More on Australia’s cop-out on CO2

21 12 2008

I thought an article from Peter Hartcher in the Sydney Morning Herald put it well this past week.  Labelling Rudd “Captain Reasonable”, he had this to say:

“He described climate change as an elephant of an issue, but then proposed not doing anything especially big about it.

He called it “a threat to our people, our nation and our planet”, but then announced only the gentlest of responses.

He said the country stood at “the crossroads of history”, but then suggested that we choose the course of least resistance.

For heaven’s sake, he seemed to be saying, can’t we all just be reasonable.

Rudd’s carbon emissions plan is crafted as a piece of political positioning, and he said as much himself…”

There are times when trying to carve the middle ground is not the right course of action.  Times when leadership means bringing non-believers along with you.  Times when there is truly a right and wrong position and no rational in-between path.  And times when anything less than urgent and drastic action equates to utter failure.

To draw an analogy, if I’m jumping across a ravine between two cliff faces, it doesn’t matter if I miss by 5 metres or only 1 metre – I’m screwed either way.  I wish Kevin Rudd could understand that his bureaucratic and political impulses willcarry destructive consequences the like of which we’ve never seen.

Further on this topic, progressive action group GetUp is raising funds to air this ad during the Cricket on Boxing Day:

…..and poet and environmentalist Mark O’Connor discusses here
the suicidally high population growth rate that Australia is pursuing
(higher than most South-East Asian countries including Indonesia!) and
how this will make significant CO2 reduction almost certainly
impossible.





Kevin Rudd – you are a disgrace

15 12 2008
Three protesters interrupted the PMs announcement today

Three protesters interrupted the PM's announcement today

World leaders gathered this last week in Poland to forge an agreed direction for climate change policies leading to the Copenhagen summit in 2009.  Australia’s ruling centrist political party (Labor) had already deferred plans to announce its intended carbon reductions on a world stage…and now we can see why.

Buckling to intense lobbying from our coal and mineral industries, the Prime Minister announced plans to reduce our greenhouse emissions by an insubstantial 5% by 2020.  There is some form of appeasement in the declaration that this might rise to 15% if there is a global agreement.

Aside from the fact that such a target, if pursued by others, will lead to catastrophic shifts in the Earth’s climate, the decision to reward polluters is particularly evil.  This ABC article outlines the outrageous handouts:

The amount of free permits available to those industries – such as aluminium, cement, lime and silicone production – has been increased to 25 per cent, compared to 20 per cent flagged in the green paper.  That amount would rise to 35 per cent once agriculture is included in the scheme, which is not expected until at least 2015.

Industries now also have the choice of being assessed for assistance via two different tests based on either revenue or the value it adds to the product in the manufacturing process.  If an industry produces over 2,000 tonnes of emissions per million dollars of revenue or 6,000 tonnes of emissions in the value it adds to a product it is eligible for 90 per cent of free permits.

If it produces over 1,000 tonnes of emissions per million dollars of revenue or 3,000 tonnes of emissions in the value it adds to a produce it is eligible for 60 per cent of free permits.  The Electricity Sector Adjustment Scheme will also provide $3.9 billion assistance to coal fired power generators over the next five years.

To put this another way – if a company produces a lot of climate altering pollution it’ll get great wads of cash, if it produce a little bit less, then taxpayers will reward it just a little bit less.  Perverse but true.  As Greenpeace Australia recently said – “it’s like paying someone to be a prick”.

I hope that such a gutless effort will come back to bite Kevin Rudd, a man who is all talk, and no action.  An archetypal politican, but not a real leader.  Here is what commenter Emma had to say in this post on the ABC online website:

A failure on all counts.

A failure of a target.

A failure of a scheme (giving away free permits to polluters, rushing to compensate at 5%, soft entry targets mean much harder targets and higher costs later)

A failure to heed the warning of scientific experts, economists and experienced policy makers and their own independent review, led by Garnaut.

A failure on the global stage – a spectacular diplomatic failure in fact.

A failure to keep an election promise.

A failure to help try to save our children and grandchildren.

A failure for the planet.

A failure of a government.

Many Australians will no doubt agree.





Secret first footage – clean coal technology

5 12 2008




A growth is a bad thing isn’t it?

3 12 2008

Here’s the ABC’s journalists talking to each other about some economic data from Australia today.  I’ve taken the liberty of adding my own reflections.  My comments are in purple.

