Home > Boneheaded stupidity, Economic policy > Hockey’s amazing discovery: Bigger households use more of everything

Hockey’s amazing discovery: Bigger households use more of everything

August 14th, 2014

I’m a bit late joining the pile-on to Joe Hockey for his silly claim that poor people won’t be hit by fuel excise because they don’t drive (or not as much). Obviously, that’s true of just about every tax you can think of: poor people, earn less, spend less and therefore pay less tax. The big question, as the Australia Institute and others have pointed out, is how much people pay as a proportion of income. Food and fuel represent a larger than average share of spending for low-income households, so taxes on these items are more regressive than broad-based consumption taxes like the GST which in turn are regressive compared to income tax.

But there’s a more fundamental problem with the ABS Household Expenditure survey data cited by Hockey to defend his claim. In the tables he used, the ABS sorts households by income, with no adjustment for the number of people in the household (the ABS also provides “equivalised” figures, which adjust for household size). To quote the ABS

This difference in expenditure is partly a consequence of household size: households in the lowest quintile contain on average 1.5 persons, compared to 3.4 persons in households in the highest quintile. Lone person households make up 63% of households in the lowest quintile.

This makes a big difference to the figures quoted by Hockey, that top-quintile households spend $53 a week on fuel, and bottom quintile households only $16.

Comparing expenditure per person, the top quintile spends $16 per person and the bottom quintile $11 – a very small difference. Of course, the income figures need adjusting also, but here the difference remains huge. Income per person in the top quintile is about 5 times that in the bottom. And Hockey’s argument would look even worse if the ABS sorted households by income.

This is the kind of mistake that’s easy enough for an individual politician to make, but Hockey has the entire resources of the Treasury at his disposal. If he’d asked them before making his bizarre claim, I’m sure Treasury officials would have warned him off. As it is, they have had to provide him with the statistics most favorable to his claim and watch him get shot down.

Still, it was good enough to fool Andrew Bolt.

The fact that a fuel tax is regressive does not mean that a return to indexation of the fuel excise is necessarily bad. There are good reasons for taxing fuel, and no sensible rationale for allowing the tax to be eroded by inflation. But fuel taxes bear most on the poor, so they need to be put in the context of a budget that it is progressive in total. That’s the exact opposite of what Hockey is doing.

  1. Pete Moran
    August 14th, 2014 at 19:11 | #1

    Is there good information on the changes made by the Abbott Govt to Treasury/Finance officials?

  2. Florence nee Fedup
    August 14th, 2014 at 19:15 | #2

    As al regressive taxes do. Especially those on what can be considered essentials for daily livng.

  3. Michael
    August 14th, 2014 at 20:35 | #3

    I thought the comment made by Ross Gittins that the budget was full of the unadulterated doozies that finance and treasury always put forward but are usually, for good reason, rejected by anyone with an ounce of common sense or instinct for political survival.

    Is Joe Hockey really this dense or is there something else out work?

  4. Collin Street
    August 14th, 2014 at 20:52 | #4

    > Is Joe Hockey really this dense or is there something else out work?

    He’s really well educated. That is, the people who educated him did a really good job of it, given the limitations of the material they had to work with. In strict mental-processing-power terms Abbott’s probably better equipped, but Abbott never read the user manual for his brain and Hockey did. Cover to cover. He’s that kinda guy.

    Long and the short of it is, Hockey’s the only one who can make mistakes this sophisticated.

  5. zoot
    August 14th, 2014 at 21:07 | #5

    Is Joe Hockey really this dense or is there something else out work?

    I have a friend who ran an NGO that had to deal with Hockey’s department at the time. As a result he has met the man himself. According to this friend, most emphatically yes, Hockey really is that dense.
    Good thing he’s displaying it before he has a chance at Prime Minister.

  6. hc
    August 14th, 2014 at 21:21 | #6

    Not all taxes need be progressive. What matters is the overall incidence of the tax transfer system. The main case for indexing the petrol excise is as an imperfect surrogate for congestion and pollution taxes and to encourage a switch away from petrol. Yes, as you say there are arguments for indexation.

    My understanding is that the demand for cars is income elastic (cars are a luxury good) but that the demand for petrol is almost independent of income. “Poor” people buy very cheap cars (or none at all) but if they do buy cars these are fuel inefficient. Also the “poor” live on the city periphery where public transport services are poor so they drive a lot.

    The stupidity of Labor and the Greens here is to reject every part of the budget for populist political reasons. They should pass the fuel excise hike immediately. The Greens are a menace when it comes to thinking about the economics of the environment. We would have a settled carbon tax policy now if it were not for these clots.

  7. August 14th, 2014 at 21:31 | #7

    In the article in the Guardian about this, Hockey was also quoted as saying that the (value of) entire tax paid by some households went to pay the family benefits of other households.

    AFAIK, there are four main reasons for income redistribution: support families with costs of children, support people with illness/disability, support people in their old age, and support people during unemployment. The rationale is that these are either normal life stages when people need additional support, or misfortunes that can happen to any of us, so we share the costs to the extent we can afford.

    Taken in conjunction with Hockey’s earlier remarks about ‘lifters and leaners’, it seems that he does not accept the idea of any income redistribution. I think that Hockey – and the government perhaps – wants to move us right away from the social democratic contract to a fully privatised economy (as opposed to society). I don’t think it’s what Australians in general want, but my fear is that the stuff Hockey is saying is ambit claims, by which he/they hope to gradually move us all to the right. The trouble is I think it’s working, but maybe, if we’re lucky, they’ll just try to push us all too far, and people will start really seeing through them and seriously pushing back.

  8. August 14th, 2014 at 21:52 | #8

    The other thing that is interesting – and frightening – about Hockey’s apparent position is that it is totally static, and completely ungenerous.

    There is no sense of change, no sense of ‘I help you today, you help me tomorrow’, or ‘I’ve been lucky, let me share my good fortune with you’. It’s all about a permanent fixed sense of grievance – someone (the wealthier person) is always getting ripped of, and someone (the poorer person) is always getting something for nothing. It’s an awful, fixed, mean view of the world.

  9. jungney
    August 14th, 2014 at 21:52 | #9

    I’m really warming to the pleasure of watching these turkeys go down. This is fun. Hockey is a real old school ruling class bully, a know nothing who is every day exposed as a political nincompoop. Good times.

  10. Paul Foord
    August 14th, 2014 at 22:00 | #10

    I would guess hc at #6 has access to effective public transport, cars are not a luxury item in the sticks, expensive cars may be, this also links in the a flexible workforce able to work 24/7 and the punitive approach to Newstart Allowance and the Disability Support Pension.

  11. August 14th, 2014 at 22:09 | #11

    I presume that Hockey’s “leaners” are the idle rich.

    And hc is right, the fuel excise should be passed.

  12. Michael
    August 14th, 2014 at 22:12 | #12

    For the record I support the re-indexing of petrol, but this government and it’s budget are unsalvageable and they got into government with an unusually sinister campaign. Why cut deals with these losers when they clearly look on the road to a one term stint.

  13. hc
    August 14th, 2014 at 22:17 | #13

    Problems with your eyesight Paul? Look at my last sentence in para 2.

  14. August 14th, 2014 at 23:10 | #14

    @John Brookes
    Why ever would you think Hockey’s ‘leaners’ are the idle rich? Seems pretty clear he’s referring to anyone who receives a net benefit from individual tax transfer arrangements – in particular people who are poor or unemployed.

    (of course pensioners, children, women having babies, parents who work part time and people with disabilities all tend to receive a net benefit too, but I think Hockey isn’t smart enough to understand the implications of that)

    But not of course fossil fuel and mining company owners who benefit from government subsidy.

  15. Megan
    August 15th, 2014 at 00:07 | #15

    The Greens have been strangely, and disappointingly, quiet lately.

    As if to confirm my suspicion that they have become nothing but a limp appendage of the ALP ‘left’ wishing to become junior partners in an ALP/Green coalition, here is Bandt’s media release:

    Tony Abbott needs to sub Joe Hockey off the field if he wants to make any headway with his Budget, Acting Greens Leader Adam Bandt said today.

