It is a pity that the leaders could not attend copenhagen in the summer months, and have a look around. This solution will be right in front of them, on the street.
Yet at the same time the people who are courageous enough to commute to work using this method in Australia, instead of being praised, are demonised, villified, threatened, and have things thrown at them from cars.
Australians are to attatched to their car, and see it as their main form of transport. Despite their support for action on climate change they quickly change their minds when it may interfere with their way of life, or effect their wallet. This is why we continuingly come up with excuses for inaction, and it is why Australians will not vote for action in the end, until it is too late.
I find it Ironic, that Tony Abott, the cyclist, is so opposed to a price on carbon emmisions.
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The point about the bicycle is correct, but the attitude is not. Everything would be better if only the pesky, contrary public acted in the global interest. Fact of life is they generally act in their self-interest, but not necessaily without altruistic behaviour. (A sense of fairness seems to be in the genes as well, but that doesn’t stop free-riding behaviour.)
Arrogance and moralising won’t do the trick; people will instinctly reject such arguments even if they sometimes agree with them. The objective is to design ‘systems’ that enable people into performing actions that are in their best interests and, alternately, hinder or punish (bluntly put) them when they don’t.
Copenhagen – like all smallish, compact towns with apartment living – is very good for bikes. It also helps that cars are a hindrance in the city (vehicle congestion taxes and roadway diversions, anybody?) and that other taxes add disincentives to the purchase and use of vehicles in Denmark (maybe a high GST on vehicles).
Australian cities in their current form will need more than cyclists as a workable alternative.
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Since cycling costs nothing, does it constitute free riding?
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Yes, they use roads (infrastructure) built for cars. An externality by other means.
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DP, cities, roads and bicycles all predate cars not that the average petrol head knowns or cares. Bring on peak oil!
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