GDP shows economy barely growing

The World Today – Wednesday, 3 December , 2008 12:10:00
Reporter: Stephen Long

ELEANOR HALL: But first to the grim news about the economy, the latest national account figures show that Australian economy is barely growing at all. [For whom is it grim?  Most species would probably think that humans are consuming plenty enough already without increasing their share.]

The country’s gross domestic product rose by just 0.1 of one per cent in the September quarter; and the non-farm economy is already going backwards. [Going backwards.  A loaded term surely.  If people are buying almost as much stuff as last year, I would think that we’re pretty keen shoppers still]

Joining us to analyse the latest numbers is our economics correspondent Stephen Long.

So Stephen, how worried should we be about these GDP figures? [She might have asked, should we worry at all about these abstract numbers?..but easier to go for the leading question]

STEPHEN LONG: Well they’re very weak Eleanor, they suggest that the economy recorded virtually no growth, was just in positive territory, almost grinding to a halt in the three months to September.  [That’s a rather odd thing to say.  If people are consuming a little bit more than last year then consumer activity hasn’t really ground to a halt.  Even if people bought half what they did last year….that isn’t grinding to a halt.  What a strange turn of phrase.]

But if you take out the, if you look at the non-farm economy which is where more than 90 per cent of the activity takes place and where most of us live and work, well that was going backwards significantly. So they are a worry. [The thing is the non-farm economy is not a place.  We don’t live in an economy….it’s just an abstract way of trying to sum up commercial exchanges in a place.  There’s an implicit suggestion that to not consume more than last year is to “go backwards” in some profound and overarching sense of the phrase.]

They suggest the economy was in bad straits before the worst of the global credit crunch hit and before we saw the world’s powers coming together to say we had to take drastic action to rescue the world economy, things were already looking pretty bad.

ELEANOR HALL: So what was slowing the economy so much then?

STEPHEN LONG: Household consumption was one of the main things; you’ve got a situation where basically consumers were on strike. [Geez Mum, you only bought as much crap as you did last year.  Are you on strike or something?] So you had just 0.1 per cent seasonally adjusted growth in household consumption.

But that’s a bit misleading because that was driven up by rising rent, up 0.6 per cent, rising insurance and financial services costs in the quarter [So because there’s a reason, then we leave that stuff out – if its explainable then it doesn’t count]. Purchases of vehicles were down eight per cent, people weren’t spending money in hotels, cafés and restaurants, that sector went backwards. [Really?  Not a single cafe, hotel or restaurant sold anything.  I’ll be damned!]

And you also had a big rise in inventories which peculiarly is counted as a positive contribution to economic growth but actually suggests that companies couldn’t sell stuff. [Not as bloody peculiar as spending on burglar alarms, deadlocks, road accidents,  fighter jets and kidney transplants which we count toward economic growth] So that suggests that consumers were on strike [yep haven’t seen a shop for about four months myself], there’s a couple of things going on.

Bear in mind this pre-dates the huge round of interest rate cuts that we’ve seen over the past four Reserve Bank meetings in the past three months. And also the fall in petrol prices.

So people were getting whacked at this stage by high petrol prices [sorry – what’s this climate change thingy?] and relatively high interest rates but also it suggests that consumers were getting very, very worried about the state of the economy and companies couldn’t sell things.

ELEANOR HALL: Now these figures are for the September quarter, can we expect things to be better or worse in the current quarter?

STEPHEN LONG: Well forecasting is a difficult game, I always stick by the maxim of the late American economist J K Galbraith that the purpose of economic forecasting is to make astrology look respectable [some truth and sense at last]; but it is quite possible that growth could go backwards and we could record negative growth in the December quarter. [Backwards growth…negative growth…does he mean shrinkage, contraction, decline, diminution… is that what he means..funny language].  That’s the forecast of a lot of economists [as if we trust them anymore].

In a sense it depends really how much the huge fiscal stimulus that the Federal Government pumped in, $10.4-billion actually feeds into spending and how much the rate cuts feed into consumption. And we did have relatively strong retail sales compared to what the market was expecting with the numbers out yesterday.

But it’s quite possible that the economy could quite formally go backwards in the December quarter. All of this is moot though in a sense [in a very bloody accurate sense], whether we actually technically hit a recession with two quarters of negative growth or not, the fact is, things are looking grim [unless you have an interest in the wellbeing of your grandchildren or the survival of hundreds of thousands of species of life on Earth. And ooh, there’s that euphemistic “technical recession” phrase again – had to squeeze it in there somewhere]

If you go back a year ago, we were recording a one per cent growth rate in the September quarter, now we’re down to 0.1 of a per cent in the September quarter. So things have slowed rapidly and we’ve seen a situation where employment growth is one-third of what it was if you go back to that stage. [Hang on, you’re saying that we’re still making new jobs!]

