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Aug 14 2013

Australia’s major parties plan 20 years of climate inaction

Australia’s two major political parties – the incumbent Labor government led by Kevin Rudd and Liberal-National Coalition opposition led by Tony Abbott – present themselves as having quite different policies on climate change. Labor, together with the Greens, has legislated a fixed carbon price soon to morph into an internationally-linked emissions trading scheme (ETS). The Liberals propose to repeal the carbon price and replace it with a “Direct Action Plan” based on voluntary incentives for polluters to pollute less. Liberal climate spokesperson Greg Hunt recently summed up the partisan divide as follows:

My view is that this is a 20-year system on our side, versus a 20-year carbon tax on their side… It’s a once-in-a-generation choice of a massive manufacturing tax… or no tax but an incentives-based scheme.

In this post I will argue the reality is that both Labor and the Liberals offer 20 years of no meaningful action on climate change.

Australian emission trajectories 1990-2030

Figure: Australia’s past and projected future emissions from 1990-2030. Grey line = historical emissions. Black line = historical emissions excluding LULUCF. Brown line = business-as-usual projection. Light pink line = Kyoto Protocol first commitment period target. Bright pink line = Kyoto Protocol second commitment period target. Red line = domestic emissions with low carbon price. Orange line = domestic emissions with medium carbon price. Blue-grey line = domestic emissions excluding LULUCF with medium carbon price. Yellow line = present bipartisan target. Purple line = upper end of conditional target range. Lavender line = Climate Change Authority’s proposed target including offsets. Green line = the target I personally proposed to the Climate Change Authority (shown for comparison).

We have already had 25 years of no meaningful action in Australia and around the world (if you start counting in 1988, the year climate change emerged as a major issue on the international political stage). Politicians back in the 1980s should have heeded the emerging warnings from scientists that fossil fuel CO2 emissions were warming the planet. Australia did promise to cut its emissions 20% by 2005, as recommended by a 1988 conference in Toronto. They should have then introduced regulations to gradually phase out fossil fuels over the then-coming decades. Instead, governments chose to listen to neoliberal economists and fossil fuel lobbyists, deciding to deregulate their economies and grow their fossil fuel industries. Both Labor and the Liberals continue to follow essentially the same strategy today, but have veiled it with an increasingly sophisticated veneer of greenwash. This greenwash can be categorized in two distinct phases.

Phase 1 began around 1990 under the Hawke Labor government, and continued through the Keating Labor and Howard Liberal governments. The Liberals even took a somewhat ambiguous position on whether anthropogenic global warming is a real and serious problem. Phase 1 was characterised by an emphasis on voluntary policies and grant programs, which by definition cannot guarantee results, and whose real main function was to justify delaying mandatory policies such as a carbon price (and sabotaging the Mandatory Renewable Energy Target). Funding was directed to research and development (R&D) to justify delaying renewable energy deployment.

Instead of absolute emissions reduction targets, Phase 1 policies were aimed at (supposedly) reducing emissions relative to business-as-usual, and measures of progress tended to focus on emissions per economic output (which tends to reduce automatically). At Kyoto negotiations in 1997, Australia secured a target that would allow absolute emissions to increase 8% relative to 1990 by 2008-2012, and also insisted on being allowed to count one-off reductions in LULUCF emissions (land use, land use change, and forestry) as an offset for increasing industrial emissions (despite the reality that the former is far less permanent than the latter). Meanwhile, Australia promoted international agreements outside UN climate talks as the true solution to climate change (to avoid any binding national emissions targets).

As a consequence of Phase 1, Australia’s emissions excluding LULUCF increased by 30% from 1990 to 2010, the last year for which finalized data is available. (Technically, 2011 data is now available here, but because it does not include LULUCF emissions for 1991-2007 I have instead chosen to rely consistently upon this 2012 document.) Yet Australia has overachieved its Kyoto target, because according to Kyoto accounting rules its emissions are just 2% above 1990.

Phase 2 began (surprisingly) in the final months of the Howard Liberal government, after Phase 1 finally wore thin in late 2006, with an upsurge in media attention to climate change and disillusionment with Howard’s climate policies. To neutralize public concern, Howard organized a taskforce of industry lobbyists to design Phase 2: an emissions trading scheme which would begin around 2012 and allow international offsets. Phase 2 had been foreshadowed much earlier, when Australia advocated international emissions trading at Kyoto. This paradigm has been continued by the first Rudd Labor, Gillard Labor, and second Rudd Labor governments, while in opposition the Liberals have essentially reverted to Phase 1.

