Industrial Prize 2010

The World International Design Day prize included a great montage.

The danger of a carbon price without a philosophy - Will the price be right

A great opinion piece by Fergus Green (www.inside.org.au)

25 February 2011

Will the price be right?

25 February 2011 @ 9:35 am

With the date for a carbon price mechanism now set, Fergus Green goes in search of the missing philosophy behind Australian climate policy

AFTER only four meetings of the Multi-Party Climate Change Committee, and well before most industry groups could finishing dusting off their talking points from the 2009 fear campaign against the ill-fated Carbon Pollution Reduction Scheme, Labor, the Greens and key independents yesterday announced their agreement on the “broad architecture” for an Australian carbon pricing mechanism. Australia looks set, finally, to establish that most elusive of prizes in Australian climate politics: a carbon price.

But a fundamental question remains: will the price be right?

The striking thing about the Australian climate debate is that a carbon price itself has become the beginning and end of climate policy. It’s striking because a carbon price is merely a tool, a way of getting from “a” to “b.” Its function is to send a market signal about which type of power plants to invest in, which forms of transport to take and how best to use our land. But just what sort of signal do we want our carbon price to send? What do we want “b” to look like?

The Greens have a fairly clear idea, but for all its committee-convening and report-commissioning, the Gillard government has yet to present a coherent and compelling philosophical rationale for its climate policy generally and for carbon pricing in particular.

Australians seldom talk about philosophy, but it is inextricable from public policy and it matters deeply in the case of climate change. The public purpose that a technocratic policy mechanism like a carbon price is designed to serve will make the difference between whether our energy future lies down a coal mine or harnessing the sun; whether we will forever drive petrol-guzzling cars or enjoy efficient forms of public and private transport; whether we log our forests bare or protect and restore them; and whether our nation helps or hinders the global effort to avert catastrophic climate change.

Establishing the philosophy for Australian climate policy used to be relatively easy. By consigning the moral dimension of climate action (averting dangerous climate change) to the international sphere, conveniently assuming that it could be taken care of by way of a treaty imposing targets on countries that would “add up” to an acceptable outcome for the climate, Australian climate policy elites came primarily to be concerned with efficiency – an amoral concept. Until relatively recently, there existed a bipartisan consensus that the purpose of Australian climate policy was simply to “meet our target efficiently” – that is, at the lowest possible cost, by way of an emissions trading scheme, or ETS.

But this “treaties, targets and trading” approach has been discredited by the failure of the Kyoto Protocol, the effective collapse of negotiations towards a successor treaty in Copenhagen and the gaping “multi-gigatonne gap” between scientifically credible emissions reductions and the weak targets currently being discussed in meandering international talks. As this intellectual edifice has crumbled, it has exposed the weakness of the Australian philosophy: we had been designing our domestic climate policy (including numerous iterations of the Carbon Pollution Reduction Scheme) to slot neatly into a tight system of global morality that simply did not exist.

It is against this chaotic background that Prime Minister Gillard and her colleagues have set about the task of eliciting fresh support for a carbon price. With apparent determination to avoid the morally infused rhetoric of Kevin Rudd, they have set their sights much lower than averting climate catastrophe, spruiking instead a case based on the opportunities for green (or, at least, greener) economic growth. A carbon price, so the argument goes, will make renewable energy more competitive, fuelling investment, job creation and export earnings in the industries of the twenty-first century.

Building competitive, low-carbon industries in Australia is a worthy goal of national climate policy and one that makes for a more compelling sales pitch than “meeting our target efficiently.” But it also makes for fuzzier philosophy, rendering it liable to abuse.

First, the “green economic opportunity” case for climate policy is hard to reduce to philosophical principles. Which industries do we want to grow, by how much and when? These are important questions that need to be pondered, but any answers inevitably prove difficult to justify by reference to economics alone. And in a political scrap over their relative economic value to the nation, you can bet that the clean-tech champions of tomorrow will be outgunned by the fossilised behemoths of today, as they were during “stakeholder consultations” on Kevin Rudd’s scheme. Unless we have a clear vision for the industrial composition of our future economy from which to design our climate policy, it will be difficult to know whether the carbon price is right.

Second, and more importantly, the more that “economic opportunity” is allowed to displace concerns about ethics, justice, values and science in the search for a philosophy for Australian climate policy, the more we risk unhinging that policy from concerns about climate change itself and our contribution to it. Much green growth could easily occur amid even greater brown growth if our concern is only to boost the former, not curtail the latter. What good are a few more wind farms for the climate if we push ahead with plans to double our coal exports in the next ten to fifteen years? Seriously trimming our carbon-obese society will present immense economic opportunities, but it will also require tough decisions that cost some industries and communities dearly in the shorter term. A wholly opportunistic approach to climate policy risks conditioning Australians to an easy-being-green mentality that would leave us ill-prepared for the difficult trade-offs of a climate-changed world – and impotent to demand them from others.

Labor’s rhetoric about green opportunities also risks ringing hollow. Will levying a carbon price “drive another sweeping technological revolution like information technology did in the 1980s and 90s,” as Gillard claimed in a recent speech? Both theory and practice suggest that a carbon price, though helpful, will not on its own be capable of sparking such a transformation.

