Last year the Economic Society of Australia surveyed its members on 46 policy issues. On some, it found economists evenly divided: on the merits of the NBN, for example, or whether Australia should promote nuclear power, whether patients should pay more of their health bills, and whether the GST should be lifted so income tax and company tax can be reduced.
But on other issues economic opinion is clear cut. Top of the list is whether taxpayers' money should be spent on big infrastructure projects without an independent publicly released cost-benefit analysis first to check the project stacks up. The survey found 85 per cent of economists want cost-benefit studies to be mandatory. (Who doesn't? Politicians.)
Surprisingly, the second most clear-cut response was on climate change: 79 per cent of economists agreed that price-based mechanisms - a carbon tax, subsidies or an emissions trading scheme - are a better way to tackle climate change than using direct regulation.
Tuesday, July 03, 2012
Colebatch on carbon pricing
The economists got it right, that's the truth
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2 comments:
Recently I re-read P J O'Rourke's All the Trouble in the World, an early-ish book by him - one of the many books in which he quixotically looks at economic/environmental/military/whatever problems from the perspective of a humourist.
The chapter on ecology and how best to go about preserving it contains a good deal of analysis of the stupidity of agricultural subsidies, and other government initiatives... but the part that really made me sit up was where he advocated, effectively, for policies very similar to emissions trading. (The problem back then was CFCs putting holes in the ozone layer).
But I'm still cynical despite my P J O'Rourke love. It's all very well for Colebatch to say that economists agree 'price-based mechanisms' are the best way to tackle climate change. His political judgment is unsound; it is highly unlikely many, or even most, countries around the world will agree to do the same to their own economy. (The survey probably didn't ask a question that specific anyway.)
Basically, I maintain that US political incentive to return to taking carbon pricing seriously will involve getting a large enough number of voters in enough democracies to take it seriously, which will take some unusually hot weather. The US is having an unusually hot year, and the heat wave under way right now is said to be happening particularly early in the summer. It also looks like it looks like we might even get a new Arctic ice minimum. All of this should turn public interest back to the topic, and if enough records are broken and enough temperature graphs show a resumption of the long term heat increase, I don't know how the Tea Party will continue to be taken seriously on the topic.
I think it interesting that the Right of politics in the US is presently in the reverse position of Australia: their Presidential candidate probably does take climate change seriously and would be happy to see carbon priced, but is having to pretend he is on side with the Tea Party denialists. In Australia, the suspicion is that Abbott does not really believe in climate change but is pretending to be convinced of the need for action.
Odd, hey.
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