Webdiary - Founded and Inspired by Margo Kingston

Too little, too late. Rudd should recall just what got him into government. The superficial media analysis this week that Labor won office by promising to bring down grocery and fuel prices is wrong. Pressures on household incomes was an element in its pitch but it was nothing compared with WorkChoices and Rudd's argument that Australia was adrift, wasting opportunities on productivity, the development of industry, education, climate change and water. This week, with Nelson engaging in psychotropic imaginings of 500-metre-long service queues, Rudd could have revisited those themes. If voters were willing to listen to them last year, they'll listen even more intently now. That's why they made him Prime Minister.

Shaun Carney is right to ask the Prime Minister to recall why we voted for him.

It was the inaction of the Howard government over a decade that has put us in such a vulnerable position. If Howard had acted earlier on climate change and peak oil we would be much further down the path to energy reform. We could have been manufacturing fuel efficient cars in Australia today. If we had increased the price of fossil fuels earlier we would have had time to change to more efficient use and alternate fuels. Instead Rudd is having to make the harsh decisions now. Let's hope he has the courage to act and overcome the factions and power brokers who will try to block his every move.

But Rudd is the Prime Minister, and terrifically popular. He seemingly has the nation's ear, but the best he can come up with is a counter-stunt.

Here we are, a fortnight after Labor's debut budget and the national conversation has stalled: not on some high principle of reform, but the question of whether Kevin's 2c-a-litre saving from FuelWatch is more meaningful to motorists than Brendan's 5.5c-a-litre cut in fuel excise.

Rudd was puzzled, perhaps even irritated, in April when The Weekend Australian posed the question of substance: "Will he become our first federal premier, a master of the media cycle who ultimately runs a do-nothing Government?"

George Megalogenis in the Australian.

As the petrol debate burns out of control, why isn't Rudd taking command of the situation? There is good reason for the oil price to soar: we are running out of cheap oil and world demand is increasing due to the growth of China and India. The price of oil needs to go higher so we will use it more efficiently. We are living in a world where the number of people who can afford to drive cars is increasing rapidly. Oil is a finite resource: if people choose to drive gas guzzling 4WD's they they should not be too upset if they pay a fortune for the privilege.

If the new Labor government really wants to help the battler it should reduce the taxes on fuel efficient cars, cars that will save the average motorist about $50 a week not $3 as promised by Nelson and his mates. The less fuel we use the less GHG we produce. It is an easy message - why is Rudd not out there spreading it?

Most Australians would be happy to pay higher fuel prices if they thought the tax money collected was being used to enable them to drive fuel efficient vehicles, vehicles that would help keep transport costs affordable.

Rather than increasing the tax on luxury cars, the Government could have raised it on cars with higher emissions. And what sort of signal does the Government think it is sending by means-testing the subsidy for installing solar panels? Certainly not one that has anything to do with encouraging people to do their bit to combat global warming.

Three weeks ago, Climate Change Minister Penny Wong said tackling the problem "is not a choice between a no-cost option and an option with costs. It is a choice about whether we take responsible action now or wait and face much higher costs and worse impacts in the future." They are fine words, but so far that is all they are.

The Government is waiting for the report it commissioned from Ross Garnaut before it makes significant decisions, including on an interim and more meaningful target than its present one of cutting emissions by 60per cent by 2050.

In the meantime, it should be getting us ready for the age of carbon constraint. Instead of raising expectations of cuts in petrol and grocery prices, it could be encouraging Australians to start making the adjustments now to a future of higher petrol and food prices and bigger power bills.

Has Rudd forgotten climate change?

Did he ever understand peak oil?

All this debate over 5 cents a litre for fuel is a joke. Instead of getting down in the gutter with Nelson and his mates, Rudd could have been encouraging Australians to make the necessary adjustments to a future of higher petrol prices. What does he think Ross Garnaut is going to say about petrol prices?

Rudd is risking his credibility by ignoring the bleeding obvious: we have to get used to the increasing price of fossil fuels.

I feel most flattered that Samantha Maiden's Oz blog this week is titled How green was my Government. Worth a read, too.

