WEBVTT 1 00:00:00.000 --> 00:00:07.960 Hello everyone. Welcome to a full session. It's wonderful. I can't see you at all now, 2 00:00:08.080 --> 00:00:14.100 but I know you're all out there. It's my great pleasure to welcome you all to a session that 3 00:00:14.100 --> 00:00:21.380 promises to be challenging, fascinating, and led by someone who I know to be one of Australia's 4 00:00:21.380 --> 00:00:29.240 most challenging and undogmatic economists, Richard Dennis. I count Richard as a friend, 5 00:00:29.240 --> 00:00:34.080 which is something that gives me a lot of pleasure and certainly provokes my interest, 6 00:00:34.220 --> 00:00:39.460 and we have many arguments. I want to acknowledge, begin by acknowledging that we're meeting on 7 00:00:39.460 --> 00:00:43.940 Kaurna land and to pay my respects to the Kaurna elders and their descendants and acknowledge 8 00:00:43.940 --> 00:00:50.400 their ongoing association with and custodianship of the land. Our topic is green capitalism. 9 00:00:50.720 --> 00:00:57.540 Can it work? And our speaker, Richard Dennis, is very well placed to lead us in our thinking on 10 00:00:57.540 --> 00:00:57.760 this. 11 00:00:58.100 --> 00:00:59.220 Dennis is Executive Director of the Kaurna Land and Land and Land Association. 12 00:00:59.220 --> 00:01:03.160 He's Executive Director of a very important Australian think tank, the Australia Institute. 13 00:01:04.100 --> 00:01:09.060 It's a public policy think tank in Canberra, which addresses some of the most significant 14 00:01:09.060 --> 00:01:14.120 questions facing our country. Richard is an economist by training, but don't hold that 15 00:01:14.120 --> 00:01:21.260 against him. He is very interested in the design of market regulation. What can markets do and what 16 00:01:21.260 --> 00:01:25.700 can they not manage to do, particularly in the areas of the labour market and the environment, 17 00:01:25.840 --> 00:01:29.200 and he's published many, many times. He's very interested in the design of market regulation, 18 00:01:29.200 --> 00:01:34.240 measures of wellbeing and in the genuine progress indicator, which is one of the things that 19 00:01:34.240 --> 00:01:35.260 he's done a lot of work on. 20 00:01:35.600 --> 00:01:40.180 He's worked as a strategy advisor for one of Australia's most significant politicians, 21 00:01:40.680 --> 00:01:42.760 Senator Bob Brown, leader of the Australian Greens. 22 00:01:43.080 --> 00:01:47.300 He was chief of staff to the then leader of the Australian Democrats, Senator Natasha 23 00:01:47.300 --> 00:01:48.260 Stott Despoja. 24 00:01:48.780 --> 00:01:53.040 He has lectured in economics at Newcastle University and he's the co-author of a very 25 00:01:53.040 --> 00:01:58.580 important book, Affluenza, When Too Much Is Never Enough, and he's also a co-author of 26 00:01:58.580 --> 00:02:00.480 Australian Policy, Theory and Practice. 27 00:02:00.640 --> 00:02:01.840 Please welcome Richard Dennis. 28 00:02:07.680 --> 00:02:13.940 Thank you, Bob, and thank you to the organisers for inviting me and to you for coming along 29 00:02:13.940 --> 00:02:14.300 today. 30 00:02:14.840 --> 00:02:17.880 Let me start by assuring you that there'll be no PowerPoint. 31 00:02:18.540 --> 00:02:21.100 Power corrupts and PowerPoint corrupts absolutely. 32 00:02:23.360 --> 00:02:28.000 So forgive me if I ramble for 25 minutes without the aid of... 33 00:02:28.580 --> 00:02:32.380 Lots of bullet points, but there's plenty of time for questions at the end. 34 00:02:33.300 --> 00:02:36.620 So yeah, thank you again, Bob, for the warm introduction. 35 00:02:37.680 --> 00:02:38.900 Yeah, I am an economist. 36 00:02:39.160 --> 00:02:43.160 I don't feel guilty about that, but I sometimes feel ashamed. 37 00:02:44.840 --> 00:02:46.840 I'm glad I did economics. 38 00:02:47.020 --> 00:02:49.000 It helps me argue with economists. 39 00:02:50.980 --> 00:02:58.560 And in framing up the conversation today of can green capitalism work, well, I know that 40 00:02:58.580 --> 00:03:04.680 unfortunately, I think we do need a bit of economics to really delve into that question. 41 00:03:04.940 --> 00:03:10.700 But the key point that I would make today is that we should never, and I'd argue that 42 00:03:10.700 --> 00:03:17.460 we have never, but we should never put economics, capitalist economics or any other form of 43 00:03:17.460 --> 00:03:21.140 economics, at the pinnacle of our decision-making framework. 44 00:03:21.420 --> 00:03:27.440 I think down that path, not just madness lies, but the destruction of our planet, whether 45 00:03:27.440 --> 00:03:28.560 it's neoconservative. 46 00:03:28.580 --> 00:03:33.860 Classical economics or whether it's Marxist economics, economics I don't think has ever 47 00:03:33.860 --> 00:03:39.800 led us to environmentally desirable outcomes. 48 00:03:40.940 --> 00:03:44.160 But let me start with some good news. 49 00:03:45.080 --> 00:03:52.860 The good news is that despite the GFC, we live in Australia in one of the richest countries 50 00:03:52.860 --> 00:03:56.940 in the world at the richest point in world history. 51 00:03:57.100 --> 00:03:58.440 There is no doubt. 52 00:03:58.580 --> 00:04:04.520 No doubt whatsoever that that wealth is not well distributed and that there is pockets 53 00:04:04.520 --> 00:04:08.680 of extreme poverty in Australia as there are in all rich countries. 54 00:04:08.900 --> 00:04:13.760 But as an economic system, Australia has succeeded. 55 00:04:14.540 --> 00:04:21.720 It has generated an enormous amount of stuff and our capacity, if not our willingness, 56 00:04:22.560 --> 00:04:28.560 our capacity to address the problems that have beset mankind for millennia, it has generated 57 00:04:28.580 --> 00:04:33.740 an abundance of abundance of abundance of abundance of abundance of abundance of abundance 58 00:04:33.740 --> 00:04:40.580 of abundance of abundance of abundance of abundance of abundance of abundance of abundance 59 00:04:40.580 --> 00:04:47.880 abundance of abundance of abundance of abundance of abundance of abundance of abundance of abundance 60 00:04:47.880 --> 00:04:48.620 abundance of abundance of abundance of abundance of abundance of abundance of abundance of 61 00:04:48.620 --> 00:04:50.380 abundance of abundance of abundance of abundance of abundance of abundance of abundance of 62 00:04:50.380 --> 00:04:50.840 abundance of abundance of abundance of abundance of 63 00:04:50.840 --> 00:04:52.360 abundance of abundance of abundance of 64 00:04:52.360 --> 00:04:52.380 abundance of 65 00:04:52.380 --> 00:04:53.480 abundance of 66 00:04:53.480 --> 00:04:54.760 abundance of 67 00:04:54.760 --> 00:04:55.920 abundance of 68 00:04:57.240 --> 00:04:58.560 abundance of 69 00:04:58.580 --> 00:05:07.440 And because we're the clever country, because we're a knowledge nation, because we're rational economic agents, we tackle the big problems first. 70 00:05:08.640 --> 00:05:16.000 And, you know, we should recognise that we've nearly solved the shortage of curved television. 71 00:05:16.440 --> 00:05:18.300 Sorry, I've bogged up my own line. 72 00:05:18.560 --> 00:05:22.520 We've nearly solved the shortage of flat screen televisions. 73 00:05:22.520 --> 00:05:29.400 We've rolled out around $8 billion worth of these essential pieces of infrastructure. 74 00:05:30.640 --> 00:05:35.640 We've nearly solved the shortage of mobile phones amongst 14-year-olds. 75 00:05:35.700 --> 00:05:36.540 We're nearly there. 76 00:05:37.280 --> 00:05:42.580 Another five or ten years and not even a 14-year-old will lack a camera in their phone. 77 00:05:43.720 --> 00:05:45.300 Sorry, Indigenous health. 78 00:05:46.440 --> 00:05:47.780 Sorry, education. 79 00:05:48.460 --> 00:05:49.740 Sorry, environment. 80 00:05:50.020 --> 00:05:51.280 Not enough money. 81 00:05:51.280 --> 00:05:54.480 We all know that these things are priorities. 82 00:05:55.660 --> 00:05:56.680 COAG met. 83 00:05:56.720 --> 00:06:08.760 We had all the premiers and the prime minister in the Northern Territory just last week reminding us what a priority, a priority Indigenous disadvantage in Australia is. 84 00:06:09.180 --> 00:06:20.620 So much so that as a nation we're about to invest $43 billion in speeding up the capacity to download pirated music and porn. 85 00:06:22.340 --> 00:06:24.840 43 billion we're about to invest in broadband. 86 00:06:25.240 --> 00:06:26.320 Do not get me wrong. 87 00:06:26.460 --> 00:06:27.620 I live on the internet. 88 00:06:27.980 --> 00:06:28.880 Fast internet. 89 00:06:29.020 --> 00:06:29.340 Great. 90 00:06:30.160 --> 00:06:38.520 But we're about to spend $43 billion speeding that up while wringing our hands and saying if only there was some money for Indigenous health. 91 00:06:39.120 --> 00:06:41.220 If only we could invest in education. 92 00:06:41.240 --> 00:06:44.500 If only we could afford, God forbid, to tackle climate change. 93 00:06:45.000 --> 00:06:48.020 Because it's expensive to tackle climate change, don't you know? 94 00:06:48.660 --> 00:06:51.260 Well, we spend $25 billion a year on defecation. 95 00:06:51.280 --> 00:06:53.280 Just in case. 96 00:06:54.440 --> 00:06:54.880 Just in case. 97 00:06:54.880 --> 00:06:57.700 Yellow peril could show up before you know it. 98 00:06:58.560 --> 00:07:01.700 $25 billion just in case on defence. 99 00:07:02.920 --> 00:07:05.060 Climate change, oh, I agree, it's a threat. 