Home > Environment, Oz Politics > Howard rolls the dice

Howard rolls the dice

June 7th, 2007

I was surprised to see, in today’s papers, that Howard has committed himself to the idea of a “Sydney declaration” on climate change, coming out of the APEC meeting in September. It seems to me that there are an awful lot of potential traps for Howard here, and relatively long odds against producing something that will stand up to scrutiny over a month-long election campaign. In particular, any understandings Howard may have with either Bush or Canadian PM Harper might turn out to be obsolete in a couple of days when (and if) the G8 meeting produces a statement on the topic. More when this happens.

In the meantime, my piece in today’s Fin (over the fold) covers some related topics

Risks in solo approach

After being stuck in limbo for a decade following the election of the Howard government, the key issues in the debate over climate change have been resolved with surprising speed over the past year.

A year ago it was evident that the political usefulness to the government of attacks on climate science had come to an end, and that the only feasible policy was to put a price on CO2 emissions either through a carbon tax or through a cap-and-trade system (Climate denial has had its day, AFR, 6/6/06).

Still, there was vigorous resistance. Delusional conspiracy theories that the whole body of climate science was a hoax orchestrated by environmentalists in search of world domination continued to get respectful treatment. The idea that the whole problem could be solved by technological innovation, wished into existence without any price incentive, remained official policy. And even when prices and trading were accepted, the idea of a target for emissions reductions remained beyond the pale.

Now, suddenly, everyone is agreed, at least in principle. Even The Australian newspaper, long a source of misinformation on all aspects of the problem has suddenly discovered that ‘the science of climate change has become more widely known and better understood’ and that emissions trading represents ‘the free market way to save the world’.

All that is left now are the disputes over targets and instruments that are the stuff of political business as usual. As always, such disputes produce lots of claims ranging from misleading to downright dishonest. The current fuss about the suggestion of a 20 per cent cut in emissions by 2020 shows all these characteristics, but also indicates that the government, and the PM’s Task Group have badly misunderstood the international environment.

The 20 per cent figure comes from two different sources. In 2005, when he was still a backbencher Peter Garrett suggested that a 20 per cent cut in emissions by 2020 would be a good target. More recently, EU countries have committed themselves to a 20 per cent cut relative to 1990 emissions also to be achieved by 2020. There’s a big difference between the two. It’s the latter proposal which has formed the basis of recent scare stories.

The PM’s suggestion that we could only meet the EU target by taking all cars off the roads and switching to nuclear power is wrong, though it’s the natural interpretation of the misleading way the issue was analyzed by the PM’s task group. Nevertheless, it would indeed be difficult for Australia to meet the EU commitment.

Under the Kyoto protocol, the EU committed to an 8 per cent reduction on 1990 emissions by 2012. Despite failures by some member countries, the EU as a whole looks likely to meet this goal. Furthermore, having gone through the task of setting up an emissions market, making plenty of mistakes along the way, the EU is well place to find the additional 12 per reduction implied by its target.

By contrast, Australia secured a target that allowed an 8 per cent increase in emissions and will meet this almost entirely through a once-off reduction in land clearing. So, to catch up with the Europeans we’d need a 28 per cent reduction, while, thanks to the lack of any real action for the past decade, our ‘business-as-usual’ trajectory is a 10 per cent increase.

But this raises an obvious question about the government’s position, which seems to have been overlooked. Having failed to ratify the Kyoto treaty, we will enter negotiations for arrangements after 2012 on the same basis as everyone else, namely 1990 emissions levels. As the Task Force has unwittingly pointed out, we are on the edge of giving away the benefits we fought so hard to get in 1997.

This is just one of a number of areas in which the Task Group and the PM, seem to have lost the international plot. The suggestion that we should not set medium term emissions targets until 2010 meets some obvious needs in terms of domestic politics. But the EU, Japan, India and China have all agreed to finalise post-Kyoto arrangements by the end of 2009. In all probability, they will be joined by a Democratic US Administration after the next US election.

The idea of pursuing an ‘Australian solution’ independent of the rest of the world, is a dangerous fantasy. Unless we ratify Kyoto as soon as possible, and rejoin the international mainstream, we risk finding that the rest of world has reached an agreement without us.

Categories: Environment, Oz Politics Tags:
  1. timboy
    June 7th, 2007 at 17:12 | #1

    Nice op ed article today

    it went nicely with my coffee and roll at lunch :D

  2. conrad
    June 8th, 2007 at 09:06 | #2

    I think worrying about what the government does now and then partially justifying that with the high probability the US will get a new Democratic Adminstration is now sounding a little like attacking a strawman, given that Australia is also rather likely to get a new government with rather different ideas to the present(or perhaps I’m just misjudging the possibility of the Howard government getting the boot also).

