Sunday, December 21, 2008

"Never in the history of Australian public finance has so much been given...

...without public policy purpose, by so many, to so few."

That's Professor Professor Ross Garnaut, on the Rudd government's decision to 'build on' the excellent ideas in his climate change review.

He is referring to the government's decision to donate $3.9 billion in unconditional payments to electricity generators in relation to 'compensate' them for the emissions trading scheme.

(Garnaut and I have spoken about this before. They will pocket the compensation and pass on the higher costs that result from the emissions trading scheme anyway. That's what they have done overseas. Rudd actually had economists working with him on this. He must have decided not to listen to them.)

Garnaut is furious too at the Government's decision to issue free carbon permits to industries exposed to international competition, such as steel, chemicals and paper and pulp. He writes that this is an act of protectionism that threatened to provoke other countries to follow suit and likens the danger to the notorious US protectionism that deepened the Great Depression of the 1930s.

And he says the Government shouldn't have limited Australia to a maximum emissions cut of 15 per cent by 2020. It should have kept 25 per cent "on the table".

As he puts it: "Australia cannot play a strongly positive role in encouraging the global community towards the best possible outcomes if it has ruled out in advance its own participation in strong outcomes."

That's how it's described in an exclusive story by Peter Hartcher on the front page of Saturday's SMH. 

Garnaut's own words, damning of the decisions made by the man who trumpeted his appointment, are here and here and here.


Anonymous said...

I thought the whole idea of an emissions trading scheme (as opposed to a carbon tax) was to allow the "market" to find the lowest cost carbon emission abatement. Giving out market-distorting subsidies defeats the whole purpose of setting up the market, but still with the costs of the brokers and other hangers on attached to market trading systems.

And, of course, the emissions cuts (all 5% of them) still have to come from somewhere, but they won't be the lowest cost to the economy.

We really have elected John Howard Lite.


Anonymous said...

It is disgraceful that Rudd ignored good advice from many respected economists on such an important policy to the benefit of the coal industry.

This is simply awful policy. Rudd's arrogance in calling people who disagree with his policy 'extremists' says a lot about him. Would it be extreme if the Federal Labor Party made policy decisions to benefit the nation rather than to benefit their re-election chances? Such is their ineptness, they sometimes do neither.

Let's hope that the Liberal Party can get their act together on Climate Change. I'm not holding my breath.


Anonymous said...

Peter- Ross Garnaut did not link to Hartcher's piece, that was editorial input on the EAF blog. Sorry about the misunderstanding. Please make this correction.

Peter Martin said...



Anonymous said...

Like many others Garnaut has allowed a little self indulgent dummy spit because his little favourite position was the toy taken. The hyberole and over reaction by all to Government's scheme only has one effect in the current economic environment - to turn everybody off it. But I guess Garnaut doesn't have to worry about having to keep the people supporting action on CC which when their jobs are at stake they will ditch all too easily. It is foolish to think that it was possible for the govt to do more than they have at the start. But self indulgent tantrums feel better than having to sit and wait for long term strategies to play out.

Anonymous said...

"But self indulgent tantrums feel better than having to sit and wait for long term strategies to play out."

Yes we wouldn't want to ruin long-term Labor party election winning strategies, regardless if it's detrimental to this country, right anonymous?


Peter Wood said...

The problem with Rudd's targets is that they either shift too much the burden of emissions reductions onto developing countries or low per-capita emitters, or they shift the burden of climate change onto future generations, or both.

This contrasts strongly with Rudd's comments in his October 2006 article in The Monthly on "Faith in Politics", where he states:

"There is an alternative vision for Australia's future: one which seeks to take Chifley's vision of a "light on the hill" into an uncertain century. This is an enlarging vision that sees Australia taking the lead on global climate change, rather than continuing to play the role of saboteur. This is an Australia that takes the lead on the Millennium Development Goals both in word and deed, and leads by example in dealing with the chronic poverty in our own region. This is an Australia that becomes a leader, not a follower, in the redesign of the rules of the international order that we helped craft in 1945, to render future genocides both intolerable under international law and impossible through international resolve. This is an Australia which takes the values of decency, fairness and compassion that are still etched deep in our national soul, despite a decade of oxygen deprivation, and breathes them afresh into the great debates now faced by our country and the international community. The time has well and truly come for a vision for Australia not limited by the narrowest of definitions of our national self-interest. Instead, we need to be guided by a new principle that encompasses not only what Australia can do for itself, but also what Australia can do for the world."

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