HSBC: Australia on its own as it puts wrecking ball through climate policies

Tony Abbott might not know it yet, but his first days “in action” as Australia’s 28th Prime Minister – during which he has set to work on repealing the former government’s carbon pricing scheme and many of its associated policies and mechanisms – look set to coincide with what HSBC is describing as a “new phase in global climate action.”

And it’s a new phase that will see Australia left behind, just as the new Conservative government endeavors to cancel the carbon price, stop the Clean Energy Finance Corporation, dismantle the Climate Change Authority and the Climate Commission, and remove public servants with expertise in carbon pricing.

In its latest report, HBSC points to the Australian election of the Coalition government, with its retrograde climate agenda, as part of a triumvirate of political and scientific events set to make September 2013 “perhaps the most important month in the climate agenda since the Copenhagen summit in December 2009.”

At the opposite end of the spectrum, HSBC is following the progress of Germany, which goes to the polls on September 22 – an election HSBC tips will be critical for unblocking domestic and European policies on renewables, carbon and efficiency.

And then, of course, there is the September 27 release of the latest report from the Intergovernmental Panel on Climate Change (IPCC) on the physical science of global warming. The first in a series of IPCC releases – others will focus on adaptation and vulnerability (March 2014), low-carbon action (April 2014), followed by a synthesis in October – the findings are unlikely to come as a surprise, notes HSBC, considering “the aim of the IPCC is to provide a global consensus based on already published research.”

Nevertheless, the report continues, “we believe that the results will be important across five crunch issues:” The reality of global warming; human contribution to global warming; impacts of global warming on the climate system; extreme events, and; future warming and carbon budgets.

All things considered, HSBC believes the IPCC report could mark “a new phase in climate action” – a new phase in which an Abbott-led Australia looks set to distinguish itself “as an exception to a broader trend to increased commitment, notably in the G-2 (China and the USA).”

Last decade, says the report, “political, corporate and public support deepened on the back of the Stern report on the economics of climate change (2006) and then the IPCC’s Fourth Assessment Report in 2007. The number of new climate policies grew by 12% between 2007 and 2008 as nations’ governments prepared for the 2009 summit; since then, the number of new policies has waned. We believe that 2013 will mark the low point in new policies and expect that policies will grow once more into 2015 as governments get ready for the finalisation of the latest round of international negotiations to be held in Paris in December that year.”

Meanwhile, with Australia’s emissions reduction target now effectively capped at or below 5% (see graph below), Australia threatens to force cleantech innovation “to seek the greener pastures of other countries as their climate policies tighten,” warns HSBC, in a separate report released a week ago.

“We think these changes make investment in low carbon infrastructure much less appealing since there would be less regulatory support, fewer financial subsidies, and almost no nationally supported efforts to shift towards any carbon-efficient trajectory.”

Australia, says the report, “could be left behind as the chance to step onto a carbon-efficient trajectory is further delayed. …(And) carbon-intensive businesses may become more isolated as their export options diminish.”