Costello on climate change: Back to the future?

The Sydney Morning Herald and ABC News today report a "softening" in the federal government’s opposition to carbon trading.

ABC News had this to say:

Federal Treasurer Peter Costello says Australia should be involved in a worldwide carbon trading system to tackle climate change... "I think, in Australia, we've got to keep a careful eye on this," he said. "I think the ground is changing. I think it is important that we bring new countries into this discussion. And I think, from Australia's point of view, if the world starts moving towards a carbon trading system, we can't be left out of that. We ought to be in there negotiating what this system would look like so that we protect our own interests obviously but also, we ensure that it's broad ranging, wide-encompassing and effective."

But Mr Costello says any new international system is still years away. "You're probably talking about the next decade," he said. "And, bear in mind, greenhouse is something that's believed to increase temperatures, say, two degrees over 50 years. I mean, the thing about greenhouse emissions is - all of the evidence is that they're emerging but it's not something that's going to emerge tomorrow. It's something we have to work out over 10, 20, 30, 40, 50 years."

According to the SMH:

Labor's environment spokesman, Anthony Albanese, said yesterday that it was bizarre that Mr Costello could not see the need for urgency in light of the Stern report and the rapid growth in the international carbon market, already worth $US30 billion ($39 billion). "They are so far behind the game. I think the Government is stubbornly refusing to acknowledge that they have wasted a decade," Mr Albanese said.

He has a fair point. The government is only now beginning to talk about considering international emissions trading. But this is what Alexander Downer, the Minister for Foreign Affairs, had to say in a speech in May 1998 – more than 8 years ago – just after the present government made the decision to sign the Kyoto Protocol that it now derides:

I am pleased to be here with you today to share with you my assessment of the opportunities and far-reaching role that international emissions trading will play in the successful implementation of the Kyoto Protocol. International emissions trading provides the means of harnessing the power of the market to provide cost effective solutions to emission abatement.

The Framework Convention on Climate Change agreed at the Rio Earth Summit in 1992 committed action by industrialised countries, to reduce greenhouse gas emissions. However, by the first Conference of Parties to the Convention in Berlin in 1995, it was apparent that a different more specific and longer term approach was necessary. The Berlin Mandate negotiations were born and we were on the road to Kyoto.

Some argued then, as some still persist in arguing now, that as the science of climate change is still evolving, that we should simply just wait and see before taking action, either collectively or individually, to reduce the level of atmos-pheric concentrations of greenhouse gases… I and my colleagues in government were not prepared to do that…

In agreeing to play Australia's part in the global effort to reduce greenhouse gas emissions, our government accepted [the] precautionary principle. In the face of the current scientific evidence supporting global warming, to do otherwise would have been foolhardy…

The responsible approach, which the Australian government took, was instead to advocate an approach of equitable burden sharing or, differentiation, along with flexible implementation to make the climate change framework workable and sustainable over the long term...

And the Kyoto outcome, agreement to negotiated differentiated targets that reflect national circumstances, vindicated Australia's stand. We now have a framework that forms a sound basis for further elaboration. Securing agreement to an equitable distribution of the effort of addressing climate change through differentiated country targets, was a major step forward for the global community.

The Kyoto protocol is a major step forward. It is an agreement which provides the framework for environmentally effective, equitable and durable action to address climate change.

Kyoto though is but one step along the long term path. Critical steps still remain for the future. We need to fill in the details and make operational the far reaching market mechanisms we agreed in the protocol.

The provision in the protocol for emissions trading has altered production fundamentals... In providing for flexibility mechanisms, in particular emissions trading among industrialised countries, the Kyoto Protocol determined what would be the key driving force behind global emission abatement action...

While the Kyoto Protocol does not provide for developing country commitments, it does include provision for a clean development mechanism. The design of the clean development mechanism provides industrialised countries with the potential for low cost emission reductions, as well as providing significant economic incentives for developing country participation…

A final issue, which I'm sure will be the subject of much domestic debate, will be how any international regime might link with any domestic trading regime…

The challenge the government faced in the leadup to Kyoto was twofold: to contribute constructively to an outcome that deals with the problem of global warming and simultaneously to protect Australia's national interests. The Kyoto outcome has, I believe, the potential to deliver on both fronts.

So what happened? When did the federal government go off the rails and why is it only now beginning to consider ideas that it actively argued for during the Kyoto negotiations? And how will it justify its lack of action over the past decade?