Australia’s cap and trade system, the Carbon Pollution Reduction Scheme (CPRS), is being reintroduced into Parliament this week, after two rejections in 2009 (see here and here). However, it is almost certain that it will fail again, following decreasing public support for the policy after the Copenhagen conference and Tony Abbott’s ascension to the opposition leadership.

To start with, public support for Prime minister Kevin Rudd’s flagship policy has dived 10 points from 66 to 56 per cent according to the latest Herald/Nielsen poll, while opposition to the trading scheme has risen 4 points from 25 to 29 per cent. While there has always been a high level of confusion in the electorate about climate change policy, and in particular about the CPRS, the failure of the Copenhagen conference shifted to a certain extent the public sentiment about climate change. In particular, extensive media coverage of a series of ‘scandals’ linked to the IPCC’s work has opened new windows for the numerous Australian and international climate sceptics (see for example Lord Monckton).

However the biggest challenge faced today by the government is without doubt the unexpected come back of the opposition (the Liberals) in the climate debate. The previous opposition leader, Malcolm Turnbull, is a supporter of the scheme, which had greatly divided his party over the climate issue, to the benefit of the government. Yet Turnbull has recently been ousted by Tony Abbott, a strong opponent of cap and trade and climate policy in general, not to say a climate sceptic. The change here is that Abbott has come forward with an alternative to the governmental policy. The Coalition’s (Liberals+Nationals) “Direct action plan on the environment and climate change” would create an AUS$2.5bn fund to provide incentives for industry and farmers to reduce emissions through measures such as storing carbon in soil. The plan also includes the planting of 20 million trees by 2020 and would provide $1000 rebates to home owners for solar cells. The plan has immediately been slashed by environmentalists, Greens and the Labour Party as been unable to lead the country to a minimum 5 per cent cut in emissions by 2020 compared to 2005 levels, as Australia pledged in Copenhagen. While Kevin Rudd has ridiculed the direct-action plan as “a climate con job”, most business groups have backed the plan, agreeing with the opposition Leader’s assertion it is “cheaper, simpler and more cost-effective” than Labour’s proposed carbon emissions trading scheme.

With a now clear opposition to the scheme, the government’s CPRS is very likely to be rejected by the Senate this week. The government would then again have the possibility to trigger an early election, though it would be very unlikely since the next general election will take place this year. In the most optimistic scenario, a cap and trade system would therefore not be voted for another year. Kevin Rudd’s approval rating is still way ahead from his potential challenger, though Abbott’s popularity is rising. But it is surprising that Rudd is not working to rally public opinion: he has not made a speech about climate change in the past weeks and is, instead, trying to change the subject. It is time now for Prime minister Rudd to start campaigning for his cap and trade scheme and explain to people why Australia should be moving when things look bleak internationally.

Following five weeks of intense negotiations between the Rudd government and the Opposition, the Australian Senate voted once more, by 41 to 33, against bills that would have established the Carbon Pollution Reduction Scheme (CPRS). The Greens, Independent Senator Nick Xenophon, and Family First Senator Steve Fielding joined the Opposition (Liberals + Nationals) in voting down the scheme (SMH 02/12/09).

 The Minerals Council of Australia and the Australian Chamber of Commerce and Industry welcomed the rejection, while WWF and the Climate Institute, called for a double dissolution and joint sitting of Parliament to get the original bills through (SMH 04/12/09).

 Under Australia’s bicameral parliamentary system, both houses must reach majority agreement on proposed legislation before it can go forward into law. Following a vote against a bill it may, however, subsequently be revived or presented again. That is what happened this autumn following a first rejection of the CPRS by the Australian Senate in August (see my previous post). The legislation had been put on the table again by the government in November, passing without surprise the House of Representative on the 17^th.

 The Senate no vote came after an extraordinary few weeks of drama, in which the Opposition reached a deal to support the legislation with big changes, and then reneged after its change of leadership. Indeed, on Monday, former Opposition leader Malcolm Turnbull (who was backing the passage of the Australian ETS) was challenged within its own party, and was ousted as Liberal party leader by right-wing climate skeptic Tony Abbott. The new Liberal leader, who has been portraying the scheme as Kevin Rudd’s “big new tax”, managed to convince most Liberal Senators who would have supported the CPRS to vote down the scheme (except for two who crossed to floor).