100 00:07:05.160 --> 00:07:09.760 But, you know, we wouldn't want to spend some money on it and find out it was unnecessary. 101 00:07:11.500 --> 00:07:13.100 Well, that's the big fear, isn't it? 102 00:07:13.780 --> 00:07:17.500 Imagine how silly we'd feel if we over-invested in saving the planet. 103 00:07:18.740 --> 00:07:19.180 LAUGHTER 104 00:07:19.960 --> 00:07:21.260 And that's how we all think. 105 00:07:21.260 --> 00:07:21.800 That's how we all think, isn't it? 106 00:07:21.840 --> 00:07:25.620 Like, I mean, I have car insurance and at the end of every 12 months I go, 107 00:07:25.760 --> 00:07:26.620 Oh, you idiot. 108 00:07:27.580 --> 00:07:28.820 Didn't crash my car. 109 00:07:29.440 --> 00:07:29.940 LAUGHTER 110 00:07:31.560 --> 00:07:32.060 Waste. 111 00:07:32.420 --> 00:07:32.920 Waste. 112 00:07:34.000 --> 00:07:35.640 Wasted another thousand bucks. 113 00:07:35.740 --> 00:07:36.480 What was I thinking? 114 00:07:36.900 --> 00:07:39.340 I thought I was buying some peace of mind. 115 00:07:39.560 --> 00:07:41.580 I thought I was buying some security. 116 00:07:41.760 --> 00:07:47.060 I thought I was investing some money to insulate me from an adverse offence. 117 00:07:48.040 --> 00:07:51.240 As a society, we spend tens of billions. 118 00:07:51.260 --> 00:07:55.180 Billions of dollars insuring our assets against very unlikely events. 119 00:07:57.760 --> 00:08:00.460 Houses, cars, our own lives. 120 00:08:00.700 --> 00:08:05.500 We spend billions of dollars just in case something goes wrong. 121 00:08:06.100 --> 00:08:08.800 And what does the science of climate change say? 122 00:08:09.180 --> 00:08:15.620 Oh, if we can keep, if, big if, we can keep temperature increases to two degrees, 123 00:08:15.780 --> 00:08:20.140 we've got a 50% chance, one in two, 124 00:08:20.360 --> 00:08:21.240 of not having a chance. 125 00:08:21.260 --> 00:08:24.580 We've got a 50% chance of not bollocksing up the entire atmospheric system. 126 00:08:25.560 --> 00:08:27.060 But let's not overreact. 127 00:08:28.080 --> 00:08:31.600 Let's not rush in and tackle problems in advance 128 00:08:31.600 --> 00:08:34.500 when there's always some hope that it's imaginary. 129 00:08:34.820 --> 00:08:37.400 There's always some hope someone will invent clean coal. 130 00:08:37.760 --> 00:08:41.040 There's always some hope someone will come up with the magic bullet. 131 00:08:41.640 --> 00:08:44.700 Well, I hate to tell you, it's the magic bullet that's going to kill us. 132 00:08:45.560 --> 00:08:47.360 Sitting around doing nothing 133 00:08:48.080 --> 00:08:50.900 while someone's off trying to invent the magic bullet. 134 00:08:51.260 --> 00:08:54.080 That says we can keep doing whatever the hell we're doing 135 00:08:54.080 --> 00:08:56.660 is what is going to kill us. 136 00:08:57.320 --> 00:08:59.680 Because it's an excuse for inaction. 137 00:09:00.140 --> 00:09:04.880 And it's an excuse to continue to harm the environment 138 00:09:06.140 --> 00:09:08.780 and at the same time tell ourselves, 139 00:09:08.920 --> 00:09:10.600 yeah, sure, we're harming the environment, 140 00:09:10.660 --> 00:09:12.540 but look at what we're doing to the economy. 141 00:09:12.620 --> 00:09:14.480 It's growing. We're all good. 142 00:09:14.880 --> 00:09:17.160 And that's what I want to talk briefly about now. 143 00:09:17.260 --> 00:09:20.760 How, if we wanted to, 144 00:09:21.260 --> 00:09:24.520 can we use markets, those economic forces, 145 00:09:25.280 --> 00:09:27.980 to tackle environmental problems for us? 146 00:09:28.040 --> 00:09:29.320 I'll focus on climate change, 147 00:09:29.460 --> 00:09:32.360 because, frankly, you get that one wrong and nothing else matters. 148 00:09:34.480 --> 00:09:39.360 So we can and we do use markets to solve all sorts of problems for us. 149 00:09:39.740 --> 00:09:42.440 We use markets to build most of our houses. 150 00:09:42.580 --> 00:09:45.240 We use markets to deliver breakfast to us in the morning. 151 00:09:45.320 --> 00:09:49.260 We use markets to invent iPods and laptop computers 152 00:09:49.260 --> 00:09:51.000 and all sorts of things. 153 00:09:51.260 --> 00:09:53.840 We use markets to make our lives sometimes better, often more fun. 154 00:09:54.740 --> 00:09:57.060 And in case you fear that I... 155 00:09:57.060 --> 00:09:59.520 Or in case you think that I think that, you know, 156 00:09:59.520 --> 00:10:01.720 progress, in inverted commas, is bad 157 00:10:01.720 --> 00:10:04.380 and that, you know, markets only invent useless things, 158 00:10:04.900 --> 00:10:07.180 I do not believe this at all. 159 00:10:07.440 --> 00:10:08.900 I think that, as I said, 160 00:10:08.940 --> 00:10:11.660 we live in a very fortunate time in world history. 161 00:10:11.880 --> 00:10:14.120 And there are two words that encapsulate 162 00:10:14.120 --> 00:10:16.500 why I like living in the 21st century. 163 00:10:16.740 --> 00:10:18.500 And that is, if you look at history, 164 00:10:18.660 --> 00:10:20.860 you'll find out that the one thing, 165 00:10:21.260 --> 00:10:23.140 that dominated the lives of people, 166 00:10:23.800 --> 00:10:25.820 basically everyone who ever lived before us, 167 00:10:25.840 --> 00:10:26.740 was dental pain. 168 00:10:27.960 --> 00:10:28.940 Dental pain. 169 00:10:30.100 --> 00:10:30.200 Right? 170 00:10:31.300 --> 00:10:35.460 Egyptian emperors lived painful, short lives 171 00:10:35.460 --> 00:10:37.180 and then died of septicemia 172 00:10:37.180 --> 00:10:40.480 because that wonderful word of dentistry 173 00:10:40.480 --> 00:10:41.840 hadn't been invented yet. 174 00:10:42.200 --> 00:10:44.880 And when you combine dentistry with anaesthetic, 175 00:10:45.820 --> 00:10:47.680 you get to exactly the kind of world 176 00:10:47.680 --> 00:10:49.680 that I'm very glad that I live in. 177 00:10:50.000 --> 00:10:51.240 Our lives are made of dentistry. 178 00:10:51.240 --> 00:10:53.160 And they're much better, if we want them to be, 179 00:10:55.080 --> 00:10:58.480 than what the wealthiest people 300 years ago 180 00:10:58.480 --> 00:10:59.580 could have possibly imagined. 181 00:11:00.560 --> 00:11:04.040 But, yes, we've used our progress and our wealth 182 00:11:04.040 --> 00:11:06.100 to solve problems like dentistry, 183 00:11:06.860 --> 00:11:09.700 but we've also used it to create an insatiable, 184 00:11:09.740 --> 00:11:11.720 insatiable demand for stuff, 185 00:11:12.580 --> 00:11:15.500 which is beginning, well, it's already begun, 186 00:11:15.680 --> 00:11:17.260 but it's becoming increasingly apparent 187 00:11:17.260 --> 00:11:20.120 that it's going to literally jeopardise 188 00:11:20.120 --> 00:11:21.220 our capacity, 189 00:11:21.240 --> 00:11:24.480 our capacity to maintain ourselves as a civilisation. 190 00:11:24.960 --> 00:11:26.120 Now, it's important to clarify, 191 00:11:26.240 --> 00:11:27.520 we're not trying to save the planet. 192 00:11:27.600 --> 00:11:28.740 The planet is fine. 193 00:11:29.860 --> 00:11:31.620 We are in real trouble. 194 00:11:32.020 --> 00:11:35.020 There will be a planet Earth with climate change. 195 00:11:35.120 --> 00:11:36.240 Relax about the planet. 196 00:11:36.380 --> 00:11:37.920 Do not try and save the planet. 197 00:11:38.180 --> 00:11:40.940 You may want to save the kind of planet 198 00:11:40.940 --> 00:11:44.060 that sustains us in the way that we enjoy. 199 00:11:44.940 --> 00:11:46.860 But what is it about markets 200 00:11:46.860 --> 00:11:48.600 that have both got us into this mess 201 00:11:48.600 --> 00:11:50.300 and possibly can get us out? 202 00:11:51.240 --> 00:11:53.680 Markets rely primarily on incentive. 203 00:11:54.340 --> 00:11:56.200 And the incentive is individual, 204 00:11:57.020 --> 00:11:57.860 is individual. 205 00:11:58.160 --> 00:12:01.440 The incentive is if I think up a way to do something, 206 00:12:01.560 --> 00:12:03.920 you'll pay me to do it and I can get rich 207 00:12:03.920 --> 00:12:06.720 and then someone else sees that I got rich doing it. 208 00:12:07.500 --> 00:12:08.260 Excuse me. 209 00:12:09.000 --> 00:12:11.300 Just trying to make sure that no one else uses PowerPoint. 210 00:12:16.180 --> 00:12:19.500 I don't want to look like I'm the only poorly prepared speaker. 211 00:12:19.760 --> 00:12:20.120 Okay. 212 00:12:20.660 --> 00:12:21.140 Okay. 213 00:12:21.220 --> 00:12:22.940 I'll knock that whole computer down in a minute. 214 00:12:23.600 --> 00:12:24.160 Sorry. 215 00:12:24.320 --> 00:12:25.720 Thank you for whoever's helping. 216 00:12:25.820 --> 00:12:26.760 I apologise for that. 217 00:12:27.880 --> 00:12:32.700 So the power of incentive can be enormous 218 00:12:32.700 --> 00:12:37.260 and it can drive change in ways that we can't possibly imagine 219 00:12:37.260 --> 00:12:39.620 or in ways that we don't really understand. 220 00:12:40.020 --> 00:12:43.680 So let's reflect on the society we now live in. 221 00:12:43.700 --> 00:12:44.500 It's 2009. 222 00:12:45.080 --> 00:12:46.920 20 years ago was 1989. 223 00:12:47.820 --> 00:12:50.920 Put up your hand if you had a mobile phone 224 00:12:50.920 --> 00:12:51.580 in 1989. 225 00:12:53.640 --> 00:12:54.160 No. 226 00:12:54.540 --> 00:12:57.180 Put up your hand if you had the internet in 1989. 227 00:12:58.280 --> 00:12:58.800 Yeah. 228 00:12:58.840 --> 00:13:00.280 Did you work at defence or a uni? 229 00:13:02.680 --> 00:13:03.720 Federal government. 