ARRCC's views put to the Senate Environment and Communications References Committee inquiry on Jan 19, 2014

ARRCC's views put to the Senate Environment and Communications References Committee inquiry on Jan 19, 2014

On the 19th January, ARRCC made a submission to the Senate Environment and Communications References Committee inquiry on the Government’s Direct Action Plan.

To whom it may concern

The Australian Religious Response to Climate Change (ARRCC) appreciates the opportunity to make this submission regarding the Direct Action Plan and the proposed repeal of the Clean Energy Package.

ARRCC is a multi-faith non-partisan network of people from around Australia aiming to galvanize the religious response to climate change. ARRCC believes that as individuals and communities dedicated to the common good, inspired by our faith and energized by our spirituality, people of faith should be at the forefront of creating a safe climate. This forms part of our broader vision of our nation taking a leading and fair role in embracing a sustainable future, one based on a more ethical understanding of human prosperity and the flourishing of all that lives on this inter-dependent globe.

We are strictly non-partisan. Our concern is only to see Australia participate more fully and effectively in global efforts to mitigate climate change. Because of this, we oppose the repeal legislation as proposed because the provisions under the legislation have already proven to be modestly effective and include mechanisms to be readily strengthened to achieve deeper carbon emissions reductions. We are not researchers but we are very concerned that analyses of the Coalition’s Direct Action Plan do not predict comparable reductions can be achieved through this alternative in its current form, and neither does it have a mechanism in place for increases in the reduction targets.

The need for action on climate change

As the political leadership of this country, the Coalition now has both the opportunity and the responsibility to lead the community in taking effective and appropriate action on climate change.

The approach taken must be about protecting the future of life as we know it, not about protecting the narrowly-defined short-term interests of fossil fuel dependent industries or even the Australian jobs and royalties that result from those industries.

The IPCC and all other authoritative scientific bodies are presenting more and more evidence that climate change is increasing at the top end of earlier projections. This amplifies the imperative to act quickly and boldly. Climate change is not just another discreet economic or political problem.  It is a systemic crisis that requires concerted action locally and globally.  It is about justice towards our children and grandchildren, about those in developed countries who are bearing the worst of its impacts currently, and about the integrity of the Earth’s eco-systems.

Australia is in a unique position, with many opportunities to be part of the solution. We are one of the world’s most economically prosperous countries, world leaders in relevant technologies with abundant sources of renewable energy. Australia is extremely vulnerable to the impact of climate change, and is likely to experience a more erratic climate, with more extreme and frequent heat-waves, floods, droughts and cyclones.

Yet Australia’s per capita greenhouse gas emissions remains one of the highest in the world – and this is ever-increasing - and we are the second largest coal exporter - which we are perversely still planning to expand.

If we, in that unique position and already experiencing climate impacts, do not show the world that we understand and are prepared to really tackle climate change, what hope is there that other, poorer countries in the global community will do so?

We must diminish our reliance on fossil fuels and replace them with clean, renewable sources of energy. We must wind back our exports of cheap coal which are currently hindering the global drive for renewable energy. As part of this, the existing Clean Energy legislation must be given bipartisan support. Only then will Australia be part of the solution.

Clean Energy legislation has reduced emissions in sectors covered

There is evidence that the legislation currently in place has been reducing emissions from those sectors that have been covered. The National Greenhouse Accounts, December quarter 2012, showed that the largest contributor to the quarterly trend increase was increases in fugitive emissions, transport and agriculture.

“Sectors covered by the carbon pricing mechanism were 1.0% lower largely reflecting lower electricity emissions (-7.2%).” [1]

We note that fugitive methane emissions primarily come from coal and coal seam gas mining, which are many times more harmful than CO2 itself. This strengthens our view that these are areas we must move away from as a nation, not continue to expand.

While members of ARRCC are not uniformly supportive of emissions trading schemes as the best way of tackling climate change, we note that spokespersons for the World Bank, the IPCC, IMF and OECD all promote emissions trading schemes as a critical tool for avoiding damaging temperature increases. In a speech given on 15/10/13, OECD General Secretary Angel Gurria on 15/10/13 said:

“There has to be progress on every front, but notably with respect to carbon pricing, and we don’t have any time to waste. Unlike the financial crisis, we do not have a ‘climate bailout’ option up our sleeves.

…. In our view, any policy response to climate change by any country must have at its core a plan to steadily make carbon emissions more expensive while, at the same time, judiciously giving non-fossil energy and energy efficiency an advantage at the margin. This is fundamental.”

