Global warming causes federal election

I think there is a chance that we will have a double-dissolution (DD) federal election that will be triggered by climate change.

The ALP has played climate change and their policy response (an emissions trading system — ETS — by 2010) as a big political issue. While they will wait a bit longer for their white-paper process and the Garnaut review to finish… they will ultimately put some ETS legislation to parliament some time in the next 12 months.

If the legislation is not passed, I think the ALP will have to use it to trigger a DD election. They will do this because (1) they will have a comfortable lead in the opinion polls against Nelson and will see the opportunity for getting a better Senate situation; and (2) after they have built up climate change as such a big issue, they can’t be seen to lose and run away.

I think there is a fair (though less than 50%) chance that the legislation will be blocked.

Over at Larvatus Prodeo they think that the Greens may vote against the ETS unless it is made stricter. I think that’s very unlikely. They will squeel and grind their teeth about needing more drastic action, but ultimately they would not take responsibility for blocking an ETS. And the ALP wont compromise with the Greens because (1) that would make it harder to deal with Family First and so the ETS would still fail; (2) they don’t want to be seen dealing too closely with the Greens; (3) the Greens are probably bluffing; (4) even if they aren’t it’s a good political outcome because it puts pressure on the Liberals.

If the Greens vote with the ALP they will have 37 votes in the Senate. South Australian independent Nick Xenophon has previously supported Kyoto and may add his support, bringing the total to 38. But they need 39. So the ALP need either Steve Fielding (Family First) or somebody from the Liberals/Nationals.

There are reasonable reasons for believing that both will oppose the legislation.

On policy grounds, Steve Fielding has consistently called for lower petrol prices and is unlikely to have a dramatic change of heart. Similarly, the Liberals have also insisted that petrol prices shouldn’t rise, the ETS should start in 2012 (not 2010) and that other countries also need to act. Brendan Nelson, Nick Minchin and Tony Abbott (among others) seem ready to fight the ALP on this issue.

However, on political grounds the story gets more interesting. Some people assume that the Liberals don’t want a DD election because of their low standing in the polls. But there are two reasons for thinking otherwise.

First, the Gippsland by-election may lead the Liberals to relish the idea of going to an election on fuel prices. Billboard adverts with “Petrol… Liberals = $1.60 // Labor = $1.90” or something like that could trigger Gippsland like responses.

Second, Nelson probably knows his days are numbered, and this is the only chance he will have to save himself. Given his current support it makes sense for him to take a political risk, and making a stand on an ETS and petrol prices might be it. If he loses it makes little difference because he was on his way out anyway.

Similarly, Family First should realise that a DD election is their only chance of political survival. Steve Fielding was elected on 1.9% of the vote and lucky preferences which won’t be repeated. In the last election they fell well short of getting elected, but they would be competitive in a DD election because it only requires half the number of votes to get into the Senate (about 7%).

I think this is a reasonable scenario. However, it is still quite possible that Steve Fielding, the Liberals, or even just a couple of Liberals using a conscience vote, will pass the ETS legislation. This is especially true if Brendan Nelson is replaced by Malcolm Turnbull within the next 12 months. Nothing is certain in politics. But this is an interesting situation worth watching.

75 thoughts on “Global warming causes federal election

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  2. Interesting thinking.

    One of Nelson’s biggest challenges will be keeping his party colleagues in line if they decide to vote against the ETS. There is a real risk one or more would break ranks to support it.

    There are two reasons. Some will fear losing their seat in a DD. Also, some Liberal members are serious Chicken Littles who think a vote against an ETS will make the Great Barrier Reef disappear.

    I think it is equally likely the Liberals will refer the ETS bill to a Senate committee and hold it up for an extended period. That will deny Rudd the trigger for a DD and also allow numerous opportunities to publicise the impact of the scheme on fuel and electricity prices. After a while, “working families” will figure out what they are being asked to accept and to start raising concerns about jobs and the cost of living.

    I am starting to seriously consider the possibility that the Rudd government might be a one termer. Without the rest of the world doing it (including China), the ETS looks like political suicide.

  3. I doubt they will have a DD, since the majority of people in Australia support the prospect of doing something about climate change, and thanks to the politicalization of what should have been a scientific question, it just means Labor will win again, destroying the Liberals even further in the process without even having to deal with issues where they might lose out.

    In addition, those that would vote against doing something would have even less impact on any actions than now (if that’s possible), since they would simply marginalize themselves into a category where a fair proportion are still stuck at stage where they are trying to convince each other that there is no such thing as climate change — and no-one is going to bother taking anyone from that group seriously on anything (including where they might contribute). Losing an election over it would simply give people a “moral” argument (in a majority rules sort of way) against even bothering with the opinions of the do-nothing camp at all.

  4. John; This sounds logical and plausible.

    We should have a long and detailed discussion to develop a detailed free market position on climate change, (which I consider to be an unproven theory). At this stage I am far from convinced that the rise in CO2 is not caused by a natural cyclic rise in Earths temperature, and I really believe that we should think long and hard before we start a worldwide campaign to stuff about with nature.

    Alternative energy will take a position in the scheme of things naturally as it becomes competitive through supply and demand factors, and technological advances in that area.

    At this stage climate change ‘science’ is in its infancy, but because it presents itself in the guise of a really good excuse for state intervention, it has been welcomed with open arms and is widely accepted by politicians and political operatives everywhere.

    We need a moderate approach pushing the approach that it is pointless trying to force the world into a technological area which is not yet capable of taking up the slack.

  5. Jim — all theories are unproven. I’m not sure why you think the contrarian theories are more likely. While both set of theories are incomplete, both are also quite likely to be contributing factors, at least to some degree. In my opinion the problem isn’t the respectable scientists saying perfectly logical and likely things about potential global warming. That’s fine. The problem is some segments of the commentariant and politics building an exagerated fear campaign… and then demanding rash policy responses.

    conrad — the initial impression of opposing the ETS might be climate change skepticism… but it won’t be true (insh’allah), and the Liberals will have 12 months to explain the difference. If they ran on having a soft trading system by 2012 with petrol excise offsets then the election would not be about action (both sides agree), but on petrol prices. And that is a significantly different prospect. Few Australians will vote for significant petrol price increases.

    I agree with DavidL that it’s still quite possible that some Liberal backbenchers may cross the floor. However, Australia doesn’t have much of a tradition of voting against your own party. And if the Greens decide to be stroppy and don’t vote for an ALP-ETS then there will need to be seven Liberals crossing the floor. That’s a big ask.

    Another option is that the Liberals offer a conscience vote, in which case the ETS will pass. But I can’t see a political benefit from that as it will simply look weak and muddled.

  6. The Unions complicate this. They’re a bit miffed because they ‘won the election’ only to have the power stations sold out from under them. The’ll be worth a lot less now with the ETS in a few years time.

    The CSIRO is against the clock; with a decade of cooling and another predicted they have to get the CO2 cuts in ASAP so they can take the credit.

