But to slash our emissions won't be a small cost to us as a nation.

That's where the double standard is. You consider the reduction in emissions from a global perspective to make it seem small, then consider the cost to us from a local perspective, to make it seem larger. You can't have it both ways. Your logic would support all kinds of selfish behaviour which is considered abhorrent in modern society.

All you seem to be proposing is a tax on carbon. That won't magically reduce our emissions.

Yes it will. Thought I wouldn't go calling it magic just because you don't understand economics.

You have admitted its total emissions that count, our emissions don't seem small - they are small.

So is the economic burden compared to the global economy. If a big change is made up of lots of small changes then the fact that each small change would only contribute a small amount is not a valid reason for not making the small change. Your argument might be jsutified if Australia was the only country making changes. We are not. We are one of the highest per capita emitters and we are lagging most of the developed world.

You don't deny the cost would be large on a local scale, especially if you rely on punitive taxes.

Taxes achieve the necessary change for the smallest possible cost.

Your proposing that by creating a phoney market where there is a cost on carbon then market forces will lead to the adoption of low carbon technologies.

Not quite. It will lead to a reduction in CO2 emissions, without discrimination for any particular method. I think the 'phoney market' slogan applies far better to trading schemes.

This may lead to all sorts of unintended problems, eg driving carbon emitting industries offshore.

This will only happen to a few industries and there are way to address the problem. Furthermore I am not suggesting we avoid international agreements.

If we are determined to reduce our emissions wouldn't it make more sense to mandate new 'clean' technologies.

No. You complain about the impact on the coal and steel industries. This would do far more damage. Clean energy technologies are a relatively expensive way to reduce emissions.

Energy taxes are regressive.

No they aren't. Whether a change to the taxation system is regressive depends on whether you use them to replace other taxes and if so, which ones. It also depends on how you spend the money, but the model I put forward is for a revenue neutral tax change.

There are only two ways to curb emissions. Either you introduce clean technologies or you reduce energy consumption. The latter only goes so far before you star reducing economic activity.

Those are two very broad groups. Improving efficiency will be far cheaper. Yes you are correct that eventually clean energy will become as cheap as we exhaust the cheap ways to improve efficiency etc. However, you should choose the cheapest options first, especially if you are cocnerned with economic impact. At any point in time, taxation will give you the cheapest transition/balance of the two strategies and all the componenet 'substrategies'.

You will also need clean technologies if deep cuts are to be made.

Taxes will achieve that for you. Whatever the extent of the cuts to be made, taxes are the best option, unless you want to go to a 100% reduction.

In any case you can also mandate for energy efficiency.

No you can't. At least, not effectively. There are millions of decisions made each day regarding energy efficiency all up and down the supply chain. There is no way for the government to get at the cheap options. You inevitably end up mandating expensive options while cheaper options go begging.

---

A timeline of climate change science

http://edition.cnn.com/2008/TECH/science/03/31/Intro.timeline/

LONDON, England (CNN) -- Climatology was once a small and often overlooked branch of science. But important discoveries made as the early 19th century have contributed to what is the most important field of scientific study in the world today. Listed below are some key dates in climate change history.


April 2008: Negotiators from 180 countries are attempting to draft a plan against global warming. According to a UN official these climate change talks could lead to the most complicated treaty in history.

1824

French physicist Joseph Fourier is first to describe a "greenhouse effect" in a paper delivered to Paris's Académie Royale des Sciences.

1861

Irish physicist John Tyndall carries out research on radiant heat and the absorption of radiation by gases and vapors including CO2 and H2O. He shows that carbon dioxide can absorb in the infrared spectrum, and it can cause a change in temperature. Tyndall famously declares: "The solar heat possesses. . . the power of crossing an atmosphere. But when the heat is absorbed by the planet, it is so changed in quality that the rays emanating from the planet cannot get with the same freedom back into space. Thus the atmosphere admits of the entrance of the solar heat, but checks its exit. The result is a tendency to accumulate heat at the surface of the planet."

