Let's face it: the ETS is dead
TONY Abbott almost singlehandedly put the Emissions Trading Scheme on life support. Now Copenhagen has killed it stone cold, motherless dead.
Climate change minister Penny Wong, who is too emotionally committed to it to accept that truth, will carry it into the new year.
A responsible prime minister would give the ETS a decent Christian burial. And it has to be a formal state funeral.
A Treasury that was not so absolutely compromised by a bizarre combination of religious zeal, institutional pomposity and basic incompetence would be gently but persistently and emphatically advising the government that the ETS was no longer a good idea. If indeed it ever was.
While an argument could have been mounted before Copenhagen for moving towards an ETS, that is not possible after the chaos in doleful Hamlet's hometown that produced the "China solution".
There will be no global agreement to cut emissions of carbon dioxide.
Formally, it was "Chindia" -- China and India. But China is the elephant in that pairing. And in any event, nothing that President Barack Obama might have promised in Copenhagen was ever going to be endorsed by the US Senate, as it has to be.
While we wouldn't have quite seen a replay of the 95-0 vote that rejected the Kyoto Treaty in 1997, there is zero prospect of the US adopting either binding CO2 emission targets or a cap-and-trade policy, their name for an ETS.
So we have a situation post-Copenhagen, where the two countries that between them are responsible for nearly half of all global emissions of CO2 are not committed to cutting emissions, far less binding targets. And more pointedly, they won't have an ETS.
It is the latter that makes any move by Australia to have an ETS even more senseless than before. We would become ground zero for every spiv and main-chancer that would have an emission permit or million in their pocket to sell us.
Indeed, even "respectable" Wall Streeters would be -- correction, are -- salivating over the next big thing.
Two things simply cannot be denied about Copenhagen. Australia locking in its ETS wouldn't have made the slightest difference to the outcome. Not even Kevin Rudd is delusional enough to believe that if only he and Penny had been able to arrive with their bit of paper, China would have agreed to destroy its future.
Secondly, but for Abbott's aggression -- helped in no small part by Malcolm Turnbull's overweening arrogance -- we would have been locked into a bad policy and a disastrous process, which is even worse. The ETS.
It's time the business community woke up from its dozy slumber, with the doziest of all being the Business Council.
This is something they should be able to understand. Copenhagen has shattered any prospect of a local ETS delivering the "certainty" they crave.
Now it would only be the certainty of the grave. That of carbon export and permit volatility and rip-offs.
That's the export of jobs, businesses and investment to other places that had no price on carbon dioxide. Those "other places" are essentially the rest of the world except for Europe -- which doesn't matter and in any event has totally debased the permits system, just as it has cynically approached the whole sorry climate saga, starting with Kyoto.
Our ETS could only work as part of a properly regulated and audited global system in which at the very minimum the US, the second-biggest emitter, participated. Even then it would still have been extremely volatile, open to manipulation and outright rorting: the very antithesis of certainty.
Without the US, an Australian ETS is an invitation to chaos.
Are our Australian Federal "Carbon Cops" Police going to control the permits that would fall from the sky like confetti from Africa, Asia and Russia?
Do you sincerely believe that ASIC, Australia's Simply Ineffective (corporate) Cop, is a match for the masters of Wall St manipulation? They couldn't nail Jodee Rich and Andrew Forrest. But never fear, they'll be right on top of global real-time trading in complex permit derivatives.
It remains extraordinary that any government could embark on a policy that directly attacked its own country. The "production" of carbon dioxide is the absolute foundation of not just our economy but our modern society.
It is an ironic comment on the crass stupidity of both our politicians and our bureaucrats that if they'd actually succeeded at Copenhagen, they would have succeeded in destroying our future export growth.
The issue of emission cuts has to be cut free from the dead parrot, the ETS.
That leaves one or both of Abbott's direct action emission cuts or a carbon tax.
If we believe we have to join hands with the rest of the world in a mutual suicide pact, let us at least choose the more efficient method.
- From: The Australian
- December 26, 2009
