/*------ACCORDION------*/ /* MAKING ALL ELEMENTS CLOSED BY DEFAULT */

Kevin Rudd, Australia’s Prime Minister, may have uttered one of the understatements of the year when he commented on Monday that an Emissions Trading Scheme was “big stuff for the nation, it is one of those things that we must get right for the long haul”.

In announcing a one year deferral of their hotly debated emissions trading scheme known as the Carbon Pollution Reduction Scheme (“CPRS”) Rudd, Climate Change Minister Penny Wong and Treasurer Wayne Swan, have potentially allowed Australia to play a meaningful role in forging a global agreement by the Copenhagen talks in December 2009. Or they could just be engaging in good old fashioned political maneouvering which could ultimately lead to a national poll being triggered – all because of differences of opinion over emissions trading policy.

Armed with their previous 5% or 15% reduction targets it was unlikely anyone would take Australia’s position in international negotiations seriously. But now the upper limit has been lifted to 25% (of 2000 emission levels by 2020) if a global deal is reached, introducing the same kind of conditional ambition that Europe has adopted.

While suffering from too much pragmatism and not meeting the latest science, the new target is just below the lowest point of the IPCC 25%-40% range (which had a 1990 base not the Australian 2000). The aim now is to generate political will to move towards a much greater and rapid global de-carbonisation, thankfully without an ineffectual 15% reduction locked in by Australia.

Of course the good news is clouded by a few ifs, buts and maybes, as well as significant concessions to industry. Some of the key items being:

The target is conditional on the world agreeing to an “ambitious global deal to stabilise levels of CO2 equivalent at 450 parts per million or lower” by 2050, which is quite a tough ask in itself, but which also includes demands for:

1. a clear pathway to achieving an early global peak in total emissions (not later than 2020)

2. major developing economies slowing the growth and then reducing their emissions,

3. advanced economies taking on reductions and commitments, in aggregate, of at least 25% below 1990 levels by 2020;

4. access to the full range of international abatement opportunities (including avoided deforestation) through a broad and functioning international market in carbon credits.

The scheme is likely to let in international credits to cover up to a quarter of the effort implied by the target.

A Global Recession Buffer will be established to provide more (yes more) assistance to emissions intensive trade exposed (EITE) industries

In other announcements, and of significant interest to Sandbag, is the proposed establishment of the Australian Carbon Trust to protect citizens’ ability to reduce the cap through their own actions. This is a surprising development and one worthy of a separate blog since apparently our business model has been appropriated as Government policy but of course without the campaigning element. More on that shortly.

Politically this is not a surprising turn of events, with the Rudd Government facing a seemingly impossible task of negotiating with an Upper House it did not control. The Greens (who along with two independents have adequate power to block or agree to legislation) were adamant they would not support the trading scheme in its proposed format, while the conservative Liberal-National coalition is yet to release its official position but has called for a delay of one to two years and indicated they would not support the Rudd-Wong plan for fears over its economic impact.

Caught between two opposing blocking positions the question now is whether the proposed changes are enough to appease the Liberal-National minority or whether Rudd will have to push through and try to ‘out-green’ them. It could be a classic example of wedge politics.

Previously the possibility has been discussed of a ‘double dissolution’ election being called as a result of the proposed CPRS legislation. The reaction of the Australian Greens, who are “prepared to support a minimum unconditional 25%target” and “will be opposed to this legislation in the Senate”, therefore increases the likelihood of an early election, potentially on the issue of Emissions Trading and climate targets.

Rudd concluded his announcement with “I wish it was easier to do this, it ain’t, it’s really hard” and “Thanks folks, gotta run”. Let’s hope Kevin, Penny and Wayne are running off to throw their might behind reaching an equitable Copenhagen framework and not trying to simply play political games with climate targets.