Alyssa Bucci29-4-14

The Inadequacy of Australian Climate Change Policy

Essay Question: Summarize the policy responses to climate change in Australia. What are the politics of this response, and is this approach justifiable and adequate, given the seriousness of the risk?

Word Count: 2713

Introduction:

Climate change is one of the biggest environmental problems facing the modern world, and

Australia is particularly susceptible to its effects. Temperature increases will lead to consequences like

increased drought in southern and eastern areas of Australia, increased extreme weather events, and

sea level rise (Mercer et al 2006; Paultikof 2010). One of the greatest concerns in Australia regarding

climate change is the increased frequency of bush fires due to the combination of dry conditions and

extreme heat (Firsova et al 2012; Paultikof 2010). The Black Saturday bushfires in February 2009 caused

173 deaths, and events like it will only become more prevalent (Paultikof 2010).

Due to the likelihood of severe environmental changes in the near future, it’s critical that

Australia make significant effort to reduce its greenhouse gas emissions. Despite the fact that Australia

only contributes 1.4% of the world’s greenhouse gas emissions, it has the highest per capita emissions of

all developed countries largely due to its dependence on coal (Firsova et al 2012). However, the

government’s response to climate change in the 24 years since the release of the first IPCC report has

been largely inadequate. Influenced by Australia’s prominent fossil fuel and mineral industries, climate

change policy has put too much of an emphasis on supporting short term economic well-being, and has

severely undervalued ecosystem services. This paper will discuss how the federal climate change

policies of the past six administrations have prioritized the economy, making them largely ineffective. I

recognize that other factors such as the plurality of the governmental system due to overlapping federal

and state policies (Byrnes et al 2010; Griffiths et al 2007), and the under-representation of climate

change issues in the media (Christoff 2013) also influence policy, but these will not be addressed.

Suggestions will then be made for future policy design to successfully combat the effects of climate

change in Australia.

Background:

Ecosystem Services:

Ecosystem services are defined as “the benefits provided to humans through the

transformations of resources (or environmental assets, including land, water, vegetation and

atmosphere) into a flow of essential goods and services” (Constanza et al. 1997). The principle

recognizes that human beings are reliant on the successful functioning of natural systems, so the true

value of these systems must be recognized when calculating the cost of environmental issues like

climate change. In the case of energy, market price signals are not a good representation of the true

cost of burning fossil fuels, because the value of environmental health and costs of degrading it are not

measurable (Department of the Environment, 2009). The true cost of burning fossil fuels is much higher

than the seemingly cheap monetary cost. Therefore, climate change policies must make a point to

acknowledge the importance of ecosystem services. Rather, Australian policies have ignored these

services and have focused instead on the short term economic costs of reducing emissions.

Prioritizing Economic Well-Being:

Multiple people have used governance theories to understand Australia’s response to climate

change. Mercer et al note that Australian attitude towards natural resources has been driven by a

principle of statist developmentalism, which emphasizes the role of the state in controlling natural

resources. This attitude applies very narrow definitions of development and progress to ecological

systems, and creates a paradigm of exploitation concerning natural resources. In this system, natural

capital has been considered a free good, resulting in the undervaluing of ecosystem services discussed

above (Mercer et al 2006).

Griffiths et al examined Australian climate change policy in terms of institutional governance

systems, and noted that policy up to 2007 (the year of publication) was dominated by a system of

market governance. In this system, market forces are relied upon to achieve adaptation, so individual

firms are encouraged to capitalize on access to natural resources. It relies on minimum compliance

standards and voluntary actions to reduce emissions, so sustainability initiatives are viewed as a cost to

production rather than an opportunity (Griffiths et al 2007). Although these two theories differ in some

respects, they are both characterized by an emphasis on short term economic growth. This attitude has

resulted in ineffective climate change policies because the focus is shifted away from the core

environmental issue, and the long term benefits of reducing greenhouse gas emissions (both ecological

and economic) are mostly ignored. The following sections will detail how the major climate change

policies of the last 24 years have been commanded by this emphasis on economic growth, and still are

despite slight improvements over the years.

Policies:

Hawke Administration (1983-1991):

Peter Christoff described the Hawke administration’s climate change response as having a tenor

of “naïve altruism,” which is a good description of the government’s attitude at this time (Christoff

2013). On the heels of the release of the first IPCC report, the government showed significant public

support for combating climate change. The administration adopted the Toronto target of achieving a

20% reduction of CO2 emissions below 1988 levels by 2005 (Bulkely 1999; Firsova et al 2012; Christoff

2013). However, the administration had given little consideration to the challenges of emissions

reduction (Christoff 2013). With heavy influence from coal producers, the Australian delegation at the

Second World Climate Conference declared that Australian support for the Toronto target was

conditional on emissions reduction not having unfavorable impacts on Australia’s economy and trade

competitiveness, unless other major greenhouse gas emitters also suffered similar economic losses

(Firsova et al 2012; Bulkely 1999). This statement established an attitude that emissions reduction was a

cost to the economy rather than an opportunity for improvement and growth, and this outlook

pervades climate change policy up to the present day.