Jenny Hume: "Now here was I, Paul, just recently saying that I think these days there is far less in common than there once was - in every aspect, not just economic. Australia has its own unique identity now, whereas for a long time we seemed to be nothing more than a clone of the US.

Oh, I definitely think Australia has its own identity - it'd take a brave man to say otherwise.

I think these things come down to personal perspective. It'd be a very interesting topic, that's for sure.

Martin Ferguson's dreams of liquefied coal fuelling our cars, and of exporting Victoria's dirty, wet coal, are a climate nightmare that can only appeal to those whose eyes are filled with coal dust. They are trying to hold back the tide of history, maintaining the coal age when the solar century has already begun. King Canute wisely proved a thousand years ago that no one can stop the tide.

Those of us who can see clearly have noticed that Australia is richer by far in sun, wind, hot rocks, waves, and brilliant ideas, than in coal. Where some see only a threat to the resource based status quo, we see an exciting future in which imagination is the key resource.

Senator Christine Milne is the Greens' climate change spokesperson

Senator Milne is right: Labor's vision is blinded by coal dust. The coal industry is swimming in cash from the increase price of coal.

Coking coal prices for export to Japanese steel mills are set to more than treble to $US300 a tonne, The Weekend Australian Financial Review reports.

The increase will create a windfall for BHP Billiton and will add as much as $24 billion to Australia's exports this year, the paper reports.

Tight supplies will increase contract prices for the year beginning April 1, 2008 from $US98 in the fiscal year just ended.

The coal industry doesn't need extra cash to develop clean coal technology - their pockets are overflowing with cash.

The sunrise industries urgently need capital to grow.

Labor needs to leave the dark age of coal behind and see the light of renewable energy. The new era has begun and it is time our politicians were made to understand the potential we have to lead the world forward.

Donald A. Brown, Associate Professor, Environmental Ethics, Science, and Law Penn State University, Program on Science, Technology, and Society writes:

In summary, global warming threatens many of the things that humans hold to be of most value, i.e., life, health, family, the ability to make a living, community, and the natural environment. The ethical duty to avoid risky behavior is proportional to the magnitude of the potential harm. Because climate change is likely to cause death to many, if not millions of people, through heat stroke, vector borne disease, and flooding, annihilate many island nations by rising seas, cause billions of dollars in property damage in intense storms, and destroy the ability of hundreds of millions to feed themselves in hotter drier climates, the duty to refrain from activities which could cause global warming is extraordinarily strong even in the face of scientific uncertainty about consequences

Therefore, the nature of the risk from climate change is enormous and using scientific uncertainty as an excuse for doing nothing is ethically intolerable.

The fact that there is wide spread cross-cultural acceptance of the idea that one should not engage in risky behavior that could cause great harm to things which people attach great value to is clear from the acceptance of the “precautionary principle” in a growing number of international treaties including the 1992 United Nations Framework Convention on Climate Change (UN, 1992, Article 3). Under the precautionary principle embedded in the binding climate change convention, nations agreed not to use scientific uncertainty as an excuse for not taking cost-effective action. This is an additional ethical reason why scientific uncertainty cannot now be used by nations as an excuse for refusing to make reductions to their fair share of safe global emissions. That is, in addition to the ethical reasons given above, a nation may not break a promise made to other nations in the United Nations Framework Convention on Climate Change to not use scientific uncertainty as justification for non-action on climate change.

To do nothing is ethically intolerable. To do next to nothing which seems to be the Rudd policy on climate change is also intolerable. We must act now to reduce our greenhouse gas emissions.

Australia's transport sector is caught in a dilemma: it must drastically reduce greenhouse gas emissions, but the means to do that is years away, according to a climate change specialist.

Ben Wheaton, a partner in climate change services at PricewaterhouseCoopers, said greenhouse gas emissions from transport were growing at the fastest rate in the country, faster even than agriculture. Australian Greenhouse Office figures show that transport constitutes 13.5% of Australia's greenhouse gas emissions.

There was nothing in the budget to stop green house gas emissions from transport. We could have given tax incentives to vehicles with low greenhouse gas emissions.

