In a press conference today, with Al Gore, Clive Palmer announced that his party will vote in the Senate to repeal the carbon tax. On one condition: That energy companies are legally required to pass any savings on to consumers.
He also said he wants to replace the carbon tax with an emissions trading scheme (ETS) that would come into effect when our main trading partners (China, Japan, the US and South Korea) implement schemes of their own.
And, lastly, he said he’ll oppose:
- The abolition of the Climate Change Authority (CCA) – The Authority provides expert advice on Australian Government climate change mitigation initiatives.
- The abolition of the Clean Energy Finance Corporation (CEFC) – A body that invests in renewable energy generation.
- Any cuts to the Renewable Energy Target (RET) – The RET is the proportion of electricity we get from renewable sources. Our current target is 20% by 2020.
So is his announcement good or bad?
I’d rather keep the carbon tax
In reality, the carbon tax and the ETS are pretty much the same thing. They’re both ‘carbon trading’ or ‘carbon pricing’ mechanisms. Both require polluters to pay the government a certain amount for each tonne of greenhouse gas they emit.
The biggest difference is that the carbon tax costs polluters more. ($24.15 per tonne of CO2 emitted, as opposed to around $6 per tonne.) And in my book, that’s a good thing. If we cut it, we’ll not only remove a proven effective disincentive to pollute, but we’ll also lose around $7.6 billion per year in government revenue.
(Here’s a simplistic summary of the technical differences, if you’re interested. Under the carbon tax system, the government sets the price, whereas under an ETS, the market sets the price. The ETS is like a pollution auction: Companies bid on a limited number of ‘units’, where each unit is the right to emit a certain amount of CO2. This not only sets the price, but also caps emissions: Because there are only a certain number of units available, there’s an actual limit on the total emissions that all our companies can produce.)
But the carbon tax was always a temporary thing
Labor introduced the carbon tax as a temporary measure in 2012. They always planned to switch to an emissions trading scheme next year. (They talked about bringing this back to July 1, 2014, but it never happened.)
In other words, Clive’s proposal was really what Labor was going to do anyway. Except for one thing…
Clive wants to wait for the rest of the world before making polluters pay – That’s not good
During his press conference speech, Clive said:
This scheme would only become effective once Australia’s main trading partners also take action to establish such a scheme.”
This, I really don’t like. Why wait ’til other countries do it? Why not be the leaders? After all, we’re the leading greenouse gas emitter per capita, so it only seems fitting.
And it’s not like we’d be all alone. The EU already has an ETS, as does New Zealand. In fact, of our 4 main trading partners, only 1 currently has no ETS plans:
- China is currently piloting an ETS in 7 cities, with a view to rolling out a national scheme within the decade.
- Japan is refusing to introduce a national scheme.
- The US has schemes in some states, but Congress has blocked a national scheme.
- South Korea is starting a national scheme in 2015.
What’s more, if we can survive more than 2 years of the carbon tax (at more than $23/tonne), I’m sure we can survive a few years of an ETS (at around $6/tonne)…
Worse, we may end up with nothing at all
In his press conference, Clive said:
In voting against the abolition of the Climate Change Authority, Palmer United senators will move an amendment to establish an emissions trading scheme.”
This means the ETS isn’t a condition of his vote on the carbon tax bill. It’s a condition of his vote on another bill entirely. I thought he might have mispoken at his press conference, but Clive confirmed this position in an interview with Tony Jones on Lateline last night:
Tony: Your senators plan to pass legislation repealing the carbon tax… Will it be contingent on an emissions trading scheme?
Clive: The repeal of the carbon tax is contingent upon the government bringing into law a system where the energy producers will refund the benefit to their consumers…
Tony: But you won’t make your repeal of the carbon tax contingent on any of these other things you want to see happen?…
Clive: That’s right.”
