End of the carbon bubble

Just to add to the material on the greatest moral challenge of our time, the following piece of mine was published in the AFR this morning.

In the UK political satire The Thick of It, Peter Mannion MP speaks for all politicians when he says “I got into this game because I wanted to make a difference”.

But it is a rare politician who does that by stripping away costs and functions created by governments. For most of them, it means adding taxes, spending, and regulations.

Climate change has become an exemplar of this. A perfect storm during the past quarter century has catapulted carbon dioxide to a central political role.

A key ingredient was “market failure”. Carbon dioxide became rebadged from a trace gas essential for plant growth to temperature-boosting emissions which could only be combated by political controls. Had politicians dispassionately examined cause and effect, they would have discovered no grounds for concern. Though politicised economists embellished the issue, the effects of a doubling of atmospheric carbon dioxide levels are trivial.

Even the alarmist IPCC in its latest estimates puts greenhouse gas induced temperature increases – themselves far from certain – at imposing a cost over the next century of less than half a year’s loss of GDP growth.

However, the global warming agenda placed the scientific establishment in the spotlight. It had been almost 50 years since Time magazine had put Robert Oppenheimer, the head of the Manhattan Project, on its front page. Suddenly scientists were flying around the world, briefing politicians, delivering papers and taking over editorial control of learned journals. Our very own CSIRO and Bureau of Meteorology basked in their new importance, the former maintaining that half of its staff and activities had been diverted to climate change related matters.

COMMERCIAL HUCKSTERS
This was amplified by a new breed of commercial hucksters. The demise of tariffs and other “industry policy” interventions left an enticing gap for pursuing politically assisted profits. Windmills and solar panels, which required subsidies to cover two-thirds of their costs, were ideally placed to fill this. Politicians and political scientists saw these as emerging new industries that would allow them, with their “holistic” framework, to demonstrate how they were more far-sighted than those businessmen focused on paring costs and seeking to supply the often irrational wants of ordinary folk.

Underpinning the perfect storm was the growth of environmental activism. The environmental movement started with the hippie fringe of society but came to claim a large swath of the media and has become sufficiently mainstream for major banks to promote their green credentials by not investing in legitimate business ventures that environmentalists oppose. Global warming rose from bit player within the movement to the crowned head directing all other issues.

The outcome was cascading programs of support for high-cost renewables and penalties for fossil fuels. In Australia these comprised the carbon tax, the Renewable Energy Target (RET) the Clean Energy Finance Corporation (CEFC) and a bewildering array of subsidies and programs. Planned costs under Labor in 2014 were $14 billion from the carbon tax, $5 billion in direct spending and a sum, rising to $5 billion a year from the RET. The RET has already sucked in $20 billion in investments that pay barely half of their commercial cost and will cost another $13 billion over future years.

But now the tide has turned. The political entombment of the climate change agenda began at the 2009 Climate Change Conference in Copenhagen to which Kevin Rudd, now an obviously ludicrous character, took a 114-strong delegation to resolve “the greatest moral challenge of our time”.

REPEAL NEXT WEEK
The carbon tax will be repealed next week and only a suicidal ALP would promise to reintroduce it. Budget disbursements are being reduced in spite of the Coalition’s own Direct Action policy, and though it is defying its government owners, the CEFC has throttled back its $2 billion a year allocation for wasted spending to less than half that.

The final domino, the RET, is under review. The only issue is how fast it is to be abolished. In this respect, powerful forces continue to demand payment for the worthless energy they have persuaded governments to fund, and these apparently include Clive Palmer and those close to Al Gore. But, as the prime minister has said, the RET “poses a serious threat to household budgets and energy-intensive industries”, adding: “All of us should want to see lower prices and plainly at the moment the renewable energy target is a very significant impact on higher power prices.”

