Photo: Dean Lewins/AAP
Last week has been a big one for everyone concerned with the faltering effort to comply with the Paris Agreement and tackle the climate crisis. It is possible that it is considered a landmark of some kind. The big step forward hasn’t been in Canberra, where an increasingly circular debate is unfolding over Australia’s first climate change law in more than a decade.
That is not to be dismissed by the Albanian government’s climate protection law or the MPs working to strengthen it. Australia’s legislation is important, especially as a confidence booster for investors wanting to champion clean energy and other climate solutions. It sets minimum targets – a 43% reduction by 2030 from 2005 and net zero by 2050 – and includes some useful transparency and accountability measures. But the reality is that there is hardly anything in it.
It contains no mechanism to reduce greenhouse gas emissions and no funding to drive change. Flipping through the 16 pages, you might be wondering what all the fuss is about.
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No, the real shift happened in the US last week, where a deal was reached between the Democratic leadership and the party’s perennial climate blockade and coal superfan, Senator Joe Manchin III of West Virginia.
Just two weeks ago, Manchin — a millionaire thanks to a family coal business and the top recipient of oil and gas money in the US Senate — was dubbed “the man who single-handedly doomed humanity,” the villain, and then with a row of unprintable things vowed to use his decisive vote to once again block serious climate legislation.
It was widely believed that was the case, but Manchin shocked almost everyone on Wednesday when he announced he would support US$369 billion (AU$527 billion) in climate and energy spending.
When it passes Congress, it’s likely to be truly transformative. The bill provides huge sums for tax credits for renewable energy and battery production, rebates on domestic electric vehicles and green appliances, support for environmental justice projects in communities disproportionately affected by climate catastrophe, and funding for funds to combat high-impact methane emissions.
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The authors say it could take the country from a 30 percent to a 40 percent reduction in emissions by 2030 compared to 2005 levels and put Joe Biden’s 50 percent reduction target within reach.
Not everything in the bill, optimistically dubbed the Inflation Reduction Act, is climate positive. It also includes significant concessions to fossil fuels, which were deemed necessary to get Manchin across the border. There will be new leases for oil wells in the Gulf of Mexico and Alaska – a move that would break a campaign promise by Biden – and faster approval processes for gas pipelines.
At another time, such actions might have triggered a stronger negative reaction. Some critics have argued that while the deal’s fossil fuel elements are dwarfed by support for renewable energy,
they could drive growing demand for gas that locks it far into the future. But pro-climate Democrats and activists have largely hailed the law as a breakthrough. Their position can be summed up as a combination of “the positives are immense” and “this is far beyond what we expected a week ago”.
Expectations in Australia are of course different. As the coalition continues to steer clear of a mature conversation on climate policy, the center of the debate lies somewhere between last year’s Labor assessment of what was politically feasible after years of electoral losses, and the science-based positions of the Greens and Independents.
Climate Secretary Chris Bowen’s position – basically that Labor will stick to its modest electoral commitments but not stand in the way of deeper cuts – is not an improper starting point given our current situation, but it has been undermined by Anthony Albanese’s extravagant suggestion that the expansion of the Australia’s coal export industry could be good for the climate because local coal is “cleaner” than that from overseas. It’s an old line of the coal industry that, as Graham Readfearn has explained, doesn’t stack.
The prime minister’s other rhetorical device was to misrepresent a Green Party push for a moratorium on new coal mine and gas field development in an attempt to quickly halt existing fossil fuel development, claiming it would have “a devastating impact on the economy”. It’s obvious politics, but unlikely to matter until 2025, when voters can judge the Albanian government on what it has actually achieved.
The key questions will go something like this. Has she implemented the promised climate policy in such a way that the country is prepared for the future? Has it convinced Australians that its emissions reductions are real and not greenwashing? Has she been honest with the communities that will be hit hardest by the inevitable changes and has she created a plan to support them?
Has it quashed dishonest claims by the Coalition and others trying to blame Labor for the increase in electricity bills caused by international factors? And has it used the incumbent’s power to set an ambitious emissions reduction target for 2035, charting a new course and eliminating the need for a debate on the 2030 target?
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We’ll get a pretty good idea of how much of that looks over the next 12 months.
In terms of new climate spending, the government isn’t offering anything on the scale the US is planning, but it has introduced legislation for tax breaks for electric cars and says that $20 billion in the country will go to 82% renewable energy by 2030.
But the big questions will be how Labor will deal with industrial pollution and future coal and gas proposals.
Bowen later this month promised a discussion paper on options for the government to use the safeguard mechanism – a coalition policy that has been in place for years without achieving anything – to reduce runaway emissions from big industry. Labor has been backed by the business community for its climate targets, but negotiations on the safeguards – which will determine how quickly 215 major emitting plants and mines have to make cuts – could prove difficult. The minister will not have much time to discuss the details. He has promised that the revised protection will run until July next year.
Labor has made it clear that it has no intention of outright banning new fossil fuel mines, regardless of what the world’s climate scientists, the UN Secretary-General and the International Energy Agency say. But a well-designed safeguard could at least make developing new coal and gas fields significantly more difficult.
Total industrial emissions need to start coming down. Obviously, allowing new fossil fuel projects will make this more difficult and put more pressure on existing polluting companies to make deeper cuts. But the government has also said trade-exposed large emitters will be protected. Something will have to give. One option would be to place much stricter emissions requirements on new fossil fuel proposals than on those already in service.
A simpler approach might be to simply introduce a climate test – often referred to as a climate trigger – into national environmental laws so that new major developments could be blocked or restricted if they would cause significant emissions. Environment Minister Tanya Plibersek has promised a revision of these laws next year, with details to follow.
As the government ponders all of this, it must also decide what to do about carbon credits. Many large polluters who fall under the protection mechanism want to use them, which would mean they would effectively be paying someone else to act while continuing to emit. But the integrity of the national carbon credit system is under a cloud, having been labeled a fraud and “largely a sham” by one of its architects.
A review is underway, led by former chief scientist Prof Ian Chubb. His answers at the end of the year – including whether there should be limits on how many credits can be used – will go a long way in deciding whether Labor can bring about the meaningful change needed.