Category: Climate

  • The Carbon Tax – Policy and Politics. John Menadue

    There are good policy and political reasons why the ALP should oppose the repeal of the carbon tax.

    The carbon tax is designed to reduce carbon pollution. That fact is continually ignored by those who talk wildly about the tax rather than what it is designed to do. In any event, the tax is working and is not producing the ‘almost unimaginable’ destruction that Tony Abbott predicted. Gladstone has not been closed down and Whyalla has not been wiped off the map. The tax had a relatively small impact on prices when it was introduced but it is now accepted as very much part of our everyday life.

    The September CPI figures released yesterday show an overall increase in prices of 1.2% for the September quarter and 2.2% for the year. It was all relatively benign. Water and sewerage costs rose by 9.9% in the quarter, fuel by 7.5%, council rates and charges by 7.9%, international holidays by 6.1% and gas prices by 4.8%. Electricity costs trailed near the back of the field for increases at 4.4%. That doesn’t sound like ‘almost unimaginable” destruction and chaos. Furthermore, even the relatively small increases in electricity charges have been due, not to the carbon tax, but much more to the ‘gold plating’ of poles and wires by the electricity utilities.

    As Peter Martin in the SMH has pointed out, the Coalition has maintained that repeal of the carbon tax would save households $550 a year. This Coalition estimate is based on the scaling up of Treasury estimates for increases in prices due to the tax. Insofar as the increase in prices will be much less than expected, the savings to households will also be less.

    It is also clear that the carbon tax is achieving what it set out to do – curbing electricity and gas consumption. Household spending on electricity and gas is now down 3%.

    The carbon tax is designed to change the pattern of investments. A move to renewable energy and  less polluting power generation  depends on the carbon tax to discourage polluting industries..It is highly unlikely that the Government will be able to achieve the Renewable Energy Target of 41,000GwH by 2020 without the carbon tax.

    So leaving the tax in place would be good policy. It is causing minimal problems despite Tony Abbott’s extravagance. Furthermore the unravelling of the carbon tax would be onerous for business which has written the tax into its energy supply contracts. It is also possible that in the repeal of the tax, the Government might have to pay $4 billion in assistance to industry with the wind back of the free permits.

    On the political front there is a clear lesson that chopping and changing on carbon reduction schemes can be fatal for political leaders. Malcolm Turnbull attempted to hold the Coalition to putting a price on carbon. He failed. And Tony Abbott became the leader because Joe Hockey, the Liberal Party’s first choice to replace Malcolm Turnbull, refused to abandon his support for a carbon price.

    Then the Greens sided with the Coalition to defeat the Rudd Government’s Carbon Pollution Reduction Scheme in the Senate. If the Greens had supported this legislation, Australia would be well on the way to sensible carbon reduction policies and programs. It would have been “all over red rover.” Instead, the sanctimonious Greens helped provoke a divisive and destructive debate on carbon which has been at the expense of good policy. The Greens have a lot to answer for on this issue as well as for their “policy purity” on asylum seekers.

    With the failure of Rudd’s CPRS, and the failure of the Copenhagen Climate Change Conference, Kevin Rudd lost his way and his confidence. He was dumped.

    Then in February 2011, and in order to lock in the Greens to her minority government, Julia Gillard announced that she would put a price on carbon. She never politically  recovered, not that the policy was wrong but she had clearly gone back on a promise and did not effectively explain why.

    My sense is that Labor supporters would be appalled if Bill Shorten retreated now on the ALP policy to retain the carbon tax and then move to an emissions trading scheme. There has been too much chopping and changing. Surely he sees the price that both Kevin Rudd and Julia Gillard paid for walking away from well established and well considered policies.

    Global warming is real and a market-based mechanism is superior to the inept ‘direct action’ policy which will be introduced by the Coalition. To achieve a 5% reduction in carbon pollution, it will cost far more than the carbon tax or an emissions trading scheme. Direct action is a confected and inefficient program designed to pretend that the Coalition is serious about global warming. It is very hard to understand how the Liberal Party which says it believes in markets could propose such a non-market scheme. It has much more to do with politics than good policy. The Coalition would serve Australia better if it spent a proportion of the ‘direct action’ funds to buy carbon credits from developing countries. Carbon pollution is a global problem. It has no respect for national boundaries.

    With an early summer in parts of eastern Australia, we are seeing the extreme weather and the bushfires which we have been warned about as a direct consequence of global warming. The need for us to seriously address global warming is with us every day. Scientific reports, one after another, warn us of the consequences of global warming unless we all take action to reduce carbon pollution.

