Liberal party compromise

For political junkies the talk of the last week has been about the Liberal party split on whether or not to support the ALP’s Emissions Trading System (ETS). On one side is Turnbull/Hockey/Pyne and the moderate wing of the party who support an ETS… and on the other side is Abbott/Robb/Minchin and the conservative wing of the party who are desperately trying to stop the legislation from passing.

It’s difficult to see a good outcome for the Liberals.

Abbott has said he will challenge for the leadership on Tuesday. Turnbull responded by throwing a hand grenade into the party, insulting the anti-ETS crowd and insisting that people back him or the Liberals will be destroyed. If Turnbull wins then we are stuck with bad climate policy, angry conservatives deserting the party (which is probably good for the LDP), and a divided parliamentary party with prominent figures on the backbench. But if he loses and quits politics then the Liberals could potentially face a Wentworth by-election (which they may well lose), angry moderates, lots of Turnbull quotes to use in the next election, another unhappy ex-leader, and then we may still get stuck with the ETS anyway.

Delaying the vote until February won’t fix the problem. That just means that the debate goes on for another three months and then the Liberals face the same problem again.

The best compromise might be for the Liberals to consider backing a carbon tax, linked to tax cuts and with a McKitrick clause. This would allow the party to unambiguously oppose all types of ETS, it would be a better policy with a wide range of support from economists and some green groups, the associated tax cuts and McKitrick clause should help to placate some conservatives, and the the moderates can be happy that the party is going to “do something”.

Turnbull and Hockey are unlikely to support this position, but Abbott has shown some interest in the idea of a carbon tax.


For those of you sensible enough not to read Crikey, I’m sorry to do this to you. If I was a stronger person I would also just stop reading neo-socialist commentary. But like a gawker at a car crash, I just can’t seem to look away.

Crikey’s main writer — Bernard Keane — has been telling us for months that expansionary fiscal policy works well, and that the ETS is good policy. I have occasionally sent him a quick e-mail pointing out some of his more egregious errors (not understanding how national accounts work, claiming that most economists prefer an ETS to a carbon tax) but he hasn’t responded or corrected them.

But today’s mistake deserves a special mention.

Flicking through the recently-released MYEFO (Commonwealth mini-budget) Keane claims that it “gives the lie to the absurd line from ETS opponents such as the Nationals that the CPRS is a giant tax.”

For Keane, the reason that the ETS isn’t a big tax is that the government is going to match the tax with higher level of government spending. In the world of neo-socialists, if you tax and spend then you haven’t really taxed. Wow.

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Documentary on environmental alarmism

The documentary “Not Evil Just Wrong” has been described as an anti-AGW film. I haven’t seen it, but I understand that the primary theme is to argue against environmental alarmism and the occasional tendency of humans to let fear drive us to silly policy. If so, then it is an important story worth telling.

The film will be premiered in private showings around the world on 18 October 2009. Various groups have arranged for screenings around Australia, with details on facebook. For those in Sydney, the screening is at Level 3, Manning Building, Manning Road, University of Sydney, and costs $15.

Bjorn Lomborg talks about climate change policy

Some people think that climate change is a disaster and we need to take drastic action now. Other people believe that it’s all in our minds and we should ignore the whole thing. I think there is a sensible middle ground that is being crowded out with all the shouting, and it is represented by the likes of Bjorn Lomborg and Pat Michaels (CATO scholar).

Lomborg and Michaels say that the globe is in a warming trend and that humans are contributing to this. However, instead of running around like a gaggle of headless chicken-littles, they ask that we have a careful look at the consequences and not jump into stupid policy.

In his most recent work, Lomborg has brought together a group of experts to look at the relative effectiveness of a range of policy options. The best options are climate engineering (specifically marine cloud whitening), new technology research and adapting to changes. The worst options were those aiming to directly reduce emissions.

Lomborg talks to Reason TV about his conclusions:

Was the Garnaut Report based on a statistically dubious science paper?

Here’s an eye opener………

I read a paper linked  by which describes a finding by a statistician, David Stockwell about a widely circulated paper suggesting AGW was getting worse. Stockwell strongly asserts that the paper applied “wrong” statistical smoothing in a non linear data series.

What’s the problem with that?

Well, Garnaut used that paper called Rahmstorf  et al (2007) to basically anchor  his entire economic analysis. So it could very well be that Garnaut’s advice to the government was actually premised on wrong statistical evidence that AGW was getting worse than originally thought, particularly as it compares to what the IPCC said.

Abstract from the Stockwell paper says:

The non-linear trend in Rahmstorf et al. [2007] is updated with recent global temperature data.  The evidence does not support the basis for their claim that the sensitivity of the climate system has been underestimated.

And here is what Stockwell says about Garnaut.

Despite the lapse in statistical rigor, Rahmstorf et al. [2007] has been widely cited in support of more urgent action on emission controls [e.g. Garnaut 2008].

So from what I can gather Garnaut moved away from the science applied in the IPCC report to a much more gloomier report and based his economic study on a paper, which has now been possibly found to be of dubious quality and reliability. Further, if is found to be dubious is there a legitimate claim for a refund?

See here for the paper. Sourced from ClimateAudit.

Here’s my question: are we going to see Garnaut and the Government come back and revise their strategy and economic analysis if the paper is found to be a unreliable?

Who is David Stockwell?

After receiving his Ph.D. degree in Ecosystem Dynamics from the Australian National University in 1992, Dr Stockwell worked as a consultant until moving to the San Diego Supercomputer Center at University of California San Diego in 1997.

[Formatting edited 06/07/09]

Effectiveness and affordability of an ETS

Guest post from Juel Briggs


Nobuo Tanaka, Executive Director of the International Energy Agency, has recently said that by 2030, to meet international emission targets, the world will need to have a carbon price of $US180 ($A225) per tonne. (Source: Bloomberg News.)

Ultimately, such costs will be borne by the tax-payer. At Australia’s current emissions (580 million tonnes p.a.) and working population (10.6 million), a carbon price of $A225 would correspond to a cost per working person of more than $A12,000 per year, or around 25% of the average after-tax earnings. Even if we halve our per-capita emissions by 2030, the cost would still be at least $6,000 each year per working person. Additionally, given the aging of our population it could be expected that by 2030 a greater burden will fall on those working.

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