Here are transcriptions of the two videos first presented at my blog post, John Humprheys and Greg Lindsay promote Carbon Tax for Australia
I'm providing these transcripts after coming across a number of misrepresentations of the content I inserted into these videos.
Unless otherwise indicated, indented quotes are of segments inserted into the original video by me.Their exact placement in this transcript isn’t quite accurate since some of the inserted segments rolled out over time while the presentation was going on.
Unless otherwise indicated, the non-indented text is of John Humphreys (Mannkal Scholar/Research Fellow, with the Economics Programme at the CIS) speaking.
[video 1 of 2 starts]
CIS Text: Logo of Centre for Independent Studies
Part 1 of 2
CIS Text: presents a roundtable discussion with Professor Warwick McGibbon, Dr Richard Denniss, John Humphreys
This video is only of John Humphreys’ presentation
CIS Text: Climate Change Policy
“How to increase energy costs”
“For all Australians”
“Rich and Poor”
…
Video clip, Southpark Al Gore: “Okay, let’s get this meeting started. What do you kids think we should do to stop Man Bear Pig?”
Commencement of Roundtable. John Humphreys at podium.
Others, including Greg Lindsay, sitting at long table.
John Humphreys speaking, unless otherwise indicated …
Well, hello everyone … and welcome to this CIS roundtable discussion on Climate Change Policy.
(CIS text: John Humphreys, Research Fellow, CIS).
My name is John Humphreys. I’m a Research Fellow here with the Centre for Independent Studies.
… None of us are Scientists. We’re all Economists.
“And some of us pretend to be free marketeers”
So, just to be very clear about this, this is not a discussion of Climate Change Science, this is a discussion of Climate Change policy. The Science debate may well be very important
The science debate “MAY … be important”??
but it is not sufficient.
What we need now is
What we need NOW is … ?
greater attention to the different sorts of Climate Change policies that Australia can be looking at.
Ehm … But carbon dioxide is not a pollutant
The timeline of the Climate Change debate in Australia has been somewhat curious. Over the last year we’ve seen the Garnaut Report calling for a trading system
Splash: Fascism
A discussion Green Paper outlining a trading system
Splash: Fascism
Treasury costings of a trading system
Splash: Fascism
And then a White Paper giving the details of a trading system
Splash: Fascism
And now last week, the government has decided to ask the question of whether we should even have a trading system.
This is finally the right question.
The right question?
It has been a point of a bit of frustration for some economists and policy makers that the government has been rushing towards the Carbon Pollution Reduction Scheme before we have had an open, public, and robust debate about the different options that exist.
What about: “No Carbon Tax” and “No ETS”?
So let’s be clear about this. Climate Change is an important political issue.
A political issue? Hmm …
And politicians are responding as they do to important issues of the day by rushing to introduce a number of schemes to add to the many schemes that already exist on this issue.
But the CIS is different?
But there is an important difference between having good intentions and introducing good policy. If I ever get into one of those books of interesting quotes, I hope it’ll be for the quote that “poor people can’t eat good intentions”
So how does raising the cost of energy help poor people?
And I think it’s important that … before rushing into things (we) have a bit more of a calm, drawn-out debate on this.
Newspaper headline style graphics:
A “Debate”! (But not about “The Science”)
There has of course been some discussion. Yesterday Dr Ron Ben-David, who is the head of the Secretariat for the Garnaut Review, emailed me to point out that the Garnaut Report did give proper consideration to the policy debate
What about the “science debate”? Is that “over”?
And he, of course, is correct. However, this debate hasn’t yet, it seems extended into the political or public domain. But perhaps this is now changing.
Newspaper headline style graphics:
Greg Lindsay, AO, shocked! “No warming for 10 years!?”
As I mentioned, last week Wayne Swan announced an inquiry into whether there is something better than a trading system. The loud answer from many Scientists and Economists from across the political spectrum is “Yes”
Did he just say SCIENTISTS (and economists)?
and many have suggested a Carbon Tax.
Splash: Fascism
Some of the most prominent Climate Change commentators, including NASA Scientist, James Hansen, and former Vice President of American, Al Gore
James Hansen is not an Economist.
Al Gore is not an Economist.
have suggested that a Carbon Tax is a better approach than a trading system.
CIS video paused.
Text: Dr James Hansen is Al Gore’s key “science” adviser. Says CEO’s who dispute AGW are “guilty of crimes against humanity and nature”. Nice guy. Here he is, June 2008 ..
