RET – There’s no future, no future, no future for you

Various

OK, so the Queen outlasted the Pistols – but,
never mind the bollocks, the RET won’t outlast me.

Back in 1977 – during her Majesty’s Silver Jubilee – Johnny Rotten and his fellow Pistols managed to spur just a little foaming outrage with their tune “God Save The Queen” by suggesting – in relation to her Royal Highness – that “there’s no future, no future, no future for you.”

While these young punks were right on the money when it came to deliberately courting controversy, their skills as predictors of social and political change were way off the mark.

The Queen has managed to rack up 60 years on the throne, celebrating her Diamond Jubilee last year.  The Sex Pistols had their 15 minutes of fame and disappeared from view. Some blamed Malcolm McLaren for their lack of longevity.

But Burchell Wilson is one predictor who STT thinks is unlikely to miss his target – the Renewable Energy Target, that is.

Burchell delivered a paper for the Australia Chamber of Commerce and Industry a few weeks ago on the future of the RET.

Just like the Sex Pistols he managed to cause quite a few people to froth at the mouth – well, really only eco-fascists and greentard bloggers like the Climate Speculator, yes2ruining-us and ruin-economy. On our side of the street it simply sounded like common sense, at last.

Unlike the Pistol’s predictions for her Majesty, we think Burchell’s predictions for the RET are spot on. Here’s a summary of the points Burchell made.

What future for the RET?
Burchell Wilson – Senior Economist ACCI
October 2013

Flawed as “industry policy”

  • On some views the RET is an industry assistance measure designed to support the renewables sector.
  • Government intervention on this basis would typically be justified by beneficial spillovers to other industries from technological innovation.
  • But RET does not directly encourage research and development in renewables sector, simply rollout of current high cost technology.
  • Spillovers to other industries actually consist of higher energy costs, inefficient and less reliable generation!

The outlook for the RET is negative

  • The Renewable Energy Target mandates the rollout of high cost generation capacity into an already over-supplied market.
  • The RET is bad policy. This is largely uncontentious amongst economists.
  • Greater focus on energy costs within business and households, it is now on the radar politically.
  • Change of government also means much more accountability in relation to abatement policy.
  • The only real question is how much longer are voters are going to put up with it?

What is the likely outcome?

  • Review will find RET is an inefficient, high cost means of abating carbon emissions and fails as industry policy.
  • Probably recommend drawing a line in the sand to protect sunk investment and no further expansion of the scheme.
  • Would be one of the few things government can do to ease the strong upward pressure on electricity prices.
  • Strong co-incidence of good policy outcome and easy political sell. Undoing bad policy is productivity enhancing structural reform.

Myriad of forces ranged against RET

  • Review will find RET is an inefficient, high cost means of abating carbon emissions and fails as industry policy.
  • Political realisation current high level of energy prices is now a deliberate public choice and one that is open to governments to remedy.
  • Renewables industry should have taken the electorate with them rather than relying on spin.
  • Bad policy is inherently unstable, it will always be re-contested politically.
  • Unwise to build your house on shifting sands.

You can read the full presentation here.

But what would Burchell know?  He’s only been the Australian Chamber of Commerce & Industry’s Senior Economist since early 2009. His responsibilities and expertise include monitoring, analysis and commentary on macroeconomic conditions, monetary policy, fiscal policy, tax reform proposals, industry policy and competition policy. Burchell also produces regular Economic Policy Bulletins on major economic data releases and announcements by the Reserve Bank of Australia.

Burchell Wilson

Burchell Wilson

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. You tell ’em Burchell. Their days are numbered….and we won’t miss them at all!

Trackbacks

  1. […] Burchell Wilson has already given the RET a serve as an insanely expensive way of reducing CO2 emissions (see our post here). […]

  2. […] experienced economists are lining up to scrap the RET.  STT readers have heard the “word” from Burchell Wilson and Alan “The Terminator” […]

  3. […] is, of course, all perfectly avoidable – and Australia’s Miners, crack economists like Burchell Wilson and Alan Moran and political young guns like Angus “The Enforcer” Taylor, are pulling out all […]

  4. […] to challenge the economic lunacy of the RET; and there is a growing number of them, including Burchell Wilson and a solid team from The […]

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