Carbon price musings 1: Petrol should be included

Nobody likes petrol price rises but an effective carbon price should include transport fuels.

Carbon pricing creates many options, one is whether transport fuels should be included. In my opinion, they should be. There are multiple reasons for this, but they generally fall under preventing market "distortions".

1) Making emission reductions more expensive

Not including large segments of the economy in the carbon price means that more greenhouse gas emission reductions need to be squeezed out of a smaller section of the economy in order to meet your targets. The overall effect of this will likely be a higher cost for reducing emissions. The reason for this is that any low hanging fruit (ie: cheap ways of reducing emissions) in the transport sector will be essentially off-limits and you might be forced to make more expensive reductions in the sectors which are included.
The point of a market mechanism is to allow the cheapest emissions reductions to be made. To achieve this you want to include the largest amount of the economy possible.

2) Creating perverse incentives

Excluding transport fuels from the carbon price could have the perverse effect of actually promoting fossil fuel use (the exact opposite of what the scheme is trying to achieve). A good example of this is public transport by train. Electrified trains are mostly powered by electricity from coal (although they still produce less C02 per person than driving a car). Under a carbon price electricity rates will rise and so will train fares. If fuel is not included and does not increase in price, the net result will be to encourage driving and so more C02 emissions. In cities like Brisbane with over crowded roads the last thing we need is more congestion and more pollution.


No one like rises in petrol prices, but the rise being promoted by the coalition of ~6 cents a litre (although no one can be sure if this is at all accurate) is not extreme. In fact petrol prices in most capital cities have increased by significantly more than this in the last few months and the world hasn't ended.

So the government should include fuel in the carbon price and not cut other fuel taxes to prevent any actual rise in the price. Compensation either through rebate checks, cuts to income taxes (better to cut a tax for productive activity ie: work, than a tax for consumption ie: fuel excise) or benefit schemes would be better. This way compensated households can spend the rebate as they see fit and there will be an incentive for people to find ways to cut their fuel consumption.

A final note: Tony Windsor (one of the rural independants) has expressed concern that unlike city dwellers, people in rural areas don't generally have the option of public transport (although that doesn't mean there is no way for them to decrease their fuel use of course). I don't think I agree with him that rural regions should be excluded from a carbon price on transport because of this, but it might be worth looking at higher compensation for people in rural areas etc.

Clean energy could be a windfall for jobs

"RESEARCH has found that a $45 a tonne carbon price could create almost 8000 more permanent jobs in the electricity sector by 2030 than there are now and 26,000 more temporary manufacturing and construction jobs, as tens of billions of dollars are invested in clean energy projects."

Some good news today showing how a carbon price should lead to the creation of lots of new jobs as investment in renewable energy cranks into gear. Because it makes polluting forms of electricity generation pay (at least some of) the cost of that pollution, a carbon prices makes renewable energy a more attractive investment. Business investment creates jobs, and according to this study more jobs will be created "greening" the electricity industry than would be lost from not building so many coal fired power plants. Good for the economy AND the environment.

Backyard Farmers at Moggill Markets

Despite the continuing rain, a number of us had managed to grow quite an abundant number of seedlings for sale, some produce and lots of fresh herbs. What fun we had! People were delighted with our idea of producing what you can in your backyard then bringing it along to share.

Ted Whybrow amazed many as he shared his knowledge of Bunya Nut preparation. Some people had never seen one before let alone know how to eat them! A great way to share knowledge and learn what grows when in our local area.

See you there next month!

Lets get Brisbane Council onto this!

Council food policy says go organic, go local

Mon, Feb 28, 2011

Council documents, NSW

Adopting ethical eating habits is easiest when done by the individual or household. It’s less easily done at the institutional level, however that is just what the City of Sydney is doing with its new Ethical Food Guidelines.

The guidelines, adopted in late 2010, make the City’s food procurement compliant with its strategic plan – Sustainable Sydney 2030. Developed in-house, the Guidelines cover food procurement for council catering using council funds and for council-managed events. They do not apply to contracted services such as Meals On Wheels, although suppliers have been requested to work towards compliance with the Guidelines.

The Guidelines complement the City’s initiatives in popularising a sustainable food supply, such as its community gardens (through its Community Gardens Policy, adopted in February 2010), the city farmers’ market and grant support for initiatives such as the Chippendale Fresh Food Co-op, grants for events organised by Sydney Food Fairness Alliance, the Myrtle Street edible verge plantings and the Peace Park community composting trial.

The Guidelines favour organic, low fat, non-GM, local and seasonal foods, although a means of identifying local foods – those produced within the Sydney foodbowl – is not provided. This will remain a challenge until a ‘locally grown-local produce’ label is devised and adopted.

Reusable or biodegradable crockery and eating utensils, avoiding bottled water for indoor events and, preferably, for outdoor events (the City has a mobile filtered water trailer where people can fill their bottles at events) and the elimination of non-recyclable packaging are other contents of the Guidelines, as is the selection of appropriate cafes and restaurants when entertaining visitors to the City for council business.

The Guidelines provide information on the impact of the food system as well as on the relationship between food and personal health. Fair Trade beverages are approved although there is a preference for made-in-Australia foods, and palm oil is to be avoided in food products due to its association with deforestation in South east Asia.

Adventurous document for a council

This is an adventurous document for a council.

for more http://communitygarden.org.au/cos_foodpolicy

Carbon price in 2012 - Gillard shows some leadership

"Australia will set a carbon price from July 1, 2012, as an interim measure until a full emissions trading scheme can be introduced three to five years later, Prime Minister Julia Gillard says.".......

