Rudd’s white flag on climate change
by Senator Christine MilneDeputy Leader
Australian Greens
With Barack Obama's arrival in the White House giving hope for a global shift in attitude and action on climate change, Prime Minister Rudd may be about to be left floundering in the rising tide of history.
The useless emissions reduction target and self-defeating design of Labor's emissions trading scheme tell only half the story. The government pre-empted the announcement by throwing half a billion dollars at expanding coal infrastructure in the Hunter Valley, and followed it up with a badly designed incentive scheme for renewable energy that will ensure it does not grow beyond a marginal player to challenge the dominance of the coal sector. These decisions are entirely consistent with the Rudd government's ongoing approach to climate change which sees reducing emissions as a problem to be avoided rather than an opportunity to be exploited.
The Age newspaper's editorial of December 19 put it clearly:
“Each time the government announces a major policy initiative on energy and climate policy, it has managed to convey the impression that a politically convenient compromise has been preferred to policy that might actually encourage fundamental changes in energy use.”
What we need now is transformative policy to turn Australia from a highly polluting resource-based economy into a zero emissions society based around our natural assets of sun, wind, wave and clever, innovative people. Instead, the white paper delivered a policy structure that pretends to encourage change while doing everything it can to protect the status quo.
It does this in two fundamental ways: by setting an extremely weak target and by shielding as many relevant players as possible from the impact of the scheme through free permits, tax cuts and cash handouts. The 5% target emissions reduction target Mr Rudd announced is completely globally irresponsible. Instead of setting the precedent of a country willing to put its best foot forward and play its responsible role on the world stage, it takes us back to the bad old days of special pleadings from every country. Australia will go into the Copenhagen negotiations with a fixed position – no target stronger than 15% – which is contrary to the spirit of the process and can only serve to undermine global progress, angering those countries pushing for a genuine response to the climate crisis.
If other countries follow Rudd's short-sighted lead, greenhouse gases will soar beyond 550 parts per million in the atmosphere (some say 650 ppm), a recipe for catastrophic climate disruption. If we are to have any reasonable chance of avoiding runaway heating, Australia would need to reduce emissions by at least 40% below 1990 levels by 2020, on our way to building a zero emissions economy as soon as feasible.
Importantly, a 40% target would not see Australia taking a lead. It is equivalent only to us playing a reasonably equitable role in the global emissions reduction effort. A truly ambitious global agreement – a plan to pull out all stops to prevent catastrophe by reducing carbon well below 400 ppm – would see Australia taking on an even more stringent target.
Beyond the target level, the scheme's design is fundamentally flawed. The whole point of emissions trading is to drive emissions reductions and behavioural change by shifting investment from polluters to clean options. The price signal caused by polluters having to buy permits provides the stick, while the sale of permits delivers large amounts of cash which the government can use as a carrot. By investing that cash in energy efficiency, public transport, switching to renewable energy, stopping logging and helping revitalise affected communities, the government would help people reduce both emissions and the increased carbon costs they would otherwise face.
This scheme, on the other hand, gives the biggest polluters most of their permits free, neutering the price signal to them, and then uses the drastically reduced cash flow to undermine the signal for everybody else by delivering tax cuts and increased welfare payments. Only a tiny proportion of the revenue will be used to reduce people's carbon liability by reducing their energy consumption.
Fifty per cent of all revenue raised will go to shielding polluters from the scheme's impact through free permits and cash and, what's worse, this is projected to rise over time! There is a real risk that this largesse to polluters will see the scheme unable to pay for itself into the future. Forty-seven per cent will go to shielding householders from the impact through the short-sighted mechanism of cash handouts instead of the long-sighted approach of energy efficiency to reduce costs and pollution. A measly three per cent of the scheme's revenue will actually go towards helping anyone reduce emissions and driving the transformation to renewable energy and energy efficiency.
This was a tremendous lost opportunity. By investing the billions of dollars raised through auctioning all pollution permits into emissions-reducing options, we could have had twice the bang for our buck, building a strong, resilient, diverse, green economy rich in green jobs. We could have rolled out energy efficiency in homes, offices and factories across the country. We could have built intelligent networks to take the electricity grid out to renewable energy hotspots. We could have done this while still increasing welfare payments to meet the cost-of-living increases that will come with both climate change and action to prevent it.
There are plenty more flaws with this scheme, not least the short-sighted decision to completely shield the transport sector from any impact and to actively prevent “additional” activities – the scheme's emissions cap will also act as a floor, meaning that any actions people take voluntarily to reduce their emissions will simply make it cheaper for big polluters to meet the target, rather than “adding” its impact on top of what polluters have to do.
The Rudd government has failed this critical test of leadership. It has betrayed all those who voted for a government that would take climate change seriously. The Greens, however, have not forgotten and will not give up. We will do everything we can in the Senate and on the streets to ensure that this scheme is “greened up”.
Senator Milne is the Australian Greens spokesperson on Climate Change, Education, Innovation, Industry, Science and Research, Resources and Energy, and Infrastructure.
Some are more equal than others: http://christine-milne.greensmps.org.au/blog/some-are-more-equal-others-whatdoes-emissions-target-mean
Green Car Plan is one small step in the right direction: http:// christine-milne.greensmps.org.au/blog/green-car-plan-onesmall-step-right-direction
Christine Milne's speech to the Sydney Institute - the Greens, balance of power and climate politics: http://christine-milne.greensmps.org.au/blog/christine-milnes-speech-sydneyinstitute- greens-balance-power-and-climate-politics
Rudd Backs the Wrong Horse on Coal: http://christine-milne.greensmps.org.au/blog/rudd-backs-wrong-horse-coal
Source: Australian Options, Issue 56, Autumn 2009, pp. 10-11.