Wednesday, September 7, 2016

Let's not blow our big chance for progress on climate change

Our attitudes to climate change are becoming like our attitude to death: we know we must face up to it one day, but right now we'd prefer to think about something else.
This may explain why the media's coverage of a potentially breakthrough report from the government's Climate Change Authority focused on environmentalists' criticisms of it rather than its actual content.
Similarly, why focus on the world's two biggest greenhouse gas emitters, China and the United States, using the G20 meeting in Hangzhou to ratify the Paris climate change agreement – thus encouraging other countries to do likewise and raising hope the deal will come into effect this year – when you can speculate about conflict over the South China Sea and foreign investment?
Forgive me, but I'd never make a card-carrying greenie, righteously condemning any proposal to act on climate change that's less than heroic – as both the Paris agreement and the climate authority's report on the policies we need to ensure we deliver on our commitment, most certainly are.
I've never believed that if you can't have it all, you're better off having nothing. Nor that if you make a less than perfect start, this precludes you from getting better over time.
Our commitment – reached when Tony Abbott was still in charge – is to reduce our emissions of carbon dioxide by 26 to 28 per cent on their level in 2005 by 2030.
This is less demanding than many other countries' commitments and, in any case, all the commitments aren't enough to achieve the stated goal of limiting global warming to below 2 degrees.
Although the climate authority was established by Julia Gillard, the Coalition has replaced most of its members with people not known for their deep commitment to environmentalism.
It's chaired by a former director of the National Farmers Federation, joined by, among others, a former Liberal chief minister and boss of a top industry lobby, and a former National Party minister.
When Abbott abolished Gillard's euphemistically named "price on carbon" – it was an emissions trading scheme, but initially with the price set by the government at $23 a tonne of carbon dioxide – he replaced it with a "direct action plan" consisting of a taxpayer-funded emissions reduction fund used to pay farmers and others to reduce their emissions.
This was combined with a "safeguard mechanism" designed to prevent gains from the purchased reductions being undone by increases in emissions elsewhere in the economy.
Under the safeguard, about 140 large businesses that each have plants with direct emissions of more than 100,000 tonnes a year have been given an emissions "baseline" they must not exceed.
Many experts have criticised direct action as inadequate to achieve our new commitments, especially considering the government's budget pressures.
The greenie evangelists are calling on the government to confess the error of its ways, repent its manifold sins, scrap its evil direct action plan and replace it with measures so politically painful as to prove it is truly born again.
The climate authority's proposals are a little more conscious of politicians' aversion to losing face. They thus have a good chance of being accepted.
Whatever it says, the government must know its present arrangements are insufficient to meet its international commitments without hugely increased cost to taxpayers.
That's particularly true since, as the authority points out, the Paris agreement itself requires countries to review and improve their commitments over time.
The authority avoids the trap of proposing the government scrap what it's doing and start again from scratch. Rather, it shows how the government can build on its existing policies to strengthen its efforts.
Rather than proposing restoration of an emissions trading scheme, or the imposition of some economy-wide carbon tax, the authority takes the less economically virtuous but more practical approach of choosing between price-based and regulation-based measures, depending on the circumstances of particular industries.
That's why its report is titled Towards a Climate Policy Toolkit.
Since electricity generation is by far the greatest emitter of greenhouse gases, the authority proposes that the industry's present baseline under the safeguard mechanism be replaced with an "emissions intensity scheme", whose baseline would be reduced to zero between 2018 and "well before 2050".
In practice, this would require fossil fuel-based generators to subsidise renewable generators, eventually causing almost all generation to be from renewables. It would raise retail electricity prices somewhat, but by far less than under the Gillard scheme.
For other industries covered by the safeguard mechanism, their emissions baselines should decline in line with our Paris commitments.
Elsewhere, the authority wants the government to impose emissions reduction standards on new vehicles, continue and strengthen household appliance standards and building codes, and tighten regulation of emissions from landfill waste.
This toolkit approach minimises the risk of hip-pocket opposition from consumers. Building on existing arrangements rather than starting again is attractive to business groups.
The proposals not only build a bridge for the government to move to policies more adequate to the challenge we face, they build a bridge to a bipartisan climate change policy because the authority's proposals fit well with those Labor took to the election.
And bipartisan policy provides just the certainty needed for business to stop arguing the toss and accept that, since our move to a decarbonised economy is now inevitable, it should get on with adjusting.