Oh, Hideous Trilemma

Tony Abbott, by announcing he will not support any form of ETS or Carbon Tax, has essentially signalled to the electorate that one of three things must be true.

1) The Liberal Party no longer believes in Free Enterprise and Free Markets

This one would be a bit of a shock, since Free Enterprise is supposed to be at the core of what Liberals believe in. Indeed a lot of supposedly small government, pro-capitalism advocates both here and other places like Europe are opposing putting a price on carbon, as a big socialist, environmentalist conspiracy, a power grab by centralised decisions makers.

Au contraire. If as a political party you propose to do something to reduce Carbon Emissions, and its not taking money off Carbon Emitters, you're the commie pinko in the debate.

If you put a price on carbon, aimed however imprecisely to try and match the amount of damage it is doing, the market then comes in and solves global warming for you. This is the whole damn idea. Entrepreneurs figure out how to make profits from cleaner sources of energy, because they are competitive with coal and oil now that the externality - the economic damage done by burning these things that no one buying or selling coal pays for - is corrected.

Any other government policy, instead of being a "terrible new tax" on carbon, instead becomes a terrible new tax on the entire rest of the economy.

Going to give bureaucrats a whole bunch of money for subsidising solar panels? To pay for them you will have to tax people's income, and profits, and other productive economic activities. And if it turns out the bureaucrats' picked the wrong solution, and some smart 22 year old engineer could have given you tidal power for half the price with some capital to back him and no subsidy to compete against? You've outright wasted the taxpayers money. Right wing people are supposed to hate that.

Going to mandate cars become more fuel efficient? What if as a result it then becomes more profitable to just burn the oil for main grid power? Hell, greater energy efficiency can increase energy consumption, in some circumstances - this is known as Jevin's Paradox.

Invest in Smart Grid technology? Al Gore's gotten rich doing this, largely because of the expectation that energy will get more expensive globally when carbon starts costing more. As the conspiracy theorists are all too quick to point out. If you were to actually put such taxes in place, why, even more private parties would probably sink billions into such research! Who needs a government grant when your idea is already profitable?

The fact is that any and all such government policies presume that government can fix the problem better than the market; that bureaucrats and politicians come up with better ideas than business people. I personally happen to think that's true, some of the time, but Liberal party folks sure aren't supposed to.

Unless....

2) The Liberal Party do not believe in reducing carbon emissions

This one is credible. Nick Minchin certainly doesn't, and I begin to wonder whether Tony Abbott does, now that he's admitted that even an international framework in Copenhagen won't actually make a difference to his stance after all. The government and Malcolm Turnbull are both fond of the phrase "do nothing on climate change", in reference to the new leadership corps, and you've got to give more than a little credence to the idea.

What this means though is that when the Liberals say they will have a policy to fight climate change, just not a tax or an ETS, they are essentially lying; and not just a distortion of facts or a false promise to try and stay in power, but an outright fabrication of what they actually believe and stand for on a core election issue. Whatever they propose to do, it will amount to taking no action to actually reduce emissions. Oh sure, they might deregulate Nuclear Power - which would be a great start - but that's not nearly enough to fix the problem, or else nuclear would be the most dominant source of energy in America today, and not a niche sector. Absent a carbon price, even nuclear is not yet competitive with coal.

So the Coalition's full policy, when finally revealed, is likely to be nothing more than elaborate window dressing piled on top off their current position, which is "Deregulate Nuclear, and say it would be nice if emissions went down, knowing full well that saying so is in absolutely no conceivable way actually going to cause emissions to go down. But we'll run a campaign of misinformation that might confuse people into thinking we're going to do something, because we certainly don't have the guts to fight an election over the science itself."

If they were willing to come out and dispute the science, openly, as their party platform, then we'd have a genuine debate on our hands. The Liberal party conservatives simply don't have the minerals, so to speak, to own their convictions; or rather, their take on the polling, or the moderates in the party, have convinced them they can't win over the public in an open argument.

Yeah, that sounds about right. Except, this wasn't a dilemma. What other possibility am I entertaining?

3) The Coalition honestly don't have a clue that they're not making any sense.

They haven't renounced their core ideological principles, and they're not just lying outright. In fact, they are utterly economically illiterate, never mind what you think of their scientific credentials. Misunderstanding isn't just going to be pumped out to the electorate, it lies at the core of the Coalition non-policy. Partly they are dishonest, and partly they are divided, and partly they are wavering, but mainly, they are just confused.

Now that Malcolm Turnbull and Peter Costello are both out of the picture, there is, perhaps, not a single person left of influence in the parliamentary party who is capable of following why economists who accept climate change are nearly universally in favour of either a tax or an ETS. Or, they don't even care.

Don't some of them have economics degrees? Surely that's what Liberal members of parliament study at university. Were they paying any attention in class?

One thing I've said in Abbott's favour a lot lately is even if I disagree with him on most things, at least he has some intellectual muscle. Now, I'm beginning to have very serious reservations.

The Opposition are, for the moment at least, an absolute disgrace.

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I promise the next post won't concern the Liberal Party, or politics, in any way, shape or form.