Alyssa Bucci

29-4-14
The Inadequacy of Australian Climate Change Policy
Essay Question: Summarize the policy responses to climate change in Australia.
What are the politics of this response, and is this approach justifiable and adequate,
given the seriousness of the risk?
Word Count: 2713
Introduction:
Climate change is one of the biggest environmental problems facing the
modern world, and Australia is particularly susceptible to its effects. Temperature
increases will lead to consequences like increased drought in southern and eastern
areas of Australia, increased extreme weather events, and sea level rise (Mercer et
al 2006; Paultikof 2010). One of the greatest concerns in Australia regarding climate
change is the increased frequency of bush fires due to the combination of dry
conditions and extreme heat (Firsova et al 2012; Paultikof 2010). The Black
Saturday bushfires in February 2009 caused 173 deaths, and events like it will only
become more prevalent (Paultikof 2010).
Due to the likelihood of severe environmental changes in the near future, its
critical that Australia make significant effort to reduce its greenhouse gas emissions.
Despite the fact that Australia only contributes 1.4% of the worlds greenhouse gas
emissions, it has the highest per capita emissions of all developed countries largely
due to its dependence on coal (Firsova et al 2012). However, the governments
response to climate change in the 24 years since the release of the first IPCC report
has been largely inadequate. Influenced by Australias prominent fossil fuel and
mineral industries, climate change policy has put too much of an emphasis on
supporting short term economic well-being, and has severely undervalued
ecosystem services. This paper will discuss how the federal climate change policies
of the past six administrations have prioritized the economy, making them largely

ineffective. I recognize that other factors such as the plurality of the governmental
system due to overlapping federal and state policies (Byrnes et al 2010; Griffiths et
al 2007), and the under-representation of climate change issues in the media
(Christoff 2013) also influence policy, but these will not be addressed. Suggestions
will then be made for future policy design to successfully combat the effects of
climate change in Australia.
Background:
Ecosystem Services:
Ecosystem services are defined as the benefits provided to humans through
the transformations of resources (or environmental assets, including land, water,
vegetation and atmosphere) into a flow of essential goods and services (Constanza
et al. 1997). The principle recognizes that human beings are reliant on the
successful functioning of natural systems, so the true value of these systems must
be recognized when calculating the cost of environmental issues like climate
change. In the case of energy, market price signals are not a good representation
of the true cost of burning fossil fuels, because the value of environmental health
and costs of degrading it are not measurable (Department of the Environment,
2009). The true cost of burning fossil fuels is much higher than the seemingly
cheap monetary cost. Therefore, climate change policies must make a point to
acknowledge the importance of ecosystem services. Rather, Australian policies
have ignored these services and have focused instead on the short term economic
costs of reducing emissions.
Prioritizing Economic Well-Being:
Multiple people have used governance theories to understand Australias
response to climate change. Mercer et al note that Australian attitude towards

natural resources has been driven by a principle of statist developmentalism, which

emphasizes the role of the state in controlling natural resources. This attitude
applies very narrow definitions of development and progress to ecological systems,
and creates a paradigm of exploitation concerning natural resources. In this
system, natural capital has been considered a free good, resulting in the
undervaluing of ecosystem services discussed above (Mercer et al 2006).
Griffiths et al examined Australian climate change policy in terms of
institutional governance systems, and noted that policy up to 2007 (the year of
publication) was dominated by a system of market governance. In this system,
market forces are relied upon to achieve adaptation, so individual firms are
encouraged to capitalize on access to natural resources. It relies on minimum
compliance standards and voluntary actions to reduce emissions, so sustainability
initiatives are viewed as a cost to production rather than an opportunity (Griffiths et
al 2007). Although these two theories differ in some respects, they are both
characterized by an emphasis on short term economic growth. This attitude has
resulted in ineffective climate change policies because the focus is shifted away
from the core environmental issue, and the long term benefits of reducing
greenhouse gas emissions (both ecological and economic) are mostly ignored. The
following sections will detail how the major climate change policies of the last 24
years have been commanded by this emphasis on economic growth, and still are
despite slight improvements over the years.
Policies:
Hawke Administration (1983-1991):
Peter Christoff described the Hawke administrations climate change
response as having a tenor of nave altruism, which is a good description of the

