So the day after tomorrow (ah that hoary old Hollywood chestnut…), Penny Wong will finally release the government’s Green Paper, to which Professor Garnaut is one of many ‘inputs’. Most of the others being big business.
While it won’t be anything like final design, and it won’t include any emissions targets or trajectories, the paper should give us a much better idea of what the government’s thinking is on emissions trading. We’ll have more of an idea of whether it’ll be something The Greens can support with amendments. The signs thus far are that it should be supportable, but there is still the chance that it’ll be so full of holes that we’d be better off without it.
Here’s some notes we’ve put together on some of the key issues with emissions trading that we’ll be looking out for.
To be environmentally and economically effective, the Green Paper must:
1. Acknowledge that emissions trading is only one policy among many:
- The Green Paper should explicitly recognise that emissions trading is only one among many policies that will be required if we are to rebuild Australia for a post-carbon economy.
- Just as high petrol prices have not driven major change, neither will emissions trading without strong investment in the alternatives. Without such investment, the ETS will simply drive up the cost of living without helping people find alternatives.
- Policies such as feed-in laws for renewable energy, funding for mass transit and the roll-out of energy efficiency are more important than emissions trading and, coupled with an ETS, would make it both more environmentally effective and more economically efficient.
- Introducing an ETS without removing systemic support to coal, oil, roads and energy-intensive activities makes it less environmentally effective and less economically efficient.
2. Deliver compensation by reducing carbon debt:
- Emissions trading is about raising the prices of greenhouse-polluting activities and products so as to change behaviour. It is vital that those people facing high costs, most particularly Australia’s poorest people, are compensated for these rising prices. However, it is also vital this compensation boosts, rather than undermines, the point of the scheme.
- Cash handouts (tax cuts, welfare cheques, or free permits) will reduce the effectiveness of the scheme, will be inflationary, and will be temporary relief from a permanent price hike.
- Revenue from permit sales can be used to permanently reduce people’s increasing carbon debt by investing massively in energy efficiency (insulating homes and providing solar hot water, and helping the commercial and industrial sector invest in energy saving equipment), bringing forward renewable energy alternatives, and shifting funding from roads to mass transit and cycleways. These investments must be systemic, not hand-outs to a few.
- Instead of compensating hugely profitable multi-national coal corporations with free permits, we should invest ETS revenue in helping the workers and communities who currently rely on coal to shift to cleaner options – seeding new industries and retraining the workforce in places like the Latrobe and Hunter Valleys for green collar jobs.
3. Implement stringent targets without delay:
- Climate action is urgent. We must move Australia into the post-carbon economy as fast as feasible, reducing emissions to at least 40% below 1990 levels by 2020.
- Costs under an ETS will rise until you reach a tipping point in solutions being implemented, after which time they come down. A fast and stringent target will bring that tipping point forward, while a lax target and delayed implementation pushes it further away. Various studies have shown that extremely swift action can be cheaper than slower action.
- There is no need to delay the ETS – we have been talking about these policies for decades and more talk will only give polluter more time to plead their case, rather than yield policy breakthroughs. Let’s put our noses to the grindstone and get working.
4. Provide broad coverage:
- The more of the economy an ETS covers, the more evenly the cost will be spread. If some sectors are shielded, others will carry a greater cost burden.
5. Set penalties to ensure compliance:
- Only a penalty set at a level that will be higher than the market price for permits will ensure compliance. A low penalty will act as a safety valve for the economy at the expense of environmental integrity. Penalties must include a ‘make good’ provision, to ensure emissions reductions not achieved in one year are achieved the following year.
6. Auction all permits:
- Auctioning permits, rather than grandfathering (allocating based on past emissions profiles) makes the polluter pay, instead of giving big polluters a windfall, and removes the potential for political interference and deliberate gaming of the market.
Timely work, all good policy priorities. Not sure if theres much evidence for “Costs under an ETS will rise until you reach a tipping point in solutions being implemented, after which time they come down.”, or if there is, how much it will apply in the future.
