Green paper tinged with blue hue

In the wake of the release of the Green paper, Michelle Grattan pings the electorate to see if they are still awake:

NO WONDER the Opposition is struggling in its efforts to pick a fight with the Government over its emissions trading scheme. The green paper model differs only marginally from the one John Howard endorsed last year.

The main variation is in timing. The Howard scheme, based on a report from a task group headed by then Prime Minister's department secretary Peter Shergold, was to start in 2011 or 2012. The Rudd plan is due to kick off in 2010.

For the rest, the similarities are great, including compensation in each scheme for the trade exposed sector and for other badly affected industries, notably electricity generators (although the green paper is rather tougher on both, as well as focusing on the household sector, brushed over in Shergold).

Notably, Howard had petrol in. As he boasted, "this emissions trading scheme will be world class in its coverage and governance" and would avoid "political fixes".

He did not propose any "fix", as the Rudd scheme does, to neutralise petrol's inclusion. Of course oil prices have shot up in the past year. The Coalition has shifted ground: it urged, and Labor adopted, an offset to ensure petrol prices don't rise as a result of the scheme.

In light of its history, it is a bit rich for the Opposition to be jumping up and down about the Government's plan to review this offset after three years' operation — which means five years from now.

There is continuity even in the bureaucratic work behind the two schemes. The Coalition's task group was serviced by a secretariat headed by Martin Parkinson, then a senior Treasury officer. Parkinson drafted the group's document. Now he is secretary of Penny Wong's Climate Change Department, established by this Government, and the most important bureaucrat in putting together the green paper.

In preparing the Shergold report, the challenge for the task group was to come up with something acceptable to Howard, at heart a climate change doubter, whatever his latter-day conversion under political pressure. Howard personally wrote the terms of reference, which inevitably made the report conservative.

The task group was successful: Howard adopted the report, more or less holus-bolus, although his government didn't last long enough to implement its measures.

The green paper is a statement of Rudd Government policy. In this case, the challenge has been to err on the side of caution and a slow start for reasons of political necessity, despite Labor's rhetoric about the imminent threat from climate change.

Approaching the task from different perspectives, the two exercises converged on a common centre.

I blame the Liberal opposition partisanship in the issue, in all but name. They are not really presenting as a party that is serious, rather as a ratbag collection of interest groups and factions. I would like to see an opposition that holds the Government to their election promises, asking why Garnaut is being swept aside for Shergold, for instance.

The rest of Grattan's piece sketches out the political landscape that new legislation will have to chart a course through.

Technorati Tags: global waming, climate change

Green Paper is cautious politics

The great Emissions Trading Scheme Sell begins, and the Rudd Government opens by signalling that they ease the pain of introducing the EMT, or whatever they will call it.

HOUSEHOLDS earning up to $150,000 and the nation's heaviest polluters will be helped to cope with the introduction of an emissions trading scheme in 2010 that the Government says will be "calm and measured".

Sounds a bit soft to me. A price signal should function as a price signal. But I don't have to stay in power, and it looks as if the Liberals have decided against a bipartizan approach. That makes me grumpy.

Labor have to position themselves for a hasty implementation, be seen to do so, yet not expose themselves to the Opposition canard that it makes no sense moving before China, India and the US. Someone should blow that damn meme out the water.

So what's the damage?

Releasing the green paper outlining the shape of the scheme, the Minister for Climate Change, Penny Wong, confirmed that increases in petrol prices would be neutralised by corresponding reductions in fuel excise.

She refused to guarantee that this would continue beyond 2013 and said motorists should start considering what types of cars they would be driving by then.

On first impression, I have doubt that market behaviour would change much by watering down the medicine. Economically, it misses the point. But, there is satisfying logic in weaning the Government of this revenue and reducing their conflict of interest with the oil lobby. I believe the revenue is about $2 billion a years, and Rudd's 'fiscally conservative' government is sure to fund the shortfall from revenue raised from issuing carbon permits to industry.

