What is 'real' action on climate change?
From https://www.theage.com.au/national/what-is-real-action-on-climate-change-20200115-p53rok.html
Polls suggest that Australians want to take action on climate change, and business leaders have joined the call for emissions cuts. One business leader called the summer’s bushfires "our generation’s Port Arthur moment" - a reference to the 1996 massacre that prompted changes to gun laws.
Pressure is growing on the federal government to take more decisive action.
But what form would greater climate change action take - and what would it cost?
Adaptation means putting in place measures to deal with the effects of climate change.
What does climate action actually mean?
Climate change action takes two forms: mitigation, which means reducing greenhouse gas emissions at a rate fast enough to prevent massive damage to our environment in the future; and adaptation, which means bracing and preparing for the changes that are happening and which will intensify.
Adapting to climate change is essential and there are many ways to do so, such as beefing up emergency services and strengthening farms and infrastructure against fires, storms and rising sea levels.
But the source of the problem is the rising emissions that are trapping heat in the atmosphere and oceans. In Australia, emissions come from electricity, industry, transport and agriculture as well as other sectors.
If we are serious about tackling climate change, we must reduce emissions faster than we are doing now. That’s the view of the world’s leading scientific bodies as well as the key expert bodies in Australia, including the CSIRO and the Australian Academy of Science. Their advice is clear: Australia needs to be close to carbon neutral by the middle of the century.
It would be nice to be able to flick a switch and change to zero emissions next week. In practice, decarbonising the nation will be a long, complex process.
The Garnaut Review, led by senior economist Ross Garnaut almost a decade ago, is still the most comprehensive assessment of Australia’s options for climate change action. It drew on leading Australian research on bushfire impacts to forecast an increase in bushfire danger by 2020. On our current trajectory, we are on track to see catastrophic fire days increase by 300 per cent by the second half of this century.
The review outlines various types of policy that can help cut emissions, both "carrots" and "sticks". There are public subsidies, such as government funding for wind and solar farms; or special tariffs to pay householders with solar panels. Then there are systems for making polluters pay, such as a carbon price implemented through a carbon tax or an emissions trading scheme. There are also policies that rely on regulating an industry, such as the now-abandoned National Energy Guarantee policy, under which companies would be required by law to use a mix of different technologies.
Several types of policy can operate at the same time. Australia had a carbon price from 2012 to 2014 before it was repealed after a change of government. Currently, it has some direct subsidies for emissions reduction projects but no mechanism for cutting greenhouse gases at the speed required.
The Garnaut Review found - and other studies, including by the OECD and by the Australian National University, have since agreed - that a carbon price coupled with an emissions trading scheme and a cap on greenhouse gas emissions would be the most effective and efficient way of cutting emissions.
The Prime Minister, Scott Morrison, has ruled out a "carbon tax" or other action that would raise electricity prices or affect polluting industries. In the wake of the fires, Mr Morrison has flagged "resilience" and "adaptation" as the areas he wants to focus on. However, he has suggested that more could be done to promote renewable energy and possibly cut emissions.
How are we going with cutting emissions so far?
Australia has promised the rest of the world it will cut its emissions by at least 26 to 28 per cent below its 2005 level by the year 2030 - but is not tracking near these targets. The promises were made under the Paris Agreement, which covers the period from 2021 to 2030.
It’s complicated, but the government is partly relying on a couple of factors to say it is still on track. Measures of how much carbon we are emitting must also include how much has been absorbed, as part of a natural process, in the soil, where it does not contribute to global warming. The science is evolving, and estimates of soil carbon were recently revised and may be revised again before 2030. The government has relied on the latest revision to suggest that emissions have dropped in the past few years.
Another factor they have relied on is "carryover credits". The government is banking on using carryover credits it received after the Kyoto Protocol - the climate change deal, covering 2008 to 2020, that paved the way for the current Paris Agreement.
