Those wretched economists are at it again — spoiling a good party with some cold hard facts. Today the cold hard facts relate to global warming and the messenger/economist is Alan Oxley:

politics is the enemy of the good. Tackling climate change requires a global consensus. There is none at present. Although the federal Government and the Opposition aspire to a new global consensus, international initiatives require a good measure of bipartisan support. The imminence of a federal election will rule this out. Climate change has become a partisan issue.

The Prime Minister’s emission trading taskforce report on a system of cap and trade to control emissions of carbon dioxide is due later this week. All state governments and the Opposition say the system is necessary, but most people do not know what this means … The political rhetoric about climate change is misleading people to believe that global warming can be stopped. None of the measures proposed by the Green groups, Labor or the Government will do that. The only way to reverse the increase of emissions generated by the human race is to reduce the world’s population…

Be worried, be very worried.

Those masochists who like to worry should also ask “When will the equity bubble burst?” In Australia, as in many other countries, we have seen unprecedented hikes in equity prices as well as in house prices, the price of art and of assets in general.

Low interest rates are a primary reason for this. Rates reached a nadir in 2003 and have not risen much since despite the powerful global boom as consumer price inflation is seemingly under control.

Soon it will be seen that unsustainably low prices of energy globally allied with a zero price on carbon emissions is part of the story of the current unsustainable global boom.

The canary in the coal mine is China, where growth is strongest and where horrific pollution has been so far largely ignored. More on the China bubble here for Henry’s Goldmembers.

More reading at Henry Thornton.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey