Apr 112011

Is the process of Climate Change heavily influenced by human injection into the atmosphere of greenhouse gases as a result of combusting fossil fuels, amongst other thing? If we have the ability to address this unrestrained release of previously stored gaseous products, should we not do so? Does cost of not doing so really enter into the equation?

Three questions which Climate Change deniers have never and doubtless will never attempt to address. Peer reviewed scientific opinion, such as that currently being aired at CSIRO’s Greenhouse 2011 conference in Cairns, is in the affirmative. Human beings have had, and continue to have deleterious impacts on the global climate through profligate use of fossil fuels used to generate energy for business, industry and domestic power consumption. If the rational thinking person stops to consider that coal, for example, is derived from plant material buried under deep rock strata for 300 to 360 million years, and is in fact stored atmospheric carbon from a time when the Earth was a lot warmer and wetter, it stands to reason that digging up stored atmospheric carbon and burning it will release the Carbon, Sulphur Hydrogen, Oxygen and Nitrogen back into the atmosphere. An atmosphere which is entirely different from the time period from whence said plant material came, when it was stored at that point as….well, plant material. It’s a no-brainer, as American’s would say.

Do we – humanity – have the ability technologically speaking to address the damage we’re doing to the thin sheath of atmosphere? Indeed we do. To be sure, we cannot simply cease the use of fossil fuels tomorrow, or next week, or even next year, but we do have the ability to start lessening our reliance on fossil fuels as the principal energy generation source for our industries, our light & warmth. The methods are legion and I won’t bother to enumerate them again here. Suffice to say, that we do have access to base-load equivalent alternate energy generation sources. What we lack – and I use the collective ‘we’ here – is the will to engage them.

I spotted this Op-Ed in The Oz today, and thought to myself, “what an obsequious, self-serving collection of strawman arguments posing as authoritative economic pontification”. Actually, I didn’t. I immediately thought, “what a load of shit!”. It speaks broadly about the cost of addressing Climate Change via the current government’s plan to create a carbon pricing mechanism, whereby pollution from burning of fossil fuels will be penalised, and adoption of alternative behaviours rewarded through the trading of pollution permits from those who need less of them, to those who need to buy them. Emissions Trading Scheme, Carbon Pollution Reduction Scheme, Carbon Marketeering call it what you will. It’s simply a means of encouraging behavioural change among those polluters who offend worse, funding R&D and compensating the end user for the inevitable commodity price rises on an ‘as needs’ basis. It’s a very simple concept, yet one which the deniers and general nay-sayers simply refuse to contemplate. The author of the linked Op-Ed being one such. Let’s examine.

On the ABC’s Insiders yesterday, Finance Minister Penny Wong said: "This is not a tax that people pay; this is a tax that polluters pay." That sounds all very reassuring, until we remember that Treasury thinks that household expenditure will go up by $860 per year for a $30 a tonne carbon tax.What many people don’t know is that the carbon tax will have to be much more than $30 a tonne to be effective.

Red-Herring, Strawman, call it what you will, but this is quite frankly what the author accuses the government of. Misinformation. The $860 figure is derived from Treasury modelling. We have no idea what other variants Treasury used in their modelling, ergo the number is a furphy. Simply a figure latched onto by the media in a bid to promote something….anything….as news in the carbon pricing debate. That government hasn’t sold their initiative at all is another issue entirely. And who says that the pricing mechanism needs to be greater that $30/tonne? The author provides absolutely zero rationale for that statement.

The reality is that while big polluters will have to pay money to government, the burden will fall on people. Then there is the notion that households will be compensated. Not all households, mind you; only low and middle-income households.People should be worried that the government won’t define what middle-income households are until late in the piece. Many households are going to be unpleasantly surprised.

No-one in government has ever hidden the fact that end users, tax-payers, which means you & me, will bear the brunt of downstream price rises in electricity, possibly fuel (the poor sales job again) and every other consumable commodity reliant upon energy generation up-stream. That’s a logical extension of any price rise in public utilities. Yes, low-to-middle income households have been promised compensation, indeed in some circumstances, over-compensation it’s been said. I question the author’s unspoken outrage that ‘high-income’ households should also receive compensation. Pricing carbon is all about behaviour change. Logically, those who can most afford the use of energy, are also those least likely to change their behaviour. Call it a class conscious observation if you wish, but I’ll stand by it. If my household is (highly unlikely) deemed to be ‘high-income’ I’ll happily wear the cost because I fear for the planet’s future and more so, that of our species. Pity a few more deniers wouldn’t think likewise.

The government is hoping the introduction of the carbon tax will be similar to the introduction of the GST. When the GST was introduced there were compensating tax cuts and increased welfare payments. This compensation has been permanent. True, the GST raises more revenue than expected, but a whole raft of inefficiencies were eliminated and replaced by a more efficient revenue system.Consumers very quickly got used to the GST and there is broad acceptance that the GST was a worthwhile and valuable reform. It is unlikely something similar will happen this time around. The GST is a tax designed to raise revenue. The carbon tax is designed to change behaviour: revenue is a secondary and, if the policy is successful, a temporary consideration.Yet most of the discussion has revolved around how to spend the revenue.

Now this is a genuine Strawman claim. Conflating an information poor concept like a price on carbon to a now 11 year old reality being the GST. Here we see the direction turning sharply toward the economists favoured subject, cost. When the GST came in there was compensation. Very selective compensation and I’ll warrant that you, dear reader, just as I, never experienced that compensation. Everything, including fuel, became more expensive, despite the cut in government excise. The GST became, in many cases, a tax on a tax. Petrol, alcohol and tobacco to name three consumer commodities. As for there being ‘broad acceptance that the GST was a worthwhile and valuable reform’ I call bullshit!The GST – essentially a taxation reform fully intended to replace a plethora of direct and indirect taxes – was bastardised for political considerations. And as for the carbon pricing regime supposedly devolved into a discussion about the spending of the income, hasn’t that been what the GST distribution has been all about since day one? Which State gets what, why & why not?

I’ll end with this passage which, to me, highlights the complete dishonesty of the whole piece:

The policy objective is to cause a substitution from low-cost but dirty energy production to higher-cost but cleaner energy production. In plain language the policy objective should lead to a permanent increase in household prices and fewer carbon emissions. But if successful, the revenue will decline, meaning there will be no money to pay compensation. There just isn’t e
nough money to finance this scheme.

‘Higher-cost but cleaner energy production’….Initially, I’m sure the cost of development of alternative energy generation sources like wave generation, hot-rocks, solar thermal, photovoltaic, wind, tidal and who knows how many other renewable alternative energy sources will be higher than burning coal & flicking a light switch. However, I challenge anyone to name me a technological advance which hasn’t become cheaper, more efficient & far more widely available as the technology matures. This entire cost issue is simply more of the same conservative bogey-man tactic, fear and loathing. Promoted, as anything related to cost is always promoted, by an economist. A very disingenuous economist. The whole article is, as my initial assessment justified, bullshit! The only illusion we can’t afford in relation to the address of Climate Change is the illusory scarecrow of cost. Taking mediatory action now, while the planetary climate is still tolerable and likely to remain tolerable into the next century IF we act now, is a course of action which cannot be logically argued against. To claim ‘it costs too much’ or ‘I can’t afford it’ when compensation is part and parcel of the carbon pricing concept, simply doesn’t hold any water. As to just what the bogey-man cost is, and will be over time….to paraphrase what Daryl Somers said when advertising Northern Territory tourism….if we never-never go, we’ll never-never know.

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