Pressure is mounting on the Australian government to toe the line on fossil fuel subsidy reform, as reports emerge that support is mounting for a robust deal to phase out incentives for new coal plant development.
The deal, brokered between the US and Japan, would rein in export credit agency financing for coal, a leading source of the greenhouse gas emissions responsible for climate change.
The credit agency proposal – which has been years in the making – will be debated at a meeting of the Organisation for Economic Co-operation and Development in in Paris next week, which represents 34 mainly rich countries, including Australia.
But the OECD will also look at overall fossil fuel subsidies, which amount to more than $70 billion a year in the OECD alone. A new report due tomorrow will put Australia’s share of those subsidies at more than $US5 billion, although the Australian government denies that this exists.
Reuters reported on Tuesday that European Union negotiators at the talks were expected to push hard for the deal which, according to another source, could make the “vast majority” of about 1,000 planned coal plants ineligible for export credit agency backing.
But this may be easier said that done, with Australia named as one of the plan’s key opponents, after it joined forces with South Korea to produce an alternative plan that would not go as far as the US-Japan deal.
The Australia-South Korea effort has been slammed by environment campaigners in Australia and abroad, who say it could scuttle negotiations hosted by the OECD, and cast a shadow over Paris.
“Behind window-dressing rhetoric, they clearly want to sabotage the OECD deal,” said Sebastien Godinot, an economist at WWF.
Jake Schmidt from US green group Natural Resources Defense Council described the Canberra/Seoul proposal as “a terrible sign” from countries that claim they want to deal with climate change.
“They are trying to stop the simplest way to deal with this problem, which is to minimise the public finance going to coal power plants,” he said.
And as Reuters puts it, “the difficulty of agreeing that rich nations should stop allowing governments to fund coal is seen as a foretaste of the challenge of negotiating a new global pact on climate change.”
Locally, the focus is on Australian PM Malcolm Turnbull, and whether or not he will pass what many consider to be his first big test on climate.
“If Australia blocks this deal, it will make us a pariah in Paris,” said 350.org campaign director Charlie Wood in a statement.
“More to the point, if we succeed in slowing down the transition, we (and everyone else) will pay for that greed with more bushfires and wilting summers, more dying reefs and rising seas,” Wood added.
“This is where the rubber hits the road on (the climate change) debate,” said Julien Vincent, lead campaigner at Market Forces. “We have a modest, proposal that would cut off finance to the dirtiest proposed coal power plants.”
And it is, indeed, a modest proposal – a small component of what needs to be a much broader phase-out of fossil fuel subsidies, in a process that has been described by the OECD as “alarmingly slow”.
It does nothing, for example, to limit subsidies for coal production and the development of new coal mines, like the huge Adani-backed Carmichael project in Queensland.
“With the Paris climate change negotiations just around the corner, it would be a disastrous start for Australia to arrive having just torched this deal and enabled dozens of new dirty coal power plants,” Vincent said.
“If Australia can’t even support this agreement, you have to wonder if anything has changed or if Tony Abbott’s pro-coal ideology still reigns supreme.”
Even the federal opposition has weighed in, taking the opportunity to sink the boot, despite the fact that – as we have reported before – Labor appears to be no more enlightened on the subject of digging up and burning coal than the Coalition.
“As the world prepares for the international climate talks in Paris at the end of the month the Turnbull Liberal Government is doing all the things you do when you are really doing nothing,” said shadow climate minister Mark Butler.
“With smooth words and warm handshakes the relevant ministers are providing a welcomed change in the tone of the conversation. The problem is there has been no change what so ever in the substance,” he said in a statement on Wednesday.
“Julie Bishop has confirmed that there is nothing new on the table for this vital Paris meeting, no strengthening of the emissions target, no additional contributions to the Green Climate Fund, just the same Tony Abbott plan.
“The thaw in the Australian rhetoric had boosted hope in the international climate change community that Malcolm Turnbull would bring Australia back to the centre of this issue and provide the kind of leadership on climate change that Australia enjoyed under the Labor government.”
No mention of coal though.
Sophie is editor of OneStepOffTheGrid.com.au and deputy editor of its sister site, RenewEconomy.com.au. Sophie has been writing about clean energy for more than a decade.