How trade policies can support global efforts to curb climate change


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Eliminating trade barriers on green technologies could help countries to shift away from fossil fuels.
from www.shutterstock.com, CC BY-ND

Adrian Henry Macey, Victoria University of Wellington

Climate change will have a big impact on the global economy as nations seek to adapt to a warmer world and adopt policies to keep global warming below two degrees. In the wake of the US withdrawal from the Paris Agreement, it is important that policies around trade and investment support national efforts to adapt to global warming while trying to curb it. Four issues stand out:

1. Border tax adjustments

Border tax adjustments, or BTAs, refer to import taxes on goods from countries where companies do not have to pay for their emissions.

This is highly controversial and problematic for practical reasons and difficult to reconcile with World Trade Organisation (WTO) compliance requirements. The arguments in favour rest on punishing free riders and protecting the competitiveness of national firms subject to climate change costs in their home country. Such taxes are also held up as a way of avoiding “carbon leakage” caused by production shifting to countries with more lax climate change policies.

The latter two arguments are similar to those that have been applied in the past to environmental protection regulations. The problem with them is that there is very poor empirical evidence for either competitiveness risk or for carbon leakage.
They also rest on the assumption that combating climate change is always a net cost. This is being increasingly challenged.

The argument against BTAs centres on the potential of unilateral measures being used to coerce developing countries. The sensitivity of such measures is shown by the fact that, until very late in the negotiations of the Paris Agreement, developing countries insisted on including the following clause.

“Developed country parties shall not resort to any form of unilateral measures against goods and services from developing country parties on any grounds related to climate change.”

2. Trade liberalisation in climate-friendly goods and services

Eliminating trade barriers on solar panels and other green technologies could help countries to shift away from fossil fuels. This is fully within the scope of the WTO and indeed the mandate of the current Doha trade round. There are several work streams within the WTO covering this area, though progress is slow.

3.International carbon trading and offsets

The Kyoto Protocol includes several mechanisms (Clean Development Mechanism, Joint Implementation and Emissions Trading) that can be used by countries that have tabled a 2020 target (European countries and Australia).

International market mechanisms beyond 2020 have not yet been created under the Paris Agreement but its Article 6 foresees them. Such mechanisms are being developed bottom-up by groups of countries, which can make much faster progress than is possible within the United Nations Framework Convention on Climate Change (UNFCCC).

However, any new mechanisms are likely to be linked in some way to the UNFCCC. There is no coverage of carbon trading under the WTO at present and there appears to be no appetite for bringing it within WTO disciplines.

4. Compatibility of climate measures and trade rules

One fear is that WTO rules will have a chilling effect on climate change measures such as subsidies, technical regulations or bans on certain products. However, Article 3.5 of the UNFCCC (which applies to the Paris Agreement as it does to the earlier Kyoto Protocol) is clear.

It uses WTO language to state that “measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade”. The UNFCCC, like the WTO, acknowledges the legitimate purpose of climate measures, including that they may involve restrictions on trade.

There is ample and growing WTO jurisprudence on measures taken for environmental purposes which confirms their legitimacy in WTO law. The jurisprudence is not static; it evolves with international thinking as expressed in treaties and less formal agreements.

Helpfully the WTO Treaty (1994) included an objective relating to protection and preservation of the environment that went further than the earlier General Agreement on Tariffs and Trade (GATT). This provision has already been used in interpretation by the highest WTO jurisdiction, the Appellate Body.

Conclusions

I expect that some carbon markets will develop amongst carbon clubs. Trading rules will be determined by those countries involved and will rest on the environmental integrity of the units traded.

Border tax adjustments (BTAs) are problematic. Some commentators have predicted a climate change trade war, arguing that countries are vulnerable if their climate measures are seen as inadequate.

This is now an improbable scenario. Any attempt to impose BTAs against countries which have signed up to the Paris Agreement would face enormous practical difficulties. It would also risk undoing the international consensus.

Transparency, peer review and naming and shaming of countries with inadequate pledges (Nationally Determined Contribution or NDCs), or countries that fail to implement an adequate one, may prove more effective than any of these unilateral measures. Evidence from the climate change negotiations is that countries do care about their reputation.

A further resource to encourage countries to act would be carbon clubs, where countries wanting to accelerate their transition to a low-carbon economy would link their climate measures through a common carbon price via their emissions trading schemes.

