Lorn Turnbull from the UK Praliament on Climate Change

From Wattsupwiththat:

My Lords, on first reading the Committee on Climate Change’s latest progress report, I found it an impressive document. It was broad in scope and very detailed. But the more I dug into it the more troubled I became. Below the surface there are serious questions about the foundations on which it has been constructed. There are questions in four areas-the framework created by the Climate Change Act 2008, the policy responses at EU and UK level, the estimate of costs and finally the scientific basis on which the whole scheme of things rests. I will consider each in turn.

Unlike many of those involved in the climate change field, I have no pecuniary interest to declare, but I am a founder trustee of the Global Warming Policy Foundation, which seeks to bring rationality, objectivity and, above all, tolerance to the debate.

I have long been in the camp of what might be called the semi-sceptics. I have taken the science on trust, while becoming increasingly critical of the policy responses being made to achieve a given CO2 or global warming constraint. First, let us look at the Climate Change Act, which has been highly praised, even today, as the most comprehensive and ambitious framework anywhere in the world-a real pioneering first for the UK. However, it has serious flaws. It starts by imposing a completely unworkable duty on the Secretary of State to reduce greenhouse gas emissions by 80 per cent by 2050, even though many of the actions required lie outside his control. It would have been better, as the noble Lord, Lord Crickhowell, and I argued, for the duty to be connected to what the Secretary of State can control, such as his own actions and policies, and not the outcome, which he cannot.

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Thirdly, there is the issue of cost. All we had to go on at the time when the target was set more ambitiously was the estimate by the noble Lord, Lord Stern, of 1 per cent of GDP. Many people were sceptical at the time and probably even more are now, including, it seems, the noble Lord, Lord Stern, himself. It was reported in the press last week that he now thinks that it might be 2 per cent, but could rise to 5 per cent. I hope he will clarify this when he speaks to us shortly.

In the document that we have before us, the committee says that it previously estimated that costs in 2020 would be about 1 per cent of GDP. That is consistent with its view that it might get to 2 per cent by 2050. In the new report it simply reaffirms the 1 per cent figure in just one paragraph in 250 pages.

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The noble Lords, Lord Krebs and Lord May, and their eminent colleagues on the CCC have a choice. They can take the policy framework as given, the policy responses as given, the costs as given, and the science as given, and then proceed to churn out more and more sophisticated projections, or-as I hope-they can apply the formidable intellectual firepower they command and start to find answers to many of the unsolved questions.

What makes a nation rich?

From MIT economist Daron Acemoglu:

Full Image – Link

And yet while Sachs and Diamond offer good insight into certain aspects of poverty, they share something in common with Montesquieu and others who followed: They ignore incentives. People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions — the rule of law and security and a governing system that offers opportunities to achieve and innovate. That’s what determines the haves from the have-nots — not geography or weather or technology or disease or ethnicity.

Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments.

How do we know that institutions are so central to the wealth and poverty of nations? Start in Nogales, a city cut in half by the Mexican-American border fence. There is no difference in geography between the two halves of Nogales. The weather is the same. The winds are the same, as are the soils. The types of diseases prevalent in the area given its geography and climate are the same, as is the ethnic, cultural, and linguistic background of the residents. By logic, both sides of the city should be identical economically.

And yet they are far from the same.

(from Greg Mankiw)

Australian ETS = Carbon Tax + Consumer Welfare

I have been rooting for the ETS for a while now but with better understanding of the legislation (thanks a lot to the commentary on BusinessSpectator.com.au) I have learned that the ETS in its current form is not going to solve Australia’s problems at all. With ability to pacify any group that the government seems fit and the issue of carbon offsets there are not guarantees on how on the scheme will work.

The latest comes from Robert Gottliebsen who explains how the money from the ETS will be used as a welfare card by the labour government to stay in power.

Over the period from 2011 to 2020 the government expects to raise a staggering $114 billion from industry based on a carbon price of above $20 a tonne.

Where will that money go? John Howard retained office via the so called ‘Howard battlers’. Rudd learned from Howard so that’s where the money goes.

About $54 billion, or just under half, goes to lower and middle income people. Around 90 per cent of all low income households – or some 2.6 million households – will receive assistance equal to around 120 per cent of the overall cost increases they face.

Around 50 per cent of middle income households – about 1.7 million – will be fully compensated for overall cost increases flowing from the carbon trading legislation. And it gets better. Once the scheme starts, assistance will continue in perpetuity because these assistance payments are indexed to CPI and upfront assistance will automatically increase in line with the increasing carbon price as it affects household cost.

