David Leyonhjelm on greenhouse policy

Once again, the Government has been getting its knickers in a knot over climate change. And once again, despite three politically shrewd options to choose from, it is choosing a dumb fourth option.

The first of the shrewd options is to withdraw from the Paris agreement and abandon the pledge to force Australian emissions in 2030 to be 26 to 28 per cent lower than emissions in 2005. In the process, the Government could announce that it would commit to reduce emissions as part of an enforceable international agreement based on equal effort, but that the Paris agreement is neither enforceable nor based on equal effort.

This option would enable the Government to abolish the renewable energy target, the emissions reduction fund (i.e. ‘direct action’), the renewable energy agency, the clean energy finance corporation and the clean energy innovation fund. It would save taxpayers at least $150 million over the next three years alone, and would also cut electricity bills. What’s more, there would be no need to introduce a carbon price.

The second option is to stick with the Paris agreement but better align our planned emission reductions with the pledges of the world’s big emitters. India, China, Iran, Saudi Arabia and Indonesia each pledge to more than double their emissions from 2005 to 2030. Russia and Brazil each pledge to increase their emissions by a third. Mexico also pledges increased emissions, while South Korea and South Africa each pledge that their emissions in 2030 will be much the same as in 2005. Japan pledges to reduce its emissions, but to a lesser extent than Australia. The only pledges that exceed Australia’s planned effort come from Obama’s US, Trudeau’s Canada, and the EU of Hollande and Merkel.

Option two is based on the idea that each country should make a comparable effort to reduce emissions, because all will suffer from rising global temperatures. (Indeed, it would be reasonable to expect those countries that might suffer less from rising temperatures, like Russia, to go to less effort to reduce emissions.)

Arguments that poor countries should be spared from the costs of reducing emissions are just flimsy arguments for foreign aid. The industrial revolution that brought great wealth to the West has also lifted much of the rest of the world out of poverty. So if the industrial revolution is causing climate change, then the responsibility to respond rests with every nation in the world.

Option two would require the retention of some of the current policies to reduce emissions, but at least it would avoid the need for the introduction of a carbon price.
Unfortunately Prime Minister Turnbull and the average voter probably couldn’t face up to the realpolitik underpinning options one or two. The warm and fuzzy feelings surrounding Australian emission reductions are just too addictive.

But there remains an option that, while more harmful to Australians than options one or two, is still politically shrewd. Under option three, a carbon tax would be used to fund high-end income tax cuts, while all other programs that reduce emissions would be abolished. In addition, nuclear power would be legalised.

Devoting all the proceeds of a carbon tax to fund cuts to top personal tax rates and the company tax rate would make Australia more competitive, boost investment, reverse the brain drain and create jobs. Moreover, as an emissions-free source of base load power, nuclear power has no equal. The only ones who would not like it are those who hate the rich, and those who choose to ignore France’s nuclear success.

Abolition of bureaucratic programs like the renewable energy target would make it impossible to establish new projects, like wind farms and solar arrays, unless they were competitive without subsidies from other forms of generation.

But despite the Government having three politically shrewd options, Prime Minister Turnbull seems to be fixated on option four — do nothing. He’s keeping us signed up to the unenforceable Paris agreement, sticking to an emissions reduction target that is out of step with the world’s big emitters, and tying himself to costly policies like the renewable energy target that the Greens love but Coalition supporters hate.

If only he were more agile and innovative.

David Leyonhjelm is a Senator for the Liberal Democrats

This entry was posted in Economics and economy, Global warming and climate change policy, Guest Post, Rafe. Bookmark the permalink.

55 Responses to David Leyonhjelm on greenhouse policy

  1. Senile Old Guy

    But despite the Government having three politically shrewd options, Prime Minister Turnbull seems to be fixated on option four — do nothing.

    Do nothing, pretty much Turnbull’s position on anything, especially anything the slightest bit disliked by left wing SJWs.

  2. Roger

    Fifth option: Get rid of Turnbull.

  3. Dr Fred Lenin

    On alpbc tv yesterday comrade “scientist”announces that green oarrot wings are up to 40mm longer now than they were 40 years ago thats 1mm per year they have grown ,the cause is of course gerbil worming! A couple of questions ,how do they know about GW ? Has there been indoctrination clases funded by the taxpayer ? Will the wings shrink to the old size when Trump destroys the GW industry? Who says the left dont create jobs?