    “On same day that the Commonwealth Bank announces record profits, we see that wages growth is the lowest in 17 years and real wages are going backwards. Meanwhile Joe Hockey says the poor don’t drive but the big banks should be let off the hook.”

    “Tony Abbott needs to put Joe Hockey on the bench for a moment and bring on someone willing to change the Budget’s direction if the government wants to make any headway before the end of the year.”

    “The Budget needs a salesman who doesn’t think that manual labour is a Spanish soccer player and that the poor should walk to work, someone willing to admit the government got it wrong and who’ll go back to the drawing board.

    “Joe Hockey’s charm offensive to the crossbench had lost its charm and is now just offensive. Everyone knows this Budget is unfair and bad for people and the economy.”

    Just when someone might hope for a serious point made strongly, about for example the hidden costs of urban sprawl on the lower income brackets or the urgent need for free or affordable public transport etc.., we get pointless puffery with a dash of cheap humor thrown in.

    What happened to the Greens?

  16. August 15th, 2014 at 00:44 | #16

    Yes of course Hockey’s stupidity is the Greens’ fault … and independent parties do really well when they pass regressive fiscal policy for the Liberals, as the Democrats showed when Lees passed the GST … oh, wait? Where are they again?

    Bandt’s second paragraph makes the point others here have been making, that the petrol excise can’t be seen independently of the whole economy. Furthermore, if you want a green tax on petrol, then pass one for that purpose. Don’t try and slip one through the back door of an indexation policy and hope it gets the job done. The Greens aren’t so stupid as to fall for such weak sauce. They forced the previous government to pass this thing called a price on carbon, which was beginning to work for its intended purpose until Abbott took over – why would they try and slip through a second-rate and limited tax on a single source of carbon, at the expense of Australia’s poorest people and their own political future? Pyrrhic victory, much?

  17. zoot
    August 15th, 2014 at 00:45 | #17

    To be fair, Hockey declared himself as mean spirited and small minded in 2012: http://www.theage.com.au/national/the-end-of-the-age-of-entitlement-20120419-1x8vj.html

  18. Megan
    August 15th, 2014 at 01:17 | #18


    You’ve got it.

    The Greens are doing to themselves, via the ALP, what the Democrats did to themselves, via the LNP.

    In both cases they thought they could sell out their solid base but achieve some kind of policy greatness.

    Nick Clegg did the same thing, via Cameron.

    The Greens were constantly, but gradually, increasing their electoral appeal by solidly holding to a social-democratic/environment core of principles. They look to have sold that out for some perceived expediency. My suspicion is that this will doom them electorally – and that, just like Gareth Evans and Cheryl Kernot, it will not have been by accident but rather by design.

  19. Megan
    August 15th, 2014 at 01:22 | #19

    This is more like ‘ALP’ talking point than anything Bob Brown would have uttered:

    The Budget needs a salesman who doesn’t think that manual labour is a Spanish soccer player.

    From the Greens???

  20. rog
    August 15th, 2014 at 05:59 | #20

    Despite trying to shift the blame onto the Greens yes, Hockey is that dense.

    At one point I thought that Abbott had cleverly handed Hockey a dud budget to diminish his profile thereby eliminating a future contender for the top job. Now there is solid evidence that Hockey doesn’t need any help in that dept.

  21. Calyptorhynchus
    August 15th, 2014 at 10:16 | #21

    When I read that I thought ‘I bet Treasury and Finance just got all their worse ideas out, because they knew these idiots wouldn’t know the difference and it would ensure they wouldn’t have to work for them for very long’.

  22. Ikonoclast
    August 15th, 2014 at 10:31 | #22

    I am a little conflicted on fuel taxes. On the one hand, I want to see all fossil fuel subsidies stopped and a carbon tax on fossil fuels. On the other hand, I would not want to hit the poor and rural communities. How could it be done?

    Maybe remove fuel subsidies, add a carbon tax and remove GST from all food and grocery essentials (whilst keeping the GST on junk food which could be accurately defined as confectionary, soft drinks, snack food and fast food). Also, increase mass transit services and lower fares. Farmers would probably need further compensation for equity reasons and maybe even pragmatic poltical reasons. I am not sure what form this could take. Perhaps a Commonwealth Rural Bank, government owned, that would refinance individual farmers (not agri-corporations) in finacial straits but still assessed as viable. A deal like 0% interest for five years and the offical cash rate (currently 2.5%) as interest after that would fair IMO.

  23. Hermit
    August 15th, 2014 at 11:37 | #23

    The awkward fact seems to be that farmers, truckers and suburban battlers will need hydrocarbon fuelled transport for the foreseeable future. Electric cars are for those with spare cash and short commutes. Perhaps miners should pay the full diesel excise with some kind of adjustment to state royalties or federal company tax.

    By now I think Australia will be importing over 60% of its oil needs some of it as refined fuel from Singapore. We’re paying for that with other carbon exports like coal and LNG. It has been claimed that makes us a bigger carbon exporter than Saudi Arabia . Perhaps we should have more natural gas powered vehicles. For example in the US Chevrolet have a petrol/ compressed gas bifuel vehicle starting at $38k. Were we to reduce the excise in Australia there would be less incentive to come up with petrol alternatives, at least for ‘distance’ vehicles.

  24. Nathan
    August 15th, 2014 at 11:55 | #24

    I’m rather curious about your last paragraph at #6. Are you claiming that the Greens were mistaken for political (passing a Rudd ETS early was the best bet to ensure a future Abbott government would find it nigh impossible to repeal) or policy (that the Rudd ETS was better than the Gillard version) reasons?

  25. Uncle Milton
    August 15th, 2014 at 12:24 | #25

    I’m sure Treasury officials would have warned him off. As it is, they have had to provide him with the statistics most favorable to his claim and watch him get shot down

    Or some knucklehead in his office, whose only qualification is Liberal Party activism at university, looked up the statistics and not knowing any better gave them to him.

  26. August 15th, 2014 at 13:17 | #26

    Megan, I was being sarcastic. If you think the Greens would improve their electoral appeal by passing the fuel excise, you’re not really very in touch with the people who vote for them. If you think the Greens can achieve their carbon reduction goals through a weak price signal on carbon like the excise, you’re really setting a low bar for what we need to achieve in carbon reduction over the next 30 years.

    The Greens need to stick to their guns, and ensure that carbon pricing only gets implemented in conjunction with a proper compensation package, and doesn’t get done slyly through things like fuel excise increases. In fact, in a proper carbon policy, fuel excise and subsidies won’t exist – there will be a single instrument on all carbon-intensive products that is intended to strongly discourage their use. Fiddling with excises because you can’t get the real effective policy through parliament is a cheap alternative that won’t work, and people here who are hoping to get some minimal carbon reduction benefits at the expense of the poor by supporting Hockey’s regressive policies are simply a) going to fail to achieve meaningful carbon goals and b) reinforce the prejudice that green ideals are a fantasy of the inner-urban “elite”.

  27. Fran Barlow
    August 15th, 2014 at 14:03 | #27


    By and large correct FN. There are a couple of other measures I’d like to see in a package (which I won’t reiterate because I’ve raised them before) but your key claim expressed in the opening sentence of para 2 above is right.

  28. Tom
    August 15th, 2014 at 14:23 | #28

    @hc: while I generally agree with your argument, and while I’m not overfond of the Greens’ political strategy, I’m not sure what the ‘We would have a settled carbon tax policy now if it were not for these clots’ means: if you’re saying that the Greens shouldn’t have insisted on a three-year fixed price regime for the Gillard ETS so that it couldn’t be construed as a broken promise, then OK, I can understand, but then that’s not really a carbon tax policy in the commonly understood sense.

    If you’re saying that they should have supported the Rudd ETS, then yes, perhaps, but the Greens didn’t have balance of power in the Senate until July 2011, well after the Rudd ETS had been shelved. Senators Xenaphon and Fielding held the balance of power under Rudd, and they were both opposed to the ETS—the Greens’ support, though I agree they should have offered it, wouldn’t have made any difference to the Senate numbers.

