CO2: The debate gains credibility

After years of discussion, craven retreats, wild exaggerations, and lashings of good old fashioned political duplicity on both sides, Australia has finally legislated for an emissions trading scheme.

So says Mark Kenny on The Drum.

Here in Australia, the political debate about carbon emissions has waxed and waned over at least the last decade. Various schemes have been proposed by both major parties, but nothing has been brought before the House. All that changed at the last election, when a hung parliament saw the formation of a coalition between Labor and the Greens, giving a bare one vote majority in the House of Representatives. Leveraged by the Greens and taking account of the best advice from science and Treasury, an Emissions Trading Scheme has been formulated. Many studies, endless committee meetings and countless volumes of hot air have culminated in our Federal government passing the legislation by the smallest of margins: two votes (which would have been just one vote, had a member of the opposition not been barred from the chamber for twenty-four hours, on the night before the vote).

Naturally, the opposition coalition of Liberal and National members has expressed outrage, concern, contempt and all the other moral discomforts they self-righteously lay claim to. Little in this life can match the hilarious spectacle of politicians scrabbling for the moral high ground, as though we, the peepul, are silly enough to associate politics with morality.

It is an interesting situation. Our lower house, the House of Represenatives, is coming up for re-election in 2013 and current polling shows the Labor/Greens coalition in woeful condition. An election today would see the Liberal/National coalition win in a landslide. The leader of the opposition, Tony Abbot, has pledged to repeal the legislation if he gains the prime-ministership at that election. However, our upper house, the Senate, is comfortably dominated by Labor and the Greens. Even if Abbot comes into power in 2013, he will face a hostile Senate, which will block any attempt to repeal the ETS. Some calculate that the earliest the ETS could be dismantled is 2018, some six years after it comes into force. By that time, it will be structurally difficult, if not impossible, to unpick the threads.

One reason it will be difficult to repeal the ETS is that the legislative package ties in tax breaks for low income families. To drop the ETS would mean increasing taxes for 60% of the population and that would be an unpalatable pill for a government to swallow. Thus, we are going to see an unpopular government bring into force a regime to address climate change in such a way as to make it almost impossible to dismantle. Those who support climate change action are delighted and those, led by the Murdoch press, who think the whole climate change debate is a conspiracy, are stridently calling for the Government to resign and put the whole ETS package before the peepul at an election. Clearly, the Government is not going anywhere and, unless the balance changes before the activation date of 1 July 2012, we Australians will have made a small step towards moderating climate change due to human CO2 emissions.

Pretty good outcome, considering the political landscape here in Oz.

A Funny Shade Of Green

Australia has announced a new tax on carbon pollution, which will morph into an emissions trading scheme in 2015. Key players in setting this tax have said:

"My message to Australians today is we are now moving from the days of words to deeds. We are going to get this done. We are going to have a clean energy future."
- Prime Minister Julia Gillard

"What's the point of all this? This is a redistribution pretending to be compensation, it's a tax increase pretending to be an environmental policy. It's socialism masquerading as environmentalism."
- Opposition Leader Tony Abbott

"It's effectively great green action day for this nation."
- Greens leader Bob Brown

The mechanism will be to apply the tax to emissions from about 500 of Australia's top polluters and use the revenue to compensate taxpayers and key industries for the inevitable price rises.

Its stated intention is to encourage polluters to clean up their acts, by finding ways to reduce their emissions, to reduce Australia's total emissions by 5% by 2020 and by 80% by 2050.

This noble sentiment is undermined by Government figures showing that the effect on domestic emissions will be negligible and carbon reduction targets will only be met if carbon credits are purchased overseas.

As can be seen, Australia's total emissions will actually increase under this scheme, although by not as much as if the scheme was not in place. The reduction targets assume that there is a carbon market overseas from which credits can be purchased and that those credits can be audited to prove they are legitimate.

Tony Abbot, Leader of the Opposition, claims that the carbon trading schemes currently operating around the world have been open to scamming and fraud, bringing into question whether carbon credits obtained this way will reflect 'real' carbon pollution reductions. How this will be policed is yet to be explained.

