8-19-09, 10:13 am

In the Australian Senate last Thursday the Rudd government unsuccessfully attempted to pass legislation to introduce a greenhouse gas emissions trading scheme, and to develop the renewable energy industry so that 20 percent of Australia’s electricity can be produced from renewable technology sources by 2020.

The defeat graphically illustrates the conflicting interests involved in the climate change struggle. The government presented the two legislative proposals as a tied bill. All non-government Senators opposed the emissions trading legislation, but in so doing were forced to vote against the renewable energy legislation, even though they supported it.

The government has now announced that it will reintroduce the renewable energy legislation soon as a separate bill. If the emissions trading legislation is rejected again in November, a double-dissolution election may be called.

In linking the legislation, the government was attempting to blackmail the Senate into accepting the emissions trading scheme. The Greens and some independents opposed it because the scheme is so weak it would be virtually useless in mitigating climate change.

Liberal and National Party Senators, on the other hand, opposed it because they believed that the scheme unduly threatened the interests of the corporations whose industries produce high greenhouse gas emissions.

The renewable energy goals

Linking the two bills was totally unnecessary, because boosting renewable energy could have proceeded immediately, independently of the introduction of the emission trading scheme.

All the parliamentarians agreed on the objective of generating 20 percent of our energy needs from renewable energy sources by 2020. The first stage in reaching this target involves the mass installation of power-generating photovoltaic solar panels. The current cost of installing solar panels sufficient to power the average household would take roughly 20 years to pay off, which is about the estimated life-span of the panels themselves. The Rudd government’s “solar credits” scheme would reduce this period to 12 years, making solar energy an attractive investment for families.

If the renewal energy legislation is not passed its objective could be thwarted by the loss of government funding, which is already said to be costing the infant renewable energy industry $2 million per week. It would also have arrested the NSW government’s introduction of a solar power tariff scheme, which was conditional on federal funding.

Having failed in their attempt to force the Senate to accept the tied bill, the Rudd government had little choice but to detach the renewable energy legislation, in order to reintroduce it as a separate bill.

“Which side are you on?”

On a per capita basis Australia is currently the highest greenhouse gas emitting nation in the world. However, the government is aware that emissions trading schemes have the potential to forcibly reduce the use of coal for power generation, as shown by the US Acid Rain program, and that if given sufficient support, renewable energy sources could dislodge coal from its dominant energy position.

According to one report, even BHP Billiton, one of the world’s biggest coal producers, intends to install renewable solar-thermal generators for use in its remote mining facilities.

In order to protect the interests of the high-emissions industrial bloc, particularly the coal industry, the government’s emissions trading scheme is based on a five percent emissions reduction goal, with the possibility of raising it to 25 percent in the unlikely event that the other nations agree to do likewise during the December UN Copenhagen conference. Just to make sure, the government also exonerated the big polluting corporations from the scheme’s initial stages.

In short, the government and the Liberals are competing with each other to impose the lowest cost to the polluting industries, while still appearing to take action to mitigate climate change.

Just like the Rudd government, most Liberals want to appear to be taking action to deal with climate change, and therefore support the introduction of some form of emissions trading. But there are divisions within the coalition ranks. Most National Party members, and some Liberals, are climate change “skeptics”, who oppose emissions trading. They contend that human industrial activity has little or no impact on climate, and has not brought about climate change.

Liberal leader Malcolm Turnbull has proposed an alternative scheme, which, he asserts, will result in better emissions reductions with a smaller rise in electricity rates. An adviser to Deutsche Bank has challenged this, pointing out that significant emission reductions will eventually necessitate hefty rate rises.

The government is failing to take further action to deal with climate change. It could, for example, prohibit construction of more coal-fired power stations, and it could introduce emissions taxation, which would encourage power generation corporations to switch to renewable energy sources.

As it is, the weaknesses in the proposed emissions trading scheme are being exploited by vested interests. The aluminum and milk-pasteurizing industries, for example, are now demanding that they should receive the same concessions as other high-emission industries under the scheme, while the coal industry is lobbying furiously for extremely hefty compensation.

Which way will they jump?

The government does not wish to attend the Copenhagen conference without a national agreement on emission reductions. They are also aware that a double-dissolution election would not necessarily give them the numbers to push through the legislation, especially if the Greens and independents received an increased share of the vote.

In order to get an emissions trading bill through the Senate in November, the government will have to reach an accommodation with either the Coalition Senators, or with the Greens and the independents. Being essentially conservative, they are far more likely to seek agreement with the Coalition, by further weakening their proposed emissions trading scheme.

The implications are tremendously important for all of us.