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Green Paper: ever get the feeling you’ve been cheated?
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You’d assume from today’s media coverage that the Government’s proposed emissions trading scheme was not about addressing the massive historical threat of global warming, but about maximising handouts to businesses and households. All the emphasis is on who will win, who will lose, and by how much. You can’t say the media aren’t focussed on the big issues. But to an extent it’s fair enough, because whatever else the emissions trading scheme announced by Penny Wong yesterday will be, it won’t be very good at cutting our carbon emissions. OK, we don’t know the carbon cap and therefore the likely price of “Australian emissions units” (I love how we need to be patriotic even about our carbon pollution). Apparently this is some grievous omission from the debate, but I can’t quite see how. In signing the Kyoto Protocol, Australia committed to 108% of its 1990 emissions by 2012. Almost certainly, this will be the initial carbon cap, and in the absence of an international agreement, will probably remain in place beyond 2012. Because we have slowed, if not stopped, the rate at which a minority of farmers engage in wholesale destruction of native vegetation, we’re on track to meet this cap. That is, we’re looking at a business as usual scenario in the early years of the scheme. But even with a lower cap to put serious pressure on carbon prices, the scheme is unlikely to have a significant impact. It is, at best, a two-thirds scheme, because up to 30% of Australian emissions units will be handed out free to our biggest polluters. The very biggest polluters in trade-exposed sectors have been guaranteed at least 90% of their emissions — albeit based on an industry average calculation – free. After 2015, when agriculture is scheduled to be brought into the scheme, the scheme’s effectiveness will increase to 80% — at that point the proportion of permits available as freebies is intended to drop to 20%. The biggest polluter of all, the coal-fired power industry, has been promised assistance and free permits. Wayne Swan was denying this yesterday, but the Paper clearly leaves the option of free permits to coal-fired power open, and it will be taken up under pressure from trade unions and industry. Bear in mind that free permits mean no price signal. No price signal means no need to cut emissions. The Green Paper proposes a vague commitment, over time, to move to 100% auctioning of permits. A clear timetable for this process would at least provide an indication that, long term, the scheme will tighten the screws on big emitters, but even that was beyond the Government. There’ll be no price signal, either, for motorists and heavy vehicles. So, in essence, the three biggest carbon emitting sectors in Australia — stationary energy, transport and agriculture — will, along with the most polluting trade-exposed industries, be out of the scheme until the latter part of the next decade. No wonder, when put on the spot by Chris Uhlmann on AM this morning about whether the scheme would actually cause a reduction in Australia’s carbon emissions, the Prime Minister ducked and weaved rather than give a straight answer. On the basis of what was announced yesterday, there’s no reason to believe other than that the scheme might slow the rate of growth of emissions, but in the absence of a dramatically lower carbon cap, it won’t reduce them. The proposed framework allows unlimited banking and the purchase of permits for up to three years out from the date of auction. You can bet the likes of Macquarie Bank are already working out how to exploit this by buying large numbers of permits and becoming a carbon broker. Our river system is already infested with water brokers who have purchased rights from irrigators and are now making a fortune from selling them to desperate farmers or governments eager to buy environmental water. Expect the same with emissions, especially if we eventually adopt a serious target. The system will favour those with lots of capital and a capacity to buy up permits for on-selling when they are more valuable. And the scheme won’t be revenue-neutral, either. The scheme will only generate two-thirds of the revenue it should be generating, there’ll be no net revenue from the transport sector, and the Government has committed to full support for everyone below $53,000 a year, as well as extensive industry and regional assistance programs. The scheme is likely to end up requiring more revenue than that raised by the scheme. Curiously, for a government that demanded the Opposition explain how it would fund its 5c a litre excise cut (presumably no longer the height of economic irresponsibility now that it has been adopted by the Government), there is no detail about the net cost to the budget of the scheme. Most alarming of all is that this is likely to be as pure as the scheme gets. From here on, unions and industry will be pressing the government to scale back the few remaining negatives for them. We might hope that once the scheme is up and running, it can be strengthened as we realise the enormity of the problem we face. In fact, political reality suggests it will be diluted and weakened as politicians worry about their electoral fortunes and look after their mates. Labor was elected, in part, because of its commitment to getting serious about climate change. Ever get the feeling you’ve been cheated? |
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22 Comments
What point do you think you proved Bernard? What a berk. Now we have the dopey Woodside boss telling us they will pack up the bat and ball if they have to pay for their own buildings.