 Mr Abbott insists that he will have a credible climate change policy but is making it clear that his policy will not include an emissions trading scheme any time soon. In particular, he said it would be “folly” for Australia to establish an emissions trading scheme before the United States had settled on its model: “The right time for an emissions trading scheme is when the rest of the world is signed up for one.” (ABC 02/10/09). Abbott plans to fight a climate change election using land management and energy efficiency measures instead of an ETS, and would welcome a debate on nuclear power as an option.

 Despite the fact that Prime minister Rudd now has the option to call for a double dissolution election, which he would without a doubt win, he has played down prospects of pulling this trigger. The government has said that in the next Parliamentary sitting period commencing on 2 February 2010, it will introduce bills to establish the CPRS, inclusive of amendments incorporated following negotiations with the Opposition announced on 24 November 2009, to give Parliament a further opportunity to consider and pass legislation. Hopes to portray Australia as a world leader on the issue have now vanished, putting Kevin Rudd in an incomfortable position as a friend of the chair in Copenhagen next week.

The UK’s energy security prospects are once again making the headlines, as Ed Milliband this week announced the top 10 suitable sites for the next generation of nuclear power plants, describing nuclear power as a “proven, reliable source of low carbon energy”.

The announcement comes amidst heightened concerns surrounding the peak oil debate, with the UK ERC claiming that conventionally extracted global oil production could ‘peak’ and go into terminal decline before 2020.

However, the environmentalists have criticised the decision, warning of the “deadly legacy” of radioactive waste, and argued that investment should be focused on renewables instead. Interestingly, one of the oldest and most efficient windfarms in Britain will be dismantled at Kirksanton to make way for the nuclear plant, to the dismay of some locals.

Faced with the prospect of depleting supplies from the North Sea, the UK is now paying the price for its ‘dash for gas’, following the closure of the coal mines in the 1980s. To support the development of this next generation of energy infrastructure, the UK Government has announced a host of measures to reduce the planning constraints that are likely to hamper such large infrastructure projects, and hopes to have the first new nuclear plant operating by 2018.

Professor Barry Brook at the University of Adelaide has welcomed the announcements from the UK government, and encouraged the Australian government to take heed. He highlights that unlike the situation for uranium power, the electricity price is strongly tied to the fuel price for gas and therefore fluctuations in gas prices lead to price spikes in power prices.

Cheap uranium energy, on the other hand, provides a much more secure proposition to meet both energy security and climate change goals; and he adds that

“…there is enough uranium to provide the whole world with zero-carbon power for millions of years.”

Nuclear power is the only proven electricity generation technology that can simultaneously meet reliable baseload demand, anywhere, and yet emit no carbon dioxide when operating. Along with hydropower from dams, it is the only clean energy technology that has been shown to be scalable.

France is a case in point. It derives nearly 80% of its electricity from 59 nuclear plants and is the world’s biggest electricity exporter. It has the cheapest power rates in Europe, and has the lowest carbon footprint per person.

However, the significance of radioactive wastes and contamination threats should not be underestimated if we really want to promote sustainable development that considers the intergenerational impact and legacy of such technologies. In this vein, it might be argued that the significant funds for these large infrastructure projects would, in fact, be better targeted at scale-up and capacity building for renewable technologies such as wind, solar, tidal and others, which don’t generate such controversial by-products.  For now, the pressure is on in the UK to streamline the planning process to enable the speedy construction required to bridge the expected energy gap.

After the Government’s Carbon Pollution Reduction Scheme’s defeat in Senate last August, the Australian Opposition, the Coalition (Liberals + Nationals), had until last Sunday to propose amendments before the reintroduction of the bill in November (for previous developments, see here). After a Party meeting lasting more than four hours yesterday, Mr. Turnbull, the Opposition leader, confirmed the partyroom had endorsed his strategy, backing “commonsense amendments” which, if agreed to, “would save thousands of Australian jobs”(The Australian 19/10/09).