  4. Tel

    How about we just say no more coal exports? Then we use our coal within Australia.

    I know you guys will bitch, but coal is a valuable energy source and one of Australia’s basic natural resources… we just dig it up and dump it with zero value add into the international market. Other people then make real industry out of this resource.

    Since coal exports get counted as Australian “emissions” we are penalized for this, and the money we make is not so great. The only reason it happens is because there are massive barriers to doing any sort of heavy industry inside Australia. Well, stop exporting, allow the international coal price to go up, if China doesn’t like it then tell them it was their idea. Eventually Australians will learn to work again and make stuff.

  5. RobK

    Fred,
    That was 4-5mm in 45 years. Relating it to climate change is pure conjecture.
    As I wrote in the previous post:

    Generally conjecture will do. See link.

    http://mobile.abc.net.au/news/2017-01-02/growing-parrot-wingspan-could-be-due-to-climate-change/8152602

  6. John Michelmore

    I fail to see how a carbon tax will make Australia more competitive , when the tax applies to business as well as the individual, then the tax is handed back as a tax cut for high end earners and businesses. Sounds just like money churning with a big bureaucracy in the middle to me. In my mind the value of option three is negative except for the single good point that nuclear energy would become a player! If David believes in smaller government, which I seriously doubt, I doubt option three would have been included here.

  7. Stackja

    RGR created AGW scam in Australia.
    TA fought and MT didn’t help.

  8. RobK

    Tel,
    Are our CO2 emissions inclusive of exports or just the energy required to mine and ship? If as you say, the energy is allocated to our emissions then it would not appear on the importers CO2 account; I’d be surprised if that’s the case.
    Your suggestion revisits the Pilbara-Queensland rail concept, shuttling coal and iron ore each way for processing.

  9. Sparkx

    Why is everyone making such a big fuss about coal? What about the emmissions from vehicles, particularly aircraft? Have a look at the aircraft flying around the world burning ,heaven only knows how much, fuel. Obviously the lefties think air travel doesn’t count. Whereas cheap reliable power for the ignorant masses is a no no.

  10. Boambee John

    RobK,

    I have long suspected that there is some double counting, with coal exports being counted against the exporter when shipped, and the importer when burned for industry.

    Makes it essier to proclaim a “crisis” if the numbers are high.

  11. Boambee John

    Sparkx,

    Air travel for our self selected “expert elites” is essential for thwm to meet their overseas equivalents and discuss plans for a New World Order.

    For the proles, less so.

  12. duncanm

    Tel:

    How about we just say no more coal exports? Then we use our coal within Australia.

    Sounds reasonable.. but keep exporting coking coal, which runs about 3:2 in $ terms exported compared with thermal coal.

    I’m not sure how the coal mix comes out of the ground — presumably, deposits can be selectively mined so you don’t need to stockpile thermal coal.

  13. Boambee John

    The overseas equivalents, of course also being self selected.

    However, Shrillary’s attempt to self select fell at the last hurdle. Unfair!

  14. Leo G

    Mal be nimble, Mal be quick,
    Mal slumped over the can-do shtick.

  15. Art Vandelay

    I fail to see how a carbon tax will make Australia more competitive , when the tax applies to business as well as the individual, then the tax is handed back as a tax cut for high end earners and businesses. Sounds just like money churning with a big bureaucracy in the middle to me.

    I agree. Leyonhjelm is incredibly naive (or ill-informed) on a few economic matters. At one point, he even said he’d back a zero-rated ETS which could be increased once other countries imposed their own. While a zero-rated ETS may look harmless, why would you expand the architecture and power of the State when we know that a future government will misuse it?

    As for his idea of using a carbon tax to fund corporate and personal tax cuts, any economist would tell you that this counter-productive. The tax cuts would mean that people and business could afford to pay the higher energy prices due to the carbon tax and would not reduce their energy consumption by as much. The whole point of a carbon tax is to make energy less affordable so that consumption (and emissions) fall.

    The result of Leyonhjelm’s plan is that you’d need to implement a much higher carbon tax to cut emissions. And, as you note, an unintended consequence of his idea is that you’d also end up with a larger bureaucracy to administer what is a pretty complex tax.