Video clip of James Hansen talking:
James Hansen: The young people and nature
Pop-up: “and nature”? Huh?
James Hansen: don’t have that much influence ... I try to get the attention
Pop-up: How to “get the attention”?
James Hansen: of the people who could solve the problem, and that’s the captains of industry … The CEO’s of the top energy companies like Exxon Mobil and Peabody Coal, they’re smart enough to know what the actual situation is.
Pop-up: They’re smart enough to know … ….what will happen to them if they don’t comply.
James Hansen: The scientific story is clear, if you ask the National Academy of Sciences, there are statements by the American Geophysical Union, and the American Meteorological Society, which are clear and inconsistent with the small number of contrarians who these fossil fuel companies continue to put forth
Scrolling text: How about asking these? … Ian Plimer … Fred Singer … Roy Spencer … Timothy F. Ball … Robert M. Carter … Vincent R. Gray … Hendrik Tennekes … And thousands more “contrarian” scientists
James Hansen: and confuse the public debate, so that the public doesn’t know for sure whether we understand the cause of Global Warming
Pop-up: What Global Warming?
James Hansen: If they continue to do that
Pop-up: Flashing question mark
James Hansen: they are guilty of crimes against humanity and nature ... (loop): If they continue to do that they are guilty of crimes against humanity and nature ... (loop): If they continue to do that they are guilty of crimes against humanity and nature.
Text inert: Get it?
[Back to CIS video.]
They are joined by Economists such as the free market Nobel Laureate, Gary Becker, and professor at Harvard, Gregory Mankiw, in recognizing that tax has virtues over a trading system.
The lesser of the evils?
And we have the curious instance of left-leaning groups
“Curious”? Lefties who love taxes? What’s so “curious”?
such as The Sierra Club, Earth Policy Institute, and the Australia Institute finding a coincidence of interest with free-market-leaning groups such as the American Enterprise Institute, the New Zealand Business Roundtable, and myself at the Centre for Independent Studies
Greg Lindsay’s C.I.S. is a free market think tank? You’ve gotta be kidding!
Since this is about having a “real debate” What about free market economists who reject ETS and Carbon Tax?
Just a few Economists who say “No ETS” and “No Carbon Tax”
Donald Boudreaux. Chairman, Department of Economics, George Mason University.
Kenneth Chilton. Director, Institute for Study of Economics and Environment.
David Henderson. Former Head, Economics and Statistics Department, OECD.
Ross McKitrick. Associate Professor of Economics, University of Guelph.
Robert Murphy. Economist, Institute for Energy Research.
Richard Rahn. Chairman, Institute for Global Economic Growth.
Douglas Southgate. Environmental Economist, Ohio State University.
Margo Thorning. Senior Vice President, American Council for Capital Development.
Even the CEO’s of Duke Energy and Exxon Mobil have come out in support of a Carbon Tax
CEO’s support a Carbon Tax? Let’s ask Dr Hansen why …
[Return to excerpt of James Hansen video clip ...]
Dr James Hansen: I’ve tried to get the attention of the people who could solve the problem, and that’s the captains of industry.
Dr James Hansen: Fossil Fuel companies
Pop-up: You mean, like Exxon and Duke Energy?
Dr James Hansen: continue to put forth and confuse the public debate … If they continue to do that they are guilty of crimes against humanity and nature.
[Return to CIS roundtable video, but rewound ...]
(re-run): Even the CEO’s of Duke Energy and Exxon Mobil have come out in support of a Carbon Tax
Amazing! Why?
[Return to James Hansen clip]
Dr James Hansen: … Fossil Fuel companies continue to put forth and confuse the public debate … If they continue to do that they are guilty of crimes against humanity and nature.
Pop-up: Lucky they now “support” a tax! ;-)
[Return to CIS video]
Lucky they now “support” a tax! ;-)
Even the CEO’s of Duke Energy and Exxon Mobil have come out in support of a Carbon Tax.
Amazing! Uncanny!
It’s interesting, a quote here from Green, Hayward, and Hassett (American Enterprise Institute) in the American context is “The irony is that there is a broad consensus”…
A … “broad” … “consensus”?
… “in favor of a Carbon Tax everywhere except on Capitol Hill”
crap!
The same may almost be said for Australia.
more crap!