1896

Swedish chemist Svante Arrhenius first proposes the idea of a man-made greenhouse effect. He hypothesizes that the increase in the burning of coal since the beginning of industrialization could lead to an increase in atmospheric CO2 and heat up the earth. Arrhenius was trying to find out why the earth experienced ice ages. He thought the prospect of future generations living "under a milder sky" would be a desirable state of affairs.

1938

British engineer Guy Stewart Callendar compiles temperature statistics in a variety of regions and finds that over the previous century the mean temperature had risen markedly. He also discovers that CO2 levels had risen 10 percent during the same period. He concludes that CO2 was the most likely reason for the rise in temperature.

1955

John Hopkins University researcher Gilbert Plass proves that increased levels of carbon dioxide could raise atmospheric temperature. By 1959 Plass is boldly predicting that the earth's temperature would rise more than 3 degrees Fahrenheit by the end of the century.

In the same year chemist Hans Suess detects the fossil carbon produced by burning fuels, although he and Roger Revelle - director of the Scripps Institute of Oceanography - declare that the oceans must be absorbing the majority of atmospheric carbon dioxide, they decide to conduct further research.

1958

Revelle and Suess employ geochemist Charles Keeling to continuously monitor CO2 levels in the atmosphere. After only two years of measurements in Antarctica an increase is visible. The graph becomes widely known as the Keeling Curve and becomes an icon of global warming debate and continues to chart the year on year rise in CO2 concentrations to this day.

1970

The first "Earth Day" takes place on April 22nd across America. Twenty million people participate in the event organized by Democratic Senator Gaylord Nelson. It follows and precedes a series of U.S. Department for Energy reports highlighting concern about global warming

1979

The first World Climate Conference is held in Geneva attended by a range of scientists and leads to the establishment of the World Climate Program.

1985

Scientists at the World Climate Program conference at Villach in Austria confidently predict that increased CO2 concentrations will lead to a significant rise in the mean surface temperatures of the earth. A hole in the ozone layer is discovered over Antarctica.

pjb05 wrote on Mar 23^rd, 2008 at 2:37pm:


OK, I have first hand experience with carbon trading, so 'hypothetically' here's how it works (at the moment). All real names are protected etc. Trading on the international market, one tonne equivalent of CO2  is worth about $13 at the moment. 'Australian Consolidated Fertilisers' produces a product which emits nitrous oxide, a greenhouse gas with a Global Warming Potential (GWP) of 310 (310 times that of CO2). Amalgamated catalysts manufacture low NOx catalyst technology which costs quite a lot, however stay tuned. When Consolidated Fertilisers buy the new catalyst, the GHG emissions drop below the baseline for that company. That means that they have carbon credits that they can sell.

Japanese Energy Giant Mitsui will purchase carbon credits from Consolidated Fertilisers, and the bottom line is that it's worth about $4 million per year to CF, which is quite substantial for a medium sized company. The technology supplier charges a (say) 25% royalty on the transaction, with payback in 5 years.

This is actually happening as we speak. Currently there are two types of credits available. EGC's (Energy Grants Credits) are the lesser of the two in value. I can't remember the other one offhand, but they are in short supply.

All this will change when the Australian Government bring in Carbon Trading locally in around 2010-11.

There is a net reduction in emissions due to the new catalyst technology. 

Now without being fired, that's as close as I can come to telling you how it operates. Carbon trading not only works - It's quite lucrative.

Muso do you know anything about the state based trading agreement here in Australia?

Also, I read in the paper that the Japanese government was buying emissions rights from some Eastern European government. Is it up to each country whether the emissions rights belong to the government or to private companies?

So it wouldn't be a problem if we implemented carbon taxes locally and the government rented out our emissions rights on the international market?

Emissions are lower than they otherwise would be without carbon trading. Obviously the extent of the reduction depends on how many countries join up and what the emissions levels are set at.

Carbon trading and technological mandates are not mutually exclusive. Furthermore pricing mechanisms will create the economic incentive for the changes you describe, but only after cheaper alternatives have been exploited. Pricing mechanisms remove the need for specific mandates.

The lack of reductions is down to the soft targets chosen, not the mechanism. The same lack of political will would hamstring a mechanism based on specific mandates, in addition to the extra economic damage they would do.