  29. Ben
    August 15th, 2014 at 14:32 | #29

    Not much mention has been made in the MSM about the 12c/L fuel excise rebate for heavy vehicles using public roads (eg. supermarket trucks, road trains, freight trucks). That particular subsidy does not hold up to the “We don’t use the roads!” argument employed by miners and farmers in response to the threat of removing the excise rebate.

  30. Nick
    August 15th, 2014 at 14:36 | #30


    “In fact, in a proper carbon policy, fuel excise and subsidies won’t exist – there will be a single instrument on all carbon-intensive products that is intended to strongly discourage their use.”

    Fuel excises are there to help pay for the cost of building and maintaining roads, not discourage carbon emissions. I’m not sure how they could be replaced by a ‘single instrument on carbon emissions’.

  31. Nick
    August 15th, 2014 at 14:38 | #31

    Personally, I’d like to see state-based yearly rego costs tied to CO2/km. Similar to what Qld has already with rego costs based on cylinder-count.

    $4-500 more in one hit to drive a V8 or inefficient V6 sends a much stronger price signal than a few measly dollars every time you fill up. And there’s already a concession mechanism in place for health care card holders.

  32. Fran Barlow
    August 15th, 2014 at 14:50 | #32

    @Nick \

    I like the idea of abolishing the excises and taxes on fuel altogether along with CTP and rego.

    In their place there should be a road user charge based on TARE along with its potential fully laden weight, tailpipe emissions, the space taken up by the vehicle, the driving profile of the road user, the risk of injury presented by that user and that vehicle, the existence/absence of parallel transport corridors and the contention on a given road at the time of day.

    An onboard transponder and metre would allow the user to view his or her bill for the road usage.

    That way, the marginal cost of using the vehicle would be at the forefront of the road user’s mind.

    Funds raised in this way could be hypothecated to road maintenance, quality housing and public transport in the areas where the funds were raised.

  33. Fran Barlow
    August 15th, 2014 at 14:53 | #33


    We would have a settled carbon tax policy now if it were not for these clots.

    LOL … This old zombie just keeps getting resurrected.

  34. Call a Spade
    August 15th, 2014 at 15:09 | #34

    I don’t think increases in fuel excise are what everyone was thinking when we heard the ”I mean, this country ought to be an affordable energy superpower.” Isn’t that the reason for scraping the carbon tax so energy would be cheaper? Or is it that they don’t mind everyone paying just not their rich friends.

  35. han
    August 15th, 2014 at 15:18 | #35

    Updated Oxford dictionary in light of the Abbott government:

    To do a Hockey – to make factually correct statement for misleading purpose or in incorrect context.

    To do an Abetz – to blatantly blame others for one’s own embarrassing mistake. Example: My son forgot to do his assignment so he Abetzed and told his teacher that the dog ate his USB.

    To do a Brandis – to grossly under-prepare when doing one’s job, especially in public. Example: I had presentation this morning but I totally Brandis-ed it because I went to a party last night.

    To do an O’Farrell – to conveniently fail to remember or appreciate a substantial gift from friend.

    To do a Bishop – take advantage of something which one has previously vehemently denounced.

    To do an Abbot- to mislead someone in order to curry favor. Example: On my first date she said she was a vegan, so I abbotted her and said I don’t eat meat either.

  36. Hermit
    August 15th, 2014 at 15:26 | #36

    A carbon price of $24.50 per tonne of CO2 works out to 6.4c per litre on petrol. That’s since petrol burns mainly to water vapour and 2.5 kg of CO2. Hence the claim that 38.1c per litre petrol fuel excise is ‘carbon tax on steroids’. When Qantas grizzled about ‘carbon tax’ on jet fuel that referred to a new 5.8c per litre component of the jet fuel excise which I believe was 9.8c of which 3.6c was earmarked to fund the aviation safety authority CASA.

    If we were to have an emissions cap based approach like an ETS then transport fuels should have a carbon price component in addition to pure excise. The coverage would include petrol, diesel, jet fuel, avgas, compressed natural gas and ship fuel. It would mean if you fly or drive more then there would be less coal fired electricity available to stay under the CO2 cap. I think it is the correct way to go in theory just that in practice (eg the EU ETS) they seem to stuff it up.

  37. August 15th, 2014 at 15:55 | #37

    Nick, if we’re going to deal seriously with the economic and social changes required to prevent a carbon catastrophe, we’re going to need to build and maintain a lot less roads, so not having the excise could be good. But having said that, I think it’s perfectly fine to add additional taxes to fuel if you think that’s the best way of funding things, but don’t pretend that they’re intended as a price signal on carbon (as others here are suggesting we should do).

    Hermit’s point about how pathetic the price signal due to a $25 carbon tax is, should make us stop and wonder how exactly we are going to get to carbon zero with just a price. I have said here before, it’s not going to be enough. Even hideously punitive taxes in conjunction with broadscale bans, huge advertising restrictions, and sales restrictions, have not caused cigarette smoking to end over 30 years of gradually ratcheting them up. If we want to send that price signal on carbon, we’re going to need a much more serious price than $25 a tonne, and we’re going to need a lot of additional measures.

    This is a fact that economists don’t seem to be able to get their heads around. We aren’t going to stave off serious global warming damage with paltry measures like this. We need a revolution in social organization, starting with renewable energy and very rapidly extending to transport. No government on earth is serious about what needs to be done; we are going to roast this planet while we bicker about paltry taxes and fuel excises.

  38. Tim Macknay
    August 15th, 2014 at 16:50 | #38

    We’d better start hoping that the crank Maurice Newman’s belief in an imminent solar minimum is partially true.

  39. August 15th, 2014 at 17:00 | #39

    I would really like to see some of the positive people on here who are sure that a carbon tax alone will work give me some idea of how a carbon tax will get us to zero carbon by itself. Bearing in mind that there are some industries (like jet travel) that are very, very far from being able to be carbon free, and will require offsets. So somehow this carbon tax has to produce not just a complete transformation to carbon free power, ground and sea transport, but has to also be able to offset the use of coke in steel milling, and jet fuel, for at least the medium term.

    That’s a huge goal. And apparently increasing hte price of petrol by 6c a litre is going to do it.

  40. Hermit
    August 15th, 2014 at 17:18 | #40

    IMO a 1970s type fuel panic could happen before 2020. Despite turmoil in Iraq, Libya, Russia and Nigeria the oil traders have decided not to blink. That may be because the last oil price surge in 2008 accompanied the GFC. A contributing factor to the present nonchalance could be quiet optimism over the success of fracking in the US. Current US domestic oil production is back to 1986 levels and Obama is leaving the decision on the full scale tar sands pipeline from Canada to his successor.

    Some predict the fracking miracle will nosedive after 2018. Climate dramas (eg Hoover Dam drying up) may cause carbon and the likes of tar sands to be demonised. Then again Maurice Newman could be right and we should worry about the next Ice Age. Recalling 2008 the oil price may be contained just the number of barrels will be a lot less. Back to odd and even number plates or ration cards for petrol with no need for carbon pricing.

  41. bjb
    August 15th, 2014 at 17:39 | #41

    When’s the $US30 a barrel of oil due to kick in as Rupert promised after Saddam was knocked off ?

  42. Tim Macknay
    August 15th, 2014 at 17:53 | #42

    Recalling 2008 the oil price may be contained just the number of barrels will be a lot less. Back to odd and even number plates or ration cards for petrol with no need for carbon pricing.

    That doesn’t make a lot of sense. Obviously if the price was kept artifically low a la 1973, there would be a shortage that would probably necessitate rationing. But if the price is contained by reduced demand, as in 2008, why would rationing be required?

  43. Donald Oats
    August 15th, 2014 at 19:13 | #43

    My difficulty with Joe Hockey’s comments is that he was using them as justification for statements (by Hockey) that the Budget is fair. With a moment of thinking about the ABS statistics he used as evidence, Joe Hockey would surely have understood why it is a poor, if not outright invalid and/or irrelevant, data set to present as supporting his fairness claim. As the Treasurer in the current government, he should be able to do much better than this, or he is not the person for the role of Treasurer.

