Ch 6: The Political Economy of Greenhouse Gas Mitigation in Australia

6.1 Introduction

An official act of the City of Copenhagen for the two week duration of the 15th Conference of Parties to the United Nations Framework Convention on Climate Change (COP15) in December 2009 was to the rename the city ‘Hopenhagen’. During this period, over 190 nations, including one of the largest ever gatherings of national leaders, focused on the Danish capital to negotiate a successor agreement to the 1997 Kyoto Protocol.

Under ‘Kyoto’ developed nations had committed to take the first steps to avert ‘dangerous climate change’ by limiting their anthropogenic greenhouse gas emissions to 5.2 per cent of 1990 levels on average over the period 2008-2012. It also established the Clean Development Mechanism to fund carbon mitigation in developing nations, which were not required to adopt ‘binding targets’. However, despite becoming a powerful international symbol of scientific and political cooperation on climate change, emissions under Kyoto in developed nations have continued to rise much along a ‘business-as-usual’ path (Barrett, 2009:62). In addition, the environmental integrity of its ‘flexibility mechanisms’ which allow these unmet targets to be covered by reductions in other nations have been called into question (Brohé et al., 2009: 94, 236, 271).

A key challenge therefore in the newly named city of Hopenhagen was the need to move beyond symbolic gestures and agree a treaty with ‘meaningful’ targets and timetables which provided a funding mechanism for the low-carbon economic development of poorer countries. However, the outcomes of the meeting were left ambiguous as the details for a final post-Kyoto accord were deferred to be agreed during 2010. Two factors behind this were the need of the United States to pass climate and energy legislation before making ‘legal’ as opposed to purely ‘political’ commitments and the intransigence of the Chinese negotiators to agree to outside authentication of their emissions data. These two issues are symptoms of the main argument of our paper: how the Kyoto negotiations, emissions trading schemes and carbon targets have created a veil behind which inaction on climate change can be hidden. Seen through this lens, the COP15 result reflects the difficulty in reconciling the symbolism of past agreements and institutional arrangements with the reality of environmental outcomes and renewed drive for effective policies.

That climate change is a global issue of great importance is now widely acknowledged (Stern, 2007). The award of the 2007 Nobel Peace Prize to the Intergovernmental Panel on Climate Change (IPCC) and to Al Gore perhaps demonstrates this best. The Third Assessment Report of the IPCC (2001) firmly established climate change as a political issue on the global agenda. The Fourth Assessment Report, released in November 2007 (IPCC, 2007: 3), suggested it was ‘very likely’ that human activities have contributed significantly to the observed temperature increase in the recent half century (i.e. an assessed probability in the interval 90-99%). Lord Nicholas Stern has highlighted (in Brohé et al., 2009) that should emissions continue on their current trajectory to 750 parts per million CO2 equivalent in the atmosphere by 2100, there would be a 50 per cent chance that average global temperatures will rise by 5° Celsius.

The last time the world was 5°C warmer 30 million years ago, forests covered the planet from pole to pole and sea levels were around 50 metres higher relative to today. The implications of such pressure on the world’s physical geography over the next 100 years on geopolitical stability are severe, with one of the first likely climate catastrophes being a sudden melting of the Greenland ice cap, with the result that sea levels would rise between 4 and 8 metres. With most of the world’s cities, even entire countries, under threat of inundation it is not surprising that nation-states have signed up to international targets and timetables to reduce emissions under the 1997 Kyoto Protocol. What is surprising, given the scale and scope of potential consequences, is the degree to which emissions seem to continue to rise and the persistence of barriers to imposing new legislation to curb them.

This paper investigates the way the Kyoto process has framed the politics and policies of greenhouse gas mitigation in Australia. Kyoto has exhorted a powerful international norm on political discourse, but it also seems to have created a framework that has not necessarily encouraged domestic emissions cuts. We have termed factors behind this observation the ‘Veil of Kyoto’. This is not to say that targets and timetables are damaging per se, or are not important to policy implementation at the nation-state level. Indeed, such aspirational goals (especially if viewed as credible) are vital to capture the imagination of the nations, individuals and entrepreneurs that will drive the low-carbon transformation of society. Rather, our argument is that such Kyoto-style agreements must not be seen as ends in themselves and focus must stay on actual emission trends and measures to improve environmental performance at the level of nation-state.