Each year the number of jurisdictions with some form of carbon price grows. According to PolitiFact on 1/11/13:

“Including the EU nations, there are now more than 40 countries with emissions trading schemes, and a further 20 sub-national jurisdictions (populous U.S. states such as California and Canadian provinces such as Quebec).”[2]

If the Coalition manages to repeal a market mechanism for reducing emissions, Australia will be in the embarrassing position of being the first country to back away from carbon pricing. This will diminish our credibility in international negotiations when we advocate for the international action Australia needs as a nation particularly vulnerable to climate change. It is very possible it will adversely affect our relationships with other nations as they count the mounting costs of climate-related disasters, in both human and financial terms.

We strongly recommend that the current system be retained. If it is not, we recommend that other measures be incorporated into Coalition’s approach to combat climate change – and that these measures be put in place in time to provide continuity of market signals to reduce greenhouse gas emissions.

Some of these measures should be:

• Legislating a more ambitious emissions reduction target – I recommend 40 per cent on the 1990 level by 2020. This is in line with the upper end the IPCC Fourth Assessment Report 2007 suggested is necessary from Annex I countries.
• The Renewable Energy Target should be strengthened. That is, it should be set much higher than the current 20% energy from renewables by 2020.
• Land-clearing laws should be re-introduced and tightened.
• Energy efficiency standards, eg, for vehicles, should be made mandatory. Currently Australia is out of step with a range of comparable countries which do have mandatory vehicle fuel efficiency standards.[3]

Use of renewable energy has increased

Some of the revenue derived from imposing a price on greenhouse gas emissions is being used to help fund energy efficiency and renewable energy projects. The Clean Energy Finance Corporation has been part of this. ARRCC would like the Government to be more discerning because, for example, the Clean Energy Finance Corporation has been delivering a net return to the public purse, yet there is an intention to close it. It makes more sense to keep it. If it were allowed to invest the full $10 billion planned, it would create a net return of $200 million a year.[4]

We are therefore strongly in favour of retaining the Clean Energy Finance Corporation. Whatever path is chosen, this body should remain well funded.

In large part because of the current legislation, the level of power generation from coal has been declining, while power generation from sources such as wind, solar, hydro and bio-energy has been increasing.[5] This is the right direction to be taking, and this shift to renewables now needs to happen even more rapidly.

Costs to businesses have not been excessive

The existing legislation has primarily resulted in increased costs for energy-intensive companies as part of a system which provided incentives for industry improving energy efficiency and reducing emissions. This is appropriate. The benefit of a price on pollution is that businesses will find ways to use less energy from burning fossil fuels, which in turn reduces greenhouse gas emissions – which is the whole point.

The current legislation provided targeted small business assistance through, for example, the delivery of clean technology advice and grants to promote energy efficiency. Small businesses have needed and used this kind of support.

We are concerned that industry assistance (including that proposed in the carbon tax repeal bills) for big business has been needlessly generous and should be reviewed.  A plan is needed to reduce and eventually remove subsidies and other incentives to using and exploiting fossil fuels.   This would go a long way to improving Australia’s international leadership standing, reducing greenhouse gas emissions, and increasing uptake of renewable energy and energy efficiency measures.

Climate Change Authority

The Climate Change Authority should be retained. It has been a genuinely independent science-based body with the authority to summarise research; review the effectiveness of the Renewable Energy Target, the Carbon Farming Initiative and the National Greenhouse & Energy Reporting Scheme; and recommend ongoing pollution reduction targets and the Renewable Energy Target.

In its recent draft report it was able to present an objective view that the current 5% emissions reduction target would leave Australia lagging behind other comparable countries. Although this wasn’t welcomed by the current Government, it has examined the implications of a recommended minimum 15% reduction, and a 25% reduction.

ARRCC’s view is that the independence of the body providing advice about climate science and the effectiveness of measures to address climate change is essential. Such independence will no longer be evident if the research and reporting is placed is under the authority of the Minister Department for the Environment.

Other related matters

There are other aspects of government policy affecting Australia’s overall contribution to global warming. The implementation of legislation to reduce Australia’s carbon pollution should not be viewed in isolation from the implications of coal exports and government subsidies for fossil fuel industries. Steps must be taken to reduce exploitation and export of fossil fuels which contribute massively to the emissions of receiving nations.

1. 1.Subsidies for high-polluting industries should be eliminated. It is morally wrong that industries producing the highest emissions in Australia attract billions of dollars’ worth of public support annually.[6] This money should be made available for energy generation from renewable sources and to provide incentives to pursue a low carbon future.
2. 2.Australia should rapidly phase out coal exports rather than expand them. We are choosing to mention coal because “greenhouse emissions from our coal exports nullify any planned emissions reductions within Australia, many times over.”[7] Australia has been the world’s second largest coal exporter (other than Indonesia), thus encouraging the developing world to industrialise in the most polluting way. Abundant and cheap coal undermines the competitiveness of renewables. It is perverse that there are plans to expand exports.This is not morally defensible.