Australia accrued the credits because it negotiated an easy target for itself under the Kyoto plan and then over-achieved. It is the only nation planning to use the credits to meet a large chunk of its promised target - as much as half - although some other nations such as Russia and Ukraine also hold credits and may use them.
Other nations that had the option of using carryover credits, such as the UK, Germany and New Zealand, have ditched them, taking the view that the credits don't equate to real emissions cuts.
As it stands, Australia’s pledge equals a 6 to 8 per cent rise in Australia’s emissions by 2030 rather than an emissions cut. (This is excluding the volatile "land use, land use change and forestry" portion of our emissions cuts, which are highly uncertain.)
Is there a link between climate change and bushfires?
What is the government policy on climate action then?
The government’s policy toolkit is based on its Climate Solutions Package. Some elements of this policy are yet to be clearly explained but the centrepiece is an emissions reduction fund - a pot of money worth about $130 million a year that can be paid to companies in return for cutting greenhouse emissions.
Its successes have been modest so far. It has funded various projects that have cut or avoided a few million tonnes of emissions each year - a far cry from the level of cuts needed to meet Australia’s pledges under the Paris Agreement.
Business interest in the scheme has been dropping off, with hundreds of proposed projects dwindling to a handful by the middle of 2019. The plan has also been hindered by a series of failed projects - ones that promised to make carbon cuts but didn’t deliver - according to the global scorecard website climateactiontracker.org.
In short, Australia currently has no mechanism for controlling its greenhouse gas emissions and may not meet its Paris commitments.
A price on carbon means companies pay for emitting greenhouse gases.
How would effective climate change action work?
The prevailing view among experts is that a carbon price with a "cap and trade" scheme is key to reducing emissions. As the Garnaut Review laid out over a decade ago, modelling suggests that if you let people make money from cutting pollution this can stimulate the growth of new industries.
A carbon price is the cost that companies must pay to emit greenhouse gases. A company, by law, must not emit more pollution than it can cover with permits.
An emissions trading scheme is a tool that governments use to control the rate at which a nation’s greenhouse emissions fall or rise, at the least cost to the public. It works like this: the government can cap how many carbon permits it issues each year. If it wants to cut 1000 tonnes of C02 to zero in 10 years, it can do so gradually by issuing 900 permits in the second year, 800 in the third, and so on.
Meanwhile, companies can buy and/or trade permits as some companies cut their emissions, leaving them with spare permits, and others emit too much and pay the price. As time goes on, permits become more scarce, their price goes up and companies change their ways to cut their emissions. Meanwhile, increased demand makes low-emissions activities - from wind farms to capturing methane from farms to planting forests - cheaper as companies invest in them.
A smart carbon market would have different but compatible strategies designed to balance profits and change in all sectors of the economy. It would put the levers that control the nation’s greenhouse gas emissions in the hands of the government instead of the hands of thousands of separate polluting businesses, as is now the case.
"A carbon price is the mechanism which unlocks emission reduction opportunities across every sector but it has more of an immediate impact in some sectors, such as electricity, than others, such as the land sector," says Emma Herd, the chief executive of the Investor Group on Climate Change, which represents investors with over $2 trillion in funds. "A carbon price is part of the policy toolkit but it's not a silver bullet. It’s an incredibly important means to an end."
Where do 'cap and trade' schemes operate?
Various cap and trade schemes are operating around the world, at state and national levels, with varying degrees of success. The general rule is that the higher the carbon price, the more effective the scheme at reducing emissions and the higher the cost for the companies.
“Clearly, the price has to be high enough to incentivise a rapid transition away from carbon-intensive energy sources to renewables,” says Professor Matthew England, of the Climate Change Research Centre at the University of NSW.
"Sweden priced carbon dioxide emissions at $US130 [$189] per tonne and Switzerland at $US100 [$145] per tonne. These are the kind of values needed to ensure the world’s fossil fuel reserves remain in the ground. The price rightly factors in the vast cost of unabated greenhouse gas emissions - costs that will be borne by both present and future generations."
