I usually wait a day or two before reposting my Fin column. But the Liberal Party is such a rapidly moving target that this column, drafted on Tuesday, looks prescient in retrospect, but may well be obsolete by tomorrow.

Apologies in advance if this gets posted multiple times. The server is flaky, so I’m using Posterous which works, but sometimes too well. Please comment on the first (lowest on page) version.

Attentive readers of the Letters page may have noticed a letter from The Hon Wilson Tuckey MP (Quiggin sticks to problem not solution Letters 24/11). Mr Tuckey gave his account of a discussion of climate change policy held at Parliament House, organised by the Federation of Australian Scientific and Technological Societies Great Barrier Reef Climate Change Alliance, in which he and I took part.  As is usual in such cases, I had a rather different recollection of events. But, since Tuckey appeared to be, in Malcolm Turnbull’s words a fringe figure of the far right, I saw little value in responding.

Now, however, the situation has changed. As one of Turnbull’s earliest and most vociferous critics, Tuckey can consider himself vindicated by the decision of the Liberal Party to replace Turnbull with Tony Abbott, someone whose views on climate change are much closer to his own.

More significantly, as Tuckey himself has pointed out, the proposals presented on his website http://www.wilsontuckey.com.au now represent the closest thing the Liberal Party has to a climate change policy. It may therefore be useful to examine these proposals, and, in the process, to recapitulate some of the points I made during our meeting in November.

As was noted in Tuckey’s letter, I did not discuss the specifics of the government’s ETS policy, canvass alternatives such as a carbon tax, or speculate on the amendments being negotiated between the government and the then leadership of the opposition. The position presented by the Great Barrier Reef Climate Change Alliance was that a 25 per cent reduction in emissions was needed by 2020, and that a market-based emissions reduction policy should be the central approach. We did not seek to promote one market-based policy over another, and my answers to Tuckey’s questions reflected that.

I was however, quite happy to explain the merits of a primarily market-based approach as against a centralised command-and-control solution, in which governments seek to determine and impose by fiat, particular technological fixes for climate change. Within a market based framework, there be room for some policies, such as feed-in tariffs for solar energy, aimed at nudging decisionmakers to adopt new technologies. But the central element must be to ensure that there is a price attached to carbon emissions, whether through taxes or through tradeable permits.

A visit to Tuckey’s website reveals a different approach. Tuckey is an enthusiast for the tidal power potential of the Kimberley region, as indeed am I. Given the incentives associated with a high enough price for carbon, and reforms to the National Electricity Market to encourage more investment in long-distance transmission lines, there is huge potential in tidal energy.

But such an incentive-based approach is of no interest to Tuckey. Rather, he suggests ‘To respond to these problems the Government should take an up front role investing in and developing Australia’s only significant and predictable renewable energy resource which is to be found in the tides of the Kimberley.’

Tuckey also proposes extensive public investment in High Voltage Direct Current transmission lines, noting that ‘China will not have an ETS. It will invest in Hydro, Nuclear and other renewable energy. Its Government is already building an extensive HVDC network.’

There are strong arguments for a return to greater reliance on public investment in energy infrastructure.  But, in the context of a policy response to climate change, it is important to avoid ‘picking winners’. There are many candidate technologies for reducing our CO2 emissions, ranging from nuclear power and ‘clean coal’ to extensive investment in energy efficiency. 

The most cost-efficient way to choose options for emissions reductions is to ensure that investors in energy infrastructure, public or private, face a price for each tonne of carbon they emit, and earn a return for each tonne they prevent. If that is done, standard commercial criteria will select the most cost-efficient path.

Tony Abbott has effectively ruled out such an option. Having denounced the government’s emissions trading scheme as a massive new tax, he can scarcely embrace the main alternative, a carbon tax. On the other hand, he has committed himself to achieving the emissions reductions promised by Labor.

In these circumstances, the Chinese approach endorsed by Wilson Tuckey is probably the only feasible option. It is, perhaps, surprising that, having elected its most conservative leader ever, the Liberal Party may have to turn to the Communist Party of China for policy guidance. But politics makes strange bedfellows.

John Quiggin is an ARC Federation Fellow in Economics and Political Science at the University of Queensland.

