PARIS: As 150 country leaders spoke in Paris on Monday, mostly reinforcing their commitment to a global agreement that aims to limit global warming to a maximum 2°C, Australia prime minister Malcolm Turnbull was forced to duck and weave his way through the first day of talks.
The country leaders were invited to Paris to try to remove roadblocks and inspire others to act. Most – including the leaders of the US, China, Mexico, host France and other EU countries, developing nations, and even Russia – did exactly that.
But the day started badly for Australia with the revelation that it had snubbed – apparently, at the last minute and under pressure from the conservative rump of the Coalition government – an invitation to join a 40-country campaign to remove fossil fuel subsidies.
Australia was also conspicuously absent when many of the world’s major economies held a special event to underline their support for a carbon price. Australia, of course, was the first country in the world to remove a carbon price when Tony Abbott was in power.
Australia announced it was adding $1 billion into climate financing fund over five years, but again appeared to be pulling much of this money from the foreign aid budget.
It also pledged an extra $100 million for clean technology research, at the same time as refusing to remove legislation that would dismantle the $10 billion Clean Energy Finance Corp and the Australian Renewable Energy Agency, from which it has stripped twice as much research funding.
All this came as Turnbull declared that Australia “was not daunted” by the challenge of capping global warming below 2°C, in a speech that included his decision to do a “Kevin Rudd” and overturn his predecessor’s opposition to the Kyoto Protocol and announce the ratification of the 2nd period of the soon-to-be defunct treaty.
That decision was branded as symbolic, yet it is largely in self interest as it will formalise his government’s ability to drawn down on surplus credit and give it, and some businesses, access to some cheap international permits. It is mostly a book keeping exercise.
It is Turnbull’s position on fossil fuel subsidies, his support for coal, his torpedoing of a carbon pricing mechanism, and his meek support for other measures, that reveal a continuing disconnect between talk and action.
Fossil fuel subsidies? What fossil fuel subsidies?
Canada and Australia were deemed to be the two big reformers on climate change since the recent dumping of their arch-conservative and climate sceptic leaders, Stephen Harper and Tony Abbott, in favour of Justin Trudeau and Turnbull.
But while Trudeau gave a commitment that Canada would do an about face and sign up to the 40-country push to remove fossil fuel subsidies, apparently it was all too much for Turnbull, who was unwilling to face down opposition from the conservative forces in his party room.
New Zealand prime minister John Key, who is leading the push, along with the US and other nations, said fossil fuel subsidy reform is the “missing piece of the climate change puzzle.” This has been recognised by the OECD, and the G20, of which Australia is a member.
Key noted that than one-third of global carbon emissions, between 1980 and 2010, were driven by fossil fuel subsidies, which total more than half a trillion a year by some estimates, or up to $5.3 trillion – or $10 million a minute – if including environmental costs; and Key said their elimination could provide 15 per cent of the effort to meet the 2°C target.
“As with any subsidy reform, change will take courage and strong political will,” Key said.
But apparently this does not apply to Turnbull. Key told RenewEconomy at the launch event that his Australian counterpart withdrew support because he “didn’t like the wording.”
Indeed, Australia struggles to admit that it provides any fossil fuel subsidy at all, a view that Turnbull repeated later in the day. Australia insists, for instance, that the fuel tax credit, which costs the budget $5.5 billion a year, is not a subsidy. He described the IMF’s estimates as gratuitous. “We don’t have any in Australia as it happens,” Turnbull insisted.
But the fuel tax credit is not the only subsidy in Australia. The Queensland and Western Australia governments both heavily subsidise consumers on their respective fossil fuel electricity grids, both to the tune of between $500 million and $600 million a year.
There are more subsidies in cheap supplies to some generators, and a report last year noted a concessional rate of excise on aviation fuel ($5.5 billion), accelerated depreciation rules ($1.5 billion), and NGOs say the removal of the carbon price amounts to a subsidy to fossil fuels of $14 to $39 billion a year.
Removing fossil fuel subsidies is just one key policy measure to try to reduce emissions. The other major plank is carbon pricing, and at the leaders’ summit the world’s major economies got together to underline their support for such a mechanism.
On carbon pricing, Malcolm Turnbull again showed he was no Justin Trudeau. The Canadian chief appeared with Francois Hollande (whose country has a $34 carbon price on its electricity sector, rising to $150 by 2030), Germany’s Angela Merkel, and the heads of Mexico, Chile, and the World Bank.
Trudeau’s speech was striking because it delivered what many would have expected of Turnbull, but have so far been disappointed.
“We can’t just look at a carbon price as a liability. We have to look at it from the point of view as an opportunity for new technologies,” Trudeau said.
Consumers, he said, are asking questions about the source of their goods, the mileage of their cars, etc. “These questions will be answered by putting a price on carbon.”
He conceded that in the last 10 years “Canada has been less enthusiastic than some” on the issues of sustainability and climate change, but at a sub national level provincial governments have taken the initiative. For example, British Colombia put a price on carbon, started low, everyone knew it would increase and had a chance to modify their conduct.
“We need to give price signals to industry. Pricing carbon is good for the economy, business and future generations,” Trudeau said.
When is a carbon price not a carbon price
But carbon pricing for Turnbull, because of the nature of the promises he gave to get the vote of some conservatives, may turn out to be a matter of definition.
