China FTA: what do we get? Post for The Hoopla.
Not that long ago I wrote that Julia Gillard could regain control of her carbon price campaign by adopting a four-part strategy. While I don’t think for a minute the PM actually read my advice, it seems someone within her camp independently came up with a similar strategy.
At least that’s how it first appeared on Monday night when the Prime Minister gave a confident, polished and personable performance on Q&A.
The first part of my strategy required the PM to be honest – to admit her broken promise and explain the constraints she had to work with in the minority government that Australian voters had imposed upon her.
That’s pretty much what she did:
“Now, I did say during the last election campaign – I promised that there would be no carbon tax. That’s true and I’ve walked away from that commitment and I’m not going to try and pretend anything else. I also said to the Australian people in the last election campaign that we needed to act on climate change. We needed to price carbon and I wanted to see an emissions trading scheme…. Now, if I’d been leading a majority government I would have been getting on with an emissions trading scheme. It’s what I promised the Australian people. As it is, in this minority parliament, the only way I can act on climate change by pricing carbon is to work with others and so I had a really stark choice. Do I act or not act? Well, I’ve chosen to act….”
It was an exciting moment; I thought the Prime Minister had taken a huge step in rebuilding her bond of trust with the community.
But then, two mistruths shattered the illusion.
Firstly, the PM claimed the carbon price would make renewable energy-based products cheaper, that consumers would react to this price signal, and this would drive innovation. She said:
“When you come to buy things, products that are made with relatively less carbon pollution will be cheaper than products that are made with more carbon pollution. So you’re standing there with your household assistance in your hand. You could still keep buying the high carbon pollution products if you want to or what you’re far more likely to do is to buy the cheaper, lower carbon pollution products. That means that the people who make those things will get the consumer signal, gee, we will sell more, we will make more money if we make lower pollution products. That drives the innovation. So I want you to have that household assistance in your hand but I also want you to see price effects which make cleaner, greener things cheaper than high pollution commodities. That’s why it works.”
This is patently untrue. Firstly, if the carbon price is set low (eg. $20/tonne as suggested), renewable energy-based products will still be more expensive than the coal energy-based products. As explained by renewable energy advocates Beyond Zero Emissions the carbon price would have to be set much higher to make the low emission products even price competitive with the high emission ones, let alone cheaper.
“Due to the nature of technology and the energy market, we would require in excess of $70/tonne even for wind power, the lowest cost renewable, to compete in the electricity market [without subsidies]. For baseload technologies such as concentrating solar thermal, the game changer we need to replace coal and gas, you would need in excess of $200/tonne for initial plants.”
If the low carbon price doesn’t make low emission products cheaper, then the Prime Minister is relying on the green consciousness of consumers to drive green purchasing. This won’t happen either; while people claim they buy green products their actual behaviour shows they don’t. In the absence of consumers changing their purchasing patterns, there will be little or no incentive for the “big polluters” to move to lower emission inputs.
This is also recognised by activist green groups such as Friends of the Earth (Australia):
“The demand for a carbon price is widespread in the climate movement. The Greens support a low carbon tax, leading to a fully fledged emissions trading scheme. But just as rising petrol prices have not lead to new investment in public transport, a carbon price will not in itself see renewable energy built. At best it is likely to make gas more competitive with coal.”
So, on the capacity for the carbon tax to change spending patterns and drive innovation, the Prime Minister could be said to be disingenuous, but I’d say she was deliberately misleading.
Similarly, the PM intentionally misled Q&A viewers with her comment about China. While scolding us for being climate recalcitrants, the Prime Minister misrepresented China’s climate actions to emphasise our tardiness:
“You know, China [is] closing down a dirty coal-fired power generation facility at the rate of one every one to two weeks.”
In reality, China is replacing its old coal-fired power stations with new ones. China is a long way from abandoning coal in the way suggested by the Prime Minister.
The International Energy Agency says China’s economic and social growth is so vast and so rapid that the nation will continue to use coal for electricity generation until at least 2035.
“The IEA estimates that China, which generates more than 70% of its electricity with coal, will build 600 gigawatts (GW) of coal-fired power capacity in the next quarter-century – as much as is currently generated with coal in America, Japan and the European Union put together.”
Also according to the IEA, China overtook the US in 2009 as the world’s largest energy user. The organization says:
“…the country’s energy demand is foreseen to surge a stunning 75% between 2008 and 2035, when it will account for 22% of world demand. China will lead the surge in electricity generation growth, and power demand in the country is expected to triple between 2008 and 2035.”
China is doing what‘s best for its people while it grapples with global issues such as climate change. The Gillard government is attempting the same, but doing a poor job of it.
Sleights of hand and half-truths won’t engender the community respect that the Prime Minister needs for us to follow her lead. Without such trust and willingness, there will be no effective climate action.
As I’ve said before, if the Prime Minister wants to bring Australian voters along with her in pursuit of a low emission economy, she must treat us like adults and start telling us the truth.
The truth, according to the International Energy Agency’s latest World Energy Outlook, is that global power generation is expected to grow by 75% between now and 2035. The truth is that fossil fuels will continue to dominate even though the proportion of renewable energy sources will grow.
The truth is that it’ll be tough to wean Australians from our country’s natural strengths, such as plentiful and affordable energy, and the comfortable lifestyle that comes with it.
And the greatest truth is that this process will require a transformation of the economy and of our lifestyles that we will have never seen before.
The full transcript of the PM’s appearance on Q&A is available here.