Daniel Andrews' Alternative Reality

Here we go again.  Today, Daniel Andrews announced a plan to build a new suburban railway system even though he has no idea how much it will actually cost, who is going to pay for it, and how long Victorians will actually have to wait until it is finished.  This is another pragmatic, yet pie in the sky announcement which typifies the Andrews government.  Victorian taxpayers have already been saddled with a $330 million tax burden after the premier abrogated contractual responsibilities by cancelling the contract to build the East-West Link.  The reality is, as now confirmed by Infrastructure Victoria, that this project would have been a very good idea after all.

But the Andrews government appears to be operating in a different kind of reality, a reality in which it is blatantly more concerned with social engineering than it is with the kind of scientific and mathematical engineering which gets roads and tunnels built.  These days, it's becoming increasingly difficult to work out where gender departments finish and governmental departments begin, so blurred are the lines between them.

In Victoria, the Department of Premier and Cabinet has decided that one of the best uses of taxpayers' money is to come up with an inclusive language guide, which is to be disseminated to the Victorian entire public service.  Accessed via the "Equality" page of the department's website and introduced jointly by the Minister for Equality and the Commissioner for Gender and Sexuality, it's exactly the kind of social activism that Victorians have wearily come to expect from the present incumbents of a state government.  This Orwellian newspeak is continuously piped in directly from our academic centres into the echo chamber of the government, bypassing the common sense of the people.

The inclusive language guide is essentially an exposé of the post-modern radical gender theory that has been peddled in across the humanities as unquestionable orthodoxy since the 1960s.  Inclusive language rests on the concept of gender, which is a vague social construct whose ever-changing definitions are increasingly untethered to traditional concepts of biological sex.

According to DPC's guide, "Gender identity refers to the way in which a person understands, identifies or expresses their masculine or feminine characteristics within a particular sociocultural context."  Back in 1949, Simone de Beauvoir wrote that "one is not born but becomes a woman".  The guide's authors, undoubtedly university graduates, have clearly been worshipping at the altar of the high-priestess of gender theory.  There is no doubt that they will also be acolytes of Judith Butler, who decided in 1990 that the perception of gender had become outdated, posing instead that gender is nothing but a performance.

The guide also makes reference to "misgendering", which it defines as "using language to refer to a person that is not aligned with how that person identifies their own gender or body".  Having thus established an arbitrary and whimsical crime, the department then goes on to helpfully explain just how such a misdemeanour can be avoided.  It explains;

Some people prefer to be described with their first name only or a non-binary pronoun such as "they" rather than a gendered pronoun.  Others prefer no pronoun at all.  Also be aware that some gender-neutral pronouns exist, such as "zie" and "hir".  If unsure, you can ask someone directly what their preferred pronoun is in a respectful manner.  If you do make a mistake, apologise promptly and move on ... try to avoid making the same mistake again.

Confused?  Not for long!  The Victorian Department of Health and Human Services has come up with an initiative called "They Day".  In order to clarify things, it has mandated that every first Wednesday of the month, its 10,000 employees are to use gender-neutral pronouns such as "they" and "them" rather than "he" and "she".

"They Day" is a considerable misnomer.  Under the auspices of inclusion, DHSS is effectively fostering exclusion and division, which of course is one of the many ugly characteristics of the post-modern theory of identity politics which is currently blighting our social, political and corporate landscape.  What possible course of action will those employees who are uneasy with language compulsion now face?  If they do go work but refuse to participate, the chances are that they will be disciplined and re-educated at the hands of the pronoun politburo.  And while this option might be sustainable in the short term, it certainly you won't be in the long term because before they know it, the first Wednesday of the month will turn into all Wednesdays of the month, and then in no time at all, "They Day" will become "Every They Day".

Those who choose to avoid work every first Wednesday of the month will be singling themselves out as dissidents.  In the short film made to accompany "They Day", viewers meet a selection of employees sporting "they/them" badges while enthusiastically extolling the many virtues of the gender-neutral pronoun.  One participant, who could perhaps be considered a veteran in this business because "they" and "them" have been her pronouns of choice for ten years now, gushes to camera "I love gender-neutral pronouns ... when people use them, I feel affirmed and I like myself".  Another says "they [the pronouns] make me happy".

With language and comments such as these, it's not difficult to see where this is going for future "They Day" dissenters.  Absentees will be cast immediately as haters, whose unwillingness to comply with the directive will be taken as proof of their wretched misanthropy.  After all, what kind of a person is anti-happiness?  What sort of individual wants their co-workers to hate themselves?  According to the bureaucrats at DHSS, it's the kind of person who "misgenders" in casual conversation with their colleagues during staff morning tea.

When it comes to forging a career for yourself in the Victorian public service, it appears the best thing you could do is to undertake a Bachelor of Arts in Gender and Cultural Studies at an Australian university.  Indeed, on the University of Sydney's Gender and Cultural Studies department webpage, future students are promised that a wide range of career of options will be opened up to them.  Certainly, three years of study in the department will get you on the payroll of a government department faster than you can spell LGBTQI.

These latest initiatives from the Andrews government confirms that it more committed to imposing radical gender theory on the society, at the society's expense, than it is to solving the Melbourne's growing congestion problem.

You Think The Coalition Is Bad? Look At Labor's Policies

Politics in a stable democracy should be boring, even relaxed and comfortable.  Yet since the fall of the Howard government in 2007 Australian politics has been exciting — almost a blood sport.  The population is certainly not relaxed nor comfortable.  Malcolm Turnbull as Prime Minister appeared well on his way to changing all that.  Re-election looked possible, even likely.

The shenanigans in Canberra now suggest the next prime minister will have a short tenure before Bill Shorten becomes prime minister.  Ordinarily a change in government can be a good thing.  Every now and again you have to throw the bastards out and give the other mob a go.  Unfortunately we can't throw them all out at the same time.

Yet that might not be the case at the coming election.  Despite the Labor Party having, on paper, a formidable economics team some of their attitudes and tax policy ideas require some very careful analysis and scrutiny.  The downside of 27 years of continuous economic growth is policy complacency.

For many Australians, the economy will just keep growing no matter what economic silliness emanates from Canberra.

Taxation is no longer seen as a necessary evil to finance public services — and a lot more besides — but rather as a punishment.  Regulation, too, is seen as punishment for poor behaviour.  In this age of "social licence to operate" it seems there are many industries and people in need of punishment.  But regulation and taxation impose costs on the economy that ultimately must be borne by someone.  Very often those who bear the costs of regulation and taxation are poor and the more vulnerable members of society.

POOR POLICY

We are going to hear a lot about inequality over the next while.  To be clear:  inequality is more of a political problem than an economic problem.  It becomes an economic problem when policies designed to reduce inequality lead to poor economic policy.

This will very quickly become apparent as Labor further re-regulates the labour market.  To argue, as Australian Council of Trade Unions boss Sally McManus does, that our current industrial relations system introduced by the last Labor government is inadequate to protect workers from big business completely misses the point:  big business itself is being disrupted by technological change.

As Australia transforms from a financial and physical capital-dominated economy to a human capital-dominated economy it makes no sense to lock in antiquated 19th-century notions of class warfare where unionism empowers the weak against the strong.  This will simply benefit entrenched interests and disadvantage the young and entrepreneurial.  The so-called gig economy is not a conspiracy against workers, it is an opportunity to work for many otherwise unemployed people.

Take, for example, company tax rates.  When last in office Labor had a policy of reducing company tax rates.  Then they recognised the positive impact this would have on economic growth and employment.  Now, in opposition, reducing company tax rates is a give-away to the top end of town.  Hopefully Labor will rediscover the benefits of company tax cuts when back in office.

