(AU) Australia's Lack Of Effort On Climate Change Is Going To Cost Us

The Guardian - Bill Hare

Australia is deeply exposed to carbon border tax adjustments due to our lack of action in reducing emissions

‘Australia looks like becoming totally isolated from the G7 and internationally on climate change.’ Photograph: Luis Ascui/Getty Images

Author Bill Hare, a physicist and climate scientist, is the managing director of Climate Analytics.

Global momentum is building on increasing climate action to meet the Paris agreement’s 1.5C limit, with all countries under pressure to increase their 2030 emission reductions ahead of the next United Nations Climate Change Conference in Glasgow this year. 

But Australia appears to be going backwards. Now another issue has arisen from its inaction: border taxes.

Climate change is firmly on the G7 agenda. Along with two other countries, India and South Korea, Australia has been invited to join the G7 process this year under the presidency of the United Kingdom. 

With many large countries, including the US, the EU, China, Japan, South Korea, looking at deeper emission reductions – the whole question of how to deal with those who are not moving as fast to decarbonise is naturally rising to the surface.

The instrument of choice in the international policy community has long been carbon border tax adjustments, constructed in such a way as to be World Trarde Oranisation-compatible and which add to the cost of imports from climate-laggard countries into those that are pressing ahead.

Australia is deeply exposed to carbon border tax adjustments due to its export fundamentals, exporting commodities that have a high carbon content either intrinsically or in the course of their production. 

Our top three importers of coal and LNG – Japan, South Korea and China – have net zero goals for mid-century. These countries are moving ahead with policies to achieve this and they account for about 75% of the value of these commodities exported.

Fundamentally, Australia is most exposed to border taxes due to its lack of action. Despite the government’s rhetoric and repeated statements that it will meet its weak targets at a canter, the numbers are there for everyone to see, and they are not good. 

Exacerbating this exposure is the bizarre and debilitating character of the governing parties’ positions on climate change. Discussions of a net zero 2050 position for Australia have quickly led to calls for mining, agriculture and other energy-intensive sectors to be excluded, with the range of exclusions extending from about 12% up to about 33% of Australia’s national emissions.

There are multiple countries pushing ahead with or considering border tax adjustments and an increase in the likelihood that these countries will coordinate either bilaterally or even informally within the G7 context. 

All of the G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – are actively considering, either alone or within regional groupings such as the European Union, carbon border tax adjustments.

The UK prime minister, Boris Johnson, is well-known to be pushing for a border tax adjustment approach to be discussed and possibly agreed this year. The Biden administration is actively working in concepts for carbon border tax adjustments for the US, as is Canada.

By far the most advanced in this area is the European Union. The EU parliament’s vote on Friday to endorse a carbon border adjustment mechanism (CBAM) has serious implications for Australia, not least because it could well end up extending to other major Australian export markets. 

The proposed EU measure could see exporters in countries without a price on carbon – like Australia – having to pay some kind of charge to export goods into the region.

While such carbon border charges have been discussed before, the European Commission’s proposal was greeted this time with much more acceptance. 

 Now the EU has increased its Paris agreement 2030 target to a 55% reduction of emissions below 1990 levels, and committed to net-zero by 2050. It is looking to level the playing field for its industry with countries failing to contribute to the climate mitigation effort and hence free-riding on global efforts.

There are questions around whether it would be an actual tax: exporters to the EU could, for example, be obliged to buy EU emissions allowances under the EU Emissions Trading Scheme. However, it still has a way to go before it would be enacted, not least because it would need to fit into a large overhaul of the EU climate change governance laws currently under way.

Australian carbon markets experts, RepuTex, has calculated that the effect of the CBAM on Australian exporters could mean that by 2030 they would have to pay €56-89 (A$88-139) per tonne of greenhouse gas emissions – based on the volume of greenhouse gas (GHG) emissions used in making and shipping their products.

And now that Biden’s “all of government” policies on climate change are beginning to take shape, it is not unreasonable to expect that the US could join in an alliance with the EU on carbon border charges. Equally, Johnson, under pressure to introduce a carbon price now that the UK is out of the ETS, could also join that club. 

China is in the process of setting up ETS systems across the nation and is likely to establish an economy-wide carbon pricing scheme that could be aligned with the EU ETS mechanism long before the US has one. Although it may seem a long shot now, this would also bring China within a border tax adjustment system. 

For those paying attention and listening, China’s officials and diplomats have been quietly asking and thinking about how this might work, in particular how to avoid destructive competition in this area as opposed to constructive cooperation.