In Phase 2, politicians acknowledge that anthropogenic global warming is real and serious, but ignore the implied need to phase out fossil fuels. They admit greenhouse gas emissions represent a market failure, but insist the cheapest way to address it is with a market-based mechanism with as few restrictions as possible. The market mechanism creates a false sense of security and provides a convenient argument against more stringent policies, causing climate action support to recede as the fossil fuel industry thrives. A locked-in trajectory of weak emissions caps actively limits action because carbon permits give polluters a legally-recognized right to pollute. Meanwhile, international offsets allow emissions in Australia to continue rising. International offsets are problematic because they link Australia to failing policies, are notorious for fraudulent accounting, prevent structural economic transition in Australia, and neglect Australia’s responsibility to lead.

At the present election, then, the choice between the major parties is a 20-year continuation of Phase 2 from Labor or a 20-year reversion to Phase 1 from the Liberals. In other words, it’s 20 years of international offsets versus 20 years of voluntary incentives. Neither seems likely to meaningfully achieve the bipartisan emissions target of 5% below 2000 by 2020, and even if the policies succeed the target is meaninglessly weak. The 15% target recommended by the recently leaked CCA Caps and Targets Review discussion paper is little better.

Under Labor, when Australia’s fixed carbon price becomes an ETS in July 2014 or July 2015, international offsets and other policy flaws will actively prevent domestic emissions cuts. According to government projections, by 2020 Australia’s domestic emissions will actually increase 13% above today, 16% above 1990, and 43% above 1990 if the land sector is excluded. Worse, those projections assumed a carbon price of $29/tonne, but it is now expected to fall to $6/tonne. Australia’s domestic emissions under a low carbon price are projected to be 18% above today and 21% above 1990. This reliance on international offsets is projected to continue until as late as the mid-2030s, when fossil fuels will still provide ~60% of Australia’s electricity (compared to 90% today).

Also, the numbers for past emissions seem to get adjusted upwards over time for reasons that are opaque to me. For example, this 2008 document stated that Australia’s total emissions in 2000 were 552 Mt CO2e, meaning the 2020 target of 5% below 2000 amounted to 525 Mt. Yet this 2012 document states 2000 emissions were 566 Mt, thereby redefining the 2020 target as 537 Mt. 1990 emissions have also been adjusted slightly upwards from 547 to 550 Mt, meaning Australia’s Kyoto Protocol target of 0.5% below 1990 averaged over 2013-2020 is merely 0.05% below the 2008 estimate of 1990 emissions.

What about the alternative government? Although the Liberals oppose emissions trading and international offsets, their description of their own policy as a “Direct Action Plan” is mere spin. Their proposed Emissions Reduction Fund would reward polluting companies who voluntarily reduce their emissions relative to projected business-as-usual growth, similar to the Howard government’s voluntary programs. It is highly dubious whether it will achieve its target, especially considering many details remain to be determined through consultation with polluters. The voluntary nature of the policy means no requirement for businesses to participate, no penalty for continuing business-as-usual, no guarantee that any emissions cuts would take place, and no guarantee that claimed emissions cuts would not have happened anyway. It would have only around $1 billion per year to spend, and would not be allowed to go over budget. And the Liberals plan to again rely mainly on sequestering carbon in the land.

I don’t trust the Liberals to even implement their policy. It has been argued that if elected the Liberals may sneakily replace the Direct Action Plan with either nothing at all as advocated by Liberal-aligned think tank the Institute of Public Affairs, a baseline-and-credit ETS as advocated by independent Senator Nick Xenophon, or even a cap-and-trade ETS like Labor’s as advocated by the Australian Industry Group. Also, comments made by some Coalition politicians make the Plan sound like a grant program where projects are chosen by the government, instead of by the market as Hunt claims. The Liberals have also hinted they might again sabotage the Renewable Energy Target by reducing it to account for falling electricity demand, leaving Australia with no effective climate policy. And on Monday, the Australian Financial Review reported that senior Coalition politicians have privately stated buying international offsets is an option if Australia’s 2020 emissions reduction target is increased from its present 5% (Hunt has publicly denied this).

