Under pressure from local election defeats, the French Government has abandoned its plans to introduce a carbon tax, having suddenly discovered it would, "damage the competitiveness of French companies".
Kevin Rudd once described reducing carbon dioxide emissions as the great moral dilemma of our time. Like Barack Obama, he has now switched off this agenda and turned to health.
This reflects a global declining interest in the matter perhaps as a result of scientific advisers having been discredited following demonstrable evidence that they had, at the very least, over-egged the cake.
The battle against measures to reduce carbon emissions is however hardly over. The issue has fuelled too many careers in politics, science, public service and the media for its beneficiaries to quietly move on. Recent public relations barrages by the CSIRO and gatherings in Canberra and Melbourne of the many beneficiaries of the scare is being repeated around the world.
And the policy momentum is on-going. We are still incurring wasteful expenditures, including on intrinsically uneconomic renewables, the will-of-the-wisp of carbon capture and storage, and draconian energy saving regulations.
But any new proposals for suppressing carbon emissions will simply be the wrapping paper for new taxes. And France's experience shows that even this is a risky policy approach.
So what was it all about? What was on the alarmists' minds behind the spurious rhetoric about a re-emergence of long-suppressed diseases, increasing numbers of cyclones, disappearance of Arctic ice and the extinction of local colonies of butterflies?
It was certainly not the cost to humanity of a warmer climate. Even pessimistic assumptions used by the official estimates put the costs as low. And those estimates were invariably carefully buried in hundreds of pages of diagrams, tables and trivia.
The IPCC assessment was for little economic change with temperature rises of 1 to 3°C, adding, "(By 2050) global mean losses could be 1 to 5% of GDP for 4°C of warming." This was in the context of GDP that is estimated to more than double.
For Australia, the costs of doing nothing by the end of the century were estimated by Treasury at 5 per cent of GDP. Significant though this may be, it is dwarfed by the increase in GDP -- sixfold -- that is estimated to take place under business-as-usual.
Treasury also estimated the costs of taking action to reduce our per capita emissions to 12 per cent of those presently prevailing would be just a few percentage points of national income. This rested on Pollyanna modelling assumptions about new technologies that would burst upon us and compensate for the forced total restructuring of the nation's industrial structure and the progressive elimination of coal, our greatest export industry.
The centralised control that climate restraint would entail led people like Lord Monckton and Czech President Vaclav Klaus to see the whole climate debate as a replay of long standing conflicts between those who want to direct our lives and those who are especially attached to individual liberty.
There are, indeed, many public officials who stood to gain from stoking the global warming flames. Global warming was also an outlet for people concerned about the inequities and injustices of the modern world. Many of these aspire to a simpler pre-industrial arcadia, though their main spokesmen, the Gore's, Pachauri's, and Prince Charles's would want to exempt themselves from the privations involved.
Even though the alarmists claim their opponents received massive financial support, they could never identify this. That's because there was none -- support for the sceptical view would have amounted to less than one per cent of that accruing to the alarmists.
This lack of support for skeptics may be due to individual liberty being nowadays so readily taken for granted. The enlargement of the state both within the economy and within our lives has not been seen, by-and-large, as excessively intrusive.
Nonetheless, as well as begetting a new class of drones, the greenhouse scare has created a serious diversion of resources. This includes all the entrepreneurs who have seen better opportunities in lobbying for assistance for everything from pink batts to carbon storage schemes.
Potential greenhouse taxes also mean additional energy costs and risks to energy intensive developments that lie at the heart of Australia's comparative advantage.
The threat of such taxes makes it impossible for any private sector business in Australia to contemplate building a new coal fired power station. Yet, if we are to avoid economic stagnation we will need additional conventional power supplies. This is because we are unlikely to see the need for these becoming redundant. Forecasts of improved efficiency of wind, new sources of power and vast new economies denting demand for electricity will not eventuate. Commercially developed new gas fired generation remains possible in a political environment where a carbon tax is threatened. However this is more expensive than coal power and undermines Australia's cost competitiveness.
The corollary is that new investment in electricity generation will require government indemnification guarantees against the possibility of a carbon tax. This in turn means government control over new capital expenditures and takes us back to the past of politically managed investments gradually unravelling the vast productivity increases that privatisation has brought.
ADVERTISEMENT
No comments:
Post a Comment