It was interesting to note the release of the Climate Change Authority’s latest discussion paper on future policy actions on Monday afternoon in Australia.
The CCA, even though it is stacked with new Coalition appointees – designed to push it away from what environment minister Greg Hunt complained was a partisan political decision (i.e. they presented policy recommendations that accorded with the science) – insisted that the government needed new policies.
In other words, it said it couldn’t continue with just Direct Action.
“The fact is that Australia will need new policies to achieve its targets to 2030 and beyond,” the CCA noted in its discussion paper on policy mechanisms. It didn’t say much else apart from presenting a range of considerations, but this is where it gets interesting.
Under the collective heading “mandatory carbon pricing” the CCA includes an emissions trading scheme, a carbon tax, and baseline and credit schemes, and safeguard mechanisms.
It just so happens that Danny Price, the lobbyist and consultant who helped design Direct Action, has also designed a baseline and credit scheme as a sort of carbon pricing alternative. This is why Hunt put him on the CCA board.
But Hunt has dismissed an ETS and a carbon tax as one and the same, even though there are important differences. Can he somehow ignore the comparisons with the obvious alternatives?
It is clear that Turnbull has promised the LNP, in writing, that there will be no new ETS. But can he pretend that a baseline and credit scheme, or a safeguards mechanism, or a combination of both, is not a carbon price? It should be interesting to see how.
Australia doubles clean energy R&D
Australia became one of 20 countries to join something that called Mission Innovation, an agreement to double government investment in clean energy research and development. This amounts to $20 billion globally, but around $100 million in Australia’s case.
Turnbull – who due to the chaotic logistics of the leaders’ day didn’t make it to the public announcement (pictured above, sans Turnbull) – likes to speak of innovation, but the galling reality for the innovators and developers of new technologies is that Australia has sought, and still seeks, to dismantle the two institutions designed to fund and finance that innovation.
The bills to pull apart the $10 billion Clean Energy Finance Corporation and the Australian Renewable Energy Agency still exist, despite numerous opportunities for the Turnbull government to withdraw them.
Equally galling, the extra $100 million amounts to a mere fraction of the funding that has been stripped from ARENA by the Coalition government.
“Quite frankly, it’s a bit rich for Malcolm Turnbull to rip money out of the already diminished foreign aid budget, re-package it as climate finance and then claim it as a gesture of generosity,” said Greens deputy leader and climate spokesperson Senator Larissa Waters, who is also in Paris.
“His announcement was in complete contrast to the spirit of the Paris conference where we have seen countries like Canada, France and Germany significantly scale up their contributions to meet the climate challenge.
“Similarly, it’s hard to take the PM’s announcement of $100 million into clean energy research seriously when this government cut over double that amount of research and development, and won’t take our own clean energy agencies off the chopping block.
Leaders take centre stage, before the hard work begins.
Paris is the first time that country leaders have been summoned to speak and meet at the start of the conference, rather than the end. The leaders section has mostly served as a call to arms for all countries to act. Even Vladimir Putin said climate change was one of the biggest challenges facing humanity, and underlined his support for the 2°C target.
But the speeches also served to highlight the tensions that exist in the talks. These centre around what legal form the agreement will take, and who will take responsibility for emission reductions – the developed world, responsible for most historical emissions, or the developing world, responsible for most that will happen from now on.
It is one of the intractable issues that has dogged these talks for years, and underpinned the other flash points around climate finance, verification and loss and damage.
China’s Xi Jinping went out of his way to underline the principle of “common and differentiated responsibilities.” India’s Narendra Modi, did the same, but in less obscure language: “Climate change is not of our making. It is the result of global warming that came from an industrial age powered by fossil fuel.”
Most developing nations, however, want the target made tighter, capping global warming at 1.5°C. This, of course would require developed countries to take even more decisive action, and vastly reduces their so-called carbon budget.
As for Turnbull, unlike Trudeau, he was never centre stage. His only public speaking event, apart from his set speech, turned out to be a briefing for Australian journalists (to which RenewEconomy – the only Australian media at the previous three CoPs, and a veteran of seven such events – was not invited). It highlights, given the paucity of his policy initiatives, that on the global stage Turnbull is an irrelevance.
All that is asked of him by other countries is that he does not get in the way. If his policies mean that Australia ultimately finds itself unable to compete in a world in rapid decarbonisation, then that is his and Australia’s problem, not theirs.
France and India underlined Australia’s increasing isolation, and the hollowness of its rhetoric, when they launched the global solar initiative. Both insisted that it wouldn’t be fossil fuels that deliver energy to the poor. Hollande insisted that fossil fuels “are not even the technologies of today.”
Fossil of the Day award:
The environmental NGOs keep a close watch on the negotiations, and each day present a “fossil of the day” award.
New Zealand shared the first gong of these talks for urging other countries to shed fossil fuel subsidies, at the same time propping up fossil fuel production to the tune of $80 million.
Belgium was the other joint winner, for being one of the few EU countries lagging behind on their carbon pollution reduction and renewable energy targets. And because its environment minister missed the train to Paris.
Giles Parkinson is in Paris for the duration of the climate talks. Additional reporting from Anne Delaney.
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