Unfortunately some of the newly elected “conservative” senators appear to have fallen for the hype on how renewables will lower overall prices and how, if they are defunded, the whole world will scream “sovereign risk” and never invest here again.  Yet, every time a government takes a decision some party is advantaged and some disadvantaged.  While a government abrogating a contract with a specific firm would be a clear case of imposing sovereign risk (the Cane government’s favourable power price contracts with Victorian smelters are mentioned in this respect), terminating harmful a subsidy is different.

Strutting the corridors of Parliament House are varied lobbyists (I briefed a back bench committee earlier this week and they had received 5 visits from the carpetbaggers prior to the committee inviting me along).  The lobbyists understand that they have a product that, unlike any commercial product, is totally dependent on the government granting them favourable treatment.  The endgame is with us on greenhouse gas regulations but there is a distance to go before the blight is eradicated.

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39 Responses to End of the carbon bubble

  1. incoherent rambler

    Cain government’s
    terminating a harmful subsidy is different.

  2. MartinG

    Strutting the corridors of Parliament House are varied lobbyists (I briefed a back bench committee earlier this week and they had received 5 visits from the carpetbaggers prior to the committee inviting me along).

    Chief among those carpetbaggers would be John Hewson.

    Palmer joins Hewson for an RET love-in

    John Conroy
    July 10, 2014 12:00PM

    Clive Palmer has joined former Liberal leader John Hewson on stage to launch the Australia Institute’s new report advocating for renewable energy.

    In a call to arms on renewable energy, Palmer again committed to the retention of the Renewable Energy Target, ensuring the prime minister “kept to his promises”, and said PUP was committed to no changes to the target until at least 2016, preferably 2020.

    In another impassioned plea reminiscent of his appearance with Al Gore two weeks ago, the PUP leader called on Australia to join the “global community” and move to an ETS ahead of the key Paris summit next year, and praised Dr Hewson for his leadership and “political courage” on climate policy for 20 years.

    “Fighting climate sceptics is a constant battle … John Hewson has persevered for 20 years,” he said.

  3. Megan

    If you need Hewson to provide you with economic advice then you really are up the credibility creek without a paddle.

  4. Louis Hissink

    More accurate to describe it as a battle between free-market capitalists, (clime sceptics), and the carpet-bagging crony capitalists.

  5. Aussieute

    +1 C.L.
    Been watching that mob for a while
    They have been sunk but the $ flowing through went to …….

  6. Bruce of Newcastle

    I’d add that the source of the global warming movement was also in the anti-nuclear movement of the seventies.

    The result of their own history is the activists just do not and will not accept nuclear as the only feasible base load power source which doesn’t produce CO2. I am with Alan in understanding from the actual real world data that equilibrium climate sensitivity is low, and CO2 is harmless. But the opposition to nuclear power despite all logic pointing to it from their own climate position, their rejection of nuclear shows how religious and how hypocritical the anti-carbon activists are.

    If Shorten was consistent with the scientific position he professes he would immediately announce a major nuclear energy support policy.

    That he has not done so, and will not do so, shows he is a first class hypocrite.

  7. jupes

    The endgame is with us on greenhouse gas regulations but there is a distance to go before the blight is eradicated.

    It won’t end until politicians call bullshit on the whole scam. Unfortunately that is only one or two voices in the wilderness at the minute. It needs to become a crescendo.

  8. egg_

    More accurate to describe it as a battle between free-market capitalists, (clime sceptics), and the carpet-bagging crony capitalists.

    +1

    They all know it’s a BS ‘air tax’, they’re just fighting over the spoils.

  9. Ant

    This is a great article. Thanks for posting it.

    It is nicely descriptive of one part of the tripartite nexus that has been most responsible for delivering the Great Global Warming Racket, IE the Deceivers.

    The other two, the Dreamers and the Dummies, are pretty much inconsequential in terms of decision making, yet they are hugely influential (the latter in particular) through their stupidity and/or ignorance and/or indifference so as to facilitate the shysters and criminals behind this massive scam.

    Like correcting the course of ship, it can’t happen instantly, but happen it will over time.