The carbon pollution reduction scheme - a tax followed by a cap-and-trade market - has been cobbled together by negotiation between the Labor, Greens and key independent members of parliament. Labor does not have enough seats to govern in its own right and relies on this uncomfortable series of alliances to hold onto power.

The details are similar to an earlier scheme proposed by the now-deposed Prime Minister, Kevin Rudd. Rudd lost the top job in a party reshuffle before the last election and the new PM, Julia Gillard, promised the electorate that there would be no carbon tax introduced by a government she led. She was forced to renege on that promise due to pressure from the Greens after the election, as they are vital to her having the numbers in the House of Representatives and hold the balance of power in the Senate. Naturally, this has opened her to the charge of having lied to the electorate, which is a barrow being pushed energetically by the Opposition.

So, apart from the politics, what does this new carbon tax mean?

On a global scale, not much. Australia emits only 1.5% of the world's CO2, so anything we do will have negligible direct impact on climate change. Any reduction here will be swamped by the huge pollution increases expected from China and India. The fact that we have a carbon trading scheme, however, will add weight to world-wide calls for action on climate change. How much extra weight we will provide in this way is hard to calculate. On the one hand, we are a small economy and small polluter. On the other hand, we are an advanced economy, with very high per capita emissions. Perhaps our example will help tip the balance toward a global emissions trading market and the Utopia of genuine global emissions reductions sufficient to affect the trajectory of climate change.

On a domestic scale, the effects of the scheme will be widespread and may be profound. Economically, increasing the costs of electricity and carbon fuels will flow through the supply chain, resulting in increases to the Consumer Price Index (CPI). Government figures show the impact will be a 0.7% increase at the inception of the tax in July 2012. The Government has promised that tax cuts and pension increases will compensate many households for increased costs of living, although relatively higher income households will not be protected and can expect to be about $1000 per year worse off. How this will play out in future, as the carbon price rises and international trading in carbon credits comes into the mix, is not clear, but the pessimist in me sees businesses becoming uncompetitive, jobs being lost, government revenues shrinking and the compensation mechanism being overwhelmed.

Domestic politics will become polarised over the new carbon tax and it is expected that the next election will be a referendum on whether Australians agree with it. Labor will have a hard time explaining what is a complex and fundamental change to the economy; Greens will be laying on with a trowel their vision for a carbon free future; the Opposition (a Liberal/National coalition) will be picking it to pieces and have already promised to repeal the tax if they win the next election.

So, is this the first step toward a brave new world, or a calamity wrought by left wing tree huggers? At the end of the day, we as individuals must become accountable for our carbon footprints, if we believe the scientists who tell us that human pollution is causing climate change. By reducing our consumption in a high carbon economy, we can reduce our burden on the planet. One way to force a reduction in consumption is to increase prices, which the carbon tax will do. There are so many exemptions and compensations that the pain will initially be slight, but the genie will be hard to put back in the bottle once it is released.

I expect the direct and flow-on costs of living will continue to be pushed upwards by this policy, so I hope the results will approach the Utopia of a greener Earth.

Of course, as Peak Oil bites, our consumption of oil based commodities will be reduced by both price and availability, so the associated pollution will reduce in consequence. Government figures do not factor in this gratuitous improvement.

No carbon credits were emitted during the creation of this blog.

Germany wants nuclear exit by 2022

So says this story I read today. Apparently, they have some older nuclear power plants which were shut down in the wake of the Japanese disaster and they have decided not to restart them. In addition, they are claiming the remaining nuke plants will be decommissioned by 2022.

Wow. Great. Excellent move. Greens the world over will be celebrating and many of us will be pleased that the nuclear industry is losing its prominence in a leading world economy. No matter the reassurances about safety, it is impossible for a large fraction of the world's population to regard all forms of nuclear energy as anything other than a capricious and potentially evil genie.

The question which nobody is answering is: what is going to replace nuclear energy in Germany? It is all very well to move away from nuclear, as long as you have an alternative in the wings. The prospect of going back to high-carbon energy sources like coal, oil and gas will not fill the bosoms of the Greens with joyful well-being. Wind farms and photovoltaics can take up some of the burden, but they don't work without wind or sun, so cannot provide base load power on those cold winter nights. Unless Germany has another technology in the wings, it seems that a return to highly polluting fossil fuelled power plants is inevitable.