Australia is, sadly, the global poster child for a lack of effort. Its 2030 target, translated into a comparable baseline to the EU, would be a reduction of just 8-11% below 1990 levels, compared with the EU’s 55% target. The government’s “technology neutral” approach has translated into increased support for the fossil fuel industry.

Federal climate policies have gone backwards – investments into renewables have dropped, and the government is promoting a carbon-intensive, gas-led recovery entirely inconsistent with the Paris agreement. Most recently, the government’s electric vehicle policy transmuted into an anti-EV policy called the Future Fuels Strategy, with the bizarrely appropriate acronym FFS. 

There is no price on carbon anywhere in the Australian system today, and each time the Morrison government goes near any climate policy, the result has been to weaken it, to advantage the fossil fuel industry.

It could all have been very different. Australia did once have a carbon price mechanism, set up under the Gillard government in 2012, and that would have ratcheted up over time, increasing the price on carbon and driving fossil fuel emissions out of Australia’s energy mix. But it saw its demise just two years later when the Senate voted through Tony Abbott’s “pledge in blood” to “axe the tax”.

Australia looks like becoming totally isolated from the G7 and internationally on climate change and the Morrison government’s attempt to fight a large movement towards border tax adjustments linked to carbon intensity is a symptom of this. 

Our leaders need to focus on adopting a real net zero goal by 2050, backed by legislation, with Paris-compatible 2030 targets well north of 50% reductions.

It would be foolish, ultimately futile and damaging for our country to continue down our current path.

Links

• Australia's climate policy is a mix of delusion and denial. We need to get real
• Australia's climate wars were always stupid. Now they've got even dumber
• Joe Biden’s move to net zero emissions will leave Australia in the (coal) dust
• Australia won’t meet the Paris targets despite what recent research claims
• Coal Phase Out 1.5°C - key facts
• Nepal’s ambitious climate target has socio-economic prosperity at its heart
• Renewed hope for tackling climate change - could it boost South Asia cooperation?
• Tackling gender inequality is ‘crucial’ for climate adaptation
• Climate change: Temperature analysis shows UN goals 'within reach'
• Coal phase out and energy transition pathways for Asia and the Pacific

(AU) Australian PM Faces Pressure On Climate Policy But Has To Deal With Resistance In His Ruling Coalition

Straits Times - Jonathan Pearlman

Australian Prime Minister Scott Morrison has steered clear of any move to put a price on carbon emissions. PHOTO: EPA-EFE

SYDNEY - Australian Prime Minister Scott Morrison is facing resistance within his ruling Liberal-National coalition to adopt stronger climate policies, just as he comes under growing international pressure to act.

 A long-time opponent of strong action on climate change, Mr Morrison has recently shown a willingness to move - albeit gradually - towards a net zero emissions target.

Earlier this month, he signalled to being open to adopting a zero emissions target - a course embraced by growing numbers of major economies but resisted by the ruling coalition in Australia.

Addressing the National Press Club earlier this month, Mr Morrison did not commit to a firm target but stated: "Our goal is to reach net zero emissions as soon as possible, and preferably by 2050."

This was a significant change for the prime minister, who famously once brought a lump of coal into Parliament to mock the opposition Labor party's push to curb pollution.

Australia is one of the world's biggest carbon emitters per capita and is currently not on track to meet its 2030 emissions reduction targets, even though many analysts believe these targets are inadequate. 

Despite Mr Morrison's recent change in rhetoric, he faces fierce opposition within his own ranks. Several MPs from the National party, the rural-based junior member of the coalition, have responded by calling for new investment in the coal sector and for the mining and agriculture sectors to be shielded from any moves to adopt new emission reduction targets.

A prominent Nationals MP, Mr Barnaby Joyce, threatened last week to vote against the government if it tries to introduce measures to meet a 2050 target. He expressed concern that farmers may have to pay for methane emissions from cattle and other livestock, which account for some 10 per cent of Australia's total greenhouse gas emissions.

"I want to see what the plan is before I make any decisions about whether we are part of this or not," he told ABC Radio.

Mr Morrison is under pressure to act because Australia's main allies and trading partners have signalled that they want stronger international action on climate change.

New United States President Joe Biden has explicitly vowed to push countries to adopt stronger emissions targets and is convening a summit of global leaders in April to discuss climate change.

The British Prime Minister, Mr Boris Johnson, reportedly plans to use international summits such as the G7 - or Group of Seven advanced economies - to introduce carbon tariffs for emissions-intensive imports from countries with weak climate policies. The European Union is pushing ahead with similar tariffs.

But Mr Morrison's coalition has strongly opposed such moves and indicated it will oppose both Mr Johnson's and the European Union's efforts. Senior unnamed sources cited by the Sydney Morning Herald said Canberra would argue that carbon tariffs undermined proposed free trade deals with both London and Brussels.

