Climate Solutions Must Be Genuinely Global

25 March 2007

Herald Sun

By Michael Chaney
Business Council of Australia

There’s no debate that’s dominated public thinking in recent times like climate change.  

Just about every issue associated with the environment is now seen through the prism of greenhouse emissions and the link with our weather patterns.  

Given the intensity of the debate, there is significant pressure on governments and policymakers to act in the short term.  

No one doubts the need for action.  

Yet we must be clear about what the challenge is, what can be done about it, and in what timeframe.  

Make no mistake, addressing the challenge of climate change means nothing short of fundamental changes to our economy and society.  

One of the biggest mistakes in the global warming debate to date is a belief that tackling the problem lies in simply signing on to a protocol, or making superficial changes to the way we go about our lives.  

Think about your own lives – the home that you live in and how you light, warm and cool it (one-fifth of all Australia's emissions come from households), the vehicle you drive (the average car produces four tonnes of CO2 a year) and the lifestyle and travel you enjoy (a round-trip by plane to Europe contributes 2.5 tonnes of greenhouse gases per passenger).  

Nearly every facet of our lives is underpinned by products and services that involve a lot of emissions to make and often a lot more to operate.  

So we should be under no illusions about the scale and complexity of our society making the transition from a high to low-emissions world.  

We should also be clear that the challenge in controlling emissions, and hence climate change, will be won or lost at a global level.  

Developing countries will likely contribute 70 per cent of the growth in future world emissions, and will soon be the source of the majority of world emissions.  

Recent figures showing China’s greenhouse emissions growing at a greater rate than all industrialised nations put together, and poised to exceed the US soon, highlight that an effective, long-term response must occur at a global level.  

All this is not an argument that in Australia, with a relatively small economy producing relatively modest levels of emissions, we can't make a difference. But we need to be realistic.  

As the Business Council of Australia has argued, the biggest contribution Australia can make is to persuade developing and developed countries alike that only a global, market-based solution can reduce emissions in the long term.  

Market structures, over the course of many years, have embedded price and consumption signals and behaviours that underpin our high-emissions economy.  

Market structures are the only effective way of unwinding these behaviours and patterns and making a sustainable transition to a low-emission economy.  

At the same time, Australia can move towards developing its own market-based systems to reduce emissions.  

This in turn will provide the basis for our economy to “link” with other national schemes into a global framework to reduce emissions.  

The Business Council is now finalising its principles for a national and global solution to emissions reduction.  

They include:  

  • Setting immediate and long-term global emissions reduction targets, including yearly targets and regular reviews of these targets;  
  • Building global and national responses around a “cap and trade” scheme, which involves governments setting a cap on overall emissions and issuing a fixed amount of permits covering these emissions that can be traded by the market;  
  • Adopting a multi-faceted approach to tackling emissions that also involves other initiatives such as those supporting the development and deployment of low-emissions technology;  
  • Bringing all economies into a global scheme by recognising that some economies, particularly developing nations, will need to increase their emissions before reducing them.  

Importantly, we should also remember that it will be the strength of the Australian economy in the future – not its diminution – which will ensure Australia is able to address the potential risks associated with climate change.  

Some have argued for an immediate start to phasing out those sectors of the Australian economy which contribute most to emissions – sectors which we are all heavily reliant on, directly and indirectly, for our prosperity.  

Yet a strong economy is the key to funding development of low-emission energy sources that will support what will continue to be an energy-intensive world, while at the same time reducing greenhouse gas emissions.  

A strong economy will provide the resources to fund other transition strategies that will be required as we move away from a high-emission economy.  

That is why the BCA strongly supports the overall direction of the federal government’s Emissions Trading Task Group, which is seeking to find a way through what is one of the biggest challenges of our time, while making sure we strike a balance between reducing emissions and preserving our economy. 



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