Giving up on climate change?

In the present economic climate, these are matters of concern. Government appears to have responded to these blandishments, as though these warnings were an imminent threat, by adopting the 2020 carbon reduction target of 5 per cent, first mooted by the Opposition and various business organisations in 2008 as acceptable.

Has Rudd done this hoping to get his measures through a hostile Senate? Is his offer to overcompensate domestic consumers and compensate the largest Australian emitters with massive subsidies ($3.9 billion for coal-fired power generators) which even made Garnaut blanche, part of the same forlorn hope or just a sign of weakness?

His decision to offer compensation to businesses and households at levels which blunt the price signal needed to discourage use of electricity generated from polluting coal, suggests the former. His warning that we must learn to live with, rather than attempt to control climate change suggests the latter. Has Rudd thrown in the towel on climate control when it comes to displaying leadership to the international community?

Without a strong and clear price signal, there is little chance that consumers will change their habit of using electricity the way they currently do, often in a profligate way. This is often characteristic of the public sector which, being monopolistic, simply passes on the cost of its inefficiencies to households and businesses.

Improved efficiency in the use of electricity generated from fossil fuels has the potential to substantially contribute to the 5 per cent reduction target proposed by government. That incentive is blunted.

Research and development of technology to improve and extend electricity generation from renewable sources with funding from the proceeds of emission licence sales was recommended by Garnaut. It has been totally rejected by Rudd who insists that such funding be included at the whim of government as a specific budget item.

Popular use of photovoltaic cells (PVC’s) to generate electricity for sale to the National Grid has similarly been dealt a retarding blow by the decision of government to refer the matter of a feed-in tariff to COAG for its consideration.

The effect has been to put in limbo the ability of households and business to purchase and install PVC’s or produce and sell solar energy. This could have been avoided by Commonwealth legislation establishing a national gross feed-in tariff for electricity generated from sunlight.

In summary, the kindest thing that can be said for the Rudd proposals on climate change is that they will fail to achieve the central goal of bringing about meaningful reduction in carbon emissions. They fail to adequately fund and promote the development and use of electricity generated from renewable sources or prompt behavioural change resulting in more frugal use of electricity produced from coal.

What will they achieve? They will establish an ETS in Australia and do so in a way which protects existing jobs and industries producing and using fossil fuels, particularly coal. In this, they accord with Liberal Party views. Unfortunately, opportunities to do very much more to reduce our carbon footprint, influence others to do likewise and create new jobs in the clean energy sector miss out. Government must review its position.