"The Morrison government will argue carbon tariffs are not aimed at combating climate change, but rather at economic objectives including protecting local industries such as British and European meat, cheese and wine," the report said.

Despite Mr Morrison signalling that he may embrace a zero emissions target, he has steered clear of any move to put a price on carbon emissions. Instead, he has suggested that new technology would enable Australia to reduce emissions. He was also reportedly considering making any reduction targets voluntary, rather than binding.

Commentators have denounced these plans, saying that specific targets and a price on carbon were the most efficient ways to reduce emissions and to provide certainty to the business community.

But Mr Morrison clearly remains reluctant to commit to a firm stance. He is keenly aware that party infighting over climate policy has led to the downfall of a series of Australian leaders on both sides of the aisle.

Indeed, Mr Morrison's own ascent to the leadership of the Liberal party in 2018 was enabled by the ousting of his predecessor, Mr Malcolm Turnbull, following an internal party dispute over energy policy.

Links

• Australia becomes climate change 'outlier' after Biden victory
• Australia says it can beat carbon goals by 2030 without credits
• Australia's PM Morrison reluctant to commit to medium-term climate goals: Media
• Australia forecasts prolonged wildfire seasons, more droughts from climate change
• Russia's Sergei Lavrov holds climate talks with US envoy John Kerry amid sanctions concerns
• Climate targets could cost petrostates $17.3 trillion, study finds
• Singapore Green Plan 2030 outlines many existing initiatives, some new ones worth watching
• Bolder climate action could save millions of lives each year by 2040: Study
• China climate data shows 2020 was 8th hottest year since 1951
• Singapore poised to take green leap forward
• Climate-driven temperature swings slow economic growth
• Trump's environmental policies killed thousands of people: Scientists
• Singapore Green Plan 2030 to change the way people live, work, study and play
• Himalayan tragedy's lesson for nations

Australia Lagging Behind On Electric Vehicles And Climate Action

Independent Australia - Graeme McLeay

The Federal Government’s electric vehicle policy was released two years ago, but they still cannot bring themselves to call it that, writes Dr Graeme McLeay.

Scott Morrison's Government needs to fully embrace a future of electric vehicles. (image by Dan Jensen)

Author Dr Graeme McLeay is a retired anaesthetist and a member of Doctors for the Environment Australia.

IT WAS RELEASED as the Future Fuels Strategy and if anyone is in doubt as to whether the Government takes decarbonisation of the economy or climate change seriously, they need look no further than this paper. 

It argues for minimal change and largely ignores the broader issues of public transport, noxious tailpipe emissions and the urgency of the climate crisis.

Health is barely mentioned.

The Ministerial Forum on Vehicle Emissions was established in 2015 and in 2016 the Government released its 'Better Fuels for Cleaner Air' discussion paper which says:

There are proven links between pollutants found in vehicle emissions and a range of human health problems (both short and long term). Air pollutants can have a significant impact on the cardiorespiratory system. Individuals with pre-existing respiratory conditions, such as asthma and allergies, are especially vulnerable to air pollutants.
The effects on human health can include reduced lung function, ischemic heart disease, stroke, respiratory illnesses, and lung cancer. The cost of premature deaths due to outdoor air pollution in Australia in 2010 has been estimated to be up to $7.8 billion.

Presented with this information, the Ministerial Forum, which, it seems, has gone missing. It has done nothing beyond a slight tweaking of fuel standards later this decade.

Most urban air pollution is caused by transport and while pollution controls and engine technology have improved, a growing population and increasing traffic congestion is reversing any gains made in air quality. Standards for air quality are set by the National Environment Protection Council and are under review.

An article in the Australian and New Zealand Journal of Public Health reported last year that many people living near main roads are exposed to much higher levels of nitrogen dioxide than official background levels. There is a clear correlation between NO2, a respiratory irritant, and asthma — particularly in children whose small airways make them more vulnerable.

The Future Fuels Strategy discussion paper makes much of individual choice and looks to better inform motorists through the Green Vehicle Guide, but the question must be asked: does your right to drive any vehicle you chose infringe my right to clean air and a safer climate?

One of the most popular vehicles on the market which can be seen most evenings advertised on television is a diesel which meets Euro five standards for noxious emissions, standards which are years behind European and U.S. standards and are at the bottom of the OECD. The same vehicle emits around 200 gms of CO2 per kilometre, or around 3.7 tonnes for every 20,000 km.

“Tradies” and others who have a real need of such vehicles must not be penalised, yet there must be some incentives applied in legislation to favour less polluting vehicles.