Also i don’t think the dangers of cash-handouts should absolutely preclude their use, particularly in the first say 3 years. General acceptance and ETS++ lifespan will hinge on whether the “its horrific/draconian/regressive system” hype sticks; i see no reason reforms enemies will stop their attacks. If A Current Affair et al can find lots of empathic-enough ‘battlers’ being “strangled” by “green extremism”, then in 3 years the ETS will be RIP. If govt can counter with lots of real helpinghand and newbegining stories, no drama (hopefully). I am not arguing for systemic supports for any sectors, only hardship or rapid-transition payments for applicant households and small businesses. The miners and electricity generators however should be told ‘you’ve had 30 years to prepare, you chose to spend it deceiving the public, tough titties.’
The Penny Wong released Green Paper needs to be environmentally effective for the Murray Darling and Coorong. The Green Paper should include news that a temporary bank will be quickly built before the next rain to close off the Menindee Lakes massive evaporation area to allow Darling River flow to reach the Murray, Coorong and marine environment. Otherwise the next Darling River flow is obviously unlikely to even reach the Murray
To date this emissions business appears all about cost and economics and not about real action to sustain environment already impacted by climate change as claimed?
Raising the prices of greenhouse-polluting activities and products and investing in alternatives are both essential parts of getting major behavioural change. But I’m still not convinced it will be enough without some extra concerted leadership to drive the sort of rapid and major behavioural (and thus cultural) changes that are required to come close to meeting targets.
That means educating people about and showing leadership on the necessary changes, rather than assuming its all going to happen just through a combination of economic pressures/incentives and providing the alternatives.
The most obvious continuing omission in this area is diet. The evidence is indisputable that emissions from livestock are a major impact - greater than emissions from all forms of transportation combined, according to the UNFAO - yet there is almost no public encouragement for significantly reducing our meat and dairy intake. This is despite the fact that there is no extra expenditure involved and no extra research or technological development required.
Of course its not popular, and is politically contentious. But if we avoid something that is as literally in our faces as diet because we don’t want to alienate people, I doubt we’ll have much chance of getting the sort of hard decisions and major changes that are needed.
Welcome to Greensblog, Andrew!
You make a very good point about diet. Of course, the question is how much a government can do beyond questionably-effective education campaigns.
There are, of course, other shifts that can be made, such as moving towards more organic farming methods. I expect our regular commenter, mcfarm, will back me up in saying that grazed cattle produce several times less methane than grain fed, for example.
Perhaps one of the most important steps, besides educating the population at large about their dietary habits, is educating the farming community about ways to reduce their emissions by changing their practices.
Consistent with changing practices, a potentially interesting way to address methane emissions from livestock is to develop suitable strains of non-methanogenic gut bacteria and innoculate said livestock with it. I understand this is the subject of current research.
If you offered Australians the choice of:
a) 1% of GDP being used for renewable investment or
b) giving up meat
Then I suspect the great majority would happily opt that we should spend the 1% on renewables.
1% of GDP over 20 years on $2/Watt or cheaper large scale GDP should make your 40% by 2020 easily achievable.
There are already many obviously bad dietary choices, with tremendous flow on costs for society and yet these seem uncontrollable. The incentive for control of these requires no leap of faith as the costs accrue to the current generation. This makes it profoundly unlikely a climate change motive will succeed where other motives have failed. Food preferences apparently operate in a similar way to drug addiction.
If controls were imposed on meat then its production would almost certainly go underground and probably introduce many serious health problems in respect of quality control.
ETS is fundamentally flawed and that is the reason why it is so difficult to implement. It is the first tax directly aimed at reducing energy consumption. Even though it is tagged to carbon emissions the current energy economy is at least 90% attached to carbon emissions.
Reduction of energy usage by either monetary or physical means lowers the standard of living as living is the act of energy potential doing the work of keeping a creature alive. In the case of humans it also powers our lifestyle technology and the industry that creates it.
The current economy, which is essentially 300 years old, has grown up in an environment of unlimited energy supplies or at least energy supplies have meet energy demand in sufficient quantity. We are now about to turn off the energy tap, hoping to turn a new tap on in the future supplied from renewable energy sources. Unfortunately energy is a instantly acting and between times there is going to be an energy shortage for those with limited financial means.
