Money Games

Critics take aim at the Coalition’s lukewarm climate policy

Prime Minister Tony Abbott announced on Tuesday the Government’s revised target for reducing greenhouse gas emissions by 26-28 per cent below 2005 levels before 2030.

MOJO-Business-Logo (1)A report Mr Abbott’s office released found this target – which would also reduce emissions by 50 per cent per person on 2005 levels before 2030 – “gets the right balance between our economic and environmental responsibilities”.

The AFR reported the new target would cost $3 billion to $4 billion.

But Mr Abbott defended the policy in Question Time, arguing the emission reduction per person is “the very best in the developed world”, and the overall target is “fairly in the middle of comparable economies”.

The targets set by each country aims to ensure global temperatures don’t exceed 2C above pre-industrial levels.

Screenshot 2015-08-18 18.08.24The Australian Chamber of Commerce and Industry said the target was “realistic” and “not impossible to meet” without significantly affecting energy prices.

But the Sydney Morning Herald reported the Academy of Science and the Climate Change Authority – which advise the Government on climate change mitigation strategy – lobbied for a significantly higher emission reduction target of 30 to 40 per cent on 2005 levels by 2030.

The ABC reported that the 2005 benchmark has been adopted because emissions were particularly high in that year.

In The Conversation, climate experts wrote that the Government had narrowly avoided being a pariah at the next climate summit, but still wasn’t doing enough to decrease warming below two degrees.

In Crikey, the World Resource Institute’s Climate Program director Jennifer Morgan explained that Australia’s “meek” target was “far behind the US and the EU” and was “banking on other countries also sticking to a high-carbon pathway”.

Australia has abundant capacity for carbon renewable energy.
Australia could be caught short if the world economy shifted to wind and solar, one expert says.

She wrote Australia could be left “ill prepared” if the global economy transitioned to wind and solar for its primary means of energy production.

University of Melbourne research economist Warwick Smith wrote for ABC’s The Drum that Australia needed to stop burning fossil fuels if it planned to hold global temperature increases below a 2C increase.

A low target that preserved jobs in the coal industry “is to effectively argue against all technological progress”, he wrote.

Labor’s proposed emission reduction target of 40-60 per cent on 2005 levels would reportedlycost an estimated $600 billion over 10 to 15 years.

But in Renew Economy, Sophie Vorrath wrote that it was not scary considering estimated external health and environmental costs of outdoor and indoor air pollution amount to over $20 billion each year.

In the AFR, politics editor Laura Tingles wrote that the policy was “the dodgiest bit of public policy in recent years” because Direct Action – a policy where the Government pays polluters to reduce emissions – costs hundreds of millions of dollars, significantly more than taxing polluters and subsidising the renewable energy industry.

She also wrote that the emission reduction “overwhelmingly relies on policies that haven’t been announced yet”.

The Monthly editor Nick Feik wrote that “this Government won’t even try to meet its target”, considering it gutted agencies used for reducing emissions and implemented a pilloried Direct Action policy.

“Everything [Mr Abbott has] said and done on the issue in the past five years is, to paraphrase, absolute crap.”

Global economy dips after China devalues yuan

China’s central bank lowered the yuan’s value by 2 per cent against the US dollar on Tuesday before continuing to devalue it until Friday for an overall decline of 4.4 per cent.

The move lowers the cost of China’s exports and boosts its economy.

China's currency has been devalued.
China’s currency has been devalued.

China strengthened its currency for asustained period, while other currencies – such as the yen and the euro – depreciated.

But weak export, investment and output data triggered a drop from 6.2298 yuan to the US dollar on Monday to 6.1162 yuan on Tuesday.

While the Chinese Central Bank said it was a “one off” devaluation and the yuan quickly rose 0.05 per cent on the US dollar on Friday, it temporarily hurt economies around the world.

The Australian sharemarket dropped 1.6 per cent on Wednesday, while the Australian dollar fell more than 1 per cent on the US dollar on Tuesday, hitting US72.5c late in the day.

The fall was primarily caused by a risk of falling commodity prices as a result of the yuan’s devaluation.

But it recovered to fetch $US73.8c on Friday after the Chinese Central Bank assured the yuan would stabilise.

Business Spectator editor in chief Alan Kohler wrote that the devaluation could lead to cheaper housing in Australia.

Bloomberg View columnist Justin Fox wrote in the AFR that the Government’s muddled explanation on the devaluation showed “maybe the Chinese Government doesn’t have a plan, or can’t agree on what the plan should be”.

The Sydney Morning Herald created a list of Australia’s winners and losers in the devaluation.

University of New South Wales economics professor Richard Holden wrote in The Conversation that China’s slowing economy was more concerning than the devaluation.

He wrote that Australia would suffer from China’s slowing economy, because it was a large importer of Chinese goods.

Peter Cai wrote in the Business Spectator’s China Spectator that “a 1.9 per cent drop in the value of the yuan will hardly be enough to compensate for the loss of competitiveness due to rapidly rising wages and sluggish demand”.

“If Beijing’s aim is to help exporters, the yuan needs to be devalued much further,” he wrote.

Dallas Buyers Club illegal downloaders dodge hefty compensation bills

The AFR reported that more than 4700 Australians who illegally downloaded the film Dallas Buyers Club would only need to pay Voltage Pictures the film’s retail price and a proportion of their legal costs.

Screenshot 2015-08-18 12.07.07It’s significantly less than the $9500 Voltage Pictures touted after it won a Federal Court bid forcing internet service providers (ISP) to hand over the ISP addresses of those who illegally downloaded the film.

In the Federal Court, Justice Nye Perram said: “Dallas Buyers Club LLC is only entitled to demand from each customer the cost of purchasing a single copy of the movie and a proportion of their legal costs.”

Josh Taylor also wrote in Crikey that Voltage Pictures would lose a $600,000 bond it paid to the court if it sent threatening letters demanding customers pay thousands of dollars.

In The Conversation, law lecturers Nicolas Suzor, Kylie Pappalardo and Suzannah Wood wrote how the ruling set a precedent for protecting customers from speculative invoicing.

In speculative invoicing, a company demands an unreasonable payment and encourages an individual to settle for a lesser amount that is still well above the remuneration that would be awarded if it went to court.

“It means consumers are protected from extortionate demands made by copyright owners,” they wrote.

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