Emissions Trading Schemes
Feb. 7th, 2010 12:43 pmSo. First, let's ignore the question of whether any sort of attempt to reduce carbon emissions is necessary, because once you get into that the whole discussion is derailed into Bolt/Monckton denialism.
The point of the exercise is to reduce carbon emissions. Simple, no?
The theory behind an ETS is also pretty simple:
- Set a limit on the total allowed emissions;
- Sell transferable permits to polluters;
- Over time, gradually reduce the limit.
Where it all gets sticky is that the scheme proposed for Australia complicates things a lot by giving away most of the permits at the start, setting a really high limit, and going nuts with "compensation" for various industries and most households. So it keeps the price down and also almost completely negates the price signal which is supposed to encourage people/companies to change the way they do things. In its present form it is unlikely to be terribly effective at getting much reduction in emissions, but it should at least control increases.
The Coalition's "direct action" proposal is even less useful. It goes after the low hanging fruit -- fair enough, we should probably be doing that anyway -- and it doesn't set any cap on emissions. So they're saying they expect to get a 5% reduction, just like the ETS proposal, but what they don't mention is that any reduction they get will be to the level of emissions we'd have had in 2020 given a business as usual approach, not against 1990 levels.
As to the idea that the Coalition proposal is taking it seriously, contrast the proposed expenditure -- approximately AU$1b a year -- to the Federal budget, which is over AU$300b a year. 0.3% of the budget is taking the problem seriously? We spend twelve times as much on "community services and culture".