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Warning: Australia’s Greenhouse Emissions are on the rise!

Posted by Barney Mezey in CPRS | Climate Change | Electricity Supply | Emissions Trading Scheme - (0 Comments)

It has been a turbulent time during the last few weeks regarding the climate change issue. There have been a number of natural disasters all around Australia all linked to weather pattern changes. Although, some may argue that these would have happened anyway –saying that these have nothing to do with global warming- it is unlikely. There has been an increase of floods all around the world in the last few years as well as extreme temperatures resulting in bush fires or heavy snow falls in countries where they don’t normally have these. And the list goes on. But I won’t go on about this as it is a huge issue in itself, just look at Bruce’s previous blog with the weather map of Australia; it sums it up succinctly.

What is a concern is that the first reaction of the Australian federal government is to cut back on the environment budget in order to rebuild flood-affected areas. Fair enough some of those policies were real duds anyway but weren’t some of these catastrophes caused by the fact that we have been putting too much carbon dioxide in the atmosphere? So it would make more sense to try to reduce these to minimise the occurrence of more natural disasters. However, this is not the case. According to an article in The Age (http://www.theage.com.au/environment/climate-change/greenhouse-emissions-to-double-unless-action-taken-20110211-1aqnb.html) quoting Ross Garnaut the way we are going at the moment Australia’s greenhouse emissions will increase by 24% by 2020 (based on 2000 levels). Hang on; weren’t we supposed to reduce our emissions by an incredible 5% by then? Oh, yes but we still haven’t got any decent policies in place such as a carbon tax after years of debating it. Instead the current and the previous federal governments have spent around $5.5 billion on mediocre and piece meal abatement programs some of which were very poorly-managed indeed.

Overall all these approaches will not make hell of a lot of difference to Australia’s greenhouse emissions and we paid a very high price for the minuscule CO2 that we did manage to curtail, which is estimated to be about one-tenth of that famous 5% target. See: http://www.theage.com.au/environment/climate-cash-goes-up-in-smoke-20110214-1atnh.html). On a state government level (referring to our home state Victoria) the recently-elected government doesn’t seem to have much to say about Climate Change –so far. They are not too concerned to the extent that some of them don’t even believe in it and suggest the commissioning of more brown coal power stations to keep up with the ever increasing electricity demand.

The only ones that are actually rolling their sleeves up and are really doing something about reducing greenhouse emissions are our local governments with the support of their constituents. There are many passionate people in these organisations that are constantly doing the right thing. In many cases they are ignoring the financial cost of implementing strategies in order to improve their environmental impact. Those higher up should learn from them.

It is paramount that we as a country start doing something about Climate Change. The longer we wait the more it will cost the economy to retool and the longer we wait the worse it will get when it comes to natural disasters.

Emissions trading scheme or direct action – What’s the best choice?

Posted by Graham Davies in CPRS | Climate Change | Emissions Trading Scheme | Leadership - (0 Comments)

In Australia I see essentially two political choices for taking action on climate change. Vote for a party committed to reducing greenhouse gas emissions and implementing an emissions trading scheme (ETS) or vote for a party not committed to an ETS and relying on ‘direct action’ to reduce carbon emissions. The major political parties are in essence providing these two choices to the Australian public – Labor for an ETS and the Coalition against an ETS. The two key minor, but still influential parties offer the same choice – Greens for an ETS and the Nationals against.

But what is an ETS and what is direct action? If people don’t understand the choices how are they to make an informed decision?

Direct Action

Direct action is essentially funding measures and initiatives through tax payer’s money that will reduce carbon emissions. Sounds simple enough, and of course voters can be led to believe that the government is taking control and doing something immediate to tackle Australia rising greenhouse gas emissions. The Liberal party is promoting direct action and refers to an ETS as a ‘great big tax’, but surely direct action could be termed the same – after all, direct action is still using tax payers’ money!

Emissions Trading Scheme (ETS)

What is an ETS and what advantage does it offer over direct action? The Department of Climate Change refers to its ETS policy as a Carbon Reduction Pollution Scheme (CPRS). An ETS is also commonly referred to as a cap and trade system or simply carbon emissions trading. What this means, is that the Government basically sets a cap or limit on the amount of pollution (carbon emissions) that can be emitted. This cap is sold to participants (the big polluters) in the form of carbon emission permits, which each are worth a specific amount of specified pollutant – in the context of tackling climate change, carbon dioxide. Holders of the permits are then allowed to trade the permits within each trading period set by the Government. The total amount of permits cannot exceed the cap, which over time is reduced by the Government, forcing the market to adjust and carbon emissions reductions to be achieved.