230 00:13:03.920 --> 00:13:05.020 Very, very rare. 231 00:13:05.380 --> 00:13:06.140 Very rare. 232 00:13:06.220 --> 00:13:09.440 So 20 years ago, no internet, no mobile phones. 233 00:13:10.780 --> 00:13:14.660 20 years later, without a government inquiry, 234 00:13:14.920 --> 00:13:16.740 without anything really, 235 00:13:16.940 --> 00:13:19.380 you know, this was driven by someone inventing something 236 00:13:19.380 --> 00:13:20.460 and rolling it out. 237 00:13:21.760 --> 00:13:24.500 We've transformed the way we communicate with each other. 238 00:13:25.700 --> 00:13:28.420 And in the last 50 years and the last 100 years, 239 00:13:28.520 --> 00:13:31.700 it's very hard to find technologies 240 00:13:31.700 --> 00:13:33.980 that haven't completely reinvented themselves. 241 00:13:34.420 --> 00:13:38.360 Technology can and markets can drive phenomenal change 242 00:13:38.360 --> 00:13:39.300 very quickly. 243 00:13:39.560 --> 00:13:41.580 This can be a good thing or a bad thing 244 00:13:41.580 --> 00:13:42.840 depending on the direction. 245 00:13:43.100 --> 00:13:44.740 And this is what it all boils down to, 246 00:13:44.800 --> 00:13:46.820 the direction that we set for ourselves. 247 00:13:47.280 --> 00:13:50.300 Now, there's an old saying that markets make a good servant 248 00:13:50.300 --> 00:13:50.900 and a poor servant. 249 00:13:50.900 --> 00:13:51.000 And that's what we're trying to do. 250 00:13:51.000 --> 00:13:51.120 We're trying to be a poor master. 251 00:13:52.300 --> 00:13:56.160 Markets do not set directions for us as a society. 252 00:13:56.860 --> 00:14:01.920 And when we rely on markets to settle problems for us 253 00:14:01.920 --> 00:14:03.480 or solve problems for us, 254 00:14:03.520 --> 00:14:05.360 we're implicitly saying at the beginning, 255 00:14:05.440 --> 00:14:06.920 we don't care how this pans out. 256 00:14:07.340 --> 00:14:08.400 We don't care. 257 00:14:08.520 --> 00:14:10.080 Let's just see what happens. 258 00:14:10.180 --> 00:14:13.680 We'll let markets figure out whether beta or VHS survives. 259 00:14:14.160 --> 00:14:18.880 We'll let markets see whether Microsoft versus Apple wins. 260 00:14:19.140 --> 00:14:20.300 As a society, 261 00:14:20.300 --> 00:14:21.120 What do we care? 262 00:14:21.160 --> 00:14:23.800 Whoever comes up with the best stuff, fine, go do it. 263 00:14:24.700 --> 00:14:27.580 So markets are great when we want to drive change, 264 00:14:27.740 --> 00:14:29.620 but we don't really care about the outcome. 265 00:14:30.660 --> 00:14:32.560 And you can see where I'm heading, I'm sure. 266 00:14:32.880 --> 00:14:35.880 Sometimes we care a lot about the outcome. 267 00:14:36.640 --> 00:14:38.020 Markets gave us slavery. 268 00:14:39.100 --> 00:14:39.580 Why? 269 00:14:39.780 --> 00:14:42.980 Because if you were the one who was owning the slaves, 270 00:14:43.060 --> 00:14:44.200 it was a great gig. 271 00:14:45.420 --> 00:14:48.800 It was not market forces that led to the end of slavery. 272 00:14:48.800 --> 00:14:53.920 It was individual countries showing unilateral leadership. 273 00:14:55.020 --> 00:14:56.420 Remember that term, leadership? 274 00:14:57.820 --> 00:15:00.300 That is, you didn't find countries saying, 275 00:15:00.400 --> 00:15:01.380 sure, I'll end slavery, 276 00:15:01.800 --> 00:15:04.220 but not unless we all ended at the same time. 277 00:15:05.060 --> 00:15:07.480 No, no, all China hasn't ended slavery yet. 278 00:15:07.540 --> 00:15:08.340 I don't want to rush in. 279 00:15:08.920 --> 00:15:11.760 Once upon a time, and still countries show leadership. 280 00:15:11.960 --> 00:15:13.840 I'll give you some examples later if you want, 281 00:15:13.960 --> 00:15:15.700 including where Australia shows leadership. 282 00:15:15.800 --> 00:15:17.120 It's just not on the environment. 283 00:15:17.620 --> 00:15:18.700 And then in countries, 284 00:15:18.800 --> 00:15:19.340 like the US, 285 00:15:19.460 --> 00:15:21.040 they had to have a civil war to settle it. 286 00:15:22.420 --> 00:15:25.860 So markets can generate outcomes that we don't like. 287 00:15:26.360 --> 00:15:28.960 And when we don't like the outcome, we intervene. 288 00:15:30.100 --> 00:15:33.920 You'll often find people who describe themselves as free marketeers. 289 00:15:33.920 --> 00:15:34.780 They like markets. 290 00:15:34.860 --> 00:15:35.880 They like market forces. 291 00:15:36.160 --> 00:15:38.280 We don't like red tape nanny state regulation. 292 00:15:38.620 --> 00:15:39.860 That's what the communists do. 293 00:15:41.000 --> 00:15:43.420 Well, you don't find many people 294 00:15:43.420 --> 00:15:45.720 who like the idea of free trade in babies. 295 00:15:46.900 --> 00:15:48.700 Now, there are people who have more babies 296 00:15:48.700 --> 00:15:49.260 than they want. 297 00:15:49.560 --> 00:15:52.140 And there are people that want babies and can't get them. 298 00:15:52.680 --> 00:15:54.140 Imagine the classifieds. 299 00:15:54.140 --> 00:15:56.060 Six weeks old, two careful owners, 300 00:15:57.700 --> 00:15:59.260 $10,000 or best offer. 301 00:16:01.280 --> 00:16:02.140 I hope you're appalled 302 00:16:02.140 --> 00:16:06.840 because we're allowed to insert our values into these things. 303 00:16:07.960 --> 00:16:10.240 Not just allowed, in many spheres of our lives, 304 00:16:10.300 --> 00:16:11.380 we're encouraged to. 305 00:16:13.140 --> 00:16:16.540 We don't rely on market forces to decide which illicit drugs 306 00:16:16.540 --> 00:16:18.180 get innovatively created. 307 00:16:18.180 --> 00:16:19.260 We get all uptight. 308 00:16:19.380 --> 00:16:22.640 And when someone uses innovation to come up with an even more fun drug, 309 00:16:23.440 --> 00:16:26.260 we quickly get in there and regulate the hell out of it. 310 00:16:26.800 --> 00:16:28.940 And the people who say they like free trade 311 00:16:28.940 --> 00:16:30.900 don't usually like free trade in drugs. 312 00:16:32.060 --> 00:16:33.000 Neither do I. 313 00:16:33.120 --> 00:16:36.800 I'm just saying that if we don't like the outcome, you intervene. 314 00:16:38.040 --> 00:16:39.060 That's what we do. 315 00:16:39.200 --> 00:16:40.560 That's what we did in slavery. 316 00:16:40.880 --> 00:16:45.200 It's what we do when it comes to illicit drugs. 317 00:16:45.380 --> 00:16:47.420 And with things like tobacco and alcohol, 318 00:16:47.480 --> 00:16:48.080 we regulate. 319 00:16:48.080 --> 00:16:49.020 We regulate the hell out of them 320 00:16:49.020 --> 00:16:52.440 for the simple reason that we don't want the market outcome. 321 00:16:52.780 --> 00:16:54.580 We want the outcome that we want. 322 00:16:56.000 --> 00:16:58.260 Yet when it comes to tackling climate change, 323 00:16:58.460 --> 00:16:59.300 we've been told, 324 00:16:59.520 --> 00:17:03.760 oh, sure, I see your point about preventing climate change. 325 00:17:03.840 --> 00:17:05.320 That seems like a worthy goal. 326 00:17:05.480 --> 00:17:07.500 Let me just go check what the market thinks of that. 327 00:17:08.580 --> 00:17:10.580 Let me just go check with Rio Tinto. 328 00:17:10.720 --> 00:17:12.560 No, they don't like it so much. 329 00:17:13.400 --> 00:17:14.480 No, it's a good idea. 330 00:17:14.560 --> 00:17:15.720 I'm not opposed to you in principle. 331 00:17:16.420 --> 00:17:18.060 In fact, let me sign up to the market. 332 00:17:18.060 --> 00:17:19.200 I'm not going to do the things that I'll do in 2050 333 00:17:19.200 --> 00:17:20.860 because I won't be prime minister then. 334 00:17:21.380 --> 00:17:24.540 But I've been talking to the people that are profiting from the status quo 335 00:17:24.540 --> 00:17:26.040 and they're quite reluctant to change, 336 00:17:26.140 --> 00:17:27.400 so I think we should let them keep going. 337 00:17:29.120 --> 00:17:33.020 If we don't like an outcome, we can do something about it. 338 00:17:33.560 --> 00:17:35.300 We used to have lead in petrol. 339 00:17:35.460 --> 00:17:42.240 It used to give kids in areas that had lots of traffic driving through them 340 00:17:42.240 --> 00:17:44.980 substantial health problems and lower IQs. 341 00:17:45.300 --> 00:17:47.640 Do you know how we managed to get the lead out of petrol? 342 00:17:49.300 --> 00:17:51.260 We said, you have to take the lead out of the petrol. 343 00:17:52.540 --> 00:17:55.300 And the oil company said, I'd like to leave the lead in the petrol. 344 00:17:56.000 --> 00:17:58.300 And we said, we'd like you to take the lead out of the petrol. 345 00:17:58.480 --> 00:17:59.620 And you've got till 1988. 346 00:18:01.400 --> 00:18:03.960 If we want to solve a problem, we can solve a problem. 347 00:18:04.540 --> 00:18:07.500 We can use markets to solve problems for us, 348 00:18:07.560 --> 00:18:10.260 but if and when we do that, we have to understand 349 00:18:10.260 --> 00:18:11.980 we have no control of the outcome. 350 00:18:13.460 --> 00:18:17.760 That when we set up a market to solve a problem, 351 00:18:18.060 --> 00:18:20.980 we sort of say, well, we're OK with where this might go. 352 00:18:21.740 --> 00:18:27.520 Now, think about not just the efficiency of using markets to solve problems, 353 00:18:27.700 --> 00:18:31.160 but the equity of using markets to solve problems. 354 00:18:31.540 --> 00:18:34.200 In Sydney, and I'm sure in Adelaide, 355 00:18:34.280 --> 00:18:38.020 there is more people who would like to live on the water 356 00:18:38.020 --> 00:18:40.140 than there are waterfront properties. 