Rudd and Wong’s emissions trading choice
Blog Post | Blog of Christine Milne
Thursday 17th July 2008, 3:32pm
by ChristineMilne in
This piece was originally published in today's Crikey email.
In the coming months before the emissions trading legislation comes before the Senate, the Rudd Government needs to think hard about what it is trying to achieve.
Does it plan to buy into the lowest common denominator populism of the Coalition? This approach drags the debate backwards, undermines the global climate fight, and risks alienating a significant portion of Labor’s own base who voted for leadership on climate.
Or will it lead from the front, inspiring Australians to embrace this challenge to rebuild, upgrade and retool for a zero emissions future? Will it appeal to people’s best instincts, articulating a positive vision of preparing ourselves for the future by investing in a systemic roll-out of energy efficiency, mass transit and renewable energy?
The final answer will be in the 2020 target that is promised in the legislation by the end of the year, but the signals from yesterday’s Green Paper were decidedly worrying. The Paper was framed entirely around costs and cash compensation instead of the opportunities for transformation we Greens have been advocating.
The Canberra insider view, surprisingly articulated even by the eminently sensible Bernard Keane last week, is that, while the Greens position makes perfect sense, it is politically unacceptable and won’t pass muster with the electorate. This is a leftover from the Howard years where good policy was abandoned in favour of pandering to special interests and appealing to base populism was seen as effective politics.
I don’t believe that that is the case anymore. The Canberra insiders are completely misreading the level of anxiety in the community about the science of climate change and the awareness that, if we don’t act now, there will be nothing that we can do to avoid runaway climate change when the politicians finally wake up.
All around the country, I and my colleagues are accosted by people demanding to know what we are going to do to help them reduce their emissions. Why isn’t the Government helping them install insulation and solar water heating, they want to know. Why isn’t the Government embracing the smart, baseload solar technologies that we are exporting to the US and Spain? What are the Greens going to do about it? They feel that hading out cash compensation while doing nothing to bring on alternatives is cruelly setting them up for a fall when the crunch comes.
Voters were outraged by the capturing of the Howard Govt by the greenhouse mafia. They will be equally outraged by the Rudd Government’s capture and storage in the pockets of the coal sector. This is the one and only case where I am hoping for leakage!
Emissions trading is supposed to go hand in hand with a suite of measures to unleash creativity and innovation and stimulate investment in the zero emissions alternatives. Instead, we have every mechanism imaginable to protect existing investments. The Green Paper even proposes free permits and cash handouts to protect investment in coal generators. This will deaden any stimulus to invest in the much-needed new infrastructure for renewables and energy efficiency.
Just as with increasing the price of petrol with one hand and decreasing it by the same amount with the other, the Government has put its foot on the brake and accelerator at the same time. The wheels are spinning madly, we’re burning up fuel, and we’re going precisely nowhere.
Prime Minister Rudd and Minister Wong would do well to read Nelson Mandela’s first lesson of leadership, in last week’s Time Magazine: “courage is not the absence of fear, but the ability to inspire people to move beyond fear.”
Rudd and Wong are so paralysed by fear that, for all their talk of transformation, they are clinging to the past. The community has moved well past the Government towards the Greens position, opening the field for courageous leadership.
Rudd and Wong would do well to consider this before bringing legislation before the Senate that gets the support of the Coalition but loses the community.
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The E&O-TS is a much better
The E&O-TS is a much better name for it Christine. Errors and omissions included in a fearful attempt to avoid liability.
[...] Senator Christine
[...] Senator Christine Milne wrote a piece for Crikey today, in which she argues that the Government has underestimated the public’s willingness to accept what is needed to truly address climate change and failed to show the leadership needed to honestly set out what must be done. [...]
The government has decided
The government has decided they are going the emissions permits trading route and we may as well accept that is the framework. The thing is to make the best we can of it because it actually does not matter much how we collect money when people emit greenhouse gases. What matters is HOW we spend the money.
We have been promoting an idea called Energy Rewards for a couple of years now and perhaps now is the time that it might catch the imagination of the people.
The essential idea is to collect some money when people pollute but to give the money to the population for behaviour that shows that they are doing something about reducing emissions. It might something as simple as your household electricity consumption is below average or it might be that you ride public transport or it might be that you close down your carbon emitting coal fired power station.
