Gamblers doth Idyl

After seeing you vacillate on Insiders, heres a simple way to explain it:

The message:

Polluting in Australia has always been essentially free. We can’t allow companies to continue polluting for nothing otherwise there is no real incentive for them to find ways to stop. The best way to do this is to attach a price to polluting by having a carbon trading system and make it illegal to pollute without having enough credits to cover it. Then companies can shop around and buy carbon credits where they genuinely can’t avoid polluting and sell their credits where they can save on pollution.

That’s a lot simpler than what you were banging on about. Its also less accurate but thats the cost of explaining something complicated in a simple fashion. You can add more later - thats how you teach. Make sure they understand addition and subtraction first before moving on to invariant calculus.

If you are going to add more, make sure the more you add is still simple. Use a metaphor.  Think of a market full of different stalls selling carbon credits. You buy a credit and then you’re allowed to emit one credits worth of carbon. You can go to different stalls and buy at different prices. You can also set up your own stall if you have left over credits and resell them. Clean energy companies might have lots of credits to sell where a coal company might need to buy a lot of credits.

Don’t get too bogged down in the metaphor either. Just a sentence or two IF YOU NEED IT. Look up the KISS principle: Keep it simple, stupid.

On a longer spot you can discuss the alternatives to a market solution, such as regulation, but explain clearly how if you do that that imposes the negatives of carbon trading (raising costs, suppressing output) without any of the positives of the market solution (selling on your carbon savings, allowing the prices to shift as other market forces change, creating new businesses, etc). However, you should only discuss the extras on a longer spot but at the end reiterate the short message above. You could reiterate the short message instead of blaming the last government. Sledge the liberals once, thats ok, but doing it a few times in a spot makes you look like you’re evading the question.

If you’re on a business program you can explain that you know that businesses have income, profit and costs. This way is the simplest way for companies to deal with this. It becomes an added cost to begin with but smart companies will be able to lower their pollution costs by polluting less. Really smart companies will be able to sell their left over credits to other companies. Regulation doesn’t work well as the fines are never large enough and companies continue to pollute, factor in the costs of the fines and pass them on to consumers. This is what happens every single day right now (if you don’t believe this look into the smelting or casting industries - or take a trip to Tassie).

Alan Kohler did a pretty good job of discussing it on Inside Business just then as well.

Please watch insiders this morning and inside business and have a think about getting a clearer message. You’re not in the public service anymore, toto. Stop sounding like it.

Cheers,

Brad

(A scientist)