Why Australia Should Adopt China’s Approach To Climate Change

The ASX 200 fell 35 points yesterday, or 0.6%. Clearly, the disastrous Wentworth by-election on the weekend weighed on prices. And with more falls on Wall Street overnight, futures prices suggest another 16-point decline for the Aussie market today.

Barring a miracle for the Libs, it’s likely that Labor will win the next general election. The market is in the process of pricing that reality in.

The major issue, bizarrely, is something that we as a nation have no ability to influence — climate change.

And because Wentworth has told us it’s a major issue, politicians will ensure they throw plenty of (your) money at it. For example, the Financial Review has this today:

Liberal moderates concerned at the Coalition’s lack of climate change policy are set to demand Scott Morrison revitalise the ailing direct action policy with a $1 billion injection into the Emissions Reduction Fund.

Warning that the climate change lesson from Saturday’s Wentworth byelection rout cannot be ignored, moderates are planning to step up their push for the government to do something concrete towards Australia meeting its 2030 Paris climate change targets, rather than just a passive adherence to the targets that is Mr Morrison’s approach.’

Politicians. Always wanting to ‘do more’…but only with other people’s money.

A few weeks ago, the UN told us that climate change was a major threat to the world. So major, in fact, that the Paris Agreement commits the world’s largest emitter, China, to have their carbon emissions PEAK in 2030.

That’s right. Despite the apparent dire threat to the global economy unless we do something NOW, China’s emissions will continue rising for another 12 years!

Meanwhile, Australia, which accounts for less than 2% of global emissions, has committed to reduce its emissions to 26–28% BELOW 2005 levels by 2030.

China, it is argued, is at a different stage of its economic development. Fair enough. But let’s not forget the Western world shifted its manufacturing operations to China following its admission into the World Trade Organisation in 2001.

Who benefited from that? Global multinationals. They are arbitraging China’s lack of environmental regulations to produce ‘stuff’ for western consumption at a lower cost than it should be.

Climate change may be a long-term threat, but it’s not so big a threat that our global technocratic masters are demanding that China move faster to get their emissions under control. That would damage profits and hurt the wealth of the people who really pull the strings in this world.

Does that sound far-fetched?

Not as far-fetched as the delusion that Australia can do something about climate change by throwing billions of its taxpayers’ money at it.

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Time to be realistic about climate change

Having said that, the Libs need to come up with a strategy to placate the climate change warriors. ‘Doing nothing’ is electoral suicide.

They could start with a credible plan to lower emissions over the long-term, while committing to keep electricity prices lower. They could also start by explaining the stitch-up that is the Paris Agreement, and tell the electorate why we will reduce emissions on our own terms.

Australia should never subordinate its sovereignty to an unelected global organisation that serves corporate interests, not the Australian people. It is the job of our elected representatives to ensure Australia isn’t being ‘had’ by global interests.

Instead, we have a slavish and unquestioning obedience to the UN and their directives. Especially from the ‘educated class’. The results from Wentworth on Saturday tell you this.

Just to be clear, I’m not suggesting we ignore carbon emissions. I’m just saying we should take the situation into our own hands and ensure that Australia’s productivity and standard of living isn’t adversely affected.

This is a situation where we need to take a bit of short-term pain to ensure long-term gain. But we shouldn’t throw everything at it. The world’s largest emitter certainly isn’t and that’s why its Paris commitment doesn’t subordinate short-term economic growth (read employment and social stability) to longer-term environmental goals.

China will only do what it has to in order to maintain the power of the Communist Party. The only reason it is acting on emissions is because its cities are so badly polluted that its people are dying. It doesn’t want to risk social unrest and so it is moving to contain the problem. If it can do so under the guise of caring about climate change, then all the better.

Is that too cynical?

Champagne socialists would certainly argue it is. But don’t forget, champagne socialists also sang Stalin’s praises before the full extent of his tyranny was revealed to the world.

China, a communist state, does what’s best for China. Australia, apparently a capitalist economy, does the bidding of global technocrats. It’s time we took a leaf out of the communists’ book.

Regards,

Greg Canavan,
Editor, Crisis & Opportunity

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Greg Canavan is a Feature Editor at Money Morning and Head of Research at Port Phillip Publishing. He likes to promote a seemingly weird investment philosophy based on the old adage that ‘ignorance is bliss’. That is, investing in the Information Age means you have all the information you need at your fingertips. But how useful is this information? Much of it is noise and serves to confuse, rather than inform, investors. And, through the process of confirmation bias, you tend to read what you already agree with. As a result, you often only think you know that you know what is going on. But, the fact is, you really don’t know. No one does. The world is far too complex to understand. When you accept this, your newfound ignorance becomes a formidable investment weapon. That’s because you’re not a slave to your emotions and biases. Greg puts this philosophy into action as the Editor of Crisis & Opportunity. As the name suggests, Greg sees opportunity in a crisis. To find the opportunities, he uses a process called the ‘Fusion Method’, which combines traditional valuation techniques with charting analysis. Read correctly, a chart contains all the information you need. It contains no opinions or emotion. Combine that with traditional stock analysis and you have a robust stock-selection strategy. With Greg’s help, you can implement a long-term wealth-building strategy into your financial planning, be better prepared for the financial challenges ahead, and stop making the basic, costly mistakes that most private investors do every time they buy a stock. To find out more about Greg’s investing style and his financial worldview, take out a free subscription to Money Morning here. And to discover more about Greg’s ‘ignorance is bliss’ investment strategy and the Fusion Method of investing, take out a 30-day trial to his value investing service Crisis & Opportunity here. Official websites and financial e-letters Greg writes for:


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