As STT followers know, the RET Review Panel is headed up by Dick Warburton – a man who’s acutely aware of the pain being inflicted on Australian families and business by the mandatory Renewable Energy Target.

Since Dick was appointed to conduct the first thorough cost/benefit analysis of the mandatory RET ever undertaken, the wind industry and its parasites have been reduced to screaming “climate change denier” – as if that were some kind of immunising hex.

As pointed out previously, these boys are just working through the 5 stages of grief: denial, anger, bargaining, depression and acceptance. From the hysterical ranting emanating from eco-fascist blogs – like the Climate Speculator, yes2ruining-us and ruin-economy – it appears they’ve got a lot more work to do before they finally come to grips with the demise of their beloved wind industry.

Adding to their grief is the fact that Dick Warburton is a hardened business-man, who couldn’t care less about the juvenile hectoring coming from the lunatic fringe of the hard-green-left. You know, the same sort of megaphone “diplomacy” seen on university campuses whenever the government proposes that the students might actually contribute a little more to their own education: same intellectually underdeveloped crowd, different ideological rant.

Here’s Dick being interviewed last Thursday on ABC Radio.

Wealthy can afford deficit tax levy: Dick Warburton
ABC Radio (AM)
Chris Uhlmann
8 May 2014

CHRIS UHLMANN: Treasurer Joe Hockey wanted a national conversation about the challenges facing the budget and he’s certainly got one. There’s been no end of the advice he’s received from interest groups and last week’s release of the Commission of Audit helped to pour rocket fuel on the debate.

Businessman Dick Warburton has advised governments from both sides and is currently heading the review of the Renewable Energy Target. Welcome to AM.

DICK WARBURTON: Oh thank you Chris, good to be here.

CHRIS UHLMANN: Well, Dick Warburton, is there a compelling need to reduce the size of government and to do it quickly?

DICK WARBURTON: I believe it is. I believe we’ve got not so much a crisis but the potential of a crisis if we don’t do something fairly quickly.

And one of the key areas that I would like to see is the reduction in the size of the government per se. Now that can be both federal and at state level. Admittedly this is a federal budget, I understand that, but nevertheless you need to start at both levels and there’s a lot of duplication between federal and state bureaucratic areas.

CHRIS UHLMANN: The footprint of government of course though is big and if you withdraw that money quickly from the economy you could crash it. Is that a risk?

DICK WARBURTON: Yes, it is a risk. Quickly clearly it’s a risk. It’s a matter of trying to do it as gently as possible without harming the growth as much as you can. You will harm growth, there’s no two ways about that, but not to crash the growth.

CHRIS UHLMANN: What do you think about having a deficit tax of 2 per cent levied on the those who pay the top tax bracket?

DICK WARBURTON: Look, I guess I’m one of those in that bracket and I’d have to say from a personal point of view, I don’t like to have an increase in tax. However, I do believe that is something that should be done. I believe this is a tax on some people who can afford to do it because the middle to the lower income people are likely to be hit with some of the cuts in some of their health and welfare and other social budget areas.

CHRIS UHLMANN: And you don’t buy the argument again that that’s taking money out of the economy which will affect demand?

DICK WARBURTON: I don’t think it will take that much money out of the economy because I think at that level it won’t have such a big impact as something in the smaller, lower to middle income areas would have. I don’t think it will have that much of an effect.

CHRIS UHLMANN: Now, of course you’ve got a background in manufacturing as well. Should the age of entitlement for business be over too? Should we see an end to many of the industry assistance programs that government provides?

DICK WARBURTON: I think we should be looking at all those. Now which ones you do or use again is a matter of how to balance the area between cutting expenditure and trying to make sure you maintain growth. Yes, I believe we should look at those but I don’t have any particular ones that I think you should focus on and say let’s cut those.

CHRIS UHLMANN: Look, as manufacturing declines everyone talks about the jobs of the future. Where do you think those jobs will come from? How will we manufacture the jobs of the future?

DICK WARBURTON: Well, in the past we’ve always seen, I mean – and always is the word I use – always seen how those jobs eventually get absorbed into the rest of the community.

I remember living in South Australia when Mitsubishi stopped in South Australia and it was an absolute case of doom and gloom. But within a space of one year to two years, those jobs were all repositioned throughout the rest of the economy. And I think that will be the case – and remember the number of jobs lost is quite traumatic to those who are affected by it, significantly affected, but in the totality of the working force, it’s actually a relatively small proportion.

CHRIS UHLMANN: What has been the thing that’s hammering the economy most recently? Is it the high Australian dollar? Is it something that really is out of the Government’s hand?

DICK WARBURTON: Well, the dollar, the exchange rate is definitely out of the, totally out of the Government’s hand. That is a monetary policy factor. But remember the exchange rate, there’s a good and bad thing. It depends what side of the fence you’re on. There are certain people who would love to see a higher exchange rate, it would affect, it would help them immensely. Other would like to see a lower one. So I’ve always seen the exchange rate as being something in the eye of the beholder.