    Does anyone remember the hapless John Kerin who got caught out by the media for (momentarily) not knowing what the technical acronym GOS stood for?
    As Tim Colebatch’s take on it shows, this is what happens if a blunder like becomes a media sh*tstorm:

    Back in December 1991, I was sitting next to then-treasurer John Kerin in a crowded press conference when he stumbled on the letters GOS and asked me what they meant. I thought nothing of it. Kerin was an economics graduate. Of course he knew GOS was gross operating surplus; he’d just had a moment of forgetfulness, as we all do.

    But the pack closed in and tore him to pieces. Watching the TV news that night, you’d think he had publicly confessed that the job was beyond him. The next day Bob Hawke sacked him. And now Kerin is remembered for that moment of forgetfulness, and his outstanding performance in eight years as minister for primary industries is forgotten.

    Politics is not life-and-death, it’s much more serious than that :-)

  44. Ikonoclast
    August 15th, 2014 at 19:22 | #44

    My problem with Hockey’s statement about the poor was the revealing way he said it. He uttered the word “poor” with smug and superior contempt. It was as if the existence of poor people who can be despised and swept aside was utterly normal to him. He clearly sees it as the correct order of things. In fact, Australia is plenty rich enough to have no poor. Any treasurer who fails to see this and fails to take real action is utterly contemptible. By this proper and correct measure, we probably have never had a good treasurer.

  45. Megan
    August 15th, 2014 at 19:57 | #45

    My initial comments above should not be misconstrued as “blaming the Greens” for anything to do with carbon emissions.

    My criticism of the Greens (and Bandt’s press release) was primarily linked to the topic at hand, ie: what Hockey said.

  46. Paul Foord
    August 15th, 2014 at 20:24 | #46

    So Hockey has now issued a faux-apology – sorry he ‘hurt’ people’s feelings, doesn’t acknowledge the failure of analysis.

  47. Douglas Clifford
    August 15th, 2014 at 20:25 | #47

    @Fran Barlow Fran, Thanks, you have clarified the issue for me.

  48. Nick
    August 15th, 2014 at 21:13 | #48


    “Hermit’s point about how pathetic the price signal due to a $25 carbon tax is, should make us stop and wonder how exactly we are going to get to carbon zero with just a price.”

    The studies I’ve seen (linked to at Brian’s blog recently) showed something like a 1-3% reduction in overall fuel use for a carbon price of $30/tonne. So, no – not nearly strong enough to achieve significant reductions.

    Having to pay $1200 a year rego, on the other hand, for a car that emits 240g/km, instead of say $600 for a car that emits 120g/km – sends a much stronger price signal.

    It works out to the dollar equivalent of a carbon tax of about $200/tonne. Importantly, though, I think people would much more readily accept the change. If Qld of all states can already do it in a similar fashion…

    It rewards people for choosing (or having already chosen) more fuel-efficient new and second-hand cars. Their rego costs would drop from what they are now. That makes it’s politically appealing.

    Fran, a complete system overhaul like that sounds fine to me in principle, but it’s a big jump from what we have now. I think it’d be a lot more difficult to educate people on beforehand, and show exactly what they stand to save/have to spend extra as a result of the change.

    Plus CO2/km largely accounts for things like kerb weight/body size/oversized engines ≈ increased driving risk anyway.

  49. zoot
    August 15th, 2014 at 21:31 | #49

    @Tim Macknay

    We’d better start hoping that the crank Maurice Newman’s belief in an imminent solar minimum is partially true.

    We’d be better served believing in the Flying Spaghetti Monster.

  50. ZM
    August 15th, 2014 at 22:00 | #50

    The British experience from memory is that their climate price correlated with a period of offshoring of manufacturing and increase in imports – if you account for carbon emissions by consumption rather than production their emissions didn’t go down. There was a Quarterly Essay that stated this was the case for the EU generally.

    Accounting for emissions by production generally makes wealthy consumer countries look better to the detriment of manufacturing/tourist countries where emissions are produced for other nationalities’ consumption.

    There is pretty much no solution for air travel apart from conservation (not flying).

    The other physical solutions would need comprehensive implementation – reconfiguring goods production and consumption, food production and consumption, transport networks, waste management, moving land use away from pasteur to reforestation to draw down emissions etc. I myself cannot see how a tax will get all this done, because it entails a comprehensive reorientation of our economy (if that means systems of production, consumption, transport and related externalities) that the economic modelling does not seem to engage with at all.

    From what I’ve heard, in Australia stationary energy is the easiest transformation – transport, food, and land use are more difficult. I have heard that reforestation might not draw down sufficient ghg and that geo-engineering might be countenanced. But I think that was 17% reforestation, so I think we can just reforest extra through more efficient land use and not countenance geoengineering.

    Poorer countries may not have even the scanty resources we have devoted to devote to this great issue – for example, I have heard Vietnam looks like it might struggle with generating sufficient stationary energy from renewable sources, but the data is not fully there , so maybe it is more likely to have enough renewable resources than it seems?

  51. August 15th, 2014 at 22:01 | #51


    There is a sort of argument that says $24 per tonne caused a small reduction, so it’s have to be something like $240 per tonne to make a big reduction. Which is, of course, not true.

    Lets say you run a pub, and you don’t want people to drink vodka. Currently vodka is the cheapest way to get drunk, at $2 per standard drink. Beer is $4 per standard drink. You charge an extra $0.50 for vodka, and a small number of people switch to beer. Mainly people who don’t particularly like vodka, but used to put up with it. The beer producers realise that things are going their way, and redouble their efforts to make beer cheaper. The price of beer drops to $3. Beer sales rise. You add another $0.50 to the price of vodka, and all of a sudden almost everyone switches over to beer.

    Of course I’m ignoring jet travel, which is kind of like drinkers who are gluten intolerant.

  52. Hermit
    August 15th, 2014 at 22:24 | #52

    @Tim Macknay
    The supply of petrol will become increasingly constrained due to oil depletion and expensive alternatives. The 2008 GFC showed that $150 per barrel may be an aymptotic upper limit to the crude oil price. Therefore oil costing $200 a barrel to make from shale or drill from Arctic waters may never be extracted. Unleaded petrol could hit say $3/L retail with no increase in excise. Any more and there will be protests against the high costs of many being able to work (as with childcare) while tourist attractions may see numbers dwindle. Big automakers don’t expect more than 3% electric car sales by 2020. Since neither crude oil nor fuel excise will decrease in cost the answer seems to be some kind of non-price rationing. Cuba comes to mind with older cars driven sparingly. Public transport for most will be essential for journey to work maybe even shopping and nights out. Rationing by price works better in a growing economy but may be unfair in tough times.

  53. August 15th, 2014 at 23:02 | #53

    Yes John, that’s the utility death spiral that’s often talked about. It won’t touch transport, it won’t affect meat, it won’t affect coking and steel manufacture. It almost certainly won’t affect shipping, even if ships carrying LNG and oil and coal stop. It won’t affect air travel. People have not got it yet that we need ZERO carbon. That is, we need – effectively – negative carbon if we still want to fly, and still want to use metals. $240 a tonne is not going to get us there, nor is $2500. We need serious political will to begin reengineering the economy. Things like the RET are a start, but we need to be seriously ramping them up, not arguing about pissy little excise taxes. In my opinion any party that – right now – is anything less than 100% serious about the greenhouse effect – i.e. basically every party except the Greens – is going to be viewed (probably very soon) as criminally negligent.

    And by extension, any idiots who think that at this stage in the unravelling of our environment the Greens should be accepting compromises, or going for less than 100% of their program, are part of the problem. Anything less than 100% of the program is a waste of time and effort.

  54. August 16th, 2014 at 00:08 | #54

    Faust, $240 a tonne carbon price will get us to zero emissions. A $100 a tonne carbon price would get us there and a $70 a tonne carbon price is also likely to get us there.

