So Long Kevin, And Thanks For All The Fish

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I’m beginning to suspect Kevin Rudd thinks that responding to climate change is about saving fish. He mentioned the Great Barrier Reef several times in Monday’s press conference announcing changes to the Carbon Pollution Reduction Scheme.

Of course, if the Prime Minister believes that we can still save the reef, it shows that he is not in regular contact with climate scientists. The way that global emissions are rising — ours especially — the reef has only a very small chance of being recognisable in its current state by the end of the century.

However, if Rudd thinks that climate change is about fish and coral, it would explain why he continues to treat the issue as a political football rather than the genuine emergency that it is.

"ETS announcement today. Possibly higher targets!?", was the text message I received early on Monday morning. I was sceptical, but part of me did start to wonder: "What if …?" As soon as I watched the announcement on Sky News, however, I was glad I hadn’t got my hopes up.

The news is pretty grim.

First up, the scheme will be delayed until July 2011. Why? All the advice that the Government has received on the economics of climate change shows that the sooner we cut emissions, the less expensive it will be. Early action is much cheaper than waiting. This was a central tenet of the UK’s Stern Review and of our own Garnaut Review. We need to move quickly, especially if we want to create new green jobs and new investments in clean tech and renewable energy in Australia.

Secondly, in 2011–2012 the carbon price will be set at $10 per tonne and there will be an unlimited amount of permits. Full market trading won’t begin until July 2012.

This is a joke — $10 a tonne! Modelling done for the Federal Government in December last year suggests that to promote renewables, we need a carbon price of over $60. A $10 carbon price won’t even be enough to promote the switch from brown coal to less polluting black coal — only at $20 will that happen. We’ll need a carbon price of $50 per tonne before gas will displace coal-fired power. At $60 per tonne we get some wind technology and solar thermal. This is of course factoring in the current $10–$11 billion worth of subsidies the Federal Government currently gives the fossil fuel industry per year.

In the European Union’s emissions trading scheme, where prices are so volatile, carbon permits are currently trading below $15 per tonne. They have found that this is not enough to keep renewable energy projects going.
"Set up to price pollution out of existence," writes Julian Glover in The Guardian, "carbon trading is pricing it back in."

It’s important to note that a carbon price is not enough as a central policy. To date, price mechanisms have been totally inadequate to drive significant transformation — the age of cheap energy (coal and oil) is catching up with us. We need to come to terms with that and get serious about complementary measures.

Next change: the most polluting industries get more free permits to pollute. There will be a "recession buffer" of free permits given away, which means that industries that had previously been eligible to receive 60 per cent of their permits to pollute for free now get 70 per cent. Those industries that were going to get 90 per cent of their pollution permits for free now get 95 per cent. This will be the case for an unspecified but "finite" amount of time.

If we are to give billions of dollars more to our most polluting industries, then the rest of the economy will have to bear the brunt of emission reductions. Furthermore, this makes it much more difficult to actually achieve emission reductions because the amount of assistance that the worst polluters are getting offers little economic incentive for them to change their behaviour.

Finally, the Government has added an extra option to its target range (which was 5 to 15 per cent) of 25 per cent by 2020 of 2000 levels if the world reaches an agreement to reduce greenhouse emissions to 450 parts per million (ppm).

This last change is the one glimmer of hope. Well, kind of. If, and only if, the rest of the world shows leadership and creates a global deal at the UN Copenhagen climate negotiations in December this year, then Australia will agree to a 25 per cent reduction by 2020 (over 2000 levels). That is to say: the 5 to 15 per cent target reduction range will be kept unless an agreement consistent with 450ppm CO2-e is agreed to by every other country at Copenhagen.

Those targets are simply not strong enough. The UN Intergovernmental Panel on Climate Change says the minimum that industrialised countries like Australia need to commit to is a 25 to 40 per cent reduction by 2020 over 1990 levels — and even that only gives us a 50/50 chance of avoiding a 2 degree temperature rise.

Greenpeace’s statement to the press yesterday was spot on:

"Kevin Rudd may know a political deal when he sees one, but you can’t negotiate with climate change. If the point of having a climate policy is to avoid catastrophe, then the new announcements still fall dismally short."

So, the big polluters win again.

I learnt from a climate activist friend in the United States the other day that for every Congressperson in Washington DC, there are four fossil fuel energy lobbyists.

I don’t know the statistics for Australia but I do know that the lobbyists hired by our own fossil fuel and emissions-intensive industries will be getting a big bonus cheque this quarter — despite the financial crisis.

New Matilda

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