Another list of worthies: this time, concerned economists

There is an enormous advertisement in The Australian today, surrounded by pictures of melting ice. It is signed by John Hewson, ex-patriate, Josh Gans, productivity guru, Saul Eslake, Glenn Withers from Universities Australia and assorted others giving us a five point plan entitled Supporting a Price on Carbon Pollution 2011.  (Don’t get me started.)

The advertisement is sponsored by WWF-Australia (gosh, you couldn’t expect the concerned economists to reach into their own pockets, would you?)

There’s some great language there, characterised by that specificity so loved by the Ruddster.  One example is technology neutral complementary measures may be necessary.  Que?  Are they supporting the RET or something else?  Big fat subsidies to renewable energy?  Who knows?

And then there is this sentence that doesn’t seem to make any sense: “Certainty on quantity targets can only be achieved by allowing the price to reach a level which is consistent with that target.”   Is this saying a low fixed price won’t get you to the quantity targets you set?

Having prattled on about the need for the citizens of Australia to adjust their consumption to this new carbon constrained world, the authors support “compensating low income and vulnerable [are they different] households for higher costs of living”.  Substitution but no income effects for that lot.

The thrust of their five points is ETS, but large up-front tax is OK.  And no exemptions – transport in, agriculture in, everything in, actually. And get this all administered by something that resembles the RBA.

I guess for all other economists not on the list, we must be unconcerned.

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35 Responses to Another list of worthies: this time, concerned economists

  1. val majkus says:

    Look I don’t want to be told what to think by Gillard or anyone else keen to get money from me
    I say ‘Stuff off’ I can think for myself
    I know you want to make money but I want to keep my own
    as I said ‘Stuff off’

  2. daddy dave says:

    The carbon tax will have no effect on the environment. It won’t stop global warming; it won’t reduce ‘pollution’, smog, species reduction, soil erosion.

    The stated purpose of a carbon tax (according to Garnaut) is to try to pressure other countries into getting a carbon tax.

    But if we assume we have no influence on China and other polluting nations, then the carbon tax will be a worthless symbolic gesture. Its only legacy will be to drive our aluminium smelters and other “polluting” industries to asia.

  3. rodney says:

    I am always reluctant to attribute dishonesty to those I disagree with, and of course it is probable that they are simply fools or mistaken.
    The ETS is different. The evidence of corruption and racketeering, especially in the EU is so overwhelming that I find it hard to believe that any advocate for an ETS is not simply a crook.

  4. pedro says:

    I notice that we are still waiting for the PC report to be released. Surely there is no reason to sit on an independent report, even if only handed over a couple of days ago.

  5. JC. says:


    Thanks for raising this and you could possibly help

    I mentioned this on the other thread. The chicago based carbon market is current pricing contract per ton at $US1.70

    I’m not sure what the European market is trading credit at in Euros.

    However why isn’t anyone making any noise about the potentially wide disparity between the current market and the 26 bucks these fools are trying to imbed in the price?

    It’s here.

  6. pedro says:

    Rodney I’ll bet pretty much all of the concerned economists are honest (maybe not Hewson). But this is a debate in which people like me who can’t see any sense in pointless penance are reflexively derided by people like them.

    I read the climate commission report and could not seen the sense in mitigation. I read the Garnaul summary (no time for the full thing) and still couldn’t see the point.

    If there was a global approach then I could see the sense of going along with it even though I’m fairly suspicious about the claims of doom. After all, what can the politicians do as an alternative to following the advice?

  7. pedro says:

    JC what’s NFIA on that exchange?

  8. C.L. says:

    Oh God. Not another Eminent Doofuses Letter.

    I’m glad you mentioned Hewson, though, Judith as I think it’s very important to make this anecdote more widely known:

    ON another occasion, closer to the 1993 election, Hewson called me into a meeting. “We need some cut-through issues. We can make law and order an issue if we promise to bring back the death penalty.” I swallowed. For a while I was speechless. His idea was to introduce the death penalty for rapists and child molesters. “There’d be huge support wouldn’t there?” I had to agree with that. But I pointed out: “Australia is party to international conventions against the death penalty. Besides, most of the crimes you have in mind are state laws. How could the commonwealth execute people for state crimes?” I was sent away to investigate. My investigation took a long time. I once asked Ian McLachlan: “Do you think we have an obligation to tell the Australian people our leader is a maniac?”

    He said: “No, the Australian people will figure it out for themselves.”

  9. Ignatius Reilly says:

    But if we assume we have no influence on China and other polluting nations …

    Ah yes. First, assume square eggs …

  10. C.L. says:

    “…square eggs…”

    They’re called Renew balls, Iggy. Get it right.

    You may have heard Bob brown talk about them. Renew balls are emissions-free, base-load briquettes that will replace our oil dependency when they’re invented.

  11. . says:

    But if we assume we have no influence on China and other polluting nations …

    Ah yes. First, assume square eggs …

    It is the assumption of a fact. Australia influences world industrial production?

    Loopy stuff.

  12. JC. says:



    could be the term of the contract. Couldn’t get it from the site either.

    Some futures contracts have funny acronyms for the each month so it could be that.

  13. rodney says:

    I will brook no criticism of John Hewson. He is an excellent chap who has a veteran car in his ballroom.

  14. Steve says:

    Bank economists love an emissions trading scheme because it gives them another commodity to trade and earn margin income from both buying and selling.