  16. mareeS

    Shame on you for using the “tax” word, Senator. You know we will do our utmost to avoid it.

    Otherwise, a good piece.

  17. King Koala

    Leyonhjelm is incredibly naive (or ill-informed) on a few economic matters

    Davo lets his ideological commitmment to libertarianism override his common sense.

  18. memoryvault

    RGR created AGW scam in Australia.

    Correction: Politically, John Howard started the AGW scam in Australia.
    RGR merely completed what Howard envisaged when he started it.

  19. Delta

    I wonder how many system blacks it will take for politicians to realise that their pet renewable schemes just will not work but eventually will result in the collapse or the electrical power system? It’s only a matter of time before we have more black outs the way we are heading.

  20. Sparkx

    Delta there will be a lot more blackouts before any pollie wakes up. I pity the poor engineers trying to keep things together in Vic and SA once the brown coal fired generator is offline. None of the green/left morons has any idea of the complexities of maintaining a stable supply on the grid particularly when adding the extremely variable inputs of wind and solar. If there is nothing to fill in the gaps where the sun is not shining and the wind aint blowing you are in deep do do.

  21. Boambee John

    Art V at 1332,

    Which was the insanity of Juliar’s compensation package for everyone but industry.

    But her real aim was to destroy the economy, not reduce “carbon polludion”.

  22. Art Vandelay

    Davo lets his ideological commitmment to libertarianism override his common sense.

    A sensible libertarian wouldn’t support imposing a carbon tax or ETS on the Australian economy.

    I suspect he is rather taken with the theoretical notion that emissions taxes are more economically efficient than income and company taxes. In theory, this is correct. However, under current circumstances where it’s extremely doubtful that carbon emissions will cause economic damage in the future, carbon taxes will only lead to drastically reduced incomes and living standards for no environmental gain.

  23. iampeter

    I hate how the discussion is all about doing this or that with “cutting emissions”. The whole thing should be challenged at that level IMO.

    Emissions are a by-product of human life and prosperity and anyone arguing for us to cut emissions is arguing to cut human life and prosperity. It’s pretty evil when stated clearly. Wish those in the public eye would do so.

    The same mistake is always made: we let the left get the moral high ground and frame the debate.

  24. memoryvault

    +1 iampeter

    Especially when the “emissions” being cut are CO2.
    We are industrialised human beings with an advanced standard of life.
    We got where we are by harnessing the energy of heat.
    Heat generated by burning stuff.
    Burning stuff generates “emissions”.

    Lower “emissions” realistically means less energy.
    Less energy means less industry.
    Less industry means a lower standard of life.
    It’s as simple as that.

  25. jupes

    India, China, Iran, Saudi Arabia and Indonesia each pledge to more than double their emissions from 2005 to 2030.

    Then what is the fucking point of the Paris agreement?

    Seriously, if CO2 causes the world to heat to hell, of what possible benefit could Australia reducing its emissions be? The total amount will still rise.

    Are we fucking insane?

  26. jupes

    Emissions are a by-product of human life and prosperity and anyone arguing for us to cut emissions is arguing to cut human life and prosperity. It’s pretty evil when stated clearly. Wish those in the public eye would do so.

    +2 iampeter

  27. john constantine

    Did hear a human rights lawyer from inside the social justice sob bubble describe how her heart just swelled with joy in her chest, when she toured a non-industrial third world community.

    “they were just so happy” she reported. “they sat around the fire and sang while the food cooked”.

    She and her tour group were overjoyed to be able to build the tribe a vegetable garden, so that they could have fresh vegetables from that day on.

    Why would serfs and proles need industry?. for hundreds of generations the serfs in the villages owned by the aristocracy did without industry, and the aristocracy reigned eternal.

    It was only the ill advised experiment with industrialisation and voting that saw the temporary non-aristocracy period.

    Back to the future and out new eternal social justice aristocracy.

  28. .

    AGW is a joke.

    If it was serious, we’d already be using nuclear power.

  29. JC

    If it was serious, we’d already be using nuclear power.

    I bought UEC just before Xmas. The fucker is up 15% since then. Uranium is at dirt lows. If Trump gives a fig leaf to gerbil warming it will likely be in the nuke field. You know this could open the spigot because the fat fuck never does things by halves.

