climate policy
10 Aug 2009
Opposition's Climate Policy Is A Weak Joke
The Opposition is billing its climate proposal as a 'more efficient' alternative to Rudd's CPRS, but a closer look reveals it will do less and protect polluters more
The CPRS bill will finally be put to a vote in the Senate on Thursday, whereupon both the Opposition and the Greens are expected to vote it down.The Greens have a clear position on climate change: they believe the CPRS as it stands does not go far enough. The science backs up this position.
The Opposition does not have anything like a clear stance on the issue. Some Senators obviously don't believe that global warming is even happening, while many others believe the costs of the CPRS to jobs in heavily polluting industries will be too high. The economics of climate change abatement does not back up this position.
But that hasn't stopped the Opposition from trying to spin its position. Today, Malcolm Turnbull released an alternative emissions reduction policy, commissioned by independent South Australian Senator Nick Xenophon in conjunction with the Coalition, and modelled by Frontier Economics.
The paper restates the "free rider" problem of reaching a global emissions reduction deal where some countries could benefit without cutting emissions, and then goes on to suggest two alternatives for Australian policy. The first is a "CPRS-Adjusted" model which retains the Government's absurdly low reduction target of 5 per cent and extends free permits and other assistance to the so-called "energy-intensive, trade-exposed" industries. The second is a "CPRS-Intensity" model which includes the first idea (basically a "more free permits" approach), but attempts to smooth price rises for electricity generators, in a way it claims is roughly in line with the United States' proposed Waxman-Markey bill.
Sadly, even a quick read of the report will show that we should dismiss this alternative policy. The reason is quite simple: this policy is not simply as weak on polluters as Labor's CPRS — it is even weaker.
Frontier Economics claims that by abandoning Labor's proposed subsidies for low-income households to help with their increased energy costs, the reduction in this "churn" will save bundles of money. And they're right. But the reason costs will be lower under the Opposition proposal is not really that their scheme is more efficient. It is simply that it is less of a scheme.
Delve into the fine print and you quickly find that this model is simply a restatement of Coalition greenhouse policy, for instance by giving away 100 per cent free permits to polluting industries — including coal mining — and by bringing agriculture selectively into the scheme, so that farmers won't have to buy permits for the methane their cows fart, but will be able to sell carbon credits for carbon they can lock away in soil.
As Ross Garnaut and many other economists have consistently made clear, the whole point of an emissions trading scheme is to force polluters to pay for the harm they do to the planet. If you don't make carbon more expensive, then you won't do this. The new Turnbull-Xenophon model abandons that idea and instead explicitly attempts to protect polluting industries, completely, from the costs of doing something about climate change. It will be cheaper, yes. But only because industry won't have to do as much in terms of abatement.
Of course, some journalists won't read through the fine print of this report, allowing Malcolm Turnbull and his dwindling band of supporters to claim that this model is better than Labor's admittedly flawed CPRS.
All in all, Australia is at a particularly depressing moment in terms of energy and climate policy. As dismal as the Opposition's belated response to the CPRS is, Labor's ongoing obsession with digging things out of the ground continues to undermine its greenhouse credentials.
Take the Renewable Energy Target (RET), one of Labor's most important prospective climate change policies. Passed already by the House of Representatives, this policy will legislate that 20 per cent of Australian electricity generation will come from renewable sources by 2020. While there is no doubt that this will mean most of that renewable capacity ends up being limited to wind power rather than taking full advantage of other promising technologies, it will nonetheless address Australia's dismal current performance in generating renewable energy.
And yet, in a tactical ploy, Kevin Rudd and Penny Wong have linked the Renewable Energy Target bill to the CPRS bill. If the Senate votes down the CPRS, which it almost certainly will, that means the RET goes down too.
The problem with this clever parliamentary sleight-of-hand is that billions of dollars in investment decisions are riding on the RET: without a renewable target, and especially given that we still don't have a price for carbon in this country, it makes no sense to build expensive wind farms and solar-thermal power plants. Thousands of jobs are likely to be at stake — not that the Coalition has noticed.
Meanwhile, did you know that Australia is developing a new energy policy? You can be forgiven if you didn't, because hardly anyone has noticed. But Labor, under Resources and Energy Minister Martin Ferguson, is continuing to forge ahead (or perhaps we should say "dig deeper") towards a new energy policy that will be almost completely reliant on fossil fuels and other non-renewable resources — at least if the Government's own "strategic directions paper" is anything to go by.