The key part however is that you must spend your Energy Rewards on INFRASTRUCTURE that will reduce carbon emissions. It might be a solar hot water heater, it might be buying a share in a geothermal power plant - whatever you choose as long as it is infrastructure and it will reduce emissions
The trick is to set up the system so it is fair and is difficult to rort. Luckily this is simple provided you make it all voluntary. There would be NO cost to the government in setting up such a distribution system. We have devised a way that it can be done with little or no regulation and best of all it can start tomorrow. There is no need to "design" a whole new set of property rights.
[...] Ms McCaughey’s
[...] Ms McCaughey’s comments came just hours after the federal government released its Emissions Trading Green Paper, a document fraught with problems and mixed-messages. She, like the Greens Council Candidates, expressed concern that the initiative simply won’t send a signal for change. [...]
"increasing the price of
"increasing the price of petrol with one hand and decreasing it by the same amount with the other"
This kind of policy shows complete and utter ignorance of markets.
http://en.wikipedia.org/wiki/Supply_and_demand
Without a change in the price, behaviour will not change. It is just a complex form of taxing and handing back and will have the same effects as if nothing has happened. Investment will be held off, people will still demand in three years what they demand today (i.e. petrol for 1c/L) and the only difference will be that another federal election will have passed by.
Looking at things from the
Looking at things from the "what can be done better?" side, in terms of building out renewables there's an interesting paper here which looks at getting renewables to 50-90% of total generation in the US by 2020 - more ambitious than any plan I've heard of in Australia.
He doesn't include possible growth in demand from normal factors and from converting away from fossil fuel use, but it's an interesting piece nonetheless. Something for the Greens to toss out the next time some drongo tells them "but it's not possible!"
Correction, wrong link, the
Correction, wrong link, the correct one is - Gore sets goal of 100% carbon-free electricity by 2020. I'm happy for Tim to edit my post to put the right link in ;)
The Greens have an
The Greens have an opportunity here to expose both the Labor and Liberal parties. Simply DONT pass this in the senate. Just watch the Libs clamber over themselves to get this through. The Greens should advocate a carbon tax to be applied as the fossil fuel is extracted from the earth. This would be easier to implement and also to police because the scheme as proposed will foster an amazing amount of innovation on how to cheat it.
Rob, The Greens should
Rob,
There are good reasons to apply a carbon price on fossil fuels as they are extracted, such as the fact that coal exports would be liable. Coal exports seem to be the thing that politicians and policy makers don't like to talk about for some reason. Unfortunately fossil fuels don't count for all emissions, there are also things like agriculture, deforestation, forest degradation, and cement production. It may be better to apply a carbon price to both domestic emissions and exports of goods that will be cause additional emissions (e.g. coal).
You are absolutely right - at the moment there is a huge perverse incentive for firms to emit more than 1500 tonnes carbon dioxide equivalent per million dollars of revenue.
At the moment the level of the cap will not be released until October, when treasury modelling will be released. The level of the cap is crucial, and just as important as the framework outlined in the Green Paper. It is hard to see how this will play out, although I suspect that people in Treasury will be less sympathetic to rent seekers than the people in charge of the Department of Climate Change.
I suggest the posters to
I suggest the posters to this should perhaps read some of this!
http://nzclimatescience.net/index.php
While I'm in no way saying believe it, but read it, and wonder "the way back" from promulgating the the efficacy of promoting GW!
fluff
What am I meant to get out
What am I meant to get out of that website?
It's just a whole lot of cobbled together articles which don't attempt to follow any scientific process at all with added headlines which distort the reader's prior knowledge.
But Austin, it has such a
But Austin, it has such a great name!
Plus it's seems so impartial. I was very taken with this headline - "To help non-scientist visitors: LAYMAN'S GUIDE TO "GLOBAL WARMING" HOAX".
Just hard to impress some people I guess.
All fluff and no substance
All fluff and no substance .................... sorry frank luff, but you really did leave yourself open for that one.
I really do like the Mark Twain quote on page one though. Yes he was a sceptic, but he also had a brain. Not that I am implying that climate change sceptics don't have brains, but any site that posts articles by Andrew Bolt, as an authority on climate change science, must be severely discounted.
