Tuesday, 21 June 2011

Numbers don't lie, but they can be used and abused

The Saturday Age
11 June 2011, Page: 12

It's a healthy sign that the numbers in Australia's ever simmering climate change debate are being disputed less and less. It used to be that these things went in cycles as soon as it became temporarily untenable to argue that the world had been getting cooler since 1998, someone else would start banging on about the uselessness of computer climate modelling, or maybe the urban "heat island" effect fooling our thermometers.

But now that carbon price legislation is looming, the real argument is about how people frame the numbers.Take the old chestnut of Australia's role in reducing global emissions. We pump out roughly 1.3% of human generated greenhouse gas emissions.

It is easy to make this number seem small. When broadcaster Alan Jones chanted "Oh, oh, oh, oh, point one eight of a% give me a break, Doc!" to climate scientist Professor David Karoly on radio a couple of weeks ago, it may have been wrong but it was an efficient way of delivering a rhetorical point.

But there are other ways of framing this same set of numbers. Australia's contribution to global emissions, from an environmentally conscious and thinly populated country of 22.6 million, is about 40% the total of the greenhouse bill of the entire continent of Africa. Africa has a billion people, it contains teeming, polluted cities and its resource sector has no lack of emissions intensive, trade exposed industry. Suddenly, 1.3% starts to sound a lot bigger.

Compared with Africans, Australians don't have a great deal to complain about. The Productivity Commission report released by the federal government this week makes it crystal clear that we are not exactly surging ahead when it comes to emissions abatement.

Nevertheless, sections of Australian industry continue to harp on about Australia's special brand of first world problems. We heard from the Minerals Council of Australia that the "gaping hole" in the Productivity Commission's work was the lack of a clear comparison with international competitors, such Indonesia, Brazil, Russia and South Africa.

The Australian Coal Association "assured" us that no other competitor nation was imposing costs on the fugitive emissions from its coalmines. How much additional cost would a $20 carbon price impose on a tonne of coal again? It's about $1.60 a tonne for thermal coal that sells for $120 a tonne, and the same for metallurgical coal that sells for about $300 a tonne.

But there was one example of climate change rent seeking this week that deserves a closer look. It happened in New South Wales, where an alliance of solar panel installers was able to convince the state government to perform an impressive backflip on its plan to retrospectively slash the state's solar feed in tariff from 60¢ to 40¢. NSW Energy Minister Chris Hartcher said it had left a $759 million hole in future budgets. In the interests of responsible fiscal management, it would have to go.

In retaliation, the industry got the government's figures audited by a respectable source, Ernst & Young. The government counter attacked with a surprise warning about the safety of the state's solar panels. Then the solar industry did some cross checking and found that the safety risk had been extrapolated from a single survey in northern NSW, based on flaws found in just three sets of panels. The government just looked silly. The solar installers prevailed by framing the debate around the numbers.

Australia now has the Productivity Commission report as a frame of reference for comparing the numbers on greenhouse gas cuts. It shows what most in industry have been talking about for years that a carbon price is the simplest, cheapest way of getting us back in the race.