However, this energy drop creates further drops in energy usage, energy acts on energy. If one million liters of petrol are saved each day, then the car fleet will not travel as far, therefore, not wear out many tires, or brakes etc. making the car have a longer life, with the a loss of the work associated in the motor industry. The large base load coal fired power stations produce the lowest priced electricity (depending on their vintage) but under ETS the cogas peak load generators will produce the cheapest electricity (it will be time before renewables kick in or carbon sequestration) reducing the base load generators income, who must put up their prices and retrench staff to stop going bankrupt very quickly and it goes on. With ETS, we will start to anchor our economy to carbon currently almost directly proportional to energy production and usage. Energy is what makes life tick and reducing energy per head of population makes life tick slower.
To at least maintain some sort of egalitarian living stability the primary objective should be introducing renewable energy technology by exchanging polluting energy generation on a kW for kW basis as quickly as possible and introducing energy saving technology particularly into buildings.
The time for ETS and similar social economic solutions was twenty years ago, the current time scale is far to short.
It seems to me that if you want to create an emissions trading scheme that does not ship our industries off shore you must account for emissions created by all Australian economic activity. That includes goods and services imported into the country.
How else can Australian industries compete with overseas competitors that don’t offset they’re CO2 emissions?
Answer, we simply can’t.
Surely we should take responsibility for the emissions created in other countries on our behalf especially those of developing countries.
I read in the news that Mobil is flagging it will close its refinery in Altona Victoria because it thinks that it won’t be able to compete with imported fuel. This is of coarse part of the scare campaign that is being perpetrated at the moment but with the signals coming from the government lately who knows what sort of half baked scheme they’ll come up with. If they get it wrong then this may become a reality. Worse still if they take to much notice of the scare mongering they may create a scheme that is so watered down that it won’t achieve anything.
I believe any scheme should target all emissions including those created producing the goods and services we import. If a product has had CO2 emitted during its production and then is exported to another country then the CO2 burden should go with it unless it can be proven that it has been offset in its county of origin.
That burden should then be the responsibility of the importer along with any other emissions produced in transporting that product to the end user.
Accounting for all emissions not only transportation but storage, refrigeration, powering and air conditioning of offices, advertising and company vehicles.
Get It… “Everything”
Why not a stick a mandatory label on all products local and imported indicating the CO2 emitted in tons during its production and delivery at every step right up to the end user.
Then next to that, the amount of CO2 which has been offset by either purchasing carbon offsets or allocating that amount to a permit as part of the carbon cap. This can be done and added too anywhere along the product chain with the entity purchasing the offset or including it in there permit cap passing on the cost with the product.
At the point where all carbon is accounted for, the product can then be labeled (100% carbon Offset) and can continue down the chain as is until it gets to the end user. If at this point there is any CO2 not offset then it will attract a tax ($ per ton).
The Carbon tax will be set, but will be significantly higher than the actual cost of offsetting which will be determined by the market.
As for non renewable fuels such as Natural Gas, LPG, Petrol and Diesel where the CO2 is created by the end user, it can be sold with the offset and the cost absorbed into the total price or not, in which case the Carbon Tax is applied much like the GST.
This may sound very confusing but is really no more confusing than the GST and of coarse no producer will want there product or service to be carbon taxed as they wont be able to compete with companies that offset at the earliest opportunity. Or better still use low or zero emission technology to produce there product or provide there service.
As for our exports you may ask.
Well as the price of carbon offsets (or carbon credits) is to be set by the global market then we are able to sell those offsets with our products and recourses to countries that have similar schemes.
If the products emissions are offset in Australia by the manufacturer then it will be labelled with the amount of CO2 emissions in tons and next to that 100% Carbon offset. The price of coarse will be more as Importer would be paying also for the offset at what ever the market rate is.
If they chose to buy the product without the offset the emissions in tons would still be labelled and next to that 0% or No Carbon offset. They would know exactly how much CO2 they need to offset and can chose to do it within their system.
