Australia shuns the low carbon transition

Update: the government has released a number of amendments that have turned me around on this issue.

The Australian government is conducting a senate inquiry into climate policy, focusing on the recent draft legislation to set up an emissions trading system, called the Carbon Pollution Reduction Scheme. For me, the government’s climate policy increasingly looks like an exercise in avoiding change.

I added my 2 cents worth here (permanent link here) – submission number 391 out of 415 unique submissions posted so far and reportedly over 13,500 total submissions (including standard form letters from activist organisations). Probably it will just be lost in the noise, but there is no harm in trying.

On the “environmental” side of the argument, the criticisms of the scheme mostly fall into these categories:

  • targets too weak (5% reduction on 2000 levels by 2020, or 15% if a comprensive global agreement is reached)
  • excessive compensation to the big polluters
  • “voluntary” emissions reductions not counted – household energy efficiency, for example, will only reduce the obligation of industry to reduce emissions

In the “big business” corner (if that is a fair categorisation), the arguments are mostly:

  • targets are excessive
  • insufficient compensation to industry X
  • there is no climate change / there is climate change but its not anthropogenic / there is anthropogenic climate change but Australia is not the primary cause and shouldn’t be acting alone

That’s a very broad generalisation, and there are many exceptions on both sides, but that seems to be roughly how the argument is playing out.

I took a slightly different angle. To me, the biggest problem with the current draft is that the focus is on meeting our international obligations on emissions reduction at the lowest cost to the economy. There are two glaring problems with that. Firstly, the post-Kyoto negotiations are happening later this year, so why set these below-par national targets in stone now, other than to play the disruptive and self-serving role of – “Oh, we can’t possibly agree to that target because we’re already defined our national target in legislation”.

The second problem, which I concentrated on in my submission, is that the focus should really be on transitioning to a low carbon economy, rather than simply meeting targets. It is possible for us to meet our targets by buying all of our permits internationally, effectively outsourcing our emissions reductions by paying others to do it. This would impose a cost, without the attendant benefits of creating new jobs and industries. The world economy is changing – we simply have no choice – and the change brings with it enormous opportunities to the early movers. If we try to minimise the damage by minimising the extent of the change, we will be left behind. This point seems to be lost in the current debate.

For the record, here are my recommendations:

  1. Implement a stronger conditional target of 25% by 2020 (in the event of a substantial international agreement)
  2. Explicitly state the importance of the transition to a low carbon economy
  3. Place a limit on the proportion of credits that can be purchased internationally
  4. Establish a price floor in the permit market
  5. Establish a broader innovation framework.

For details see my full submission. For a laugh, also see the sentence before my recommendations: “Four recommendations are addressed in this submission”. I threw that in to make sure they were paying attention.

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One Response to “Australia shuns the low carbon transition”

  1. Emissions trading - it’s time to support it « Everything is changing Says:

    […] proposal for an emissions trading scheme. I had a number of criticisms of the original CPRS scheme, which I discussed here, but with these changes, along with the newly expanded Renewable Energy Target, I would be prepared […]


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