In other words, he’s simply going to vote with the Coalition to repeal the carbon tax, unconditionally, and hope that his ETS amendment gets up. If it doesn’t, we could end up with no carbon tax and no ETS. Or as economist and Former Australian Minister for Trade and Competitiveness, Dr Craig Emerson, says:
Which is exactly what Abbott wants! He’d then move to introduce his Direct Action Plan, which the government says:
…will commence following the repeal of the carbon tax.” (p.3)
The House of Reps would naturally approve this plan (the Coalition has the majority there), and it’ll be passed to the Senate for approval. You’d assume Labor, the Greens and PUP would oppose it there, but if Clive is silly (or crafty) enough to let this situation occur in the first place when he has the balance of power, that may not be a safe assumption…
This would all be a crazy outcome! Especially as all Clive has to do to get an ETS is oppose the repeal of the carbon tax and wait until next year, when the carbon tax will automatically become an ETS. It’s already legislated!
We don’t want Abbott’s ‘Direct Action Plan’
Abbott’s Direct Action Plan is completely different from the carbon tax and ETS. Instead of making companies pay to pollute, he wants to pay them NOT to pollute. Or, put another way, he wants taxpayers to fund the cleanup, not the polluters themselves.
This would cost us $7.6 billion per year in lost revenue from the repealed carbon tax, plus another $3 billion in handouts to polluters. Plus there’s all the admin overhead and thousands of extra staff that would be required to process grant applications. Indeed, the OECD conducted a study which found subsidy schemes like Direct Action to be far less cost effective than carbon pricing:
The highest costs by far per tonne of CO2 abated are associated with various capital subsidies… The lowest costs per tonne abated were for trading systems, in line with classical economic theory – a fact which confirms “textbook suggestions” that trading systems (and broad-based carbon taxes) are the most economically efficient policy tools to mitigate climate change.”
Experts have noted many other problems with Direct Action too, including difficulty verifying emissions reductions, a propensity for short-term gains, an inability to cap emissions across the board, and a tendency towards a culture of entitlement.
So you can see why I wouldn’t want that to be passed! :-\ (I’m not alone either. Only 22% of Australians support it.)
Carbon pricing (either the carbon tax or ETS), on the other hand, has been cited by the World Bank, the OECD and the IMF as the best approach for reducing greenhouse gas emissions. This has certainly been the case in Australia. Emissions from companies covered by the carbon tax fell 7% in 2012–13.
Al Gore’s involvement is a good sign… in the long term
I can only guess at Al Gore’s reasons for taking part in all this. It’s strange that he’d help announce the repeal of a carbon tax, so he must have his own agenda. I suspect his goal is to get America’s trading partners moving on ETS schemes, so there’s less resistance to an ETS back at home. Congress has proved a sticking point for a US ETS in the past, but if all their trading partners have one, there’ll be fewer excuses.
If I’m right, this is a good sign, globally, but from Australia’s immediate perspective it’s a bit unfortunate. It looks to me that he’s treating us as a loss-leader. We’ll lose out in the short-term by exchanging a profitable, effective carbon tax for a zero-rated ETS. But the world will win in the long-term.
There’s also the possibility that Gore’s doing this to pressure Abbott into adding climate change to the agenda of November’s G20 conference (Australia is chairing it this year, in Brisbane). The US and EU have repeatedly asked that it be added, but Abbott has repeatedly refused. Despite the fact that most Australians think it should be on the agenda:
The rest is good news too
Clive’s other announcements are great news…
Firstly, he’s opposing the abolition of the Climate Change Authority (CCA). This is great because the CCA provides independent research and analysis, which is critical in this age of misinformation and climate change denial.
Secondly, he’s opposing the abolition of the Clean Energy Finance Corporation (CEFC). Again, great for Australia, because the CEFC has not only helped reduce emissions by funding renewable energy ventures, it’s also been operating at a 7% profit – about $200 million per year in revenue for the government!
And finally, he’s opposing any cuts to the Renewable Energy Target (RET). This target is successfully reducing emissions and will lower electricity bills. Abbott has been trying to reduce/abolish it since winning office, despite the fact that 71% of Australians want to retain or increase it. He commissioned a review soon after the election, with a hand-picked panel of climate-science skeptics, who then chose a firm to crunch the numbers, and EVEN STILL, the figures show we’ll be better off economically if we retain our target. More so if we increase it:
…household bills will be higher in the years to 2020 but after that they will start to fall and consumers will be better off by an average $56 a year from 2021 and $91 a year from 2030.”