Of course, Climate Change policy should not be based on popularity or consensus
What should it be based on?
but careful analysis of the benefits and costs of various options, an d a robust political debate.
A robust political “debate”? i.e. Excluding a science “debate”?
So what is that debate?
The main policy question we’re facing is, should we have a Tax? A Trading System? Neither?
“Neither!” Thanks!
Or both?
While they’re often considered similar and sometimes confused in public commentary, Tax and Trading are different, and differ in important ways.
As “different” as Mussolini and Stalin?
A Tax fixes the price of Carbon or other Emissions and allows the quantity to vary. A Trading system fixes the quantity of Emissions and allows the price to vary.
What happened to “Neither”?
Now, for a number of reasons, which I’ll discuss a bit later, I prefer a Tax.
Yippee!
Southpark, Al Gore: “Excelsior!”
Yippee!
I’ll just take a side-track before I come to my reasons. In 2007 I wrote a monograph called “Exploring a Carbon Tax for Australia” that suggested a revenue-neutral Carbon Tax.
Shredded by Gerard Jackson
I looked at options of fifteen or thirty dollars per tonne of CO2 or equivalent, offset against other tax cuts.
Recently, Richard (Denniss) ran across these arguments and gave me a call.
Now, Richard and I know each other from a previous life, when I used to work down in Canberra. And I think it’s fair to say that we come from somewhat different parts of the political spectrum.
The CIS Spectrum:
Do we destroy wealth?
or confiscate wealth?
or redistribute wealth?
or control wealth?
or undermine wealth?
Take your pick!
The researchers from the Australia Institute and the CIS have disagreed on a number of issues before, but on this occasion Richard was calling up to say that he agreed with the Carbon Tax I’d been suggesting.
While we have somewhat different reasons for preferring a Tax over Trading, and I like to emphasize that I think it’s very important that there are off-setting tax cuts, we both agree that a Tax would be better than the current proposed policy. And we both think the government should take another look at alternative policies
Alternative policies? What happened to “No Carbon Tax”? “No ETS”?
So I’m very happy to have Richard here today. Thanks for coming. And he’ll be sharing his views about the CPRS (Carbon Pollution Reduction Scheme) shortly.
Southpark, Al Gore: You see, there is something out there which threatens our very existence and maybe the end to the human race as we know it. I’m talking of course about Man Bear Pig.
Southpark kids: Man Bear Pig?
…
End of part 1 of 2. To find out more about how John Humphreys and Greg Lindsay will save the world, please go to part 2 of 2.
“Excelsior!”
…
Southpark, Al Gore: Excelsior!
Southpark kids: (Look at each other with pained expressions.)
[video 1 of 2 ends]
[video 2 of 2 starts]
Part 2 of 2: John Humphreys promotes a Carbon Tax for Australia on behalf of Greg Lindsay and the board of the Centre for Independent Studies
In terms of framing this debate, the starting assumption
The “starting assumption”?
is that the government wants to shift towards a low emissions economy.
Why accept this?
And this, ultimately, can and will only be achieved through switching to new technologies, which emit fewer greenhouse gases.
Is nuclear on the table?
The goal of Climate Change policy should be to speed up the transition to cleaner technology. The goal should not be to reduce the use of energy, transport, or agriculture - all of which have given us significant benefits.
Carbon Tax & ETS make energy more expensive. That’s the whole point.
I think this distinction is very important, and is often missed.
I think, people on both sides of the political spectrum (are) misunderstanding this distinction.
Both sides? There are just two sides?
On the left, some groups have occasionally associated economic growth with Climate Change and therefore called for lower growth.
On the right, some people have made the same link, and have suggested that economic growth is more important than Climate Change, so therefore we should not worry about Climate Change.
Oh? Who has said this?
And I think they’re both missing the point.
But John, isn’t “the point” that AGW is BOLLOCKS?
What we’re trying to encourage is not for people to immediately shift away from transport, to drive less, to use less electricity.
BOLLOCKS
What we want is … for technology, over time, to shift so that we have low emissions technology replacing high emissions technology, so that we can continue to use a high and growing amount of energy and transport while emitting fewer greenhouse gases.
By raising the cost of energy?
Simply cutting energy and transport, as an approach to Climate Change, simply won’t work. If we cut transport and energy by ten, or twenty, or thirty percent, we could well do significant damage to our economy and to society, (and) the way we all live our lives,
Will a Carbon Tax raise energy costs?