    These are the guys who turned boring old home loans into the GFC, via mortgage-backed derivatives. If they could do that with land and buildings, what do you think they’ll do with carbon dioxide?

  15. JC. says:


    Try and find him when it’s his turn to do the next beer shout.

    I don’t think his wallet has ever seen the light of lights in a bar.

  16. daddy dave says:

    Ah yes. First, assume square eggs

    Are you for real? We have no influence over China’s environmental policies. In fact, we don’t have any influence over China at all. Remember Stern Hu?

  17. Penndragon says:

    At best they are telling the world that they should never be trusted to make decisions that may affect any of the rest of us.

    When the truth is finally recognized these types of publications will be recognized as at best career suicide letters and at worst self serving acts of fraud.

  18. . says:

    These are the guys who turned boring old home loans into the GFC, via mortgage-backed derivatives

    They did no such thing.

  19. Bank economists love an emissions trading scheme because it gives them another commodity to trade and earn margin income from both buying and selling.

    I heard Westpac’s Bill Evans on the ABC this morning spruiking the carbon tax. That’s probably why.

  20. Myrddin Seren says:

    I query whether the Big 4 local banks have the trading desks to successfully mix it up with the likes of Macquarie and the Goldies when it comes to trading pretty much anything.

    But I am damn sure they want some other magic source of revenue to fall in to the government’s lap before the cash gouge of last resort “Bank Superprofit Tax” is resorted to.

    Gail and Co are essentially throwing their mining and industrial banking clients to the tax sharks and screaming “Take them – not us !!”

  21. samuel j says:

    So China will shoot itself in the foot because Australia does so?

    Introduce a carbon tax or ETS and Australia will understand the true meaning of relevance deprivation syndrome.

  22. Viva says:

    We’re becoming more like New Zealand every day.

    PS Did you note the mad rush by other countries to institute an ETS when NZ did it?

  23. Steve of Ferny Hills says:

    I understand how a carbon dioxide tax can fund personal tax cuts and other compensation measures, but how will the tax cuts and compo be funded when the tax is replaced by an ETS?

  24. Pingback: Open letters and such : Core Economics

  25. Judith Sloan says:

    New Zealand only introduced an ETS (most sectors excluded,eg. transport and agriculture) because it thought Austraila was about to introduce one. It is also a sort of crazy cap and trade but with no cap. It is currently being reviewed and there is every expectation that it will be dropped, further water down or put in the freezer.

  26. rodney says:

    New Zealand is in a comparable situation NSW with its extemely expensive solar power subsidies.
    These Green clever dick schemes are open ended and create entitlements as well as costs. To pay out the entitlements is very expensive because nothing is ever costed properly in the first place.

  27. Another concerned economist – a real one, not a financial markets spiv running a line for the banks – had an interesting letter in The Australian the day following.

    A poorer nation (Letter published in The Australian, 3 June 2011)

    Dr Ken Henry’s appointment as a “special adviser” to the Prime Minister marks a clear watershed in the role and status of the Commonwealth Public Service.
    Dr Henry, who resigned as Secretary to the Treasury last December, is entitled to take whatever job he (properly) chooses. However, the choice he has now made means that there can no longer be any shadow of doubt as to the politicization of his former role during his tenure of it.

    For years now Dr Henry’s behaviour as Secretary to the Treasury has come under increasing public scrutiny. Throughout, and despite my own growing doubts, I have refrained from any public criticism of him. Indeed, in a March, 2008 Quadrant article I went out of my way to criticize his treatment by the Howard Government over a particular incident in May, 2007. (I have since come to think that the Government was right, and I was in error).

    My reluctance, until now, to criticize Dr Henry (and certain other Treasury officers, such as his successor, Dr Martin Parkinson) stemmed from my deeply held belief that the Treasury is a great national institution – an institution in whose intellectual integrity (and hence, political detachment) it is imperative that we be able to have faith. Sadly, I can no longer do so on either count.

    In recent days another notable Australian, Professor Ross Garnaut, has also shed all semblance of political impartiality in his intellectually laughable, but irremediably politically tainted, final report to the Prime Minister on “global warming” and the proposed tax on carbon dioxide emissions. In the process, he has finally completed his own move from the role of respected professional economist to that of political hack.

    These basically related developments have not come to pass overnight. They have been, under successive governments, some 35 years in the making, and Australia today is a poorer nation as a consequence.

    John Stone, Lane Cove, NSW

  28. Sinclair Davidson says:

    NGD – tidied that up – looks a bit better. Happy to change back if you prefer.

  29. Pingback: Stone v Treasury at Catallaxy Files

  30. Brilliant – cheers.

    Stone’s remarks are long overdue and necessary in my opinion.

  31. Sinclair Davidson says:

    NGD – the published version is much shorter – do you have an unabridged version or is that some of your commentary in there too?

  32. That’s the unabridged version. I’ve not touched it.

  33. Sinclair Davidson says:

    Cool – Is Stone happy for the unabridged version to go up?

  34. I suspect he would be absolutely delighted. The letter was given a very wide circulation via e-mail this morning, so it was definitely intended for a broad audience. One individual very close to him assures me it’s fine to post the unabridged version.

    I just rang to double-check but I got the machine unfortunately.

  35. Stone confirmed the unabridged version is fine to publish … I suspect people have moved on at this point.

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