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a free ride for energy pollutors? « Previous | |Next »
May 29, 2007

It appears that John Howard, who has resisted an nationwide emissions trading scheme, will agree to one when the PM's emissions task group recommends one next week. That policy reversal is what the leaks are saying, even if the PM is on the record as regarding climate change as an irritant. The spin is interesting to watch: denialist, sceptic, realist. Realist means protecting jobs and economic growth.

But what kind of emissions trading scheme will be recommended? Will it be one that recommends big exemptions for energy intensive industries, such as steeling making and aluminum? One that gives exemptions to the biggest pollutors? Now that would be a strange way to reduce greenhouse emissions. So would one in which permits to pollute are given away rather than being bought, through auctioning. The aim is for price to be used to encourage companies to reduce their emissions.

in his op-ed in the Canberra Times Peter Martin says asks, 'surely that couldn't happen to emissions trading? His response:

It is exactly what is being proposed. Polluter after polluter that has made a submission to the Prime Minister's taskforce on emissions trading has said that while it supports the idea of a trading scheme, it wants the price of the permit set low and it wants to be given enough permits gratis to cover most of the pollution it already does. As Australia's most venerable economic modeller and one of the signatories to the economist's letter, Professor Peter Dixon, of Monash, University told me, "It's the same as putting a tax on carbon pollution and then instead of doing something useful with the proceeds like cutting another tax giving it to the shareholders of the polluting companies."

Martin adds that it is even better than that for the polluting companies. If they get given for free permits that a would-be competitor would need to buy, they get given a built-in cost advantage. Their would-be competitors might not bother! No wonder they like the idea.

Setting the price low --say about $10 per tonne emitted----would be another indication that climate change is not being taken seriously to cut emissions from electricity generators. In Question Time in Parliament Howard indicated that he would go light on targets. Targets are not good. It looks as if Howard just wants to be seen to tackle problems. He isn't interested in trying to fix problem. Rather he wants to just be seen trying. Since he is in the appearance business he can a make grand gesture while the problem is a concern of the electorate's mind. He did the same thing with water in the Murray-Darling Basin.

Update: 30 May
I see that Michelle Grattin in The Age agrees with me about Howard's performance on climate change in Question Time yesterday. She also saysthat:

yesterday's lashing out [by Howard] at Sir Nicholas Stern will do him little good. This is a big issue and the PM has a challenging fight ahead to convince people that the Government is fair dinkum about it. Yesterday's performance would give his troops little confidence that he's up to winning on this issue.

Spot on. He has to convince the broader business community he is serious, not just play the protection line for the intensive energy industry.

Bob Brown, in an an op-ed in the Canberra Times, addresses Howard's politics of appearance on climate change:

Politically he [Howard] needs to appear to take climate change seriously (thus his change from "climate-sceptic" to "climate-realist") and appear to act urgently (thus the creation of the emissions trading task group). John Howard doesn't need an emissions trading scheme to work that would upset the mining industry it just needs to neutralise the argument that the Prime Minister has no plan for addressing climate change at this year's election.

Brown says that Good climate change policy makes the polluters pay, raising billions of dollars in revenue and creating a real incentive to reduce emissions. Bad climate change policy pays the polluters, using taxpayers' money to fund ineffective policies. So far the Government has chosen bad policy. Some $10 billion from taxpayers goes each year to subsidise polluters in the fossil fuel industries in tax breaks or payments. As Brown says:
For a decade Howard has delayed action, refused to set targets, relied on voluntary action, blamed other countries and said they should act first, subsidised the polluting fossil fuel industries, and strangled funding for the cleaner alternatives like solar and solar-thermal and energy efficiency.

Will that end?

| Posted by Gary Sauer-Thompson at 9:06 AM | | Comments (1)


It all sounds very like the pope selling tickets to heaven