Analysis
Updated
Governments around the globe are grappling with ways
to mitigate climate change, but will they be able to successfully manage
the competing demands of saving the planet while also keeping their
economies going?
Some of Australia's biggest emitters have been put on notice and they are not happy about it.Under a bombshell Environmental Protection Agency (EPA) ruling, companies could face strict new rules which stipulate all new projects and expansions in WA which emit more than 100,000 tonnes of carbon dioxide equivalent a year be carbon-neutral.
WA's environmental watchdog has put the policy forward as it grapples with ways to cut carbon emissions, which just keep rising.
The revised rules, which are effective immediately, could eat into the profits of big developers.
But the ruling is only a recommendation and the West Australian Government, which has heavily focused its message on job creation and stimulating the economy, can choose to ignore it when giving developments the green light.
Regardless, it has raised the ire of the resources industry, with Woodside's chief executive Peter Colman saying he was perplexed and angry about the decision, describing it as "red tape gone mad".
Move reveals climate desperation
The bold move unanimously endorsed by the board of the EPA, which is charged with overseeing and managing the state's greenhouse gas emissions, gives the public an insight into the desperation being felt inside some government departments at the lack of progress towards climate targets.You only have to look to Canberra to see how difficult climate policy appears to be for politicians. It has helped kill-off seven prime ministers.
This is exactly the point the watchdog is making.
It is responsible for making sure we hit our targets, but if the policies set by Canberra do not allow for this to be achieved, the EPA will attempt to take matters into its own hands.
When releasing his report, EPA chairman Tom Hatton politely acknowledged the Commonwealth was the lead agency on Australia's efforts to reduce emissions, in line with international obligations, but in the same breath also noted that its efforts had not gone far enough.
"Over the past two decades the EPA has recommended greenhouse gas abatement measures for around 40 proposals, however more needs to be done to limit global warming, consistent with the Paris Agreement," Dr Hatton said in a report.
"The revised guidance … clarifies what is required from proponents of significant proposals in the state to avoid, reduce and offset their impacts, and includes a more stringent approach to offsets."
The report went as far as to say effective regulatory requirements to mitigate greenhouse gases at a federal level were "absent", which meant a greater share of the burden would fall to regulators in state and territory jurisdictions.
Most states and territories, fed up with a lack of action at a federal level, have now moved to introduce their own renewable energy targets, but the WA Government has refused to do so.
Premier Mark McGowan was also quick to distance himself from the EPA's ruling, describing it as a step too far — again reinforcing that his main aim was job creation.
Mr McGowan said the policy would put WA producers at an unfair disadvantage to big emitters in other states and territories, which many would argue is a fair point.
But at what cost is he willing to ignore the effects of climate change in his attempts to create jobs?
As emissions rise, companies hit back
The state of WA, which is dependent on mining and resources, reported a whopping 27 per cent jump in greenhouse gas emissions between 2000 and 2016. It was the only Australian jurisdiction to experience an increase during the period.The state generated 80 million tonnes of CO2 — or 16 per cent of the nation's greenhouse gas emissions in 2017 — making it the second highest per capita emitter of all the states and territories.
But WA is not the only beneficiary of the state's big mining and oil and gas projects, which keep hundreds of thousands of people employed and boost Federal Government coffers by billions of dollars in royalties each year.
Unsurprisingly, the industry's response to the EPA's announcement was swift.
While it has been difficult to find out the extent to which companies would be affected, the new guidelines would most certainly affect Chevron's Wheatstone project and Woodside's Browse and Scarborough developments, which are currently being assessed.
Woodside chief executive Peter Coleman said the company's Pluto project was also at risk from the policy.
The move would cost the big players billions of dollars, as they would be forced into buying carbon credits to offset emissions.
Profits aside, the bigger threat could be big business threatening to defer projects.
That would send fear through federal and state governments as to what that means for job creation and economic growth.
It's not just a state problem
The threat of job losses is never something a Federal Government wants hanging over it ahead of an election.And if previous campaigns are anything to go by, the mining and resources industry will show it is willing to fight for its livelihood, no matter the cost.
The "R" word — recession— was muttered this week as national accounts data revealed the nation was in a recession on a per capita basis because households just aren't spending.
On a positive note, Australia is getting more for its exports due to higher commodity prices, and this is helping to keep the economy afloat.
This fact will surely become part of the argument for those opposed to the policy changes.
While the exact implications of such a policy are not yet clear, what is certain is that the Federal Government will do everything it can to create jobs and keep the economy moving ahead of the looming federal poll.
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