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Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
You can prove my 2 ex-comrades wrong by donating to my blog En Passant at BSB: 062914 Account: 1067 5257, the Commonwealth Bank in Tuggeranong, ACT. More... (12)

My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
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Sick kids and paying upfront

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Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

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Why Kevin Rudd is heating up the planet

These are the notes for a talk Peter Jones gave recently to the Canberra branch of Socialist Alternative on Kevin Rudd’s Emissions Trading Scheme.

OK, let me begin with two observations I’m sure you’ll all agree with. Climate change is real and it’s going to be bad. It already is bad.

I don’t have to defend these assertions because the argument has long since been won. So-called climate change sceptics now enjoy the irrelevancy and derision they richly deserve.

In a sane, sensible world, ruled by a thoroughgoing democracy informed by lively and productive political debate – in other words, under socialism – climate change would not be that big a deal.

I mean, yes, we’d have to put lots of work into transforming the economy to one fuelled by renewable energy, and if we hadn’t already done so we’d have to make sure that practically everyone was well served by fast and efficient public transport also run on renewable energy.

But really, that would pretty much be it – we’d just make the sensible, collective decision to transition to a zero carbon economy as quickly as possible, prepare for the warming that’s already in the pipeline, perhaps we might also need to ration aeroplane flights, and there you go, problem pretty much solved.

Because even today, under capitalism, despite the consistent efforts of the big polluters to convince us that we shouldn’t do anything about climate change, substantial majorities of people around the world have come the conclusion that saving the planet is probably rather a good idea.

So why won’t governments take real action to solve the problem? A certain kind of liberal environmentalist will tell you that it’s because of a lack of awareness – because, until people really start to feel the effects of climate change, see that it’s real, get affected by a storm surge or something, they won’t support action to do anything about it.

Bullshit.

As I said before, if anyone bothers to ask them, an enormous majority support taking action on climate change.

Now, they’ve been systematically locked out of any understanding of what concrete action on climate change might look like, as politicians and economists bamboozle them with the arcane, acronym-studded language of ETSs, the CPRS, the CDM, market-based mechanisms, cap and trade, carbon offsets, least cost abatement, CERs, the IPCC, emissions reduction targets, the UNFCC, CO2, CO2-e, HCFCs, HFCs, MRET, PPM. Alright I’ll stop now.

But the point is that if they had a real say over the way the economy is run, we wouldn’t be in the mess we are in now.

So what is preventing real action on climate change.

Well, to understand this I think we should begin with the advice offered by Rage Against the Machine in the name of one of their tracks on their self-titled album: know your enemy.

Because unless you understand that the weakness and at times the absurdity of carbon trading schemes stem from their nature as thoroughly bourgeois responses to climate change, you understand nothing about why we are hurtling towards what might be the most serious disaster human beings have ever created for themselves.

This is what I’m going to cover in this talk.

But first, I know I said I didn’t need to convince you that climate change is going to be bad, but I think we do need to begin with a bit of context about the seriousness of the problem, in order to fully understand just how inadequate the solutions being offered by politicians like Kevin Rudd really are.

The authority everyone cites on global warming is the Inter Governmental Panel on Climate Change.

Every few years they bring out a new report, making predictions about how fast the planet is likely to warm, based on the concentration of greenhouse gases in the atmosphere.

To make these predictions, they rely on computer models of the Earth’s climate systems. Over recent years, observed planetary warming has proceeded faster than even their worst case scenario estimates, and this has led many climate scientists to have a rethink about their methodology.

James Hansen and co. released a paper in March last year based on paleoclimatology: looking at the record of the relationship between CO2 and temperatures based on things like pollen and air bubbles trapped in ice they found that changes in concentration of CO2 like are experiencing now don’t just lead to an amount of temperature increase according to a fixed, proportionate relationship explain non-linear feedback effects, like melting ice and albedo, and burning forests.

This leads them to argue that even if we reduced GHG emissions to zero tomorrow, there’re still plenty of feedback effects waiting in the pipeline.

This is pretty bad, but the really bad possibility is that we might pass a point of no return – that we’ll get to the stage at which warming ‘in the pipeline’ is already high enough to induce enough other feedback effects that even if human beings reduced their emissions to nothing, the world would continue to warm-up until it found a new natural equilibrium.

