CCA must put on its thinking cap

I am afraid to say the Caps and Targets Review by the Australian government’s independent Climate Change Authority (CCA) is shaping up to be next to useless. This is very disheartening because CCA had seemed Australia’s best hope of real climate action. I have previously expressed concern about the appointment of business lobbyists to the CCA board and the status quo recommendation of its Renewable Energy Target Review, but I remained hopeful that CCA would come through on emissions targets.

The Australian Financial Review reports today:

The Climate Change Authority, headed by former Reserve Bank governor Bernie Fraser, is likely to recommend a target of reducing emissions by 15 per cent by 2020 and 40 per cent by 2030 in a report out early October.

The plan is in part driven by expectations the cost of international carbon permits will likely remain low over the medium term. In discussions with some business groups, the authority’s chief executive, Anthea Harris, has suggested an increase in the current target of a 5 per cent reduction on 2000 levels to 15 per cent will create little additional economic cost. […]

On Thursday, the authority declined to comment on its likely re­commendations.

“The authority is still undertaking detailed analysis for the Caps and ­Targets Review and no decisions have been taken at this time,” an authority spokeswoman said.

“The authority intends to release a draft report later this year to consult with the public before finalising its recommendations.”

I should stress that it is still early days – the Review will not even release its discussion paper until October, followed by another round of consultation and the final report next February. But if this rumor is accurate, then CCA is squandering its opportunity to substantially change the Australian government’s climate policy approach.

(CORRECTION: Apparently this is more than a rumor; ABC Radio National’s Breakfast says it has seen a leaked draft report. CORRECTION OF THE CORRECTION 28 August 2013: CCA board member John Quiggin has denied the existence of the alleged leaked report.)

A possible increase in Australia’s 2020 emissions target from 5% to 15% might superficially seem like an improvement. In reality it would be relatively meaningless and not a significant break from Australia’s present avoidant approach to climate policy, for the following reasons:

  • 15% lies within the Australian government’s present target range of 5-25%, in which targets beyond 5% are dependent on a long list of conditions concerning the level of international action. The existence and specifics of those conditions are unfair, undiplomatic, and counterproductive. Waiting for other countries is a recipe for failure, as present pledges put the Earth on course for an unimaginably catastrophic >4°C global warming by 2100. As long as this remains the framework for determining targets, more ambitious targets will remain off the agenda, and even 15% may be easily kyboshed. (Indeed, according to the AFR report, CCA board members are still debating how much action is being taken by other countries.)
  • The 15% conditional target is based on the Garnaut Review’s recommendation for Australia’s fair share of a global agreement to stabilize greenhouse gas levels at 550 ppm CO2e. But a truly safe target is <350 ppm CO2, and Garnaut’s method of dividing up the global effort unfairly favors Australia and ignores the growth in Australia’s non-land-sector emissions since 1990.
  • As indicated in the quote above, CCA has failed to challenge the present policy of allowing companies to buy cheap and dodgy international offsets, which will allow Australia’s domestic emissions to rise. Australia has a responsibility to decarbonize its own economy. Offsets are limited to twice the level of the national cap, but this limit will be ineffectual until the target reaches 50%, which according to AFR wouldn’t happen until beyond 2030. Indeed, the AFR article suggests CCA intends to argue a 15% target will have minimal costs because of the availability of offsets! But what’s the point of increasing the target if it won’t be met in Australia anyway?
  • Offsets are just one of the many accounting loopholes in Australia’s planned ETS (trading of non-equivalent emissions and abatement, free carbon permits, banking and borrowing, surplus permits from the Kyoto Protocol’s first commitment period). These policy flaws could render the target meaningless, and could be difficult or impossible to fix in a timely manner after the ETS begins in July 2014. Yet so far all indications from CCA (both publicly and to me privately) are that the Review will not even cover these vital issues. They stubbornly insist the Review is about targets only, and intend to postpone consideration of policy issues until a 2016 review of the carbon pricing mechanism.
  • Even without international offsets, due to past creative accounting a 15% target means that in 2020 Australia’s fossil fuel CO2 emissions will probably still be higher than they were in 1990.
  • With no floor price and low international carbon prices, the Australian carbon price will still plummet to a level utterly insufficient to drive behavior change.
  • The ETS emissions caps recommended by CCA are likely to be locked in until 2020, will work against other climate policies, and may be legally difficult or impossible to strengthen later.
  • Targets as distant as 2020 and 2030 ignore the urgency of rapid emissions cuts and are easily undermined.
  • Domestic emissions targets do not address Australia’s largest contribution to climate change, its fossil fuel exports.