The problem with sites like
The problem with sites like the one fluff identified is that we can be sure that less discriminating readers will buy the message. Only a tiny percentage of the population has scientific training necessary to properly critically examine the site.
Genuine scientists can and probably should be legitimately critical of emotive campaigns which claim science as their bedrock. The deniers will sieze on such critical statements as sign of dissent, regardless of the true opinions of the scientist.
This suggests the popular support for climate change response could be quite fragile. My guess is that right now the broad support for climate change response is like a fad. Many people support it simply because lots of other people support it. Many of those who now say they support a response will not actually understand the issue very well at all.
If the popular tide turns then all the actions predicated simply on climate change may be derailed. It would be foolish to imagine their won't be a backlash, we are already seeing the early signs of one.
The existence of increasingly sophisticated sites like nzclimatescience mean we need to give the general public more reasons than climate change science in order to help them stay the course during the difficult hours that lie ahead.
We can appeal to two things.
The first is a built in human psychological aversion to risking free rider punishment. Whether climate change is likely or not, its clear that other nations fear it, and so we risk sanctions from them if we thumb our nose at the risk by emitting more than our per capita fair share. This is the key reason why people felt good about signing Kyoto. This is something John Howard deeply misunderstood. We just felt more vulnerable outside the Kyoto club than inside it.
The second reason is that the climate change response promises inflation resistant future energy security.
Both these two things are motivators for response, even for a person who feels the climate change fears are overblown.
I wouldn't be so sure about
I wouldn't be so sure about that, Griffin. People can spot bollocks. Well, uneducated people can, as Monbiot recently observed in an article,
"On almost every other weighty issue, the professional classes appear to be better informed than the rest of the population. On global warming the reverse seems to be true. The only people I have met over the past few years who haven’t the faintest idea what manmade climate change is or how it is caused are university graduates."
It's very strange, but matches my experience. I work in kitchens and have worked in factories and the Army, and except for the 17 year old waitresses, everyone else is well aware of climate change and peak oil - not all the crunchy details, but they have the gist of it. But I also meet schoolteachers, IT professionals and engineers, and they have no idea.
I don't think you need a BSc to spot bollocks.
Kiashu there is a handy
Kiashu there is a handy explanation for what you and Monbiot observe and it is the opposite of what you imagine. The professional classes have two reasons to dismiss climate change:
a) Firstly they are better trained at being skeptical of various claims, they know not to believe everything they read, or see on television.
b) Secondly climate change risk means we need to change the status quo, and the status quo favour the professional classes, so they will happily invoke their tendency towards skepticism of this thing that threatens the world which suits them.
On the other hand it is entirely plausible that the less trained are frankly more gullible. They are much more prepared to believe what they see on TV. What's more if they perceive a threat to the status quo then they are more likely to embrace it, since it presents the opportunity of being a leveller by unwinding the paradigm which sees them presently disadvantaged.
Once the media siezes an issue (as it has with climate change) then the less trained will readily buy into it and the more highly trained resist especially given the threat the highly trained percieve in it.
So now we have two possibilities, your explanation that the untrained are more perceptive and intellectually discerning than the highly educated, or my explanation which is the polar opposite of yours. For the moment the result is the same.
However the critical thing is what happens when the pain of climate change discipline bites (decades before the severe justifying climate consequences arrive). With my explanation for what you observe comes the risk of a popular backlash against the deprivation to the current generation and thus the unwinding of the effort to protect the future. Because the buy in is fad like devotion to pet media issues, the media can take it away when it wants to sell more advertising, or when it senses the public is bored with the issue. And then the house of cards tumbles down.
And that dear Kiashu is the whole point of my argument in 14. That is we need to innoculate ourselves against this backlash risk by building an unbreakable argument for decarbonisation.
The thing I find most odd is your confidence that we shouldn't even feel the need to bother to build a solid case for the cause. Why are you so cavalier about this?