The alternative, of course, is for Germany to de-industrialise to the point where green power sources are enough for the population to get by on. Will that happen? Will Germans settle for wood fires, candles and a primitive lifestyle? Of course not. I suspect no government would have the intestinal fortitude to propose such a course, as it would provoke a civil uprising.

Thus, I am of the opinion that this is a populist move by a government which needs the support of the Greens and others with an anti-nuclear agenda. When push comes to shove, when the fossil fuel shortages start to bite, I suspect the government will quietly shelve this altruistic policy and the nuclear plants will be taken out of mothballs. Let's face it, industrialised economies are addicted to the consumption of energy and it has to come from somewhere.

So, Germany, nice headline, but I don't believe it.

Only renewable energy was used to power the fingers which typed this blog.

Who Is Enemy Number One?

It is now widely accepted that US forces have removed Osama Bin Laden from the world stage. Whether assassinating him was a wise move will play out over the next few months. There is a school of thought that bringing him to trial would have been seen to be a more moderate response: what we have been told about the final confrontation makes us wonder whether he could have been captured alive. However, the action was taken and the stage has been set for his followers to express their feelings in the usual way.

What that leaves us with now, though, is a Public Enemy No. 1 vacuum. While Osama was alive, every red-blooded, freedom-loving, democracy-supporting, flag-waving citizen of the developed world knew instinctively that Osama was the one we were out to get. Now, who will take the focus? Will we continue to fuel the fires of evil by putting another middle-eastern warlord at the top of our list?

Let us look at the alternatives.

Religion has always been a convenient excuse for evil deeds. The major religions each claim they have exclusive access to The One True God and, therefore, everyone else is godless. The godless are wasting God's valuable time and resources, so each religion does its best to convert 'em, or kill 'em if they refuse to see sense.

Today, there is a perception that the world is divided into Muslims and Everyone Else, but this is not the whole truth. Muslim extremists certainly make the western press when they commit acts of violence against non-Muslims, but there seems to be even more bloodshed inside the Muslim camp when the extremist Shi'ites and the extremist Sunnis argue amongst themselves. The unrest in several Muslim countries at present is all internal, characterised as Muslim democrats seeking freedom from Muslim oppressors. In Palestine, the two major Muslim factions of Hamas and Fatah have only recently settled a peace between themselves and it remains to be seen whether they can unite to present a single face to the world. The concept of Islam as being a single force is purely a Western invention.

The Western focus on Muslim extremists is playing into the hands of those who want to increase friction between Muslim and non-Muslim, polarising the world and, in some twisted fashion, justifying even more friction. The sad truth is that, on both sides of the supposed divide, the vast majority of people have no hatred and would happily live together in peace, if only they were allowed to. Most of us are more interested in making a living and looking after our families than in the dubious views of a few psychopaths. In the Western world, no better example exists than Ireland, where people of peace finally managed to cleanse themselves of the evils perpetrated in the name of Catholic vs Protestant.

No. Religion has had its time in the spotlight of Public Enemy No. 1. What else is there?

Politics, of the non-religious kind, is a fervent hotbed of contrary opinions. Surely we can find a politician who needs to be hunted down and eliminated? We are all aware that politicians are universally labelled as corrupt, greedy, self-serving and ignorant, but the truth is that most of them are working very hard at a thankless job. Why they choose to get into politics is an interesting question for psychologists to answer, but remarkably few do it for the money. The majority are clever enough to have achieved pre-selection at some level inside their own party machinery and have put aside a successful career or business in order to run for office. Here in Australia, our Prime Minister had a distinguished career as a lawyer before entering parliament. Lawyer jokes aside, it is difficult to believe that she earns more as PM than she did before the courts and we are left to assume that she is in politics for some other reason.

Certainly, around the world there are politicians who are misguided, corrupt or malicious and they need to be brought to heel by their people, but no-one living seems to leap out from the pages of history as a creature so evil that they need to be given the ultimate accolade as Public Enemy No. 1.

No. Politics, like religion, has its share of rotten apples, but lacks anyone of such evil persona that they deserve the title.

Having eliminated politics and religion, we are left with Business and Culture. Can we find an Osama substitute in either of these spheres?