Keating Administration (1991-1996):

The Keating government established the National Greenhouse Response Strategy (NGRS) to

meet the Toronto targets in December of 1992 (Talberg et al 2013). The strategy outlined a series of

“no regrets” abatement measures, relying on the voluntary cooperation of corporations, when and

where it was economically feasible, and concentrated on the need for insurance measures to reduce

uncertainties about climate change. It made no plans to change the structure of Australia’s fossil fuel-

reliant energy generation industry, and instead aimed to improve efficiency of the existing system. Due

to lack of political will and confusion over the meaning of no regrets, the NGRS failed to change anything

(Firsova et al 2012; Bulkely 1999).

The government made another attempt by enacting the Greenhouse Challenge Program, which

encouraged individual firms and industries to reduce greenhouse gas emissions by undertaking energy

audits, purchasing green energy options, and offsetting emissions from car fleets. However, this

program also relied upon voluntary measures, and did not reward or penalize companies for meeting

emissions targets (Griffiths et al 2007; Bulkely 1999), so companies only complied as a means of avoiding

more severe measures like a carbon tax (Bulkely 1999).

Both of these policies made emissions reductions optional, demonstrating greater concern for

the economy than the environmental issue they were meant to address. Analyses by the Australian

Bureau of Agriculture and Resource Economics of the impact of emissions reduction on economic well-

being expressed the same sentiment. Results indicated loss of economic welfare in Australia’s fossil fuel

dependent sectors, but failed to recognize the benefit of reductions to other sectors, or account for the

intrinsic value of a healthy environment.

Howard Administration (1996-2007):

The Howard government continued the trend of symbolic policies and environmental apathy. In

negotiations over the Kyoto protocol, Australia negotiated an emissions target of 8% greater than 1990

levels by the end of the first commitment period. Despite the generous target, the administration didn’t

ratify the Protocol in 2002 because doing so would supposedly have a crippling effect on the economy

and trade competitiveness.

Prime Minister Howard expressed a clear bias towards fossil fuel technologies. He stated “You

can’t run power stations on solar and wind, let’s be realistic, you can only run power stations in a

modern Western economy on fossil fuel, or in time nuclear power” (Howard 2007). His administration

invested much more money in nuclear and carbon capture and storage technologies than renewable

energy research, showing a desire to capitalize on Australia’s fossil fuel reserves rather than enact more

sustainable long term energy plans (Schläpfer 2008).

The ineffective NGRS was replaced by the National Greenhouse Strategy in 1998, which

intended to encourage organizations to improve their energy efficiency and promote best practice

approaches to greenhouse gas emissions. However, the strategy was still based on voluntary

mechanisms, and proposed no clear methods to reduce industry’s carbon reliance (Griffiths et al 2007;

Firsova et al 2012).

The government appeared to take a step in the right direction with the implementation of the

Mandatory Renewable Energy Target (MRET) in 2001. It declared that by 2010, electricity buyers must

source an additional 2% of their electricity from renewable or specified waste product energy sources,

equating to 9500 GWh (Kent & Mercer 2004; Falk & Settle 2011). The mandatory nature of the policy

was an improvement over the NGS and Greenhouse Challenge program, but it was much too modest. It

was also comprised by its inclusion of non-renewables like coal mine gas, and allowing exemptions for

emissions-intensive trade-exposed activities (Falk & Settle 2011). Finally, the program did not run for

enough time to allow renewables to gain a strong foothold in the energy economy (Schläpfer 2008). In

the end, the MRET made minimal improvements in renewable energy production, and served as more of

a symbolic measure than an instigator of positive change.