    Will the unions try as hard to win the election for Labor next time? The watermelons won’t.
    Will the cash flow from stamp duty on CO2 trading and the sale of powerstations replace the fees they ripped out of the state power companies? Costa doesn’t think so…
    Will the overstressed mortgagees in marginal western Sydney electorates be fooled again? Probably…

    The LDP could be hammering away at all these boondoggles, “why should you let these bozos waste your money, when you can do just as good a job yourself.”

  7. John:

    You seem to offer a DD as a plausible outcome. However it seems that you also think the possibility of a DD will favor the other parties (and not Labor). So what would labor gain from a DD?

    The Greens are politically toxic to the ALP. Their best hope is negotiating with the other parties.

    Labor/Rudd seem to be in serious political trouble to me. It may be too soon to show up in the polls just yet. Their policies are basically incoherent. Wait until the full costing of the ETS comes out and they need to justify going early while the big economies that do matter are still in limbo. This could really going to turn ugly for labor.

  8. JC — I can see a scenario where all parties think it’s in their interest to fight a DD.

    Labor will see climate change as a good issue to fight on, given popular support to “do something”. They will also prefer to take on Nelson while he’s still around, instead of waiting a bit longer and taking on Turnbull. The potential benefit for them is a better Senate, because the current one is difficult to deal with. Also, given how much climate change has been played up, it will be difficult for the ALP to turn around and say “oh well… we tried… I guess we’ll just give up now”.

    I agree the ALP won’t want to be seen dealing with the Greens too much. But with the current Senate they have to deal with both the Greens & Xenophon & Fielding! Hence their desire to change the Senate.

    I’m not sure that the ALP are in as much trouble as you say. But more importantly, I think that some Liberals may be starting to think like you. If they have 12 months to hammer home the difference between higher and lower petrol prices… and at the same time the general economy slides… then they will have some hope.

    I can imagine adds that play on Rudd’s pre-2007 talk about petrol prices… then show a graph of petrol prices going up… then showing where the ETS will take petrol prices. Repeat that add every day and night for two weeks. Presto!

  9. Yea.. good points.

    look I agree that Labor isn’t in trouble right now. But it feels like they are losing popularity with each passing day.

    Their policies are simply too incoherent. Fuelwatch is seen as a total joke. The ETS is looking more and more like that too.

    There is also a large gap between what people want to pay for mitigation and what the Rudd/Labor/Garnaut lot wants us to pay. Andrew Norton posted a thread on the subject some while ago suggesting that although the public wants to mitigate they actually don’t want to pay much for it. This is where it really gets interesting especially if we add the fact that the large economies look like they aren’t going to do anything until 2012 at the earliest.

    A 1/2 decent opposition could make a lot of political hay with this.

    ETS is like buying a Chubb-home insurance policy for an average home . It seems total over-kill.

  10. John — I think you are assuming a far too intelligent and knowledgeable electorate. The main distinction people are going to understand is whether there is a system or not and perhaps when it will begin, not what type of system it happens to be. There’s almost no issue I can think of where technical issues have made a real difference to public opinion. That’s of course why we never see “we intend to reduce tax in the lower quartile of income earners via a tax credit system” vs. “you will get less tax if you pay less than $30,000”. Or “education revolution” vs. “the complex pattern of things we will actually do”

    Also, imagine yourself as a marketer for a second:

    “The Liberal party is in denial about your children’s future” or “The Liberal party is happy to destroy the Earth” etc.

    As for petrol prices — I imagine if it was election time Labor would simply exclude them too (as they appear to already want to do), in which case the Liberals would be left with no position whatsoever apart from wait longer, in which case any smear campaign is going to stick.

  11. And John:

    The stories coming out about the aluminum smelters moving overseas is true, they will move. The absolute stupidity of this policy will come out soon enough. We could actually cause the emissions problem to become worse. The smelters will simply move to places like China which will place less burdens on them in terms of emissions. Net/Net emissions will worsen.

    ——–

    Another thing.

    I was told by a reliable source recently that Japanese firms were mitigating by buying Chinese carbon credits. It was subsequently found to be a fraud as there was no mitigation equal to the payments.

    The Japanese don’t care as they are doing everything above board while the Chinese simply pocket the money.

    This cap and trade thing is a sick joke.

  12. Conrad:

    You’re assuming there aren’t any sceptics in the labor party. This is when the broad coalition between the labor browns and greens will show up and could actually fall apart.

  13. John; how does At this stage I am far from convinced that the rise in CO2 is not caused by a natural cyclic rise in Earths temperature, justify I’m not sure why you think the contrarian theories are more likely.

    There is a growing body of scientific opinion which disagrees with the current ideas on the subject, and you should probably try to keep an open mind on the subject.

    I hope that ‘Temujin’ guy comes back soon, I was starting to get along with him.

  14. Double dissolution?

    Rudd is kidding himself if he thinks people voted for him over the environment, it was the poorly packaged sold idea of WorkChoices after a long line of labour market reform.

    He might be one year one term Kev. Nelson is improving.

  15. conrad — if the ALP exclude petrol then the Liberals would definitely avoid a DD. That is one of the many possible reasons a DD might not come around. I don’t think a DD is a likely (> 50%) outcome, just a possibility worth keeping an eye on.

    Jim — I have an open mind. But “open mind” does not mean “dismiss the main theory and accept the contrarian theory”. A sceptical person would not be quick to jump on to every new theory that comes along… as some “sceptics” (not saying you) seem to do. I hope the contrarian theories explain much of the recent climate change. But hope is not a good substitute for careful and sceptical analysis of the information. The mainstream theory is still fairly strong.

  16. I think you’re right, mark. Extremists (the usual gaggle of idiots) like to paint the picture that environmental issues were important, however they seemed to have been a side show if Norton’s poll is to be believed.

    they seem well on their way to truly fucking this policy up by monumental proportions.

    they got the government benches by bullshitting the electorate about free labor markets and they now think with the help of Garnaut they can turn the world’s thermostat down by a 2.23451901 degrees.

    this is why I say their policies are basically incoherent. Nelson is bad, but he’s 1,000 times better than this incoherent rabble of fools.

  17. I think our lefty friends need to have a cup of tea and a lay down. Every new government and their feral supporters fantasise about a DD. That doesn’t mean that there won’t be one, but I wouldn’t be getting too excited. A DD over the AGW hypothesis is unlikely – more likely some other Liberal die-in-a-ditch idea that is somewhat tangental to the main game.

  18. If there is a DD it will undoubtably be triggered by a super-bill which will include many different issues. That way the joint sitting of parliament (after the DD election) will pass all the backlogged legislation.

    But irrespective of all the other policies included is the DD-trigger legislation, I think the ALP will want to play the enviornmental angle, and the Liberals will want to play the fuel angle. Both are vote turners.

    That… and the economy.

