The next Federal election will be won and lost on the issue of greenhouse gas emission reduction, but how well does the electorate understand the competing proposals?
Kevin Rudd has called climate change the greatest moral challenge of our time, and he has made no apology for that. Tony Abbott is more succinct, he calls it “crap”. But both men are firmly committed to reducing Australia’s greenhouse emissions in order to tackle climate change.
The reason that Australia’s greenhouse gasses present such a great moral challenge is that there are so few of us, and on average, we are so wealthy. Our per capita emissions are a disgrace, pretty much the highest in the world.
Rajendra Pachuari, the jet setting cricket enthusiast, steel tycoon and chairman of the IPCC, despite having a personal carbon footprint equal to that of New South Wales, is actually having less effect on the climate than the average Aussie. His greenhouse emissions are counted as part of the Indian total, and thus average out to be only one twentieth that of an Australian.
Last year, Rudd’s greatest moral challenge required a 25% reduction by 2020, and 60% by 2050, but the polls haven’t been so good lately. The revised answer to the greatest moral challenge is a 5% cut in emissions by 2020.
The way to achieve this, according to Mr. Rudd, is by an Emissions Trading Scheme. Businesses will have to register with the National Greenhouse and Energy Reporting Scheme, or NGERS, and will be allocated emissions permits, equivalent to their “business as usual” emissions, which they will expend against their emission of greenhouse gasses. If they can reduce their emissions, they may sell their excess permits to other businesses that may wish to increase their emissions.
Other buyers are expected to include currency traders, Wall St speculators and the international Mafia, who will provide liquidity to the market. Should the UK proceed with its plan to issue personal emission permits to all its citizens, there will also be strong demand for permits from London bond traders relocating to New York, Shanghai and Rio de Janeiro.
The Emissions Trading Scheme requires businesses that are registered under the NGERS to self-report their emissions each year, so the scheme is virtually foolproof.
In fact, 680 businesses have already registered, including Snowy Hydro Ltd and Snowtown Wind Farms Pty Ltd. Since these renewable energy companies don’t produce any greenhouse gasses, the shareholders are looking forward to some pretty tidy bonuses once the ETS kicks off in 2011.
That is, unless Tony Abbott and the Coalition win the next election. Then the situation changes dramatically.
Mr Abbott is committed to tackling “crap”, or climate change, as he sometimes calls it. As he explains it, the secret to tackling climate change is to reduce Australia’s greenhouse emissions by 5%, and for best results, this should be done by 2020.
Should he win government, Abbott will establish an Emission Reduction Fund. Businesses will interact with the fund in the following way. Those that are able to reduce their emissions below “business as usual” levels will be eligible for a payment from the Fund. Those that increase their emissions will have to pay a penalty into the Fund.
Surplus funds (in the Fund) will be used to buy charcoal, which will be buried in the soil, thus becoming “biochar”, a well known method of reducing emissions.
Businesses will have to register with the NGERS. The Emission Reduction Fund requires businesses that are registered under the NGERS to self-report their emissions each year, so the scheme is virtually foolproof.
Two of the businesses already registered, Snowy Hydro and Snowtown Wind Farms are not expecting to emit any greenhouse gasses, so will not be eligible for any payment from the Emission Reduction Fund. Shareholders of these companies have been prominent attendees at Labor fundraisers recently.
It all seems simple enough. What could possibly go wrong?