John Howard missed the opportunity of a decade over the weekend when he responded to the report by his Emissions Trading Task Group. It could have been the moment when we emerged after years of delay with a comprehensive emissions trading scheme with clear targets, a national energy efficiency plan to reduce energy waste, and a clean energy target to ensure all new energy comes from low or zero emissions technology. It could have been the moment that Australia finally committed to doing its part to help avoid dangerous climate change.
Instead, we saw further delay.
It should be recognised that the Prime Minister has come a long way in the last six months in accepting that we need to set a domestic carbon price and that we shouldn’t wait until every other nation is involved in a global emissions trading scheme.
But without targets to reduce emissions, no climate change policy has credibility. The Australian public, Australian investors and Australia’s environment all need a target to ensure certainty and a secure future.
While the Prime Minister’s response stressed economic issues, the reality is that Australia’s economy is at much greater long-term risk if decisive action on climate change is not taken immediately. Economic modelling has shown that an early and effective price signal on carbon, matched with clean energy targets and energy efficiency, will ease the economic costs and limit price increases for consumers and industry.
And unless we act decisively Australia will remain marginalised from the 21st century global, clean-energy economy worth $75 billion in 2005 and expected to grow into a $225 billion a year industry within a decade.
A policy of delay without solid targets prevents the restructuring of our more polluting industries and reeks more of protectionism than far sighted economic management.
The policy outlined by Howard on Sunday an emissions trading system commencing no later than 2012 does not set targets and therefore misses those that have been set by Australia’s best scientists. The CSIRO’s submission to the Emissions Trading Task Group advised that developed countries like Australia must cut emissions by 60-90 per cent by 2050 if dangerous climate change is to be avoided.
If the world were to follow a similar path of delay, we would risk being locked into at least three degrees of warming which would devastate the Great Barrier Reef, halve the flow of water into the Murray River and result in the extra deaths of 3000 to 5000 Australians every year from heat stress.
The Australian economy is on a collision course with climate change. More droughts, water shortages, health impacts and loss of natural assets and agricultural productivity will mean serious job losses and serious economic impacts.
Without genuine measures to tackle climate change now, we will bequeath our grandchildren a huge carbon debt with massive economic and environmental consequences.
But acting decisively to protect our future isn’t as hard as the Government would have us believe. To suggest that making 20 per cent cuts in carbon emissions by 2020 means taking all the vehicles off our roads and changing coal-fired power stations into nuclear ones is more than a bit cheeky. It ignores the fact that we can make massive cuts in energy waste, that existing renewable energy technologies can supply at least 20 per cent of our energy needs by 2020, and that if we participate in global carbon trading under the Kyoto Protocol (and its successors) we can invest in schemes to reduce emissions in developing countries to offset our emissions.
To get on track we need to ensure that Australia’s greenhouse emissions stop growing and actually start decreasing from around 2010. For a Government that successfully introduced something as complex as the GST in 12 months, a climate plan with targets should be a walk in the park.
Such a plan would certainly give the Government much needed ‘climate change credibility’ and differentiate it from Labor, whose policies, unfortunately, also fall short of delivering a credible Climate Plan.
Last week, Kevin Rudd tried to get out ahead of the Prime with what he described as a ‘comprehensive framework to tackle climate change.’ Labor’s policy now includes a long-term target to cut greenhouse emissions by 60 per cent by 2050, a commitment to an emissions trading scheme, funds for research and development (with significant funding for ‘clean coal’), support for solar and geothermal energy research and development, and a loans scheme for people to improve energy and water efficiency.
This framework, while including a number of significant and important points, is still missing the mark as effective and credible climate policy. There is no sign yet of when it will seek to turn around Australia’s rising greenhouse pollution and what target it has for 2020. And while there is talk of increased clean or renewable energy targets and the importance of comprehensive energy efficiency policies, Labor’s statements to date are, in reality, small beer.
Modelling commissioned in 2007 by the Climate Institute indicates that cutting greenhouse emissions by 80 per cent by 2050 in the electricity sector is affordable and achievable particularly, when backed by a clean energy target ensuring all new electricity generation comes from clean energy (which would then provide 20-25 per cent of our energy by 2020) and a national energy efficiency plan that at least comes up to the OECD average by 2013.
To protect both our economy and our environment we need to better plan the emissions path to 2050.
Why do we need short-term targets? Partly, it’s about accountability. We need to know that we are on track to reduce emissions by 60-90 per cent by 2050 a challenge which Australian business leaders last year agreed cannot be dealt with at the last minute without risking a disruptive shock to our economy.
It’s also about investment gateways. In particular, for companies operating in the electricity sector where infrastructure has a fairly long life span it’s important to know whether an investment is likely to become a stranded asset (for example, a coal-fired power station that has to close down prematurely). Short-term targets make it easier to plan investment including investment in low- and zero-emission technologies.
Australia ‘s greenhouse pollution has increased by around 10 per cent over the last decade, and, late last year, the Government projected a 27 per cent increase on 1990 levels by 2020. So, each year we fail to turn around that trend the task becomes tougher.
Virtually all the economic modelling done to date (by the Australian Business Roundtable on Climate Change, the Stern Review and McLennan, Magasanik and Associates) shows that we can reduce greenhouse pollution and still grow the economy, and that it is cheaper to act sooner rather than later. Most of this modelling is extremely conservative. For example, it doesn’t factor in the risk posed to tens if not hundreds of thousands of tourism jobs reliant on natural assets such as the Great Barrier Reef, Kakadu or the Australian ski fields, which are threatened by climate change.
An emissions trading scheme, from any government, will not in itself reduce greenhouse gas emissions. If we introduce a scheme with a carbon price which is too low to significantly change behaviour, our greenhouse pollution will not fall.
The effectiveness of any scheme will be determined by where the emission target is set and whether this begins to significantly reduce emissions within the next 5-10 years. A slow start to emissions trading and low carbon prices risk longer-term disruption to the economy as we play catch-up in the future.
The new ‘bipartisan’ support for emissions trading could also be harnessed to introduce a scheme much more quickly than either the ALP or the Government suggest. If we got cracking now we could have a scheme going by late next year (or 2009 at the latest). This would allow cost savings and access for Australian firms to the global Kyoto carbon market, which is now worth more than $36 billion.
If Australia’s climate policies continue to delay or miss the mark we will be imposing costs on business and the community for no benefit. But an effective emissions trading scheme and supporting policies will not only put Australia at the forefront of global efforts to avoid dangerous climate change, it will also put us at the leading edge of the booming global clean-energy economy of the 21st Century.
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