CHRIS UHLMANN: And do you think that the monetary policy settings are right at the moment, 2.5 per cent? We’ve moved from an easing bias, if you like, with the Reserve Bank to one where it’s now neutral.

DICK WARBURTON: Yes, I think it’s exactly in the right position.

CHRIS UHLMANN: Now, you are reviewing the Renewable Energy Target at the moment; that is that Australia have 20 per cent of its energy sourced from renewables by 2020. That is driving up the cost of power, but is that a cost that is worth bearing because of the long-term environmental benefit?

DICK WARBURTON: Well, what we’ve got to look at in this review is not just the environmental benefits; we’re looking at the economic benefits, we’re looking at the social benefits. We have to take into account the effect on the electricity prices, which we’re doing, and we’re modelling to see just exactly what that is. And when we’ve completed all of those studies and the review of all the submissions that have come in and the modelling, then we’ll come up with a decision to give to the Government.

CHRIS UHLMANN: Is it your sense at the moment that the economic costs are too high because the cost of power is too high?

DICK WARBURTON: Well, it’s certainly having an effect, Chris. Whether it’s too high, we’ll find out as we get into the study.

CHRIS UHLMANN: What kind of effect is it having? Just give us a sense of the cost of power and how the renewable energy target has driven that up over time.

DICK WARBURTON: Well, we’re looking at emissions, we’ve got a target for an emission control of 5 per cent. That’s a bipartisan approach. And certainly renewables have their place in that particular equation.

I’d like to believe that we’ll look at this and say, now, is the cost of the RET worth the economic pain that you get by imposing it on the electricity consumers?

CHRIS UHLMANN: And there’s no doubt that there is economic pain because of that?

DICK WARBURTON: Yes there is, yes there is economic pain. It is one part of the equation. It is not the whole part of the equation.

CHRIS UHLMANN: Is the cost of energy doing damage to business in Australia?

DICK WARBURTON: Depends on the business, Chris. Some of the businesses that use relatively small bits of electricity, obviously it hasn’t got a great effect. But there are industries that use large quantities of electricity and in those places they’ve been telling us this is having a major impact on their cost side of the balance sheet.

CHRIS UHLMANN: Well, one of the areas where Australia always had a competitive advantage was that energy in the past here was relatively cheap and abundant. That equation has changed. Are you concerned about that?

DICK WARBURTON: Well, it is still cheap and abundant if you look at the black coal and the brown coal.

CHRIS UHLMANN: But we’re not looking at that though, are we? We’re looking at more renewables.

DICK WARBURTON: Well, no we’re not necessarily looking at all, we are looking at renewables in our study but we’re trying to look at the overall generation of electricity, what are the factors that affect the generation, and we’ll be looking at all types including renewables.

CHRIS UHLMANN: And when will your review report?

DICK WARBURTON: We’re due to report in July, Chris.

CHRIS UHLMANN: That is businessman Dick Warburton who is currently reviewing the Renewable Energy Target.
ABC

STT thinks that Dick was simply being politic, by faintly suggesting the economic pain being inflicted by the RET on families and business might (somehow) be worth it.

When the Panel met with miners, business groups and wind industry rent-seekers a few weeks back he was less circumspect – telling the audience that the review has nothing to do with “climate change” or CO2 emissions – and that it’s primarily “concerned with the cost impacts of renewable energy in the electricity sector” (see our post here).

The consultants, ACIL Allen have already found that the mandatory RET (set to expire in 2031 – unless scrapped beforehand) will involve a transfer of (at least) $53 billion from power consumers to wind power generators – in the form of RECs issued to them and added to all Australian power bills. That, in anybody’s books, is a whopping cost. And the cost of the REC Tax to power consumers is just the tip of the power-price-punishment iceberg (see our post here).

Wind power cannot and will never reduce CO2 emissions in the electricity sector – simply because 100% of its capacity is backed up 100% of the time by fossil fuel generation to account for the fact it disappears for hours every day – and for days on end – producing nothing more than hollow promises of “powering” millions of Australian homes (see our posts hereand here and here and here and here and here).

Thanks to the mandatory RET – in less than a decade – Australia has gone from having the lowest power prices in the world to the highest. And, despite wild claims from the wind industry about reducing CO2 emissions, it has failed to produce a shred of credible evidence to that effect: indeed, all the evidence points in the opposite direction (see this European paper here; this Irish paper here; this English paper here; and this Dutch study here).

And there is, of course, the renewables “pinup girl”, Germany as the perfect empirical (and disastrous) case study. The Germans have poured 100s of €billions into subsidising wind and solar over the last decade and, despite all that pain, Germany has seen its CO2 emissions increase not decrease (see our post here). A very costly “oops”.

The conclusion of any cost/benefit analysis of the mandatory RET – and its bastard child – wind power – can only be: ALL PAIN and NO GAIN.

Why not let the Panel know what you think (see our post here). Submissions close on 16 May.