Home > Environment, Oz Politics > How to get an ETS through the Senate

How to get an ETS through the Senate

July 25th, 2008

After the contortions of the last few weeks, I think it’s pretty safe to draw the following conclusions
(i) The Liberal Party is all over the shop on climate change and is going to stay that way, at least as long as Brendan Nelson remains leader
(ii) Whatever legislative proposal the government comes up with, the Opposition will oppose it

The first is pretty obvious. While the outright delusionists kept quite in the leadup to the election, and for a few months afterwards, they’re getting louder again, and Nelson is already pandering to them. On the other hand, the small but important group who actually want to do something, most notably Hunt and Turnbull, have nothing to lose by saying so. The great mass whose instinct is to do nothing, but who can see the political risks of this approach (of whom Nelson is a prime example) are swinging from one side to the other.

On the second point, in a situation like this, it’s natural to fall back on the maxim ‘the duty of Opposition is to oppose’ and that’s what I expect will happen in the end. That leaves the Rudd government with a number of choices, some of which must be made in advance.

The most aggressive response would be to move forward rapidly with legislation close to the model in the Green Paper, with the expectation that neither the Coalition nor the Greens would support it. A three-month wait and the same legislation would provide a trigger for a double dissolution. This seems appealing in a lot of ways. The risk of defeat in the Reps is small, and a more tractable Senate highly likely. On the other hand, Rudd is generally cautious.

The main alternative is to attempt a deal with the Greens and independents, with the threat of a double dissolution held in reserve. It’s hard to tell how this would turn out. The best outcome, in terms of a combination of political salability and environmental effectiveness, would be one where the government maintained compensation for households and at least some for industry, and secured Green support by the adoption of reasonably stringent targets for emissions reductions.

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  1. TerjeP (say tay-a)
    July 25th, 2008 at 18:43 | #1
  2. chrisl
    July 25th, 2008 at 20:18 | #2

    At the very least ,let’s have a debate about it.
    Is it the best model?How much will it cost? Will it work? How will we know if it has worked?
    We debated the GST for 15 years and the Labour Party went from support to opposing it and back again.
    Paul Keating famously said of the GST, “If you don’t understand it, don’t vote for it”
    What would he make of an ETS?

  3. BilB
    July 26th, 2008 at 06:37 | #3

    I think that the “b” option is the most likely, with the process being drawn out for as long as it takes for public pressure to force the Coalition (what an inappropriate name for their party/rabble) to produce some defectors.

  4. July 26th, 2008 at 08:27 | #4

    fortunately, this doesn’t matter: without a cap on population growth, no cap on carbon emissions is likely to prevent ecological catastrophe.

    this is not going to happen even here in oz, much less in india. china is showing a way to do it, but politicians in the west have not subscribed to party discipline as they do in china. the various factions which contend for power in western nations can not afford to talk about population control.

    it really isn’t fair to laugh at politicians. they are practicing a trade, as well as they can. even brian nelson is more important, and more powerful, than any of his detractors on this site. indeed, politicians as a class are right to be disdainful of civilians, who do not understand the mechanics of their own society.

  5. observa
    July 26th, 2008 at 08:44 | #5

    “Is it the best model?”
    Theoretically carbon trading offers the most efficient path to some theoretical reduction goal. However the practical problems are daunting which is why we’ll dip the toe in the water with only 1000 emitters to begin with. To gain anywhere near the theoretical maximum benefit claimed we’d really have to auction caps to every man woman and child in Australia. The lunar world of carbon credit cards for all.

    “How much will it cost?”
    To set quantity controls and let the resulting market set the ultimate price is to completely abandon any notion of cost. As well the administration and policing costs are beyond the cheering bureaucrats’ wildest imaginings, but that is not of any concern to them of course.

    “Will it work?”
    For that you have to ask yourself where it’s worked so far and to what extent in achieving the desired rate of amelioration. The answer my friend is blowing in the wind.

    “How will we know if it has worked?”
    When the concentration of CO2 in the atmosphere actually halts and then declines presumably. How are we doing with ETS so far?

  6. observa
    July 26th, 2008 at 09:16 | #6

    Observa, I’ve deleted this comment and will in future delete anything from you that is in any way snarky. My advice to you is to draft your comments on a word processor, and read it over before posting. If it seems to you to be particularly clever, don’t post it.