Essentially, participants of the trading scheme are allowed to pollute a certain amount within each period. If they exceed this amount (the cap), then they must purchase permits to allow them to pollute. So participants below the cap can choose to sell their permits to participants who require them. This puts a price on carbon pollution and if well designed, provides an incentive for participants to reduce their emissions.
The Labor Government came very close to passing an ETS, however it was blocked in the Senate twice in 2009. The Greens Party played a key part in the failed policy adoption of a ETS as they viewed the scheme as watered down, with a target to reduce Australia’s net carbon emissions by only 5 percent. To some degree I agree that the targets need to be much higher if Australia is to really move towards a low-carbon economy, however being too ambitious too early must have implications for our economy.

Labor is still committed to implementation of an ETS, but has postponed any commencement until 2013, claiming a divide on the issue due to a lack of consensus on climate change. They are offering direct action initiatives in the short-term, and a so called Citizens Assembly to form consensus for a future ETS. I get the feeling the lack of consensus is within the political realm, because I get the feeling most Australian’s want action on climate change, but just aren’t sure what the best action is.

Are you for an ETS or against?

I see the choice as simple – vote for a potential ETS or vote for no ETS. So what’s the advantage of an emissions trading scheme over direct action? An ETS is market-based, which from an economic perspective is more efficient and results in reducing carbon emissions at lowest cost. So the claim by the Liberal Party that an ETS is a ‘great big tax’ is not directly true. The problem lies in Government intervention in the form of subsidies and other exemptions, which are funded through tax payers’ money. Australia is a carbon emissions intensive nation, due to key sectors including the energy sector and aluminium smelter industry. An ETS without government intervention would mean these sectors would be the hardest hit, such that they would need to invest dramatically to improve energy efficiency and where above the cap, pay to pollute. This is argued to impact Australia’s global competiveness and will most likely increase the cost of commodities affected.

So, the argument against an ETS is that participants will have to spend money to reduce their carbon emissions and this expense will partly be passed on to consumers. While this may be true, at the end of the day, someone needs to foot the bill and if climate change is everyone’s problem then we should all be contributing.

Getting the balance right

The question is, do we contribute through direct government expenditure, or indirectly through a market-based scheme? Governments do not exactly have a good reputation for spending tax payers’ money efficiently so I would argue an ETS is the way to go. However, the success of an ETS really comes down to its overall design. Yes, we want to reduce emissions, but we don’t want to endanger Australia’s economic competitiveness. Like anything, it’s a balancing act, but if we get so bogged down in analysis paralysis, we’ll never achieve any real outcomes.

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What are you voting for?

Posted by Regina McLeod in CPRS | Carbon Conservation | Climate Change | Emissions Trading Scheme | Leadership - (0 Comments)

The Australian Conservation Foundation (ACF) has released its scorecard for the forthcoming federal election, and will update it weekly. With only 3 weeks to go, the three major political parties have clearly put entirely different emphases on the importance of the world in which we live. Which best suits you?

As the ACF states: “Unfortunately, the scorecard shows that to date the ALP and the Coalition are failing on cutting pollution and protecting the environment. Check out how the environmental policies of each of the parties rate, and what work needs to be done…”

These have all been calculated from the publicly stated policies of the political parties. Some of the criterion for the results above included:

Question 1 – Pollution and a Clean Economy:

  • Deliver science based greenhouse gas pollution reduction targets with the urgency required?
  • Reduce fossil fuel subsidies and re-invest the proceeds into the clean energy economy?
  • Embed environmental sustainability into decision making processes of government?

Question 2 – Clean Energy:

  • Boost renewable energy at the scale needed by 2020?
  • Put Australia on track to be a leader in energy efficiency in the developed world by 2020?

Question 3 – Sustainable Cities:

  • Result in world leading, better planned, resource efficient and sustainable cities by 2020?
  • Boost federal transport spending to achieve world class public and active transport systems for Australian cities and regional centers?

Question 4 – Healthy Environment:

  • Build resilience of ecosystems to climate change, protect carbon stores and significantly reduce land use emissions?
  • Bans the importation of illegally logged timber products and helps achieve effective forest protection in the Asia pacific?
  • Protect the cultural and natural values of the Kimberley with Traditional Owner consent?

For more detail on how the four scores were assessed, go to http://www.acfonline.org.au/default.asp?section_id=374 .

As you decide what you’re going to use your vote for, consider the consequences of voting for each of these parties. Some cultures plan for sustainability many generations ahead – the Iroquoi up to seven generations. Can enough Australians see beyond the next election?

Have your say on whether voluntary energy savings are recognised under the CPRS

Posted by Bruce Rowse in CPRS | Carbon Conservation | Emissions Trading Scheme - (1 Comments)

Starting today, public workshops are being held by the government to get public opionion and advice about how voluntary climate change action can be taken into account when setting emission caps for the Carbon Pollution Reduction Scheme (CPRS).