Australia, as a nation, is highly dependent on energy resources. In addition to being one of the world's largest exporters of coal, Australia's per capita energy consumption is one of the highest in the world, with a heavy reliance on fossil fuels. Australia has a higher dependence on fossil fuels for electricity production (90%) than most other countries or regions in the world.

Together, household electricity use and motor vehicle use by households, accounted for over 30% of Australia's energy-related greenhouse gas emissions.

The way for most Australians to reduce their greenhouse gas emissions is to put solar hot water and a solar panel on their roof and drive a fuel efficient car.

We need financial incentives to make the changes.

The first Rudd/Swan budget was a disgrace. We are doing next to nothing and that is ethically intolerable.

Jenny Hume: "Well Paul, daily living costs in this country are pretty steep and taxes are a lot higher than in the US."

What you'll likely find is that when everything is taken into consideration (health, education, welfare etc) affordability evens up (to some extent) for at least the medium income.

You'll also find that Australia will move toward a lower income tax regime going into the future. The reasoning is simply that globalization has made it this way (irrespective of income tax laws). That's why the great carbon tax scam is finding its way so easily. It's a tax that can't be avoided for great numbers of people. Added to that the loses that will come about through Chinese and Indian competition (they'll have no such scam taxes).

Australia signing onto this scam is of little importance to the world. Why it becomes important is because it adds extra pressure on the United States to do likewise - and really that's what it's all about. Mr Rudd didn't receive such a warm welcome recently because people really care what Australia is doing - it's more the message Australia is giving to somebody in particular.

Australia and the United States have a lot more in common than many would like to admit. This is especially so in this new world of globalization. It's clear from recent announcements just how much importance the Australian government really places on changing the environmental scene - as opposed to the tax scene. It's also clear they'd like the United States to follow them down this dead end path. For what real reason I ask you?

Note: The UK Government no longer even speaks about climate change. Strange what an election can do to ones green principles, eh?

Jenny Hume: "I would think it highly unlikely that many on less than $100 000 under similar pressure would be prepared to invest in solar even with the subsidy. The benefits of savings in household electricity costs only come in the longer term so families are unlikely to outlay $20 000 in the current climate and Rudd knows that."

Well yes, solar will only show a cost benefit when prices triple - of course by then for most (non rich) it'll be too late.

If carbon taxes aren't the new century scam I believe them to be, the government will sign a legally enforceable prospectus detailing just how much it's all going to cost (pdf here). What have they got to hide being honest? It's not as if people will suddenly change their mind, is it?

On another note: I just cannot believe how easily billions of dollars (Australian taxpayer money) can be placed in a fund. Does anyone even know how these funds will operate? I mean, will the government even be accountable for the decisions the fund managers (appointed by the government) make? Can the government even be questioned about the decisions?

Seems to me that Australians aren't always as skeptical (or as questioning) as many would like to believe.

My reply to Jim Turnour:

Over the past four or five months, more than 900 Australian households each month have been signing up for solar rooftops. But last week, the industry went into freefall. Businesses are facing closure, staff cuts of 50% or more are widespread, and skilled, intelligent solar power installers will be re-employed in less visionary jobs as households cancel their orders. Some installers may be lost to the 45 countries that have sensible solar power laws.

The fledgling solar panel industry was installing 900 Australian homes a month. That is only just over 10,000 a year or only 100.000 homes by 2018. We need to multiply that by at least 10 times to about a million homes by 2018. This will need 10 times more technicians and will create many more small business opportunities. Cutting back on the rebate will only slow the process down when exactly the opposite is needed. Tim Flannery and many other scientists are pointing to the urgency of the problem and the Rudd government is putting the brakes on.

Professor Flannery, who spoke at a business and sustainability conference in Parliament House today, said new science showed the world was much more susceptible to greenhouse gas emissions that had been thought eight years ago.

Regardless of what happened to emissions in the future, there was already far too much greenhouse gas in the atmosphere, he said.

Cutting emissions was not enough. Mankind now had to take greenhouse gases out of the air.

"The current burden of greenhouse gas in the atmosphere is in fact more than sufficient to cause catastrophic climate change," Prof Flannery said.