Think about it, if we provide people with 120% of the increase in costs; so more than what the costs have increased; then there is no hope in changing behaviour which is the goal.

Earlier I quoted Greg Mankiw on the fundamental theorem of the ETS:

Cap-and-trade = Carbon tax + Corporate welfare.

Well Greg, we have changed that in Australia. It should now read,


Cap-and-trade = Carbon tax + Consumer welfare + Corporate welfare.

Rudd takes centre stage in climate talks

The focal point of the partnership will be Australia’s Global Carbon Capture and Storage Institute.

The President announced the creation of the partnership in a joint press conference with Mr Rudd, who is attending the summit as part of his ongoing overseas trip.

“Australia, for example, is creating a new centre which Kevin will be introducing shortly which points to the ability for us to pool our resources in order to see the technological breakthroughs necessary in order for us to solve this problem,” Mr Obama said.

Mr Rudd first announced the formation of the Institute in April but used the meeting in the Italian town of ‘L’Aquila to relaunch it.

Mr Rudd says 23 governments and more than 100 companies are now backing the Australian institute.

“It’s mission is clear,” he said.

“It’s to get large-scale carbon capture and storage projects done around the world, not just discussed.

“Unless we do these projects we will not have an effect in bringing down those huge numbers of energy production I referred to before coming from coal, and their greenhouse emission impact.”

via Rudd takes centre stage in climate talks – ABC News (Australian Broadcasting Corporation).

Fielding’s Open Mind

I saw the lateline edition on ABC Australia on their latest iView internet TV player.

Steve Fielding, a Family First Senator, is a crucial vote for the Rudd government’s Emission Trading Scheme.

He is attending a climate skeptic conference and meeting with the Obama Administration about climate change issues.  He is self-funding the trip to better understand both sides of the issue and then take a decision.

He talks about having a open mind and hearing both sides of the story. I think that is great. To be able to be calm and objective and hear all sides to a story in a issue as important as climate change is a great attitude.

It will be interesting to see what he comes back with.

He writes more about this on his blog:

I think it is very important, being an elected person that I give both sides a chance to put their case forward so that I can make an informed decision on the Rudd Government’s proposed carbon reduction scheme that I will be asked to vote on in just under two weeks.

I am not a climate sceptic and I am not a climate change extremist. What I am, however, is someone that actually wants to take a balanced view, look at the facts and then respond appropriately, unlike the Greens.

As well as meeting with various scientists I will also be having high level talks with members of the Obama Administration on how they plan to deal with reducing carbon emissions.

I hope this will give me more information so I can chart a clear course in my mind for where Australia needs to head in reducing carbon emissions.

Green Govt Grants in Australia

The latest AusIndustry newsletter carries some good information on the green funds and grants available from the Australian government. Adelaide information sessions are provided here. The links would provide information in other cities.

I was involved in the Climate Ready round last time and it is an interesting exercise.  There is quite a bit of work involved so you should plan ahead.

Green Car Innovation Fund

On 24 April 2009 Minister Carr opened the Green Car Innovation Fund for applications. Grants from $100,000 are offered to develop low-emission, fuel-efficient cars and components in Australia.  Participants in this very significant grants program will include businesses both inside and outside the automotive sector.

An Information Session will be held in Adelaide on Monday 4 May 2009.  For further information, please contact the AusIndustry hotline or Kerrie Trevena in our Adelaide Office, on 8406 4723.

Climate Ready

The Climate Ready program is open for applications under round 4 until 25 June 2009.  Grants from $50,000 are available to develop technological solutions to address climate change challenges.

An Information Session will be held in Adelaide on Tuesday 5 May 2009. Intending applicants are encouraged to register for the information session and to discuss their proposal with a customer service manager as soon as possible.  For further information please contact Kerrie Trevena in our Adelaide office on 8406 4723.

Three South Australian companies shared in $16.4 million grant funding under round 2 of the Climate Ready Program:

· Seed Technology & Marketing Pty Ltd $376,700 for their Pasture legumes for a changing agricultural climate project.

· Cavitus Pty Ltd $620,919 for High-power ultrasonics systems for the global wine industry.

· SBS International Pty Ltd $891,969 for the Supaloc Eco-Load Bearing Wall project.


Click here to view the full list of round two Climate Ready grant recipients.

TQUAL Grants

TQUAL Grants aim to stimulate sustainable growth in the tourism industry by supporting innovative, high-quality tourism products that contribute to the long-term economic development of Australia.