In addition, horrible hikes in the cost of oil are predicted anyway. I've been reading suggestion that market pressures going to have more of an impact on the cost of fuel, than a carbon tax.

Back to the question of damage:

When the scheme begins, electricity and gas prices will rise immediately. Under a $20-a-unit carbon price, electricity bills would increase by 16 per cent, gas bills by 8 per cent and the overall cost of living by 0.9 per cent.

Using some of the billions in revenue the scheme will generate, low-income households - those earning up to $53,000 a year - will receive full compensation through either the tax or family payments system.

Middle-income households - earning up to $150,000 - will receive partial compensation. Pensioners, carers, the elderly and others will have their pensions increased to compensate fully.

The payments will start either when or before the scheme begins and will help insulate Labor against expected electoral fallout.

So how are they going to fund this electoral fire-break?

A cap will be put on the amount of carbon that can be emitted. Within this cap, 1000 of the nation's biggest polluters will have to buy permits for each tonne of carbon they produce. The costs will be passed on to consumers and companies can trade unwanted permits. These are designed to act as incentives to reduce emissions.

The carbon price - the cost of each permit - will depend on the level of emissions.

UPDATE

Reaction (and a growing round-up of of reactions) from Not a Hedgehog: "Piss.Weak."

Technorati Tags: global warming, climate change

ASX preparing to trade carbon

Greed is good, but green greed is best.

The ASX has their eyes on their share of the $46.5 trillion investment market that the International Energy Agency says is required to reduce the world's CO2 emissions by 50 percent by 2030, 21.5 years away.

Robert Elstone | July 14, 2008

AS record high prices for coal, gas and oil - together with speculation as to the impact of the forthcoming emissions trading scheme on the Australian economy - dominate the headlines, the existing infrastructure of the Australian Securities Exchange remains a conduit to help firms raise and allocate capital as well as manage the risks associated with fluctuating energy and environmental product prices.

The International Energy Agency estimates that a $US45 trillion ($46.5 trillion) investment would be required to reduce the world's carbon dioxide emissions by 50 per cent by the year 2030.

Domestically, the National Generators Forum estimates that $150 billion is required to meet a 60 per cent reduction on year 2000 emissions by 2050.

While these estimates appear staggering, a well-designed ETS will generate an acceptable rate of return on the investment required. In other words, superannuants and other investors will be beneficiaries of the transformation process.

To put in context what needs to be achieved over the 42 years until 2050, one only has to look back over the same duration since 1966 to see how far that investment in new technologies and the sophistication of financial markets have advanced.

In 1966, we did not have personal computers or futures contracts on financial instruments such as equity indices and interest rate securities, let alone active derivative markets for compliance instruments such as emission permits and renewable energy certificates.

This is good news for prescient Australian companies who are already trading overseas, like AGL trading abatements on the Chicago Climate Exchange.

Technorati Tags: global warming, climate change

Developing world won't take lead in climate fight

On page 2 of the Draft Garnaut Climate Change Review he cuts to the chase:

The work of this Review is directed at nurturing the slender chance that Australia and the world will manage to develop a position that strikes a good balanced between the costs of dangerous climate change and the costs of mitigation.

A slender chance that needs nurturing?

Australian emissions reductions are not going to make a big difference, on a world scale. But without them, we are not going to convince the developing world to cap theirs. As they told us a month ago:

Berlin June 8 The Prime Minister, Dr Manmohan Singh, and leaders of four other emerging economies, China, Brazil, Mexico and South Africa, took the offensive in the debate on climate change asking the developed world first to make significant cuts in greenhouse gas emissions.

"Greenhouse gas mitigation in developed countries is the key to address climate change given their responsibilities in causing it," noted a joint policy paper that was presented to the leaders of the G-8, the group of eight top industrialised nations: the US, UK, Japan, France, Italy, Japan, Russia and Canada.

