Sunday, February 24, 2008

American elections - Barack Obama on the environment, climate change and energy use

I was curious to find out what the leading politicians in the race for the White House have to say about climate change, energy use and the environment. Watching the race to the nomination unfold from outside the US, it is not always easy to work out where the candidates actually stand on a variety of issues.

Here is Senator Obama outlining the challenges ahead. Obama provides a refreshing and radically different approach to what we have seen from the White House under George W. Bush. He is also proving increasingly popular with American voters, so it is quite possible he may end up being the next President of the United States.

Of course, saying all those things is easy and doing something about them is not. However, if we could finally get real leadership on these issues from the highest office in the United States, the world would have a chance to tackle some of the greatest challenges we have ever faced.

Thursday, February 21, 2008

Modern slavery - or: How the banks take us to the cleaners

The other day I asked myself how much money we have paid our bank in interest payments for our mortgage over the last ten years. It was an enlightening exercise. In fact, I was quite shocked. Once I added it all up, it was well over to $100,000.00 in interest payments and bank fees such as the insidious "fee for servicing your loan".

We always paid back a bit more than was required - we followed the usual advice of paying fortnightly rather than monthly (which adds a couple of payments per year and thus cuts down on the total amount of interest payable) and we also paid a couple of hundred dollars more than was required each month. In return, the bank showered us with letters depicting beautiful holiday spots in Hawaii and other lovely places, encouraging us to take a break by using some of our built up equity. To be fair, these letters stopped when the first inklings of the US credit crunch appeared on the horizon. Nevertheless, it was pretty obvious that the bank was not happy with our attempts to reduce our debt faster than the standard 25-30 year loan. No wonder!

According to the Commonwealth Bank home loan calculator, at current official standard interest rates of 8.97 per cent, an average home loan of $200,000.00 with a loan term of 30 years will generate over $375,000.00 in earnings from interest for the bank. Add to that $96.00 a year in monthly fees (a total of $2880.00) plus entry and exit fees of, say, $500.00 all up, and you might as well resign yourself to the fact that for several years, you will have to hand over your entire post-tax income to the bank. And there are plenty of people who have a mortgage that is much bigger than the "average" home loan. This is a form of modern slavery.

Of course, nobody forced you or me to become a modern slave. It's just that we all fell for the idea of being able to gain in the long run from ever increasing house prices, and that it is fine to stretch our debt over decades. Given the way house prices have gone in Australia, very few people can now afford buying a home without a mortgage. Most people tend to look at whether they can meet the next required minimum payment and maybe survive a couple of interest rate hikes when they first take out a home loan. We were no exception. We may then fiddle around the edges by paying fortnightly, feeling smug that we are cutting "years" off our loan, when in reality we continue to fatten the bank's pockets with our hard earned money.

I am no longer willing to play that game. I have put our family on the tightest budget possible to put every single penny we can spare into our mortgage. It is amazing where you can save when you put your mind to it! At last we can see some real progress in reducing our loan amount, even if the interest rate hikes of the last 12 months have slowed down our march towards freedom. And once the mortgage is gone, I do not want to ever go back into debt again.

Australian Climate Change Policy - Ross Garnaut's Interim Report

It is finally out, the long awaited interim report by Professor Ross Garnaut, the eminent Australian economist who had been commissioned by the Labour Party to model the cost of dealing (or not dealing) with climate change for Australia. Professor Garnaut's report makes sobering reading. Professor Garnaut confirms what many climate scientists have been arguing for some time, namely:

- The pace of climate change is much faster than anticipated (see my earlier entry on recent Australian research findings here), emissions have continued to rise and time is running out if we want to avoid catastrophic climate change.

- Australia will suffer more under climate change than other developed countries due to its already hot and dry climate. Australia therefore has a particularly strong interest in mitigating the effect of climate change.

- We will have to start acting now and continue with a sustained effort to cut emissions beyond the 60 percent reduction target set by the government for 2050.

What is particularly interesting is Professor Garnaut's take on Australia's role in reducing world emissions. The previous government under John Howard consistently claimed that Australia only emitted a small percentage of global emissions and therefore Australia could be excused from taking action, totally ignoring the fact that Australians have among the highest per capita emissions in the world.

Professor Garnaut, by contrast, sees Australia as vital for achieving a positive climate change outcome. While he stresses that Australians do have to an important part in reducing our own emissions, it will have a much bigger role to play in working with other countries to achieve a significant reduction on a global scale. According to the Executive Summary of the report:

"Australia has an important role to play alongside its international partners in establishing a realistic approach to global mitigation. Australia can contribute to the development of clear international understandings on the four components of a successful framework for global mitigation: setting the right global objectives for reduction of the risk of dangerous climate change; converting this into a goal for stabilisation of greenhouse gases in the atmosphere at a specified level; calculating the amount of additional emissions that can be emitted into the atmosphere over a specified number of years if stabilisation of atmospheric concentrations is to be achieved at the desired level; and developing principles for allocating a limited global emissions budget among countries."

