The federal government's greenhouse policy is a failure

Despite the Government's programs to reduce greenhouse pollution, emissions in Australia continue to rise. According to the Australian Greenhouse Office AGO), Australia's industrial emissions are now more than 16.9 per cent above 1990 levels, a full 8.9 per cent over our Kyoto target already and continuing to rise.

In a narrow and inadequate response to the grave risks posed by climate change, current government policy continues to strongly support polluting fossil fuel exploration and development. Current greenhouse policy is clearly failing and it is absolutely essential that Australia takes immediate steps to reduce fossil fuels at source and spawn a sustainable energy (efficiency and renewables) industry.

Land clearing has begun to slow in some states, but in Queensland the rate of growth in issuing clearing permits has grown exponentially. The Federal Government hopes to achieve most of its international greenhouse gas commitments by reducing land clearing rates, rather than achieving a real reduction in industrial emissions. If this is to be the case the Government will have to ensure that a socially and environmentally equitable arrangement is negotiated with pastoral owners and lease holders so that land clearing can slow.

The Government's Renewable Energy Electricity Act calls on electricity generators to source 9500GWh of new "renewable energy" from the market by 2010. At the current rate in consumption of electricity, this is below a 1 per cent addition to Australia's energy mix. This is well below international best practice and has taken over three years to become law. Over the same three-year period Denmark has managed to increase its share of renewables, mostly from wind energy by 5 per cent.

Despite its excellent title, the Renewable Energy Electricity Act is little more than legislation that encourages the low-value use of our native forests. The sad irony is that under this law, energy companies may be penalised for NOT sourcing their power from burning native forests – a non-renewable source claiming to be "renewable energy".

The Greenhouse Challenge has been trumpeted as a great success, but continued massive growth in the industrial sector demonstrates that Australia must move beyond its current approach which looks only at incremental improvements on business as usual. Voluntary National Greenhouse Strategy programs such as minimum energy performance standards and energy building codes in practical terms have had little effect.

A recent voluntary initiative of the AGO aims to provide businesses with "credit for early action" for greenhouse abatement projects undertaken before 2008, the start of the first Kyoto commitment period. The details of the program are still being discussed in the public arena. The key issues include what will be considered "additional" activity (ie. what is business-as-usual and what is the action for which to allocate credit?) and why the AGO has failed to launch an emissions trading scheme which would provide a price for carbon in the market.

Voluntary industry programs have achieved little and Australia has overshot its Kyoto target. Australia must now legislate for an enforceable cap of greenhouse pollution and back this up with targeted performance-based regulation.

Finally the revised GST tax law package resulted in an increase in fossil fuel subsidies of more than $4.5 billion over four years resulting in a predicted increase in greenhouse pollution of almost 5 million tonnes over the business as usual projections by 2010.

Potential improvements to Australia’s policies to reduce greenhouse emissions

Proposals to plant trees as carbon sinks have received considerable interest as a tool to reduce greenhouse emissions. Planting trees has clear social and ecological benefits, but it is not a long-term solution to equipping our society and economy to deal with climate change. The credibility of trees as a long-term solution to climate change is considered doubtful by the International Panel on Climate Change. The most recent scientific studies show that existing forests that were thought to be net sinks, may in fact become net sources. Spending money on sinks has the potential to divert funds from the long-term solutions of shifting Australia from fossil fuels to energy efficiency and renewables. In this light, the $400 million dollar Greenhouse Gas Abatement Program should not be spent on tree planting programs.

Emissions trading is an effective mechanism to drive cost-effective reductions in greenhouse pollution. The primary objective of any scheme must be to deliver substantial, real and timely reductions in greenhouse gas pollution. Permits should be auctioned and the substantial funds raised used for greenhouse gas reduction programs. Any emissions trading scheme must have a rigorous monitoring and verification system. It should also be noted that the Danish Government has already established a domestic trading scheme for large polluters in the electricity sector which will start in 2002. BP Amoco has committed to reduce its greenhouse pollution by 10 per cent on 1990 levels in the first commitment period through a company-wide international emissions trading scheme. Australia needs to promptly introduce an emissions trading scheme for all polluters emitting more than 50,000 tonnes of CO2 per annum.

To complement an emissions trading scheme Australia should introduce an integrated national sustainable energy policy. The Danes have introduced such a model and now generate 10 per cent of their electricity from wind power and wind turbines have become the country's fourth largest export, worth US$1 billion per year. The Danish integrated policy of a combination of tax incentives, subsidies, accelerated capital depreciation and guaranteed electricity purchasing agreements has provided incentives for investors to develop clean renewable energy technology.