    The same goes, in spades, for any comment whatsoever referring to any ethnic or religious group: any post of this kind from you in future will result in an immediate ban – JQ

  7. jquiggin
    July 26th, 2008 at 09:31 | #7

    Chrisl, that’s a pretty good summary of the kind of thing I expect we’ll hear from Nelson. That’s why I’m confident the Libs will end up on the wrong side on this one.

    Of course, if the questions are meant seriously rather than rhetorically, there’s lots of useful discussion in both the Garnaut review and the Green Paper, as well as in the reports from the earlier state schemes.

  8. Hermit
    July 26th, 2008 at 09:56 | #8

    I think Turnbull has misread public opinion on this one and will go backwards politically. With all hands on deck an ETS start date of 1 July 2009 seems quite doable, particularly if there are only 1000 or so big enterprises covered with an initial fixed carbon price. However I suspect the Treasury simulations will be vague and scenario based. The claim by the generators that a third of plant could be mothballed is alarming on the jobs front yet underscores the reality of the task. A lot could happen to alter perspectives in the next year, for example China’s looming coal shortage.

  9. Hermit
    July 26th, 2008 at 10:05 | #9

    Whoops make that 1 July 2010.

  10. observa
    July 26th, 2008 at 10:21 | #10

    You’re too touchy John. The response of US politics and their elite bases to be seen to ‘do something’ in the face of respective threats to their underlying alliances, re Freddie Mac and Fannie Mae is relevant here. It’s true that Nelson and the Libs have no overarching policy on CO2 and the environment and will fight a rearguard action on behalf of their constituency against those impacts of ETS. That doesn’t mean that ETS isn’t seriously flawed and is being pushed through to be seen to ‘do something’. I’d liken it to Rudd’s Fuelwatch and a kneejerk petrol prices commissioner and staff we inherit now. This new costly baggage, when we have talk of $1.20/L petrol again. The administrative and policing trappings of an ETS will be fraught with the same empire building, not to mention special pleading and rent seeking, all in the name of saving the planet. On top of that we’ll get calls for more protectionism wrapped up in arguments over the inherent carbon content of imports from non ETS nations. What a can of worms that will be, not to mention the plethora of experts and bureaucrats it will require to sort out. I’m supposed to believe in much ado about nothing in terms of real outcomes, in order to be seen to ‘do something’ is my take on it all. The little bloke needs much more from his elites than that now.

  11. July 26th, 2008 at 10:25 | #11

    If my understanding of the numbers in the Senate is that the Govt requires the support of the Liberals, or the Greens, Xenophon and Fielding. I suspect that deal with Greens support could get Xenophon’s support, but I’m not sure about Fielding. Without Fielding’s support you could still get legislation through if you had at least one Liberal cross the floor. This would make things very interesting.

  12. chrisl
    July 26th, 2008 at 10:25 | #12

    ” there’s lots of useful discussion in both the Garnaut review and the Green Paper”
    Unfortunately we live in a world of sound bites and photo opportunities. Cue Penny Wong visiting the Great Barrier Reef.It has survived warmings and coolings and sea level changes before but it won’t survive without an ETS. Good grief.

  13. Spiros
    July 26th, 2008 at 10:41 | #13

    Why are people so fixated on what the Liberals are doing? They are the opposition. It’s infinitely more important what the government does.

    On which: if the machinery for getting the ETS going is blocked in the Senate, which may or may not happen, the government can always put in a “temporary” equivalent carbon tax. It can do this even if the tax isn’t passed by the Senate. This is what it has done with the alcopops tax and luxury car tax while the opposition frigs around with inquiries. These temporary taxes can be renewed again and again by administrative order – no Senate numbers are required.

    As far as the environment is concerned, what matters is cutting emissions, not trading them, so the ETS is nice to have, but not essential. From the international diplomacy perspective,what matters is a demonstration that the government is serious and won’t free ride on the efforts of the big polluters. This can be done with a carbon tax in the short term. It’s not an ideal solution, but it’s not an ideal world.

  14. Ian Gould
    July 26th, 2008 at 12:01 | #14

    “As far as the environment is concerned, what matters is cutting emissions, not trading them, so the ETS is nice to have, but not essential.”

