17/11/2020

(AU) Vital Signs: A Global Carbon Price Could Soon Be A Reality – Australia Should Prepare

The Conversation - 

John Nacion/AP

As well as restoring dignity to the Oval Office, another thing that will definitely change under a Biden presidency is US policy on the environment.
Biden's plan includes rejoining the Paris Agreement on climate change. (AP: Carolyn Kaster)

Biden’s plan for “a clean energy revolution and environmental justice” includes rejoining the Paris Agreement on climate change, investing US$1.7 trillion over the next decade in “green energy” and achieving net-zero greenhouse gas emissions by 2050.

The European Union, Japan and South Korea have already committed to net-zero emissions by 2050. China’s net-zero target is 2060.

With the US joining the fold, the implications for Australia could be huge.

A carbon border tax coming our way

The European Union has already announced it is considering a carbon border tax. This would involve a tariff on imports from nations without a price on carbon similar to the EU. The tax would be proportional to the amount of carbon in the imports, and the relative difference in carbon price between Europe and the exporting country.

This type of “border-adjustment tax” is a smart way to protect domestic industries from being undercut by imports from other countries without a price on carbon.

It would make eminent sense for the US to follow suit.

If so, things get really interesting. It would make it even harder to challenge such taxes as trade restriction before the World Trade Organisation. It would trigger similar moves by other countries serious about tackling climate change.

Joe Biden speaks about climate change and the fires affecting western US states on September 14 2020. Patrick Semansky/AP

In fact, a border-adjustment tax is part of the US Climate Leadership Council’s proposal for a carbon tax and “carbon dividend” – returning all net proceeds from the tax to the American people on an equal basis.

The carbon dividend idea is supported by 28 Nobel laureate economists, 15 former chairs of the US Council of Economic Advisers and four former chairs of the US Federal Reserve.

If most of our trading partners have a carbon border tax, then Australia will have a price on carbon – but only for exporters.

This will leave the Australian economy in a bad position.

With no price on carbon internally, no serious commitment to reduce emissions and a vain hope of meeting our Paris Agreement obligations through dodgy accounting tricks and future technological innovation, the rest of the world is unlikely to be sympathetic.

Action on the environment in the US and Europe ought to provide the impetus to put Australia's climate wars to rest. (Reuters: Simon Dawson)

A carbon dividend plan

There is a better way: enact our own carbon dividend plan.

In 2018 law professor Rosalind Dixon and I proposed a plan for Australia similar to the Climate Leadership Council’s.

University of NSW

Our Australian Carbon Dividend Plan involves a price on carbon, with the proceeds being distributed as a dividend, equally, to every voting-age citizen.

It also allows for a border-adjustment rebate so exporters aren’t penalised if exporting to countries without a similar price on carbon.

This would see a significant majority of Australians better off financially, and help protect exporters while we transition to cleaner energy.

It would also give the Australian government’s Technology Investment Roadmap (to accelerate the use of low-emissions technology) a chance of working. It makes no sense to bet on technology without using market price mechanisms to give suppliers and buyers the right incentives to develop and adopt the most effective technologies.

The world is acting

The US just voted out a climate denier and is now going to take serious action on the environment. Europe is already acting. Our major trading partners are committing to net-zero targets.

We’re getting left behind. This ought to provide the impetus to put Australia’s climate wars to rest. Even if our elected politicians don’t want to do something serious about climate change for moral reasons, they now have little choice but to do so for practical reasons.

And that involves a price on carbon. Otherwise our exporters are going to be seriously disadvantaged. Using the proceeds from that price on carbon to pay it back as a dividend to Australians would be the best way forward.

How climate change policies continues to divide parliament

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(AU) A Coalition Of 29 Health Groups Are Urging Climate Action In Open Letter To Scott Morrison

SBS - AAP

Health groups have banded together to send an open letter to Prime Minister Scott Morrison calling for urgent action on climate change.

Health groups have sent an open letter to Prime Minister Scott Morrison calling for urgent action on climate change. Source: Climate Media Centre

A coalition of 29 health groups have issued an open letter to Prime Minister Scott Morrison calling for the same level of urgency in tackling climate change as the COVID-19 pandemic.

The groups include Climate and Health Alliance, Public Health Association of Australia and Australian Epidemiological Association.

They warn climate change is accelerating and if the current trajectory continues unchecked, Australia faces "existential threats to humanity".

"To avoid further health and environmental disasters, governments must take heed of the science, listen to health experts and act now to reduce greenhouse gas emissions and protect the natural environment," the groups say.

Climate and Health Alliance executive director Fiona Armstrong said there can be no recovery with gas, the government's preferred measure to tackle emissions.

"The latest evidence suggests gas is just as emissions-intensive as coal," she said in a statement.