Once again, it’s a complicated business but if you want to see successful emissions trading schemes there’s no need to look to Europe, there is one running smoothly in NSW: the Hunter River emissions trading scheme.
Decades ago, the river was heavily tainted by coal companies and other industries dumping salty water and other pollutants. But the NSW government designed a cap and trade scheme that made each company accountable for its emissions.
The scheme has transformed the river from an extremely polluted waterway into a place where dolphins now swim. The same type of scheme can work for the air as it does for the water - it’s the same basic model that the Garnaut Review proposed for a national greenhouse emissions scheme.
"I think a price on carbon is critical," says Professor Michael Mann, one of the world’s leading climate researchers and the director of the Earth System Science Centre at Pennsylvania State University in the US. "There are, of course, other lever arms to use in levelling the playing field in the energy market [such as] subsidies for renewables. Countries like Germany have made quite a bit of progress using feed-in tariffs, for example. But, in the end, polluters cannot be allowed to dump their carbon waste into our atmosphere at no expense."
The Capital Wind Farm in NSW, the largest in the state.
How much would climate action cost?
Climate action would be expensive, though not as expensive as some claim. "The overall cost to the Australian economy from tackling climate change is manageable and in the order of one to two-thirds of 1 per cent of annual economic growth," the Garnaut Review concluded.
That’s not GDP as a whole, but GDP growth. This means that the economy would still be growing while becoming less dependent on greenhouse gas emissions. The cost would probably put up electricity prices and the prices of some other goods, depending on the design of the scheme, as companies pass on extra costs to consumers. There is no economic model that can give us a price with precision. But, in a typical emissions trading model, the government could choose to use some of the revenue raised from companies by selling them carbon credits to compensate consumers. Nonetheless, climate action is not free and would mean some people paying slightly more for some products.
The price of adapting to climate change - what Mr Morrison is talking about when he refers to resilience against bushfires - comes on top of the costs of cutting emissions by decarbonising the economy.
There are other strategies, apart from a carbon price, but they are considerably more expensive. A decade ago, a report from the Beyond Zero Emissions research group laid out "a detailed and practical road map to decarbonise" Australia’s energy sector in 10 years by encouraging massive direct investment in wind and solar power. It put the cost at $37 billion a year, all of it apparently coming from the private sector.
But other studies have found that harnessing market forces and private sector innovation would probably make the transition both cheaper and less disruptive. As the Garnaut Review found, "When powerful incentives to innovation are introduced to a market environment, however, human ingenuity usually surprises on the upside."
The message of modelling in the Garnaut Review is that the more action we take earlier, the more costs can be avoided a few years down the track.
A two-degree rise in temperatures could spell the end for the Great Barrier Reef.
Are we absolutely sure this is necessary?
Unfortunately, yes. The Garnaut Review concluded that unmitigated climate change would be "bad beyond normal human experience", both due to the extreme weather and the consequences that those extremes would have on the safety of our societies. Even with immediate action, the impacts on Australia will be far more severe than they are now. It is likely that, even if we do everything we can to cut emissions, the Great Barrier Reef will be dead, or close to dead, if temperature rises reach 2 degrees. Such a path may become inevitable by 2030.
"Without mitigation, the best estimate for the Murray-Darling Basin is that by mid-century it would lose half of its annual irrigated agricultural output," says the Garnaut Review. "By the end of the century, it would no longer be a home to agriculture." Since then, the temperature rises driven by rising emissions have been causing impacts that are tracking at the more dangerous end of scientists’ forecasts.
"The bushfires have shown that doing nothing is itself a choice," says Herd, "with radical implications as Australia is highly vulnerable to the frontline effects of climate change. As such, we are choosing to lock-in climate change and the damage it will bring rather than reduce the emission intensity of our economy. And the extent of this damage will worsen the longer we choose not to act and the more temperatures increase."
