Posts Tagged ‘ETS’
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
A Negawatt is the opposite of a Megawatt. It’s a unit of energy we didn’t have to generate due to energy efficiency.
Negawatt power is cheaper and greener then wind, solar or tidal power. It’s been estimated that every kilowatt of savings at the plug actually contributes 3 kilowatts of savings in total due to energy losses from generation, distribution and consumption.
According to modelling from the International Energy Association, energy efficiency offers the biggest scope for cutting greenhouse gas emissions. It can contribute more abatement than renewable energy, more than carbon capture and storage and more than nuclear power.
The IEA goes on to say in their report:
Energy-effiency investments in buildings, industry and transport usually have short pay-back periods and negative net abatement costs, as the fuel-cost savings over the lifetime of capital stock often outweigh the additional capital costs of the efficiency measure, even when future savings are discounted.
While the recent name change of the Department of Climate Change and Energy Efficiency probably has more to do with the Government’s backflip on the ETS the focus on energy efficiency is welcome.
Greensense View is one way we are supporting energy efficiency. Contact us, if you’d like to find out more.
It’s been a long time since the US passed their Climate Change Bill through Congress but, so far, no progress has been made getting a similar bill through the Senate. There are some parallels with the passage of the CPRS here.
On Monday a new US Climate Change Bill is due to be presented to the Senate, proposed jointly by Democrat John Kerry, Republican Lindsey Graham and independent Joe Leiberman.
This is going to be the last real chance to get a bill passed before the US mid-term elections and the trio have been working hard to get bipartisan and industry support for the Bill. The outcome of the debate on this Bill is important for Australia for two reasons.
Firstly, the prospects for improving on the Copenhagen Accord will be bleak without meaningful US action. While the US has made a reduction commitment under the accord, as has Australia, we still need to see what policy the US will use to achieve the target.
Secondly, both major parties in Australia are keen to be seen to be in-line with US policy. With a Federal election looming, the outcome of debate on this bill in the US could influence policy here — or at least election posturing.
There have been claims in the media here that ‘cap and trade’ is dead and this means the US will move to a direct action model, in line with Coalition policy. On the other hand, we’ve recently had President Obama’s comments on the 7:30 Report that “you have to put a price on carbon of some sort”, in line with Labor policy.
We should know more details on the Bill this week and have a good idea of its prospects soon enough, but no one is suggesting it will pass easily, and most are suggesting it will fail. If the Bill does fail, does that mean the US won’t meet its reduction target? Does it mean ‘cap and trade’ is dead? And what does it mean for Australia?
I recently attended a presentation by from Frank Litz, a Senior Fellow from the World Resources Institute (WRI). He said that research still to be published by WRI has found that the US could still meet their reduction target without a national ‘cap and trade’ system. There are two reasons why. Firstly, there is already a regional emissions trading scheme in the US and there are two more in development. The Regional Greenhouse Gas Initiative is underway and covers the electricity sector in 10 mid-Atlantic states. The Western Climate Initiative will cover 11 Pacific states across the US and Canada and the Midwest Greenhouse Gas Reduction Accord will cover 7 more US states. It is clear that even without a national ‘cap and trade’ system, emissions trading will be a major driver of abatement in North America.
Also, the President has significant power to regulate emissions through existing legislation, such as the Clean Air Act. The Environmental Protection Authority has recently issued a finding that greenhouse gas emissions endanger public health and welfare with the support of the White House and following a ruling from the Supreme Court. This means they can begin to put in place performance standards on major emission sources such as vehicles, factories, and power plants. Other agencies such as the Department of Energy and the Department of Transport also have powers that could be used by the President to regulate emissions.
It’s important to distinguish this kind of ‘direct action’ from that proposed by the Liberal Party. The Liberal Party’s policy is to make direct investments in offsets and some renewable energy production and to provide grants to companies to reduce emissions. The policy placese no limit on emissions and makes no attempt to regulate emission sources.
