Well the Government’s ETS ain’t a Ferrari, Penny Wong admitted yesterday. But that was no reason, she said, to reject this vehicle for transitioning to a low-carbon future.
Some hours earlier, the decidedly odd couple of Andrew Robb and Christine Milne arrived for a press conference to announce they were going to have a look under the bonnet, as it were, via a Senate Select Committee that will look both at broader approaches to addressing climate change issues and the Government’s “proposed approach”. This rather cut across Wong’s declaration that she’d be referring her bill — bills, and lots of them, in fact — to the Senate Economics Committee.
The Robb-Milne version is superior in that it will be run by a Coalition chair and Greens deputy chair. The Economics Committee is run by Labor’s Annette Hurley and can be expected to produce the usual Government endorsement and a slew of dissenting reports. The Select Committee will be split between four senators each from the major parties, a Green and Xenophon or Fielding.
Given their diametrically opposed views, it’s not clear how long the Coalition-Green alliance will last, but it’s a pointer to just how difficult the Government’s job will be to pass a scheme that, whatever car model it might be, has a two-stroke engine in it.
The issue of voluntary action by households has shown a remarkable persistence in the media and Wong is right on this if on not much else to resist amending the bill to somehow make voluntary action by households “count”. Industry could make exactly the same complaint — that they could undertake the hard yakka of reducing emissions, only for households and motorists to take advantage of it by more profligate use of energy.
What’s missing from this is a realisation that Australian firms will be paying the international price for carbon permits, not a domestic price. Households will not be “subsidising” polluters through voluntary action. Firms will be able to purchase permits overseas, provided the relevant scheme is compliant with ours. In fact, it is highly likely Australian firms will import a lot of permits to enable them to keep operating at current levels. And that’s fine, as long as the international trade in permits is genuine, because it means the price will reflect the global target for carbon emissions, not Australia’s. Voluntary action simply means there’ll be slightly less demand for Australian-sourced permits.
And if households want to take direct action, they can. Buy a permit. Buy a hundred permits. Join a club and contribute to buying a million of the things. If enough people in enough countries buy permits and stick them on the shelf, it will push the international carbon price upwards, making it more expensive — up to the upper price limit in each country — for Australian and overseas firms to generate carbon emissions and encouraging them to curb their emissions, either by cutting back production (like, closing) or making it more efficient.
And while the draft legislation faithfully reflects the White Paper cave-in to polluters, it reveals a little bit about the “Australian Climate Change Regulatory Authority” which will run the ETS. A pliant, industry-friendly ACCRA would make a bad scheme worse in achieving emissions targets, but a bureaucratic, process-focussed entity more interested in managing the scheme than ensuring the scheme actually has some sort of effect would be just as bad for emissions and worse for industry. Based on the exposure draft, the Government wants a lean, mean body, with between three and five commissioners.
The bill also takes the unusual step of mentioning the role of consultants, opening the door to heavy reliance on external expertise rather than public servants. The appointment of the chair and other commissioners would be in the hands of the Minister, who would also have general direction powers over the new body. The authority would have a measure of independence — it will be separate from the Department of Climate Change — but there will still be a strong degree of political oversight.
Finding commissioners for the authority will be the easy part. Staffing it up and bedding down the systems required to oversee the scheme by early 2010 will be the hard part. The Government will be desperate to ensure that the start of the scheme — currently scheduled for 1 July, 2010 — goes smoothly, because there’ll be an election shortly after that. Don’t count on a gung-ho regulator making life difficult for businesses, at least not for the first few months.
Is this better than nothing? A bad ETS can always be improved later, but that assumes we ever get a government prepared to ignore the rentseekers and lobbyists. It probably is better than nothing, but the difference is so small as to make no difference.
I am pleased with Bernard’s suggestion that households can club together and buy carbon permits – to drive up the price and therefore encouraging curbs.
But I have a slightly different suggestion – how about the government hands out its free permits, not to large polluters but to ordinary citizens/taxpayers/householders in a form of economic stimulus 3. We can then decide whether to hoard them (driving up the price) or sell them to polluters, thus killing 3 birds with one stone 🙂
I can’t for the life of me work out why we aren’t looking at this entire process in terms of pollution and environmental degradation rather than some indefinable – global warming notion. We can see pollution and recognise environmental degradation. Global warning is far more intangible and thus difficult for people to grasp. If people or organisations pollute or destroy the environment they should be fined or reprimanded. There doesn’t need to be any trading scheme; which Garnaut suggested should be run by the banks of all people. This is an issue of social responsibility – corporate responsibility and it makes sense that people are not allowed to do it.
What is so difficult to grasp? The problem is that by fining the perpetrators you aren’t making enough money whereas the cost of an ETS is ultimately borne by the end user (consumer) and so everybody gets slugged. That is the sole purpose of this crap in my view
So shocked am I, and such is my sense of horror; not to mention my dismay, I cannot bring myself to read this article. I dare say you think something is better than nothing. That is debatable. The point is we, the taxpayer, have spent hundreds of thousands dollars to pay for all the committees and the research into global warming. Many of us voted Labor on the strength of Kevin Rudd’s promises. Silly bastards that we are.
What did we get for out concern of Australia, Global Warming-THINK VICTORIAN BUSHFIRES MR RUDD- and the erroneous belief that Oz, under a Labor government, would be far better than the Oz of Mr McGoo? Bugger all, is what we got. Unless the po-faced visage of Ms Wong, together with her total disregard for her adopted land and her delight at being Ms Wong.
As I think I said elsewhere. What is the difference between a mad bull and the Rudd government? The mad bull still retains some ethics.
After all the shonky deals with financial instruments leading to the Global Financial Crisis why would anybody think that ETS trading would not be similarly corrupted.
One of the most difficult issues confronting world financial regulators is activities conducted on international markets through so-called tax havens (financially corrupt and morally culpable despotic regimes) where financial transactions can be laundered and repackaged and sold on to unsuspecting buyers.
A simple example for rorting of the ETS would be a corrupt south-east Asian country (tell me one of that isn’t?) replacing pillaged forests with new growth and selling the consequential carbon fixation to the ETS system several times over through offshore financial intermediaries.
I would be quite sure that the mafia and other corrupt institutions are already looking at ways to subvert the ETS system.
A carbon tax at the point of consumption is the only way to exercise any real constraint as it is totally manageable within the local jurisdiction. Anything else emanating from Penny Wong is complete political double speak.
The problem with Wong and Ken’s ETS is that it is only ‘nothing’ in terms of effect on climate change. Its really something to industries which think they can, and should, continue with the business of status quo. it will be something to the attack-zombies like Bolt who will spend the remaining years of their lives savaging left wing excess. It is very politically costly, and it acheives nothing. This will make it harder to do something effective in the future, not easier. Tax carbon and be done with it. The surveillance required to check all those forrests are getting planted etc alone is going to be a headache and, let face it, business hasn’t been able to manage the supply of real money let alone another abstract financial product.