Comments on: Carbon Price Is Not A Silver Bullet http://therealewbank.com/2010/10/15/carbon-price-is-not-a-silver-bullet/ Progressive Political Analysis and Commentary by Leigh Ewbank Wed, 15 Feb 2012 03:17:36 +0000 hourly 1 http://wordpress.com/ By: Leigh Ewbank http://therealewbank.com/2010/10/15/carbon-price-is-not-a-silver-bullet/#comment-262 Mon, 13 Dec 2010 11:36:41 +0000 http://therealewbank.com/?p=921#comment-262 Thanks for the comment Mike and apologies for the delayed response.

Firstly, this piece is focuses on the domestic climate and energy debate which is why the Clean Development Mechanism was not discussed. Second, my ‘scathing criticism’ of the EU ETS is not mine. It is the analysis of the pro-carbon pricing group Sandbag, whose analysis has found deficiencies with the current emissions trading scheme. I was simply presenting some of the findings of their Cap or Trap? report.

You claim that I present investment and carbon pricing as mutually exclusive. This is not the case. In fact, you will find that throughout my writing, I present public investment as a way of increasing the prospects of effective carbon pricing measures. I have argued on many occasions that strategic public investment in clean technology research, development, demonstration and deployment as well enabling infrastructure can lay the foundation for a decarbonising economies.

In the context of Australia, investment in enabling infrastructure, clean technology procurement, and other initiatives that make clean technologies cheap will help the nation avoid implementing a carbon-pricing regime that resembles a block of Swiss cheese.

Earlier this year, the Melbourne-based public policy think tank the Grattan Institute identified compensation worth $20 billion (over a decade) for Australia’s most carbon-intensive industries in the government’s Carbon Pollution Reduction Scheme. This generous industry assistance would delay the structural adjustment needed to decarbonise the Australia economy. Similarly, the Australia Institute’s Dr Richard Denniss found that offset mechanisms contained in the CPRS would allow Australia to import international offsets in lieu of reducing domestic carbon emissions until 2033.

In your comment you argue that ‘a market mechanism will promote ongoing carbon price consciousness, domestic supporting services such as monitoring, reporting, validation/verification, trading and investment services while allowing the market to find the lowest price for emissions reductions for projects.’ Energy technology innovation is an interesting omission (I wonder if it was intentional?). The Breakthrough Institute and the ITIF argue that energy innovation is a complex process and will require a comprehensive energy policy not just a price on carbon.

This position is consistent with the International Energy Agency’s Peter Taylor (Head of the Energy Technology Policy Division), who said earlier this year that ‘…[A] price on carbon is needed to send a strong signal to the market, but it’s unlikely this will be enough to transform our energy system. Other policies will be needed to support technology development and deployment.’

Cheers, Leigh Ewbank

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By: Mike http://therealewbank.com/2010/10/15/carbon-price-is-not-a-silver-bullet/#comment-256 Fri, 03 Dec 2010 05:20:02 +0000 http://therealewbank.com/?p=921#comment-256 It’s no silver bullet but it is a bullet and we’re shooting blanks right now.

You have put forward an interesting analysis, however I would suggest that the reality of carbon pricing and emissions trading in Australia would likely be combinations of regulation within an ETS and allocation of revenue from permits combined with subsidy to promote renewable energy sources.

You should also be fair about the role the CDM and the EU ETS has had in promoting renewable energy in some of the fastest growing and largest emitting countries. China which has been mentioned is currently erecting a wind turbine at a rate close to one an hour thanks in no small part to CDM investment.

Further to this is the fundamental reality that a market mechanism will promote ongoing carbon price consciousness, domestic supporting services such as monitoring, reporting, validation/verification, trading and investment services while allowing the market to find the lowest price for emissions reductions for projects.

The issue of renewable energy, energy efficiency and addressing climate is already a political football in Australia and our history of government spending on large projects is riddled with waste and accusations of negligence.

Your rather scathing criticism of the EU ETS overlooks the progress and relative miracle that an international emissions trading scheme exists at all, especially when we still find ourselves having debates at political level as to whether climate change is indeed human influenced. The UNFCCC and EU has always adopted a learning by doing approach which has seen ongoing refinement of the CDM and EU ETS at all levels. It is by no means perfect and has turned some of my own hair grey recently but it continues to deliver emissions reduction, technology transfer and capital transfer to small and medium sized industry and is an example of international cooperation and partnership that is increasingly rare.

The lessons and flaws of the EU ETS (should we ever find ourselves with an ETS) provide invaluable lessons and guidance. It is ludicrous to suggest that these would simply be ignored but whether they are incorporated or not is a domestic political issue here.

There is definitely a role for large scale government investment but emissions trading is complimentary to this, not mutually exclusive. Emissions trading engages industry and business at a resolution (industrial plant level) and cost efficiency government action can never hope to, allowing energy efficiency gains, decentralised renewable energy gains and supporting the development of businesses and services further contributing to the economy and domestic intellectual capital.

I apologise for the poor structure of this comment, it was written on a bus, but I felt compelled to comment as I passionately believe that market mechanisms have a crucial and beneficial role in our response to climate change. There is no silver bullet (those that spruik one are understandably enthusiastic but lacking a realistic view) but any bullet that takes effective action out of the hands of fickle, impressionable and uneducated politicians and into an enterprising free market should be welcomed with open arms.

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By: Mike http://therealewbank.com/2010/10/15/carbon-price-is-not-a-silver-bullet/#comment-255 Thu, 02 Dec 2010 21:36:01 +0000 http://therealewbank.com/?p=921#comment-255 Interesting cost analysis, however the reality would likely be combinations of regulation within an ETS and allocation of revenue from permits combined with subsidy to promote renewable energy sources.

You should also acknowledge the role the CDM and the EU ETS has had in promoting renewable energy in some of the fastest growing and largest emitting countries. China is currently erecting a wind turbine at a rate close to one an hour thanks to the CDM helping Kyoto signatories meet their emissions reduction targets.

Further to this is the fundamental reality that a market mechanism will promote ongoing carbon price consciousness, domestic supporting services such as monitoring, reporting, validation/verification, trading and investment services while allowing the market to find the lowest price for emissions reductions.

There is definitely a role for large scale government investment but emissions trading is complimentary to this, not mutually exclusive.

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By: Tweets that mention Carbon Price Is Not A Silver Bullet « TheRealEwbank -- Topsy.com http://therealewbank.com/2010/10/15/carbon-price-is-not-a-silver-bullet/#comment-199 Mon, 18 Oct 2010 12:06:00 +0000 http://therealewbank.com/?p=921#comment-199 [...] This post was mentioned on Twitter by Green Times and Leigh Ewbank, Leigh Ewbank. Leigh Ewbank said: @ClimateDilemma: People can gain a more holistic view of #climate policy by reading both pieces: http://ow.ly/2UTeP http://ow.ly/2UTfa [...]

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