Business is a likely candidate. The scum-suckers who triggered the whole GFC thing by selling junk mortgages as securities should have been at the top of our list, but that damage has been done and a seek-and-destroy mission against them now would smack of revenge more than justice. Presumably, the people they deceived once will not fall for their tricks again. If there is a risk of another GFC due to the current activities of other scum-suckers, they are keeping their activities so secret that we will not know enough about them to place them at No. 1 until the sky starts falling again, by which time it is too late.

No. The whole point of Public Enemy No. 1 is that their elimination will prevent current or future actions on such a scale as to darken the history of our times. If religion, politics and business provide no current candidate, we must turn to culture to throw up our next evil mastermind.

Culture covers sport, drama, music, writing and fashion, as well as a slew of lesser topics such as architecture and its fellow traveller, design. In spite of the opinions of sports fans, no single sports-person or team really deserves the label 'evil'. Bad, yes. Incompetent. Cheating. Obnoxious, arrogant, overpaid and corrupt, perhaps, but not up there with Osama. In the field of drama, there are some awesomely bad performances and the bulk of movies produced today would be better left on the cutting room floor, but evil is too strong a term for them. Music follows a similar line, although the person who invented elevator music should be hounded to an early grave, but not as No. 1. Writing could incite bad behaviour in some susceptible readers, but generally only in the fields of religion or politics, which have already been covered.

Fashion, then, must be the key. Our next Public Enemy No.1 is lurking in the shadows of the tattoo parlour and the catwalk. Who will it be. Is it the person who told our kids they look cool in hoodies? What about the one who conned young blokes into wearing their trousers with the waistband down at the level of their genitals? A prime candidate must be the one who is still telling fat girls they can wear shorts. What about the idiot who made up the fiction that body piercing looks sexy?

All the above are worthy of our contempt, if not pity, but none comes close to my personal Public Enemy No.1. I submit that the greatest threat to our civilisation is the person who continues to brainwash us into believing that we can continue our carbon fuelled ways with impunity; who tells us it is OK to get into our massive SUV to travel two blocks; who makes us think that the latest, fastest, biggest, noisiest motorcycle is a suitable vehicle for us to use to commute to work in the city; who leads us into blind belief that we can still feed the world when crude oil becomes scarce and expensive. Who is this person? It is each of us, all the greed and self-interest within which lets us ignore the facts and instead pursue the goal of more of everything.

Forget about everyone else. You are your own worst enemy, unless you have the courage to face truth.

All words in this essay have been crafted from recycled after-dinner speeches.

We are a plague

Humanity has exceeded its natural place in the order of things and its population is unsustainable by any measure. Countless millions of square kilometres of virgin ground now lie suffocated under the paving and paint of our cities. Countless species have taken millions of years to evolve, only to be exterminated by the unthinking juggernaut we call progress.

It all has to end sometime. The crazy merry-go-round of civilisation is falling apart at the seams. Mad carnival music plays harder and spruikers shout their spiels louder in an attempt to drown out the cries of pain from our planet. As passengers on this insane carousel, many of us are becoming frightened by the blindness of those at the controls. Can't they see that we cannot keep going faster and faster without something breaking?

We are, of course, supporting the adventurers through our apathy as much as through any active agreement with their aims. We suppose that "they" know what "they" are doing. We suppose our own knowledge, experience and common sense are somehow inferior to those of the cabal at the controls. We sit back and let others do the work, as has been the case since the first cave-person sat back and watched another scribble on the walls. We conspire merely by failing to oppose.

Let them eat cake. Let them tidy up their own messes. Let them figure out how to shut down the damaged nuclear power plant in Japan. Let them solve the puzzle of how to rebuild towns and villages obliterated by the tsunami. Let them sort out the Libyan problem, the Afghan problem, the Palestinian problem. Let the unknown "them" develop a magical replacement for oil, now that Peak Oil has come and gone with hardly a headline. Let the overworked "someone else" keep our industrial technologies powering at full steam ahead, to keep food on our tables. Just don't expect "us" to do anything to help.

No threatened species were exterminated by this blog. Well, no interesting or cute ones, anyway.