    Yes but emission trading allows us to identify the lowest cost ways of cutting emissions.

  15. Spiros
    July 26th, 2008 at 12:14 | #15

    Yes Ian, that’s why the sentence began with
    “as far as the environment is concerned”.

    If the opposition want to be responsible for an outcome whereby we cut emissions, but not in the least cost way, then they can playing blocking politics in the senate. Their business constituency won’t be pleased.

  16. gerard
    July 26th, 2008 at 23:10 | #16

    it was pretty dumb how Rudd rocked up in Canberra threatening public service razor gang a few days before the election. almost like he wanted the Libs to keep that senate seat rather than the Greens.

  17. Andrew
    July 26th, 2008 at 23:53 | #17

    I think you’re way off the mark JQ if you think Rudd wants to cut a deal with the greens. He is far closer idealogically to the Libs.

    The Greens are not even in this debate.

    Rudd & Wong are handling this very well so far – they’ve come out with an ETS policy which is almost identical to Liberal policy (give or take 2 years) – so have wdged Nelson into a corner. Straight from the Howard play book.

    Nelson wants to oppose Rudd – but on the ETS there actually in the same camp. Put in a trading scheme and give away permits – sets the framework for CO2 reduction in the future without actually doing any damage to the economy in the short term. We can then see whether the rest of the world wants to help – if not – then we don’t need to clamp down on the permits.

    This is miles from the Greens policy which, if you gave them their way, would trash the Australian economy with no global benefit at all.

    Rudd won’t woo the Greens – he’s just enjoying Nelson’s discomfort. Nelson has nothing to oppose.

  18. Jill Rush
    July 27th, 2008 at 00:12 | #18

    The problem in getting an ETS in place in this term, is that it may be better politically to delay beyond the next election. This would make it easier to cast the opposition as hopeless fools who fail to listen to the electorate and thus shore up the government’s position.

    If the government puts in place an ETS there are two possible negative scenarios. The first is that the public service will not have had time to identify unintended consequences with the ETS not robust enough, and thus the voters losing confidence in the government. The second is that the additional costs have filtered through to the public and there is a voter backlash on that account. The Opposition may benefit from this just as happened with Workchoices.

    On the other hand an Opposition which has successfully opposed, but has not put forward any other suggestion except for a delayed time frame, will be left in a weak position as the public wants the issue to be addressed.

    The arguments for and against are way over most people’s heads and this is unlikely to change as most people just want a solution which works. It may be as you suggest Prof Q that a double dissolution towards the middle of the third year may begin to look attractive but it is unlikely that Rudd will risk his government over something which has the possibility of backfiring – especially on a matter where the Libs and Nats look so incompetent and through their opposition make the government look noble fighting for the future of our children against an undisciplined rabble.

  19. Ian Gould
    July 27th, 2008 at 08:41 | #19

    Given Nelson’s poor showing in the polls and the constant rumors of a leadership challenge, it’s quite possible that eh will be unable to maintain a united Coalition position on the ETS – either for or agaisnt.

    If he bcks the scheme, he may face a backlash from Nationals and skeptics within the Liberal Party.

    If he opposes the scheme, he may face rebellion from some Liberals.

    The problem for Nelson, is that if Turnbull feels the time is right to challnge him, he can simply adopt the opposite of whichever position Nelson adopts.

    So it’s either “Protect the environment, yes, but not at the cost of the economy” or “I have resiegned from the Shadow Cabinet today because the future of our children is more important than my political ambitions”.

  20. swio
    July 27th, 2008 at 09:31 | #20

    I think Nelson has little choice but to oppose an ETS. I remember Alan Jones on the radio the other day talking about new waste management plant that burns its own methane emmissions to generate electricity he said something like “this will be great for the environment, not to imply I accept man made global warming”. The contortions he was going through were actually quite funny.

    My point is that the conservatives are still in la la land on global warming and if they are Nelson’s only base of support he can’t afford to disappoint them. If he supports an ETS the la la lander’s will dump him, he’s approval rating will drop to the mid single figures and he’ll be thrown out by the Liberal within a week.

