Archive for the ‘Events’ Category
In the lead up to the UN Climate Summit in September this year, the Abu Dhabi Ascent was held on May 4-5th as the only preparatory event. Former Vice President Al Gore was one of the keynote speakers and perhaps got the most tweeted line, which came in response to a question from the moderator regarding the single policy he would ask for if he had only one choice. He said, “. . . . put a price on carbon in markets and put a price on denial in politics”. In fact this is two things, but I wouldn’t expect anything less of Al Gore.
This comment set the scene for Rachel Kyte of the World Bank to launch their call for countries and companies to put a price on carbon. This isn’t the first time such a call has been made, but it is perhaps the first time such a call has been made directly to governments at a forum designed for governments by a multilateral agency linked with governments.
The call is a relatively simple one at this stage and fills a glaring gap in the UNFCCC agenda as it has been developing over recent years. Arguably the UNFCCC started the multilateral process back in the 1990s with a carbon pricing approach, in that the Kyoto Protocol is in part built around the idea of allowances, offsets and trading which in turn implies a price on carbon. Over time as the Kyoto Protocol has waned, talk of carbon pricing at the international level has gone in a similar direction. By the end of the Warsaw COP last year, all talk of markets and carbon pricing had been largely put to one side in favour of the efforts just to get everybody around the table and talking about contributions.
“Contributions” may be the political language of the day, but they will do little to stem emissions if carbon pricing isn’t core to the national effort underpinning said contributions. Some countries seem to have figured this out, but the actual price on carbon that currently prevails in those economies that have tried to create it is a far cry from anything that might actually make a difference. While the efforts to date may be a good start from the perspective of building the necessary national institutional capacity for carbon pricing, there is little evidence that governments, business and consumers are actually prepared to accept a carbon price that will deliver a tangible change in energy investment.
I would suggest that this is where The World Bank most needs to focus its attention. If not, I believe that we may end up with a complex system of carbon markets, linkages, trade and compliance all operating at under $10, which will look impressive on paper but in reality won’t make a difference to global emissions. The acid test for a carbon pricing system is its ability to deliver carbon capture and storage (probably with some additional fiscal support for the first generation of projects). At least for the next few decades, carbon pricing below this point may put a dent in the profitability of fossil fuels, but it won’t make them go away. This will inevitably lead to one thing – regulation. That might sound like the answer for some, but the reality will be a much higher cost for economies to bear for the same mitigation effort.
In my last post I provided a short review of the IPCC 5th AR, WGIII on Mitigation, with the emphasis on one table which showed how much more expensive mitigation will be over this century without carbon capture and storage. Unfortunately, this pearl from the IPCC didn’t get much coverage. Looking another layer down into the WGIII Technical Report, Chapter 6, the CCS case is very clear;
As noted above, the lack of availability of CCS is most frequently associated with the most significant cost increase (Edenhofer et al., 2010; Tavoni et al., 2012; Krey et al., 2014; Kriegler et al., 2014a; Riahi et al., 2014), particularly for concentration goals approaching 450 ppm CO2eq, which are characterized by often substantial overshoot. One fundamental reason for this is that the combination of biomass with CCS can serve as a CDR technology in the form of BECCS (Azar et al., 2006; van Vliet et al., 2009; Krey and Riahi, 2009; Edmonds et al., 2013; Kriegler et al., 2013a; van Vuuren et al., 2013) (see Sections 6.3.2 and 6.9 ). In addition to the ability to produce negative emissions when coupled with bioenergy, CCS is a versatile technology that can be combined with electricity, synthetic fuel, and hydrogen production from several feedstocks and in energy‐intensive industries such as cement and steel. The CCS can also act as bridge technology that is compatible with existing fossil‐fuel dominated supply structures (see Sections 7.5.5, 7.9, and 6.9 for a discussion of challenges and risks of CCS and CDR). Bioenergy shares some of these characteristics with CCS. It is also an essential ingredient for BECCS, and it can be applied in various sectors of the energy system, including for the provision of liquid low‐carbon fuels for transportation (see Chapter 11, Bioenergy Annex for a discussion of related challenges and risks). In contrast, those options that are largely confined to the electricity sector (e.g., wind, solar, and nuclear energy) and heat generation tend to show a lower value, both because they cannot be used to generate negative emissions and because there are a number of low‐carbon electricity supply options available that can generally substitute each other (Krey et al., 2014).
