Garnaut and beyond

How can we come to terms with climate change? As new technologies are developed, will the future really be that bleak?

The last few weeks have seen two major developments in the nation's response to climate change, with the release of the Garnaut Climate Change Review, followed by the release of a Federal Government green paper outlining the steps toward carbon trading. Weighing in at a combined 1,070 pages, I'm not going to pretend I've read every word of either document, but I did attend the public briefing at the Melbourne Town Hall from Professor Garnaut on Wednesday July 9, and hope to give some of my thoughts on both documents here.

The science supporting climate change has been well covered — both here in Inside Story, and in the mass media. What is particularly interesting in the Garnaut report is the Australian specific consequences of inaction on greenhouse gas emission. According to the report, by 2100 there would be a decline of 92% in irrigated agricultural production in the Murray Darling Basin, affecting dairy, fruit, vegetables and grains without mitigation. There would also be catastrophic damage to some of our most iconic natural environs — the Great Barrier Reef and Kakadu. While 2100 is a long way away (outside the lifetime of all but the youngest members of the congregation) and one could argue that the uncertainty in modelling that far into the future is high, the effects are expected to be significant, even within the next generation. The time for action has come.

It's true that we are a small country in terms of population, and that Australia is responsible for something like 1.4% of global greenhouse gas production. On a per capita basis, though, we are much more significant. We are the 3rd ranked nation in greenhouse gas per person from transportation, and the 1st in greenhouse gases from electricity and heat — a reflection of our reliance on the car, on the large distances that we have to travel to go from city to city, and on our heavy use of coal for power generation.

The argument that we can't afford to act because we will lose international competitiveness doesn't hold up. As Professor Garnaut has been fond of saying, we won't be the first nation to introduce a cap and trade system for carbon, should the government go ahead and do so by 2010 as they are planning to; we will be, at best, the 27th — and that's not counting some of the states in the USA who have taken the lead ahead of action from their federal government.

There is some truth in the idea that what the large polluting nations do will dwarf whatever happens here. Our delay in ratifying the Kyoto Protocol, however, gave us no foothold to try to convince other countries to act. Ultimately, someone is going to have to lead on this issue, and inevitably it's going to have to be the developed nations.

I was listening to a podcast today from Professor Michael Oppenheimer from Princeton University. He had one line that's sticking with me: "without scarcity, there is no market".

As of 2008, we don't have a major shortage of fossil fuels, although there is a lot of evidence that we will in the next generation or so, and the speculation about this is a factor in the current oil price. If we accept that fossil fuel consumption leads to greenhouse gas production (which is demonstrated by basic chemistry), and we accept the IPCC evidence that this is leading to global warming, we have two choices. The first is to limit the amount of fossil fuel consumed — which can only be done by legislation, mandating that coal, oil and gas stays in the ground. The second is to limit the amount of greenhouse gas sent to the atmosphere.

The intention of carbon trading is to work on the second approach.

I'm going to use the analogy of the AFL Grand Final. The capacity of the MCG limits the crowd in this year's Grand Final to 100,000 people. Now, imagine each year the MCC takes 1,000 seats out of the MCG. Each year, there will be fewer and fewer seats at the MCG, and they will become more valuable. Those who can't get in will look to other ways to follow the grand final — whether on TV at home, or listening on the radio, or the internet. Some might find that they give up on football altogether.

That's what is supposed to happen with carbon trading. By 'capping' greenhouse gas emissions (like the MCG is 'capped' to 100,000 spectators), there will be a limit on how much carbon dioxide and other pollutants can be emitted. That cap is supposed to be reduced each year, to some target —somewhere between 50% and 90% of the current levels, depending on political will.

Whether the carbon trading system that's proposed is effective or not is uncertain. It seems inevitable that costs of carbon intensive activities will go up — from fuel, to power. How much these costs increase depends on the price of carbon, which will depend on what targets are chosen for emissions in 2050 (and what interim targets are chosen for 2020).

Professor Michael S. Northcott of Edinburgh University argues against a carbon trading system in his new book A Moral Climate (which I will review in a future Inside Story), and for legislation to leave fossil fuels in the ground instead. Personally, I have concerns about the plans to leave petrol out of the trading system, and I hope by the time the full legislation is introduced, we may see a change in this plan. However, I'm not optimistic.

There is always hope that new technologies might help people find new and better ways to transport themselves or goods, or to power or heat their houses. Some of those technologies are already fairly well established —solar cell and wind turbines, for example. Some technological improvements will happen without us even noticing. I read recently that on average, fridges have become 1% more efficient each year for the past 30 years.

There are other big, potential technologies that will change the world enormously if they can be made to work. Professor Garnaut, both from his report and his public comments, has enormous faith in the potential of carbon capture and storage for coal-fired electricity generation (or geo-sequestration). If this technology —which essentially involves taking the carbon dioxide out of the gases that go up the chimney when coal or oil is burnt, and then injecting it deep underground — can be made to work, it will enable us to use a lot of the fossil fuels on the planet without the greenhouse emissions. Although there have been some recent tests reported, it is a long way from being proven technology. Using geothermal hot rocks for power and heating is a possibility that has excited many people, and has parallels in the way volcanic gases are used in geothermal hotspots such as the North Island of New Zealand.

The other technology mentioned in the Garnaut report is the potential to use algae as a source for biofuels. As has been pointed out by the United Nations and others, the use of '1st generation' biofuels, which have been largely based on edible crops, including grains, corn and sugar, has put upward pressure on global food prices, with devastating results in many countries. The possibility of using algae for making biofuels has the dual attraction of avoiding the use of food crops, as well as providing the chance to be very low in carbon emissions. Both of these are common goals with other '2nd generation' biofuels, including those based on lignocellulose, that I have discussed before.

In my mind, it is not as bleak as it looked a few years ago. The tide has turned in response to public sentiment, and where that goes, governments will follow. While the thought that we can have a globally negotiated, well managed agreement on greenhouse gas emissions seems overwhelming, the thought that we could even have a serious national and international discussion about limiting emissions seemed impossible a few short years ago!

Further information on the report can be found on the website for the Garnaut Climate Change Review www.garnautreview.org.au. The website includes the draft report, issue and discussion papers, media releases and transcripts, and a schedule of public events.

Steve Loffler