Meanwhile I have two things to say about that. BHP & Rio Tinto.
Bernard, tell me precisely why you think I am barking f……….g mad. Go on, I dare you.
This will achieve nothing. absolutely nothing.
The only way change will be achieved is by us.
We need to let the corporate world know that we require change, so they will initiate more eco friendly marketing campaigns simply to draw us in.
A great example of this is at http://www.thegreenroad.com.au/about-the-greenroad
That is one australian company putting their money up and not charging us a cent, while making a real difference to the emission situation in australia.
There are still ways of rescuing the system because it really doesn’t matter how you collect money as long as the money collected is spent on infrastructure for renewables. One way to compensate people and still achieve the objectives is to give the money from permits back to the population but require them to spend the money on renewables. Here is a way to get it started.
The green paper on emissions trading says that the government will add an emissions permits tax to fuel and pay for it by reducing excise tax. In other words money from one tax bucket will be moved to another tax bucket so that there is no change to the price people pay. This is a good idea but it could be made more effective by giving the tax directly to purchasers. This could be done by giving Energy Rewards that can only be used for purchasing infrastructure to save energy or to increase the supply of emissions free energy. Energy Rewards are like shopper dockets. When Energy Rewards are spent the amount of emissions saved will be estimated and reported.
Energy Rewards will be saleable. That is, if you can’t think of any way to spend your Rewards on green infrastructure you can sell them for a discount to someone who can. The value of Energy Rewards will reflect the true costs of reducing greenhouse emissions and will be able to be used to set the price of emission permits.
The Federal government (or the ACT government) could trial the approach immediately in Canberra by returning a few cents per litre of the excise currently collected. The system would decrease the effective price of fuel while at the same time diverting money to infrastructure to produce green energy or infrastructure to save energy. The systems to implement this would happen overnight for no implementation cost to the government as every petrol station will want to give their customers Energy Rewards. Renewable infrastructure projects that will accept Rewards will appear immediately and companies will pay to participate and report the results of the expenditure. Importantly the spending will be market driven not government directed.
Both receiving Rewards and accepting them as payments are voluntary. Compliance with the rules require no legislation as standard contractual arrangements are made between people who get Rewards and Companies that supply goods and services. If anyone cheats on the contracts then they are not allowed to participate in the system.
The system provides an alternative market based mechanism for the expenditure of some of the money obtained from emissions permits. Rewards can be given to the poor, or to people who consume little energy or to companies who close down emission producing factories, or farmers who put carbon into soil or any other way that behaviour change benefits the whole community. As well as using pricing to reduce emissions the system uses the money from the price increases to Reward people for changing their behaviour in ways that reduce emissions.
Desist from giving us puff piece comments Marilyn! Tell it like it really is for a change!
It’s plainly a ‘Clayton’s’ scheme, so let’s call it that.
In a funny way Marilyn and BK are on the same page about something - sincerity. There is no doubt M believes what she says. Angrily so, and there is no doubt BK is focusing on the same quality or rather Rudd’s calculating lack of sincerity. You don’t have to be a genius to know Yellowcake Bob Hawke wanted to save the Franklin as a means to an end - win the election. Or Carr in 1995 wanted to save the forests in NSW to wedge the Libs and Nats. Or Rudd in 2007 to apply the same wedge on climate (miners are big donors to … the Nats).
The ALP must have total contempt for environmentalists to think we don’t notice their shoeprints on our shoulders and faces. Every year the Green Party gets another 0.5% of the baseline vote direclty correlated number of shoe prints. (I’ll say one thing about NSW Premier aspirant Nathan Rees - at least he has a horticulture degree.)
And another thing - I do like M’s reference to the CFC-Montreal Protocol process that was slogging it’s was through the policy machines of governmnents everywhere from say 1987 (http://en.wikipedia.org/wiki/Montreal_Protocol) - and still trying to mop up the cheaters even this year 2008. That highly extended and very qualified mulitlateral success tells me BK and other’s scepticism about sincerity is well justified. If the pace and limiations of the critically important Montreal protocol is our benchmark as “the most successful treaty of them all” for a CC threat about 1000 times bigger - we are really f*cked.
