Saturday, October 17, 2009

Carbon politics after the ETS

Carbon politics after the ETS

In all interesting team games the good players are thinking more than one move ahead, and the most interesting team game is politics. Consider the ETS. It is, in principle, a brick wall. We set a cap on our carbon emissions and emitters are forced to trade to stay below that. The assumption is that the magic of the free market will supply the best possible way of staying below the cap with minimal economic pain. 

Does the free market have enough common sense to avoid running full speed into a brick wall? This was amply disproved in 2008 when the economy proved totally unable to prepare for the spike in oil prices which has been predicted for decades. We don't need the magic of the market to work out how to get over the ETS brick wall, because there is only one possible way.

Things that aren't going to work include: the hydrogen economy, carbon capture and storage, solar energy of any sort, covering the landscape with wind farms, building dams, switching agriculture to producing biofuels, geothermal, tidal dams, stopping cows from farting. Many of these involve mankind making a grab for ever more of the limited resources supporting life on Earth. It is a relief that they won't do the job, so that we will be forced to move to the one energy source that nature isn't interested in.

The only thing that will get us over that ETS brick wall without economic disaster is Nuclear Power. Which brings us back to the game of politics. Once Malcolm and the Coalition get the ETS signed up, then they can roll out the Nuclear solution. It will be trivial to use the Senate's powers of enquiry to tear all the alternative options to shreds. They can unwrap a Nuclear policy, complete with a proof that nothing else will do the job. And then suddenly the boot is on the foot. Nuclear Power will tear the ALP and the Greens to shreds, since so many of them think that the truth should never be allowed to get in the way of a good fantasy.

Is anybody in Australian politics thinking more than one move ahead? It is hard to know. You would think that such a plan would make it easy for Malcolm to get Senators to pass the ETS. However he may be wary of discussing it, given that many in his party hate his liberal views, and others are just too talkative to keep quiet about it. I suspect however that is is the clued up ALP that can see this possibility. They'd prefer to have the ETS fail. This avoids the problem. Once again such a cynical intention could not be shared with the rank and file MPs, so we are not likely to ever know. Still it will be interesting to keep this next move in mind while we follow the struggle for an ETS.