Workshops are being held on the following dates:
Perth
11 June 2009 9:00 am – 12:00 pm
Rydges Hotel Perth Corner Hay & King Street, Perth
Adelaide
12 June 2009 9:00 am – 12:00 pm
Mercure Grosvenor Hotel 125 North Terrace, Adelaide
Brisbane
30 June 2009 9:00 am – 12:00 pm
Chifley at Lennons 66 Queen Street Mall, Brisbane
Sydney
16 June 2009 9:00 am – 12:00 pm
Wesley Conference Centre 220 Pitt Street, Sydney
Melbourne
24 June 2009 9:00 am – 12:00 pm
Rydges on Swanston 701 Swanston Street Carlton, Melbourne

To attend register your interest at:
http://www.climatechange.gov.au/emissionstrading/householdassistance/index.html.

Voluntary action isn’t recognised under the proposed CPRS unless you pay to have the carbon retired into the Carbon Trust. In other words you pay twice – you pay to actually cut your carbon emissions (eg upgrading your office lighting by installing reflectors. Then, if you want the carbon you’ve saved to be “retired” so it can’t be traded by one of the large companies participating in the CPRS you have to pay again to lock it up in the Carbon Trust.

This is a tremendous disincentive for voluntary action. So have your say at these workshops.

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Budget 2009: Pay twice to cut carbon.

Posted by Bruce Rowse in CPRS | Carbon Conservation | Carbon Measurement and Tracking | Emissions Trading Scheme - (1 Comments)

Direct quote from the government’s 2009 budget web site:

“Households and small businesses will be able to calculate the potential dollar savings from their energy efficiency actions and make tax deductible donations to the Energy Efficiency Savings Pledge Fund. The Australian Carbon Trust will use these donations to purchase and retire Australian emissions units or purchase carbon offsets.”

What this means:

  • If you voluntarily cut your household energy consumption to save greenhouse gas – sorry the greenhouse savings don’t count! If you want to reduce greenhouse gas emissions, you have to actually now go and pay to “retire” the carbon you’ve saved – and pay the government to do so. See my earlier blog posting rantings about the disincentives in the CPRS (Carbon Pollution Reduction Scheme) for more detail. Basically if you don’t pay to retire the greenhouse gas you’ve saved, the entity generating the energy (say an electricity generator) can claim it. And trade it. And you have contributed no additional greenhouse savings beyond that which the emissions trading scheme would achieve anyway.
  • If you are a small business…. hang on… what is a “small business”? As only Australia’s top emitters get to participate in the CPRS doesn’t the definition of a “small business” in this context mean anyone who can’t participate in the CPRS? To participate in the CPRS you either have to directly generate over 25,000 tonnes of carbon a year, or consume more than 100 Terajoules of energy. In other words you are a small business if your annual energy consumption is less than 100 TeraJoules of energy or you directly produce less than 25,000 tonnes of carbon. What is a tera joule? You are probably familiar with kilojoules (1,000 joules), a tera joule is actually 1,000,0000,000,000 Joules. 100 TJ equates to an annual energy expense of about $2 million (as does the production of 25,000 tonnes). So, if you spend less than around $2 million a year on energy you are a “small business”!

So let me rewrite what budget actually means in plain English. “If you spend less than around $2,000,000 a year on energy, and you cut your energy use, in order to be able to also say that you’ve cut Australia’s greenhouse gas emissions you need to pay the government for it to recognise that what you’ve saved is an actual saving.”

Or, lets do a hypothetical here. Lets assume that you are a “small business” – ie your energy expense is less than $2 million a year. (What a tiny, wee business you’ve got if you’re not spending $2 million a year on energy!) You invest $10,000 in upgrading your lighting (using Mirrorlux Reflectors say). This saves you  $5000 a year on your electricity bills and about 25 tonnes of carbon annually. But if you want to say that your investment has reduced Australia’s emissions you actually have to pay. Lets say the carbon price settles at $50 a tonne. You’ll have to spend $1,250 a year to be able to genuinely say that your investment in your lighting upgrade is saving greenhouse gas. Because if you don’t, under the CPRS, the electricity generator supplying you the power that energises your lights has the right to the carbon you’ve saved.

Another hypothetical. This time you invest in a new gas heating system in your school. You spend $300,000 to put in gas space heaters and eliminate the old central heating system. It saves you approximately $20,000 a year in gas costs, and about 160 tonnes of greenhouse gas emissions a year. At $50 a tonne you have to pay the government $8,000 to “retire” the carbon you’ve saved. 40% of the financial savings you’ve realised goes to the government if you want to be able to say that your investment is actually reducing greenhouse gas emissions.

Are, you, like me, someone who believes that personal or “small business” action can do something to avert dangerous climate change? Do you, like me, spend less than TWO MILLION DOLLARS a year on energy? Well the government is clearly telling you and me that if we want to make a difference we have to pay twice. Pay for the investment to cut your emissions. And then pay the government to retire those emissions.

Isn’t there something really really wrong if we have to spend twice to cut our greenhouse gas emissions?

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