Greenhouse leader or laggard?

February 13, 2005

The Government says Australia is one of a few countries to meet its target on reducing greenhouse gas emissions under the Kyoto Protocol, while critics say that claim is a sham. Phillip Hudson and Claire Miller report.

Australia will be among just four countries to meet its Kyoto target to reduce greenhouse gas emissions, according to a new report which the Federal Government says justifies its decision not to sign the international agreement.

New Zealand, Britain and Sweden will also comply, while Germany is very close to meeting its target, according to the Industry Department study.

But the Australia Institute's chief executive officer, Dr Clive Hamilton, says the Government's claims are a complete distortion. "If Australia is going to go close to meeting its target, it will be for one reason only - because Australia was given an extraordinarily lenient target when it threatened to walk out of the negotiations.

"I am just breathless at the chutzpah of the Federal Government in making these claims. The fact is that Europe agreed to a tough target at Kyoto, and has introduced far-reaching policies to meet their targets. If they fail, it will not be for want of trying, yet if Australia succeeds it will be because there was no need to try."

The European Union is committed to collectively reducing emissions to 8 per cent below 1990 levels by 2012. Australia's target allows for emissions to increase by 8 per cent, a figure made even easier by the so-called "Australia clause", which included land clearing in the equation.

Industry Minister Ian Macfarlane yesterday described Australia's performance as satisfying and said other countries would have to buy credits to meet their targets or induce a recession to lower energy consumption.

"Australia and the Howard Government never allowed itself to get swept up in the hoopla surrounding a regime which is going to have no impact in terms of lowering global emissions," Mr Macfarlane told The Sunday Age.

"The reality is that all it provides is an opportunity for countries to trade their sins away - to say 'well I haven't been able to lower my emissions, but I'll go and buy some credits from someone else'."

Mr Macfarlane admitted it would be a "really hard step" for Australia to cap its emissions at 2012 levels because strong economic growth caused growing energy consumption.

Australia had the luxury of not having to consider nuclear power because it was on track to meet its emissions target and enjoyed strong economic growth. Switching to nuclear power was the quickest way for some countries to meet their obligations under the Kyoto agreement, but there was no desire to make the change in Australia.

Mr Macfarlane said Australia had set up a $500 million lower emission technology fund to encourage at least $1.5 billion worth of research by industry into lowering greenhouse gas emissions.

Australia has been heavily criticised for refusing to ratify the Kyoto Protocol, but Mr Macfarlane said the agreement would put economic growth at risk.

"There's certainly a very strong suggestion that because of the number of countries that will fail to get even close to their target and will basically have to buy their way out, that Kyoto 2 is going to be quite extreme," he said.

"Australia's stance is that we are not going to jeopardise our economic growth on what is basically a bureaucratic process that doesn't actually reduce emissions."

Dr Hamilton said Australia's emissions from coal-fired power and transport had been going through the roof, with no slackening in the rate of growth, but the Government was able to offset the blow-out because the Queensland Government had reined in land clearing, reducing emissions from that sector.

"The mask is about to be taken away in the next couple of years, because land clearing will have been reduced to a minimal level," he said. "You can't keep reducing it and thereby covering up failures in other areas."

Dr Hamilton is a member of the international climate change task force that released a plan to bring Australia and the US back into the international fold by expressly addressing their concerns about the protocol. The plan would involve developing countries, and targets for emission cuts would be negotiated.

In December, fresh from observing the UN climate change conference in Buenos Aires, Environment Minister Ian Campbell said Australia wanted to engage in a new global agreement after 2012 - an ever-so-slight softening of the previous hard line.

The minister also appeared to step back from the Government's earlier outright rejection of an emissions trading market.

Mr Campbell said Australia was investigating alternative "currencies" and a "credits system", which some observers interpreted as creating much-needed political wiggle room.

He also expressed a desire to get Australia on the front foot on climate change. In that spirit, he told The Sunday Age that far from being a global spoiler, Australia was a world leader.

So why not ratify the protocol, if Australia is going to meet its generous target anyway, apparently at no cost to its expanding economy?

The Government claims the protocol imposes unfair costs on Australia's fossil fuel-intensive economy and that ratifying will drive investment, jobs and processing offshore to developing nations without emissions constraints.

It has done neither so far, and many developing nations, including China and India, have already ratified the protocol on the understanding they also will be required to cut emissions after 2012, giving them no advantage over Australia.

But Australia's fossil fuel lobby and energy-intensive industries have the Government's ear. They believe a world with tightening controls over greenhouse gas emissions is not in their commercial interests and their view is reflected in the Government's energy white paper, released last June. The paper favours massive investment in speculative research to make fossil fuels cleaner at the expense of schemes boosting growth and investment in clean, renewable energies.

Dr Martin Callinan, a climate change consultant based in New York, says the prospect of Australia engaging in a global process post-Kyoto has prompted much chatter behind the scenes in business and industry circles. Dr Callinan, who worked with the John Kerry presidential campaign and the ALP before last year's election, said there was growing concern among Australia's coal and aluminium companies that an anti-Kyoto stance was not serving their interests.

"Australian industry's understanding of climate change, its impacts and the ramifications of efforts to reduce emissions has matured in recent years," Dr Callinan said.

"Many companies are either foreign-owned or have foreign operations and thus have a broader perspective, but there are still some companies who are not listening and have been led to fear not climate change but efforts to curb climate change."