Which brings me to the political chronology of Rudd’s career - he was getting his teeth into work for the Goss premiership just about the time India and China were saying no way we can’t retool to ban CFC and HCFCs from manufacturing. They did agree though but only under threat of a US-Euro threat to embargo their cheap imports. The buyer’s leverage. What happens when their domestic markets are big enough that such a threat doesn’t/can’t work on GHG emissions for cheap imports? Their domestic populations will quite logically say it’s your 100 year legacy, you compromise your living standards.
Doesn’t look good folks, with or without a mandarin speaking PM.
Yes, Marilyn, please heed the fine advice you’ve received yesterday and today - or maybe a Bex, cup of tea, and nice lie down.
It’s distressing to see this central issue discussed in terms of whether J Howard would have done it better or worse, or which party has the better record on “climate change.” This is no time for mushy relativism, either - although the weak seem to find that method of appraising things produces comforting bromides.
Our society (and the literate global society) has been presented with a remarkably comprehensive array of well founded scientific and a priori material. Let’s keep the debate in that territory, and use it to coerce our timid, wordy, self-serving politicians (KR, BN, et al) to produce the tough and reasonable measures it seems ordinary Australians are ready to face up to.
Sadly, it looks as if our governments and the noisy special pleaders from industry and the industrial movements will work together to hold the nation to the comforts of past practice and power.
I notice Penny Wong called CO2 a natural gas a ‘pollutant’ which is a sudden change in rhetoric from her.
I am polluting the planet by breathing….please excuse me!
The science behind anthropogenic global warming is a lot less certain than it was with ozone depletion and the solution simpler and less costly.
Two opposing positions here: http://www.aps.org/units/fps/newsletters/200807/hafemeister.cfm
:http://www.aps.org/units/fps/newsletters/200807/monckton.cfm
For several reasons we should act, but within reason and sensibly. Dr Peter Shergold’s sensible pre-electoin Coalition policy and Rudd’s are not substantially different but the changes are monumental in nature.
Remember Rudd’s backflip after Garrett’s comments during the election campaign when Howard pointed out the silliness of going it alone? Rudd has been playing silly politics instead of seeking bipartisanship. This can only impede the attainment of the ETS goal: to change behaviour such that industries and households become more energy conscious and to encourage alternative low carbon emitting energy production. The budget and this green paper are manifest failures. Tom McLoughlin’s comment is excellent but the Greens are not being any too smart either in this regard particularly Milne.
Thanks Marilyn, that’s pretty much the perfect demonstration of my point. Cheers.
Every crap journalist on the planet wrote this same crap when the CFC debate was on. They were wrong then and wrong now. The petrol makes commonsense in the short term because about 5 million people cannot afford to change too quickly as they are poor. Perhaps the journalists and reporters and other wankers might like to think about that for one minute. During those transitions the governments all over the country will be forced to do what they have avoided for the past 12 years - build public transport.
This is a discussion paper for the people, not a bloody document for the likes of this drivel to be published as “fact”.
Here is something to chew over. In Iraq, Palestine, Bangladesh and places like East Timor and Afghanistan there are very tiny carbon emissions and they live a metaphorical nuclear winter.
Why don’t the journalists stop whining and start thinking. Kevin Rudd cannot fix 12 years of neglect in 5 years without destroying all of us.
Marilyn, you are barking mad, but your capacity to link any policy issue to Iraq is truly awesome.
No … I don’t feel cheated. Sure the government could have done more and accommodated less and probably should have so. I keep thinking how little Johnnie would have handled it had he won the last election and I say thank you for what we have in the Green Paper presented; I say thank you for Kevvie’s role in all that and I say thank you for having Penny Wong looking after it all for us. The news about the environment is so full of scare mongering I wonder why politicians take any notice of the headlines we have on any climate issue. I happen to think this one (climate change) is real though the track record says this is only the second “doom” story with any legs since the world was about to end in the mid 18th century.
The coal industry has had more than enough time to prepare for climate change and the horrors that await us but up here in Queensland we are opening new coal mines and keeping pace with the Chinese opening their new coal fired power plants.It’s as if no one really cares and I recall all those lemmings in that long ago Disney movie.
I despair that the world as a whole will never agree to harmonise their efforts to avoid catastrophe and we’ve just seen evidence of this in the government’s green paper.
Marilyn says: “Iraq is part of this issue you twit”.
I say Irag is this issue!
Nelson was the only one who told it like it was…the carbon pollution that Bush and that weasel Howard wanted!
Vote Brendan Nelson and the Coalition (less those two pussies Turnbull and Greg Hunt) !
