Yesterday The Climate Institute released a policy brief Coalition Climate Policy and the National Climate Interest which not to mince words is a complete crock, will increase emissions and ruin our reputation on climate matters in the world. The report, based on modelling by Sinclair Knight Merz-MMA and Monash University’s Centre of Policy Studies, was then declared by Greg Hunt to be “one of the silliest reports” he has ever seen prepared by “a clear partisan political organisation” which backs the ALP.
Giles Parkinson’s article The black hole in Tony Abbott’s frat party climate policy gives a comprehensive account and I commend it to readers.
Abbott in response to Rudd’s bringing forward of the ETS gave his memorable opinion on such trading schemes:
“It’s a so-called market in the non-delivery of an invisible substance to no-one.”
Sara Phillips finds this curious since
the financial markets do a lot of trading in non-deliveries of invisible substances to no one. Water-front mansions in Abbott’s electorate of Warringah have been built on the profits of those trades.
Phillips again:
And then there’s his comment that everyone else in the world has moved away from carbon pricing. This statement is flatly incorrect.
However she sees Rudd as running scared on climate when the majority of voters still want a leader who is strong on climate change. She sees his ETS policy as a move to neutralise the price on carbon as an election issue. Her final summation is:
Rudd should remember that he was propelled to power in 2007 partly because of his stronger stance on climate change than John Howard. His expulsion from the top job was in part because he softened his climate approach.
Moving faster to the ETS looks like running scared, when Australians have historically rewarded those who have stood firm on climate.
By dancing to Abbott’s tune, Rudd tangos to a man whose climate statements are incorrect. It’s not a good look for either of them.
Back in May Greg Combet termed Abbott’s proposal to remove the price on carbon immoral:
“All nations at the moment are working on an agreement to be concluded by 2015 to reduce greenhouse gas emissions and take account of the scientific advice.
“With all of this policy that is working, that is environmentally effective, that’s economically responsible and socially fair, and what’s more is essential if we are to tackle climate change and protect the interests of future generations, Mr Abbott’s position on abolishing these measures is completely immoral.”
Remember him?
I think Phillips is being a bit severe on Rudd. He inherited a policy from Gillard and the group of parliamentarians she worked with which provides a robust and flexible platform from which to move to increase our effort in the future, as the need becomes obvious and accepted. In particular the institutional framework, the Climate Commission, the Climate Change Authority and the Clean Energy Finance Corporation, all to be swept away under Abbott, are to be kept under Rudd. The whole package, termed Clean Energy Future, a label which didn’t stick, was light years ahead of Rudd’s CPRS and whatever Gillard took to the 2010 election. The CPRS did not provide a flexible platform for enhanced effort; indeed it secured the place of fossil fuels into the 2030s.
Given the mood of the electorate (swinging voters in marginal seats) it appears the liars and clunkheads will prevail here too. Once again Australia will become an international laughing stock.
There are a number of issues with connecting Australia to the European ETS
• It is not a real market but the price is essentially set by the number of permits allowed which is a political decision. So essentially Australia’s price will be set by the European parliament and Council of Ministers – which makes our parliament look like a well-oiled machine. Most Europeans do not want the European parliament doing this
• There has been some very large rorting of the European ETS in the past
o Chinese and Indian creation of extra greenhouse gases so they can be paid to reduce the gases
o GST rorting between member states
o Abatement certificates supplied to questionable projects
o The cost have driven a number of industries out of European to countries where there are less regulations so greenhouse gases increase
o Sometimes it becomes the situation that it is cheaper to close a factory and make money from the abatement certificates than it is top actually build products used by Europeans
• The Europeans give abatement certificates to any trade exposed industry that are competing against Australia in the European and World market. So if the price were to increase dramatically to say $70 Australia industries would be the big loser as we will be paying a tax to the Europeans to support their manufacturers to compete against our manufacturers, such as
o Car Manufacturing
o Wine
• International crime syndicates controlling renewable projects in Italy, Spain and Greece
• Payments for abatement will now be funneled out of Australia into European market so that will be a net outflow to the economy
• European use of greenhouse gases have not decreased as they are not including their consumption of goods manufactured outside of Europe
Now I am not saying we should not do this but be aware that this is not necessarily a great plan. Reduction in consumption is the only real solution along with renewable energy and development of better storage for energy
If Greg combet really did say that removing the carbon price is immoral it tells me more about Greg’s limited capacity to think analytically than the morality or otherwise of a carbon price.
A similar comment about capacity to think could be made when Greg Hunt tries to defend the coalitions particular version of direct action.
The reality is that the carbon price is not the only way to drive climate action. For example, consider things that have actually worked in Australia:
1. Regulations on lighting efficiency.
2. The RET has been the main driver of large scale renewable power investment in Aus. It is one of the few emission trading schemes in the world that actually works. It is a hybrid scheme that uses market forces to put a price on both clean and dirty. An RET style scheme is a logical way to drive down emissions per km for new cars.
3. Various FIT schemes have driven investment in rooftop solar both here and overseas. FIT schemes put a price on clean, not carbon. FIT schemes need to be changed so that market forces rather than bureaucrats are used to set the contract FIT.
4. Increases in the price of power and fuel for reasons other than emission reduction have helped reduce emissions.
At the moment both Rudd and Abbott are peddling climate policies that will produce little real increase in climate action over the next three years. Abbott is even talking about watering down the RET scheme.
John D, I thought Rudd’s advancing the ETS was unnecessary. Many businesses say that what they need is policy consistency over time and the carbon price, whatever one thinks of it, was bedded down.
Other than that Rudd is retaining the policies put in place under Gillard, and should be credited with that rather than being seen in any way as equivalent to Abbott in policy terms. That’s my view!
Bolt1493, ETS schemes typically require so many conditions attached to make them work as policy makers intended that they become very artificial as markets and inevitably reflect political interference.
Eventually they may be required but I would have favoured introduction in concert with our trading partners so that they don’t become trade-distorting.
I would have preferred that we stayed out of the EU system until it solved its credibility problems.
Brian: I said when Rudd got in that he should not change the carbon tax in part because of need for investor certainty. (The other was that watering down stopped him from attacking Abbott over all the lies told about the carbon tax. )
Cutting the tax has highlighted the sovereign risk of investing in renewables on the basis of schemes that can be cancelled or fiddled with.
Renewable investors need the certainity that comes fom long term contracts.