"Backing gas and fossil fuels will only accelerate the climate health emergency, further putting at risk the health of all Australians."

The coalition are calling for Prime Minister Scott Morrison to tackle climate change with the same level of urgency as the pandemic. SBS News
Public Health Association of Australia chief executive Terry Slevin said the impacts of COVID-19 had been severe and wide-reaching.

"Yet climate change is something which poses just as significant, if not a greater, challenge in terms of the impacts on human health, societies and economies," Mr Slevin said.

"We are already witnessing the public health impacts of climate change - through bushfires and smoke, through heatwaves, through communities devastated by drought."

Tackling climate change came back to the fore in the past week after US President-elect Joe Biden committed to returning his country to the Paris Agreement.

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(AU) Why Climate Change Is Keeping Directors Awake

AFR - Nina Hendy

Boards have been promising to clean up their act on climate risk for years, but 2020 is shaping up to be a year of reckoning for those yet to take decisive action.

Industry watchdogs, climate change advocates and climate-conscious consumers have been on the warpath this year. And companies that still fail to address climate change in the boardroom have been left with nowhere to hide.

Action on climate change is on the agenda of an increasing number of businesses. Nine News

Addressing climate change in the boardroom has been on the agenda for a growing number of corporate giants.

More than 80 companies have so far ruled out being involved in the increasingly contentious Adani coal project, deeming reputational risk as being too great.

It means they won’t share in the $1 billion in contracts that the project will generate. Adani itself has rebranded its Australian arm as Bravus Mining and Resources.

The big four banks are among those putting their money where their mouth is on climate change. Westpac told media at the time that backing away from the "toxic political debate around coal sends a powerful message that coal is rapidly going out of fashion in the business and finance community".

A turning point emerged this month, when a 25-year-old Brisbane man successfully sued one of Australia’s biggest super funds over its handling of climate change, forcing it to commit to zero-net emissions by 2050.

Australia has the second-highest number of litigation cases related to climate behind the US.
— Zoe Bush, 2019 John Monash Scholar

The case against the $57 billion super fund Rest forced it to join a growing number of pension funds vowing to align investment portfolios to a goal of net-zero emissions by 2050. It marks the first time a superannuation fund has been sued for failing to consider climate change and should serve as a warning to boards.

Cases against companies found guilty of "greenwashing" consumers have also been on the rise.

Climate change litigator and 2019 John Monash Scholar Zoe Bush says: “Unfortunately science tells us that what boards need to do to address climate change should have been done 20 years ago.

“It’s not broadly recognised, but the fact is that Australia has the second-highest number of litigation cases related to climate behind the US,” she says.

“A growing number of boards are acknowledging that climate risk needs to be taken very seriously, with new guidance issued by industry watchdogs forcing companies to closely watch and manage their own climate risk at a board level,” she says.

Companies are shifting their focus away from governance and towards environmental issues in increasing numbers, according to research from boutique asset manager, Perennial Value Management.

Climate change has garnered a great deal of media and shareholder attention in 2020, prompting boards to make it a strategic focus as investor and consumer pressure mounts, Perennial’s Sustainable Future Strategies portfolio manager, Damien Cottier, says.

Clearer pathway needed

Its research found that 55 per cent of respondents agree that a national energy policy would provide a clearer pathway for sustainable investment, helping companies to plan and invest in environmental considerations.

“These issues are having a greater impact on share prices, and stakeholders are increasing their expectations. Companies are looking at ways to improve, albeit there is still some way to go,” Cottier says.

Meanwhile, Deloitte this week issued a stark warning for companies in a new report: if climate change goes unchecked, then Australia’s economy will be 6 per cent smaller and have 880,000 fewer jobs by 2070.

Principal report author Pradeep Philip says the costs of climate change continues to rise, along with the costs associated with reducing the risks it presents.

“Climate change is no longer a possibility. It is a reality. Doing nothing is now a policy choice, and it is costly. Both government and private sector investment need to get cracking to accelerate Australia’s inevitable shift to a low emission future. Every day’s delay costs Australians more,” Dr Philip says.

“By 2050 Australia will experience economic losses on par with COVID every single year if we don’t address climate change. That would compromise the economic future of all future generations of Australians,” he says.

Boards yet to act on climate risk can expect some guidance to be released by the Australian Institute of Company Directors, which is working on some new resources on governing climate change risks in the year ahead for members.

The move comes after its recent Director Sentiment Index survey found that directors rate climate change risk as one of the top five issues keeping them awake at night, after COVID-19 impacts, long-term growth and global economic conditions.

CEO Angus Armour says it encourages boards to consider the implications of climate change on their organisations as part of sound risk management and reporting. “Boards have a key role in governing risks related to climate change, as well as considering stakeholder and community expectations.”

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