Jan 27, 2015 - 1:00pm
This article first appeared in
The Sydney Morning Herald
on 27 January 2015.
CEO, The Climate Institute
Those who hoped the 2013 election would put carbon and climate issues on the backburner would have been disappointed. This year will only get hotter.
The recent confirmation from NASA and others that 2014 was the warmest year on record was just the final blast from a year that started with the highest land temperatures across the southern hemisphere, and more recently saw Australia undergo its hottest spring. Today’s CSIRO/BOM report illustrates how climate change is and will be slugging the Australian economy.
In 2014 Climate politics sizzled. Al Gore’s mid-year cameo with Clive Palmer was overshadowed by historic developments in domestic and international politics.
Australia’s carbon laws were axed after two solid years of performance, but the Senate protected the Clean Energy Finance Corporation and the Climate Change Authority (CCA). The Senate also ensured emission trading will stay in view, with the government agreeing the CCA review international action. And the renewable energy target has proved much hotter to touch than many in government and Big Carbon industries expected.
Internationally, conservative economic institutions like the International Monetary Fund, the World Bank and the OECD pulled political and business leaders into the debate. Each agency made clear the economic imperatives of avoiding two or more degrees warming, the internationally agreed goal. They pointed out that this requires fully decarbonising the global economy, not just shaving a few percentage points off our emissions.
Ban Ki Moon’s UN climate summit drew heads of state and mobilised a march of hundreds of thousands through the streets of New York. Ahead of the G20, the US and China stunned many by announcing a climate partnership, while both countries ramped up their domestic efforts.
Both here and abroad, institutional investors began to come out of the shadows to address growing concerns about their exposure to carbon assets which would become unburnable and commercially-stranded for the world to avoid two degrees warming. At the New York Summit investors managing over US$ 24 trillion called for carbon pricing and the end of fossil fuel subsidies.
Divestment announcements from the likes of the family of oil baron Rockefeller put further pressure on carbon-dependent industries, while other innovative strategies like active ownership and low carbon investments are entering the mainstream.
With several more key milestones in 2015, there will be even fewer places to hide for the
Government and other political and business groups.
This year will likely conclude with a new international agreement on post-2020 emissions reduction. But pressure builds long before the December summit – news of action will start breaking as early as March, when the US, China and Europe will put forth their pollution reduction targets. Australia and others will need to come forward with their own contributions by July.
All nations’ commitments will be scrutinised against the goal of avoiding two degrees warming. . In this light, Australia’s minimum 5 per cent reduction target by 2020 below 2000 levels melts into insignificance against the much bigger reductions needed over coming decades. It already pales against the US’ 2025 target, which equals around a 30 per cent reduction from that base year.
The post-2020 target will be a key test of Australia’s commitment on climate action, and its approach to global citizenship and fairness.
Domestically, key moments are also on the horizon.
The political risks of drawing out uncertainty over the very popular Renewable Energy Target are growing. Plummeting renewables investment is ever more visible and exporting high carbon industries want their exemptions maximised before a March deadline.
After half a decade as a rhetorical weapon, the Government’s Emission Reduction Fund will finally come into full glare. With the first reverse auction expected in March, taxpayers will soon find out how much they and a stressed Budget are paying companies to cut emissions.
We will also see details on the Government’s “safeguard mechanisms” or potential controls to be set on the country’s 100 biggest polluters. The safeguards are as yet undefined, but will need to be determined by October and will start on 1 July 2016.
Overshadowing this process is the rebound in carbon pollution from the electricity sector following the removal of the carbon laws.
These will all be big tests for the Government but also for the ALP, which has termed this its year of “Big Ideas”. It has continued to support emissions trading and the renewable energy legislation, but a small target strategy will leave it exposed.
These are the known highlights on the 2015 calendar, but surprises from the relentlessly warming political and natural world will undoubtedly provide more. It’s getting hotter with fewer places to hide.
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.