 

Unfortunately, they think this new equilibrium might be somewhere in the realm of a mean average surface temperature 6 degrees hotter than today.

 Humanity today, collectively, must face the uncomfortable fact that industrial civilization itself has become the principal driver of global climate chnge. If we stay our present course … we will soon leave the climate of the Holocene, the world of prior human history. The eventual response to doubling pre-industrial atmospheric CO2 likely would be a nearly ice-free planet, preceded by a period of chaotic change with continually changing shorelines.

 

Unfortunately, a doubling of pre-industrial CO2 is not a remote possibility: before the industrial revolution, CO2 concentration was around 280ppm, now it’s around 430ppm, and people like Ross Garnaut are saying it would be a great achievement if we could get a global agreement at 550ppm. 

 

 

-based on misunderstanding of science due to non-linearity of feedbacks effects.  But even assuming this away,

that’s only 10ppm off a doubling of pre-industrial CO2.

 

Hansen and co. think we should aim for 350ppm or lower, in order to minimise the risk of uncontrollable feedback effects kicking in.  This would require a cut in emissions to pretty much zero as soon possible, in order to let our emissions fall below the natural rate of decay of GHGs in the atmosphere.

 

OK, so clearly our current approach doesn’t reflect the potential seriousness of the problem.  Kevin Rudd has put forward a bewildering array of different targets, but his present position is this:  Australian polluters will be made to cut their emissions by a minimum of 5% based on 2000 levels by 2020, and a maximum of 25%.

 

Now, what our politicians end up choosing for us within that range is subject to what the rest of the world says it will do – because there’s no way the Australian state is going to sacrifice the competitiveness of its capitalists by moving ‘faster’ than the rest of the world (more on that later).

 

OK, this position sort of has a veneer of legitimacy when you frame it in terms that disregard class: why should ‘we’ be forced to cut ‘our’ emissions faster than everyone else?  But as the Greens, to their credit, have pointed out, the offer of a 25% cut emissions is a total furphy, because it comes with the condition that the rest of the world has to agree to stabilise the total concentration of greenhouse gases in the atmosphere at 450ppm.

 

Now, of course, we need to stabilise emissions at at least 450 ppm, since scientists are now saying that really we should be aiming for 350ppm if we want to avoid disaster.  But Rudd is saying Australian polluters will cut their emissions by only 25%, in exchange for the rest of world agreeing to take drastic action to cut theirs!

 

There’s no way the rest of the world would agree to this, especially when you consider that Australia’s emissions per person are currently around 26 tonnes of CO2, while in the EU they are around 10 tonnes per person, and in China and India – whose rising pollution is always invoked in right wing arguments for Australia’s polluters not doing anything – pollution per person is much lower still.

 

Based on the 15% percent target that Rudd was offering at the time of the release of the CPRS White Paper – which he didn’t attach conditions to that were quite so ridiculous – Australia’s per capita emissions would fall to 18.9 tonnes CO2. If the rest of the developed world put in the same  claim for per capita emissions in absolute terms, global emissions would actually rise by

 about 35 per cent, not fall towards the 450ppm target that Rudd claims is ‘in the national

 interest’. If all countries were to pollute at this per capita level in 2020, global emissions would more than triple.

 

In practice, therefore, Rudd’s negotiating position seems deliberately calculated to weaken the Copenhagen agreement even further than we would otherwise expect.  To their shame, the Australian Conservation Foundation, the World Wildlife Fund and the Climate Institute have given the government green cover by supporting these targets, along with the social democrats in the Australian Council of Trade Unions and Australian Council of Social Services.

 

So why is Kevin Rudd so weak on climate change?  Well, I suggested earlier that you have to see emissions trading and the targets associated with it as primarily reflecting the interests of the capitalist class when it comes to climate change.

 

But what are those interests?  I’ll begin by acknowledging that it has become belatedly apparent to a significant section of the capitalist class that something needs to be done about climate change: that if they let the problem get too bad, it will start to seriously impinge upon their profits.

