Extract from The Guardian
With economists thinking big emissions reductions not possible under the Coalition policy, reality is about to meet slogan
- Lenore Taylor, political editor
- theguardian.com,
Slowly, inexorably, we are inching towards the time when one of the
greatest fudges in recent Australian politics will be exposed.
Tony Abbott’s political demolition of the former government’s carbon pricing scheme was based not on what many in his party believe – that climate change is not happening and there is therefore no need to do anything at all – but rather on the assertion that the Coalition could achieve “the same” environmental benefit in an almost pain-free way.
The painlessness and effectiveness of the Coalition’s Direct Action plan has long been disputed. Study after study has concluded that it would actually require far more than the allocated money ($300m, $500m, $750m and then – at least according to the original document – $1bn a year until 2020) to achieve emissions reductions, but the environment minister, Greg Hunt, simply brushed them all aside and insisted his plan would work. Since it was always so vaguely defined it was difficult for those with doubts to pursue the debate.
And post-election it turns out that “the same” environmental benefit might well be the very bare minimum 5% reduction by 2020, despite the Coalition having promised in writing to increase that target under specific circumstances. The independent regulator (which the Coalition is seeking to abolish) says under the agreed conditions it should now be trebled. The Coalition says it is sticking with 5%.
But on both these fronts – the effectiveness and cost of the policy and the target it will need to achieve – a moment of truth is imminent.
The government now has to implement Direct Action. It will set up its emissions reduction fund that will pay for what may well be useful emissions-reducing things. But it must also legislate the other parts of the Direct Action “plan”, including the “baselines” to ensure polluting industries don’t, as the minister puts it, “go rogue” and increase their emissions and undo (in terms of national emission reductions) all the good done by the projects paid for from the emissions reduction fund.
Emissions from new state-of-the-art plants or mines or land clearing are not considered “rogue” under the plan, which raises another whole set of questions about how the emissions from massive new coal mines, or from weakened land clearing laws in Queensland will impact on Australia’s ability to meet an overall emissions reduction target, even with reducing electricity demand.
But as well as that, industry is now waging a concerted campaign to water down the baselines against which any “rogue” behaviour by existing operations may be measured.
The government’s Direct Action “green paper” suggests it might do this using the already-existing reporting scheme, from mid next year, with some kind of “safeguard” mechanisms to rein in companies that exceed their baseline.
The Minerals Council doesn’t like that idea. It points out that as ore grades decline it will take more energy for existing mines to produce and process the same amount, and “gassier” coal deposits will be have to be accessed, and therefore the existing baseline might be too tough and the government might have to allow it to be varied – upwards of course.
The LNG (liquefied natural gas) industry points out that production is set to treble over the next six years, and baselines will need to take account of that.
The Australian Industry group argues that “baselines” for manufacturers would have to take account of the fact that gas prices are set to rise and many factories will switch back to electricity generated from coal. It concludes it might be better not to have “baselines” at all.
But without some limit on overall emissions, the Coalition’s emissions reduction fund will be like plugging a tiny hole in a dyke that is leaking torrents in other places.
At the same time, the government’s insistence that a 5% reduction by 2020 represents Australia’s “fair share” in global greenhouse efforts is also starting to sound hollow. By April it needs to tell the UN whether it will increase its 2020 target, and British economist Lord Stern recently told Guardian Australia that re-submitting 5% will look “weak”, as if “Australia is just not serious”.
By April next year the government will be expected to say what target it is prepared to adopt post-2020. According to leaks, the IPCC report to be released Sunday night will recommend that countries like Australia need to make very large emission reductions – perhaps 50% by 2030 – while major emerging economies like China will need to start reducing emissions in absolute terms, rather than just slowing their growth.
Others, including the United States, the European Union and China, are well advanced in talks about their increased commitments.
But according to the available modelling, even if Australia spent $88bn from 2014 to 2050 on Direct Action-type policies, emissions would still rise by around 45%. Most economists conclude that big emissions reductions under Direct Action are just not possible.
That’s exactly the point former Liberal leader Malcolm Turnbull was making when he explained in 2011 that continuing to use a big government taxpayer-funded scheme to reduce emissions in the long term would "become a very expensive charge on the budget in the years ahead".
Tony Abbott dismissed the modelling of Direct Action during the election campaign, saying the Coalition intended to “have a crack” at implementing the policy, rather than commission alternative modelling, and that even if it didn’t meet the 5% target, no more money would be allocated.
