Senate inquiry bogged down in party lines

A Senate inquiry into the Australian Government’s proposed climate Direct Action Plan reported on Wednesday. The report says nothing new, and I’m fed up with the inane narrow positions which each of the three parties has manoeuvred themselves into.

First, the good news. The main report, authored by Labor Senators Lin Thorp, Louise Pratt, and Ursula Stephens and Greens Senator Christine Milne, correctly found that the Direct Action Plan is a piece of crap (see here for 21 reasons why it won’t work). In a nutshell, it consists of solely voluntary incentives, allowing Australia’s emissions to go up for the next 20 years. Not that it deterred the governing Liberal/National Coalition’s Senators Anne Ruston and John Williams from writing a dissenting report insisting, against all evidence, that it will work and should replace existing climate policies. The dissenting report backs up each of its claims by quoting business lobby groups.

But the Direct Action Plan was always an easy target. More important is that the majority report by opposition Senators failed to advocate the urgent action that is needed. They adopted the Climate Change Authority (CCA)’s recommended emissions targets: 15% below 2000 by 2020 and 40-60% by 2030. These targets look positively active compared to the measly existing 5%-by-2020, and I congratulate Labor for shifting a little closer to reality (though apparently it is still not official Labor policy). However, CCA’s targets are based on special pleading which I have thoroughly dissected, ignore Australia’s responsibility to lead, and remain laughably lethargic in comparison to the urgent action required to have any hope of preserving a safe and stable climate.

The majority Senators further concluded the optimal set of policies to deliver these targets just happens to be the existing deeply flawed hodgepodge political fix negotiated in 2011 between Labor and the Greens. Most of these existing policy elements (Carbon Pricing Mechanism, Renewable Energy Target, Clean Energy Finance Corporation, and CCA) are okay albeit terribly inadequate, and Labor and the Greens are right to oppose the Government’s crusade to abolish them. But the central mechanism, an internationally linked Emissions Trading Scheme (ETS) due to start in either 2014 or 2015, is a time-bomb that threatens to sabotage the rest by flooding the system with international offsets, devaluing the Australian carbon price and allowing Australia’s domestic emissions to go up for the next 20 years.

The only point in the Senate report on which the Greens disagreed with Labor was whether the ETS should begin this July (Labor) or next July (Greens). Milne argued now is not the time to move to an ETS, correctly pointing out present rock-bottom international carbon prices would cause the Australian price to crash. But there is no reason to think that 12 months later, all the problems with emissions trading will suddenly be fixed and carbon prices will magically recover. It seems to me that either emissions trading is already working, in which case Labor’s timeframe makes sense, or emissions trading will not work in the foreseeable future, in which case my position makes sense. The Greens’ timeframe makes no sense at all, as July 2015 is a completely arbitrary date negotiated with a former government which has since gone back on its own side of the bargain.

Moreover, the position of both opposition parties contains a logical inconsistency. They correctly identify a key flaw in the Government’s proposed Emissions Reduction Fund as “the difficulty involved in ensuring that emissions reductions are ‘additional’ to reductions that would have happened without intervention” (p. 101). But they overlook this same flaw in the international Clean Development Mechanism which, under their beloved ETS, Australian polluters can use to offset up to 12.5% of their emissions.

The report further argues that the Direct Action Plan’s (purported) lack of international offsets is a deficiency. I notice a footnote on p. 117 misattributes this view to my own submission to the inquiry. In fact, I clearly said the opposite (ie. it would be a deficiency if the policy turns out to allow international offsets):

Despite the Government’s public assurances that international offsets will not be used to meet Australia’s emissions target, the Green Paper in several places suggests allowing polluters to buy either domestic or international permits as an alternative to cutting their own emissions.

I agree with the Government’s pre-election argument that international offsets should not be allowed because they allow Australia’s domestic emissions to go up instead of down. As Tony Abbott said, this would be “shirking our environmental duty”. In a pre-election speech, Greg Hunt listed several reasons not to allow international offsets. Not only do international offsets have similar additionality issues to the Emissions Reduction Fund, they also delay systemic economic decarbonization in Australia and unfairly shift the burden of Australia’s target onto other countries, making a mockery of the (already misguided) notion that Australia is doing its fair share. Australia’s targets must be met by action within Australia’s borders.

