Posts Tagged ‘emissions trading scheme’
Following a deal with the Greens, Julia Gillard announced plans for a carbon tax today. The scheme will start in July 2012 with a full Emissions Trading Scheme to following in three to five years. Lets see if Labor can get it over the line this time around. There is some more information available on the Carbon Price Mechanism. The announcement is below:
CLIMATE CHANGE FRAMEWORK ANNOUNCED
The Prime Minister Julia Gillard today outlined the Government’s plan to cut pollution, tackle climate change and deliver the economic reform Australia needs to move to a clean energy future.
This is an essential economic reform, and it is the right thing to do.
The two-stage plan for a carbon price mechanism will start with a fixed price period for three to five years before transitioning to an emissions trading scheme.
The Government will propose that the carbon price commences on 1 July 2012, subject to the ability to negotiate agreement with a majority in both houses of Parliament and pass legislation this year.
A carbon price is a price on pollution. It is the cheapest and fairest way to cut pollution and build a clean energy economy. The best way to stop businesses polluting and get them to invest in clean energy is to charge them when they pollute.
The businesses with the highest levels of pollution will have a very strong incentive to reduce their pollution.
The Government will then use every cent raised to:
- Assist families with household bills
- Help businesses make the transition to a clean energy economy
- Tackle climate change
The Government will not shy away from this difficult but vital economic reform to move Australia to a clean energy nation.
The global economy is shifting.
Right now, Australia is at risk of falling behind the rest of the world. The longer we wait, the greater the cost to the economy, and the greater the cost to Australian jobs.
An initial fixed carbon price will provide businesses with a stable and predictable platform to transition to a ‘cap and trade’ emissions trading scheme that will be linked to international carbon markets.
This will give businesses time to understand their carbon liability and begin the transformation in a steady and purposeful way.
Today’s proposal is the result of hard work by the Multi-Party Climate Change Committee which has been meeting co-operatively, determined to help deliver this crucial economic reform.
The framework has been agreed by Government and Greens members of the Multi-Party Climate Change Committee (MPCCC). The other members, Mr Tony Windsor and Mr Robert Oakeshott, have agreed that the proposal should be released for community consultation.
The Committee will continue to discuss other important elements of the proposal including the starting level of the fixed price, any phasing in of sectors of the economy, and assistance for both households and industry.
The document outlining the proposed carbon price mechanism is attached.
Members of the public and interested parties who wish to provide input on this approach should contact: MPCCC@climatechange.gov.au, or write to:
The Multi-Party Climate Change Committee Secretariat
GPO Box 854
Canberra ACT 2601
Australia
The 2009 Waste & Recycling Conference is on this week at the Esplanade Hotel in Fremantle. The theme of this year’s conference is ‘The Business of Risk or just plain Risky Business?’. This Friday’s program includes a stream on climate change. The keynote speaker for the stream will be Professor Dexter Dunphy from the University of Sydney. I’ll also be speaking during the climate change stream and the title of my presentation is ‘Emissions Abatement, Offsets and Permits: Finding the Right Balance’. If you’ll be at the conference on Friday then I hope you’ll come to my presentation, otherwise you can download a copy of my paper from the conference proceedings.
Power and greed bank on fear and ignorance
Jorg Imberger is an eminent and influential Australian academic who heads the Centre for Water Research at UWA. In Monday’s West Australian he presented an argument against the proposed Carbon Pollution Reduction Scheme (CPRS).
The first half of his comments included some creative rhetoric suggesting that climate change was being used as a tool to maintain political power and that emissions trading was being adopted as a profit making mechanism.
He presented some interesting arguments in the second half of the article discussing the scope of the problem of climate change and his views on how we should respond.
Professor Imberger pointed out that Australia is only responsible for about 1.5% of the world’s carbon emissions and so the “amount of carbon that will be saved each year if the scheme is fully implemented is miniscule”.
He went on to point out that the warming we are already experiencing due to our use of fossil fuels (anthropogenic warming) is now triggering feedback mechanisms that are exacerbating the problem.
A good example of this is the recent study in Geophysical Research Letters which has been the first research to show arctic melting has caused an increased release of methane into the atmosphere, methane being a potent greenhouse gas.
