Australian business heads push for carbon tax | Connect Asia

Australian business heads push for carbon tax

Australian business heads push for carbon tax

Posted 26 October 2010, 10:57 AEDT

Gloom continues to hang over negotiations for a new and binding global agreement on cutting greenhouse gas emissions.

Talks last week between the climate envoys from Washington and Beijing reinforced the pessimism, by failing to achieve a breakthrough ahead of the next UN climate summit at Cancun, Mexico, late in November. Increasingly, however, it seems not to matter that there's no international deal as countries act on their own. A new Australian study says despite different formulations, countries are pledging a similar amount. The finding puts pressure on Australia to raise its emissions reduction ambitions just as Australian business steps up pressure for the government to adopt a carbon tax.

Presenter: Linda Mottram, Canberra correspondent

Nathan Fabian, chief executive, Investor Group on Climate Change; Dr Frank Jotzo, director, Centre for Climate Economics and Policy, Australian National University

MOTTRAM: Australia's Labor party was elected to office in late 2007 on a promise of action on climate change. But it failed to deliver during its first term. And after winning a second term, it's been tentative. But business hates uncertainty and Australian business figures have been increasingly vocal - right up to the BHP Billiton boss, Marius Kloppers, - in calling for action, including a carbon tax. In the latest development, the chief executives of nine of Australia's biggest investment firms have formed a panel to have their say with a recently established business round table formed by the Gillard government to advance climate change policy. The chief executive of the Investor Group on Climate Change, which serves as a base for the CEO panel, is Nathan Fabian.

FABIAN: What you're seeing is a reaction I guess to the lack of action by government, there's a sense of frustration and the most senior people in the investment industry are preparing to put their case, they're working together to put their case to Canberra.

MOTTRAM: Nathan Fabian says the CEOs can see the low carbon economy coming and they want clear rules now to make the transition. And that's regardless of whether there's a binding global agreement on reducing carbon emissions.

FABIAN: A binding agreement would have made it easier but it's pretty obvious to Australian investors that the rest of the world is moving. Some of our trading partners are moving well ahead of us in terms of reducing their emissions and investing in clean technology. And for these Australian investors it's ultimately a competitiveness question. Where will they put their money in Australia if it's not positioning for the economy of the future?

MOTTRAM: And environmental economist, Dr Frank Jotzo, says the continuing inability to reach a new international climate deal appears increasingly not to matter.

JOTZO: As long as countries actually put in place the kind of policies, the kind of measures, the kind of investments that do constrain their emissions growth, we don't really need an internationally ratified piece of paper that says so.

MOTTRAM: Dr Jotzo is director of the Australian National University's new Centre for Climate Economics and Policy. And he's found that at least where their pledges are concerned, the major carbon emitters - developed and developing - are set to take strong and similar levels of action to meet the challenge of climate change. In a new paper, he compares the different non binding pledges of the 13 largest carbon emitters, makes adjustments for their different ways of formulating those pledges, and concludes that the numbers on the table are broadly comparable.

JOTZO: If you look at decarbonisation of the economy, what we're seeing is that China is aspiring to essentially the same thing as Australia, the United States, the EU, and Japan are aspiring to. So, what we're seeing there is quite an amazing level of ambition in the main developing countries, and not just China, it's also countries such as Indonesia, Brazil, Korea, Mexico, South Africa, that if they follow through with them, [they] have really put some substantial pledges on the table.

MOTTRAM: Not that delivering on the pledges is necessarily easy. China, with its voracious energy appetite, has struggled with its targets to reduce emissions intensity in recent years. Frank Jotzo says it'll continue to be difficult, but says there's reason for optimism about China.

JOTZO: What's really clear is that the Chinese leadership seems committed to actually push ahead with their 2020 target and to put in place the necessary policy frameworks.

MOTTRAM: Frank Jotzo says there's been a big shift from the debate of past years that saw developing countries demanding that the developed countries go first on climate action.

JOTZO: We're really in a different paradigm now, where we're seeing substantial domestic action in many developing countries quite irrespective of the fact that there is no legally binding global agreement. That in turn of course puts the onus back on developed countries to really follow through.

MOTTRAM [TO JOTZO]: Now, you mentioned Australia a moment ago, Australia's of course promised five per cent cuts by 2020 unconditional, 15 to 25 if the world does better, should Australia now be upping that five per cent pledge formally, if you like?

JOTZO: What I argue is that what we see in the international sphere now, what we see in key developed and developing countries warrants the Australian government to go to a reduction such as 15 per cent relative to the year 2000.

MOTTRAM: So while Australian business is crying out for certainty in Australian climate change policy, Frank Jotzo's paper brings further pressure to bear for Canberra to reach for its more ambitious targets on emissions reduction, regardless of the poor prosects for a binding international climate deal.

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