  19. There is ample precedent to believe that Australians support the government doing something about global warming, as long as it does not cost anything.

    It’s the same with all environmental causes. They buy “dolphin safe” tuna as long as it is cheap. They only buy organic food when it has been discounted. The uptake of “green power” is very low.

    And it’s not just environmental issues. The gap between what people say and what they are prepared to spend money on is considerable. The “Australian Made” campaign, for example, is moribund despite surveys showing it ought to be a huge success.

    The luvvies in the Labor Party might not realise it, but I’m sure the hard heads are well aware that increases in either the price of fuel or electricity are too high a price for solving global warming. Most people want the government to just fix it, not charge them for it. They’ll vote against anyone who increases their electricity bills, just as they’ll vote against anyone who plans to increase fuel prices.

  20. John; I don’t want to get bogged down in an argument on what was essentially a position statement in relation to what I was saying. You have come up with a reasonable prediction, I think it quite possible that Rudd, a control freak would rather face an election than be denied the chance to do something which will increase his stature among the left and greens regardless of the consequences.

    You can disagree with that position as much as you wish, but in all honesty I felt that our audience should know where I was coming from.

    What you missed was my main statement “Alternative energy will take a position in the scheme of things naturally as it becomes competitive through supply and demand factors, and technological advances in that area.”

    Unless we are happy to go back to the horse and buggy days, and lets not forget that animal emissions will be taxed, Rudds policy is bad. I do not want to argue here about whether your idea of a DD is right or wrong, as I said ‘it is plausible’ and I would prefer to direct this thread towards what we should do about it.

    Lets assume you are right and we have another quick opportunity to make our mark, and not be pedantic about where people stand.

  21. I’m not sure what you’re saying Jim. You seem to be defending a position about the liklihood of a DD, but I didn’t think we were arguing about that. If we were — which side of the argument am I on? 🙂

    Rudd’s policy has nothing to do with the horse and buggy days. These sorts of comments worry me because I think it is important to combat AGW alarmism… but we can’t do that if sceptics are making embarassingly weird comments, and therefore undermining our credibility among reasonable thinkers.

    I didn’t miss you comment. As you say, alternative energy will grow as the technology allows. And as I’m sure you’re aware, investment, R&D and decisions about energy technology will be influenced by price signals. A price on carbon is a price signal that incourages faster adoption of alternative energy. This has nothing to do with horses, nor buggies, nor sunburnt penguins. The sensible people debating these important issues (ie, excluding alarmists & denialists) are not trying to decrease the use of electricity or transport. They are talking about changing how these things are produced.

  22. I don’t see the deniers as being the ones causing the problems, John. For the most part they don’t have much of a voice these days and they do speak they are basically ridiculed or shut down.

    The alarmists are the ones causing the problems as they seem to have more influence on the levers of power. Some of them are scary. Jim Hansen- one of the authors of the IPCC is calling for the energy company CEOs to be tried for crimes against humanity. HE said this in fron t of a congressional committee.

    Then you have people running blogs that produce propaganda 24/7. Some are quite short, bald and have large bulbous heads and lie a lot. These alarmists are even scarier.

  23. JC… I agree that the alarmists are causing the problem. That is why a sceptical voice is so important. But every time a “sceptic” says something weird, grossly uninformed and/or easy to ridicule then it is harder for the real sceptics to be taken seriously. This makes it easier for the alarmists to get away with their fear-mongering.

    It is important to build a strong sceptical voice to counter the alarmists. And one step towards building a stronger scpetical voice is to recognise and abandon the “denialist” arguments.

  24. All of this reminds me of my growing up in a communist country. Everyone would claim how wonderful everything was, how we were all better off than ever before and how soon we would reach nirvana – i.e. communism. While we were all growing steadily poorer.
    Now here we are, with the incredibly dodgy “science” behind the CO2-driven “climate change consensus”, and yet most of us pretend it’s all “settled” and Australia can somehow “combat climate change” by committing economic suicide; the rest of the world notwithstanding.
    It’s scary stuff…the madness of the crowds, indeed. The tulip mania revisited, but with much more dire consequences. And even some self-proclaimed libertarians here seem to be all for massive waste of wealth, ever more taxation/regulation/bureacracy via government intervention, in the name of some “precautionary principle”, perhaps. Who cares about any cost/benefit analysis, or even an examination of the evidence – what little of it there is.
    I suppose in a sad way, it will be up to the global economic meltdown that is now slowly gathering steam, which will put a stop to all this silliness, as the rich western world becomes once more reminded of the basics, rather than the current navel gazing and inventing imaginary disasters….

  25. JC,

    its funny that you are criticizing the alarmists. A better way to look at this is to determine what the probability is that we will see extreme difficulties caused by warming and compare that to what the probability is that none of the warming is caused by human pollution at all (which, for example, we see multiple claims of in the comments here alone). It should be fairly clear that people who sit in the middle of this, who are basically betting on the high probability outcomes, are going to see both the aforementioned groups as a bunch of wackies and not particularly care about either set of opinions.

    On this note, I don’t really see why warming isn’t treated like any other risk management problem, where you try and insurance against terrible outcomes and try and mitigate against bad ones. Or is warming special in that it is something we should not consider this for?

  26. its funny that you are criticizing the alarmists.

    Conrad, deniers are treated like dogshit. They don’t have any voice whatsoever.

    A better way to look at this is to determine what the probability is that we will see extreme difficulties caused by warming and compare that to what the probability is that none of the warming is caused by human pollution at all (which, for example, we see multiple claims of in the comments here alone).

    Okay. So present the figures and show the workings

    It should be fairly clear that people who sit in the middle of this, who are basically betting on the high probability outcomes, are going to see both the aforementioned groups as a bunch of wackies and not particularly care about either set of opinions.

    Maybe so.

    On this note, I don’t really see why warming isn’t treated like any other risk management problem, where you try and insurance against terrible outcomes and try and mitigate against bad ones.

    It’s not that easy, because we really don’t know what problems there are if any. Stern’s report was a crock of shit. He didn’t even weight for cost of capital – as Mark Hill has mentioned before. Also according to Mark even if we took Stern’s workings and not assigned a fair cost of capital it would suggest we simply do nothing and watch. In other words we should leave GDP to accumulate unmolested.

    Or is warming special in that it is something we should not consider this for?

    It’s potentially a 100-year problem that technological change can sole by itself without need to mitigate. In fact government intervention and greenie scare tactics have made this worse. How so?

    The US was well on its way to becoming the lead nuclear power producer in the world. It could have- like France- been producing the large bulk of its energy using nuclear reactors. After three-mile-island the nuclear power industry was shut down in its tracks in the US. It was stopped dead as a result of dishonesty and lies from environmental groups and the relevant governments caving in to pressure. So sorry if I am a little skeptical of the while mitigation thing these days.

