Real hope on climate change?

In a piece of news some will regard as predictably disappointing, the Cancun Climate Conference has reached an agreement, but its targets are both non-binding and fairly modest (reputedly a ¹ reduction in emissions of 13-16% by 2020), and include both developed and developing nations.  While that’s less than needed to avoid a global temperature rise of much more than 2 degrees C by 2100, it’s at least a good start if the commitments can be converted to binding ones in the next few years.

Agreement about the $100 billion per year commitment of developed nations to assisting the developing world is even better news:

The Green Climate Fund is intended to raise and disburse $100bn (£64bn) a year by 2020 to protect poor nations against climate impacts and assist them with low-carbon development.

I always thought the expectation of a universal binding climate agreement either at Copenhagen or Cancun was a wildly optimistic, utopian fantasy.  International politics, conflicting national interests and understandable mutual distrust mostly militate against quick, neat, global scale agreements.

However, that doesn’t mean major progress is impossible in a rather more messy, chaotic, ad hoc way.  In fact significant progress has already been made since Copenhagen despite its seeming failure.  For example, Brazil has achieved an impressive reduction of almost 60% in the rate of Amazon deforestation over the last 2 years:

This is the second consecutive year Amazon deforestation has reached a record low, dropping 13.6 percent below last year’s record low rate, President Lula said. Last year, Brazil slowed the rate of Amazon deforestation by 45.7 percent from August 2008 to July 2009. …

In 2009, Brazil passed into law a commitment to cut its projected greenhouse gas emissions between 36.1 and 38.9 percent by 2020.

Deforestation reduction is a critical part of Brazil’s strategy to reduce national emissions; official calculations estimate that meeting deforestation reduction targets could reduce Brazil’s greenhouse gas emissions by up to 24.7 percent.

In October 2010, President Lula announced that Brazil’s 80 percent Amazon deforestation reduction target would be met by 2016, four years earlier than promised.

Even Indonesia has announced a 2 year moratorium on rainforest clearing in return for a $1 billion grant from Norway, although the deal seems to have more holes in it than swiss cheese.

China, demonised along with the US as the main culprit for the failure of Copenhagen, is arguably making the greatest progress of all towards combating climate change. China is moving towards a market-based carbon price (presumably some form of emissions permit trading scheme) as early as next year, and is also making impressive progress in the meantime, especially by comparison with Australia:

Australia’s failure to impose a higher cost on carbon emissions has discouraged investment in renewable energy, according to a report prepared for the ² Institute by London-based Vivid Economics and published today. Investment in cleaner energy in Australia was less than $1 billion last year, compared with $11 billion in the U.K, $18 billion in the U.S. and $35 billion in China, it said. …

Australia’s current policies, including a goal of sourcing 20 percent of power from renewable energy by 2020, imply a carbon price of $1.70 a ton for electricity producers, the study found. That compared with $29.30 in the U.K., $14.20 in China, $5.10 in the U.S., $3.10 in Japan and $0.70 in South Korea. …

China, the world’s biggest polluter, said in July it may spend about $750 billion in the next decade developing cleaner alternatives to burning oil and coal. The country is replacing inefficient and high-emitting coal-fired power stations and spurring renewable energy with subsidies, the report said.

While this is advocacy research and should be treated with a grain of salt, it does indicate that China’s image as a recalcitrant laggard on climate change policy is at the very least simplistic.  It is likely that China knows very well that it has no practical choice but to implement stringent greenhouse gas reduction policies and has every intention of doing so, but is not prepared to compromise its sovereignty at this stage to a binding international agreement, especially given the highly dubious outcomes of the Kyoto Protocol and the West’s ambivalent attitudes towards it so dramatically emphasised by Wikileaks .

The bottom line for Australia is that the climate change policy ball is now squarely in the Gillard government’s court.  We can only hope that rhetoric is matched by action in 2011.  Fortunately, the Greens’ holding of Senate balance of power, along with at least two of the Reps cross-benchers in Green Adam Bandt and former Green Independent Andrew Wilkie, will together help to ensure that Labor won’t have much choice but to make a serious effort at achieving a legislated carbon price.

The big problem Gillard will need to surmount is that the Greens can be expected on previous form to oppose compensation to “polluters” from carbon tax/ETS revenue, whereas Labor will correctly assess that failing to offer such compensation would be political suicide in the face of Tony Abbott screaming “GREAT BIG NEW TAX” and with affected businesses opportunistically joining in the chorus.  The fact that so many voters swallowed the mining industry’s spurious propaganda to that effect in the lead-up to the recent federal election rather strongly suggests that such a tactic would be likely to work again unless industry is brought onside, as does recent opinion polling on community attitudes to climate change.

I suspect that to get a substantive outcome Gillard may need to lift Australia’s 2020 emissions reduction target of 5-15% to more like 20%, as the carrot to persuade the Greens to agree to generous compensation to industry.  It needs to be understood that the Greens’ opposition to industry compensation always had much more to do with stubborn moral purity than rational policy.  Surely the aim of any workable emission reduction policy should be to achieve a price on carbon that will encourage adoption of much lower emission energy technologies.  Returning some of the revenue from a carbon tax or ETS scheme to the “polluters” in no way undermines that objective because, once a price mechanism exists, affected industries have just as much incentive to reduce the price they pay by investing in cleaner technology irrespective of whether they receive one-off lump sum compensation.  Indeed, receipt of compensation will make it easier to make or bring forward the major investment decisions that will be needed to achieve emission reductions in the order of 20% by 2020.

The last piece of paradoxically good news comes with the fact that 2010 is on track to be the first or second hottest year on record, despite the fact that we’re in the midst of a La Nina event and nowhere near the 12 year Solar Maximum.  It’s good news because it will make it much more difficult for the anti-warming shills and denialists to convince the general public that human-induced warming isn’t happening or has stopped ( a favourite RWDB meme over the last couple of years).

The next year promises to be a fascinating and possibly decisive one in the climate change debate.

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