Howard embraces carbon trading?

Well, a week is a long time in politics and, as you’ve probably heard by now, the Australian Prime Minister, John Howard has announced that he’s setting up a government-business task force to investigate a carbon trading scheme.

The announcement came, rather appropriately, at a speech at the annual dinner of the Business Council of Australia, which represents big business:

I think it is important to keep the challenge of climate change in perspective. I share [the President of the Business Council’s] view that it is happening and although I have been accused and continue to be accused of being somewhat of sceptic on the issue, the truth is I’m not that sceptical, I think the weight of scientific evidence suggests that there are significant and damaging growths in the levels of greenhouse gas emissions and that unless we lay the foundation over the years immediately ahead of us to deal with the problem, future generations will face significant penalties and will have cause to criticise our failure to do something substantial in response…

I’ve indicated in the past that I do not intend to preside over policy changes in this area that are going to rob Australia of her competitive advantage in the industries that are so important to us and I repeat that commitment tonight. I do welcome the contribution that the Business Council has made and many other people in the business community have made to tackling this issue. Many of you will know that
over the past few weeks the Government has reiterated its broad approach and later this week I will meet some significant business figures, some of them are in the room tonight, who are involved in the resource sector to discuss aspects of the Government’s response to the climate change challenge.

I want to indicate to you tonight that the Government will establish a joint government business task group to examine in some detail the form that an emissions trading system, both here in Australia and globally, might take in the years ahead. I think it is important to involve the business community in an analysis of this issue because decisions taken by the Government in this area will have lasting ramifications for Australia’s business community. I think we all recognise that we have to examine in the time ahead how we might devise an emissions trading system which properly cares for and accommodates the legitimate interests, and therefore maintains, the competitive advantage that this country enjoys in the industries that are familiar to you…

Although couched in familiar pro-resource-industry language, this is something of a turnaround from the Australian Government and so people are understandably questioning whether it’s genuine. I think we should give the benefit of the doubt – that the Government is airing these issues must be a good thing. It is quite odd though, given that the Australian States set up a task force two years ago to examine this issue and invited the Federal Government to take part or, preferably, take the lead. (The Government refused to be involved). The States’ taskforce issued a detailed paper outlining a possible trading scheme in August and it would seem to make more sense for the Government to get involved in that existing process. But I guess the national mood is changing and Howard wants to be seen to be doing something himself – and perhaps he wants to have more control by having his own taskforce rather than joining the States.

It’s also important to note that Howard is talking about looking at carbon trading both domestically and internationally, and spoke repeatedly of "a new Kyoto". I’m sceptical about this. Australia has actively disengaged from global negotiations on climate change since 1998 and now lacks influence internationally to be talking about setting up a ‘new Kyoto’. The existing Kyoto Protocol has always been flexible enough to accommodate what the Australian Government wants (in particular, targets for developing countries, which were not part of the first commitment period from 2008-2012 but will be at least on the table after that) and its refusal to ratify was, in my view, based on politics, not on principle.

If this task force is to come up with something useful, it should concentrate on the area it can influence – that is, a domestic carbon trading system. If Howard genuinely wants a new Kyoto, I’d suggest it’s time to re-engage in global negotiations.