Australia Now Has A Carbon Trading Scheme, But Nobody Seems To Have Noticed

31 thoughts on “Australia Now Has A Carbon Trading Scheme, But Nobody Seems To Have Noticed”

• In further news from Australia, putting a wig on a volleyball now counts as having a girlfriend.

  • Actually at fist I didn’t think putting a wig on a volleyball would work, but then I added a couple of more volleyballs and now, well, I think this relationship has legs. Or at least it will after I add a couple of salamis.

• ALL these cap/trade plan are broken in that they give away free a lot of credits to existing sources and only look at big sources. It is some much simpler, start charging $30/ton and raise it every quarter. Refund all equally to each person. Then there is a market for to cleaning up.

  • Why refund? I’d rather see its revenues used for a reform of the tax system. Reducing business rates and payroll taxes (which reduce growth and distort the labor market) and funding it by consumption side taxes such as a carbon tax are one of the few measure economists across the political spectrum agree on.

• Cap and trade schemes are fundamentally flawed. The credit allocations are typically so high that prices collapse and tightening supply is a mug’s game.

  Reduce the volume of credits too slowly and the scheme collapses. Reduce them too fast and you risk choking growth. And of course, the rules are often too complicated and full of loopholes.

  The simplest, fairest and most efficient system is a flat tax per unit of carbon dioxide equivalents. Let it start at a low level and then tighten gradually according to a schedule clearly set out in advance. And please make it inflation-linked to avoid a US gas tax style disaster.

  • Why not just reduce the volume of credits in line with a country’s international commitments, or science-motivated targets? RGGI and California (or now California+Québec) seem to be going this way.

    And so what if prices are low, like in Europe, CA/QC and RGGI? Doesn’t that mean that technology and other mechanisms are reducing carbon emissions more cheaply than anticipated? Isn’t that a good thing?

    • No. The low price of carbon credits has no relation to the cost of reducing emissions.

      The volume of free credits allocated, especially to former Eastern Bloc countries, is such that there is an oversupply of credits. Not a single company has to buy so many credits that reducing carbon emissions is worthwhile (of course, other factors like high electricity prices are causing demand to fall, but no faster than it would have without cap and trade).

      There is no ‘science-motivated’ way to calculate the optimal rate of decline (that is, the rate that results in maximum carbon mitigation without fundamentally harming or distorting the economy). It’s always a bit of a judgement call.

      Cap and trade is a complex mechanism that is highly vulnerable to even small changes in technology or economic conditions. It also has the not insignificant weakness of hurting only the largest emitters. A focus on industry and electricity generation, areas where emissions are falling anyway, does nothing to address the increasing role of individual households and their seemingly minor lifestyle choices (eating a steak, for example). Oh, and in its European implementation it also gives a lot of leeway to former Eastern Bloc countries by calculating against Soviet era emission levels.

      A flat carbon tax spreads the ‘burden’ of reducing emissions equally and unambiguously. It is simple, predictable and does not discriminate.

  • The US has had very good results with acid rain and NOx (Northeast regional) cap and trade programs.

    California has been running a cap and trade CO2 program for a couple of years. We’ll have to wait to see if this one is properly administered.

    • If you want a example of a not perfect but excellent carbon trading scheme by world standards, just look at Australia’s. Or rather it’s ghost since it was stabbed to death by Tony Abbott. Pity that.

    • The clean air act is 25 years old and should have been enacted long before that. Emissions from America’s industrial heartland were having international consequences and Canada lobbied long for action.
      You are right, though, that it seems to have been fairly effective at reducing SO2 and NOx emissions.

      • Sorry the clean air act is actually 50 plus years old I believe the cap and trade part is from about 1990.

      • “seems to have been fairly effective at reducing SO2 and NOx emissions”

        Right. Cap and trade has worked in the past. It’s also been not so effective at other times.

        The bottom line is that a well run system would likely work. That’s not to say that there’s not a better approach, but let’s not automatically dismiss cap and trade.

