Sunday, July 03, 2011

Abbott vs Economists

Tony Abbott has continued his politically-motivated aggression against any price on carbon pollution. This time he has attacked Australian, and international, economists. They are in general agreement that a carbon tax is a good, simple, short term measure to reduce carbon pollution, before an ETS is introduced. Speaking at The Australian-Melbourne Institute Growth Challenge conference (of economists) in Melbourne, he said:
“It may well be, as you say, that most Australian economists think that the carbon tax or emissions trading scheme is the way to go. Maybe that’s a comment on the quality of our economists.”
It is classic political “shoot-the-messenger” response. He tried it, with only mixed success, on Ross Garnaut.  Of course, it does nothing for public debate, and is merely an assertion to be reported in the media. I’m not aware of any research on Australian media, but with Rupert Murdoch having significant interests in the UK, the USA and Australia, I’d hypothesise that the figures in the chart below would not be too different for the media & public opinion. (the chart also links to the original site)

His figures for climate scientists consensus are supported by Anderegg, W. et al. in  Proceedings of the National academy of Sciences of the United States of America (PNAS) (Link 5, below)

The Productivity Commission Report ( ) made the following points in its conclusion:
“The cost effectiveness of these actions (carbon emissions reductions policies) in achieving abatement, and the amount of abatement actually achieved, also varies widely, both across programs within each country and in aggregate across countries.
–  Explicit carbon pricing in the United Kingdom appears to have been a cost-effective way of achieving considerable abatement.
–  At the other end of the scale, policies to encourage small-scale renewable generation are substantially less cost effective and have led to relatively little abatement.

The relative cost effectiveness of a price-based approach is illustrated for Australia by stylised modelling that suggests that the abatement from existing policies could have been achieved at a fraction of the cost.”
That is, a carbon tax or emissions trading scheme is a more cost-efficient way to use the tax system to reduce emissions than subsidies for small-scale projects, such as household solar panels, for example.


In researching this article, I also looked at: