Conclusion - Four Degrees of Global Warming - page 240

Rising public concern about global warming, relating to the impacts of
extreme weather, will heighten expectations of climate policy. Already there
is evidence of such changes in the United States, which was hard hit in the
past two years by extreme weather events. Such shifts will lead to a rapid
global turn away from fossil fuels - the recent policy shift in China to cap its
greenhouse emissions, and US President Obama's Climate Action Plan (EOP,
2013) are merely precursors. Only the timing is in doubt. Under these circum-
stances, it would be unwise for Australian governments to continue to boost the
development of fossil fuels-based energy as a major source of Australia's future
economic wealth.
We now need a national energy transition plan, which includes immediately
capping and rapidly scaling back our dependency on coal and gas. The experience
of leading nations - such as Germany, which in 2010 had cut its emissions by 24.8
per cent from its 1990 base (EEA, 2012) and has an emissions target of -40 per
cent by 2020 - emphasizes the need for effective, stable institutions for assessing
what climate science tells us, for determining national targets, and for ensuring
strong policy settings and effective abatement. In Australia, some of these insti-
tutions are now in place. The Clean Energy Finance Corporation (CEFC) and
the Australian Renewable Energy Agency (ARENA) are well placed to assist in
the funding of Australia's energy transition. The Climate Change Authority can
provide independent, scientifically informed recommendations on Australia's
future targets and annual carbon budgets. Yet at time of writing, they appear to
be under political threat, as is the practice of pricing carbon.
The Clean Energy Act 2011 (Cwlth) created a carbon pricing mechanism
which will switch from a fixed price to a cap-and-trade scheme, which will be
linked to its European counterpart, and will likely be governed by targets revised
in an orderly manner every five years. Carbon pricing has been the focal point of
heated debate in Australia and entrenched political opposition by the Coalition
since 2010. Yet carbon pricing was accepted by all political parties prior to the
2007 election as a valuable policy instrument for achieving abatement targets
(see Howard, 2007). The use of carbon pricing, carbon markets and emissions
trading is now internationally accepted as a key measure to reduce emissions,
including in the European Union, a range of states in the USA, New Zealand
and in China.
While carbon pricing is important, policy and industry experts generally
recognize the need for a broad suite of policy measures rather than reliance
purely on this measure alone if rapid change is to occur. A full palette of measures
(REN21, 2013) would include:
● legally binding targets and scientifically informed timetables for emissions
reduction and the introduction of renewables;
● electricity market reforms for power generation and combined heat and
power;
● publicly supported research, development and commercialization;
● feed-in tariffs, quotas and/or other finance-attracting policy regimes;