The threat of BTAs – clearly foreseen by major American companies after the Trump Administration’s decision to leave the Paris Agreement – may be a useful political lever to gain cooperation. But there are other ways of achieving similar ends.

The ConversationOne example is to require all goods, domestic or imported, to meet sustainability standards. This is potentially allowable under the WTO Technical Barriers to Trade agreement (TBT) as a type of processing and production method. But even if not, the existence of the Paris Agreement – a universal agreement with clear objectives and requirements on all parties to act on climate change – would be a useful reference in any dispute settlement proceedings.

Adrian Henry Macey, Senior Associate, Institute for Governance and Policy Studies; Adjunct Professor, New Zealand Climate Change Research Institute. , Victoria University of Wellington

This article was originally published on The Conversation. Read the original article.

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15th-century Chinese sailors have a lesson for Trump about climate policy


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Disruptive technology, Ming Dynasty-style.
Vmenkov/Wikimedia Commons, CC BY-SA

Dave Frame, Victoria University of Wellington

In the early 15th century the Ming Dynasty in China undertook a series of expensive oceangoing expeditions called the Treasure Voyages. Despite the voyages’ success, elements of the elite opposed them. “These voyages are bad, very bad,” we can imagine them tweeting. “They are a bad deal for China.” Eventually these inward-looking, isolationist leaders gained enough power to prevent future voyages.

But this was an own goal. The parochial elites who killed off the Treasure Voyages could stop Chinese maritime innovation, but they could do nothing to prevent it elsewhere. Decades later, European sailors mastered the art of sailing vast distances across the ocean, and created fortunes and empires on the back of that technology (for better or worse). It is hard to see how China’s strategic interests were served by abandoning a field in which they led.

There are some striking parallels in the Trump administration’s decision to renege on the Paris climate agreement. It has been cast as a move to protect America, but in the long run it won’t derail the world’s transition to a low-carbon economy, and instead the US will find itself lagging, not leading.

Trump’s repudiation of the Paris deal is regrettable for at least three reasons. First, because the US is a technological leader whose entrepreneurs are extremely well placed to lead the global low-carbon transition; second, because America’s abdication of climate leadership weakens the global order and sends a wink and a nod to other fossil-fuelled recalcitrants like Saudi Arabia and Russia; and finally because having the world’s second-highest emitter outside the agreement is a clear negative.

That said, US flip-flopping on climate is nothing new. The nation played a strong role in shaping the Kyoto Protocol, only to fail to ratify it. And while that did not help matters, it did not derail international efforts to combat climate change. In fact, the momentum behind climate-friendly initiatives has grown several-fold since the early 2000s.

Viewed in the long run, the latest US defection changes little. Any conceivable future Democrat administration will rejoin the Paris Agreement. But more importantly, the transition to a low-carbon future is not dependent on the actions of a single player.

The criteria for successful climate change policy are hard to achieve but easy to describe: success will come when non-emitting technologies economically outcompete fossil fuels, pretty much everywhere in the world, in the main half-dozen or so sectors that matter.

Beating the ‘free-rider’ issue

A stable climate is what we call a “public good”, similar to fresh air or clean water. The US political scientist Scott Barrett has pointed out that climate change is an “aggregate efforts public good”, in the sense that everybody has to chip in to solve the problem of safeguarding the climate for everyone.

“Aggregate efforts” public goods are especially hard to preserve, because there is a strong incentive to free-ride on the efforts of others, as the US now seeks to do.

But technology can transform this situation, turning an aggregate efforts public good into a “best-shot public good”. This is a situation in which one player playing well can determine the whole outcome, and as such is a much easier problem to solve.

We have seen technology play this role before, in other global environmental issues. The ozone hole looked like a hard problem, but became an easy one once an inexpensive, effective technological fix became available in the form of other gases to use in place of ozone-harming CFCs (ironically, however, the solution exacerbated global warming).

Something similar happened with acid rain, caused by a handful of industrial pollutants. Dealing with carbon dioxide emissions is harder in view of the number of sources, but breakthroughs in five or six sectors could make a massive dent in emissions.

Technology trumps politics

This suggests that solving climate change relies far more heavily on technological innovation and successful entrepreneurship than it does on any single government. Policies in specific jurisdictions can speed climate policy up or slow it down, but as long as no single government can kill the spirit of entrepreneurship, then no country’s actions can alter the long-run outcome.

