Australia’s ETS and Why we need it

At 12 noon on Sunday the Federal Government announced the details of the Carbon Tax. This is a momentous occasion as it finally marks the start of a serious program to reduce Australia’s green house gas emissions. The Gillard Government is to be commended for having the courage to begin this process.

Scientists established the heat trapping ability of green houses gases more than 150 years ago. There has been strong evidence for urgent cuts to human emissions for 20 years. Recent research has greatly strengthened this evidence. Australia is at last heeding the calls for action.

The current carbon tax is the precursor to an emissions trading system. This is agreed by economists to be the cheapest means of providing a signal into the economy to drive reductions. The price is to be set initially at $23 per tonne of CO2 equivalent and will cover around 500 of the worst emitters in Australia.

The scheme is introduced in the context that Australia is in the top 20 emitters in the world and has the highest emissions per head of population in the developed world (27.3 t/person, 2005). Australia is extremely vulnerable to the impacts of climate change, already being a very hot and dry continent where the vast majority of people live around the coasts.

Human burning of fossil fuels is causing the climate to heat up. Studies show that droughts and floods will get worse, bushfire danger increase, land and property will be lost to a rising ocean, fish stocks will be reduced, storm damage increased and agriculture will become more difficult.

Although we support the introduction of a carbon reduction strategy, we understand from the science that the degree of reductions will have to be increased rapidly over time. Current science calls for around 30 – 40% reductions within 10 to 15 years. This represents far more urgent reductions than the 5% target by 2020 of the Gillard Government or the Opposition. The need to urgently reduce human GHG emissions will not cease until we have reached a zero emissions economy. This is not possible to achieve overnight but will take decades and we must make detailed long term plans to continue to force emissions downwards. The longer we leave it the more difficult and expensive it will become.

The science calls for urgent and rapid reductions of emissions down to zero with the possibility of needing to go on to extract CO2 directly from the atmosphere and the ocean. This is a huge undertaking. The problem will not disappear with the introduction of a carbon tax but will continue for decades to be the most significant survival issue for the human race.

As the masters of this planet we cannot morally ignore our responsibility to the millions of other species on earth. They provide us with the environment in which we work, rest and play including the very oxygen which we breathe and the fresh water and food on which we rely. The rate of change in our climate will be much faster than has occurred in the past and some project extinction of 30% to 50% of all species.

So when commentators say that there is nothing to fear from climate change or that we should fear the increased costs or job losses that might be caused by a carbon tax, we should balance this up against the destabilization of our climate and culture. What will we say to our children when they ask us why we did nothing?

We are living at the expense of our grandchildren and a carbon price is the first step to us taking the responsibility to correct that error.

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Why reduce green house gas emissions

It is very clear in the scientific reports that humans are driving our climate to warm by emitting huge amounts of green house gases into the atmosphere. To put this into perspective, the amount of extra heat trapped in our atmosphere every year currently amounts to the equivalent of 1 million Hiroshima bombs.

This energy is driving extreme changes in our climate and will lead to widespread disruption, misery and death within the next 50 years. If we do nothing to reduce our emissions the risks will not only double but accelerate into a destabilized climate with significant loss of biodiversity and collapse of food supplies. If we cut emissions too slow this will still happen. In fact we are already facing very serious impacts such as rising sea levels and changing regional climates which will require large adaptation efforts.

The need for action is urgent and the situation is an emergency.

What gases are we talking about?

Carbon dioxide (CO2) is not the only green house gas. A raft of gases are considered dangerous and listed under the Kyoto Protocol including CO2, Methane, Nitrous oxide, Perfluorocarbons, Sulphur hexafluoride and Hydrofluorocarbons (the last two are not included in the Australian proposal). Many of these are more powerful heat trapping gases than CO2. For example, when compared over a 100 year period, Methane is 25 times more effective per tonne at trapping heat than CO2.

The largest effect of humans is from the burning of fossil fuels. These materials are the stored carbon from millions of years of plant and animal growth. We are taking this material and putting it up into the atmosphere as CO2 in a matter of a couple of hundred years. The rapidity with which we are doing this is overwhelming the planets ability to absorb the gases and driving us into a rapidly destabilizing climate.

How a price on carbon works

Up till now, anyone who burns fossil fuels for any purpose has paid nothing, zip, zero for the privilege of emitting the burnt gases. Putting a price on CO2 emissions simply acknowledges that the gas does have an impact on our future economic and social prosperity. Such a low price of $23 per tonne means that most of the emitting companies will try to reduce the money they pay for their emissions by investing in energy efficiency. This will reduce their costs under the carbon price as well as reducing Australia’s overall emissions.

We are simply giving these companies an economic reason to act. Businesses such as those who run electricity power stations need to be able to predict their costs decades into the future to justify their capital expenditure. Hence the need for predictability in the fact that there will be a price on carbon into the future.

Increases in efficiency have the potential to save these companies a great deal of money under the carbon price and so there will be a strong incentive for them to find the most efficient way of reducing their emissions. This is how the market will be altered to create a downward force on emissions.

Why the carbon price must increase

Over time the ability of businesses to create efficiencies will reduce and they will need to simply replace their fossil fueled energy with renewable forms of energy. In order to make this economically attractive the carbon price needs to rise because the price of renewable energy is higher than fossil fuel energy (although this is projected to change as the economy moves towards using more renewable energy). Statements reported by some suggest that to make it economical to build gas fired power stations instead of coal fired power stations the price needs to be $40/t while for wind it needs to be around $70/t.

The other reason for a rising price is that if a high price is introduced suddenly, the fossil fuel economy becomes un-economical and our economy would grind to a halt. That is indeed how reliant we are on fossil fuel for everything.

Compensation

According to Treasury modeling, the increases in groceries, fuel and electricity is likely to be less than 1%. Compensation is being delivered to low income households, to pensioners and to many of the trade exposed industries, such as steel, concrete and aluminium.

Dangers of doing nothing

It is clear we must act. As each year passes the scientific reports become worse. Scientists are at heart conservative people. They will say no more than they can support with measurements and fact. The unfolding picture is one of a planetary climate already undergoing change. We are in danger of that change accelerating out of our control.

For example, a recent paper studies the release of methane from melting permafrost (Amount and timing of permafrost carbon release in response to climate warming, K. SCHAEFER, T. ZHANG, L. BRUHWILER, A. P. BARRETT, published in Tellus, 2011). It shows that we will already have the equivalent of 10% of current world carbon emissions occurring by 2030 from methane released by melting tundra (1 billion tonnes of carbon per year by 2030 and a total of 100 billion tonnes by 2100). This melting will occur due to the GHG emissions already released and expected to be released in the coming decades.

The study does not take into account release of methane from other sources (such as methane clathrates under the arctic seas) and takes no account of the increased warming caused by these additional releases. Even more worrying, it does not take into account the fact that the carbon will be released as methane which is a much more powerful green house gas than CO2.

What this means is that we are already facing the start of runaway climate change, out of human control, within a couple of decades. There is now no excuse to delay any further the serious cutting of our emissions.

(See a detailed article on the above paper at: http://climateprogress.org/2011/02/17/nsidc-thawing-permafrost-will-turn-from-carbon-sink-to-source-in-mid-2020s-releasing-100-billion-tons-of-carbon-by-2100/)

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