The Future Fuels Strategy discussion paper claims that the cost of emissions abatement in subsidising battery electric vehicles is not value for money. Transport experts, such as Jake Whitehead of The University of Queensland, have pointed out the errors in this assessment.

Importantly, the paper fails to account for the emissions from extraction, transport and refining of petroleum, known as scope three emissions, thereby underestimating these emissions by 20 per cent.

There is little consideration of an electricity grid rapidly evolving towards cleaner energy in all states, and the huge uptake of rooftop solar, both of which will work synergistically with electric vehicles to lower emissions and benefit the consumer.

The discussion paper points to the uptake of hybrid vehicles, suggesting these will satisfy demand and enable consumers to adapt to new technology and the Minister for Emissions Reduction and Energy, Angus Taylor, has expressed a clear preference for these cars.

This is little more than an argument for the status quo, and while all low emission vehicles are desirable, for real impact on emissions complete electrification of transport is needed.

Many of the major car manufacturers are going straight to battery electric vehicles (BEVs) and range anxiety is becoming a thing of the past, with fast chargers and BEVs with a range of more than 500 kilometres on a single charge entering the market.

With billions now being spent on road infrastructure, the funding of a vital transition to electrified transport proposed in this paper seems miniscule and little more than a fig leaf to ward off criticism of the Government’s lack of action on the climate emergency.

With the Biden Administration pledging to continue subsidies for electric vehicles and provide extensive charging infrastructure, and Europe and the UK committed to action, Australia is again a laggard.

Links

• What Australia can learn from electric vehicle policies in Indonesia
• The Coalition’s foolhardy war on electric cars
• Electric vehicles threaten oil but are a boon for health
• (AU) Almost Alone: Australia Isolated On Climate Despite PM’s Ambitions
• (AU) 'Do-Nothing Document': Australian Electric Vehicle Strategy Lets Emissions Keep Rising
• G.M. Will Sell Only Zero-Emission Vehicles By 2035
• The End Of The Internal Combustion Engine?
• (CAN) The Myth Of Electric Cars: Why We Also Need To Focus On Buses And Trains
• Are We Witnessing The Death Of The Car?
• Electric Vehicles Are The Road To The Future
• Here’s Why Electric Cars Have Plenty Of Grunt, Oomph And Torque 

(AU) The Government Is Stuck In The Fallacy Of Debt And Deficit While Ignoring The Climate Crisis

The Guardian - Greg Jericho

Do we really want to say in a decade’s time that we couldn’t spend money on lowering emissions because we were worried about interest rates?

‘We are ... at a crucial moment, which requires massive investment in order to lower emissions.’ Photograph: David Crosling/AAP

Despite a year in which there was a massive increase in government debt that had no discernible impact on interest rates or inflation, our politics remains stuck in the fallacy of debt and deficit, even in the face of the great crisis of climate change.

One of economist John Maynard Keynes’ most repeated aphorisms is “when the facts change, I change my mind. What do you do, sir?” There is no evidence he ever said such a thing, which is just as well because while many utter the line, few follow through.

Usually, the change of mind is brief, until the facts can once again be dismissed.

For all of my lifetime, the Liberal party has sowed fear of government debt and budget deficits because they said it would increase inflation and interest rates.

In 2010 Mathias Cormann told parliament that GFC stimulus “has delivered record levels of debt and record levels of deficit and which has been putting upward pressure on interest rates and inflation”.

At that time the cash rate was 4.75%. Since then government net debt has gone from 3.7% of GDP to 34% and yet the cash rate is now 0.1%.

But hey, “facts”.

Then when the pandemic hit, the facts changed and so did their minds.

Last year, Cormann responded to questions about the massive increase in the budget deficit by saying “what is the alternative? Are you suggesting that we should not have provided the support we did to boost our health system, to protect jobs, to protect livelihoods? I mean, in the circumstances what was the alternative.”

It was a good answer and remains so even though this week the parliamentary budget office revealed government net debt has increased by 42% in one year from $430bn to $611bn.

And yet there has been no increase in the amount the government needs repaying because interest rates have actually fallen.



The PBO estimated that in the December quarter last year debt interest repayments were $4.1bn – the same amount it was in December 2016 when total debt was half the current level.

Imagine doubling your mortgage, but not your fortnightly repayments.

In December 2016 the government paid around 2.8% interest on a 10-year bond; right now it is paying around 1.2%.

And yet despite this, the fear of debt and deficit has returned.

