OK, a bumper crop of Hulka today, as here is another thought that has been brewing in my head for a couple weeks. See, periodically, I can see the future. But I am unfortunately a cynical futurist, and when I can see things well, I can basically only see bad things. Here is the first of my views on where we are going in Australia in the next few years.
We are almost certainly going to have a Coalition government in Australia following the next election. If that future Coalition government follows through on its promise to repeal the carbon tax AND also repeal the move to carbon trading, it will be a very retrograde and bloody-minded step that will cost us billions of A$.
The step back will take us back to before the Howard government started us down the path of legislating NGERs (estimating CO2e scientifically) and the CPRS (the trading instrument for the CO2 market), and essentially ignore (in a bureaucratic sense) the anthropogenic effects of CO2-e gases in the atmosphere. I believe it will also expose the government of Australia to significant legal claims with respect to liabilities created in the implementation of carbon pricing mechanism to this point by industries. As industry in Australia has already “tooled up” significantly to address its CO2-e emissions in its methods of accounting, capital planning and trading, it likely has a valid claim of loss if the government abandons the game, rather than just modifying the price, or moving more quickly to a floating price. One thing is for certain; the abandoning in full of the pricing of CO2e, and failing to internalise those costs is wrong scientifically, is known to be wrong scientifically by a large majority of the members of the Coalition, and is therefore simply bloody minded.
And here is some evidence as to why I am telling the truth: I don’t have an interest in advocating my position, and will actually likely do better financially if what I believe is bad policy goes through. For my company (which is carbon neutral and independently certified as such), it won’t make much difference. We don’t emit much now, we emit at a lower rate each year, and we have enough CO2-e in the bank to cover our needs in the short term, regardless of the effect on the market of the government abandoning carbon pricing. In fact, we can probably hedge our long-term expense very cheaply in the short term, if a new Coalition government carries through on its promise. Plus, I can also probably figure out a way to make some money on the bad change in policy.
But over time, the real important loss under proposed Coalition policy will be that of opportunity to Australia as a whole. This is because the adage that “the world is ruled by those that show up” is fundamentally true. Australia is now in a position where we participate and lead in addressing anthropogenic emissions of carbon internationally, and we can help define the markets that will deliver a means to address it. A future Coalition government has committed to abandoning participation, in a move that will rightly be viewed as embracing climate change denial. We will be left out of the “team” that makes up policy and infrastructure in the trading of CO2-e, and the yanks will likely end up owning the game again.
Add to this another really bad idea from the Coalition that I have gone through in detail before, direct action. See, direct action involves picking winners and losers in industry. Shit like giving large emitters large sums to stop emitting nasty shit rather than regulating them. Picking individual winners and losers by any government is virtually always (and I cant think of a single counterfactual) a bad idea. It’s assumes a way too effective means of prediction, is distorting of markets and invites corruption. I hate it when Labor does it, the Greens do it or the Coalition does it. That is not to say that incentivising markets is wrong. I have nothing wrong with the government providing incentives for innovation, just incentives for any specific innovation. Incentive for anyone that can improve the delivered efficiency of electricity to homes in all Australia = good. Direct subsidy to build more gas fired power plants to private companies because that is the currently available cheap fuel = bad. Now, you want to talk about doing a little bad in the short term to get a long term good, let’s discuss nuance, but it had better be part of a well thought out and comprehensive plan, and not just the next government’s rort for their buddies. I am not sure the Coalition does nuance.
I am happy to be proven wrong by evidence and alternate theories at this point, or by history, but that is my view about where we are going with respect to doing something bureaucratically about climate change. My next prediction of looming bad could be the NBN under the Coalition. But we shall see. I also take requests.