Most provisions intend to provide greater exemptions to key industries. Amendments include exemptions for the coal industry, greater assistance to power generators, a permanent exemption for agriculture, greater exemptions for energy intensive industries, and protection for food processing. The detailed list is available on the Liberals’ website. The Coalition won early support for its position last night, with the Minerals Council of Australia backing its amendments. “The proposed amendments will better align the CPRS with other emissions trading schemes around the world, promote investment in low-emissions technologies and provide the necessary flexibility to adjust to the outcome of the United Nations climate change talks in Copenhagen in December,” chief executive officer Mitchell Hooke said. (SMH 20/10/09)

Prime Minister Kevin Rudd, set a six-week timetable for negotiation and debate before a vote in November. The bill will be introduced to the House of Representatives this week, and should reach the Senate by mid-November. The government will push very hard for the passage of the bill by Copenhagen and may extend Senate sittings if necessary (SMH 18/10/09). However, the Nationals and some key Liberals strongly oppose the ETS, and threaten to cross the floor if Mr. Turnbull strikes a deal with the government. The legislation might still pass under this scenario, but Mr. Turnbull will face the embarrassment of a Coalition split on the issue just weeks after declaring he would stake his leadership on success.

The Australian domestic climate surrounding the emission trading scheme issue contrasts with the confidence and dynamism demonstrated by Labour Prime minister Kevin Rudd in multilateral talks. Mr Rudd was in New York late September to advance international negotiations on strategies to cut greenhouse gas emissions ahead of the December Copenhagen summit. He met Bill Clinton to discuss climate change and positioned Australia as a middle-power honest broker that can help smooth the way between the two superpowers, the US and China, which hold the key to a successful agreement in Copenhagen. Discussing tactics with UN Secretary-General, Ban Ki Moon, the latter asked Mr Rudd to chair a meeting at the climate talks - a significant role which recognises the contribution Australia has made so far to the global effort to strike a deal (SMH 21/09/09).

Nevertheless, back home, the Opposition (the Coalition of Liberals and Nationals), is trying to delay as much as possible the adoption of ETS legislation. As previously explained on this blog here and here, Rudd’s Carbon Pollution Reduction Scheme (CPRS) was defeated by the Senate in August. The legislation is due to be reintroduced in Parliament in November and the Opposition had been given until October 19th to present amendments.

But the Opposition leader, the Liberal Malcom Turnbull, is struggling to control the disunity among Coalition members. Increasing the pressure on their leader, many Coalition MPs are urging not to cut a deal with the government before the December meeting in Copenhagen. The Coalition argues that there might not be time to debate the legislation before the end of this parliamentary year. But in reality, it wants to wait and see what other countries will commit to. During a shadow cabinet meeting held last week, tactics were discussed and Turnbull desperately tried to unify his colleagues in favour of negotiations with the government. But opponents like Senator Mason have been arguing that to pass climate legislation before Copenhagen would “risk Australian jobs and Australia’s standard of living for negligible environmental benefit” (CourrierMail 06/10/09). Some Opposition members have charged that the rationale of the shadow cabinet for backing a pre-Copenhagen climate deal was to “avoid a double dissolution election” and the possibility of a flawed emissions trading scheme passing at a joint Parliamentary sitting (CourrierMail 06/10/09).

Mr Turnbull might actually be right to fear an election since his party has just taken another hit in the poll, the government leading by 16 points. Turnbull is now calling for a special meeting on October 18th, and hopes to get an agreement on proposed amendments to the CPRS legislation (ABC 06/10/09). Now that he has officially canvassed a split with the Nationals, who have said they will not agree to any deal with the Government over the scheme, Mr Turnbull must reduce chances of potential unrest among its own party when Parliament will resume on October 19th.

Ice sculpture in Darling Harbour. Image by Kirsten Spry.

There are only a few months left until leaders of the international community convene in Copenhagen to agree upon a replacement for the Kyoto Protocol. Prime Minister Rudd has already declared that Australia will not go to the convention empty-handed. So far, Australia’s climate change legislation has faced some hurdles with its CPRS bill. However, with the recent approval of the renewable energy target, there is hope that Rudd will be able to keep his promise.