Show us your costings, Economist.
and ultimately with very little difference on the amount of emissions in the atmosphere.
Memo to Greg Lindsay and John Humphreys: Anthropogenic Global Warming is utter crap.
The alternative - the viable, functional alternative - is that we continue to use - to enjoy - a relatively high
"relatively"?
... (loop) a relatively high ... (loop) a relatively high ... (loop) a relatively high use of transport and energy, but over time we switch to new technologies which supply clean and ... cheap energy.
Is nuclear on the table?
Not only would we avoid the significant economic damage, but we'd be much more effective at reducing Greenhouse gas concentrations,
Fossil Fuels are fabulous
not only in Australia, but anywhere where the technology is replicated.
So I would suggest, the consequence of this is that the important thing is not how much we're decreasing energy use or transport use by 2012 or 2015. The important issue is what are we doing to encourage a shift ... (loop) what are we doing to encourage a shift ... (loop) what are we doing to encourage a shift ... (loop) what are we doing to encourage a shift ...
Is the CIS free market or fascist?
to low-emissions technology?
What are we doing to change the incentives? ... (loop) to change the incentives? ... (loop) to change the incentives? ... (loop) to change the incentives? ...
Mussolini would be proud of you
... in the production of energy and transport?
So, that's my framing of the debate, and I think that's important. I don't know if anyone else does, but ...
Switching on to my actual preferences, as I said before, I prefer a Tax to a Trading system - and importantly a revenue neutral tax, where we have offsetting tax cuts.
My position first is that I'm a technology optimist.
A "technology optimist"? That's nice. But I thought you were here as an ECONOMIST. Let's re-run what you said ...
(re-run of segment from video 1 of 2): None of us are scientists. We're all economist. So just to be very clear about this ... (loop) So just to be very clear about this ... (loop) So just to be very clear about this, this is not a discussion of Climate Change science. This is a discussion of Climate Change policy
That's what I thought you said.
(re-run): (loop) So just to be very clear about this ... (loop) So just to be very clear about this ... (loop) So just to be very clear about this ...
(re-run): My position first is that I'm a technology optimist ... (loop) My position first is that I'm a technology optimist.
i.e. "Screw fossil fuel companies. But do it with a smile on your dial and a spring in your step!"
The price advantage of traditional energy sources has been decreasing over recent decades. And there is every reason to believe that technological change will continue this trend in future decades,
That's personal opinion, not Economics.
and that the rules of the game in twenty or thirty years will be unrecognizable to us today.
If we want to speed up this transition,
Extrapolate the past? Accelerate the future?
the first option we have is we can fund particular pieces of technology, that we think are going to be important in the future - we can pick winners. The problem with picking winners is that very few of us
"very few of us"?
actually knows what the future's going to look like. I don't think that Kevin Rudd or Malcolm Turnbull or Bob Brown knows the future better than us mere mortals,
Not even the "optimists"?
And I would prefer that we rely on the more historically useful approach of using the price mechanism.
The "price mechanism" isn't there to be "used" by the state, John.
And that takes us to using a Tax or a Trading system to put a price on emissions.
i.e. You want to undermine the "price mechanism".
As I said, my preference is a Tax
Video clip, Southpark Al Gore: Excelsior!
and there are several reasons. Just briefly touching on some of them.
A tax would be administratively simpler. It avoids rent-seeking. It would not involve the creation of complex new financial markets, and I note that those don't seem to be too popular these days ... (loop) and I note that those don't seem to be too popular these days ...
Ha ha ha ha! Oh you free market economist you!
It's more transparent than a Trading system. Has lower compliance costs. It will be easier to change if and when changes are needed, and the government doesn't always get the policy right the first time, so being able to change it is, I think, a good thing.
It allows greater certainty and flexibility for business, which is a very important point which I'm not going to stress now
Greater certainty for business?
but it's been made by serveral others ... (fade out, overlap)
(re-run) It will be easier to change if and when ... (loop) It will be easier to change if and when ... (loop) It will be easier to change if and when changes are needed ...
Greater certainty for business?
(re-run) It allows greater certainty and flexibility for business, which is a very important point which I'm not going to stress now but
I thought you said a carbon tax is easier (for government) to change?
its been made by several other commentators.
And it avoids the picking (of) winners which is inevitable with the allocation of Carbon permits in a Trading system.
