CPRS / ETS / “a price on carbon” is back. WTF!

The government never seems to learn. They nearly lost the election, they lost their previous leader, and the opposition lost their previous leader over a money spinning taxation mechanism called “a price on carbon”.

No second order mechanism has ever succeeded in their intended effects, and always have unintended consequences. Legislating first order effects is simply much cheaper for everyone, with far more certainty for investors and consumers.

Points in case:

• Cars are 40x less polluting than their 1970’s counterparts, not because we put a tax or trading scheme on noxious fumes, but mandated that exhausts had to be cleaned up.
• In Australia, incandescent light bulbs are hard to buy now, and soon will not exist. For most homes the savings from using CFLs and LED bulbs are modest, but over the entire population, this is a huge CO2 / energy saving.
• Leaded petrol, paints, and toys (mostly) don’t exist any more. Far less health issues now, saving the community millions of dollars and enabling everyone to be at their full potential.
• Insulation is mandatory, saving most folks 30-40% in kw/h on their heating and cooling bills compared to even 20 years ago.
• Mandatory water saving mechanisms (dual flush toilets, water saver shower heads, high efficiency appliances, etc) have cut average Victorian household water use from 450 litres per person per day in the 1980’s to around 150 litres per person today. If only we could get oldies to give up their climate inappropriate English gardens and grass, I think we’d make more in roads to way less than 150 litres per person / day.

Effectively, these first order regulations and effects have been 100% successful in their aims and outcomes. They usually saved the consumer a great deal of money, and cost the government little to nothing.

The price on carbon is simply a way to allow speculators to make billions, polluters not change a thing, kill the investment market in renewables and green technology, and all of us pay more for the same outcome – terrible and expensive climate change. The government of course, will make billions from selling permits to suckers not bright or powerful enough to get them for free.

As I’ve noted previously, the 80/20 rule should be applied source to sink on our use of fossil fuels and the carbon life cycle. Concentrate only on the things that can be easily changed for everyone by eliminating “does not scale” from the equation. It’s easier to shut one coal fired power station than it is to get millions to stop commuting every day, for example. No one or any industry should be exempt from this review. In my view:

• Using carbon based fuels should be phased out by 2025 as most cars last about 15 years. This gives time for the car makers to get serious about non-fossil fuel alternatives and the confidence that there will be a long term market for them. We need those fossil feed stocks for other necessary things, such as medicines, plastics and so on, and not to fritter away on cars or busses or planes. This would kick off jobs in electric car research and manufacture, as well as stimulate the economy in building re-charging stations and so on.
• Eliminate subsidies for high energy users such as aluminium smelters and concrete plants. They should pay the going rate for electricity so their products better reflect the actual costs of production and damage to the environment. There is nothing “eco” about aluminium or concrete.
• From today, the government should just fess up and legislate the inevitable – there should be no more coal or gas fired power stations built in Australia, and no more coal exports will be entered into. However, no coal power station will be forced to shut down within their designed life time. It was never going to happen anyway even under a CPRS as they were getting their polluting credits for free, so may as well let those who run them now get their investment back. Power stations have a long lag time, and we need time to build the necessary nuclear and renewable power stations to replace them. But we can make it a statement of fact that there should be no more coal. Investor confidence problem solved.
• The greens need to get off their anti-nuclear hobby horse. Nuclear power is clean and modern reactor design can use a lot more of the fuel reducing nuclear waste dramatically. It does require a lot of fresh water, but that’s also solvable in many parts of the country.
• Make it mandatory that houses are to be built with solar power, solar water heating, much better insulation, appropriate siting and design for their climate, and require ground heat pumps to reduce their impact on the grid. If a house uses 20% to 80% less electricity and gas, that’s not only savings to the owners but less public power required and many millions tonnes of emissions we didn’t emit during the life of such houses.
• Promote policies that dramatically reduce the requirement for folks to move large distances every day. There are so many it’s not funny, from enforcing urban boundaries and consolidation, telecommuting is the default work style unless required to be on site (say for manufacturing or retail sales), eliminating 99% of public servant flights for interstate meetings by requiring video conferences, public transport investment, change car registration to include a distance component as the major cost factor, eliminate car tax benefits for those who use their companies to buy luxury or even bottom dweller cars to enable a daily commute. There’s so many pro-commuting policies that need to be removed or changed. I’m sure you could think of many more that I’ve left out.

The last 20% of things that folks worry about but are hand waving at their best – things like useless status LEDs and clocks in consumer goods. Yeah, dumb design, but honestly, not going to kill the earth any time soon. Let’s not waste time on those now. There’s far bigger fish to fry, like using cold water to wash clothes rather than 50 C water, and eliminating the daily commute for at least 20% and preferably 80% of all workers. Since I’ve stopped wasting life and fuel going to an office, my fuel bill has dropped from using about 50 L a week before leaving Australia, to using about 30 L every two to three weeks now. This is a dramatic improvement in my quality of life (my commute is about 10 seconds from my breakfast), and a dramatic drop in fossil fuel use. We save at least $100 per month in fuel alone. Imagine if most folks could do the same? I realize that not everyone can telecommute, but I think the majority of the poor sods who go to CBDs to work in a souless life sucking cubicle every day could easily telecommute. That should be the default going forward. Working from home would revitalize the local shops, such as cafes and shops as more folks would be home during the day, again reducing the commute for the weekly shop instead of driving a long distance to the nearest mega mall.

Realistically, first order effects are simple, cheap and effective. They tend not to be fund raising mechanisms, which is why our government won’t choose them, but without first order changes to our policies and life styles, the planet is stuffed. Second order mechanisms such as a “price on carbon” just means we’re poorer because we’ll be paying 50-200% more for our electricity that still burns coal, with a polluter who has no reason to change their ways.

Let’s get some action happening, and not a price on carbon.