Following the defeat of Prime Minister Rudd’s Carbon Pollution Reduction Scheme (CPRS) 42-30 by the Senate on August 13th, the Renewable Energy Target was split from Rudd’s controversial carbon trading legislation. The new legislation - calling for a 20 per cent renewable energy target - was subsequently approved when brought before the Senate again last Friday.

This new target matches the renewable energy target set by the European Union and means that, within a decade, all Australian households could be powered by renewable energy. While the Greens argue that this renewable energy target should be 30 per cent, it is huge increase from the 8 per cent target in place prior to the bill’s approval.

Upon the failure of Rudd’s CPRS scheme, Minister of Water and Climate Change, Penny Wong, vowed to bring the legislation up for a vote once more in three months time.

“I urge those opposite who have become supporters of renewable energy in recent times to join the bigger fight, the bigger fight against climate change, and I urge them to support when the government next presents the carbon pollution reduction scheme,” says Wong.

With the approval of the new renewable energy targets, Australia is guaranteed at least some legislation on hand in Copenhagen. However, the Rudd government faces an uphill battle in the months ahead to get their carbon trading scheme through.

With one failure already on its books, the carbon trading legislation will need re-tooling over the course of the next three months in order to stand a chance at success.

In its current form, the proposed legislation faced several opponents who will make the same claims in the next round of votes if their concerns are not appeased. These opponents included the Greens, Conservatives and independent senators who blocked the emissions trade scheme due to its impact on the economy, environment, and on jobs for Australians.

With so many groups to appease, can Rudd make the necessary adjustments in time to get his carbon trading legislation through parliament? The timing might be short, but the Opposition has already begun drafting amendments for the bill and Government continues to have talks with the coal industry.

It may be impossible to please every opponent, but hopefully by mid-November, some form of consensus will be reached on an emissions trading scheme for Australia, allowing Rudd to bring a solid example of Australia’s commitment to combat climate change with him to Copenhagen.

Cloud over climate climate change deal in Parliament House, Canberra

On Thursday (13/08/09), the Australian Senate defeated the Rudd Government’s Carbon Pollution Reduction Scheme (CPRS), a legislative package made up of a Carbon emission trading scheme and ten related bills (click here for previous developments). The Opposition, Greens, and the independents, Nick Xenophon and Steve Fielding, voted to defeat the package 42 to 30. Prime Minister Rudd has called the day “a disappointing day for Australia” and accused the opposition of “placing the nation’s future at risk” (ABC 13/08/09).

The Government is determined not to go to Copenhagen empty-handed, and will reintroduce the same legislation in three months. At that time, if the bills are rejected a second time, Labour will have a trigger to dissolve both houses of Parliament and call an early election.

Let’s have look at the opponents’ rationale for rejecting this scheme.

Malcolm Turnbull, the Coalition leader, has managed to save himself some embarrassment by gaining the support of the majority of his party room to keep alive the prospect of negotiating a deal with the Government over the emission trading scheme. Indeed, if Turnbull had directed the Coalition to vote for the Government scheme, his weakness would have been fully exposed. The Nationals, and perhaps even some Liberals, would have defied him by crossing the floor in the Senate.

However, his leadership is seriously threatened as he will have to reassess his position to avoid potentially disastrous elections, and faces an inevitable split among the Coalition. Eventually, Liberals will somehow have to support the legislative package and split from the Nationals, who are not prepared to countenance any emissions trading scheme. In the meantime, Turnbull is trying to win some time in order to offer constructive alternatives. But he is not. Two days before the vote, the Coalition had produced a policy model, commissioned from the consultancy Frontier Economics, and which Climate Change Minister Penny Wong has described as a ”mongrel” (SMH 14/08/09). The model is radically different from Labour’s scheme in that it treats electricity generation less punitively and claims to reduce the negative impacts on Australian employment, one of the main Liberal arguments against CPRS. But Turnbull has little hope of succeeding in negotiating with the Government, which is showing him no mercy.

The Greens rejected the bills because they see the Government’s 2020 emissions reduction targets - between an unconditional 5 per cent and a highly-conditional 25 per cent - as too timid; and generally condemn the CPRS’ easiness on polluters (ENS 14/08/09). Green groups are now using the defeat of the emissions trading scheme bill to urge the Government to separate its renewable energy target from the rejected trading legislation. Indeed, the renewable energy target - 20 per cent by 2020 - is set to reach the Senate next week for a vote, but is not expected to pass unless the Government removes a part of the bill that links compensation to heavy-emitting industries under the target to the passage of its now-rejected carbon trading scheme.