Free permits to the biggest polluters - why not free booze to the chronic alcoholics - free ciggies to the 40-a-day smokers - free heroin to the drug addicts?
Why did I ever get my hopes up that things might be different under this lot!!
davidg, analysing the value of an industry to our economy by simply looking at their contribution to GDP doesn’t address the interconnected nature of our economy, and won’t help you forecast the real cost/benefit of closing those businesses down - even in emmissions terms.
the obvious example is power generation, which may not generate a very impressive share of our gdp but is clearly essential to the viability of every other industry - and all of our essential services.
aluminium smelting is a different story - but there would be no net global emissions reduction from aluiminium processers going offshore to countries whose regulatory regime is looser - in fact quite the opposite.
i’m not disparaging the author here, but news media should be speaking to the broader macroeconomic realities of this very complex issue. too often rhetorical position statements like ‘corporate handout’ stand in place of sound and balanced analysis.
Why do we give such massive support to the highest polluting industries that only produce 0.6% of our GDP and only 0.17% of our jobs to the DETRIMENT of industries that produce more than 30% of our GDP and jobs. If the high polluting industries carried out their fake threats and moved off shore they would become more efficient because simple economics would necessitate their new infrastructure would be more efficient.
The single largest emitter industry, is the aluminum industry at 7% of national emissions from just 6 smelters, but it is only contributing 0.6% to GDP (Non-ferrous = 1.32% of GDP) (Aust Mineral Stats June 07 ABARE page 6)
Bernard that was ridiculous. I have never been barking mad and Iraq is part of this issue you twit. We know they have massive oil resources but we blew up the country. Take a good look at how they live. Is that what the wankers in the press gallery want for us?
I used to work in that air bubble place so I know what they do, how they decide the lines and their complete disconnect from the world - they work in a place with cafes and restaurants on tap, with massive energy use and even more massive aircon use. The long corridors are almost 1 km long, I worked there during the CFC debate.
Now how about all the people like Pearse, Hamilton, the press gallery and others tell us what they have done to reduce their own emissions, how the hell cutting down trees to print books on does anything much, why they don’t put their books on CD’s for perusal on PC’s which are much more efficient than cutting down forests and how often they drive, fly all over the place and so on.
I practice what I preach mate. My electricity bill states my tonnage of emissions each year. Less than 2 tonne.
I don’t drive, have few appliances, do my shopping with a trolley and I conserve water and recycle all paper and plastic products.
So Bernard, what sort of bit do you do because government’s can only legislate, they cannot control the behaviour of the lazy.
Kapeesh? Do not ever again tell me I am barking f………..g mad, I have been at this conservation stuff since the Menzies era turned the place I grew up in into a desert that grows bugger all these days but has been recycling lawn watering water for 50 years.
Honest to god, if you want to call someone mad, find a press gallery journalist.
“But even with a lower cap to put serious pressure on carbon prices, the scheme is unlikely to have a significant impact. It is, at best, a two-thirds scheme, because up to 30% of Australian emissions units will be handed out free to our biggest polluters.”
While it may seem irksome to assist the biggest polluters in this way, this is simply a form of wealth redistribution and will have no impact on the impact of the scheme. As long as the penalty for emitting without an emission unit is sufficiently harsh, the cap will be met (or very close to it) regardless of any rebate scheme. What the schemes may do is change where the behaviour changes are made. If excise reductions offset petrol price changes and car driving is unaffected by the scheme, the changes will be made elsewhere. But a cap is a cap: if your concern is to reduce emissions, then the rebates are irrelevant. If your concern is some notion of fairness (or retribution?), then that’s a different matter.
Yesterday’s report blithely asserts that an emissions trading scheme will touch “around 1,000 Australian companies in total,” or “less than 1%” of Australian businesses. “Ever get the feeling you’ve been “… lied to?
Sooner rather than later we’re going to have to move to Nuclear power, there is no safer or better alternative. Coal just aint King any more
Give the bloody thing a chance. Anyone who thought the government, and I mean any goverment could jack up petrol and power prices in one fell swoop needs a reality check. Politics is the art of the possible. The softly softly approach being taken at the moment ,hopefully will ensure, the carbon trading system is accepted in its early stages by the punters out in voterland. Incremental adjustments can be brought in later. Meanwhile the hair shirt brigade might focus their attention on the options for power generation in the future. There seems to be lot of misplaced faith out there in clean coal.