Importantly, this isn’t just about the cost of mitigation, but about the feasibility of meeting the global 2°C goal. As such, you would expect that CCS should figure at the top of the agenda at a climate conference, but this is rarely the case – in fact, in my experience it is only the case when the conference is actually about CCS.
On May 4-5th, the global climate fraternity will meet in Abu Dhabi for the Abu Dhabi Ascent, the first and only preparatory conference for the UN Secretary General’s Climate Summit on September 23rd in New York. The objectives of the meeting are as follows;
The objective of the Abu Dhabi Ascent is to provide an opportunity for all Governments to be fully informed about the Climate Summit, including how they can bring bold announcements and actions to the Summit, as requested by the Secretary-General. The Ascent will be the only meeting before the Summit in which Governments, the private sector and civil society will come together to explore international and multi-stakeholder efforts that have high potential for catalysing ambitious action on the ground. The Secretary-General set two objectives for the Summit: to catalyse ambitious action on the ground to reduce emissions and strengthen climate resilience, and to mobilize political momentum for an ambitious, global, legal agreement in 2015.
That certainly sounds like a conference where CCS would get some air time, but no, the agenda only includes the following;
- Energy Efficiency
- Renewable Energy
- Short-Lived Climate Pollutants (SLCPs)
- Climate Finance
- Adaptation, Resilience and Disaster Risk Reduction (DRR)
- Economic Drivers
Top of the list is my “old favourite”, energy efficiency, a great way to spur economies and stimulate economic growth, but almost certainly a red herring in the drive to contain cumulative emissions over the course of this century. My real favourite, carbon pricing, is there but well hidden under the obscure heading of “Economic Drivers”. As noted, CCS isn’t there at all.
We might imagine a world of clean, efficient renewable energy and we will need that, but it isn’t obtainable today and possibly not even by the end of this century. It will take time to evolve as the current energy system has evolved over the last 200 years. But the CO2 issue presents us with a pressing problem today that somehow needs a solution. The concern is that in the casino we live in, we seem to be betting all our chips on one colour, green, which might be a gamble too far. The even money bet on CCS and alternatives (renewables, nuclear) is what is needed.
The learning from IPCC WGIII and their scenario analysis seems to be lost on those who are leading the challenging process to bring nations together to solve the climate issue. There is something almost comical about this situation – perhaps an echo from Dr. Strangelove would be “You can’t talk about CCS here, this is a climate conference!”.
It’s difficult to sum up 2013 from a climate standpoint, other than to note that it was a year of contrast and just a little irony. Overall progress in actually dealing with the issue of global emissions made some minor gains, although there were a few setbacks of note along the way as well.
- The IPCC released the climate science part of their 5th Assessment Report and that managed to keep the media interested for about a day, after which it was back to issues such as health care, economic growth, Euro-problems and assorted regional conflicts. Importantly, the report introduced into the mainstream the much more challenging model for global emissions, which recognizes that it is the long term accumulation that is important, rather than emissions in any particular year.
- The global surface temperature trend remained stubbornly flat, despite every indication that the heat imbalance due to increasing amounts of CO2 in the atmosphere remains in place and therefore warming the atmosphere / ice / ocean system somewhere, although where exactly remained unclear. The lack of a clear short term trend became a key piece of evidence for those that argue there is no issue with changing the concentration of key components of the atmosphere, which further challenged the climate science community to provide some answers.
- The UNFCCC continued to put a brave face on negotiations that are being seriously challenged for pace by most of the worlds declining glaciers while the world’s largest emitter, China, often thought of as blocking progress at the international level kicked off a number of carbon pricing trial systems in various parts of the country.
- Australia elected a government that proudly announced on its first day in office that the carbon pricing system which was finally in place and operating after eight years of arguing would be dismantled, only to be confronted by the fact that the country sweltered under the hottest annual conditions ever recorded in that part of the world.
