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White paper on climate change « Previous | |Next »
December 15, 2008

The Rudd Government's white paper on an emissions tradings scheme (ETS) will be made public today. It is pretty clear that it will politically be situated in the middle ground between what Rudd is calling deep cuts advocated by environmentalists and The Greens and the doing nothing position of the miners, heavy energy users, big emitters and the sceptical Right whose rhetoric is about short term economic survival, job losses and businesses being driven offshore.

Rudd + Co want to be criticised by both sides of politics to show that their government is doing something sensible and rational. So we can expect a low starting point to reform. The ground has been well prepared with all the talk about the cap target to reduce Australia's greenhouse gas emissions in 2020 being between 5 and 15 per cent below 2000 levels. The Opposition has focused on the timing of the proposed ETS, dodging the issue of appropriate targets or caps on emissions.

The middle ground----striking the right balance says Rudd + Co--- will provide lots of free permits for the energy intensive industries, lots of talk about dire economic conditions and the need to protect jobs, compensation for households and business, little in the way of incentives for innovative investment in renewable energy and not that much to drive energy efficiency in households and business.

This--a shift to a low carbon economy--- is going to be a major structural economic reform, and it will help define the politics of the Rudd Government and the possibility of its re-election in 2010. There has been no "solar revolution" rhetoric from the Rudd Government; very little from them about new green jobs or renewable manufacturing industry; and little about any assistance to heavy polluters being conditional on investment in low emission technology deployment industries to ensure investment in world’s best practice low emission technology and energy efficiency.

Wong's standard message has been to attack the Coalition for being opposed to an emissions trading scheme and the scepticism within its ranks,. She has been concerned to paint the Coalition as climate change sceptics. She has said very little about industry rent seeking, industry's need to invest in clean technology research, and/or integrating the cost of carbon into long-term planning, decision making and investments; or industry's failure to be clear about safe, long term global greenhouse gas levels.

Update
What a damp squid! 5% unilateral reduction in 1990 levels of greenhouse emissions. An absolute maximum cut to emissions of 15% by 2020 - if the world signs an effective climate pact -The emissions scheme is expected to earn about $12 billion a year. Of the $12 billion, about $10 billion will go for compensation and free permits. Only $700 million goes for energy efficiency measures. It's out and out protectionism disguised as an example of the "reforming centre" that locks Australia into a hot and rather bleak future.

Rudd and Co have simply crumbled under pressure from the big polluters. They've only had enough political courage to stand firm on their commitment to begin the emissions trading system in 2010.They have shielded from change everything emissions trading is designed to change. So how are Rudd and Co going to drive the change to a lower carbon economy? Where are the reform drivers?


| Posted by Gary Sauer-Thompson at 5:11 AM | | Comments (19)
Comments

Comments

The reality is that the emission trading scheme has been crippled by polluter interests. The major polluters, some business leaders and their representatives.They have lobbied for “soft starts” and/or delayed action. They continue to shirk their responsibility to reduce emissions by demanding free permits to pollute, large handouts of public funds and corporate welfare without the ‘mutual obligation’ that would require them to invest in clean technologies.

The Australian newspaper has been their media voice.

The debate so far has been about how much the big polluting energy corporations (Business Council of Australia) can get by way of subsidy (compensation payments for heavy industry that is emissions intensive and trade exposed). The big polluters have a history of casting doubt on the fundamental science of climate change; of delaying action by highlighting the costs of change and downplaying the benefits; an trying to shift the costs of the transitionfrom the big polluters to the rest of the Australian economy and community.

Nan,
the naysayers ignore that Australia is amongst the highest per capita polluters, is amongst the top 20 global polluters, and that Australia is the developed country most at risk from climate change. So it is in our interests to do something in the context of helping to forge an effective global agreement.

Peter,
we do not hear much about Australia’s 2020 target being consistent with the objective of avoiding a 2C increase in global temperature and stabilising concentrations of greenhouse gases below 450 ppm-e.

It is that measure that drives Australia’s target range, and it is the reason for reducing Australia’s emissions by at least 25% below 1990 levels by 2020.

Maybe cultural change has to precede political change, or alternatively there has to be courage and leadership. Both are difficult albeit necessary options.

You can see why the Rudd Government bought forward its Renewable Energy Fund---gone from being a six year program commencing in 2009-10 to a two year program commencing right now---on the weekend. Its the figleaf that tries to cover up its emissions trading scheme backflip.

That scheme delivers even greater assistance (hush money + free permits) to Australia’s biggest polluters and it scales back its commitment to participate in any international agreement. It proposes that Australia commit to a unilateral 5% reduction in carbon emissions on 2000 levels by 2020.

he government has set an absolute maximum cut to emissions of 15% by 2020 - if the world signs an effective climate pact - in its greenhouse plan released today.If no pact is signed, Australia will go with an unconditional 5% cut in emissions, compared with 1990 levels.

There is not even an attempt to line up action with rhetoric by the Canberra hollowmen and woman

All that fuss about global warming delivers this feeble action! The compensation measures are still significant although the target is much smaller.

The scheme will hand about $4 billion to the coal and power industry to compensate it for efforts to tackle climate change: electricity generators will get about $3 billion, with coal producers receiving about $750 million.

More businesses will receive free pollution permits than the government first planned, and they will get more of them. By 2020, almost half the permits in the system will be given to business for free. Free permits for trade-exposed exporters with little obligation for energy efficiency and other requirement for them. So much compensation and so many free permits to business means there is little money left over for other measures, such as energy efficiency,

It's a joke. There is compensation and free permits to continue to pollute. It's an exercise in caving into rent seeking.

Well to the Labor voters all I can say is;
If you say Gullible very slowly it actually sounds like you are saying orange.

So this is how we deal with the greatest threat to our future? It's a terrible betrayal.

Hopefully Obama will take it all a bit more seriously. Australia deserves to be the pariah if this is the best we can do.

Not 'gullible' Les, but 'hopeful' on this issue.
See "gullible' would have meant a vote for the Coalition, better make that 'downright stupid' if anyone believed they were ever going to do anything positive for the environment and climate change. That is apart from scribble a few numbers on the back of an envelope or dinner napkin or ask a stacked 'task force' of polluters what to do.
Nope, we had a choice of one of the 2 major parties and most of us went for the mob we 'hoped' were better, and, the gods help us, we made the right choice. I mean what would the Coalitioon have given us? Less than the near nothing we got today.
So the remaining question is, how do we force or encourage the ALP to do what needs to be done?
Because they haven't....yet.
And they must.

fred
The White Paper reads thus:

In Australia, temperatures are expected to rise by around five degrees by the end of the century. Coastal properties will be threatened by rising sea levels and tidal surges. Food production from our farms will be reduced as a result of longer, more frequent and more ntense droughts. National treasures, including the Great Barrier Reef, Kakadu wetlands and the big tourism industries they support will be under threat. That’s why we need to act decisively to protect our way of life and the Australian economy.

I can't disagree with that. But Rudd and Wong wants us to believe that a 5% cut is acting decisively. They have buckled under pressure from the polluters.

Lyn,
Business is not satisfied. It wants more. Thus the executive director of the Australian Industry Group, Heather Ridout, said the white paper was:

a positive compromise but a stretch nonetheless.The challenges for business will be exacerbated by the fact that they will have to be met at a time when businesses are being called on to manage their way through an unparalleled global economic crisis and unprecedented domestic economic uncertainty."

The executive director of the Australian Coal Association, Ralph Hillman, said coal companies should be given the same protection as aluminium and cement companies.
It is in Australia's best interests to ensure the coal industry is not disadvantaged compared to its competitors in countries that aren't planning to impose the same carbon limits

Not disadvantage?. Wasn't the whole point of an emissions trading scheme to drive change to a cleaner technology and power generation?

Les,
the electoral politics overrides the science.

Peter,
Your are right. Rudd and Co have added a little lead to the saddlebags of heavy polluters without giving enough incentive for investors to switch to emissions-free technology. So much for green-collar jobs in Australia.