Both Carbon Tax and ETS pick and create losers ... who? ... capital and energy intense industries
There are other problems with a trading system, and I think Richard (Denniss) is probably going to have more to say about this in a second. But there's one point I want to stress.
A Carbon Tax gives the government a consistent stream of revenue which they can then use to offset - by cutting - other taxes
When was the last time a government collected money and gave it all back?
With a Trading system, this is more difficult because revenue is inconsistent, and the permits are often given away.
In my view it is quite important that the proceeds of a Carbon Tax are used to offer tax cuts, and not more spending.
Good luck with that
A couple of reasons. Firstly, I think it's important to separate the Climate Change debate from other political debates about the role and the size of government, and redistribution in the economy.
The "size" of government is not the point.
Those are all extremely important debates, and I'm happy for us to have many more roundtables about those on a different day, but I think for Climate Change policy we should just stick to trying to solve one problem at a time with one mechanism.
The CIS "mechanism": Capital destruction + Higher energy costs + Optimism! (lotsa optimism!)
Personally, I think we should have less government, I'm sure other people think we should have more. This is a separate debate and I think the way to separate this debate is to introduce Climate Change policy that does not change the size of government.
"size" of government is not the point
So if we have a Carbon Tax, we lower another tax elsewhere. We just try to look after Carbon now and we deal with size of government issues later.
Sure! Why wouldn't your Carbon Tax comrades agree with that?
Having an offsetting tax cut also goes a long way to reducing the economic fears that some people have about Climate Change policy.
Opponents of a Carbon price correctly point out that all taxes and the ETS are distortionary and would have economic costs and would distort decisions and destroy some capital
Only someone like Hayek would say that sort of thing
... (loop) and would distort decisions and destroy some capital ... (loop) and would distort decisions and destroy some capital ...
However?
However, if a Carbon Tax was linked with other tax cuts, then the economic costs of one tax would be offset by the economic benefits of lowering another tax.
Hayek would NEVER say something like that!
Nor would Mises or Menger
Indeed, if this was done well, it is possible that a revenue neutral Carbon Tax could be simply good tax policy
ridiculous
which would be a no-regrets solution
dumb!
and allow us to move forward with the benefits on the environmnet without any costs on the economy side.
even dumber!
A final side benefit worth noting is that by offering offsetting tax cuts, Climate Change policy becomes more acceptable by people who are currently skeptical of the need for government action.
Except those who reject the pseudo-science of the Global Warming Orthodoxy
As I said, there's a possibility that a well framed (approach of) tax cuts with a Carbon Tax would create no economic cost and would be a no regret policy
What utter rot!
and would be quite easy for people from across the political spectrum to find some comfort there.
"comfort"?
So those are my two cents. They're outlined in more detail in my policy monograph
Visit: tinyurl.com/greglindsay
which I forgot to bring out here but is available here (in the CIS building) if anyone wants to get a copy, if anyone wants a closer look.
I'll finish on one meta issue.
Warwick, Richard, and I have three views amongst many on the Climate Change policy debate. We might be wrong.
Bingo!
But the options of a Carbon Tax, a revenue neutral Carbon Tax, or a hybrid scheme are important alternatives and we think they are deserving of more consideration in the public and political debate now, before the government rushes in to a potentially costly and impotent policy.
Pop-up: Zieg Heil and Thanks Greg Lindsay! John Humprheys! CIS supporters!
Video clip from song, Sprintime for Hitler and Germany, begins.
Singer: And now it's Springtime [splash: Optimism!]
... for Hitler and Germany[splash: Yay! Carbon Tax!]
Singer: Deutschland[splash: Energy prices UP! UP! UP!]
... is happy and gay [splash: Capital investment Down! Down! Down!]
Singer: We're marching to a faster pace [insert: Speeding up the "transition"!!]
Singer: Look out, here comes the master race.
[Cross to audience members looking uncomfortable.]
Pop-up: Why are we funding these clowns?
Singer: Springtime for Hitler and Germany [fade out]
Text: Read Gerard Jackson's analysis of the CIS Carbon Tax @ TinyURL.com/greglindsay
Video clip of Southpark Al Gore: Excelsior!
Southpark kids looking uncomfortable.
Please note: Strict moderation will be applied to any comments under this post @ http://prodos.thinkertothinker.com/?p=600.
Disagreements, criticisms, corrections welcome. No swipes, rude comments, or character attacks on John Humphreys or Greg Lindsay, please.