On Friday the man who took over Cormann’s role as finance minister, Simon Birmingham, said in a speech to the Australia-Israel Chamber of Commerce that if interest rates converge to their long-run level the “increase in interest payments alone would add a further $44.5bn to gross debt in a decade’s time”.

He further suggested that “you don’t run an Australian economy on crisis settings when you’ve got through the crisis”.

Except, of course, we currently are in the greatest crisis to face the world’s economy – climate change.

We are also at a crucial moment, which requires massive investment in order to lower emissions.

The EU are moving towards imposing a carbon import levy, and Australia now finds itself utterly struggling to make the cuts required to keep temperatures from rising 2C above pre-industrial levels.

The Coalition only sees a crisis when it wants to. It refused to admit the GFC was one, and has never treated climate change as anything other than something to be mostly ignored.

But despite all contrary evidence, they keep saying rising debt is a crisis.

Do we really want to be telling people in a decade’s time that we couldn’t spend money needed to lower our emissions because interest rates were 1.2% and we were worried they might rise?

The Coalition reacted to the economic impact of Covid-19 by dismissing concerns about debt. And yet when faced with a much greater impact of climate change they remain wedded to old canards that have been shown not to hold.

But, to paraphrase Cormann, what is the alternative? Are you suggesting that we should not provide the support we need to get to net zero emissions to protect jobs, to protect livelihoods?

Unless you deny climate change, there is no alternative.

Links

• Australia's climate policy is a mix of delusion and denial. We need to get real
• The biggest Coalition conspiracy theory is climate change denial
• Australia's Emissions Data Would Shame The Coalition, If Such A Thing Were Possible
• It's No Surprise Emissions Keep Going Up. There's No Price On Carbon
• (AU) Australia Needs To Stop Thinking That Setting A Target Of Zero Emissions By 2050 Is Good Enough
• (AU) The Climate Crisis Looms As The Coalition Fiddles With Fossil Fuels
• 'Good' Climate Policy Can No Longer Be Our Goal. It's Time To Reach For Perfect
• If You Love Australia, Climate Change Should Scare The Hell Out Of You
• (AU) Behind The Smokescreen, The Coalition's Stance On Climate Change Hasn't Changed At All

(AU) Climate Change Inaction Spurs Berowra Residents To Take Some Action Themselves With Local Ideas

ABC Radio - Amanda Hoh

Kate Friend installed solar panels last year and hopes other Berowra residents will follow her lead. (ABC Sydney: Amanda Hoh)

Key points The Berowra Climate Change Action Group was established after the 2019/2020 bushfires Founder Kate Friend hopes to introduce a solar hub to reduce the suburb's carbon footprint The local council is looking to set up similar infrastructure in other local villages

In late 2019 when Australia's first "mega-blaze" tore through Gospers Mountain in northern Sydney, all Kate Friend felt was hopelessness.

If the fire had managed to cross the valley into the bushland shire at Berowra Heights it would have been at her doorstep.

Smoke wafted over her home for weeks, the sky was tinged orange for days, and Ms Friend's husband was on standby with the Rural Fire Service.

But rather than cower from the experience it sparked Ms Friend, a scientist who works as a business development consultant, to make a change.

"I was really frustrated about the lack of [government] action and the hopelessness that we all felt [during the bushfires]," she said.

"The problem of climate change is so huge that it's almost unattainable.

"However, I do think there are steps we can do as a community and as individuals that can make an impact and a change."

Anatomy of a 'mega-blaze'

As the first Black Summer inquiry prepares to report, we reveal the inside story of Australia's biggest bushfire. Read more...

With the drive to make that impact "from home", Ms Friend launched the Berowra Climate Change Action Group.

The first meeting at the local pub last year saw 30 residents show up to lend their support.

The pandemic stalled any further activities for the group, however Ms Friend relaunched it last week with the backing of Hornsby Shire councillor Nathan Tilbury and NSW Energy and Environment Minister Matt Kean who attended the meeting.

There are now at least 60 local residents that have signed up to the group.

Kate and her family have lived in Berowra for about eight years. (ABC Sydney: Amanda Hoh)

"The community has my back," Ms Friend said.

"I'm surprised there are more people interested in actual action on climate change.

"Like me, they are all frustrated, wondering what we can do, so they are all on-board with being a part of the change that's happening."

What do they hope to achieve?

Ms Friend is focused on setting up a solar hub for the suburb.

That would involve putting solar panels on council owned buildings, schools, sporting precincts, churches, and residential houses, and harvesting excess electricity to feed into the grid and back into the suburb.

She also wants incentives to encourage residents to install a water tank in their home and believes this could be established within three months.

The Berowra Climate Change Action Group has council backing to establish local sustainability projects. (ABC Sydney: Amanda Hoh)

Both ideas are backed by Hornsby Shire Council.