Analysts have worked out that we are only able to burn up to one-fifth of the world’s known reserves of fossil fuels before creating an unacceptable risk of going over 2°C warming. If we continue with business as usual, in just 15 years we would reach this limit.[8]

One of the major expansion plans is in the Galilee Basin in northern Queensland, with associated plans to expand the Abbott Point Port and dredge a section of the Great Barrier Reef. A number of mines are planned. It has been calculated that if all the coal reserves in the Galilee Basin were burnt, they would constitute 12% of the global carbon budget.[9]

While aware that Australian coal creates emissions overseas, both Labor and Coalition Governments have preferred the royalties and other benefits from mining. However, it is becoming increasingly certain that the continued burning of coal and other fossil fuels are threatening our planetary survival. In Bill McKibben’s now well-known words: “If it’s wrong to wreck the planet, then it’s wrong to profit from that wreckage.”

The benefits from mining are questionable:

• Around 80% of the industry is foreign-owned so most profits go overseas.[10]
• Royalties are received but the Federal Government (along with State Governments) also provides billions each year in tax concessions and other subsidies.
• The jobs created through coal mining are overstated by the industry, as it has become increasingly mechanised. The industry in fact competes with agriculture, tourism and renewable energy industries in terms of job opportunities.[11]
• The negative impact of mining on water supplies, people’s health and on biodiversity is well-documented.
• Some of the acceptance of coal has been based on a completely unrealistic assessment of the potential of carbon capture and storage as a technology.[12]

It is also economically unwise to expand coal exports at a time when global demand for coal is beginning to decrease. A University of Oxford report published in December 2013, Stranded Down Under? is the latest in a growing body of work warning investors that coal’s environmental and health impacts, and the rapid rise of renewable energy, is moving the international market to a point where fossil fuel projects, such as Australia’s, are likely to be financially unviable. The health and environmental impacts are particularly acute in China, whose coal-fired plants are taking an estimated five years off the lives of its northern citizens. There is also no “coal renaissance” happening in Europe, and decreasing consumption in the US.[13]

It would be tragic for dredging to happen on a part of the Great Barrier Reef, only for coal mines and infrastructure in the Galilee Basin and elsewhere to become white elephants.

In the meantime, energy generation from renewable sources such as wind and solar is readily available and proven. The costs are rapidly falling, to the point where new solar and wind energy generation has cost parity with new coal-based energy generation.

The belief that acting on climate change is somehow in opposition to a buoyant economy is unfounded. For example, the United States’ environmental protection technologies and services industry in 2008 supported 1.7 million jobs.  The industry generated approximately $300 billion in revenues and exported goods and services worth $44 billion.[14]

The shift away from coal should occur as part of a wider plan to establish alternative industries in coal-mining areas. It would be unjust to expect that workers in the coal industry bear the cost of the changes needed by society as a whole, so they should be provided with income support, training and opportunities for alternative employment.

Conclusion

In summary, there should be no repeal of the Clean Energy legislation until a credible alternative plan is carefully detailed and independently verified to be potentially effective. We are very concerned that analyses of the Coalition’s Direct Action Plan do not predict that the policy will effect comparable reductions to those made possible by the existing legislation.

ARRCC believes government policy must reflect the vital stewardship role that humans have as care-takers of our planet. This stewardship involves us recognising the limits of our planet’s ability to support life as we know it and delivering the most robust responses available to us in line with the gravity of the ecological crisis we are all facing.

A robust response on Australia’s part must also reflect justice towards vulnerable populations, particularly in other countries. We have contributed disproportionately to the problem of greenhouse gas emissions globally. We have a commensurate moral obligation to do all we can to contribute to the solution.

Those with vested interests will insist the kinds of responses that ARRCC and others recommend will be economically disastrous. On the contrary, however, they have potential to create new employment opportunities and ultimately protect the ecosystems on which life itself depends.

It is the current climate that has allowed us to exist as a species and develop and maintain our civilisation, including our economy and standard of living. If the climate changes, so does human civilization, and that will make economic challenges like the Global Financial Crisis look minor. If we are not prepared to make the structural changes now and bear some short-term costs, the medium-long term economic costs are projected to be far, far greater.  The human toll here and overseas will be greater still, through adverse health impacts, population displacement and increasing deaths from climate-related disasters, and food and water shortages. What we face now is a Global Future Crisis, and it needs serious, thorough and immediate action.

Thank you again for the invitation to put forward these views.

Yours sincerely

Thea Ormerod

President, ARRCC

If the Senate Environment and Communications References Committee would be interested in hearing from a representative of ARRCC, we would be very happy to have the opportunity to speak to the points in this submission.