THE symbolism couldn’t be more deliciously appropriate: we are linking the collective insanity of our carbon tax to the collective insanity of Europe’s.
It was made even more deliciously appropriate by the complete and utter unknowingness projected by Climate Change Minister Greg Combet in his press conference yesterday.
Europe is the world’s basket case. Spain and Greece have unemployment rates of 25 per cent. Their youth unemployment rates are 50 per cent. To repeat, 50 per cent – one in every two young Spaniard and Greek is out of work and with precious little prospect of finding it.
The overall jobless rate for the European Union – our new partner – is more than 10 per cent.
Europe has been in semi-recession since the GFC and looks like staying there – unless it plunges into a real recession. Or worse. Even the powerhouse Germany is now limping.
And that’s just the economy, stupid, as the infamous saying goes.
The whole European project, built around the euro and collective and hugely punishing fantasies like the Emissions Trading Scheme, is crumbling.
Combet stood by Treasury’s forecasts/modelling of a rebound in the European economy by 2015, when this new deal kicks in.
Oh yeah. Treasury’s modelling and around $3.50 – or should that be $3.70, including the carbon tax hit – will get you a cup of coffee.
Perhaps Combet and/or Treasury would care to inform us what the modelling ‘says’ about Greece leaving the euro. And Spain. And indeed, whether there’ll still be a euro by 2015.
Now there is a certain complex logic in linking us to Europe. Despite the nonsense that Combet, Prime Minister Gillard & Co spout about the world moving to price carbon, only Europe will be doing it in any substantive way anytime soon.
Assuming the European ETS survives the likely chaos from the all-but inevitable European financial implosion and continued pan-European recession.
So if we are going to allow CO2 emitters to buy foreign permits, the place for them to go is Europe.
Why do we want to allow them to buy foreign permits? So we can have our carbon-emitting cake and still get to eat it.
If we had to actually achieve our 2020 target only by cutting domestic CO2 emissions, we would send power prices really soaring, have to close power stations, and wreck the economy.
But what buying foreign permits means, is that we will be writing out cheques for potentially billions of dollars a year, ever year, electronically posting them off to foreigners, just to buy a piece of paper.
That paper will say, we can emit some CO2.
We will be literally paying foreigners for the right to keep our own power stations operating. And also, what few factories we have left.
No wonder former Labor Queensland state treasurer, Keith de Lacy, sees this as an exercise in collective insanity.
The deal will also get the government out of its hole, that it was insisting on a minimum price for buying-in those foreign permits after 2015, that was going to be way above the likely ‘world price’.
But that led on to the bizarre ‘projection’ – wish, more accurately – that the European price would have shot up from its current level below $10 a carbon unit to over $20 by 2015.
So we have the government changing its two-month old carbon tax to enable Australian companies to buy cheaper permits. While hoping that the permits will actually be much more expensive by 2015.
That is to say, the government wants power prices and other prices to be even higher. Which is why Greens leader Christine Milne was all smiles in her backflip.