A positive response to climate change

How should Australia respond to the threat of climate change and global warming? As the federal government works out details for a national emission trading scheme (ETS), a few simple facts need to be emphasised.

Can an Australian ETS make a significant difference to global carbon dioxide levels in the atmosphere? Can anything we do save the Great Barrier Reef from global warming? Does it make any difference if the ETS starts in 2010 or 2012? Will China and India deny their citizens the opportunity to improve their standards of living by cutting back on economic development and energy consumption? The honest answer to each of these questions is no!

Can Australia set an example that the rest of the world can follow? Is it important for ordinary Australians to change their energy consumption patterns? Are technologies being developed that, in time, will make a difference to global CO2 emissions? Are our two major political parties more interested in political spin than in solving some of the world’s problems? The answer is yes to these four questions.

Here’s the bottom line: it’s taken more than 200 years since the start of the industrial revolution to understand that we have a serious problem and must act. But the amount of CO2 already in the atmosphere, plus the time needed (tens of years at least) to reduce emission levels mean that we have time here in Australia to get it right, regardless of whatever it is.

We shouldn’t be sitting on our hands, however. Many things can be done to start Australia down the road of a low carbon economy.

At the personal level, we need to make sensible economic decisions about what environmentally friendly actions we should be taking in the next few years. Trading in a good quality existing car just because it uses 20 per cent more fuel than current models doesn’t make economic sense. A new $25,000 car will drop $5,000 in value once it’s left the dealer’s premises. You can buy a lot of energy for that much money and you’ll only reduce your fuel bill by a few hundred dollars each year.

Instead, other environmentally friendly decisions make much more economic sense. Install a solar hot water system on your roof. Government assistance of various forms gives you a three- or four-year pay-back period, after which your bank balance will be well ahead. Put insulation in your roof and cut your seasonal heating and cooling charges by between 10 and 30 per cent, giving a payback period of about five years.

Promises during the recent state election by both major parties to buy renewable electricity from households at 60 cents per kilowatt hour gives domestic photo-voltaic systems a much shorter pay-back period.

And how cheap would it cost to make a solar hot water system if the government decided to order several million of them and give them away free to every house in Australia. You can already buy one for $1,000 (plus installation and freight) after rebates and incentives. They might be so cheap thanks to economies of scale that the nation’s lower energy demand overcomes the need for more coal-fired power stations for decades!

The federal government is tinkering around the edges as the planet warms. Just like every other crisis faced by humanity, solutions will be found: it’s simply a matter of time. So, if you believe that future technological advances will provide us with the weapons we need to fight climate change, the government should set the entrepreneurial flame alight by giving tax breaks if we invest just 1 per cent of our superannuation funds into energy-related research and development. Australia’s superannuation savings currently total $700 billion. Just 1 per cent of this vast sum would provide $7 billion in start-up capital for new research. Sure, some will be wasted or rorted, but the big picture is that we urgently need more R&D in this country.

As for an emissions trading scheme, ultimately, only one group of people pays for everything: us, the consumers. Government could compensate those who would suffer genuine hardship with cash payments. However, providing them with free solar hot water systems, roof insulation and other devices to save them money for many years into the future would be far more effective at reducing their carbon emissions and their financial outgoings. Of course, the best compensation for these people is to give them a job, not export jobs overseas to countries that don’t have an ETS, but that’s another issue.

If Australia is to go it alone with an emissions trading scheme (one scenario outlined in Ross Garnaut’s latest report), we should try to cut our CO2 emissions in ways that make economic as well as environmental sense. When the large polluting countries finally agree to do their part, only then should we take actions that have significant economic costs to our nation.

So, Kevin and Malcolm, here’s a suggestion. If we must have an ETS, bring it in whenever you like - the starting date really isn’t important. Give the big polluters free emission permits, but tell them they have just three years to start reducing their CO2 emissions. After that date, the government will impose a $40 per tonne carbon tax and will use the extra taxation to fund clean technologies in direct competition with the existing polluters. By giving industry a firm date by which they must begin to reduce their CO2 emissions by a set amount each year and by funding research into new technologies, our corporate citizens will respond to the threat of higher taxation by lowering their CO2 footprints.

Australia produces less than 2 per cent of global carbon emissions. Possibly our most important response to global climate change is to help developing countries avoid the many environmental and energy-consuming mistakes we made as we reached our high standard of living. This will mean providing them with free or at-cost access to the improved technologies and practices that we will be implementing over the next few years as our ETS takes hold. It may cost us billions of dollars but huge cuts in Australian CO2 emissions will be overwhelmed by even small increases in emissions from China, India, Brazil and Russia.