Advance Oztrailier Fair (or pretty reasonable, anyway)

For those of you who have the misfortune to not be Australian, today is Australia Day. It is the day when our nation pats itself on the back for being the best place on Earth, full of the best people, who are full of themselves. By mid-afternoon, a good percentage of the population will also be full of alcohol, which is supposed to indicate some kind of macho male superiority in the males: I do not know what it indicates in the females. Sitting in front of the telly, watching our favourite sports, eating fatty food and drinking high-carb beverages, we congratulate ourselves on being a land of bronzed and fit pioneers who can ride horses, raise cattle and shear sheep.

It is all hogwash, of course. Australia is about the most urbanised country on the face of the planet. The number who really can ride horses, raise cattle or shear sheep is vanishingly small. In fact, the fraction of the population having any knowledge of important survival skills, like gardening and how to wear an Akubra hat, would scarcely rate a slice on a pie-chart of national aptitudes. We can all drive cars, however, because the distances involved in getting anywhere interesting from anywhere else make walking or cycling the pastimes of the lunatic fringe.

Our recent tragic floods have galvanised those involved into great acts of generosity, supporting each other with what we Okkers term 'Mateship'. Now, mateship is a vague catch-all phrase covering anything considered noble in the spirit of humanity. Give a stranger $100 in normal times and you are suspected of being a deviant, but give a stranger $100 now and you are regarded as a Good Bloke (or Blokette: mateship is not gender-specific).

As is the way of human nature, there are some who are taking unfair advantage of all the handouts and generosity, but we speak of them, if at all, in the most scathing terms, as Bludgers. The Bludger is the lowest form of life: lower than the cockroach, lower even than pond slime. The Bludger is too lazy to expend effort to get ahead and prefers to sit back while others do all the work. This is not the same thing as the Battler, a person who has little and is doing it hard, but (at least in this version) is nobly uncomplaining. The difference between the Bludger and the Battler is that the Battler enjoys the dignity of being seen to be deserving of a helping hand. Battlers do their best with what they have, in spite of whatever handicaps stand in their way. Bludgers just expect others to take care of them and constantly have their hands out, wanting something for nothing.

Australia Day is all about honouring The Mate, sanctifying The Battler and trying to stifle The Bludger. The trouble is, each of us is partly all of these things. The times ahead will be interesting, for the effect they have on the relative proportions each of these national traits come to occupy in the body politic. When energy becomes fearsomely expensive, bludging may become unprofitable. It will become a case of "work or starve" for most of the population and the few who are able to be carried by the labours of the many will have to justify their existence, in ways and degrees unheard of at present. Even mateship may become unfashionable, in a society where getting enough food for myself and my family could be a higher priority than looking after the battlers.

Nobility of spirit may be the luxury of an affluent society. The Battler may be the eventual winner in our game of survival, where a willingness to work will be more important than the mere possession of labour-saving technologies. An axe will be more valuable than a pen; a horse-drawn buggy will have more value than a fossil-fuelled vehicle. An understanding of the seasons will pay better than a specialisation as a banker; knowledge of soil fertility will feed more mouths than having a thousand followers on Twitter. Wearing out the knees of your jeans will become more socially acceptable than wearing out the seat of your best trousers. Washing clothes using river stones will be more affordable than stone-washed denim.

As we celebrate Australia Day, I wonder how many more there will be before the crash. Carry on drinking folks, carry on over-eating, carry on being life's spectators. As for me, I have to go out and weed the garden.

A small sample of what is to come?

Here in Queensland, Australia, we are in the midst of the worst flood crisis in recorded history. Lives have been lost. Billions of dollars will be needed to replace and repair the damage to property and infrastructure. The city of Brisbane, population two million, has a drowned CBD and thousands of inundated homes today. In Ipswich, near Brisbane, the Bremer River rose 19.5 meters, or 64 feet in American money and flooded huge areas.

Out here in rural Queensland, flood waters have devastated many towns and isolated others. My home town has been cut off for days and supplies are running out. Milk, bread, flour, all the basic essentials have disappeared from the shelves of our four supermarkets. Empty shelves, empty bakeries, many shops closed. By some miracle, the electricity is still on and broadband is still available.

Petroleum products are running out, because of panic buying. How do I know it is panic buying? Because, with all the roads closed, there is nowhere to go! Queues were long at all the pumps yesterday and 'Sold Out' signs were starting to appear.

