The Copenhagen Accord asks Australia to submit to the UNFCCC secretariat by January 31, 2010 its “quantified economy-wide emissions targets” for 2020. Other developed countries are also expected to submit economy-wide targets. These pledges will not be legally binding.
So-called developing countries, on the other hand, need only submit “nationally appropriate mitigation actions”, not economy-wide targets. It is not yet clear which developing countries will make this weak pledge.
The arbitrary differentiation between developed versus developing countries is an UNFCCC absurdity. It allows relatively advanced countries such as China, Brazil, Mexico, South Korea and perhaps another 35 countries to seek refuge in the developing country camp - yet they all have GDP per head greater than the Ukraine, the poorest of the developed countries, which is prepared to commit to an economy-wide target.
Copenhagen demonstrated, as if it were ever needed, that Australia’s pledges have no influence whatsoever on the level of commitment the world’s advanced countries are prepared to offer. Indeed, it has become clear that the pledges of the President of the USA, Barack Obama, have little influence either. After all, China’s offer, if it still stands, was little better than a business-as-usual, non-binding target that will see its emissions double by 2020.
Copenhagen was a reality check and Prime Minister Kevin Rudd has now rightly promised that Australia should “do no more and no less than other advanced economies”. What commitment then should Australia make that would be consistent with the no more, no less promise?
The measurement of “comparable effort” among countries is of course complex, but one measure that is reasonable is the estimated loss in Gross National Product, an economic welfare indicator.
The first point of reference for measuring loss in GNP is the government acclaimed Treasury modelling released in November 2008. Treasury modelled an Australian emission reduction commitment of -5 per cent of 2001 emissions in 2020 and emission reductions for the EU of -23 per cent of 2001 emissions by 2020, the USA -19 per cent and Canada -9 per cent, all advanced countries Australians would compare themselves with. The result was that, as measured by the loss in GNP, Australia would pay significantly more than the EU and the USA, and about the same as Canada. In other words, for the same environmental outcome, Treasury found that Australians would pay three to four times more than Europeans and Americans by 2020.
Importantly, the modelling demonstrated that, because of Australia’s national circumstances, simple comparison of the percentage level of commitment, in this case -5 per cent for Australia compared with -23 per cent for the EU and -19 per cent for the USA, is a very poor indicator of comparable effort.
Late last year, the Australian Industry Greenhouse Network (AIGN) commissioned Access Economics to update the Treasury modelling. Importantly, the global scenarios used by Access were more realistic than the perfectly co-ordinated world scenarios used by Treasury. Further, the Access assumptions about country commitments were in line with the pledges on offer at Copenhagen, including the -5 per cent for Australia and -20 per cent for the EU based on 1990 emissions, -20 per cent for the USA based on 2005 emissions and -20 per cent for Canada based on 2006 emissions. It is noted, however, that in Copenhagen President Obama lessened the USA pledge to a range of -14 per cent to -17 per cent by 2020.
The Access Economics report found that, with a -5 per cent pledge and the -20 per cent pledges for the other countries, the government would be asking Australians to shoulder an estimated annual welfare loss of US$785 per capita by 2020. This compares with US$615 per capita for Canadians, US$349 per capita for Americans and for Europeans just US$186 per capita per annum in GNP losses by 2020. The average for all OECD countries was US$268 per capita per annum.
Clearly, on the basis of the pledges from these advanced countries, Australia’s -5 per cent offer is much more than is warranted under the Prime Minister’s no more, no less promise. Further, it is known that the President of the USA will not be offering more than has already been proposed and, even were the EU to offer its maximum -30 per cent by 2020, the impact on Europeans would still fall far short of that imposed on Australians by the -5 per cent pledge.
The conclusion reasonably drawn from both the Treasury and the Access work is that Australia should be offering lesser, not tougher targets than the -5 per cent pledge.
It is in the national interest to have a public debate about what the government is proposing to submit to the UNFCCC secretariat. AIGN urges the government to provide further information about “comparable effort” and the specific criteria the government is proposing to use to ensure Australians pay “no more and no less than other advanced economies”.
An informed public debate through an inquiry by the Joint House and Senate Parliamentary Treaties Committee is warranted. That means missing the January 31, 2010 date; but surely transparency from the government and an informed community is more important.