  21. observa
    July 27th, 2008 at 19:59 | #21

    “I think Nelson has little choice but to oppose an ETS.”
    Looks as if he already has if you follow Slatts links here-
    http://www.slattsnews.observationdeck.org/?p=2448#respond
    Nelson may also be lining up with Kininmoth (and Evans previously)and the significant number of skeptical scientists by the looks of things. We may have a serious schism on our hands over CO2 based AGW. This debate is not over by the looks of things. Evans and Kinimoth’s critiques of the new wisdom have to be taken seriously and they’ve clearly entered the political arena now.

  22. chrisl
    July 27th, 2008 at 23:07 | #22

    If an ETS is so wonderful,effective,cost free and won’t disrupt the economy then a little scrutiny from the opposition won’t be a problem, will it.

  23. jquiggin
    July 28th, 2008 at 06:36 | #23

    Chrisl, the snarky tone of your comments indicates precisely what kind of scrutiny the opposition is going to give the proposal, which is why I’m confident in predicting that, no matter what is proposed, they (and you) will oppose it.

  24. Ken
    July 28th, 2008 at 07:52 | #24

    If you accept that the science has it right, there is no excuse to delay. Relying on the varied pretend sciences of McKitrick, Linzden, Carter @ Monckton to turn out to be correct (with Carter backpedalling on the need for emission reduction – ocean acidification, not warming!) for a sound basis for future policy seems like a recipe for disaster. Anyone who says because it’s hard, don’t bother, is very mistaken. It seems clear to me that we will be doing a lot of adaptation, but the less mitigation, the more costly it will turn out to be – with costs likely to be beyond measuring in monetary terms; displaced populations, famines, conflicts over resources, … the measure is likely to be how many hundreds of millions of excess deaths.
    Meanwhile the cost gap between renewables and fossil fuels is narrowing and imposing some of the external, presently unaccounted costs closes that gap further. Any projections of the costs of solar for example, based on crystalline and polycrystalline silicon are already gross overestimates – Nanosolar is already doing it much cheaper. Then there’s Ausra , who’s technology was developed in Australia, that shows that solar thermal can be competitive with (does it even exist?)clean coal. Well suited to Australia, but to deploy it we’ll have to import it from the US.

  25. observa
    July 28th, 2008 at 08:28 | #25

    “If you accept that the science has it right, there is no excuse to delay….Anyone who says because it’s hard, don’t bother, is very mistaken.”
    There is clearly an excuse to delay and indeed not even bother if the proposed amelioration edifice is fatally flawed and in the final analysis much ado about nothing in terms of any real outcomes. Digging holes and filling them in again might assuage some intrinsic psychological need to be seen to ‘do something’ and indeed add to some esoteric measure of GDP, but it’s hardly the stuff of everyone grab a shovel.

  26. wilful
    July 28th, 2008 at 10:21 | #26

    I couldn’t possibly see a Liberal crossing the floor on this issue in the upper house, it’s not (perceived as) values or morality based enough for that, and can’t see a deal that would satisfy that idiot Fielding coming to fruition without truly bastardising an ETS.

    So the options as I see them are:
    i. the Coalition has to swing behind it, and it passes with amendments, some time next year
    ii. Double dissolution (goodbye Steve Fielding, hello Greens BoP), which I rate highly unlikely until at least mid-2009 as Rudd is naturally cautious.
    iii. an election as early as 8 August 2010, with a fully costed ETS as a central policy platform, to be passed and implemented for 1 Jan 2011.

    Any which way, the Latham effect on the Senate will pass. I am very much guessing but I think Labor can win an election on this issue, it is something that the majority of Australians including swinging voters want and if properly explained and with appropriate offsets it is quite saleable. Also, some green voters will return to the fold. The only real risk is if there are aberrant weather periods and another La Nina, leading more out in voterland to doubt ACC. A solid El Nino will really kill that one, and I would not want to be the Libs betting my strategy on unlikely chance events!

  27. David
    July 28th, 2008 at 11:18 | #27

    A number of correspondants have either deliberately misrepresented, or completely misunderstood, the Greens’ position on the ETS. While they are likely to push for amendments to the govt’s proposal, Bob Brown has made it clear that they will vote for it, at the end of the day, because even an inadequate scheme is better than nothing. The govt will certainly get Greens support, but will possibly have trouble with Xenephon, and will certainly have trouble with Fielding (given what they’ve both said about fuel prices).