        • It reduced SO2 emissions and NOx emission but did not significantly reduce the burning of coal in spite of incentives.
          Yes, a good cap and trade program could be effective. A carbon tax is a little different though and is a little indiscriminate.

        • The purpose was to clean up coal. Not to eliminate coal use.

          Let’s not play drag the goalpost.

• From brief research it appears that gasoline is much higher in price in Australia than in The U.S.A. Also true in Canada.
  In Canada this is due to high taxes and I suspect this is also most of the reason in Australia.
  This constitutes a very effective carbon tax that is unprecedented in the U.S. as far as I am aware.
  It seems that Australia also has high electricity prices and, if most power is from coal or other FF, then this has the same effect as a carbon tax.
  Canada’s electricity is largely produced by hydro and other renewables and as such a carbon tax would have little effect on GHG from that source.
  Both Canada and Australia are major exporters of FF and as such their economies could be negatively affected by a carbon tax.
  The U.S. is in a totally different situation as a major importer, and carbon taxes in other countries would act as protective tariffs. Is it any wonder that that some Americans encourages carbon taxes for other countries while being slow to implement their own.
  Finally the whole point is to reduce global temperature increases.
  I think that it is generally accepted that carbon taxes in Canada and Australia would not lead to a measurable or even a noticeable difference.
  It seems to be reasoned that CO2 is the major driver of anthropogenic global warming. Yet the only evidence would seem to be a weak correlation and physics that show CO2 as absorbing heat. There is not much evidence of climate sensitivity to these tiny amounts of CO2. There could be more important anthropogenic forcing, and there is certainly other factors at play.
  Is it any wonder that governments are unwilling to take drastic actions that may have little positive impact and possibly severe negative impact

  • Blink…Blink… Okay. I will just point out that Australia had a carbon price for two years. It reduced emissions. And it had basically exactly the effect on the economy that was predicted. It was one more demonstration out of many that a carbon price is the most efficient way to reduce greenhouse gas emissions.

    • A carbon tax does nothing to lower GHG. It is the reaction to the carbon tax that has the effect.
      It is a typical activists (leftist) response. Find and identify a problem and then punish everyone who is perceived to be creating that problem.
      That punishment is usually to take some money away from them, destroy their livelihood, or restrict their access to something.
      Many environmentalists perceive everyone to be the problem so therefore we must punish everyone indiscriminately.
      Why do you Think your Carbon Tax is gone? I think it is probably because it was widely unpopular.
      Most people are aware of the need to reduce the dependence on FF. I have not heard a lot of general resistance to subsidies for improving the efficiency of homes and transportation.
      Programs in Canada for improving home efficiency (often enhanced for low income people) had wide use and I never heard of any resistance to them.
      Try a system of rewards and leave the punishment for real criminals.

      • “A carbon tax does nothing to lower GHG. It is the reaction to the carbon tax that has the effect.”

        Read that over to yourself a few times, Rocky. Slowly if needed….

        • Interesting. In 1878 the Colony of Victoria perceived that Ned Kelly and his gang had killed three police officers and they set about to punish everyone that that perceived to be creating that problem which was Kelly and his gang. When they finally caught up with him they took away his mobility by shooting him in the left foot, the left leg, the right hand, the left arm and twice in the dick. And then after his trial they took away his life with a rope. So I see that justice in Australia was, and is, thoroughly leftist according to rockyredneck. I wonder what they do in countries where the justice system isn’t thoroughly leftist?

        • I have never heard of a Mountie (Canadian for Royal Canadian Mounted Police) shooting a perp in the dick to slow him down. Could be real effective though, especially if he was mounted. On a mare that is.
          Oh, Canada is socialist country, compared to the U.S.A, but many of our current governments are slightly right leaning. We are just too polite to point it out to them, hoping they will straighten up by themselves.
          No I don’t think Australia is left of center. I think it is rather south.