    But what about the ‘mandate’ which Tony Abbott claims for the abolition of the carbon tax? What the election confirmed was the right of the Coalition to form a government. It was not a referendum on a whole clutch of policies.  On September 7, we had a general election. We did not have a referendum on the carbon tax or a double dissolution election on the carbon tax.

    Let’s try and hold to the carbon tax and then move to an emissions trading scheme. That would be the best policy.  I suggest it would also be good politics for the ALP, that despite all of its political mistakes, does take more seriously than the Coalition, the threat of global warming .Its supporters would feel let down if Bill Shorten turned tail on climate change.

     

  • Bushfires and climate change. John Menadue

    Last week, the Environment Minister, Greg Hunt, was really trying to tell us that black is white.  He attacked Adam Brandt who had said that the bushfires in NSW were part of a pattern of more extreme weather caused by climate change.  Brandt added that the government should not embark on dismantling sensible policies to limit global warming. What Brandt said was entirely consistent with the very strong advice that we have been receiving for many years from the best climate scientists in the world about weather changes.

    Having an indefensible policy called ‘Direct Action’ on climate change; Minister Hunt turned to political invective and attacked Adam Brandt for ‘politicising’ the bushfire tragedy. The Minister obviously decided that his “direct action” couldn’t sensibly be defended so he turned to filling the news cycle with political spin and nonsense by attacking Adam Brandt. Incidentally, Malcolm Turnbull, who lost his position as leader of the Liberal Party for espousing sensible marked based emission policies has told us quite clearly that he regards ‘direct action’ as a fig leaf when you don’t really have a policy.

    What Adam Brandt was saying is, I believe, at the top of the mind for a very large number of Australians. Is our weather becoming much more extreme? The evidence is increasingly pointing in that direction. Commenting on Minister Hunt’s political invective, the CEO of the Climate Institute, John Connor, said that it was time to face up to the growing risks of severe events such as bushfires owing to climate change. He said ‘Now is the time for a sensible debate’. But nothing sensible came from Greg Hunt.

    The Australian Climate Commission report ‘The Critical Decade 2013’ has just reported on the very worrying trends. It said

    • 70% of Australia experienced severe heatwaves across late December 2012 and January 2013. Temperature records were set in every state and territory. January 7, 2013 was the hottest ever average Australian maximum temperature.
    • Between 1973 and 2000, 16 out of 38 weather stations across Australia showed a significant increase in the Forest Fire Danger Index.
    • One quarter of the way through the Critical Decade, many consequences of climate change are already evident and the risks of further climate change are better understood.
    • 2000 to 2009 was the hottest decade since records began.
    • Global changes in rainfall have been observed, including in Australia.
    • The longer term regional drying trends over the south-west and south-east (of Australia) continued.
    • Increased heat is also causing significant global changes in snow and ice.
    • As expected, with the warming ocean and loss of land-based ice, the sea level is rising.
    • Climate change is likely to continue to affect Australians in a number of ways including: rising temperatures and more hot days; GREATER RISK OF BUSHFIRES; increased frequency and severity of extreme weather events including heavy rainfall and drought; and sea-level rise leading to more coastal flooding and erosion.

    The science on climate change is not conclusive but all the evidence and information points to the fact that we are embarking on a much more carbon intensive world and that that problem is mounting year by year.  This has been confirmed yet again last month by the fifth United Nations Intergovernmental Panel on Climate Change. More than 600 of the world’s top scientists contributed to the report.  There were 50,000 contributors to the report and exhaustive peer review. The IPCC report concluded that there was now a 95% probability that humans are responsible for global warning. It pointed to rising sea levels, rising temperatures and greater variability in weather patterns. Minister Hunt says he accepts the IPCC findings but then does a complete about face and resumes his police war.

    The greatest risk that we could take would be to ignore the possible calamity for the planet and our children. These serious prospects deserve a much more serious response than we have had from Greg Hunt and his leader, Tony Abbott, who have been playing politics hard and fast and successfully on climate change for years.  They are leading us down a dangerous cull ds sac.

    My concern is not just the abdication of responsibility by Tony Abbott and Greg Hunt but they have misled so many people and particularly their own supporters. In polling on October 1 this month, Essential Research found that 51 % of Liberal/ National voters did not believe in climate change. They believed that we were just witnessing normal fluctuations in the wold’s climate.

    I am stunned and alarmed by such poll findings. Surely so many Liberal/National voters can’t be such slow learners. Are they such party loyalists that they have allowed Tont Abbott to close their minds? Are they that partisan? Is it that they won’t allow any facts to threaten their comfortable life style?