  28. wilful
    July 28th, 2008 at 12:25 | #28

    David, got a link re Bob brown’s actual position?

    Surprised that he would tactically give up in this way so early, cutting himself out of the game.

  29. derrida derider
    July 28th, 2008 at 12:43 | #29

    What wilful said – it’s foolish of Brown to actually say that aloud. It’s no way to stiffen the government’s spine, and he’s just ruled out any chance of getting some Harradine-like favours for other pet causes.

    I think a week is a long time in politics. By the time this gets to the Senate some short-term factors – especially the spike in the price of oil – will have changed. Rudd has big opportunities to play the wedge here – the compensation package can be lovingly crafted to make both Senator Fielding and the Liberal wets very uncomfortable.

  30. observa
    July 28th, 2008 at 13:40 | #30

    To be critical of the new conventional wisdom of ETS, as being much ado about nothing and in terms of being seen to ‘do something’, you might assume I’m comfortable with doing nothing and simply adapting. Far from it. There is a much better way of approaching the plethora of interlinked problems manifesting themselves all around us now. I’d argue that the better solution lies in the fundamental rewrite of the constitution of our marketplace now. Tacking ETS onto the current flawed one is an exercise in futility IMO, particularly with a world recession/depression looming large. That and AGW should be the catalyst for much introspection and circumspection more generally, rather than some singular, somewhat manic focus on AGW.

    In some sense the little bloke is supposed to enter Camelot passing 2 great pillars or buttresses either side of the road, Left and right, Austrian or Keynesian perhaps, towering either side of his path as he carries his heavy load, both proclaiming to lighten the load and brighten the path for him. In which mighty edifice should he take some small comfort? That is his eternal question or more simply his lot in life. Unfortunately his Camelot has been built with the compromises of both and the cracks in the foundations are beginning to show.

    An obvious example should suffice. We build a progressive income tax system, complete with capital gains tax, but with an exemption for the humble abode (naturally a serf’s home is his castle) and negative gearing to boot for rental market investors. Well you have to treat interest costs the same across investment sectors obviously. Then you add the depredations of central bankers’ miscalculations to that and it’s God, Kevin or Wayne save the first home buyer and ultimately renters. That isn’t the failure of capitalism or the market but the market doing exactly what it was constituted to do in the first place with all that incrementalism and the law of well intended consequences coming through loud and clear. Now it’s the devils own job to extricate the unintended consequences from that quagmire without dealing with the fundamental CM underlying it all.(just ask the Hawke/Keating govt about tinkering with capital gains tax in that regard)

    Take another obvious example with the environment. John Walmsleys Earth Sanctuaries Limited attempts at investing in natural environment. Now we can all accept the noble sentiments behind such an endeavour, but it had a snowball’s chance in hell of surviving in the current marketplace. Only altruism of the investors or the rearguard action of public investment (after all the other demands of the public purse) could survive the onslaught of bitumen, concrete and tuscan boxes in our current CM. Again that’s not capitalism or the failure of the market, but the way in which the market has been constituted and it doesn’t have to be that way if we think carefully about how to constitute an ideal marketplace, rather than more bureaucratic incrementalism and the law of well intended consequences kicking in.

    Where is the blueprint for such a CM you may well ask? In our logical minds and going back to first principles, bearing in mind our current starting point (history, knowledge, technology and inherent challenges) and how to redesign it afresh in a Rawlsian sense, where none of us know where we’ll be as ultimate players. More left or more right, more Keynesian or Austrian I hear you ask. Which of the 2 great pillars? My answer is both, locked together by a keystone arch of the third way, beneath which all can safely pass on the road to Camelot.

