The Australian federal government released its eagerly awaited green paper today on its response to climate change. A green paper is government speak for a “discussion paper” and does not represent a commitment to act. However, it is a significant response to the challenge issued by the Garnaut Report. The green paper says the Government still intends to introduce Garnaut’s model of an emissions trading scheme by 2010 but has renamed it a Carbon Pollution Reduction Scheme. Climate Change minister Penny Wong says the scheme represents a significant economic reform which responds to threats across the Australian economy. "Placing a limit and a price on pollution will change the things we produce, the way we produce them and the things we buy," she said.
The Green Paper’s foreword (pdf) reiterated the line that carbon pollution is causing climate change, resulting in higher temperatures, more droughts, rising sea levels and more extreme weather. It says the impact will be great on Australian food production, agriculture, water and tourism if no immediate action is taken. The paper says the Government is taking action on three fronts: reducing greenhouse emissions, adapting to climate change, and helping shape a global solution.
The central plank of the strategy is the Carbon Pollution Reduction Scheme. It is a cap and trade scheme which will place an upper limit on carbon pollution each industry can emit. The biggest polluting businesses and industries will buy a permit for each tonne of emitted carbon. This involves one thousand companies (representing just one percent of Australian business) who produce 25,000 tonnes of carbon each year. The money raised by the scheme will go towards investments in clean energy and what it calls “adjustment” costs.
These adjustment costs are attracting the most flak from Green groups. The key element of the adjustment cost is the decision to cut fuel taxes for three years on a cent for cent basis to offset the initial price impact. The Government has also promised assistance measures for low and middle income households and free permits to the most emission-intensive industries including coal-fired electricity generators. Greens Senator Christine Milne says the adjustments neutralise the carbon price signals and has protected the investment of polluters in the coal, aluminium and logging industries. She also criticised the mixed message on petrol. “The Government has its foot on the brake and the accelerator at the same time,” she said.
Meanwhile the Government says that climate change requires a global solution. It points to its early ratification of the Kyoto Protocol and its serious negotiations for the next stage. It says that emission schemes are already in place in 27 European countries while 28 states and provinces in the US and Canada are also introducing trading as is New Zealand. The Government says it will take account of the evolving international negotiations in determining the path set to meet the target of reducing Australia’s carbon pollution by 60 per cent below 2000 levels by 2050.
Many critics have stated that the Government have caved in to Opposition pressure with its proposal. Canberra Times’s economic correspondent Peter Martin says the real author of the report is Brendan Nelson. Gary Sauer-Thompson agrees and says “the ALP has embraced the Liberals policy whilst belting them over the head for being wimps.” Chris Hammer in The Age said the Government has “defied” Ross Garnaut (though whether the act of ignoring the evidence of an independent auditor can be described as defiance is a moot point). Onymous Lefty Jeremy Sear described the plan as a “pissweak ALP copout” and said the petrol excise reduction is futile as oil prices will continue to rise.
Bernard Keane in Crikey calls the green paper “a handout bonanza for our biggest polluters”. He says the Government will give away more in assistance and free permits than it gets for the paid permits. Keane believes the scheme is a political reaction designed to “minimise the whingeing from our biggest polluters – motorists and electricity generators.” In its efforts to minimise opposition to the scheme, the Government have come up with an anodyne response that is likely to fail in its primary duty to reduce carbon emissions.
Sadly, this prevarication seems to be the norm from the overly poll-conscious new Labor administration. Two weeks ago, Barrie Cassidy interviewed Kevin Rudd for ABC's Insiders program and he asked him to nominate the "toughest decision" the Government has made since coming into office. Rudd gave a waffly answer before alluding to the theme of climate change saying: "The easiest thing to do is stick your head in the sand and say not my problem, but I frankly don't think most Australians can do that and look in the faces of their children and their grandchildren. They think that it is their problem and they expect Government to take responsible, calm, measured approaches to dealing with it and that's what we're seeking to do." The Green Paper is certainly calm and measured, but is it responsible? The jury will be out for a very long time.