Australia: Climate change leader or straggler?

Australia’s approach to the climate change debate over the past few years has seen it positioned as the Dr Jekyll and Mr Hyde character on the international stage.

For years Australia stood out in the international community as the only developed country in the world, alongside the US, not to ratify the Kyoto Protocol.

That position changed in December 2007 when the newly elected Prime Minister, Kevin Rudd, supported by a clear mandate by the Australian people that they want something done about climate change, made it his first action in the top job.

The news that Australia would ratify Kyoto was greeted by a standing ovation at the Bali climate change summit and appeared to herald a new way forward.

Mr Rudd said Australia would introduce a cap and trade scheme and set emissions reductions targets that would be decided upon once Professor Ross Garnaut, the Government’s chief climate change advisor, delivered his review into the likely effect of climate change on Australia’s economy and environment.

Australia had moved from climate change laggard to leader.

But much has happened since then and the applause has since fallen silent. Green groups have questioned that so-called leadership and withdrawn their support for Australia’s Carbon Pollution Reduction Scheme saying it will do little to stop the onset of serious climate change.

Professor Garnaut’s review into climate change delivered some harsh realities. The report found that global carbon emissions have grown by 3 per cent each year since 2000 as the world’s insatiable appetite for resources produced a significant multiplier effect on emissions. Furthermore, Professor Garnaut predicted that emissions will continue to rise by more than 3 per cent each year until 2030.

If the Intergovernmental Panel on Climate Change’s worst case scenario of a 2.5 per cent rise in emissions each year was considered to be pessimistic, Professor Garnaut had given greater cause for alarm.

The IPCC has called on developed countries, including Australia, to reduce their emissions as a group by between 25 per cent and 40 per cent below 1990 levels by 2020 to help keep global greenhouse gas concentrations below 450 parts per million, a level at which temperature rise could be limited to 2C.

In his final report delivered in September last year, Professor Garnaut agreed with the IPCC saying Australia should aim to stabilise emissions at 450 parts per million.

However, he said, to try and get there now was unlikely to succeed and instead he advocated a 10 per cent reduction on 2000 levels by 2020, conditional on achieving an international agreement to stabilise carbon emissions at 550 parts per million.

If that agreement was not forthcoming then Australia should scale back its commitment to 5 per cent by 2020, he said.

With that report in hand and after significant public consultation the Federal Government this month introduced legislation into Parliament.

It is proposing a scheme with a medium range emissions cap target of 5 per cent below 2000 levels by 2020, or 15 per cent if a ‘truly global’ treaty emerges.

Now that the detail of the scheme is on the table, support has dissolved. Green groups say it does not go far enough. Industry says it goes too far and that the Government needs to consider the onset of the global financial crisis and push back the start date from mid next year.

There is no doubt the Federal Government believes the bipartisan dissatisfaction of the scheme means they have found the middle ground between protecting the economy and acting towards combating dangerous climate change.

If the Government gets its Carbon Pollution Reduction Scheme through Parliament, and that is far from a fait accompli as it needs to rely on either the Opposition or the minor parties for support, it will go to Copenhagen as only the second country or region with an established emissions trading scheme.

But will the scheme be judged to be robust enough to position Australia as a leader in the climate change discussions or will Mr Rudd be accused of losing his newly found shade of green?

Mark Lewis, Deutsche Bank’s international head of commodities research, believes Australia has an important role to play in the international negotiations.

He says criticism that it has not matched Europe’s 20 per cent reduction target by 2020 is unfair.

‘If you look at the European target, a 20 per cent target below 1990 levels sounds extremely impressive but we have to remember that a large measure of that achieved in a non recurring fashion because Eastern Europe’s economy basically was transformed and there were bankruptcies and mass shut downs of plants. That was a one off,’ he said. ‘You can’t compare Australia’s 5 per cent target with Europe’s 20 per cent target because there are different factors in play. 5 per cent for Australia from here in terms of the effort required to get to the target, given it is an extraction economy, is still going to take a lot of effort.’

Mr Lewis believes Australia is uniquely positioned to take a leadership role in the Asia Pacific.

‘It is an interesting country in that culturally, historically, industrially, is very much a part of the Western Anglo-Saxon tradition. Having said that, culturally it is changing and there is more Asian influence now in terms of trade patterns and greater trade integration into the Asia Pacific. That gives it an interesting place in the firmament of nations,’ he said.

Mr Rudd, the Mandarin-speaking former diplomat, will have his work cut out for him at Copenhagen. Australia must be open about the challenges nations will face in setting targets and reducing emissions. Its decision to be an early mover on emissions trading must be used to inform the debate and pave the way for others, including the US, to proceed. Australia must engage countries within Asia, particularly China and India, about the urgency of action on climate change. Perhaps then Australia can legitimately claim to be a climate change leader.

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