New carbon trade policy is an obstacle

Nearly five months after the global community failed to reach an agreement on climate change in Copenhagen, Denmark, last December, the Australian government has altered its climate change policy and postponed discussions on the emissions trading scheme (ETS) until 2013.

The Australian government’s about-turn on global warming has created uncertainty within the country’s energy industry and surprised a number of countries that had hoped Australia would provide global leadership on some aspects of the international climate change debate.

While campaigning for the ETS both at home and abroad, Australian Prime Minister, Kevin Rudd, repeatedly claimed that global warming was the greatest moral and economic challenge of our era and that no country could afford to postpone actions to deal with it.

Yet, he has done precisely that.

In Australia in the past two years, support or lack of support for the ETS has ruined the political careers of two opposition leaders in interesting ways.

The main opposition group, the Liberal Party of Australia, is socially and ideologically conservative.

The first to suffer was Dr. Brendan Nelson, now Australia’s ambassador to Belgium and the European Union, who lost his party’s leadership in September 2008 partly because he could not support the ETS.

His successor, Malcolm Turnbull, who had been the environment minister when John Howard was the Prime Minister, supported the Rudd government’s version of the ETS, but he lost his leadership of the party largely because conservatives and climate skeptics in his party thought he accepted the climate change science too readily.

The Liberal Party is now led by the ultra-conservative Tony Abbott, who took the reins in December 2009 after claiming that the scientific findings about global warming were “absolute crap”.

It is possible that Australia’s abandonment of the ETS has dashed the hopes of many, but such hopes were seriously misplaced because the ETS is a tax arrangement, and could not be relied upon as an effective tool for reducing carbon emissions.

The idea that countries can address the dangers of climate change through caps and trades with offsets is the road to nowhere.

The global community tried it with the Kyoto Protocol, but the global emissions actually accelerated.

The Australian ETS was designed to reward some of the biggest carbon polluters through compensation while taxing others, but as long as most corporations could pay their way, emissions were not going to be reduced.

The Copenhagen climate summit failed partly because several developed countries were keen to pursue offsets through trade so they could continue business as usual.

For example, as Australia was pursuing the ETS, it was at the same time encouraging the private sector to export more coal to China.