Every year the federal government sets out how it will spend its money via a budget. Should we have a carbon budget, too?

British climate adviser David Kennedy is in Australia talking about, among other things, the UK’s carbon budgets. These stretch out to 2027 and set out exactly what needs to be done to meet targets to reduce greenhouse gas emissions. The five-year budgets set a headline figure for emissions and then carve up the carbon pie between different sectors of the economy.

Australia doesn’t do carbon budgets. The government has promised to cut emissions by 80% by 2050; how that will happen is anyone’s guess.

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Kennedy, CEO of the UK’s Committee on Climate Change (an independent statutory body similar to our Climate Change Authority), told Crikey having a carbon budget “gets you focused on what you do across the economy over time”. The budget has been “transformative” in the UK, he says, with long lead-times giving investors confidence and certainty.

The UK is covered by the European Union’s emissions trading scheme so doesn’t have a national carbon price; the UK carbon budgets set out how much each sector should cut emissions by and how. The budgets push for nuclear power (one new plant to be built every 18 months from 2018), carbon capture and storage (CCS is a controversial technology that buries fossil fuel emissions) and wind power. They make recommendations on everything from heating and roof insulation to road pricing, electric cars and “regenerative braking” on trains. The CCC is also pushing for re-regulation of the electricity market, a sleeper topic in Australia.

Kennedy, an economist, says the UK is meeting its carbon budgets, which started in 2008, although that’s partly due to the recession. (A recession is the best way to reduce a country’s emissions if recent history is any guide; in the US, dwindling economic activity did what President Barack Obama never could and cut greenhouse pollution.)

The UK government writes some of each of the CCC’s budget into law — the Conservative-led administration of David Cameron did so for the most recent budget.

“There is a very strong consensus across all of the parties,” Kennedy said in relation to the carbon budgets. “They continue to agree with us, the government.” And there hasn’t been fierce push-back from industry to carbon policy in the UK, he says.

Australia’s Carbon Change Authority (under the watch of ex-Reserve Bank chief Bernie Fraser) could write carbon budgets, but it’s not yet clear if it will do so or what they would look like. Both major parties have pledged to reduce emissions by 5-25% by 2020 depending on what other countries do, but no number has been settled on by either party. Both parties tend to talk about the 5% cut, although some experts believe the actions taken by other countries would translate to a 10-15% cut by Australia. Early next year the authority is due to recommend emissions caps to the government (that is, the maximum amount to be emitted); these would be written into the carbon price.

Opposition Leader Tony Abbott has promised to dismantle the authority if he wins power, as well as dumping the carbon price. Among others, Kennedy met with former opposition leader Malcolm Turnbull, describing him as “a well-informed person; he seems to get it”.

Asked if a country needs an unelected climate advisory body, Kennedy told Crikey: “If you didn’t have us, what you would tend to find in this area is there’s people with very strong ideological beliefs and commercial interests who will try and cast doubt on climate science … It’s very helpful that we’re here to say ‘hang on, here’s the facts’.”

Kennedy says he’s surprised to find little appetite for CCS in Australia, which is heavily reliant on coal-fired electricity. The UK will soon announce sites for two CCS demonstration projects. Australia had a Kevin Rudd-led (and very well-funded) burst of enthusiasm for CCS, which has petered out due to concerns about high costs and possible leakage, and opposition from some environmentalists. Kennedy rejects the argument it’s too expensive because “nobody knows” — all new technology is expensive to start with.

CCS captures the emissions from coal or gas plants, liquefies them and buries them underground.

*The Power Index is counting down Australia’s top 10 carbon cutters — from Monday in Crikey, No. 4 to 1

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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