  27. And even some self-proclaimed libertarians here seem to be all for massive waste of wealth, ever more taxation/regulation/bureaucracy via government intervention, in the name of some “precautionary principle”, perhaps. Who cares about any cost/benefit analysis, or even an examination of the evidence – what little of it there is.

    Actually we are all libertarians here apart from the odd lefties who take it on themselves to drop in and try to change us to creatures of the state then disappear. Actually I could tell a great story of a union official back in the Progress Party days, who attended one of our meetings to try to explain to us where we had got it wrong.

    He was a very sincere kind of guy who listened with an open mind and stood as one of our candidates at the state election, but I digress.

    I agree with you on the crowd thing, herd instinct is playing a big part in the success of the whole climate change thing, hence the zealotry of the GW hysterics.

  28. JC,

    every major real science organization Earth without vested interests predicts some global warming (CSIRO, CNRS in France, etc.), so feel free to see them for their arguments, probabilities of warming, models etc.

    What do you expect governments to do this in this situation? Simply ignore them? You can imagine what would happen if this was norm for governments and their independent organizations (let’s stick interest rates to zero tomorrow).

    “It’s not that easy”

    Many risk management problems are hard and unknown JC, but we still do something about them. Life isn’t full of easy problems and easy solutions.

    “It’s potentially a 100-year problem that technological change can sole by itself without need to mitigate…[nuclear is good]”

    I agree with you on these things (I would hope to see technology of alternatives replacing coal etc. because they are simply cheaper sooner rather than later for power variations in the day). As for base load power, it surprises me that people hate nuclear so much, especially in the Northern hemisphere, where the effects of other types of power are pretty in obvious (especially in your lungs).

  29. conrad — just because there is a problem doesn’t mean there is a government solution. It may well be that the most logical outcome is to admit the truth of AGW and then do nothing about it. When the option is between a bad outcome, or making it worse, then the clamor for the government to always just “do something” is not a good instinct.

    Bayley — nobody is calling for a “massive waste of wealth”. Also, it’s fairly silly & pointless to play the “I’m a more pure libertarian” game. If you want to play that game… then you’ll lose.

  30. “I think our lefty friends need to have a cup of tea and a lay down.”
    And maybe the wingnuts need to wake up. With figures in the low to mid teens, Dr Nelson is looking so like a winner for you boys.
    The only reason you’re all getting barred up is because of the Liberal porn in The Oz (and other Digger outlets).
    Stop taking the Viagra and stop publically embarrassing yourselves.

  31. John,

    I agree with you, but it seems to me that we’ve long past that stage (and even longer past the stage of assuming global warming exists), and most of the arguments now are going to be about what the best way to move forward is. Those that have no suggestion will simply be left out, which I imagine is why the Liberals seem to have backflipped yet again on their position (if that’s possible given their almost non-extant position on the matter). I also imagine that this will get nastier on a global scale once some countries start doing things and others don’t — it will be interesting to see if we get a new wave of protectionism over it. I’m personally disappointed that some things are going to get excluded with no real consideration (like obvious things such as nuclear power and less obvious things like better city design), but that’s just the way life is I guess. My faith is in new technology, which I think will do far more to solve problems than trading schemes will — I can’t see why it is going to be too hard for Australia to get non base-load power generation from alternative sources when there is essentially unlimited space, sunshine, wind etc. (quite unlike many other countries). Hopefully this will encourage places like China, which also has lots of space and sunshine, but needs better power sources on non global-warming grounds far more than we do (like reducing smog) to start using it more.

  32. JC,

    every major real science organization Earth without vested interests predicts some global warming (CSIRO, CNRS in France, etc.), so feel free to see them for their arguments, probabilities of warming, models etc.

    Nonsense, Conrad. To argue that one group has vested interests while Climatologists don’t have vested interest is being naive.

    What do you expect governments to do this in this situation? Simply ignore them? You can imagine what would happen if this was norm for governments and their independent organizations (let’s stick interest rates to zero tomorrow).

    That’s a silly analogy. We ‘re talking about two things here. Garnaut, Stern and the rest of the rat pack are suggesting we buy a very expensive Chubb insurance policy for our home. In fact it may simply be better to self-insure in the this case and take the risk.

    “It’s not that easy”

    Many risk management problems are hard and unknown JC, but we still do something about them. Life isn’t full of easy problems and easy solutions.

    True, but we Garnaut is quantifying the solution we should at least try to quantify the problem.

    I agree with you on these things (I would hope to see technology of alternatives replacing coal etc. because they are simply cheaper sooner rather than later for power variations in the day). As for base load power, it surprises me that people hate nuclear so much, especially in the Northern hemisphere, where the effects of other types of power are pretty in obvious (especially in your lungs).

    Mitigation without nuclear is a sham. To be perfectly honest AGW will not be a big issue anyway. I anticipate China will eventually go nuke in a huge way building 400 nuke reactors and the problem will essentially become less from their end. India will do the same.

    My bet is that China will create a blueprint for a nuke reactor that will make it 50% cheaper than current costs making AGW a thing of the past.

  33. correction:

    True, but IF Garnaut is quantifying the solution HE should at least try to quantify the problem.

  34. Even if we totally agreed with all the wild views expressed about how bad things will get because of Greenhouse Warming (ignoring the lack of evidence for it, and the evidence against it), the libertarian position would be that the marketplace is more to be trusted than the Government. The sole positive contribution that a government might make would be to award prizes to companies or individuals who completed set goals, and then stay out of it. I saw a TV show where they showed how the development of accurate clocks was initiated by a prize, and such accurate chronometry helped the British nation, whose government was giving the award. It took years, but would have taken even longer without the prize.
    So that should be the only role of government in combatting climate changes.

  35. ”Also, it’s fairly silly & pointless to play the “I’m a more pure libertarian” game. If you want to play that game… then you’ll lose.”

    Rather an odd statement from a guy who supports government action on the introduction of what is essentially a massive redistribution of wealth tax in terms of : ”A price on carbon is a price signal that encourages faster adoption of alternative energy.”

    With the resources boom and the current shortage of oil, there has already been a huge increase in the carbon price caused by market factors we hardly need calls on this venue for an extra one from the government. I wasn’t aware we were into that.

    This should on its own cause an explosion in research into alternative energy on the basis of those higher cost methods becoming more competitive.

    The sole positive contribution that a government might make would be to award prizes to companies or individuals who completed set goals

    Nicholas, are you seriously suggesting that in addition to the rewards that royalties and licensing agreements bring, (if you are talking about innovations) or higher profits through more efficient use of fuels, taxpayers should be called on to give them more?

    This thing will end up as a mess as was stated in the ‘Australian’:

    John Roskam, executive director of the Institute of Public Affairs, thinks the ETS will make the Income Tax Assessment Act look easy to understand by comparison. It will involve government planning and regulation on an unprecedented scale. He says one can only wonder what sort of regime will be needed to ensure that companies do not profiteer unfairly.