The idea of reintroducing double taxation on company dividends is particularly poor.  Double taxation distorts both financing and investment decisions.  While somewhat complex, the dividend imputation system introduced by the Hawke-Keating government was an excellent reform that Labor should be championing not dumping.

Then there is the idea of tinkering with negative gearing.  All sorts of ideas have been floated here — having a cap on the number of properties, or grandfathering existing properties, and what not.  Somehow many people have become fixated on the notion that tinkering with the tax system will make housing "more affordable".  That somehow the tax system is to blame for high housing prices.  Why has nobody thought of blaming low interest rates for high prices?  Has nobody in Canberra realised that high prices could be a market signal to increase supply?

TOO MUCH TINKERING

The fact is that being a landlord is one of the few small-business opportunities available to thousands of Australians on middle incomes.  People who work at day jobs — schoolteachers, police, nurses and the like — and want to save and invest a bit more for their retirement or kids and don't want to do so through the superannuation system.  A system itself subject to far too much tinkering over the years.

Too many of Labor's current policies look like they're out to punish ambition and/or self-funded retirees.  Whether they get to implement these policies will depend on the makeup of the Senate.

The issue well worth exploring, however, is how and why we have got to this situation.

Since 2013 Malcolm Turnbull, Scott Morrison, Tony Abbott and Joe Hockey have held the levers of power and occupied the bully pulpit.  Yet in that time none of them has made a serious coherent argument for small government with low taxes and reduced regulation.  Rather we have heard of tax rorts, fair shares, base erosion, cry-me-a-river, and they make no apology.  That's all very nice, yet there is now no reason for the electorate to fear a Labor government that will also increase taxes, and bring in new levies, and regulate industries that have fallen out of favour.

It will be government as usual after the next election.

Peter Dutton Will Not Solve The Existential Crisis Of The Liberal Party

Tuesday's Liberal leadership ballot settles nothing.  Malcolm Turnbull's victory margin of 48 votes to 35 practically guarantees another challenge to the Prime Minister, if not from Peter Dutton than from any number of contenders.

Neither does yesterday's vote settle the fundamental question the Liberal Party has been been grappling with since the retirement of John Howard and Peter Costello.  For a decade the Liberal Party has struggled with the question of what should be its philosophy and its principles.

It is undeniable that over the last 10 years, the Liberal Party and its policies have drifted from the free market and centre-right towards the centre.  When a political party of the centre-right moves towards the centre, by definition it is moving towards the left.

Political commentators play up the differences between Malcolm Turnbull as a "moderate" and Peter Dutton as a "conservative", and while there might be differences of policy emphasis between the two, the reality is that the main factions of the Liberal Party are on a unity ticket when it comes to the direction of the party.

TRADITIONAL PARTY VALUES

The so-called "Praetorian Guard" of the "right" in the federal Liberal Party, Peter Dutton and Mathias Cormann, have aided and abetted the Liberals' embrace of higher taxes and higher government spending.  And on issues that are supposedly important to "conservatives" like freedom of speech, Dutton or Cormann have said nothing.

The Liberals have endorsed the massive social welfare programs first advocated by Labor, such as the so-called "Gonski reforms" and the national disability insurance scheme.

To pay for this new spending the Liberals have increased income taxes, levied special taxes on the banks and attempted to retrospectively impose higher taxes on superannuation.

Key sectors of the economy such as finance and banking, and energy, are now subject to a level of government control that's unprecedented.  The Liberals have shunned undertaking any major reform to either industrial relations or the level and extent of red tape.  Cutting company tax, while a worthwhile initiative, seems to be the only economic policy of the Liberals to speak of.

Meanwhile the Liberals have steadfastly refused to engage in any sort of debate about changes to the the direction and nature of the country's culture.  The Liberal Party is afraid to defend either freedom of speech or freedom of religion, and most Liberal MPs are unwilling to confront growing community unease about rapid population growth, immigration and levels of cultural cohesion.

POLICY PRIORITIES

Peter Dutton might win more votes for the Coalition in Queensland than Malcolm Turnbull, and that's certainly a good enough reason for 35 Liberal MPs to vote for him, but as yet it is unclear what government policies would change if Dutton instead of Turnbull were prime minister.

No doubt Dutton will have the chance to ponder this in the coming weeks as he contemplates whether to challenge Turnbull again.

Dutton will have to decide for example whether he would take Australia out of the Paris Climate Change Agreement, whether he'd abandon company tax cuts and put the money into personal income tax cuts instead, and whether he'd abolish the Australian Human Rights Commission.  If he didn't do these things, as a minimum, there's no point him becoming prime minister.

Whether he could actually get any of these policies through the Coalition party room, let alone Parliament, is beside the point.

The point is that at least he'd be arguing for them and he'd create a point of difference between the Liberals and Labor.  At the moment that point of difference is barely discernible.

What's happening to the Liberals in Australia is not very different from the situation facing the Conservative party in Britain.

The senior echelons of the parliamentary party feel they must follow popular opinion down the path of more government intervention in the economy and a bigger role for the state in civil society.

MPs feel they must pursue this strategy to get re-elected.  Rank-and-file party members, the so-called "base", are resisting.

Here in Australia climate change policies are the touchstone issue, while in Britain it's Brexit.

In the same way as the Tory leadership in Britain has tried to turn Brexit into merely a technocratic matter, rather than an issue of principle, the Liberals have happily argued around the finer points of the National Energy Guarantee without answering the question of what effect implementing the NEG will have world's climate.

LOST IN DETAILS

In years to come political historians in this country will ponder how it could be that a prime minister could nearly lose their job over the question of whether a government-mandated reductions in carbon dioxide emissions should be enforced through legislation or regulation.

Seemingly this is the narcissism of small differences, but it is precisely because they have lost the willingness of fight to either each other or the Labor party over big issues, that they fight over small issues.

Since John Howard lost the prime ministership in 2007, the Liberals have avoided asking themselves whether they want to join with Labor in leftward drift of politics and policy in this country because they actually believe that is the direction in which Australia should be heading, or because they feel there's no viable alternative to bigger government and higher taxes.

Democratic politics always involves compromise, but what's happened to the Liberals in recent years is that they've stopped arguing for their principles.

The idea that a Liberal government would, to use the exact words of ministers, wield a "big stick" and not shirk from "heavy-handed intervention" against energy companies who are deemed to be charging too high prices sits oddly with the alleged free market principles of the Liberal Party.

Energy companies are doing nothing more than responding to the policy settings that the Liberals themselves have determined.

Peter Dutton or anyone else becoming prime minister between now and when the Coalition is likely to lose the federal election won't solve what is verging on an existential crisis for the Liberals.

Tim Soutphommasane and the Exacerbation of Race Politics

In his final speech as Race Discrimination Commissioner, Tim Soutphommasane declared that "race politics is back" and asserted that the "biggest threats to racial harmony ... come from within our parliaments and from sections of our media."

But I would argue that Soutphommasane has overlooked his own contribution to racial discord.  The political left's obsession with identity politics undermines the critical social norm of treating people as individuals, triggers an angry reaction which feeds white identity politics and increases divisions in our society.

Soutphommasane has previously responded to critics by arguing that, "Division is caused not by our response to racism;  the real division is caused by racism itself."  Racism is divisive, true, but Soutphommasane has also played a part in fuelling identity politics.

Identity politics is the idea that society is defined by the power dynamics between groups primarily based on race, gender and sexuality.  It asserts that institutions are inevitably shaped by the hierarchies of these groups that persist over time.  White nationalists claim that these hierarchies — especially that of race — are legitimate sources of political authority.  The identarian left claim that these hierarchies must be dismantled through state action.

