Monday, March 09, 2009

Climate change policy pessimism & policy

Its only a small sample but 78% of Australians still have climate change concerns despite the economic crisis - only 35% want action deferred because of the crisis.  However at the current conference in Copenhagen prominent scientists from the Tyndall Centre for Change Research believe that an effective cooperative global agreement to restrict emissions at the UN meetings in Copenhagen in November is unlikely - they believe geoengineering solutions (mirrors in space, encouraging growth of plankton in the oceans) have more potential that what looks like becoming the 'weak daughter of Kyoto'.  These types of backstop policies should be taken seriously if agreement cannot be reached though the safest course is to seek agreement.

Moreover although President Obama clearly wants mild GGE controls - at 14% reductions by 2020 his stance parallels weak Rudd-driven Australian targets - but the financial crisis suggests Congress might not go along with even this restricted target.

The Four Corners show on the ABC tonight (Heat on the Hill) provided an excellent guide to the current staste of play with respect to climate policy in Australia. Rudd has set a maximum cutback by 2020 of 15% which is pathetic and cannot help the November UN negotiations.  Very impressed with Ross Garnaut's remarks - one senses the deep disappoint he feels at Labor Party political cowardice in the face of interest group pressures. 

A central issue in the show was the distribution of free permits.  The principle is simple in my view. Provide exemptions from quotas for all exports of carbon-based goods at some base level and subject to the need to purchase a quota all imports of goods from countries which do not impose adequate controls on carbon emissions*.   The idea - effectively tax all local carbon consumption in accord with the principles of destination accounting. Thereafter provide no exemptions at all to the local consumers of carbon fuels - subject them all from 2010 to a $20 per tonne CO2E tax in a two-year transition to a full-fledged carbon trading scheme.

Of course doing this provides heightened reasons for other countries to switch to some form of carbon charging. They then collect the duties not the countries they seek to export to.

The ANU's Frank Jotzo made the claim during the show that it was fine to wipe out the Australian alumina industry because it was coal-based while alumina industries overseas relied on hydropower.  That seems unreasonable to me since the CO2 is consumed elsewhere. Moreover, in other industries where coal is the basic energy input in Australia and in a competitor country such as China - the result would be a carbon leakage that would shift activity to China but do nothing to limit global emissions.

A second central issue was that of long-term carbon control objectives.  The issues are serious enough to put a 350 ppm target for 2050 on the table and to seriously negotiate around that.  Harvard's Daniel Gilbert gets it right - the difficulty with climate change is that it is proceeding too slowly.  Dramatic shifts might invoke specific action but a gradual drift upwards in temperature over decades gives politicians like Kevin Rudd the chance to endlessly procrastinate.  The difficulty is that once dramatic shifts have occurred it may be too late.  The image of the frog gradually being boiled is the ultimate source of the Garnaut view that thiws is indeed a 'diabolical problem'.

The 100% exemption policy is consistent with the views of the Liberal Party which I support. I definitely do not support the Liberal Party's move to delay introduction of the scheme. It is now way past the time for action.

* If there were WTO objections to this under Article 1 of the GATT then appeal the decision and fight it.  The WTO does not have the right to imperil the world's economic future.

1 comment:

Real Estate Agent in Toronto said...

Sometimes the carbon tax seems a little cruel to me. Especially in these times of recessions all over the globe. How are the companies supposed to afford more taxation if they're already struggling with existing. Climate change is a major threat, I agree with that, but maybe it could wait for few more months until the economy gets started up again.

Take care, Julie