Block’s Indicator of Sustainable Growth

by Ray Block

With the global financial crisis pushing the Australian economy into an inevitable recession, the Australian Government’s carbon pollution reduction  scheme (CPRS), based on the European emissions trading cap-and-trade scheme, will not be implemented in its present legislative form. The scheme was to come into operation in 2010.

That is at least clear, with the political divisions in the Australian Parliament. The Rudd Labor Government has a clear majority in the House of Representatives, but is in a minority of seven in the Senate. 

The government’s policy of a carbon abatement scheme would require a puny 5 per cent reduction in greenhouse gases from the 2000 level by 2020 (GHG).  But this would increase to 15 per cent, if the major AsIan carbon polluters (mainly China and India) were to join in a post-Kyoto internationally accepted plan for reducing greenhouse gases. 

As China and India are not coming on board at this stage, the 15 per cent emissions cut by 2020 is purely window dressing.

The government has already put into place a mandated 20 per cent increase in renewable energy by 2020.

But  it has not yet mandated the renewable energy target for each of the years from 2010 through to 2020. This is essential if the renewable energy companies are going to commit to new investments in wind energy, solar PV, solar thermal, geothermal, biomass, second generation biofuels etc.

This lack of imperative to get the renewable energy industry excited about the opportunities ahead in Australia shows a curious lack of energy for a government committed to grow local industries, and is very disappointing. The Spanish style of feed-in tariffs to encourage a larger domestic demand for solar panels would be extremely positive, if it was accepted in Australia.

To make real progress, so that the government walks-the-walk, rather than merely talks-the-talk, it now  needs to recast its carbon abatement scheme to widen the definition of carbon reduction and storage to include soil carbon and biochar, along with the already accepted CO2 from power stations.

Soil carbon is a name for fostering deep-rooted plant species in degraded soils, while biochar consists of pellets of very stable carbon made from burning biomass, without oxygen, in a controlled process.

The new timing for the emissions trading scheme could be set for  July 2011, when world economic and trading conditions are likely to begin a slow growth stage. The Australian carbon reduction scheme could then be set at a more respectable 5 per cent to 10 per cent from the 2000 level by 2020. The Europeans will still claim this is too low. 

Butif you look closely at the country by country targets for the European Union, 10 per cent is a reasonable target for a country, where coal is the dominant form of electric power generation.