Policy foundations for affordable, reliable, lower-emissions power, absent NE'G' nonsense

The second policy foundation replaces the current focus on national emissions production with a global approach based on national emissions consumption. This improves chances of a genuinely global approach to reducing emissions by eliminating the trade competitiveness flaw inherent in the production model.

What if the rest of the world doesn't adopt a consumption model? In that case, Einstein's definition of insanity continues. Global policy undermines its own objective, as it has since at least 1992.

Then Australia has three options:

i. It's easiest for us to do nothing to lower our emissions. That's what the world is doing, Paris or no Paris, anyway. This option has no net effect on global emissions. We can then concentrate on restoring affordable, reliable power. We'd be better off, global emissions no worse, delivering a Pareto-optimal outcome.

ii. We could indicate we'll adopt a consumption-based approach to pricing emissions, if/when most of the world's major emitters do. Given our tiny emissions share, promoting a global response is the best we can do,if actually dealing with global anthropogenic emissions is really the policy objective.

iii. Pending agreement on (ii), Australia might consider 'leading the way' with a modest consumption price model. This is not costless, but would be closer to a 'no regrets' policy than a production model.

What do we have to lose? The NE'G', RETs, and all their attendant high costs and distortions.

That's a good start towards durable, cheaper, reliable, power too.