Much recent work on climate change in human geography has focused on its boundarymaking (Bakker, 1999; Shmueli, 1999), cultural (Dalby, 1996; Kartin, 2000; Feitelson, 2002; Dalby, 2003; Boykoff, 2007, 2008), and military (Toset, Gleditsch et al., 2000; Jasparro and Taylor, 2008) dimensions and the spatiality of carbon governance (While, et al. 2009). A special issue of Political Geography was devoted to the theme of climate change and conflict (Nordås and Gleditsch, 2007). Global environmental negotiations have also attracted the attention of political geographers, providing an important laboratory for understanding both the social construction of abstract issues (Dalby 1996), as well as the possibilities and limits of national action (Taylor 1999) and global structures of governance, especially the United Nations (Caflisch 1996; Dalby 1996; Momtaz 1996).

Somewhat paradoxically for a sub-discipline traditionally concerned with nation-state actors, the role of the state in climate change has been strangely underplayed on the political geography (and political ecology, its sub-disciplinary bed-fellow where the environment is concerned) research agenda. There are, of course, notable exceptions to this in existing literature. They include: Bailey and Rupp’s (2005) and Bailey’s (2007a) comparative studies of climate policy in the UK and Germany; Kerr’s (2007) work on the efficacy of national climate programmes; and Bailey’s (2007b) investigation into the ‘scalar politics of EU emissions trading’. However, few studies have explored the multiple framings of climate change (particularly from a risk perspective), and fewer still have unpacked what ‘national interest’ actually means and how it is played out in the climate change context.

Outside of political geography, there has been considerable analysis of Australia’s self interest as a global player on the Kyoto stage (for example, Hamilton 2001; Lowe 2004; Macdonald 2005), some analysis of its poorly targeted, ineffective abatement policies (Pollard 2003; ANAO 2004; Lyster 2004), and an exploration of non-ratification and domestic climate policies (Crowley 2007).

To set our work apart from existing literature, we instead focus on both the political geography and the structural situatedness of climate change in Australia, making an assessment of nation-state policy the cornerstone of our argument. In an editorial in Political Geography, Paul Robbins (2003) called for the space to be created within political geography for “an everyday political ecology of the state” (as well as “an ethnographic exploration of institutions in nature”, in political ecology) as “the analytical and practical benefits of such a convergence are too attractive for critical scholarship to ignore” (pg. 644). By investigating the influence of ‘Kyoto’ on the politics and policy of climate change at the nation-state level in Australia, our work attempts to go some way towards meeting this geographical exigency.

This paper is organised as follows. In the next section we describe the politics and structure of climate change discourse in Australia and argue how the veil of Kyoto has masked actual environmental performance and shaped Australia’s centre-piece environmental legislation, the Carbon Pollution Reduction Scheme (CPRS). Significantly, in August and December 2009, the CPRS legislation was rejected by the Australian senate creating the potential for an early election based around the climate change issue, possibly sometime early in 2010.

In conclusion we summarise the key contributors to the veil of Kyoto in Australia and draw out what our analysis might mean in the wider discourse on climate change and directions for further research elsewhere. If treated sceptically, the Copenhagen outcomes could be interpreted to reinforce our key point: that ‘political’ commitments seem to be eclipsing ‘legal’ frameworks while emissions continue to rise. However, more optimistically, the COP15 result could be seen as exposing the inherent difficulties of a Kyoto-style process driven through obtaining agreement among over 190 states through the international UN system. This can be contrasted with a more bottom-up approach of coordination through the UN system which reflects the legislative action taken by the most significant nationstates. This focus on nation-state legislation is what we argue must form the foundation of any meaningful international agreement on climate change.

We interpret the politics of greenhouse gas mitigation in Australia in terms that Beck (1995, 2005) describes as a risk society ill prepared to deal with contemporary hazards and as a culturally embedded symbol of climate change in the world’s driest inhabited continent. These hazards are translated to the public through media coverage and political debate around a number of high profile events. These events, beginning with the ‘Stern Review’ (released on 30 October 2006), came together to create a sense of scientific consensus on human-induced climate change and, as a result, Australian public opinion polls began shifting in favour of ‘taking action’ against global warming. This combination of factors was also important in shaping Japan’s decision to ratify the Kyoto Protocol: Tiberghien and Schreus (2007: 71) argue that “… media discourse, public opinion, and bureaucratic actions, helped to build the Kyoto Protocol into a symbol of Japan’s new policy identity … embedded symbolism [emphasis added] constrained the ability of anti-Kyoto forces to get their concerns onto the political agenda … The rallying effect of Kyoto essentially trumped the decision in favour of ratification”.

In Australia, climate change became an election issue in 2007, although its relative significance to other issues is beyond our scope here. Suffice to say that there were a number of issues that came together to compound the difficulties of the ruling Liberal/National coalition government.

6.2 The Veil of Kyoto

The November 2007 Australian Federal Election heralded a dramatic shift in Australia’s climate policy. Held just weeks before the United Nations Climate Change Conference in Bali (otherwise known as the ‘Thirteenth Conference of Parties’ or COP13), the newly elected Labor Party ousted the incumbent Liberal/National Coalition and, at the earliest possible occasion, on 3 December, 2007 ratified the Kyoto Protocol as their first act of parliament. The announcement, which was greeted with sustained applause from the assembled dignitaries and members of the press, suggested that the global politics of climate change appeared to have turned a corner, the US was isolated and a new, more inclusive agreement seemed possible (Christoff 2008). At the same time, the new Labor Government sought to fast-track the institutionalisation of a formal CO2 market by bringing forward the implementation date for a national emissions trading scheme from 2012 to 2010 and committing Australia to a long-term target of a 60 percent reduction in emissions relative to 1990 by 2050.

The data in Figure 6.1 suggest climate change was amongst the factors that became important to voters in the 2007 election. While health and education were of higher importance in voters’ minds, the politics of these issues were relatively stable or even declining between 2004 and 2007. In contrast, ‘the environment’, which can be reasonably considered as a proxy for climate change given the public discourse over this time, rose around 13 points to 70, along with the other main policy issue of the campaign — industrial relations — which rose around 25 points to just over 50.

Exit poll data for the Australian Climate Institute (2007b) reinforces the impression that climate change was an important factor. Their report states that “for those [voters] who made up their mind [which party to vote for] during the campaign, climate change was more important than for those who made up their mind earlier in the campaign” (pg. 2), and that voters who “switched to Labor from the Coalition rated climate change as an influence on their vote more highly than the rest of the population” (pg. 3).

Figure 6.1: The Evolution of the Importance of Federal Issues in Australia, 1989 – 2008

The Evolution of the Importance of Federal Issues in Australia

Prior to November 2007, climate policy in Australia had followed a course closely aligned with the United States. Both countries refused to sign the Kyoto Protocol or introduce a formal cap on domestic emissions, leaving the way open for state-based emissions trading markets to develop in an ad-hoc manner and voluntary emissions markets to emerge in response to growing public concern. At the core of the position adopted by the Liberal/National Government was the belief that even though Australia was on track to achieve its Kyoto Target of 108% of 1990 emissions during the period 2008-2012 it did not wish to ratify the protocol until the meaningful participation of major developing countries, in particular China and India, was achieved. This policy was supported by a number of domestic measures such as a Mandatory Renewable Energy Target (introduced on 1 April 2001) and the Ozone Protection and Synthetic Greenhouse Gas Management Act (introduced 5 December 2003) which encouraged renewable energy and controlled hydrofluorocarbons respectively.

The Government also implemented the Greenhouse Challenge programme, which aimed to maximise participation by promoting voluntary action among polluting businesses. At the same time internationally, Australia focused its efforts on establishing the Asia-Pacific Partnership on Clean Development and Climate which set out a framework for clean technology transfer between Australia, the US, China, India, Japan, Canada and the Philippines (see www.asiapacificpartnership.org/). The International Forest Carbon Initiative was another initiative which sought to use Australia’s expertise in the area to build capacity in developing countries to account for and trade in carbon credits sourced from changes in land use (see www.climatechange.gov.au/international/publications/fs-ifci.html).