"It is on the agenda already and we know at council that if we have the community behind us it gives us a lot better chance at being successful," Cr Tilbury said.

"I believe state and federal [governments] have grants for that sort of thing.

"We have a couple of isolated communities like Brooklyn and Cowan who are also looking to do something similar."

Is there a precedent?

 Berowra is not the first suburb to take the battle against climate change into their own hands.

The NSW town of Tyalgum has been working for the past few years to take themselves off the grid entirely.

Since the devastating bushfires in 2019 and 2020, electricity companies have trialled standalone solar systems in rural and regional towns.

NSW Energy and Environment Minister Matt Kean was a guest speaker at the launch of the group. (ABC Sydney: Amanda Hoh)

Mr Kean said everyone had a role to play — from government down to grassroots community action groups.

"It starts with government, it starts with government leadership putting strong policy settings in place, and that's what I've done in NSW," he said.

"Working with people who care about their community, people who care about the planet, is exactly how we're going to solve this problem."

While setting up the infrastructure for a solar hub in Berowra could still be some time away, Ms Friend is determined to see it through.

"In terms of a timeline it might take us a while, but I have no doubt we can achieve this," she said.

Links

• (AU) Denmark Is The Small WA Town That's Proven You Can Dream Big When It Comes To Renewable Energy
• (AU) Local Community Needs Must Not Be Overlooked As We Adapt To Climate Change
• (AU) The Case For Sustainable Communities: Three Big Ideas To Future-Proof Australia
• NSW Liberal Minister lashes PM's 'ridiculous' emissions stance
• Across Australia, a quiet revolution is happening to our electricity networks — and it's all about off the grid
• Australia's largest ever bushfire, like you've never seen it before
• Small Australian town aims to become its own power station

(AU) ‘Real Struggle’: Map Shows Silent Crisis Threatening Australia

Yahoo News - Nick Whigham

Australia is facing an uncertain future when it comes to our continent’s most precious resource – water.

That’s the daunting warning laid out in a draft report on Thursday by the government’s Productivity Commission which highlights the immense challenges facing the nation as it looks to reform national water policy.

If not, a grim future awaits.

The twin trends of population growth and climate change mean Australia’s drying continent will struggle to cope with our future needs as water scarcity becomes an increasingly pressing issue, the major review finds.

In a worst case scenario imagined in the report, demand for water in the city of Melbourne could outstrip supply in just seven years.

Water has to be stored, distributed as needed and carefully managed. Water is heavily used in some areas while in others the percentage used is fractional. Source: PC      LARGE IMAGE

“In major cities where readily-available supply sources have already been accessed, ongoing population growth is likely to create significant pressure on water supplies,” the report says.

“Scenarios developed for Melbourne, for example, include a worst case of demand outstripping supply by around 2028.”

Signed in 2004 during the Millennium drought, the National Water Initiative (NWI) has been credited with positive changes in water usage by placing caps on how much water can be taken from river and groundwater systems, improving industry efficiency, and allocating water for the environment. However, the review found the NWI had “reached its use-by date”.

“If we look at the current NWI, it really will struggle in the face of our future challenges,” Commissioner Jane Doolan said.

Climate change central to Australia’s looming water woes

The draft report into the NWI, a federal-state reform agreement which has informed water policy for 17 years, urged governments to make climate change a top consideration with severe droughts and floods set to increase.

“Climate projections point to hotter, drier and more extreme weather — particularly in southern Australia. This will likely mean material reductions in water availability for most of the country and an increase in the frequency and severity of droughts and floods across the nation,” the report says.

Median projections of percentage change in average annual rainfall, potential evapotranspiration and run-off in the coming decades show a drier continent. Source: PC       LARGE IMAGE

Planning will need to include climate and population growth, which are set to sap the amount of water available for the environment, urban populations and farmers.

Ms Doolan said an estimated additional 11 million people would be living in Australia's capital cities by 2050.

“The NWI needs to be refocused to provide strong guidance on how to adapt water management to best meet our needs in a changing climate,” she said.

“The droughts and water scarcity experienced during the past 20 years are likely to be a harbinger of things to come.”

Urban water management will become increasingly important in the years ahead. Source: Getty

The report insists on a greater focus on urban water management, a more stringent economic criteria for projects, and the end of special treatment for mining and fossil fuel companies.

Among the recommendations is a call for mining and petrol companies to no longer be exempt from planning requirements faced by farmers and other water users.

The report also calls for Indigenous people to be given a greater say in water use to support cultural objectives and economic development.

