Tasmanian Times

Economy

The Greens and emissions trading

There is broad recognition that the Rudd government’s emissions trading scheme is weak and badly designed. However, some still hold the view that “something is better than nothing”, that,
if the bill passes, “at least we’ll have the architecture of a scheme to build on”.

If that were the case and the CPRS were merely too weak, the Greens might have supported it as a start. But even the government acknowledged, as they negotiated with the opposition, that there comes a point when action becomes so weak that it is useless.

Beyond that simple point, we Greens recognise that, when faced with a serious and complex problem, it is the choice of the right action that is vital, not simply the decision to act. Prescribing and locking in the wrong treatment to a seriously ill patient can hasten death rather than prevent it.

The Greens oppose the CPRS as it stands not because it is too weak but because it is the wrong action – it would actually point Australia in the wrong direction. It would pay polluters to keep polluting, hiding inaction with smoke and mirrors. It would undermine global action with its weak target, a target which, once set, would be impossible to lift without paying more billions in compensation. It would demoralise and disempower the community and it would repeat the mistakes of the Murray River, over-allocating permits.

This is why we say it is not just a failure, but it locks in failure.

Paying polluters to keep polluting – sending precisely the wrong investment signal:

o Far from driving investment in renewable energy, energy efficiency and clean transport, the CPRS as it stands would unleash a wave of investment in coal. Far
from making polluters pay, Mr Rudd’s plan will pay them to keep polluting.

o A weak target and price signal will drive short-sighted investment in polluting infrastructure that will have to be closed down when appropriate targets and price signals are implemented, wasting time and money. Compensation to polluters linked to a requirement that they continue generation exacerbates this problem.

o In Western Australia, generators are considering recommissioning two old coal fired power stations to take advantage of this. In addition, experts expect to see new coal and gas fired power stations and refurbishment of old coal fired power stations that should really be closed down.

o If we set out on the right trajectory with a realistic price signal from the beginning, we will make fewer of these mistakes and waste less time and money.

o If, globally, we are to reduce emissions enough to constrain temperature increases to less than two degrees, then we need to make rapid emission cuts urgently. A slow start means that emissions have to be reduced much more rapidly later on, a requirement that is quickly becoming unrealistic.

Hiding inaction with smoke and mirrors:

o Minister Wong claims that the CPRS will transform the Australian economy, but her own figures show that Australia’s emissions, substantially from coal, will not drop at all before 2033. Almost all emissions reductions under the CPRS will be bought in from overseas – a case of smoke and mirrors, with offsets hiding the reality that Australia would be continuing with its highly polluting economy.

o The government even refuses to accept the Greens’ proposal to ensure that all offsets from offshore are accredited to make sure they are 100% reliable. There have been increasing reports of dodgy offset schemes around the world.

Undermining global action with a weak target:

o The key stumbling block to a global climate agreement is the refusal by developed nations to sign up to the kind of targets the science, the community and the developing world demand – in the order of 40% below 1990 levels by 2020.

o The Rudd government’s 4% target (below 1990), and the obnoxious conditions placed on moving to the still too weak 24% target, are part of the problem globally.

Locking out the option of > 25% cuts limits the options of later governments:

o The government repeatedly refused Greens’ requests to model the economic impact of emissions cuts beyond 25%. This is particularly bizarre given that, while the economic impact of 25% cuts is almost identical to 5%, there is evidence that steeper cuts will be cheaper, as we will learn faster and make fewer mistakes.

o The Greens have obtained legal advice that says that if a future government chooses to lift the targets to beyond the current 5-25% range even more compensation to polluters would be payable. Read this advice here. (link unworkable).

Demoralising the community with a weak target and undermined voluntary action:

o There is significant disquiet in the community about the impact of the CPRS on voluntary and additional action to cut emissions.

o We need the community to be inspired, not disempowered.

Repeating the mistake of the Murray by over-allocating free permits:

o Once rights are issued for something – for example for water rights – it is politically very difficult, and very expensive, for a government to change its mind.

o The government has been at pains to point out that scheme will provide long-term certainty by setting a 5 year rolling cap, supported by longer term gateways. In reality, this means that it will politically very difficult for any government to ramp up emissions targets after they are set.

o Just as the over-allocation of water in the Murray Darling has made a fix almost unimaginably difficult, the over-allocation of free permits in the early years would lock in a weak trajectory and make it almost impossible to strengthen the scheme without massive additional compensation to polluters or cost to taxpayers through purchasing imported permits.

What do the Greens propose?

The simplest way to fix all of these fatal flaws is to lift the target to what the science demands straight away and accrue the benefits of early action – slow starts mean higher costs later.

While the remaining design flaws would make it more expensive to reach that target, they would not prevent it from being reached.

The Greens have a suite of proposed amendments which have been presented to the government and the community. Beyond lifting the targets, the Greens’ amendments would:

Adopt Professor Garnaut’s economically credible proposals to:

o auction all permits;

o compensate trade exposed industries only to the value of their lost competitiveness, not for lost profits; and

o not compensate electricity generators at all;

• fix the problem of undermining additional and voluntary action by providing for such action to be tallied and equivalent emissions cut from the following year’s target;

• remove market distortions such as the price cap and the ban on permit export;

• ensure that transport is covered by the scheme; and

• only allow the import of the most highly credible permits and restrict total imports to ensure credibility of the scheme and drive domestic economic transformation.