This little-heralded publication, released in March 2009, outlines the arguments underpinning the forthcoming Energy White Paper. While the CPRS gets a cursory mention, the document is heavy on the "economic opportunities" afforded by Australia's resource endowments. "Maximising the value of energy resources will enhance Australia's economic prosperity," it claims on page 8. "This is best achieved by expanding the production of Australia's energy resources to meet domestic and international demand and by adding value to those resources where it is economic to do so." That doesn't sound like a government committed to sustainability to me.
There is, however, one type of energy that isn't directly carbon-based which the state and federal Labor governments are pushing through at top speed. That's uranium mining. Since Labor abandoned its "no new mines" uranium policy, which capped the number of uranium mines in the country at just three, the Rudd Labor Government has approved the Four Mile uranium mine in South Australia, as well as an extension for the Ranger mine in the middle of Kakadu National Park in the Northern Territory. Meanwhile pressure is building on Queensland Premier Anna Bligh — including from Martin Ferguson himself — to change her stance on approving uranium mining in Queensland.
And then there's the idea of Australia's not simply exporting uranium, but perhaps also using it to generate nuclear power ourselves. Industry lobbying for a nuclear power industry in this country will inevitably continue to build, and exploit obvious arguments about climate change and the fact that Australia already mines so much uranium. An example is former nuclear scientist and Telstra boss Ziggy Switkowski's statement in a recent speech to the 2009 Australian Uranium Conference: "[Y]ou're not serious about overcoming global warming and transitioning to clean energy unless you include nuclear energy at the heart of the nation's strategy." The uranium industry has won some allies in its campaign too: prominent climate scientist Barry Brook has swung heavily over to nuclear power, so alarmed has he become over the looming global climate catastrophe.
All of which leads you to wonder if our major party politicians ever get serious about energy that is not dug out of the ground. Judging by the current policy situation, the answer is No.
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This whole ETS makes me so angry. We are bogged down in rhetoric and semantics, with the government - deep down - not being at all interested in abandoning fossil fuel generated energy. (Big business calls - we have to comply)
Yes, I heard a rumour about this strategic directions paper, but it certainly did not make headline news.
If we are fair dinkum then we will forget about ETS and simply charge polluters for their pollution. It is called a carbon tax or polluter tax. The more one pollutes, the more one will be charged. This tax has support from environmentally concerned people.
ETS has too many flaws, and it will be exploited. Leon Gettler, writing in The Age, predicted the other day that our next bubble will be the ETS bubble (remember: we had the IT bubble, then the meltdown!) as hedging takes off on this scheme.
If we are fair dinkum then we will do out utmost to advance the development of alternative renewable energy sources so that we can once and for all leave the non-renewables where they should be: in the ground. No more digging of big holes.
Of course, turning a ship around from non-renewables to renewables is expensive. But if we all chip in a bit, get our priorities right, forego some of the excesses which we do not really need, take more from those who waste than from those who don’t, we should get there.
I don’t really buy the loss of jobs. In the end, we still need energy, the same as we need today and more, but it needs to be clean. The renewable energy industry will provide the jobs that the non-renewable energy industry loses.
There is just not the willingness to change and there are too many vested interests that want their profits today - and to hell with the distant future.
Harry Morton Malcolm Who?
The acute problem for us, Marga is that it is no longer "to hell with the distant future" - serious climate disruption is occurring NOW.
See Professor John Holdren (Professor of Environmental Policy and Professor of Earth and Planetary Sciences, Harvard University; Director, Woods Hole Research Center; former president, American Association for the Advancement of Science, AAAS; President Barack Obama’s chief science adviser), “The Science of Climate Disruption” (2008) – an excellent power point summary of the basis of man-made global warming and the climatic disruption that has already occurred [32 pages]: http://www.usclimateaction.org/userfiles/JohnHoldren.pdf .
I too am angered to the point of despair by the disgraceful, GREEDY, irresponsible, terracidal, pro-coal Lib-Lab commitment to continued greenhouse gas (GHG) pollution.
Today I sent the following letter to mainstream media and to numerous Federal MPs.