Unemployment is going to go up [hmmm.  what are the astrologers saying on that one?], as I said the non-farm economy is going backwards [so the farm economy must be doing very bloody nicely thanks]; it will feel and smell like a recession for most people [how does a recession smell?  I think I’ve forgotten.  Perhaps it the smell of fresh air, or lavender or something quite lovely]

ELEANOR HALL: And a year ago too we were very reliant on the resources boom, have we got to give up on that at this stage? [No Eleanor, we ought to just keep digging shit out of the ground like there’s no tomorrow.  Why care?]

STEPHEN LONG: Yes and one of the other things here is that, you’ve had a fairly strong contribution to economic growth over the year by capital investment from business and that’s going out the window. There was also a reasonably strong contribution in the quarter from public spending, we’ll be expecting that to go up but it shows you how weak the private economy is.

ELEANOR HALL: So how is the Treasury forecast of two per cent growth over the year to next June looking now? [Well, Eleanor it is probably as good a number as any]

STEPHEN LONG: Well I think it’s looking pretty shaky, I think it’s looking very optimistic. Of course they’ll be banking on these massive interest rate cuts by the Reserve Bank feeding into higher consumption and the Government throwing money into the economy to generate spending to get them over the line with that two per cent growth forecast. But it’s looking very ambitious right now.

ELEANOR HALL: Stephen Long our economics correspondent thank you.

Apologies for the cynic in me but I tire of opinion presented as analysis.  The agenda has been set and we know what we’re allowed to think before the interview hits its stride.  And this, from the national broadcaster.  But at least they didn’t interview Bill Evans– chief economist of Westpac, or the ubiquitous Saul Estlake of ANZ or any other number of vested interests.





The financial crash was predicted and avoidable.

1 12 2008
Adbusters

Adbuster

Below is a passage from the book “Economia: New economic systems to empower people and support the living world” by Australian academic Dr Geoff Davies published in 2004.

It is clear to me that before the recent reflexive soul-searching about financial institutions and systems, there have been many non-mainstream voices condemning the structures and patterns of economic globalism and financial markets (a.k.a financial casino) in particular.  This passage was written at a time well before most people had ever heard of “sub-prime”.

DOMINANT, UNSTABLE, DESTRUCTIVE AND PARASITIC

Financial markets, as presently structured, are intrinsically unstable. The disconnection of stock markets from the real values of commerce weakens the stabilising negative feedbacks from reality and permits the destabilising influence of speculation to take hold. The larger and stronger the financial sector becomes, the more its internal instabilities are manifest. Its instability greatly magnifies the inevitable fluctuations and surprises that result from our inability to foresee the future. That is why seemingly minor events can occasionally trigger economic catastrophe.

You may have noticed earlier. that I put ‘cycle’ in quotes when referring earlier to the business ‘cycle’ This is because ‘cycle’ is the language of equilibrium and stability. Neoclassical theory would have us believe that we are meandering along a round-bottomed valley. If we deviate too far to one side, the gently rising slope of the valley will bring us gently back towards the centre of the valley. If we overshoot, we will be brought gently back from the other side, like a pendulum. This gentle oscillation could correctly be called a cycle.

A more accurate metaphor is that we are teetering along a roundtopped ridge. If we stray to one side, we must work to climb back to the top. If we stray too far, we may have to claw our way back. If we can’t, we may slide down faster and faster until we crash into the gully below. Rather than oscillating in a gentle cycle, we are trying to tame runaway exponential instabilities, either the booming climb of a rising market or the crash of a market in free fall.

The power of the financial system has grown steadily for over half a century. The source of this growth is partly in the machinations of the financial system, which draws more wealth into itself, and partly in the strange and archaic rules of the monetary system underlying it, which are explored later in this book. The financial system ought to be an appendage to the real economy, serving its needs and involving a small fraction of its total resources. Instead, the financial system has grown to dominate the real economy, and to inflict the effects of its own pathological and selfserving internal dynamics upon the real economy.

The financial markets promote destructive instabilities, they are failing to invest capital properly for the future, and they are parasitic. These are fundamental failures. If we are to have healthy economic systems, we must reduce the role of financial markets to that of serving the real economy, and we must learn how to eliminate their intrinsic instabilities.

I’m glad these type of opinions are now getting something of an airing in the popular media.