Polls suggest that Australians want to take action on climate change, and business leaders have joined the call for emissions cuts. One business leader called the summer’s bushfires "our generation’s Port Arthur moment" - a reference to the 1996 massacre that prompted changes to gun laws.
Pressure is growing on the federal government to take more decisive action.
But what form would greater climate change action take - and what would it cost?
Adaptation means putting in place measures to deal with the effects of climate change.
What does climate action actually mean?
Climate change action takes two forms: mitigation, which means reducing greenhouse gas emissions at a rate fast enough to prevent massive damage to our environment in the future; and adaptation, which means bracing and preparing for the changes that are happening and which will intensify.
Adapting to climate change is essential and there are many ways to do so, such as beefing up emergency services and strengthening farms and infrastructure against fires, storms and rising sea levels.
But the source of the problem is the rising emissions that are trapping heat in the atmosphere and oceans. In Australia, emissions come from electricity, industry, transport and agriculture as well as other sectors.
If we are serious about tackling climate change, we must reduce emissions faster than we are doing now. That’s the view of the world’s leading scientific bodies as well as the key expert bodies in Australia, including the CSIRO and the Australian Academy of Science. Their advice is clear: Australia needs to be close to carbon neutral by the middle of the century.
It would be nice to be able to flick a switch and change to zero emissions next week. In practice, decarbonising the nation will be a long, complex process.
The Garnaut Review, led by senior economist Ross Garnaut almost a decade ago, is still the most comprehensive assessment of Australia’s options for climate change action. It drew on leading Australian research on bushfire impacts to forecast an increase in bushfire danger by 2020. On our current trajectory, we are on track to see catastrophic fire days increase by 300 per cent by the second half of this century.
The review outlines various types of policy that can help cut emissions, both "carrots" and "sticks". There are public subsidies, such as government funding for wind and solar farms; or special tariffs to pay householders with solar panels. Then there are systems for making polluters pay, such as a carbon price implemented through a carbon tax or an emissions trading scheme. There are also policies that rely on regulating an industry, such as the now-abandoned National Energy Guarantee policy, under which companies would be required by law to use a mix of different technologies.
Several types of policy can operate at the same time. Australia had a carbon price from 2012 to 2014 before it was repealed after a change of government. Currently, it has some direct subsidies for emissions reduction projects but no mechanism for cutting greenhouse gases at the speed required.
The Garnaut Review found - and other studies, including by the OECD and by the Australian National University, have since agreed - that a carbon price coupled with an emissions trading scheme and a cap on greenhouse gas emissions would be the most effective and efficient way of cutting emissions.
The Prime Minister, Scott Morrison, has ruled out a "carbon tax" or other action that would raise electricity prices or affect polluting industries. In the wake of the fires, Mr Morrison has flagged "resilience" and "adaptation" as the areas he wants to focus on. However, he has suggested that more could be done to promote renewable energy and possibly cut emissions.
How are we going with cutting emissions so far?
Australia has promised the rest of the world it will cut its emissions by at least 26 to 28 per cent below its 2005 level by the year 2030 - but is not tracking near these targets. The promises were made under the Paris Agreement, which covers the period from 2021 to 2030.
It’s complicated, but the government is partly relying on a couple of factors to say it is still on track. Measures of how much carbon we are emitting must also include how much has been absorbed, as part of a natural process, in the soil, where it does not contribute to global warming. The science is evolving, and estimates of soil carbon were recently revised and may be revised again before 2030. The government has relied on the latest revision to suggest that emissions have dropped in the past few years.
Another factor they have relied on is "carryover credits". The government is banking on using carryover credits it received after the Kyoto Protocol - the climate change deal, covering 2008 to 2020, that paved the way for the current Paris Agreement.