 

This is what the neoliberal British economist Sir Nicolas Stern means when he calls climate change ‘the greatest and widest-ranging market failure the world has even seen’.  He means that the market has failed to price in the damage that greenhouse gas pollution is going to do to ‘the economy’ (read “capitalists’ profits”), and that incentives need to be shifted so that these ‘economic costs’ are taken into account by capitalists deciding whether or not to open up another coal-fired power plant.

 

This is also the kind of argument that Ross Garnaut goes through at the beginning of the report Labor commissioned him to write: he discusses how, if we don’t do something to ‘mitigate’ the consequences of climate change, we won’t have a Great Barrier Reef, and won’t that be terrible for the Australian tourism industry.

 

I’ve read the thousand pages of nauseating apologetics contained within the Garnaut review, and not once does he mention that climate change threatens the lives of millions of people in places like Bangladesh.

 

Marx called economists like Garnaut ‘hired-prize fighters for the bourgeoisie’: people uninterested in an even remotely scientific or critical analysis of the capitalist economy, and simply interested in defending the existing order.  Well Garnaut himself is not so much a hired prize fighter for the bourgeoisie as a fully paid up member.

 

He made a good slice of this money setting up the Lihir gold mine in PNG, which has destroyed the environment of Lihir island through cyanide contamination and dumping vast quantities of tailings into the sea.

 

OK, but Garnaut nevertheless supports doing something about climate change – indeed, he and Nicolas Sterne are seen by some members of the establishment as having got a little bit carried away with their investigations into climate change.  But I think their position is evidence that it just so happens that even if your only concern is promoting the interests of the capitalist class, in some ways it makes sense to do something about climate change.  I mean, under the present system these people effectively own the world, so they don’t want to completely destroy it.

 

However, this doesn’t at all mean that they will win argument within the capitalist class, or that even if they did the ‘solutions’ they favour would be at all desirable.  For a start, these economists have their eye on the interests of the capitalist class as a whole.  But the capitalist class doesn’t act as a collective whole – at least, not very often.

 

In other words, the ‘capitalist system’ does not exist as a pure abstraction.  We live in a world in which a particular set of bosses and big shareholders have large investments tied up in dirty industries, and they have a particular interest in destroying the planet at the most rapid rate they can get away with.  Indeed, almost all capitalists benefit in the short term from having access to cheap, fossil fuel power.

 

More importantly, the system is also built on competition between capitalist states.  Politicians and capitalists within Australia ‘need’ the economy to be competitive on the world market.  Australia’s relative economic ‘success’ has been underpinned in part by the cheap, coal-fired power available to sectors such as the aluminium industry, and direct exports of coal.  The Australian capitalist class isn’t going to give up this advantage lightly.

 

The same argument applies to other capitalist states.  Each has an interest in trying to do less than their ‘fair share’ towards cutting emissions, to try to gain a competitive edge over the others.

 

And while it’s true that there’s another side to this coin – that countries whose industries are well-positioned to pioneer the production of renewable energy technologies will benefit from a tougher global agreement – the need for international consensus amongst capitalist states means we get lowest common denominator agreements like Kyoto was, and like Copenhagen almost certainly will be.

 

But most importantly, if we let the bosses and the politicians design the response to climate change, they’ll do everything they can to shield business from the costs of whatever small actions they do decide to take, and pass them on to workers.

 

Carbon trading is the approach that capitalist states have come up with in response to these contradictory pressures, and the imperative to protect profit rates above all else.

 

OK, so I’ll explain now how carbon trading is supposed to work.

 

Each year the ‘cap’ under Rudd’s scheme is set by printing a certain number of permits, entitling the holder to pollute a hundred tonnes or whatever number of CO2.  The amount of permits printed is supposed to be calculated so that Australian polluters can meet the next target committed to by government – the 5% target or whatever by 2020.

 

It’s this ‘cap’ part of the scheme that initially sucked in a lot of environmentalists, and is part of the reason why almost all of them – including the Greens – still won’t take a position against all forms of carbon trading, and have at times been some of the strongest supporters of market based ‘solutions’.

 

The ‘cap’ sounds attractive because, if all goes to plan, it’s a legally enforceable maximum on the amount of pollution released by companies covered by the scheme, unlike a carbon tax, which allows total pollution to go as high as polluters choose, as long as they pay the tax.