governments attitude at this time (Christoff 2013). On the heels of the release of
the first IPCC report, the government showed significant public support for
combating climate change. The administration adopted the Toronto target of
achieving a 20% reduction of CO2 emissions below 1988 levels by 2005 (Bulkely
1999; Firsova et al 2012; Christoff 2013). However, the administration had given
little consideration to the challenges of emissions reduction (Christoff 2013). With
heavy influence from coal producers, the Australian delegation at the Second World
Climate Conference declared that Australian support for the Toronto target was
conditional on emissions reduction not having unfavorable impacts on Australias
economy and trade competitiveness, unless other major greenhouse gas emitters
also suffered similar economic losses (Firsova et al 2012; Bulkely 1999). This
statement established an attitude that emissions reduction was a cost to the
economy rather than an opportunity for improvement and growth, and this outlook
pervades climate change policy up to the present day.
Keating Administration (1991-1996):
The Keating government established the National Greenhouse Response
Strategy (NGRS) to meet the Toronto targets in December of 1992 (Talberg et al
2013). The strategy outlined a series of no regrets abatement measures, relying
on the voluntary cooperation of corporations, when and where it was economically
feasible, and concentrated on the need for insurance measures to reduce
uncertainties about climate change. It made no plans to change the structure of
Australias fossil fuel-reliant energy generation industry, and instead aimed to
improve efficiency of the existing system. Due to lack of political will and confusion
over the meaning of no regrets, the NGRS failed to change anything (Firsova et al
2012; Bulkely 1999).

The government made another attempt by enacting the Greenhouse

Challenge Program, which encouraged individual firms and industries to reduce
greenhouse gas emissions by undertaking energy audits, purchasing green energy
options, and offsetting emissions from car fleets. However, this program also relied
upon voluntary measures, and did not reward or penalize companies for meeting
emissions targets (Griffiths et al 2007; Bulkely 1999), so companies only complied
as a means of avoiding more severe measures like a carbon tax (Bulkely 1999).
Both of these policies made emissions reductions optional, demonstrating
greater concern for the economy than the environmental issue they were meant to
address. Analyses by the Australian Bureau of Agriculture and Resource Economics
of the impact of emissions reduction on economic well-being expressed the same
sentiment. Results indicated loss of economic welfare in Australias fossil fuel
dependent sectors, but failed to recognize the benefit of reductions to other sectors,
or account for the intrinsic value of a healthy environment.
Howard Administration (1996-2007):
The Howard government continued the trend of symbolic policies and
environmental apathy. In negotiations over the Kyoto protocol, Australia negotiated
an emissions target of 8% greater than 1990 levels by the end of the first
commitment period. Despite the generous target, the administration didnt ratify
the Protocol in 2002 because doing so would supposedly have a crippling effect on
the economy and trade competitiveness.
Prime Minister Howard expressed a clear bias towards fossil fuel technologies.
He stated You cant run power stations on solar and wind, lets be realistic, you can
only run power stations in a modern Western economy on fossil fuel, or in time
nuclear power (Howard 2007). His administration invested much more money in

nuclear and carbon capture and storage technologies than renewable energy
research, showing a desire to capitalize on Australias fossil fuel reserves rather
than enact more sustainable long term energy plans (Schlpfer 2008).
The ineffective NGRS was replaced by the National Greenhouse Strategy in
1998, which intended to encourage organizations to improve their energy efficiency
and promote best practice approaches to greenhouse gas emissions. However, the
strategy was still based on voluntary mechanisms, and proposed no clear methods
to reduce industrys carbon reliance (Griffiths et al 2007; Firsova et al 2012).
The government appeared to take a step in the right direction with the
implementation of the Mandatory Renewable Energy Target (MRET) in 2001. It
declared that by 2010, electricity buyers must source an additional 2% of their
electricity from renewable or specified waste product energy sources, equating to
9500 GWh (Kent & Mercer 2004; Falk & Settle 2011). The mandatory nature of the
policy was an improvement over the NGS and Greenhouse Challenge program, but
it was much too modest. It was also comprised by its inclusion of non-renewables
like coal mine gas, and allowing exemptions for emissions-intensive trade-exposed
activities (Falk & Settle 2011). Finally, the program did not run for enough time to
allow renewables to gain a strong foothold in the energy economy (Schlpfer 2008).
In the end, the MRET made minimal improvements in renewable energy production,
and served as more of a symbolic measure than an instigator of positive change.
Rudd Administration (2007-2010, 2013):
During his campaign, Rudd promised to improve upon Howards ineffective
policies, so his election came with hope from the public for positive change. While
he tried to instigate this by ratifying the Kyoto Protocol (Falk & Settle 2011;
Valentine 2010; Firsova et al 2012), commissioning Ross Garnaut to review