357 00:18:41.100 --> 00:18:43.860 And if there are more people that want to live on the water 358 00:18:43.860 --> 00:18:46.360 than there are properties, someone's going to miss out. 359 00:18:47.240 --> 00:18:48.040 And the way... 360 00:18:48.060 --> 00:18:50.400 The way that we usually figure out who's going to miss out 361 00:18:50.400 --> 00:18:51.340 is to have an auction. 362 00:18:53.240 --> 00:18:54.320 Someone's going to miss out, 363 00:18:54.400 --> 00:18:58.340 and the people who are willing and able to pay the most get the places. 364 00:18:58.780 --> 00:19:01.360 We all think, fair enough, someone's going to miss out. 365 00:19:01.440 --> 00:19:02.400 That's the way you do it. 366 00:19:04.180 --> 00:19:08.540 But how do we allocate places in the emergency ward in a hospital? 367 00:19:09.740 --> 00:19:11.740 There's a lot of people in emergency sometimes, 368 00:19:12.680 --> 00:19:14.780 and there's not enough doctors to see everybody. 369 00:19:15.320 --> 00:19:17.300 Can you imagine the nurse coming out and saying, 370 00:19:17.340 --> 00:19:17.640 all right, 371 00:19:18.700 --> 00:19:20.940 who wants to see the doctor next? 372 00:19:21.360 --> 00:19:22.420 What am I bid? 373 00:19:24.760 --> 00:19:25.800 What's the difference? 374 00:19:26.800 --> 00:19:28.880 The difference is we care more, 375 00:19:29.720 --> 00:19:33.100 we absolutely care more about who misses out on health treatment 376 00:19:33.100 --> 00:19:35.240 than who misses out on waterfront property. 377 00:19:35.780 --> 00:19:39.200 So in turn, we use entirely different mechanisms 378 00:19:39.200 --> 00:19:41.020 for allocating scarce results. 379 00:19:41.540 --> 00:19:44.920 Sometimes we use markets, sometimes we don't. 380 00:19:46.200 --> 00:19:47.920 The problem that we have, 381 00:19:48.060 --> 00:19:49.300 we don't have to... 382 00:19:49.300 --> 00:19:50.200 How am I going for time, Bob? 383 00:19:50.680 --> 00:19:51.220 Doing fine? 384 00:19:52.020 --> 00:19:52.420 OK. 385 00:19:52.700 --> 00:19:55.120 I told her, because I'll just rave on, 386 00:19:55.160 --> 00:19:55.800 I don't have PowerPoint. 387 00:19:57.900 --> 00:20:00.640 There's no last slide I can threaten is coming up. 388 00:20:00.740 --> 00:20:02.180 I can just go and go and go. 389 00:20:05.400 --> 00:20:09.340 We often have these phony conversations, 390 00:20:09.760 --> 00:20:11.220 these phony conversations that say, 391 00:20:11.320 --> 00:20:12.980 well, are you for or against markets? 392 00:20:13.720 --> 00:20:15.580 Or do you want to regulate everything 393 00:20:15.580 --> 00:20:18.040 because you don't trust individuals to make their own choices? 394 00:20:18.060 --> 00:20:19.360 Well, you know what? 395 00:20:19.400 --> 00:20:21.280 We don't trust people to make their own choices. 396 00:20:21.340 --> 00:20:23.620 That's why we force them to have seatbelts in their cars. 397 00:20:23.820 --> 00:20:25.780 And we don't trust people to use seatbelts. 398 00:20:25.840 --> 00:20:27.400 That's why we make it a law to put them on. 399 00:20:27.560 --> 00:20:29.380 And we don't trust people to obey the law. 400 00:20:29.440 --> 00:20:31.080 That's why we pay the police to drive around. 401 00:20:31.400 --> 00:20:33.540 And we don't trust people to pay any common sense. 402 00:20:33.580 --> 00:20:36.100 That's why we spend a fortune putting ads on television saying, 403 00:20:36.260 --> 00:20:37.760 don't forget to put your seatbelt on. 404 00:20:40.680 --> 00:20:42.560 That's called red tape nanny statism. 405 00:20:43.700 --> 00:20:46.020 But don't do that when it comes to tackling climate change. 406 00:20:46.060 --> 00:20:47.140 Let's leave it to the market. 407 00:20:49.340 --> 00:20:53.280 If people are willing to bollocks up the planet for other people, 408 00:20:53.420 --> 00:20:55.240 who are we to intervene? 409 00:20:57.100 --> 00:20:58.120 Now, that's okay. 410 00:20:58.560 --> 00:21:01.800 It's not obvious that we're smart enough to solve these problems. 411 00:21:02.200 --> 00:21:05.640 And it's not obvious that those of us who want to solve these problems 412 00:21:05.640 --> 00:21:08.880 will be persuasive against those people that don't want to solve them. 413 00:21:09.120 --> 00:21:11.040 But let's not fight the wrong fight. 414 00:21:12.020 --> 00:21:14.200 Let's not get drawn into thinking 415 00:21:14.200 --> 00:21:16.720 you're either for or against markets 416 00:21:16.720 --> 00:21:18.040 or for or against the market. 417 00:21:18.040 --> 00:21:19.280 Or for or against regulation. 418 00:21:20.400 --> 00:21:23.640 When in fact we all walk down the street every day 419 00:21:25.400 --> 00:21:29.020 comfortable living entirely dual lives in this regard. 420 00:21:30.500 --> 00:21:34.000 And of course we argue about where the boundaries on these things are. 421 00:21:34.140 --> 00:21:38.160 But I've never met a person that's opposed to all regulation of everything. 422 00:21:39.380 --> 00:21:42.500 Even the anarchists end up forming sort of groups 423 00:21:42.500 --> 00:21:44.920 and have rules for what it is to be an anarchist. 424 00:21:45.640 --> 00:21:46.440 They do. 425 00:21:48.160 --> 00:21:50.540 Just, if you feel like it, Google anarchy 426 00:21:50.540 --> 00:21:52.460 and look at the arguments they have with each other 427 00:21:52.460 --> 00:21:54.080 about what makes a proper anarchist. 428 00:21:57.820 --> 00:22:00.240 So, everybody is comfortable with the fact 429 00:22:00.240 --> 00:22:02.560 that in some spheres of our personal life 430 00:22:02.560 --> 00:22:04.580 and in some spheres of our collective life 431 00:22:04.580 --> 00:22:08.160 we rely and we trust individuals to make their own decisions 432 00:22:08.160 --> 00:22:09.700 and we leave things up to markets. 433 00:22:09.800 --> 00:22:12.180 And frankly, for delivering coffee, I think that's great. 434 00:22:13.440 --> 00:22:15.560 But then there are other things in our lives 435 00:22:15.560 --> 00:22:17.240 and other things in our community 436 00:22:17.240 --> 00:22:20.540 that we've always relied on for non-market mechanisms. 437 00:22:20.980 --> 00:22:22.820 And let me just give you a little bit of a list. 438 00:22:23.240 --> 00:22:25.840 Here in Adelaide, let's do a little pop quiz. 439 00:22:26.120 --> 00:22:30.720 And the answers are market or government. 440 00:22:31.000 --> 00:22:31.340 Alright? 441 00:22:31.460 --> 00:22:33.700 I'm imposing a dichotomy on you. 442 00:22:34.240 --> 00:22:36.240 Market or government are the possible answers. 443 00:22:36.520 --> 00:22:37.660 Who built your roads? 444 00:22:39.600 --> 00:22:40.120 Government. 445 00:22:40.220 --> 00:22:41.260 Come on, you can do it. 446 00:22:41.560 --> 00:22:42.080 Government. 447 00:22:42.140 --> 00:22:42.660 There you go. 448 00:22:43.260 --> 00:22:44.440 Who built your sewers? 449 00:22:44.980 --> 00:22:45.500 Water. 450 00:22:47.240 --> 00:22:47.740 Government. 451 00:22:47.740 --> 00:22:48.100 Telephones? 452 00:22:48.640 --> 00:22:49.240 Government. 453 00:22:49.240 --> 00:22:49.760 Government. 454 00:22:49.760 --> 00:22:50.500 Sold them? 455 00:22:50.860 --> 00:22:52.220 After we built it. 456 00:22:52.760 --> 00:22:54.600 It wasn't the market that built them. 457 00:22:55.740 --> 00:22:56.340 Alright. 458 00:22:56.580 --> 00:22:57.180 Roads. 459 00:22:57.300 --> 00:22:57.900 Trains? 460 00:22:59.440 --> 00:23:03.000 Roads, trains, water, sewage, electricity, phones. 461 00:23:03.160 --> 00:23:05.740 All the infrastructure you can think of 462 00:23:06.620 --> 00:23:09.840 built or at least paid for by the government 463 00:23:09.840 --> 00:23:12.860 often sold off to the private sector in the last 20 years. 464 00:23:13.960 --> 00:23:16.840 There is no piece of substantial, 465 00:23:17.240 --> 00:23:20.320 network infrastructure in Australia that has ever, 466 00:23:20.440 --> 00:23:22.720 I'm just choosing my words carefully here, 467 00:23:22.780 --> 00:23:25.420 ever been built by the private sector. 468 00:23:26.400 --> 00:23:28.400 Who's going to deal with the transformation 469 00:23:28.400 --> 00:23:30.020 in response to climate change for us? 470 00:23:30.940 --> 00:23:34.480 The market's going to fix it. 471 00:23:34.680 --> 00:23:35.580 Isn't that great? 472 00:23:36.460 --> 00:23:37.700 Look at the scoreboard. 473 00:23:38.840 --> 00:23:39.420 Zero. 474 00:23:42.220 --> 00:23:46.020 Markets have never wheeled out massive infrastructure 475 00:23:46.020 --> 00:23:47.040 across the country. 476 00:23:47.040 --> 00:23:48.600 And they've never done it in a timely manner. 477 00:23:48.820 --> 00:23:51.520 And before the last election, the Rudd government, 478 00:23:51.660 --> 00:23:52.680 the Rudd opposition said, 479 00:23:52.800 --> 00:23:56.740 we're going to spend four, four, singular, billion 480 00:23:58.060 --> 00:24:00.960 to basically encourage Telstra and Optus 481 00:24:00.960 --> 00:24:02.860 to build the broadband network for us. 482 00:24:02.900 --> 00:24:04.560 Four, singular, billion. 483 00:24:04.680 --> 00:24:07.840 We'll encourage the private sector to do it for us. 484 00:24:08.920 --> 00:24:15.780 Post-election, 43, 10 times as much, billion dollars. 