Some interesting views
Some interesting views above, but I believe that no matter what type of carbon trading system is implemented, the following will happen:
a. Increased businessess migrate to countries that do not have a carbon tax (eg. India, China), and the loss of jobs in Australia (remember a factory worker cannot be retrained to be an environmental scientist).
b. Australian business that remain will need to pass all the increased costs direct to the consumer.
c. The wealthy will just sigh, and pay any increases.
d. The Governments will have to subsidise the low income earners who will never be able to afford to new technology installations (besides most rent, and if landlords install, rents will go through the roof), else there will be riots in the streets (remember that low income earners include the working poor, welfare recipiants, pensioners (Gov and Self Funded)), and these numbers will increase as business sheds staff.
e. Middle income earners will bear the majority of the cost increases, and are likely to throw out the instigators of the system at the 1st opportunity.
f. Interest rates and rents will continue to increase as increased costs push up inflation.
Sorry people, but I agree with a few comments above that suggest the majority of supporters of the carbon trading systems wil only remain as long as they are not directly hurt. Wait until a family cannot afford to buy the necessities in life due to increases caused by environmental who have pushed prices to unpayable levels.
One thing for sure is that, I am a retired baby boomer who does not have the funds to implement any new technologies, so will just have to limp along reducing spending as necessary, and wait for the Feds to subsidise my energy bills.
What I can also see happening is that the Federal Government will instigate a scheme in say, 2010, with a rollout term of 3 years, then as time goes by, and people / the economy start to hurt (maybe badly), the Government will change the roll out to run for 10 - 15 years (political necessity).
I agree to a certain extent
I agree to a certain extent with Grant, his prophesies seem realistic.
I have written on many blogs that there is no way we can deal with climate change or any other aspect of the ecological crisis without major pain and major structural change to the economy. I have often been told on these blogs, including by Greens, that we can deal with climate change within our current economic frameworks and that the economic opportunities of green industries will fill the economic vacuum where carbon intensive industries used to be. But I still reckon this is escapist crap.
Until we keep coal in the ground there is nothing realistic Australia can do to reduce warming. Keeping coal in the ground means the collapse of the export economy as well as local industry and this is just unthinkable - as reflected in both Garnaut and Wongs strategic directions. The myth of clean coal emerging at some future stage is the only legitimisation of the current responses based on affluence as usual.
This is not just a matter of re-engineering industry and energy modes but also basic questions of the distribution of wealth in society. As Grant correctly points out, the pain of the emissions cap will not be felt by the richest in society, in fact they are being given all sorts of exemptions and incentives to pollute in order to maintain their businesses; it is the poorest who will pay the cost. This is the case in Australia as indicated by Grant but it is also the case internationally as the big polluting corporations get world bank support through such things as carbon trading as well as the usual loans system to build energy and industry infrastructure in the third world - rather than the third world using carbon credits for economic development which they are demanding but being ignored in united nations climate change processes. Australia's aggresive loyalty to the U.S. and world bank priorities at Bali and our role in sabotaging the third world perspectives at that conference is a glimpse of how this whole scheme will unfold internationally.
It seems to me the future will go in one of two directions 1/ Economic collapse through treating climate change seriously including a global zero emmissions target in the next few decades or 2/ economic collapse through not taking cllimate change seriously, such as the present ETS proposal and what looks like an inability in most of the rest of the world to act.
In either case, questions of how will the poor survive (or will they survive) need to be on the agenda too, not just arguing about various inadequate scientific models of climate action.
The Greens have always said they were not a single issue party and that they are committed to social justice. I believe this aspect has been missing in the climate debate - including from the Greens.
Strange there is never any
Strange there is never any discussions about what kind of jobs/wealth will be created from low carbon emission economic opportunities.
I know it is easy to think in terms of the past, but the you cannot state that there will be few jobs in a future with low emissions without any evidence. In fact, there is plenty of evidence to show that there are heaps of entrepreneurs out there who can use the skills that people have today in low emission technologies if given the chance.
And this garbage about overall increased costs. Inflation is targeted between 2 and 3 percent (in Australia). No matter how fast scarcity increases we can remove money from the economy at a rate which keeps prices within that target range. The people who will suffer are those who have to borrow for future investment. That is, we will need to use our current technologies wisely if we wish to maintain low costs of money. The is exactly why trying to reduce Australia's emissions with nuclear power and CSS is crazy. That is a future investment as we have no capacity in these technologies at all with today's assets.
