Category: Carbon Pricing

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Australia Carbon Pricing Economics of mitigation

February 15, 2013 – the carbon bubble, will it burst?

Ten years ago, on this day, February 15, 2013, a journo for the Melbourne Age writes a piece about the then-all-the-rage topic of “unburnable carbon”

Energy analysts and activists warn that most of the world’s fossil fuels must remain in the ground, and that it can’t be business as usual for the industry.

Green, M. 2013. Bursting the carbon bubble. The Age,15 February, p.16.

The amount of carbon dioxide in the air was roughly 397ppm. As of 2023 it is 419ppm, but check here for daily measures. 

The context was

This “unburnable carbon”/”carbon bubble rhetoric was all the rage 10 years ago. It looked like the UNFCCC process was going to be a slow route back to feeling that the system could deliver. Copenhagen had been a failure, Paris was two and a half years off and it was still not clear that it would provide anything. So all those people who need to believe that there are levers and buttons in the policy sphere that we can push turn their attention to the idea that investors rather than statesmen could solve the problems; they just needed to be given stark advice that investing in stranded assets was a bad idea. 

How do you strand an asset? Well, ultimately, you need to have markets and regulations that make some investments,a bad idea and other investments a better one. How would you do that on carbon? Well, you would need a strong legally binding international agreement (which you can’t get), and therefore, we’re all toast. 

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What I think we can learn from this

Using one “part” of the financial system – whether it is the re-insurers, the insurers, the institutional investors as the leverage point, the secret push-this-button-to-change-the-system is a long-standing and soothing idea for a certain kind of climate-motivated person. Some of them are super-smart. This does not mean they are right.

Unburnable carbon as a meme allowed people to hold conferences, put out press releases, videos, get interviewed on Newsnight and podcasts and generally feel that things were still salvageable. Am I too cynical? My therapist says so.(1)

What happened next

You hear less about unburnable carbon these days, now that Paris and Net Zero are flooding the zone.

What do you think? Does this pass the ‘so what?’ threshold? Have I got facts wrong? Interpretation wrong?  Do comment on this post.

  1. As someone who read this before publication said – “I understand the dynamics of hoping there is a secret lever to pull, but in dismissing that at the same time as providing a psychological sort of explanation for why people keep coming back to this, you might be throwing the baby out with the bath water. There may not be a simple lever we can pull, but even if a mass movement formed which highly organized, highly effective and coordinated, competent, resourceful and dedicated, in the way you would like to see, it would still end up having to deal with the power of capital and would be highly involved in trying to pull these various “levers”

References and See Also

IPIECA on the concepts…

https://seors.unfccc.int/applications/seors/attachments/get_attachment?code=6IPYS06R1TK33GFX33NA3I1IDOJ9OHB5

July 2022 “Unburnable Carbon Ten Years On.”

Unburnable Carbon: Ten Years On
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Australia Carbon Pricing Uncategorized

February 6, 1995 – Australian business versus a carbon tax

Twenty seven years ago, on this day, February 6 1995, co-ordinated action to defeat a carbon tax was on display

 “As part of its media strategy, the network sent out a series of five news releases on 6 February 1995 under the banner Carbon Tax Threatens Regional Jobs. The releases focused on the regions that would be most affected by the introduction of carbon tax.”

(Worden, 1998: 87)

The Business Council of Australia press release is a corker. A carbon tax  “could jeopardise more than 47,000 jobs and $43 billion in production in the nation’s export energy industries” and have “a serious impact on Australia’s oil and gas, coal, metal products, petrochemicals, pulp and paper and cement industries” (Thomas 1995)

The amount of carbon dioxide in the air was roughly 361ppm. As of 2023 it is 419ppm, but check here for daily measures.

The context was

John Faulkner, the Federal Environment Minister, had a proposal for a carbon tax that would fund research and development of renewable energy. Business organisations hated this so they dusted off their 1990-2 playbook and improved it. Press releases from various actors were coordinated, to influence the minds of those people (especially ministers) who were attending two round tables on consecutive days.

What I think we can learn from this

When threatened (or merely feeling threatened), business is very good at putting aside their individual differences and presenting a united front. They have the resources, and Secretariat usually, to do that. Whereas those advocating for a better world tend to be running on the sniff of an oily rag.

What happened next

Faulkner’s plan was defeated. Australia didn’t get a price on carbon until 2012.

What do you think? Does this pass the ‘so what?’ threshold? Have I got facts wrong? Interpretation wrong?  Do comment on this post.