  36. Jim — if we are having a purity contest, it is hard to beat an anarchist. 🙂

    The sentence “a price on carbon is a price signal that encourages faster adoption of alternative energy” is simply a statement of fact. Similar to me saying “2+2=4”. In short, all I have said is that “incentives matter”, which is pretty much the golden rule of economics.

    Whether you want to introduce an additional incentive is another matter. But *if* you start with the assumption that carbon needs to be reduced, then the options are (1) command & control (very bad); (2) picking winners (bad); or (3) put a price on carbon (less bad).

    While my dream country has no government, back in political reality I know that the government is going to do something. Indeed, they have been spending billions of dollars already for over 10 years addressing AGW and both major parties are committed to even more action… so the argument for “do nothing” has already lost.

    If we have to do something, a revenue-neutral carbon tax is a good idea, and much better than the ETS & picking winners (ie current policy) in my opinion. One reason is that the carbon tax will be offset to some degree by tax cuts elsewhere in the economy. Carbon taxes aren’t the only bad tax in the world. All taxes are bad. So swapping taxes is not necessarily the end of the earth. In many instances, a tax swap has a neutral impact.

  37. Temujin we already have a price on carbon and it is increasing of its own volition owing in part to natural forces, and to government restrictions on availability. What you are referring to as “incentives matter” Is in fact (1)” command & control.”

  38. Jim is right.

    We have parity pricing and excise tax. Carbon is already tax at over $100 per tonne, on petrol anyway.

    But I assume the “Humphreys Plan” removes these distortions before applying a swapped tax.

  39. if we are having a purity contest, it is hard to beat an anarchist.

    But as it’s a game, Bayley and Jim can pretend to be anarchists as well 🙂

    A specific carbon tax only makes sense if it can be shown that the current carbon taxes (ie excise, GST and mining royalties) do not produce the intended incentives ie encourage fuel efficiency. I don’t think that’s likely.

    A carbon tax would primarily increase the price of electricity, just as an ETS will. It would be administratively simpler than an ETS, but what else? Either way you get a mess, as Jim said. The main difference might be the size of the mop needed to clean it up.

  40. Jim, I was merely showing the only way that I think governments should try to change behaviour, by rewards. I was merely pointing out that it has worked in the past. This was not meant as a declaration that governments SHOULD do this, but that this is the most that they should be allowed to do.

  41. DavidL – not sure why you include GST as a current carbon tax. If you buy Green energy it still includes GST. Arguably fuel tax and royalties also don’t align with emissions but they are at least cases of government imposed costs that can be avoided by alternative energy suppliers.

  42. Jim, I know that electricity and fuel already has a price. I simply made the self-evident point that if you change the price then you will change behaviour.

    A tax is not command & control. It’s a tax. Under a command system the government directly determines behaviour. Under a tax the government changes the price and lets the price mechanism change behaviour. These things are (obviously) not the same and so everybody else on earth makes a distinction between the two concepts.

    I understand you don’t like either concept. Neither do I. But that doesn’t make them the same thing. I don’t like anchovies and I don’t like basketball. But that doesn’t mean that anchovies and basketball are the same thing.

    And if you recognise that they are different things (as everybody else on earth does) then it is also possible to distinguish between them. One is worse than the other.

    DavidL — There are multiple benefits from a tax over a trading system. Enough reasons to justify me writing a booklet. There’s no point re-writing it here, given that you can download it for free at the CIS website.

    http://www.cis.org.au/policy_monographs/pm80.pdf

    And the standard economic justification for a carbon tax would be that carbon produces a negative externality. Though that’s not the argument I’m making. My argument is that a carbon-fuel tax swap would produce little to no cost, and if the government is going to do something (guaranteed) then a no-cost solution would be better than a high-cost solution.

    Anybody arguing for the high-cost solution is free to do so. Anybody wanting to hold hands and hum and dream about utopia is also free to do so. But back in reality, I’m going to argue for the “no-cost” solution.

  43. Jemujin – surely you mean “low cost” not “no cost”. And clearly that is low cost only in a relative sense. If you change the tax mix to bias against the existing energy producing capital then you create a bias in favour of new energy producing capital. This diverts resources away from other alternative activities. So for example instead of curing cancer we build windmills. Every action that entails a decision has a cost.

    I agree that low cost is better than high cost.

  44. Not quite true Terje. The cost can be sunk before the decision takes place. There is a high fixed cost and negligible switching and variable cost.

    Swithcing to a more efficient tax system and emliminating subsidies has benefits, and what costs? The only argument that seems valid is that “old taxes are fair taxes”, but the system was/is so complicated I don’t accept this.

    Unless you are talking about the cost for John to come up with a proposal, you can’t quantifiy the benefits and he probably enjoys this kind of work. It is consumption for him, not a cost.

  45. The follow report from the cover of todays The Australian newspaper says that petrol excise will be cut to offset the cost imposed on fuel by Rudds emission trading scheme (ETS).

    http://www.theaustralian.news.com.au/story/0,,24027312-2702,00.html?from=public_rss

    This would seem to make the package somewhat more acceptable to the likes of Family First. It also calls the Liberal parties bluff given that they have said they would support an ETS if the price effect on petrol prices was neutral.

    Now who is going to pay for the increased electricity bill?

  46. Mark #47 – a carbon tax does not reduce complexity within the tax system. Your argument seems to rely on the idea that it does.

  47. Terje — a carbon-fuel tax swap will reduce distortions by having a lower tax on a broader base. That is secret special economics code for saying “more efficient”.

    Also, I’m suggesting that a carbon price replaces all subsidies. I know the politicians aren’t going to listen to that part, but if they did then my proposals would increase total welfare.

  48. Actually Terje I will elaborate a bit more on John’s point:

    John’s carbon tax would braoden the base on carboin taxes and also be a Pigouvian tax and closer to a Ramsey tax. Ramsey taxes are the ultimate in efficiency except you need perfect information economy wide.

    Taxing a commodity and subsititues with well known insensitive elasticities and external costs and making this compensatory to an inter household tariff which itself has been simplified would be more efficient and less complicated and perhaps more importantly to some, less arbitrary (i.e less inequitable).

    But of course I only want a carbon tax if no private action can work (and this can be proved) and intervention has a clear net benefit. So far, there is no evidence of the second precondition I believe we should have for this policy.

    I am all for private solutions. However, we have some bad news on that front. Firstly, in recent times, many nations have agreed to a UN convention banning iron seeding. Their rationale was applying the precautionary principle – the same reasoning that says we should apply a carbon tax even if it doesn’t pass a CBA as an insurance policy.

    I think if free market and libertarian types set up their own environmental fund to offer something like an X prize (like Jason Soon, John Z and Hunphreys (Temu)) discussed on catallaxy for global warming, and also to set up a fund which did practical things like tree planting and research into other low cost solutions (tree burial, whitening roofs) and showed that civil society and for profit organisations can mitigate carbon voluntarily, there would be a case for no carbon tax or a reduced carbon tax even if the precautioanry principle was followed.