  3. observa
    June 8th, 2007 at 13:08 | #3

    “The idea of pursuing an ‘Australian solution’ independent of the rest of the world, is a dangerous fantasy. Unless we ratify Kyoto as soon as possible, and rejoin the international mainstream, we risk finding that the rest of world has reached an agreement without us.”

    Rubbish! I’ll let the Carbon Tax Centre Blog spell out a clear alternative-

    “A carbon tax simply imposes a tax for polluting based on the amount emitted, thus encouraging polluters to clean up and entrepreneurs to come up with alternatives. The tax is constant and predictable. It doesn’t require the creation of a new energy trading market, and it can be collected by existing state and federal agencies. It’s straightforward and much harder to manipulate by special interests than the politicized process of allocating carbon credits.

    It’s been a slow process of education for me… What brought me around to my pro-tax position is, ironically, my libertarian streak. The essential libertarian insight is that complexity and bureaucracy are invitations to corruption. Big business will try their best to game the system. We know that. Politicians will be subject to lobbying and financial support. We know that. So the best route is the one that minimizes complexity and bureaucracy.”

    Let Iemma and Bluescope Steel be the warning to us all. Furthermore let’s not hear any more nonsense about how a Howard Govt has had a decade to deal with GW. I didn’t noticed too many Arnies among the Labor Premiers in that time, despite all the born again Pledgers among them nowadays.

  4. observa
    June 8th, 2007 at 14:34 | #4

    All at once now….”Praise the Lord and pass around the emissions” http://news.bbc.co.uk/2/low/business/6720119.stm

  5. Smiley
    June 9th, 2007 at 11:49 | #5

    let’s not hear any more nonsense about how a Howard Govt has had a decade to deal with GW

    To use your own words observer… Rubbish!

    It’s not like the Greens were sitting on their hands and doing nothing. And even though they were probably not as vocal as the Greens, Labor’s policy has been to meet the Kyoto targets.

    It’s been a slow process of education for me…

    Yeah, its hard to talk to people who are dogmatic (almost) religious in their outlook. You know, the economic rationalist types.

    Be honest observa, the dissinformation was intentional and culpable. In the same mold as the tobacco lobby.

    The “I had no idea” argument does not stand up. Liberal appologists are just a bit scared. It’s time for a bit of tough love.

  6. observa
    June 10th, 2007 at 21:39 | #6

    Smiley,
    My point was Howard was not alone in failing to ameliorate global warming over the last decade. Which is the worse crime? To be the non-believer or skeptic and do nothing, or be the evangelical convert/eraly adopter and achieve precisely nothing, like State Premiers and Kyoto signatories over the same period?
    How about the British Labour Govt who agree that Kyoto caps have not reduced emissions, whilst raising electricity prices 7%,
    “But the Minister for Climate Change, Ian Pearson, told File on 4 that the carbon trading scheme has been an administrative success..” I wonder who Sir Humphrey Appleby asked to work that pearler out? The electricity companies? What would you expect them to say to the question-’Are you happy with the administrative success of the scheme?’ On a scale of ‘Bloody ecstatic’ to ‘Not happy Jan!’ Sheesh, what a no-brainer. However, the economic rationalists mustn’t worry because ‘Phase2′ (presumably Left/Greenspeak for the Surge)is coming.

    So let me flesh out where we’re up to at present. The Milky Bar Kid was on national TV today, promising us all a petrol price commission, presumably because they’re ripping us off at the bowser, particularly every long weekend if you listen to the economic literati. Never mind about a dozen enquiries to the contrary and the ACCC on the job, or the fact the ACTU with its ‘Solo’ effort eventually came to the same conclusion. OK, let’s suppose Milky is right. Then why on earth would he want to give out permits to screw under Kyoto type measures to these same screw merchants? Furthermore he craps on about how the poor battlers can’t afford these petrol price rises, when he knows full well, signing on to Kyoto will raise the price of everything from their petrol to their gas and electricity bills.

    That’s the trouble with us economic rationalists. Too bloody rational for our own good, which is why I want to see wall to wall Labor after the next election and all those promises fulfilled. One giant warm fuzzy love-in, as they and their Big Biz/union mates solve GW, and Milky and the Premiers fix everything from the Murray Darling to Education, Health, Welfare, no child living without fast Youtube, etc, etc. The last thing I want to see is any Liberal Govt responsible for introducing Kyoto type measures here. Better to let Milky Bar and Co have their heads as one term wonders and then back to commonsense for the next decade or so.

  7. observa
    June 10th, 2007 at 21:44 | #7

    And what the hell, after 18 months of it, the punters might be begging for Supply to be blocked and a fresh election called.

