Oct 12, 2012 - 11:00am
This article first appeared in Climate Spectator on 12 October 2012.
By John Connor, CEO of The Climate Institute
It’s been a key line for those seeking to delay or deny the need for changes to Australia’s high carbon status quo.
As highlighted by a report from The Climate Institute, launched yesterday by independent MP Tony Windsor, this argument is increasingly difficult, if not impossible, to make given China’s recent policies and performance.
The report, Carbon Markets and Climate Policy in China, details recent performance and proposed policies including the seven pilot emissions trading schemes due to start in 2013-14.
Though covering a fraction of China’s total emissions, these pilots are expected to cover 700 million tonnes of CO2e by 2014. To put this in perspective, it’s nearly twice the 382 million tonnes covered by Australia’s scheme, much larger than the 165 million tonnes of California’s, but behind the 2.1 billion tonnes of Europe’s.
This means that China’s ambitious pilot schemes – which are expected to lead to a nationwide system around 2016 – will make up the world’s second largest emission trading scheme. And the action doesn’t stop there, with supporting renewable energy policies and potential additional carbon taxes.
The report’s authors are from Climate Bridge, a multi-national project developer with years of experience in emission reduction projects in China. They point to the importance of the 11th Five Year Plan that just concluded and the transformative role of the Kyoto Protocol’s often maligned Clean Development Mechanism as key stepping stones.
Under the last Five Year Plan, China very nearly achieved its goal of a remarkable 20 per cent improvement in energy intensity and, from a virtual standing start, also produced a boom in clean energy production. It is now among the world’s leaders in installed capacity and export, with export revenue from China’s solar panels now matching that of its shoes.
While there is legitimate scope for criticism of some of the quality and benefit of early projects under the CDM, it has opened the door to a transition to carbon markets. The economic benefits of the projects did not go unnoticed and combined with stronger accountability requirements, led to building of key development, auditing and management skills and institutions as well as boosting domestic capacity and international engagement.
Where to from here?
The series of pilot emissions trading schemes, and their systems of limits, are particularly important if China is to reduce its absolute carbon emissions. At the moment those continue to grow and now top that of other nations.
The schemes are at different stages of development and intentionally take differing approaches. Depending on their design, individual pilot schemes will cover a range of industries including electricity, cement, iron and steel, chemicals and large public buildings (see Pilot Scheme Overview, p.12 of the Carbon Markets and Climate Policy in China Report
China’s emerging schemes can dovetail with other global schemes as a stepping stone towards a global climate change agreement by 2015.
It is important to understand that China’s actions are driven by self interest, not only regarding concern for climate impacts, but for strengthening energy security, developing a low carbon economy with export opportunities and showing international leadership.
This story is mirrored worldwide. Countries have chosen different paths, targeting different industries, depending on their economic makeup and what they perceive as an opportunity for gaining a competitive edge in an increasingly global low carbon economy.
Action at national levels is significant if yet still insufficient to deal with the rising climate challenge. Tony Windsor also launched The Climate Institute’s new interactive map of global climate action which will be continually updated. Just to prove the point of ongoing changes, Norway yesterday doubled its carbon tax on oil and gas.
The action in China and globally belies the myth that Australia is acting alone. If we are fair dinkum about doing our fair share, then Australia must ready itself for stronger emissions reductions than the 5 per cent 2020 target that is based on a world of inaction and is not enough to help avoid the risks of the growing climate challenge.
Australian business and political leaders should recognise that the world is on the move and that our high carbon economy and highest per capita carbon pollution levels is no advantage.
John Connor is CEO of The Climate Institute. Whilst qualified as a lawyer, John has spent over twenty years working in a variety of policy and advocacy roles with organisations including World Vision, Make Poverty History, the Australian Conservation Foundation and the NSW Nature Conservation Council. Since joining The Climate Institute in 2007 John has been a leading analyst and commentator on the rollercoaster that has been Australia’s domestic and international carbon policy and overseen the Institute’s additional focus on institutional investors and climate risk. John has also worked on numerous government and business advisory panels.