According to economic theory, even a high and stable carbon price will be insufficient to encourage the sort of large-scale technological innovation – in electricity generation and transmission systems, for example – required to meet scientifically credible emissions reduction targets. Because of market barriers to large-scale private investment in technology research and development and network infrastructure (like “smart” electricity grids), governments must invest in such “public goods” through targeted policies, including direct grants, loan guarantees and R&D tax credits. A carbon price can at best assist more mature, commercially available clean technologies by raising the price of incumbent, carbon-intensive alternatives.

In practice, existing carbon pricing regimes in other countries have had minimal impact on the development and diffusion even of mature low-carbon technologies, let alone new ones. The European ETS — the world’s largest carbon market — with its historically weak emissions caps and brown-industry-friendly loopholes, has yielded low and volatile carbon prices, making it a poor catalyst of low-carbon industrial development. An EU-wide renewable energy target (divided into individual country targets) and policy mechanisms providing direct support for clean-tech industries have therefore been necessary to stimulate the desired local “green growth.” Germany, for example, like many European countries, has implemented a system of direct payments to renewable energy producers, known as feed-in tariffs, which spurred a five-fold increase in the share of German electricity consumption from renewable sources between 1991 and 2009 and fostered a thriving German renewable energy sector.

NONE of this should come as a surprise: the point of an ETS is precisely to meet an emissions target at the lowest cost; developing new industries and technologies amid competition from incumbent alternatives is messy and costly. Sparking an Australian clean technology revolution will require sustained and sophisticated investment in innovation, infrastructure and technology, along with a smoothly rising — and eventually very high — carbon price, free of the loopholes and carve-outs that would undermine its transformative potential.

If recent signals are anything to go by, the Gillard government looks intent on pushing for the complete opposite. In February, Gillard referred to the industry compensation arrangements crafted for the Carbon Pollution Reduction Scheme, which would have seen more than $20 billion of taxpayers’ money doled out to Australia’s biggest polluting industries, as “good work” that should inform the design of the new scheme. Simultaneously, Labor tried to scrap funding for large-scale solar power plants – the sort of strategic investment in breakthrough energy technologies that will be necessary if we are to have any hope of sparking a “sweeping technological revolution” – on the spurious basis that such policies will be redundant when we have a carbon price.

While yesterday’s announcement that the new scheme would start as an annually rising fixed price is a step in the right direction, moving to an ETS after three to five years could prove damaging to the development of low-carbon industries in the absence of an effective floor price to provide certainty for investors in those industries (a lesson the Europeans are learning slowly).

If we’re truly serious about both green industrial development and deep emissions cuts then the terms of the political debate now need to shift well beyond whether “to have or not to have” a carbon price and mere platitudes about green growth. In the few months before the carbon price legislation is settled, environmental groups and progressive business voices need to articulate a clear and coherent philosophy for Australian climate policy in a post-Copenhagen world.

Only with such clarity of purpose can one establish firm principles from which to argue persuasively for particular design features of the new carbon pricing mechanism (let alone for the further policy measures that will be needed to develop clean technologies and industries). Without such a philosophy, the all important details of the carbon price will be resolved in backroom deals between politicians, bureaucrats and industry lobbyists, as happened with Labor’s previous scheme. If that occurs again, we’ll get a weak scheme that does little to reduce our emissions, let alone transform our industrial base.

If, on the other hand, we can bring these issues to the forefront of our public debate, we might be able to get not just a carbon price, but a carbon price that’s right. •

Fergus Green is a lawyer and policy analyst specialising in climate change. He has published widely on Australian and international climate policy in both print and online media

URLs in this post:

[1] Climate policy: a new momentum: http://inside.org.au/climate-policy-a-new-momentum/

[2] Paying for Australia’s infrastructure deficit: http://inside.org.au/paying-for-australias-infrastructure-deficit/

[3] Rethinking the Murray–Darling buybacks: http://inside.org.au/rethinking-the-murray-darling-buybacks/

[4] Europe’s radical carbon choice: http://inside.org.au/europe-carbon-choice/

[5] Kicking the petrol habit: http://inside.org.au/kicking-the-petrol-habit/

[6] Malcolm in the middle: http://inside.org.au/malcolm-in-the-middle/

[7] The more things change…: http://inside.org.au/the-more-things-change%e2%80%a6/

[8] Budget wars: http://inside.org.au/budget-wars/

[9] Primaries: a second-best option: http://inside.org.au/primaries-a-second-best-option/

[10] Life in the UK: the exam: http://inside.org.au/life-in-the-uk-the-exam/

Pedestrians rule in big city slowdown

Professor Newman would be proud of light rail coming to Sydney:

Sydney Morning Herald, 13 September 2010

Traffic in the centre of Sydney will be slowed to 40 km/h and the City of Sydney council will introduce shared streets with top speeds of 10 km/h, under an agreement between the lord mayor, Clover Moore, and the NSW government.

