Wednesday, November 17, 2010

Others doing more than us to cut emissions

To adapt an old saying, bad news is halfway round the world before good news has got its boot on. The media love bad news because they know their customers find it more interesting. But when the news is mixed, ignoring the good bits can leave you with a false impression of reality.

You already know the latest bad news on action to limit climate change: the loss of a Democrat majority in the House of Representatives has obliged Barack

Obama to abandon his efforts to get an emissions trading scheme through Congress.

Many have taken this as further evidence - on top of our own Senate's refusal to pass a trading scheme and the failure of countries at the Copenhagen conference to agree to binding emissions-reduction targets - that action on global warming is getting ever less likely.

The sceptics keep pointing out that, since greenhouse gas emissions are a global problem, if all the major countries can't agree on action it's pointless for any individual country to bother doing anything. That's true even for the United States or China, let alone a small country like Australia, which is responsible for just 1.2 per cent of the world's emissions.

To this we get the familiar refrain from the small-minded: why should we be the first to do the right thing? Why not let someone else make the sacrifice this time?

So what's the good news? There's a weakness in the logic that, unless we all agree, it's not worth anyone doing anything. We don't actually have to reach an explicit agreement.

There's nothing to stop each of the major emitting countries from acting unilaterally in the hope that, this way, a tacit agreement to act could be formalised later. Perhaps this was always the smartest way to achieve an agreement.

Wishful thinking? Don't be so sure. Contrary to popular impression, Copenhagen wasn't a total failure. The countries did reach an accord and one thing they agreed on was to each submit a pledge of the targets they were prepared to agree to.

Dr Frank Jotzo, director of the Centre for Climate Economics and Policy at the Australian National University, has studied those pledges and been encouraged by what he found.

He looked at 13 major countries that between them account for about two-thirds of global emissions. Among the developed countries he took the US (accounting for 14 per cent of global emissions), the European Union (11 per cent), Russia (4 per cent), Japan (3 per cent), Canada (2 per cent) and Australia.

Among the developing countries he looked at China (15 per cent), Brazil (6 per cent), Indonesia (4 per cent), India (4 per cent) and Mexico, South Korea and South Africa (each with 1 per cent).

All the targets to which the countries committed themselves were for their emissions in 2020. On the face of it, they varied greatly. The developed countries pledged to reduce their emissions by some absolute amount relative to their emissions in an earlier base year, whether 1990, 2000 or 2005.

China and India pledged to reduce their "emissions intensity" by a certain percentage - that is, the amount of emissions per dollar of their gross domestic product. The other developing countries pledged to reduce their emissions by a certain percentage below what they would otherwise have been in 2020.

What Jotzo did was to put all the targets onto various comparable bases, using certain assumptions. When compared in terms of absolute reductions in emissions the pledges varied widely, with emissions by China and India continuing to grow - but reductions in all other countries, developed and developing, bar Russia.

When compared on the basis of emissions intensity, however, remarkable similar percentage reductions were pledged, with the developing countries targeting bigger reductions than the rich countries. China, for instance, is targeting a reduction of 40 to 45 per cent over 15 years.

And when compared on the basis of reductions from what emissions would otherwise have been, the targets reveal a similar degree of effort.

Because we haven't done much - and because Obama's promise to continue working to achieve emissions reductions by other means received little attention - we happily assume other countries haven't done much.

Not true - especially not for China. It is actively pursuing the target it reported to Copenhagen. It has ordered the shutdown of inefficient and high-emitting coal-fired power stations and their replacement with high-efficiency coal-fired generators. It has imposed energy performance standards for emissions-intensive industries and vehicle emission standards, is offering various incentives for clean energy and is spending bucketloads on developing renewable energy.

You can use trading schemes or a carbon tax to impose an explicit price on emissions of carbon dioxide. That's the best way to do it. But government subsidies and other measures can do the same thing indirectly.

A study sponsored by Australia's Climate Institute has sought to measure the implicit carbon price in various countries. It's $29 a tonne in Britain because its participation in the European trading scheme is backed up by various domestic measures.

It's $14 a tonne in China thanks to the measures I've mentioned and it's even $5 a tonne in the US because of federal subsidies to clean energy sources and state renewable energy targets.

And what do our bits and pieces add up to? A princely $1.70 a tonne.

Two conclusions. All the key countries - even the US - have pledged their willingness to take significant action and some, including the biggest single emitter, China, are getting on with it. As other countries see this, they'll become more active themselves.

Far from being the country that's leading the way and making sacrifices while others hang back and marvel at our naivety, Australia - a country with more to lose than most - is dragging the chain.