So overall, I think there’s more good than bad
BAD: I’d rather see Clive block the repeal of the carbon tax. Then it would switch automatically to a low-rate ETS next year, and polluters would continue to pay, throughout. Instead, he’s angling for a zero-rate ETS from July, so polluters would stop paying next week, and may not start paying again for years.
BAD: But if he must vote to repeal the carbon tax, and he must have a zero-rate ETS, then I wish he’d only do the first in return for the second. i.e. Make his carbon tax vote conditional. As things stand, we could end up with neither.
UNSURE: It’s possible that Clive’s ETS could be used to fast-track ETS schemes in other countries (especially the US, but also Japan). But if this is going to happen, surely it would have happened next year anyway, when the carbon price automatically switched to a low-rate ETS. Maybe Gore thinks the extra year will make a difference?
GOOD: I’m ecstatic that Clive’s voting to keep the CCA, CEFC and RET. This is great news! And probably outweighs the negatives above.
So although it’s not black-and-white, I think the there’s more good news than bad in Clive’s announcement. And from what I’ve read, most of Australia’s environment movement agrees.
But that doesn’t mean CLIVE is more good than bad
Clive’s a mining baron, and no matter how affable he appears, no matter how straight-talking, we have to remember that. This is the bloke whose nickel refinery pumped toxic waste into the Great Barrier Reef park, and threatened to sue them if they tried to stop him. The guy who admits to rigging (bribing) opinion polls. The guy who sued the government because they rejected a railway proposal, then offered to drop the suit if they backed a mining proposal. The guy who still thinks big political donations are fine. So to assume he has the environment and the people in mind may be a bit optimistic. Sure, it’s possible he had a change of heart, but this first move doesn’t necessarily suggest that. It looks more like he’s simply swapped a carbon price for no carbon price.
What did you make of Clive’s press conference?
Please comment with your thoughts.
Clive says:
This scheme would only become effective once Australia’s main trading partners also take action to establish such a scheme.
The countries he listed were China, the United States, the European Union, Japan and Korea.
Given the EU is there, Korea almost, the US is risking its competitiveness with other forms of carbon reduction, and China will have a scheme soon, perhaps Palmer could be convinced that a price now will not hamper our competitiveness with anyone but Japan (and would it even with them? I’m no economist, but what do we actually trade there and how affected would it be by a carbon price?)
Given PUP was never going to vote against repealing the carbon tax, I think this is a possible positive move.
pleas understand I worked in the News Paper industry, and I have a copy of a report on climate change in 1967, and all it is, is a tax for the united nations and people like Al Gore. and the one world people. it states in the report that it is a system that can be used to make the people act as they want, under threat of calamity, instead of under a war and nuclear threat to get things done. it also says that it would take two and one half generations to believe the lie. and that is where we are now.
also kemtrails that is the American air force is polluting our sky’s with vaccine type chemicals to bring this lie to the surface. if you would do research on this matter for their are many a information on the web. and Al Gore, makes a lot of money spooking the people, and he has a house right on the beach at home in the U.S. – Yes there is a problem, and it is NOT the world But the people like Gore, that are sitting up the people, just like the wars that have popped up, that are wars of Inquisitions, that are controlled by these world people. if you understand the way these people work, you can see what is happening. and sir you haven seen nothing yet. Climate Change is a baby to what is going to happening.
A truly disturbing comment Ernie.
You may, however, be correct about Al Gore being spooky.
I watched an interview with Clive Palmer, Alan Jones and Richi last night. Clive was very impressive. To me he mostly skirts around issues and is vague on details. The interview I watched was a total contrast and his knowledge and grasp of facts and details was inspiring.
I disagree with aboloshing the carbon tax. The infrastructure is already in place, suppliers will never reduce their pricing to compensate for the tax no longer being in place, the Government will never know if they do or don’t as they won’t have the resources to vet it. I’m totally against setting up an infrastructure and tearing it down again in a couple of years. It’s a total waste of our (tax payers) money.
