“Political agreement is OK – as long as you live up to it afterwards. So make the political agreement as far reaching as possible.” – Peter Westerman, Australia
“The world’s future is up to you. Please use the chance and act wisely NOW.” – Mira Kapfinger, Austria
“Dear World Leaders, I am praying for you all at this critical time. Let’s do the right thing for the poor and the environment.” – Carl, UK
Those are just four messages out of 3,860 posted on the Copenhagen Climate Change Conference website.
Reading just a handful of those messages – all in favour of world leaders “doing something” of course – it’s no wonder bureaucrats and politicians of the world believe they’ve got a mandate to rip billions of dollars from the hip pocket of the world’s taxpayers.
As we’ve written on several occasions in Money Morning, we’ve no idea whether climate change is genuine. And we’ve also got no idea whether it’s man made. After all, it’s been quite a while since we studied science.
Over twenty years actually. But what we do know is this…
It isn’t possible for the talking heads in Copenhagen to do anything about it, whether it exists or not.
Time and again we’ve seen governments cause more problems than they cure. And not only that, but it inevitably costs the individual taxpayer thousands of dollars for the privilege.
Why should we believe that this time will be different? That suddenly government has found the one thing that it’s good at – solving a problem that may or may not exist.
But you only have to look at the “How this affects your household” document from the Department of Climate Change to see that the Carbon Pollution Reduction Scheme (CPRS) is little different from any other government wealth redistribution scheme.
It does what most other government schemes do, it takes money from one of your pockets hands it around various government departments and then deposits it in another one of your pockets, usually minus a few cents on the dollar.
Of course, if you happen to be “rich”, such as a single income couple with two dependent children and you earn $120,000 per year then you can expect to pay an extra $1,027 per year thanks to the CPRS.
If you’re an average wage earner on $65,000 in the same household formation then you may actually make a profit out of the scheme. According to the Department of Climate Change you’ll receive total government assistance of $1,082 compared to a forecast increase in living costs of $767.
That’s if you have any faith in the forecasting ability of any government department. More likely it will still cost you money – and lots of it.
If governments did want to do something about Climate Change then what they really need to do is get out of the market and let free enterprise solve the problem.
Think about it, almost every opinion poll shows that individuals are in favour of environmentally friendly practices. Clearly there is a will among the global population to reduce pollution.
After all, who wants to breathe in smoke and fumes? No one wants to do that.
And we’re sure that contrary to popular opinion, “evil capitalist” businessmen don’t have a preference for spewing out noxious fumes from their factories or for dumping dangerous chemicals in rivers.
And likewise individuals don’t consciously choose or prefer to do something that causes more pollution instead of something that causes less pollution.
The fact is it’s the very people and organisations – politicians and governments – who claim to be the saviours of the planet that ensure the problems of pollution will last even longer.
For instance, ‘green’ energy provider Jackgreen Ltd proudly boasts that 190,000 households in New South Wales are signed up to one of its ‘green’ services.
These are services that allow you to receive either 10%, 50% or 100% ‘green’ power. For the 10% option you pay nothing extra, for the 50% option you pay $3.30 per week extra, and for the 100% green power option you pay $6.60 extra per week.
That’s just a total of $343.20 per year added to the cost of a fuel bill. That doesn’t seem like much if you really are concerned about saving the environment.
And remember, the opinion polls tell us that around 80% of Australians believe something needs to be done.
But then you look at the numbers again. 190,000 New South Wales households isn’t quite as impressive a number as it first seems.
According to the 2006 Census there were 2.7 million households in New South Wales. That means only 6.9% of households in the Premier state choose to use the ‘green’ option through this particular company.
But maybe that’s not a fair representation. What about a bigger energy provider such as Origin Energy?
Well, the numbers are better but still not mindblowing. In 2008 Origin Energy claimed to have over 423,000 customers signed up for its ‘green’ options, more than double those signed up through Jackgreen.
But still that only represents 14% of its national customer base of three million customers.
So, what does that tell us? Does it suggest that say, three-quarters of the population couldn’t care less about the environment and pollutions, or does it suggest there are other reasons why more households don’t participate?
We’d go for the latter option.
When you consider the amount of money remaining in the taxpayer’s pocket after they’ve paid taxes, food, mortgage/rent, bills, and travel, there isn’t that much left to spend on optional items.
It’s no wonder individuals feel they need for governments to do something, because most individuals don’t have the spare capacity to do something about it for themselves.
But surely the better and more efficient option is to allow the individuals to make their own choices.
I mean, do we think that in a free market, individuals would choose to support a polluting industry at the expense of a ‘green’ industry?
Or course, we don’t know for sure, but the odds are that with more money in their pockets, individuals would make a rational decision to support ‘green’ at the expense of ‘black’ energy.
The idea that individuals only have short time horizons and are unable to make decisions based on a long-term payback doesn’t hold true. People make long term decisions all the time. To suggest that only a government which has a three or four year election cycle to contend with is the only one capable of thinking about the long term is false.
We’re pretty sure that left to a free market, individuals wouldn’t artificially support polluters at the expense of ‘green’ energy just to save jobs in one particular industry.
In a free market, individuals would know that jobs lost in a dirty industry would result in jobs gained in a ‘green’ industry. The presence of government and its manipulation of markets prevents this adjustment from happening.
As for the Copenhagen Summit, the one saving grace you have as a taxpayer is that in the short term it’s unlikely to achieve anything. But that doesn’t mean you should drop your guard.
A global tax scheme looks to be inevitable, and it’s something to be avoided at all costs. As I wrote in Money Morning a few weeks ago, when the European Union began it was nothing more than a free trade organisation covering coal and steel.
Fifty years later, it’s a gigantic bureaucratic undemocratic monster, as decisions effecting the people are made ever further from the people.
The fear from the Copenhagen Summit is that national governments will cede power to a global organisation which can never be recovered.
for The Daily Reckoning Australia