Abbott’s maligned carbon-cut measures face French scrutiny

Prime Minister Tony Abbott may get a taste of mounting international pressure for Australia to curb its carbon emissions when he meets France’s President Francois Hollande in Paris.

Environment Minister Greg Hunt said he expects Abbott, who last year described coal as “good for humanity,” to defend Australia’s progress in tackling climate change since scrapping a carbon tax on heavy polluters. The government held its first carbon auction this month, giving taxpayer-funded handouts for voluntary cuts to emissions.

“Other countries will increasingly look at the fact that Australia is tackling climate change without a punitive electricity tax and through an incentives-based scheme,” Hunt said in an April 23 interview.

Since Abbott’s government scrapped the levy on carbon in July, emissions from electricity generators have risen while political deadlock over future renewable energy policy has stifled investment in wind and solar power. The US and UK have urged Australia, the world’s biggest coal exporter, to step up its fight against climate change, while France is urging Abbott to set an ambitious target to curb emissions before a global deal to be signed in Paris in December.

“Abbott’s going to have to move toward making some significant emission-reduction commitments because that’s where international opinion is heading,” said economist and former Liberal Party leader John Hewson, who employed Abbott as his press secretary in the early 1990s. “We can’t stay a laggard.”

Abbott’s going to have to move toward making some significant emission-reduction commitments because that’s where international opinion is heading.

John Hewson, economist and former Liberal Party leader

Big polluter

The government says it’s committed to a 5 per cent reduction in emissions by 2020, and is due to announce its post-2020 target by mid-year. Australia is one of the largest polluters per capita among industrial nations, and since the carbon levy was scrapped has lacked an enforceable system to reduce greenhouse gases.

France expects Australia “to be one of the key countries, one of the leaders” before the Paris accord, Ambassador Christophe Lecourtier told the Australian Broadcasting Corp. on April 13.

The center-piece of Abbott’s environmental policy is a A$2.55 billion ($1.98 billion) Emissions Reduction Fund to encourage companies to cut greenhouse gases through taxpayer-funded grants.

His government on April 23 announced results of its first carbon auction — awarding A$660 million of contracts to deliver more than 47 million metric tons of abatement. It paid an average A$13.95 per ton to companies for projects including capturing methane from pig manure, planting trees and managing fires in savanna grasslands.

Green army

The auction is a “mere drop in the bucket” of the cuts Australia needs to make, according to the Climate Institute — an independent advisory that calls the government’s 5 per cent reduction by 2020 inadequate. Last week, the Climate Change Authority, another independent body, recommended Australia cut carbon pollution by 30 percent by 2025 from 2000 levels and between 40 and 60 per cent by 2030.

The auction will achieve just 15 per cent of the government’s 5 per cent reduction target, according to the group’s calculations. According to Hunt, the cut in emissions will be about four times the amount reduced during the two-year period of the carbon price.

Another core part of the government’s climate-change strategy is the so-called Green Army, where teams of people aged 17 to 24 carry out projects including clearing litter from waterways or building nature trails. Critics question how the program curbs greenhouse gases and say it provides the government with cheap labor.

Planting trees

“I just don’t see any negatives to this program,” said Katie Hendry as she led a five-person team pulling out invasive privet and honeysuckle from the banks of the Queanbeyan River in rural New South Wales state and planting native eucalyptus seedlings. “We’re putting more trees in the ground and rehabilitating sites while young workers learn new skills.”

Since scrapping the carbon price, Australia’s greenhouse-gas emissions from electricity generators have reversed a trend of decline even as power demand has fallen, according to the Pitt & Sherry Carbon Emissions Index.

Abbott has defended coal, which directly employs 55,000 people full time and accounted for 64 percent of the nation’s electricity generation in 2012-13. Exports of the fuel were worth A$40 billion in the 12 months to June 30, 2014.

Renewable target

His government is seeking to cut Australia’s renewable energy target, which requires electricity retailers to buy certificates from wind and solar farms or generate clean power themselves. It’s negotiating in parliament to scale back the 2020 target from 41,000 gigawatt hours to 32,000. The renewables industry last month offered a target of 33,500 gigawatt hours.

Spending on large-scale renewable energy projects slumped 88 per cent last year to the lowest since 2002, according to data compiled by Bloomberg.

General Electric Co, the largest US turbine maker, said an agreement is critical to restore investor confidence in the industry.

A deal would “unleash some A$10 billion of investment for Australia,” said Jason Willoughby, managing director of sales and project finance at GE’s Australian unit. “Such engagement is manifestly in Australia’s national interest.”

Droughts, wildfire

Abbott is under pressure even from Australia’s closest allies. President Barack Obama, Abbott’s guest at the Group of 20 summit in Brisbane last year, called for more action by the US and Australia and warned that climate change would lead to “longer droughts” and more wildfires. UK Prime Minister David Cameron said in December that Australia will “feel pressure and want to do more.”

Reaching harder targets will come at an economic price. The Australian Industry Group, which lobbies on behalf of 60,000 businesses, estimates that should Australia match the US commitment to cut emissions by as much as 28 percent below 2005 levels by 2025, it would cost about A$26 billion.

Rejecting international criticism, Hunt said the European Union’s Emissions Trading System “hasn’t gone smoothly” and noted the US had missed its 2010 targets.

“We’ve achieved our emissions reduction targets when many other countries haven’t gone close,” Hunt said. “It’s important that we draw the distinction between pledges and achievements” in reducing greenhouse gases.

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