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International action on climate change – what’s happened?

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As Brian’s post on the “new hockey stick” shows, the public policy implications of climate science haven’t changed a lot over the past few years. If we don’t all act, we are screwed. In fact, we may already be screwed.

So, is the world acting? And what form is that action taking? Australia, of course, has adopted a policy response with a price on carbon at its centre; as noted, while manifestly inadequate, it appears to be achieving its stated aims. But what of the rest of the world?

First, the bad news. Global greenhouse gas emissions continue to rise. While it’s surprisingly hard to find good global emissions statistics, every source I’ve been able to find, including the US Energy Information Administration, indicated a continued rise in emissions to 2011, virtually all of it from the developing world. Chinese emissions from energy consumption (not including agricultural, land use, fugitive emissions and the like), grew by a staggering 37% from 2007 to 2011, despite the Chinese’s government’s efforts to improve energy efficiency.

For all that, the Chinese government has already been acting on climate issues for some time. China nominated a specific goal to reduce emissions intensity by 2015 in the Twelfth Five-Year Plan. As part of that process, seven pilot emissions trading schemes are being established in some of China’s largest cities, including Beijing, to commence in 2013. As this press release notes, the Australian government is cooperating in the development of these pilot schemes. The pilot schemes will, in total, cover twice the amount of emissions than Australia presently emits. China has publicly announced a plan for a nationwide ETS by 2015.

Europe’s emissions are declining, in part thanks to the Union’s clever strategy to tank its own economy. Still, absolute reductions in emissions levels, particularly given that much of Europe has relatively low emission levels by develope world standards, is a pretty impressive achievement.

The economic catastrophe afflicting Europe has caused some difficulties for the Europe-wide ETS. In short, there are too may permits available and the price has tanked, discouraging any further investment in clean technologies. Negotiations to deal with the surplus permits and push the price back up have been glacially slow. Given that Australia’s ETS is planned to be linked to the EU one by 2018, it will be rather important to Australia that the EU sorts this one out.

The GFC has, similarly, been a major contributing factor to the recent trajectory of American greenhouse gas emissions, which are barely above 1990 levels and well below the 2007 peak. However, there are other factors, chief among them a massive switch away from coal to natural gas (though questions remain about fugitive methane emissions). The multiplicity of lunacies infecting the Republican Party ensures that a nationwide carbon pricing scheme is off the table for now. However, contrary to perception in some quarters, the Obama White House has not been idle. Draft EPA rules for new power plants limit power plant emissions to “1,000 pounds per megawatt-hour” – a standard that natural gas plants can meet but coal can’t without carbon capture and storage. However, a lobbying effort by Democratic senators from coal-mining states is trying to kill the rule before its introduction. It’s also worth noting that the Obama administration pushed through much tougher car fuel efficiency standards as part of its rescue of American carmakers during the GFC. Finally, a number of US states, notably including California and New York state, have their own emissions trading schemes.

Our close neighbour to the north, Indonesia, is a cause for both concern and optimism. While Indonesia’s emissions from the energy sector are quite low, forest clearing for logging and palm oil production, and subsequent emissions from peat bogs make Indonesia one of the world’s largest emitters. As is the case for many non-energy emissions, the scale of the emissions is disputed, with the Indonesian government denying some estimates that suggest Indonesia is the world’s third-largest largest emitter. Nevertheless, there is some good news, with the Indonesian government likely to extend a moritorium on forest clearing, which has at least apparently slowed down the rate of deforestation.

While this quick tour omits much of the world – for instance, South Korea has legislated for an ETS to start in 2015, the trend is pretty clear. While the scale and urgency of emissions abatement is painfully small against the threat posed by climate change, the world is acting, and carbon pricing is increasingly the preferred mechanism for much of the abatement in the world’s largest economies.


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