Tuesday, October 05, 2004

Economic Responsibility and the Environment

Apparently, the govt's first ever anti-Green leaflet is being distributed today to that small percentage of hourseholds who decide who runs the country. According to the SMH, the pamphlet argues that

Just as the major political parties must be environmentally responsible in pursuing economic responsibility, so too the minor parties and the Greens must be economically responsible in pursuing their environmental policies.

So, the argument cuts both ways. Economic policy needs to be environmentally responsible as well. What could that mean? Well, for a start it would mean acting to make our environmental duties more affordable.

Environmental policy, like economic policy, should be about providing the best for our children and our childrens' children. Can Grandpa Howard really cry poor for eight years? - claiming that we can't afford Kyoto - especially when he's down at the pub at election time buying rounds for the marginal voters!

Surely, someone's got to tell him to save up for the kids' future. By investing in structural changes to the economy to make it more environmentally sustainable.

In July, I asked the "responsible" govt ministers to respond to a report by the Australia Institute on our current contribution to greenhouse gas emissions, and the suggestions they made of how to address the problem. Here's the text of my letter. So far, no response.



As the responsible federal ministers, could you please comment on the recent report by Hal Turton of the Australia Institute called "Greenhouse gas emissions in industrialised countries: Where does Australia stand?", and in particular let me know whether the government would consider the suggestions made within that report on strategies for reducing Australia's emissions?

The report makes two claims that I found surprising. The first is that Australia's per capita emission's are not merely high, but in fact the highest in the industrial world. Australia's contribution are usually presented as high, but exceeded by other countries such as the US, on the basis of data on per capita energy-related emissions. The report suggests that this data gives only a partial representation of that contribution and that it should be replaced with data drawn from national communications and greenhouse gas inventory submissions to the UNFCCC (United Nations Framework Convention of Climate Change) secretariat. When calculated from this more comprehensive data, the conclusion drawn is quite different:

Australians have the highest emissions per person of all industrial countries. At 27.2 tonnes of carbon dioxide equivalent (t CO2-e) per person, emissions by Australians are 27 per cent higher than those of US citizens (21.4 tonnes) and more than double the average for industrialised countries.

It also argues against the assumption that, even if Australia has a high per capita contribution, because our population is so small, our total contribution is negligible. Again, I quote from the report:

While Australia accounts for 3.4 per cent of total Annex I emissions, Australia’s total emissions exceed those of major European economies such as France and Italy (each with around three times Australia’s population), and are only 20 per cent lower than those of the UK. Thus if Australia’s contribution to the climate change problem is trivial then so are those of these countries.

Are you, the ministers, disturbed by these findings? Do you disagree with the content of the report, and if so, are there other studies can you point me to which offer a different opinion?

Finally, I ask you to respond to three suggestions that the report makes, and to clarify the government's position on each of these proposals.

First, the report suggests that a less GG intensive mix of fuels (more natural gas and less coal) explains the smaller emissions of larger EU states, and changing Australia's mix is one avenue for future policy.

Another avenue is in transport policy. The report challenges the assumption that the large distances between centres explains Australia's higher GG emissions due to the transportation of freight. In fact, the average distance for freight in Australia is slightly shorter than Europe, because such a large of proportion of freight is transported within rather than between regional centres. Instead of lamenting the tyranny of distance we confront in Australia, the report suggests that policy-makers, such as yourselves, should set about influencing the number of additional trips and the average weight of freight transported, factors which do actually distinguish Australian freight practices from their European counterparts.

The third suggestion that the report makes concerns the status of the Aluminium smelting industry. The government clearly recognizes the significant contribution that this industry makes to Australia's GG emissions. On DFAT's "Kyoto Conference - Environment Home Page" the following comment is made:

Trade specialisation has caused Australia's economy to become more energy- and greenhouse-gas-intensive. The importance of changing trade patterns and specialisation of countries is probably best illustrated by Australia's aluminium industry, which is among the most energy-intensive of industries. Australia's aluminium industry has been among the five fastest growing industries in Australia, whereas elsewhere in the OECD it has been one of the most rapidly declining industries.

Yet, the report points out that it is also a heavily subsidized industry, "to the tune of $210-250 million per year through contracts for cheap electricity". It therefore suggests that the reduction of these subsidies may be a cost-beneficial response to the issue. Has the government considered reinvesting these subsidies in making the industry more environmentally friendly, rather than simply fuelling a growth that the same DFAT page suggests will be supported by greater trade liberalisation. Does the government feel that it needs to doubly support this industry by liberalisation of foreign trade and the maintenance of domestic subsidies?

One final question: the government's policy on Kyoto has been centred on the idea that an equitable protocol is one that has the same economic impact on all participants. What else is the government doing to ensure that Australia is in a better economic position in the future to contribute to the reduction of emissions? How have the government's policies over the past eight years improved Australia's ability to afford climate control?

Your response would be greatly appreciated.

Justin Tauber


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