The simplifying assumption for this discussion is the current politicing between the Libs and Labour over the ETS is just what everyone pretends it is: a discussion solely over the best way to tackle Global Warming. It isn't of course, it is also a proxy battle over whether AGW is real of not. But let us set that aside and assume both sides really do think AGW is real, and recent policy announcements are what they say they are: what they think is truly the best way to tackle global warming.

So in one corner we have the ALP advocating a free market solution: put a price on emissions and let the market sort it out. The people who have to pay for all of this is the emitters themselves - which are primarily businesses.

In the other corner we have Libs advocating what is essentially a centralised planning approach reminiscent of what you might find in old Soviet Russia. They decide of the best techniques for emission reduction, they pass laws to impose them on everybody, and to keep businesses onside the use taxes gleaned from the workers to pay for it all.

This max's out my irony meter. And it just shows the contortions a pollie will go through to get a vote.

rstuart
Yes they are both absurd and disgusting.

However it's not correct to call Labor's policy 'a free market solution'. To politically 'put a price on emissions' is not a free market solution, it's a central planning solution. It involves the use of force - policy - to impose an arbitrary value chosen by a political process, backed up by threats of fines and police, courts and prisons. It must necessarily have all the detriments and disadvantages of interventionism, namely, incapaable of economic calculation, planned chaos producing unintended negative consequences worse than the original problem, the creation of legal privileges feeding exploitative vested interests, and any defects being dealt with by an expansion of all related bureaucracies: the complete disaster. Also, strictly speaking the parties to a transaction under the ETS are not trading carbon, they are trading tax receipts.

A free market solution is to leave the parties to contracts free to choose what value to set on the exchange. It probably would not involve trading in carbon receipts, which depends on a whole-of-world approach much beloved of social engineers and central planners - the forcible improvers of their fellow creatures. A free market solution is much more likely to be directed at satisfying human wants in the most direct and economical way, as judged by the people themselves. So for example, when the Dutch faced the problem of the incursions of sea-water onto their habitat, they didn't deal with it by trying to tax the whole world and control the tides. They did it by building dykes. They also economised on repairing dyke-holes by assigning this task to noble-minded boys who always used to stick their fingers in holes in dykes, when they weren't riding on ice-ponds on silver skates, riding bicycles to clog-making shops, and colonising the East Indies for spices which were always incorporated into Dutch short-bread. But I digress.

Peter Hume: "A free market solution is to leave the parties to contracts free to choose what value to set on the exchange."

No doubt the ETS not as free as you would have it, but it is as "free market" as it is possible to be, I think. If there is some other solution that forces carbon emissions down but in some sense gives even more freedom to individuals, I'd be interested to hear about it.

Peter Hume: "trying to tax the whole world and control the tides. They did it by building dykes"

Correct, they didn't tax the entire world. They just taxed the Dutch, including those who lived inland and didn't give a rats about the dykes.

rstuart

John Hewson has some good (and not so good) things to say here:

http://www.abc.net.au/unleashed/stories/s2812572.htm

It's never really been about the science.

I would have some optimism for the future if it were not for political, religious or socio-economic dogma.

qanda: "It's never really been about the science."

Naturally. If you are talking about politicians, their number 1 priority is and should be the politics. Their very survival in politics depends on it.

On that note, I think Howard is a far better professional politician than Rudd. Hewson's claim that Rudd hasn't explained the ETS rings true for me. In fact he rarely spends much time explaining any issue to the people who voted him in. It seems he leaves that job to his ministers. Howard made a point of hitting the airwaves in various forms a daily habit. Thus, regardless of what you thought of Howard's policies you at least knew what they were.

The same can't be said for Rudd. And if nobody understands your policies a clever opposition can turn them into anything they like. Right now Abbott is doing just that by characterising the ETS as a big fat tax. All I can say is: well done Mr Abbott. Mr Rudd left an opening so big your could drive a truck load of spin through it. That is just what Mr Abbott is doing. He would be a very poor politician if he didn't. I do hope Mr Rudd is learning from this, as we need good politicians that are also policy wonks, but my gut feeling is he isn't.

If it's not about the science then who will be the first international political leader to break ranks, dispute the whole idea and spend the money on other things?

Even India and China (who have the most to lose) don't dispute the phenomenon is real - they just don't want to surrender their current economic advantage to others who have less to sacrifice.

There are no new votes in this for anybody who accepts climate change as fact and there won't be any evidence of success until long after the current regimes are gone.

If that's the case, it must be about the science because there's no political advantage in it.