This is why German climatologist John Schellnhuber is right to say that “if the US really chooses to leave the Paris agreement, the world will move on with building a clean and secure future”.

The low-carbon race is still on, and the main effect of Trump’s decision is to put US innovators at a disadvantage relative to their international competitors.

We have seen these technological races before, and we have seen what recalcitrance and isolationism can do. Just ask the Ming Dynasty, who ceded their maritime leadership and in doing so let Europe reap the spoils of colonialism for half a millennium.

Similarly, the Trump administration can ignore basic physics if it likes, although this is electorally unsustainable – young Americans can see that it is in their own interest to support climate policy. Democracies are imperfect, but over time they have the ability to self-correct.

The ConversationDeveloping polices that regulate the release of environmentally damaging gases is important. Pricing carbon is important. But government policy is not everything. Ultimately, this problem will be solved mainly by technology, because the way out of the jam is by finding new, inexpensive ways for humans to flourish without harming the planet.

Dave Frame, Professor of Climate Change, Victoria University of Wellington

This article was originally published on The Conversation. Read the original article.

Labor’s climate policy could remove the need for renewable energy targets


Tony Wood, Grattan Institute

The federal Labor Party has sought to simplify its climate change policy. Any suggestion of expanding the Renewable Energy Target has been dropped. But there is debate over whether the new policy is actually any more straightforward as a result.

One thing Labor did confirm is its support for an emissions intensity scheme (EIS) as its central climate change policy for the electricity sector. This adds clarity to the position the party took to the 2016 election and could conceivably remove the need for a prescribed renewable energy target anyway.

An EIS effectively gives electricity generators a limit on how much carbon dioxide they can emit for each unit of electricity they produce. Power stations that exceed the baseline have to buy permits for the extra CO₂ they emit. Power stations with emissions intensities below the baseline create permits that they can sell.

An EIS increases the cost of producing electricity from emissions-intensive sources such as coal generation, while reducing the relative cost of less polluting energy sources such as renewables. The theory is that this cost differential will help to drive a switch from high-emission to low-emission sources of electricity.

The pros and cons of an EIS, compared with other forms of carbon pricing, have been debated for years. But two things are clear.

First, an EIS with bipartisan support would provide the stable carbon policy that the electricity sector needs. The sector would be able to invest with more confidence, thus contributing to security of supply into the future.

Second, an EIS would limit the upward pressure on electricity prices, for the time being at least.

These reasons explain why there was a brief groundswell of bipartisan support for an EIS in 2016, until the Turnbull government explicitly ruled it out in December.

Moving targets

Another consideration is whether, with the right policy, there will be any need for firm renewable energy targets. This may help to explain Labor’s decision to rule out enlarging the existing scheme or extending it beyond 2020.

If we had a clear policy to reduce emissions at lowest cost, whether in the form of an EIS or some other scheme, renewable energy would naturally increase to whatever level is most economically efficient under those policy settings. Whether this reaches 50% or any other level would be determined by the overall emissions-reduction target and the relative costs of various green energy technologies.

In this scenario, a separately mandated renewable energy target would be simply unnecessary and would probably just add costs with no extra environmental benefit. Note that this reasoning would apply to state-based renewable energy policies, which have become a political football amid South Australia’s recent tribulations over energy security.

An EIS is also “technology agnostic”: power companies would be free to pursue whatever technology makes the most economic sense to them. Prime Minister Malcolm Turnbull explicitly endorsed this idea earlier this month.

Finally, an EIS would integrate well with the National Electricity Market, a priority endorsed by the COAG Energy Council of federal, state and territory energy ministers. State and territory governments may find this an attractive, nationally consistent alternative that they could support.

Strengths and weaknesses

A 2016 Grattan Institute report found that an EIS could be a practical step on a pathway from the current policy mess towards a credible energy policy. Yet an EIS has its weaknesses, and some of Labor’s reported claims for such a scheme will be tested.

In the short term, electricity prices would indeed rise, although not as much as under a cap-and-trade carbon scheme. It is naive to expect that any emissions-reduction target (either the Coalition’s 26-28% or Labor’s 45%) can be met without higher electricity costs.

Another difficulty Labor will have to confront is that setting the initial emission intensity baseline and future reductions would be tricky. The verdict of the Finkel Review, which is assessing the security of the national electricity market under climate change policies, will also be crucial.