This was a response to the assertion of the G-8 that cutbacks in emissions by only the developed countries would not be adequate; the emerging economies too have to do their bit. "We invite notably the emerging economies to address the increase in their emissions by reducing the carbon intensity of their economic development," the declaration of the G-8 had said.

The key to bringing them on board is their cheap access to renewable energy technology.

The emerging countries said that access to adequate technology was a key enabling condition. "We need an agreement on transfer of technologies at affordable costs," they noted in their joint paper.

Aware of the constraints that patents imposed on transfer of technologies, they said, "Rewards for innovators needs to be balanced with common good for humankind."

Like the man said... a slender chance.

Technorati Tags: global warming, climate change

Garnaut Draft: Critic discounts it by 33%

The 537 page Garnaut CLIMATE CHANGE REVIEW DRAFT REPORT is out today, and already we know it's hurting Australians.

We know exactly who, too. L. Ron Bolt is already clawing at the report, and he hasn't even got to the Table of Contents:

Garnaut goes for the scare

UPDATE

Ross Garnaut’s 360-page blueprint for tackling the urgent crisis of the end of the warming world is printed on paper. But, says Garnaut on page 2, it’s environmentally kind paper:

9Lives80, composed of 80 percent post-consumer fibre....

Pity that this is paper that’s actually made in Italy, requiring lots of gassy transport to bring here. What hope of purity for the rest of us, then, when the gurus set this example?

(Thanks to reader Owen.)

Or should that be reader Pwn?

Don't it jest drive you nuts when deniers spear us well-meaning non-deniers with such sharp shards of perspicacity? Here is the whole statement that Andrew's playing Gotcha Garnaut with.

This report is printed on 9Lives 80, a paper composed of 80% post-consumer fibre and 20% totally chlorine-free pulp? 9Lives 80 is a Forest Stewardship Council mixed-source certified paper identifying that all virgin pulp is derived from well-managed forests and manufactured by ISO 14001 certified mills?
All inks used in the printing of this report are vegetable based.

Of course Andrew knows that ISO 14001 is the environmental management planning ISO certification? The Italian paper company, Burgo Group, must have strict compliance and reporting standards. In a trice I was downloading their Paper Field 2007 Environmental Report for an statement on their transport, logistics and distribution.

Eureka.

The path towards sustainable growth also includes responsible logistics and transport management: moving and storing goods, in fact, produces noise, consumes energy and creates traffic, therefore, emissions into the environment. We have organised an approach to tackle these problems that leads to benefits in terms of savings, efficiency, safety and less pollution. Movement of materials arriving at and leaving our mills, production planning and warehouse management is controlled at Group level.

Thanks to precise coordination of goods and raw material flows we have managed to limit movements, so reducing the noise this creates, emissions from vehicles (fork-lifters and trucks) and risks of damage to finished products.

As far as possible we at the Burgo Group try to reduce road transport by resorting to alternative methods. We use railways, the multimode system that consists in a combination of truck, ship and rail transport, and short-range coastal sea transport, also encouraged by the European Commission. During the year the PM9 was installed at Verzuolo we expanded rail facilities from 6,500 to 19,000 wagons per year, both arriving and departing.

Our Duino mill has an internal railway line to handle arrival of raw materials and is linked directly to already organised major European printing centres and those that will be connected in the future.

So Andrew's caught out again, and rightly so. If a company bothers enough about customers and the environment enough to implement costly ISO 14001 compliance, is it too much to ask newspaper opinion journalists to implement simple research before snidely sniping from the sidelines?

I note he didn't even download the Garnaut Draft before criticising: It's a 537 page blueprint, not a 360 page blueprint. Andrew's discount is by 33% — before even reading the table of contents.

What hope of an honest debate for the rest of us, then, when the L. Ron Bolt sets this example?

Technorati Tags: global warming, climate change