Councillor Moore and the Premier, Kristina Keneally, will release a memorandum of understanding today that will also lock in plans for the return of light rail to the city and overhaul bus lanes and clearways in an effort to speed up journey times for commuters.

The government has also agreed to trial countdown timers on traffic lights - common in cities from Bangkok to London and, most recently, New York - after years of opposition by the Roads and Traffic Authority, which has been reluctant to allow pedestrians to monitor how long they wait for traffic.

The plan also promises to ''improve pedestrian priority at major pedestrian intersections and reduce wait times for pedestrians in peak periods''.

It also involves a crackdown on motorists at 21 intersections in the city - including Market and George streets, Macquarie and Bridge streets, Elizabeth and Park streets and King and Clarence streets - to discourage queueing across key roads.

The new 40 km/h speed limit is likely to apply to the area bounded by Circular Quay and Central Station to the north and south, and College Street and Sussex Street, to the east and west.

The Herald understands Ms Keneally made an overhaul of the bus precinct at Wynyard a key condition of the memorandum and threatened not to sign unless it was included in the overall revamp of the city.

It includes new clearways in the morning and afternoon peak hours on York, Bridge and Market streets and the extension of bus lane times on Clarence Street until 9pm.

At least seven roadways will become 10km/h precincts and traffic is to be banned on York Street during the morning peak period.

Wilmot, Central, Cunningham, Little Hay, Valentine and Factory streets, along with Kimber Lane, will be remodelled to resemble Barrack Street in the city. With its brick paving, seating and food carts, the short road between George and York streets is designed to allow pedestrians and slow-moving cars to share the streetscape.

The memorandum confirms that light rail will return to the heart of Sydney, with details to be finalised by early next year and pushed with ''rapid planning approvals''. ''The memorandum will guide improved public and active transport options, as well as traffic flows for the whole of the city centre,'' Cr Moore told theHerald in an email.

''It recognises that extending light rail is the key initiative that can fundamentally change the city centre by improving traffic flows and reducing congestion.''

A joint state-city taskforce will begin immediate work on determining the route of the light rail, although the Heraldunderstands the RTA has raised objections to trams on Sussex Street, claiming it is too narrow.

One option is to lay light rail along George Street, looping around Dawes Point to Walsh Bay and the planned Barangaroo precinct.

Launch of WREX - Waste and Resource Exchange

Ffitch Solutions is proud to announce the launch of WREX.biz, an online waste and resource exchange.

WREX.biz provides:

• Generates additional revenue for business,
• Facilitates the exchange of waste resources and materials,
• Creates a new market for resources that would ordinarily go to landfill,
• Earns money from waste and surplus resources,
• Identifies opportunities to change waste into a valuable resource,
• Provides opportunities for Australian organisations to be proactive with their resources
• Delivers a sustainable use of resources,
• Addresses environmental problems by reducing the level of waste and pollution.

World is 'unequivocally' getting hotter, says study

The Daily Telegraph, London:

THE world is "unequivocally" getter hotter and has been for more than 30 years, according to the most comprehensive study of temperature readings from the top of the atmosphere to the bottom of the ocean.

The report, compiled by the British Met Office and its US equivalent, The National Oceanic and Atmospheric Administration (NOAA), provides the "greatest evidence we have ever had" to support global warming, its researchers say.

They forecast that this year will be the hottest on record, globally. Usually scientists rely on the temperature over land, taken from weather stations, to gauge whether the climate is changing.

However, today's State of the Climate report brings together data from 10 separate indicators stretching back 150 years, including measurements of sea level rise taken from ships, the temperature of the upper atmosphere taken from weather balloons and field surveys of melting glaciers.

New technology also means it is possible to measure the temperature of the oceans, which absorb 90 per cent of the world's heat.

Seven of the 10 areas measured including air and sea surface temperatures, the amount of heat in the ocean and humidity, had rising figures. Three areas, the extent of Arctic sea ice, glaciers and winter snow cover in the northern hemisphere, were in decline.

According to the researchers, the study shows "unequivocally that the world is warming and has been for more than three decades".

And despite the cold winter in Europe and north-east America, this year is set to be the hottest on record.

The NOAA has stated that the first six months of this year were the hottest on record, while the Met Office believes it is the second hottest start to the year after 1998.

Dr Peter Stott, head of climate monitoring and attribution at the Met Office, said "greenhouse gases are the glaringly obvious explanation" for the 1F (0.56C) rise in average global temperatures over the past 50 years.

"Despite the fact people say global warming has stopped, the new data, added on to existing data, gives us the greatest evidence we have ever had," he said.

Climate change sceptics have questioned global warming in the wake of the "climategate" scandal. It was claimed that emails stolen from the University of East Anglia show scientists were willing to manipulate the land surface temperatures to show global warming. The scientists were cleared in an independent inquiry.

But Dr Stott said that sceptics could no longer question land surface temperature as other records also prove global warming.

He said each indicator takes independent evidence from at least three different institutions. Despite variations from year to year, each decade has been warmer than the last since the 1980s.

He said: "When we follow independent analyses from around the world, we see clear and unmistakable signs of a warming world."

The Daily Telegraph, London