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EU Nobel Prize More of Giggle Than a Full-Bodied Laugh

Have you heard that bit about the European Union? No? It goes a little something like this:

EU walks into Oslo City Hall, takes all the chairs and is awarded the Nobel Peace Prize.

Well, a number of people are viewing the awarding of the Nobel Prize for peace in that manner, a complete and utter joke. But, it’s not quite as farcical as one might think. Does it look good? No, not in particular. It doesn’t really matter what it was given out for, people have made up their own minds about this year’s recipient and their worthiness.

Perhaps the European Union receiving the peace prize was a not so clever ruse perpetrated by the committee, which had the intention of getting people talking about the award again, but that actually backfired?

Let’s begin to put the award in some context. What is the Nobel Peace Prize awarded for? Well, that’s all pretty clear there in italics. It’s about peace, or at least that was the original intention of the honour. The prize has come to mean so much less because the original intent of the this particular Nobel Prize, peace, has not always been behind the gifting of it.

The long-awarded prize has turned into a recognition, not every year, but from time-to-time, of relative peace rather than absolute peace on earth, sleigh-bells jingling and all that jazz.

Again, to the intent of the prize which appears lost on a number of people. It is about peace. The European zone, in case anyone hadn’t noticed, is going through a prolonged period of economic woes. They’re not great money managers, but that is usually a whole different story to being a peaceful or relatively peaceful region. Yes, we have witnessed scenes of less than peaceful protests, but that is slightly different to governments or individuals not promoting a wider form of peace.

Do economic woes sometimes lead to conflict? You bet. But precious few, indeed probably only the most uninformed, are suggesting that scenario carries any legitimate weight.

The Nobel Peace Prize was awarded to Europe for their post-war efforts in developing the region into a peaceful, relatively secure continent after World War 2. It is a recognition of the huge shift from a politically and geographically divided region into one of relative harmony, regardless of the much less than ideal way the continent decided to go about uniting. It is though entirely arguable that awarding a supranational institution, which has the ability to erode national sovereignty, is a stupid one. Again, it seems to hark back to the Nobel committee rewarding relatively peaceful, secure and democratic recipients.

The European Union being given the award is also just as much about the way in which it has promoted human rights. Few could deny that Europe, partly as a result of the shame wrought by World War 2 acts of barbarity and aggression have fostered a culture promoting the human rights of every citizen. The European Court of Human Rights is an example of one such institution which aims to further the cause of human rights across Europe.

Very few doubt the source of black humour that the award has become. In 2009 the award was bestowed upon the President of the United States of America, a world leader responsible for the increase of drone attacks which have killed countless civilians, among other things. Examples of recipients like this are probably playing a part in clouding the judgement of the masses.

The Nobel Peace Prize has been awarded to an institution. It is an example of a body set up with the express purpose of promoting human rights. That’s great, but the award should be limited to individuals, or at the very least small groups of individuals that aim to promote peace, security and human rights, governments and governing bodies should do this as a matter of course.

The 2012 award does not look great, but it’s far less humorous than many are making out. It appears there is a need for a vocabulary lesson in order for the difference between economics and peace to be distinguished.

Government Still Emitting Mixed Messages and Potentially Leaking Revenue

Carbon pricing is happening, it’s been legislated and that legislation has commenced. The fixed price period began almost two months ago now, on July the 1st. But today things have moved forward as far as the floating price, the emissions trading scheme which will commence in just under 3 years time after the fixed price period ends. The Australian Government has today announced that they’ve reached an agreement with the European Union to link their respective schemes which means Australia joins with 30 other nations in a common market for carbon credits.

But there’s also been a step backwards from existing Labor Party carbon pricing policy, there will no longer be a floor price, that’s gone as part of the pact with the EU linking Australia and European Union countries. This new market, though heavily regulated, will be the largest carbon market in the world, but by no means does it cover anywhere near the majority of the globe and its population. The European ETS covers  just over 500 million people and Australia will add a further 22 million people living under the carbon market.

For the first 3 years of the emissions trading scheme, Australians will have access to European carbon credits but not vice versa. European businesses being able to purchase carbon credits in Australia will be allowed to occur from 2018.

Aside from the broken promise over the carbon price, the biggest point of contention since the decision was made in minority government to pursue the carbon price was over the floor price.

The floor price was instituted by the government supposedly to provide certainty to business and to avoid the price of emissions becoming too low. This price was to be set at $15 per tonne from 2015 when the market-based trading scheme will start. We were told, just as recently as last week that the floor price would happen, though reports had surfaced that the ALP were considering backing away from this element of their climate change policy.

Essentially now, the common market with the European Union will determine the price, any price it likes, and if the EU example is an indication, that price has the potential to go quite low, well and truly under the $29 per tonne that the Treasury modelling banks on for the year 2015-16. This means the revenue projections are surely under serious threat.

But Greg Combet doesn’t think so. The Climate Change Minister today said that the long-term average over the past 4 years of the European ETS has been $23 per tonne of carbon emissions. But whether that’s enough to achieve an effective price of $29 in 2015-16 alone is fanciful. This is especially so with a European economic community in chaos financially, a common market that has seen their permits go as low as single digits per tonne of carbon emissions.

Worse still, this backdown on the floor price is in effect an admission that the Gillard Government was wrong with its legislated policy direction. Rightly or wrongly, it will be construed as the government admitting that a floor price would have hurt Australia and our competitiveness and the people dealing with the flow-on costs of the scheme and that could easily have further negative implications at least temporarily for the struggling ALP.

For an administration struggling with expectations, the mixed messaging and second backflip this month doesn’t bode well in trying to run consistent messaging in areas of public policy and that just makes the government look confused and scared.

By far the biggest damage will be to revenue and that will in turn make promises much harder to deliver, though maybe they’re not too worried about that given the chances that they’ll hold the purse-strings at the start of the floating price are slim. Oh, and the fact that the trading scheme might well not be there under a Liberal Government. But who knows, it’s certainly much, much harder to repeal now.

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