Given that we are already committed to 2°C of warming and the potential effects of these feedback mechanisms, the implication of Professor Imberger’s comments is that the CPRS is a dangerous distraction and we should instead be facing up to the consequences of climate change.
Instead of an emissions trading scheme, Professor Imberger suggests two main alternative strategies to tackle climate change.
Firstly, he argues that we should stop exporting food and make agricultural production more efficient. Farmers could then be encouraged to grow native trees and plants on the 37% of our land mass that would be freed from this change. This would sequester a large amount of carbon and begin to return some of the biodiversity lost due to global warming
Secondly, he suggests that given the changing rainfall patterns in Australia — less rain in the South East and South West and more in the North West — people could be progressively encouraged to relocate.
While I’ve attempted to summarise the key points of the argument, I’d encourage you to read Professor Imberger’s comments for yourself.
A rational response to a diabolical problem
Professor Garnaut has called climate change a diabolical challenge for Australia. On the one hand Australia can’t afford to act alone, on the other we can’t afford not to act.
Is the CPRS the right response to climate change or is Professor Imberger correct, and is it “clearly irrelevant to the climate change problem”?
It is true that Australia’s overall emissions are dwarfed by those of the United States and China. It is also true that an emissions trading scheme will have an impact on Australia’s economy, although less than might be feared. However there are a number of other important points that need to be made.
Climate change is a global problem and requires a global solution. The mechanism we have as a society to enact global policies are international agreements between states. These agreements cover a wide range of topics from human rights to international trade. A particularly relevant example is the Montreal Protocol which addressed the threat to the Ozone layer by reducing the use of CFCs.
There is an important process in train to reach an international agreement on reducing emissions of greenhouse gasses. The process started in Rio in 1992, continued in Kyoto and then Bali last year, and will progress further in Copenhagen next year.
This long period of time has coincided with a gradual increase in awareness of the impacts of climate change by citizens, empowering governments to take action on their behalf.
The only way the world is going limit global warming to 2°C is to reach an international agreement to reduce emissions and stablise the levels of greenhouse gasses in the atmosphere. Despite only being responsible for 1.5% of the worlds emissions, Australia is an important player in this process, particularly in the Asia region, and it is critical we are working positively towards an agreement.
Australia needs to demonstrate leadership and maintain credibility through action on climate change; signing the Kyoto Protocol; being prepared to agree on a specific reduction target and implementing a mechanism — in our case the CPRS - to achieve that target.
The CPRS is an effective mechanism because it allows us to agree reduction targets at a national level and then set limits on the emissions of individual businesses to achieve those targets. By auctioning permits and then allowing them to be traded it provides an efficient mechanism for businesses to meet their reduction obligations.
Professor Imberger is rightly concerned about the potential economic impacts of the CPRS impeding our ability to adapt to climate change. However Australia won’t unilaterally adopt deep cuts and Penny Wong, the Minister for Climate Change, has made it clear that we will wait until the outcome of the Copenhagen discussion before making any specific commitments.
The key point is that Australia must be working towards a global agreement and must be ready to act when we have an agreement. Participating in this process is the only chance we have for limiting global warming to 2°C.
The second important point about an emissions trading scheme is that places a price on carbon. This enables the country and businesses to make rational economic decisions to reduce emissions. Placing a price on carbon is already having a positive impact by helping to fund abatement projects in developing countries under the Clean Development Mechanism.
With a price on carbon, businesses are enabled to make decisions that might include the strategies suggested by Professor Imberger. If the cost of water and of transportation means it is no longer economic for Australia to export food, then we will stop. If the abatement benefits of reclaiming agricultural land and replanting bush provides sufficient economic incentive, then it will happen.
What is the alternative way to implement these strategies?
I do think Professor Imberger is absolutely right in one particular respect: it is important that we also plan for the consequences of climate change. The world is already committed to some level of climate change and so it is true that reduction is not enough and adaptation is critical.
As an aside, some businesses are already acting in this respect. For example Woodside Energy has conducted a large study in conjunction with Oklahoma University to help them prepare for climate change. The study will, amongst other things, guide them in the design of future offshore production platforms to cope with changes in tropical cyclone wind speeds and wave heights.