Despite media reports to the contrary, Chief Scientist Alan Finkel and his panel have not recommended an EIS. Their preliminary report drew on earlier reports noting the advantages of an EIS over an extended renewable energy target or regulated closure of fossil-fuelled power stations, but also the fact that cap-and-trade would be cheaper to implement.

Labor has this week moved towards a credible climate change policy, although it still has work to do and its 45% emissions-reduction target will still be criticised as too ambitious. Meanwhile, we’re unlikely to know the Coalition government’s full policy until after it completes the 2017 Climate Change Policy Review and receives the Finkel Review’s final report.

Australians can only hope that we are starting to see the beginnings of the common policy ground that investors and electricity consumers alike so urgently need.

The Conversation

Tony Wood, Program Director, Energy, Grattan Institute

This article was originally published on The Conversation. Read the original article.

What role for the states on climate and energy policy? NSW enters the fray


Anna Bruce, UNSW Australia; Graham Mills, UNSW Australia, and Iain MacGill, UNSW Australia

We’re currently having a national conversation about climate and energy, with reviews of climate policy and the National Electricity Market underway. Up for debate is how the states and federal government will share these responsibilities.

Following the recent statewide blackout in South Australia, the federal government pointed the finger at Labor states’ “aggressive”, “unrealistic” and “ideological” renewable energy targets.

Victorian Premier Daniel Andrews returned: “Rather than peddle mistruths, Malcolm Turnbull and Barnaby Joyce should start providing some national leadership and focus on developing a renewable vision beyond 2020.”

It might seem to be yet another partisan, ideological stoush between a Liberal federal government and three Labor state governments.

However, the Liberal-led New South Wales government has now also entered the fray, with a 2050 emissions target that will almost certainly require complete decarbonisation of the electricity sector within the next 25 years.

And to achieve this, renewables will have a key, many would argue overwhelming, role to play.

What are the states already doing?

NSW released its climate policy framework in November, joining Victoria, South Australia and the ACT with an aspirational target to reduce carbon emissions to net zero by 2050.

While NSW didn’t announce a renewable target, the majority of states now have one. Queensland is seeking 50% renewable generation by 2030, Victoria 40% by 2025 and South Australia 50% by 2025.

Tasmania’s generation is already mostly renewable (albeit mostly conventional hydro generation). The Australian Capital Territory looks set to achieve 100% renewables by 2020 and the Northern Territory has announced a 50% target for 2030.

At present, the federal government has a renewable energy target of around 23.5% renewable electricity by 2020 and a 2030 target of 26-28% greenhouse emission reductions from 2005 levels. These ambitions fall way below those of the states.

And way below the almost complete electricity sector decarbonisation by 2040 that the International Energy Agency says is required globally to avoid dangerous global warming.

What does the law say?

Constitutionally, energy policy in Australia is a matter for state governments. The development and implementation of the National Electricity Market over the past two decades has been achieved through the Council of Australian Governments (COAG), with harmonised legislation in each state.

State governments therefore have the constitutional scope to act both independently and in consort to achieve clean energy related goals.

Whether they should choose to do this, however, is another question. There is an obvious national context including Australia’s participation in international climate change processes such as the UN Framework Convention on Climate Change.

National policy coherence also has value in avoiding uncoordinated policies that can adversely impact investment incentives, increase compliance costs, and generally lead to less efficient outcomes.

While suitably ambitious, nationally consistent, legislation under federal government leadership may be ideal, it hardly seems realistic at present. The apparent divisions within the federal government seem likely to prevent useful progress, even with the two reviews.

It might well be a choice between state leadership or very little leadership over the next few years. And these years will be key to setting Australia on a clean energy path fit for the future.

New South Wales’ climate plan

The NSW climate change policy framework proposes to meet the net zero target through a number of policy “directions” to reduce emissions. It also proposes adaptation measures to cope with the warming that is already underway.

The emission reduction directions include: enhancing investment certainty for renewables; boosting energy productivity (energy efficiency); capturing other benefits of reducing emissions (such as improved health from reduced air pollution) and managing the risks; and growing new industries in NSW.

These are to be advanced through government policy, government operations, and advocacy. Specific initiatives are to be outlined in a set of action plans, including a climate change fund and an energy efficiency plan, which are currently under consultation.

A further advanced energy plan will be developed in 2017. This will include provisions for the future role of renewable energy. Clearly the government will not be able to achieve its aspirational emissions target in the absence of a transformation of the energy system, so how will renewable energy figure in the absence of a state target?

