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In his 2011 State of the Union address, President Obama outlined his vision for an America powered by clean energy, traveling by High Speed Rail, and competing in global clean technology markets. Obama set out a clear principle: “[I]nstead of subsidising yesterday’s energy,” he implored, “let’s invest in tomorrow’s.”
Excellent idea Mr. President.
By choosing the future, not the past, President Obama has opened a fierce technology competition with China and Germany, to bring the cost of renewable energy down below gas, coal and nuclear.
Recently, the Climate Institute released a report comparing the climate and energy policies of six major economies. The joint Climate Institute/Vivid Economics report (PDF) calculates the ‘carbon price equivalents’ of non-price-based initiatives like clean energy investments, renewable energy mandates, feed-in tariffs, and other regulatory measures, for example. Whether it makes sense to shoehorn these distinct policies into the carbon price model is worthy of discussion, but for now I’d like to look at the key talking point in the communications surrounding this report.
The Climate Institute claim that carbon pricing is key for ‘driving competitiveness in the clean energy economy.’ This might be the case. But is it the same thing as driving progress towards a clean energy economy? To gain a perspective on this question, I asked leading energy policy expert Alan Pears what he thought.
At the weekend, The Age reported that increased alcohol prices are driving many young people* to switch to the party drug ecstasy.
A new phenomenon of young people ‘switching’ to the increasingly cheap party drug ecstasy has been fuelled by rising alcohol prices, according to drug researchers, nightclub owners and the people themselves…
‘It is cheaper and convenient to use pills,’ said Professor Jake Najman, director of the University of Queensland’s Alcohol and Drug Research and Education Centre. ‘A lot of young people are making that choice to switch between alcohol and ecstasy. Pills can be cheaper, there is no question.’
Many readers will be thinking ‘what the hell does ecstasy have to do with climate change policy?’—the frequently discussed topic of this blog. The answer is simple: the case highlights the unintended consequences of pricing-based policy and the substitution effect.
Published by the National Times.
The silver bullet view of carbon pricing is a common theme in Australian climate change policy debates. It is argued that by establishing domestic carbon price signals the nation will reduce its greenhouse gas emissions and address the challenge of climate change. International examples of carbon pricing initiatives are often cited in these debates. Unfortunately, incomplete accounts of them hide important lessons for policymakers at home. A recent opinion piece by Dr Peter Wood and Paul Burke of the Australian National University is no exception.
Wood and Burke present several international cases where carbon pricing is now operating, or is on the cards, to make the case that Australia is behind many nations in adopting such measures. While this contention is correct, Wood and Burke do not consider whether the carbon pricing measures adopted abroad have been effective. They do not consider the initiatives that preceded carbon pricing proposals or the fact that carbon taxes are often used to generate revenue rather than creating a price signal for the private sector.
In April, the Rudd Government abandoned the severely flawed Carbon Pollution Reduction Scheme, the centrepiece of its national climate policy agenda.
After two defeats in the Senate, and unwilling to risk a double dissolution election on the issue, Labor backflipped and deferred its plan to establish a domestic emissions-trading scheme to 2013. At a time when decisive action is needed to avoid dangerous climate change our national climate policy is at a standstill.
Australia desperately needs a new approach. We need a policy agenda that acknowledges the urgency of the situation and accepts the requirement of evidence-based emissions cuts identified by climate science. We need a circuit breaker to reinvigorate the debate and spur action.
Published by the Breakthrough Generation.
A few weeks ago, the editors of The New Republic published ‘Nudge-ocracy’—an article discussing the Obama Administration’s early decisions and what these reveal about the Administration’s governing philosophy. The Obama Administration is still in its infancy and it’s too early to draw concrete conclusions about the Administrations approach. Nonetheless, Foer and Scheiber’s article provides a useful interpretive framework for the Administration’s climate and energy policy agenda.