Rudd Administration (2007-2010, 2013):

During his campaign, Rudd promised to improve upon Howard’s ineffective policies, so his

election came with hope from the public for positive change. While he tried to instigate this by ratifying

the Kyoto Protocol (Falk & Settle 2011; Valentine 2010; Firsova et al 2012), commissioning Ross Garnaut

to review Australia’s climate change actions (Falk & Settle 2011), publishing a plan for an emissions

trading scheme (ETS) (Falk & Settle 2011; Firsova et al 2012), and revising the MRET (Valentine 2010;

Byrnes et al 2013), in the end his policies still fell flat. The Carbon Pollution Reduction Scheme (CPRS)

intended to reduce carbon emissions to 5-15% below 2000 levels by 2020, and 60% by 2050 by enacting

a cap and trade ETS (Falk & Settle 2011). Despite good intentions, it watered down the goals advised by

the Garnaut review, and intended to give the majority of funds generated by the ETS to support trade-

effected, emissions-intensive industries. Critics have argued that the market based mechanism

proposed by the CPRS could not make any change in an economic system focused on over consumption

(Firsova et al 2012). In the end, the CPRS was rejected all three times it was presented to Parliament,

even with its significant concessions to fossil fuel industries.

The Rudd government was successful in enacting the Renewable Energy Target (RET), a revision

of the MRET. The target increased the goals of the MRET, stating that 45,000 GWh of electricity must

come from renewables from 2020, and increased the penalty to electricity retailers who failed to reach

their quota. However, the scheme still prioritized short term economic goals. It allowed waste coal

mine gas fired power plants to apply for Renewable Energy Credits, which in turn subsidized the coal

industry and decreased the market price of coal. It was also designed to expire in 2030, so there was

little incentive for retailers to invest in renewables beyond the first 10 year period. Like previous

policies, the scheme failed to change the structure of the energy system to give renewables a chance to

become more economically feasible (Valentine 2010).

Gillard Administration (2010-2013):

The policies of the Gillard government were more progressive than past administrations. The

Climate Commission was established in 2011 to communicate climate change science to the general

public (Talberg et al 2013). Funding for renewable energy research was provided through the Australian

Renewable Energy Agency and the Clean Energy Finance Corporation (CEFC), and the Clean Energy Act

of 2011 finally established a price on carbon and plans for an ETS. While these policies were an

improvement, they still made significant concessions to fossil fuel industries, which undervalued the

seriousness of climate change as an environmental issue (Byrnes et al 2013).

Only 50% of the funds provided by the CEFC were committed to renewable energy projects;

others were devoted to “clean technology” projects like natural gas, which still produce greenhouse gas

emissions (Byrnes et al 2013). While measures enacted by the Clean Energy Act did succeed in reducing

greenhouse gas emissions, the act was still too lenient (McDonald 2013). It allowed trade-exposed

industries and coal fired power stations to be eligible for free credits, and further subsidized these

industries through programs like the ‘Steel Transformation Plan,’ the ‘Jobs and Competitiveness

Program,’ and the ‘Coal sector Jobs Package.’ As a result, the external environmental costs of fossil fuel

use were not fully internalized, and renewable energy companies were yet again put at a disadvantage

(Byrnes et al 2013).

Abbott Administration (2013-Present):

Tony Abbott has expressed opposition to an emissions trading scheme for years; his

replacement of Malcolm Turnbull as the leader of the Opposition during the Rudd administrations was a

big reason for the failure of the CPRS (Falk & Settle 2011). He called the tax a “job-killer,” and a threat to

Australia’s resource industry (Changing the Political Climate). Therefore, it’s not surprising that his main

priority after gaining office was repealing the Clean Energy Act. Abbott has also abolished the Climate

Commission, intends to cease investments in the CEFC, and has plans to abolish the Climate Change

Authority (an independent advisory board put in place by the Gillard administration) (Talberg et al

2013).

A Direct Action Plan has been designed to replace the Clean Energy Act. This plan will draw from

a set Emissions Reduction Fund to reward businesses and farmers with emissions reduction plans that

have the lowest cost per amount of abatement. Although the Abbott administration supports the

previous government’s goal of reducing emissions 5% on 2000 levels by 2020, he does not intend to

increase the amount of the Fund if the goal is not met (Miller 2014). While the Direct Action plan

encourages innovation in emissions reduction, which is a good thing, it prioritizes short term economic

well-being over reaching Australia’s already meager emissions target. In addition, competition between

businesses to obtain government funding will likely overshadow the core issue of climate change, and

will make it difficult for developing renewable technologies to gain prominence in the energy market.

Gillard’s carbon price mechanism wasn’t perfect, but it was the first legislation in years to produce

significant reductions in greenhouse gas emissions. Completely overhauling this system for a program

that is not firmly committed to meeting Australia’s emissions target shows a clear bias towards short

term economic stability, rather than committing to establishing a sustainable energy future.