While we can’t preempt the plan, the policy framework defines advanced energy to not only cover renewable generation itself but also how it is integrated into industry structures and adopted by end users.

Given the importance of integration in transitioning the energy system, such a broad focus could usefully complement the activities of other states as well as NSW.

The policy also emphasises collaborating with the commonwealth and other states through COAG.

NSW: a climate advocate?

Combined state action has historically played a key role in federal climate policy. It was bottom up pressure from states that resulted in the Howard government’s initial emissions trading scheme (ETS) proposal in 2007.

The Garnaut review that formed the basis of Kevin Rudd’s ETS was originally commissioned by Labor state governments.

On this point SA Premier Jay Wetherill has taken the lead in calling for a national emissions trading scheme to be implemented through harmonised legislation at a state level.

While this seems unlikely to be a feature of NSW’s advocacy in 2017, continued failure by the federal government to advance climate and energy policy might require such types of coordinated state efforts.

In this light, state government efforts do not appear “ideological”. That would seem to better describe the federal government’s present opposition to even exploring promising emission reduction options.

And while it is too soon to know if NSW’s climate policy is fit for the future, it certainly represents welcome progress, and provides a basis that can be built upon.

The Conversation

Anna Bruce, Lecturer in the School of Photovoltaic and Renewable Energy Engineering, UNSW Australia; Graham Mills, , UNSW Australia, and Iain MacGill, Co-director, Centre for Energy and Environmental Markets, UNSW Australia

This article was originally published on The Conversation. Read the original article.

The real lesson from South Australia’s electricity ‘crisis’: we need better climate policy


Tony Wood, Grattan Institute

Australia’s energy markets got a big shock in July this year, when wholesale electricity prices spiked in South Australia, alarming the state government and major industrial customers. Commentators rushed to find the immediate culprits. But the real issues lie elsewhere.

As shown by the Grattan Institute’s latest report the market worked. Having soared, prices fell back to more manageable levels. The lights stayed on.

Yet South Australia’s power shock exposed a looming problem in Australia’s electricity system – not high prices or the threat of blackouts, but an emerging conflict between Australia’s climate change policies and the demands of our energy market.

A perfect storm

On the evening of July 7, the wind wasn’t blowing, the sun wasn’t shining, and the electricity connector that supplies power from Victoria was down for maintenance. This meant gas set the wholesale price, and gas is expensive these days, especially during a cold winter. At 7.30pm wholesale spot prices soared close to A$9,000 per megawatt hour. For the whole month they averaged A$230 a megawatt hour. They were closer to A$65 in the rest of the country.

Australia has committed to a target to reduce greenhouse gas emissions by 26-28% below 2005 levels by 2030. Despite this well known and significant target, the national debate on climate change has been so toxic and so destructive that almost no policy remains to reduce emissions from the power sector in line with that target.

By 2014 the much maligned renewable energy target (RET), a Howard government industry policy to support renewable energy, remained as the only policy with any real impact on the sector’s emissions.

Wind power has been the winning technology from the RET, and South Australia has been the winning state. Wind now supplies 40% of electricity in South Australia due to highly favourable local conditions. Because wind has no fuel costs it suppressed wholesale prices in the state and forced the shutdown of all coal plants and the mothballing of some gas plants. But wind is intermittent – it generates power only when it is blowing, and the night of July 7 it barely was.

A report by the Australian Energy Market Operator noted that the market did deliver on reliability and security of supply in July. It reviewed the behaviour of market participants and concluded there were “no departures from normal market rules and procedures”.

The events of July do not expose an immediate crisis, but they have exposed the potential consequences of a disconnection between climate change policy and energy markets. If it is not addressed, the goals of reliable, affordable and sustainable energy may not be achieved.

The bigger problem

Climate change policy should work with and not outside the electricity market. With a fixed generation target of 33,000 gigawatt hours of renewable electricity by 2020 and a market for renewable energy credits outside the wholesale spot market under the RET, the conditions for problems were established some time ago.

The specific issues that arose from the design of the RET would have been far less problematic if one of the attempts over the last ten years to implement a national climate policy had been successful. A rising carbon price would have steadily changed the relative competitiveness of high and low emissions electricity sources and the RET would have quietly faded.

The first lesson for governments is that we need to establish a credible, scalable and predictable national climate change policy to have a chance of achieving emissions reduction targets without compromising power reliability or security of supply. A national emissions trading scheme would be best, but pragmatism and urgency mean we need to consider second best.

