Cap-and-fade for Australia's conservatives

The defeat of Australia’s climate plan is not bad news for cap-and-trade 12

It may be tempting to view the Australian Senate’s defeat Wednesday of climate change legislation as a portent of things to come as the U.S. Senate prepares to take up a cap-and-trade bill.

Coal mine in Queensland AustraliaQueensland is Australia’s coal country. Its mines power the country and feed China’s demand for energy.Courtesy Wikimedia CommonsBut the rejection of the Australian legislation reflects the peculiarities of Aussie politics rather than the viability of cap-and-trade. More importantly, it could trigger what might be the world’s first national election fought over climate change—an election that could give the ruling center-left Australian Labor Party a renewed mandate and perhaps the cojones to strengthen what is widely viewed as a weak emissions-trading scheme packed with perks for Big Coal and other carbon polluters.

But first, a short primer on politics Down Under.

After a decade in the wilderness, Labor returned to power in 2007 under the leadership of Kevin Rudd, a technocrat from Queensland who falls on the charisma scale somewhere between Michael Dukakis and John Kerry. Ousted Prime Minister John Howard, a once-popular politician despite having the demeanor of a constipated koala, lost his own seat in Parliament and the Liberals (as the conservatives are called) replaced him as party leader with Malcolm Turnbull.

Rudd promptly signed the Kyoto Accord (something Howard refused to do) and Turnbull, a former Sydney merchant banker who served as environment minister in the last Howard government, reversed the Liberals’ opposition to cap-and-trade. But here’s the catch: The Liberals, whose power base is among urban conservatives, depend on an alliance with the rural National Party (a partnership called, what else, the Coalition), whose stronghold is Queensland’s coal-and-cattle country. The two parties vote together as a block.

The Nationals resolutely oppose any climate change legislation, which threatens to rend the Coalition asunder. (Think Obama and the Blue Dogs.)

The Labor plan already gives away carbon allowances to the industries that would be the most hard-hit by the legislation, which would only require a 5 percent reduction in greenhouse-gas emissions below 2000 levels by 2020. Turnbull wants to cut industry even more slack, and thus the Liberals’ vote Wednesday (Thursday in Australia) against Labor’s cap-and-trade bill. The Greens also voted against the legislation, albeit because they deemed it a giveaway to corporate polluters.

(Under Australia’s hybrid Westminster-American system, the majority party in the House of Representatives controls the government and legislation is passed on strict party-line votes. But Labor does not have a majority in the Senate and needs votes from the Coalition or minor parties like the Greens to pass bills.)

Labor looks set to reintroduce the climate change legislation within three months. If the Coalition scuttles the bill again in the Senate, Rudd can ask that Parliament be dissolved and early elections called. Australian commentators expect Turnbull to try to negotiate a further watered-down bill rather than face the voters. But if Rudd is feeling particularly confident, he could go to the polls and seek a renewed mandate—and control of the Senate—to enact an even stronger cap-and-trade system.

But don’t hold your breath, mate. If coal is viewed in some quarters of the United States as an industrial atavism, it remains king in Australia. Coal-fired power plants supply about 86 percent of the country’s electricity, and mining the black stuff for export is a huge domestic industry. It’s one reason why Australia’s 20 million people have the highest per capita carbon emissions in the world.

Coal’s throne sits in Queensland, the “Deep North” of Australia. I’ve spent quite a bit of time in central Queensland’s coal belt in recent years, and though the global recession has dampened things a bit, the coal economy continues to boom. Mountains of coal are piled alongside railroad tracks and coal trains seem to run 24/7 between central Queensland strip mines and the coast, where ships are stacked offshore waiting to transport Australia’s black gold to China.

In sun-blasted Rockhampton—“the cattle capital of Australia”—miners pulling in six-figure salaries tool around in new Land Cruisers and pony up half a million dollars for suburban tract homes that might have been worth a tenth the price not too many years ago. On my way into town from the airport recently, the taxi driver lamented that she and her husband passed up the opportunity to buy for $10,000 a house in one of the company mining towns where they used to work; today those homes sell for $300,000.  (When I visited a cattle station a couple hundred kilometers out of Rockhampton, a mining company was present to do exploratory drilling for gold under the property. “If they find coal, that would be even better,” the ranch owner told me.)

Australia’s commodity-dependent economy will limit how far the Rudd government will push on climate change. So far, his environmental policies have generally been a disappointment to enviros.

Exhibit A has been the spectacle of Environment Minister Peter Garrett—the ardent environmentalist and former frontman for agit-prop rockers Midnight Oil—biting his tongue and approving environmentally destructive projects and policies ordered up by the party. As I was driving through Queensland last month, Garrett—a longtime anti-nuclear activist who ran for Parliament in 1984 on the Nuclear Disarmament Party ticket—appeared on the radio to announce the approval of yet another uranium mine for Australia.

There is one particularly apt lesson to be learned as Australia’s grapples with reforming its economy for a carbon-constrained world. After watching politicians spend a decade debating what, if anything, to do about climate change and renewable energy, some of Australia’s green-tech entrepreneurs have decamped for greener pastures, mainly Silicon Valley, where they’ve been welcomed by venture capitalists eager to fund their startups.

On one flight alone from Sydney to San Francisco, you could have found David Mills, co-founder of solar power plant developer Ausra, and Danny Kennedy, a veteran Greenpeace activist heading to Berkeley to start Sungevity, an innovative solar company. (Disclosure: Kennedy’s and my kids attend the same elementary school.)

While the Obama administration has moved to energize green technology with government funds and loans, some of the best and brightest here may start looking further afield unless Washington adopts legislation that will create certainty and a dynamic market for renewable energy. In other words, to countries like China.

Todd Woody covers green technology and the environment from Berkeley, where he’s a contributing editor at Fortune Magazine and writes his Green Wombat blog. He’s one of the few people on the planet who has seen the rare northern hairy-nosed wombat in the wild.

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  1. kuke's avatar

    kuke Posted 9:22 pm
    12 Aug 2009

    Great post - I live in Queensland and we're so addicted to coal it ain't funny.The crazy thing is that coal will kill our Great Barrier Reef and all the tourism dollars that are worth far more than this poisonous black rock.

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  2. Delay And Deny's avatar

    Delay And Deny Posted 10:33 pm
    12 Aug 2009

    Here, here!

    Well spoken Bruce!

    Australians are leaders in the fight against charlatans.

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  3. Maxi's avatar

    Maxi Posted 11:24 pm
    12 Aug 2009

    For Australia to put in apt legislation towards a low carbon economy we probably need one of our major cities to run out of water or the great barrier reef to collaspe first, prompting a massive public campaign.  Both of the major parties pander to big coal/mining interests first and foremost before public sentiment which supports measures like an ETS but only as long as it does not adversely affect them too much. I hope i'm wrong but its hard to see it happening any other way. Australian culture is very much geared towards me me me, i i i. 

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  4. dbaker Posted 10:13 am
    13 Aug 2009

    International Criminal CourtInformation and Evidence Unit
    Office of the Prosecutor
    Post Office Box 19519
    2500 CM The Hague
    The Netherlands(JavaScript must be enabled to view this email address)

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  5. undyau Posted 4:40 pm
    13 Aug 2009

    Its a bit of a stretch to describe the proposed Australian scheme as a cap-and-trade measure - the only cap that has been defined at the moment is the $10/tonne cap on the price of permits.What could have been a good scheme, a proving ground for other countries has turned into a scramble by the polluters for free permits (value $billions). With its very low targets (a reduction of 5% on 2000 emissions) and the ability of polluters to buy in credits from overseas, its possible that the scheme could see NO REDUCTION in Australian emissions.The most successful scheme for avoiding emissions in Australia has been the GreenPower scheme whereby homeowners, businesses and local authorities can buy certified GreenPower by paying extra for their electricity. Each kWh of GreenPower is currently certified to be clean energy produced above and beyond the mandatory targets that the power industry has. This scheme will be eviscerated by the proposed legislation which is going to include any GreenPower as part of the targets that the power generators have to make - so every kWh of GreenPower I buy is a kWh less that the power company has to generate.The government seems to be having two dialogs about this legislation - one with the resource companies, who donate vast amounts of money their way and one with the even-more-coal-faced Liberal/Nats party who are electorally irrelevant. They aren't engaging with the public or the Green party (who could pass the legislation if it was amended to be effective).   

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  6. Jim Devine Posted 9:09 pm
    13 Aug 2009

