The economic consequences of decarbonisation
A common observation in the cowboy movies of Hollywood of a bygone era was “White man – him speak with forked tongue.”
That line would today more accurately read “Green man – him speak with forked tongue.”
The forked tongue is most brazenly manifest in the economic forecasts which the carbophobes put forward as the consequences of decarbonisation. When Ross Garnaut, sometime prophet of climate doom, was prescribing his remedies for preventing climate catastrophe, he was predicting only marginal reductions in our GDP, reductions which in his eyes were more than compensated for by the assurance that climate catastrophe would be averted.
The Commonwealth Treasury, under the watchful gaze of Ken Henry, came to similar conclusions, justifying them on the basis of what their economic models were forecasting. These models failed to predict the global economic crisis, but more seriously had previously been unable to get within a bull’s roar of predicting the economic outcome for 11 of the previous 13 budget years Thus these assurances did not soothe anyone who remembered these facts.
Debate has been focussed on the employment consequences of the Rudd Government’s “Carbon Pollution Reduction Scheme” (CPRS) legislation. For example, the PM himself, speaking to the ALP’s federal conference on July 31, said:
The climate change sceptics constantly scaremonger about the possible loss of jobs through the transition to a lower carbon economy.
But they constantly fail to talk about the new clean energy jobs of the future which will arise from the introduction of the carbon pollution reduction scheme, the renewable energy target and energy efficiency measures in the future.
The debate about employment is really beside the point. In the 19th century, the world which the Greens wish to recreate, unemployment was generally low. When economic crises came, as they did in Victoria in the 1890s, bread winners sailed over to the goldfields of Western Australia and sent home remittances to keep their families going in the suburbs of Richmond and Collingwood.
The Green’s real ambition was described by Peter Shergold, John Howard’s head of PM&C, in a speech he gave on 14 June, 2007, two weeks later after the release of the report which Howard had commissioned in December 2006. This report recommended the introduction of an Emissions Trading Scheme very like the scheme now before the Senate under the CPRS legislation. Shergold said:
This is the one thing on which I think we are pretty clear: that we are not necessarily sure on what the government should do, but we are bloody certain what the government shouldn’t do. And what the government shouldn’t do is simply use the revenue to subsidise the power bills of individual households. In case that sounds a bit mean, think about what we are trying to do here. We are trying to change the behaviour of industry and households.
There we have it. We [i.e. the chattering classes] are trying to change the behaviour of households.
You bet we are. We want to shut down the coal burning power stations of the Latrobe Valley and the black coal fields of NSW and Queensland, because they are polluting the planet. They are, in religious terms, unclean, and must be abjured. People will just have to get used to doing without electricity.
When it is argued that cities like Brisbane, Melbourne and Sydney cannot survive without electricity, the answer is that renewables – wind and solar will take their place. Ross Garnaut, in his first report, famously used the economists’ tin-opener approach. An economist is cast adrift on a desert island, and finds a tin of bully-beef that had drifted ashore. But no tin opener is to hand, so the economist solves his problem with the words “Let’s assume a tin-opener.” In similar fashion, Ross Garnaut blithely assumed the existence of new, unknown forms of electricity generation to take the place of coal-based power stations at roughly the same cost.
Wind and solar are fantasies in the Green mind. Where they have been seriously tried, as in Spain, the costs have been prodigious and the impacts on employment calamitous.
The political consequences of cities suddenly finding themselves without electricity, a very real prospect in Melbourne as the Latrobe Valley generators are facing bankruptcy next year, are serious. My prediction is that not a single Labor seat in Melbourne will survive the next election should this happen.
Kevin Rudd is now facing the sorcerer’s apprentice dilemma. The apprentice has used the magic words “climate change” to achieve a political end, but now the broom keeps on bringing the water, and the house is flooding. Only by blocking the CPRS Bill in the Senate can the Liberal Party play the role of the sorcerer who returned just in time to prevent disaster.
Ray Evans is secretary of the Lavoisier Group and has written a number of tracts, articles and speeches on the Global Warming movement, its doctrines and strategies.