Tuesday, July 7, 2009

Time's up for old industry

OVER the past decade, investments and jobs in clean energy have been leaving Australia for countries such as Germany and China, which have strong policies to drive low-carbon growth. And further delay is costing jobs at home, as a friend of mine has just discovered. An adviser to business on how to make the most of low-carbon industry growth, she sent me an email the other day saying that she had lost her job. She had been laid off because of political wrangling in Canberra over climate action.

The stalled carbon pollution reduction scheme and renewable energy legislation is discouraging investment in Australian clean-energy and low-carbon growth industries, while in other parts of the world the low-carbon industry train is leaving the station with a clear destination in sight — new clean-energy jobs and industries.

In the US, President Barack Obama has committed about $US86 billion in his stimulus package to renewable energy, energy efficiency, clean transportation and smart electricity grids.

The lower house of Congress has also recently passed a clean energy and pollution reduction bill that — if passed by the Senate and alongside Obama's clean-energy stimulus package — will create more than $US150 billion per year in new clean-energy investments and generate a net increase of about 1.7 million jobs.

More than 70 countries including China and India have strong policies to encourage clean energy and last year, for the first time, clean-energy investments outstripped investments in traditional coal, oil and gas generation.

The challenge for world leaders is how to underpin this investment surge with an ambitious global agreement to reduce greenhouse pollution.

This week in Italy, Prime Minister Kevin Rudd joins Obama and the heads of state from the world's largest economies for a meeting on how to build political momentum towards such an agreement in December in Copenhagen.

The countries at this meeting account for 80 per cent of the world's emissions and include not only rich nations, but rapidly industrialising countries such as China, India, South Africa and Brazil.

The political declaration from this meeting will be the first major litmus test of how ambitious the agreement in Copenhagen will be and what level of new low-carbon industrial growth it will deliver.

Negotiators have been trying to break long-standing political deadlocks, including pollution reduction targets and, just as important, how to drive investment in low-carbon growth of developing countries. Another crucial challenge will be how we prove and drive transformational technologies like concentrated solar power at the scale required.

To date, the key sticking point in the negotiations has been whether industrialised countries such as Australia would agree to 80 per cent reductions in emissions by 2050, and whether the world as a whole should peak emissions by 2020 and then more than halve pollution levels by mid-century.

However, there are signs of hope that these countries may agree to a shared vision that would aim to limit global warming to less than 2 degrees. Such an agreement has been elusive in the past as it would require significant action from all major emitters and has been blocked by the US and the major emitting developing countries.

While Australia's international standing will be diminished by Senate squabbles that have stalled clean-energy and low-carbon economic legislation, the Prime Minister has a key role to play in this week's meeting. This year's federal budget allocated billions towards fast-tracking investments in building new industries and export opportunities in solar power and cleaning up fossil fuels.

Building on this foundation, Rudd could play an important international leadership role by helping develop a plan to drive these vital new technologies to markets in developed and developing countries.

This week the Global Climate Network — an alliance of influential think tanks including the Climate Institute, the Centre for American Progress and the Research Centre for Sustainable Development at the Chinese Academy of Social Sciences — will release a joint study examining how to achieve breakthroughs in low-carbon technology.

This report highlights that new focus on technology would tangibly help avert climate crisis and could also transform the debate from one of mutual mistrust into one of shared opportunities. The development and sale of low-carbon technologies is part of the profit and job-creating low-carbon growth economy of today and tomorrow and part of a shared vision we can embrace.

By working with other countries on technology and backing it up with a strategy to unlock private and public sector financing, Australia can build trust between countries that will be crucial to achieving an ambitious agreement in Copenhagen.

A strong outcome in Copenhagen can be a key step towards protecting Australia from the worst impacts of the climate crisis. An ambitious outcome in Copenhagen can be an engine for low-carbon economic growth. This week we will see the first real test of whether the world's political leadership is up to that task.

Erwin Jackson is director of policy and research at the Climate Institute (www.climateinstitute.org.au).

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