On the "Rooted" blog today, Tim Hollo asked: Is an ETS automatically more ambitious than a tax?
This debate is urgent, as a grouping of large NGOs enters the public arena to advocate for politically-based climate targets. It's disturbing to see that the Climate Institute and the Southern Cross Climate Coalition (SCCC) are it again, pitching for climate policy targets that fall well short of what the climate science requires.
[It is interesting that the SCCC sees the ACTU still linking with the Climate Institute, which was founded with philanthropic support, but is now financially dependent on big business, including GE, Westpac, KPMG, OgilvyEarth, PacHydro, AGL and Jemena! This seems an usual relationship for the ACTU to be engaged in.]
The SCCC says a policy foundation is that "Australia’s domestic pollution levels are declining by 2013 and are able to be reduced by at least 25 percent by 2020 (from 1990 levels) as our contribution to an ambitious international climate agreement."
This blog has previously looked at how a number of large environment and NGOs went minesweeping for Labor's crook emissions trading scheme, and what's up with emisions reductions of 25-40% by 2020.
I thought getting beaten to a pulp in the 2008-2009 CPRS debate would have taught these groups something. Back then, they tied the success of Labor's climate policy to a process that was obviously failing long before it died at the December 2009 Copenhagen climate conference, in what Sweden's Environment Minister, Andreas Carlgren, called a ''great failure''.
While much of the world recognised that commitments under Kyoto were a disaster, in Australia Kyoto was used in 2006 and 2007 as a stick with which to beat the Howard government. That suited Labor and the big environment NGOs, but this strategy reinforced a public view that the international process on which Kyoto was built could save us.
How else to explain groups such as the Australian Conservation Foundation, Climate Institute and Worldwide Wildlife Fund supporting Labor's decision to make the polluter-friendly trading scheme dependent on the outcome of the Copenhagen summit? Before the doors had closed on Copenhagen, this strategy was in tatters, and Rudd's credibility. From there it was a short skip to the climate backflip and his loss of the PM's job. And a 5% by 2020 target which both major parties took to the election.
How can we start this discussion anew, other than by arguing for what the science demands? The strategy for acceptable increments assumes we have got decades to slowly build on a series of increments - we don't.
The climate system is already passed significant tipping points, including the total loss of Arctic sea-ice as we head towards a seasonally ice-free Arctic Ocean. The most detailed satellite information available shows that ice sheets in Greenland and western Antarctica are shrinking faster than scientists thought and in some places are already in runaway melt mode. Even if greenhouse gas levels were to stabilise at today's level, "then our natural relationship suggests that the sea level would continue to rise to about 25 metres above the present”.
It's not hard to demonstrate that even for a 2-degree target (which would not avoid the impacts just listed) and an equitable reduction in emissions, Australian's carbon budget runs out in under a decade! Surely this must be the starting point?
Most in the community climate action sector are extremely wary of the conversation being pushed back into an ETS with poor outcomes, in a tragic repeat of history. A test for Labor will be its willingness to bury the CPRS remains.
The CPRS was a policy race-to-the-bottom, locking in a brown economy by failing to cut emissions below the baseline till 2035, in the vain hope that clean coal would then kick in, and relying on importing permits as a substitute for emissions reduction. Rudd ignored Garnaut's warnings and caved into the big polluters with obscene levels of compensation. The Labor-oriented think tank, the Grattan Institute, found industry assistance "a $20 billion waste of taxpayers’ money... many of the proposed free permits would delay structural reform that will ultimately improve Australian living standards. Where businesses are unsustainable, government support should be directed to assisting individuals and communities to adjust, not propping up profits. In the few industries where some assistance is justified – particularly steel and cement – assistance could be delivered better, at lower cost to taxpayers, through border tax adjustments".
Andrew Macintosh, associate director of the ANU Centre for Climate Law and Policy, describes the CPRS as "a spectacular screw-up from a policy and political perspective". He says the first version had a modicum of policy credibility but, by the time it got to version four in late 2009, it was farcical: "The mitigation targets were weak and the government caved in to every half-baked plea for special assistance from industry, thereby stripping the scheme of economic credibility. Coal generators were offered $9 billion-$12.5 billion worth of free permits over 10 years... emissions-intensive trade-exposed industries would get $48 billion-$83 billion over 10 years... the list of handouts was never-ending."
If a new carbon pricing mechanism is re-built from the CPRS, its hard to see in not falling victim to the same special interests and gang of rent-seekers, and the lure of offshore permits. The very structure of emissions trading builds a market in carbon pollution permits that can become detached from the goal of emissions reduction. Cap or trap?, a recent study of the European Union's emissions-trading scheme for 2008-2012, found it will reduce emissions by only 32 million tonnes despite covering annual emissions of 1.9 billion tonnes.
It also found that says the availability of cheap offsets could allow Europe's domestic emissions to grow a staggering 34 per cent from current levels by 2016. And those offsets have been systematically rorted. Firms participating in the Kyoto Protocol Kyoto's Clean Development Mechanism (CDM) carbon scheme are abusing it by artificially inflating their greenhouse gas emissions, thereby allowing rich nations' emissions to rise significantly, according to CDM Watch.
This is not to say that the mechanism debate is more important the the outcomes we aspire to, but once bitten...