Some people have gone further and suggested that the US EPA might have the power to implement a national emissions trading scheme under existing laws. But even without using existing laws there are some reasons to think the US will have a national scheme soon and if not during this congress, then probably in the next one. And if the US puts a price on carbon, Australia is pretty sure to follow suit.
One of the reasons there is doubt that the Kerry-Graham-Leiberman Bill will get enough support this time around is the looming mid-term elections, rather than insurmountable opposition to such a scheme. The Bill will need Republican support to pass and there is a view that after Obama’s success with Health reform, the Republicans don’t want to give the Democrats another high-profile win. Also, President Obama has indicated that the Financial Reform Bill is a higher priority and he also has a highly political Supreme Court nomination to deal with before the mid-terms. So climate change might not get the attention it deserves.
Direct regulation by the EPA is very unpopular with industry and is seen as a more expensive way to achieve emissions reductions. So we can expect to see renewed pressure from industry for a national trading scheme if and when they become subject to more stringent regulation of emissions. Again, there are echoes of the situation in Australia, where industry is calling for more certainty.
What does this all mean for Australia and our upcoming Federal election?
Right now neither of the major parties has a strong or popular position on climate change, but both parties will hope to get some political mileage from the outcome of debate on this bill. If the US bill does get up then it will provide strong support for Labor’s policy and may see Rudd want to make even more of climate change as an election issue. Despite his failure to pass the CPRS Bill and the disappointment of Copenhagen, he is back talking about emissions trading now and definitely sees it as an area where he has stronger credentials than the Coalition.
Tony Abbott seems quite happy to make up new policies on the run, so what he will do is anyone’s guess. If the Bill fails it should be good news for him because the media will interpret this as a trend away from emissions trading towards direct action. However, President Obama will still want to show international leadership on climate change and demonstrate to partners that the US is taking action to meet its commitment under the Copenhagen Accord ahead of COP16 in Mexico. He will probably draw to attention to the trading schemes that are already underway in the US and use his executive powers to start regulating emissions with new performance standards.
This kind of action is quite different to what the Coalition is proposing, which lets polluters off the hook entirely. And the US will probably get a national emissions trading scheme, sooner or later.
In a media statement released today, the WA State Government announced that the Forest Products Commission (FPC) will close down its carbon division.
The decision, announced by the Forestry Minister, Terry Redman, will doubtless be well received by the other main players in Australia’s developing forest carbon sector. Companies like Carbon Conscious , CO2 Australia and Rewards Group have been arguing for a while now, and with some justification, that a State Goverment owned entity should not be competing against the private sector in the carbon space.
FPC had previously completed deals with Synergy (5000 hectares) and BP but uncertainty over a start date for emissions trading had already forced an organisation restructure late last year.
The immediate future of existing contracts is not made clear in the statement, however FPC “will be exploring ways it can transfer this work to the private sector” according to Minister Redman.
The government today released the draft CPRS legislation amongst media reports that the emissions trading scheme would be delayed. Meanwhile, there are continuing reports that climate change is accelerating faster than previously feared.
The preamble to the draft legislation sets out a clear rational for action and action now.
“Climate change is the greatest social, economic and environmental
challenge of our time. Scientific evidence confirms that human activities,
such as burning fossil fuels (coal, oil and natural gas), agriculture and land
clearing, have increased the concentration of greenhouse gases in the
atmosphere. As a consequence, the earth’s average temperature is rising
and weather patterns are changing. This is affecting rainfall patterns,
water availability, sea levels, storm activity, droughts and bushfire
frequency, putting at risk Australian coastal communities, health
outcomes, agriculture, tourism, heritage and biodiversity for current and
future generations.“
Perhaps the scheme proposed by the government is flawed: perhaps the targets are too low and the subsidies too high. But the CPRS does commit us to action and it does set us firmly down the path to carbon reduction.