    In fact, nuke could be a very smart move by Trump. He could turn around and say…

    sure, gerbil warming is bullshit, but if you’re worried we’re approving 50,000 new reactors.

    I think it’s worth a spec as other people have.

    UEC will be a 10 buck stock.

  30. JC

    let me rephrase… UEC could be a 10 buck stock if Trump goes nuke.

  31. JC

    And no, I don’t think the Trump Administration will approve 50,000 nuke reactors. That was a joke, meathead.

    I have to mention this because the sites is loaded to the gills with what Fisk refers to as thickos.

  32. egg_

    But despite the Government having three politically shrewd options, Prime Minister Turnbull seems to be fixated on option four — do nothing.

    Typical narcissist, paralysis by analysis.

  33. egg_

    Fifth option: Get rid of Turnbull.

    Aren’t the LNP considering same by 2Q2017?

  34. Andrew

    So now that the LDP is advocating for a carbon tax, with “compensation” its official that the LDP has gone full Julia?

  35. memoryvault

    with “compensation” its official that the LDP has gone full Julia?

    Correction: Full Howard.

  36. Hydra

    So now that the LDP is advocating for a carbon tax, with “compensation” its official that the LDP has gone full Julia?

    The libertarian position should be any improvement should be voted in favour of.

    So the combination of policies proposed that involve a carbon tax are deemed to be preferable to current circumstances (i.e lower tax and economic impact) hence support from the LDP. They do not support an outright carbon tax is my understanding, but onmy in combination of removing other policies already in place which in aggregate would create a better policy suite and be more economically liberal.

    You may understand this with some simple research on the current policies on place, which already include a tax on emissions above a certain level for power plants, I believe.

    Libertarianism isn’t about getting to the goal in one fell swoop, because that is not going to happen. Baby steps.

  37. Hydra

    The biggest reason Hazelwood is closing is not the carbon tax but the suite of other policies subsidising competitors, and the new Vic brown coal tax which was designed specifically to make Hazelwood close. A carbon tax is far more favorable to these policies, and in fact after reinbursements etc Hazelwood used to make money off the carbon tax – but consumers of course lost out.

  38. memoryvault

    The libertarian position should be any improvement should be voted in favour of.

    This is utter bullshit. There is no such thing as a “libertarian position” on a carbon tax.

    Libertarianism isn’t about getting to the goal in one fell swoop,
    because that is not going to happen. Baby steps.

    This is even greater bullshit.
    Libertarianism is not about reaching “goals”, by baby steps or otherwise.

    Libertarian philosophy defines the legitimate use of force by the government.
    Nothing more. Nothing less.

  39. Mark A

    I given up on Leyonhjelm a long time ago.
    My opinion was reinforced when my dad alerted me to his interview on the ABC a day or so ago.

    Leyonhjelm’s view that the age pension is welfare has upset my old man, he is not on the age pension but remembers paying for it.

    I think it’s a softening up exercise by all pollies to make people almost ashamed of collecting the age pension.
    Anywhoo he is full of it, as far as I’m concerned just an other politician.

  40. memoryvault

    Leyonhjelm’s view that the age pension is welfare has upset my old man, he is not on the age pension but remembers paying for it.

    I think it’s a softening up exercise by all pollies to make people almost ashamed of collecting the age pension.

    This has all happened before. And in ten years or so it will be people currently boasting about their “private super” who will be bitching that they were robbed, while a younger generation complains about paying taxes to support oldies who never made any contributions to supporting themselves in their old age.

    The more things change, the more they stay the same.

  41. Hydra

    Libertarian philosophy defines the legitimate use of force by the government.
    Nothing more. Nothing less.

    Missing the point. Let me put it in your words. If you are a libertarian who wants to use your power as an MP to limit the use of force by government, do you ignore superior positions just because the result is not perfect? Of course not. You may understand philosophy but you have zero understanding of politics.

  42. Sparkx

    And a headline in todays Australian “Energy Bills Soar in Shift From Coal – Electricity companies have begun hiking consumer prices around the country. “

  43. Tel

    Are our CO2 emissions inclusive of exports or just the energy required to mine and ship? If as you say, the energy is allocated to our emissions then it would not appear on the importers CO2 account; I’d be surprised if that’s the case.