As for countries that don’t have an ETS or Carbon cap such as China or India we would not obviously offset the carbon as that would make it hard for us to compete, but the Labeling would still remain. As long as the CO2 emissions are accounted for and quantified then when those countries convert those products, minerals and energy into exports and sell it back to us we will know how much CO2 was used and can deal with it in our system.
This way whether a product is imported or locally produced it will be on a level playing field when sold in our market.
I don’t think it’s too much to ask developing countries that don’t commit to an emissions trading Scheme to at least indicate how much CO2 was emitted to produce the goods or service’s they export.
I can’t understand why agricultural faming is not going to be included first off.
The farmer knows exactly how much product he has produced by weight. He can then simply subtract the carbon he has generated growing it by simply looking at his energy and other input bills and the difference is a carbon credit he can then sell to the market.
A mechanism that allows the farmer to buy fuel/energy, seed, fertilizer even farming equipment with no offsets would be an advantage as it would reduce his initial cost. The same mechanism could be used for other industries that absorb more CO2 than they produce.
When the GST was introduced remember all the doom sayers. It will be inflationary and an administative nighmare. We now know different. and as with the GST some things will go up but others will come down such as some food and plantation timber.
The main thing is to set up the frame work, get it operating properly and then over time reduce the overall cap by issuing slightly smaller permits each year until you get to the target
ie. 20% by 2020 and 60% by 2050.
John Griffin -
Personally, I’m not convinced that livestock and meat constitute a grave problem in terms of the problem of anthropogenic forcing of the greenhouse effect.
Whilst livestock do expire methane and carbon dioxide, like all animals, they exist within the natural biological/ecological carbon cycle, that is, they eat carbon fixed in plants and excrete greenhouse gases into the atmosphere.
If we were feeding cows on carbohydrates synthesised from coal or petroleum, it would be a different story, but we don’t.
I think the primary problem by far with regards to unnatural, anthropogenic effects on greenhouse gases is fossil fuels, especially the use of coal for stationary electricity generation in this country.
Good stuff overall. In general I think that carbon taxes would be much better than trading - we did not eliminate slavery by setting up a market for it, after all - but I understand that the Greens cannot really oppose an ETS, only try to amend it.
Certainly the penalties for over-emitting should be heavy - just set it as (say) twice the highest market rate for the permits in that financial year. That should get them crying in self-pitying pain.
Best of all would be to simply tax/trade carbon in its primary forms - coal, natural gas, oil and timber and wood products. That would save an awful lot of messing about calculating the emissions of this and that and everyone asking for exemptions.
It would leave out a good part of agriculture, but would have indirect effects on it, since a god chunk of nitrous oxide emissions are from artificial fertiliser (made with natural gas) and animal manure (and so many animals can only be kept with high inputs of fossil fuels), and of course a tax/trade on timber/wood would affect deforestation.
Regarding grass-fed cattle, note that their emissions are not zero, they’re just considerably less than CAFO beasts; it’s like a gas-fired electricity station vs a coal-fired one. Better but still not great. And in many cases it’s just as bad. It turns out that cattle require just the right species of grass, not just any grass, or they get just as gassy as with wheat, maize and oilcakes. But again, that could probably best be handled indirectly by tax/trade on the coal, gas, oil and timber/wood.
One issue which concerns me is that at present, renewable energy under the GreenPower initiative is set at conventional energy + surcharge rates. I have a strong suspicion that if a tax/trade system causes the conventional rates to go up, the GreenPower surcharge will go up, too. I pay the extra 5.5c/kWh because their justification is that building new plants costs more than using the old ones; but if the old ones cost more, that does not make the new ones cost yet more all over again. Rather the prices should come closer, perhaps even the conventional being more expensive.
If GreenPower and conventional are priced the same, it’ll be interesting to see which people will prefer.
It’s something to keep in mind, anyway.
[...] Here’s some notes we’ve put together on some of the key issues with emissions trading that we’ll be looking out for… Full Article: Source [...]
I wonder if the government’s ‘green’ paper will be printed on recycled paper?
Kiashu, the price differential on Green power is a function of supply and demand.