While such an outcome is the first priority, it will not provide all the answers. The rapid introduction of a very large proportion of new intermittent electricity supply creates problems that were not foreseen when traditional generation from coal and gas supplied the bulk of Australia’s power needs.

All of the wind farms in one state could be offline at the same time – a far less likely event with traditional generation. The problem can be solved by investment in storage and in flexible responses such as gas and other fast-start generators. Commercial deals with consumers paid to reduce demand could also contribute.

Lower average prices combined with infrequent big price spikes are not an obvious way to encourage long-term investors. The market may find solutions with new forms of contracts for flexibility or the market operator could introduce new structures or regulations to complement the existing wholesale spot market.

Much uncertainty exists, no easy fixes are in sight and the consequences of failure are high. Getting it right will provide clear signals for new investment or for withdrawal of coal plants as flagged by speculation over the future of the Hazelwood power station in Victoria.

Josh Frydenberg, as the new minister for the environment and energy, and his fellow ministers on the COAG Energy Council would be unwise to waste a near crisis.

The Conversation

Tony Wood, Program Director, Energy, Grattan Institute

This article was originally published on The Conversation. Read the original article.

Attacks on renewable energy policy are older than the climate issue itself


Marc Hudson, University of Manchester

The recent battles over the budget of the Australian Renewable Energy Agency (ARENA), and before that over the size of the Renewable Energy Target, are the latest skirmishes in a long-running war over support for technologies that harvest Australia’s abundant wind and solar resources.

Perhaps surprisingly, the conflict even predates the popular awareness of climate change, which is generally dated to 1988.

UNSW Australia’s Mark Diesendorf has described how in early 1983 he and his colleagues had identified an ideal site in northern Tasmania for a wind farm. They presented their proposal to Labor’s newly appointed resources minister, Peter Walsh.

We submitted a proposal that the federal government fund a demonstration wind farm and assist in establishing a local wind generator manufacturing industry in the region, which was suffering from high unemployment. The next day, Senator Walsh announced that a northwest Tasmanian wind energy project could be a part of a development package, if the Commonwealth was successful in the High Court challenge to the construction of the Gordon-below-Franklin dam.

The Commonwealth won its High Court battle, but the wind industry did not get its windfall. As Diesendorf recalls:

The federal government did not implement our proposal. It was soon obvious that the coal lobby, which was already very strong in the Department of Resources, had succeeded in turning the minister against wind power.

At the same time, CSIRO, a world leader in several areas of renewables, closed down all of its renewable energy research. In Diesendorf’s view this was brought on by “powerful coal and nuclear energy interests within the CSIRO”. In the absence of deathbed confessions by those who made the decisions, Diesendorf’s suspicions can’t be proved correct, but renewables did indeed disappear from CSIRO’s research agenda and annual reports from that time.

Once climate change hit the headlines, things changed – a little. In 1990 the Hawke government established the Energy Research and Development Corporation (ERDC) and launched a National Energy Efficiency Program. Meanwhile, research commissioned by the Victorian government found that renewable energy, paired with energy-efficiency measures, could save A$3.14 billion a year by 2005, create almost 14,000 jobs, boost economic productivity by A$800 million a year, and cut greenhouse emissions into the bargain.

But privatisation took hold in Victoria, and the Keating government in Canberra seemed indifferent at best. In 1994, green groups including the Australian Conservation Foundation called for a carbon levy to provide funds for renewable energy. Their request was ignored.

Renewables back on target

In 1996 the new Howard government disbanded Bob Hawke’s ERDC and energy efficiency program. In late 1997, in the run-up to the Kyoto climate summit, John Howard announced a new Renewable Energy Target (RET).

Greens leader Bob Brown was underwhelmed. He pointed out that the scheme’s A$65 million over five years was less than the A$75 million that had been axed the year before, while the target of an extra 2% of electricity from renewables (making a total of 11% including existing large-scale hydro electricity generation) fell short of the ambition shown by other nations. Britain, for instance, was aiming for 20% by 2010.

The RET finally came into place in 2001, after the fossil fuel lobby succeeded in getting it watered down, and was subjected to constant reviews.

Infamously, at a secret meeting whose minutes were leaked, the then energy minister, Ian MacFarlane, lamented to the chief executives of companies like BHP and Rio that the RET was working too well – renewables were growing too fast.