Dear Sir/Madam,
The world is facing a worsening climate emergency due to man-made greenhouse gas (GHG) pollution. Professor James Hansen (top US climate scientist, head, NASA’s Goddard Institute for Space Studies): “We face a climate emergency”. Australian Nobel Laureate Professor Peter Doherty: “We are in real danger.”
However, the coal union- and coal industry-supported and pro-coal Australian Labor Party Government offers (a) an Orwellian-named Carbon Pollution Reduction Scheme (CPRS) that will actually increase Domestic and Exported GHG pollution 80% by 2050; (b) a flawed, fraudulent, ineffective and dangerous carbon trading Emissions Trading Scheme (ETS); (c) a derisory 20% renewable energy by 2020; (d) a derisory “5% off 2000 GHG pollution by 2020”; and (e) increased GHG pollution by Australia, a world leader in annual per capita GHG pollution.
In stark contrast, top climate change experts demand (a) urgent steps to decrease GHG pollution; (b) an honest, effective, revenue-neutral Carbon Tax approach advocated by top climate economists; (c) “100% renewable energy by 2020”; (d) “cut carbon pollution 80% by 2020”; and (e) urgent reduction of atmosphere CO2 from the current 390 ppm (corresponding to 450 ppm CO2-equivalent) to a safe and sustainable 300 ppm.
Labor is betraying Australia, ignoring Science for private profit.
Yours sincerely,
Dr Gideon Polya
Macleod, Victoria, 3085, Australia
PS. For details and documentation of the above see:
[1]. Yarra Valley Climate Action Group: http://sites.google.com/site/yarravalleyclimateactiongroup/Home .
[2]. “Australia’s “5% off 2000 GHG pollution by 2020” endangers Australia, Humanity and the Biosphere“: http://sites.google.com/site/yarravalleyclimateactiongroup/australia-s-5… .
[3]. “Cut carbon emissions 80% by 2020”: http://sites.google.com/site/cutcarbonemissions80by2020/ .
[4]. “300.org – return atmosphere CO2 to 300 ppm”: http://sites.google.com/site/300orgsite/300-org–return-atmosphere-co2-… .
[5]. “100% renewable energy by 2020”: http://sites.google.com/site/100renewableenergyby2020/ .
[6]. “Experts: Carbon Tax needed and NOT cap-and-trade Emissions Trading Scheme (ETS): http://sites.google.com/site/yarravalleyclimateactiongroup/carbon-tax-ne… .
Peace is the only way but Silence kills and Silence is complicity.
CPRS/AERP: Evidently, it seems, a clandestine form of Lobbying.
Another shameless, quick-fix and desperate public-private partnership that seeks to ensure as this article attests: more environmental destruction for spreadsheet profits; try spreading that sheet over the dead of Kinglake and you’ll find that such figures grievously deceive.
Ah, such that will invoke the ire of future generations as well as that of todays conscientious.
For example, my honourable relative Charles; the future King of Australia?
He whom our backward Politicians do so haphazardly ignore?
Behold the project of his Royal Highness! (he who is also related to Al Gore)
http://www.iblf.org/about_us.jsp
Whatever slight glimmer of hope that Turn-Bull had (thank you Harry!), must surely be dashed by such a transparently hideous plan. Yet none should be surprised by the liberals, they who like Mammon in Paradise Lost have always favoured the dollar over the Health, Honesty and Future Prosperity of this great Nation.
And Labor, their only hope lies in a serious re-education that may perhaps be finally administered to them in Copenhagen?
Lo! ‘The third way’ lies with the Greens!
Disappointing to see the continuing focus on Emission Trading
Electricity generation and transport alone account for most emissions:
Simply focusing on them, with emission targets - similar to the emissions of sulphur dioxide or other gases - is a much simpler way forward:
I have written extensively on this regarding current USA proposals,
but it applies even more to Australia, given the greaster coal component.
A key political issue is of course the cost involved, and how that is passed on to consumers:
but long term fed/state guaranteed loan finance minimizes year-on-year impact on power company customers.
The Way Forward
http://ceolas.net/#cc10x
Introduction — Funding and Impact — Energy Efficiency — A New Electric America (and Electric World)
Electricity: Generation — Distribution
Transport: Power Generation — Regulation — Taxation
Market Reduction of CO2: Cap and Trade - or Not?
http://ceolas.net/#cce5x
A criticism of Emission Trading Schemes:
Basic Idea — Offsets — Tree Planting — Manufacture Shift — Fair Trade — Surreal Market — Real Market — Allowances: Auctions + Hand-Outs — Allowance Trading — Companies: Business Stability + Cost — In Conclusion
I have to agree with most of what Ben Eltham has to say. The fantasy that we can have serious action on climate change that allows the sectors that are the problem to be protected is shared by LibNat’s and Labor alike. The nuclear question isn’t really dealt with adequately by anyone in Australian politics. Climate change is too serious to fail to look at any serious clean energy options.