I’m disappointed Clive is not going to repeal the Carbon Tax, but very happy he is opposing the abolition of CCA, CEFC and RET.
Re: Ernie’s comment – I have no idea what you are trying to say. 1967 is a long time ago. Perhaps you could clarify your comments.
Clive Palmer owns Mineralogy, WARATAH COAL, Palmer Industries, Queensland Nickel.
He has his own agenda.
It is a fact of recent history that Tony Abbott made many motherhood statements and promises before the last election to convince the gullible that he was a nice fellow, to be trusted to work in our interest. Once he got the votes, he turned on us like the mongrel dog he is and attacked our rights, treasured institutions and values.
Clive has the balance of power in the voting on the climate related legislation coming before the Senate. Who believes that his voting will be purely “…..for the good of Australia….” now and in the near future?
Waratah Coal is the largest tenement holder within the Galilee Coal Basin and is developing their world class coal assets known as the “Galilee Coal Projects”.
The Galilee Coal Project is located in the Galilee Basin near Alpha in Central Queensland, The proposed thermal coal mine would be linked to a new coal storage and loading terminal at Abbott point near Bowen by a 453 km standard heavy gauge railway line. (where it was planned to dump dredging spoil into Barrier Reef waters)
Is Clive going to fill in the holes and renege on the $8 billion “China First” contract, and keep the carbon in the ground?
Is it coincidental that Clive’s plan will delay the establishment of an Emissions Trading Scheme in Australia?
“This scheme would only become effective once Australia’s main trading partners also take action to establish such a scheme.”
Has Clive become a born again conservationist, like uncle Tony?
If you believe that warm, cuddly Clive is thinking only of the people of Australia, then I have a great deal on a Harbour Bridge for you!
Thanks for your comment Ian. Just to be clear, I’m not suggesting Clive’s doing any of this out of the goodness of his heart. I don’t trust him at all. :-\
Thanks for making all of that a bit clearer for me. I agree that overall Clive’s announcements are a good thing. Yes it would be better if the ETS was a condition of repealing the carbon tax and better still if Australia adopted an ETS straight away without waiting for trading partners. But who would have expected Clive, a billionaire mining magnate, to come out in support of the CCA, CEFC and RET? It’s a positive sign.
Maybe, people should have a look at ClimateChangeModification-Leons_AGW_presentation_1.pps (cut and past the link)
and get a clearer picture of Australia’s position and contribution to “climate change”.
As has been shown from the various ETS’s established overseas, they are, fundamentally, part of a financial market, which like all other financial markets, are subject to manipulation and corruption.
I am not disputing that climate change isn’t real, it is as real as atmospheric pollution, but far too much of the current science has discounted the major contributing effect of the Sun.
As for Al Gore- he is in it for the money and has already made millions out of his involvement. His bandwagon started off as “global warming” but when that was discredited – see – Evidence for Predicting Global Cooling for the Next Three Decades By Prof. Don J. Easterbrook
Global Research, January 07, 2014 – he switched to “climate change”.
I think people need to go outside and have a look at the sky, at the cloud formation, at the ever changing patterns of the weather, and ask themselves, does “man” really have the power to effect the enormity of global weather?
Yes, we do have the ability to affect the climate! All the top climate scientists of the world agree on that and have for a long time.
It only takes looking at the massive changes we have made to the environment and the way that has affected the natural balance.
I am glad of your article Glenn. It has clarified several points for me about the carbon tax. This once again shows up the lies and misinformation being spread by the popular media.
But I think it is a sad thing that people are relieved by Palmer leaving the RET etc in place.
True this a a good thing, and things could be worse, but this whole state of affairs is still disastrous for the environment and the economy.
As you say, it is fitting that we be a leader in reducing CO2 emissions, as we are the biggest polluter per capita.
Al Gore said himself, he would prefer to see the carbon tax left in place in Australia. And Obama’s preference was all along for a carbon tax, but his opponents have continually blocked this.
They want a carbon tax because it is the most effective way to reduce emissions.
Palmer is making it seem like he cares about the environment while scrapping the very effective carbon tax which was due to convert to an ETS anyway. As already commented, this is a ridiculous waste of the time and the money that has already gone into the system already in place.