    Rather than me write many boring paragraphs about why this is the case, let me just start by asking you what you would have to do to go carbon neutral personally? What would you need in the way of solar panels or other renewable generation to supply all the electricity you consume. Don’t worry about energy storage for now, we’ll assume that power you sent out into the grid from your solar panels or whatever is reducing someone else’s carbon emissions. If you buy petrol how many kilos of plants would you need to sink in the ocean or turn into biochar to remove the CO2 emitted? Same for flying. Same for buying steel and other materials. I’m not asking for exact figures here, just back of the envelope stuff. Then we can see if a carbon price of $2,500 a tonne is more than enough or not for you to get to zero emissions.

  55. Fran Barlow
    August 16th, 2014 at 08:41 | #55

    @Ronald Brak

    I’d sooner work backwards from the community cost of carbon emissions which some years ago was put at about $100tCO2e. It may well be higher now. Not all of that cost needs to be in explicit pricing of course and we ought not include effective community subsidies being abolished in the programs.

    We probably need a multi-pronged attack. A decade ago I was on balance inclined to the view that there was still time to avoid resort to geoengineering. Now I find it hard to believe that societies can make the structural changes needed in the time available to avoid a roiling series of disasters. We ought to be looking at a range og active and passive geoengineering measures ready to go over the next decade and scaling them up, with a view to buying the world the time needed to transform our carbon desequestration systems.

    While I don’t see algae to fuel as the shining light I did for decarbonising transport systems and providing firming for intermittents I did a decade ago, I certainly think that for $100 per tCO2e you could remove a lot of CO2e from the atmosphere and store it in the atmosphere and store it in ways that would be stable for hundreds if not thousands of years — long enough for humans to decarbonise energy, transport and industrial systems nearly completely and return concentrations to those obtaining 120 years ago.

    The trick is that we need to be reducing absolute atmospheric concentrations sharply by 2030 — and if that’s not possible — then mimicking the forcing of having succeeded in doing that, if we are to stop the decomposition of the permafrost and the ancillary release of CH4 from those stores. Dimming the atmosphere over the polar ice caps with SO2 at very high altitude might help with that, and likewise the loss of albedo and the decomposition of the GIS. That probably wouldn’t be that expensive.

  56. August 16th, 2014 at 11:17 | #56

    Ronald, I live in a rented ground floor apartment, so your solar solution is a non-starter. I live in a country which has to import much of its food and all it’s material resources, so unless you have a vision of battery powered super freighters my food is always going to be carbon intensive.

    As for 240 a tonne… Assuming linear scaling of the price, that will (by the calculation given here) lead to a 65c increase in the price of petrol. Do you think joe hockey will stop driving whatever gas guzzler he has at that price? Remember, if we are to avoid significant geo engineering we need every car user to stop or switch to electric cars, and every scrap of electricity to be renewable. We need our entire rail freight network to be electrified, along with every truck. There are no electric trucks on the market, and rail electrification hasn’t been discussed by anyone. What do you think the capital costs of that are?

    All of these processes require massive market-distorting govt intervention, now and for the nexttwo generations, combined with huge foreign aid efforts. Just as an example, how are you going to get rooftop solar on ground floor apartments? You are not. No one living in apartments can go off grid, and home owners in the suburbs can’t support them. Government is going to have to force rooftop solar onto business, and force network operators to upgrade the grid to take it. The RET and solar subsidies are a neat first step for the rich, but serious scale up is needed, and this needs to be continuous and aggressive and independent of a carbon tax, because a carbon tax is not enough.

  57. August 16th, 2014 at 11:25 | #57

    Fran, that geoengineering proposal is extremely reckless. No one knows what effect dimmed solar radiation will have on plant growth and productivity, we don’t know what feedbacks might occur, we will have to keep doing it if we don’t concurrently reduce co2, we don’t know what acid rain or ocean acidification effects it will have, and most importantly it won’t stop ocean acidification which is the first and potentially most devastating disruption to the human food chain. A billion people depend on fish for protein, and aquatic plant life is essential to managing future carbon concentrations. You gain nothing if you stall warming for a few years only to have massive algal die off release huge carbon stores!

    This is an example of the risks of geoengineering: an immediate human-induced loss of agricultural productivity that fails to stop a long term crash in protein stocks. And no experimental setting in which to test it first. The only safe solution to warming is mitigation, and we haven’t even started.

  58. August 16th, 2014 at 12:01 | #58

    I’m a bit surprised by your reply Faust. Let me ask a more specific question that might open your mind to a new realm of possibilities. How much would you have to pay to get solar PV put on your apartment building’s roof, or someone else’s roof?

  59. August 16th, 2014 at 12:30 | #59

    I can’t get solar PC put on my own roof, Ronald, because i don’t own my home. If I did pay, someone else in my building would not be able to pay. There are five ground floor flats in my building, and five first floor flats. What are you suggesting we do? Build nine new roofs? Perhaps we should pay to cover the nearby park? I live in a city that lacks abundant roof space. And I don’t know what i would be willing to pay, because I don’t know what the benefits would be, though right now it doesn’t matter – I don’t have enough savings to pay for solar panels on someone else’s roof and have reserves for medical expenses. I think you might find there are many millions of people in a similar position. We don’t need subsidized private solutions for rich landowners, we need wholesale reconfiguration of power generation and distribution networks, transport systems and agriculture.

    There are reports available online investigating the effects of a carbon tax. One, investigating a carbon tax starting at $10/ ton and increasing by that much yearly, finds a 50% reduction in emissions from baseline by 2035. Another, suggesting a 113$ tax starting immediately, finds a 25% reduction by 2030 (both in the USA). Do you think that’s enough? Most reasonable estimates of our future need us near zero carbon by then.

    Do you think that someone who is still driving a car at $240 a tonne is likely to stop when it increases by 5% to 250? They would definitely stop if we outlawed internal combustion engines by 2025.

  60. August 16th, 2014 at 13:08 | #60

    Faust, I get the impression you’re having trouble with the approach I’m taking which is to consider what it would take for one person or household to go carbon neutral and whether or not $2,500 a tonne of is a high enough carbon price to get there. So instead, how about you just tell me which country you live in we’ll go from there.

  61. August 16th, 2014 at 14:05 | #61

    I presented you some models Ronald, sadly without links so I don’t get binned. I live in Japan, in Tokyo. My electricity bill is probably $2000 a year I guess and my gas bill $500. Electricity is primarily aircon, and used to be nuclear but sadly since govts aren’t taking climate change seriously it is now 100% carbon emitting. I could easily afford a tripling of that bill – I would need to cut back a little on good restaurants and love hotels, but no biggie – before I had to get more efficient, and given the weather here is what drives my bill, it’s unlikely I would opt for efficiency first. My gas bill can’t be reduced, and I could afford a big increase in the cost to support that. So, what is the carbon tax level required to get my bill to three times what it is now? It would be about 70% tax by then. Further increases would make me head for efficiency but unless the generator switches back to nukes or goes renewable, I will always be carbon emitting. And since I don’t own land (like most young people in japan) I can’t personally take control of my emissions.

    And what about the fish I eat? What is your plan to decarbonization the Japanese fishing fleet?

    Also note that at some carbon tax level, electricity generation from waste industrial heat becomes profitable. At that point it is possible that you will lock in carbon emissions, because industries can eliminate their carbon tax by selling energy generated from carbon-intensive processes. Remember we need to be carbon zero here. How will price incentives do that?

  62. Ernestine Gross
    August 16th, 2014 at 15:10 | #62

    The series of events since the ‘audit report’ would be funny if it would be a comedy show.

    We are observing the unravelling of a PR spin bubble to support policy actions based on false premises.

    According to some, November is the time when the last bit of hot air is dissipated. The deflated bubble could leave a stain (“a mess”), which might become known as the IPA-MN-JH-MC mythology memorial.

  63. August 16th, 2014 at 16:04 | #63

    As luck would have it I am reasonably familiar with Japan, Faust. Not that this is necessary for basic calculations. Japan can go carbon neutral by putting a carbon price of $120 a tonne on emissions and then paying that money to Australia to remove and sequester the CO2 released into the atmosphere. And this is the maximum figure, an upper limit. In reality it would actually be much less than this.