        • Well, an umbrella doesn,t stop the rain, and speed signs are seldom obeyed to the letter, but perhaps that is not really an apt corollary.
          Dang, that might not be the right word either.

  • Rocky
    Just to add to what Ronald has to say. I differ with almost every conclusion that you reach. There is an international price for oil and in most countries refinery costs are similar, so major variations in the price of gasoline are the result of subsidies in a few countries and significant taxation in many countries, including the EU, Australia and Canada. To some extent this tax has worked as a partial carbon tax and, most obviously in the EU where the gasoline taxes are significantly higher than Australia, this has worked to encourage fuel efficient vehicles as compared to the US. Increasing taxes on gasoline will in the long run also assist the adoption of EVs. I am therefore fully in favour of a gasoline tax, however it does nothing to reduce the use of fossil fuel for the generation of electricity, which is the single largest contributor to Australia’s carbon footprint and therefore does not serve as a replacement for a carbon tax.
    Australia, the US and Canada are amongst the highest emitters of CO2 on a per head of population basis. It is neither fair nor practical to expect countries such as China and India to limit their emissions of CO2, which are at much lower levels per head of population, if the high emitters are not prepared to take serious steps to reduce their own emissions.
    Australia’s high electricity prices are mainly the result of high distribution costs, inefficiency, monopolies and errors in forecasting future demand. High prices have had some effect in reducing demand, but they do nothing to encourage a switch from fossil fuels to renewables. Australia has limited hydro, but it is blessed with excellent wind and solar resources. Studies have shown that encouraging and increasing wind and solar power would actually lower electricity prices and benefit consumers, but the existing generators would suffer losses and closures, hence the resistance and political lobbying. A sensible and progressively increasing carbon tax not only assists in the changeover from fossil fuelled generators to renewables, it also reduces the government’s budget deficit.
    I am not qualified to argue with you on the details of the science of anthropogenic global warming, other than to say that the overwhelming majority of relevant scientists do consider that the increase in CO2 levels is the most significant cause of the global warming that has indisputably occurred over the last half century and that a continuing increase in global temperature will have catastrophic consequences for mankind and that for me it is unbelievably stupid not to accept those warnings when the remedy is known and achievable. At worst, even if all these scientists should be wrong, the remedy is no more than payment of an insurance premium for a risk that did not eventuate. However, even then, it is not money wasted, the remedy will still have immediate short term benefits to our health, through a reduction in pollution and probably also to our economies, through innovation and renewal resulting in increased economic activity.

    • Okay Henry, I expected to get a more vitriolic and unreasoned response to the last part of my comment. However it is only alarmists who predict catastrophic (open to definition) consequences.
      You are right that nobody disputes the warming that has occurred in the last century or for that matter in the last several thousand years. The degree of warming is small however and we are not certain it will continue.
      Most people agree that some degree of warming in the last century has been caused by human activity. And most would even agree that much human activity can have negative effects on the planet and on people.
      Many people and many scientists feel that anthropogenic CO2 is accelerating global warming. There is no real experimental proof of this and only weak observational evidence. There does, however, not appear to any other obvious culprit.
      Finally, it appears the earths average temperature is actually much higher than today if you go back a few millions years (about 20C compared to todays 14.5C). It also appears that life was abundant during the warmer periods, (the Cambrian explosion, the age of the dinosaurs).
      You mention relevant scientists. Is this an attempt to gloss over the fact that very few scientists are qualified to make judgements about the climate. In fact, with a cursory search, I could only find three climatologists among the authors of the 2014 IPCC report.
      I agree with you that we need to reduce the burning of FF, or for that matter, the burning of anything. I definitely do not agree with you that carbon taxes will have the desired effect, or any more than a short term reduction in CO2. The economics will just adjust to allow for burning. They will simply be too painful for too many people.
      I am not commenting without providing an alternate solution. Please read my response to Mr. Brakels

      • a) There is quite significant experimental proof for the effect of greenhouse gases, and there’s of course a historical association between temperature and greenhouse gas concentrations as shown by isotope studies from ice cores and sediments.

