Jeff Angel is the Director of the Total Environment Centre, a legend of the Australian conservation movement and author of Green is Good. We are at a crossroads, he writes:
In the next month Australia will take some steps forwards on the journey to a low carbon economy or falter to a deadstop. In December the Rudd government will release its white paper on the emissions trading scheme (now called the Carbon Pollution Reduction Scheme) setting out timing, targets, free permits for polluters and carbon prices; and we will be present at Poznan in Poland participating in the international climate talks. Will we support a soft 2020 target or something more ambitious in line with the climate scientists’ dire warnings?
The final Garnaut report set the scene for a backdown suggesting a 5% cut if we act alone or 15% if other countries take action. Environment groups are pressing for 30-40% cuts on 1990 levels. The Polish talks are a precursor to the hoped-for final post-Kyoto agreement to be held in Cophenagen at the end of 2009. Already we have seen climate sceptic opportunists call for a halt in any action due to the financial crisis sweeping the world. To their credit Rudd and Wong have clearly committed to staying the course on a 2010 timetable for the ETS.
That’s nice, but the detail will be the real deal. At the same time there are serious concerns amongst the emerging green industries such as energy efficiency, recycling and voluntary carbon action. While the economic purists in government argue that a CPRS is all you need to send price signals about how much better efficiency and recycling are; this is a naive position. The compensation being negotiated for big polluters like coal-fired power stations and trade exposed business means they will be advantaged in the early years of a CPRS and the green sectors will lose out – crippling growth opportunities for years.
For example, big companies who pollute past a threshold will get compo and if they import paper made from old growth forests, they will have a financial advantage over more efficient Australian domestic producers who use recycled fibre and who will also be paying higher energy costs from a CPRS. The voluntary carbon market (genuine offsets and GreenPower) which has done a great job getting tens of thousands of people to take action and pushed innovation along, will find its profile seriously diminished if the CPRS absorbs their carbon gains, instead of being seen as ‘additional’ to that required by a CPRS on polluting industry. They will lose a crucial distinguishing feature as consumers will ask why they are wasting their money just too make it easier for the polluters in the scheme. These industries are calling for ‘complementary policies’ to make sure they are not adversely affected and can provide the emissions cuts we so desperately need to achieve.
Australia has truly reached a historic turning point. In my book ‘Green is Good: an insider’s story of the battle for green Australia’* I track the progress of environmental ideals up to the present day and ask the question – are we close to transition? Certainly there has never been a policy debate as big and important as the emissions trading scheme – it is about economic adjustment on a macro scale. Compare this to the long years taken to push timber getting and woodchipping from many old growth forests, and the institution of multi-million dollar adjustment programs for workers and mills. Or the slow turnover of the car fleet so that it now has much improved emissions controls and uses lead-free petrol, under clean air policies.
These were single sectoral changes – emissions trading affects all parts of the economy. It’s the big opportunity the environment movement has been working for. There was a (in retrospect) feeble attempt under the Hawke government in the late 1980s with its ecologically sustainable development process, which did canvass the early warnings about climate change. But it was scuttled under the pressure of big business and the eventual election of the conservative Howard government.
Now we will test how mature environment concern in Australia has become.
* ‘Green is Good: an insider’s story of the battle for a green Australia’ (ABC Books) was released in September.
This is a great article, and highlights the problems in trading in opportunity costs. It was all the rage to ‘fight the market with the market’, in the early naughties, and I wonder, in the wake of the global financial crisis, whether governments might re examine the market logic behind things like ETSchemes. This article shows up the unintended consequences of trading schemes like the ETS.
I am afraid that the Rudd Government believes in “market forces” acting in the Environment, at a time when the Finance Market has been shown to be totally self-serving, and unreliable.
The Murray Darling will end up being privatised, and ruined. Not sure of the order.
Garnaut is after all an economist, and he was Kevvie’s boss in the Embassy in Beijing. We need to learn to challenge his fundamental assumptions, not bow down just because we are told he is a wise old owl.
I am afraid he is leading us to a hopeless compromise. Exemptions for the largest polluters is a nonsense, based upon fear of the power of the mega-powerful companies which are destroying our world.
Fingers crossed we take the more ambitious route.
As Denis sez – Garnaut, like Stern, is an economist and it was the manipulation of the ‘dismal science’ that led to the current (& future) meltdowns.
There is no rational reason to feed such morally myopic anti-rationalists, let alone take notice of their noxious nostrums yet the bureaucracy is still beholden to them – viz the vast acreages of ads for vacancies, at quite obscne (or at least economically irrational salaries.