The Greens understand how negotiation works – we presented these amendments as a starting point for discussion and did not expect the government to accept them all. Neither, however, did we expect the government to reject them all out of hand. Significant progress towards our position needs to be made if the CPRS is to be improved to a state where we could support it.

What others say:

The Greens are not alone in our analysis of the CPRS. Here is a selection of comments others have made about the CPRS:

Editorial of the Australian Financial Review, December 2 2009:

“The CPRS is so riddled with concessions and handouts that it will struggle to achieve the underlying goal of transforming the fossil-fuel-dependent Australian economy into a low-carbon economy while maintaining our prosperity… Even before the latest round of handouts to the coal and coal fired power industries, the government’s handpicked expert Ross Garnaut had denounced it as the worst public policy process he’d seen. Any vestigial arguments for passing the CPRS before next week’s Copenhagen summit… disappeared weeks ago”.

Highly respected Australian climate scientist, James Risbey, New Matilda, December 3 2009:

“The Australian Government’s argument is effectively that it is preferable to adapt to large climate change than to prevent it. Their argument is not usually stated in this form, but that is the inescapable consequence of their policy of postponing meaningful carbon reductions. On the one hand the Government calls for rapid action to prevent climate changes, while on the other hand it has crafted a policy that would guarantee that effective action is not taken.”

Citi Investment Research and Analysis director Elaine Prior, ABC Inside Business, November 29 2009:

“One of the things that the package has done is provided more surety for the coal-fired generators to keep generating until roughly 2020 or beyond … So one might say in that sense that it’s on the one hand created more stability in the electricity market, but perhaps reduced the urgency for people to look at change.”

Brian Toohey, Australian Financial Review, November 28 2009:

“Even when he [Rudd] announced billions of extra dollars to the biggest polluters on Tuesday, he lacked the policy nous to make this conditional on cuts to emissions. Instead, he subsidised them to keep polluting as usual.”

Environment groups like Friends of the Earth, Greenpeace, the Australian Conservation Foundation and hundreds of local climate action groups have condemned the CPRS as too flawed to be allowed to pass.

Global leaders from NASA’s James Hansen to Lord Nicholas Stern and Kofi Annan have said that a weak deal at Copenhagen would be a worse outcome than no deal at all. It would take years to unravel and replace. The Rudd Government’s CPRS is such a deal.

In addition to this, Fran Kelly told ABC Insiders program on Sunday November 15:

“There’s lots of positive changes within the Greens’ amendments that could make this bill better.”


How have the Greens been working with the Government?

The Greens first attempted to discuss emissions trading plans with Prime Minister Rudd and Minister Wong as soon as the government was elected. Early meetings set the tone for what was to come – a complete refusal by the government to accept Greens input.

Bob Brown and Christine Milne have written to Prime Minister Rudd and Minister Wong requesting negotiations, setting out proposed amendments and looking for a way forward on no fewer than ten occasions since March 2009. Responses have been less than forthcoming. A full timeline is available on request.

With the CPRS returning to the parliament on February 2 and no prospect of the opposition supporting it, the government must either work with the Greens or acknowledge that bringing the legislation back a third time is purely a political stunt.

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7 Comments

7 Comments

  1. Russell

    January 29, 2010 at 10:31 am

    Re #6
    “Here are some facts -“???

    “2. There is no empirical evidence that carbon dioxide is a major driver of change in climate.”

    Where is your “empirical evidence” that shows otherwise?

    “3. The assertion that “man’s” miniscule addition to the CO2 in the atmosphere causes global warming (climate change when it’s cold) is absurd.”

    And what, in your opinion then in scientific opinion, does put most of the non-human manufactured CO2 in the atmosphere then?

    Do you think the billions of cars, trucks, planes and other fossil-fuel eating, CO2 spewing machines as well as the thousands of fossil-fuel driven (and water guzzling) power generators have really only made “a miniscule addition to the CO2 in the atmosphere”? Your logic and understanding of reality, let alone science, is incredibly lacking.

    “6. And, most importantly, CO2 is not a pollutant.”

    Then why don’t you do a simple experiment and suck on a hose supplying it and get back to us?

    There is but a tiny fraction of the natural vegetation and forests left from 200 years ago. We no longer have enough plants to take up the amount of CO2 being ever-increasingly generated. Every single thing you buy and consume (including the money or card you pay for it with) has produced CO2 in vast quantities. This is the real world, not your fantasy one of denial and ignorance. It’s called “balance.”

    “It’s plant food.”

    What a load of scat! Plants need much more than CO2 to live and grow (verbal diarrhoea not included). But, too much of anything isn’t good for anything either. You can even die from drinking too much of that safe element known as water.

    Back to school, toad.