Palmer can be confident that his scheme means the big CO2 emitters get off with having nothing at all to pay for an indefinite time into the future.
That is a disgrace!!!
The above PowerPoint link needs to be pasted in the PowerPoint program – not on the internet.
Graham
You can’t just copy a bit of text and ‘paste’ it into Powerpoint. And there’s no link to anything on the internet associated with that text. Not that I would want to see it, as what you have written is nonsense. I agree that ‘market’ based schemes should not have any faith placed in them, but your last few lines about the sky and the clouds etc. is nonsense, Graham. I suggest you read this: http://www.aip.org/history/climate/summary.htm
and
http://www.skepticalscience.com
instead of posing absurd rhetorical questions.
There are plenty of debunkings of Easterbrook’s fraudulent work, such as
http://www.skepticalscience.com/don-easterbrook-heartland-distortion-of-reality.html
Carbon Tax or No Carbon Tax… ETS or No ETS…
Either way the people of Australia will be the ones getting the raw end of the deal. The media and the politicians put the sprinkles on the shit and tell us its ice cream.
The power brokers will be the ones that end up getting what they want. That’s why they’re there in the first place. To protect their own interests and agendas. Nothing more. Don’t kid yourselves. They’re not there for us.
General.
Real News Australia.com
Glenn
Good article, well researched, and it’s predominantly what I’ve been discovering and writing about for awhile.
Here is what Clive Palmer and PUP senators-elect and other “carbon tax” repealers don’t understand.
There is NO CARBON TAX! It does not exist in Australia.
The Clean Energy Act spells out everything about the Carbon Pricing Mechanism, but not once does it mention “carbon tax”. The Abbott government’s Clean Energy (Carbon Tax Repeal) Bill is an act to repeal nothing, but who in the Opposition ranks has picked up on this?
A tax is generally economy-wide. The part of the carbon pricing mechanism that applies to businesses that emit more than 25,000 tonnes CO2-e annually, is a targeted scheme which requires these businesses to purchase carbon credits. So, this part of the Clean Energy Act is NOT a tax, but everyone has been conned into thinking that the whole business about transitioning the economy to lower emissions is only about the “carbon tax”. Tony Abbott hooked into this when the infamous Gillard statement emerged – “There will be no carbon tax under a government I lead”.
But Mr Abbott already has form – he agreed in 2009 that a carbon tax was the best way to put a price on carbon (http://www.skepticalscience.com/Tony-Abbott-denies-climate-change-advocates-carbon-tax-in-the-same-breath.html). View the video.
One would think that that statement would have been picked up by the Opposition. No such luck.
For anyone – and I include every politician – who wants to seek a summary of the latest science on climate change (and even the effects that the sun has on global climate), go no further than these reports.
“Assessing ‘Dangerous Climate Change’: Required Reduction of Carbon Emissions to Protect Young People, Future Generations and Nature” by James Hansen and 16 other scientists.
http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0081648
Then read this …
“National Security and the Accelerating Risks of Climate Change”
http://www.cna.org/reports/accelerating-risks
And that’s not to mention the stranded assets (coal mines, ports etc) that are now emerging because big banks and fund managers are steering clear of anything that is climate negative.
Then if the reader still thinks that climate change action is not required, it’s time to find another planet.
Back to Oz. The Abbott government is an aberration in terms of climate change action. It will leave the scene as fast as it came. Just like a pendulum – left to right, right to left, left to right … There will be no option in several years from now but to have an effective ETS. Australia’s trading partners will require it, otherwise there will be an additional price on exports. This is already being planned by the EU.
Abandoning the carbon pricing mechanism will cost the budget (aka taxpayer money) more than $10 billion in the short term. It’s not difficult to do the sums (most of the information is in the Explanatory Memorandum of the repeal bill). Although the Direct Action Plan has already been pared back in the current budget to less than half of the promised program (more broken promises), the opportunity cost of retreating from climate change action falls on … guess who? … the taxpayer. THIS cost is the government’s CARBON TAX. And that’s the way the government always wanted it.
As for Clive Palmer, no one should believe anything until they see it!