  8. Smiley
    June 11th, 2007 at 16:26 | #8

    And what the hell, after 18 months of it, the punters might be begging for Supply to be blocked and a fresh election called.

    observa, I honestly think that you are an angry, angry person. As MarkTwain once said:

    History doesn’t repeat itself, but it does rhyme.

    Maybe this is a more appropriate analogy for our times.

    How about the British Labour Govt who agree that Kyoto caps have not reduced emissions, whilst raising electricity prices 7%.

    Yes the price of energy needs to go up so that people value it more, instead of wasting it. Obviousely 7% hasn’t changed habits much. Maybe 10-15% will see a change. Lets hope that appropriate rules are put into place to make sure that the extra money is going into more efficient and renewable industries and not just lining the pockets of the wealthy.

    You seem to be forgeting that one of the core principles of economics is efficiency. What’s efficient about using a non-renewable resource at a rate that you know will deplete it within your own life time. Its like starting a business when you know one of your core materials is about to run out (or become very expensive).

    If you’re my age (X-gen), then life is going to get a lot harder once the demand for oil starts outstripping supply (if it hasn’t already started). Wars are fought over such things.

    To be the non-believer or skeptic and do nothing, or be the evangelical convert/eraly adopter and achieve precisely nothing…

    Really! You use terms like “evangelical” for people who use measurable, repeatable scientific facts to back up their claims, unlike your mesiahs like Andrew Bolt, who operate on the edges of reason and who have been proven time and time again to be making it up as they go along. Sounds like the Catholic church to me. Infact, I would suggest that you could almost equate the deniers to the Easter Island bird god worshipers.

    To sum up, your use of language is really quite twisted.

  9. Smiley
    June 11th, 2007 at 16:31 | #9
  10. observa
    June 11th, 2007 at 20:16 | #10

    “Yes the price of energy needs to go up so that people value it more, instead of wasting it. Obviousely 7% hasn’t changed habits much. Maybe 10-15% will see a change. Lets hope that appropriate rules are put into place to make sure that the extra money is going into more efficient and renewable industries and not just lining the pockets of the wealthy.”

    Basically we agree here, except about that ‘hope’ bit. You hope while I’ll argue long and loud for govt(and opposition) to be open and honest about the need for the price of carbon to rise substantially and for a direct carbon tax to contribute to general revenue, rather than line the pockets of the wealthy, like Kyoto is currently doing. (I suppose you could argue some of the juicy economic rent involved in emission handouts, to big corpora, could find its way back into the battler’s hands via their super funds, but that’s a bit of a long bow)We can then argue about the overall level of taxation, or what to spend it on.

    There is an evangelism for Kyoto cap and trade now, which is not justified by outcomes to date, nor the inherent problems of such schemes. There is a great deal of denial about that. Still, we can all say the invasion of Iraq was a military success eh? As for the subsequent administrative shortcomings, well just be patient and wait for ‘Phase 2′ eh? ;)

  11. observa
    June 11th, 2007 at 22:57 | #11

    An honest motoring organisation man. Well I’ll be…!!!!
    http://www.news.com.au/dailytelegraph/story/0,22049,21884707-5005941,00.html

  12. June 12th, 2007 at 01:54 | #12

    Yes observa, great quotes those:

    ACCC chairman Graeme Samuel has urged the Government to introduce jail sentences for price-fixing.

    Mr Samuel said the process of introducing jail sentences for hardcore cartel activity was important.

    “It changes the cost-benefit analysis very significantly,” Mr Samuel said.

    “If you get caught now you will face penalties and fines, not five years’ jail.”

  13. June 12th, 2007 at 01:59 | #13

    Another great quote:

    Following last week’s petrol spike, which saw the price in Sydney peak at to $1.43 cents a litre, Labor said it would establish a national petrol commission to monitor and investigate price gouging.

    Prime Minister John Howard has promised to meet the Australian Competition and Consumer Commission watchdog (ACCC) this week to offer it more powers.

    So once again hoWARd is playing catch up. Will it be a “non-core” election promise?

  14. observa
    June 12th, 2007 at 19:32 | #14

    Hmm, the last link I provided has changed articles. Can happen with news items sometimes. It was quoting the RACV who was basically saying a pox on both party’s houses re the usual long weekend hand wringing and if they want to bring petrol prices down, there was always excise to be cut.

  15. observa
    June 12th, 2007 at 19:37 | #15

    Actually the new linked article adds emphasis to what the RACV are saying, as the parties squabble over who is the least pregnant on excise. Truth is they both want to give the Oilcos the cap and trade system to jack up prices in the future anyway. What hypocrites.

Comments are closed.