If 100% of customers demanded Green power when the Green power price was less than or equal to the coal power price then there would not (for a long time at least) be enough Green power supply to meet demand.
So we can expect Green power will remain more expensive than coal power for as long as the need to ration Green power supply exists. What Green power costs to produce will probably end up being fairly irrelevant for some time in setting its price.
The most likely thing is the gap will narrow from the present level only as Green power production increases.
Nice tactical pre-release leak this a.m.: fuels excise cut to offset ETS/CPRS including petrol, seems NewsCorp/The Australian heard it first
http://www.theaustralian.news.com.au/story/0,25197,24027312-2702,00.html
Smart politics, and i don’t see it having a significant or longterm effect so long as oil price continues its climb.
Luke Weston - “If we were feeding cows on carbohydrates synthesised from coal or petroleum, it would be a different story, but we don’t.” Not so simple, considering that majority of cattle penned for any period are fed protein, mineral and vitamin supplements, all manufactured from inputs affordable only thanks to fossil fuels. Hay may also (in poor years) come from interstate, and the market for most beef is overseas. As a steak lover i’m all for improvements in stomach ecology to cut cattles direct emissions but its not the whole story.
Sorry all, but we’re stuffed, and the populist Rudd government will ensure it.
The action below will compensate the 1.2 million Australians that eat meat at McDonald’s everyday, most of them probably use the drive through facility too.
http://www.abc.net.au/news/stories/2008/07/16/2304765.htm
Tim Hollo @ 4, me thinks a price on carbon via tax or flawed ETS will be the only way to change the status quo amoungst farmers. Farming for most is a business, and reducing input costs is one of the few ways a commodity producer can stay profitable. When the major (and currently externalized) input cost is priced upwards, it will be the catalyst for a business rethink. Reducing the externalization of costs to the environment will helped significantly by putting a price on carbon via an ETS and cap or tax and cap.
Already the recent diesel and super price rises have forced farmers to reconsider their options. Alternative fertilizers are experiencing a boom as farms wean themselves off the artificial fertility of super phosphate dependency and look for cheaper alternatives. As an aside I would like to see a lot more research on the use of brown coal as a fertility enhancer and carbon sequester mechanism. It could solve a massive problem that is the Latrobe Valley. Also feedlots (aka CAFOs) have shortened their finishing schedule to 60 days on grain down from 90 days minimum - part grain prices, part oil price (they are linked).
In short, please keep pushing for forestry and agriculture to be included in the ETS ASAP.
Incidentally big “O” organics is systemically flawed, as it is supported by the same carbon subsidies as any other farm business. Hence, as one example,organic agriculture fails to deal with food miles too, and you can buy “fresh organic Peruvian Asparagus” in Perth, and “organic hams” from Spain and Italy in Sydney and Melbourne.
Eating is an agroecological act!
Kiashu @ 8, I like the slavery market analogy, however the difference between a slavery ‘market’ and a carbon ETS is the cap. The cap will make or break the whole scheme, and unfortunately excluding major emitters and weak targets set by a populist government, means the environment will continue to pay for our sins.
Paul McCarthy@8, “The farmer knows exactly how much product he has produced by weight. He can then simply subtract the carbon he has generated growing it by simply looking at his energy and other input bills and the difference is a carbon credit he can then sell to the market.”
Paul, Of course I can tell you exactly how much meat, eggs, honey I have exported off farm. I can also tell you exactly how much feed, diesel, electricity and other inputs have come on to farm. BUT, I can’t calculate how much carbon I have sequestered or mined from my soils, I can’t tell you if the 23,000 + trees I planted are net emitter of absorber of carbon, I can’t tell you if the 40% of my land that is not farmed is an environmental plus or minus, I can’t tell you the quantities of, or if, the farts and burps of my ruminants are offset by my other farming and environmental practises.
In short the protocols and systems of measurement do not yet exist for me to be able to give you a definitive answer about my farms total CO2e emissions. There are many talented people working on it but it is not simple, change one input and the whole changes. Location, climate, topography, orientation, species (plant and animal), farming systems and all the hundreds of variables that make up a natural system make carbon accounting for a specific entity a nightmare.