"Everything's going in the wrong direction at the moment, timelines are getting shorter, the amount of pollution in the atmosphere is growing.

"It's extremely urgent."

Catastrophic climate change requires us to go onto a war footing to fight climate change. Forget inflation, forget the coal industry: we need to act now. We need to dramatically increase our support for all renewable energy sources and efficiency measures. We have the money, we need to be training the technicians, we need to be investing in the new power generating systems now. We will then be in an excellent position to export our knowledge to the rest of the world.

We still have not accepted that catastrophic climate change is likely to destroy the human race and most living things on the planet.

To do anything less is to put the planet at risk.

There's some of $56.6 million (via rebates on solar panels for the "not rich"). Those selling said solar panels could count that in their sales targets and then set about making the sales. Sure, customers might not walk in the door as excited as they'd be if they could get a grant to cut the cost of a wide-screen TV; so those salespeople will have to get out there a sell, sell, sell the benefits.

Then there's some of $300 million (via Green Loans to anyone "rich" or not who wants to invest in energy efficiency). Those selling solar panels could count on that too. Work out the numbers, combine with an attractive financing package, and the ROI could look good.

Then there's a big chunk of $480 million for selling their kit to schools across the nation; not to mention the intangible value in the marketing to the next generation of eco-friendly prosumers.

That's say, discounting for competing claims by other green businesses, about half a billion in taxpayers' money. And then we shouldn't keep overlooking the investment in renewable energy R&D; another half a billion.

Look at the whole lot, stack up what's going toward renewables, energy efficiency and other green policy priorities, size it up against the "clean coal" contribution that'll have to be matched 3 to 1 by the coal and related industries, and it still looks far better than we'd have got if Mr Climate Change Denier was still in power.

There was nothing "lost" for those people who had orders in place. Anybody who applied under the old program prior to midnight on Budget night would have their applications assessed and accepted under the old guidelines, i.e. no means-test applied.

So there's no real reason to cancel an order if the rebate application had been made, especially if they'd been made by those who are taking climate change seriously.

And if the businesses involved had their budgeted forward planning in place and figured correctly, then they'll not be overly affected by over-ordering materials to meet orders because most of the orders booked can be supplied as long as the rebate application had been made. If anything, they'll be under-geared to step up to growth in orders from the nation's schools.

The other main change to the Solar Homes and Communities Plan introduced in the Budget just delivered is that schools are no longer eligible for solar power rebates under that program. That's freed up more rebate money for households and the key reason for that change is that under the new National Solar Schools Plan there's $480 million enabling every Australian school to access a grant of up to $50,000 for solar power, energy efficiency and water efficiency works. 

The solar industry will no doubt be positioning itself to get its hands on much of that $480 million.  It more than offsets the "lost sales" and it introduces a whole new market to the wonders of solar power.

Imagine the scenario:

"Hey Mum, hey Dad, at my school we've got solar power."

"The Principal says we're producing stacks of Megawatts and the school has got all these carbon credits that can be traded."

"The money made goes to the bottom line and he says the school might not need to raise its fees by such a huge amount this year."

"Why don't we use that tax cut and the saving on school fees next year to get solar panels at home with the money saved?"

"It'll pay itself off by the time I finish school and, after all, we're serious about climate change, aren't we?"

Scott, a friend of mine who was in the mmm, forgotten, overseas but not diplomatic services, told me only the other day that when McMahon was arriving they had to find squash partners for him, and nobody wanted to oblige as he was a 'very dirty player'.

(I said I didn’t see the problem, just hand out a bit more than you got, but apparently this attitude is very improper!)

The title does not contain a typo ...

John, you may believe the people taking the orders would have their "finger on the pulse" and provide the media with accurate figures.

I make a point of pulling out my calculator when I read claims like theirs.

They say "millions "lost"; it sounds a very serious situation. But how many millions? Over what period?

Obviously, their use of the plural signals it has to be at least $2 million or more in sales they say are "lost."

The news this past few days also has industry spokespersons putting the price of a household solar panel system as $20,000.

So if we take that price and the minimum "lost millions" then they're saying they'll not be selling 100 systems.

