11
Jun
2014

Climate Change, Terrorism and Privatisation

The Fairfax press has continued  its attacks on Abbott through disputes over climate change policy (and ridicule), with today’s Age  even making what seems a ridiculous suggestion that Abbott is seeking an “alliance to thwart President Obama on climate change policy”. This does not mean Abbot is not seeking support from other countries, including his sympathetic host country, Canada, that have no carbon tax. But to suggest he is an alliance seeker is absurd.

It seems a pity, though, that Abbott is praising Obama’s proposal on the ground that he is taking “direct action” like Australia. He could better be using an article in the Washington Post which concludes that “whether it would affect the world’s climate is more questionable”. The author, Robert Samuelson (who I have met), is no right winger but, unlike some of our local media, he is critical of all proposals by governments which do not stand up to close examination. He points out that market forces have already reduced the electricity industry’s use of coal from 50% at Obama’s base line of 2005 to 39% in 2013, replacing it with cheaper gas. And the US Environment Protection Agency has predicted coal usage would fall to 31% by 2030. In short, the 30% target could well occur naturally and without what seems, as the author says,  a “hugely complex” operation involving state governments and likely legal actions. In short, the scheme seems largely symbolic and with little substance.

I have included below both the Samuelson article and, for comparison, two from the Fairfax press.

Abbott has also made an important address in Canada supporting intelligence gathering and implying that he will not be making any apology for doing so. This may be taken as confirmation that his meeting with Yudhoyono at the start of his trip did not require an apology and contrasts with Obama’s apology to Merkel for tapping her mobile.

The Australian reports that a study commissioned by the NSW Treasury and conducted by Ernst & Young  has found that States with privatised electricity (poles and wires) have experienced real reductions in electricity prices whereas States with government electricity have experienced large price increases. This publication of an in-depth analysis is a good example of what governments should do when they are considering major policy changes, as the NSW and Queensland governments are planning with regard to electricity. While there will be controversy over the conclusion, if handled well by the relevant Premiers and Ministers it should greatly help the two states in improving their finances and productivity.