- Several very unusual global weather extremes were reported, including what may be the most powerful ever storm to make landfall, yet there was a distinct lack of desire by scientists and commentators to attribute anything to the rising level of CO2 emissions in the atmosphere, except perhaps for the UNFCCC negotiator from the Philippines who went on a brief hunger strike in response to devastation that hit parts of his country.
- The EU carbon price remained in the doldrums for the entire year, although did show a few signs of life as the Commission, Parliament and various Member States teased, tempted and taunted us with the prospect of action to correct the ETS and set it back on track. In the end, the “backloading” proposal was passed by the Parliament and will likely be adopted and implemented, but the test will be whether or not the Commission now has the backbone to propose and unconditionally support the necessary long term measures to see the ETS through to 2030 as the main driver of change.
- For the first time that I had seen, a book was released that finally got to grips with the emissions issue, yet somewhat alarmingly failed to find any clear route out of the dilemma we collectively find ourselves in. “The Burning Question”, by Mike Berners-Lee and Duncan Clarke recognized how difficult the emissions challenge has become and questioned those who trivialize the issue by arguing that more renewable energy and better efficiency is all that is needed to solve the problem. Clearly a book for those who designed the hallway posters [Link] at COP19 in Warsaw to read. Closer to home, new Shell Scenarios released in March [Link] 2013 did chart a pathway out of the emissions corner that Mike and Duncan painted themselves into, but the much discussed 2°C wasn’t quite at the end of it.
- The IEA put climate change back in the headlines of their World Energy Outlook, with a special supplement released in June outlining a number of critical steps that need to be taken to keep the 2°C door open. Unfortunately they hadn’t taken the time to read “The Burning Question” and consequently positioned enhanced energy efficiency as a key step to take over this decade.
- In North America both the US and Canadian Federal governments continued to head towards a regulatory approach to managing emissions, while States and Provinces respectively continued to push for carbon pricing mechanisms. California and Quebec linked their cap and trade systems to create a first cross border link in the region.
- The World Bank Partnership for Market Readiness continued its mission of preparing countries for carbon markets and carbon pricing, with numerous “works in progress” to show for the efforts put in to date. But the switch from early trials and learning by doing phases to robust carbon trading platforms underpinning vibrant markets remains elusive.
These were all important steps, particularly those that tried to broaden or strengthen the role of carbon pricing. On that particular issue, 2013 saw both positive and negative developments, with progress best described as “baby steps” rather than anything substantial. With a change in the European Parliament, mid-term elections in the US and Australia in the process of unwinding, it is difficult to see where the big carbon pricing story in 2014 will come from. Perhaps the tinges of orange (see below) now beginning to appear in South America will flourish and green with COP20 being held in that region towards the end of the year.
The flight from London to Warsaw this week gave me a chance to flick through the latest World Energy Outlook from the IEA (I couldn’t use the word “read” here as that would barely be possible on a flight to Melbourne, let alone Warsaw) and read a number of articles in the principle introductory publication to COP 19 (Climate Change – The New Economy), which amazingly enough was available in the BA Lounge at Heathrow.
Further to these publications, UNEP released their 2013 Gap Report on Wednesday afternoon at a side event in the football stadium where the COP is being held (it doubles as a convention centre).
The COP publication contains a series of articles from various stakeholders, all extolling the virtues of one particular technology over another as a means of delivering the needed emission reductions over the coming decades (e.g. efficient lighting!!). But on opening the publication there is a two page advertisement for a much more efficient and clean coal bed methane to liquids process under the heading “You will be amazed what we can do with coal”, followed by a two page spread from WWF titled “Help Save the Fridge”, with an expansive picture of pack ice in Spitsbergen. This rather sets the scene for the tensions that may well run right through this particular conference.
The document then continues with messages from the Polish Minister for the Environment (the COP President) and Christiana Figueres, Executive Secretary of the UNFCCC. Ms. Figueres’ article outlines with great exuberance how climate change represents “the mother of all opportunities” and goes on to note that more than 30 countries have climate legislation and 100 countries have renewable energy regulations. Of course she needs to be optimistic, how else could anyone face up to the reality of increasing global coal use and the task of delivering a deal that needs to bring global emissions to somewhere near zero later this century.
