The federal government has budgeted to spend around $5 million on its climate change roundtables with business and NGOs over the next 12 months, but at least it will be able to make savings on name tags. Most of invitees that will get together for their first meetings in Canberra on Friday are well known to each other.
But while the faces are familiar, they may struggle to recognise some of the rhetoric, with each of them invited to deliver three-minute thought bubbles on carbon pricing following presentations by Treasurer Wayne Swan and climate change minister Greg Combet.
In 2008, when similar roundtables were held, the split between those who would push for a carbon price, however modest, and those that would fight against it, was pretty even. The series of ad-hoc meetings hosted by Penny Wong were said to be feisty affairs, and quite entertaining if that’s your thing.
In the new business roundtable, the process has become more formalised. The let’s-not-have-a-carbon-price brigade have been weeded out and are now a small minority. The rest appear to accept the need for a carbon price but are split between those who would like to narrow and minimise the breadth and the depth of the scheme, and those pushing for a broad and ambitious mechanism.
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Over time — the group will likely meet a further three times in the first half of 2011, and monthly thereafter, as the legislation draws nearer — it should be a fascinating clash of egos and self-interest. “Like so many bulls in a paddock,” noted one observer.
The business and NGO roundtables fit some way down the flow chart the government has drawn up to reach its carbon pricing legislation — below the cross-party climate change committee, and the seven-person cabinet sub-committee that will eventually decide on the scheme presented to the party room and then to parliament.
But the role of business will be crucial in winning public and political acceptance for a carbon price. The context in which they are acting was highlighted on Wednesday by Jeff Harding, the former head of Pacific Hydro and now chairman of Ceramic Fuel Cells. He told his company’s AGM: “Contrary to what some politicians and media would have you believe, Australia is a laggard on this issue. International visitors often comment that Australia is one of the few places in the world where mankind’s impact on climate change is still being debated — a reflection of the extremely strong coal and resources lobby here.”
That debate, he noted, is evolving quickly as business understand the implications of not having a carbon price and the massive investments and transformation towards a low carbon economy that is being made by the country’s principal trading partners in Asia. Still, there is a suspicion that having agreed that a carbon price is inevitable, many are focused on limiting the scope of the scheme.
Which is all very well, but unless the science is wrong, and we are all obliged to prostrate ourselves in front of the Mineral Council’s Mitch Hooke and beg his forgiveness, then greater action and higher targets will be inevitable.
And it is critically important that Australia has the flexibility to respond to those demands and is not locked into a scheme that protects the interests of a chosen few, at the expense of others. “You need to have a framework that will stand the test of time — you need the moving parts — prices and targets to move with the science. You do yourself a disservice if you lock in fixed mechanisms,” said one business participant this week.
Business played a critical role in the recent mid-term elections in the US; particularly in California, where the clean energy lobby fought off fossil fuel attempts to stymie the state’s climate change bill. The result is that California — the world’s eighth-largest economy — will have a cap-and-trade scheme by 2012. Utilities and traders are wasting little time; the first futures contracts were exchanged last week at more than $US11.50 a tonne/Co2e. China, Korea and Japan all appear set to have trading schemes of their own by 2015 — their business groups demand it because they are looking at their corporate profiles in 2020 and beyond, not just the approaching quarter.
But in Australia, short-termism is rearing its ugly head again — impacting not just the carbon debate but the complimentary measures that are designed to ensure that Australia has a credible alternative to its current reliance on coal-based power.
A shift of much of that capacity to gas seems inevitable. But then what? As the International Energy Agency recognised in its annual World Energy Outlook, gas will work well as a transitional fuel, but it doesn’t address the long-term issue of emissions-free energy. That leaves Australia with three options: the two that are freely discussed — fossil fuels with carbon capture and baseload (or its equivalent) in renewables — and the one that politicians will not discuss — nuclear.
The government clearly has a preference for the first two options but its policy settings suggest great faith in carbon capture. It is a sad fact that, after three years, Labor is unable to point to a single renewable energy project that has been completed as a result of federal policies — the price of renewable energy certificates has slumped back down towards $32/mWh and there is simply no market signal for emerging renewable technologies to push forward.
If this continues, it would want to hope that CCS can deliver, or it will bequeath an even trickier energy dilemma to its successors.
*This article was originally published on Climate Spectator.