20 December 2008

So much given without public policy purpose, by so many, to so few.

the Prime Minister is talking the talk but not walking the walk, he doesn't really beleive in the capacity of green jobs and small scale energy systems and efficiency measures and our future role in renewable technology. The treasury models are static, after all. The policy seems to be to provide massive public assistance for the big political players, first and formost. Cars, Coal and Construction are getting free kicks at the expense of the renewable sector....

Even the master of deregulation Garnaut the climate change economist... is pissed.

"THE national climate change adviser, Ross Garnaut, has damned the Rudd Government's carbon policy as a threat to the environment, the national budget and global prosperity.

Professor Garnaut has called on the Government to make urgent changes to the policy that the Prime Minister, Kevin Rudd, announced this week.

Writing in today's Herald, Professor Garnaut urges the Government to keep open the option of a more ambitious cut to carbon emissions to keep alive the prospect of averting dangerous climate change.

While Mr Rudd has limited Australia to a maximum cut to emissions of 15 per cent by 2020, Professor Garnaut writes "the Government should keep the 25 per cent option on the table".

He argues: "Australia cannot play a strongly positive role in encouraging the global community towards the best possible outcomes if it has ruled out in advance its own participation in strong outcomes."

The Government could restore this option without unpicking its overall package, he says.

But Professor Garnaut reserves his toughest criticisms for the Government's plan to compensate the biggest polluters.

"There is no public policy justification for $3.9 billion in unconditional payments to [electricity] generators in relation to hypothetical future 'loss of asset value'.

"Never in the history of Australian public finance has so much been given without public policy purpose, by so many, to so few."

The cost to the taxpayer was likely to blow out further over five years, posing "a large risk to public finances", he writes.

Professor Garnaut is even more alarmed at the dangers posed by the Government's decision to issue free carbon permits to industries exposed to international competition, such as steel, chemicals and paper and pulp.

He writes that this is an act of protectionism that threatened to provoke other countries to follow suit.

He likens the potential to the notorious US protectionism that deepened the Great Depression of the 1930s.

Professor Garnaut was an adviser to the former prime minister Bob Hawke and a key voice in arguing an end to protectionism in the 1980s.

Mr Rudd and the premiers commissioned him to write a report on options for responding to climate change - the Garnaut Review. The final version was delivered at the end of September.

Professor Garnaut says the Government had acknowledged there was a principle involved in compensating trade-exposed companies - levelling the playing field to allow them to compete against firms from countries which had no carbon restraint.

But the Government had failed to apply the principle: "The consequences of not having a principled basis for the issue of payments are profound."

The Government, in a green paper in July, initially proposed giving these industries free carbon permits equal to a maximum of 20 per cent of the value of all permits issued.

He endorses these as "reasonable upper limits to principled initial claims".

"By contrast, the white paper's approach would see the proportion of permit value given free to trade-exposed industries rising to 45 per cent on conservative assumptions."

Under some conditions, the share could rise as high as 75 per cent, he calculates.

Fixing this was "an urgent matter for the restoration of global prosperity".



Bron Suchecki said...

Have a look at "The Carbon Causes Global Warming Sceptics Handbook" http://joannenova.com.au/globalwarming/scepticshandbook1-1.pdf The evidence carbon is behind global warming needs to be rock solid before we impose costs to the economy.

kevin said...

Its a risk management issue. Are the few credible skeptics in the world going to write a CDS (Climate Default Swap) to provide the ten trillion dollar needed to cover their position. No, so we all do what we can knowing that changes to the chemistry of the oceans and excessive dependance on carbon based energy is folly anyway. The Artic is expected to be ice free in summer in five years, all over the world Glaciers are receeding.
It is hardly a question that responds to simple denial, except in the heads of those that inhabit conspiracy wonderland, where any international tax based policy response to any problem (ozone depletion, sulphur dioxide cap and trade) was always greeted with howls of derision.
I have taken a carefull, unrushed approach to the problem and any intellectual deficits I see in the IPCC consensus report relate to it being a conservative consenus document and mild compared to the completely non peer reviewed psuedo scientific political values based assertions of the global warming denial industry.
Bron the assertion in your last sentence is absurd, effective risk management involves accepting that some expenditure is justified to mitigate even small risks, otherwise who would buy insurance.
While the subject is not central to this blog, this bloggers position is that global warming denial is a bankrupt position. The removal of the vast hidden subsidies on the current pattern of energy generation even excluding the right to externalise all atmospheric carbon emissions would go some way to regressing thid balance.

I hope my position is clear and would recommend this in response: