PM's way on climate allows profit from pollution

The Age
December 14, 2006
By Kenneth Davidson

Climate change is heating up as a political issue in Australia. Prime Minister John Howard has appointed a taskforce of climate sceptics and major polluters "to advise on the nature and design of a workable global emissions trading system in which Australia would be able to participate".

Really? Howzat for writing the policy into the reference? The Government is looking for a method of creating legal rights for industry to profit from pollution. Opposition Leader Kevin Rudd has appointed Peter Garrett as Labor's spokesman on the environment. Garrett has made it clear that he will not support Rudd's decision to give the green light to removing restrictions on uranium exports until the ALP federal conference in April gives Rudd's decision the green light. Labor is also in favour of increasing Mandatory Renewable Energy Targets to encourage the expansion of electricity generation from renewables. Good stuff.

Both major parties are playing politics. They are extremely reluctant to come to grips with the central issue - whether to use carbon taxes or some form of "cap and trade" to reduce greenhouse gas emissions soon enough to prevent a climate-induced catastrophe. Surely somebody in the major parties can join the dots. Australia is suffering a 10-year drought and, although summer has barely started, experiencing the worst bushfire threats since 1939. Are they waiting for something to come up to save the "lucky country" before the bushfire season reaches its peak in February? Globally, recent reports show that carbon emissions are rising at an increasing rate despite all the talk.

British Chancellor George Brown's decision to ignore in his budget this week Sir Nicholas Stern's recommendations of the urgent need for strong actions on global warming sparked Stern's resignation from the Treasury and howls of protest from both sides of British politics. But all is not lost in Britain. Up-and-coming Environment Minister David Milliband is pushing ahead with a radical proposal, which, if adopted, will ensure that emissions are cut year by year towards a sustainable level. Even more importantly, the Conservative Party supports the plan because it has been widely debated, leading to a discussion paper prepared by the Centre for Sustainable Energy for the Department of the Environment published last week.

The system involves individual carbon rationing in much the same way as food and petrol rationing applied during WWII. According to the report, the issue of individual energy quotas for greenhouse gas emissions "has the potential to constrain in an economically efficient, fiscally progressive and morally egalitarian manner the 40 to 50 per cent of UK carbon dioxide emissions caused directly by individuals".

According to David Fleming, who devised the tradeable energy quotas (TEQs), they are an electronic system for rationing energy in which every adult is given an equal number of units and industry and governments bid for the units at a weekly tender. The units can be traded. The national quota is set by an independent body, which produces a budget, fixed over five years and projected for a further 20 within global sustainability parameters.

According to Fleming, TEQs are better than carbon taxes because the carbon budget is a guarantee that the reduction will be achieved. If taxation were high enough to influence the behaviour of the rich, it would price the poor out of the market, taking money from people at the time they need it to make energy-reducing investments.

And the conflict with the economy? The CSE report quotes Archbishop of Canterbury Rowan Williams, who said "the economy is a wholly owned subsidiary of the environment". The CSE said "the potential costs of climate change are so high as to be unquantifiable in anything other than economically theoretical terms, and much of the damage from climate change will be irreversible. This means a premium should be placed on the certainty with which policy instruments can deliver greenhouse gas emissions reductions, leading to the conclusion that permits are more appropriate instruments than taxes for delivering climate policy objectives."

According to the experts, another five years of "business as usual" and emissions will take atmospheric carbon to a level likely to produce a final temperature increase by two degrees. The scientific view is that this is the point at which positive feedback mechanisms will start to trigger runaway climatic change.