Australia heads for showdown over greenhouse gas emissions

Division appeared in Australian government ranks last week, as the federal cabinet wrestled with conflicting promises concerning Australia�s greenhouse policy. Since the Kyoto meeting in 1997, the government has vowed that it would limit greenhouse gas emissions to an 8% increase over 1990 levels by 2010. It has also promised Australian industry that it would do nothing to harm industry�s international competitiveness. It seems unlikely that both promises can be met.

May 30th, 2000


MELBOURNE�Division appeared in Australian government ranks last week, as the federal cabinet wrestled with conflicting promises concerning Australia�s greenhouse policy.

Since the Kyoto meeting in 1997, the government has promised on the one hand that it would limit greenhouse gas emissions to an 8% increase over 1990 levels by the year 2010. One the other hand, the government has promised Australian industry that it would do nothing to harm industry�s international competitiveness (OGJ Online, May 16, 2000). If debate on the issue in cabinet last week is any indication, it seems unlikely that both promises can be met.

Environment Minister Robert Hill pointed out that a "blowout" in greenhouse gas emissions�particularly in the industrial and electricity sectors�has taken Australia further away from its Kyoto target. His statistics said that, by 1998, Australia�s emissions had risen by 19% from 1990 levels�more than twice the Australian "special case" allowance agreed in Kyoto. Emissions from the industrial and electricity sectors had risen a staggering 26% above 1990 levels by 1998.

Hill has proposed that industry be subject to more stringent requirements to reduce or offset greenhouse emissions, including the use of a veto under federal environment law that would be triggered by projects emitting significant amounts of carbon. A figure of 500,000 tonnes/year of carbon has been mentioned as the trigger point.

However, Energy and Industry Minister Nick Minchin brandished some figures of his own. He said that economic research commissioned by him from the Australian Bureau of Agricultural and Resource Economics has found that forcing industry to meet Australia�s targets under the Kyoto agreement could reduce the country�s gross national product by as much as 1.4% in 2010. The research also suggests that achieving Australia�s Kyoto commitment could necessitate gasoline price increases of 5-18 � (Aus.)/l., and the cost of coal use could rise by $50-200 (Aus.)/tonne.

Deputy Prime Minister John Anderson weighed into the debate by being publicly critical of Hill�s "trigger" proposal, saying that it would harm employment, investment, and regional growth.

Industry's view
Not surprisingly business and industry side with Anderson and Minchin, while the green lobby groups are behind Hill.

Executive Director of the Business Council of Australia, David Buckingham, said that business believes a trigger would be unhelpful to industry and a bad strategy for reducing emissions. He said that there is a need for a comprehensive policy framework before such a greenhouse trigger is pulled.

Executive Director of the Australian Greenhouse Industry Network, John Eyles, added that the greenhouse trigger would cause a significant loss of investment, jobs, and new technology to overseas competitors. It would discriminate against some projects just on the basis of the volume of their emissions output without taking into consideration their greenhouse efficiency and contributions to the country�s economic growth.

However, Australian Conservation Foundation Executive Director Don Henry said that Hill�s proposal for a greenhouse trigger is an important weapon in the battle to reduce greenhouse pollution.

Although Australia has committed to the Kyoto Protocol, it has yet to ratify it. The debate continues.

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