    In designing such a blueprint for such a new CM, you need to be aware of the two great philosophical pillars pulling you in false directions from time to time and also the flaws of past engineering/architecture in that regard. That said I’ll refresh part of my ideal blueprint again. Wipe the slate clean of all other forms of taxation for reliance on resource and carbon taxing, including land as a resource (nil rate for natural environment to a maximum for artificial cover ie. buildings, concrete and bitumen) Immediately that sends market signals that the use of new resources is dearer than existing and aids careful, considered use and recycling. Pirsig’s quest for quality over quantity, which is relevant to a spaceship earth outlook today. It’s neutral WRT private, business, religious or charitable pursuits and taxes the life blood of capital rather than labour. Also neutral on savings and investment, borrowing or lending, which is very important for those first home buyers you’ll recall. With no stamp duties or transaction taxes capital and labour will be free to be fleet of foot in the challenges of the future as well. Basically no frictional effects to hamper individual ingenuity and entrepreneurship. To give up progressive income tax the tradeoff will have to be an annual net wealth tax for the top end, adjusted for lifecycle stage of course. Physical wealth is more easily identified and measured than income. Also much of that wealth has been built on the past pyramid of fossil fuel use and there are intergenerational equity concerns to consider here too. That’s the basis so far, but now we need that keystone to lock it all in place. For that we’ll need to review some past philosophical points and settle some old arguments with modern realities. Off into the ether for a bit and then back to the practical blueprint for the final touches.

    Now John Locke had a valid point about enclosure and private property rights in order for individuals to capture the productivity of their efforts and avoid the tragedy of the commons. However he was a man of his times, in a frontier world. He might have had some different thoughts had he experienced the view of earth from the window of a moon mission and the birth of the concept of spaceship earth. Welcome to the tragedy of total private enclosure, should there be no John Walmsleys or simply lack of incentive for them. Whilst Locke might agree with some communal tax on his private enclosures, for the right of private exclusion and communal defense of such rights, he might not have agreed with Henry George, that all communal taxation be based on the market value of said enclosures. In that sense Henry might have been the pioneering Marxist, because if the level of that taxation were high enough, all private return to effort and ingenuity might be lost to the individual, something Henry George fans might like to ponder. However the main point is that taxing land via its market value today, would force its exploitation and that was one of Walmesley’s major problems. Coming back to Locke and George, if land as natural environment is held in private trust for us all, now and for the future, then clearly it should not be communally taxed to aid and abet its destruction. In fact quite the contrary. There should be tax credits for those who actively nurture and create more of it, as a countervailing market power against its conversion for economic use.

    The keystone to our overall blueprint then is to allow an exemption from that ANWT for all of it that is invested in natural environment ie an individual parcel of land or simply shares in a Walmsley’s ESL. Furthermore, if calls are made for more capital for the creation of more natural environment then ANWT obligations can be satisfied with such franked credits. That gives high wealth individuals a choice. Pay a communal deeming tax or invest in the environment. With that keystone in place, coupled with the other planks of a simple, neutral, fair and understandable CM, we could all go forward at great pace, with minimal bureaucratic interference and cost, toward a future we can agree on. (having said that we could always reserve an ETS to overlay carbon taxing later if desired) You might also like to dwell on just what section of our society might suddenly have a strong economic role and purpose with that last keystone in place, since they have a snowball’s chance in hell in the current one.

    This personal blueprint is why I back Nelson’s critique of the grand plan, systemic risk, jurisdictionally impossible ETS being promulgated as the only true conventional wisdom now. Not because he has the answers, but because there are better, exemplary paths for us to follow and I present this one as the best I can think of for consideration. It’s a market green policy with Keynesian overtones in overall setting. Also note that if central bankers continue to get it wrong, it may show up in some speculative capital gain in natural environment rather than first home buyers’ mortgages. The signs that price and markets work is all around you if you look closely. Keynesians should understand the need to set the overall course and leave the steering to deft individuals. Old habits die hard I guess and hence the attraction for bureaucratic, nightmare ETS add-ons to the current mess.

  31. observa
    July 28th, 2008 at 14:01 | #31

    And while you’re mulling that over you might like to think about-
    1. How your ETS add-on deals with the incentive to enclose more land particularly in LDCs for say corn and sugar to ethanol, or palm oil for biodiesel.
    2. How we’re going to deal with SWFs and all their dough buying up our jurisdictional resources and indulging in some transfer pricing and the likes.
    3. The growing number of Lowys, etc claiming the Fifth on their Leichtenstein bank accounts.
    4. Why on earth the income from the O’s subsidised solar panels and feed in tariffs aint income in the current CM, just to mention one priceless anomaly of your current CM.

    Of course in my ideal CM, I’ve got all that covered, not to mention the kids’ housing affordability problems all wrapped up neatly.

  32. July 28th, 2008 at 17:46 | #32

    For what it’s worth, here’s the Family First environment policy.

