Renegade Economists Podcast 67

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Creative Commons License photo credit: madaboutasia

Carbon Catchcry: this hour long special is our last formal show of the year, with an interview of Anna Rose (Australian Youth Climate Coalition) on Rudd’s filthy 5%. Also international guest Fred Foldvary discusses the insides to the GFC and what could be really done if politics was for people not cronies. How many policy papers will the Rudd govt slide thru this week?

Show Notes

Why economic growth fails us -> society’s progress is captured and reflected by higher land prices. The wealth gap expands when speculators dominate such an essential market as land and housing.

Rudd on climate fail
– top heavy capitalism
– slow to change due to lobbyocracy, Chomsky informs us of academic Thomas Ferguson and his ‘investment theory of politics’. Read Chomsky’s first interview since the Obama election.

Rudd’s Emissions Target: A Policy Analysis by Anna Rose.
Article highlights:

Thirty per cent of the permits from the scheme will be given away for free, and there will be direct cash handouts to some industries like coal-fired generators, who score a cool $3.9 billion — untied to any structural adjustment programs to transition out of this dirty fuel.

The more polluting you are, the more free permits you get. The biggest polluters get 90 per cent of their pollution permits for free, and the second biggest polluters get 60 per cent of their permits for free.

It’s worth noting that LNG companies like Woodside and Santos are huge winners from the scheme, as they had been excluded from receiving assistance in the Government’s Green paper in July. Now, they’ll receive 60 per cent of their permits for free, despite being well positioned to make windfall gains from emissions trading since LNG is a less polluting fuel than coal and oil.

Risky business: banking and borrowing
Borrowing is even worse, because, say I run a company and am not doing very well financially, I can “borrow” permits from future years to make up for excess emissions that I’ve emitted over the cap this year with the “intention” of paying them back in future years. How convenient it would be if I go bankrupt and avoid having to pay my carbon liability…

And just to make sure the scheme can’t be too effective, here’s a price cap
– the scheme will have a price cap of $40 for the period 2010-11 to 2014-15.

Let other countries do the work for us: overseas credits
There is no limit on the amount of permits companies can import from other countries’ emissions trading schemes. This means that if it is cheaper to buy emission reduction units from overseas, companies could make no changes domestically in Australia.

Companies can profit from this scheme — but it will cost the government money
The White Paper suggests that the cost of compensating business will be fully met by the revenue received from the auctioning of permits.

However the scheme allows polluters to deduct the cost of the permits they need to buy from their taxable income. This means the Government will likely receive less tax from our major corporations, which will impact the bottom line, leaving less money for renewable energy, schools, hospitals and public transport.

So if I hate this scheme, should I put solar on my roof and “do my bit”?
if I put a solar panel on my house, it doesn’t lower Australia’s overall emissions but just frees up permits for my generator that they can then sell to Alcoa to produce more aluminium. It also lowers the carbon price, meaning companies have an incentive to produce more greenhouse pollution.

It’s not just Bob Brown who is getting Kevin Rudd and John Howard confused. Punch in Kevin Rudd into Google Image Search, and Google helpfully offers — “Related Searches: John Howard”.

John Faulkner: Captain transparency
Bernard Keane writes:

The 2010 election will be held under significantly stronger funding and disclosure requirements if John Faulkner has his way. Faulkner this morning released the Government’s long-awaited Electoral Reform Green Paper and declared that it was critical that reforms be in place prior to the next election.

The Paper contains no recommendations but canvasses a number of fundamental reforms in electoral funding and disclosure, including:

* Bans or caps on donations and external funding of political parties
* Different regulation for different types of donors, such as corporation, NGOs and individuals
* American-style links between public funding and restrictions on private funding
* Greater rigour in disclosure, including relating to “associated entities” and third parties, and electronic reporting
* Caps on, and disclosure of, election expenditure, and possibly expanding the definition of expenditure to activities not currently caught
* The regulation of third party participants such as trade unions, and their expenditure on political activities
* Greater financial transparency of political parties, including disclosure of their balance sheets and disclosure by branches and campaign committees
* Expansion of the definition of “associated entities” controlled by political parties
* Greater harmonisation of Commonwealth, State and Territory laws to reduce confusion

Man trademarks 😉 emoticon By James Sherwood

A Russian businessman has trademarked the combination of semicolon, dash and bracket that make up a winking face ’emoticon’ in texts and emails.

Noam Chomsky: “What Next? The Elections, the Economy, and the World”

Obama’s choices to more or less run this were Robert Rubin and Larry Summers from the Clinton–Secretaries of Treasury under Clinton. They are among the people who are substantially responsible for the crisis. One leading economist, one of the few economists who has been right all along in predicting what’s happening, Dean Baker, pointed out that selecting them is like selecting Osama Bin Laden to run the war on terror.

So once again, the election was essentially bought. 9 out of 10 of the victors outspent their opponents. Obama of course outspent McCain.


Regi Bugalu
Melodious Wayfarer
Fake Plastic Tress – Radiohead

Please Note: the show will be in summer program mode for the next 3 weeks featuring our favourite economically inspired music. Happy reading out there!

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