References

Thomas, C. 1995. Business Council Hits Plan For Carbon Tax. The Age, 7 February, p.50.

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Carbon Pricing United States of America

January 16, 2003 – Chicago Climate Exchange names founding members

Twenty years ago, on this day, January 16 2003, a “milestone” was reached. Oh yes.

CHICAGO, IL – Efforts to develop market-based solutions to global warming reach a milestone today as leading U.S. and international companies and the City of Chicago announce they will be the Founding Members of Chicago Climate Exchange (CCX®), a voluntary cap-and-trade program for reducing and trading greenhouse gas emissions. In an unprecedented voluntary action, these entities have made a legally binding commitment to reduce their emissions of greenhouse gases by four percent below the average of their 1998-2001 baseline by 2006, the last year of the pilot program.

Anon. 2003. Chicago Climate Exchange Names Founding Members. Business Wire, 16 January.

The amount of carbon dioxide in the air was roughly 375.5ppm. As of 2023 it is 419.

The context was that a bunch of people thought – or chose to pretend they thought – that we could trade our way out of trouble, and that those who were early and/or quick could make a killing, and be doing well by doing good.

Carbon trading as a substitute for actual action… Because, you know, it would be cheaper that way…

What I think we can learn from this

That trading schemes are going to cause a feeding frenzy for banks and legal consultancies, and keen-to-burnish-image customer-facing businesses. Smart people take a breath and try to separate the hype and froth from what is actually being proposed.

What happened next

Turns out it didn’t work.

“CCX ceased trading carbon credits at the end of 2010 due to inactivity in the U.S. carbon markets,” (wikipedia)

What do you think? Does this pass the ‘so what?’ threshold? Have I got facts wrong? Interpretation wrong?  Do comment on this post.

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Australia Carbon Pricing

January 6, 1995 –  Australian business interests battle a carbon tax with “nobody else is acting” argument

Twenty eight years ago, on this day, January 6, 1995, as part of a broad attack on a proposed carbon tax, business whined “yeah, but no other country is doing anything.”

”THE business push for a cautious approach by the Federal Government on greenhouse gas controls has been given a boost by a new study which shows only a handful of countries will meet their emission reduction targets.

The study, prepared by industry groups, shows only five of the 36 countries  which are key members of the International Panel on Climate Change appear likely to meet their greenhouse gas reduction targets by 2000.”

Dwyer, M. & Wilson, N. (1995). Study argues against $320m carbon tax. The Australian Financial Review, 6 January, p.5.  (See also the editorial – Anon. 1995. The trouble with a carbon tax. Australian Financial Review, 6 January, p.12)

The amount of carbon dioxide in the air was roughly 360ppm. As of 2023 it is 419

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The context was that Australian business interests had already defeated a carbon tax proposal in the lead up to the Rio Earth Summit, and were mobilising an even broader coalition of actors and ‘arguments’ (including our old friend ‘the sky will fall’ economic modelling) in this effort.

What I think we can learn from this

The fact that doing anything about climate change is a really hard collective actor problem is used to make climate change a really hard collective actor problem, and to ‘justify’ (excuse) doing nothing, and engaging in predatory delay.

What happened next

The business lobby effort was successful (for multiple reasons). The carbon tax was abandoned.  Attention switched to emissions trading schemes. No actual carbon price came into play until 2012. And was then swiftly killed off by the next Australian government. The emissions and the atmospheric concentrations? They climbed. Of course they did.

What do you think? Does this pass the ‘so what?’ threshold? Have I got facts wrong? Interpretation wrong?  Do comment on this post.

References

Dwyer, M. & Wilson, N. (1995). Study argues against $320m carbon tax. The Australian Financial Review, 6 January, p.5

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Australia Carbon Pricing

 November 16, 1994 – Industry lobbyists trot out “sky will fall” argument against emissions cuts. Again. Of course. As ever.

On this day, November 16 in 1994, in the midst of another flare up in the “should we put a price on carbon?” battles, the Aluminium industry released more “evidence”.

THE Commonwealth’s current targets for reducing greenhouse gas emissions will cost the economy almost $200 billion over the next decade, wiping out Australia’s aluminium industry in the process, a new study released yesterday claims.

Dwyer, M. 1994. Emission cuts ‘to kill aluminium industry’. The Australian Financial Review, 17 November, p.13.

[The amount of carbon dioxide in the atmosphere was 359ish ppm. At time of writing it was 419ishppm- but for what it is now,well, see here for the latest.]