    History will not judge kindly the way that Tony Abbott and Greg Hunt are playing politics with a looming danger. Our wondrous and delicate planet is on a dangerous trajectory and humans are the cause of the problem. We also have solutions in our hands. But ethical and wise leadership is essential. We have not got it at the moment.

    Hopefully, the ALP will not give way on the carbon tax unless it is satisfied that there is a better policy in place to combat the clear signs of climate change.

    On the particular issue of bushfires, let us not get distracted by the relatively minor issue of hazard reduction. That should be addressed, but we are facing a much more significant and possibly catastrophic problem, global climate change.

  • Facing the future. Guest blogger: Prof. Stephen Leeder

    Facing the future in a world where black swan events change everything.

    When considering what we may be facing with a new federal government in Australia, a wise starting point would be a conversation with Nassim Nicholas Taleb, he of the Black Swan theory.

    Taleb has written extensively, using the discovery of black swans in a world that did not believe they existed as his metaphor, about the impact of unpredictable game-changing events. Such events (9/11, the tsunami that led to the Fukushima catastrophe, the internet) change the course of history but we do not see them coming.

    According to Wikipedia, Black Swan events have the following characteristics:

    1. The event is a surprise (to the observer).
    2. The event has a major effect.
    3. After the first recorded instance of the event, it is rationalized by hindsight, as if it could have been expected; that is, the relevant data were available but [not processed in a way that enabled us to prevent it].

    So perhaps the best that we can do in thinking about what we are facing is to acknowledge that the big things that will shape our history over the next 3-6 years are not predictable.  An epidemic, an earthquake, a nuclear war, a tipping point in climate change that kills all the fish, a crazy person on a rampage with a gun, the discovery of a cure for cancer or dementia – no-one can say.

    In the meantime of course there is a high measure of predictability about our daily lives.  Tony Abbott will continue to conduct his business with intelligence, discipline, an ascetic athleticism, a trenchant debater’s criticism of opponents and a demand for loyalty in his ranks.  He may well manifest a religious concern for the plight of the poor. Think three years in a seminary and then think three years as prime minister.  The differences are unlikely to be profound.  None of us really change much over time.

    Tony Abbott is on record as having little sympathy for those with mental illness, questioning whether what is commonly called mental illness is not a cute name for weakness of character.  He may have moved beyond this caricature: we shall see.

    Stopping the boats and abolishing the carbon tax are core promises.  The first will only be achieved by a more sophisticated and nuanced approach than having the Australian navy intervene.  Settling the xenophobic paranoia whipped up over this matter will take time.  Carbon has a bad history in Australia.  Maybe a Black Swan event is necessary for our nation to address climate change seriously.

    In relation to health care, little has been said to indicate what the new national policies will be.  The challenges – older people, more chronic disease, more technology, more need for national prevention programs, and more resources for general practice – are mainly managerial and only secondarily political, though of course the capacity for faulty politics to stuff things up in health care is substantial.

    The previous government embarked upon a program of change to the health care system as described recently in a blog by John Dwyer.  As he argued, however, much remains to be done to better align the provision of care with the health needs of Australians.  This is especially so in relation to the care of those who have serious and continuing illness who require care from hospitals, general practitioners, community health staff, specialists in the community and home care.  The joining up of these care modalities is best done from a community base and while progress has been made, we lag far behind international best practice.

    The preventive agenda, never enthusiastically endorsed by the conservative side of politics, has much work to do with the disastrous epidemic of obesity, diabetes and cardiovascular disease.  To address this effectively will require the engagement of the food industry, curbs on our alcohol consumption, revised plans for urban design and much more.  A retreat into assigning responsibility entirely to the individual for lifestyle behaviour and food and beverage choices is unacceptable and silly.  We have done well with a long struggle over tobacco, especially during the past six years, and much more needs to be done across portfolios to address the huge health problems associated with over- and inappropriate consumption of processed foods. Tony, are you listening please?

    We can only wait and see what Mr. Abbott et al. have in mind.  Black Swan events can change everything in a trice.

    In summary, the predictable aspects of the future can be discerned in the character of the principal players and the political context in which they are operating.  But it is the big, unpredictable events that will shape our history. Let’s hope they are good ones that create new opportunities!

     

  • The election – punishing bad behaviour. John Menadue

    One thing the election did was to explode the perceived wisdom that if the economy was doing well, governments are seldom voted out. But the Rudd Government was.

    As I have written in earlier blogs.

    • The Australian economy, by almost any measure is one of the best performing and managed in the world.
    • Our material stand of living is continuing to rise at a rate of about 2.5% p.a.
    • Only two days ago, The Herald – Lateral Economics Wellbeing Index showed that our ‘wellbeing’ rose by 7% last financial year. The index measures not only changes in income but also knowhow, environment, health, inequality and job-satisfaction.