Australias climate change actions (Falk & Settle 2011), publishing a plan for an
emissions trading scheme (ETS) (Falk & Settle 2011; Firsova et al 2012), and
revising the MRET (Valentine 2010; Byrnes et al 2013), in the end his policies still
fell flat. The Carbon Pollution Reduction Scheme (CPRS) intended to reduce carbon
emissions to 5-15% below 2000 levels by 2020, and 60% by 2050 by enacting a cap
and trade ETS (Falk & Settle 2011). Despite good intentions, it watered down the
goals advised by the Garnaut review, and intended to give the majority of funds
generated by the ETS to support trade-effected, emissions-intensive industries.
Critics have argued that the market based mechanism proposed by the CPRS could
not make any change in an economic system focused on over consumption (Firsova
et al 2012). In the end, the CPRS was rejected all three times it was presented to
Parliament, even with its significant concessions to fossil fuel industries.
The Rudd government was successful in enacting the Renewable Energy
Target (RET), a revision of the MRET. The target increased the goals of the MRET,
stating that 45,000 GWh of electricity must come from renewables from 2020, and
increased the penalty to electricity retailers who failed to reach their quota.
However, the scheme still prioritized short term economic goals. It allowed waste
coal mine gas fired power plants to apply for Renewable Energy Credits, which in
turn subsidized the coal industry and decreased the market price of coal. It was
also designed to expire in 2030, so there was little incentive for retailers to invest in
renewables beyond the first 10 year period. Like previous policies, the scheme
failed to change the structure of the energy system to give renewables a chance to
become more economically feasible (Valentine 2010).
Gillard Administration (2010-2013):

The policies of the Gillard government were more progressive than past
administrations. The Climate Commission was established in 2011 to communicate
climate change science to the general public (Talberg et al 2013). Funding for
renewable energy research was provided through the Australian Renewable Energy
Agency and the Clean Energy Finance Corporation (CEFC), and the Clean Energy Act
of 2011 finally established a price on carbon and plans for an ETS. While these
policies were an improvement, they still made significant concessions to fossil fuel
industries, which undervalued the seriousness of climate change as an
environmental issue (Byrnes et al 2013).
Only 50% of the funds provided by the CEFC were committed to renewable
energy projects; others were devoted to clean technology projects like natural
gas, which still produce greenhouse gas emissions (Byrnes et al 2013). While
measures enacted by the Clean Energy Act did succeed in reducing greenhouse gas
emissions, the act was still too lenient (McDonald 2013). It allowed trade-exposed
industries and coal fired power stations to be eligible for free credits, and further
subsidized these industries through programs like the Steel Transformation Plan,
the Jobs and Competitiveness Program, and the Coal sector Jobs Package. As a
result, the external environmental costs of fossil fuel use were not fully internalized,
and renewable energy companies were yet again put at a disadvantage (Byrnes et
al 2013).
Abbott Administration (2013-Present):
Tony Abbott has expressed opposition to an emissions trading scheme for
years; his replacement of Malcolm Turnbull as the leader of the Opposition during
the Rudd administrations was a big reason for the failure of the CPRS (Falk & Settle
2011). He called the tax a job-killer, and a threat to Australias resource industry

(Changing the Political Climate). Therefore, its not surprising that his main priority
after gaining office was repealing the Clean Energy Act. Abbott has also abolished
the Climate Commission, intends to cease investments in the CEFC, and has plans
to abolish the Climate Change Authority (an independent advisory board put in
place by the Gillard administration) (Talberg et al 2013).
A Direct Action Plan has been designed to replace the Clean Energy Act. This
plan will draw from a set Emissions Reduction Fund to reward businesses and
farmers with emissions reduction plans that have the lowest cost per amount of
abatement. Although the Abbott administration supports the previous
governments goal of reducing emissions 5% on 2000 levels by 2020, he does not
intend to increase the amount of the Fund if the goal is not met (Miller 2014). While
the Direct Action plan encourages innovation in emissions reduction, which is a
good thing, it prioritizes short term economic well-being over reaching Australias
already meager emissions target. In addition, competition between businesses to
obtain government funding will likely overshadow the core issue of climate change,
and will make it difficult for developing renewable technologies to gain prominence
in the energy market. Gillards carbon price mechanism wasnt perfect, but it was
the first legislation in years to produce significant reductions in greenhouse gas
emissions. Completely overhauling this system for a program that is not firmly
committed to meeting Australias emissions target shows a clear bias towards short
term economic stability, rather than committing to establishing a sustainable
energy future.
The Future:
If Australia wants to successfully combat climate change in the future, the
government will have to drastically change its attitude towards emissions reduction

policy. Policies must address longer time frames and extend over multiple political
terms, and they should be flexible to accommodate new research and national
economic changes. They have to avoid the easiest and least effective options for
emissions abatement, and rather look to design a long term sustainable energy
system that emphasizes the use of renewable technologies (Mercer et al 2011).
Australia has vast supplies of coal and other fossil fuels, but these will not last
forever, and with a growing population, relying on them will only exacerbate the
effects of climate change. Although reducing emissions may be economically taxing
in the short term, supporting fossil fuel companies and impeding the success of
renewable energy will only hurt us in the long term.
Conclusion:
Ever since climate change was introduced to the political agenda, Australian
government has been attempting to design policy that will combat the problem
without hurting its fossil fuel dependent economy. However, these policies have put
more of an emphasis on economic development than the core environmental issue,
making them largely ineffective. The present and future government has to
recognize the importance of a healthy environment to Australias economic and
social well-being and design emissions reduction policies that put the environment
first. Otherwise, the country will continue to be entrenched in debate over
economics and logistics, and fail to combat the problem at hand.
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