In the run-up to the 2004 Energy White Paper, the renewables industry had hired well-connected lobby firm Crosby Textor (yes, Crosby as in Lynton Crosby) in a bid to get the RET raised to as much as 10%.

According to Age journalist Richard Baker, a Liberal backbencher warned the renewables advocates that “you guys are stuffed”. And so it came to pass – the white paper spruiked carbon capture and storage, not renewables.

In the white paper’s aftermath, CSIRO boss Geoff Garrett announced that the organisation would be reducing its renewables research and instead focusing on “clean coal” technologies such as coal gasification and carbon capture and storage.

Months later, a draft copy of an August 2005 CSIRO report describing solar thermal technology as “the only renewable technology that can make deep cuts in greenhouse emissions” was leaked to The Canberra Times. Before the leak, sources claimed the report had been “passed around like a political hot potato” with no date set for its release. It was eventually released to the public later that year.

Bloody public battles

Since 2007 the battles have been more public and even bloodier. An attempt to harmonise (and perhaps increase) different state and federal targets (all with different baselines, target years and amounts) was a dispiriting process. This was due in part, it seems, to federal bureaucratic intransigence and arrogance.

The major changes have been an increase in the renewables target, split into large-scale (wind farms, solar farms and the like) and small-scale (mostly rooftop solar). That increased target was of course subjected to significant watering down by the Abbott government.

Meanwhile, the two agencies that were set up to support renewable energy have also come under attack. The Greens, whose support was a life-and-death issue for the Gillard government, had managed to insist on the creation of ARENA and the Clean Energy Finance Corporation.

Between them, these two organisations were designed to ensure funding both for basic research and development and for commercialisation of the resulting technologies, thereby smoothing the path for renewables to enter the electricity sector.

The attacks on these organisations have helped create investor uncertainty in renewables. Efforts to close them down ultimately failed, so the Abbott government switched to changing their terms of reference. The Turnbull government has continued this, along with salami-slicing ARENA’s budget.

This investment uncertainty, deliberately created, is a kind of “divestment campaign” against renewables. It can also be seen as a way of provoking an “investment strike”.

Whereas the mining industry threatened to take its investment dollars elsewhere while fighting Kevin Rudd’s proposed Resources Super-profits Tax in 2010, in this case, the supporters of the status quo energy system are hoping to dissuade external investors from coming to Australia. Thus do incumbents defend their patch.

Australia is famously the “lucky country”. But of course, Donald Horne meant it ironically, believing that the country was richly endowed with resources but “run mainly by second-rate people who share its luck”.

Given what we know of the trajectory and probable impacts of climate change, nobody, surely, will be able to be claim surprise as the future arrives.

The Conversation

Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of Manchester

This article was originally published on The Conversation. Read the original article.

Timeline: Australia’s climate policy


Annabelle Workman, University of Melbourne and Anita Talberg, University of Melbourne

With the Australian federal election just over a week away, it’s a good time to review the key milestones in Australian climate policy since the last federal election in September 2013.

After winning office, the Abbott government successfully repealed the “carbon tax”. However, an eclectic group of senators banded together to thwart attempts to remove other elements of Julia Gillard’s carbon price package, including several influential climate change agencies.

Heading into the July 2 election, both parties are clear on their climate policy platforms, committing to distinct approaches to meet international and domestic obligations.

Labor has pledged to establish two emissions trading schemes and achieve a goal of 50% renewables by 2030. While the Coalition, under prime minister Malcolm Turnbull, is standing by its Direct Action plan and the pursuit of technological innovation.

The timeline below highlights Australian climate policy interventions from the past three years. A more comprehensive survey of the climate and clean air policy landscape since the last election is detailed in a working paper from the Australian-German Climate and Energy College.

The timeline below is best viewed on a full screen browser window. To navigate, click on the arrow on the right to move forward (and on the left to move back).

https://cdn.knightlab.com/libs/timeline3/latest/embed/index.html?source=1E-CX2tob2T5jTI3Ot5RImCK6HItAiJpplcfXqW6LToo&font=Default&lang=en&initial_zoom=2&height=650

The Conversation

Annabelle Workman, PhD student, Australian-German Climate and Energy College and EU Centre on Shared Complex Challenges, University of Melbourne and Anita Talberg, PhD student in the Australian-German Climate and Energy College, University of Melbourne

This article was originally published on The Conversation. Read the original article.