Writing for another state sponsored publication, Tim Colebatch, formerly of Fairfax, comments on Why gas prices went sky-high, and what governments need to do about it. BTW, the state sponsored publication is Inside Story, produced by the Institute for Social Research at Swinburne University of Technology. From Fairfax to Inside Story eh.
Colebatch details an interesting perspective on Australia’s current energy “issues” and he seamlessly moves from gas to electricity to energy policy in general. He also makes some rather “interesting” observations including:
That (Victoria’s gas policy) was a protectionist policy. Like many (though not all) protectionist policies, it mostly worked well.
When the free marketeers won control of the policy levers, they sold off state energy companies, and allowed prices to be set by the market, at world parity levels. Not because the public was demanding that; quite the opposite. Australian voters, then and now, wanted their power and gas supplies to be under public ownership.
The electricity and gas sectors are now mostly privatised, and are dominated by monopolies and oligopolies which – even while formally regulated, or competing in open markets – have the means to effectively set their own domestic prices. And we consumers and downstream businesses are paying dearly for it.
There were several other “interesting” observations in Colebatch’s article, but for the above, Colebatch failed to provide any evidence that Victoria’s protectionist policy worked well, but more to the point that it worked better than would have a non protectionist policy. Colebatch also failed to provide any evidence as to voter preference around “power and gas supply” ownership or public ownership of these assets relative to other uses of government capital. But who needs evidence to support such assertions.
Most interestingly, having earlier said that gas prices were set by international markets, he suggests that energy companies set their own prices. He also fails to note that retail energy prices are set by regulators.
But this is the corker:
The electricity industry is waiting for the government to produce an energy policy that explains how it will meet its commitment to drive down greenhouse gas emissions by 2030 to 26 to 28 per cent below 2005 levels.
Having complained about the rising cost of electricity and the damage caused to the manufacturing sector, Colebatch refers to the Government’s “commitment to drive down greenhouse gas emissions by 2030 to 26 to 28 per cent below 2005 levels“, a commitment that is designed to increase the price of energy.
The real energy policy question is why Australia has committed to ” drive down greenhouse gas emissions by 2030 to 26 to 28 per cent below 2005 levels” in the first place.
Assuming carbon emissions can be and are accurately measured, and are measured using the same methodologies in all countries, what is the benefit of of Australia making such a commitment? Australia’s emissions account for, perhaps, 1.3% of global emissions.
Assuming no change to Australia’s emissions, given the ongoing industrialisation in India, China and Africa, this ratio will decline naturally anyway. And even if Australia stopped emitting entirely, the impact on global emissions would be irrelevant.
Can someone explain why it is bi-partisan policy for Australia to commit economic suicide? Why, why, why?
Is this something to do with social licences or social justice?