Australia accrued the credits because it negotiated an easy target for itself under the Kyoto plan and then over-achieved. It is the only nation planning to use the credits to meet a large chunk of its promised target - as much as half - although some other nations such as Russia and Ukraine also hold credits and may use them.
Other nations that had the option of using carryover credits, such as the UK, Germany and New Zealand, have ditched them, taking the view that the credits don't equate to real emissions cuts.
As it stands, Australia’s pledge equals a 6 to 8 per cent rise in Australia’s emissions by 2030 rather than an emissions cut. (This is excluding the volatile "land use, land use change and forestry" portion of our emissions cuts, which are highly uncertain.)
Is there a link between climate change and bushfires?
What is the government policy on climate action then?
The government’s policy toolkit is based on its Climate Solutions Package. Some elements of this policy are yet to be clearly explained but the centrepiece is an emissions reduction fund - a pot of money worth about $130 million a year that can be paid to companies in return for cutting greenhouse emissions.
Its successes have been modest so far. It has funded various projects that have cut or avoided a few million tonnes of emissions each year - a far cry from the level of cuts needed to meet Australia’s pledges under the Paris Agreement.
Business interest in the scheme has been dropping off, with hundreds of proposed projects dwindling to a handful by the middle of 2019. The plan has also been hindered by a series of failed projects - ones that promised to make carbon cuts but didn’t deliver - according to the global scorecard website climateactiontracker.org.
In short, Australia currently has no mechanism for controlling its greenhouse gas emissions and may not meet its Paris commitments.
A price on carbon means companies pay for emitting greenhouse gases.
How would effective climate change action work?
The prevailing view among experts is that a carbon price with a "cap and trade" scheme is key to reducing emissions. As the Garnaut Review laid out over a decade ago, modelling suggests that if you let people make money from cutting pollution this can stimulate the growth of new industries.
A carbon price is the cost that companies must pay to emit greenhouse gases. A company, by law, must not emit more pollution than it can cover with permits.
An emissions trading scheme is a tool that governments use to control the rate at which a nation’s greenhouse emissions fall or rise, at the least cost to the public. It works like this: the government can cap how many carbon permits it issues each year. If it wants to cut 1000 tonnes of C02 to zero in 10 years, it can do so gradually by issuing 900 permits in the second year, 800 in the third, and so on.
Meanwhile, companies can buy and/or trade permits as some companies cut their emissions, leaving them with spare permits, and others emit too much and pay the price. As time goes on, permits become more scarce, their price goes up and companies change their ways to cut their emissions. Meanwhile, increased demand makes low-emissions activities - from wind farms to capturing methane from farms to planting forests - cheaper as companies invest in them.
A smart carbon market would have different but compatible strategies designed to balance profits and change in all sectors of the economy. It would put the levers that control the nation’s greenhouse gas emissions in the hands of the government instead of the hands of thousands of separate polluting businesses, as is now the case.
"A carbon price is the mechanism which unlocks emission reduction opportunities across every sector but it has more of an immediate impact in some sectors, such as electricity, than others, such as the land sector," says Emma Herd, the chief executive of the Investor Group on Climate Change, which represents investors with over $2 trillion in funds. "A carbon price is part of the policy toolkit but it's not a silver bullet. It’s an incredibly important means to an end."
Where do 'cap and trade' schemes operate?
Various cap and trade schemes are operating around the world, at state and national levels, with varying degrees of success. The general rule is that the higher the carbon price, the more effective the scheme at reducing emissions and the higher the cost for the companies.
“Clearly, the price has to be high enough to incentivise a rapid transition away from carbon-intensive energy sources to renewables,” says Professor Matthew England, of the Climate Change Research Centre at the University of NSW.
"Sweden priced carbon dioxide emissions at $US130 [$189] per tonne and Switzerland at $US100 [$145] per tonne. These are the kind of values needed to ensure the world’s fossil fuel reserves remain in the ground. The price rightly factors in the vast cost of unabated greenhouse gas emissions - costs that will be borne by both present and future generations."