  49. Mark – your preferred carbon tax and Johns peferred tax may both involve a reduction of complexity. However there is no guarantee that you will get the carbon tax you prefer. In fact even if the government did switch to a carbon tax approach instead of an ETS there is every reason to believe that it would still be an extra tax not a replacement tax. I agree with you and John that a more efficient tax system can be achieved at the same time as a carbon tax is introduced but I disagree with any implication that it will necessarily happen like that or that it will necessarily reduce complexity. We may well find ourselves with a carbon tax in addition to a mish mash of other taxes. Your prefered version of events is far from inevitable and you should draw a distinction between “a” carbon tax and “your” carbon tax.

    John – efficiency and complexity are not the same thing. Everybody on Earth knows this. It is like anchiovies and basketball. One thing is not the other. You may have some special version of english in which they are the same thing, which is fine, but the rest of the english speaking world knows them as different things. 😉

  50. I didn’t say anything about complexity. You suggested that a carbon-fuel tax swap would have a cost. I pointed out that it could actually be more efficient.

    You’ll note that Mark’s original response to you also said “switch to a more efficient tax system”, and only mentioned complexity as a side-issue about whether we should like the status quo.

    I agree that a carbon tax could be introduced in several different ways. That’s also true of education vouchers and a negative income tax and many other libertarian suggestions. Friedman (who was famous for supporting the NIT) actually argued against a specific piece of NIT legislation to congress. I’m only supporting my version… 🙂

    Another version may be more likely. But in reality I think the move towards an ETS is already so strong that any non-ETS alternative is unlikely. 😦

  51. A tax is not command & control. It’s a tax. Under a command system the government directly determines behaviour. Under a tax the government changes the price and lets the price mechanism change behaviour. These things are (obviously) not the same and so everybody else on earth makes a distinction between the two concepts.

    Temujin, A tax is in fact “command and control” if used as in this case for social engineering. There is in fact little difference between the state ordering that something be done a certain way, and creating a tax that will force by economic emasculation a behavioral change in the whole of society.

    Well in fairness there is a difference – one offers prison as an incentive, the other offers bankruptcy.

    The following is what a (non anarchist) libertarian, Wayne Allyn Root would do: –

    So, how do we stop this vicious cycle? Simple- we get government out of the way. Please, do not get me wrong. There is one area in which I am in consensus with the environmentalists and the Democrats. There is no question that the only long term solution for America’s energy independence is to wean ourselves off of fossil fuel (oil) and replace it with clean and renewable energy.

    But, the reality is that it may take another 20-30 years to be accomplished. In the meantime, the answer is drill, drill, and drill some more. President Bush took a first step today by lifting the “Executive Ban” on offshore oil drilling. …

    Stop listening to liberal environmental extremists who want to drive America (by horse and buggy) back to the dark ages. They couldn’t care less about the average working American. These radical environmentalists want to keep us all poor and beholden to them for handouts- that is how they buy your vote and keep themselves in power. It is time in my opinion to put the interests of Americans and the American economy FIRST. ….

    Take ethanol as an example. Government tried to solve the energy crisis by picking ethanol as the winner. Big mistake. Ethanol has not only done nothing to solve our energy crisis, it has caused a worldwide economic crisis. The corn crops now dedicated to ethanol production have produced a worldwide shortage of corn needed for food (as well as cattle/chicken feed). That has in turn spiked grocery prices, caused shortages at the grocery store, and incited riots across the globe. Yet gas prices continue to rise, because it actually takes more than a gallon of gas to create a gallon of ethanol. And, it turns out that ethanol causes more pollution than gas as well. The result is an energy and economic crisis caused by government.

  52. No Jim, tax simply isn’t command. I don’t know what else to tell you. The words don’t start with the same letter and they don’t even rhyme. I have never heard of anybody else on earth unable to make the distinction.

    Yes, they are both bad. Yes, they are both involuntary. Yes, they can both be used to try and influence behaviour. But that doesn’t make them the same thing.

    I guess for an absolutist the difference doesn’t matter. They are both coercive. But for people trying to make a nuanced distinction between different forms of government intervention it is absolutely necessary to at least be vaguely aware that there is such a thing as different forms of government intervention!!

    Please don’t tell me you still think tax, nationalise and regulate are synonyms because it would pain me to have to start giving dictionary definitions and basic english lessons. (I re-read this and decided it was unnecessarily snarky… but given it has already been responded to below I couldn’t just delete it. But consider it retracted. Sorry Jim.)

    (I agree with what Root says. But nowhere does he endorse you’re … ummm … unique understanding of the word “tax”.)

  53. John – I did not question Marks point about efficency. I questioned his assumption about reduced complexity. So it seems odd that you then lecture me about efficiency. Complexity is not efficiency and I did not make any reference to efficiency. It is possible that Marks point about efficiency does not rest on an assumption of reduced complexity however he implied that it did and I merely acknowledged and highlighted that assumption.

  54. Please don’t tell me you still think tax, nationalise and regulate are synonyms because it would pain me to have to start giving dictionary definitions and basic english lessons.

    Straw arguments and sophistry do not help John. Jim’s point has nothing to do synonyms or English (spelt with an upper case E!).

    His point is simply that a tax intended to produce a designated social outcome (ie a disincentive to continue using carbon-based fuels) is command and control. Specifically, he said: There is in fact little difference between the state ordering that something be done a certain way, and creating a tax that will force by economic emasculation a behavioral change in the whole of society.

    That might not match the definitions in an undergraduate economics text, but it is obviously the case. Try not paying it and you’ll get the point.

    Being cheerfully ignorant of such definitions myself, I regard so-called progressive taxation as much the same. Just because it is not nationalisation (but it is regulation) does detract from the fact that it is a form of command and control.

  55. When it comes to reducing carbon emmissions there are several options.

    1. You can simply say “you can’t turn on lights between 7-9am” or “electricity must be 20% renewable” or “all cars must pass certain fuel efficiency standards”. This option is sometimes referred to as “command and control” because it directly commands you how to act.

    2. The government could nationalise something. Thankfully, this approach is relatively less popular these days.

    3. The government could change the relative price signals by introducing a carbon price. This could be done through traded permits or a carbon tax.

    4. The government could try to pick winners.

    Jim & DavidL are right that all involve involuntary actions. But it does nothing to advance the debate if we pretend there aren’t different types of government action, or if we pretend they are all equal. Introducing a carbon price is using a market mechanism to achieve the government’s goal. Using a market generally works better than nationalising, regulating or picking winners because it allows more flexibility.

    Terje — I wasn’t lecturing you. I was responding to your comment that the carbon-fuel tax swap would have costs. I was pointing out that it may actually be more efficient. I think it’s perfectly reasonable for me to directly respond to something you have written.

    This is separate to what Mark wrote. But even then, I don’t think Mark implied that the efficiency was caused by less complexity.

