Tom Switzer - Greenhouse gas battle is slowly losing steam

The former adviser to Brendan Nelson has written an excellent piece in the Australian Financial Review comparing the likely fate of emissions trading legislation both here and in the US:

When Kevin Rudd and Barack Obama were elected to power, Australia and the United States were expected to implement overdue and concrete measures to slash the greenhouse gases that cause global warming.

But a curious thing is happening on the road to the UN post-Kyoto global conference later this year: the legislation to implement an emissions trading scheme (ETS) – the chosen policy that would change the way we use energy – is likely to collapse in both Canberra and Washington.

And the reason for the opposition among politicians and commentators is the same in both Australia and the US: that any serious action to reduce each nation’s carbon footprint would be futile without the support of the developing, big polluting nations, most notably China and India, at the Copenhagen conference.

It was not Adelaide University’s Ian Plimer, but Harvard University’s Martin Feldstein who argued in the Washington Post this month that we “should wait until there is a global agreement on CO2 that includes China and India before [we] commit... to costly reductions.”

It was not Liberal frontbencher Andrew Robb, but leading Republican Congressman James Sensenbrenner who argued in the Wall Street Journal we “cannot reduce the growth of greenhouse gases in the earth’s atmosphere without the developing nations cutting their emissions as well.”

And it was not National Party Senator Barnaby Joyce, but Indiana Governor Mitch Daniels who warned in last week’s GOP radio and Internet address that, under an ETS, “our farmers and livestock producers would see their costs skyrocket and our coal miners would be looking for new work.”

Public opinion in the US is also shifting dramatically: according to Gallup, 41 per cent of Americans think climate change is exaggerated (the highest percentage in more than a decade of polling) and among eight environmental concerns, climate change ranked last. Amid the financial crisis, protecting jobs now takes priority over combating global warming.

Just last week, President Obama's No. 2 special envoy for climate change Jonathan Pershing said the US may miss the December deadline for committing to reduce its emissions, making it impossible for US negotiators to set a target for any successor deal to the 1997 Kyoto Protocol in Copenhagen. Simply put, the US will follow its national interest as well as the electoral mood on global warming.

To the extent that such views prevail, they contradict the notion that Obama’s America will lead the world to a post-Kyoto low carbon future. In Australia, the federal Opposition’s support for a carbon pollution reduction scheme is conditional on not just the support of developing nations to cut emissions but also the passage of a US law that sets specific carbon targets. Ditto the governments of Canada and New Zealand.

The Chinese government expects developed nations to not only cut their emissions by at least 40 per cent from 1990 levels by 2020, but donate up to 1 per cent of annual GDP to help poorer nations cope with climate change. The demands won’t be met.

The Australian Government has downgraded target rates to as low as 5 per cent from 2000 levels by 2020 and proposes to hand out free permits to big polluters.

Europe has pledged to cut emissions by 20 per cent from 1990 levels by 2020. But, despite having already implemented an ETS, it has failed to meet its mandatory carbon targets under the Kyoto protocol and it has fattened polluters’ profits without protecting consumers from higher energy prices.

In the US, the Waxman-Markey bill - named after two leading Democrat congressmen active on climate change – proposes a cut by 17 per cent from 2005 levels by 2020 as well as a host of subsidies and special exemptions, including at least 85 per cent free permits to big polluters. The legislation has just passed a key congressional committee, and it will probably clear the House of Representatives during the northern summer.

But the bill faces a roadblock in the Senate, where 60 votes are required to overcome a filibuster. Most of the 40 Republicans as well as several Democrats from states that rely heavily on coal and whose energy costs would rise under an ETS are likely to oppose. Which means the climate bill will probably crash to defeat just as a similar bill did last year.

The point here is that different nations have different interests, and none is willing to make a serious cut without an equal commitment from others. It’s easy to understand why: if one nation adopts an ETS and its trading competitors do not, the former’s exports would cop a carbon cost not borne by its competitor. What may make sense for a developed country in Europe, moreover, does not work for a developing one in Asia eager to grow its economy and lift its people out of poverty.

Put another way, if every advanced country drastically slashes carbon emissions, cuts would be wiped out by emissions from China, already the world’s largest polluter, and India, coming up fast. Even before the global recession, neither nation was prepared to accept mandatory cuts, lest it hinder economic development.

Source: AFR - 18 June 2009