BT Australia’s Chief Economist, Chris Caton, says that any economist who does not support an emissions trading scheme should
hand his degree back.
So Caton is basically saying that we need to have an ETS in Australia which (a) cannot possibly affect global temperatures or the climate and (b) would make an insignificant difference to global CO2 emissions.
If there was a true global ETS involving all countries (developed and developing) and based on consumption rather than production one could understand Australia being part of such a scheme.
But to implement an ETS in Australia when the vast majority of the world does not have an ETS and for it to be a production rather than consumption-based ETS for CO2 emissions is lunacy.
Even a high school economics student would understand that economics is about comparing benefits and costs. Under the ETS that Caton supports, the costs are significant (including the direct costs to consumers and businesses, but other indirect costs including trade diversion to countries not applying an ETS). The benefits are precisely zero.
Now I’m sure that BT (which is part of Westpac) is spruiking an ETS as a profit centre for the bank. They have probably punted a good deal of money on getting the infrastructure and personnel ready for carbon trading only to be disappointed that the Abbott Government will not be moving to an ETS.
So from a narrow Westpac sense I can understand some disappointment that an expected cash cow does not come into existence.
But from an Australian perspective, it would be ludicrous to implement an ETS given the nature of climate politics throughout the world. The likelihood of a global ETS is more remote than say five years ago.
If Caton knowingly advised his clients to ‘invest’ money in a scheme which had no possibility of a return he would rightly have his Australian Financial Services license taken away.
Yet this is precisely what he is advocating the Australian Government do.