The contrast between these realities is highlighted by the UNEP Gap Report and the IEA World Energy Outlook. The Gap Report clearly recognizes that current national actions will not put us on a trajectory that looks anything like 2°C, but it then outlines a wide range of actions that UNEP claim could potentially be taken to reverse this trend. Although the Gap Report notes that timing is now very tight, it nevertheless goes on to outline reduction potentials across all the major emitting sectors (including agriculture) that add up to 17 GtCO2e per annum (middle of the range) below “business as usual” in just six years. This would take us well below current emissions and reverse a trend, almost overnight, that has been a reality for over 200 years.
The IEA also present a 450 ppm scenario, as they always have, but perhaps a more realistic scenario is their New Policies case. This scenario assumes the continuation of existing policies and measures (like the ETS in Australia !!!) as well as cautious implementation of policies that have been announced by governments but are yet to come into effect (e.g. the ETS in Korea). Given the pace of energy policy change over the last decade and the time it takes to debate, agree and implement new policies, this is probably a much fairer assessment of what is to come. Under this scenario, CO2 emissions in the energy sector rise from 31 GT in 2011, to 34.5 GT in 2020. This is quite a modest increase of just 1.2% p.a. which may well have been (almost) realized between 2011 and 2012 (see previous post), but that depends entirely on whose data is used. However, it isn’t the reduction that UNEP is saying is still possible.
This isn’t exactly news, but despite the wealth of optimistic publications and climate-speak here in Warsaw, the 2°C pathway remains out of reach. Perhaps the two page spread in the front of the COP publication was inserted as a sobering but much needed reminder of how the energy system is actually developing. Until delegates and observers come to terms with this and plan for it rather than attempt to swim upstream against the deluge, it is hard to see real progress being made. There continues to be a lot of criticism of the fact that Poland is holding this conference while at the same time continuing to run its economy on coal, but hopefully this actually helps ground the process in the difficult reality that is the current global energy system.
The first full day of 400+ ppm CO2 as recorded at Mauna Loa in Hawaii last week produced an outpouring of sentiment and grief from many, but the news has seemingly passed. Unfortunately, the arrival of such a day had become inevitable. Since the early days of the Keeling Curve at 315 ppm when it became clearly apparent that anthropogenic CO2 emissions were accumulating in the atmosphere, we have counting up the ppm to this day.
Despite an early clear warning to the Johnson Administration at 321 ppm, it wasn’t long before there was a brief worry about global cooling. Then, with atmospheric chemistry growing as a discipline (probably on the back of concerns about a cold war nuclear winter), we were distracted at 332 ppm by the first major anthropogenic global concern, the hole in the ozone layer. But with a treaty negotiated and ratification underway by 349 ppm (only 17 ppm to sort that one out), it didn’t take long for the science community to remember that another big issue was lurking in the shadows.
At 352 ppm and nearly 40 ppm on from the start of the Keeling Curve, James Hansen stated to a US Congressional Committee that;
- The earth is warmer in 1988 than at any time in the history of instrumental measurements.
- Global warming is now large enough that we can scribe with a high degree of confidence a cause and effect relationship to the greenhouse affect.
- Computer simulations indicate that the greenhouse effect is already large enough to begin to effect the probability of extreme events such as summer heat waves.
But it was another 13 ppm before the Kyoto Protocol was adopted by parties to the UNFCCC and 14 ppm more before it was finally ratified. 21 ppm later and it is a shadow of its former self, but at least with the legacy of some beginnings of a global carbon market. However, it is trading close to zero!! In the interim there was a valiant attempt at a new global deal, but even that was 12 ppm ago.
Our goal to be avoided, 450 ppm, is now feeling a bit close for comfort, given we are already at 400 ppm and 300 ppm was only passed under the previous British monarch.
Not to worry, it should only be another 15 ppm before a new global deal comes into force, although after more than 3ppm of discussion, the negotiations don’t really seem to have started. So we wait again, hopeful that someone has got a plan.