While their goals are very different, the underlying analysis is the same:  politics is a game of power played between groups whose identities can be constructed, understood and analysed.  What gets lost in this analysis is the fact that individual identity is irreducibly complex.  Individuals are much more than just their skin colour, sexuality, or gender.  This is what makes thinking and judging at the individual level so valuable.

The role formally held by Soutphommasane is legally mandated to highlight racial issues in Australian society — that is, it exists to promote a form of identity politics.

During his time in the job Soutphommasane encouraged complaints to the Human Rights Commission against the cartoonist Bill Leak, supported a proposal which would reverse the onus of proof in complaints of racial discrimination, and campaigned against the abolition or amendment of section 18C of the Racial Discrimination Act.  Soutphommasane has repeatedly asserted that racism drives debates about China, immigration, integration, crime and free speech.  He has called for "ramping up our efforts to fight racism".

Soutphommasane's focus on race, I would argue, does not make people less bigoted;  rather, it keeps the focus on group characteristics.  This approach has counterproductive implications.

In the first instance, while is important to create a strong societal norm against racism, it does not achieve much to simply label people "racist".  New York Times columnist Margaret Renkl recently wrote that the best way to combat racism is to build understanding with conversations:  "Being called a racist almost never causes a racist to say, 'Oh, wow, you're right'."  Renkl's theory is supported by research which has found that the most effective and long lasting method to reduce prejudice is deep interpersonal conversations.  These dialogues force people to think about their views, builds empathy and reduces the likelihood of a combative response.

Furthermore, it is unhelpful to insert race into and presume racist motivations behind policy debates.  Soutphommasane said that concerns about Chinese Communist Party influence in Australia "smacks of The Yellow Peril revisited" — which is effectively to say, if you are concerned about Chinese state influence, racism must motivate you.  This claim is despite evidence of substantial Communist Party operations outlined by Clive Hamilton.  This policy debate does not need to be about racial divides — after all, many Chinese Australians express concern about Communist Party.  Hamilton himself criticised those who see everything "through the lens of race, gender and sexual orientation" in "a kind of competitive piety, verging on the sanctimonious."

Inserting racial elements into policy debates unnecessarily increases racialisation in Australian society.  And the more you focus on racial difference, the less tolerant and more tribal people become.  In this case, it pits Australians of Chinese background against the rest, rather than addressing the question of foreign influence operations.

The focus on race also triggers a defensive response that unites the alleged bigots against the very people the anti-racists are trying to protect.  When people feel like their family, community and nation are under threat they become more intolerant.  Perceived threats against the dominant group — including calling them a bunch of "racists" and "bigots" — triggers a defensive response which increases racial prejudice, dislike of minorities and anti-immigrant sentiment.

In other words, the politics of identity on the left fuels white identity politics on the right.  American political scientist Mark Lilla, who comes from the progressive left, wrote in the New York Times shortly after the election of Donald Trump that the left's "own obsession with diversity has encouraged white, rural, religious Americans to think of themselves as a disadvantaged group whose identity is being threatened or ignored".  Identity politics was key to Trump's victory.  "Those who play the identity game should be prepared to lose it," Lilla concludes.

Since Lilla wrote those words, the identity politics has continued to fester on both sides.  Last weekend marked one year since the "Unite the Right" rally in Charlottesville, Virginia, during which a car driven into the crowd murdered counter-protestor Heather Heyer.  This week, Katter's Australia Party Senator Fraser Anning's maiden speech expressed nostalgia for an ethnically discriminatory immigration system, called for immigration that reflects Australia's historic "European Christian composition" and an end of Muslim immigration.

Meanwhile, last week it emerged that newly hired New York Times editorial board member, Sarah Jeong, had written a series of tweets critical of white people.  Jeong wrote that "white people are bullshit", that "The world could get by just fine with zero white people" and "#CancelWhitePeople".  Jeong's defenders asserted racism reflects "institutional power" — and because white people have "power" her comments were not racist.

This convenient redefinition contradicts the plain understanding of racism:  "Prejudice, discrimination, or antagonism directed against someone of a different race based on the belief that one's own race is superior."  It is also unhelpful — Jeong's behaviour feeds the white supremacist narrative that there is a conspiracy against them, endangering more tribal white racism in response.

Jeong has unintentionally shown the symmetry between the far right and the identarian left, who both relentlessly focus on defining and dividing people by their group membership.  British Conservative Dan Hannan wrote:

"The alt-right and the woke Left are not opposites when it comes to race.  They both define people by ethnic identity.  The real anti-racists are the classical liberals who see everyone as an individual."

TREATING PEOPLE AS INDIVIDUALS

The University of Western Australia's "Courageous conversations about race" seminar, which was presented to hundreds of academics and students, declares the need to "Keep the spotlight on Race".  The handout associated with the seminar calls for "racial consciousness" which means accepting that, "Race permeates everything in modern Australian society 100%".  The handout also rejects the notion that, "Everyone should be treated equally and judged solely on the basis of merit and their accomplishments.  Race/cultural background are irrelevant."

This seminar reflects a historic shift on the political left.  In the post-war era, liberals sought to protect the oppressed by securing rights at the individual level.  This is the approach of the UN Universal Declaration of Human Rights, which outlines rights held by all individuals not special rights held by some groups.  Canadian political philosopher Will Kymlicka points out:

"Rather than protecting vulnerable groups directly, through special rights for the members of designated groups, minorities would be protected indirectly, by guaranteeing basic civil and political rights to all individuals regardless of their group membership.  Basic human rights such as freedom of speech, association and conscience, while attributed to individuals, are exercised in community with others, and so provide protection for a minority's group life.  Where these individual human rights are firmly protected, it was felt, no further minority-specific rights are needed."

In recent decades the identarian left has rejected colour blindness and treating people as individuals because they claim it allows for the continuation of structural inequality.  Harvard University academic Amy Chua notes:

"A shift in tone, rhetoric, and logic has moved identity politics away from inclusion — which had always been the Left's watchword — toward exclusion and division.  For much of the Left today, anyone who speaks in favor of group blindness is on the other side, indifferent to or even guilty of oppression."

Chua argues that this approach pits groups against each other, increasing tribal tensions.

Downplaying the importance of race was precisely the strategy of U.S. civil rights campaigner Martin Luther King, Jr. King promoted a constrained forms of identity politics that demands equal treatment as an individual no matter what group you are a part.  King's "I Have a Dream" speech appealed to America's creed "that all men are created equal".  He dreamed of a nation where people "will not be judged by the color of their skin but by the content of their character".  King strategically used America's unifying national symbols — in this case, quoting from the Declaration of Independence — to call for everyone to be treated equally.  He sought not a rejection of the past, but a full realisation of America's founding principles in a way that transcended race.

King understood that the best way to protect members of oppressed groups is to treat people as individuals, and aspire towards a future where none of this matters.  This is practically impossible when you just focus on race.  As Harvard political theorist Yascha Mounk writes, the logic of identity politics on the left "would ensure that all members of society are forever defined by the colour of their skin or the province of their ancestors".  While it may be difficult to achieve, we should not simply give up on a society that judges people as individuals and does not focus group membership.

When we stop respecting people as individuals, the result is ugly politics.  Jacinta Nampijinpa Price, an Alice Springs councillor and Country Liberal candidate for Lingiari, has faced dehumanising identity politics.  Price has attracted substantial hatred for speaking against changing the date of Australia Day.  Bill Nicholson, of the Wurundjeri Tribe Land and Compensation Cultural Heritage Council, called for her to "die a painful death" and described her as a "sell out coconut".  This is a form of prejudice — prejudging Price's views on the basis of her skin colour, not on the basis of the value of her argument.  This reduction of Price's experience to an arbitrary category is precisely what undermines our individual humanity and reasoned argument.