    But there were other factors at work in the election.

    • The public clearly chose to punish bad political and personal behaviour by the ALP – the ousting of Kevin Rudd by Julia Gillard, his undermining of her and then her overthrow. Division is political death.
    • There were obviously concerns about the flakiness of Kevin Rudd.
    • The ALP campaign was ad hoc and chaotic. There was one thought bubble after another. It lacked a consistent theme based on the values and principles that most people thought the ALP stood for – like fairness, decency and equal opportunity.
    • Kevin Rudd and Chris Bowen were no more successful than Julia Gillard and Wayne Swan in persuading the public of the government’s good record on the economy. Chris Bowen now has two consecutive ministerial failures in his c.v. – Immigration and Treasury.
    • The swing against the ALP in NSW showed that the public did not accept that the ALP in that state had been cleaned up. It could only have been achieved by sacking the whole branch.
    • The easy-ride by the media of Tony Abbott’s policies and the bullying campaign by Murdoch seems to have had an effect. The ALP mistakes, and there were many, were highlighted particularly by the Murdoch media and the coalition was given an easy ride.

    The coalition waged a very successful political campaign with very little substantial policy. Tony Abbott’s campaign over four years has been attack dog style- brutal, dishonest, but effective.

    • We were told that we had a debt crisis and a budget emergency, but it now turns out that that was all phoney talk. Tony Abbott has pledged instead a reduction in taxes, e.g. carbon tax, and increases in spending, e.g. parental leave. There is a fundamental inconsistency in what Tony Abbott has been telling us for years and in what he now proposes to do.
    • Tony Abbott offers us stability after the apparent chaos of the hung parliament. But in terms of legislation and participation by independents, the last parliament was probably one of the most successful for a long time. In the last few days of the campaign Tony Abbott has told us that if his carbon tax legislation repeal is not passed by the Senate, there will be another election. That doesn’t sound like stability!
    • Tony Abbott and Scott Morrison have quite deliberately whipped up xenophobic, racist and anti-Muslim sentiment.

    My concern is that on two key issues, climate change and asylum seekers, the election has taken us backwards.

    In his first term, Kevin Rudd said that climate change was the greatest moral challenge of our generation. He was correct. He introduced the Carbon Pollution Reduction Scheme but it was defeated in the Senate by the coalition and the sanctimonious Greens. Then Kevin Rudd dropped the ball and Tony Abbott has kicked it into touch ever since.

    In the hung parliament, a deal with the Greens and other independents was necessary. The carbon tax was the result. That tax has delivered valuable results, despite the pain inflicted on Julia Gillard. In his brief second period as Prime Minister, Kevin Rudd announced that a future Labor government would move to a market-based carbon emissions scheme – the same type of scheme that was proposed by John Howard many years ago.

    Tony Abbott has opposed any meaningful program to reduce global warming. In an off-guard moment he said that global warming is ‘crap’. He then adopted his absurd ‘Direct Action’ scheme to reduce carbon pollution. This was a smoke-screen to divert attention whilst he relentlessly attacked the carbon tax. Malcolm Turnbull has described Direct Action as nonsense, a fig-leaf to provide cover when you don’t have a credible policy. But now it seems that Tony Abbot is even retreating from Direct Action.  He said that the coalition would be spending ‘no more and no less’ than it has committed to Direct Action, even if it doesn’t achieve the 5% emission reduction target by 2020 as promised. Almost every expert says that direct action will not work and it will be extremely expensive.

    Our grandchildren are going to pay a heavy price for our generation’s failure to address the issue of climate change. Month by month the scientific evidence is overwhelming that global warming is occurring and that humans are the cause. The experience of almost all of us, whether in record August temperatures, storms, droughts or cyclones  points in the same direction as the scientific evidence. Climate change is occurring. This is a great moral and environment challenge for which our generation is avoiding its stewardship responsibilities.

    We have also now reached the nadir on boat arrivals. Our slippery slide on this issue started in 2001 with Tampa and children-overboard. Since then the Liberals have been unscrupulously but successfully setting traps for the ALP. The Liberal Party in Opposition did not want boats to stop. The more boats that came the better the politics for them. That is why the Liberals sided with the Greens to block the amending of the Migration Act in the Senate which would have enabled implementation of the agreement with Malaysia. Boat arrivals have increased dramatically since that time. In world terms the numbers are not large, but it became a political plaything for the Liberal party.