However, we do have the ability to build solar panels, wind turbines, water turbines and a wide range of proven ideas including energy efficiency that with the proper signal will be online quicker than any of those grandiose alternatives.
And about industries going offshore, great. We don't need them for our future. Demand in developing countries follow the demand of developed countries (that is, they are catching up). So these fundamentally emission intensive corporations will find more profit elsewhere, but not in the long term and will eventually find themselves in dark corners. This has occurred in the past for things that were traded that we shun in today's (e.g. slavery, but there are far worse examples).
There is no easy solution (easy meaning doing nothing in this context), but the thinking in above comments is fairly ignorant of what society knows about economic development.
Futher to Austin's comments
Futher to Austin's comments @ 19, listening to Alan Jones of the London Climate Change Agency this morning, moving to 'greener' and decentralised power in Woking U.K. saves the council 1.2 million pounds a year in power costs (80% reduction in energy consumption).
BUT importantly this was at an upfront capital cost of 250,000 pounds, AND jobs were created in the process, AND the cost of electricity went down, AND social justice?? A 120 to 200 pound saving per annum on a households power bill! Now that's what I call a return on investment!
So please Grant @ 17, stop all the Furphy's about increases in costs, loss of jobs, and John Tracey @18 reduced social justice by pursuing 'green' power. Economic and social collapse need not happen, and there are working towns/examples that prove it!
Furthermore due Australia's distances, Alan claims the savings will be greater than those of the UK, not less, as our transmission losses are higher. The power industries that see these energy savings as a threat to business as usual, will go the way of the dinosaur, but industries with a different mind set will profit - big time, and so will all Australians.
This is an overview of Woking and Alan Jones http://www.guardian.co.uk/society/2005/jun/29/environment.interviews
and these are the figures for Woking pop. 100,000 (read them and weep for what we could have started in the 1990's):
Summary of Energy,
Environmental and Financial Savings
1 April 1991 to 31 March 2004
Energy Consumption Savings 244,408,155 kWh 48.6% saving
Carbon Dioxide CO2 Emission Savings 142,013 Tonnes 77.4% saving
Nitrogen Oxides NOX Emission Savings 439.0 Tonnes 76.6% saving
Sulphur Dioxide SO2 Emission Savings 1,480.84 Tonnes 90.9% saving
Water Consumption Savings 412,855,000 Litres 43.8% saving
Savings in Energy and Water Budgets £5,388,721 31.36% saving
Notes:
• The Council’s target was to reduce energy consumption by 40% within 10 years from 1991/92 to 2000/01.
• The above savings are for corporate property and housing stock, where the Council pays the energy and water bills, and exclude Council tenant and private sector savings achieved by the Housing Energy Efficiency and Sustainable Energy Programmes.
Climate Change Strategy
for Woking
1 April 1991 to 31 March 2004
Reduction of CO2 Equivalent Emissions 17.23% saving
Electrical and Thermal Energy from Sustainable Sources 97.7%
Notes:
1. Woking’s Environmental Footprint - 1,060,000 tonnes of CO2 equivalent emissions at 1990 levels.
2. Target to reduce CO2 equivalent emissions by 80% from 1990 levels by 2090 RCEP target.
3. Council targets to purchase 100% of its own electrical and thermal energy from local sustainable sources and 20% of its own electrical energy from local renewable sources
The above savings, and benefits, will also be greater in Australia due to our needs for Tri-generation (power-heat-cooling).
Most importantly for Australia he says, "You don't get a energy and carbon emissions reduction by trading it, you get a reduction by doing something". The trading system will not reduce energy consumption or CO2e emissions, only the proposed and ill-defined, dare I say "rubbery", cap will do that.
The good news is that Alan is replicating the Woking results in London which is 75 times the size, and is in Australia calling on Sydney to do likewise and be an example in our region.
I strongly urge the Australian Greens not to be diverted by the carbon trading scheme, that they renew their calls for the "doing" of energy emissions reduction, and they not support the parasitic and emasculated "trading" option as proposed by Labor.
I did not put that smiley in
I did not put that smiley in my post! Bloody annoying that I can't edit it out too. Please turn the auto smiley's off.