NOT DOING THE RACISTS' WORK FOR THEM

The identity politics mantra is most commonly observed during "culture war" debates about history, symbols such as the flag and southern cross, and national practices such as Australia Day and Anzac Day.  These debates are both extremely divisive, and stroke tribalism on both sides.

Political psychologist Karen Stenner has found a latent authoritarian switch in some people's brains that is triggered by criticism of the nation, encouragement of diversity over unity and allowing immigration without limits and integration.  Stenner argues that the most effective response is to build group solidarity around common themes:

"Ultimately, nothing inspires greater tolerance from the intolerant than an abundance of common and unifying beliefs, practices, rituals, institutions, and processes.  And regrettably, nothing is more certain to provoke increased expression of their latent predispositions [towards authoritarianism] than the likes of "multicultural education", bilingual policies, and nonassimilation."

In Australia's case, there has been unhelpful efforts to link certain rituals and practices exclusively to "white Australia".  Filmmaker Warwick Thornton said that the Southern Cross has become "very racist nationalistic emblem" and compared it to the swastika.  Singer-songwriter Dan Sultan said on Q&A that Australia Day is "racist".  The Greens now support changing the date of Australia Day, and some local councils are refusing to hold citizen ceremonies on 26 January.  Earlier this year comedian Catherine Deveny dismissively labelled Anzac Day "Bogan Halloween".  Soutphommasane himself has asserted that discussion of "middle Australian values" and concerns that "cultural Marxism" is "undermining Western civilization" are signs of white identity politics.

These claims, which exclusively link key national symbols to white Australia, create an "us versus them" mentality that pits white Australia against the rest.  Ironically, the ends of the identarian left and the goals of white nationalists are identical:  making the symbols of Australian nationhood, middle Australian values and Western civilization exclusively associated with white Australians.

In fact, most Australians have an inclusive idea of what it means to be Australian.  The Pew Research Centre found that relatively few think that to be truly Australian you must be born in Australia (13%) and few think that you must be Christian (also 13%), the religion traditionally associated with European heritage.  Australians do believe that speaking English (69%) and sharing Australia's customs and tradition (50%) are important — however, these can be learned by someone of any race.

It is essential to emphasise the inclusivity of Australian values, symbols and institutions — not to unnecessarily racialise them.  It is doing the racists' work by linking middle Australian values and Western civilisation to a single race.  The core ideas of the West, from respect for individual rights to the rational scientific method, are universal not racial.  Furthermore, we should be associating middle Australian values with tolerance and giving people a fair go, not white supremacy.

SAFEGUARDING AUSTRALIA'S SUCCESS

Australia is an economic, social and cultural success story.  We have achieved this as a nation of immigrants from across the world.  Demographer Bernard Salt points out that a very high proportion of our communities are migrants.  In Sydney, 42% of urban residents were born overseas, substantially higher than New York (29%), Paris (22%), Berlin (13%), or Tokyo (2%).  Immigrants contribute to Australia's economy and social fabric.

Meanwhile, racist attitudes are relatively uncommon.  The World Values Survey found just that 5% of Australians say that they would feel uncomfortable being neighbours with someone of a different race.  In comparison to our region, 11% of Chinese, 22% of Japanese, 26% of Indians and 40% of Thais, do not want to live next to someone of a different race.

Although Australia is an inclusive society, we must do all we can to not exacerbate racial tensions with counterproductive rhetoric or policies.  We must strive to treat people as individuals and reject group-based identity politics on all sides.

Why Australia Must Withdraw from the Paris Climate Agreement

Why Australia Must Withdraw from the Paris Climate Agreement

EXECUTIVE SUMMARY

• The Paris Agreement (the Agreement) is an international climate agreement which 195 nations have signed up to.
• The aim of the Agreement is to keep the increase in global temperature this century to well below 2 degrees Celsius above pre-industrial levels.
• To achieve this, the Agreement requires nations to reduce their greenhouse gas emissions.
• Under the Agreement, Australia is required to reduce its greenhouse gas emissions by 26-28 per cent of 2005 levels by 2030.
• There are three key reasons why Australia should exit the Agreement.
• Firstly, the economic cost of Australia meeting its emissions reduction requirement under the agreement is estimated to be $52 billion in net present value terms, over the period 2018-2030.  This equates to $8,566 per family in Australia.
  • This cost reflects the additional cost of generating electricity in Australia as a result of the Agreement emissions reduction requirements.
  • There will also be a series of flow-on consequences which are not empirically estimated in this paper, but include:  lower business investment;  lower employment and lower wages growth;  and a reduction to real incomes due to increased cost of consumption.
• For the nation as a whole, $52 billion could have provided funding for 22 new hospitals, two decades' worth of the Gonski 2.0 education funding, or over four years' worth of funding for the National Disability Insurance Scheme (NDIS).
• For families, $8,566 would provide funding for five years' worth of schooling at a local government school, paying down entire credit card debt, or four years' worth of electricity bills.
• The cost of the Agreement more than twice eliminates the income tax relief provided in the 2018-19 Budget to individual middle income earners.
• Secondly, the Agreement is not operating as intended.
• US President Donald Trump has provided formal notice that the world's second largest emitter, the United States, will withdraw from the Agreement.  And the world's largest emitter, China, is unconstrained by the Agreement.
• The Climate Action Tracker, a consortium of three research organisations, tracks national progress of 32 nations, which account 80 per cent of global emissions, in meeting their Paris emissions reduction targets.
• The tracker finds that just seven nations out of the sampled 32 are on track to meet their national emissions reductions contributions to keep warming below 2°C above pre-industrial levels.
• Those nations — Morocco, the Gambia, Bhutan, Ethiopia, Costa Rica, the Philippines, and India — collectively account for just 6.6 per cent of global greenhouse gas emissions.
• Thirdly, the Agreement will make no noticeable difference to the global temperature, even if all nations meet their national emissions reduction requirements.
• Dr Bjorn Lomborg, President of the Copenhagen Consensus Centre and visiting professor at Copenhagen Business School, estimates that adopting all promises under the Agreement from 2016-2030 will reduce the temperature increase in 2100 by just 0.05°C.
• Australia accounts for just 1.5 per cent of global emissions from human activity.  And human activity accounts for just three per cent of total emissions.  Even the complete de-industrialisation of the Australian economy would make no noticeable difference to the global climate.
• The government should withdraw from the Paris Climate Agreement and end all subsidies to weather-dependant energy generation such as wind and solar.

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INTRODUCTION

The Paris Agreement under the United Nations Framework Convention on Climate Change (the Agreement) is an international climate agreement involving 195 nations.  The central goal of the Agreement is for signatory nations to hold average global temperature increase to below 2°C and pursue efforts to keep warming below 1.5°C above pre-industrial levels. ⁽¹⁾  The reduction in the growth in temperature is to be achieved through reducing, or limiting the growth to, greenhouse gas emissions.  Under the Agreement, each nation sets its own greenhouse gas emissions targets and policies to meet those targets.  Australia's target is to reduce greenhouse gas emissions by 26-28 per cent of 2005 levels by 2030. ⁽²⁾

The National Energy Guarantee (NEG) is the Commonwealth government's proposed policy for achieving the emissions reductions required under the Agreement.  To do this, the NEG would place obligations on energy retailers to reduce the emissions intensity of their energy acquisition portfolio. ⁽³⁾  This will result in a higher penetration of wind and solar energy generation, and a lower penetration of coal-fired energy generation than what would prevail under the status quo.