An Information Session will be held in Adelaide on 12 May 2009.  For further information please contact the AusIndustry hotline or Kerrie Trevena in our Adelaide office on 8406 4723.

2009 Australian Innovation Festival

The 2009 Australian Innovation Festival runs to 30 May and promotes the best of Australian innovation and entrepreneurship. It encourages networking and business opportunities, particularly in research and development, and in technology commercialisation.  The South Australian launch will be held on 29 April at the National Wine Centre.

AusIndustry will present a number of business innovation information sessions during the festival, including Business Innovation Opportunities on Tuesday 19 May.  For further information about the Business Innovation Opportunities information session please contact Kerrie Trevena in our Adelaide office on
8406 4723.

R&D Tax Concession 30 April 2009 deadline

The deadline for submission of applications for registration for the R&D Tax Concession for the 2007-08 income year for June balancing companies is Thursday 30 April 2009.  The R&D Tax Concession allows companies to deduct up to 125% of qualifying expenditure incurred on R&D activities when lodging their corporate tax return. A 175% Incremental (Premium) Tax Concession and R&D Tax Offset are also available in certain circumstances.  Further information is available in the latest edition of the R&D Tax Concession Information Bulletin. Please contact the AusIndustry hotline or our South Australian team for assistance.


Re-tooling for Climate Change

Re-tooling for Climate Change helps small and medium-sized manufacturers improve the energy and water efficiency of their production process.  Grants from $10,000 are available.  The program is open for applications under round 3 until 1 June 2009.  Intending applicants are welcome to contact the South Australian team to discuss their proposals.

Green Building Fund

The Green Building Fund aims to reduce the impact of Australia’s built environment on green house gas emissions, by reducing the energy consumed in the operation of existing commercial office buildings.  The program is open for applications under round 3 until 30 June 2009.  Intending applicants may contact the Adelaide office team to discuss their proposals.

Commercialising Emerging Technologies (COMET)

COMET is a competitive, merit based program that supports individuals, early-growth stage and spin off companies to improve their potential for successful commercialisation of their innovation.  Intending applicants are encouraged to contact the South Australian team.

Tradex

The Tradex Scheme allows an importer to gain an up-front exemption from Customs duty and GST on eligible imported goods that are intended for export.  An application for a Tradex Order may be approved quickly in the Adelaide office, if necessary.  Please contact the AusIndustry hotline or our South Australian team for assistance.  

Should Solar Panels rebate be means tested

The Rudd government in Australia ordered a new way of providing solar pv rebates to families. As reported before on Worldisgreen.com, The Clean Energy Council told The Sunday Age that one company had 98% of orders abandoned. The biggest impact has been in cities, where 50-70% of orders were being ditched, leaving companies with millions of dollars of lost business.”

The government has clearly not understood the scenario here. The concept of means tesing makes sense if the subsidy is for the welfare of the people directly. However, in this scenario that is simply not the case. The subsidy for the solar pv is to be seen as a subsidy for the solar industry and provided through the consumers rather than directly to the industry.

The Messenger local news in Adelaide asked their readers about the means testing, and the answer was:

Solar PV industry and govt. subsidy

The Age reports on solar PV cancellations from households

Solar businesses, in a national phone hook-up on Friday, reported that at least five people had already lost their jobs and more were expected to go this week as cancelled orders surge.

From midnight on Tuesday, a family that earns more than $100,000 a year could no longer claim the rebate of up to $8000 on a solar photovoltaic system for their home.

The Clean Energy Council told The Sunday Age that one company had 98% of orders abandoned. The biggest impact has been in cities, where 50-70% of orders were being ditched, leaving companies with millions of dollars of lost business.

As previously noted, this clearly shows the effect of public policy and subsidy for the solar industry. As feed-in-tarriff’s, a mechanism which has produced good results in Europe, is not being aggressively pursued in Australia, this rebate is the only meaningful subsidy for the solar PV industry.

However, all is not lost. The Rudd labour government has announced a Green Loan program.

Around 200,000 households on up to $250,000 a year will be able to take advantage of the program which will offer loans of up to $10,000, with interest capped at the inflation rate, for green products aimed at making established homes more energy and water efficient.

The program would come into effect in January 2009 and run until 2012-13 but Mr Rudd flagged Labor would consider expanding it if it proved successful
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“(This is so) working families can install solar panels or rainwater tanks or roof insulation or solar hot water systems or high efficiency gas hot water heaters … or awnings or grey water recycling systems and energy efficient lighting,” he said.

We need to see how this industry will perform in the coming months and whether there will be a change in policy.