“Kiashu, the price differential on Green power is a function of supply and demand.”
Only on Planet Looney Tunes does low demand create high price. In reality, when demand is lower than supply, price drops; when demand is higher than supply, price rises.
The stated reason for the higher price of GreenPower is to encourage investment; the surcharge is meant to be that encouragement. “If I sell coal power I can get 16c/kWh, if I sell wind power I can get 22c/kWh” or whatever.
Retailers selling GreenPower are required by law to buy an equivalent amount. So if customers pay for 1 billion kWh and there are only 0.5 billion kWh available for sale, then the companies have to build more GreenPower generation. That’s the exact idea behind it all - to encourage more new renewable generation.
Should there be a carbon surcharge on conventional power bills, there exists no longer any justification for the higher rate on GreenPower.
But I’m sure it’ll still exist. The government is probably worried that given a free market choice, customers will prefer GreenPower, and then lots would have to be built, far in excess of any MRET any government would come up with, and their coal, gas and oil buddies would come weeping to them.
One problem with the green power I use (country energy’s deepest green) is that the maximum kilowatt allowance is limited and I can’t buy more even though I want too. Yes I have reduced consumption as far as possible, but the farm business and home are one. So when I exceed the limit I begin using dirty coal generated electricity.
So here is yet another market failure slapping me in the face. I want to buy green power, and pay the premium, and they will not supply. So much for market choice.
That’s why we have greenelectricitywatch, mcfarm. I don’t which you’ve got, but the only mention of countryenergy I see gives them a one-star rating, “poor”. The business version gets half a star, “very poor”.
Indeed, we don’t have a truly free market, many people face local monopolies.
You should write to your electricity retailer, and get them to sort their caca out.
“Dear Company X,
“I want to give you more money, but your policies prevent me from doing so. Why does your company have a policy preventing customers from giving you more money? Perhaps I should speak to your shareholders about this.
“Love,
mcfarm”
mcfarm@16. Oh dear.. More problems. I must not be very smart. How about some solutions, that’s what I’m trying to put forward here. “how much carbon I have sequestered or mined from my soils.” Give me a break! If you think that the 40% of your land that is not farmed will ever be part of the equation think again. There must be a statute of limitations here. We’re not starting from a pristine natural environment. We’re starting from what exists now.
Of coarse we can’t measure the hundreds of variables between farming and natural systems and we shouldn’t try to. And it won’t be up to the farmer to tell what the CO2 plus or minus is. It will be some official from the department of green house or whatever. If you want to measure every fart, go ahead but I don’t think an ETS can. This will have to be dealt with by some other measure.
I probably over stated the easy part by including animals but if you just focus on plant farming the equation is easy. You get your emissions figure from your input bills and your offset figure from your buyer. As far as the 23,000+ trees you’ve planted, if you want to go through the process of getting that accredited as a legitimate carbon sink and having it inspected and assessed every year by the department then they will give you the offset figure. All the farmer has to do is the accounting and I’m sure that QuickBooks and MYOB will come up with something as they did with the GST.
What I’m most concerned with is including imports and exports into the scheme as I stated earlier so that countries that don’t have an ETS don’t have an unfair advantage in our local and overseas markets. Rather than giving large emitters such as the Aluminium and steel industries free permits.
It is available here:
http://www.greenhouse.gov.au/greenpaper/report/index.html
They are seeking submissions by 10 September 2008.
There will be big handouts to both “emissions-intensive trade exposed industries” (EITEs) and “strongly affected industries”. These handouts will probably be free permits or Strongly affected industries are industries that emit 1500 tonnes carbon dioxide equivalent per million dollars of revenue and include electricity generation (especially from brown coal), waste, and production of natural gas. Strongly affected industries will receive handouts on the basis for their assets while trade exposed industries will receive handouts that are based on their emissions.