"This is an essential economic reform, and it is the right thing to do," Ms Gillard told a news conference. "Carbon pollution is a threat to our country, and a threat to our future prosperity."

See the full SMH article here. More excerpts below. The basic idea is to start with a straight carbon tax and then transition that into an Emissions Trading Scheme over time. Economically using a market mechanism to price carbon is the most efficient (ie: lowest cost the economy) way to go. Also crucial is what happens to the money raised by the Tax and/or Emissions Trading. According to the PM.

Ms Gillard said the carbon price set by the government would be fair.

"Every cent raised from pricing carbon will go to assisting households, helping businesses manage the transition and funding climate change programs," she said.

"And the government will always support those who are in need of assistance with cost of living pressures."

This is the right thing to do and if managed correctly will help shield those on lower incomes from price rises and help businesses invest in low carbon tech and clean business practices.

Reading comments on various newspaper stories it seems that how this all works is poorly understood, with people asking how a carbon price could work if you also compensate people? The answer is to remember a carbon price doesn't just act on consumer behaviour but also on business investment and decision making.

I.e.: A carbon price will increase the cost of electricity from coal, leading to higher power bills, but it will also make building new dirty coal power plants (and keeping old ones running) a much less attractive investment. Instead cleaner plants will be built which will lower the C02 generated. Meanwhile consumers will be reimbursed for cost increases, which you can spend on anything, so you could use it to pay the higher power bill, or you could put it towards more efficient appliances or solar hot water etc to help lower your bill. This is the point of a market mechanism, you can make the decision that's best for you.

Despite today's announcement important questions remain to be answered:

What will be the starting price and at what rate will it increase?

What is the emissions reduction target to 2020 and 2050?

Will transport be included?

What level of "compensation" will be offered to business?

Some of which I'll try to opine on in a future post.

The Gas Rush - ABC Four Corners on the coal seam gas industry

If you missed the ABC Four Corners expose on the coal seam gas industry in Queensland and NSW, you can still watch it on ABC iview .

From the website:

"With access to guerrilla activists and their undercover filming, Matthew Carney reports on the coalition of farmers, local townspeople and even a corporate titan who want to halt Australia's gas rush.

Imagine you are running a successful farming operation; then one day a man from the gas company arrives with news that a coal seam gas field lies beneath your feet. From there 3 wells are sunk, then another 18. And then a proposal for another 30, turning your property into a thriving gas field, while threatening the viability of the working farm."

From farmers powerless to stop gas companies accessing and drilling on their land, to leaking gas wells, water bores contaminated with methane and fears for the future of the Great Artesian Basin, the show makes compelling viewing in detailing just what is happening only a few hours drive away.

You can watch it here for the next couple of weeks.

A New Year, Clearer Vision Workshop summary

Ian Plowman ran a very useful workshop for our Wednesday 16 February meeting to help us identify goals for the next 12 months, based on the practice of Meetings Without Discussion. Here is a short summary of the outcomes of the meeting, followed by a brief description of the process Ian uses. We had a smaller turnout than the average at this meeting, which was a pity because Ian’s approach is interesting especially if you have long been frustrated at decision-making meetings that go nowhere or produce sub-optimal outcomes.

Outcomes
We identified the following as the top-priority goals for the next year (from highest to lowest in votes):

1. increase publicity
2. organise a festival
3. invite other groups to join in activities
4. start a community garden
5. set up a fun committee

This picture illustrates the big picture outcomes, as we summarised them. The top part of the picture is the summary that had the highest votes as representing the outcome; the bottom part the statement with the second highest number of votes.

The next stage is to convert all this to even more specific goals, including allocation of responsibilities and identifying resources, which would be useful to slot into another meeting soon, though it should not take up a whole meeting.

The Process
The general principle of the process is to reduce talking, to avoid the gap caused by extroverts who like to think things through by talking, and introverts who prefer to work through an idea mentally before expressing it.

The first stage was to ask everyone, in  groups of 5, to write down what they would say to a person 12 months from the meeting date what had been achieved over the last 12 months. Then each person in turn stood up with their imagined future conversation on a large piece of paper, and invited each of the other participants, chosen in an approximately random order, to say something positive about what they had written.

The next stage was to put all the large pieces of paper on the floor, and walk around choosing one point from each that we liked that we did not write ourselves.

We then split into different groups to come up with a unified statement based on the previous thoughts. This again started with each individual writing, before sharing ideas to produce a summary of the best points. We all voted on which of these new summaries was the best. Each person’s vote in this round counted as 2, but they could not vote for their own statement. In the second round of voting, they could vote for their own statement, but each vote counted as 1.

We then identified goals based on the summaries, and the same voting procedure applied to identify the top goals: round one, 2 votes per person, scored each goal, with votes for your own disallowed, and round two, one vote per person, allowed voting for you own goals.

Feedback Summary

After the workshop Ian invited participants to comment on what worked, what didn’t and what would have made it better. The table below summarises responses.

What worked	What didn’t	What would have made it better
wisdom without discussion	summarising different opinions into one	more time to write a better summary
facilitation worked very well	small group may not be fully representative
getting everyone involved; getting people thinking; effective manager; bouncing of ideas	no close	more time -- a few ideas -- more clarification?
the process		more of the group present; more time to consolidate; goal activities resources responsibilities
our own thoughts, ideas used; all participated but not threatening; no hoggers, boggers etc.
choosing the goals and voting process	still had dominant folk in the immersion stage	more time to plan actual activities + responsibilities arising from goals
no talking	summary stage a little hard	some hints on how to do the summary stage
space for range of ideas & opinions; practical outcomes