Posted by John, December 7th, 2009 - under Socialism.

Tags: Australian politics, Capitalism, Carbon Pollution Reduction Scheme, Copenhagen climate summit, Emissions Trading Scheme

To understand what the debate on the Carbon Pollution Reduction Scheme is about, and what Tony Abbott’s magic pudding solution to pollution actually amounts to, let’s look briefly at what an emissions trading scheme is.

The Rudd Government’s Carbon Pollution Reduction Scheme is one version of an ETS. I’ll explain the main points of the CPRS in a later article.

An ETS is a market for pollution and polluters. The Government will set an amount for pollution in Australia. This is the cap. The Government will then divide up that overall amount into permits.

Those permits will be the basis for trade in rights to pollute. (That’s why the Rudd ETS is often described as a cap and trade scheme.)

The peopel who stand to benefit from this trade are the banks and the stock exchange jockeys. You know, those bastions of proper behaviour who bought you the global financial crisis. That should concern people for starters.

The Government will give permits to various sectors of the economy. These permits will allow industry to pollute to a certain ‘acceptable’ level.

If the polluters want to pump extra CO2 into the atmosphere they’ll have to buy permits to do so, or develop mechanisms for reducing their greenhouse gas emissions.

The argument is that that those companies which reduce their greenhouse gas emissions will have excess credits they can then sell to the polluters.

And over time the cap will be reduced, forcing industry to move to greener sources of energy for example.

It all sounds so simple, doesn’t it?

Yes, but it won’t work, or more precisely has some major flaws which create grave doubts about if it will work.

Let’s leave aside whether the market can solve the problems the market created and any discussion of the metabolic rift that capitalism has created between humanity and the environment.

The Europeans have a cap and trade scheme. It is a failure. The price of permits has collapsed meaning there is little incentive to change behaviour.

Here in Australia the government will set the cap and its rate of reduction over time. This is the first problem. In both cases it will be too generous to have any impact.

The government will also give compensation to the polluters and those on lower incomes having to pay higher energy prices. This will total about $120 billion over the next ten years.

Now if the whole basis of the cap and trade scheme is to use price signals to change behaviour, then any economic rationalist will be able to tell you that compensating polluters with billions of our dollars won’t do that.

In fact the $123 billion would be better spent on solar, wind,geothermal and tidal energy to create millions of green jobs instead of propping up the bottom line of the polluters.

Eventually a global ETS scheme will see Australian polluters purchasing permits from poor countries with permits. This will entrench and reinforce North-South divisions.

The ETS scheme will encourage offset industries. These could for example be planting extra trees.

Of course trees only keep the carbon out of the atmosphere until they die, so this is a stop gap measure to mask increasing green house gas emissions and postpone the inevitable. It is a book entry to befuddle us.

So is there an alternative to an ETS?

Well yes. It is called socialism – a world in which production is planned democratically to satisfy human need.

In such a society of freedom measures to address global warming would be undertaken as of course.

Since society is based on satisfying human need, and not profit, and it is in the interests of humans to switch to alternative energy sources besides carbon fuels.

Without the complicating factor of profit, the switch would be fairly easy.

To save the planet from global warming requires removing profit as the driving force of production, the driving force of a humanity on the road to the environmental abyss.

Meanwhile back in the ‘real’ word, the failure that is Copenhagen awaits its inevitable conclusion – hot air and more green house gases.

I will in articles over the next few weeks examine in more detail the Rudd-Turnbull CPRS and what comes out of Copenhagen, as well as flesh out this bare bones description of an ETS.