Then given the published figures I'd pointed out on Beer, cigs up -- showing the $8,000 rebate has only encouraged a little over 3,000 households to purchase and install solar panel systems this financial year (to the end of February) -- that means the lost "100" sales is about 20% of the monthly take-up rate (which was trending toward 500 systems installed per month).

But that result doesn't square with their estimates of the percentage of contract cancellations.

So it must be more than $2 million in "lost sales" they're talking about. Let's drop the minimum "lost millions" scenario and start again with the industry's estimates of cancelled contracts.  Claims of 50% is what I've seen.  Sounds bad, doesn't it?

But if all these claims of cancelled contracts are true, and the claims about the cost of these systems are true, then about 250 fewer systems would be installed per month and we're talking about $5 million in "lost sales" per month.

No change in the budget and they would have sold 500 units per month, which at $20,000 unit is $10 million in sales.

So they see, or say they see, the glass half empty.

Yet it is actually a glass still full.

There's still funding to the tune of $56.6 million available to provide for rebates in 2008/09. In fact that is $25.6 more than was budgeted for 2007/08 by the Howard government.

It's just that now the rebates have to go to low income households rather than people who, if they were serious about their contribution to curbing the CO2 emissions from their household, could afford to install a solar panel system.

So whilst there's actually more grant money for the industry to put in its pocket, the industry needs to get at it by encouraging people in households with less than 100K income to purchase the systems.

Then there's all the money they can get if they sell to those who see the need for government assistance to make what will be a good investment of a little of their own capital more attractive, for there's funding to the tune of $300 million available over a period of 36 months for thousands to pay for part of their system with government money in the form of a low interest Green Loan.

So you see there's 60 months worth of $5 million in sales per month there to be gained by selling systems to households with incomes over 100K, plus there is still all the potential rebate money to get their hands on.

They just have to find a way to sell what's an attractive good return investment to the low income households who'd benefit most.

So I reckon the household solar panel industry should start calculating how to package deals and expand the market rather than tallying a "lost sales" estimate.

Federal Environment Minister Peter Garrett has defended the Government's decision to means test its solar panel rebate, saying those most in need will benefit.

The solar energy industry says it has lost millions of dollars in business since the Government announced it was limiting the $8,000 rebate to home owners earning less than $100,000.

The industry argues that even with the rebate, those under the threshold cannot afford to install solar panels.

But Mr Garrett disputes that claim.

Peter Garrett disputes the claim that the solar energy industry has lost millions in sales. What is he saying? "Trust me I'm a politician I know best." Surely the people taking the orders would have their finger on the pulse.

If the goal of the Rudd government is to increase the number of solar panels on Australian roofs this has to be a retrograde step.

F Kendall: "On the other hand, I heard on ABC yesterday - "The World Today " or somesuch? - that solar is  widely popular in California, because electricity is far more expensive than in Australia, so that one's savings are equivalent to a 20% return on the investment."

I wouldn't doubt this. Though, you'll find most people with use of solar are in a certain income band (upper) - lack of trust in services perhaps? You'll also find solar rose dramatically in 2002, oddly enough, Enron was playing their little games toward the end of 2001. Maybe there's something in that for  Aussies?

Scott Dunmore: "How refreshing it is to have a change of government. Finally I get to agree with the likes of Andrew Bolt, Gerard Henderson (occasionally,) and our very own Paul and Alan."

And I only voted for them so Costello would retire. I told you he would be the funniest Prime Minister since McMahon.

I had wondered whether the means testing of the solar rebate was to help NSW sell its electricity suppliers, Paul Morella.

On the other hand, I heard on ABC yesterday - "The World Today " or somesuch? - that solar is  widely popular in California, because electricity is far more expensive than in Australia, so that one's savings are equivalent to a 20% return on the investment.

Jenny Hume: "And of course there is the budget bonanza expected from the alcopops tax, nothwithstanding that the sale of the drinks was supposed to fall due to the tax."

Don't be fooled Jenny Hume - they've no chance of getting that extra tax. Getting such a return would be totally contradictory to how pricing works. The people that put together this tax would know this already.