    How did I arrive at this figure? Well, right now in Australia I can have the cheapest grade of barely loaded onto a ship for about $215 a tonne. By dumping this into the ocean, either in an area of sedimentation or deep water that is not a zone of ocean upwelling, the carbon in it, which came from the atmosphere, will be sequested for at least thousands of years. In reality we wouldn’t actually use grain, we would use something much cheaper such as agricultural waste, chaff, wood offcuts, baled up lantana, etc. And other methods of sequestration such as biochar may be cheaper. But we know we can do it for $215 a tonne and that comes to a cost of around $120 per tonne of CO2 sequested. (A tonne of low moisture plant matter represents about 1.9 tonnes of CO2 removed from the atmosphere. Note that plants trap the C part and release the O2 part of CO2.)

    Now you might say that Australia couldn’t possibly produce enough agricultural waste or other plant material to sequester Japan’s CO2 emissions. There are 126 million Japanese people and they emit over a billion tonnes of CO2 a year. And if that was all there was to it you’d be pretty much right. But here is where the magic of a carbon price comes in. At $120 a tonne Japan would emit much less carbon dioxide as everyone who emits it has a strong incentive to emit less or eliminate emissions all together. It doesn’t matter where you look, whether it is flight, fishing, electricity generation, vehicles, or home heating, people will have an incentive to cut emissions and they would be eliminated entirely from broad swathes of the economy. If you can’t see how this works I would say you lack imagination, but I am happy to provide examples if you have difficulty in this area.

    For example, the cost of producing electricity from coal would increase by roughly 12 cents a kilowatt-hour and electricity from gas by about 6 cents a kilowatt-hour, and so fossil fuels would be priced out of the market as this puts both well above the cost of solar in Japan, whether point of use or utility scale, and above the cost of wind power. And of course Japan’s massive pumped storage capacity helps in eliminating fossil fuel use from electricity generation. And while solar panels don’t have to go on roofs I will mention that Japan has about 20 square meters of roof per person and putting solar panels on half that would produce electricity equal to about 37% of Japan’s current consumption. After a bit of a slow start Japan is now installing solar PV at a ferocious rate with incentives that act as a high carbon price would.

    The price of petrol would increase by about 27 cents a liter encouraging further efficiency there. To rapidly electrify transport starting now would take incentives from the government, but as Norway has shown, that’s not difficult to do. (Ignore Toyota’s smoke screen about hydrogen cars, they are merely attempting to delay the introduction of Norway like electric car incentives as it would give their competitor Nissan an advantage.)

    And I’m sure you’re quite aware that when it comes to heating and cooling Japanese buildings are the least efficient in the developed world.

    Also note that a carbon price is a transfer, not a cost. In other words a price on carbon allows lower prices elsewehere. For example the income tax cuts and benefit increases that came with Australia’s carbon price.

    So to sum up, we can remove CO2 from the atmosphere right now for $120 a tonne and probably much less in practice. At a carbon price of $120 carbon emissions become a small fraction of what they are now, drastically reducing the amount of CO2 that needs to be removed from atmosphere and sequested. So even if there are areas where it is difficult to eliminate emissions, those emissions can still be removed from the atmosphere for much less than $240 a tonne and for vastly less than $2,500 a tonne.

  64. ZM
    August 16th, 2014 at 16:31 | #64

    There are not proven ways of sequestering great amounts of carbon for time immemorial, so since these measures don’t exist it doesn’t matter what price you decide to make up to charge for taking them.

    The only really proven way I can think if is whatever happened to all those trees aeons ago to get buried underground and turned into coal and oil. There must have been some great geological events behind this I would imagine? If so, it would not be pleasant to be a human and living while such great geological events took place.

    I am not sure that putting lots of plant materials in to the sea is a good idea at all. I think it might badly affect marine ecosystems. I notice people do this a lot with the sea, think they can pollute it because it is so vast and no humans live in it to make a fuss.

    Bio char is not fully researched, so I think you ought not count on that working until the research is more definite one way or the other.

    The best we can do now is take back all the land used for pasteur and other poor land uses and reforest this land. The problem with this is lots of people who have tenure of this sort of land do not seem immediately amenable to having their tenure revoked and the land be reforested. And other people are not amenable to giving up eating meat and dairy, despite the accruing legacy of ghg emissions.

    Also, in Australia stationary energy, as I said, is the easiest solved. The greater problems are transport (airplane travel needs to be permanently banned since people still take planes knowing the damage like smokers still smoke – banning is the only solution – and there needs to be a move away from so much traveling so people should work and go to school in their neighbourhoods by walking and bikling, and use trains/trams when necessary for further necessary travel and the occasional outing. Some exceptions would be necessary – like for ambulances and fire trucks); embodied emissions in consumer goods and food; and emissions from poor waste management (this connects with food related emissions – we currently do not reuse food waste as compost after we have eaten and the waste has past through our bodies – but the soil needs to have nutrients – instead of reusing food waste aftert has past through people, they invented artificial fertiliser which emits nitrous oxide. Apparently this was threshed out in London by the parliament there in the 19th C – a famous scientist told the parliament they should use human waste to fertilise the land and prevent the loss of nutrients, but the parliament were heedless to sensible advice (like they are today) and the scientist was disheartened and decided he had better work to invent and artificial fertiliser to prevent crop failures like happened in the Roman Empire).

    I think trying to correct such a great amount of problems that people pretended were not problems (like the parliament in London) for such a length of time needs a lot of transformations to current laws and socio-economic practices, not just a carbon/ghg tax.

  65. August 16th, 2014 at 16:46 | #65

    ZM, just how much more do you think we need to increase our understanding of charcoal before it’s ready for mainstream use? I don’t mean to be pushy, but the clock is ticking here. If we’re not going to use a technology that is 10,000 years old because we just don’t have a good enough handle on it yet then I don’t think those icecaps are going to remain unmelted. I have to wonder what your opinon of this new fangled PV stuff is, let alone these weird windmill things the Dutch have come up with.

  66. August 16th, 2014 at 16:52 | #66

    And ZM, you may not think that sequestering CO2 in the ocean or as charcoal is a good idea, but I’m not discussing that. What I am doing is showing that the carbon price necessary to eliminate net CO2 emissions is not $240 a tonne and definitely is not $2,500 a tonne.

  67. August 16th, 2014 at 16:53 | #67

    Nick and Ronald, I have written a post at my blog that attempts to quantify the effects of carbon taxes and review (some) of the evidence for their role in getting us to carbon zero. Have a look if you want to continue the debate with numbers. My estimation is that even a $2500/ton carbon tax will only increase the cost of e.g. inner-city car journeys by a factor of 3, not enough to completely stop it. I have made some suggestions for what needs to be done in addition to a carbon tax.

    As I have said before here and on my blog, we need to start taking this stuff seriously. We have serious economists like our good host seeming to claim that we can stave off civilization collapse with a tax. We can’t. We need to get real about this. I would really like to see economists like our good host actually look at the issue of getting carbon neutral, and making a judgement about whether it can be done with their preferred policy. My guess is an honest assessment will find their policy prescriptions sorely lacking.

  68. ZM
    August 16th, 2014 at 17:20 | #68

    Ronald Brak,

    I think conservation is first and foremost for people in wealthy countries.. Everyone in countries with ‘advanced economies’ can likely reduce their impact the most by conservation – everybody should be trying to adjust and do this presently because the governments are not being sensible. But apparently when everyone becomes sensibly frugal like they ought to, so as to not damage the environment and the climate in irreparable ways or cause there to be so many poor people in far off countries, this causes recessions – this is called the paradox of thrift. This is why economic laws need significant reform so the government stops hindering people from consuming only sensibly needed amounts and stops threatening people with their recessions and depressions etc.

    I think reforestation is best known even before charcoal – and I advocated reforestation above. reforestation is also called – land based carbon storage: plants. What I have heard of bio-char is there are limits to how much, land is needed to grow plants to be charred (and then these plants can’t be composted and added to the soil), energy is needed to char the plants, all this growing and charing of plants takes time and can’t happen overnight, and soil only will take so much bio-char (and then you would have to put it in holes underground, but you would have to make sure not to contaminate underground water or other important underground things), and there is uncertainty as to how long the sequestration lasts for. So this means more research is needed before we know what bio-char can offer in terms of sequestration and so we cannot just keep emitting GHG and say we will bio-char it all later.