This is not the only way in which the report could have done a more thorough job of debunking the Direct Action Plan. It neglected to cover several other important issues I pointed out in my submission:

  • Issues with the Emissions Reduction Fund:
    • Instead of raising the 2020 target as is urgently needed, the 2015 review will apparently focus on post-2020 targets and base its decision on the level of international action.
    • It pays polluters. As the actions funded are unlikely to be meaningful, in effect this is a financial reward for their bad behaviour over the last 25 years while harm from emissions was foreseeable.
    • The Fund is designed to cut emissions intensity (emissions per economic output), not absolute emissions. Emissions will be allowed to increase wherever production increases, because even if historical absolute baselines are used they will not apply to new companies or significant business expansion. This is pointless as emissions intensity will fall automatically even if emissions rise; the problem is that those efficiency gains are being cancelled out by the exponential growth of the fossil fuel economy.
    • The same goes for the baselines that companies would need to exceed to trigger the safeguard mechanism. This means the safeguard mechanism will not be a penalty for business-as-usual emissions and is extremely unlikely to ever come into play, so obsessing over its design misses the point.
    • Proposed changes to carbon farming rules would allow stored carbon to potentially be released after just 25 years, meaning it is not a permanent offset for fossil fuel emissions that will stay in the atmosphere. (The Senate report mentions this issue but doesn’t explain it.)
    • A Fund designed to select the cheapest available abatement may choose actions  less credible or less significant than those with higher upfront costs. It is most important and urgent to phase out fossil fuel CO2 emissions, the largest and longest-lived cause of global warming.
    • The Government’s own (pre-election) estimates of total tonnes avoided, total cost, and cost per tonne avoided do not add up. Also, it is incongruous that the timeframe of funding has not been accelerated since the 2010 election despite the fact that the target date is three years closer.
    • The Government’s confidence that it has budgeted enough money seems to be based solely on assurances from polluting companies eligible for support from the Fund, who may be able to game the price.
  • Issues with the Government’s broader climate policy:
    • The Government is vastly expanding fossil fuel exports, Australia’s largest contribution to climate change. In a world where national emissions targets do not add up to a safe global target, Australia shares ethical responsibility for these exported emissions. Fossil fuel export growth is also the main reason for the projected increase in Australia’s domestic emissions.
    • If the Government decides to reduce the RET, it would effectively halt the deployment of renewables by 2016.
    • The Government’s approach to clean energy appears to focus on R&D. We urgently need large-scale deployment of existing renewables, which can provide 100% of Australia’s energy.
    • The Government says it will negotiate climate agreements with the US, EU, China, and India. Although these countries have the power to largely solve climate change because they are responsible for most global emissions, for exactly the same reason they do not have the political will.
    • The Government supports investor-state dispute settlement (ISDS) clauses in free trade agreements, which give multinational corporations the power to sue a government for any policy that hurts their profits. Any climate policy or restriction on fossil fuel industries could be overturned through ISDS.

I’ve long since given up on the Coalition and Labor parties, but I believe the Greens can be better than this. Underneath the political rhetoric, they understand we are in a climate emergency. Having been tainted by their association with the unpopular former government, they desperately need to distinguish themselves from Labor by taking a strong stand based on their own set of values: namely, about protecting our future. Instead of wasting time, resources, and political capital defending inadequate targets and deeply compromised policies (which, unless Scott Ludlam can get re-elected, is likely a losing battle anyway), the Greens should communicate to the public the true direness of our situation.

Science tells us that to have any hope of preserving a safe and stable climate, we must leave most fossil fuels in the ground. Thus our central demand should not be merely “keep the carbon price”. It should be “leave fossil fuels in the ground” – in other words, real direct action.

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  1. […] 2014/03/28: JWright: Senate inquiry bogged down in party lines A Senate inquiry into the Australian Government’s proposed climate Direct Action Plan reported on Wednesday. […]

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