Last week when the European Parliament voted down a proposal to prop up the EU Emissions Trading System’s languishing carbon price by postponing the sale of 900 million emission allowances until the back-end of this decade the price fell to below AU$4. There are obvious concerns about the legislated linking of the Australian carbon price to the EU scheme in mid-2015. Treasury had forecast an EU price of at least $29 in 2015.
Radio National’s PM program had a roundup of political commentary. Julia Gillard on the 7.30 Report was very clear. The legislation was there, it was hard enough to get through the parliament in the first place and we’d have to work with it.
Big business, quick off the mark, was suggesting that link with the EU should occur earlier, so they could buy permits while they were cheap.
Ross Garnaut said, don’t panic, the ETS is only one measure and targets may tighten by impacting on the price:
I don’t think it should in Europe and in Australia action on climate change does not at this stage depend only on the carbon price. It’s the interaction of various direct interventions with a carbon price.
In Europe these other interventions are now very large compared with the carbon price in their effects, you could say that also in Australia where for example the renewable energy target is having a more powerful effect than the carbon price.
There’s an opportunity over the next couple of years and in the period beyond that to tighten up targets that will only be done globally with the major countries. In that context the European carbon price will rise and the Australian price with it and the carbon price which is a more efficient mechanism will become more important than all those other interventions including the renewable energy target. (Emphasis added)
(In the rest of the interview Garnaut talks about putting a cap on the Australian dollar and bringing our interest rates a bit closer to the rest of the developed world.)
Anthony Hobley, a London-based analyst, looks at Where to next for EU climate policy? In brief he sees three options, a carbon tax, a patchwork of uncoordinated responses by member states or a command-and-control response. That’s if they don’t take his preferred option, a fundamentally restructured ETS.
Spiegel Online talked to Felix Matthes who sees the EU decision as the end of European climate policy and the squandering of an opportunity to create an international trading system which would do what formal talks have not been able to achieve.
Deutsche Welle points out that some of Europe’s largest energy companies like Shell, Eon and EDF wanted the price increased to support their innovation.
At The Guardian Connie Hedegaard, EU commissioner for climate action, and Phil Hogan, the Irish environment minister who holds responsibility for the portfolio under the Irish presidency, vow to fight on while the World Coal Association called the European parliament vote “a triumph of common sense and balanced policy”.
Will Hutton sees the international consensus on climate change dissolving and the world heading towards a disastrous 6C of warming. He points out that in 2012 the top 200 energy companies spent $674bn on finding new reserves of fossil fuels and that these companies are currently valued at $4trn, with $1.5trn of debt. Downgrading their value could in itself precipitate a new financial crisis.
What is needed is a new vision of how to do capitalism in which enlightened self-interest is hard-wired into its operation, saving us from decades of austerity and environmental disaster. There are instruments at hand – the Unburnable Carbon report sets some of them out – and they mesh with larger arguments for stakeholder capitalism. The political task is to bind them together to underpin a new consensus and a new narrative. There is no time to lose.
The BBC tells us that 22 British Tory MPs voted the EU proposal down against UK official policy, enough to swing the vote which was 315 in favour and 334 against. The BBC’s Roger Harrabin also looks at unburnable fossil fuels. If we burn more than a quarter of what is already owned we are in trouble.
Elisa de Wit and Damon Jones look at some options Australia might take.
Tristan Edis comments at Climate Spectator cross-posted at Crikey. Terry Flew on another thread paints a scenario where the question of Labor’s carbon policy becomes a factor in the post-September leadership issue, assuming an election defeat of course.
You’ll be pleased to know that prime-minister-in-waiting Mr Abbott has plans to save the world. Apart from perhaps ramping up the national target for reduced emissions Abbott is going to take a lead at the G20 meeting hosted in Brisbane next year:
“Where a real global agreement will come is when China and United States reach a point of common position and when that’s backed up with India and the EU,” Mr Hunt told ABC TV on Thursday.
Mr Hunt said Australia would chair the G20 summit in Brisbane next year and it was in a unique position “to bring together the G4 as the basis for a global agreement”.
“I think (Tony’s) a fantastic negotiator,” he said.
Now I’ve heard everything! The G4 is presumably the USA, the EU, China and Japan.
That’s the same Tony Abbott who told Tony Windsor that he’d do anything except sell his arse to become prime minister and who in negotiating with Andrew Wilkie put his feet on the coffee table.