Ben mentions Barry Brooks as a proponent of nuclear but I believe the kind of nuclear Pr. Brooks advocates would not require any uranium mines at all and would be fuelled with existing spent uranium and end up using it up. I suspect the same mentality to be at work in our politicians in their advocating of nuclear as is at work in the support of ongoing expansion of coal exports; it’s not about what will let us shut down coal furnaces, it’s about markets for what we can mine and sell.
Many around the country know that not half of what can be done to reduce carbon and other GH gases is being done. Total reliance on "the market" to deliver improvements in efficiency and halt bad practice. Exampling this has been the ongoing use by a Steel Foundry in Kilburn in SA, of a 1946 furnace for their principle operation, operating alongside residents. The stupidity of poisoning vulnerable people for so long, and the stupidity of such poor design and technology being used up until 2008 begs belief…but that is how the market works. There are many other examples around the country. I ask all those with influence to consider raising such issues as part of the NEPC responsibility. Such a wonderful public authority service such little purpose with its present protocols. Thousands of Australians would be most grateful…and it would lead to reduced greenhouse gas production and more competitive business.
Great paper Ben but I think you’ve been hijacked by the con artists discussion. If the governments are allowed to keep on running the country the way they have & we the people do not put a stop to it & make them take responsibility for their actions, refusing them to go on with these side stepping arguments, we will not get a resolve to what will be a very big futuristic shortfall & even more so to what we are seeing now.
Taxes need to be directed to the things they were designed for & the governments of the day must stop crying poor.
Good article Ben, but you have made the mistake of thinking that Malcolm’s scheme is a policy. I read this morning that it is not a policy at all. He hasn’t nominated exactly what it is, although he helpfully suggested it ‘shape amendments’ to the Rudd government’s policy.
Ain’t that a fact Dr Dog! The inhouse disagreements of the Lib’s says it all.
Personally I rather like the idea of splitting the energy-producing sector from the rest of the economy.
If I was Kevin-Rudd-with-Rupert-and-the-Big-end-of-town’s-full-backing, out to implement a truly effective scheme for reducing emissions quickly (but without social dislocation and suffering), I’d push on several fronts - something like this:
(a) Cap and Trade for the Large Energy Producers - with strong targets to reduce emissions and no rorts (i.e. permit give-aways to big polluters). This would force the big producers to invest heavily in renewables and / or purchase supply from small scale renewable energy producers to a much greater extent.
(2) Carbon tax paid by all energy consumers to encourage energy efficiency in fuel usage and in other forms of energy-consumption by domestic, commercial and industrial sectors of the economy. It would also generate some revenue.
(3) Massive state-funded infrastructure program to reduce emissions via more use of public transport and inter-city rail, retrofitting for insulation etc
(4) Strong well co-ordinated policy to implement more greenhouse-friendly building codes and other relevant standards
(5) Appropriate compensation to needy individuals negatively affected by these changes i.e. we should compensate individuals and communities for economic dislocation caused by these changes - not keep ecologically-disastrous industries on life-support at public expense.
This list is not intended to be comprehensive, just a start. Some deep consideration should also be given to our commodity export industries. The best solution is global: the world as a whole should work out a rational program for extracting and distributing required raw materials that makes ecological as well as economic sense.
The reason I think it’s correct to Cap and Trade big power generators is that I understand there’s some precedent for cap and trade working effectively - to reduce sulfur emissions - in a similar earlier crisis (acid rain) in North America. It was on the strength of that, I understand, that Al Gore persuaded the EU to adopt Cap and Trade instead of Carbon Tax at Kyoto. As we now know, the USA was not to ratify the Treaty anyway - so the EU was left to work on a emissions trading scheme, largely on its own.
Is there any evidence the economy-wide Cap and Trade works effectively anywhere on earth at present? I’m not aware of it, but I’d like to be put straight if I’m wrong.