485 00:24:15.780 --> 00:24:18.900 Of yours, of my money, oh, we're going to do it ourselves 486 00:24:18.900 --> 00:24:20.400 because the market didn't want to do it. 487 00:24:21.960 --> 00:24:25.300 Right, in two years, we went from 4 billion will induce 488 00:24:25.300 --> 00:24:27.840 the private efficient market to do it, 489 00:24:27.880 --> 00:24:29.560 to bloody hell, we're on our own. 490 00:24:30.320 --> 00:24:32.460 We're going to have to spend 43 billion ourselves 491 00:24:33.140 --> 00:24:34.520 to build the same bit of infrastructure. 492 00:24:35.700 --> 00:24:37.880 Markets can do all sorts of things. 493 00:24:38.200 --> 00:24:39.900 They have done all sorts of things. 494 00:24:40.340 --> 00:24:42.680 Markets are powerful, and flexible, 495 00:24:42.780 --> 00:24:43.920 and at times efficient. 496 00:24:44.940 --> 00:24:45.760 But they don't mean to do it. 497 00:24:45.780 --> 00:24:53.600 do big risky things at all well. They don't risk their own money on big speculative ventures. 498 00:24:53.840 --> 00:24:58.600 That's what the government's always done and I fear that's what's required to tackle climate 499 00:24:58.600 --> 00:25:08.880 change. Excellent. I had five minutes to go. Let me just end with my imaginary last slide 500 00:25:08.880 --> 00:25:16.000 on the market mechanism that we're, and how, I just want to explain to you the market mechanism 501 00:25:16.000 --> 00:25:21.200 that we're going to use, allegedly, to tackle climate change in Australia. It's called the 502 00:25:21.200 --> 00:25:27.720 Carbon Pollution Reduction Scheme, the CPRS. I call it the Carbon Pollution Reallocation 503 00:25:27.720 --> 00:25:33.620 Scheme for reasons that you're about to become familiar with. Now, to do this, I need three 504 00:25:33.620 --> 00:25:38.760 victims to come on up and just stand here and stare awkwardly. You can't see anyone, 505 00:25:38.880 --> 00:25:43.660 it's pitch black. So, come on, I need three victims from the front row. Come on, come on, 506 00:25:43.680 --> 00:25:49.400 three people. I'm mic'd up, this is good. All right, now your job is just to stare awkwardly. 507 00:25:49.680 --> 00:25:55.160 There you go. All right, we're going to have the, can you hear me out the back all right? Yep, 508 00:25:55.220 --> 00:25:59.940 we're going to have the Festival of Ideas Emissions Trading Scheme. We pollute too much. 509 00:26:00.380 --> 00:26:05.740 We need a cap and trade scheme to restrict our pollution. The whole point of restrict 510 00:26:05.740 --> 00:26:08.860 means we can't do as much of it as we usually do. 511 00:26:08.880 --> 00:26:12.740 We can't do as much as we used to. Someone's going to miss out. That's the plan. It's not 512 00:26:12.740 --> 00:26:18.200 an unintended consequence that when you reduce emissions, that people reduce emissions. 513 00:26:19.600 --> 00:26:26.160 Stick with me. The whole point is to reduce emissions. So, someone in here is going to 514 00:26:26.160 --> 00:26:31.340 have to miss out, just as you miss out on waterfront land and Ferraris and anything 515 00:26:31.340 --> 00:26:36.440 else that you aspire to and can't afford. So, in order to restrict our emissions to 516 00:26:36.440 --> 00:26:38.860 three tonnes, we're going to set up a new emission system. We're going to set up a new emission 517 00:26:38.860 --> 00:26:42.760 system. We're going to set up a cap and trade scheme where we say, right, anyone who wants 518 00:26:42.760 --> 00:26:48.620 to pollute has to buy a permit to pollute. This is not radical. This is how you allocate 519 00:26:48.620 --> 00:26:55.020 taxi plate licences here in Adelaide. All right, you can't just set up Richard's Taxi 520 00:26:55.020 --> 00:26:59.760 Business. You've got to go buy a taxi plate and there's a fixed number of taxi plates. 521 00:27:00.920 --> 00:27:04.920 Well, that's how emissions trading works. Now, if you two could just stand slightly 522 00:27:04.920 --> 00:27:08.840 to the side here. Yep. Now, here's, we've got three permits. Permits are the first one. 523 00:27:08.840 --> 00:27:12.540 Permit one, permit two, permit three. Anyone in possession of one of these permits can 524 00:27:12.540 --> 00:27:16.620 put one tonne of CO2 into the atmosphere. Anyone who doesn't own one of these permits 525 00:27:16.620 --> 00:27:22.760 can do what? Sort off. All right? If you can't afford one of these permits, you can't pollute. 526 00:27:23.000 --> 00:27:28.760 So, let's start with our household sector doing two tonnes of polluting and you can 527 00:27:28.760 --> 00:27:31.600 be an evil polluter for today. You can be Rio Tinto or someone. 528 00:27:32.940 --> 00:27:38.520 By the way, you know Rio Tinto don't make steel and aluminium and things just to ruin 529 00:27:38.520 --> 00:27:38.820 the planet. 530 00:27:38.840 --> 00:27:43.040 We do actually buy it off them. All right? It's very easy to blame the big polluter, 531 00:27:43.100 --> 00:27:48.260 but they don't really temple their fingers saying, oh, let's make pollution today. All 532 00:27:48.260 --> 00:27:52.820 right? They're only making stuff we buy off them. So, here we have our household sector 533 00:27:53.260 --> 00:27:57.220 and it's, you know, running our TVs and our air conditioners and our cars and here's our 534 00:27:57.220 --> 00:28:01.600 polluting sector. It's making our steel and aluminium and concrete. And we've got our 535 00:28:01.600 --> 00:28:08.260 scheme, our carbon pollution reduction scheme. And we set a target of three tonnes, but unfortunately 536 00:28:08.260 --> 00:28:13.720 in hindsight, probably three tonnes are still too many. Three tonnes, according to science, 537 00:28:14.000 --> 00:28:18.340 is going to bollocks it all up for us. So, the household sector starts to feel a bit 538 00:28:18.340 --> 00:28:23.140 anxious and it thinks, well, three tonnes is too many. And, you know, the scientists, 539 00:28:23.340 --> 00:28:28.300 the politicians were got to by the big polluters. So, I'm going to do my bit. I'm going to do 540 00:28:28.300 --> 00:28:32.660 my bit to reduce pollution. So, I'm going to put insulation in my roof. I'm going to 541 00:28:32.660 --> 00:28:36.480 ride my bike everywhere. Never going to use my air conditioner. Going to feel guilty all 542 00:28:36.480 --> 00:28:36.880 the time. 543 00:28:37.700 --> 00:28:42.320 Can't solve the planet without feeling guilty all the time. All right. So, the household 544 00:28:42.320 --> 00:28:46.740 sector reduces its emissions by 50%. Can you just take a big step in the right direction 545 00:28:46.740 --> 00:28:52.940 for me? Look at that. Fantastic. We've just reduced the household's emissions by 50%. 546 00:28:52.940 --> 00:29:01.040 Give yourselves a pat on the back. Well done. What do you think happens to the permit? What 547 00:29:01.040 --> 00:29:05.600 do you think the evil polluter over here would like to do? Can you just come stand over here? 548 00:29:05.840 --> 00:29:06.560 There you go. 549 00:29:06.880 --> 00:29:12.960 How many permits were there at the beginning? How many permits are there now? What was the 550 00:29:12.960 --> 00:29:20.420 impact of the household's efforts to reduce its emissions? That's it. There's nothing 551 00:29:20.420 --> 00:29:27.980 more to it. It's called emissions trading for a reason. If you don't want to pollute, 552 00:29:28.720 --> 00:29:36.860 someone else can. Okay? And if we get the target wrong, that's exactly what we're going to do. 553 00:29:37.360 --> 00:29:56.120 What are we going to do? What are we going to do? What are we going to do? What are we 554 00:29:56.120 --> 00:29:57.380 going to do? What are we going to do? What are we going to do? What are we going to do? 555 00:29:57.380 --> 00:29:57.420 What are we going to do? What are we going to do? What are we going to do? What are we 556 00:29:57.420 --> 00:29:57.960 going to do? What are we going to do? What are we going to do? What are we going to do? 557 00:29:57.960 --> 00:29:58.700 What are we going to do? What are we going to do? What are we going to do? What are we 558 00:29:58.700 --> 00:29:58.760 going to do? What are we going to do? What are we going to do? What are we going to do? 559 00:29:58.760 --> 00:29:58.840 What are we going to do? What are we going to do? What are we going to do? What are we going 560 00:29:58.840 --> 00:30:06.860 to do? What are we going to do? What are we going to do? What are we going to do? What are 561 00:30:06.860 --> 00:30:08.780 want a waterfront house, you can sell it 562 00:30:08.780 --> 00:30:10.640 to someone else who wants it. If you don't want a 563 00:30:10.640 --> 00:30:12.720 taxi plate anymore, you can sell it to 564 00:30:12.720 --> 00:30:14.740 someone else who wants it. Once you create 565 00:30:14.740 --> 00:30:15.920 a market for pollution, 566 00:30:16.700 --> 00:30:18.860 if you don't want to pollute, good on you. 567 00:30:19.940 --> 00:30:20.780 Someone else can 568 00:30:20.780 --> 00:30:22.780 do it instead. It's 569 00:30:22.780 --> 00:30:24.780 the politicians that set the targets. 570 00:30:25.460 --> 00:30:26.820 It's the market that says 571 00:30:26.820 --> 00:30:27.780 who's going to use it. 572 00:30:29.200 --> 00:30:30.780 Now that's fine, as 573 00:30:30.780 --> 00:30:32.720 long as we all understand that if 574 00:30:32.720 --> 00:30:34.560 we get the target wrong, we're 575 00:30:34.560 --> 00:30:36.680 stuffed. So please think our permits. 