Right now the CPRS is the government’s principal response to climate change and it is an important one, but perhaps we should now ask the government for a Climate Change Adaptation Scheme as well.
So the Australian Greenhouse Office Green Paper has been released describing the Rudd Government’s first attempt at doing something meaningful in the fight against climate change.
The paper is there to generate discussion ahead of the white paper and draft legislation due for release in December 08. So let’s do just that – generate some discussion:
At Greensense we care about the environment and the impact that any change has on not only our quality of life but our ability to sustain life. We exist primarily to make a difference and secondly to do business. Surely any battle against climate change needs to take the same approach – environment and life first, economics second.
Ross Garnaut summed it up well in his report stating that:
“Without that action, it is probable that Australians, over the 21st century and beyond, will experience disruption in their prosperity and enjoyment of life, and to longstanding patterns in their lives.”
It seems though, that the government can only speak of economic fear right now, worried of the impact of petrol prices, how low income households will cope, will high emission producing businesses be protected well enough to not take their operations offshore and the list goes on. They can get away withit becausethere is still enough ignorance among the general public on what an increase in global temperatures really means. The thing is – no one will care too much about the economics if there starts becoming a tangible difference in constraining life.
The Green Paper from the outset has a focus solely on the economics of any decision and protection of the very organisations, that since the industrial revolution, are the cause of the problem. So fear is driven around economic impact, with the government’s paper bowing to the green lip service driven by the corporate dollar, rather than tackling the real issue – let’s reduce carbon emissions on every level as quickly as possible for the sake of generations to come.
To solve climate change it requires a massive cultural shift not only at a economics level but at individual household and business level with all tactics being applied to have any chance of making a difference, from carbon trading, green oriented technology and power, offset programs and beyond. By making The Green Paper the first attempt at legislation changes we have made climate change an economic issue rather than a life issue.
So lets get to some specifics to prove the point:
Free permits are being offered to the Emission Intensive Trade Exposed (EITEs) organisations. When a carbon trading scheme should be there to drive down carbon pollution why would we protect the highest carbon producers – economic fear. Where is the investment in innovative solutions to the problem that raises awareness to the real issue and drives a cultural shift in dealing with it. The whole concept of carbon leakage illustrates that the real heart of the issue is not understood by business.
The legislation only targets companies that produce more than 25,000 tonnes of carbon in a year which is 1,000 of the 7.6 million companies within Australia. Now on the one hand it makes sense to focus on the highest carbon producers but here are the issues (even forgetting the free permits to the EITEs). Of the highest producers the agricultural industry will not be included because, “the Government does not consider that it is practical at this stage to include agriculture emissions in the trading scheme at commencement”, yet they are the second highest carbon producing industry. By only targeting 1000 of the 7.6 million companies in Australia we will not create the required cultural shift if we can’t find a way to make it relevant for everyone.
To apply a national carbon limit it assumes a foundation of accurate measurement. This will predominantly occur under the reporting standards generated by the NGER Act 2007. The problem is this only brings companies who produce over 87,500 tonnes of carbon per year reporting by 2010 and those producing more than 50,000 tonnes in 2011. That seems to give a lot of inconsistencies on the governments own plans to address this is a sensible fashion if they want the carbon trading scheme running by 2010.
The government cannot articulate the real impact to the individual household or business with comments in the report such as: “such a concentration of carbon dioxide is expected to have severe impact on our environment” and “the IPCC concluded that Australia’s water resources, coastal communities, natural ecosystems, energy security, health, agriculture and tourism would all be vulnerable to climate change impacts if global temperatures rise by 3 degrees or more.”. The fact that we are vulnerable and the impact is severe doesn’t seem to present a well structured case as to why we need to do something. Cultural shift will drive the change and perhaps investment needsto be made into providing that compelling case (which happens to be something that Greensense is very good at).
So by all means fear the economics of any carbon trading scheme and be sure to join the discussion to make sure there is an effective solution, but lets not forget that the fear should lie in the very issue that the we are trying to fix.