In addition to Australia’s 108 per cent target (relative to 1990 emissions), at Kyoto in 1997 the then-Environment Minister, Senator Robert Hill, had negotiated the inclusion of emissions from land clearing (deforestation) in the base year (1990). This became known as ‘the Australia clause’. As can be seen in Figures 6.2 and 6.3, this clause is critical for Australia’s ability to meet its 108% target. Since 1990, emissions from land clearing have declined sharply due to a combination of new federal and state regulatory native vegetation controls, such as the Environment Protection and Biodiversity Act (2003) and various statebased native vegetation controls.

It is also important to note that the accounting rules for the Kyoto Protocol only include anthropogenic emissions. The National Inventory Report, which is compiled under the broader rules of the UNFCCC (as opposed to the Kyoto Protocol accounting rules) shows the overall Australian emissions have risen by 82 per cent over the period from 1990 to 2007 as a result of a “temporary” jump in emissions from grasslands and croplands due to widespread drought conditions (Department of Climate Change, 2009a). Under current Kyoto accounting rules, these ‘non-anthroprogenic’ emissions are not included towards mitigation targets. This is a position Australia is keen to maintain (Wong, 2009).

Thus, despite being an actual source of emissions in 2007 relative to 1990, land use and change under Kyoto actually constitutes the only substantial emissions reductions over the 16 years to 2006, falling by 54 per cent. All other major categories of emissions have risen strongly in Australia since 1990 with stationary energy emissions rising the fastest by almost 50% (Department of Climate Change, 2009b). Yet despite this highly contingent sectoral emissions profile, the Government repeatedly stated (and continues to under Labor) that it is ‘on track’ to meet its Kyoto target. It is this use ‘Kyoto’ to hide underlying emission trends is what we have termed part of the ‘veil’ of Kyoto.

In the post-11 September 2001 diplomatic environment, this allowed Australia, during the 2002-2003 national debate on emissions trading and Kyoto ratification, to position itself firmly alongside its US ally. When criticised by the Europeans Australia could rebut that the EU was in no position to criticise given that Australia would meet its Kyoto target and most European states would not. It is worth noting that in addition to a strong personal relationship between Prime Minister Howard and President Bush, Australia was, at the same time, negotiating a long desired Free Trade Agreement with the United States which was finally agreed and brought into effect in 2004 (at a critical time for domestic and international climate policy development).

Thus, while it is difficult to point to any one causal factor explaining the Government’s decision not to ratify the Kyoto Protocol, especially given that Kyoto was unlikely to impose any immediate additional cost on the 301 economy (Australia was expected stay within its Kyoto target of 108% of emissions), these factors can go some way to understanding the optics of the decision-making process (for a critical examination of the role of the fossil fuel industry in lobbying on the Kyoto Protocol, see Pearse 2007 and Hamilton 2001).

From the Howard Government’s perspective, the decision to ratify or not ratify the Kyoto Protocol seems to have largely been regarded as a symbolic one. However, over the year leading up to the 2007 election (see Figure 6.4), a combination of international criticism and domestic pressure made this very symbolism the weakness in their credibility on the issue and an important point of political differentiation with Labor.

In October 2006 the British Government released the Stern Review on the Economics of Climate Change. In many ways the report was as much intended as a political and diplomatic staging post to launch a vigorous international public-relations campaign as it was a serious attempt at the most comprehensive and rigorous economic analysis of climate change to date. By making explicit his approach to the ethics of discounting, Stern arrived at a benefit-cost calculus which gave economic support to strong early action on climate change, favouring emissions trading over carbon taxation. Stern also attempted to reframe climate change as an opportunity for business and a boost for the economy, rather than the standard attitude that control of emissions would cost jobs and prevent economic growth.

In March 2007, amid much media interest, Nicholas Stern visited Australia to present his report to both John Howard and Kevin Rudd. As a visiting academic, he was in a less constrained position than British officials to criticise the Government position of not ratifying Kyoto: 302

Figure 6.2: Percentage Change in Emissions, 1990 – 2007

Percentage Change in Emissions

Figure 6.3: Composition of Australian Greenhouse Gas Emissions, 2007

Composition of Australian Greenhouse Gas Emissions

More and more countries round the world are prepared to move on the basis of their own responsibilities and their judgement of their own responsibilities in the light that others are also moving. That gains momentum and if some countries peel off then that momentum is seriously damaged. (ABC, 2007)

Moreover, at the same time parts of Australia were caught in the longest, most severe drought on record. In 2006, the late-winter to mid-spring rainfalls failed. While the average rainfall South Australia was the lowest since 1900, across Victoria and the Murray-Darling Basin the season was the second driest since 1900. Although New South Wales’ rainfall was boosted by above normal falls along the north coast of the state, the state average rainfall for the season was the third driest since 1900. The nationwide drought had been picked up on by voters — fuelled by media coverage — as an ‘everyday’ impact of human-induced climate change. In effect, drought had acted as a surrogate for climate change: it assisted Kevin Rudd to position himself as leading the party that was most in touch with contemporary issues and best equipped to deal the complexities of modern life. Howard on the other hand preferred to address the drought through the lens of federal-state relations on water policy.

On February 2, 2007 the United Nations Intergovernmental Panel on Climate Change (IPCC) handed down its Fourth Assessment Report (IPCC, 2007) in Paris. This coincided with the first sitting week of the year in the Federal Parliament and provided yet further impetus to the growing momentum on the climate change issue.

Figure 6.4 Labor benefits from increased international pressure on Climate Change

Labor benefits from increased international pressure on Climate Change

Kevin Rudd, then-Leader of the Opposition, used the opportunity afforded by the first sitting day of Parliament to call a ‘Matter of Public Importance’ on the challenges of climate change and water scarcity. In his address to Parliament he made clear his plans to frame the Federal Election around sound economic management based around opposition to the government’s industrial relations policy and climate change:

This year we will see a battle for ideas for the nation’s future… The battle ground on which we are going to engage this fight is one which centres around our [the Labor Party’s] two sets of values regarding the way we want to shape this country’s future. …we have to build long-term prosperity without throwing a fair go out the back door and we have to build long-term prosperity and take action on climate change and water (Australian Parliamentary Hansard, 2007:49).

Quoting directly from the IPCC Report he went on to criticise what he characterised as the Government’s overly sceptical approach to the issue:

The understanding of anthropogenic warming and cooling influences on climate has improved since the Third Assessment Report leading to very high confidence that the globally averaged net effect of human activities since 1750 has been one of warming… Going to the footnote, what is ‘very high confidence’ defined as? ‘Very high confidence’ means: at least a 9 out of 10 chance of being correct (ibid: 51).

Then-Environment Minister Malcolm Turnbull responded by repeating the Government’s long-held position that the Kyoto Protocol was not the best instrument to address the problem. Turnbull also commented that in the climate change debate room must be given to sceptics:

The response to climate change is a complex one. It requires an open mind, and it requires practical measures. What the opposition is giving us now is some kind of cramped political theology. Nobody is allowed to doubt. Sceptics are to be banned. Anybody with an open mind is to be banned (ibid:19).

We all recognise that ratifying the Kyoto protocol by itself will not result in Australia emitting any less greenhouse gases because we are already on track to meet our Kyoto target. It will not have, in and of itself, any effect on the greenhouse gases in the atmosphere (ibid: 52).

The other major element in the intensifying international campaign for greater cooperation on climate change came with the release of Al Gore’s movie documentary An Inconvenient Truth late in 2006. This film was a world-wide phenomenon leading to a Nobel Peace Prize for Gore in conjunction with the IPCC. In addition to the film running for the year leading up to the election, the Nobel Prize came just one month before the November 2007 election again elevating the issue and damaging the Government for its perceived scepticism at a crucial time. In Australia the film had a significant impact on public perceptions. Data indicated that half of the people who saw the film said it changed their mind on the issue, with 54, 74, 87 and 91 per cent for the age groups under 25, 25-39, 40-55 and 55+ respectively, said it would change their habits (Nielsen-OUCE, 2007).

Figure 6. 4 shows how these various events had the effect of creating a perception of scientific consensus around the belief that climate change is human-induced and the perception that a tangible solution was to be found in the symbol of the Kyoto Protocol. In this sense, we can see how successive pronouncements by John Howard attempted to portray himself as a ‘climate change realist’ and the Opposition as ‘hysterical’, whereas the Opposition framed their position as ‘serious’ and the Government ‘untrustworthy’ (Olsson and Paglia 2008). This suggests a process of labelling – an essential element in the politics of ‘risk society’ (Beck 2005).

In recognition of the serious electoral threat climate change was posing to the Government, in January 2007 Howard appointed the Liberal Party’s rising star Malcolm Turnbull to shore up the environment portfolio. Indeed, it can be argued that a structural shift in the LiberalNational Party’s ability to command the environmental high ground (2002 to 2004) over the Labor opposition can be traced to Ministerial changes with a break seeming to occur just before the 2004 election. On the other side of politics Labor appointed high-profile Peter Garrett – an environmental lighting brand famously opposed to nuclear energy and former lead singer of rock band ‘Midnight Oil’.

In addition, in December 2006 Howard established a group to report to him on a new Australian Emissions Trading Scheme. The Emissions Task Group (ETG) had very particular terms of reference, designed to ensure the position of the resources sector was maintained:

“Australia enjoys major competitive advantages through the possession of large reserves of fossil fuels and uranium. In assessing Australia’s further contribution to reducing greenhouse gas emissions, these advantages must be preserved.

Against this background the Task Group will be asked to advise on the nature and design of a workable global emissions trading system in which Australia would be able to participate” (Howard, 2007).

What is notable is Howard’s explicit reference to supporting the fossil fuel sector in a policy process designed to reduce carbon emissions. This highlights the geographical embeddedness of fossil fuels in Australia. Linking the issue of uranium mining to climate change was particularly controversial as Australia currently has no nuclear power plants aside from one small nuclear reactor at Lucas Heights in Sydney, used for research and the creation of medical isotopes. This may have been an attempt to frame climate change around the decision to ‘go nuclear’ and drive a wedge between environmentalists.

In May 2007, the ETG handed down its report and the Government announced that it would move to implement an emissions trading scheme in 2012. This was in contrast to Labor’s policy to bring one in by 2010. As can be seen in Figure 6.4, public opinion continued to run against the Coaltion. The situation was so clear that the Coalition was facing an electoral landslide against it, that carefully placed rumours of a Cabinet revolt to ‘sign Kyoto’ led by Malcolm Turnbull were leaked to the nation’s leading pro-business newspaper, the Financial Times around one month before the election in October 2007.

However, Howard was determined not to give in to pressure on the issue. A combination of public feeling on climate change, anxieties over industrial relations, and a sense of a need for change in leadership translated into a landslide defeat of the Government with the Prime Minister losing his own traditionally safe seat of Bennalong, only the second time in history a sitting Prime Minister had lost their seat.

As a classic problem of social coordination around how to manage a global public good, international norm building is fundamental if nations are to put aside short term national interest for the longer term gains that cooperation on CO2 mitigation offers. This relies on solving the problem of collective action and the ascension of the ‘free rider’ problem at the nation-state level. The 2007 Australian election suggests (at least in the context of a liberal democratic state) that this is possible – through the weight of international and moral pressure and without recourse to trade restrictions or other punitive measures.

However, it also showed a triumph of symbolism over pragmatic responses as voting Australian’s were able to feel good about ‘taking action’ by ‘signing Kyoto’ – a decision which does not bring about any reductions in Australia’s emissions from the business as usual. Ratification of the Kyoto Protocol has not seemed to have helped Australia gain control of its own rapidly rising emissions, and at worse, may have distracted voters from how this can be done – legislation aimed at root-and-branch reform of Australia’s energy sector. In the following section we evaluate post-election policy developments focusing on Australia’s centre-piece environmental legislation, the CPRS.

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