        b) You are correct in pointing out that present day temperatures are not exceptional by historical standards and that the increases predicted due to global warming still fall short of the warmest periods in the earth’s history. However, the rate of change is faster than it has ever been in the geological record. That, rather than the absolute size of the increase, is what worries those involved in biology (including crop scientists and plant breeders such as myself).

        c) Climate change’s most damaging consequences are not due to the temperature increase or even due to its direct consequences such as sea level rise. The really worrying part is the effect of even very small and local temperature fluctuations on the distribution of water in both space and time. It doesn’t take much to alter the course of the moisture rich layers of air that have sometimes been called ‘atmospheric rivers’ and that underpin many of the world’s most productive agricultural systems.

        In my own field, plant breeding, drought tolerance is already becoming the biggest single area of research because that is what farmers are increasingly demanding. The 20th century was about developing crops that could feed an explosively growing population; the 21st is about developing crops than can provide steady yields under stress conditions (principally drought, but also a few others like mild salinity and heat).

        Quite apart from drought, temperature change also has considerable effects on crops. In greenhouse studies, a very mild temperature increase of just 1,5°C over current average reduced yields by nearly 5%. Not disastrous, but enough to matter.

        Of course, breeding for temperature tolerance is easy – but only at the expense of other parameters such as nutrient use efficiency or yield.

        d) All authors in the IPCC reports that contributed to the sections on climate change are qualified, peer reviewed researchers. Climate change is not studied just by climatologists (most universities don’t have a chair called ‘climatology’ but use more general terms for historical reasons). The vast majority of climate research is done by people who have a chair in fields like geology, physics or eco-physiology.

        • Ice core samples do not go back a significant period of time and correlation does not establish cause and effect, Some studies indicate that warming precedes increases in atmospheric increases in CO2.

          Some scientists doubt the validity the conclusions from ice core sampling. Notably Dr. Zbigniew Jaworowski

          You are of course right, that water and its distribution is by far the most significant factor.

          Water vapor and clouds are also the most significant greenhouse gas, by a wide margin. CO2 can really only be significant as a driver in that regard.

          The problem is that we don’t have a very good understanding of the role of water vapor in the atmosphere and if it can contribute to warming or cooling under different circumstances.

          You are partly right about change in the climate. We don’t really know if the current (barely measurable) acceleration is unusual or not. Assuming it is , can lead to many other assumptions, which may or not be true.

          That warming will have a negative affect on crop production relies on the assumption that the same crops will be grown in the same areas. Even now corn is being grown further north and replacing much lower yielding crops such as wheat and forage.

          Your point of breeding for climate tolerance is one that is probably far more achievable than reducing atmospheric CO2 levels without drastic and damaging consequences.

          About the science, climatology is a young field, and usually it has been a part of geology. Most scientist must rely on the studies of the few directly involved. Peer reviewed is often thrown at me as an argument for validity. It only ensures that a degree of proper scientific protocol has been followed. Conclusions can only be supported by much other study or experiment. Most contrary conclusions are also peer reviewed, although I must admit there is a lot of pure B.S. on the internet, from both sides.

        • “That warming will have a negative affect on crop production relies on the assumption that the same crops will be grown in the same areas. ”

          Rocky, spend a little time studying a world map.

          As we lose the fertile farm lands of North America we would need to move northward into areas with poor topsoil. Europe would be looking at rocky mountains and swampland. South America and Africa do some major tapering as one moves pole-ward.

          As we overheat our present agricultural lands we push ourselves into a real problem of places to grow.

          There is no soil underneath the Greenland ice cap.

        • Bob
          I live in the north and do not have to rely on maps. I do not see the same issues as you do. You underestimate the vastness of the North American prairies or the North Asian steppes.

        • You thinking floating gardens or will we live on watercress sandwiches? Without the bread.