Federal government slammed for inefficient water strategy

The draft report also launches a scathing assessment of governments' funding decisions around dams, weirs, pipelines and other water infrastructure projects.

It finds seven projects received federal funding without businesses cases or environmental approvals.

The Rookwood Weir in Queensland is used as an example of a funding commitment at odds with Infrastructure Australia's independent project evaluations.

The harshest criticism is reserved for the $484 million Dungowan dam near Tamworth in NSW, which is being funded on a 50-50 basis by the federal and state governments.

Dungowan dam near Tamworth was declared an expensive option to improve water supply. Source: WaterNSW

The dam is estimated to provide an extra six gigalitres of water a year with a current market value of $11 million.

Directly purchasing the same amount of water would cost two per cent of the dam.

Based on the cost of the dam, the extra six gigalitres would be valued at 44 times the current market rates for irrigators.

Prime Minister Scott Morrison and Nationals leader Michael McCormack have made separate funding announcements for the dam over the past 18 months.

The commission warns maintaining the same approach to funding water infrastructure will unnecessarily burden taxpayers.

Links

• (AU) Productivity Commission Says New Australian Water Deal Must Recognise Climate Change
• Our national water policy is outdated, unfair and not fit for climate challenges: major new report
• Productivity Commission finds Australia's water policy not up to challenge of climate change, population growth
• Productivity Commission: National Water Reform Draft report
• Climate must dictate water policy: Productivity Commission
• Murray-Darling Basin Inspector-General To Oversee Water Efficiency, Compliance And Allegations Of Theft
• (AU) Wake Up, Australia: Deceit And Post-Truth Politics Will Not Save You From The Flames
• (AU) Climate Change: Words Don't Matter As Much As Action
• Drought Plan Must Factor In Climate Change
• Productivity Commission says Coalition should adopt price on carbon

(AU) Carbon Tariffs: What Are They And What Could They Mean For Australia?

The Guardian - Adam Morton

Several major economies and Australian trading partners are looking at introducing them. Adam Morton explains why

Countries that have pledged to be more ambitious in combating the climate crisis are looking at charging some products from countries not taking similar steps. Photograph: Dean Lewins/AAP

Countries that have pledged to be more ambitious in combating the climate crisis are looking at charging some products from countries not taking similar steps. Carbon tariffs, and what the Morrison government thinks of them, are in the news.

We know the minister responsible for emissions reduction, Angus Taylor, is “dead against” them. The trade minister, Dan Tehan, is concerned they may be a “new form of protectionism”.

But some experts say it is a matter of when, not if, they are introduced – and the Australian government and business community should be prepared.

What is a carbon tariff? Is it a carbon tax?

In simple terms, it is a charge imposed on overseas businesses that make products that lead to greenhouse gases being pumped into the atmosphere but don’t face a cost for them at home.

Countries that have pledged to be more ambitious in combating the climate crisis are looking at imposing greater carbon costs on their own businesses to drive emissions cuts. But they don’t want locally made goods to be unfairly disadvantaged against overseas competitors.

The answer in some cases is likely to be a carbon tariff – or, if you like, a tax – charged on some products coming in from countries that are not taking similar steps to deal with climate change.

The idea is not to penalise the overseas companies or – as the Morrison government appears to be suggesting – to embrace old-school protectionism.

It is to level the playing field so local businesses in countries applying a tariff can compete while this vast global problem is addressed.

Who is doing it?

No one just yet, but that may soon change.

The idea of carbon tariffs is not particularly new – there have been studies and proposals dating back years – but the global push to cut emissions has accelerated in recent months.

Several of the world’s biggest economies are now planning much deeper cuts in emissions under plans to reach net zero emissions by 2050.

The European Union and Britain both made commitments late last year to make significant cuts by 2030 (55% and 68% compared with 1990 levels, respectively).

Joe Biden has promised a 2030 target for the US before he hosts a leaders’ summit on climate on 22 April.

Australia’s major trading partners in Asia – Japan, South Korea and China – have set net zero goals for either 2050 or 2060 and each is considering what they will do by 2030, with announcements expected this year.

The EU is the most advanced in its carbon tariff thinking, with plans to introduce a system no later than 2023.

The European Commission president, Ursula von der Leyen, proposed a tariff – known as a carbon border adjustment mechanism, or CBAM – as part of a green deal put forward in 2019. The plan was strongly endorsed by the European parliament’s environment committee earlier this month, and is due to be tabled in parliament in June.

As explained above, the goal is to avoid emissions cuts on the continent being undermined when it brings in goods from countries that are not acting on climate in the same way.

