Thursday, November 04, 2010

DCC briefing:  a farrago of spin, obfuscation and exaggeration

Flush from its near death experience following the hung parliament, the Department of Climate Change and Energy Efficiency (DCC) has published its briefing to the incoming Gillard Government.

It talks of its mission to bring to the government advice of the ''highest quality'', which is ''integrated'', ''objective'', and ''well informed''.  Oh, and hiding its blushes, it promises to bring ''Quality outcomes through effective design and delivery of programs, services and regulatory administration.''

And as a euphemism for the agit-prop outfit that it is, the Department talks about ''bringing understanding of climate change risks and opportunities''.  It sees many quangos as supporting it in playing ''a central role in building community consensus for action on climate change'', including the newly formed Climate Change Committee, the proposed Citizens' Assembly and the proposed Climate Change Commission.  These add to the legion of agencies of government and NGOs dependent on government funding that are already out there using transfusions from the taxpayer to help persuade the taxpayer to accept further extortions.

Unsurprisingly, the Department's Strategic Brief is a farrago of spin, obfuscation and exaggeration.  It is also riddled with inconsistencies.

Thus it argues that a carbon price is the way to go since other measures are hidden ''and give a false impression of being cost free to households''.  Though less fashionable following Obama's post November 2 apostasy on cap-and-trade, a single economic instrument like a carbon price does have the merit of being neutral and transparent.  But having embraced this, the DCC brief goes on to promote additional measures, showing its support for a price on carbon is simply opportunistic.

Thus, the DCC brief also praises the renewable energy regulations that impose costs by forcing electricity retailers to incorporate more expensive renewable energy into electricity supplies, smearing its costs into bills hoping the consumer won't realise the price increase stems from government regulations.

DCC favours other requirements on product standards, to combat ''entrenched behaviours'' by consumers who don't have highly paid bureaucrats' sophistication and are unable to decide for themselves which products best meet their needs.

The area of briefing to incoming ministers that is particularly risible is when the Department explains that most people favour action on climate change but are wary about paying for it because of the spectre, ''often overstated'', of increased costs including electricity costs.

Though they neglect to say so, the policy they advocate cannot result in prices rising less than $1,000 per household.  Our research has found that only six per cent of people say they are willing to incur such an outlay and politicians' would have even more comprehensive data than that.

Though containing stacks of hype, the DCC brief offers no estimate of what warming would cost us if it were to take place.  And it suggests that the warming this century will likely be as much as 4 to 7°C (more alarmist even than the IPCC which puts the rise at 1.1 to 6.4°C).

One of the few cost numbers mentioned is that we will be 2.5 per cent worse off as a result of a need for new infrastructure.  This would be a gross understatement if the DCC meant we have to replace our low cost energy by the pie-in-the-sky new technologies it promotes.  However it has in mind new roads, ports and other hardware, meaning it predicts that these will increase in cost by over a quarter.  Obviously the fabricators of such a figure have not researched hotter places like Hong Kong, Singapore and the US Gulf Coast to validate whether these climates mean a higher infrastructure spend.

Nowhere does the briefing come clean on what the costs are likely to be if nothing is done.  That's because the costs are likely to be trivial.  The dozen available peer reviewed studies put the costs of warming, should it occur, at around +/- 2.5 per cent.  This cost (or benefit) takes place in the context of a growth in underlying incomes for Australia of 70 per cent (200 per cent for the world at large).

As for the costs of taking the far-reaching action it advocates, DCC cites Treasury's hopelessly over-optimistic, assumption laden modelling.  It fails to understand that replacing efficient coal generators with high cost windmills would totally destroy the resource base of the Australian economy, returning the nation to some nineteenth century pastoralist past and hoping that we will all prosper in such an economy.  And even when it cites the Treasury projections it expresses them as forecasting a loss of 0.1 per cent a year without mentioning that even this means over 10 per cent this century.

Having people and even government agencies express views is beneficial.  But we have with DCC an agency that seeks to exercise leadership in thrusting its own view of the world onto the hapless Australian public.

Like previous such Vanguards of the Proletariat, the DCC is an affront to individual liberties.

In promoting the idea that government should become the master of the people not the instrument by which the people's preferences are translated into action, it would reverse the democratic principles on which our society is based.

The DCC is not the only taxpayer funded agency that treats the public and even its direct political masters with contempt.  Agencies established to be the handmaidens of the public now see themselves as legitimately nudging us and even deceiving us into directions they favour.  It was never meant to be like this and it will worsen unless such powers are rolled back.


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