In one of the great betrayals in Australia’s history, Malcolm Turnbull today abandoned any pretense of support of small government and liberalism by throwing his weight behind the considerably corrupted Carbon Pollution Reduction Scheme.
The CPRS as originally introduced by Climate Change Minister Penny Wong was fatally flawed. But following amendments forced on Labor by Malcolm Turnbull, the CPRS was horribly distorted with an obscene potential to embed rent seeking behaviour in most companies and build up crony capitalism.
In theory an emissions trading scheme can provide a sound market-based means of capping carbon emissions. But a necessary condition is for a world-wide trading scheme. It is clear that there is no such scheme. And it is clear that there is no possibility of such over the next decade.
Under these circumstances, for Australia to introduce a perfect ETS would be silly. But to pass the amended CPRS would be lunacy. It would be considerably superior to introduce an appropriate carbon tax, which would be more efficient and less prone to corruption and rent seeking. The dead weight cost of the CPRS is magnified with relatively low emissions reductions targets – the community bears this cost. It does not deliver least cost abatement – more likely it delivers maximum cost abatement.
Better still would be to be serious and allow nuclear power – after all, two of the new generation nuclear reactors would achieve the five per cent reduction in emissions as per the target signed on by both the Government and the Opposition and would allow for greater emissions reductions in the future. The future of energy is nuclear - fission at present and eventually fusion.
On 2 October 2009, at an address to the Foreign Correspondents’ Association, Turnbull said:
… the rush to legislate before Copenhagen is completely indefensible, and I have to say genuinely to you, I find it completely baffling. The summit will be in December. The Parliament sits again in February. For the sake of sixty days why would you not want to be better informed?
Well we are now better informed. Copenhagen was a disaster for those wanting common action across nations. It proved that Turnbull’s comments were right – but applied post Copenhagen too.
Today Turnbull said
The planet is warming because of the growing level of greenhouse gas emissions from human activity. If this trend continues then truly catastrophic consequences will ensue, from rising sea levels to reduced water availability to more heatwaves and fires.
Such statements amount to dogma not scientific inquiry.
He further stated that
The scheme will raise a substantial amount of revenue over the period to 2020, but it is not designed—nor should it be—to raise additional net revenue for the government, as taxes do, since the funds raised by the sale of permits will be returned to compensate lower income households and assist businesses
this shows he does not understand the nature of taxation – which is to obtain resources from the general community to fund government projects. Taxes are not designed to raise additional net revenue for the government – no government seeks to maximise surpluses.
But he correctly stated
All of us in this House know that industries and businesses, attended by an army of lobbyists, are particularly persuasive and all too effective at getting their sticky fingers into the taxpayers’ pocket. Having the government pick projects for subsidy is a recipe for fiscal recklessness on a grand scale, and there will always be a temptation for projects to be selected for their political appeal.
This applies in spades to the corrupted CPRS.
When Malcolm Turnbull crosses the floor to vote in favour of the CPRS, he should keep his seat on the right side of the Speaker. Then the Prime Minister can make him the new Climate Change Minister and allow him to passionately argue the case for the CPRS which he so strongly supports.
