The NZ government has announced a delay in implementing the proposed Emissions Trading Scheme. The 5 year pushback for the transport sector comes at a time when fuel prices are going through the roof and the government is concerned about the impact of further price rises on consumers.

Forgive me for wondering if that isn’t the whole point. First up it was the carbon charge which was dumped back in December 2005 and now the brand spanking new ETS which looked full of holes and now is barely recognisable as a piece of effective policy.

The main concern cited by “critics” is that higher costs may be passed onto consumers. Well the goal of the carbon charge and the ETS is to raise prices in order to lower demand. However, fuel prices are generally regarded as inelastic i.e. demand does not fall as prices rise, which consigns a price approach to the bin. Of course, there is some level of price at which demand will certainly fall. According the research it is when the price increase exceeds income rises i.e. the is the affordability as opposed to higher prices.

Or to put it more succinctly as long as money is available fuel will be purchased regardless fo the absolute price. So the supply of money is a major player in this equation. Now with the credit crunch bedding down money has become less available and so the impact of higher fuel prices is starting to kick in.

So given fuel prices have nearly doubled in the last 3 years, one would expect to have seen a huge fall off in fuel consumption. This has not been the case.

One can conclude that price measures will not reduce emissions and therefore any policy based on this approach is doomed to fail.

Why, you may ask, is no one clamouring for quotas to be implemented? The answer to that is very simple. It’s too hard.

So let’s keep pouring millions of $ into schemes that won’t do the job and keep the veneer of pretending to do something about climate change. They’d be better off spending the money on something important like child poverty and education.

Do you ever feel like life is an endless re-run of Star Wars? Maybe not but news comes that Thailand has floated the idea of a rice cartel along the lines if OPEC.

Not surprisingly the Phillipines, the world’s biggest importer of rice, expressed strong reservations saying almost 3 billion people are rice eaters and calling it inhumane. Oh dear.

One can see his point. But the rise in agricultural commodities is giving producers a great opportunity to flex their muscles for a change and they may see it as one to grasp, especially if they happen to be major importers of oil.

This type of proposal will have many importers worried especially if those imports include oil and rice. We know the impact that the formation of OPEC had on the world economy and coming at at time of global financial instability, this proposal can only add to the uncertainty.

This is a big story. Wal-Mart has started to ration the amount of rice that people  can buy. Apparently this is the first time food rationing has happened in the US.

People don’t like the mention of the word “rationing”. It brings back dark memories, constructed or real’ of war economies and ration books. In our new world of credit on tap (or should I say old new world) we just have what we want when we want. The idea of not being able to do that is surely a restrction on our freedoms.

Well no it isn’t. The credit bubble that we’ve lived in post financial deregulation has lulled us in a false sense of entitlement and desire.  Hark back to the days where we had to save up for stuff or couldn’t actually buy things because we didn’t have the cash.

Those who have read my climate change paper will know it is based on establishing global quotas for fossil fuel production.  We have been living way beyond the ecosystems capacity to provide for us and the rise in food prices is a signal that we have a major problem.

This rationing which has been followed by Israel and no doubt other countries shortly.

Right then I’m off to the supermarket.