Monthly Archives: November 2011

Secretary Clinton urged to not block process on global climate deal at UN Durban negotiations

EDF joined 15 other major non-governmental organizations in urging U.S. Secretary of State Hillary Rodham Clinton to not block progress on a global climate deal going on now in the UN climate negotiations in Durban, South Africa.

In a letter sent to Secretary Clinton, the groups highlighted a 2008 speech from then President-elect Obama during which he said combating climate change was one of the most urgent issues facing America and the world, and pledged:

Once I take office, you can be sure that the United States will once again engage vigorously in these negotiations, and help lead the world toward a new era of global cooperation on climate change.

But now, three years later in Durban, the groups say America:

risks being viewed not as a global leader on climate change, but as a major obstacle to progress.

The letter urged Secretary Clinton to direct U.S. negotiators to show more flexibility on the U.S. position for two major issues in the negotiations, which threatens to impede critically needed global cooperation:

  1. The mandate to launch negotiations for a comprehensive binding climate regime
  2. Climate finance

Jennifer Haverkamp, EDF’s international climate program director, said:

Domestically, despite the cacophony coming from Congress, the U.S. is making major strides using existing legal authorities to reduce air pollution from power plants, mobile sources, and factories in ways that will also significantly reduce U.S. carbon emissions over the next several years.

However, that doesn’t make up for the fact that the U.S. is going out of its way to stymie progress in Durban toward a binding new agreement.  In the remaining week and a half in Durban, the U.S. needs to clear the way for countries to move forward on preventing the catastrophic effect of global warming.

The groups again signaled in the letter their unhappiness with the U.S. opposition to the European Union’s pioneering anti-pollution law for aviation, calling for the U.S. to end its opposition to include aviation emissions within the European Union Emissions Trading System.

Signers of the letter, which was sent to Secretary Clinton yesterday and released publicly today, include: Center for International Environmental Law, Defenders of Wildlife, Earthjustice, Environmental Defense Fund, Greenpeace USA, National Tribal Environmental Council, Native American Rights Fund, Natural Resources Defense Council, Oxfam America, Physicians for Social Responsibility, Population Action International, Population Connection, Sierra Club, Union of Concerned Scientists, The Wilderness Society, and World Wildlife Fund.

Posted in Aviation, Durban (COP-17), News, UN negotiations|: | 1 Response

Durban UN climate talks open to calls from African and world leaders for solutions

The latest round of the UN climate negotiations opened on this balmy spring morning in the beach-side city of Durban, South Africa with strong affirmations of the urgent need to address climate change.

South African President Zuma addressed the opening session of the UN climate negotiations today in Durban.

In a series of powerful statements at the opening "plenary” at the conference of nearly 200 countries and almost 20,000 delegates, speakers expressed need for quick  and effective action on climate change, concern for their countries’ ability to adapt to climate change, and hope for what the next two weeks in Durban could accomplish.

Last year’s president of the conference, host country Mexico’s Patricia Espinosa, highlighted the successes of the 2010 negotiations in Cancun but cautioned “there is still certainly more to do.”  Then the conference presidency was  turned over to South Africa’s Minister of International Relations, Maite Nkoana-Mashabane, who said “countries must find a common solution to secure the future for generations to come.”

Two speakers from African nations told of the severe consequences climate change was bringing to their home countries, and said Africa must play a significant role in these negotiations. UN Executive Secretary Christiana Figueres received loud applause when she opened her speech with a Zulu welcome; and South Africa’s President Zuma, concluded the session, thanking the UN for its confidence in Africa’s hosting the conference, and declaring climate change as not just an environmental challenge, but a holistic development challenge.

Jennifer Haverkamp, EDF's international climate program director said in a statement at the opening of the conference that “the world can’t just “sit back and do nothing.

We need to build on the efforts of individual countries and regions so that every nation does their part to reduce the emissions that are harming our way of life.

Environmental Defense Fund is urging the climate conference to move forward in four key areas:

  1. A negotiating work plan with concrete goals for the next two years and a clear path toward a comprehensive, binding agreement.
  1. Agreements on financing arrangements for the Green Climate Fund, which will be dedicated to helping developing countries address and adapt to climate change.
  1. Positive signals to the carbon market that there’s life after Durban, encouraging more countries to follow Europe, New Zealand, and most recently Australia’s lead in setting a domestic carbon price.
  1. Accounting rules for measuring emissions from land-use change and forestry that accurately determine whether countries have reduced their emissions and met their obligations.

Read more in our statement and comprehensive blog post on Durban expectations: Durban UN climate talks could see modest, incremental progress; What to watch at COP-17.

