Don’t argue the mechanism, set the target

The UK Prime Minister David Cameron surprised everyone this week by proposing to write into law a 50% emission reduction target over 1990 levels by 2025.  A bold step perhaps, albeit one that serves his political ends as much as benefiting the atmosphere. The audacious move even managed to leave the environmentalists with nothing to argue about. Mr Cameron probably allowed himself a wry smile into his shaving mirror.

Naturally there is a get out of jail free card in the form of a review in 2014 to see if other European nations have followed the lead. Plus UK emissions are already 23% lower than 1990 thanks to initiatives on easily achieved reductions. Yet no one doubts the ambition, for it will become increasingly harder to close in on the target.

So why did Cameron impose such a mission on a country with an ailing economy and huge government debt requiring draconian actions to cut public spending? Because there is nothing like a mission impossible to galvanise people; a collective cause get people fired up enough to take action, innovate and embrace risk.

Cameron has taken a gamble. Success will see UK business change to be more efficient and grow new sectors in innovation, especially in clean energy, and the gamble is that a mature economy has the smarts to achieve it. Plus he has the market mechanism of the EU ETS and an electorate who already understand the cause. The downside is that cause may not be strong enough to ignite passions and the target too distant and potentially too costly. On balance though, what appears bold is solid politics and an understanding that transition to a less carbon intensive economy is inevitable; in short, leadership.

Not so surprising this week were opinion poll numbers in Australia.

The Prime Minister Julia Gillard is currently less popular and the Labour Party primary vote is lower than when the jitters struck and the party ousted her predecessor and she became Prime Minister almost a year ago. The pollsters take is that the Australian public is not listening anymore and they don’t want a carbon tax. Only it would be suicide for the government and the party to capitulate again. Somehow, someone somewhere has to come up with a policy on emissions.

The problem is that, unlike the UK, Australia is in a time of plenty. It may feel precarious to be so reliant on a resources boom and there are fiscal challenges, not least the effect of a strong currency on trade exposed sectors, but really, these are good times. And in good times mighty challenges have trouble finding traction. Any call for a ‘fight on the beaches’ spirit just sounds odd. So instead of a cause we have a 5% emission reduction target, a laughable proportion already massively exceeded by the UK.

Now suppose the PM embraced the risk and made a 50% emission reduction by 2025 her carbon policy. Forget the tax for the moment, go back to basics and set the target.

Such a policy has meaning, can be explained and provides the context for any number of mechanisms to achieve the result. The debate can then be about the most efficient way to reach the target.

Success would see Australia emit 225 MtCO2e in 2025.

In reality this will be a net emission, combining emission reductions and sequestration. Quietly amongst the ‘great big new tax’ spin the Carbon Credits (Carbon Farming Initiative) Bill 2011 is in front of parliament, the mechanics of a domestic carbon offset scheme that could see 20 MtCO2e per annum sequestered by the agricultural sector alone.

Take a punt on this offset option, educate for energy saving, keep the feed in tariffs, even try a CPS style market instrument and the target is achievable. And, best of all, the electorate will understand why it was all necessary.

Who knows, the public might even respond to such leadership in the polls.

One thought on “Don’t argue the mechanism, set the target

  1. Pingback: Labour leaders « Alloporus

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