Here's another reason why Australia would benefit from an ETS specifically. It turns out Australia's potential to capture carbon in our soil using very simple farming techniques could potentially capture half of our emissions. With no ETS, there's no incentive for farmers to do this - the government would have to hand them the money to do it, costing taxpayers. But with an ETS, they can sell the carbon credits either to Australian polluters, or even sell them overseas, bringing a steady income to farmers who don't usually have steady incomes. And the techniques also add to the productivity of the soil. It's a win-win ... but only if Australia has an ETS.

From another thread:According to best estimates, if countries institute efficient policies such as carbon taxes or and ETS, it would cost the world around 1% of global GDP to keep global warming to 2C. No surrender of sovereignty required.

Still awaiting with interest your response to my last post in this thread. I find it odd that someone so strongly libertarian is so fiercely opposed to free-market solutions.

I thought I'd revive this thread since Abbott just released the coalition's plan to combat climate change.What do folks think about the two plans?

I've made no secret in this thread that I believe a market-based solution (either ETS or carbon tax) is far more efficient than "direct action" plans like Abbott's. "Direct action" simply means the government has to choose which companies get rewarded and which strategies it's going to pay for. Seeing what the American government did to corn ethanol makes me very cautious about big government subsidies for industries they've decided are "winners".

Despite claiming that Rudd's plan would be "a bureaucratic nightmare", I don't see how Abbott's plan is any less bureaucratic - rather than regulating a free market, Abbott's plan forces the government to RUN the market.

In essence Abbott is proposing exactly the same thing as the ETS - unspecified "rewards" to businesses who reduce their emissions and unspecified "punishments" for those who increase their emissions. But instead of putting a cap on emissions and letting businesses buy and sell these rewards to each other, there's no cap (e.g. polluters can continue business as usual with no punishments) and the handouts come from taxpayer dollars.

In Rudd's plan, the costs to consumers comes from rising prices for "carbon-expensive" goods. The Libs have jumped on this claiming it's a "tax on everything" that will punish all consumers. Yet if energy bills go up, consumers DO have options to reduce their power use or to buy greener products. Furthermore Rudd's plan includes compensation for low income households who can't reduce their power bills.

On the other hand in Abbott's plan, the costs come through taxpayer dollars (despite his claim of "no new taxes," his plan costs over $3 billion a year and he still hasn't told us how he's going to pay for it). So under Abbott, everyone gets to pay for reducing carbon and there's nothing consumers can do to reduce this cost.

And does anyone else find it blaringly ironic that Labor is proposing a free market solution and the Liberals are screaming for a government-run scheme?

I heard Kevin on the TV last night. Apparently the taxes will offset the cost of energy bills for working families.

So basically he's putting a company tax in place which will increase energy prices only to give the money back to the people in the first place.

It's a claytons solution to a non existent problem.

Build a high-speed rail network, invest in nuclear power. Do something....do anything!!!! But not another tax that serves no purpose....what's the fucking point!!!

Kevin, tax me as much as is required to deliver services I need and to benefit the wider community, like transport, health, schools, and make sure those services are delivered.
Don't tax me to give it back and tell me what a good job you're doing. I can see that your doing fuck-all.

Tony Abbott's Environment and Climate Change policy can be read here.



This is the key phrase in the entire policy. The traditional question then becomes how will they pay for the policy? After all another statement is:



So Abbott’s policy is to find $3.2 billion over 4 years, that’s $800 million a year without any new taxes and without any increased costs. Surely this shows Abbott and perhaps the Coalition itself are living in a fantasy land.

Barnaby Joyce, Shadow Finance Minister gives the game away on Lateline:



Tony Abbott’s Coalition will find “those savings” by cutting back expenditures in other areas of the Budget but they are incapable of saying where as Senator Joyce makes clear. It does not matter where in the Budget these expenditures are cut, it will result in “increased costs to Australian households and families.”

The only way this proposal and the other proposal in Abbott’s Environment and Climate Change policy can be made tenable is by deficit spending. Tony Abbott has all ready argued against the current stimulus spending which has taken the budget into deficit as has Barnaby Joyce.

So, either the policy is not credible or the coalition is ignorant to the hypocrisy within their policy.

Senexx

"So, either the policy is not credible or the coalition is ignorant to the hypocrisy within their policy."

No all you can say its not fully costed, which is normal for most opposition policies. Sometimes they do get them costed, given he only just announced the policy it might happen. Barnaby bumbling in front of the media is standard practice.

I am not sure when Barnanby became the finance spokesman for the opposition, but Tony just needs to clarify how he intends paying for this policy, the figure quoted is nothing like the ALP massive 120 Billion tax collection/Santa Clause exercise with the ETS policy. Given the Kruddy's governments waste (demonstrated by their inability to build house for Aborigines but spend the allocated budget anyway) one can only wonder at the billions that will be pissed down the toilet in the name of ETS ideology.

Putting it in the right thread.



Yes. For one thing, the govt could demand that Business first become more efficient, then second take on carbon trading. Just as we have OHS reps do checks on business assessing their compliance, and just as we had govt. tax consultants visit business to explain the new system, so too can the govt. visit business and provide quick efficiency solutions then return to ensure they have done it.

