The news that both the Opposition and the Greens are to oppose the reduction in company tax proposed by the government (to be financed by the Minerals Resource Rent Tax) gives the Gillard government a golden political opportunity, if they are competent enough to take it. All they need to do is put the bill up once and, when it is rejected, announce that they will come back again next year. Meanwhile, they can bank the proceeds which will go a long way towards meeting their (ill-advised) commitment to return the budget to surplus in 2012-13. Then, next year they can do a deal with the Greens to make a cut for small business only. That will leave Abbott promising both to reverse the small business cut, and to impose a new levy on big business to pay for his parental leave scheme. This seems to me to work pretty well for both Labor and the Greens, and it gives Abbott the outcome he has chosen, so maybe it’s a win all round.

Meanwhile, and perhaps more significantly, some news on EU cabon prices, which have been the subject of numerous beatups to the effect that a low price will create budget problems for the government. The EU recognises that the low prices means they can make bigger cuts in emissions at low cost. A proposal to do that was vetoed by Poland at a recent ministerial meeting. But a similar proposal is going forward and will be the subject of qualified majority voting in the EU Parliament, probably in June. The most ambitious versions will require emissions cuts of 80-95 per cent by 2050, with milestones along the way.

One of the issues in the debate over CSG and fracking is the timeframe over which the global warming potential of methane (in the form of leakage from both conventional and unconventional natural gas projects) should be assessed. The leading critics of fracking, Robert Howarth and his team at Cornell have used a 20-year time-frame. Since methane has a much shorter residence time in the atmosphere than carbon dioxide, but has a greater warming potential over that time, the use of a 20-year time frame makes methane seem more serious than if a timeframe of 100 years or longer is used.

The original justification put forward by Howarth for the 20 year timeframe was that this was the likely life of a project. This is nonsensical, and (to me at least) undermines Howarth’s credibility. The world is still warming as a result of coal burned in power stations that closed decades ago, and no one suggests that we should not worry about this.

Howarth has now adopted a new justification that, on the surface at least, is more plausible. Most attention in the debate over climate change has been based on the assumption of a gradual increase in mean global temperatures, equilibrating to a new higher level some decades after concentrations of greenhouse gases have stabilized, with effects that will then play out for centuries. Since stabilization is unlikely to be achieved before 2050, that implies that we should be looking at timeframes of 100 years or even longer.

However, there is also a risk that we will pass some tipping point, after which the entire process will be irreversible. We don’t know much about tipping points, but, as Howarth observes, “”the world runs a high risk of catastrophic climate change in the period of 15 to 35 years from now.””

That’s true, but unfortunately for Howarth and for us, it doesn’t help his case.
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As part of the FAQ “Behind the Seams” series being run by Mark Bahnisch and others, I posted a piece (here at Crikey ) arguing that CSG is less environmentally damaging than coal.