Could Abbott government's double-backflip extend to climate policies? | RenewEconomy

Could Abbott government’s double-backflip extend to climate policies?

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Abbott is back-flipping on Gonski. Again. Would he do the same on climate policies? Not while the Oz keeps him on an ideological leash.

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The reported back-flip by the Abbott government on the Gonski education reforms shows that the new conservative government can, after all, do a backflip. Even a double one.

Could this extend to the carbon price? Abbott once was supportive, when the Coalition was trying to make itself indistinguishable from Labor on climate policies, as it pretended later to do on Gonski. Abbott then back-flipped on climate when he was installed as leader by a group of climate change denialists. Could he possibly change his mind again?

You would be forgiven for thinking that this could be the case, if you thought that sound policy and science had any influence on the debate. Yesterday, in the Senate inquiry into the Abbott government’s mass repeal of carbon and related legislation, Treasury officials revealed that they had not costed or analysed the Direct Action policy. Or even been asked to.

That’s probably because, as Climate Change Authority heads Bernie Fraser and Anthea Harris told the same inquiry last week, there is nothing there to analyse. Just a slogan, and a few ideas jotted down into a policy consultation document.

Independent Senator Nick Xenophon told the inquiry chairman he was surprised the modelling had not been done, AAP reports. “I must say, chair, I am quite surprised, shocked in fact, that the treasury hasn’t taken any modelling in respect of this.”

This came as the CEFC delivered its spirited defence of its role, dismissing the various criticisms leveled at it by the Abbott government, as we reported yesterday.

CEFC chairmwoman Jillian Broadbent said the institution could deliver half of the government’s abatement target, and deliver a net benefit to the government.

Asked on the ABC’s PM program why the market couldn’t do what the CEFC does, Broadbent said the financial sector simply didn’t have enough experience with clean energy, and needed to be persuaded or have their arm twisted to get them on the road.

“We’re investing and trying to develop the market’s appetite for participating in this field. Grants (as Direct Action proposes) have a very different role, and when you’re investing, you’re going to get the funds repaid and you’re earning a return on your money. Making a grant is just a straight expense,” she said.

“Now there’s a role for grants in emerging industries, but I really think the investment model of the Clean Energy Finance Corporation is a more fiscally responsible path to encourage the industry to be self-sufficient and wean itself off this government handout.

“We’re actually not a cost at all, but an earning. So every emission that we’re achieving has a return to the Government of $2.40, if it’s consistent with our current portfolio, whereas they (Direct Action’s emission reduction fund) are not going to get submissions where “We will pay you $2.40 if you let us pursue this investment”. So it’s very hard to compare a positive return with a cost.
”

So would the Abbott government consider a rethink on climate policies, and on the repeal of the CEFC, built around sound evidence? Probably not. This is not really about sound policy analysis, it is about ideology – as Abbott betrayed when he described this and international institutions as “Bob Brown banks”. And here’s how the Abbott advisers are being prepped.

The Australian newspaper today delivered an extraordinary editorial blaming the carbon tax for the possible closure of the Gove alumina refinery in the Northern Territory, even though the company involved, Rio Tinto, had never cited this as a reason, and any closure will likely happen after the carbon tax is repealed.

Nevertheless, the Australian sallied forth in a piece titled “carbon Tax’s dirty big legacy”.

It wrote: “The company has cited low alumina prices, a high exchange rate and substantial after tax losses as the key factors involve. Although Rio Tinto has not said so, Labor’s carbon tax must figure in the business equation.”

Now, why is that Rio has not blamed the carbon price? Quite possibly because their fuel costs are barely impacted by the carbon price.

The refinery relies on diesel which is astonishingly expensive (and dirty). The company had sought to change to gas, to lower costs, but decided that the price of gas is also going to be too high – nothing to do with the carbon price, but because the price of gas is doubling and possibly trebling due to Australia’s great LNG export rush. Apparently, Rio Tinto did not seriously entertain Geodynamics’ proposal to supply geothermal heat.

 

But mere facts won’t phase the Oz when it’s on a crusade. “It’s … one of the dangerous consequences, that many saw coming, of Labor’s crazy leap with extremist Greens in putting our companies at a disadvantage by moving ahead of the world on a misguided climate change adventure.”

And this on a day in a week that China, Australia’s biggest trading partner, launches emissions trading in its two key centres, Beijing and Shanghai.  Good grief.

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10 Comments
  1. Jason 7 years ago

    you can not change a man’s mind ( or groups) when his pay check( campaign funding ) depends on him not changing his mind…
    this is all about money and power… the other issue is if we are to make radical changes to the energy sources that power our society we are going to need a very broad support base and right now we don’t have it, oil and gas simply are not expensive enough, electricity on the other hand is expensive enough and people are shifting en masse…
    the real problem is going to be growth – no one is asking why the economy has to grow? is it some type of otherworld force that has to grow or is it a consequence of how we have constructed the foundation of the economic system?
    Does anything in Nature continue to grow and grow and grow forever? Yes, cancer and it kills the host.
    Cheers

  2. Gus Griffin 7 years ago

    I’m sorry to have to say this, Giles, but I see this piece as rather lazy journalism. Certainly, I agree with everything you say, but aren’t we long past simply criticising the positions of the Abbott Government and The Australian? Where’s the effective news-telling in that?

    Yes, investigative reporting requires a lot more work than merely commenting or pointing out the fallacies of what is on the public record, but surely the real story here is WHY Abbott is cleaving to his bloodymindedness or the real reason why The Australian is more chauvinist than the mining companies themselves.