What does this tell us?

For one thing, it tells us that scarcities will be made worse by hoarding and panics. For another, it tells us that communities have become utterly dependent upon reliable shipping and road transport to function normally for more than three days. Thirdly, it makes us realise how valuable our larder and fuel supplies become, which makes them attractive targets for those who face doing without.

In case you were concerned, we are doing OK. The freezer is full, the pantry is full and we have electricity. For now. If we are prudent, our supplies could last us a month, although losing electricity would be a big hit to our fortunes. But it does give us furiously to think. We are better off than many, because we had just completed our monthly shopping, but it is only by luck that we are this well prepared.

We are not prepared for totally doing without liquid fuels or electricity for more than a few days. We are not prepared to be self-sufficient for long periods. Like most people, we are not prepared for a permanent change to our expectations of life's essentials being in bountiful and cheap supply.

This current crisis will soon be over and people will become complacent once again. Until next time. Until the big one hits. Until the coming crash.

Philosophy prospers with a dry bed and a full stomach.

Will we fall off a cliff, or stumble down a slope?

This morning, the oil price reported at www.oilprices.com.au is $90.47, with the range for the twelve months being $66.50 - $90.47. It doesn't really matter which currency we use, or the oil market we watch, because it is the long term trend which tells the story. Oil is at historically high prices and there are no economic indicators which seem likely to place downward pressure on the market. The slow-down in the world wide economy is acting as a mild brake on consumption in some countries, but in the developing economies of China and India, the foot is still firmly on the gas pedal.

We know the age of cheap crude oil is over. We know demand is increasing. Therefore, we know that prices will continue to rise. That means the price of fuel for cars, trucks, aeroplanes, ships and tractors will continue to rise. The cost of generating electricity and heating the home will rise, where they are dependent upon oil. Railway locomotives will cost more to run, whether they are diesel or electric, so rail freight and passenger transport prices must rise. The cost of growing or mining primary products, transporting raw materials, manufacturing goods, transporting these to shops and even hauling them home is going to rise, with the rising price of oil multiplying the problem at every level.

As consumers, we will have to demand higher wages, in order to pay the increased price of everything we consume, which will, in turn, force prices up. Those dependent on welfare, or on fixed incomes, have been the first to suffer, as their ability to survive is steadily whittled away. In many cases, their incomes are increased each year in line with the official inflation rate, but this chapter of Dr. Chris Martenson's 'Crash Course' should make it clear that the official figures do not necessarily reflect reality. If Dr. Martenson is right, the poor, the weak, the huddled masses are being officially victimised. How does that make you feel? Remember what mass poverty did in revolutionary France, in revolutionary Russia, in Germany after the First World War. If you are not concerned about this, you are probably part of the problem.

We are in a time when the prosperous middle classes of developed economies are suffering from the US housing bubble and the global financial crisis. World economies are dependent upon these middle classes to consume the goods and services which contribute to growth. When they stop buying, the whole structure of international finance starts to crumble. We have seen this happening before our eyes in our nightly news and financial pages, but have we realised the full implications?

I think not. I think most of us are happy to stick our heads in the sand and trust that "they" will sort it out. The trouble is, "they" have lost control. "They" can only meet debt by going further into debt, adding fuel to the fire. "They" can only oil the wheels of commerce by printing more money, effectively devaluing every dollar you already own. If it were possible to get out of debt by borrowing more money, everyone would be doing it and many have tried to do it by using one credit card to pay another. It doesn't work for families and it doesn't work for countries. Sooner or later, no more credit will be available and debts will have to be repaid. When there is nothing in the piggy bank, the borrower will default and the value of the debt will evaporate.

This is the real danger we face: the collapse of wealth. The rising cost and increasing scarcity of crude oil is important to the equation, but oil will not be our downfall. Insupportable debt is what will write the epitaph to Western greed.

When it happens, it will either happen suddenly, with catastrophic results, or it will be a slow decay from robust youth to feeble old age. Personally, I expect debt defaults to start as a trickle and turn into an avalanche, which will cause the relatively rapid destruction of the world we have thought was stable and have taken for granted.

Where will you be when the avalanche comes?

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