There are three central reasons why Australia should withdraw from the Agreement.  Firstly, implementing policies to meet the emissions reduction requirements will impose significant and irreparable damage to the Australian economy.  Drawing on data and analysis undertaken by the consulting firm Jacobs Group, this paper estimates that the cost to Australia of meeting the Paris Agreement emissions reduction requirements to be $52 billion from 2018-2030, in net present value terms, which equates to $8,566 per family in Australia.  This cost reflects the additional cost of generating electricity in Australia compared with the counter-factual of exiting the Agreement and removing emissions reduction policies (proxied by the prices which prevailed under pre-2007 energy and climate policies).

For the nation as a whole, $52 billion could provide funding for 22 new hospitals, ⁽⁴⁾ two decades' worth of the Gonski 2.0 education funding, ⁽⁵⁾ or over four years' worth of funding for the National Disability Insurance Scheme (NDIS). ⁽⁶⁾  For families, $8,566 would provide funding for five years' worth of schooling at a local government school, ⁽⁷⁾ paying down entire credit card debt, ⁽⁸⁾ or four years' worth of electricity bills. ⁽⁹⁾

The cost of Paris more than twice eliminates the income tax relief provided in the 2018-19 Budget to an individual middle income earner.  An income earners of $80,000 is expected to receive cumulative tax relief of $3,740 over the period 2018-19 to 2024-25, under the government's Income Tax Plan. ⁽¹⁰⁾

Secondly, the Paris Agreement is not functioning as intended.  Under the Agreement, all signatory nations are to implement policies to meet national targets.  However, the United States, which is the world's second largest emitter of greenhouse gases, has provided formal notice that it will be withdrawing from the Agreement.  None of the European Union (EU) nations are on track to meet their obligations.  And China, the world's largest emitter, is unconstrained by the Paris Agreement.  China can continue to increase its emission, unabated, to 2030.

Thirdly, the best available evidence suggests that the Agreement will deliver little environmental benefit.  Dr Bjorn Lomborg, President of the Copenhagen Consensus Centre and visiting professor at Copenhagen Business School, estimated that even if every nation reached its emissions reductions obligations, the global temperature would warm by just 0.05 degrees less than under the status quo.  Moreover, Australia accounts for just 1.5 per cent of global emissions from human sources.  And humans activity accounts for just 3 per cent of all emissions.  This means that even the complete de-industrialisation of the Australian economy would make no noticeable difference to the global climate or temperature.

There are many environmental challenges aside from climate change or global warming (which are of questionable significance in any event).  These include litter, air and water quality, ocean pollution, and conservation matters.  These issues are more relevant to the lived experience of Australians, and can be resolved, or at least managed, through voluntary engagement (such as private conservation efforts) rather than through coercion, taxes, and regulations.

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STAYING IN THE AGREEMENT WILL RESULT IN SIGNIFICANT ECONOMIC COSTS

This paper estimates the cost to Australia of meeting its Agreement emissions reduction requirements.  To calculate this cost, this paper estimates the additional cost of generating electricity under the parameters of the Agreement compared with the counter-factual of exiting the Agreement and removing all emissions reduction policies at the Commonwealth level (proxied by pre-2007 Commonwealth energy and climate change policies).  This section uses the data provided by Jacobs Group in its Report to the Independent Review into the Future Security of the National Electricity Market. ⁽¹¹⁾

The National Energy Guarantee (NEG) is the Commonwealth government's proposed policy for Australia to meet its Agreement requirements.  The NEG (and, hence the Agreement) only directly applies to the electricity generation sector.  The electricity sector accounts for 35 per cent of Australia's greenhouse gas emissions. ⁽¹²⁾  For comparison, stationary energy excluding electricity generation accounts for 18 per cent of national emissions, the transport sector accounts for 19 per cent, and the agricultural sector accounts for 13 per cent. ⁽¹³⁾  According to Jacobs, in 2017 there were 160 million tonnes of carbon dioxide equivalent (Mt CO₂e) emitted from the national energy market (NEM).  In 2005, there were approximately 177 of Mt CO₂e emitted from the NEM.  The Paris Agreement required reduction of 28 per cent means the required level of emissions in 2030 from the NEM is 127 Mt CO₂e. ⁽¹⁴⁾

In their paper, Jacobs Group provide analysis of a BAU scenario.  Under the BAU, Jacobs analyses what would occur in the absence of further policies to encourage a reduction to emissions of 28 per cent of 2005 levels by 2030.  In other words, the BAU scenario can be thought of as a scenario where Australia doesn't meet its Paris targets, and therefore doesn't implement the NEG, but maintains the existing range of policies that are in place to support renewable energy generation, such as the RET.  The estimates of NEM generation, wholesale prices, and emissions under this scenario are outlined in Table 1 below.  Importantly, under the BAU scenario, emissions will drop to just 140 Mt CO₂e, a shortfall of 13 Mt CO₂e needed to meet the Paris targets.

Table 1:  BAU Estimates from the National Energy Market ⁽¹⁵⁾

These results indicate that under the BAU scenario NEM wholesale prices are estimated to increase by 14.6 per cent and NEM emissions are estimated to decrease by 12.5 per cent.  This gives an emissions price elasticity (EPE) of -0.85.  The EPE is used to estimate the additional increase in NEM wholesale prices between 2018 and 2030 required to reduce projected NEM emissions in the electricity sector to 127 Mt CO₂-e by 2030.  As shown in table 2, wholesale prices are estimated to increase by 24.1 per cent in order to achieve the required 20.6 per cent reduction to emissions from the electricity sector by 2030.

Table 2:  Estimated increase to wholesale prices needed to meet Paris

In order to estimate the NPV cost of meeting the Paris Agreement, the rise in wholesale prices needs to be compared to a counter-factual.  Ideally, the counter-factual would be the Jacobs estimate of price changes under the BAU.  The deficiency of this approach is that the BAU includes a series of policies designed to reduce emissions.  However, exiting the Paris Climate Agreement would make the rationale for emissions reductions policies obsolete.  It is therefore necessary for the counter-factual to include a policy scenario that does not include emissions reductions polices.  To our knowledge, there is no existing analysis to that effect. ⁽¹⁶⁾

In order to develop a proxy for this counter-factual, this paper estimates the average NEM wholesale price for a period within which there was limited policy support for renewable energy generation.  A logical point for this is 2007, when the Rudd government was elected on a platform that included a substantial expansion of the Renewable Energy Target (RET) to increase renewable energy generation to 20 per cent of total electricity generation by 2020. ⁽¹⁷⁾  The expanded RET was eventually passed in 2009.

The NEM was established in 1998. ⁽¹⁸⁾  From 1998 to 2007 there were relatively few policies in place to support renewable energy generation.  While the RET had been in place since 2001, its impact was modest.  The original goal of the first incarnation of the RET was to increase renewable energy by two per cent by 2010 from 2001 levels. ⁽¹⁹⁾  This increase was largely going to be realised under the BAU, and so had an immaterial effect on investment in renewables.

Hence, this paper takes the wholesale price which prevailed in the NEM from 1998-2007 as the counter-factual.  The average weighted NEM wholesale over the period 1998-2007 was 2017$/MWh 60. ⁽²⁰⁾  This is taken to be the average price that would prevail in the absence of aggressive emissions reductions policies.

Therefore, in order to estimate the additional cost of meeting Agreement targets, the average price from 1998-2007 is subtracted from the estimated wholesale prices required to achieve a 20.6 per cent reduction to emissions by 2030.  This additional cost is the multiplied by the amount of expected electricity generation for 2018-2030 as forecast in the Jacobs report.  This is done on an annual pro-rata basis.  Applying a discount rate of four per cent gives an estimated NPV cost of $52 billion of meeting the Paris Agreement emissions reductions requirement. ⁽²¹⁾  This equates to $8,566 per family in Australia. ⁽²²⁾  Table 3 below outlines the different assumptions, estimates, and costs derived from the approach outlined above. ⁽²³⁾

Table 3:  Annual Additional Cost of Paris Agreement

The cost estimate of $52 billion represents the additional cost of generating electricity in Australia under the Agreement emission reduction targets.  It is a conservative estimate as it does not attempt to measure the broader economic costs associated with higher electricity prices.  These costs include lower productivity growth due to a higher than optimal penetration of wind and solar energy;  increased business operation costs and hence lower after-tax profits and lower business investment;  lower employment growth;  lower wages growth;  and reduction to real incomes associated with higher cost of consumption.