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Durban UN climate talks could see modest, incremental progress; What to watch at COP-17

Amid the dismal global economic climate and the nearing expiration of the sole international agreement that obligates nations to cut their greenhouse gas emissions, the Kyoto Protocol, representatives from more than 190 countries are gathering in Durban, South Africa to continue negotiations toward a comprehensive global agreement to curb climate change.

Regrettably, but not surprisingly, this year’s annual two-week meeting of countries party to the U.N. Framework Convention on Climate Change (UNFCCC) – the 17th Conference of Parties, or COP-17 – is generally anticipated to make only modest, incremental progress toward that goal.

Modest success for the Durban conference would entail countries producing a timetable and clear path to negotiate a new comprehensive agreement that has binding obligations to reduce global emissions and achieve climate safety. Countries also need to commit to further reducing emissions through pledges and commitments – ideally by signing up for a second round of commitments to the Kyoto Protocol.

However, given political realities and the global economic downturn, even that’s a heavy lift.

Under these unfortunate circumstances, our expectations for Durban must fall far short of our desired outcomes.   Instead, the best outcomes EDF can foresee in Durban are:

  1. For countries to maintain forward momentum in the UN climate negotiations process.  A reasonable expectation is for agreement on a negotiating “work plan” that states which issues countries will tackle for the next couple of years, and for a clear path toward a comprehensive, binding agreement.
  2. Incremental progress in setting up the institutional structures needed to implement the Cancun Agreements.  Most notably, countries should launch and agree to begin funding the Green Climate Fund, dedicated to helping developing countries address and adapt to climate change.
  3. A positive signal to the carbon market that there’s life after DurbanAustralia’s passing a domestic carbon price sent a very strong signal just this month.  But more countries need to step up to the plate.
  4. For emissions from land-use change and forestry, the adoption of rules for accounting that determine with environmental integrity whether countries have in fact reduced their emissions and met their obligations.

Later in this post, we analyze in greater detail these and other key issues likely to figure prominently in the upcoming negotiations.

The U.S. role in Durban

There’s a perception that the United States – in the midst of President Obama's reelection campaign– does not want to rock the boat in Durban, since climate change isn’t a high-profile issue in the race back home.

It’s also very difficult for the U.S., which never ratified the Kyoto Protocol and has no near-term prospect of domestic federal climate legislation, to support a negotiating mandate whose goal is a binding, ambitious global climate deal anytime soon.

But the Obama Administration is trying to walk a fine line between urging global action and putting the brakes on negotiated outcomes too ambitious for its domestic politics.  At a press conference during his recent trip to Australia, Obama reiterated the U.S. position of wanting all countries – not just major developed countries – to address climate change:

We all have a responsibility to find ways to reduce our carbon emissions [but] advanced economies can’t do this alone…  [S]o, ultimately, what we want is a mechanism whereby all countries are making an effort.  And it’s going to be a tough slog, particularly at a time when… a lot of economies are still struggling.  But I think it’s actually one that, over the long term, can be beneficial.

The critical question for the other countries around the table is now this: do they temper the ambition and reshape the objectives of this process to accommodate the U.S. domestic situation, or do they continue striving for the kind of comprehensive, binding agreement needed to deal with the problem?

Regardless, until the U.S. can bring more to the climate change negotiations than empty pockets on its domestic policy side, emerging economies are unlikely to come forward with bold actions themselves.  Put another way, incremental progress is probably the most the UN process can expect for the foreseeable future.

Real progress being made through national, regional, local “bottom-up” measures

UN climate negotiations, while important, are fortunately but one front of several in the fight against disastrous climate change.  When looked at in the broader context of what must happen, Durban in and of itself is not the place where the battle will be won or lost.

Real progress is taking place at the national, regional and local levels, creating a world of bottom-up actions addressing climate change.

  • In Australia, an official carbon price goes into effect in July, which should help dent its emissions – the highest, per capita, of any developed country.
  • Europe’s Emissions Trading System continues its steady growth, and soon will cover aviation emissions.
  • California has just approved the largest, first-ever economy-wide carbon market in North America, which could eventually link to other carbon markets around the world.
  • China’s latest five-year plan has a limited cap-and-trade system and significant carbon intensity reduction targets.
  • New Zealand has a domestic emissions trading system.
  • Korea has pending legislation to create its own domestic emissions trading system.

A great story in the Financial Times along these lines says that despite the “glacial pace” of the UN talks, it has become “more and more evident that many of the world’s biggest countries and companies are pressing on regardless. From China to California, from Ford to PepsiCo, there has been a striking surge in emissions-cutting activity."

Policy issues to watch

EDF's experts have been closely tracking policy issues leading up to Durban, and below we highlight some background and recommendations for those likely to feature prominently in the negotiations.

