Australian Lefty on Politics, Governance, Science and Info Management

Killing two birds with one underhanded stone

Posted by Dave Bath on 2009-09-28

If it’s considered OK to pay money for carbon credits to developing nations for not burning forests that would otherwise be burned and release significant carbon dioxide, perhaps it’s possible to argue the same for ancient forests (coal), after transferring title to Australian coalfields to our indigenous communities who are demonstrably living in third-world conditions, then excise those lands from Australia (we did it to Christmas Island) and grant them to a new indigenous nation, which, because of current appalling living standards, would qualify as a developing nation, and thus eligible for "non-burning" credits.

It might sound like an underhanded ridiculous rort, but it’s no more ridiculous than the way not burning forests can get carbon credits in places like Indonesia and the Amazon.

Besides, it would let white Australia cynically wash their hands of a couple of centuries of guilt and responsibilities, funnel funds directly to indigenous communities, and as the coal-rich communities would still require goods and services from the rest of the mainland, our economy would gain just as many benefits as it does (supposedly) from subsidies to miners and others in the Big Carbon Mafia.

Just because it might be cynical and underhanded doesn’t mean that our politicians wouldn’t jump at it.

No, I don’t think such a rort is the right thing to do, but as a thought experiment, raising the issues associated with the rorts of carbon credits for non-deforestation, it does prompt some useful points to think about.

Besides, Aussie Rules Footy would instantly become an international game, with a VERY competitive new international team that would be a joy to watch, and send even more funds (from TV rights, etc) to indigenous communities.  This way, it becomes easier to argue that Aussie Rules should be an olympic sport, and this might assuage the anger of the rednecks and a possible political backlash.

Again, that’s a smartarse tongue-in-cheek remark… but again it raises the issue of what sort of things might make necessary economic restructuring more palatable to those who’d still love to be able to vote for Pauline Hanson.


5 Responses to “Killing two birds with one underhanded stone”

  1. Jacques Chester said

    Putting aside the political impossibilities, I see two practical problems:

    1. The bulk of aboriginals living in third-world conditions are in the north. The coal is not.

    2. Any such new country would do very poorly without a tax base.

  2. Dave Bath said

    The post was mainly about my objection to the rorts possible with the “not burning”/”not deforesting” calculations of offshore carbon offsets. So this wasn’t a serious suggestion, more a thought experiment, as I explicitly stated in the post.

    But on your points
    1. There’s another land area, one in the middle east, that seems quite happy to relocate all of a diaspora replacing most of the pre-1945 population with an influx from europe.

    2. Are you saying that the mining industry doesn’t provide a tax base to Australia, or at least is a net drain! Wow!

  3. Jacques Chester said

    I guess I’m saying that royalties in — let’s be frank here, the NT — wouldn’t replace income tax, GST and company tax transfers from the rest of the Commonwealth. Not even close.

  4. Jacques Chester said

    You’re right about the rorts though. The first time I saw one of those carbon-offset stickers on a car, I thought to myself that it’s a beautiful opportunity to remonitise something you already do. Do you run a farm? Wheat, a carbon sink! Manage a forest or plantation? Carbon sink! Set things on fire and do nothing with the ashes? Carbon sink!

    The possibilities are endless. Indeed, since there’s no real auditing or accreditation, you can skip the whole bother of actually setting up a carbon sink and just saying you did.

    Then before long some smart fellow in London or New York will say, “Hey, we can package these up into bundles. Let’s call them Carbon Depreciation Obligations. Well sell them in tranches: tranche 1 will be low-risk carbon offsets and pay 15%, tranche 2 at 5% and tranche 3 at 2.5%. Tranche 1 can’t possibly fail, because it’s based on wheat farmers in Australia! Nothing could possibly go wrong with all those farms at once, right?”

  5. Dave Bath said

    Brilliant Jacques. Ever thought about a career in creative accounting or being a tax minimization lawyer?

    And you can always make those tranches now pay after the expected date that the climate changes makes everything go belly up.

    I’m not completely loony left enough to rail against traditional equity (you pays your money, maybe try to assist the business perform better, and takes your chances), with trades in a properly regulated exchange, but the “innovative” products that are sold underover the counter are very likely to cause major problems.

    Your inventiveness (and we better be vewy vewy qwiet, coz the wabid wascals will wip off your ideas) prompts be to think that maybe rather than with CDOs and CDSs waiting until the horse has bolted to control them with legislation, there should be some form of regulatory control over the form of instruments sitting on carbon, for example, submitting the structure to ASIC for approval before instances of it can be legally traded.

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