    Depends on who is doing the counting, here’s one example:

    So where do I get that 3.7bn tonne figure come from?

    During the case in Queensland’s land court, Hancock Coal appointed an expert to submit a report outlining the emissions from the Alpha coalmine – accounting for all the mining operations, releases of methane from the ground, use of explosives, transport, shipping and the eventual burning of the coal in power plants.

    The report, which was submitted to the court and which I have seen, indicates the Alpha mine will emit an average of 61.9m tonnes of CO2-e every year for the 30-year life of the project.

    https://www.theguardian.com/environment/planet-oz/2013/nov/07/climate-change-keystone-galilee-queensland-coal-mining

    That said, many reports are a bit fuzzy on how they calculate that. It may be surprising, but the lengths to which the whole Global Warming scam has already gone to is also surprising.

  44. min

    ABC says that Kenya has 60% renewable energy and we have only 14% but as usual it is the detail that tells the real story.
    No mention of how many kilowatts are produced from their geothermal plants and wind turbines , but we do know that 50% of population do not have electricity, So it is how you present the stats and numbers to create a false picture. Would not think Kenya has much manufacturing either . Twenty plus years ago there was hardly any 3 phase electricity and a lot of generators
    It will be hot in SA in the next few days so let’s see how they cope with their 40%.

  45. .

    Hydra
    #2251255, posted on January 4, 2017 at 1:18 am
    Libertarian philosophy defines the legitimate use of force by the government.
    Nothing more. Nothing less.

    Missing the point. Let me put it in your words. If you are a libertarian who wants to use your power as an MP to limit the use of force by government, do you ignore superior positions just because the result is not perfect? Of course not. You may understand philosophy but you have zero understanding of politics.

    Well said. He is one man, he can’t legislate libertopia from a position of 1/76 or 1/226.

  46. old bloke

    This whole discussion on how to tax “carbon pollution” is a waste of time. There is no evidence that anthropogenic carbon dioxide has any significant impact on global temperatures so we need politicians to stand up and state that fact. No more arguments about tax options please, just declare the obvious, i.e., the “scientific consensus” was wrong and scrap all associated subsidies, handouts, bureaucracies, and lies.

  47. Andrew

    Well said. He is one man, he can’t legislate libertopia from a position of 1/76 or 1/226.

    Wow, Dot’s gone full Julia too.

  48. JohnA

    iampeter #2250915, posted on January 3, 2017, at 5:50 pm

    I hate how the discussion is all about doing this or that with “cutting emissions”. The whole thing should be challenged at that level IMO.

    Emissions are a by-product of human life and prosperity and anyone arguing for us to cut emissions is arguing to cut human life and prosperity. It’s pretty evil when stated clearly. Wish those in the public eye would do so.

    The same mistake is always made: we let the left get the moral high ground and frame the debate.

    +1 x 100

  49. JohnA

    Mr Turnbull’s “do-nothing” approach actually means “do not change any of the present settings”.

    But we need to argue that “do nothing” is “do nothing to mitigate “carbon pollution”, which includes dismantling all the rorts currently in place.

  50. .

    Andrew
    #2251697, posted on January 4, 2017 at 2:17 pm
    Well said. He is one man, he can’t legislate libertopia from a position of 1/76 or 1/226.

    Wow, Dot’s gone full Julia too.

    You vote for the Liberal party. You haven’t got any credibility about this at all.

  51. jupes

    Well said. He is one man, he can’t legislate libertopia from a position of 1/76 or 1/226.

    Is that where 50,000 Qataris immigrate every year?

    Why don’t libertarians just emigrate to Qatar and stop infesting us with Muslims?

  52. .

    It is the Liberal party that is doing it to you right now.

    The LDP policy would see less MENA immigration, not as low as you’d like though.

  53. jupes

    The LDP policy would see less MENA immigration,

    What? You racist bastards.

  54. King Koala

    A sensible libertarian

    A sensiblee libertarian is an oxymoron. Libertarians support open borders without understanding that libertarianism is something that only a small subset of European people are capable of.

  55. .

    Oh great. We have a Daily Stormer idiot now professing that only whites can have freedom.

    Thom Sowell is a better class of human than you will ever be, Constable Kenny.

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