Julia Gillard has announced an Australian version of the cash for clunkers program of the Obama Administration. Reader Ben Elliston writes
read an article some months ago by Jeffrey Sachs evaluating a
similar policy from the Obama administration:
It turns out that the Gillard proposal is even worse than Obama’s.
Sachs calculated the greenhouse gas abatement value of Obama’s scheme
at US$140 per metric tonne. Gillard’s policy will reduce emissions by
1 million tonnes at a cost of $394 million dollars ($394/tonne).
My only observation is that Ben’s estimate is taken directly from the government’s press release, which is almost certainly overoptimistic. For comparison, at about $25/tonne, brown-coal electricity generation becomes uneconomic compared to gas and black coal. At $100/tonne, just about all the alternatives (including wind, nuclear, CCS, and solar) look pretty good. Cash for clunkers is, as Sachs concludes, a clunker of a policy.
And just in case anyone has forgotten, Abbott’s anti-policies are even more focused on this kind of nonsense/