The context was this – 

The fossil fuel lobby and its mates were determined to kill any carbon taxes/prices at birth. This was part of the effort.  Basically, find an economist willing to produce a “report” that shows the sky will fall, that the economy will collapse and we will all be reduced to living in mud huts and eating each other’s corpses if so much as a molecule less of coal/oil/gas is extracted.  Time the release of the “report”, give it to your tame mates in the media, then get tame mates in Parliament to quote the report and newspaper coverage. Bish bosh…

Why this matters. 

Think where we might have got to with political leaders with spine!!  We might be as much as 10 per cent less doomed than we are now!!

What happened next?

No carbon tax.  A carbon price in Australia didn’t kick in until July 2013. And then was killed off a year later.  Ha ha ha ha .

Categories
Carbon Pricing Europe

September 25, 1991-  European Commission proposes a carbon tax…

On this day, 25th September 1991 a carbon tax in Europe was proposed

“The other factor concerned the difficulties the [European] Commission has had in putting into practice the fourth arm of the strategy, the carbon/energy tax. The details of this tax were announced on 25 September 1991. It would be levied on the basis of 50 per cent on the carbon content of energy, and 50 per cent simply on the energy ,and would be set at US $3 per barrel of oil equivalent, rising to US $10 per barrel by 2000. However, by the time the details were announced, it had already become hampered, not least by highly intensive lobbying by European industry (according to the Economist, [19 May 1992: 91] the heaviest lobbying of the EC it has ever engaged in.”

Paterson 1996, p.88

On this day the PPM was

Now it is 420ish – but see here for the latest.

Why this matters. 

The basic things that needed to happen (or some of them) have been known for a very long time.  We couldn’t even get the basics right (thanks in large part to fierce and successful resistance by fossil-ised interests)

What happened next?

The tax got squashed by the diligent and determined efforts of vested interests

Categories
Australia Carbon Pricing

September 10, 2007 – shiny #climate promises versus grim reality

On this day, September 10, 2007, shiny declarations met grim reality.

“THE gap between doing something about climate change and talking about it was revealed yesterday. Before the ink was dry on the Asia-Pacific Economic Co-operation forum’s Sydney declaration on climate change calling for a boost in global energy efficiency, the NSW scheme designed to do just that was crashing.”

Wilkinson, M. 2007. Going global, crashing locally. Sydney Morning Herald, 11 September.

The NSW scheme was the Greenhouse Gas Abatement Scheme. Tits on a bull, chocolate fireguard, whichever you prefer…

On this day the PPM was 381.2. Now it is 421ish- but see here for the latest.

Why this matters. 

The good news of shiny declarations always wins out…

What happened next?

Marian Wilkinson wrote a book about “The Carbon Club”.

Categories
Australia Carbon Pricing Economics of mitigation

September 6, 2000 – Emission scheme defeated, it’s time for a gloating press release… #Climate #auspol

On this day, September 6, 2000, South Australian Senator Nick Minchin puts out a press release… I know, hold the front page, right…

But the context is that the first attempt to introduce a national level emissions trading scheme had just been defeated – with Nick Minchin largely responsible.  This was the semi-gloating declaration of victory…

Below is a quote from the ever-reliable Jim Green, writing in “Green Left Weekly”

The federal Coalition government has taken a number of decisions to reassure big business that measures adopted to reduce greenhouse gas emissions will have little or no impact.

Federal minister for industry, science and resources Nick Minchin outlined “specific commitments” to industry in a September 6 press release. They were:

●        that a mandatory domestic greenhouse gas emissions trading scheme will not be introduced “prematurely”;

●        that the government “will involve industry from the inception through to the implementation phase of greenhouse gas abatement policies and strategies that impact on the industry”;

●        that the government will work internationally “to get Australia the best possible greenhouse position”;

●        that the government will assist in “minimising the burden of greenhouse measures on business         through cost-effective actions”; and

●        that the government will not “discriminate against particular projects or regions in greenhouse policies and programs”.

“What we are saying to industry is that in any decisions we make on greenhouse, we will work to maintain their international competitiveness. This is a framework for the government’s greenhouse policy processes. These are all common sense measures that will allow Australian industry to grow and meet our Kyoto commitments. It’s good news for industry, which has warmly welcomed the government’s commitments”, Minchin said.

The government’s “specific commitments” are noticeably lacking in specifics. Canberra’s primary aim is simply to reassure business interests that measures to curb escalating greenhouse gas emissions will have little or no impact on their activities.

