Thursday, 31 October 2013

Australia’s Carbon Emissions Target: Intellectual Laziness At Work

Most of us have difficulty admitting we have been wrong. More importantly, views which cannot be supported by reasonably intelligent analysis of the facts at hand can be considered intellectual laziness, the failure to keep abreast of the latest knowledge. Behavioural economic and other studies reveal people are more wedded to their preconceived views based on their own experience and the views of those they respect than they are to what is revealed by the latest information and experience. Only what agrees with the past is retained.

That is something that typifies Tony Abbott’s ministers. As I will describe elsewhere later, Education Minister Christopher Pyne continues to spruik the benefits of standardised testing, and even wants to get the NAPLAN tests on line, whilst the performance gap in educational attainment between the advantaged and disadvantaged shows a dreadful situation and the recent OECD study of adult literacy shows Australia not doing all that well in math. Information on tests won’t improve achievement, as trends have already shown! As if more evidence was needed

The debate around climate change and Australia’s strategies have been bogged down by absolute refusal to depart from earlier policy decisions despite overwhelming evidence on two fronts, one of which is well traversed, the other less so but just as important.

The less well-known evidence has been covered several times in recent months by the splendid website Climate Spectator. The most informative article, by Tristan Edis on 16 August last year, pointed out that Australia’s abatement task may in fact be much lower than anticipated. Attention is drawn to this in the just released report from the about to be axed Climate Authority.

Edis reported, “the abatement task has been slashed to a half or almost a third of what official government estimates put out less than 12 months ago”. Edis reminds us that, together with the Grattan Institute’s John Daley, he had pointed out that the cost of reducing carbon pollution would be less than expected because of underestimations in technological and commercial innovation as well as failure to account for economically beneficial industrial restructuring (not by simply offshoring production!)

The gap in the abatement task to meet Kyoto II (the 5% target set in Doha in November 2012) obligations between the target and where we are likely to end in 2020 with present trends, as at 2012, is estimated at 275 million tonnes, not the 786 tonnes forecast in 2012 by the former Department of Climate Change and Energy Efficiency (DCCEE).  These international obligations are for the entire period!

So, if getting to a 5% reduction is the Coalition’s target based on previous estimates and set for the policy of ‘Direct Action’ to which the Government continues to be committed, and the reduction needed is actually about a third of what it was previously estimated, what is Minister Hunt’s problem in committing to increasing the emissions reduction target to 15%? Or better still 25%!

The estimates for Edis’ August 2012 article came from the carbon and energy advisory firm Energetics. Edis reported that a previous estimate by carbon emissions analysts SKM was a reduced reduction of 375 million tonnes. Of course, as Edis admits, estimates are subject to uncertainty. Variations in price of the Australian dollar and in the renewable energy targets set by government are relevant.

The second, better known issue for Minister Hunt is the nature of the ‘Direct Action’ plan itself. Not much needs to be said. Opinion after opinion says this is too costly and will not achieve the target anyway. Economists have condemned the plan as an expensive, inefficient and ineffective way to reduce greenhouse gases.

Even Malcolm Turnbull said so. As noted by Giles Parkinson Turnbull said Direct Action plan would place an annual cost of $18 billion on the budget by 2050. “.. That would become a very expensive charge on the budget in the years ahead.” Parkinson noted that was only part of the story, because his assessment was based on the Coalition’s assumed abatement cost of $15 a tonne of C02e. “And how many people think the cost of abatement will be $15 at that level of abatement? No one.” A price of $100 a tonne would mean that Direct Action would cost in excess of $100 billion.

The Productivity Commission found in June 2011 that the most efficient path to reduce carbon emissions is through an emissions trading scheme; it found the Direct Action option the most expensive way to go about the task!

There are numerous analyses of the Direct Action proposals. They all show essentially the same thing: Minister Hunt rejects them all, branding them as political.

In the face of the reconsidered costs of abatement and the increasingly publicised fact that if the world is to have a reasonable chance of limiting warming to two degrees centigrade, a seemingly impossible task now, then less than a quarter of known reserves of fossil fuels can be burned, government inaction  and persistence with discredited strategies are entirely inappropriate. The Potsdam Institute published in the journal Nature five years ago.  that conclusion.

And Minister Hunt? He and Prime Minister Abbott have said the Government has a mandate to abolish the carbon price. That is because they were elected and abolition was their policy. As Ian McAuley said recently that assertion “completely misrepresents the complexity of political choice in a democracy”.

The website Politifact reported after the election that Galaxy gave 3220 respondents a list of eight options: the carbon tax was named as most important by 8 per cent, ranking behind leadership, budget, the "it’s time" factor and asylum seekers. Another exit poll conducted by JWS Research, commissioned by the Climate Institute, an automated telephone poll of 1591 voters, found "repealing the carbon tax" was the most important priority for just 3 per cent of respondents. A mandate?

As far as Minister Hunt is concerned the Government will not change its targets until it gauges the international response at the next UN Climate Summit, due to be held in Paris in September 2015. That excuse has been dismissed comprehensively. 


Developing countries have a special responsibility to take action and the fact that Australia leads the world in per capita terms in emissions is an added reason. And waiting another two years? How irresponsible is that? Another example of intellectual laziness.

That is not all of course. Increasing frequency and severity of storms and drought all over the world flowin g from rising temperatures make taking action more important than ever. Messrs Abbott and Hunt and others denied a link between climate change and the recent fires in New South Wales. The just released Intergovernmental Panel’s Fifth Report states clearly, as pointed out by Tristan Edis,  in one of its graphs that for each of the three scenarios extreme fire weather is a significant feature! 

This article is also posted on my website.

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