    I am not against bio-char, but it seems to have limitations and there is not enough research at present to know how helpful it will be.

    I have been told Solar PV as it is will have unfortunate environmental consequences as these early mass installations come to the end of their usability in a decade or so. This is because they have not been built to be recycled and have toxic components that will be difficult to manage. I hope we will devote many resources to studying how we can recycle solar PV and manage the toxicity before this comes to pass.

    I am not sure of the recyclability and toxity of wind turbines. I think wind turbines would look better if people grew gardens around them, but lots of people complain about being near them, so you would have to find other people to do the gardening. Old wind mills look to be made out of plain metals, but left out in the elements they get rusty and then can’t be recycled so easily. If metals are kept properly they can last for many centuries or even thousands of years.

  69. August 16th, 2014 at 17:20 | #69

    Ronald, your example for Japan is incomplete. The incremental cost of driving you give is trivial, for example, against the cost of parking – it won’t change peoples’ behavior much at all. Remember to own a car in Japan you need to have a confirmed permanent parking spot, which costs usually $100 a month. And wherever you go will cost $5 a time in parking, as there is no such thing as free parking. Increasing the cost of petrol even astronomically will mean that the overall cost of a single trip doesn’t change anywhere near as much – doubling petrol prices for example will increase the average cost of a single short trip by maybe 20% if you’re lucky.

    And remember, as I keep saying (and you keep ignoring) “increased efficiency” is not what we are after. We are after zero carbon. You will not get that from a tax.

  70. Hermit
    August 16th, 2014 at 17:40 | #70

    All is not lost on the decarbonisation effort since it seems to be getting harder to exploit fossil fuels even without deliberate restraint. For example Galilee Basin coal may be too costly for India once port and rail facilities are built. Next year eastern Australia may triple the price of gas by diverting it to LNG exports. The US fracking boom which has arguably stabilised oil prices is set to nosedive from 2018. That leaves the tricky question of what to use as alternatives either for fuel or cash flow. No biggie, fossil fuels only provide about 80% of current world energy needs.

    The problem with biochar as a carbon sink and biofuel as an energy source is that they are realtime. Mother Nature has a 300m year head start (say from the Carboniferous Era) in burying plankton and land plants. With amazing application one species has burned half the accumulated carbon material in little more than a century or 0.0001 million years. Maybe this is why aliens from other galaxies don’t visit…they stuffed up.

  71. August 16th, 2014 at 17:42 | #71

    Faust, you don’t appear to understand that the ability to remove carbon dioxide from the atmosphere and sequester it places an upper limit how high a carbon price needs to be to reduce net emissions to zero. Do you understand that plants remove carbon dioxide from the atmosphere through photosynthesis?

  72. Watkin Tench
    August 16th, 2014 at 17:44 | #72

    The IPCC released a statement April 2014 that says we’ll probably need to curb GHG emisions by 40% to 70% by 2050 and get them to near zero by 2100.

    Meanwhile, in spite of strong growth in emissions the increase in world temps are near the bottom of the IPCC estimates, as John Quiggin has repeatedly stated on this blog.

    The clowns who are getting their rocks off by promoting panic are just as annoying as the jokers who pretend nothing is happening. We sdhould be luistening to the scientists and not grandstanding fearmongerers like faustusnotes.

    It is the time for being alert and active but there is no need for talk of upending civilisation by giving up private cars etc…

    We haven’t even come close to realising the potential of trees etc to soak up carbon.

  73. August 16th, 2014 at 17:55 | #73

    Watkin, the name challenge still stands. Are you capable of actually naming people you are talking about or will they forever remain a mystery to those of us without the advanced ability to Vulcan mind meld through the internet and forever remain unknown shades? Or perhaps puppets named Left and Right who never keep seem to keep position but instead whirl around each other like a circle in a spiral, like a wheel within a wheel, never ending or beginning on an ever spinning reel, like a snowball down a mountain, or a carnival balloon, like a carousel that’s turning running rings around the moon, like a clock whose hands are sweeping past the minutes of its face, and the world is like an apple whirling silently in space, like the circles that you find in the windmills of your mind.

  74. ZM
    August 16th, 2014 at 17:59 | #74

    Ronald Brak,

    There is only a certain amount of land available to grow plants for bio-char and it takes time and energy to grow the plants then turn them into biochar then put them in the soil/somewhere else. I explained the other limits I am aware of also above.

    Watkin Tench,

    The IPCC has 2 degrees of warming as a politically determined acceptable amount of warming. Lots of climate scientists say 2 degrees is too high and too dangerous and we need to be decreasing ASAP to get back to 350 parts per million carbon equivalent.

    Australia has a goal of reducing GHG emissions to 20% of currentish levels by 2050 – the problem with this is if the whole world emits at the level of 20% of Australians’ currentish emissions in 2050 it is much too much and we will exceed even 2 degrees.

    I explained the potential of trees above quite clearly. Students in primary school learn this about trees, it is not too difficult to understand.. The problem already mentioned is reluctance of people currently having tenure of land to give it back for reforestation and the reluctance of people to give up inappropriate land/’resource’ uses like eating meat and dairy and driving cars instead of walking and cycling and taking trains/trams when necessary.

  75. Watkin Tench
    August 16th, 2014 at 18:12 | #75

    Dear Ronald,

    Lord Monckton is at one extreme- “its gonna get too cold!” , let’s call him Father Bear, Faustus is at the other extreme let’s call him Mother Bear- “its gonna get too hot!”. In the sensible middle we have most of the mainstream scientists and folk like Prof John Quiggin (I wonder if he’d mind being compared to Baby Bear?)- “it’ll be all right if we calmly take the not-very-painful measures needed to sought this thing out”

    Meanwhile, it is apt that the latest post on Real Climate, a blog that features the thoughts of real fair dinkum sciencey scientsist, is telling us that we shouldn’t worry too much about the coming Siberian Methane Burp Apocalypse.

    ps. There is definitely something in the human psyche that attracts us to apocalytic scenarios. I’m currently enjoying the vampire apocalyse scenario in the new series “the Strain” along with millions of others, judging by the furious torrenting ;)

  76. Ken Miles
    August 16th, 2014 at 18:19 | #76

    At some price on carbon, air capture of carbon dioxide (ie. removal of CO2 from the atmosphere) will become economical, which should put an upper limit on the price of carbon.

  77. ZM
    August 16th, 2014 at 18:46 | #77

    Watkin Tench,

    The moral of the unwelcome intruder and the three bears story is not that anything in the middle is necessarily right !?!

    You do not evince a very good understanding of the morals of folk tales in this comment, and are demonstrating you have a very poor way of judging matters if your method is to extrapolate your misfounded assumptions of the morals of fairy tales into judging what is true and right about anthropogenic climate change and it’s solutions !?!

  78. ZM
    August 16th, 2014 at 18:49 | #78

    Ken Miles,

    Before the air capture of carbon becomes economical it needs to become practicable. At the moment scientists have not found a way to make it practicable, and there is no certainty they ever will.

  79. Watkin Tench
    August 16th, 2014 at 18:49 | #79

    Ken is correct of course. There is a whole field of economics called environmental economics that talks about this stuff. See books like this for instance. I had a look at Faustus’ blog and his plan is the old fashioned prescriptive central planning that we already know is usually the least efficient and most painful way to bring about change.

  80. Watkin Tench
    August 16th, 2014 at 19:12 | #80


    You do not evince a very good understanding of the morals of folk tales in this comment …

    I wasn’t atempting to; I was merely being flippant in order to dissipate the hysteria generated by faustus. Sorry if that wasn’t obvious.

  81. August 16th, 2014 at 19:16 | #81

    Watkin, is Faust one of the, “…clowns who are getting their rocks off by promoting panic.” as you put it? If so, can you present any evidence of his promoting panic? (I don’t require evidence of his rocks becoming off.) If you weren’t referring to Faust, who were you referring to?

