An angry Prime Minister Kevin Rudd told the May 12 7:30 Report that he was “passionate about acting on climate change”. Yes, we know. But if only he’d stop acting and start doing.
The demise of the Rudd Labor government’s proposed Carbon Pollution Reduction Scheme (CPRS) is not the problem. It’s a good thing. The problem is that the government still has no serious climate change policy.
The 2010 federal budget confirmed this. An extra $650 million will be spent over four years on renewable energy and energy efficiency measures — a boost to the insufficient $1.6 billion already slated for investment in solar energy.
At the same time, a rebate scheme to conserve and recycle water lost $249 million and bush regeneration programs lost $161 million. The Department of Climate Change had its budget cut by $238 million.
The government has also skimped on its promise made at the Copenhagen climate summit to increase aid to countries most affected by climate change, especially Pacific island nations threatened by rising sea levels.
The budget had a climate aid item, but it’s not new money. It has merely allocated a part of the existing aid budget.
Before the budget was released, more than 40 climate action groups and NGOs signed an open letter to the government that called on it to “scale-up investment in renewable energy and climate-friendly infrastructure in this year’s federal budget”.
The campaign and research group Beyond Zero Emissions (BZE) initiated the open letter. It said: “We express our profound concern that your government has still not proposed or implemented any policy to significantly reduce Australia’s greenhouse gas emissions.
“At a time when climate change experts agree we must act, it is imperative that your government begins efforts to de-carbonise our national economy.”
The letter stressed a transition to a renewable energy economy would be jobs-rich. It called on the government’s climate spending to match its planned investment of $22 billion to $42 billion in the national broadband network.
This initiative is important because it unites the climate movement around the idea that the government must take primary responsibility for stopping climate change, rather than leaving it to the market alone.
It echoes the call coming out of Bolivia’s World People’s Summit on Climate Change, which was held in Cochabamba last month. The summit’s final declaration called on governments in the rich world to commit at least 6% of annual gross domestic product (GDP) to help developing countries.
The first step towards the kind of just solution to climate change envisioned at Cochabamba is for big polluting nations like Australia to sharply cut their own carbon pollution.
BZE is finalising its stationary energy plan, which outlines how Australia could get 100% of its energy from renewable sources in just 10 years. It estimates this would cost about $380 billion over the decade, or $36.7 billion each year until 2020.
It sounds like a huge expense, and, compared with the main federal budget items, it is— close to 3.5% of Australia’s annual GDP.
As a major category in the recent budget, it would have been third behind social security ($110 billion over 2009-10) and health ($53 billion), ahead of education ($35 billion) and “defence” ($20 billion), and three-and-and-half times total actual and projected federal spending on climate change initiatives so far ($10 billion according to the government — $8 billion when funding for bogus carbon capture and storage is removed).
Where would the money to fund such a shift to renewable energy come from? The present tiff between the government and the mining industry over the Resource Super Profits Tax (RSPT) provides the clue.
In 2006-07, (the year for which full statistics are available) pre-tax resource industry profits stood at $41 billion and the industry profit margin (pre-tax profits as a proportion of total income) at 35%.
If mining super profits in that year had been creamed off to bring the mining industry profit margin to the average (economy-wide) rate of 12.8%, the public purse would have benefited to the tune of $26 billion. That’s 70% of the annual funding needed for energy sustainability.
We should also add in the $2 billion a year that the industry receives in fuel and energy tax exemptions.
Despite the orchestrated squealing of the billionaire mining oligarchs, the Labor government’s RSPT won’t be reducing mining industry profitability anything like that much. When the RSPT is in full operation, it is predicted to trim only $9 billion a year off the industry’s profits, between 10% and 15% of the likely total.
Taking the profit share of the Australian economy as a whole, the $36.7 billion BZE estimates is needed for the renewable transition amounts to only 12.7% of the 2008-09 gross operating surplus of corporations operating in Australia.
It could be collected by lifting the company tax rate, pursuing corporate tax evasion and imposing a super-profits tax not only on the mining sector, but on the finance sector, in particular the big four banks. These accumulated $22 billion in pre-tax profit in 2008-09, and their return on equity stands around 20%.
At a time when a legal “class action” is being launched against the banks for bleeding $5 billion from customers in four years through fees on late payments and other ruses, it’s time to start building our own “class action” for urgently needed climate sustainability funding.
That’s even more true because the BZE plan for 100% renewable energy represents only part of the total investment needed to reach a 5% annual cut in total carbon emissions. As further detailed plans for other sectors are made, further funding will be called for.
When it comes to saving our planet, those who can most afford to pay — the billionaires, especially those whose obscene wealth derives from polluting industries — must foot the bill.
It falls to the climate movement to spread the word that such a transition is possible — and must be paid for by the wealthy polluters. Building support for this kind of emergency transition is the way forward.
But climate campaigners should shed no tears for the postponement of the CPRS — it was never meant to cut emissions sharply. Rather, it was designed to help the ALP satisfy the widespread public concern about climate change while still letting carbon-intensive industries to continue as usual.
From the outset, grassroots climate activists campaigned against the CPRS. They said its loopholes and compensation to big polluters made it worse than nothing.
Others pointed to the bad results of emissions trading in the European Union and questioned whether a scheme that privatised the air and traded in the “right to pollute” was a good idea.
Most of all, opponents pointed out the CPRS ignored the climate science, which demanded far bigger emission cuts than the government’s 5% target.
The proposed CPRS was unlikely to meet even this tiny goal because it legalised a scam whereby companies could buy carbon credits for emission cuts made overseas. The government would have counted the credits as “Australian reductions”, even if Australia’s actual emissions had still risen overall.
The 150 climate action groups at the 2009 grassroots Climate Action Summit concluded the scheme was a dangerous distraction from real climate action. The summit decided stopping the scheme from becoming law was a priority. The 2010 summit reaffirmed this goal.
Differences over the CPRS arose in the broader climate movement, however. Some big NGOs, such as the World Wildlife Fund and the Australian Conservation Council, put their credibility on the line to back the government’s scheme, despite its flaws.
But in April, Rudd announced the CPRS would be delayed until 2013. Like the initial legislation itself, the decision to postpone was a cynical one, devoid of principle.
Labor simply calculated the complex carbon-trading scheme would be too risky to sell to the public in an election year. Under new leader Tony Abbott, the Coalition has adopted a more strident climate denial position. In response, Labor ruled out dealing with the Greens to make its legislation stronger.
Rather, it decided to minimise its differences with the Liberal/National Coalition and junk its centrepiece climate policy.
It appears the government’s recent battering in the polls has much to do with its perceived backflip on climate action. Public support for an emissions trading scheme is still high, largely because many people still understand it as a climate-friendly policy.
However, the policy’s delay opens the door for campaigners to build pressure for genuine climate-friendly alternatives.
It’s clear the community campaigns for 100% renewable energy are already having an effect. The May 5 Australian reported ALP MPs were concerned after “being bombarded by outraged younger voters in their electorates” about climate change.
Climate action groups around the country connected with the 100% Renewable Energy campaign have led this “bombardment”. Dozens of groups organised to contact their local MPs in the first week of May to let the politicians know the climate movement is more determined than ever to force sustainable change.