 

OK, the next step is for the governments to decide how they’re going to allocate these rights to fill up the Earth’s atmosphere with pollution.  In practice, they usually decide to hand the vast majority of these rights out to polluters for free, and I’ll say something more about this later.

 

Once these permits are out in the market, polluters are then free to trade them as they wish.  So you get a market for pollution credits established, and the price at which these permits trade is called the ‘carbon price’.

 

Now, this carbon price doesn’t just affect polluters.  When the CPRS comes in, polluters will be free to pass this cost on to consumers.  So the price of carbon intensive goods, like electricity, will go up considerably.

 

All up, Treasury made an estimate that the average consumer will pay an additional $300 a year on things like electricity, transport and food.  (Now, that estimate itself is wrong for a few reasons, which we can go over it discussion if anyone’s really interested why, but the point is that it’s not controversial to say that the CPRS will cost workers a considerable amount of money.)

 

Worse still, this will hit the poorest workers the hardest.  Think about it this way.  If you’re on a low income, it doesn’t necessarily follow that your electricity bill will be lower, or that you’ll pay less for petrol or bus fares than someone on a higher income.

 

For a start, you might be forced to live out in the sticks where there’s no decent public transport because you can’t afford a house closer in.  You also might have to spend more on heating your house because you don’t have the money to insulate it properly, and you might also be stuck with an expensive and emissions intensive electric hot water heater because you can’t afford a solar or gas one.

 

So in absolute terms those on lower incomes often need to consume just as much if not more emissions intensive goods than those on higher incomes.  Therefore as a proportion of their income, those on low incomes spend a lot more on carbon intensive goods and services than the rich.

 

The upshot of all this is that emissions trading works like a highly regressive tax.  I mean, the GST was bad, because it was just a flat 10% on consumption regardless of how much you earned, but in percentage terms carbon trading could be much worse.

 

Now, I should add that in the first two years of the scheme Rudd has committed to providing ‘full compensation’ to low income households, and some compensation to what they call ‘lower middle income’ households, in the form of lump sum payments.  But it would be naïve to think that this will continue much beyond the first two years.

 

The White Paper says that compensation will be reviewed as part of the taxation review currently being conducted Treasury head Ken Henry, who has already expressed the view that taxation reform should aim to reduce the ‘tax burden’ on business.

 

So who benefits financially from taking this money from workers through the carbon price?  The answer is: whoever gets to keep the revenue defined into being by writing the pollution permits.  If government decides to hand-out permits to polluters for free, it’s effectively giving them the ability to charge workers the cost of the permits they were handed for free.

 

In some cases, this can mean the net effect of carbon trading is to make polluters more profitable, not less.  This is what happened under the first four years of the EU’s ETS.  A report commissioned by the UK Treasury estimated that UK power companies had made an additional 800 million pounds, taken straight from electricity consumers, as a result of carbon trading.

 

Based on Treasury’s own calculations, Rudd’s scheme will hand out an enormous subsidy package to polluters, worth $3.5 billion over the first two years of the scheme, that includes free permits, direct cash payments, and research funding for so-called ‘clean coal’ technology.  Let me emphasise again – when the compensation inevitably goes away, this money will come directly out of workers’ pockets, and hit the poorest workers the hardest.

 

So it’s no wonder that even moderate environment groups like the conservation foundation have criticised this aspect of the scheme – although, appalling, lent their support to the package overall.

 

But what is usually overlooked by these groups is that even if the permits weren’t handed out to polluters for nothing, emissions trading would still be a highly regressive tax – it’s just that the money would first go onto the budget bottom line, and then back off it again to be spent on tanks or submarines or harassing refugees or whatever other reactionary policy our beloved leaders decide is best for them and their allies in the capitalist class.  OK, I’m getting a bit ultra-left there because obviously tax revenue can be used for purposes that we would defend as well, but the point is that the tax would be highly regressive.

 

Pushing the carbon price onto consumers also happens to be a pretty ineffective way to transition the economy to one fuelled by renewable energy.  According to economists, emissions trading provides incentives for the cheapest reductions in emissions to be made first.  Now, viewed in the way that economists like to view these things, the ‘cheapest’ way to reduce emissions is to make improvements to the existing infrastructure for generating and consuming energy.