  82. Watkin Tench
    August 16th, 2014 at 19:35 | #82

    A quick google and you’ll hundreds of technologies like this one for carbon dioxide capture via artificial trees.

    Sure, some of them may not work as well as advertised but between now and 2100 I think it unlikely that all will fail.


    Try looking at some of the more hysterical from Greenpeace etc…

  83. August 16th, 2014 at 19:54 | #83

    There are five ground floor flats and five first story flats in my building fn, and we worked out that we could have 1.5kw each on the roof. I’ve already done it, will send the link shortly. You don’t own your flat, but using my example, perhaps you can start talking to owners and other renters about possibilities

  84. ZM
    August 16th, 2014 at 19:58 | #84

    Watkin Tench,

    The technologies are not currently practicable, scalable or affordable. There is no evidence they will become so in the future. There is also the problem of where to store all of the gas if it can be captured, indefinitely?

    Storage materials can break or decompose – if the captured GHG are stored and the storage material breaks (say there was an earthquake or something) or decomposes, then all the people at that period of time in the future get inundated with our stored GHG emissions. This is not fair at all.

    We need to conserve GHG emissions right now as best we can individually, reduce them to zero with the assistance of a sensible government, and reforest substantially to draw down emissions (and a bit of bio-char to the extent that it can help and is practicable).

  85. August 16th, 2014 at 20:01 | #85

    Here’s the link to how I got solar panels on the roof of my block of flats http://fairgreenplanet.blogspot.com.au/2013/12/solar-panels-for-apartment-owners-my.html

    It is possible, these things can be done

  86. August 16th, 2014 at 20:04 | #86

    And this is about community solar, which is an option for people who do to have the roof space for solar. This option is encountering more difficulties, but these things can be done

    I wonder sometimes how often and how long I have to keep saying this, but it is possible for us to change.

  87. August 16th, 2014 at 20:10 | #87

    Watkin, so no one whose name I would know if I heard it then?

  88. Collin Street
    August 16th, 2014 at 20:11 | #88

    > if the captured GHG are stored and the storage material breaks (say there was an earthquake or something) or decomposes,

    Indeed. As we all know, carbon-storage material doesn’t grow on trees.

  89. August 16th, 2014 at 21:09 | #89


    You really don’t get it. Ronald Brak does.

    If there was a carbon price of $2500 per tonne, then it would be much cheaper to run an electric car using solar panels, and only the very rich would consider using petrol. And within a few years self-driving cars will become common, so you won’t need to park them, the company(s) that runs them will build an efficient storage facility.

    I’m not sure why you don’t trust basic economics to work.

  90. Watkin Tench
    August 16th, 2014 at 21:13 | #90

    Ronald my boy, you really haven’t been paying attention or maybe you have a poor memory. I can think of ten examples off the top of my head but this one will suffice: James Lovelock. Note how Lovelock himself notes other alarmists.

    Having said that, I suppose some folk might just need an element of rocks-off hysteria to motivate them into action. I have been a big Tim Flannery fan since I read The Future Eaters as a teen and I think it would be uncharitable to attack him just because some of his comments have been imprudent. Besides, the denialists have said much sillier things.

  91. Nick
    August 16th, 2014 at 21:43 | #91

    Watkin, it’s not about these technologies “not working as well as advertised”.

    As ZM says above it’s about hard physical limits. Scale is everything.

    A “quick google” led me to Prof Lackner in 2008:


    Arizona, US-based company Global Research Technologies (GRT) has revealed the technological breakthrough behind its plans to suck carbon dioxide economically from the air. The discovery, says company co-founder Klaus Lackner of Columbia University, New York, could allow millions of portable filters the size of shipping containers to alleviate global warming.

    Lackner calculates that, depending on local climate conditions, the membranes should dry quickly enough after their moisture-induced CO2 release to allow the capture of around a tonne of carbon dioxide a day.

    A tonne of CO2 a day is 20 V6 cars commuting 100kms to work. So we’d need a contraption the size of a shipping container for every 20 V6 cars travelling from Seymour to Melbourne…Geelong to Melbourne…south of Frankston to Melbourne…

  92. August 16th, 2014 at 21:54 | #92


    Of course, having got that tonne of CO2, you still have to do something with it…

  93. Watkin Tench
    August 16th, 2014 at 22:00 | #93


    the keyword being


    . Lackner’s idea, which is just one of hundreds out there, has come some way since then. Who knows where we’ll be at with high and medium tech solutions in 20 or 40 year’s time.

  94. ZM
    August 16th, 2014 at 22:16 | #94

    “Who knows where we’ll be at with high and medium tech solutions in 20 or 40 year’s time.”

    Exactly. You don’t know so you shouldn’t bet other people’s futures on it.

  95. Nick
    August 16th, 2014 at 22:25 | #95

    John, yep.

    The alternative to building one of those shipping container-sized cation exchangers would be to just plant 50 trees (or not chop them down).

    They tend to be pretty good at knowing what to do with the carbon they capture – they just turn themselves into bigger trees.

    That won’t solve all our problems. But it’s a hell of a lot cheaper and easier for the same result.

  96. Nick
    August 16th, 2014 at 23:26 | #96

    Watkin: “Lackner’s idea, which is just one of hundreds out there, has come some way since then.’

    Nope, it hasn’t at all. That’s partly why I linked to it. From the article:

    A prototype scrubber, which Lackner hopes to demonstrate in two years, would cost around £100,000 to build.

    I didn’t see any prototype shipping-container sized scrubber in that Jan 2013 video you showed.

    I saw a handful of membrane filters I could email a water-softening equipment manufacturer for tonight, and have them send me in the post tomorrow.

    It’s interesting enough research, and it may well find good, practicable uses in the future. But it’s not going to revolutionise what we’re talking about. A tonne is a tonne – surely it’s clear a contraption which absorbs and contains a tonne of something has to be of a certain size and relative strength in the first place.

    I guarantee you that basic physical fact is not going to change in the next 20-40 years.

  97. August 16th, 2014 at 23:38 | #97

    Nick, do V6 cars only get about 6.4 kilometers to the liter? On the highway, no less.

    Optimistic estimates of the cost of non-biological methods of extracting CO2 from the atmosphere start at $300 a tonne. But if there were no other alternative, paying such a price would be pretty trivial in the great scheme of things. It would add about a dollar a litre to the cost of petrol and $60 to a flight from Sydney to Perth. It’s not a price we couldn’t afford to pay. Fortunately there are cheaper options such as biological capture and not driving a V6.

  98. August 16th, 2014 at 23:41 | #98

    Watkin, you find Lovelock as annoying as Monckton? Really?? Well, each to their own, I guess.

  99. derrida derider
    August 16th, 2014 at 23:47 | #99

    @Pete Moran
    Pete, there’s still heaps of people in Treasury capable of and willing to give this sort of advice. John’s right – I’d lay odds he never asked for Departmental advice. I’d bet it all came from one of his IPA (or similar) background advisers. I suspect Hockey won’t make this particular silly mistake again.

    Quite apart from Treasury having people expert in income and expenditure surveys who can all spell “equivalisation”, Treasury’s tax experts would also have known that a petrol tax is mildly regressive because it is a very well known finding from extensive overseas studies.

  100. August 16th, 2014 at 23:57 | #100

    Ronald, above you say that 120/ton will get 27cents/litre. Tokyo now has pprius taxis with a 90c per km fee. The prius does 40km/litre. Your tax will add 1.5 cents to that fee. The flag fall for a tokyo taxi is $7 and to get to my house from my local station costs 10. Your tax increases my trip cost by 0.5%. This is going to save the world? Yourr only hope is that this huge extra cosst will encouragge a low-paid taxi driver to trade in her brand new prius for an electric caar? That will happen when the prius is dead and not before, because the prius is the main paart of the drivers costs.it’s bot that i don’t trust economics, it’s that the economics tells me it won’t work. Your claims are basef on the assumption that the main cost of these industries is the carbon but i have shown the carbon is marginal to capital and labour. You need a better plan.

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