A key assumption of these estimates is the increase in electricity generation costs can be entirely attributed to emissions reductions policies, which are in turn implemented though the addition of intermittent energy sources such as wind and solar.  This is a reasonable assumption.  As Graph 1 shows, the addition of intermittent energy generation has been associated with rapidly rising electricity prices.  While correlation is not causation, there are two key reasons why the addition of intermittent energy generation has been the cause of high and rising prices, rather than high and rising prices causing more intermittent energy generation.

First, there is the direct cost of government programs designed to promote renewable energy generation.  The Renewable Energy Target (RET), for example, creates an artificial market for renewable energy generation by forcing energy retailers to acquire a certain amount of their energy from renewable sources via the acquisition of generation certificates.  One certificate can be created for each megawatt-hour of eligible renewable electricity produced by an accredited renewable power station.  The additional cost of the acquisition of these certificates is then passed on to households as higher electricity costs.

Secondly, and more importantly, is the indirect cost of renewables programs.  Government policies such as the RET, solar subsidies, and the proposed NEG have the effect of promoting renewable energy generation at the expense of coal-fired generation.  A consequence is for coal-fired power stations to shut down, and fewer new ones to be built.  However, because renewable energy generation is less reliable, ⁽²⁴⁾ extra pressure has been placed on gas to generate electricity.  But gas is highly regulated and hence supply is limited.  This has placed structural upward pressure on prices.

Another way of conceptualising the approach taken in this paper is as follows.  The hypothetical considered is the complete removal of emissions reductions policies.  This would be somewhat similar to the pre-2007 set of policies, where there was little policy favouritism of renewable energy generation.  As chart 1 shows, prior to 2007 there was virtually no solar or wind energy generation on the NEM.  The prices which prevailed during that period are taken to be the prices that would prevail if we returned to those policies.  It is acknowledged that there are a range of other factors contributing to price changes in the NEM, including network and transmission charges.  Partly offsetting this is that network and transmissions charges have always played a role in changing electricity prices, including in the pre-2007 set of policies.

Graph 1:  Real Consumer Electricity Prices, Indexed, (1990=100)

Original:  Dr Michael Crawford

Adapted from Jo Nova

Source:  Prices 1955-1980:  Electricity in Australia, prepared for CIGRE by Frank Brady AM (former CEO, Electricity Commission of NSW), 1996 1980-2016:  ABS 6401.0 Consumer Price Index 2017-2018:  Adjustment (15% nominal increase) to take account of price increases announced by major elect distributors in June 2016 Intermittent power generation (Terra Watt hours, TWh) from Figure 4.2 in Independent Review into the Future of the National Electricity Market

For the purposes of comparison, we also consider what the additional cost of the Paris Climate Agreement is compared with the BAU scenario analysed in the Jacobs Group paper.  The BAU scenario in the Jacobs paper does not include the Paris Agreement but it does include the existing set of policies in place to support renewable generation, such as the RET.  Using the same method as described above, but substituting column seven for column four of table 3, we estimate a NPV cost of $10 billion. ⁽²⁵⁾  This means that if the government were to exit the Paris Agreement (and, hence, not proceed with the NEG), but maintain all other policies which subsidise renewables under the guise of a different emissions reduction policy, the economic cost from 2018-2030 is estimated to be $10 billion.

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THE AGREEMENT IS NOT FUNCTIONING PROPERLY

The Agreement is not functioning as intended.  U.S. President Donald Trump has given formal notice that the United States, which is the second largest emitter of greenhouse gases, will withdraw from the Agreement.  Few nations are on track to meet their target.  And China, which is the largest emitter of greenhouse gases, is effectively unbound by the Agreement.

Most Nations are Not Meeting their Obligations

This section uses data from the Climate Action Tracker (CAT). ⁽²⁶⁾  CAT is a consortium of three research organisations, Climate Analytics, NewClimate Institute, and Ecofys, which "track[s] progress towards the globally agreed aim of holding warming well below 2°C, and pursuing efforts to limit warming to 1.5°C."  CAT covers 32 nations which collectively account for 80 per cent of global emissions.

According to data provided by the CAT, the Paris Agreement is disintegrating.  As of writing, just seven nations out of the sampled 32 are on track to meet their national emissions reductions contributions to keeping warming below 2°C above pre-industrial levels. ⁽²⁷⁾  Those nations are Morocco, the Gambia, Bhutan, Ethiopia, Costa Rica, the Philippines, and India.  Collectively, these nations account for just 6.6 per cent global greenhouse gas emissions. ⁽²⁸⁾

However, India's emissions reduction target is largely superfluous.  India's target is to reduce emissions intensity by 33-35 per cent by 2030, compared to 2005 levels. ⁽²⁹⁾  However, Oren Cass, Senior Fellow at the Manhattan Institute, argues that India's commitment will have no effect on its emissions trajectory compared to the status quo. ⁽³⁰⁾  Cass cites a number of studies which suggest India would meet its Paris Climate Agreement reduction targets without any policy change.  Cass argues "India reports that its energy efficiency has already improved more than 17 per cent between 2005 and 2012.  Assuming no change in its carbon intensity of energy, India could improve only half as fast going forward and still achieve its 'goal'."

Cass cites several other studies corroborating this view.  This includes the Indian-based Centre for Policy Research which estimates that emissions reductions absent further policy change would see India meeting its emissions reductions targets. ⁽³¹⁾

The European Union is Off Track

The European Union holds itself to be a leader in reducing greenhouse gas emissions.  For example, in 2017 the EU won an Ozone Award by the United Nations Environmental Program for its role in negotiating the The Kigali Amendment to the United Nations' Montreal Protocol. ⁽³²⁾

However, the CAT finds the EU's climate policy to be "insufficient".  Specifically, according to the CAT:

"The EU's climate policy has not yet effectively responded to the 1.5°C limit enshrined in the Paris Agreement ... Its 2050 goal of decreasing total GHG emissions by 80-95% below 1990 levels is also not consistent with the Paris Agreement long term warming goal ... neither the historical, nor the projected, rate of emissions reduction will allow the EU to meet its 2030 goal, at least not with currently implemented measures." ⁽³³⁾

These findings are supported by a 2018 publication from the Climate Action Network, a proemissions reductions non-government organisation based in Europe.  The report, Off Target:  Ranking of EU countries' ambition and progress in fighting climate change, analyses the progress made by EU countries in implementing domestic policies designed to meet the Paris Agreement emission reduction targets.  The report finds that "all EU countries are off target:  they are failing to increase their climate action in line with the Paris Agreement goal", and that "no single EU country is performing sufficiently in both ambition and progress in reducing carbon emissions." ⁽³⁴⁾

Even France, where the Paris Agreement was drafted, scores just 17 out of 100 for its "progress on implementation of 2020 targets".

Interestingly, the report also shows that there is a large gap between the extent to which countries promote the climate change agenda and implement tangible policy.  For example, whereas France scores just 17/100 for its progress on reaching 2020 targets, it scores 83/100 for its "promotion of more ambitious EU targets and strategies".  Similarly, the Netherlands scores just 25/100 for its progress on implementation of 2020 targets, but scores 75/100 for its promotion of more ambitious EU targets and strategies.

