Australia hung out to dry on climate change

“If this looks like Kyoto, the answer is 'No',” President Bush said in an interview recently in response to a question on a potential climate change agreement at the recent G8 summit. That’s the same old line. The new line was the president’s support for efforts to “diversify away from fossil fuels”.

This is not just rhetoric. Two weeks ago the US Senate passed an energy Bill to diversify away from fossil fuels and offered formal recognition that mandatory action on climate change was necessary. Where does this leave Australia?

As the largest per capita greenhouse gas emitter in the world, a champion of voluntary management of greenhouse gas emissions and a steadfast opponent of market-based limitations and incentives - Australia now stands alone. Now no developed country stands either beside or behind Australia on energy or climate matters.

The new US legislation will require energy suppliers to source at least 10 per cent of their entire supply from renewable sources by 2020. To help businesses meet this requirement, the Senate Finance Committee approved US$14.4 billion for tax incentives and credits, particularly for renewable sources such as solar, wind, bio-diesel and ethanol production. These tax breaks over the next decade will foster domestic and industrial energy efficiency, hybrid fuel transport, export markets and more efficient fossil fuel technology.

In awkward contrast, Australia’s mandatory renewable energy target is set at 9,500 GWh, which will equate to less than 2 per cent by 2010 or near 1 per cent, by 2020. Labor’s alternative policy is to more than double the target to a proportional 5 per cent by 2010.

The US Energy Policy Act of 2005 was passed with overwhelming bipartisan support (85 to 12). The Bill is now being reconciled with the version passed by the House of Representatives in April. A National Energy Plan was the president’s first priority when he came to office, since then two proposed energy Bills have failed to pass congress. The Bill passed this week will be on President Bush’s desk before August.

With crude oil contracts at US$60 a barrel and the cost of renewable energy sources dropping, the US Senate has taken a big and logical step forward. The Bill and its considerable funding have clear ramifications for Australia because US lawmakers have stepped ahead of the Bush Administration.

If US action to support renewable energy doesn’t concern the Howard Government, then the president’s re-posturing in the lead-up to the G8 Summit and the changing nature of US approach to climate policy should.

During debate on the Bill, a “Sense of the Senate on Climate Change” resolution was passed, with the support of 12 Republican Senators, saying “that congress should enact a comprehensive and effective national program of mandatory, market-based limits and incentives on emissions of greenhouse gases that slow, stop, and reverse the growth of emissions ...”

The Bush Administration’s voluntary approach to address climate change was debated and considered to possess zero prospect of ever reducing greenhouse emissions.

With express reference to countries like Australia, the resolution also held the mandatory national program should function in a manner that “will encourage comparable action by other nations that are major trading partners and key contributors to global emissions”.

Such legislative development in the US also raises questions about how the Howard Government balances frank policy advice with the impulse to follow its political instinct. Australia, unlike the US, has no mechanism for the creation of law that is not the explicit political will of the leader of the administrative branch of government. How Australia’s energy and climate policy have become disconnected from the rest of the world’s actions deserves some scrutiny, particularly in light of the government’s new-found control of the senate.

Such political progress in the US is courtesy of its normal checks and balances but it has unsheltered and consequently isolated Australia’s energy and climate policy. Time inevitably founders all policy based upon reality-aside ideology. Is this the case for the Howard Government or is it just an unusual irony that it is the US showing Australia the way forward on climate change?