But nooooo! Govt won't do that. Govt has not said boo about that. So inefficient business wait for Carbon Trading before they improve efficiency for the sake of the icing they can skim from the top.



What will be the cap? How will the cap be determined? How do we know that the same won't happen here? I've heard that it is based on global averages which count for naught since China and India do not want in on the scheme. And anyways, why are global averages presented as a significant number for Australian averages in the first place?

How does this carbon trading actually reduce greenhouse emissions?



Quite frankly I have very good reason to be cynical.

I think that only Leftwingers should be taxed. That way, the Leftwingers can have all the taxes they want and the innocent dont get hurt.

They can tax Leftwingers income at 95%, and redistribute to others. They can pay an extra $10 or $20 a liter at the gas pump. Whatever their hearts desire.

Thanks for bringing this over to this thread Sappho.I don't blame you for being cynical. But personally, I still prefer to lobby for what I see as the best solutions, rather than decide that nothing can be done. Maybe it's just because I'm young and idealistic. But SOMETHING is going to be passed soon, best we can do is make it the best system we can.That's something of what's happening in America - they don't think they'll be able to pass an ETS so they're considering passing the "other strategies" part of the package first. But with your suggestion, government "efficiency monitors" implies that all companies would be forced to make efficiency cuts, and that the government monitors are the best people to make the decisions of how much and how to do it. Some businesses simply cannot reduce their pollution - a coal power plant will still produce lots of greenhouse gases and "clean coal" is at worst a pipe dream and at best a distant possibility. Under an ETS, businesses have an option - become more efficient OR spend money buying carbon credits ... but more on how that works that later.
The cap is the limit on the number of carbon credits for sale; it's calculated based on how much reductions you're aiming for. So when Rudd refers to "5% reduction based on 2000 levels," that's presumably based on the capped number of carbon permits plus savings from other parts of his scheme. Caps don't have to refer to global averages, global averages are considered when an ETS becomes global and you start deciding what you want the global CO2 level to be. But Rudd's ETS for the time being at least is just a national scheme.

We may have a carbon credit bubble here because the proposed carbon price ($10/tonne) is quite low plus they've agreed to hand out lots of free permits to coal and other "trade exposed", heavy-polluting industry. Unfortunately the only people yelling at Rudd to do better are the Greens. Everyone else is yelling at him to water it down even more.I described it in the opening post but I'll paraphrase here. Under a cap-and-trade scheme, the government decides how many carbon permits they want available and divvy up the first round of credits (in some countries they've auctioned them off, others sold them at a fixed price, others give them away; Australia's proposing a mix of free and fixed price). If a business pollutes more than that, they have a choice - pollute less, or lose money by buying permits from other businesses who have spares. Businesses that simply can't pollute less become more expensive, those expenses pass on to consumers, and then consumers start to vote with their feet and use less of that product.

This should reduce pollution to the initial cap. But the next step is just as important - over the years, the government starts to withdraw permits. If you used to have 1,000 permits, you now only have 900. If you're polluting 1,000 units, you now have to figure out how to pollute 10% less, or buy more permits. Same market forces, they've just made the resource more scarce.

Fred, you are correct that the policy is not fully costed. However that is not all you can say. The method to how they will pay for it is in their policy. It will not have new or increased taxes on Australian industries or increased costs to Australian households and families.

Therefore the only way the policy can be paid for is either by cutting expenditures to other services in the budget which will logically increase the cost of these services to Australian industries or households and families. Another method is they can use a form of deficit spending (stimulus) which would be suitable in these economic times until recovery is ensured. However, the Coalition is all ready arguing against existing stimulus.

So, either the policy is not credible or the coalition is ignorant to the hypocrisy within their policy.

Senexx

So how is it not credible, are you saying that you can not cut expenditure ?

You seem tio present very feeble arguments, given the largest of kruddy without any real effectiveness in any policy area, expenditure can sure be cut with little to no impact.

Turnbull's committed to crossing the floor to support the ETS, not surprising. But interesting that he cited exactly what I brought up earlier - it is in not in the Liberal tradition to rely on the government to solve problems.

Abbot's scheme is just Howard's paint-a-rock turned into pull-a-weed or plant-a-tree, a play for the base (who have come back to the lib fold) but not a serious way to tackle real climate change.

I don't know about you Fred, but I am discussing Abbott's policy. Raising Kevin Rudd is a distraction from the issue at hand.

Fred, yes you can cut expenditure - with little impact, probably; with no impact, not at all.

When you cut expenditure, you drive up the price of whatever you have cut expenditure on.
In the Introduction to the policy it says so in black and white.



I did not say they could not cut expenditure, I said they cannot do it without increasing costs on whatever they cut expenditure on.

It is simple deductive reasoning.

I hope you have a good night.

The fall-out from the Rudd government's free insulation plan is yet another piece of evidence of why it's unwise to rely on government subsidies to reduce emissions. Subsidies create artificially inflated markets - everyone runs to snap them up - standards go out the window - and when it's over the industry collapses. In this case, four installers have lost their lives during the course of the program. Subsidies are a nice idea in principle, but if Abbott's plan is relying mostly on subsidies it's doomed to these kinds of bungles and failures.