A 60% cut in emissions by 2050 is still proposed, so Australia will probably remain among the highest per-capita polluters; the trajectories will be determined by 5 to 10 year gateways which will provide certainty for industry but reduce our flexibility if we decide that we need reduce emissions much more quickly; petrol left out for the time being; no price floor; land clearing and revegetation not included or funded; emissions from our coal exports not mentioned; emissions from livestock not included until at least 2015; emissions from forest degradation and grazeland degradation are not mentioned (except for in developing countries), so logging and burning old growth forests will probably continue to not be measured in Australia’s greenhouse accounting and reporting unless things are changed at the international level. There will be some compensation for low to middle income households but there may not be so much after the big polluters have been catered for.
Kiashu@17
It will be impossible to price Green power the same as coal power until green power can reliably supply say around 80% of our national electricity needs.
The reason is obvious. If they were priced the same, households and businesses would switch to Green power in droves, and exceed the available Green generation.
The simplest and most obvious way to prevent this is for Green power to be priced higher. This neatly solves two problems. It rations available supply to the most enthusiastic consumers and in a small way (along with other incentives) encourages development of new supply.
The differential would need to much higher than at present in order to truly encourage rapid development of more expensive Green power solutions.
At present we are seeing a market equilibrium supply and demand solution constrained by regulatory factors.
As supply of Green power increases then the price differential drops, inviting participation by interested (but slightly less enthusiastic) consumers.
Supply and demand is operating in a transparently obvious way here. Don’t be so easily hoodwinked by website marketing spin and justification.
Your analysis of the question makes no sense at all.
Paul McCarthy @ 20, let me depersonalise this so there is no longer a need to be patronizing.
The protocols and systems of measurement do not yet exist to provide an answer about any agriculturally based industries total CO2e emissions. They do not exist, and even after they exist they will have to be agreed upon. The baseline data is only now being formulated by various research institutions (CSIRO, various Ag depts, Office of Climate Change et al.), but all this will take several years to get vaguely right.
To MYOB, how does one manage a business without a means of measuring income and expenditure and inputting the non existent data? Not to mention that there is no starting point, no inventory, no assets and liabilities and so on. Basically no one could run a business and generate a profit and loss statement given this amount of information. This is why the good Professor of Economics has excluded agriculture from the ETS for the time being. However agriculture is to be included as soon as possible (when data and measurement tools are available), and so it should be.
But to imports and exports, I agree, and have stated elsewhere on this blog site the necessity for including them in a carbon pricing system. A carbon tax would work with imports, and for exports tax credits should do the trick. A domestic ETS is more problematic for imports and exports and this does need addressing.
Kiashu @ 19, thank you. One phone call and for 5.5 cents a kilowatt all our electricity use is now100% green.
“Cash handouts (tax cuts, welfare cheques, or free permits) will reduce the effectiveness of the scheme, will be inflationary, and will be temporary relief from a permanent price hike.”
Please tell me that the Greens do not oppose compensating the poor, particularly those on welfare, for added costs to their food and energy bills which will result from an ETS.
I vote for the Greens as a social justice party as much if not more than as an environmental party - I would be very disturbed to learn that they were supporting what is in effect a consumption tax without assisting the already-struggling poor in coping with it.
If demand for GreenPower exceeded supply, the result would be that they’d build more renewable energy. We’d have an enormous investment in our country, many thousands of jobs would be created, and we’d have huge amounts of very low carbon energy.
Yeah, sounds dreadful, eh? Nobody wants that!
Glad you found what you wanted, mcfarm.
Jeremy, I would imagine that the Greens would support something like the current system many states have - for electricity year-round, gas in winter, and water year-round bills there’s a concession rate for low-income people. And they’re on record as supporting increases to the rates for unemployment benefit, youth allowance, and disability and aged pensions. Put all those together and the poor need not suffer financially from any carbon tax or trade scheme.
I’m not sure that’s clear enough an official answer. I get sick sometimes of simply assuming the Greens will do the right thing when I know perfectly well other parties won’t. I guess hearing from a Greens MP a confirmation that they will make sure the poor are protected from having their standard of living reduced is what I’m really seeking.