Cap and Trade may work well when there are a relatively small number of ‘players’ in a small market (e.g. large-scale power generation in Australia, or sulfur-emitting power plants in north America). As a general society-wide measure, I think a carbon tax is a better approach.
I believe the Rudd/Wong approach is so deeply misguided - particularly because it will lock-in dependency on the big polluters - that I welcome the fact that Malcolm Turnbull is trying to widen the debate.
The Government’s scheme is a cynical re-packaging of business as usual. It deserves to be attacked from every quarter.
I have sympathy for Turnbull. So many of his members are obviously ill-educated on ecological issues. They would be a drag on any Opposition leader trying to turn the right-wing of Australian politics to a more enlightened stance on this environmental policy. (I don’t think the ALP causcus are a great deal better, incidentally).
It’s easy to poke fun at Turnbull’s attempts to stimulate a broader debate about what needs to be done - but that broader debate is, in truth, a urgently needed.
If the low-targets, many-rorts greenhouse policies proposed by KRudd and Penny_Wong become law, we may well be worse off than before, in terms of making the massive structural changes needed to develop a sustainable way of life.
We may also be lending international momentum to an approach that is deeply misguided.
Quite apart from all your distracting facts and ideas Syd, it is easy to poke fun at Malcolm. And fun.
The only problem I see with your proposal Syd is that it addresses the issue in a comprehensive and intelligent manner.
I am with Syd Walker on this! Way to Go!
But how does anyone or anything get through to a Bone-headed Krudd and an Utterly Wrong Wong that they are very much on the WRONG TRACK!
IT really does seem that this mob are so intent on destroying Turnbull that they would rather destroy the World than give him an inch. Not that Turnbull’s mob (????are they?) are doing any better. I am not a fan of ‘democracy’ when it can be corrupted as easily as this.
p.s. Phillip Adams thinks that the Australian voting public have totally turned off all the details of any CPRS, ETS etc., gone to sleep, and have allowed Krudd and Wrong Wong to do as they wish. What an utter failure of democracy!
I suppose one of these days they (the sleeping voters) will wake up to what has not been done, find that they are still in a dying world, that their grand-kids have been relegated to an early extinction, that the Big Polluters have been handed billions of their dollars in gross profits, and take their revenge. Like far too bloody late!!!!! Grrrrr!
There is no real way of getting through to them. That’s the same as asking how do I get through to a Catholic priest, that there is no such thing as God? You can’t, it’s so wound up believing it’s own bullshit and it’s not going to believe you or me.
(Off-topic material deleted.)
"and (e) urgent reduction of atmosphere CO2 from the current 390 ppm (corresponding to 450 ppm CO2-equivalent) to a safe and sustainable 300 ppm."
This is the crux that no carbon trading or carbon tax scheme will address.
Stop worrying about preventing additions and work out how to reduce existing concentrations that have been built up over centuries.
But hold on; this represents less than 25% of Greenhouse gas concentrations.
Start learning how survive in your new environment!
I think any carbon tax of whatever form has to apply to the coal and gas we export as well as use locally. The illusion that what we export isn’t our responsibility is one that may be popular but it’s a dangerous delusion. As the rest of the world takes this issue ever more seriously, they’ll look closer and take a harder line on the suppliers of fossil fuels.
Earnest Lee has the logical brain of an Atheist & knows that we are destined to adapt to our environment. However that doesn’t mean that I want the environmental damage to continue but like every one else I want the transfer to green energy. This argument about a carbon trade is a political fallacy & we all know that the problem is ‘POLUTION’ in general.
Atheistno1,
The only viable green energy is tidal and hydro. For hydro we need water. Let us secure water instead of "p……" in the Wind".
Why replace the chimneys in our skyscape with environmentally unsound windmills?
Hurrah,
Just announced. Malcolm has scored major victory.
Krudd and Wrong are splitting the legislation. Now the public can target both proposals!
I’m with you on that one EarnestLee & I hear those wind turbines in large numbers are causing nearby residents to have detrimental effects on their health. I think that Turnbull should steer away form the secondary tax & concentrate on the green energy prospectus. If the media was smart & stopped trying to score it’s bucks from selective deafness, keeping the conversation focused on the ETS, focused it’s ability to discuss the green proposition & financial benefits, the public may get a clearer understanding of what to expect & gain the ability to decide a clearer path of action. The politicians as well for that fact.