Last weekend, the Australian government announced several amendments to their 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 to support it. It’s time to get behind this legislation and support its passage through a hostile senate.
In a nutshell, the changes are –
- An effective delay of 2 years before emissions trading begins (with no trading in 2010 and a very low fixed price of $10/tCO2 in 2011)
- Increased compensation for polluters
- A “Carbon Trust” scheme to make voluntary emissions reductions meaningful
- Moving the conditional emissions reduction target from 15% to 25% by 2020
The first two changes are disappointing, but in the grand scheme of things will make little difference to the environmental outcome. I can accept that they are justifiable politically and economically.
The third change addresses one of the big criticisms that many environmental groups and green commentators had about the original scheme, that voluntary reductions (at a personal and household level) were not counted, and would only decrease the burden on industry. Personally I was, and still am, ambivalent about this issue, because I have a feeling that the scale of these voluntary measures would be pretty small.
The most important change to the environmental outcome of the CPRS was the fourth point above. The government is now saying that if a comprehensive international agreement is reached on reducing emissions, Australia will commit to a reduction of 25% on 2000 levels by 2020. That’s a significant improvement on their original position of 15%. It puts us in the right ballpark internationally and shows that we are prepared to lift our share of the burden. You could, if you were being generous, even call it a position of leadership, but I probably wouldn’t go that far.
Disappointingly, this position has been criticised heavily by some green groups – most notably the Australian Greens – and many left/green commentators. They still have their eye on the “unconditional” target of 5%, if no global agreement is reached, pointing out that this is our only real commitment. But I disagree. Frankly, if the world cannot reach a comprehensive agreement in the next few years, we’re all screwed. If we are still in a situation of business as usual by 2020, it may be too late to avoid dangerous climate change. In that case, it would be game over, and it wouldn’t matter one bit what reduction Australia had committed to. 5%, 15%, or 25%, if the world doesn’t come to the party, our actions are, sadly, pointless.
The global agreement is the whole point. That’s why having a big differential between the unconditional and conditional targets is good policy. The government is not trying to shirk our responsibilities, they are trying to add to the international pressure for action.
My other criticisms of the CPRS related to its support for innovation and green jobs. I would have liked to see a price floor on carbon, and a limit of the amount of abatement that can be outsourced to other countries. These criticisms still stand, but I am realistic enough to know that it probably won’t happen. And the consolation is that the expanded renewable energy target, which will force 20% of electricity to be renewable by 2020, along with other measures like R&D funding, state initiatives on energy efficiency and building standards, will help by supporting domestic innovation.
It’s time for green groups to stop pushing for some kind of theoretically ideal scheme and realise that this is as good as it’s going to get. The Australian Greens, in particular, need to realise that their absolutism has only made them irrelevant in these negotiations. If they want to have a positive effect on Australia low carbon future, they need to come down from the mountain.
Elsewhere: John Quiggin