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Jul 19 2013

If I were Prime Minister…

I recently wrote a submission to the Australian independent Climate Change Authority’s Caps and Targets Review. Unfortunately, indications so far suggest the Review may be heading in a direction different from what I had hoped. I do not want to have wasted all the effort I put into my submission, whose level of detail almost approaches that of a policy document, so I am posting it here. Consider it my fantasy policy for the upcoming Australian election (of the real-life political parties, my approach is closest to that of the Greens).

My submission argues Australia’s 2050 target of an 80% emissions reduction should be brought forward to 2020. More broadly, it also deconstructs Australia’s present approach to climate policy, which I see as avoidant, and advocates replacing it with an activist one.

The table below is from the summary of my submission. It summarizes my arguments and recommendations (green text, right-hand column), and how they contrast with the Australian government’s present beliefs and policies (red text, left-hand column). My full submission, which contains detailed arguments for most of these points, can be read here.

Existing assumption/policy

My counterargument/recommendation

Climate policies designed mostly as advocated by industry lobby groups

Because of the need for fossil fuel phaseout, the fossil fuel industry cannot be trusted to participate in the design of climate policies.

Climate change is one among many competing priorities.

Climate change is the largest and most urgent threat facing humanity today. Climate change mitigation must override all other objectives where they are perceived to conflict.

Australia’s interest in climate policy is the competitiveness of its fossil fuels.

Australia’s true interest is to prevent dangerous climate change.

Climate policies should remain largely unchanged to give investors certainty.

Investment certainty is unachievable because of the sabotaging influence of vested interests. Instead, climate policies and targets should be strengthened to send a strong investment signal.

Emissions caps to be locked in through to 2019-20. Unclear whether carbon permits are associated with property rights. Voluntary actions to be counted five years after they occur, if ever.

Emissions targets must be implemented in a way that does not limit ambition. Otherwise, a bad decision will be difficult if not impossible to correct before 2020.

Banking and borrowing of permits allowed

Banking and borrowing is unwise.

Stabilizing atmospheric CO2 at 450 ppm should limit global warming to <2°C and prevent dangerous climate change, based on IPCC AR4.

IPCC has systematically understated the problem. Unpredictable feedbacks could amplify projected warming. At nearly 400 ppm, atmospheric CO2 is already too high to avoid tipping points for dangerous climate change. A safe level is somewhere below 350 ppm (~1°C). The Arctic melt implies even 350 ppm is dangerous.

Emissions targets and caps are assumed to determine the level of action achieved.

The Review’s scope must be expanded to include policies, because they determine whether targets are meaningful. It is urgent to get both right.

Existing policies will work reasonably well without being changed.

Australia’s ETS contains time-bombs which would cause domestic emissions to rise, not fall. These must be fixed now.

Market mechanisms are preferable to regulatory ones.

A mix of markets and regulations are needed; indeed the carbon price already has elements of both. More regulatory elements are needed to ensure the market aspect delivers an effective outcome.

The value of a floating carbon price does not matter because the target will be met.

A higher carbon price is better than a lower one, because a stronger price signal is more likely to drive behavior change. A weak emissions cap, or flawed policy design, would cause the carbon price to crash.

Ceiling price; no floor price

The floor price should be reinstated to help prevent the carbon price from crashing. The ceiling price should be removed because it limits the penalty for pollution.

ETS to be linked to EU ETS and various international offset mechanisms

International linking and offsets displace domestic decarbonization, allow flawed schemes to contaminate each other, will cause the carbon price to crash, shift the burden to other countries, and may not represent real emissions cuts. Australia must meet its targets domestically.

The most important measure of a climate policy is cost of abatement, so the ideal climate policy is a carbon market with as few restrictions as possible to ensure emissions cuts occur where they are cheapest.

Australia’s ETS treats non-equivalent types of emissions and abatement as equivalent, and is unlikely to deem the most important places to cut emissions as the cheapest. It is most important and urgent to phase out fossil fuel CO2 emissions, the largest and longest-lived cause of global warming. The ETS could be compartmentalized by sector and/or greenhouse gas.

Transition to ETS scheduled for July 2015, based on caps set in May 2014 (UPDATE: Labor recently announced an election policy to accelerate this timeline.)

