We can have the most well-designed, democratic, efficient, no-loser everyone-gets-a-pony policies in place -- if the climate goes to pot, we’ve lost, writes Martin C. Jones, an environmental economist and researcher.
With the details of the Multi-Party Climate Change Committee’s (MPCCC) carbon price proposal almost fully fleshed out, it is worth reminding ourselves of the broader context in which this policy should be assessed.
The starting point -- and simultaneously the final metric of assessment -- is the state of the Earth’s climate. We can have the most well-designed, democratic, efficient, no-loser everyone-gets-a-pony policies in place -- if the climate goes to pot, we’ve lost.
The ultimate goal, according to the UN Framework Convention on Climate Change (UNFCCC
), is to "stabilise greenhouse gas (GHG) concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system", which was further specified in the Copenhagen Accord
to recognise "the scientific view that the increase in global temperature should be below 2 degrees" from pre-industrial levels. The most commonly accepted atmospheric concentration of greenhouse gasses commensurate with a 2° rise in temperatures is roughly 450 parts per million
(ppm) of carbon-dioxide equivalent gasses (CO2-e).
This goal is by no means unanimous within the United Nations: countries more vulnerable to climate change
(typically small island states) have called for the target to be only 1.5° of warming (roughly 350 ppm CO2-e). However, the present concentration
of CO2-e is 394 ppm, and at the current rate of abatement the world appears more likely to hit 4° of warming
, if not higher.
Regardless, the ultimate goal is to stabilise the atmospheric concentration of GHGs. In principle, this is very simple: for the level of CO2-e in the atmosphere to remain constant, the inflow should equal the outflow. (The climate system is more complicated than this, involving time lags and higher-order effects, but for our purposes the principle suffices.) The "outflow", in this case, is the amount of CO2-e that nature absorbs or that breaks down over time (and, possibly, the CO2-e humans are able to remove), while the "inflow" is the sum of naturally-released CO2-e and human emissions. (Skeptical Science
has a good overview, as does Wikipedia
The global carbon cycle is such that nature can safely absorb a certain amount of human-produced CO2-e, and it’s only human emissions in excess of this level that would cause atmospheric concentrations to rise. Stabilising concentrations thus means reducing worldwide human emissions to this "safe" level, and it would seem equitable that, eventually, each person has the right to emit an equal share of this level.
So what should the global annual per capita allowance of CO2-e be? Australia’s Climate Commission recently estimated
that "humanity can emit not more than 1 trillion tonnes of CO2 between 2000 and 2050 to have a probability of about 75% of limiting temperature rise to 2° or less [by 2100]". At the current global population of 6.8 billion people, that’s slightly less than three tonnes of CO2-e per person, per year -- remembering that this is only to slow
the rise in CO2-e concentration to 450 ppm by 2050.
To stop CO2-e concentrations rising altogether, the 2011 Garnaut Review
estimated that global per capita emissions would need to fall to less than two tonnes of CO2-e per year (even less if we want to reduce concentrations). Australia, as we well know, is the developed country furthest away from this limit: our 2010 emissions
were roughly 25 tCO2-e per capita (excluding land use, land use change, and forestry (LULUCF)).
No one is pretending that a domestic carbon price of $20-$30 per tonne will reduce Australian emissions from 25 tCO2-e pa to anywhere near two or three tonnes per year. Even the Greens’ target of reducing Australia’s emissions by 40% on 1990 levels, which Bob Brown
recently described as being visible in the current MPCCC proposal only with "a pair of binoculars", would still result in roughly 12 tCO2-e emissions pa at current population levels and can only be seen as an interim target.
Just as, if not more important than the starting price of any Australian scheme are therefore the structures and institutions the scheme establishes to enable future transformation of our economy: for example, whether future (interim) targets are set by an independent body or the government of the day; or the manner in which the carbon pricing scheme interacts with other climate policies (a point also raised by Richard Denniss in Crikey
A balance must be struck between the need to decarbonise the Australian economy and the transitional difficulties that this will bring. Government policy, with the MPCCC’s scheme as its centrepiece, will -- and should -- be scrutinised on how disruptive the transition will be. But this disruption must be assessed in the long-term context of decreasing our CO2-e production, or else it’s merely politics, not policy.
*Martin C. Jones is an environmental economist and researcher at the Centre for Energy and Environmental Markets (CEEM), University of New South Wales. These are his personal views.