576 00:30:36.860 --> 00:30:37.620 Thank you. 577 00:30:41.460 --> 00:30:42.560 And look, 578 00:30:42.640 --> 00:30:43.900 just to conclude, 579 00:30:44.920 --> 00:30:46.580 markets and a market-based 580 00:30:46.580 --> 00:30:48.280 mechanism like emissions trading 581 00:30:49.060 --> 00:30:49.760 can 582 00:30:50.640 --> 00:30:51.340 be 583 00:30:52.100 --> 00:30:54.580 an efficient way of tackling 584 00:30:54.580 --> 00:30:56.720 climate change. But it doesn't 585 00:30:56.720 --> 00:30:58.420 mean it will be an 586 00:30:58.420 --> 00:31:00.620 efficient mechanism for tackling climate 587 00:31:00.620 --> 00:31:02.680 change. And the questions that 588 00:31:02.680 --> 00:31:04.800 we have to ask of those who are designing 589 00:31:04.800 --> 00:31:06.740 it on our behalf are not 590 00:31:06.740 --> 00:31:08.640 do you have a clever market-based 591 00:31:08.640 --> 00:31:10.600 scheme, but what will the 592 00:31:10.600 --> 00:31:12.580 outcome of your 593 00:31:12.580 --> 00:31:14.220 clever market-based scheme be? 594 00:31:14.560 --> 00:31:16.740 And if you don't like the outcome, 595 00:31:17.600 --> 00:31:18.520 then you don't like 596 00:31:18.520 --> 00:31:20.700 the scheme. If you do 597 00:31:20.700 --> 00:31:22.660 like the outcome, then you should 598 00:31:22.660 --> 00:31:24.600 love the scheme. Markets 599 00:31:24.600 --> 00:31:26.700 don't set direction for us. 600 00:31:26.880 --> 00:31:28.600 Only we can do that. 601 00:31:29.660 --> 00:31:30.260 Markets 602 00:31:30.260 --> 00:31:32.280 are a good 603 00:31:32.280 --> 00:31:34.560 servant and a poor master. 604 00:31:34.680 --> 00:31:35.320 Thank you. 605 00:31:45.440 --> 00:31:46.080 Thank you. 606 00:31:50.760 --> 00:31:51.360 Thank you. 607 00:31:53.420 --> 00:31:53.920 Thank you. 608 00:31:55.500 --> 00:31:55.800 Thank you. 609 00:31:56.480 --> 00:31:56.960 Thank you. 610 00:31:56.960 --> 00:31:57.100 Thank you. 611 00:31:57.100 --> 00:31:57.120 Thank you. 612 00:31:57.120 --> 00:31:57.260 Thank you. 613 00:31:57.260 --> 00:31:57.920 Thank you. 614 00:31:58.040 --> 00:31:58.520 Thank you. 615 00:31:58.860 --> 00:31:59.180 Thank you. 616 00:31:59.180 --> 00:31:59.600 Thank you. 617 00:31:59.940 --> 00:32:00.440 Thank you. 618 00:32:00.440 --> 00:32:00.880 Thank you. 619 00:32:00.880 --> 00:32:00.940 Thank you. 620 00:32:00.940 --> 00:32:00.960 Thank you. 621 00:32:00.960 --> 00:32:01.140 Thank you. 622 00:32:01.140 --> 00:32:02.360 Thank you. 623 00:32:02.480 --> 00:32:03.240 Thank you. 624 00:32:03.240 --> 00:32:03.540 Thank you. 625 00:32:04.060 --> 00:32:04.720 Thank you. 626 00:32:04.720 --> 00:32:12.000 a crisis, a poverty crisis, and now it's starting, it's hitting where it starts, with the wallet, the GFC crisis. 627 00:32:12.540 --> 00:32:18.000 My question to you, especially in the context of the think tank, to actually push an agenda and make it, 628 00:32:18.020 --> 00:32:22.360 and virtualize it and make it understood by the masses who really want to be involved, 629 00:32:22.540 --> 00:32:27.620 is that, is there a way we can actually phrase this project saying it's not a crisis of climate change, 630 00:32:27.620 --> 00:32:35.820 but overall it's a crisis of sustainability, a crisis of binge that's made devolved in financial media also, 631 00:32:35.820 --> 00:32:41.180 where the trader binges on the market, the financial markets, or when we binge on media, 632 00:32:41.260 --> 00:32:46.620 or when I binge on joint television, or when I binge on joint food, or when I binge on the environment, 633 00:32:47.840 --> 00:32:54.400 only eventually it goes back to the same value issue that the way I live is not sustainable, 634 00:32:55.120 --> 00:32:57.540 and is there a way you can actually... 635 00:32:57.620 --> 00:33:06.080 I'm thinking of a way to articulate this agenda item, not from a climate change perspective, 636 00:33:06.380 --> 00:33:12.740 which would antagonize people because it's a loading agenda, but in a way that can more profoundly change society. 637 00:33:13.100 --> 00:33:19.240 And just to conclude this question, when you made the reference on the social contract, 638 00:33:19.500 --> 00:33:25.340 I grew up in a country where heavy infrastructure, road, transportation infrastructure in France, 639 00:33:25.540 --> 00:33:27.600 I mean, this is something that wasn't the standard. 640 00:33:27.620 --> 00:33:30.060 I mean, I was told at least 30 years ago that the market wouldn't stop this. 641 00:33:30.200 --> 00:33:34.120 When the world articulated its vision to the country after the Second World War, 642 00:33:34.320 --> 00:33:38.220 people voted for it, and it followed through for 30, 40 years. 643 00:33:38.620 --> 00:33:41.740 So are you thinking of that kind of approach? 644 00:33:43.100 --> 00:33:46.320 Look, short answer, yes, but long answer, whew. 645 00:33:50.240 --> 00:33:55.160 Look, by definition I was talking about a subset of what I see today, 646 00:33:55.200 --> 00:33:57.500 and that is the role of markets in tactics. 647 00:33:57.620 --> 00:34:01.480 They are non-cost ondanious, noncost ondanious, 648 00:34:01.480 --> 00:34:03.740 noncost ondanious, noncost ondanious, 649 00:34:03.740 --> 00:34:07.100 noncost ondanious, noncost ondanious, 650 00:34:07.100 --> 00:34:10.620 noncost ondanious, noncost ondanious, 651 00:34:10.640 --> 00:34:25.620 noncost ondanious, noncost ondanious, 652 00:34:25.620 --> 00:34:33.120 right balance is, but I know the wrong balance when I see it. And I think that the way that I 653 00:34:33.120 --> 00:34:37.480 try to address it, just quickly, but have a chat to me afterwards if you want, I actually think the 654 00:34:37.480 --> 00:34:44.400 word sustainability is dangerous. I think it's a fool's errand to try and define sustainability. 655 00:34:44.820 --> 00:34:50.800 And what I'm working on at the moment is measures of unsustainability, because I know failure when 656 00:34:50.800 --> 00:34:57.060 I see it, and I don't know what Adelaide should look like in 50 years' time. And I think it's 657 00:34:57.060 --> 00:35:01.680 arrogant to say, look, I can tell you what sustainability is, I know what the meaning of 658 00:35:01.680 --> 00:35:07.000 life is, I know how to get the balance right, if you do this we'll all be happy. I won't take 659 00:35:07.000 --> 00:35:11.780 responsibility for that. But if you keep building three times as many roads as you do rail, 660 00:35:11.940 --> 00:35:16.800 if we keep putting more CO2 into the atmosphere than we did last year, that looks like 661 00:35:17.300 --> 00:35:20.780 unsustainability to me. So let's just call it as we see it. 662 00:35:20.800 --> 00:35:27.320 And I reckon step one, stop going in the wrong direction. Step two, argue about the right 663 00:35:27.320 --> 00:35:30.960 direction. Sorry, I've got to convince Barb. 664 00:35:32.540 --> 00:35:36.820 Has Australia taken any positive steps towards the third wave of COVID-19? 665 00:35:39.560 --> 00:35:47.580 No. Look, Australia, we live in a strange country. Globalisation and the internet has done nothing 666 00:35:47.580 --> 00:35:49.880 to join Australia to the rest of the world. 667 00:35:50.800 --> 00:35:58.260 Because when you say in Australia we are playing a leadership role in the climate change debate, 668 00:35:58.440 --> 00:36:05.100 people don't laugh at you. Yet if you went to France or to Germany or to South Africa 669 00:36:05.100 --> 00:36:10.080 or pretty much any country in the world apart from America who hasn't heard of it yet 670 00:36:10.080 --> 00:36:16.480 and said, did you know that Australia is playing a leadership role in climate change, 671 00:36:16.780 --> 00:36:20.780 you would be laughed at. And the best proof of that, 672 00:36:20.800 --> 00:36:26.920 is when they watered down the CPRS further to make it start later and have cheaper permits 673 00:36:26.920 --> 00:36:33.660 and more free ones, but allegedly increased the target to 25% under conditions that will never be 674 00:36:33.660 --> 00:36:40.280 met. One of the reasons Kevin Rudd said that they'd gone to 25% was because the US was moving 675 00:36:40.280 --> 00:36:45.800 so fast. And Kerry O'Brien said, well, how is it that you're showing leadership if you're trying 676 00:36:45.800 --> 00:36:46.880 to catch up to the US? 677 00:36:47.360 --> 00:36:47.880 LAUGHTER 678 00:36:49.620 --> 00:36:50.780 Wasn't a very convenient question. 679 00:36:50.780 --> 00:36:51.940 That's a convincing answer to the question. 680 00:36:53.400 --> 00:36:54.020 Can I ask that? 681 00:36:54.080 --> 00:36:55.620 Can you just do it briefly? 682 00:36:56.140 --> 00:36:56.740 No. 683 00:36:57.480 --> 00:36:58.080 LAUGHTER 684 00:37:02.040 --> 00:37:04.260 Are pros and cons of a carbon tax? 685 00:37:04.860 --> 00:37:11.960 Sure. Look, I'm not philosophically opposed to emissions trading, but I'm increasingly convinced 686 00:37:11.960 --> 00:37:19.960 it's a waste of time. The advantage of an emissions trading scheme is that you get certainty 687 00:37:19.960 --> 00:37:24.660 about the amount of pollution, and you get uncertainty about the price of the pollution. 688 00:37:24.900 --> 00:37:28.320 Because, you know, the picture of the three permits out the front, we have to auction them, 689 00:37:28.440 --> 00:37:32.960 you don't know what the price will be. So, in theory, emissions trading gives you a fixed 690 00:37:32.960 --> 00:37:40.820 quantity and an unknown price. And a carbon tax gives you a fixed price, but an unknown quantity. 