For Western European nations, there is a wide divergence between how much they talk about climate change policy and what they actually implement in practice.  This gives rise to the "talk-towalk" ratio which captures the divergence between talk of action and actual action.  To estimate this the value for "promotion of more ambitious EU targets and strategies" (talk) is divided by the value for "progress on implementation of 2020 targets" (walk).  Western European nations are twice as likely to promote the benefits of climate action as they are to implement policies to reduce greenhouse gas emissions.  France is the worst offender, with a ratio of 4.9, meaning its policy makers are close to five times as likely to talk than walk. ⁽³⁵⁾

The United States has Withdrawn

On 1 June 2017, US President Donald Trump announced that the United States would be withdrawing from the Paris Climate Agreement. ⁽³⁶⁾  In announcing the withdrawal, President Trump argued:

"Thus, as of today, the United States will cease all implementation of the non-binding Paris Accord and the draconian financial and economic burdens the agreement imposes on our country.  This includes ending the implementation of the nationally determined contribution and, very importantly, the Green Climate Fund which is costing the United States a vast fortune."

In absolute terms, the United States is the second largest emitter of greenhouse gas emissions, accounting for 12.1 per cent of global emissions. ⁽³⁷⁾

China's Target is effectively non-binding

China is the largest emitter of greenhouse gases, accounting for 23.75 per cent of global emissions.  China's commitment requires its emissions to peak by 2030.  This means the Paris Agreement has no binding effect on China.  Provided emissions come down after 2030, China will be meeting its requirements.  But the Paris Agreement ends in 2030, so it is superfluous. ⁽³⁸⁾  As Graph 2 shows, under the Paris Agreement, China is expected to increase its emissions by 150 per cent by 2030 on 2005 levels. ⁽³⁹⁾

Graph 2:  Change in emissions under Paris

Source:  Department of Energy and Environment

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THE AGREEMENT MAKES NO NOTICEABLE DIFFERENCE TO THE ENVIRONMENT

Dr Bjorn Lomborg, President of the Copenhagen Consensus Center and visiting professor at Copenhagen Business School, is far from a global warming or climate change "skeptic".  Lomborg is an advocate of the view that human activity is a leading cause of global warming, and that global warming is a net negative.  As stated in his chapter to Climate Change the Facts:  2017 "Global warming is a real phenomenon, it is mostly man-made, and it will have a long-run overall negative impact." ⁽⁴⁰⁾  However, Lomborg argues that simply believing those assertions doesn't automatically imply that any policy to reduce greenhouse gas emissions is beneficial.

To assess the effect that the policy promises under the Paris Agreement could have on the global temperature, Lomborg uses the climate model MAGICC 6, which is the latest version of a simple climate model used in all the five Intergovernmental Panel on Climate Change (IPCC) assessment reports from 1990 to 2014.  He finds that adopting all promises under the Paris Agreement from 2016-2030 will reduce the temperature increase in 2100 by just 0.05°C. ⁽⁴¹⁾  And this is assuming that all commitments are met.  As discussed in the previous section, few nations are on track to meet the emissions reduction commitments.

Australia is a very minor subset of the totality of the Paris Agreement.  Australia accounts for just 1.5 per cent of global greenhouse gas emissions. ⁽⁴²⁾  Even the complete de-industrialisation of the Australian economy would not make a noticeable difference to the global climate.

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WHAT SHOULD GOVERNMENT POLICY BE INSTEAD?

Energy Policy

Energy policy should be completely technologically neutral.  This means removing emissions reductions as an objective of energy policy.  Emissions reductions necessarily favour less carbon intensive forms of energy generation, such as wind and solar, at the expense of coal.  Withdrawing from the Paris Agreement would mean the emission reductions component of energy policy would be removed.  This should not be replaced with an alternative emission reduction policy.

Rather, all subsidies and non-subsidy regulatory interventions which favour one form of energy generation over another should be removed.  This would mean electricity retailers and large energy users would purchase energy generation in a combination that is consistent with the preferences of businesses and consumers.  Most likely this would mean the focus would be primarily on affordability and reliability, rather than emissions reductions.

Environmental Policy

There is no shortage of environmental problems that need to be managed or resolved.  Many of these problems are local and tangible in nature, rather than global and abstract.  People can improve their local environment without imposing draconian taxes and regulations on others in their own country and in other nations.  Such local environmental problems include:  littering, the build-up of refuse in waterways and the ocean, waste disposal, and air and noise pollution in built-up urban areas.

Instead of seeking to impose government regulation on others, those who are concerned about environmental outcomes could instead seek to resolve those issues voluntarily.  Examples include the voluntary acquisition of land by conservation groups in order to use that land for conservation, rather than developmental, purposes;  local community organisations that clean-up litter and raise awareness of local environmental issues;  and larger not-for-profit groups and non-government organisations that enlist help to address broader problems, such as the build-up of pollution in the ocean.

An example of the latter is being undertaken is by a group called the Ocean Cleanup.  The Ocean Cleanup is a not-for-profit organisation that is developing technologies with the aim of ridding the world's oceans of plastics.  The organisation was founded by Boyan Slat in 2013 at the age of 18 with his own income.  The venture was subsequently built-up by a team of volunteers who developed a feasibility study, and then by a crowdfunding campaign which attracted the support of over 38,000 funders from 160 countries, and raised over 2 million USD in 100 days. ⁽⁴³⁾

The Ocean Cleanup was the result of voluntary initiative.  One young man identified a problem and went about solving it through enlisting the help of others and raising funds from those willing to provide it voluntarily.  No compulsion, regulation, taxes, or imposition of the lives of others was considered necessary.

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CONCLUSION

Australia should withdraw from the Paris Climate Agreement.  Reducing emissions under the Agreement will result in significant and irreparable economic damage.  Based on data and analysis undertaken by the consulting firm Jacobs, this paper estimates the cost of meeting the Paris Agreement to be $52 billion in NPV terms over 2018-2030.

Further, the Agreement is not functioning as originally intended.  The United States, which is the second largest emitter of greenhouse gases, has given formal notice that it will be withdrawing from the Agreement.  None of the EU nations are on track to meet their commitments.  And China, the world's largest emitter, is unconstrained by the Agreement.

Even if every nation met their obligations, there would be little discernible effect on the environment.  The best available evidence suggests that a fully function Paris Agreement would result in just 0.05 degree less warming than under the status quo.

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ENDNOTES

1. Department of Environment and Energy, "Paris Agreement", Canberra, Australia

2. Department of Environment and Energy, "Australia's 2030 Emissions Reduction Target", Canberra, Australia

3. Energy Security Board, "Draft Detailed Design Consultation Paper", (15 June 2018)

4. The new Royal Adelaide Hospital in Adelaide cost $2.4 billion. Report of the Auditor General, "New Royal Adelaide Hospital: March 2018", Government of South Australia, (3 May 2018)

5. One decade of Gonski 2.0 funding is $24.5 billion (the "Quality Schools" package). Commonwealth government, "Budget 2018-19: Budget overview", Canberra, Australia, (2018)

6. Funding for the NDIS from 2018-19 to 2021-22 is $43 billion. Commonwealth government, "Budget 2018-19: Budget paper no.1", Canberra, Australia, (2018)

7. Taking into account levy payments, and costs of textbooks, uniforms, and other ancillary costs.

8. Average credit card debt is $4,268

9. Average annual household electricity bills are around $1,700.

10. Commonwealth government, "Budget 2018-19: Stronger growth to create more jobs", Canberra, Australia, (2018)

11. Jacobs Group, "Report to the Independent Review into the Future Security of the National Electricity Market", Melbourne, Australia, (21 June 2017). The author would also like the acknowledge the considerable assistance provided by Dr. David Carland in the preparation of these estimates, as well as assistance provided by Kyle Wightman.