If the Direct Action Plan is cancelled or fails to achieve any significant emissions cuts, we might even be back on the business-as-usual pathway, in which Australia’s emissions in 2020 would be 24% above today, 26% above 1990, and 55% above 1990 excluding LULUCF.

Why are both major parties set on at least 20 years of inaction? Combined with the past 25 years, that would make a 45-year free ride for Australian polluters – which, it strikes me, is approximately the lifetime of a coal power plant. According to a Deloitte report commissioned by the government in 2011, electricity companies expect Australia’s existing coal-fired power plants to last until the 2030s. This suggests part of the major parties’ motivation may be to allow companies to milk every last dollar out of those plants. Given the companies must have known about climate change for at least 25 years, they should not be rewarded for having chosen to continue to invest in fossil fuels.

It seems we can expect about 20 years from now to move into a Phase 3 which adherents of both the first two phases have been planning for. In both Phases 1 and 2, governments have funded R&D programs for carbon capture and storage (CCS). Proponents believe this technology will be ready around (you guessed it) the mid-2030s, and can then be deployed to save the fossil fuel industry from extinction. Although funding allocated for CCS has been repeatedly delayed by governments of both stripes, Rudd recently confirmed he still sees it as the solution that will save the fossil fuel industry. Labor’s expected reliance on CCS has been outlined by Treasury modelling, projections of energy generation sources, as well as the Garnaut Review. Unfortunately, faith in CCS is misguided because dramatic emissions cuts are required well before the 2030s to prevent dangerous global warming, the technology may never pan out, industry will be reluctant to ever actually deploy it because it will increase electricity prices, and even if it becomes viable it would need to be rapidly deployed at a global scale to cut emissions to zero as is urgently needed.

If, as seems likely, Phases 1 and 2 continue to fail to cut emissions, and because of the inadequacy of CCS, other necessary aspects of Phase 3 would include attempts to geoengineer the climate to cool the surface of the planet, and/or “adapt” to the climate change that has already happened. Both of these are fools’ errands. A global temperature much higher than today’s is likely to be impossible to adapt to. Geoengineering has myriad pitfalls, not least that if we’re not careful the cure could be worse than the disease: fiddling with the Earth’s climate system was how we got into this mess in the first place. Another problem is that many forms of geoengineering are temporary and we would need to keep doing them constantly for centuries to counterbalance the CO2 that would have accumulated in the atmosphere. Given how far gone we are already, some level of geoengineering may prove to be necessary, but that should be a last resort and a supplement to drastic emissions cuts; it certainly should not be used as a substitute for cutting emissions.

Unfortunately, we just don’t have time for yet more decades of delay. Human-caused global warming is the greatest threat facing humanity today. Rapid cuts in global emissions are urgently needed to prevent dangerous climate change. The decisions made in this decade will determine the extent of global warming for thousands of years. The vast majority of the world’s fossil fuel reserves must be left in the ground to even limit global warming to <2°C, let alone achieve a truly safe target. If all countries waited for others to act, nobody would ever do anything. Australia’s wealth and high responsibility for emissions oblige us to lead the world. We need real action to rapidly cut Australia’s greenhouse gas emissions, long before 2033.

If you require any more evidence about whose interests the major parties really represent, consider this recent remark from Minerals Council of Australia (MCA) chairman Andrew Michelmore:

I think we’re in that limbo land where promises are being made every day. I think we need to let the dust settle, see one party get in with a very clear majority, and then I think we’ll see some sense come to what does that package look like. I’ve seen it before with many elections where lots of things are said in the election, and then when the government actually gets in, and they look at it, they go: ‘Ah, okay, forget all that. Now, this is what we actually have to do.’ I think that’s what we’ll wait for.

So according to the MCA, this is how democracy works: politicians announce fake “policies”, then the people vote on which party has the best “policies”, then after the election whichever of the two major parties wins government gets together with the MCA to design its real policies. Both Tony Abbott and Kevin Rudd have ruled out doing deals with crossbenchers, but they haven’t ruled out doing deals with the MCA.

The fossil fuel lobby appears to have set up what TV Tropes calls a Xanatos Gambit: no matter which of the major parties win government, the polluters win one way or another. The only way to even have a chance of defeating them at this election is to vote Greens.

1 comment

  1. jj

    It’s harder and harder to be optimistic about the policy response to the pollution externality… and I’ve got to live in this century.

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