David Kennedy

David Kennedy meets CCC’s Australian counterpart…

Over the last couple of years we have received a number of visits from Australian officials who were interested in setting up a body similar to the Committee on Climate Change.

Such a body – the Climate Change Authority – was set up in 2012 under Australian legislation, which also introduced a cap and trade scheme covering around 60% of emissions in the Australian economy.

I was invited by the Authority to go and share our experience with them. I accepted on this basis, and also to get an understanding of climate policy more generally in Australia.

In addition to meeting with the Authority members and officials, the UK High Commission organised a programme of meetings with politicians, civil servants, representatives of business, together with a public lecture at the Australian National University, and various media interviews.

One key thing I learned is that politicians on all sides accept the need for Australia to contribute to global emissions reductions with a view to limiting risks of dangerous climate change.

This is consistent with the analysis of Professor Ross Garnaut, with whom I had very interesting discussions. He built on the Stern Review, and in his 2011 report showed that it is in Australia’s interest to act, given mitigation costs and benefits for the Australian economy and society.

But while there is agreement over the need to act, the mechanism to deliver emissions reductions is hotly disputed and a major issue for the forthcoming general election in September.

The cap and trade scheme currently in place was introduced following the 2010 election. It was pushed by minority partners in the coalition government, and enacted despite a Labour party promise prior to the election not to introduce it.

Scare stories were put out and people were worried that the cap and trade scheme would drive up their energy bills. This has not happened in practice. As my taxi driver from the airport said, they were told the world would end with the introduction of the carbon price – but it hasn’t, and there doesn’t seem to be any impact on his electricity bill.

There was also anxiety amongst energy intensive industries – but this has been eased by a package of compensation for those industries subject to competition in international markets. The Australian Industry Group – similar to our CBI – have now called for the cap and trade scheme to be continued following the election.

Notwithstanding the relatively benign impacts of the policy, the opposition has vowed to replace the cap and trade scheme with a mechanism under which there would be auctions to purchase domestic emissions reductions (i.e. a baseline and credit scheme) – and to abolish the Climate Change Authority.

Whether this scheme would work, most people I met were pretty sceptical about it – and the onus is on the opposition to make a stronger case, or to stick with the current arrangements, which have the benefit that they are tried and tested and offer Australia the opportunity to contribute to required emissions reductions in a cost effective manner.

The future is uncertain, both as regards the outcome of the election and if, whether elected, the opposition would be able to push through their current plans given that they are unlikely to control the senate.

We will know more in the coming months. In the meantime, I hope the opposition think again and pledge to retain the Authority, which could bring evidence and facts to bear on debates that otherwise run the risk of becoming dominated by short term political factors, ideological positions and commercial interests.

More generally, and whatever happens, I take heart from the fact that all the main parties understand the economic arguments and are committed to reduce Australian emissions as part of the global effort to limit risks of dangerous climate change – as we are here through the Climate Change Act.

 

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