691 00:37:41.740 --> 00:37:48.600 So, historically, environmentalists have liked the idea of emissions trading because it gives you a fixed quantity. 692 00:37:48.740 --> 00:37:49.800 We know that. 693 00:37:49.800 --> 00:37:50.780 that we'll solve the problem. 694 00:37:51.300 --> 00:37:55.600 But I hate to say it, the naive people that we are 695 00:37:56.280 --> 00:37:57.680 never really thought through, 696 00:37:57.760 --> 00:38:01.100 what happens if we had emissions trading with a really crap target? 697 00:38:02.260 --> 00:38:04.360 Because remember, the strength of emissions trading 698 00:38:04.360 --> 00:38:05.860 is you know exactly the quantity. 699 00:38:06.560 --> 00:38:08.780 And the weakness of emissions trading is 700 00:38:08.780 --> 00:38:11.540 you know exactly what the quantity's going to be. 701 00:38:11.720 --> 00:38:13.960 So you plug the wrong quantity into emissions trading 702 00:38:13.960 --> 00:38:14.940 and you're in real trouble. 703 00:38:15.100 --> 00:38:16.200 That's what I was trying to explain. 704 00:38:17.280 --> 00:38:19.520 Secondly, look, carbon tax, it's quick. 705 00:38:19.800 --> 00:38:20.940 You can start one tomorrow. 706 00:38:21.720 --> 00:38:25.200 You can always change the carbon tax going forward. 707 00:38:25.440 --> 00:38:29.480 And unlike emissions trading, look at what's happened with water. 708 00:38:29.700 --> 00:38:31.280 See, I told you I couldn't speak briefly. 709 00:38:31.460 --> 00:38:32.620 Look at what's happened with water. 710 00:38:33.380 --> 00:38:37.160 If there was an over-allocation, there were too many water permits, 711 00:38:37.520 --> 00:38:41.080 you want to spend billions of dollars buying back water permits, 712 00:38:41.360 --> 00:38:44.100 you want to take that from the health budget or the education budget? 713 00:38:45.280 --> 00:38:47.000 You want to jack up the carbon tax? 714 00:38:47.300 --> 00:38:48.380 More money for us. 715 00:38:49.320 --> 00:38:53.100 So I don't, I dispute entirely, did it again, 716 00:38:54.200 --> 00:38:57.680 the assertion that it's harder to increase the carbon tax down the track 717 00:38:57.680 --> 00:38:59.080 because there's money in it. 718 00:38:59.680 --> 00:39:01.340 You try buying back permits 719 00:39:01.340 --> 00:39:03.140 and you take it straight out of health and education. 720 00:39:04.500 --> 00:39:06.180 There was another question next to you. 721 00:39:06.200 --> 00:39:08.460 I'm going to get down here and then start to go up it. 722 00:39:08.800 --> 00:39:11.600 I just wanted to pick up on your point about the targets 723 00:39:11.600 --> 00:39:14.040 and also link it to your point about 724 00:39:14.040 --> 00:39:17.300 arguing about what's unsustainable rather than sustainable. 725 00:39:18.380 --> 00:39:22.020 What do you think are the constraints on why we can't have 726 00:39:22.020 --> 00:39:26.240 a good, sensible argument and debate about what are the appropriate targets? 727 00:39:26.620 --> 00:39:29.460 Do you think it's the science or do you think it's the politics? 728 00:39:29.700 --> 00:39:31.240 Oh, it's absolutely the politics. 729 00:39:33.900 --> 00:39:35.500 Look, I'm an economist. 730 00:39:35.960 --> 00:39:36.780 I'm sorry. 731 00:39:37.480 --> 00:39:43.040 I can't tell you anything with certainty in three months' time. 732 00:39:43.200 --> 00:39:46.160 I can't tell you the interest rate, the inflation rate, 733 00:39:46.260 --> 00:39:47.980 the unemployment rate, the growth rate, 734 00:39:48.020 --> 00:39:48.360 the carbon rate. 735 00:39:48.360 --> 00:39:49.100 I can't tell you the current account deficit. 736 00:39:49.620 --> 00:39:52.220 And my colleagues have got the audacity 737 00:39:52.900 --> 00:39:54.860 to say to climate scientists, 738 00:39:55.040 --> 00:39:57.740 so what's the temperature going to be in 70 years' time? 739 00:39:58.800 --> 00:40:01.100 And when they say, well, I think it'll be this, 740 00:40:01.120 --> 00:40:02.580 plus or minus a little bit, 741 00:40:02.920 --> 00:40:04.540 you mean you're not even certain? 742 00:40:06.540 --> 00:40:10.760 This bizarre, absolutely bizarre argument 743 00:40:11.640 --> 00:40:14.440 that we need to provide certainty 744 00:40:15.700 --> 00:40:18.340 and that we can't tackle climate change, 745 00:40:18.360 --> 00:40:20.340 unless we can give business certainty. 746 00:40:21.400 --> 00:40:21.920 What? 747 00:40:22.840 --> 00:40:23.820 I don't know what... 748 00:40:23.820 --> 00:40:28.520 The exchange rate fell from 90 cents US to 60 cents US last year 749 00:40:28.520 --> 00:40:30.080 and now it's back up to about 75. 750 00:40:31.720 --> 00:40:33.920 Any firm that's exporting anything 751 00:40:33.920 --> 00:40:36.400 has just been on the rollercoaster ride from hell. 752 00:40:36.600 --> 00:40:37.880 And I don't hear them saying, 753 00:40:37.960 --> 00:40:40.180 well, we'll have to get rid of a floating exchange rate 754 00:40:40.180 --> 00:40:41.800 because I can't cope with the uncertainty. 755 00:40:42.820 --> 00:40:46.620 So I think that the scientific uncertainty is just an excuse. 756 00:40:48.360 --> 00:40:49.960 And frankly, I think... 757 00:40:50.480 --> 00:40:51.720 Look, here's the problem. 758 00:40:52.000 --> 00:40:55.120 There is no reason we have to tackle climate change tomorrow. 759 00:40:55.780 --> 00:40:56.820 We can put it off. 760 00:40:57.420 --> 00:40:59.440 And what better political strategy 761 00:40:59.440 --> 00:41:00.900 than to say to all the people 762 00:41:00.900 --> 00:41:02.760 that are worried about climate change, 763 00:41:02.960 --> 00:41:03.780 I'm on it. 764 00:41:04.100 --> 00:41:05.620 And to say to all the polluters, 765 00:41:05.680 --> 00:41:07.000 relax, I'm not doing anything. 766 00:41:08.560 --> 00:41:09.300 Everybody's happy. 767 00:41:10.020 --> 00:41:10.720 All right? 768 00:41:10.720 --> 00:41:12.700 As long as people think we're solving it. 769 00:41:12.920 --> 00:41:14.560 Oh, the target's a crap, 770 00:41:14.620 --> 00:41:16.060 but I've put insulation in my roof. 771 00:41:16.340 --> 00:41:18.340 Well, you just freed up a permit for the polluters. 772 00:41:18.340 --> 00:41:20.960 You know, so it's just politics. 773 00:41:21.180 --> 00:41:22.280 It's just politics. 774 00:41:22.420 --> 00:41:25.440 And the scientists have been too sincere 775 00:41:25.980 --> 00:41:27.700 and gone, oh, you want more certainty? 776 00:41:27.820 --> 00:41:29.700 Oh, give me five years and another 10 million bucks 777 00:41:29.700 --> 00:41:30.280 and I'll be back. 778 00:41:31.420 --> 00:41:32.240 You know, great. 779 00:41:32.360 --> 00:41:33.660 Another five years, we don't do anything. 780 00:41:37.280 --> 00:41:39.120 Going to the larger question 781 00:41:39.120 --> 00:41:42.100 of whether green capitalism is useful, 782 00:41:44.080 --> 00:41:45.940 the kind of moment I think is 783 00:41:45.940 --> 00:41:48.180 that we're already consuming 784 00:41:48.340 --> 00:41:50.360 and we're at 134 on the list collectively, 785 00:41:50.680 --> 00:41:52.360 which is going to have an environmental impact. 786 00:41:54.340 --> 00:41:56.400 Put that alongside the fact that 787 00:41:56.400 --> 00:41:58.060 for capitalism to work, 788 00:41:58.140 --> 00:41:59.260 we have to have a profit. 789 00:42:01.020 --> 00:42:03.320 Therefore, because the profit is going to be 790 00:42:03.320 --> 00:42:05.960 a claim on future resources, 791 00:42:06.920 --> 00:42:09.580 where therefore we are intrinsically 792 00:42:09.580 --> 00:42:12.400 going to get further into debt, 793 00:42:13.340 --> 00:42:15.140 how can capitalism, 794 00:42:15.860 --> 00:42:17.060 regardless of whether it's green, 795 00:42:17.320 --> 00:42:17.340 green, 796 00:42:18.340 --> 00:42:19.200 or non-green, 797 00:42:22.500 --> 00:42:23.920 how can capitalism, 798 00:42:24.320 --> 00:42:24.480 regardless of whether it's green, 799 00:42:24.480 --> 00:42:25.120 how can capitalism, 800 00:42:25.120 --> 00:42:25.620 regardless of whether it's green, 801 00:42:25.620 --> 00:42:28.800 or non-green, 802 00:42:28.920 --> 00:42:30.740 how can capitalism, 803 00:42:30.740 --> 00:42:31.300 regardless of whether it's green, 804 00:42:31.300 --> 00:42:31.700 or non-green, 805 00:42:31.700 --> 00:42:31.920 how can capitalism, 806 00:42:31.920 --> 00:42:32.440 regardless of whether it's green, 807 00:42:32.780 --> 00:42:34.100 or non-green, 808 00:42:34.100 --> 00:42:34.180 how can capitalism, 809 00:42:34.260 --> 00:42:36.240 regardless of whether it's green, 810 00:42:36.440 --> 00:42:36.480 or non-green, 811 00:42:36.620 --> 00:42:37.760 how can capitalism, 812 00:42:37.760 --> 00:42:38.840 regardless of whether it's green, 813 00:42:38.840 --> 00:42:40.320 or non-green, 814 00:42:40.340 --> 00:42:41.460 how can capitalism, 815 00:42:41.460 --> 00:42:42.460 regardless of whether it's green, 816 00:42:42.660 --> 00:42:43.240 or non-green, 817 00:42:43.240 --> 00:42:43.540 how can capitalism, 818 00:42:43.540 --> 00:42:43.720 regardless of whether it's green, 819 00:42:44.060 --> 00:42:44.580 or non-green, 820 00:42:44.580 --> 00:42:44.820 how can capitalism, 821 00:42:44.820 --> 00:42:45.040 regardless of whether it's green, 822 00:42:45.040 --> 00:42:45.860 or non-green, 823 00:42:45.860 --> 00:42:46.460 how can capitalism, 824 00:42:46.460 --> 00:42:47.580 regardless of whether it's green, 825 00:42:47.580 --> 00:42:54.320 I fear that people have been predicting the demise of capitalism for a long time. 826 00:42:54.460 --> 00:42:56.880 I think that one day it will fall over, 827 00:42:57.000 --> 00:43:00.780 but when it comes to tackling climate change, I'm not ready to wait. 828 00:43:00.980 --> 00:43:06.980 So I'm pragmatic enough to basically try and push any system that's currently going 829 00:43:07.720 --> 00:43:10.660 into a direction that would be better, if not perfect. 