Aust emissions pressure builds ahead of Paris climate pact
As the microphone played up, its volume dropping in and out, the senior economist and bureaucrat who leads a government taskforce on Australia’s post-2020 greenhouse gas emissions reduction targets cracked a gag, of sorts.
“I’m just wondering if there are particular words I say and all of a sudden it goes blank,” said David Gruen, his comment provoking chuckles through the Australian National University auditorium.
The reason for the mirth was that the microphone had, mischievously, dropped out at precisely the moment he uttered a dangerous phrase, one that has, arguably, brought down prime ministers.
“We will obviously be looking at economic impacts of a range of possible sectoral approaches to reducing emissions but the government’s made it clear that it’s not interested in an economy-wide carbon tax,” Gruen had said, the microphone dropping out on the last two loaded words.
It was not a criticism of the government’s position. He was merely a bureaucrat, explaining his remit.
Despite the prevalence of climate change sceptics in government ranks, Australia has committed to joining the next big global climate pact, to be negotiated in Paris in December. Its contribution would be “responsible and fair”, Ambassador for the Environment Peter Woolcott told the same forum, hosted by the ANU’s Crawford school of public policy last month.
Unlike the Rudd government’s enthusiastic build-up to the ill-fated Copenhagen summit in 2009, Australia’s engagement with the international preparations for Paris has been low-key.
The signs of climate change scepticism and even denial within this government are plenty. Climate change was skimmed over in the recently released Intergenerational Report and energy white paper; federal funding has been granted for a new think tank associated with Bjørn Lomborg, who argues the impacts of climate change are overstated; and, rather than promoting a low-emissions future, Tony Abbott argues that coal is “good for humanity” and wants to slash the renewable energy target. Even Woolcott’s title is telling. When he was appointed in November, the role was rebadged from ambassador for climate change to ambassador for the environment.
Yet alongside this scepticism, there is also a realisation that Australia cannot completely ignore the growing international momentum towards a climate deal that demands deeper emissions cuts.
By midyear, the government will finalise its post-2020 targets.
As Gruen’s comment indicates, these targets must at least seem achievable without the policy that Abbott refers to as a “toxic, job-destroying tax”, even though many economists consider it, or a variation on it, to be the most efficient way to reduce emissions.
The dilemma was apparent this week with the publication of questions posed by other countries about the extent of Australia’s emissions reduction plans and how they would be achieved now that there was no carbon tax, no emissions trading.
The questions were submitted to an online portal as part of a United Nations process designed to increase pressure on developed countries to adopt ambitious targets ahead of the Paris summit.
They pulled no punches.
China, for instance, wanted to know what emissions reductions would be achieved by the Abbott government’s Direct Action policy and whether it would match what could have been achieved under emissions trading.
In another question, China summarised Australia’s commitments thus far and commented: “This ambition level is far below the requirement that Australia set out for advanced economies. Please clarify the fairness of such requirements.”
Brazil wrote: “Considering the low level of ambition presented until now, as well as the historical data, does Australia intend to change its unconditional target in order to increase its level of ambition?”
The United States asked whether the Emissions Reduction Fund, which is the centrepiece of Direct Action, would be the primary measure replacing emissions trading “or are other significant policies and measures being contemplated?”
It was easy to interpret the questions as evidence that Australia was being viewed internationally as a laggard, demonstrating neither the will nor policy capability to be part of the global response.
However, Howard Bamsey, who as a former special envoy on climate change was one of Australia’s most experienced negotiators, says such robust questioning is unsurprising, given Australia is seen as a “key arena for the development of climate change policy”.
“You would expect people would be looking very carefully at Australia because of the volatility of our policy in the last couple of years,” says Bamsey, who is now adjunct professor at ANU and argues that Australia must adopt more ambitious targets.
“They will be wondering if the sorts of commitments they heard from Australia are going to be followed through.”
He adds that Australia’s vulnerability to the impacts of climate change and its relatively high proportion of emissions intensive industry, as well as the leadership casualties, mean it is seen globally as a country where climate change policy matters.
Bamsey says Australia has long been known in international climate negotiations for its hard-headed pragmatism on an issue that other countries tend to see in a more sentimental light.
The logical extension of this pragmatism, Bamsey argues, should be more analysis of the opportunities presented by a transition to a lower carbon economy, rather than just the costs. Otherwise, he warns: “As the rest of the world changes, we will find ourselves with an old economy.”