McFarm, Please do not
McFarm,
Please do not caracature my position as "reduced social justice by pursuing ‘green’ power".
The reduced social justice comes through pursuing and protecting corporate profits.
The truth is, what ever the carbon plan is, somebody has to pay - and it is either the consumer or the big corporations. If the consumer pays, then the poorest in society suffer the most.
The corporations will not pay without a sustained political battle which they will avoid by relocating to some secure, cheap and ecologically dirty dictatorship somewhere else to maintain their profits and emissions.
I agree with Austin - good riddance to them, but if they just move their pollution we have achieved nothing for the environment.
If we do not plan for a more nationalised and self sufficient economy then our present economy will collapse with the exodus of foreign capital.
To really attempt to create a dissincentive for the coal industry, we need to create an alternative economic base - not just for ourself but also for the poor and developing nations such as self sufficient energy so they wont be dependent on the big corporations centralised and polluting systems.
Green power is essential to social justice, not just in terms of the nature of the technology (eg wind, solar) but also in the social mode of the technology, e.g decentralised self sufficient energy modes. - especially in the third world. However the third world and developing countries are being offered centralised nuclear and "clean coal" technologies that will entrench the domination of these big corporations over the poor communities that they continue to suck wealth from.
What we have with the Rudd/Wong and UN and World bank plan is not a process of developing green energy, unless you consider nukes and the myth of clean coal to be green energy. It is a process for the maintainance of centralised monopoly control over energy and therefore the economy.
The UK example is perhaps not so relevant to here as they no longer have cheap coal as we do. A better example would be the magnificent plan to make Cloncurry in N.W. Qld. totally emmision free for electricity. However, Cloncurry's main industry is mining including coal mining. So while the coal miners might enjoy solar hot water and electricity in their homes, the economy still demands massive carbon emmissions through the mining itself as well as the stuff being burnt in Australia and overseas. The other big industry in Cloncurry is cattle. While the farmer may have clean green energy running the freezer and washing machine, the cattle still keep on farting.
Only major social and economic change can deal with climate change. Only social and economic change can deal with local and global poverty.
And Austin,
you said..." No matter how fast scarcity increases we can remove money from the economy at a rate which keeps prices within that target range. "
What are the mechanisms for doing this and how does it affect the poor?
Also, what are the implications of the global credit crisis on our capacity to adapt to scarcity through the mechanisms you suggest?
At present the reserve bank does it through interest rates which has driven up housing and grocery prices causing great suffering in a rapidly expanding underclass. Now it seems electricity prices are going to go up too - and leaving our shores to go to the multinational energy and mining corporations, so I guess that is another way to remove money from the economy and fight inflation in a time of scarcity?
One of the myths put by the
One of the myths put by the big corporations is that imposing a carbon cost will scare away foreign investment.
There is an excellent case instead that the reverse is true. Properly imposing a carbon cost can (if not corrupted) encourage clean generation which will attract foreign investment on two levels. Firstly to fund construction of clean generation and secondly to develop industries which are users of that clean generation.
Australia will one day have the world cheapest power. This will happen because we have the worlds most abundant, and cost effective renewable potential. Foreign capital will obviously be attracted like bees to honey to access this clean cheap power.
It is critical that all politicians understand this so that the misinformation from the fossil fuel industry on this point is ended. Can the Greens senators please explain this to the other pollies?
Some old dirty industries will feel some pain, but this is a vital and necessary case of creative destruction which allows new and better things to emerge. Propping up an industry which has no place in our future offers no satisfactory return on investment.
Sorry John, it was not meant
Sorry John, it was not meant to antagonistic, I am just frustrate by the lack of vision and leadership by the tired old parties, and also worry that the Greens are being side tracked by a superfluous trading system. That said I hardly think the Greens are the party that will be "pursuing and protecting corporate profits", do you?
But if the version of energy and carbon reduction, as presented by Alan Jones and the Woking example, means lower energy bills for all, where is the lack of social justice?
As for dismissing the UK example because of "our cheap coal", I thought coal was a globally traded commodity and we paid world parity prices for our own coal? I could be wrong about that, but price doesn't stop the Chinese and others form using our cheap coal - unfortunately.
