27 April 2010

Death of the ETS

Lenore Taylor reports today in the Fairfax newspapers (see the SMH report here) that the Government has shelved its carbon emissions trading scheme for at least three years – which means for ever. Action on what then Opposition Leader Rudd declared to be “the greatest moral challenge of our time” has been adjourned sine die.

There will be much debate in the weeks ahead about when this initiative died. For my money, the ETS, and the whole governmental response to climate change, died the day Senator Wong, the Minister for Climate Change, declared that the Garnaut Report (at that stage yet to be completed) would be “just one input to the Government’s thinking”.

That was the day the starter’s gun punctured the air in the big race for the rent seekers to get in for their cut.

The Garnaut Review had immense credibility. It was established by the wall-to-wall Labor Premiers and Territory Chief Ministers, and the then Opposition Leader, who joined the panel of sponsors, became Prime Minister early in the days of the Review.  The man appointed to lead it, Professor Ross Garnaut, had enormous credibility throughout the community. Apart from his academic economic credentials, he had been, as Economic Adviser to Prime Minister Bob Hawke, a key figure in the economic reform ambitions and achievements of the Hawke-Keating era. He is well known to and highly regarded by big business, commands respect across party lines, and is himself the chairman of a significant gold mining company, Lihir Gold.

He consulted widely, gave everyone an opportunity to have their say, and produced a report that is one of the better pieces of public policy formulation that I have seen in my forty years in the game.  If the Government had stuck to the Garnaut script, it could have pressured everyone to come on board on the grounds that everyone had had their say and the Garnaut Review laid out the most economically efficient way to achieve what the science dictated needed to be done. The opportunity was there for the Government to get everyone into the cart, and it has been squandered.

Senator Wong, evidently a person for whom politics is just about doing deals (who cares about science or economics, what have they got to do with it?) took this robust and healthy calf, slit a vein, and threw it into the Orinoco, so that we could all watch the piranha with their sharp little teeth snatch everything they could until there was nothing left but the bones.

As Garnaut himself ruefully remarked, this is one of the worst examples of public policy making in recent memory.

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