The rationale is if it didn’t go down this path there would be a risk of “carbon leakage” – local production shutting down and moving to countries without strong climate policies. Obviously enough, this would do nothing to cut global emissions.

Revenue raised from the charge would be largely used to help pay for the EU’s green transition.

The EU has pledged its system will comply with World Trade Organization rules that aim to ensure fair treatment for all.

It means the tariff will be levelled only on big emitting industries that compete directly with local industries paying a carbon price. Those affected in the short term are likely to be steel, cement, chemicals and fertilisers.

The tariff is not initially expected to apply to industries that do not currently face a carbon cost under the EU emissions trading scheme, such as agriculture. That could change as steps are introduced to make deeper emissions cuts in the years ahead.

A short paper by advisory firm RepuTex noted the current EU carbon price is now about A$60 per tonne of emissions – more than twice what Australia’s carbon price reached before it was repealed in 2014 amid bad faith claims about its catastrophic impact.

It is forecast to hit more than $70 a tonne next year and keep rising.

What about countries outside the EU?

The issue has had a flurry of attention in recent days after reports the British prime minister, Boris Johnson, is considering using the presidency of the G7 this year to forge an alliance on carbon border taxes.

Bloomberg reported the proposal was in its early stages, and Johnson was more likely to push for an agreement in principle at a meeting in Cornwall in June than a binding commitment. The UK is pushing hard for stronger global action on climate in line with what scientists say is necessary on climate ahead of a major climate conference in Glasgow in November.

Johnson has been emboldened by Biden’s election. The new US president has promised to make climate a major priority this year, and already made a raft of executive orders that experts have described as “breathtaking”.

Biden’s election platform included a commitment to introduce a “carbon adjustment fee against countries that are failing to meet their climate and environmental obligations”. It is early days in his presidency and he is facing no end of major domestic issues, but watch this space.

The suggestion the G7 may reach an agreement on a carbon border tax accelerated further on Thursday when the Nikkei newspaper reported that Japan was looking at introducing one, with a decision expected by the middle of the year.

Are the proposed tariffs aimed at Australia?

Not specifically. They appear mainly designed to deal with emissions-intensive goods from emerging economies, notably China and India.

But to stand up under the WTO they will need to be applied equally, so don’t expect Australia-specific exemptions.

What will it mean for Australian government and business? Tennant Reed, a climate policy expert with the Australian Industry Group, expects the EU carbon tariff to have little direct impact here in the short term for the simple reason the country sells few goods to the continent that compete directly with local industries that are caught by the EU emissions trading scheme.

Australia’s biggest single export to the continent is coal for use in steelmaking. It could be affected, but the actual cost would likely be quite small as the EU scheme does not cover “fugitive” methane emissions released during coalmining.

If Japan was to follow the EU’s lead it is possible some industries could be affected – agriculture, for instance – but coal and gas exports are less likely to be charged. Japan overwhelmingly relies on imported energy and there is very little local fossil fuel extraction to level the playing field with.

If China, which buys Australian coal and has its own substantial coal industry, were to head down the carbon tariff path it would be a different story.

The world is moving increasingly rapidly on climate, and what happens in the years ahead will turn largely on how the Morrison government (and its successors) act.

If Australia maintains its current increasingly isolated stance – claiming that climate change will eventually be solved through technology alone, and that businesses and consumers should not face anything that might be described as a tax or regulation that forces emissions cuts – the pressure from the international community is likely to grow.

It stands to reason that if more countries adopt carbon tariffs, more Australian industries will be hit. In the case of the US, aluminium imports could be affected if Biden follows through on his pledge.

But in the short term, the most clear impact if countries make good on their emissions pledges will be shrinking demand for Australia’s fossil fuels and carbon-intensive goods.

Thermal coal, used in power plants, is already in decline and that is expected to accelerate. Metallurgical coal for steelmaking and gas are not as immediately at risk but may follow sooner than the Australian political debate suggests.

Planning for that – and a world in which the global community expects the cost of emissions to be reflected in government policy – may be a good idea.

Links

• Australia ‘dead against’ climate tariffs, declares Taylor
• Big-emitting Australian businesses could soon face costly carbon levy in Europe
• ‘Breathtaking’: what Joe Biden’s sweeping climate plan means for Scott Morrison
• Europe trade talks: Australia urged to be 'more ambitious' on climate
• Big-emitting Australian businesses could soon face costly carbon levy in Europe
• Australia needs to cut emissions by at least 50% by 2030 to meet Paris goals, experts say
• Katharine Murphy  Australia's climate wars were always stupid. Now they've got even dumber 
• The Biden Plan to Ensure the Future is “Made in All of America” by All of America’s Workers