Independent moves to find alternatives to Kyoto

Individual businesses operating below the cap would be able to sell their credits to those wishing to operate above the cap. Businesses would be free to choose to cut their emissions or buy credits from other businesses. “This is not a carbon tax, which is a penalty imposed on industry for emitting carbon or greenhouse gases," the premier pointed out. Unlike a tax, credits could flow between companies and not to government. (Greenhouse Challenge for Energy and the coinciding Allen Consulting Group report)

The farmers’ plan

The National Farmers’ Federation has proposed a vegetation plan on the lines of and in parallel with the National Water Plan. President Peter Corish, who was convinced the Kyoto agreement would disadvantage Australian farmers, is concerned however over the federal government’s reluctance to canvas a carbon credit trading market.
 
 He believes producers should own carbon credits emanating from their properties, which would provide farmers with a major incentive. Government claims concerning the success of restricting, or banning, tree-clearing had ignored the fact that these measures were forced on farmers without financial incentive. “The whole community benefits, but farmers are constantly expected to foot the bill,” Peter Corish said. “This situation cannot continue.”

An NFF report, Tracking to the Kyoto Target 2004, indicates that native vegetation restrictions in Queensland and NSW had reduced annual greenhouse emissions by million of tonnes.

Carbon dioxide storage plan

ABARE executive director Dr Brian Fisher advocates that carbon capture and geological storage technologies, applied to coal and gas-fired electricity generation, could provide significant opportunities to reduce carbon dioxide emissions over the period to 2050. (Near Zero Emissions Technologies report, 2005).

Because of Australia’s high dependence on fossil fuels and availability of geological carbon storage sites, he believes long-term storage of carbon dioxide from electricity generation plants has the potential to substantially reduce emissions growth from the electricity sector, currently contributing around 40 per cent of total anthropogenic carbon dioxide emissions.

The professor’s plan

Professor McKibbin, in conjunction with Professor Peter Wilcoxen, of Syracuse University, has put forward this “Blueprint”, a hybrid version of Kyoto, as an alternative, and uses government bond markets and monetary policy, common to many countries, as an analogy. Under the Blueprint, he writes:

“… each country would issue two kinds of emissions permits: long-term permits that entitle the owner of the permit to emit one metric ton of carbon every year for a long period …and annual permits that allow one ton of carbon to be emitted in a single, specified year. Both types of permit would be valid only within the country of issue - unlike the Kyoto Protocol, there would be no international permit trading. Each year, governments would require firms within a country to have a total number of emissions permits, in any mixture of long term and annual permits, equal to the amount of emissions they produced that year.

“The number of long-term permits each country could issue would be decided by international agreement and could be based on the limits in the Kyoto Protocol - on average about 95 per cent of most countries’ 1990 emissions. It would be up to each government to decide how to allocate its long term permits … Once distributed, the long-term permits could be traded among firms, or bought and retired by environmental groups. In addition, the government itself could buy back permits in future years if new evidence on climate change indicates that emissions should be cut more sharply or in extreme circumstances they could change the units of these permits in a uniform way.

“Annual permits would be sold at a stipulated price determined by international negotiations … Every ten years, countries would meet to evaluate the information on emissions, climate change, and climate science and then decide whether or not to change the agreed annual permit price to be in place for the following decade.

"Professor McKibbin concludes that by establishing property rights over carbon and removing direct subsidies, it would minimise lobbying by industry. It gives the government who creates the property rights the opportunity to allocate this new form of wealth however it wishes ... It compensates fossil fuel intensive industries (and their shareholders) for past carbon investments and creates a market for hedging future investments which creates value in reducing uncertainty … And if the Blueprint is shown to be an attractive system that works as well as expected, it would encourage other countries to adopt a similar price based system. In contrast to a country by country carbon target, a global system based on costs and efficiency would benefit an efficient, low cost energy exporter like Australia, even in a world of tightening carbon constraint.”

(Uncertainty and Climate Change: The Challenge for Policy, Academy of the Social Sciences 2005.)

Moves overseas

In the US, climate change leadership is occurring independent of the White House. Michael Northrop, in the Washington Post on February 28, 2005, writes that some businesses and several governments have not waited for US political leadership, but “have moved ahead, often aggressively, to constrain carbon dioxide releases, mostly by using energy more efficiently. In doing so, they are reaping enhanced profitability and robust growth.