Thursday, October 13, 2011

Passage of Australian Carbon Pricing legislation may influence UN Climate talks

Julia Gillard don't cave in to pressure from big polluters - Melbourne World Environment Day 2011

Could our carbon pricing package be a "game changer" at the next UN climate talks to be held in Durban, South Africa from 28 November - 9 December 2011? Australia's climate change ambassador, Louise Hand thinks it is possible. But first a look at the passage of the legislation through the House of Representatives and some community reactions.

Yesterday the House of Representatives passed the Government's carbon pricing and clean energy legislation with the support of Independent members Tony Windsor, Rob Oakeshott, Andrew Wilkie, and Greens member Adam Bandt: the vote was 74-72. The legislation passed despite a vociferous campaign against climate change science well orchestrated by right wing talk back radio identities like Alan Jones and supported by the Liberal and National opposition parties led by Tony Abbott, who in the past has denied climate change and also advocated a carbon tax.

The legislation still has to go before the Senate where the Greens have the balance of power, and it is anticipated the legislation will pass successfully before the end of the year and become law with a starting date of July 1, 2012. The 18 bills involves a substantial package of compensation to individuals as well as to targeted industrial sectors including support for clean energy programs. The legislative changes and reforms were announced in July 2011, and involved changes to income tax and Government pensions and allowances. Once implemented, many commentators belief it will be difficult to unravel these economic reforms without major cost and social upheaval.

The Australian Chamber of Commerce and Industry continues the attack on the carbon pricing legislation. It has vehemently opposed the carbon price legislation arguing that Small business will suffer and "that minority government is not working well for the Australian economy.

There is little direct compensation for small business in the Government compensation package and the increasees in costs of electricity and fuel due to the $23 a tonne initial carbon price will need to be either absorbed by the business or passed on to customers (most of whom will be paid compensation). "At the end of the day what we're doing is undertaking a very important environmental and economic reform for Australia and it will be of benefit to future generations. Yes, there'll be some modest price increases, a 0.7 per cent increase in the CPI, but nine out of 10 households will receive assistance through either tax cuts or increase in pensions or other Commonwealth payments." Greg Combet told Chris Uhlmann on ABC TV 730 Report on October 12.

Deputy Prime Minister and Treasurer described the passing of the legislation at a press conference, "Well today we saw an historic vote on one of the most important economic reforms in a generation; an historic Labor reform to strengthen our economy for the future and to make sure that we look after the interests of our children and our grandchildren. As I said, it was an historic Labor reform, a defining moment for our economy and a defining moment for our country, and it owes a lot to the determination and strength of our Prime Minister."

All of Australia's top economists agree that carbon pricing is a necessary economic reform. In June 2011 an open letter signed by 13 of the country’s top economists and published in The Australian newspaper called for the speedy introduction of a price on carbon pollution. You can read Professor John Quiggin's take on Why economists support carbon prices?.

Today Dan Cass (@DanJCass) tweeted from a the All-Energy conference meeting in Melbourne, billed as the biggest clean energy event in Australia: "Crowd laughing, politely, as @GEAustralia politely puts Greg Evans (LOL ACCI) back in his box, with #climate #reality." Two minutes later he followed with another tweet: "ACCI Greg Evans is the Tea Party of industry policy. No credibility. No facts. #auspol #All-Energy Conference."

General Electric, which employs about 6000 Australians, issued a media release calling the carbon pricing legislation "An important step towards cleaner industries, innovation and growth for Australia". GE has committed to directly invest on a global basis US$10 billion from 2010-15 in renewable energy and clean-technology research and development, with an additional US$6 billion invested via GE Energy Financial Services.

“The decision is an important step for Australia to transition to a low carbon future. Putting a price on carbon combined with a well-designed mix of policies with a few broad, complementary measures such as the Renewable Energy Target, will secure Australia’s economic prosperity and encourage technology innovation in a carbon constrained future,” said Steve Sargent, President and CEO of GE in Australia and New Zealand.

“Businesses across the country will now have the certainty with which to make decisions that minimise the risks and maximise the opportunities presented by climate change. We have managed our business since 2005 under a carbon price and have seen tremendous benefits. Between 2005 and 2010, we’ve reduced our own carbon emissions by 24%, achieved cost savings of $130 million and revenue growth from lower carbon products and services of $85 billion."

“Today’s decision is a significant step to ensure Australia moves ahead with our leading trading partners. It is a fantastic opportunity for Australian businesses to demonstrate entrepreneurial spirit and leadership to help progress Australia’s transformation to become a low carbon economy.

John Dee, Do Something! founder and former NSW Australian of the year told the ABC, "A lot of the worse case scenarios that are being discussed are based around the assumption that businesses are going to do nothing to reduce their energy use. Many businesses have at least ten to 20 per cent fat that can easily be cut out and most of that is using too much energy. A carbon tax will encourage innovation because if you don't innovate, it will cost you more money." he told the ABC.

Conservation and climate groups welcomed passage of the legislation as an important start to combatting climate change, reducing carbon emissions and transitioning to a clean energy future. Climate Institute CEO John Connor said in a media release "This vote creates the potential for a win-win of a cleaner, less wasteful, more competitive economy and greater credibility to help boost the efforts of Australia and other countries taking action. The domestic task now is to ensure Government and private sector investments connect with climate solutions in clean energy, like solar, wind and geothermal power, and other opportunities like carbon farming and energy efficiency. The existing Renewable Energy Target and policies that come with these laws, like the $10 billion Clean Energy Fund and Carbon Farming Initiative, can develop the technologies, skills and jobs crucial to reducing our economy’s dependence on carbon pollution."

"Today’s vote is historic for the millions of Australians who, in the face of well-funded scare campaigns, have tirelessly urged successive Australian governments to take action on climate change,” said Australian Conservation Foundation CEO Don Henry in a media release. "A decade of people power means we are now just weeks away from having laws that will cut pollution and contribute to the global effort to tackle climate change."

The legislation was passed with interjections from the public gallery from anti-carbon tax protesters who were ejected, while outside on the lawns of Parliament House the Australian Conservation Foundation and other groups had a much quieter, less abrasive media conference and celebration which included many placards with personal messages and a hot air balloon with a banner saying "No more hot air - cut pollution now!"


With a carbon pricing and clean energy package in place the Australian Government will have renewed authority in next global talks set for the Durban Conference of the Parties - COP17 - to be held in South Africa from 28 November - 9 December 2011.

Louise Hand, Australia's Climate Change Ambassador said that passage of the legislation may very well be seen as a game changer in a very difficult year. "Because if a country like Australia is able to make this significant economic reform with a very powerful and strong future focus then that offers hope to a number of other countries. It is also an overt sign of Australia's commitment to being part of global action on this issue" she said in a video interview conducted by a UN Climate tracker in Panama on October 7.