Most people would be devastated to hear the boss declare their work to be “a complete waste of money”. Commonwealth Finance Minister Mathias Cormann said this about the Clean Energy Finance Corporation (CEFC), which has $10 billion of taxpayer money for issuing soft loans to green projects reliant on government subsidies. Yet the money-wasters at the CEFC, like those at the Climate Change Authority, have not batted an eyelid. Both are legacies of the Rudd/Gillard era, each reprieved by the unholy alliance of the ALP, Greens and Palmer United Party.
To maintain their faith in the hard-wired belief system that animates them, green activists deny anything that conflicts with their creed — empirical observation, for instance — while crafting from whole cloth supportive and bogus factoids to support their ongoing influence on the shaping of public policy.
This week, Professor Ross Garnaut, whose recommendations on carbon penalties were too extreme even for Julia Gillard, told a typically gullible ABC that Tony Abbott might enhance his chances of re-election were he to adopt carbon-light energy policies. He was apparently unaware that Abbott won the 2013 election by campaigning on precisely the opposite agenda, and that the Prime Minister is at present stoutly promoting coal, with its high carbon dioxide emissions, as key to a prosperous Australian economy and to poor countries’ development. Globally, coal has for decades been the fastest growing energy source and, green propaganda aside, will remain so.
Overlooking mountains of evidence to the contrary, Garnaut also told the ABC that the US, China and practically everyone else is doing more than Australia to force lower levels of carbon dioxide emissions. The US elections this week will impede any ambitions the Democrats have to implement carbon-reduction policies, with only 3% of Republicans reportedly accepting the theory of man-made global warming. Australia’s Coalition MPs have more warmists than this.
The direct cost to households of Australia’s now-repealed carbon tax are clear for all to see. They appear on electricity bills as a saving of about 9%. We still have the Renewable Energy Target (RET) which, if not abolished, will cost the economy nearly $30 billion. The effect of these and other measures resulted in Australia being pushed from one of the lowest cost energy countries to one of the highest – a typical electricity bill is now double that of its counterpart in the US, where such savings are testimony to the US having rejected vigorous carbon-abatement policies.
The Abbott government also has cut some of the wasteful direct spending on reducing carbon dioxide emissions. But it has also introduced its own Direct Action Program, with an initial pledge of $2.5 billion to be showered on companies that can produce evidence of reduced emission levels. Canberra seems unwilling to abolish or even to seriously curb the RET, in part because of the vast, rent-seeking lobby supporting the scam.
Other abatement costs are hidden — like, for example, Kevin Rudd’s measures that prevent farmers clearing land for productive uses, a policy that effectively appropriated private property. With this measure the Commonwealth colluded with state governments to destroy the market value of properties as part of signing up to the Kyoto agreement. Having the states undertake the regulatory seizure was a neat way of avoiding paying compensation under the “just terms” requirements for property acquisition enshrined in Section 51(xxxi) of the Constitution. This issue has been boiling for eight years, stoked by the likes of rebel NSW farmer Peter Spencer, whose case is to go before the NSW Supreme Court later this month.
Carbon policies also have a bearing on Victoria’s state election, set for November 29. The Coalition repealed the state’s costly renewable program, but buckled under green anti-fracking pressure and suspended all drilling for gas. Warmists parade gas as the “transition fuel” to a carbonless economy. Foreclosing its development will adversely affect all Victorians in years to come. Should Labor triumph in Victoria, as the polls suggest is likely, Labor would reinforce the ban on gas drilling while also threatening to reintroduce the state-based renewable program and establish intensified carbon-abatement regulations. Though Premier Denis Napthine’s Coalition has done little to unwind Labor’s legacy – its most significant boast is to have halved Labor’s spending growth – at least it would not take us backwards on energy policy.
Alan Moran is an economist with Regulation Economics