Green, J. 2000. Business warms to greenhouse ‘commitments’. Green Left Weekly, 13 September.

https://www.greenleft.org.au/content/business-warms-greenhouse-commitments

On this day the PPM was 367.15 Now it is 421ish- but see here for the latest.

Why this matters. 

There is inertia in human systems, but that inertia is often helped on its way by intransigence.  And that intransigence is not “stupid”. Underestimate the opponents of action at your peril…

What happened next?

Prime Minister John Howard got away with it for two more elections. Only in 2006-7 did this unravel for him.

Categories
Australia Carbon Pricing

August 9, 2001 – OECD calls on Australia to introduce a carbon tax. Told to… go away…

On this day, August 9, 2001, the OECD called on Australia to introduce a carbon tax. Was told to piss off.

CANBERRA, Aug 9 AAP – An OECD call for Australia to introduce environment taxes was today ruled out by the government and opposition despite support from rural backbenchers.

The Organisation for Economic Cooperation and Development’s latest report showed that Australia’s economy was faring well, and that a carbon tax would be a cost-effective way to benefit the environment.

“Setting up a trading scheme or a carbon tax of broad sectoral coverage is the most cost-effective way to achieve emissions reductions,” the OECD report said.

Environment Minister Robert Hill branded the call Eurocentric, saying the government was instead focused on building economic growth with a low-tax environment.

McSweeny, L. 2001. Fed – Major parties reject OECD call for environment tax. Australian Associated Press, 10 August

Hill’s “Eurocentric” line would later be deployed by his boss John Howard, when Nick “Stern Review” Stern was dismissed for being (checks notes) English.


The depths of banality and venality. It is staggering, isn’t it?

Fun fact – Matthias Cormann, who helped stop the Liberal Party do anything even remotely un-cray on climate in the 2010s is now head of the OECD. Oh how we laughed.

On this day atmospheric co2 was 369.78 ppm. Now it is 421ish- but see here for the latest.

Why this matters. 

A carbon price was not a communist conspiracy. It really wasn’t. And it would have, with other measures, made some difference, delayed the apocalypse by a few days/weeks/months. Oh well…

What happened next?

The Howard government kept on shitting on everyone’s future. The Rudd government said it would do better. Didn’t. The Gillard government got the climate legislation through, but in the process gave the Murdoch press and the wrecking ball known as Tony Abbott all the ammo they needed (but to be clear, no matter WHAT Gillard did, they were going to try to destroy her).

Categories
Australia Carbon Pricing

Feb 23, 2009 Penny Wong flubs the CSPR… The CPSR..  THE PCRS. Oh, hell. #auspol

On the day 23rd of February 2009, Australia’s climate minister, Senator Penny Wong – full disclosure, I knew her when we were both at Adelaide University – confused the policy that she was advocating the carbon pollution reduction scheme.

“Under pressure from the mounting criticisms about how the CPRS cancels out the benefits from individual emissions reductions, Wong responded on the ABC’s 7.30 Report on February 23 that individual reductions will allow the government to increase carbon targets in subsequent years. This prompted an incredulous response from Andrew Macintosh, associate director of the Australian National University Centre for Climate Law and Policy. “Either Wong doesn’t understand her own scheme or she is deliberately lying”, he wrote on Crikey.com.au on February 24.”

The context is this. The Howard Government, 1996 to 2007 had successfully resisted all calls to meaningful action and climate change and even meaningless stuff like an ETS, even from within its own cabinet. Kevin Rudd used this uselessness on climate change – or rather, this defence of fossil fuel interests, which is not useless to fossil fuel interests – as part of his branding, to become prime minister. And in 2008, a torturous, confused, complex, complicated and ultimately corrupted process to create a carbon pollution reduction scheme had unfolded. 2009 was to be the year when the legislation was pushed through and what Wong was doing was trying to sell it. But the CPRS was insanely complex and hard to explain. And I for one, taken with the idea of a very simple carbon tax which might be less “efficient”, but more effective and hard to game was the way forward. It was not to be… 

Why this matters 

Because when politicians make complicated proposals, they lose the public and the public thinks this is going to be unfair, there are going to be loopholes, the rich will get their way and the public is usually right. “And the policies are planned, which we won’t understand” as TV Smith sings…

What happened next 

The CPRS failed to get through first time in the middle of the year, as was expected, and then didn’t get through again in November, December. And therein lies a story….