Gary,
After reading everything I could find in the blogosphere about this, I think you're right about the electoral politics. The one uncertainty for me now is whether Rudd would do more on climate change if he had the senate. Some think he would, more in the interests of international diplomacy than the climate, some think he wouldn't because climate change was only raised in 2007 because it wedged Howard.

A lot of people are thinking like Fred. We're better off than we would have been, and at least 5% gives us somewhere to go.

I haven't read the thread at George Megalogenis, but it's worth reading what he has to say about household compensation. The mortgage belt will do better out of Rudd than they did out of Howard. Without massive compensation to dirty industries, household compensation would be eaten up when they pass increased costs on to consumers.

Possum does the senate thing which is a reminder that Greens voters won't preference the coalition. Even if Malcolm wanted to criticise the 5%, the ever reliable Barnaby has already deemed 5% catastrophic.

Some are anticipating more money for renewables, particularly solar (popular solar) sometime closer to the next election.

Alternatively, Rudd could have gone in hard, lost mortgage belt seats at the next election to the coalition and they could have dumped the whole thing.

On green collar jobs, they're not there yet to replace the dirty collar ones and we're looking at recession.

Rudd has given us something to be going on with while he concentrates on keeping the current political landscape in place. If he can manage to keep the polls the way they are now they'll gain more upper and lower house seats at the next election.

It's pathetic, but Fred's right. We're better off than we might otherwise be.

Lyn,
re your comment:
"Fred's right. We're better off than we might otherwise be".

True. Only marginally though. It is Howard-lite isn't it. Not all of that is explained by forcing the Coalition to pass the legislation in the Senate. And haven't they been quiet?

That comment is looking backwards. Looking forwards, the emissions trading scheme is a second step after signing Kyoto. It's a a big step to set one up, but such a small step into shaping a low emissions future. I wonder what the 3rd step will be? Something to drive investment toward a low emissions economy? A 5% cut by 2020 ain't going to do that--it's too low to shift investment.

And that investment is what is now needed. Rudd + Co seem to be unable to link that investment into creating jobs as a way of responding to the big bust in the resources sector. Rudd is throwing money everywhere to stimulate the economy but continually makes an exception of renewable energy. Where is the emphasis on fostering competition in the provision of different kinds of energy?

Gary,
What if we assume that Rudd couldn't give a toss about climate change, or that he thinks god will fix it, or something?

It was an important issue in 2007, but it's not anymore. He said he'd do something, so he's done something which allows him to say he's kept his promise, but nothing else.

He's got business, polluters and the mortgage belt onside. All he's lost is the green vote which will flow back to the ALP after preferences anyway.

There's no point the coalition making a fuss about it. It's not their territory.

I can't remember who it was, but somebody from something like an aluminium smelter was on telly last night praising it because it will drive company growth. There is no evidence that Rudd intends to give green energy or the jobs that go with that any advantage. So is it safe to assume that it's about getting into the emissions market rather than the climate?

Lyn,
there is a globally integrated carbon market with close linkages between that international market and Rudd's misnamed carbon pollution reduction scheme CPRS) .

Australian companies will be able to purchase or generated from the international market to meet their obligations under the CPRS.

So Australian companies can meet their obligations to pay $20 a tonne carbon price by participating -getting credits--- in the UN backed Clean Development Mechanism (CDM). This provides a pathway for companies to commercialise their capabilities in low carbon technologies and services.

I'm at the limit of my knowledge here but it looks as if a carbon abatement market has been established and Australian companies have been given opportunities to participate in CDM projects and credits. This low cost source of permits may lead to involvement in clean energy production.

Will this be a driver to do the same in Australia in renewable energy and energy efficiency? Who knows.

Gary,
It seems Rudd fears the unemployment stats in the short term (his term) more than he does the future outcomes of the environment.
Big business has the power to lay off large numbers of workers that never look good for the now government. This has played a big part in Rudd's turnaround/broken promise. Unemployment will be the big issue next year.