But as pressure builds domestically and internationally for Australia to do more, and to explain how we will actually do it, that kind of answer just won’t cut it. Reality will meet slogan.
Tony Abbott’s political demolition of the former government’s carbon pricing scheme was based not on what many in his party believe – that climate change is not happening and there is therefore no need to do anything at all – but rather on the assertion that the Coalition could achieve “the same” environmental benefit in an almost pain-free way.
The painlessness and effectiveness of the Coalition’s Direct Action plan has long been disputed. Study after study has concluded that it would actually require far more than the allocated money ($300m, $500m, $750m and then – at least according to the original document – $1bn a year until 2020) to achieve emissions reductions, but the environment minister, Greg Hunt, simply brushed them all aside and insisted his plan would work. Since it was always so vaguely defined it was difficult for those with doubts to pursue the debate.
And post-election it turns out that “the same” environmental benefit might well be the very bare minimum 5% reduction by 2020, despite the Coalition having promised in writing to increase that target under specific circumstances. The independent regulator (which the Coalition is seeking to abolish) says under the agreed conditions it should now be trebled. The Coalition says it is sticking with 5%.
But on both these fronts – the effectiveness and cost of the policy and the target it will need to achieve – a moment of truth is imminent.
The government now has to implement Direct Action. It will set up its emissions reduction fund that will pay for what may well be useful emissions-reducing things. But it must also legislate the other parts of the Direct Action “plan”, including the “baselines” to ensure polluting industries don’t, as the minister puts it, “go rogue” and increase their emissions and undo (in terms of national emission reductions) all the good done by the projects paid for from the emissions reduction fund.
Emissions from new state-of-the-art plants or mines or land clearing are not considered “rogue” under the plan, which raises another whole set of questions about how the emissions from massive new coal mines, or from weakened land clearing laws in Queensland will impact on Australia’s ability to meet an overall emissions reduction target, even with reducing electricity demand.
But as well as that, industry is now waging a concerted campaign to water down the baselines against which any “rogue” behaviour by existing operations may be measured.
The government’s Direct Action “green paper” suggests it might do this using the already-existing reporting scheme, from mid next year, with some kind of “safeguard” mechanisms to rein in companies that exceed their baseline.
The Minerals Council doesn’t like that idea. It points out that as ore grades decline it will take more energy for existing mines to produce and process the same amount, and “gassier” coal deposits will be have to be accessed, and therefore the existing baseline might be too tough and the government might have to allow it to be varied – upwards of course.
The LNG (liquefied natural gas) industry points out that production is set to treble over the next six years, and baselines will need to take account of that.
The Australian Industry group argues that “baselines” for manufacturers would have to take account of the fact that gas prices are set to rise and many factories will switch back to electricity generated from coal. It concludes it might be better not to have “baselines” at all.
But without some limit on overall emissions, the Coalition’s emissions reduction fund will be like plugging a tiny hole in a dyke that is leaking torrents in other places.
At the same time, the government’s insistence that a 5% reduction by 2020 represents Australia’s “fair share” in global greenhouse efforts is also starting to sound hollow. By April it needs to tell the UN whether it will increase its 2020 target, and British economist Lord Stern recently told Guardian Australia that re-submitting 5% will look “weak”, as if “Australia is just not serious”.
By April next year the government will be expected to say what target it is prepared to adopt post-2020. According to leaks, the IPCC report to be released Sunday night will recommend that countries like Australia need to make very large emission reductions – perhaps 50% by 2030 – while major emerging economies like China will need to start reducing emissions in absolute terms, rather than just slowing their growth.
Others, including the United States, the European Union and China, are well advanced in talks about their increased commitments.
But according to the available modelling, even if Australia spent $88bn from 2014 to 2050 on Direct Action-type policies, emissions would still rise by around 45%. Most economists conclude that big emissions reductions under Direct Action are just not possible.
That’s exactly the point former Liberal leader Malcolm Turnbull was making when he explained in 2011 that continuing to use a big government taxpayer-funded scheme to reduce emissions in the long term would "become a very expensive charge on the budget in the years ahead".
Tony Abbott dismissed the modelling of Direct Action during the election campaign, saying the Coalition intended to “have a crack” at implementing the policy, rather than commission alternative modelling, and that even if it didn’t meet the 5% target, no more money would be allocated.
But as pressure builds domestically and internationally for Australia to do more, and to explain how we will actually do it, that kind of answer just won’t cut it. Reality will meet slogan.
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