Wednesday, October 14, 2009

At Last, Some Realistic Climate Policy Ideas



13 Oct 2009

The Greens' amendments to Labor's emissions trading scheme are sensible, rational improvements to a vital piece of public policy. And they'll be ignored, writes Ben Eltham

As the climate change debate rumbles on towards a possible denouement in Copenhagen, it's comforting that at least one of Australia's political parties is taking the issue seriously.

No prizes for guessing who — it's the Greens, who yesterday tabled 22 amendments to Labor's flawed emissions trading scheme, the Carbon Pollution Reduction Scheme.

Commentators love to point out that the Greens simply have to be left of the ALP on climate change in order to satisfy their environmental base — and that's true. But the science of climate change has moved so rapidly, and the climate debate in Australia is so infested with vested interests, that it is the Greens who now occupy what should be the policy mainstream in the climate change space.

This is reflected in the most important aspect of the amendments: the Greens' headline target for carbon emissions reduction of at least 25 per cent by 2020, and 40 per cent if an agreement can be reached at Copenhagen. Labor's target, you will remember, is a desultory 5 per cent unilaterally, up to 25 per cent if Copenhagen delivers. (When and if a coherentCoalition climate change policy emerges, we'll let you know about it.)

Where does the Greens target come from? It's worth remembering that realistic emissions reduction targets are not some parlour game of political one-upmanship. They're actually based on the best available scientific predictions of the future course of global warming driven by heat-trapping gases emitted by burning fossil fuels.

Labor's policy, which it took to the last election, was already predicated on outdated science. It postulated that atmospheric concentrations should be limited to 450 parts per million as a supposedly safe upper limit for carbon pollution. But the rapidly emerging picture from climatologists is of a global climate system far more sensitive to carbon dixoide than first appreciated.

Currently, CO2 concentrations in the atmosphere, at 387 parts per million and climbing, are already above what most scientists consider to be "safe". In other words, we're already over the red-line, and need to reach carbon neutrality as quickly as possible. The Greens' amendments recognise this frightening reality, arguing that "a safe climate requires an eventual return to 350 parts per million."

The other big facets of the amendments are merely what most sensible policy-makers have been arguing all along. Like Ross Garnaut, the Greens' amendments argue that all pollution permits should be auctioned, and that compensation to the so-called "emissions-intensive, trade-exposed industries" like aluminium smelting should be limited to "offsetting the impact created by the fact that some trading partners have not yet introduced carbon pricing policies". In other words, big carbon should be compensated for some loss of competitiveness, but not to anywhere the absurd level Labor has promised.

As for electricity generators, the Greens again agree with Garnaut that these polluters should have seen carbon pricing coming, and deserve nothing. Quite how the lights will be kept on in brown-coal dependent Victoria is a problem their amendments don't deal with, but it's hard to argue with the broader point that every dollar spent compensating the filthy coal-fired power generators of the Latrobe Valley is a dollar that can't be invested in new clean-tech power generation.

An interesting aspect of the amendments is the far greater role the Greens envisage for the Productivity Commission in the economy if and when the CPRS is passed. The Greens want the hard-headed technocrats at the Productivity Commission to play the leading part in reviewing industry compensation, including mandated three-yearly reviews of industry assistance, carbon leakage and how many jobs are really being lost due to carbon pricing.

Other amendments seek to tighten up some of the anti-competitive loopholes of the CPRS, including removing the absurdly low $10 carbon permit price cap, which the Greens' rightly argue is a market distortion, and requiring much greater transparency in carbon accounting down to the facility level (meaning corporations will not be able to bury highly polluting aspects of their operations in a company-wide emissions number).

The Greens also take aim squarely at one of the most outrageous aspects of the design of the Rudd Government's scheme: the fact that under the current draft legislation, companies will be able to offset most of their emissions in dubious and poorly regulated overseas schemes (for instance, by preventing deforestation in Papua New Guinea). The Greens want to significantly tighten this aspect of the scheme, allowing only 20 per cent of permits to be traded in this way, and demanding that those companies which do trade permits for international offsets do so using Gold Standard Foundation-accredited carbon permits. This will go a long way towards stopping big polluters simply buying cheap and dubiously regulated carbon permits from third-world countries on the international market, rather than making an appreciable effort to actually reduce emissions.

The Greens are also trying to address one of the difficult conceptual aspects of a cap-and-trade scheme, which is that voluntary emissions reductions by consumers and small businesses in effect function as a subsidy for big polluters. To get around this, the Greens are proposing "an independent expert advisory committee to estimate the level of additional abatement for a year". Once this figure has been arrived at, the Climate Change Minister will then be required to reduce the national emissions cap by that amount. It's an intriguing idea that, if ever implemented, would almost certainly add to hysterical levels of lobbying by big polluters.

All in all, the Greens' amendments are sensible, rational and constructive contributions to the national public policy process — precisely the kind of thing that the Democrats were once known for.

But will Kevin Rudd and Penny Wong listen to the Greens?

No, of course not. Why would Kevin Rudd negotiate with the Greens, when merely threatening a double-dissolution election on climate change is just about tearing the Liberal Party apart? Or to put it another way, why let the little matter of the future climate of the planet get in the way of party political advantage?

On the face of it, the Government needs the support of Family First lightweight Steve Fielding — a self-confessed climate sceptic — to get the bill through, even with Nick Xenophon on board. But at the moment that's a mere detail, a sideshow to the real action entertaining Government strategists, namely the self-destructive carnage the Coalition is currently inflicting upon itself over the issue.

Ultimately, the only way the Greens will be able to exert a significant impact on national climate policy will be by winning the Senate balance of power. That may well happen after the next election. On the basis of their contribution to developing sensible climate policy, it would be a good thing for the country.

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