The Greens will move amendments to the target legislation, increasing it and removing industry assistance, and introducing a renewable energy feed-in tariff. The Opposition is also working on amendments, mainly to add extra exemptions for the aluminum and milk pasteurisation industries. Prime Minister Rudd said he would not commit to changes to the renewable energy target but that Labour is likely to separate this question from the carbon trading scheme. Next week’s vote on renewables target will therefore be an important test to see if Australian parties manage to overcome their excessive divisions. All the more so as a recent poll showed that Australians, who by a majority support the CPRS legislation, are losing patience with their politicians on climate change. (SMH 14/08/09)

Al Gore, former U.S. Vice President and climate change campaigner, was in Melbourne on Monday for the launch of the new think tank Safe Climate Australia and to help train 300 people from 19 nations to address and encourage their leaders on the issue of climate change. Gore’s visit also coincides with Australia’s first ever Youth Climate Summit which hopes to mobilize a new generation of climate change activists. Speaking before a group of 1,000 Australian business leaders, Gore praised the Rudd government for pushing forward with emissions trading legislation ahead of the climate change conference held in Copenhagen this December.

Safe Climate Australia is a new environmental think tank composed of scientists, business and civic leaders and is modeled on a similar project in the United States called Repower America. The group demands that emergency action must be taken in order to address global warming and plans to help Australia move away from emissions-heavy coal towards a zero-carbon economy. Gore stated that the mounting environmental challenges in the world require immediate action.

According to the SCA organizer, Brendan Condon, the SCA hopes to develop a blueprint for the transition of all major sectors of the Australian economy to net zero carbon with a draft expected in 12 months.”This is a massive body of work that will include collating all relevant scientific research, developing systems architecture, scenario planning, emission reduction and sequestration strategies.”

While Gore praised the work of Rudd and the progress that the United States and Australia have made toward making climate change a higher priority, Gore mentioned that he would have written stronger emissions targets than currently proposed in Australia’s Carbon Pollution Reduction Scheme (CPRS) bill. “It’s not what I would have written, I would have written it as a stronger bill, but I’m realistic about what can be accomplished in the political system as it is,” Gore said.

Rudd’s proposed legislation has also been attacked by green groups who claim that the emissions targets are too weak. Currently, the emissions trading legislation commits to an emissions reduction target of 60% by 2050 and interim targets of between 5-25% by 2020. Rudd hopes to push the trading bill through parliament in August, four months ahead of the Copenhagen conference.

While Prime Minister Rudd’s legislation has come under fire, Gore still remains encouraged by the progress made by the Rudd government. “I am sincerely convinced that the right way forward is to get to the maximum that the political system will allow us to accomplish and begin the change, and then, as we gain experience with it, toughen it, strengthen it, make it better based on experience as business and industry learn how to adjust.”

Scientists warn that Australia can be vulnerable to damage caused by warming temperatures such as more severe storms and droughts as well as rising sea levels. Gore sited the record temperatures and brutal wildfires this past February in parts of Victoria that took the lives of 173 people as evidence that the planet has a “fever” brought on by climate change. “The odds have been shifted so heavily that fires that used to be manageable now threaten to spin out of control and wreak damages that are far beyond what was experienced in the past. This crisis is gaining momentum and the reason why is not that complicated.”

At the climate change talks in Copenhagen later this year, governments will meet in order to negotiate an international environmental agreement to succeed the Kyoto Protocol when it expires in 2012. While an agreement between leaders will be difficult, Gore remains optimistic. Gore stated before reporters, “One of the barriers in the Kyoto process was that the United States and Australia did not provide the kind of leadership necessary…Now with new leadership in both the United States and Australia our two countries are providing leadership. When that leadership is most needed is in the run up to Copenhagen, it can make a huge difference.” One of Rudd’s first acts as Australian Prime Minister was to sign Australia on to the Kyoto Protocol and both Australia and the United States have been active in the negotiation process leading up to Copenhagen in December.

