The need for indirect action on climate change

Recently, the Rudd Government introduced the central plank of its climate change policy to the Parliament. And it’s a sure bet that the so-called Carbon Pollution Reduction Scheme legislation, which sets up a national emissions trading scheme, will continue to attract criticism from across the political spectrum.

I am not interested in criticising the design or impact of the ETS here, I will leave that to people already engaged in that debate. What I am interested in highlighting are the opportunity costs of the Rudd Government’s climate policy program - alternative policies our government might have pursued to reduce Australia’s climate impact.

Batteries, transmission lines, and intellectual property rights are the last things that come to mind when we think about climate change. Yet it is these seemingly irrelevant and barely mentioned issues that are central to dealing with our changing climate. As the goal of creating a new energy economy fueled by cheap renewable energy becomes the focal point of global climate change policy, such matters should be seen as important drivers for making the clean energy economy a reality.

When speaking of batteries, transmission lines, and intellectual property, I’m really referring to the reliability of clean energy technology, the access we have to renewable resources, and the ongoing innovation and low-cost manufacturing of clean energy hardware: factors which influence the economic viability of renewable energy.

Let’s consider the role of batteries first. The potential for achieving reliable energy from renewable sources is constrained by our ability to store it effectively. How can energy from the sun and wind power our communities year round when these resources are intermittent? Through strategic public investments in R&D for improved battery technology, Australia can position itself as an indispensable part of the renewable energy supply-chain. Such a policy will allow Australia to work with its relatively small tax pool and R&D expenditure and contribute to climate change solutions by making renewable energy more reliable.

Access to renewable resources is central to the economic and practical viability of renewable energy production. Currently, our ability to harness such resources is constrained by out-dated infrastructure that privileges polluting energy. How can we harness energy from the wind, sky, sea, and earth if our electricity grid is geared towards the old energy sources of our polluting past? A case in point is Australia’s windy southern coast - the longest ice-free coastline in the southern hemisphere. This vast resource is ripe for renewable energy development yet is not connected to the national grid. Our sunny deserts, geothermal hotspots and tidal zones are similarly disconnected. Without government investment in transmission lines to renewable energy hot-spots, clean energy production will never be viable in Australia.

Continued innovation and low-cost manufacturing will increase the affordability of renewable energy technology over time. But lax intellectual property (IP) protection in nations like China currently stifles both. How can we achieve affordable renewable energy technology through low-cost manufacturing if innovation is not protected from IP theft in those nations? The mutually beneficial situation of Chinese manufacturing of Australian innovations is impossible while IP theft and cheap imitations are tolerated. Guaranteed IP protections will spur on energy innovators, who should have their innovations rewarded, not stolen.

Unfortunately, our government has not publicly recognised the importance of these issues in dealing with our changing climate. Our government has repeatedly failed to elevate these issues in climate change policy discourse and formulate policy responses. Recent examples include the missed opportunity to allocate funds from the Rudd Government’s fiscal stimulus package in new transmission lines to areas rich in renewable energy resources, and achieve more bang-for-the-buck by ensuring that the newly formed Australian Solar Institute conducts strategic research on battery technology.

Additionally, there is Trade Minister Simon Crean’s announcement of a free trade agreement with ASEAN nations - many of which are on the US Department of Trade’s watchlist of intellectual property violators - without mentioning the implications for intellectual property rights. Such actions demonstrate that these initiatives are low on the Rudd Government’s agenda.

Our Government should not bear all the blame for this situation. The environmental lobby is also partly responsible. For too long, climate change advocates have focused the climate policy agenda on the three T's: targets, trading schemes, and treaties. By advocating a laudable - but unlikely - international treaty capping global carbon emissions; a politically challenging - and potentially ineffective - carbon emissions trading scheme here in Australia; and perpetuating assumption that a “strong” reduction target is synonymous with our capacity to reduce emissions, the environmental lobby has diverted attention away from policy areas with great potential for advancing the new energy economy.

So where to from here? Climate change advocates must look beyond the three T’s and start communicating the importance of policies like the ones I have mentioned here. This can be followed by a concerted effort to educate the public and ensure that good policy is good politics for our government. Such an approach might have the additional benefit of receiving less resistance from vested interests intent on thwarting action on climate change.