  56. Isn’t the heading wrong? Surely it should be “Federal Hot air causes Global Warming- nobody surprised.”?

  57. The GST was 10%, the carbon tax is 1%, and there are people here dreaming it is going to result in a one term labor government. Talk about la la land.

    And as for “I think CO2 is going up because the weather is getting warmer”, cars emit CO2 there is a lot of cars, oh yes that is going to be easy to sell.

    The path the Liberals are going down is political insanity. Forget your little arguments over differing scientific views (and being an engineer I can tell you many of the minority arguments are just plain rubbish); think about the politics. The politics is on the side of the majority scientific view, the melting Greenland ice, the pollution, EU policy and probable USA policy after November.

    If the melting of the Greenland Ice accelerates do you really think Northern Hemisphere panic isn’t going to set in. Forget the planet, do you really want to bet the future of the Liberal party on it not happening, given that the level of the Greenland ice has fallen 60 meters in the last 20 years.

    Get real guy.

  58. As the Sloan Chaired Professor of Climatology of MIT, Richard Linzden would also tell you of many minority arguments that aren’t rubbish – like him, we aren’t interested in the rubbish ones.

    The GST wasn’t 10%. It was applying 10% to almost everything instead of 28% to some things and not others.

    A carbon tax might be 1%. An ETS is unworkable.

    AGW is happening – but there is no credible cost benefit analysis that says we should do anything. If action must be entered into in the future, a tax which is compensated against income tax and transfer payments is best.

  59. Mark you ignore the central point, climate change or not, pollution is not a good thing. Europe was well down the path of reducing carbon admission because their forests where dieing from acid rain. Stop circling trivia.

    Who cares when what, how, where or how many letters after the names the minority view can muster, that has nothing to do with the politics of the issue over the next decade or so.

    And when you have people like Andrew Bolt writing straight out drivel the minority view hasn’t got much hope of being taken seriously. When it comes to politics being taken seriously matters.

    The Liberal party are setting themselves up to hit a political brick walls. Idiots.

    “ETS is unworkable.” Yes if you say so. To my simple mind a straight out tax would be simpler but it would seem economists think the ETS is a better solution, I’m no economist and I think the preferred solution of the people who think about these things should be give a go before the simple solution offered by the ignorant ( and I include myself in that list when it comes to economics).

  60. The Liberal party are setting themselves up to hit a political brick walls. Idiots.

    Rising prices and unemployment result in governments being voted out. If Labor’s ETS causes these, they’ll be out unless the Liberals agree with them.

    But I’m sure that’s what you had in mind.

  61. Economists think an ETS is better – no we don’t.

    Andrew Bolt doesn’t help because he is so divisive.

    Pollution is bad – yep. Short of a command and control economy, how would you eliminate it?

    There is an optimal level of everything. Typically it lies somewhere between but not equal to zero and infinity.

    I thought acid rain was due to sulfur emissions, which in fact lowers carbon forcings on temps.

  62. The basic equation is:
    H2O (l) + CO2 (g) → H2CO3 (aq) ( carbonic acid)
    Sulfur adds to it.

    Reducing pollution; oh how about a tax on carbon, an ETS, something like that.

    Look Europe have done a pretty good job of tidy up their mess, they have the largest economy, higher taxes on fuel, toll on their roads, an ETS and public transport that works. There is more than one way to skin the economic cat.

    Andrew Bolt is he is an idiot, the problem is increasing the public is associating him with the Liberal party.

    David, yes unemployment might go up in the next few years, the US have made a real mess of it, but your going to be hard press blaming it on a ETS that has not been introduced ( remember we are talking about a DD that result because the ETS didn’t get through the senate).

  63. Look Europe have done a pretty good job of tidy up their mess, they have the largest economy, higher taxes on fuel, toll on their roads, an ETS and public transport that works. There is more than one way to skin the economic cat.

    What twaddle. Their unemployment is double ours, they have higher taxes and much of their industry survives because of protection or subsidies.

    I’ll vote against any party that increases my fuel or electricity bill in the name of climate change. I’m certain a lot of other Australians will too. People like me could win the Liberals government in 2010 if they are half smart.

  64. DavidLeyonhjelm
    Look at the GDP figures, the how and the why really isn’t the issue. It’s the total goods and services produced that determines the size of an economy. Europe is the largest economy. David you don’t win government by ignoring facts.

  65. Europe is the largest economy.

    Can an economist please jump in if I’m wrong here, but Europe is the largest economy because they keep adding countries to the EU. It wasn’t that long ago that they weren’t the largest economy.

    I don’t think you could say that the relationship between EU counties is all that strong to consider it the same as a true single economy – the fact it has a single currency only makes it look that way to the uninformed. Maybe it will get that way but I don’t think it will be any time too soon. By then China and India will be well on their way and conflicting value systems in Europe coupled with their propensity toward soft socialism will hamper their growth compared to rapidly growing parts of the world.

  66. Mick

    You are sort of right, Europe has worked out how to expand it’s borders without having a war; when you sit back and think about it it’s pretty amazing stuff. The US ( externally)and China (internally) are still trying to wield political influence with a gun. It would seem Europe has finally had enough wars to work out it doesn’t work.

    Only sort of right because the countries they are expanding into are underdeveloped and a lot of money gets poured in to bring up their standard of living, but it is this cross subsidization that encourages more countries to join.

    You have used that magic word socialism and suggested that this will hold back Europe’s further development, might be wise to look at the counties with the highest standard of living and reflect on the why, and to reflect on why Europe is finally united, and why Europe is expanding it’s borders.

    There are lessons to be learned looking at what is actually happening and considering it.

    From a social point of view even China is interesting, in January they introduced the 40 hour week, time and a half for overtime and double time for the weekend. Doesn’t sound like work choices does it. (this is about a DD over global warming, how did I get onto that).

  67. You are sort of right, Europe has worked out how to expand it’s borders without having a war; when you sit back and think about it it’s pretty amazing stuff.

    Are you copying and pasting from Ken Davidson at The Age, Charles? He’s about the only lunatic who would suggest such nonsense.

    The US ( externally)and China (internally) are still trying to wield political influence with a gun. It would seem Europe has finally had enough wars to work out it doesn’t work.

    Great comparison. China of course runs its primaries and elections every 3 years instead of 4 ☺

    Only sort of right because the countries they are expanding into are underdeveloped and a lot of money gets poured in to bring up their standard of living, but it is this cross subsidization that encourages more countries to join.

    Great deal for the taxpayers in those countries forced to fork out the cash, hey Charles? Subsidies and aid has really done a great job of bringing Africa in the rich countries club. Not!

    You have used that magic word socialism and suggested that this will hold back Europe’s further development, might be wise to look at the counties with the highest standard of living and reflect on the why, and to reflect on why Europe is finally united, and why Europe is expanding it’s borders.

    Expansionary socialism perhaps?

