Look who's drinking the climate change Kool Aid China is increasing its emissions by more than Australia's total emissions every year. LAST week in The Australian newspaper I noted how the global warming cause and its legions of true unthinking believers constituted a perfect union of stupidity and dishonesty, hypocrisy and hysteria. On Tuesday in this paper I added that the two words "climate change" had a remarkable facility to turn the brains of otherwise rational people to mush. As if on cue, in an extended column on Tuesday that set out to vigorously assert that China was "doing something" about climate change, The Age newspaper's Peter Martin managed to brilliantly demonstrate the truth of both of those characterisations. His column did not start well; that "China must hate" having its commitment to action "belittled" by Treasurer Joe Hockey. Oh dear me, the feelings of "China" - the leadership? All 1.4 billion Chinese individually, but in some sort of collective cry of pain? Perhaps the land mass itself as part of Gaia? - were hurt. With all due respect to our Joe, allow me to let Martin in on a little secret. No one in China, and certainly not the leadership could give two hoots about Hockey's so-called belittlement - actually, what was merely a recitement of the facts of China's emissions commitments. Those facts were captured very effectively, in a very different piece, in The Australian yesterday by Keith DeLacy, the former - entirely rational - Queensland Labor treasurer and, shock, horror, former chairman of Macarthur Coal. "At a historic joint press conference with Barack Obama in Beijing last week Chinese President Xi Jinping signalled that China would continue to increased its CO2 emissions until 2030," DeLacy had opened his piece with. Exactly. That is the one single tangible "commitment" in the supposedly "landmark" deal between China and - Martin, take note, a lame-duck and now also a wood-duck - president Obama and most decidedly not "the US." There is no way in the world that a rationalist Republican-controlled Congress is going to endorse Obama's "commitment to cut." Indeed, even the Democrats are going to run a mile from carbon cutting - after the midterm election drubbing. Presumably Martin hasn't been able to see through his rose-coloured climate glasses the way Democrat senators are now desperately rushing to approve the evil Keystone pipeline, which would carry Canadian liquid hydrocarbons deep into the US heartland. No doubt they've all been bought or mesmerised by the evil Koch brothers. Now DeLacy dubbed his opening an "alternative media report." It's a striking and a crushing commentary on the "journalism" of Martin and the massed ranks of his colleagues that detailing the basic facts is all too appropriately described as "alternative." Here's a further secret I'm willing to share with Martin. While legions of journalists in Fairfax and the ABC like him want to fantasise about China smiting coal-fired power stations from its good earth and scattering tens of thousands, nay millions, of wind farms in their place, President Xi and the rest of the leadership know exactly what they are doing. Indeed some vague understanding of this seems to seep into the part of his brain that has not turned fully to mush from drinking the Climate Kool-Aid that The Age clearly pipes into its internal water system. "China is lifting its emissions because it is rapidly industrialising," Martin admits. But he does so, not as an admission that Hockey is, well, exactly right, when he said exactly the same thing - as Martin actually records in the preceding sentences. And I quote Martin quoting Hockey: "China is going to continue to increase emissions." But to claim that the "perspective" missing from Hockey's account is that China's living standards are a fraction of Australia's. Sorry Pete old chum, there is only one "perspective" when we are talking about CO2 emissions and climate change - as you and your fellow believers, well, believe. This is that increased emissions will fry the planet. Increased emissions from China to lift its living standards have exactly the same impact as increased emissions from the US and Australia. Further, China is increasing its emissions by more than Australia's total emissions every year. If you want to stop the planet frying - in your belief system - China has to cut now. It can't "get a pass" until 2030 and it sure can't keep increasing every year for the next 16. That vague recognition that Hockey (and DeLacy) are dead right, though, evaporates as the Kool-Aid inspires Martin's words. The Coalition had often said that Australia would lift its "emissions reduction target" beyond 2020 if other major nations lifted theirs, Martin writes. "China is doing so," he asserts triumphantly. But that claim was immediately followed by - in that perfect mix of stupidity and dishonesty - Martin writing that the promise was to "cut its emissions growth to zero while industrialising." Sorry Pete, a promise to cut emissions growth to zero is not a promise to cut emissions. It is also only an "intention" not a promise. And what you critically failed to spell out is even that intention only starts in 16 years; between now and then China will massively increase its emissions. So, at best, it might stop increasing them from a much higher base than it is emitting now. If you believe the planet is going to fry because of increased CO2 emissions, what China actually did last week, as opposed to what Martin & Co fantasise it did, was commit to frying the planet. FROM the ridiculous to, if not quite the sublime, at least the essentially rational - the minutes of the last Reserve Bank meeting. After more than a year of hiding it in plain sight - in its after meeting statements every month, in the subsequent minutes of those meetings, and in continual statements from governor Glenn Stevens and his senior colleagues - the RBA's core message might just be filtering into the collective minds of the economentariat. The RBA is in no hurry to hike and it sees little point in cutting further. What do you think that combination might suggest? Why, that a "period of stability" in rates might be appropriate. That does not mean that nothing is happening. Or that the RBA is not actively assessing 24/7 in real time what is or might be developing in the great complex of dynamics that could impact on Australia and so what it should do with rates. Right now there are three great "uncertainties." The first and central one is what happens to the US dollar and, behind it, the US economy and US capital markets, including when/if the RBA's counterpart, the Fed, starts to raise US rates from zero. The US dollar continues to firm against the big two (other) currencies - the euro and the yen; but its rise again the Aussie has stalled with us around US86-87c. This means the Aussie has recently risen quite sharply against the euro and the yen - probably giving us the best of all possible (short-term) worlds. The big challenge is not just when the US starts to hike, but even more all the swirling speculation ahead of any move. The second big uncertainty is what happens to China; and so critically to both commodity prices - especially for iron ore and coal (the US is the driver now of oil and gas prices) - and Chinese capital flows. The third straddles the first two - Japan, sliding into recession despite massive monetary stimulus.