    It won’t be easy and it will take time, but we must find a way to change the conversation on asylum seekers and refugees. It is not just an Australian problem. It is a major and serious global problem. Unfortunately John Howard, Tony Abbott and Scott Morrison have successfully drawn the ALP into the quagmire they have created.

    Lord Acton said that power corrupts. Power also reveals. It revealed a lot about Kevin Rudd. What will it reveal about Tony Abbott?

  • National Party fails farmers. John Menadue

    Warren Truss and Barnaby Joyce have allowed the National Party to be dragged along at the heels of the Liberal Party on climate change and other issues. What was it that Tony Abbott said about climate change being ‘bullshit’? Australian farmers particularly in Western Australia are now paying the price of failed leadership by the National Party.

    Last week the government announced measures to assist distressed farmers who face drought, a strong dollar and other difficulties. Particular mention was made of farmers in the south-west of Western Australia.

    Evidence keeps coming that the drought in Western Australia is more than a normal drought – it is man-made and the result of climate change. Consider the evidence and views of the experts on this question.

    • The Australian Climate Commission said very recently ‘Western Australia, particularly the south-west, is vulnerable to climate change. Rainfall patterns in WA have changed over the last forty years. There is significant evidence that climate change has contributed to the marked drying trend in the south-west of the state. This has had serious implications for urban water supplies and agriculture. Sea levels along the west coast of Australia have been rising at more than double the global average. With a significant part of the population living in coastal cities and towns, rising sea levels pose significant risks … ‘.
    • Professor Ross Kingwell of the University of Western Australia’s School of Agricultural and Resource Economics said in the Australian Financial Review on May 1 2013 that ‘in the 1900s the (south-west) region enjoyed a wet year about one out of every two years. This has diminished significantly since the 1970’s”.
    • A senior climatologist at the Bureau of Meteorology, Blair Trewin, told the AFR that ‘The biggest driver in the rainfall declines is long-term climate change.’
    • Dr Wenju Cai, a research scientist at CSIRO, said that the long-term deprival of rain in WA’s south-west represents one of the strongest examples anywhere in the world of the impact of human induced climate change on a region.

    Australia has always had to deal with drought. But it is now becoming clear that climate change is playing an increasing and long-term role in affecting the livelihood of many farmers, particularly in WA. I wonder what questions farmers are asking Warren Truss and Barnaby Joyce about their failure to join in a national and international effort to minimise global warming. If only they had done that instead of playing politics on the issue we would all have made more progress.

    John Menadue

     

  • A canary in the coal mine. John Menadue

    When environmental activist, Jonathon Moylan, sent a hoax email concerning Whitehaven Coal to the ANZ in January this year, there was outrage and tut-tutting by business journalists about his action.

    A few months later, it is becoming clear that the future of new thermal coal mines is doubtful. Australian resource companies have let over-optimism skew their investment decisions.

    Would any sensible investor take not only the political risk but also the financial risk of investing in new thermal coal mines in Australia?

    The case for continuing investment in coking coal for steel making remains strong, but not for coal to produce electricity. The case against thermal coal is growing.

    • The Australian Climate Commission this month reported that ‘levels of greenhouse gasses from the combustion of fossil fuels have increased almost 40% since the beginning of the industrial revolution, causing the earth’s surface to warm significantly. … All weather events are now occurring in a global climate system that is warming and moister than it was 50 years ago. This has loaded the dice towards more frequent and more severe extreme weather events’.
    • Professor Ross Garnaut warned recently that China was moving away from coal electricity generation to a new, less resource intensive phase of growth which would trigger a plunge in Australian mining investment. Last year, China bought 20% of Australia’s thermal coal exports worth $3 billion.
    • European consumption of coal has fallen to below 2007 levels and will fall further when new air pollution requirements apply from 2016.
    • The US Energy Information Administration shows that coal output in 2016 is likely to be lower than in 1990. Many US power companies using thermal coal have been shut down since 2009.
    • Bloomberg reported in February that Australia is unlikely to build new coal-fired power stations because of tumbling prices for renewable energy and the rising cost of finance for emission intensive fuels.
    • As a result of the Fukashima disaster Japan will need more thermal coal in the short term. But the Abe Government will progressively restart its nuclear reactors which have been closed since the disaster. These restarts will result in reduced output from coal-fired generators. Before the disaster about 25% of Japan’s power production was from nuclear energy.
    • The Climate and Health Alliance in Australia, in referring to a review by health experts at the University of Illinois said ‘the review adds to a suite of papers that point to the effects on human health of electricity generation from coal’

    Belatedly, we should acknowledge that Jonathon Moylan was telling us something about the future. The canary in the mine was more on the ball than those business economists who criticised him for his irresponsible behaviour.

    John Menadue