The international scrutiny is only going to increase in the lead-up to Paris, where the world will try to reach agreement to keep global warming below 2 degrees Celsius. Domestically, the pressure is also rising.
The debate over targets intensified this week as the Climate Change Authority, which the Coalition sought unsuccessfully to abolish, outlined the targets it considers would be comparable with the commitments of other wealthy developed countries.
The authority, chaired by former Reserve Bank governor Bernie Fraser, recommends Australia commit to reducing emissions by 30 per cent relative to 2000 levels by 2025 and then pursue further reductions within a range of 40-60 per cent below 2000 levels by 2030.
Those sound like drastic cuts but a study released this week by the ANU and the World Wildlife Fund claims Australia can reach net zero emissions by 2050, with minimal economic cost, even without resorting to the authority’s back-up option of purchasing international credits.
The Climate Change Authority’s report says that, as the 13th largest emitter in the world, with per capita emissions that are the highest of all developed countries, Australia has a “moral responsibility” to at least match other country’s efforts, as well as this being in the national interest.
The post-2020 task would be less onerous, the authority argues, if Australia lifts its 2020 target, to aim for a 19 per cent reduction in the next five years, rather than the current 5 per cent, which is at the bottom of a range of targets previously nominated by Australia.
For a while, there were concerns that even the 5 per cent might prove elusive under current policies. The task, however, has become a lot simpler, thanks to a reduction in emissions as a result of industrial closures and declining electricity demand.
Environment Minister Greg Hunt says Australia will “easily meet” the 5 per cent target but he won’t commit yet to anything further. He gave the authority’s recommendations a frosty reception: “On their own numbers – what the CCA is proposing is not just the largest reduction in emissions intensity in the world, but a third more onerous than any other country.”
For the Minerals Council of Australia, the authority’s recommendations were irresponsible ambit claims that would slash economic growth, wages and living standards. For the Climate Institute, they did not go far enough to prevent 2 degrees of warming.
In the months ahead, much of the focus will be on the numbers. And it may get confusing, as the targets can be massaged to appear more or less ambitious, depending what year is used as a baseline.
For instance, if the government adopts a 2005 baseline, rather than the current year 2000, then the existing 5 per cent 2020 target is expressed as 12 per cent, even though the emissions reduction is the same.
Much of the momentum towards an international pact has come from the agreement struck by the world’s two biggest emitters, the US and China, which commits the US to reducing emissions by 26 to 28 per cent below 2005 levels by 2025 and by 80 per cent by 2050. China plans for its emissions to peak around 2030 as it invests heavily in renewables and low-carbon energy and introduces emissions trading schemes.
Frank Jotzo, associate professor at the ANU’s Crawford school, says the targets announced by both the US and the European Union involve a rate of reductions in emissions each year that is twice as fast as this decade, putting pressure on Australia to increase its ambition.
Given signals thus far from the government, Jotzo says: “I think what you’d expect would be a target that aims to be acceptable to the international community, aiming for Australia to be with the pack, but certainly not leading the pack.”
The target will signal Australia’s intentions. At the end of the day, though, what matters is whether Australia can deliver it.
On Thursday, the government hailed the results from the first auction of carbon abatement contracts under the $2.55 billion Emissions Reduction Fund as a success. It spent $660 million purchasing 47 million tonnes of abatement, at an average price per tonne of $13.95. This is more than the current European price of about $10 a tonne. If this result is replicated in future auctions, the fund might only secure 183 million tonnes of the 236 million tonnes reduction Australia still needs to achieve to meet the minimum 5 per cent target by 2020, and some of the abatement will not be delivered by then.
There are also concerns this abatement could be meaningless without effective limits on emissions from industry.
Independent senator Nick Xenophon was one of six crossbenchers who supported the passage of Direct Action through the senate last year, on the proviso there would be rules to prevent rising industrial emissions cancelling out abatement. He now fears the government is considering inadequate “safeguard mechanisms” to guarantee this.
Earlier this month, he accused the government of “neutering” Direct Action by reneging on commitments that the safeguards would have “real teeth”. Without this, he lamented, the whole policy “has no point”.
This article was first published in the print edition of The Saturday Paper on Apr 25, 2015 as "Pact pressure hotting up". Subscribe here.