Even assuming the AFR report is accurate, the Review still has many months to change direction. So what should CCA recommend instead? In the coming days, I intend to publish a series of posts making the argument that Australia should increase its emissions target to a much more ambitious amount than 15%. Or you can read my submission to the Issues Paper, in which I argued Australia’s emissions targets must rapidly reduce toward zero, and specifically suggested Australia’s 2050 target of an 80% emissions reduction could be brought forward to 2020.

The Review should also expand its scope to include international offsets and other policy loopholes. CCA CEO Anthea Harris has argued CCA’s target recommendations will be important regardless of policy design, but in reality policies determine whether targets will be met in a meaningful way. If CCA refuses to consider “policy issues”, maybe they could be framed as accounting issues, but it would be a big mistake to continue to ignore them. Now the ETS is due to begin next year, it is even more urgent to fix these problems than when I first advised CCA to do so. If CCA believes the ETS cannot or should not be strengthened before it begins, it should recommend extending the fixed carbon price.

A successful climate change response by Australia requires two things: 1) ambitious targets and 2) effective policies to meet those targets. A 15% target falls short of the first, and allowing international offsets is inconsistent with the second. It seems to me that the latter is very relevant to the Review. Does CCA believe the problems I’ve pointed out are not real or not serious? If so, why? If not, does CCA believe they can be easily and quickly fixed after emissions trading commences? If so, how?

I have spoken to CCA about these policy flaws (and many other submissions to the Review raised similar points). They have hinted they might have some sympathy with me, but they insist such decisions should be made by “the government of the day” and therefore I should lobby politicians instead. But I thought the whole point of the Climate Change Authority was to provide the government with an independent source of advice advocating Australia’s national interest in preventing dangerous climate change! Australian governments have for 25 years listened mostly to the fossil fuel lobby, and have rarely shown any sign of understanding the increasingly urgent warnings from climate science. In the last two years I have emailed Prime Ministers, Ministers, MPs, and Senators; made submissions to parliamentary committees; signed petitions; attended rallies; and more. Far from making a positive difference, if anything I seem to have an uncanny knack of advising the government to do the exact opposite of what it then goes on to do. And this is not about a personal ego trip – it’s about the future of the world.

CCA is one of the very few voices that is likely to both make the argument for effective climate action and be heard by the government. Silence is assent, and if CCA does not challenge the holes in existing policies it will de facto support them. Who will fix these problems if not CCA?

CCA is at a fork in the road. They could continue attempting to ingratiate themselves with Australia’s political class by spouting platitudes about moving up the conditional target range at minimal cost. This might make CCA and the government look good, but it won’t do much to address climate change. Or they could choose to wipe the slate clean and challenge the government’s beliefs about Australia’s role in climate action. The government may not listen, but they certainly won’t listen if CCA never makes the argument, and CCA’s report would at least help to reframe the climate debate. Therefore CCA should not shy away from making the strongest possible recommendations.


    • David Hamilton on 3 August 2013 at 21:53
    • Reply

    James, I agree with you. I see a further problem with the CCA: they take the approach that the right policy position lies at some balance point between the climate and the economy. They seem to regard it as legitimate to find a trade off between the laws of physics and the “laws” of economics. This attitude is dangerously wrong. It’s pretty simple really: we are subservient to the laws of physics, and the economy is subservient to us – after all, we created the economy. In other words, our policies must be dictated by the science; any adverse impact on the economy should be addressed as a separate issue.

    I criticised the CCA for this fallacy in my submission and clearly had no impact.

    1. Yes, I read and broadly agreed with your submission. I made a similar point in my submission.

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