Over the past few weeks, there has been debate about the Government’s Carbon Pollution Reduction Scheme (CPRS) and how, under the scheme, voluntary actions like putting solar panels on your roof will not reduce emissions. Penny Wong’s response to this criticism has been to argue that this is false because voluntary action allows the Government to set more ambitious targets in the following year.
Either Wong doesn’t understand her own scheme or she is deliberately lying.
Under the CPRS, the caps will be set for a minimum of five years. If the international commitment period is longer than five years, the caps might be extended to the end of this period. The scheme caps will be updated each year, to maintain “a minimum five-year certainty period”.
In addition to the certainty period, there will be “gateways”, which are essentially a range within which the cap will fall beyond the certainty period. The gateways will be set for each year from the end of the certainty period to the end of the gateway period, which the White Paper says will be up to ten years. The gateways will be reviewed every five years, meaning the length of the gateway period will fluctuate from year-to-year.
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The combined effect of these rules is to provide at least 10 to 15 years of caps — 5 years of set caps and 10 years of a cap range. Consequently, Wong is wrong to suggest the Government will be able to reduce the cap to account for voluntary action in the following year.
Once the scheme starts, the best she’ll be able to do is reduce the cap five years in advance, and even then her capacity to do so will be limited by the gateways. Further, if the Government chooses to extend the certainty period to the end of the international commitment period, she may be unable to change the cap at all until sometime around 2020.
Of course, all the talk about voluntary action is a storm in a teacup. Voluntary action was never going to play a significant part in reducing Australia’s emissions.
The real environmental hole in the White Paper is the proposed national target range for 2020 (5-15% below 2000 levels). This is light years away from where Australia must be if there is a desire to keep the atmospheric concentration of greenhouse gases below 550 parts per million.
The block on voluntary action (and any complementary measure) reducing emissions merely means there is no way to improve the environmental effectiveness of the scheme once it starts.
Some people have suggested that voluntary action will still survive under the CPRS because individuals will be able to club together to buy and surrender permits. In doing so, they will be able to make up for the Government’s weak target, or so the argument goes. This is true — voluntarily surrendering permits will reduce emissions. However, the extent of abatement through such voluntary action is likely to be tiny.
The operating revenue of Australia’s four largest conservation organisations is around $60 million per annum. Let’s make the wildly optimistic assumption that all of this money is directed to buying and retiring permits, which will cost around $25 each and will equate to one tonne of CO2-e. This would reduce emissions by 2.4 million tonnes, or less than 0.5% of Australia’s annual total. This is hardly the type of rescue package the CPRS needs.
The only way to revive the environmental credibility of the CPRS is for the Government to commit to stronger targets.