The Future:

If Australia wants to successfully combat climate change in the future, the government will have

to drastically change its attitude towards emissions reduction policy. Policies must address longer time

frames and extend over multiple political terms, and they should be flexible to accommodate new

research and national economic changes. They have to avoid the easiest and least effective options for

emissions abatement, and rather look to design a long term sustainable energy system that emphasizes

the use of renewable technologies (Mercer et al 2011). Australia has vast supplies of coal and other

fossil fuels, but these will not last forever, and with a growing population, relying on them will only

exacerbate the effects of climate change. Although reducing emissions may be economically taxing in

the short term, supporting fossil fuel companies and impeding the success of renewable energy will only

hurt us in the long term.

Conclusion:

Ever since climate change was introduced to the political agenda, Australian government has

been attempting to design policy that will combat the problem without hurting its fossil fuel dependent

economy. However, these policies have put more of an emphasis on economic development than the

core environmental issue, making them largely ineffective. The present and future government has to

recognize the importance of a healthy environment to Australia’s economic and social well-being and

design emissions reduction policies that put the environment first. Otherwise, the country will continue

to be entrenched in debate over economics and logistics, and fail to combat the problem at hand.

References:

Bulkeley, Harriet. "No Regrets? Economy and Environment in Australia's Domestic Climate Change Policy Process." Global Environmental Change 11 (2001): 155-69. Elsevier. Web. Apr. 2014.

Byrnes, Liam, Colin Brown, John Foster, and Liam D. Wagner. "Australian Renewable Energy Policy: Barriers and Challenges." Renewable Energy 60 (2013): 711-21. ScienceDirect. Web. Apr. 2014.

"Changing the Political Climate." Tcetoday.com. Institution of Chemical Engineers, Oct. 2013. Web. Apr. 2014.

Christoff, Peter. "Climate Discourse Complexes, National Climate Regimes and Australian Climate Policy." Australian Journal of Politics and History 59.3 (2013): 349-67. Web. Apr. 2014.

Department of the Environment, Water, Heritage and the Arts (2009). Ecosystem Services: Key Concepts and Applications, Occasional Paper No 1, Department of the Environment, Water, Heritage and the Arts, Canberra.

Falk, Jim, and Domenica Settle. "Australia: Approaching an Energy Crossroads." Energy Policy 39.11 (2011): 6804-813. ScienceDirect. Web. Apr. 2014.

Firsova, A., V. Strezov, and R. Taplin. "After 20 Years of Creating Australian Climate Policy: Was the Proposed Carbon Pollution Reduction Scheme a Change in Direction?" Australasian Journal of Environmental Management 19.1 (2012): 21-34. Web. Apr. 2014.

Griffiths, Andrew, Nardia Haigh, and Jenine Rassias. "A Framework for Understanding Institutional Governance Systems and Climate Change: The Case of Australia." European Management Journal 25.6 (2007): 415-27. Web. Apr. 2014.

Harriet, Bulkeley. "No Regrets? Economy and Environment in Australia's Domestic Climate Change Policy Process." Global Environmental Change 11 (2001): 155-69. Web. Apr. 2014.

Howard, J. Reported in The Age Newspaper, February 3rd 2007.

Kent, Anthony, and David Mercer. "Australia's Mandatory Renewable Energy Target (MRET): An Assessment." Energy Policy 34 (2006): 1046-062. Elsevier. Web. Apr. 2014.

McDonald, Matt. "The Future of Australian Climate Politics." Australian Journal of Politics and History 59.3 (2013): 449-56. Web. Apr. 2014.

Mercer, David, Linda Christesen, and Micahel Buxton. "Squandering the Future- Climate Change, Policy Failure and the Water Crisis in Australia." Futures 39 (2007): 272-87. ScienceDirect. Web. Apr. 2014.

Miller, Daniel. "What Is the Coalition's Direct Action Climate Policy?" ABC News. Australian Broadcasting Corporation, 24 Apr. 2014. Web. Apr. 2014.

Palutikof, J. P. "The View from the Front Line: Adapting Australia to Climate Change." Editorial. Global Environmental Change 2010: 218-19. ScienceDIrect. Web. Apr. 2014.

Schläpfer, August. "Hidden Biases in Australian Energy Policy." Renewable Energy 34.2 (2009): 456-60. ScienceDirect. Web. Apr. 2014.

Talberg, Anita, Simeon Hui, and Kate Loynes. "Australian Climate Change Policy: A Chronology." Parliament of Australia. Parliament of Australia, 2 Dec. 2013. Web. Apr. 2014.

Valentine, Scott. "Braking Wind in Australia: A Critical Evaluation of the Renewable Energy Target." Energy Policy 38.7 (2010): 3668-675. ScienceDirect. Web. Apr. 2014.