The Rudd government has just released (19/06/09) draft regulations for the Australian Carbon Pollution Reduction Scheme (CPRS), outlining how carbon emissions will be measured and industry compensation calculated. The draft regulations specify the framework for the Emission Intensive-Trade Exposed assistance program, application procedures and reporting requirements for eligible entities under the program.

The regulations just published are the first of several disclosures on how the country’s emissions trading scheme will take shape, Australia’s Climate Change Minister Penny Wong said. The rules outline some of the highly emissions-intensive sectors that will receive up to 94.5 per cent of their expected needed amount of emission permits for free under the CPRS.
Production of carbon black, methanol, silicon, bulk flat glass, newsprint, and zinc will all be counted in this category. Moderately emission-intensive sectors will get up to 66 per cent of their allowances free of charge.

Treatment of energy-intensive trade-exposed industries under the carbon scheme is playing a major role in Australia’s debate on how to tackle climate change, as many industries and the Opposition fear jobs will be lost to countries without carbon regulations, such as China and India. In addition, Greens strongly oppose the draft, as stated by Senator Christine Milne: “The draft regulations confirm that the carbon pollution reduction scheme will be a multi-million dollar wealth transfer from the people to the big polluters, and that stands in the way of protecting the climate,” (ABC 19/06/09)

The Government says it is releasing the draft regulations earlier than normal because it wants to give MPs as much information as possible. It is indeed trying to get senators to support its scheme in an effort to have the legislation passed by the Senate next week. But the ETS legislation is in trouble. The Opposition, which does not want to vote on the scheme until next year, plans to filibuster all week to avoid it being put to a vote at all. The Greens have vowed to vote the scheme down but do not support delaying the vote. (ABC 18/06/09) If the bill is defeated, or there is a vote to defer it until August, either will count as a refusal by the Senate to pass it. In this case, things could start to become very difficult for the Rudd government, possibly triggering an early election before the end of the year. (SMH 19/06/09)

South Australia (SA) has reaffirmed its leadership in a move to a low carbon economy, announcing an ambitious 33% renewable electricity target for 2020.  The target is matched with a A$20m Renewable Energy Fund to encourage investments and uptake, booting the renewable energy sector.

This builds upon the federal target, which saw the Rudd government asking each state to reach 20% of renewable electricity generation by 2020.  Mike Rann, Premier of SA and Minister for Climate Change & Economic Development, added that

“We had a much more ambitious target in South Australia to reach that 20% by 2014. We are going to reach our target ahead of our 2014 deadline, and years ahead of the national deadline.

“So we’re now announcing an even tougher target of 33 per cent by 2020 which will keep us at the forefront internationally of jurisdictions supporting renewable energy.”

According to Rann, South Australia is home to 56% of the nation’s wind power, 90% of its geothermal investment and nearly 30% of its grid-connected domestic solar systems - by far the highest in Australia. The first project to be funded from the Renewable Energy Fund will be the South Australian Centre of Excellence for Geothermal Research at the University of Adelaide, which will receive A$1.6m over two years.

If the 33% target is met, South Australia will not only be a global leader, but will also produce 3 times as much energy as it consumes, potentially exporting clean energy to Victoria, New South Wales and Queensland. Whilst Premier Mike Rann is hoping that other states may follow this admirable lead, the details of a federal target will shed more light on what this might mean for other states. Barry Brook highlights that SA may burden most of the nation’s load if it is agreed that a national target can be achieved across any state. However, if each state is assigned an individual target or quota, SA’s leadership position will triumph, strengthening a new industry, which promotes economic development and creates green jobs in difficult economic times.

The news comes just days after Rudd’s announcement that Australia is the only developed nation in the world that is not in a recession; and SA is one of the benefitting states.  A strong focus on sustainable development, renewable energy and alternative fuels has sparked a successful economic development story amongst countless doom and gloom reports of budget cuts and set backs in the face of the global financial crisis. In a recent TV interview, Lord Stern stressed the need for stronger leadership from Australia on the climate change agenda in the run up to Copenhagen - whether the federal government will strengthen its position on climate change remains to be seen, but for now, South Australia is leading the way.