"Only major social and economic change can deal with climate change." True, and change can be positive. Your premise is that change will be painful and that there will be winners and losers. The Woking example is proof positive that change can be a win for all, including the poorest of our society. Bring it on I say.
"What are the mechanisms for
"What are the mechanisms for doing this and how does it affect the poor? "
http://www.rba.gov.au/MarketOperations/Domestic/open_market_operations.html
Two moderate sized words... repurchase agreements.
If you choose to read this document just remember that when the RBA "debit" and "credit" escrow accounts, they don't actually have another account to credit or debit accordingly. The values are just increased and decreased and in other words money is just created and destroyed.
As I said, it only really affects future purchasing. That is people who want stuff in the future and hence borrow today to do it (i.e. the cost of money)
If poor people want to borrow finance to survive into the future then it would become more expensive. If they have the opportunity for meaningful secure employment in which they are given a _fair_ share of the profit margin then the amount of money is pretty much irrelevant because of the inflation targeting. If the policy continues we will know that prices will be kept steady in that range and hence will have a good idea as to what to expect into the future.
And remember prices of assets are determined by supply _and_ demand, not just interest rates alone. Our country seems to have leaders which want to spur on demand at all costs for everything. Say for example, real estate investments. Which has the drastic effect of making it almost impossible for people to have security of ownership of their family or first home. Which is why the demand for rentals is so high. Which is why demand for investment properties is so high. (and so it goes). Hence prices are just stupidly high. Supply does have a role to play, but so does demand.
High interest rates tend to affect middle/upper class people more as they cannot spend like there is no tomorrow. It also affects businesses as they cannot spend money in anything they like to increase profit; they have to think harder as to how to organise themselves.
I've typed just about enough.
Moderators, may I suggest
Moderators, may I suggest this blog/the Greens needs a Carbon Myth Busters section. Above contains commonly held misconceptions about the pain, losses, cost/benefits and ROI's etcetera, of a move to a low carbon economy. Granted there can be pain and loss, but it ain't necessarily so.
It would be helpful if there were an area, or perhaps a link to a site, that tackled this misinformation. Perhaps someone has a link to such a site that is in plain English and eschews jargonese?
I agree with mcfarm's call.
I agree with mcfarm's call. It's not too much trouble to put up a static page outlining what is involved with a decent ETS. Environmental Economics (an American blog, but very good) has a page on Carbon Tax vs. Cap and Trade under their Environmental Economics 101 section.
Synthesising the env-econ information with Greens policy and Christine Milne's Crikey articles would go a long way to giving the Greens a page outlining the economics of a move to a low carbon economy.
Australia's strength in a
Australia's strength in a post-carbon world is the quality of our renewable potential.
Our present weakness is dependance on fossil energy.
We should be playing to our strength and eliminating our weakness.
mcfarm and Sam, we are in
mcfarm and Sam, we are in the process of building a new website, as discussed previously here, which is planned to go live in about a month. You can be sure that such a page is part of the plan and in development as we speak.
McFarm, While you may
McFarm,
While you may disagree with what I and others say, please do not caracature what you disagree with as myth.
And I did not say "the Greens are the party that will be “pursuing and protecting corporate profits”.
What I did say was "I believe this aspect (social justice) has been missing in the climate debate - including from the Greens.
I have just been looking at the climate change policy and while it has a number of brief platitudes about social justice, there is no policy framework at all as there is on the technical aspects of the debate. This is important for Australia but is especially important for international efforts. The World Bank is in control of the whole agenda of transfering technology and carbon credit to the third world and developing nations, a plan created and supported by the rich world including Australia and in direct opposition to the stated will of the third world and developing nations on this matter.
And Austin,
The reserve bank is a non-elected group of bankers and corporate executives making up the most powerful entity in Australia, with no accountability to government at all for its decisions about the economy, and it has an inherent bias to maintain profits of banks and corporations. Questions of unemployment and unaffordable housing are just collaterall damage to protect the profits of the elite.
And you said..."High interest rates tend to affect middle/upper class people more as they cannot spend like there is no tomorrow. It also affects businesses as they cannot spend money in anything they like to increase profit"
Although this is very sad for the middle/upper class people and business, what is the flow on effect of this to the poor? - jobs and prices?