Kyoto Protocol

Durban is not a case of “the future of Kyoto hanging by a thread,” although that’s how some have been casting it.  Rather, nations are grappling with how to proceed, despite there having been very few developments to help them overcome the historically deep divides between industrialized and developing countries on climate policy, divides whose origins go back to the birth of the UNFCCC more than twenty years ago.

Notably, the U.S. is not offering anything new to help overcome these divides. The dismal state of US federal climate policy has raised problems for both the Dialogue on Long-Term Cooperative Action (“LCA” – discussions under the UNFCCC track, in which the US participates) and for the talks about extending the Kyoto Protocol through a second round of emissions reduction commitments (in which it does not). But the US paralysis, and consequent exacerbation of the gaps between and among the countries in those forums, open up, for those nations that do want to move forward, an important opportunity to closely consider what they really need and want from the Kyoto Protocol and the UNFCCC in order to tackle the climate change problem effectively.

What’s important here is not specifically whether nations agree in Durban to a second commitment period under Kyoto.  Their low probability of doing so at this meeting has been widely recognized for some time. What IS important is that the nations participating in Kyoto have learned a lot about its fundamental architecture in the fourteen years since it was adopted.  They have learned that much of that architecture is capable of catalyzing large amounts of investment, innovation, and finance for low carbon development.  They have also learned that, frankly, some of that architecture is clunky and could usefully be revised.  Based on that learning, many nations are sorting out which elements of Kyoto they want to keep and build upon, which elements could usefully be changed, and what new elements might need to be added in order to improve the efficiency and effectiveness of efforts to tackle and respond to climate change and foster low-carbon economic development.

What’s clear is that, at the top of the list, many nations have learned that well-designed carbon market frameworks have great potential for helping achieve these goals.  So they want to keep, in some fashion, and to build upon, the carbon market elements of the Kyoto Protocol.  That’s why we are seeing continued progress in the Kyoto Protocol and LCA on market infrastructure and expansion, for example in the areas of MRV (infrastructure), and REDD+, and sectoral mechanisms (expansion), and we expect that Durban will yield positive incremental results in these areas. That’s also why we are seeing the EU moving forward with its carbon market, and new carbon markets under development in Australia, New Zealand, California, and China.

Where Kyoto’s architecture is incomplete, nations will continue to try to build out new elements, focusing, for example, on adaptation and finance. Whether nations ultimately build on the elements of the Kyoto Protocol under the auspices of that agreement, or under the UNFCCC through the LCA track, or by developing new frameworks that build on the key elements of each, will not be sorted out completely at Durban.

In fact, the Durban meeting could simply agree to apply the existing Kyoto framework as a practical matter for a few years beyond 2012 as nations undertake this build-out process. But what is clear is that core elements of the Kyoto Protocol – including the core concepts of carbon markets – will continue, through Durban and beyond. 

Climate Finance

Financing both the reduction of greenhouse gas emissions and countries' adaptation to the changing climate will be one of the most critical issues in this year's negotiations.

Often the current global economic crisis is offered as a reason for slow actions on climate finance. For a while this was true but this is rapidly evolving. It should be noted that liquidity exists in the market and capital is seeking good places for investment – meaning now is the time to really leverage climate finance as one of the tools to catalyze investments and job creation while addressing climate change.

Countries must think creatively about new and sustainable sources of financing.  Most observers, including the UN Director General's advisory committee on finance, recognize that much of the $100 billion will have to come from private sources.  Well-functioning carbon markets (including linked global markets) are one way to finance and efficiently reduce emissions globally.  But especially in the interval while that market is developing, the role of well-directed scarce public finance is critically important to progress on climate mitigation and adaptation.

In Cancun, countries agreed to establish a “Green Climate Fund.” In Durban it’s likely – and we believe necessary – that countries make critical progress on the Fund by determining where it will be housed.  There are many options available for where and how the Fund will operate, but the ultimate system selected should leverage existing institutional capacities, and not create a new bureaucratic structure.  It should also be efficient, transparent and effective, and include methods for measuring return on investment.

We urge countries to direct climate finance funds to investments that:

  • Avoid overly political allocation decisions.
  • Help countries adapt to climate change.
  • Include good climate effectiveness, ensuring that funds lead to real emissions reductions.

With finance being a major issue in Durban, countries can’t afford to allow the global economic crisis or political issues to undermine much-needed funding efforts. If nations don’t pay for climate mitigation and adaptation to avert problems now, they will be paying for it later in the aftermath of devastating natural disasters, destruction of farmlands and other inevitable impacts from unchecked climate change.

