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June 24, 2008
At last some truth about climate change and the costs of change, which highlights how much the politicians have been overacting, especially those on the conservative side of politics.
A joint CSIRO-Climate Institute study made public yesterday predicted low-income households would need between $50 and $185 a year in compensation in the short term, rising to as much as $500 a year by 2025, and petrol prices would rise by 10 per cent to 50 per cent. This has forced the Rudd Government to start addressing the issue, not evading it has in the past, even though Ross Garnaut has said that monies raised from selling the emission permits would be used to compensate households.
In Australia the debate still works in terms of how do you ensure that the legal limits on greenhouse emissions do not put "local" firms at disadvantage to their foreign competitors in China or India. Or how do you protect jobs in the intensive energy industries (eg., aluminum or steel) from going offshore. The debate is conducted in terms of shrill protectionist rhetoric by those (most notably the aluminum industry) wanting the subsidies that ensure cheap electricity to continue.
Their lobby groups (the greenhouse mafia) paint a scenario of Armageddon.
This scenario, often taken at face value in Australia, is challenged by a recent report Levelling the Carbon Playing Field from the Peterson Institute for International Economics. This argues that the damage would be small since most manufacturers do not use much energy and so would not suffer big costs. Even some energy intensive industries (power generators) have no foreign competition and would pass their costs onto customers.
So we are talking about a few industries--metals, paper, chemicals cement. The question to ask is how much do they contribute to Australia's national output , what is their share of jobs, and what percentage of their costs is energy? Probably a small percentage.So would the fall in output. Secondly, these energy-intensive industries are faced with increasing demand for their products that keep their manufacturing profitable in the face of rising energy costs. Thirdly, a cap and trade emissions scheme would bring new forms of manufacturing in solar energy (windmills, solar panels, hot rocks).
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I think people are ready for this and have begun (deniers aside) to adjust their behaviour accordingly, no matter how small.
Petrol prices are rising regardless of what the Gaurnaut report will say, and people will start getting sick of the petrol-price-punishment in parliament and look for action, not reaction.
I just can't see the Libs gaining any traction for the next election by harping on about price rises.
Hopefully people will start to realise that the only thing that stands between them and big business is the government and any resentment should be adjusted accordingly.