Greens response to PC report on climate change measures reveals much about their economic delusions

If you want a good insight into the economic delusions of the Greens, have a look at their reaction to last week’s Productivity Commission report comparing climate change policy measures in nine different countries.

Deputy Greens Leader Christine Milne said that the Commission had “fallen into the trap of only measuring the effectiveness of policies in terms of how much they cut pollution in the short term, ignoring the fact that many of these are very effective industry development policies designed to transform the economy over the long term.”

This was evidently a response to the Productivity Commission’s work in calculating the implicit amount being paid, per tonne of abatement of greenhouse gas emissions, in eight different countries. 

According to Milne, Australia is tragically failing to follow the shining example of Germany: "Germany's world-leading renewable energy policies have had enormous benefits which aren't measured by this report - a jobs boom, energy security and cleaner air, amongst them.”

Which country did the Productivity Commission find was paying the most?  Surprise, surprise, it was Germany, which spent more than AUD 10 billion in 2010, producing an implicit subsidy of between $137 and $175 per tonne of greenhouse gas emissions abated.

Christine Milne claims that this avalanche of spending constitutes “effective industry development policies”.

How does she know?  Can she predict the future?  Isn’t it more likely that these rivers of cash are being handed out at the whim of politicians and bureaucrats, and if it all gets wasted no-one will be held accountable?

The notion that industries should be ‘developed’ according to the fashionable priorities of green politicians is a recipe for squandering money.

If the Parliament sets an objective to reduce greenhouse gas emissions – and both major parties in Australia have committed to reducing Australia’s emissions such that in 2020 the country emits 5 per cent less than in 2000 – then we should select the most effective and least economically disruptive policies to achieve this objective.

If the private sector responds to the new regulatory target with innovative products, that’s great – after all, that’s what the private sector is good at.  But we should not be investing scarce taxpayers’ funds in ideologically driven attempts to pick winners in different kinds of alternative energy driven technologies.

Instead, there should be a clear focus on generating the most abatement per dollar spent – the very principle at the core of the Coalition’s Direct Action Policy on climate change.