    It’s so convoluted and self-contradictory that it could be used to justify everything from the Greens to Nick Minchin’s position on greenhouse issues.

    They want an ETS, but don’t want to impose increased costs on families. And businesses. And they want to cut petrol tax because it’s too expensive. The only conclusion I can come to is that they’re utterly clueless.

  33. observa
    July 28th, 2008 at 23:02 | #33

    Don’t you just love this typical la la land view of the world-

    “FAMILY FIRST believes it is important to recognise that households account for less than 10 per cent of greenhouse gas emissions, with the bulk coming from the electricity sector, gas,
    water, agriculture, forestry and fishing..”

    It’s just like some insurance co, accounting firm, law firm, bank, etc adding up the electricity bill and the fuel bill for the company cars and saying that’s our CO2 consumption and trotting off to plant some trees and buy some green power and bingo, they’re carbon neutral. Forget the energy tied up in their building, office furniture, computers, consumables, the roads, trains, trams, buses cars to get the workers to work. The pro-rata food clothing and shelter for the workers working week, the power station infrastructure, that portion of power workers carbon allocated to their power,Govt admin workers, etc, etc, etc. As if the whole bloody edifice and infrastructure of a modern, industrialised economic system is somehow immediately excisable from their little patch. What a bunch of blinkered moral posers and tosspots.

  34. observa
    July 28th, 2008 at 23:16 | #34

    So the ETS fans haven’t said whether my environmental blueprint for a new CM from first principles fits the Greens, Libs, Labs or Family First view of the world. Any thoughts?

  35. TerjeP
    July 30th, 2008 at 00:05 | #35

    Yes but emission trading allows us to identify the lowest cost ways of cutting emissions.

    So does a carbon tax. You are hardly going to see consumers using the most expensive alternative energy source to avoid a carbon tax so long as there is a cheaper alternative.

  36. James Haughton
    July 30th, 2008 at 13:35 | #36

    observa,
    What the Georgists want is a tax on the unimproved value of the land, not the market value. That forces land-owners to make the best economic use of it or relinquish it and would likely stop a lot of e.g. land clearing of marginal-productivity farmland as it would no longer be cost-effective. Given that most modern Georgists believe in taxing natural resource use (e.g. mining rights, fishing rights, spectrum rights, etc) your position sounds a lot like Henry George to me.

  37. Ian Gould
    July 30th, 2008 at 14:00 | #37

    Terje, a carbon tax imposes the same cost on all emitters – which ignores the differing marginal cost of abatement which is what drives trading in an ETS scheme.

    A carbon tax has the same problem as a quota system – it ignores the fact that different businesses have differing potential for emission reductions.

  38. Ian Gould
    July 30th, 2008 at 23:07 | #38

    “The Federal Opposition has finalised its climate policy of starting emissions trading by 2012, with a soft start if necessary.

    The Coalition joint party room met today and endorsed the position of shadow cabinet reached yesterday.

    Today’s decision means Opposition Leader Brendan Nelson has lost his fight to make the trading scheme conditional on big emitting nations coming on board.

    The Coalition today decided to start by 2012, regardless of what other countries do.”

    http://www.news.com.au/story/0,23599,24101663-5007133,00.html

  39. observa
    July 31st, 2008 at 12:43 | #39

    “What the Georgists want is a tax on the unimproved value of the land, not the market value…..[hence]your position sounds a lot like Henry George to me.”

    To some extent council rates, land tax, water and sewer rates are all defacto taxes on unimproved land at present and it’s that holding cost that often forces say farmers on suburban fringes to ultimately sell. Walmsley’s Warrawong Sanctuary was in the desirable Adelaide Hills and without customary economic return was effectively doomed, barring altruism. Notice under my schematic, his holding costs are nil and he has no need to make an economic return for wealth-holders(shareholders). He can simply provide them with a sanctuary from wealth tax and furthermore they get an ANWT franking credit if he calls upon them for more capital to build the natural environment. The reverse of current economic wisdom. Tell me how Georgists deal with that countervailing market power on behalf of natural environment? In fact under my blueprint, there may ultimately be no need for any Govt owned national parks and wilderness. Internationally you might go and visit the Bill and Melinda Gates Trust Amazon Forest, tended by locals. Think about aboriginals and their land locally too in that regard.

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