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 (http://www.pc.gov.au/projects/study/carbon-prices/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.

John

In researching this article, I also looked at:
1)  http://www.petermartin.com.au/2011/06/impact-of-carbon-tax-will-be-how-small.html
2) http://www.smh.com.au/business/productivity-commission-backs-carbon-pricing-20110609-1fu2j.html
3) http://www.theaustralian.com.au/national-affairs/opposition-leader-tony-abbott-defies-economists-on-carbon-tax/story-fn961iy1-1226085675981
4)  http://renegadeconservatoryguy.co.uk/wp-content/uploads/2010/07/Climate-Change-Infographic1.pdf
5) http://www.theage.com.au/environment/climate-change/climate-debate-appalling-20110621-1gdms.html 

Abbott’s Plebiscite Another Stunt

Tony Abbott has suggested a National Plebiscite to determine whether Australia should have a Carbon Tax.

Plebiscites and Referenda are somewhat different. In Australia, we use the term ‘Referendum’ when a question of Constitutional change is put to the people. If it passes by a majority of Australian voters, AND a majority of voters in a majority (4 –6) states, then the Government is bound to implement the change. A Plebiscite, or Advisory Referendum, has no requirement for Government action, regardless of the voting result.


Independent MP’s and Senators, the Greens, and the Labor Government have been critical of Abbott’s proposal. They have generally cited:

1. the $80 Million estimated cost of a vote that does not require Government action
   and
2. it is just a political stunt, being nothing more than an opinion poll.

Independent Senator Nick Xenophon (SA) was less critical, saying the question to asked should be “neutral”, avoiding the word ‘tax’. You can almost see Tony Abbott, and his faceless advisers, wince with pain.

There have been only 3 other national plebiscites:

1916	Conscription	LOST
1917	Conscription	LOST, but Billy Hughes introduced conscription anyway.
1977	Change National Anthem	Anthem Changed to Advance Australia Fair

Tony Abbott has produced a media stunt derived purely from his own political pursuit of power. It would contribute nothing to debate about good policy: he wanted a question that effectively would have asked “Do you want to pay more tax? He did, however, admit that he would ignore the voice of the people if the vote went against him, while he would have insisted the Government follow the vote if it went against the Government!

While researching for this post, I came across the following sites. The third one, about Billy Hughes, is an interesting, because he tried to use Plebiscites to change the attitudes of his own (Labor) party, and opposition Senators.

1. Australian Electoral Commission information, at http://www.aec.gov.au/Elections/referendums/Advisory_Referendums/
2. article from Peter Brent, in The Australian. You can see it at http://blogs.theaustralian.news.com.au/mumble/index.php/theaustralian/comments/fielding_does_abbott_a_favour/
3. Information about Billy Hughes’ plebiscites on Conscription at the Museum of Australian Democracy – Old Parliament House, at http://billyhughes.moadoph.gov.au/conscription/

John

Carbon Tax Debate Hijacked

The debate about whether Australia should, or should not, have a carbon tax is being hijacked. Today in Sydney there were two rallies: one in favour of a carbon tax, and one opposed to any carbon price.

The anti-tax rally, apparently organized by on Luke Jenkins, boasted the support of 22 organizations. All were pro-conservative media (The Australian, The Daily Telegraph); conservative-media journalists (Andrew Bolt - he of the current controversy concerning his comments about some aboriginal people); political organizations (Menzies House); Jo Nova (she has links to the Heartland Institute, which worked with tobacco giant Philip Morris to try to discredit second-hand smoke as a danger to health); One Nation; ... There website is: http://www.nocarbontax.com.au/ I don't doubt that there are extremists associated with, and driving, the organization. They play on one basic human trait: we don't like paying any tax.

Rallies are organized, and the Liberal and National Party politicians invited. It is as if the no-tax power-brokers are waving the tails of the Coalition politicians! Some of them are willing subjects, for their own political purposes.

The pro-tax, pro-climate change rally was organized by GetUp! - http://www.getup.org.au/ - an organization also known to contain some extremists, and willing to criticise all and sundry that don't meet their "social" wishes, including the Labor Party. Like the No carbon Tax group, they attempt to wag the tail of politicians and political parties.

Both rallies are reported to have had about 4000 participants.

So, should we have a carbon tax?? Yes ... and No.

Here, let me say that I think that people are contributing to rising Carbon Dioxide levels; and that increasing Carbon Dioxide levels are a cause of increasing average temperatures of the earth, rising sea levels and (likely) increasing  frequency and severity of extreme weather events. Rational argument doesn't work with climate sceptics / Conservative politics, but:

• NASA (Oct, 2010) has a report that concludes 

"... industrial activity is responsible for the rapidly increasing levels of atmospheric carbon dioxide and other greenhouse gases. It is not surprising then that global warming can be linked directly to the observed increase in atmospheric carbon dioxide and to human industrial activity in general."  http://www.nasa.gov/topics/earth/features/co2-temperature.html

• If it comes down to believing the myriad Conservative media & skeptics, or Dr Karl Kruszelniki, I'm mush more inclined to believe Dr Karl

Yes - a carbon tax would work better in a closed economy. That is, one not exposed to, and part of, world-wide economic activity. Taxes, like interest rate movements from The Reserve Bank are designed to change people's behaviour. A carbon tax will help change people's behaviour in their use of carbon-based energy: mostly electricity and petrol. This is because society needs an impulse to change its behaviour, and if people want to not pay the tax, they will change their behaviour.

No - because Australia is part of a 'global economy', and taxes work best in a closed economy, an Emissions Trading Scheme with a capped amount of carbon pollution, or even one that reduces the levels of carbon pollution, is a better option.

A price on carbon is appropriate, the pollution has an economic cost that polluters have not had to pay, and economics says that they should.

John