Cap-and-Trade Backflip (Australia)

Wall Street Journal Asia ^ | May 8, 2009

[reaganaut1]

Kevin Rudd likes to talk about showing moral leadership for the world on climate change. But the better example for other governments to follow is the Australian Prime Minister's backtrack on a costly emissions trading scheme.

Mr. Rudd announced on Monday that he will delay implementation of his trademark cap-and-trade proposal until at least 2011. With luck, that will be after the clouds of a global economic slowdown have started to clear and -- more important for Mr. Rudd's Labor Party -- after the next parliamentary election.

The draft Mr. Rudd floated in March would have imposed total carbon permit costs (read: taxes) of 11.5 billion Australian dollars (US$8.5 billion) in the first two years, starting in 2010. This would have increased consumer prices by about 1.1% and shaved 0.1% off annual GDP growth until at least 2050, according to Australia's Treasury. All for negligible green gain, since Australia accounts for only 1.5% of global greenhouse gas emissions. No wonder it's been hard to win support from business groups and individuals who earlier professed enthusiasm for cap-and-trade.

The proposed delay is widely characterized as a "backflip" and has caused Mr. Rudd a lot of embarrassment this week. He may yet push ahead with legislation in some form -- as he certainly promised to do when running in the 2007 election. But it's becoming clear the proposal won't be a shoo-in, despite all the votes Mr. Rudd won when he campaigned on environmentalism.

[Rembrandt]

Is this the same guy who entered office pledging to sign the Kyoto agreement. When he saw the actual, estimated annual costs, he put thumbs down on it.

[ChicagahAl]

"increased consumer prices by about 1.1% and shaved 0.1% off annual GDP growth"

Uh huh. Move the decimal a couple places to the right.

Rudd figured out the Earth is cooling and he doesn't want to go down in history as having presided over the death of his country, as Ø is doing.

[steelyourfaith]

 

Beam Me to Planet Gore !

[4rcane]

he knows it will hurt the economy, thus delaying it

[Nipfan]

He did sign Kyoto and made a big deal out of it.

The problem with this “back flip” is that Rudd still want the legislation to be passed this year and some of the changes he’s made, including delaying the start by a year, comply with what the opposition was proposing so its not impossible that they’ll get it through. If he had kept on his original course it would definitely have been blocked in the Senate. I still have all my fingers and toes crossed that we’ll dodge this bullet because its definitely not a done deal.

The one bright spot here is that more and more people are speaking out, and some of the mainstream papers, particularly the Australian, are starting to be more balanced in what they carry. Also, the release of Professor Ian Plimer’s book, Heaven and Earth: Global Warming, the Missing Science has made a big splash and increased the debate.