Once again, it’s a complicated business but if you want to see successful emissions trading schemes there’s no need to look to Europe, there is one running smoothly in NSW: the Hunter River emissions trading scheme.
Decades ago, the river was heavily tainted by coal companies and other industries dumping salty water and other pollutants. But the NSW government designed a cap and trade scheme that made each company accountable for its emissions.
The scheme has transformed the river from an extremely polluted waterway into a place where dolphins now swim. The same type of scheme can work for the air as it does for the water - it’s the same basic model that the Garnaut Review proposed for a national greenhouse emissions scheme.
"I think a price on carbon is critical," says Professor Michael Mann, one of the world’s leading climate researchers and the director of the Earth System Science Centre at Pennsylvania State University in the US. "There are, of course, other lever arms to use in levelling the playing field in the energy market [such as] subsidies for renewables. Countries like Germany have made quite a bit of progress using feed-in tariffs, for example. But, in the end, polluters cannot be allowed to dump their carbon waste into our atmosphere at no expense."
The Capital Wind Farm in NSW, the largest in the state.
How much would climate action cost?
Climate action would be expensive, though not as expensive as some claim. "The overall cost to the Australian economy from tackling climate change is manageable and in the order of one to two-thirds of 1 per cent of annual economic growth," the Garnaut Review concluded.
That’s not GDP as a whole, but GDP growth. This means that the economy would still be growing while becoming less dependent on greenhouse gas emissions. The cost would probably put up electricity prices and the prices of some other goods, depending on the design of the scheme, as companies pass on extra costs to consumers. There is no economic model that can give us a price with precision. But, in a typical emissions trading model, the government could choose to use some of the revenue raised from companies by selling them carbon credits to compensate consumers. Nonetheless, climate action is not free and would mean some people paying slightly more for some products.
The price of adapting to climate change - what Mr Morrison is talking about when he refers to resilience against bushfires - comes on top of the costs of cutting emissions by decarbonising the economy.
There are other strategies, apart from a carbon price, but they are considerably more expensive. A decade ago, a report from the Beyond Zero Emissions research group laid out "a detailed and practical road map to decarbonise" Australia’s energy sector in 10 years by encouraging massive direct investment in wind and solar power. It put the cost at $37 billion a year, all of it apparently coming from the private sector.
But other studies have found that harnessing market forces and private sector innovation would probably make the transition both cheaper and less disruptive. As the Garnaut Review found, "When powerful incentives to innovation are introduced to a market environment, however, human ingenuity usually surprises on the upside."
The message of modelling in the Garnaut Review is that the more action we take earlier, the more costs can be avoided a few years down the track.
A two-degree rise in temperatures could spell the end for the Great Barrier Reef.
Are we absolutely sure this is necessary?
Unfortunately, yes. The Garnaut Review concluded that unmitigated climate change would be "bad beyond normal human experience", both due to the extreme weather and the consequences that those extremes would have on the safety of our societies. Even with immediate action, the impacts on Australia will be far more severe than they are now. It is likely that, even if we do everything we can to cut emissions, the Great Barrier Reef will be dead, or close to dead, if temperature rises reach 2 degrees. Such a path may become inevitable by 2030.
"Without mitigation, the best estimate for the Murray-Darling Basin is that by mid-century it would lose half of its annual irrigated agricultural output," says the Garnaut Review. "By the end of the century, it would no longer be a home to agriculture." Since then, the temperature rises driven by rising emissions have been causing impacts that are tracking at the more dangerous end of scientists’ forecasts.
"The bushfires have shown that doing nothing is itself a choice," says Herd, "with radical implications as Australia is highly vulnerable to the frontline effects of climate change. As such, we are choosing to lock-in climate change and the damage it will bring rather than reduce the emission intensity of our economy. And the extent of this damage will worsen the longer we choose not to act and the more temperatures increase."