ETS lessons not learnt

Crikey - Rudd's talking out of his mandate

More on Labor's emissions trading scheme from Bernard Keane:

This scheme is so badly designed there’s a real question as to whether it is worth establishing. This is one issue on which greenhouse sceptics and ardent greenies can be in furious agreement: the Government’s ETS is profoundly flawed. Two groups previously excluded from free permits -- the coal-fired power industry and industries between 1000-1500t per million dollars revenue, will now have access to them (the coal industry will get $3.9b worth of free permits over five years -- not $3.9b in cash, as a lot of us thought yesterday). Throw in that a change to the formula to enable firms to use value added instead of revenue in determining eligibility will mean more firms will qualify for 90% free permits, and the scheme will commence with minimal incentive for our biggest polluters to cut back.

It starts off thus flawed and gets worse. Under the Green Paper, the proportion of free permits was capped at 30%, which at least constrained our most polluting industries to find more efficient and less carbon-intensive ways of operating if they wanted to expand. Under the White Paper, the supply of free permits simply increases as our heaviest polluters expand. As Martin Parkinson, head of the Climate Change department said yesterday, this has potentially serious consequences for scheme revenue. It also means that there’s a real danger that at some point in a few years’ time, more permits will be given away to heavy polluters than auctioned for use by those with low emissions.

Well done, Mr Rudd -- you’ve invented a scheme that actually punishes low emitters and rewards heavy emitters.

Yes, it is remarkable that both Jennifer Marohasy and the Greens are going to be criticising the scheme's design.

Even more remarkable that the well publicised problems with the European scheme do not seem to be being properly addressed.

I must say, however, that is more typical of the Left to not care about results so much, as long as the intentions are "good" (ie ideologically sound, or politically correct if you will). Aboriginal welfare is a typical example of that, but also the way Labor supporters considered it a virtual crime that Australia hadn't signed the ineffective Kyoto Treaty, even though it was meeting its targets as if it had. The attitude is not entirely gone: there are commenting on blogs "oh well, better than nothing."

In fact, it is worse than nothing if it takes away the realisation that nothing effective is being achieved.