But a lot can happen in 50 ppm if we try hard and we really want something!! After all, the first world wide web page was posted only 43 ppm ago!
As if following on deliberately from the PWC report which I wrote about last week, come two new initiatives announced this Monday.
The first is a report from the World Bank and is the flip side of the PWC finding that a 2°C goal is now effectively out of reach. Turn Down the Heat: Why a 4°C Warmer World Must be Avoided, has been commissioned by the Climate Change Adaptation team at the World Bank, utilising the expertise of the Potsdam Institute for Climate Impact Research. Starting with the impacts that we are already seeing in a 0.8°C world, it looks at the unsettling prospects of a 2°C world and then the somewhat alarming implications of letting the climate issue slide and all of us wandering, eyes wide open, into a 4°C world.
The report is measured in its approach, not relying on histrionics to gets its message across. Rather, by stepping through the issue in terms of areas of concern against current observations, 2°C and 4°C impacts it gives the reader clarity in terms of where we are now, the political space currently targeted and the expected consequences in the medium term of not acting. The report also notes that impacts such as sea level rise will play out over many hundred of years, causing ongoing disruption over that period. A wealth of data is presented from a variety of sources, covering concerns such as ocean acidification, ice loss (sea level rise), extreme temperature events, agricultural impacts, water stress, disease vectors, non-linear change and changes to critical eco-systems.
The President of the World Bank Group, Dr. Jim Yong Kim sums up the issue very clearly in his forward:
We are well aware of the uncertainty that surrounds these scenarios and we know that different scholars and studies sometimes disagree on the degree of risk. But the fact that such scenarios cannot be discarded is sufficient to justify strengthening current climate change policies. Finding ways to avoid that scenario is vital for the health and welfare of communities around the world. While every region of the world will be affected, the poor and most vulnerable would be hit hardest. A 4°C world can, and must, be avoided.
Avoiding 4°C brings me to the second initiative of the day, the Carbon Price Communique. This is a statement released at an event in Brussels by the The Prince of Wales’s Corporate Leaders Group on Climate Change (CLG), a group which brings together business leaders from major UK, EU, and international companies who believe that there is an urgent need to develop new and longer term policies for tackling climate change. The statement serves as a timely reminder of the need for a carbon price within the global energy system, ideally delivered through national and regional market based policies such as the ETS in Europe. The Communique follows from similar statements in previous years, but is much more focussed on a specific policy recommendation that all governments now need to take on board. At launch, the Communique had been signed by well over 100 companies, with the numbers growing daily.
The Communique goes beyond the CLG and includes input from the International Emissions Trading Association (IETA) and the World Business Council for Sustainable Development (WBCSD). This adds strength to the effort and hopefully brings even wider business support.
At the heart of the Communique is the key ask:
Putting a clear, transparent and unambiguous price on carbon emissions must be a core policy objective. Although there are a number of mechanisms that can be used to do this, as businesses we would focus on working through the market, utilizing approaches such as emissions trading which offer both environmental integrity and flexibility for business. A price on carbon will reveal the lowest cost pathway to existing emissions reduction goals and can open the door to increased ambition.
The strongest evidence for the need for a carbon price comes from one technology, carbon capture and storage. Without it, there is little possibility of balancing rapidly growing energy needs against an atmosphere with a finite capacity to hold CO2 and stay below a given temperature threshold. But getting CCS will require a price on CO2 emissions. Along the way, a clear pricing structure will deliver rapid fuel switching, new bioenergy technologies and renewable power generation. But the eventual prize is CCS, also because it is currently the only known approach to deliver a reliable negative emissions scenario which the World Bank 4°C report identifies as the necessary approach to actually reverse some of the damaging impacts it identifies (e.g. ocean acidity beginning to recover by the end of this century).
More companies need to read, recognize and sign the Carbon Price Communique in the coming weeks.
The PWC report is a reminder that the lack of substantive action today has consequences. In support, the World Bank has given us a clear heads up on what those consequences are. Finally, there is the Carbon price Communique and the growing level of business interest behind it. This is what governments now need to do and it is clear that a significant portion of the business community is there to support such action.