    Incidentally, I noticed at the recent Brasil 2014 World Cup, one of the major sponsors was Yingli Solar – which has subsidiary operations all over the western world – where the Dreamers and Dummies are stupid enough to buy its snake oil while the Deceivers cash in at their expense.

  10. H B Bear

    Hewson hasn’t ever knowingly backed a winner, mainly because he is involved. We are lucky he didn’t do an Elderslie Finance to Australia.

    “Kevin Rudd, now an obviously ludicrous character,” – KRuddy’s place in Australian history is secure.

    Nice work.

  11. Roger

    Keep up the good work, Alan.

  12. .

    I can’t wait for all of these subsidised, corporate welfare whores to become completely busted arse.

    They are literally holding society to ransom.

  13. H B Bear

    Still a long way to go.

    GE must be starting to worry, vice Chairman John Rice is sent down to Australia ensure GE keeps its hand in our pocket and siphons off our taxes under the cloak of the RET. Hopefully he will make good on his threat, take his windmills and go home.

  14. .Dr.Sir Fred Lenin

    All politicians are wary of exposing stupid behavior by other politicians ,waste ,lying ,deceit and outright criminality is covered up ,in order that the People are not informed of how grasping and deceitfull they all are.It is bad for the brand,they get this from the lawtrade where most of them learn to be totally dishonest.The whole systemis riddled with corruption and total incompetence.I mean just look at the shower of pillocks in both houses of parliament ,I doubt if one of them would get a proper job in private enterprise.Sack the lot ,much cheaper to have them on Centrelink.and Quieter!

  15. Alfonso

    ” nuclear as the only feasible base load power source “.

    Indeed, but the bridge engineers involved in the safe fail / redundancy design requirements of nuke reactors don’t seem to get it. Give nuke reactor design to Boeing who will show the blacksmiths exactly how its done and we’ll all live happily ever after.

  16. Rob MW

    Hewson and Palmer obviously need instructions on how to boil water.

  17. johno

    Alan, you are clearly upset that you didn’t make in onto Tubsy Milne’s honor roll of ‘carbon criminals’.

    Need to try harder.

    Keep up the good work.

  18. Menai Pete

    The Carbon Tax, ETS in its various forms, direct action and the global warming/climate change scare in general can be traced to a Marxist attack on the means of production. This attack started in the mid 1970′s. It lay dormant and festered until the west won the cold war in the 1980s. The (defeated) communist believers then infiltrated the political systems of Europe with the rise of Green political parties and the insidious process of indoctrination to demonise an innocent gas and distort the cost of production started.

  19. Baldrick

    Shorten commits Labor to a price on carbon (dioxide) at the next election, ensuring it will lose:

    CHRIS UHLMANN: So to be clear on that, you will campaign at the next election to introduce a carbon price by way of an emissions trading scheme?

    BILL SHORTEN: Yes.

    (A.M. – Thursday, July 17, 2014)

  20. .

    Baldrick
    #1384749, posted on July 17, 2014 at 11:22 am
    Shorten commits Labor to a price on carbon (dioxide) at the next election, ensuring it will lose:

    CHRIS UHLMANN: So to be clear on that, you will campaign at the next election to introduce a carbon price by way of an emissions trading scheme?

    BILL SHORTEN: Yes.

    (A.M. – Thursday, July 17, 2014)

    Oh thank Christ. Now Abbott is assured of victory.

  21. Mike of Marion

    10 months to overcome these fuckwits

  22. H B Bear

    CHRIS UHLMANN: So to be clear on that, you will campaign at the next election to introduce a carbon price by way of an emissions trading scheme?

    BILL SHORTEN: Yes.

    Somebody better remind Loughnane nearer the election. He needs all the help he can get.

  23. incoherent rambler

    The RET. Wind, solar subsidies have to go. Anything else means “there will be no electricity generators under a government I lead”.

  24. Pedro the Ignorant

    Carbon Tax repealed.

    Senate vote 39-32.

    Tubbsie Milne sooking at record levels.