12. Department of Environment and Energy, "Quarterly Update of Australia's National Greenhouse Gas Inventory: December 2017", Canberra, Australia, (May 2018)

13. Ibid.

14. The Jacobs report assumes a 28 per cent reduction to greenhouse gas emissions on 2005 levels, rather than 26 per cent. The two percentage point difference is immaterial to the final analysis.

15. Adapted from Jacobs, "Report to the Independent Review" (2017)

16. This itself is an indictment of the cost-benefit analysis underpinning government decisions in this area. To this end, I have initiated freedom of information (FOI) request with the relevant Commonwealth government departments to determine if such analyses has been undertaken. As of writing the FOI requests remain ongoing.

17. The Labor Party, "Labor's 2020 target for a renewable energy future", Policy Document, (October 2007)

18. About the National Electricity Market (NEM) - AEMO

19. Parliament of Australia, "The Renewable Energy Target: a quick guide", Canberra, Australia, (2014)

20. NEM wholesale prices from the Australia Energy Regulator. Prices adjusted using CPI data from the Australian Bureau of Statistics. Note: Tasmania was added to the NEM in 2006. Data from 1998 to 2005 includes NSW, Vic, QLD, and SA. Data for 2006 and 2007 includes Tasmania.

21. A four per cent discount rate is used rather than, say, seven per cent, because firstly a portion of the revenue stream of renewable energy generators is effectively guaranteed by the obligation placed on retailers to acquire more renewable energy than they would under the status quo. This reduces commercial risk. Secondly, this paper is estimating the social cost, rather than just the commercial costs, of the Paris Agreement. It is generally recognised that the social discount rate is lower than the commercial discount rate. For a discussion of the effects of a partially government-backed revenue stream see Department of Infrastructure and Regional Development, "National Public Private Partnership Guidelines: Volume 5 Discount Rate Methodology Guidance", Canberra, Australia, (2013). For a discussion of the social discount rate see Department of Finance, "Handbook of Cost-Benefit Analysis", Canberra, Australia, (2006)

22. According to the Australian Bureau of Statistics, there were 6,070,316 families in Australia at the time of the 2016 census. Australia Bureau of Statistics, "2016 Census", Canberra, Australia, (2016)

23. Note: if "households" is used rather than "family" the estimated per household cost is $5,200. This is based on an estimated 10 million "dwellings" in Australia in 2016. However, "dwellings", as defined by the ABS, did not need to be inhabited on census night but just need to be "habitable". As one individual or one family can own multiple dwellings, this is not considered an appropriate measure.

24. Wind operates at a maximum of 37 per cent capacity, whereas coal can operate up to 81 per cent capacity. See Australian Energy Council.

25. Again, a discount rate of 4 per cent is used.

26. Climate Action Tracker

27. Climate Action Tracker

28. Carbon Brief

29. United Nations, "India's Intended Nationally Determined Contributions", (2017).

30. Cass, Oren, "Testimony of Oren M. Cass before the House Committee on Science, Space, and Technology", (1 December 2015)

31. Navroz K. Dubash et al, "Informing India's Energy and Climate Debate: Policy Lessons from Modelling Studies," Centre for Policy Research, April 2015

32. European Commission

33. Climate Action Tracker

34. Climate Action Network Europe, "Off Target: Ranking of EU countries' ambition and progress in fighting climate change", Brussels, Belgium, (June 2018)

35. Nations included are Sweden, Portugal, France, Netherlands, Luxembourg, Denmark, France, Belgium, Germany, Finland, and Austria.

36. The White House, "Statement by President Trump on the Paris Climate Accord", (1 June 2017).

37. Carbon Brief

38. United Nations, "Enhanced Actions on Climate Change: China's Intended Nationally Determined Contributions", (2017).

39. Data for chart is sourced from Department of Environment and Energy, "Australia's 2030 climate change target", Canberra, Australia.

40. Lomborg, Bjorn, "The impact and cost of the 2015 Paris Climate Summit, with a Focus on US policies", Chapter 15 from Marohasy, Jennifer (ed.), "Climate change the facts: 2017", Connor Court publishing, Melbourne, Australia, (2017)

41. Ibid

42. Marohasy, Jennifer (ed), "Climate Change: The Facts 2017", Connor Court Publishing, Melbourne, Australia, (2018)

43. See The Ocean Cleanup

Government Snooping Will Not Stop At The Banks

Here's an idea.  In order to improve the confidence of the public in democracy, the federal government should embed "Taxpayer Compliance Officers" in cabinet and the Expenditure Review Committee.  The role of such officers would be three-fold.  They would have a general responsibility for ensuring taxpayers' money was spent efficiently and not wasted, they would ensure compliance with all the processes and procedures appropriate to good government, and finally the officers would be proactive and would be charged with stopping bad policies before they were implemented.

Taxpayer Compliance Officers would sit in on cabinet meetings, pop in to the Prime Minister's office to ask question the PM and the PM's staff, and would read and vet all cabinet submissions.  Officers would be embedded for up to three months at a time and would be regularly rotated to avoid them getting too close to ministers and public servants.  Once a year, Taxpayer Compliance Officers would issue a public report detailing how the government was complying with its responsibilities to taxpayers.

Without doubt such a scheme would be immensely popular.  Taxpayer Compliance Officers would help satisfy the public's demand that government be more accountable and transparent, and the scheme would go a long way to demonstrating to the community that governments were complying with the social licence to operate.  The involvement of Taxpayer Compliance Officers in every aspect and at every level of government decision-making would ensure that government acted in the best interests of the community and not simply for the benefit of whichever political party happened to be in power at the time.

If Taxpayer Compliance Officers were already in place, they'd be able to explain to the public the process for the decision of the federal government to give nearly half a billion dollars of taxpayers' funds to an organisation with six full-time staff, the Great Barrier Reef Foundation, without a tender process and without the Foundation even asking for the money.

Such a scheme would overturn most of the principles of representative and parliamentary democracy, but many would argue that the public's trust in politicians is now so low that drastic times call for drastic measures.

Taxpayer Compliance Officers sounds like a radical idea — but it isn't.  On Tuesday, the Turnbull government announced such a scheme to apply to the private sector, whereby staff from the Australian Securities and Investments Commission will be embedded in banks.  At his press conference when the Treasurer, Scott Morrison, was questioned about the scheme — "Treasurer, can I ask, if it will work, can it be extended to other sectors, like mining companies, insurance companies, super funds you heard are problematic too?" — the Treasurer replied:  "We have an open mind on all of these things.  Take the Banking Executive Accountability Regime.  I've flagged very clearly that we're keen to extend that into other sectors once we've stood up the model and it's working ..."

The Banking Executive Accountability Regime gives the government the power to decide who financial institutions can employ in executive positions and how much those executives can be paid.

What will be left of the free enterprise system in Australia after the Coalition government is finished with it is anyone's guess.

If the Coalition is going to start embedding government officials to monitor and control non-government organisations, there's no reason why the Coalition should stop at the banks.  Before Labor rushes to embrace the government's plan for the banks, it might stop to consider its reaction to the Office of the Australian Building and Construction Commissioner embedding its staff in the headquarters of the Construction, Forestry, Maritime, Mining and Energy Union or the Australian Prudential Regulation Authority embedding its staff in the offices of industry superannuation funds.

In these pages yesterday, Professor Rodney Maddock of the Monash Business School outlined in convincing and persuasive detail why the federal government is so bad.  As he wrote in relation to the government's regulation of the finance sector — "There are fundamental issues of privacy, of private ownership, of the freedom to run a business, and of responsibility for the outcomes, which need to be discussed."

Unfortunately that's a discussion the Turnbull government at the moment either doesn't understand, or doesn't want to have — or both.