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I have just been at the inaugural Global Green Growth Forum (3GF) in Copenhagen. This was a high level event, opened by the Crown Prince of Denmark and the new Danish Prime Minister, then following the initial panel discussion there was an introductory keynote by United Nations Secretary General Ban Ki-Moon – in person. The venue was also around the corner from the Copenhagen Tesla dealership!!
So the event got off to a flying start, but what then? One of the issues for me is that it wasn’t entirely clear what the conference was actually about. Green growth has become one of those new catch phrases that means many things, depending in large part on the listener. Perhaps the best articulation came in a coffee break discussion – “green growth” is the recognition of the type of growth in energy production and the provision of key goods and services that will be required over the coming decades as some three billion people move from a relatively low income status to middle class.
In fact this income shift is well underway and is placing stresses on a number of systems. Rising CO2 in the atmosphere is perhaps the early warning, but little has been done to mitigate that problem. Now there is concern about water, food, energy supply and general resource availability. Unlike the CO2 issue, there is little clarity as to what we might do about these issues. Faced with rising CO2 emissions, economists, the business community and much of civil society have been clear on the course of action to pursue – to put a price on carbon. We know how to do this, we know the timeframe within which it must be done and we have a reasonably clear notion of where it will lead (CCS, renewable energy etc.), but even this seems beyond our collective capacity to act. Instead, we are arguing about science, an otherwise solid bedrock of society.
At its root, the green growth agenda feels like a growing worry that the market structure we have created over the last two centuries isn’t sufficiently robust to take us forward and that somehow market fundamentals like supply, demand and ultimately price won’t work. It’s not exactly a surprise that we might be thinking this today, after all the financial markets have hardly done us any favours over the last two to three years. But does that mean markets in general will let us down? In the 1970s similar worries surfaced – then it was overpopulation, food supply and energy as the primary concerns. It was also a time of deep recession (1974), oil price shocks(1973) and a prevalence of floods (Australia 1974) and famine (Ethiopia 1973-74). But economies grew, the energy system adapted, amazing new technologies surfaced and food supply issues soon faded.
So back to the conference in Copenhagen and two days of leading figures talking about all things green. It was certainly interesting, but I don’t think it got very far. Leadership was identified as a key component, but there was no articulation as to where that leadership should take us. In fact, when one key panelist was answering a question on the agenda for Rio+20 he said that the agenda was currently lacking because there was no leadership. There was also a spattering of business bashing (e.g. “it is the fault of Japanese business that Japan won’t accept a second Kyoto commitment”) and even the assertion that government had sent a clear signal to business that it was serious about addressing climate change because of the agreement on the 2 °C target.
It looks like the green growth agenda is here to stay, even though we may just decide to take our chances with the market system that we have. But we shouldn’t do nothing. The CO2 issue represents a market failure, the Stern Report made this clear in 2006. Arguably, deforestation is another. There are ways to address these failures within the existing market system, the application of a carbon price as discussed above is one. The development of REDD has the necessary ingredients to tackle deforestation.
A green growth agenda that can propose, clearly define and implement a limited number of such approaches is what we need. Hopefully the meeting in Copenhagen was a forerunner to this, rather than just a taste of more and more discussion forums.
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A new film is currently having it’s cinema release in the USA, aptly titled Carbon Nation. As the name suggests this is a story about carbon dioxide emissions, but not in the space occupied by Al Gore and the science discussion (although it briefly dips its toe in this water for context reasons), rather it talks about the energy issues we face today and how society might begin to tackle them.
The film has been around for over a year now, but at film festivals and special screenings. Throughout February and into March it is on general release across the USA. I saw it recently at a private showing in London, led by the incredibly motivated Director Peter Byck. Peter is pretty new on the directing scene but has been involved with such block-busters as The Matrix and King Kong. This is his first widely released film.