If it is deemed politically impossible to set strong caps and fix the ETS by May 2014, the government should extend the fixed carbon price to avert the time-bombs.

$13b/year in fossil fuel subsidies including $4b/year in free carbon permits

Fossil fuel subsidies and free carbon permits outweigh the carbon price signal, and must be removed.

The carbon price is the central measure. Most other policies are redundant.

 

Success should not hinge on any single policy. Australia must support its carbon price with other new and existing policies, including renewable energy subsidies, feed-in tariffs, a ban on new fossil-fuelled electricity generators, a plan to close coal power plants, and a greenhouse trigger for environmental approvals.

2020 target range of 5-25% below 2000; 2050 target 80% below 2000

CCA’s mandate puts no limit on the ambition of the targets it can recommend.

The objective of domestic climate policy is to implement the government’s 2020 and 2050 targets.

Distant targets ignore the urgency and are easily undermined. It is more important to begin, in a single electoral term, systemic decarbonization of the economy.

Unconditional 2020 target 5% below 2000

The present target is meaninglessly weak. Australia must set emissions caps that rapidly reduce toward zero.

Australia’s only responsibility is to cut its domestic emissions.

In a world where national emissions targets do not add up to a safe global target, Australia shares responsibility for emissions resulting from its fossil fuel exports.

Surplus permits carried over from Kyoto first commitment period

Surplus permits should be voluntarily cancelled so they do not dilute future targets

No sense of urgency

Returning CO2 to <350 ppm requires cutting global fossil fuel emissions by 6%/year beginning in 2013 (or even faster if the world delays), and to near-zero as soon as possible.

Foresees a future for the fossil fuel industry

Fossil fuels must be phased out globally, leaving most reserves in the ground.

Australia can rely on UNFCCC talks to solve global warming.

UNFCCC talks have delayed global participation until at least 2020, and present voluntary pledges put the Earth on course for an unimaginably catastrophic >4°C global warming by 2100.

15% and 25% 2020 targets conditional on international action

The existence and specifics of Australia’s conditions are unfair, undiplomatic, and counterproductive. Unconditional unilateral ambition is required to break the international deadlock. Australia is obligated to lead the world.

Australia can only be a small part of the global solution.

As the world’s largest coal exporter, Australia can make a global difference.

Facilitate expansion of fossil fuel exports

Demand for Australia’s planned fossil fuel export growth depends on an emissions scenario leading to >4°C global warming. Australia must stop expanding and start phasing out its fossil fuel exports.

Australia’s negotiating strategy in UNFCCC talks will help reach a global solution to limit global warming to <2°C.

Australia’s position is counterproductive. Instead Australia must adopt unconditional ambitious Kyoto targets, stop advocating loopholes, and stop prioritizing a post-2020 agreement.

Targets allocated by Garnaut’s modified contraction-and-convergence method

Garnaut’s approach unjustly favors Australia in multiple ways, so a fairer method should be used. Australia should not refuse to do more than what it calculates to be its “fair share”.

Emissions cuts must be made at the lowest possible cost.

Many policy measures intended to reduce costs actually reduce effectiveness. Policies that mitigate enormous costs from climate change are preferable to policies that are cheap and ineffective.

Emissions cuts are generally costly.

The costs of mitigation are greatly exaggerated, short-term, and mainly paid by polluting companies. The costs of climate change are mostly not modeled by Garnaut, and are likely far higher than $23/tonne. Cost-benefit analysis effectively discounts the lives of future generations.

Fossil fuels are essential to Australia’s economy.

The contribution of fossil fuels to the economy is overblown. Continuing to rely on fossil fuels would damage Australia’s future competitiveness.

An ETS is inherently superior to a fixed carbon price.

Shifting to a floating carbon price would not be an improvement if it causes the Australian emissions reduction rate to slow, or the carbon price to fall.

New information on global warming potentials not to be applied until 2017-18

Improved information should be applied immediately.

Australia’s emissions have barely increased since 1990.

Australia’s emissions excluding LULUCF rose 32% between 1990 and 2011.

Gas is a transition fuel.

Investment in gas would lock in fossil fuel infrastructure for decades.

CCS will save the fossil fuel industry.

CCS is unlikely to be deployed on a global scale for decades.

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