Posted via email from John’s posterous

The ETS has been rejected, and the government has announced it will come back for a third try, adopting the failed deal with Malcolm Turnbull as its new policy. In short-run political terms, there are some obvious benefits here.
Clearly, a crucial consideration is that the government does not want to negotiate with the Greens and would much prefer a deal with the Liberals. But if they are looking at three or four terms in office (and they should be) they will have little choice but to make such deals.

And, even if they don’t care about having an ETS that is decent in environmental terms, the government could save billions of dollars that is currently being handed over to ungrateful political enemies.
I hope this bill is rejected once again, and that the government finally bites the bullet for a double dissolution.

Posted via email from John’s posterous

A day ago, it looked as if Malcolm Turnbull could survive at least long enough to implement his deal with Labor, a deal that would deliver a drastically weakened emissions trading scheme with massive overcompensation of every possible big business interest. It would be marvellous to report that a popular uprising against rent-seeking lobby groups changed all this. But, in fact, Turnbull’s leadership has been rendered untenable by a Liberal Party base, and commentariat, that has entered a state of collective insanity in which the most absurd conspiracy theories are taken as a starting point for reasoning. Over time on this blog, I’ve seen even seemingly sensible commenters of a libertarian or conservative cast of mind succumb to this tribalist lunacy. The handful who have resisted (hi, Tokyo Tom) are increasingly regarded as “beyond the pale”.

From delusional beliefs on climate science follow equally delusional beliefs on political strategy, symbolised by the 37 votes for a Kevin Andrews spill yesterday and by the apparent certainty that, assuming Turnbull holds his ground, a majority of Liberals will vote for the delusionist candidate, Tony Abbott

Amazingly, even the editorialist at the Oz, whose columnists have uniformly promoted delusional conspiracy theories recognises the hopelessness of such a stance. as the Oz says

In truth, there is nowhere for Coalition members to go on this issue, other than to support the amended and improved bill and claim as their work the concessions they have wrung from the government. The introduction of a cap-and-trade ETS has been bipartisan policy for more than two years and it is supreme folly for rebels within the Liberals to believe they can go to an election as the destroyers, rather than the enablers, of such a scheme.

There may be room for the Nationals to argue against an ETS in the bush, but it is politically naive to think that voters in the inner-city areas of Melbourne and Sydney would welcome such regressive policies from their MPs. How exactly would Mr Abbott, for example, propose campaigning on this issue in seats such as North Sydney and Wentworth, where Liberal voters are determined to see action on climate change? Having a bob each way on the issue will not go down well with voters who have followed the debate and who expect, as Mr Turnbull says, responsible political parties to take responsible action

There is no reasoning with lunatics, and my attempts to do so have gone nowhere. At this point, we just have to hope that they will remain, as they are at present, in the minority, and that they can be kept as far as possible from political power.

There’s no guarantee that sanity will prevail. As the conman in Huckleberry Finn says ‘Hain’t we got all the fools in town on our side? And ain’t that a big enough majority in any town?” But, as I recall, he ends up tarred and feathered and run out of town on a rail.

I’m one of a group of more than 20 academic and business economists who have put together a statement criticising the Queensland government’s case for asset sales and arguing that we need a proper public debate. The group includes some of Australia’s leading economists, including Joshua Gans, Stephen King, Warwick McKibbin and Adrian Pagan, as well as ten professors of economics from UQ, and more from other Queensland universities. But maybe the most surprising, and heartening, signature is that of Henry Ergas who has been one of my sparring partners on many occasions, most recently a debate on whether government should be the ultimate risk manager, held by the UQ Alumni Association (Henry won, by popular vote). Although Henry has been a strong supporter of privatisation in many instances where I have opposed it, we agree that these issues should be decided on the basis of costs and benefits, and not by spurious claims that privatisation provides governments with money they can invest in schools and hospitals.

Update I just did an interview on Madonna King’s ABC Radio program, and have promised to debate the issue with Andrew Fraser. I will also probably do a TV interview.

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It’s time, once again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language.

Accidental duplicate post – please comment on the other thread

It is I think, comparatively rare for a senior political figure to describe equally senior members of their own party as  “fruit loops” and “f…wits”, going on to observe that “They don’t know how crazy they look, because crazy people never do”.

Test

Posted via email from John’s posterous

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic.