Market News

 March 02, 2009
Getting it Right Down Under

 GLOBE-Net - Fire fighters in Australia’s devastated state of Victoria are bracing for a new bush fire threat as conditions similar to the Black Saturday blazes which killed 210 people and left 7,000 homeless return. "The very worst conditions that we’ve had in our state in the last 100 years" said Victoria premier John Brumby. A few hundred kilometers to the east, parts of New South Wales have been declared natural disaster zones after heavy storms spawned floods that severed roads and left towns isolated. Parts of neighbouring Queensland state were under water after cyclonic rains flooded more than one million square kilometres and killed more than 100 000 cattle.

Floods and bush fires are not new to Australia. Neither is drought or severe cyclonic storms. But what is different is the pace with which these natural disasters are taking place. And scientists are placing the blame squarely on climate change.

Australia is one of the most vulnerable countries to climate change impacts because of its hot, dry climate, and prolonged drought conditions. Temperatures are expected to rise by 3 degrees Celsius by 2050 across most of the country’s tropical north and desert interiors.

Australia’s Prime Minister Kevin Rudd is well aware of the dangers that lie ahead. A White Paper on Climate Change his government released last year notes that eleven of the past 12 years rank among the 12 warmest years since records began and Australia has experienced warmer-than-average mean annual temperatures for 16 of the past 18 years.

As one of the hottest and driest continents on earth, Australia will be one of the nations hardest and fastest hit by climate change, and its impacts will drastically affect the nation’s economy and the way of life of its people.

At risk are Australia’s coastal properties through rising sea levels, storm damage and tidal surges; food production from farms due to longer and more frequent droughts; and the destruction of the country’s national treasures such as the Great Barrier Reef and the Kakadu wetlands and the tourism industries they support.

It is in our national interest to take strong and decisive action on climate change, says the White Paper, and the national government has launched a comprehensive climate change strategy built on three pillars: reducing Australia’s carbon pollution; adapting to unavoidable climate change; and helping to shape a global solution.

One of the actions taken by the Rudd government was to bring all the cross cutting issues and concerns affected by climate change under one administrative structure, the Department of Climate Change, which was established in December 2007 as part of the Prime Minister and Cabinet Portfolio.

Its mandate basically is to shepherd the National Climate Change Adaptation Plan to reduce national emissions by 60 per cent on 2000 levels by 2050; to implement a comprehensive emissions trading scheme by 2010 to deliver these targets; to dramatically expand the use of renewable energy and achieve a 20 per cent target for renewable energy by 2020 and; to invest in research and development on low emissions technologies; to manage the nation’s land resources to reduce emissions; and to work with other nations to achieve a stronger post 2012 international regime to deal with climate change.

Under the leadership of Minister for Climate Change and Water, Senator Penny Wong, the department is pursuing a plan to put in place the necessary powers and structures needed to achieve these ambitious goals.

The department will release draft legislation for a Carbon Pollution Reduction Scheme next week designed to deliver on another of the White Paper’s policy decisions.

"The Carbon Pollution Reduction Scheme is one of the most significant economic reforms before the Parliament in years," said Minister Wong in a recent statement. "With the support of the Senate, the Carbon Pollution Reduction Scheme will start reducing Australia’s emissions for the first time ever from next year," She added.

The CPRS is the central plank of emissions reductions action and the Government recognizes that other complementary measures are needed to sit along side and support the trading scheme. To this end, the Government is investing $500 million in a Renewable Energy Fund; $500 million for a National Clean Coal Fund; $500 million for the Green Car Innovation fund; $150 million for solar and clean energy research and $240 million to establish Clean Business Australia, tackling climate change through projects with a focus on productivity and innovation.

Renewable energy sources such as wind and solar will be a key part of Australia’s climate change strategy as will investment in low emissions technologies, clean fossil fuels, biofuels, hydrogen and other energy efficiency measures.

Households will be encouraged to use less energy through low interest loans to implement energy and water savings, rebates for energy-efficient insulation for homes; $8,000 rebates for rooftop solar power panels; $1,000 rebates for solar hot water systems; $500 rebates for rainwater tanks and grey water recycling; improved cost-saving energy and water efficiency standards for new homes and appliances; and making every school a ’solar school’ within eight years.

The government has set a target to cut overall greenhouse gas emissions by 5 percent by 2020, and will cut further to about 15 percent if there is widespread international agreement on tougher actions.

Ratifying the Kyoto Protocol was the first official act of the newly elected government of Kevin Rudd, and through the Department of Climate Change, Australia is pursuing a constructive stance in international discussions on future international accord to deal with emissions reduction.

The global economic downturn has not deterred the government in its action plan. Some industry sectors have called for a delay in the introduction of mandatory emissions trading under a national cap and trade system due to deteriorating global market conditions, which have affected the nation’s economy.

Minister Wong has stated the government will not defer action on its climate plan. Acknowledging that changing the nation’s economy over time to become a low carbon economy is a severe economic adjustment; but "the longer we delay the higher the costs".

The key thing to keep in mind about climate change, notes Shayleen Thompson, First Assistant Secretary Strategies and Coordination Division
Department of Climate Change, is that it is not just the most significant environmental challenge it is also an economic issue.

In an interview with GLOBE-Net, she noted that because there are so many cross cutting issues that affect every aspect of the economy and the society, climate change is best managed with a central agency perspective to ensure all departments and agencies are working toward common goals.

The other key message noted by Thompson is that there can never be too much communication on the issue of climate change. While most Australians accept that climate change is a reality and that something must be done about it, the subtleties of emissions reduction and carbon trading often are not well understood.

Transforming Australia to a lower carbon economy is arguably The most significant economic transformation in Australia since the great tariff debates at the beginning of the last century, she notes.

Public awareness is growing as more people become aware that their nation’s climate is changing. Every morning brings more news of raging bushfires, flooded pastures, and continued drought conditions.

Australia’s innovation in establishing a central policy coordinating Department of Climate Change may prove a model that other countries may wish to consider.

After all, global warming is not just a problem in Australia.