I wrote in support of the Carbon Pollution Reduction Scheme (CPRS) when it was first announced, and before the finer details were apparent. Post the lobbying efforts by those industries with most to lose, and the fine print, I’m starting to seriously doubt whether indeed the CPRS will indeed deliver what its name espouses to – pollution reduction.
As recently advocated by a group of ten prominent economists, there are three key changes necessary for the CPRS to be effective:
- Lifting the targets to 25-40% by 2020 based on the latest scientific evidence;
- Abolishing the free permits granted to the biggest polluters; and
- Ensuring that individual action results in lower emissions, not lower carbon prices.
Most will understand the issues around lifting targets (better certainty for a renewable energy future and more immediate decline in emissions) and abolishing free permits (preventing uneven transfer of wealth and not rewarding industries that have failed to act and creating an anti-competitive market), but the issue of how voluntary action will not be counted under the CPRS has slipped the attention of mainstream media.
Let me explain. Under the proposed scheme, if individuals, communities or states reduce their emissions by increasing energy efficiency or increasing their renewable energy capacity, they simply free up permits for the bigger polluters. Surprised? Well, that’s the marvel of a cap and trade scheme (without any mechanism to recognise contribution through voluntary efforts). How it works is that any efficiency gains within the covered sectors (most sectors other than Agriculture) simply creates additional space within the cap for emissions from others. Accordingly, on a global scale, there is no net effect on greenhouse gases and subsequently no ‘pollution reduction’.
As outlined by the group of ten economists, “the Rudd government has designed a scheme in which every tonne of emissions saved by households frees up an extra permit for the aluminium or steel industry to expand their pollution. In addition to destroying the moral incentive for households to ‘do their bit’ to reduce emissions, this design feature renders all other policies aimed at reducing emissions pointless”.
A recent study, What Assures Consumers in Australia on Climate Change? Indicated that 65% of Australian consumers have bought or plan to buy products in the next 6 months specifically because they contribute less to global warming. It would seem politically and scientifically nonsensical not to factor in such a strong commitment to voluntary action in tackling Australia’s greenhouse emissions.
Terence Jeyaretnam is a Director of Net Balance (email@example.com), based in Melbourne.
Sources: Economists speak out against flawed Carbon Trading Scheme, February 18, 2009 – 2:34 pm, by Anna Rose (www.crikey.com.au) and What Assures Consumers in Australia on Climate Change?, August 2008, Net Balance Foundation, (www.netbalance.org).