  25. MartinG

    Baldrick
    #1384749, posted on July 17, 2014 at 11:22 am

    Shorten commits Labor to a price on carbon (dioxide) at the next election, ensuring it will lose:

    Chris Uhlmann is the only decent interviewer on the ABC. Shorten kept trying to weasel out of the commitment but Uhlmann wouldn’t let him. Shorten almost choked when he had to admit it.

    Classic gotcha by Uhlmann.

  26. incoherent rambler

    Senate vote 39-32.

    So we have 32 senators that still think a carbon dioxide tax is a good thing. The strongest possible argument for senate reform.

  27. MemoryVault

    The endgame is with us on greenhouse gas regulations but there is a distance to go before the blight is eradicated.

    Meanwhile, the Goaracle’s mockumentary is STILL being shown in primary schools as “science”.
    Christopher Pyne, the “conservative” Education Minister, has just given his tick of approval to the new National Curriculum, which is chock full of “environmental” claptrap.

    That light you see at the end of the tunnel may just be a train coming the other way, Alan.

  28. outsider

    We all look for the few glimpses of hope, so it’s hard to resist a little schadenfreude this morning. Thank you Alan for all your efforts, and the news at Bolt’s place is almost thrilling given the status of the UK as AGW central these past few years.

    Do ex-LNP leaders undergo a forced lobotomy on leaving office? As W.C. Fields used to say: I’d rather have a bottle in front of me than a frontal lobotomy – before dying of liver cirrhosis anyway.

  29. MemoryVault

    Oh thank Christ. Now Abbott is assured of victory.

    Never forget the First Law of Politics: Oppositions don’t win elections, Governments lose them.

    Given the performance of Abbott and the LNP to date, they are quite capable of snatching defeat from the jaws of victory, regardless of any idiocracy Shorten may commit in the meantime.

  30. .Dr.Sir Fred Lenin

    Why didnt Lifeline save shortass and the alp clowns from mass suicide.its not appropriate having this on TV, the alp greens,cream of our universities,some of the top ones scored 42 out of 100 at uni,well you cant fail them all .loose your bludge ers job,wouldnt you?

  31. JimmyB

    Baldrick
    #1384749, posted on July 17, 2014 at 11:22 am
    Shorten commits Labor to a price on carbon (dioxide) at the next election, ensuring it will lose:

    CHRIS UHLMANN: So to be clear on that, you will campaign at the next election to introduce a carbon price by way of an emissions trading scheme?

    BILL SHORTEN: Yes.

    Madness rules Bill ‘Fonebone’ Shorten….

  32. .Dr.Sir Fred Lenin

    The untidy nayshuns general assembly today passed a motion condemming Australia fo repealing the untidy nayshuns enrichment tax brought in be the previos gilliard brown government.there were no negative votes ,even the Ausyralian delegation voted for the motion.

  33. wreckage

    YEAH!

    Re: governments losing elections, they main thing they lose them for is not being effective. Abbott just got one of his most important policies through, AFTER massive opposition and a press feeding frenzy. This could not – COULD NOT – be better.

  34. Aussiepundit

    Very good article.

  35. Walter Plinge

    ” …the effects of a doubling of atmospheric carbon dioxide levels are trivial.”

    An increase in the world’s food supply and increased cropping rates aren’t trivial.

  36. Yohan

    Like Alan says there is always winners and losers when government changes policies. Better to have the rent seeking, crony capitalist’s lose than real business which serves the actual preference of the consumer.

  37. egg_

    JimmyB
    #1385004, posted on July 17, 2014 at 1:29 pm
    Baldrick
    #1384749, posted on July 17, 2014 at 11:22 am
    Shorten commits Labor to a price on carbon (dioxide) at the next election, ensuring it will lose:

    CHRIS UHLMANN: So to be clear on that, you will campaign at the next election to introduce a carbon price by way of an emissions trading scheme?

    BILL SHORTEN: Yes.

    Madness rules Bill ‘Fonebone’ Shorten….

    Labor still trying to pull the Green vote.

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