It's a softening up tax for futher tax rises when people naturally switch to other forms of alcohol. Any tax increase (morality) tax or otherwise is an impost on a free society. If an illegal drug dealer told you he had doubled the price for the health benefit of his drug addicted clients, would you believe him?

When it comes to taxes there is indeed a sucker born every minute.

John Pratt: “I think the people on less than $100,000 are not going to be able to afford a solar panel system: a $5000 outlay for them is a big decision. Should they put a solar panel on their roof or pay $5000 off the mortgage? For people who can afford it – those over $100,000 – the price has just trebled.”

Of course they won't be able to afford it - and they're not meant to be able to afford it. Given that China will go on its merry way, it wouldn't make any difference anyway. The entire "green" episode is a con for the easily fooled.

When carbon taxes come into force somebody will have to pay for them. it's obvious that middle income earners have been selected for that task. When the time of the mooted taxes do come about, solar power will become viable. The sting in the tail is that only those earning above 350K will be a part of it. Those earning less than 50K will also undergo (no doubt) a round of special subsidies.

Similar to what is happening in the UK the whole thing is a con, and the patsies have been selected. Though, if people have asked to be taxed (amidst massive almost obscene surpluses), they deserve little sympathy.

This doesn't even take into account that Australia is in the process of selling its power companies. Now don't you think having the majority of Australians not hooked into a service might, just slightly, dent the price of such assets?

How's the cheaper gas, produce, and housing prices faring?

I received a reply from Jim Turnour, Federal Member for Leichhardt, last night.

Dear John,

Thanks for sending me through your email. We will have a lot more to say about climate change following the Garnet report due later this year. Attached is the budget overview if you haven’t seen it.

Jim

My reply to Jim Turnour

Reading through the budget overview on climate change I still think we are not taking the threat seriously. I accept that when the Garnet report is released we may see more money allocated.

The budget:

Provides $300.0 million over five years for low interest green loans of up to $10,000 to assist families to install solar, water, and energy efficient products.

This will only solar equip 30,000 houses by 2013. We need all our houses to be solar efficient to reach our goal of a 60 percent reduction.There are at least 6 million homes in Australia. We need to equip at least 500,000 houses a year if we want all our homes solar efficient by 2020 or 250,000 a year if we want to achieve the goal by 2040. 30,000 a year is a joke.

The budget should be $3 billion, per year.

Provides $7.9 million over four years to support the gradual phase-out
inefficient hot water systems used in Australian homes.

A $1000 grant for solar hot water? $2 million a year is only 2,000 homes a year again we need to be be installing about 250,000 solar hot water systems a year.

The budget should be $250,000.000 not $2,000,000 per year.

When we look at the enormity of the task in front of us it is easy to see we need to significantly increase our spending and with a lot more urgency,

At the moment we are just window dressing.

John, the mass of the Earth’s atmosphere is 5.14×10^18 kg, and the total mass of atmospheric carbon dioxide is 3.0×10^15 kg, or 3,000 gigatonnes.

The concentration of CO2 in the atmosphere is increasing by 0.4% per year. It increases because the natural sequestering systems can't cope with the Earth's total annual increase in CO2 production.  So the amount that must be sequestered per year by other than natural means just to hold the global atmospheric concentration constant is 0.4% of 3,000 gigatonnes, or 1.2 x 10^10 tonnes. When we write that out in longhand, it comes to 12,000,000,000 tonnes per year, or 33 million tonnes of CO2 per day.

From memory, Australia is responsible for about 4% of human greenhouse gas production. If Australian industry is going to capture, liquify and bury its CO2 emissions, then it will have to capture, pipe to site and bury about 1.3 million tonnes of liquid CO2 per day.

This is a problem in itself. However, there are also major problems with the whole feasibility of carbon capture and storage, even if on an industrial scale it can handle the huge daily mass of CO2 involved. It is likely to turn out to be a monumental folly. I am working on a piece about this at the moment.

I have serious reservations about the whole business, and regard the $500 million earmarked in the budget for it as likely to be wasted. Though it will all finish up in certain peoples' bank accounts, whether it will do any good as it makes its way into them is an open question.