        • a) Ice cores go back long enough, but you’re right they don’t go back as far as you’d ideally want. Which is why there’s stable isotope analysis from sediment layers – some of which go back as far as the fossil record.

          b) Mr. Jaworowski’s claims were disproven in their entirety by peers such as professor Oeschger. Even the journal that initially published his work no longer stands by his claims. A quick look at a database like Web of Science will also show the rather… limited number of citations he receives.

          c) Water vapor is more important, but its presence is limited by simple physical principles (e.g. saturation volume). CO2 concentrations have no hard cap and are thus one of the few climate parameters that can vary outside of very narrow ranges. Your claim that we don’t understand its distribution is curious – the papers I’ve read seem to disagree.

          d) No, crop scientists like myself do take into account that some crops can simply move northwards. The problem with that idea, however, is twofold:

          – The stock of agricultural land experiencing increased drought stress dwarfs the limited acreage of land that will lend itself to productive agriculture as the climate warms.

          – Those northern areas underwent little or no pedogenesis. That means they’re worthless to agriculture without extremely expensive interventions and decades long waits.

          Is breeding for climate adaptation easier than mitigating climate change? Yes and no. We’re hugely successful at breeding for mild stress tolerance, so adapting to a 2° or even 3° warming is indeed easier than preventing it.

          We’re on course for more than that, however, and no credible crop scientists believes we can keep yields intact beyond that sort of increases.

          As such, you won’t hear me joining the ‘two degrees at all costs’ crowd, but a more gradual emissions reduction is necessary.

          I’d also like to note that maize cultivation has moved northwards not due to climate change, but due to the breeding of strains that have improved tolerance to cold stress (something maize is notoriously susceptible to, as are most C4 plants).

          e) Peer review is indeed proof of proper methodology, but also of other factors (were data not manipulated? Was the sample size large enough?). With well over 99,8% of peer reviewed publications agreeing on climate change, we have a winner (for comparison: there is currently a weaker consensus on the idea that cancer kills people).

        • I keep having to repeat that I am convinced that our climate is warming. But the science community foresees a wide variety of possible outcomes, from a few that see no negative effects to a few that see major catastrophe.
          Your statement that northern soils have seen little or no pedogenesis is unsupportable. There may have been less biological action but glaciers ground countless tons of rock into nutrient rich clays that only need a few different farming techniques and favorable climate to be highly productive. The desert sands of the American southwest have seen even less pedogenesis but are highly productive if irrigation is available. The limitations to agriculture in the north has always been primarily climate.

          The saturation point for atmospheric water varies greatly with temperature. A good thing, or we would never see rain or snow.
          I don’t think it has been clearly established that there is a connection between global warming and drought although I am sure it could cause local or seasonal changes in precipitation.
          There are several ways to estimate past climates. Ice cores are only one. The accuracy is arguable for all but ice cores do offer a more direct way of measuring CO2 levels. In all cases,however, we must assume that there were no local effects, and when you are measuring amounts of only a few hundred parts per million the difficulties are obvious.
          I admit that new varietie have had the greater influence on moving crops northward. But experience and direct observation has convinced me that a warmer climate is contributing as well.
          Everybody agrees climate change is happening. The disagreement is on what kind of change, how much change, how fast a change and of course what effect the change will have. Your 99.8% means nothing.

• Senator Nick Xenophon and I don’t quite see eye to eye on everything, but I believe in giving credit where credit is due, so I went over to his house this morning to play a congratulatory game of touch as a way of saying thanks for improving the the Coalition’s Direct Action policy that is still a compete and utter train wreck. But he said he couldn’t come out to play because he wasn’t feeling well and he thought that maybe South Australia’s wind turbines had given him cooties. Yes, that’s right, Senator Nick Xenophon, a grown man, actually believes that despite the complete lack of evidence wind turbines can have negative health effects on people who live near them or even not particularly near them. I wonder if he believes in underpants gnomes as well? But I did say that I should give credit where credit is due, so here it goes:

  Nick Xenophon: Better than Tony Abbott.

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