Stand Firm Against Race to the Bottom

An Open Letter to the Greens and Senator Nick Xenophon on Australia’s Emissions Trading System

Global warming is the most significant moral issue of our time. Current generations still have a choice. We can act to reduce dangerous climate change or persist with business as usual, despite knowing that doing so risks denying our children the most fundamental of birthrights – a habitable planet. That we know this, yet seem collectively incapable of pulling ourselves together to do what is right and necessary, offers a depressingly instructive lesson on the limits of our species and the systems of governance under which we labour.

Senators, you are right to say the government’s cap and trade scheme is not good enough. The Rudd Government’s target of 5 to 15 per cent is too low, and far too many free permits to pollute will be handed out. A cap and trade scheme is all about putting a price on carbon and getting polluters to pay. Yet the Rudd scheme is all about rewarding precisely those businesses that knew a market-based scheme to reduce pollution was coming, but did little to prepare for the change.

The problem is that the politics on the issue is now running the wrong way. This week’s announcement by Kevin Rudd that emissions trading will be delayed until 2011, and that big polluters will get another $2.2 billion in handouts seems designed to wedge the Opposition in order to capture the votes of the Liberals in the Senate later, on a more neutered bill. It signals a race to the bottom on climate change in preference to an improvement in the environmental credentials of the scheme in order to cultivate you.

You must try to turn this around. To deal yourself back into the unseemly political horse-trading around the planet’s future so that an emissions trading scheme with its fundamental features intact can be put into place.

Why? Because while there are other carbon reduction policies we can pursue, emissions trading matters. Cap and trade schemes are the cheapest and most efficient way of getting business to change its ways for the good of the environment. History shows that, once in place, business adjusts and gets on with it. But it also shows that to get a scheme in place, concessions must be made to the most egregious polluters.

Take Europe. They got their cap and trade system in 2005, but its had little impact on emissions because too many free permits were granted and offsets allowed. Nonetheless, the existence of the scheme encouraged innovation and changed business investment and operational decisions. Experts interviewed on ABC Radio’s Rear Vision now expect that when the next phase of the scheme begins in 2013, most permits will be auctioned instead of given away, and real emissions reductions will finally be achieved.

To get a cap and trade scheme, Europe bought the business lobby off to stop its squawking. Australia must do the same, but with you-the Greens and Independents-cutting the deal, not the Liberals, who say the government’s scheme is structurally flawed. If they call the shots, the fundamentals of a cap and trade scheme could be bargained away.

Compromise hurts. It hurts all the more when those forcing you to the mat are as ethical as raptors. But sometimes in politics it is those with the foresight and fortitude to insist on baby steps that triumph in the end.

I wish you all success.

Publication history

Stand Firm Against Race to the Bottom  Sunday Sun-Herald (Sydney)