Emissions plan a meal unfit for human consumption

MITCH HOOKE
From: The Australian http://www.theaustralian.news.com.au/
November 09, 2009 12:00AM

US writer Calvin Trillin once wrote that the most remarkable thing about his mother was that for 30 years she served the family nothing but leftovers. The original meal, he said, had never beenfound.

When it comes to the Carbon Pollution Reduction Scheme, the Rudd government has been serving up the same inedible dish for 18 months. The odd garnish has been added, but the serving has not been altered. The flaws remain. The scheme, in its present form, is the gastronomic equivalent of three-day-old meatloaf.

A few weeks ago the Coalition suggested the addition of some new ingredients and the removal of others. The proposed dish was no gourmet offering, but at least it was palatable.

The revised emissions trading scheme was still going to be harder to digest than any other emissions trading scheme. Australian industries would be paying higher carbon costs than any of their competitors. Higher than in the European Union -- that celebrated home of emissions trading gastronomy -- and higher than anything contemplated in the US (where the authorities are still divided on whether an ETS is fit for human consumption).

But at least the economy would not choke on it. Jobs would be saved, investment protected and the competitiveness of key export sectors secured.

But it is increasingly clear that the Government’s master chefs have no intention of sharing their kitchen or changing their menu. Last Monday, 320 days after it released its 1000-page white paper on the CPRS, the government released its revenue-cost esti- mates for the scheme to 2020.

According to the new numbers, the scheme will lose $2.5 billion to 2020, even though it will raise a total of $115bn in the same period. (Oddly, these numbers were not available during the first Senate vote in June.)

Of course, those dishing it up will tell you that most of the money goes to big polluters: right? Well no, actually. Two-thirds -- about $75bn -- goes to households and motorists.

Suddenly, the chefs declared the ingredients in the Coalition dish far too expensive. The numbers confirmed the ETS meal was not the only thing the government had been cooking.

The numbers are as rubbery as a week-old calamari ring.

When Treasury remodelled the numbers they assumed a higher exchange rate and thus a lower carbon price. Suddenly $12bn disappeared from the scheme.

The numbers proved the Coalition amendments could not be accepted ‘carte blanche’, Climate Change Minister senator Penny Wong said.

Then on Friday, Kevin Rudd described anyone who didn’t follow his strict recipe for a CPRS as heretics and deniers. He pointed to a multinational conspiracy that was being orchestrated by a powerful minority driven by vested interests who were “quite literally holding the world to ransom”. But it wasn’t just those who questioned the science who were labelled deniers. It was also anyone who raised questions about the design of the CPRS or expressed concern about its effect.

Using this criteria, there are many deniers and participants in the global conspiracy.

They would include John Brumby, Anna Bligh, Nathan Rees, Mike Rann and Colin Barnett: all the state premiers and chief minis- ters whose governments commissioned work that showed the CPRS, unamended, would cost 126,000 jobs by 2020.

Even the commonwealth Treasury is implicated. Buried away in Treasury’s own modelling is an admission that under the CPRS (5 per cent reduction scenario) coal-mining output will be 35 per cent lower than it would otherwise have been.

Presumably even some of the CPRS’s staunchest defenders will concede that a one-third reduction in forecast output will mean thousands fewer jobs.

And is the global investment bank Morgan Stanley another unwitting stooge of this vast conspiracy? (That’s the group that’s been asked to take a look at the effect of the CPRS on the power generation sector.)

That would be an incredible double-cross play worthy of the KGB, as it was the federal government itself that asked Morgan Stanley to determine if the vested interests-deniers-conspirators were exaggerating the effect of the CPRS on their businesses.

According to well-sourced reports, the results did not quite match up to the conspiracy theory. In fact the report -- which the gov- ernment refuses to release -- is understood to vindicate those against the scheme.

Let’s get back to basics. Australia can still lead on climate change. But no one will follow our recipe if the dish gives us food poisoning.

In every kitchen in the country, there is an old-fashioned smell test that will betray any dish that is half-baked or beyond its use-by date.

The CPRS menu needs major revision, not minor tinkering. It’s as obvious as a dodgy oyster.

Mitch Hooke is chief executive of the Minerals Council of Australia.

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