In 2004, Australia’s total greenhouse gas emissions totalled 564.7 million tonnes of carbon dioxide. About 68.5% of this came from the energy sector.
While most other developed countries have begun reducing their emissions, Australia’s are skyrocketing.
The two key greenhouse polluting sectors, energy and transport, are expected to increase their greenhouse gas emissions by more than 40% by 2010.
Buying and selling greenhouse pollution has become a multi-billion dollar business around the world and Prime Minister John Howard is now signalling he will at least consider carbon trading.
In February, a Howard Government taskforce investigating a global emissions trading system rejected carbon tax on industry as an effective method of lowering emissions, instead supporting carbon trading.
A carbon tax is a levy on energy according to its carbon content. The main aim of such a tax is to force firms and households to shift towards less carbon-intensive fuels, such as those resourced from renewable energy.
Opponents argue it could damage Australia’s international competitiveness.
Unlike a carbon tax in which industry pays an arbitrary financial penalty for the amount of carbon it emits, carbon trading “uses the open market to discover the lowest cost ways of reducing emissions”, according to the taskforce’s report.
Business Council for Sustainable Energy executive director Ric Brazzale said that emissions trading would be a cheaper way to achieve greenhouse gas reductions.
“Not only will it let you meet your target at a lower cost, but it will also drive innovation in new technologies and will drive trading amongst liable parties,” Brazzale said.
“Evidence shows that with a market-based mechanism like that, you’ll get a much more effective response.”
But WWF-Australia chief executive Greg Bourne said neither scheme could be a standalone policy.
“When we’re trying to bring about change, particularly in emissions, we’re going to have to use a whole mix of policies and measures and market-type mechanisms,” Bourne said.
“Regulation and standards are also part of the mix and sweep of things that need to be done. No one instrument does everything for all people – that’s the key.”
Both Bourne and Brazzale said a carbon price signal would make gas-fired generation much more commercially competitive compared to coal, which has twice the greenhouse emissions of gas.
“Once you put a price on carbon, gas becomes quite a cost-effective power generation option, which leads to a significant expansion of the gas market,” Brazzale said.
“We don’t have to look any further than Queensland to see what will happen. The Queensland Government introduced their 30% gas scheme, which requires electricity retailers to buy a certain proportion of their electricity from gas-fired retailers.
“Under that sort of regime, we would expect there to be a significant uptake of gas-fired generation and in Queensland that’s supported a massive expansion in gas fields.”
Brazzale said over the next 20 years there would be a “significant” increase in greenhouse gas emissions caused by rising electricity demand and high intensity power generation.
“If we’re going to stabilise emissions, then gas and renewables will have to double their current contribution in that sort of time frame,” he said.
“And things like clean coal and nuclear are just not going to be within that time frame with any sort of involvement because those technologies are still a long way away. They are not going to be competitive with gas and renewables.”
But Bourne believed all of these technologies would play a role.
“It is imperative that we carry out all over Australia a number of pilots with great urgency,” he said.
“If, for example, carbon capture storage is going to work, we want to know quickly. More importantly, if it’s not going to work, we want to know now because we will then have to find alternatives.”
He said the best way to tackle climate change was to set targets.
“By the end of 2010, we need to be turning down our emissions instead of them going up by 2% per annum,” Bourne said.
“If we’re not turning down by 2010, why would an investor have confidence that the country was going to go through a 20-30% reduction gate by 2020?
“Those targets become really important and we’re really going to have to do things across the whole of the economy – not just the supply side in the energy generation sector, but across the demand side as well.”
APPEA 2007 environmental sessions tackle sustainability
APPEA 2007’s Tuesday morning session on Environmental Management and the Cost of Carbon includes three presentations: Challenges of applying an integrated risk management approach to social and environmental issues by M Ames and J Wysocki of URS Australia; The emerging black market in carbon credits in Australia by A Warburton of Minter Ellison; and Options for responding to the threat of a cost of carbon by L Maimone and M Nelson of Ernst & Young.
The Wednesday morning plenary session is on the theme, Managing the Sustainable with the Commercial.
WWF-Australia chief executive Greg Bourne will speak on Reducing our Footprint and a Low Carbon Future: What Role for the Oil and Gas Industry; Rare Consulting principal Mark McKenzie will outline how natural gas can be used for road transport in Australia, while Australian Industry Greenhouse Network chief executive John Daley will discuss how carbon-priced power generation is likely to affect the gas market.
Other environment-related sessions include balancing sustainable and commercial outcomes and an overview of Australia’s first geosequestration project, the Otway Basin pilot project.