The media have made much of Senator Wong's insistence that Australia will not increase its reduction target for 2050 from currently 60 per cent to 90 per cent as recommended by Professor Garnaut. While I was disappointed about this myself, I do think it is far more important to see what the government will do in the immediate and medium term future.

A target as far away as 2050 is a beacon to guide us in the right direction. However, it is also kind of meaningless as it is so far in the future, and there is a danger that we may leave action until a later date if we only focus on this particular date. By getting serious about climate change right now and starting to tackle the massive structural change needed in our economy, and indeed in the economies of the world, we may well find that once we start moving in the right direction, this change will develop a momentum of its own and we may be able to achieve a reduction beyond what we can imagine today.

I still feel very optimistic that the Rudd government is serious about climate change and will lead the country in the right direction but I will be watching carefully how they will go about it.

Tuesday, February 12, 2008

A Historic Day for Australia - Saying Sorry to the Stolen Generations

Prime Minister Kevin Rudd's speech in Parliament today was one of those very rare occasions where we could witness history in the making. It was a moving speech, a speech of sorrow and hope. It was a wonderful start to a new parliamentary year. Following the apology, Rudd also recounted some of the stories members of the stolen generation had told him over recent days.

I am so pleased that Australia has finally come to this point of reflection on the past. Former Liberal Prime Minister John Howard wanted to make Australia a country that would only celebrate its proud history and forget about any wrongdoings. However, no country can move into the future without accepting and taking responsibility for both the good and the bad things that have happened in the past. In fact, bad things continue to happen to many Aboriginal people in this country today. The truth has to be acknowledged. Everything else is propaganda. Today is the day that we can hold our heads high and be proud of this country. The standing ovation Rudd received from the gallery and from the other Members of Parliament reflected the mood of the country and was well deserved. I hope it is a sign of things to come.

This is the text of Rudd's speech:

Today we honour the Indigenous peoples of this land, the oldest continuing cultures in human history.

We reflect on their past mistreatment.

We reflect in particular on the mistreatment of those who were Stolen Generations - this blemished chapter in our nation's history.

The time has now come for the nation to turn a new page in Australia's history by righting the wrongs of the past and so moving forward with confidence to the future.

We apologise for the laws and policies of successive Parliaments and governments that have inflicted profound grief, suffering and loss on these our fellow Australians.

We apologise especially for the removal of Aboriginal and Torres Strait Islander children from their families, their communities and their country.

For the pain, suffering and hurt of these Stolen Generations, their descendants and for their families left behind, we say sorry.

To the mothers and the fathers, the brothers and the sisters, for the breaking up of families and communities, we say sorry. And for the indignity and degradation thus inflicted on a proud people and a proud culture, we say sorry.

We the Parliament of Australia respectfully request that this apology be received in the spirit in which it is offered as part of the healing of the nation.

For the future we take heart; resolving that this new page in the history of our great continent can now be written.

We today take this first step by acknowledging the past and laying claim to a future that embraces all Australians.

A future where this Parliament resolves that the injustices of the past must never, never happen again.

A future where we harness the determination of all Australians, Indigenous and non-Indigenous, to close the gap that lies between us in life expectancy, educational achievement and economic opportunity.

A future where we embrace the possibility of new solutions to enduring problems where old approaches have failed.

A future based on mutual respect, mutual resolve and mutual responsibility.

A future where all Australians, whatever their origins, are truly equal partners, with equal opportunities and with an equal stake in shaping the next chapter in the history of this great country, Australia.

It would have been hard for anybody to match this speech, and Opposition leader Brendon Nelson would have been well advised to keep his own speech short and in support of the sentiments expressed by the Prime Minister. Nelson was in the unenviable position that he had come to be the Opposition leader because he had been opposed to an apology. Now he found himself saying sorry and having to bring his Liberal crew along. As a result, the speech was somewhat muddled. He did say the word "sorry". That was the main and most important aspect of his speech. Nevertheless, I felt disappointed by Nelson's speech.

And it seems that many Australians felt the same way. In Canberra and Melbourne, where many had gathered in front of large screens broadcasting live from Parliament, large numbers of people booed and turned their backs when Brendon Nelson started to veer off the track in his speech. What a shame. What a wasted opportunity for the Liberal Party.

At least, Kevin Rudd's motion to formerly apologise for the stolen generation found overwhelming bipartisan support. I did not see any dissenters but apparently, according to the news, a small number of Liberal Party members did not find the strength to acknowledge past wrongdoings and had stayed away.

The bipartisan support in turn gave rise to spontaneous applause from the gallery and from the many people assembled outside. It was a historic moment indeed.