Jeremy, the point is that giving people one-off increases in welfare payments is not an equitable and fair way of dealing with the increasing price of carbon that will come with an effective emissions trading scheme. It is a cruel hoax, really, allowing people to feel they are OK while ratcheting up the pressure. Eventually the crunch will come and people will hurt badly.
It’s exactly the same as protecting jobs in the Latrobe by insulating the coal sector. That can only last so long and, finally, the coal corporations will disappear and leave thousands of workers in the lurch. Thoughtful policy would start retraining the workforce and seeding new industries now.
Our policy is to use revenue from the ETS to roll out energy efficiency and mass transit that will more than offset the increases in cost of living thanks to the ETS. In addition, we’d see money invested in renewables R&D and roll-out. If and where appropriate, and if the ETS does lead to significant rises in other cost of living expenses, additional compensation may be required, and we would support that, of course. But any rise in grocery prices thanks to the ETS will be tiny comparative to the price rises thanks to climate change.
Our policy will make sure the poor are protected by investing in making them more resilient, not pretending that everything will be OK.
Next to that, we have a raft of policies to increase social equity through the tax and welfare and education and health systems, of course.
And, Jeremy, climate change will disproportionately impact the poorest people.
Kiashu@26
Sadly it is not as simple as you suggest.
To create “enormous investment” in renewables, the business case for investing in renewables must be compelling.
It is not enough that demand exceeds supply at an arbitrary price of say 20c/kWh. It is crucial to know how much unmet demand exists at that price and whether the unmet demand can be met at that price.
We then need to consider the cold hard relative return on investment question for meeting that demand. The renewable source only gets built if the ROI exceeds all competing requests for the funds required to build the plant.
If not the suppliers will only supply what they are compelled to by regulation. This is the supply and demand equilibrium solution under regulatory constraint.
There is no conspiracy to understate green energy demand. There is only a transparent and ruthless imperative to maximise profits under existing the regulatory framework.
The fact that a few enthusiasts can’t get supply at 20c/kWh is evidence that investment decision makers haven’t yet found renewable solutions that stack up at a 20c/kWh sell price.
This may be because they are incompetent, but it is more likely because they are conservative engineers who need to see proven examples before committing to projects.
Conservative approaches to engineering may be frustrating, but we all like our built environment to be reliable and safe and this has created a culture and a bureacracy that creates standards to curb reckless approaches.
When we see schools in China collapse killing children we are horrified that the people who designed and built them were not more conservative in ensuring the safety. We can’t suddenly switch off conservatism in engineering practises and assume no consequences for it.
Australia in general has a very conservative business environment, David.
For example, Zhengrong Shi came to Australia in the late 1980s to study, and while here Tianamen Square happened. To stay on he head to study more, and he worked towards a PhD. While there he developed new solar cell technology which could produce more energy from less silicon. His company was not interested, and sold the patents to a German company. Australia now imports those solar cells from Germany.
Frustrated, he returned to China. There he was approached by Chinese businessmen, asking him to start a solar panel production factory - would $6 million be enough? they asked. He said yes, and built Suntech Power. Within five years it was worth $6 billion. Australia now imports those solar cells, too.
So the technology he produced worked. It obviously reaches Australian safety standards or we wouldn’t be importing it. We could have had that here. But a technology which can turn $6 million into $6,000 million in five years, create jobs and export income? Nup, we Aussies don’t want that rubbish! Dig it up and send it overseas! That’s the Aussie way!
Likewise, we last year had a wind turbine factory in Tasmania close down. It was using proven Danish technology, so again we knew it was safe and worked well. But they just couldn’t get the demand.
Thus the issue is not safety in engineering or anything like that. It’s closed-minded Australian business people and certain elected representatives. We’re not failing to produce wind turbines and photovoltaic cells because we’re worried they’ll fall and squash schoolchildren. It’s because our businesspeople and elected representatives are largely very conservative. They fear and avoid the new.
We’ve built our country on digging stuff up and sending it overseas, whether gold or iron or coal or aluminium or - through wool and wheat - topsoil. We’re reluctant to move away from that and into more sustainable stuff. That’s got nothing to do with safety in engineering.