    Let me get this straight… You have no problem with Europe expanding its borders but you do if it is China and the US? And how exactly is the US expanding its borders, genius? The likely prez has already said he is withdrawing the troops.

    From a social point of view even China is interesting, in January they introduced the 40 hour week, time and a half for overtime and double time for the weekend. Doesn’t sound like work choices does it.

    And why exactly is China an example, Charles? Last time I looked they weren’t allowed to vote, genius.

    And stop being so scared of AGW, Charles. You won’t die.

  68. Many points you’ve raised, Charles, but I’ll just have a reply to one. Love to do socialism with you but can’t afford the time to make a decent reply and someone else probably will anyway. I recommend hooking in with Mark Hill.

    You are sort of right, Europe has worked out how to expand it’s borders without having a war; when you sit back and think about it it’s pretty amazing stuff.

    I agree with your ‘amazing stuff’ comments about countries uniting. However, I think the ideal is when countries come together because their values are the same, and trade between them has become so open that it just seems to be silly not to do away with borders. After all, they’ve become little more than administrative burdens anyway and it’s got to the point where they don’t really provide anything! Furthermore, their cultures will at least complement each other, if not already being well on the way to melding.

    I would argue that the motivations between European nations coming into the EU are not entirely ‘pure’ i.e. not really for the reasons I’ve mentioned above. I think some western European nations realised their already declining influence in the world would only decrease further if they didn’t ‘gang up’ a bit. Ditto economic influence. While their values are certainly close relative to most of the world, I don’t think they are close enough for harmonious relationships – especially as the EU expands out of western Europe. I also think all the good benefits from free movement of people and cultural exchange were already happening, and the EU tampering with this will probably have detrimental social effects. Also, as you’ve pointed out, I think it’s mostly at the point where the poorer nations are coming in looking for ‘free’ economic benefits rather than first fully developing their trade and economic relationships.

  69. JC
    Are you copying and pasting from Ken Davidson at The Age, Charles? He’s about the only lunatic who would suggest such nonsense.

    I don’t understand, Europe is expanding it’s borders on that you must agree, they are doing it without wars on that surely we agree, what exactly are you arguing about.

    Great comparison. China of course runs its primaries and elections every 3 years instead of 4 ☺

    Sorry I’m not sure what this is about.

    Great deal for the taxpayers in those countries forced to fork out the cash, hey Charles? Subsidies and aid has really done a great job of bringing Africa in the rich countries club. Not!

    As no African country is yet part of the EU what has Africa got to do with Europe expanding? As for the tax payers, as I said before take a look at who has the highest standard of living, who has the largest economy.

    I think you missed my point, Europe is expanding,they have worked out how to do it without a war. Beginning and end of it.

    Let me get this straight… You have no problem with Europe expanding its borders but you do if it is China and the US? And how exactly is the US expanding its borders, genius? The likely prez has already said he is withdrawing the troops.

    Yes the gun didn’t work did it. I think you missed my point, Europe is successfully expanding it’s borders, the US is not, the gun doesn’t work as well as economic methods. Even the US’s recent successes have been tiny compared to the EU results. I make no judgment on the rights or wrong of empire building.

    And why exactly is China an example, Charles? Last time I looked they weren’t allowed to vote, genius.

    And what has voting got to do with GDP, perhaps it has a lot to do with social structures and the long term viability of China’s economy.

    And stop being so scared of AGW, Charles. You won’t die.

    JC I will be long dead before it matter. In my view JC it is not about bing scared, its about making rational political choices.

  70. Chalres – you didn’t know what I was talking about. Sulfur emissions do not add to carbonic acid – they form their own oxidised acids. Not all of the CO2 in the atmosphere is a “bad”.

    There is a well known tradeoff between sulfur oxides which act as aerosols but can form acid rain and carbon forcing. If you didn’t understand what I meant, you should have been more upfront.

    The US has made a mess of things – Iraq, bailing out failed banks and printing money like it is going out of fashion. Basically it is a spending spree on a credit card that no one will ever willingly pay back. There are two choices the Government has here – increase taxes now and cripple productivity, or have massive forced savings in the future (higher costs of debt, crowding out of private investment – which simply decrease productivity at an accelerated rate at a later date).

    Just how would an ETS actually help US unemployment if it puts burdensome regulation on businesses and if it works, (unlike Europe’s) will add about 8% of GDP to total taxation? If it doesn’t work like Europe’s, it will be an expensive joke.

    The European Union’s ETS is a joke. A tonne of carbon was being traded for 10 eurocents not long ago. Each of the member States cheats so much that this increases the supply so much that the theoretical price (20-120 AUD/tonne) is traded down to about 0.17 AUD/tonne.

    You are congratulating these guys for this charade?

    Please point out a reliable cost benefit analysis that shows we need mitigation – Nordhaus has shown that we don’t. Dasgupta and Ken Arrow (Nobel winner) have also criticised Stern for using “inappropriate” discounting figures. This means the whole thing is biased and if it used realistic capital costs he too would have come to the comclusion that mitigation isn’t worth it (yet).

    Europe has more fuel taxes – so what! Taxes like this are not necessarily more efficient than levying a GST on everything anyway – and they are extremely regressive (and on top of all other taxation and subsidies). Australians already pay fuel taxes equal to pricing carbon at over 100 AUD per tonne, or well above the cost of maintaining raods plus a moderate price for carbon. Europe has also seen sceleoretic growth except in oil rich nations or nations which have lowered their taxes and deregulated their labour markets recently. The States with more taxes have larger public sectors with lower productivites. You are congratulating the Europeans for mandating poverty through a regressive tax, but why?

    The US has a misguided foreign policy. So do most countries. The US probably shouldn’t have gone into Iraq, but they also shouldn’t leave. NATO (most of the EU) went into Afghanistan with America (I think they were right to do so). The EU also reckons they can topple Mugabe with “smart” sanctions. What can they offer Mugabe that the US couldn’t offer Castro? Do you even know how dirty France’s dealing’s are?

    So much for Europe not trying to force things through the barrel of a gun! Total/Elf/FINA which has significant Government ownership (which has reduced in recent years) has some unpalatable dealings in Myanmar. Perhaps you should google this. This has some factual basis rather than most of the insinuations made about Bush.

    Charles, this may come as a shock to you, but the neoconservative goal, which many libertarians don’t actually agree with (and often get quite angry about) isn’t to “expand the borders of America”. That is what NAFTA might become one day. But not Iraq which they are (probably foolishly) pulling out of.

    Your statement about Work Choices and China is simply – stupid. Work Choices was a flawed policy, badly sold but it gave workers and bosses more flexibility. China uses slave labour and sells it to foreigners. Pull your head in son. Are China’s labour unions going to have a well organised series of rallies somewhat like “your rights at work” to protest the Government has not given them enough?

  71. Charles – if it is about rational policy choices, why do you support mitigation when mitigation simply doesn’t cut the mustard when it is subjected to a reliable cost benefits test?

    I’d like to know.

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