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Climate Change « Previous | |Next »
April 3, 2004

This is an interesting article on climate change, the US Republicans and John McCain as an unlikely champion of global warming legislation to curb climate-change.

It asks a good question: How did the party of Theodore Roosevelt become so anti-environmental? It says that the rejection of global warming comes from a kind of worship of the market–---a deep belief that there's never any good to come from interfering with the free operation of laissez-faire economics--- and the notion that economic prosperity is tied to the consumption of fossil fuels that they simply refuse to let go of it. So they reject any argument that postulates that fossil fuels have downsides and that there are good reasons to accelerate the transition to renewable forms of energy. Republican environmentalism---thoise who actually accept that global warming is a problem needing to be addressed---is almost a contradiction. The Bush administration's energy policy is written by the oil, gas, and coal industries.

You have a similar story in Australia. The coal industry is opposed to any environmental regulation makes industry competiveness central and maginalizes any research outside cleaning up coal.

Australia's high energy emissions are a legacy of two main factors: the high dependence on cheap domestic sources of fossil fuel, especially coal, and recent energy market reforms which have seen electricity generation based on the highest carbon-content fuels become the most price-competitive in the new deregulated market.

The electricity market reforms are producing negative greenhouse outcomes. As the Senate Report into Australia's greenhouse future observes. the micro economic reform of the electricity market does not directly create an environment where emissions are minimised. It actually creates an environment where the lowest cost of generation is developed. The competitive wholesale electricity market drives purchasers of electricity, who in the first place are the retailers of the electricity, to pursue the cheapest available electricity. The cheapest available electricity by and large is coal-fired, and that is why in the recent past in Australia there has been an increase in the use of coal and, therefore, of course, an increase in greenhouse emissions.

Clearly, Australia has an energy problem. The competitive market is not producing sustainable outcomes. Another case of market failure?

Where is Treasury?

| Posted by Gary Sauer-Thompson at 12:03 AM | | Comments (0)