    An idle reading of this article simply leaves us tut-tutting over their stupidity, when a deeper investigation into their real motives, as Jason alludes to in his comment here, might actually do a lot of good and be much more likely to be picked up and spread by other media. These guys are selling Australia down the river for their own selfish blinkered reasons – it would be a real breath of fresh air to have some intelligent reporting about how exactly this is being engineered in this country behind closed doors and by whom.

    The only way to force a change in this sociopathic behaviour is to subject it to the bright harsh light of public scrutiny. Find ways to make it safe enough for the “minions” to give you the skinny on what’s really going on. Name names, detail the actual times and places, depict the behaviour and events which are really pulling the strings to cause these despicable policies and behaviours. Shame specific people into doing the right thing.

    Do your job.

  3. JohnRD 7 years ago

    A quick check on the price of alumina (see http://www.indexmundi.com/commodities/?commodity=aluminum&months=60) came up with about $US1700/metric tonne.

    This environmental study (http://www.ntepa.nt.gov.au/__data/assets/pdf_file/0007/20320/section4.pdf) said that it takes approx 0.5mt/yr of fuel oil to produce 2 mt/yr of alumina. This corresponds to about 0.9t CO2/tonne alumina or a carbon tax of $21/tonne alumina assuming gove got no concessions at all. Given the price of alumina it is a bit hard to see that the carbon tax shut down gove.

  4. Chris Fraser 7 years ago

    This new government would backflip for any compelling political cause. A snake will easily shed its skin when it doesn’t need it anymore. But we need to be aware of what those causes would be based on previous patterns.

    • Chris Fraser 7 years ago

      For instance, any great idea conceived by the Rudd-Gillard government is complete anathema and must be disposed of thoughtfully.

  5. Motorshack 7 years ago

    I agree that going after the personality and ethics of Tony Abbott is largely a waste of time, but for Parkinson to indulge himself a bit on this point is still rather harmless, I should think. And we all have a few mental scabs that we cannot resist picking at compulsively. So, I see little value in arguing the point.

    In contrast, as also noted above, unconstrained economic growth is probably at least as dangerous as climate change, and may even kill us faster.

    It is all well and good to switch to cleaner energy sources, but that alone will not prevent the environmental damage that goes along with economic growth. We will still have habitat destruction, industrial pollution, biodiversity loss, and most of the other nasty side-effects of an industrial economy. We just won’t be heating the planet with excessive amounts of greenhouse gases.

    Moreover, given the huge amount of solar energy available, and the very low price it will have over the long term, energy will no longer be the constraint on growth that it has been to date. There will also be little moral reason to avoid excessive energy use, since there will be relatively little perceived environmental damage directly associated with energy production.

    So, ironically, our attempts to avoid dangerous climate change, even if very successful, could still leave us more vulnerable than ever to catastrophic environmental damage.

    Finally, if you are looking for the forces driving endless growth, I would suggest that the culprit is the fractional-reserve banking system that is now almost universal. I once spent a couple of years on Wall Street designing financial software, and I would be the first to say that a full understanding of the banking system takes some real study. However, the basic idea is simple enough.

    Namely, if you borrow money to build production facilities then you have to pay back more than you borrowed. So, there is a built-in incentive to produce as much as possible, even if the output is not really all needed by the customers.

    In addition, the bank doing the lending can only stay profitable if its loan portfolio keeps growing. So they have a built-in incentive to keep the economy as a whole growing as well. Otherwise there would be no market for their loans.

    So, in the industrialized countries, we have long since met our actual material requirements for survival, and our economic “growth” is increasingly a matter of digging up raw materials, turning them into “useful” products, which we then throw into overflowing landfills at the first excuse.

    In the end, the only real point to the exercise is to keep the banks from collapsing as “profitable” institutions.

    Unfortunately, the average voter has no clear conception of what is going on, so they continue to grind away their lives as debt-slaves, doing make-work jobs, to earn pretend money, in order to pay interest on loans that were never really necessary in the first place.

    In short, we are likely doomed. Smart enough to create the problem, but too dumb to solve it intelligently.

    • mike flanagan 7 years ago

      Well said. Hang the Banker together with Bullion Bulls are informative sites to get a grip on our lost democracy and our environmental irrationality.

      • Motorshack 7 years ago

        Thanks for the kind words about my writing.

        As for hanging the bankers, I would suggest another approach, for two reasons.

        First, I once spent year on the ground in Vietnam, and I can tell you that killing never really works out the way one might hope. Plus, even if it did, it is still amazingly nasty stuff. It’s really not worth the bother. Indeed, not even close.

        Second, it is probably far more effective just to stop buying so much junk, and especially to stop buying on credit.

        After all, the problem is not really the personalities that make up the One Percent, but is rather a design flaw in the system. And anyone can compensate for that flaw simply by refusing to be a debt-slave in the first place. It is still perfectly legal to pay cash, and to buy only what you really need. No one is compelled, much less forced at gunpoint, to buy grossly overpriced junk on the installment plan.

        For those who would like to get their personal finances under much better control – and almost automatically reduce the environmental damage they do – I would recommend two web sites.

        http://earlyretirementextreme.com/

        and

        http://www.mrmoneymustache.com/

        And, if you still have it in for the bankers, you might consider how badly they will feel if we were all to stop borrowing money. If you kill them, they will be put out of their misery immediately, but if you let them live they will have years to regret the folly of their former careers.

        • mike flanagan 7 years ago

          Thanks for your erudite response and additional reeding.

          • mike flanagan 7 years ago

            ……reading

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