830 00:43:10.860 --> 00:43:13.820 So, look, there are inherent contradictions in capitalism. 831 00:43:13.820 --> 00:43:20.180 There is an inherent and poorly understood mechanism within capitalism, 832 00:43:20.380 --> 00:43:26.520 which does exactly what you describe in terms of basically mortgaging the future. 833 00:43:27.820 --> 00:43:32.520 But, you know, I guess the point I would make is 834 00:43:32.520 --> 00:43:35.500 there's no such thing as free market capitalism in the world. 835 00:43:36.040 --> 00:43:36.940 Absolutely none. 836 00:43:37.160 --> 00:43:39.300 George Bush was not a free marketeer. 837 00:43:39.340 --> 00:43:40.600 Look at their agriculture industry. 838 00:43:40.900 --> 00:43:42.920 John Howard was not a free marketeer. 839 00:43:42.960 --> 00:43:43.800 Look at the private health. 840 00:43:43.820 --> 00:43:44.500 Health insurance subsidies. 841 00:43:45.140 --> 00:43:45.820 All right. 842 00:43:45.940 --> 00:43:50.940 The right wing just say they're free market while they're busy helping out their friends. 843 00:43:51.760 --> 00:43:55.300 The left says, I'd like to help my friends, and people say, oh, you can't do that. 844 00:43:56.280 --> 00:44:00.060 You know, so there is no free market capitalism. 845 00:44:00.320 --> 00:44:02.680 All capitalism is governed and regulated, 846 00:44:03.440 --> 00:44:07.920 and I do think we can make some big steps in the right direction under the status quo, 847 00:44:08.040 --> 00:44:11.680 even though I agree the status quo is literally unsustainable. 848 00:44:12.080 --> 00:44:13.320 The last question. 849 00:44:13.820 --> 00:44:17.540 I think we've just got two points I'd like to ask you to comment on. 850 00:44:18.420 --> 00:44:23.940 It seems to me that the GFC is being used as an excuse, as you highlighted, to do absolutely nothing, 851 00:44:24.280 --> 00:44:27.400 and industries you didn't touch on the coal industry specifically. 852 00:44:28.020 --> 00:44:32.620 But the amount of money and the amount of subsidies that is currently going to the coal industry, 853 00:44:32.940 --> 00:44:37.700 I think that makes your point that there is no such thing as free markets, 854 00:44:37.780 --> 00:44:42.080 and the governments have got a role to play in setting the parameters. 855 00:44:42.780 --> 00:44:49.480 You also talked about the freeing up of permits so that polluters can pollute. 856 00:44:50.260 --> 00:44:56.680 I don't take from that that you're saying to those of us who have moved down the path of solar hot water 857 00:44:56.680 --> 00:45:00.080 or using panels or riding our bikes or whatever that we should stop. 858 00:45:00.220 --> 00:45:01.100 No, not yet. 859 00:45:02.260 --> 00:45:06.900 You haven't actually given us any hope about what can our governments do. 860 00:45:07.160 --> 00:45:10.000 Can they reduce continuously? 861 00:45:12.300 --> 00:45:14.840 In other words, the three becomes two. 862 00:45:15.140 --> 00:45:19.440 And can they clearly say that in 10 years we will be down to X or Y? 863 00:45:19.800 --> 00:45:24.480 The other thing that I'd like you to comment on is the state governments 864 00:45:24.480 --> 00:45:30.020 who have pulled the wool over everybody's eyes by paying net feeding tariffs 865 00:45:30.020 --> 00:45:34.640 for any electricity generated rather than gross feeding tariffs, 866 00:45:34.920 --> 00:45:39.460 and the ACT is the only territory that has shown any leadership. 867 00:45:40.240 --> 00:45:41.840 New South Wales, of course. 868 00:45:42.080 --> 00:45:44.160 Now going down that path of net tariffs. 869 00:45:44.360 --> 00:45:48.620 And I wondered if you could give us some practical things that we can do 870 00:45:48.620 --> 00:45:51.380 to change this in terms of our governments. 871 00:45:51.520 --> 00:45:51.800 Sure. 872 00:45:52.140 --> 00:45:52.980 Very briefly. 873 00:45:53.880 --> 00:45:55.580 Look, I hate to say it. 874 00:45:55.620 --> 00:45:59.300 I think I'm a relaxed, good, fun kind of person. 875 00:45:59.500 --> 00:46:01.840 And unfortunately, I come and talk about this stuff and people go, 876 00:46:01.920 --> 00:46:03.340 but Richard, you haven't given me any hope. 877 00:46:03.440 --> 00:46:05.420 It's like, it's because I'm trying to scare the hell out of you. 878 00:46:06.960 --> 00:46:08.260 Things are bad, people. 879 00:46:09.260 --> 00:46:10.680 But there are things you can do. 880 00:46:10.720 --> 00:46:12.060 But the number one thing you can do, 881 00:46:12.080 --> 00:46:14.980 is pick up the phone and write an email to your elected representatives 882 00:46:14.980 --> 00:46:17.300 and say, this is a disgrace and I want it fixed. 883 00:46:18.920 --> 00:46:21.480 Because what you said is exactly the case. 884 00:46:23.600 --> 00:46:25.460 I sort of propose a scheme. 885 00:46:25.820 --> 00:46:28.680 I don't think carbon emissions trading is a great idea, 886 00:46:28.820 --> 00:46:30.960 but if we're going to have it, I want the best scheme we can get. 887 00:46:31.160 --> 00:46:35.640 So I talk about a cap and slice scheme rather than a cap and trade scheme. 888 00:46:36.100 --> 00:46:37.860 So under a cap and slice scheme, 889 00:46:38.040 --> 00:46:40.120 if you save yourself a ton of emissions, 890 00:46:40.360 --> 00:46:41.980 then next year we issue one. 891 00:46:42.080 --> 00:46:42.720 And then you have one fewer permits. 892 00:46:43.400 --> 00:46:46.200 Which is actually how most people probably think it works. 893 00:46:47.300 --> 00:46:47.820 Alright? 894 00:46:48.040 --> 00:46:50.000 But it doesn't work that way. 895 00:46:50.160 --> 00:46:52.140 But it could work that way. 896 00:46:52.320 --> 00:46:56.360 But it will only work that way if we persuade the parliament to do it. 897 00:46:56.620 --> 00:46:59.560 Your local senator is the climate change minister. 898 00:47:00.100 --> 00:47:02.640 You know, just email her and say, 899 00:47:02.760 --> 00:47:05.820 dear Penny, is it true that if I turn off my air conditioner, 900 00:47:05.900 --> 00:47:07.240 someone else gets to pollute more? 901 00:47:07.580 --> 00:47:10.960 What she'll say is, you will be contributing to meeting our target. 902 00:47:12.200 --> 00:47:13.080 Think about the words. 903 00:47:13.460 --> 00:47:15.420 You're contributing to meeting our target. 904 00:47:15.540 --> 00:47:17.360 That is because you did a little bit X. 905 00:47:17.440 --> 00:47:19.480 We get to the target while someone else is doing less. 906 00:47:20.120 --> 00:47:21.460 So we could fix it. 907 00:47:21.480 --> 00:47:24.660 Cap and slice is, I think, a simple way of doing that. 908 00:47:26.160 --> 00:47:27.820 As for the feed-in tariffs, 909 00:47:27.980 --> 00:47:30.080 look, there's all sorts of better and worse policies 910 00:47:30.080 --> 00:47:31.560 state governments can implement. 911 00:47:31.960 --> 00:47:33.920 But again, understand what I'm saying. 912 00:47:34.020 --> 00:47:35.760 If we don't fix the CPRS, 913 00:47:35.860 --> 00:47:39.440 you know what the feed-in tariff will do to help Australia's greenhouse gas emissions? 914 00:47:40.300 --> 00:47:40.700 Nothing. 915 00:47:41.320 --> 00:47:42.700 We've got to fix the CPRS. 916 00:47:43.600 --> 00:47:47.500 Because otherwise, the state government here encourages a whole bunch of renewables, 917 00:47:47.600 --> 00:47:49.580 so you burn a little less coal down here, 918 00:47:49.700 --> 00:47:52.760 so that up in New South Wales they can burn a little bit more. 919 00:47:53.200 --> 00:47:56.420 So yes, a gross feed-in tariff's better than a net feed-in tariff, 920 00:47:56.580 --> 00:48:00.800 but the CPRS negates both of them, unless we fix it. 921 00:48:01.000 --> 00:48:03.600 So I'm not saying stop doing good things. 922 00:48:03.800 --> 00:48:07.000 I'm saying demand, politically demand, 923 00:48:07.100 --> 00:48:10.220 that your good things are recognised and included. 924 00:48:10.220 --> 00:48:13.080 So I think I should wrap up on that note. 925 00:48:13.120 --> 00:48:14.460 Let me do it with a little plug. 926 00:48:14.880 --> 00:48:18.500 The Australia Institute doesn't get any money from BHP or Rio Tinto. 927 00:48:19.400 --> 00:48:23.120 We also don't get any money from the federal government. 928 00:48:23.800 --> 00:48:26.000 All of our stuff is free online. 929 00:48:26.560 --> 00:48:31.600 And if you go to our website, just Google the Australia Institute, 930 00:48:31.980 --> 00:48:35.080 give us your email address on our front page, 931 00:48:35.260 --> 00:48:38.080 we'll tell you when we put research out about this stuff. 932 00:48:38.240 --> 00:48:40.100 It's all designed to be easily read. 933 00:48:40.560 --> 00:48:43.100 All right, because I'm an academic escapee. 934 00:48:44.300 --> 00:48:46.980 I like to talk to people in ways they understand. 935 00:48:47.080 --> 00:48:49.840 So if you do want to hear more from us, it's all free. 936 00:48:49.920 --> 00:48:51.400 Just give us your email address. 937 00:48:51.660 --> 00:48:52.660 Thank you very much.