Carbon Nation doesn’t profess to offer the big solution, rather it shows through a series of interviews at community and individual level how progress is being made and could potentially be accelerated. The 82 minute film starts with a really excellent description of the sheer size of the energy system, which sets the scene nicely for the track it then follows. From a vast wind farm in Texas to a local community centre being fitted with solar panels, the film explores how a wide variety of people are making a difference. This includes major corporate players such as Virgin Atlantic owner Sir Richard Branson and his quest for a bio-fuel based solution in aviation. The film explores a wide range of CO2 technologies and energy alternatives, in transport, agriculture and electricity generation and also has a major focus on the potential for energy efficiency improvements across the economy. As with all the discussions, the film approaches all these avenues by example, rather than simply pontificating on the possibilities. This is its real strength in terms of delivery.
As a film to go and see, it is worth paying the money at the box office. I thought it had a first class script which sits between and nicely joins together the many interviews making up the bulk of the time. It also tells a good story. But in watching the film, some viewers might come to think that energy services are an entirely local issue and that therefore the problem of CO2 emissions can also be managed locally. This is perhaps the one drawback of the interview approach taken. But another way of interpreting this and hopefully the one that most leave the cinema with is that energy provision and use should in fact be an issue that individuals think about. This is not to say that everyone should climb on their roofs to fit solar panels, but to the extent that they engage with the political and information processes in our society, energy should at least be a part. That of course includes the ballot box. There are very real choices that can be made there and this film serves as a good point to start the journey to become a true energy citizen.
Last but not least, I should admit to a minor bias in all of this – I was one of the many people interviewed for this film and if you are patient and get to the end then you can hear me discuss the role of a carbon price in the economy. Thanks to Peter Byck for not leaving me on the cutting room floor.
As an Australian living in London and subject to the market forces that an emissions trading system brings to the economy, I watch with great interest as Australia wrestles with the Carbon Pollution Reduction Scheme (CPRS), or “cap-and-trade” by another name (or emissions trading by another).
Since Kevin Rudd became Prime Minister just days before the Bali UN Climate Change Conference in 2007, he has ratified the Kyoto Protocol and tabled legislation to introduce an economy wide cap-and-trade system. The legislation has passed through the House of Representatives but is now stuck in the Senate where the Rudd government does not have a working majority. Over recent weeks the government has been negotiating with the leading opposition party to try and find a workable consensus and deliver the bill before Copenhagen.
This week that failed spectacularly. The nature of the legislation has also split the conservative opposition, with the result that the parliamentary leader of the party was deposed by a one vote majority and the new leader, Tony Abbott, has now made it clear that no immediate deal will be done and as expected, the legislation has now been rejected by the Senate. This potentially paves the way for a double dissolution of parliament and what could truly be the world’s first “climate change” election, although the government has indicated that it will reintroduce the legislation in February after Copenhagen and the summer recess of parliament. Abbott has also been labelled by some media outlets as a “climate sceptic” .
Australia has seen a number of weather extremes in recent years. A prolonged drought has brought despair to much of the rural sector, water restrictions are now common in places such Adelaide, temperatures in Melbourne hit a record 47 degrees C last February, the list goes on. Whilst all or none of these may be related to a changing climate (and Australia is a country of climate extremes), there is little doubt that they have raised the awareness of the issues we may all face in the decades to come. Both party leaders now claim the ear of the public on the issue, with the government arguing that the majority of Australians want to see the country act on climate change and the opposition leader claiming that the majority of Australians are opposed to the cap-and-trade legislation. Contrast all this with the reality that, according to the International Energy Agency, Australia has the highest per capita emissions in the world (apart from a handful of countries with small populations and a particular concentration of industry). It is also a country with huge solar resources, significant wind opportunity, ample uranium and over the last few years a very aggressive development programme for carbon capture and storage.
Whilst there will doubtless be short term political winners and losers in Australia, the real issue here is that there may be significant impairment to the long term policy solution set for managing emissions – with cap-and-trade at the heart of it. In turn, the environment itself suffers as widespread policy action is weakened. The development of a global carbon market, built by linking together various national trading schemes, is arguably where the world needs to go. Energy pricing is global, so injecting a carbon price into the mix will, over time, deliver change at a global level. Whilst there are many ways of creating a carbon price, cap-and-trade is designed to do it through a market based approach at lowest cost to the economy – things that should be attractive to legislators in market based economies. It’s really that simple, although as Australia is showing, simple is not always as simple as it seems.