  2. barking toad

    January 28, 2010 at 2:36 pm

    I applaud the Greens for opposing the ridiculous CPRS/ETS but disagree with their reasons.

    The Rudd/Wong (and Turnbull) argument is based on total faith in the IPCC reports, especially the Summary for Policy makers, which seems to be all some people read – the political summary, not the facts. Those reports are increasingly being exposed for the scam that they are.

    Here are some facts –

    1. Climate changes. Always has. Always will.
    2. There is no empirical evidence that carbon dioxide is a major driver of change in climate.
    3. The assertion that “man’s” miniscule addition to the CO2 in the atmosphere causes global warming (climate change when it’s cold) is absurd.
    4. The likes of Pauchari and Gore are making a fortune by perpetuating the myth – trading air is just part of the scam (should I also mention the recently deposed merchant banker?)
    5. So much of the alleged “consensus science” is driven by an egocentric clique chasing funding for their personal aggrandisement
    6. And, most importantly, CO2 is not a pollutant. It’s plant food.

    By all means, stop pollution of our air and water -And there has been a lot of work done on this over past decades. We now need to get the developing counties to follow suit. But this has nothing to do with the CPRS/ETS proposal.

    For Rudd/Wong to impose a crippling tax on our economy so they can strut when they jet off to the next climate talkfest is sheer stupidity.

    Especially when it does SFA to the weather anywhere!

  3. George Harris aka woodworker

    January 20, 2010 at 12:55 pm

    (Comments deleted under TT Code relating to personal observation)
    I can’t wait for the Senate ballot paper, and my chance to vote first for those I like the least, starting with the highest number at the bottom of the list…

  4. phill PARSONS is beyond salvation

    January 20, 2010 at 8:36 am

    It appears their is one party offering a credible approach to climate instability by following the scientific advice to reduce actual Carbon emissions. The Liberals yet to be announced scheme does not contain the possibility of reducing emissions at source in the immediate term, important in avoiding further temperature rises and their consequences.

    It is likely we will face an election on the issue this year, perhaps a double dissolution.
    Either way it appears the Senate will not have a government majority post that elector poll and the Liberals will not budge if Abbott is electorally popular.

    Therfore Rudd has 2 effective options, to abandon the legislation or hold a double dissolution election. Representing th CPRS legislation again and again will make Rudd appear rudderless.

    The Greens should endorse their Senate Teams preparing for 2 to be elected in each State if the national Newspoll is a correct interpretation of voter intentions at a double dissolution election.

    End result will most likely be the passage of the governments legislation as they are likely to have an absolute majority when both Houses sit together but a significant vote of elector opposition may asssit in a rethink now the global community is riven with national self interest.

    Austrlaia taking a leading role will be important in itself but it is also important now to increase national resilience as we are forced to adapt to the failures of government here and elsewhere to act comprehensively, effectively and in a timely way to reduce Carbon emissions.

    The centrality of this issue to everything anyone who has invested in the future through children, through building community or institutions reduces effective choices to the Greens.

  5. Reality is truth

    January 20, 2010 at 1:24 am

    Oh Brenda,
    Here you go again:
    “Unfortunately the Greens have also shown that they are unable to recognise a dodgy certification scheme when they see one. The push for certification of vast chemically-dependent industrial monocultures by the Greens using FSC is simply not credible.”
    You would know by now that any certification scheme is as good as yje intention and the stakeholders that actually participate.
    Triple bottom line approaches are the way to go.
    “Dodgy”?
    What can you imagine and suggest as a better option?
    Will you bring the public, the envionmentalists and the industries along with you? If yes, we have a platform to work from.
    Such is the situation …

  6. Russell

    January 19, 2010 at 4:26 pm

    Trading in emissions is just another version of MIS. Nothing but rip-offs and the continued fleecing off tax-payers will be achieved.

    Companies like BP and Origin Energy (and many others) have been sitting on and/or over-pricing solar and other technologies for years waiting for their fossil fuels/energies to run out or become uneconomical before switching.

    Force them to become non-polluting or price/tax them out of existence, NOW.

  7. Brenda Rosser

    January 19, 2010 at 11:44 am

    Milne wrote: “the Greens’ proposal to ensure that all offsets from offshore are accredited to make sure they are 100% reliable. There have been increasing reports of dodgy offset schemes around the world…” AND “only allow the import of the most highly credible permits…”

    Unfortunately the Greens have also shown that they are unable to recognise a dodgy certification scheme when they see one. The push for certification of vast chemically-dependent industrial monocultures by the Greens using FSC is simply not credible.

    Milne: “all permits to pollute should be auctioned.” So much for social justice and democracy. In our time when “the three richest human beings on earth owned as much as the poorest 600 million …”

    http://oldtt.pixelkey.biz/index.php?/weblog/article/the-great-recession-and-neo-liberalism/

    Those with the most money are the ones who get to pollute. When those with money are in the best situation to pay for new non-polluting technologies. Wouldn’t it be much more effective to focus on the industries where non-polluting technologies don’t exist. In which case, the auctioning of permits to pollute is hardly a satisfactory means to solve this problem!

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