Tuesday, November 25, 2008

Our emissions trading scheme will make saving energy "pointless"

An independent think tank has issued an eleventh hour call for the Rudd government to modify the details of its planned carbon pollution reduction scheme, saying it will render attempts by ordinary households to cut pollution "pointless".

In a report issued this morning entitled "Fixing the Floor" the Australia Institute argues that the carbon pollution cap due to be announced shortly will in effect also be a "carbon pollution floor".

"When emissions trading comes in, every tonne of carbon dioxide saved by households will simply free up a tonne that can be used by industry," said the Institute's executive director Dr Richard Denniss.

"Installing solar hot water systems, driving smaller cars and turning off the light's will not help the environment one bit."...

The institute is proposing a modification to the scheme put forward in the so-called green paper that would allow household energy reductions to cut the total number of pollution permits in circulation.

In a separate development the Climate Institute today takes the unusual step of taking out newspaper advertisements calling on business leaders to speak out about targets in the lead-up to the government's decision.

“To their credit, most business leaders now accept the science of climate change," said the Institute's John Connor. "But remaining silent on the objectives we now need to set ourselves is a ‘greenwash’ of epic and global proportions."

“It is time business leaders came clean on their 2020 and long term objectives for ensuring a safe climate for future generations," said Mr Connor.

REACTION: Joshua Gans writes: Is the Australia Institute off the planet?

2 comments:

mOOm said...

All such efforts will make the trading price of the permits lower by lowering demand for energy. So assuming the cap is a real constraint saving energy will be good for the rest of the economy by lowering the cost of carbon.

Anonymous said...

Its true that the beneficiaries of household energy savings will be the big polluters (via cheaper permits) but that is part of the problem. Under the proposed CPRS there is a weak link between some of the decision makers (eg households pursuing energy efficiency) and those who benefit (the polluters). This will impede gains from trade.

In a textbook ETS this would bot be the case, but because the CPRS includes only the big 1000 polluters it prevents them from engaging in trade with those outside the schem (eg households).

The problem is that those pushing the the CPRS are spruiking the benefits of the textbook ETS while designing a system that doesnt look much like the textbook model.

Richard Denniss (TAI)

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