Wayne Swan is wrong

The latest news from the government about the petrol price question really is far from promising.

The ABC is saying that Wayne Swan believes that less cheap petrol is not going to have any impact upon the level of greenhouse gas emissions by Australia. I simply cannot take this viewpoint.

To see why, go back before Kyoto - before the 1973 energy crisis. The fact is that the large differences in emissions we observe among developed nations today were already in place in 1973, before most people realised we only had a finite supply of crude oil.

The very fact that energy was less cheap via heavier taxes in Europe than in Australia or North America meant European companies had real incentive to be innovative and develop means of reducing energy consumption. Fuel consumption patterns, as I recall from old editions of Autocar, have always followed a pattern of decline when petrol becomes less cheap and a rise when its price falls back into the basement.

In Australia's history, petrol prices have never got anywhere near ground level. If prices did rocket out of the basement, Australian car makers would have a very different outlook from the conservative, staid one that they have had ever since major US automakers set up branches here seventy or so years ago.

The "household pain" Swan speaks about will only be temporary if people move away from gas-guzzling 4WDs, whose sales have not fallen at all since petrol's cheapness began its current decline. If people became use to pooling cars to eliminate empty space and even to sharing fuel bills for long trips, they would lose little even with petrol at $5 per litre.