    While I am the first to applaud writings on Australia and Queensland in particular, readers might wish to compare Mr Woody's post with some facts:The Australian Labor Party (ALP) holds the majority of 'coal and cattle' seats in the Australian Parliament, with the 2007 additions in Queensland being Flynn and Dawson in the north and Blair in the south.  The ALP also holds all the federal seats in the other major export coal producing region, the Hunter Valley of New South Wales.
    While an important and growing market for Queensland coal - primarily metallurgical coals used in steelmaking - China is a secondary destination to Japan, Korea, Taiwan and Europe. Currently, Holland imports more coal from Queensland than China, which using domestic reserves (est. 70 billion tonnes) is the world's largest producer and consumer.
    The 'only 5 per cent' onconditional GHG reduction target proposed by the Australian Government is equivalent to the current annual emissions from the state of Queensland.
    Based on current information, including China's plans to build another 1,000 coal-fired power stations over the coming decade, Australia's contribution to GHG reduction will have no impact whatsoever on the highly speculative fate of the Great Barrier Reef.With around 850 billion tonnes readily available on most continents, coal is unlikely to be abandoned as a primary energy source, particularly in developing countries such as China and India whose reserves are ranked No. 3 & 4 in the world behind the United States and Russia.Developed coal exporters such as Australia, the USA and Canada have an obligation (and an enormous commercial incentive) to ensure that coal's environmental performance in electricity production is vastly improved.In Australia, ongoing coal industry funding of low-emission electricity technology commercialisation has been in place since 2006.  For more information visit: http://www.newgencoal.com.auJim Devine, Queensland Resources Council, Brisbane.

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    1. Maxi's avatar

      Maxi Posted 2:07 am
      14 Aug 2009

       true Jim - there is little to no difference between labour and liberal in their allegence to the coal indusrty -its quite amazing - short-term gain for the few at the expense of the many is true to form for organisations such as the Queenslands resources council. such is the heroin dealers lament.    

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  7. kuke's avatar

    kuke Posted 9:38 pm
    13 Aug 2009

    Undyau: The "Green Power" scheme is a joke: http://www.abc.net.au/news/stories/2009/08/05/2646205.htm Oh, and ignore Jim, he's just "coalpromized". Coal is dying, let's suffocate it with a pillow before it costs us too much to keep it on life-support.   

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  8. Jim Devine Posted 10:20 pm
    13 Aug 2009

    I fail to see the connection between my comments and the marketing by Australian electricity retailers of 'green power' through premium prices paid for (mostly) wind and hydro.Suggest however that Undyau alert the Chinese Government to the folly of their ways ASAP.

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    1. undyau Posted 11:03 pm
      13 Aug 2009

      Kuke The link you supplied refers to a story about GreenPower that will reflect the situation if the proposed legislation is passed, not the current state. Its not very well written, because a lot of the quotes are taken out of context, but skip to the last three paragraphs. Its the same point that I'm making.There is an old story on the SMH by Jeff Angel (quoted out of context in the ABC story) which makes things clearer:http://www.smh.com.au/environment/earth-hour/its-not-easy--being-green-20090324-9848.html Jim,Your comment was posted about five hours after mine, so any link between my comments and yours is in your imagination. I'm also not sure why you are referring me to the Chinese government - perhaps you are confusing me with a different poster. In defence of the Chinese government, their one-child policy is probably the single most effective policy in reducing future emissions enacted anywhere in the world.I'm suprised that you elect to draw attention to the coal industry -
      the meagre reduction in emissions sought by this legislation are more
      than outweighed by the planned increase in coal exports from Asutralia.
      Whilst the public has already turned on the coal export industry, I suspect
      that you will become increasingly visible as an originator of emissions.Regarding clean coal - the coal industry has repeatedly shown down here in NSW that it can't even mine under a water-catchment without the water emptying from the creek systems and into the mines. The idea that it has the competence to transport and sequester massive quantities of CO2 for hundreds of years underground without leaks is laughable. I haven't me a single geologist who believes that is is possible on even 10% of the scale required (I'm married to a geologist, so I meet a fair number). Keep taking the clean coal handouts while you can, your days are clearly numbered and our day in the sun is coming.  

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  9. Rick V Posted 8:12 am
    14 Aug 2009

    It's a sad fact that even if the Greens  and independent Nick Xenophon had voted for the bill, it would have still been defeated in the Senate by one vote, namely Family First senator Steve Fielding, with his opinion that global warming is not the result of human activities, even though the overwhelming evidence proves that it is.

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  10. Jim Devine Posted 12:16 am
    17 Aug 2009

    UndyaApologies for the mix-up, and speaking of same:The Australian black coal industry does not own nor does it propose operating power stations. The majority of coal-fired power stations in NSW and Qld are owned by taxpayers.The 'handouts' largely still 'proposed' by state and federal governments are to protect publicly-owned generation investments worth around $45 billion. The Australian black coal industry is committing $1 billion to assist R&D into the commercialisation of CCS in Australia.Suggest you/spouse contact Dr Peter Cook at the CRC for CO2 for further progress on CCS.A pilot project in the Otway Basin (Victoria) has successfully stored 60,000 tonnes of CO2 to date, complementing the 35 million tonnes already stored globally by the petroleum industry over the past decade.SincerelyJim Devine 

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