Heating up

Its been quite remarkable to watch the Coalition tear itself apart over climate change.

The issue has become so politically charged that one of the potential leadership candidates (Joe Hockey) is considering reversing his position on climate change due to agitation from the Coalition base.

This highlights the deep political divisions this issue creates, which while they are too complex to be fully explained by the left/right dichotomy, seem to align somewhat with David Burchell's assessment:

We know that we believe in climate change because we also believe in solar energy, social welfare, indigenous culture and women's rights. We know that we disbelieve in it because we believe in the coal industry, personal thrift and responsibility and the traditional family. There never was a catechism more hypnotic, more elemental, or more purely devoid of thought.

I'm not denying some people approach the issue more rationally and scientifically than described by Burchell. But how many people do you know who've waded through both the IPCC's reports and Ian Pilmer's musings on the matter?

I would argue most of us, whether consciously or subconsciously, use shortcuts to decide how we stand. I guess the trick is to try, as much as possible ,to use intentional and informed (rather than random) shortcuts when deciding how we will respond.

So here we go... I am in favour of policies which seek to reduce carbon emissions. The key questions I've considered and the shortcuts I've used to answer them are:

Q. Does the science support the idea humans are causing climate change?
A. Yes but this point is contested. Not being a scientist all I can really do is listen to climate change scientists and major international scientific bodies. I'm yet to hear of a climate change expert who has published peer-reviewed research that refutes it*.

Q. Is an emissions trading scheme (ETS) a good way to address climate change?
A. It seems to be a good start. People say an ETS is a waste of time because Australia's emissions are so small in a global context. But this is like saying Australia's relatively small contingent of troops in Afghanistan doesn't impact the political and military reality on the ground. Also, an incremental (rather than revolutionary) approach is consistent with how Australia usually approaches these things.

Q. Will an ETS hurt households and/or the economy?
A. Yes and no. According to Meganomics' predictions in the Aus, the vast majority of households will be better off once government compensation is taken into account. In terms of the broader economy, clearly high-emitting industries will face higher costs. This is inevitable when you are trying to re-align incentives and internalise the cost of 'externalities' (i.e. carbon emissions) that would otherwise continue to be costless due to market failure.

Q. Are we getting too far ahead of other countries in signing up to an ETS before Copenhagen?
A. I don't think so. Quite apart from the outcome of Copenhagen, the EU has had an ETS in place for several years, the US has one before Congress and Japan has a target of an 8% cut in emissions by 2020. China and India tend to be the countries most people talk about - India probably won't cut its emissions and fair enough - 50% of the population doesn't have access to electricity. Re: China, after the recent high-level US-China talks there is growing confidence China is moving to curb emissions due to the obvious effect climate change is having on the country.

I'd be interested in hearing how you would answer these questions using your own 'shortcuts'.

*Of course there is a possibility of a conspiracy theory involving all reputable climate change scientists across the world. But I consider this less likely than the proven track record of high emitters paying less reputable scientists to come out against anthropogenic climate change.

The Battle of 1944 (Polanyi vs Hayek)

1944 was the year Allied forces took to the beaches at Normandy, beginning one of the bloodiest and most pivotal phases in World War II.

It was also the year in which two mighty salvos were fired in the battle of ideas about political economy: Karl Polanyi's 'The Great Transformation' and F.A Hayek's 'The Road to Serfdom'.

Both texts have the rare quality of being intimately linked to their context while retaining the power to inform today's debates.

Hayek's work is arguably more famous and influential, courtesy of his status as one of the 20th Century's great economists and role in shaping the 'neoliberal' revolution and its leaders: Thatcher and Reagan (and in Australia, John Howard) all regarded Hayek as a guiding light.

'The Road to Serfdom' tried to hang fascism and communism by the same noose, arguing that both had the same roots in denial of individual freedom and overarching belief in the state. More explosively, Hayek argued that even seemingly benign state interventions in the economy - such as the welfare state and demand management (e.g. fiscal stimulus) - were likely to result in deprivation of liberty and authoritarian government as the 'planners' took over.

Hayek's book was a direct challenge to the Keynesian consensus that emerged in Britain and the US during and after World War II. Later, it would shape the neoliberal reaction that swept the Anglosphere from the 1970s.

Polanyi's book will never be as iconic but provides a compelling alternative to Hayek's neoliberal interpretation of modern political economy.

'The Great Transformation' begins with an examination of how the Industrial Revolution ruptured the fabric of British society in the 18th and 19th centuries. Polanyi shows how the creation of national markets for labour and land was based on the belief that economic forces were autonomous and could not (and should not) be subject to social control. The result was a dizzying increase in production accompanied - and driven by - a stagnation in the wages and living conditions of the working poor.

Polayni also argues that reactions against laissez faire in the 19th Century - labour laws, minumum wages, trade unions and 'poor relief' - were spontaneous attempts to limit the damage caused by the unfettered market, rather than a conspiracy of 'vested interests' against 'progress', as was claimed by some liberals. He dubbed this process of economic liberalisation followed by attempts at social protection as a 'double movement'.

As it turns out, both Polanyi and Hayek were right and wrong.

Hayek was right about the market economy being a more efficient and individual liberty-enhancing mechanism than command and control, but wrong in his doomsday predictions about social democracies turning into authoritarian monsters (Sweden anyone?).

Polayni was right about the legitimacy and importance of social protection in providing an acceptable level of equity but probably wrong in assuming the working class would be worse off under capitalism.

Either way, its fascinating to see how many of these debates resonate in the current (post?)-GFC climate - think of the term 'market fundamentalism' (made popular in Australia by our very own Prime Minister) or anxieties over the corrosive effect of 'middle-class welfare'.

It all goes to show while the guns of Normandy have died down, the battle of 1944 continues...

Torres Strait media coverage

The Torres Strait - and particularly the issue of health risks arising from PNG overstayers - has hit the headlines in the last couple of days here and here. This follows earlier stories (here and here).

Thanks to Brad who pointed out that the Torres Shire Council is currently holding consultations on whether the region should become a territory in its own right.

With all this bubbling away in the background - and as submissions to the Senate Inquiry keep rolling in - it will be interesting to see how things play out.

It's quite clear to me that despite the diverse range of issues the Torres Strait faces, the problem of PNG overstayers will now frame the whole Inquiry and its recommendations. That's the way our political system seems to work.