5 September 2013

Jarrod Troutbeck <jarrodtroutbeck@gmail.
com>
Re: Some questions on the Liberal Party's environmental policy
Jarrod Troutbeck <jarrodtroutbeck@gmail.com> Thu, Sep 5, 2013 at 8:26 PM
To: "Hunt, Greg (MP)" <Greg.Hunt.MP@aph.gov.au>
Cc: "Garnock, Denise (G. Hunt, MP)" <Denise.Garnock@aph.gov.au>
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Hi Greg,
Thanks for your prompt response.
Yesterday on Lateline, you reiterated that no further funding would be approved in the case you fail to meet the 5
per cent reduction target
(1)
. Can you please detail the economic principles explaining how Direct Action
will achieve a lower cost per tonne of abatement than an emissions trading scheme (ETS)?
Regarding your speech (attached, p2), you introduce by stating that Australias emissions would rise under the
carbon tax, presumably you are referring to the ETS (due to commence in July 2014).
Does your analysis account for the offsets purchased through the linkage with the European Union?
Under the EU-linked ETS Australias total emissions will be capped, such that they will be reduced (with
certainty) by 5 per cent by 2020. Irrespective of whether we reduce these emissions internally, or purchase EU
offsets, the impact on climate change is the same.
Purchasing EU offsets is consistent with the fundamental economic principle of comparative advantage; where
one country has the ability to produce goods or services at a lower opportunity cost than another
(2)
. An EU-linked
ETS allows Australia to pay the EU to reduce emissions where it is cheaper for the EU to do so. Your party
supports this notion of comparative advantage in other circumstances, including in your campaigns plan for a
building a 5-Pillar economy
(3)
.
I appreciate some industries may attract the issue carbon leakage, where producers seek foreign operations in
order to avoid the carbon price. However, the current arrangements manage these risks through assistance for
emissions-intensive trade-exposed industries
(4)
.
Considering this, it seems a floating price, internationally-linked ETS will cap Australias emissions,
providing certain environmental outcomes at the lowest cost per tonne of abatement.
Regards,
Jarrod
Sources:
(1) at 14:44 seconds http://www.abc.net.au/lateline/content/2013/s3841419.htm
(2) http://www.economicshelp.org/dictionary/c/comparative-advantage.html
(3) https://www.liberal.org.au/our-plan/5-pillar-economy
(4) http://www.cleanenergyfuture.gov.au/clean-energy-future/securing-a-clean-energy-future/chapter-5-
supporting-austtalain-industry-and-business/
On Wed, Sep 4, 2013 at 6:01 PM, Hunt, Greg (MP) > Greg.Hunt.MP@aph.gov.au < wrote:
Hi Jarrod,
Many thanks and I will send you my extended speech to the Grattan Institute from two weeks ago.
It sets out why we need to act, why a carbon tax fails the basic environmental test and why directly reducing
emissions is a far preferable option to what is essentially an electricity tax.
I deeply respect your views but also set out the case that under the carbon tax Australia's emissions rise from
560 to 637 m tonnes between 2010 and 2020.
Regards and I would be happy for you to share this email and the subsequent speech with any others who
may be interested.
Regards,
greg
Sent from my iPad
On 04/09/2013, at 4:50 PM, "Jarrod Troutbeck" <jarrodtroutbeck@gmail.com> wrote:
Hi Greg,
As a university student, I used to meet with you to discuss my concerns about climate change.
I'm still concerned about the environment and I'm unsure of how to vote in Flinders this
Saturday. Please take the time to read what I have to say. Ive bccd about 350 friends who vote
in your electorate and may also want some clarification on your policies. I will forward them your
response.
There's no doubt you are passionate about climate change - you wrote a thesis on the merits of
market-based mechanisms for taxing pollution
(1)
.
However, you have plans to abolish the emissions trading scheme (budgeted at $6/tonne of CO2
abated in 2014-15)
(2)
and replace it with 'Direct Action' (Treasury estimates $28.8/tonne in 2014)
(3)
. Consensus is that Direct Action is a less economically efficient means of achieving outcomes,
when compared to market-based mechanisms
(4)
.
At one fifth of the price, why would a Liberal Government of all governments choose
anything but a market-based mechanism?
Your party seeks to attribute large electricity price rises to the carbon price, yet the Productivity
Commission has clearly shown the true causes of these price rises
(5)
. This provokes suggestions
that your party does not take climate change seriously and in fact may be positioning itself to
scrap Australias 5 per cent reduction target altogether
(6)
.
Even some of the world's largest petroleum companies (ExxonMobil, Shell) and miners
recognise the need to be proactive in managing the risks associated with climate change. These
companies have dropped financial support of the Liberal-linked Institute of Public Affairs, amid
concern at its campaign against action on climate change
(7)
.
Another issue of concern is the Liberals plan to reverse the extension of the Tasmanian
Wilderness World Heritage overlay
(8)
. Your party's 'Economic growth plan for Tasmania' suggest
that the extension was put in place against the will of the Tasmanian people.
Yet by definition, what makes the concept of World Heritage exceptional is its universal
application. World Heritage sites belong to all the peoples of the world, irrespective of the
territory on which they are located.
Please outline why you should be trusted on environmental issues?
I would feel privileged to have my electorate represented by the Minister for Climate Action,
Environment and Heritage - but due to your policies, I am not convinced that you do in fact
defend the interests of the climate, environment or heritage.
Regards,
Jarrod
Sources:
(1) http://www.scribd.com/doc/50162694/a-tax-to-make-the-polluter-pay
(2) Page 17: http://www.budget.gov.au/2013-
14/content/economic_statement/download/2013_EconomicStatement.pdf
(3) Page 4: http://www.treasury.gov.au/~/media/Treasury/Access%20to%
20Information/Disclosure%20Log/2011/Coalitions%20Direct%20Action%
20Plan/Downloads/TEM_coalitions_direct_action_plan.ashx
(4) Page 9:
http://grattan.edu.au/static/files/assets/3ae75b49/077_report_energy_learning_the_hard_way.pdf
(5) Productivity Commission chart for NSW: http://www.abc.net.au/news/2013-09-
03/llewellynsmithimage/4931828
(6) http://www.theage.com.au/federal-politics/federal-election-2013/carbon-target-may-be-
missed-abbott-20130902-2t16g.html
(7) http://www.theage.com.au/federal-politics/federal-election-2013/climate-hard-line-costs-ipa-
support-20130824-2sirk.html#ixzz2dmVSGZf8
(8) Page 18: http://lpaweb-static.s3.amazonaws.com/The%20Coalition%E2%80%99s%
20Economic%20Growth%20Plan%20for%20Tasmania_.pdf
--
Jarrod Troutbeck
+61 (0) 408768843
Speech to Grattan Institute 19-08-2013.pdf
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