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climate change: costs « Previous | |Next »
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).

| Posted by Gary Sauer-Thompson at 9:16 AM | | Comments (8)


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.

You raise an important point. This will be very hard to administer federally. Perhaps Kevin should hand this off to the states pronto. It might lessen the negative feed back in his direction some.

Another important thing to remember is if the country was completely solar powered we would all be paying sun tax.

re your "deniers aside" remark---the Coalition has come out against an emissions trading scheme. Yesterday in Parliament was day one in their campaign---a scare campaign on emissions trading. They are sinking back to their bad old ways. I' sure that we are going to see a concreted campaign by oil, coal and electricity companies, and the network of lobbyists, fake experts and thinktanks they have sponsored against emissions trading.

The Climate Institute’s report was written by two leading economists in the field, Richard Denniss and the CSIRO’s Steve Hatfield-Dodds. The report demonstrates very clearly that, while the cost increases that will come down the line with an effective emissions trading scheme are quite substantial, they are still smaller than expected increases in wealth for all income brackets and for all carbon prices modelled.

its a safe bet that OPEC --Sadi Arabia apart--is pumping as much oil as it canat $US140 a barrel. So energy security requires more than making the OPEC cartel the scapegoat.

Why doesn't SA make the leap from the home-grown green movement to a thriving solar power export market? It has all the desert sun that is needed and the space for the rows of solar panels.

Why cannot the Infrastructure Fund be used to build the lines that would transmit the solar energy to the grid?

So it will cost us more but we will be able to and have to absorb it. Good news.

Now where did I put those plans for that car that runs on bullshit.

if you were a rational consumer your next car would be a more fuel efficient one. Or you could catch public transport to work. Or walk. The resources boom will cause your wages to increase and the proportion of the cost of petrol in your household budget will decline.

It's the Coalition and its media spruikers like Bolt who are talking bull on this with their talk of a big tax crushing us.