 

As we are told ad nauseam, there are lots of pretty ‘cheap’ ways to reduce emissions: you can install energy efficient light bulbs, put insulation in ceiling, buy a solar hot water heater, catch public transport, ride your bike to work, so on and so on.  Or, faced with rising power bills, workers could just turn their heating off in winter.  From the perspective of the capitalist class, that’s a pretty ‘cheap’ way to cut emissions.

 

When the carbon price comes in, there’ll be no shortage of ‘incentives’ to do this sort of thing.  Indeed, the explicit intention is that these so-called efficiency measures will happen first – since, in terms of dollars spent per tonne of CO2 saved, they are very cheap.

 

Indeed, if Rudd adopts a low enough target, it’s possible that almost all of Australia’s emissions reductions could be achieved in this way, at a very low marginal cost.  That’s what behind those Treasury studies that say things like emissions trading will only cost us 0.1 of GDP by 2020 or whatever, that people like Clive Hamilton like to wave around.

 

The reality is that a serious transition to a zero carbon economy will be much more expensive than this, and would involve qualitatively different actions.  Even under capitalism, no one is seriously suggesting that we could get emissions to zero by switching off the lights when we leave the room, or installing a bit of insulation.

 

To get to a zero emissions economy, it’s obvious that we have to build renewable energy power plants.  Moreover, once the renewable energy has been built, it really won’t matter that much if you leave the house and forget to switch the lights off, since the energy will be coming from renewable sources in any case.

 

Emissions trading therefore might actually slow the transition to a renewable energy economy, even if it achieves its moderate targets, since it will make the present energy system more ‘efficient’ – prolonging its life – as well as taking money from workers and handing it to polluters.

 

To put is another way, suppose Rudd really did agree to a 25% cut in emissions by 2020.  Common sense would suggest that this brings us 25% closer to an economy with zero carbon emissions.  Common sense is wrong.

 

The other thing Rudd is proposing as part of the CPRS is to make scheme fully open to the international carbon trading market.  This means that, alongside all the other concessions being granted to polluters, they will be allowed to buy carbon offset certificates from overseas, and have these count as permits within the scheme.  So, theoretically, Australian polluters could shift their entire responsibility for cutting emissions overseas.

 

I don’t have time to go into the enormous problems with the international carbon market, but let me just cite one example of how these alleged emissions ‘reductions’ work.

 

-explain HFC plants in India and China

 

-one Indian manufacturer made $600 million on a $3 million dollar investment in an incinerator, and ploughed into back into producing – you guessed it – more HFCs

 

In other places, peasant farmers have had their land stolen to plant trees on – and, in at least one example, successfully fought back, burnt down the monoculture plantations and took back their land

 

So if you’re serious about saving the planet, you have to know your enemy.  The ‘solutions’ being put forward by the capitalist class are nothing of the sort, and are attempts to shift the costs of whatever small emissions reductions are achieved onto workers.

 

Carbon trading is what you get when economists, capitalists and politicians are acting from a position of political strength, and when the environmental movement is not solidly based on a pro-workers politics, and is, indeed, at times openly anti-working class.

 

Indeed, emissions trading is an extension of the trend towards ‘user pays’ which has formed an important front in the class war from above which has been waged since the 1970s.  Just as the ‘free market’ means that workers lose their houses while banks are given multi-billion dollar bailouts, ‘market based’ environmentalism means workers are made to pay the alleged ‘true carbon cost’ of the things they buy, while the owners of coal-fired power stations are handed millions of dollars in ‘compensation’ in exchange for years of making profits from environmental destruction.

 

But there is an alternative to making the Earth’s increasingly limited capacity to absorb GHGs a commodity that is sold-off or given away to corporations. Although Marx could not have foreseen the dire threat we face currently, his philosophy and the struggle for socialism he theorised and participated in remains the most radical and important demand for change, both in the relations between people themselves, and in the relations between people and nature.

 

Let me finish with this quote from Capital, which has all the more importance given the current attempt to commodify the atmosphere:

 

From the standpoint of a higher socio-economic formation [he means socialism], the private property of particular individuals in the earth will appear just as absurd as the private property of one man in other men. Even an entire society, a nation, or all simultaneously existing societies taken together, are not the owners of the earth.  They are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations

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