REDD+ and Indigenous Peoples

Reducing emissions from deforestation and forest degradation (REDD+) was a highlight of Cancun last year, as parties put their stamp of approval on and agreed to the basic framework for the REDD+ program.  In Durban, the parties could agree on REDD+ policy details that would enable countries to move forward with their own initiatives while ensuring environmental integrity –  but decisions on REDD+ are likely tied to achieving breakthroughs on the higher profile , more political issues, such as the fate of the second commitment period of the Kyoto Protocol and the launch of the Green Climate Fund.

If countries do overcome these major political issues, Durban could produce REDD+ decisions on:

  1. Social safeguards/ information for safeguard systems: The discussions over the past year, most recently in Panama, of a safeguard information system – a system to provide information on the implementation of safeguards that ensure respect for the basic human rights (rights to resources, land, consultation, etc.) of people affected by REDD+ activities – have provided enough momentum to help the Parties reach a decision in the Subsidiary Body for Scientific and Technical Advice (SBSTA).  Although a final outcome may be beyond reach in Durban, EDF believes that even a basic outline for safeguard strategies, which includes support for indigenous peoples, will help move REDD+ policy in a good direction.
  2. REDD+ finance: With a few exceptions, countries have largely agreed that carbon market financing should be included as a potential source of financing for REDD+.  Although broader financing decisions may not be reached, we hope that the Durban conference will formally adopt the use of carbon markets as a finance option.
  3. Reference Levels: Countries in Durban may, though are unlikely to, settle on REDD+ reference levels (that is, initial reference points for countries which help them determine their total emissions from deforestation and measure their progress in reducing emissions).
  4. Measuring, reporting and verification (MRV): MRV is its own agenda item in the negotiations, but the MRV of REDD+ is unique, since measuring emissions in relation to trees is different from measuring emissions from cars or smokestacks.  We don’t expect MRV to be decided for REDD+ in Durban, either in the MRV discussions or in the REDD+ discussions.

Most easily attainable of these REDD actions  would be a technical decision on a framework for the functioning of the safeguard information system, followed by REDD+ finance.  But if the talks stall on the larger political issues, even these REDD+ decisions will, unfortunately, get pushed off to next year.

Land Use, Land-Use Change & Forestry (LULUCF)

Issues related to the greenhouse gases associated with land use and forestry are tremendously important for climate change, but over the years they have consistently been among the most contentious topics in the UNFCCC, as covered under rules for Land Use, Land-Use Change & Forestry (LULUCF).

Forests sequester vast amounts of carbon every year, removing greenhouse gases from the atmosphere, and for some countries the management of their forests makes a huge difference in whether they can meet their national targets for reducing emissions.  However, forests are natural systems, and their dynamics are not entirely under human control, making it difficult to account for the effects of forest management and other land-use activities.

Forest accounting discussions are important for both developed countries that are managing emissions from their forests, and developing countries that are working to reduce emissions from deforestation.  Flawed forest accounting rules could directly reduce the financial support for both efforts.  The accounting rules for forests in developed countries may serve as a guide for future accounting rules for developing countries under REDD+, so all countries have a stake in these rules.

This year, we have seen reasonable progress on forest-related accounting issues.  In Cancun, the developed countries agreed to submit new, more detailed information on their forest emissions. All of this information was subjected to an expert review, giving us a higher level of clarity about what is happening in their forests.  Also, the countries negotiated solid provisions to deal with unforeseen disturbances (such as wildfires and tsunamis) and to improve accounting for durable wood products, such as housing and furniture.

We think the time has come for countries to adopt a set of robust rules for forest accounting, so that the issue does not impede the effort to set new Kyoto Protocol targets.  At the same time, we insist that these rules have environmental integrity – civil society and vulnerable countries will not — and should not — accept a set of rules that undermine the goals of the Convention and the Kyoto Protocol.

A group of African countries has been working on an approach that we think could break the logjam in Durban on this difficult and complex issue. It would award countries credits toward their targets only after they reduce their forest emissions to below historical levels. That approach could give countries the necessary flexibility to stabilize emissions from forest management over the longer term. EDF experts have been advising the Africa group on their work.

The proposal by the African nations could correct a flaw in another approach, called Reference Levels, which would permit countries to increase their emissions by cutting down more forests, without paying the price for those emissions.  Since increasing emissions from forests has the same atmospheric impact as burning fossil fuels, we consider increasing forest emissions without consequences to be unacceptable.

International Transport

Efforts to curb emissions from international aviation, one of the more contentious issues of  the year, will likely spur heated debate during the Durban climate negotiations as Parties push for action to tackle emissions reductions in the separate UN agencies responsible for global aviation and maritime shipping.

Tensions already are high with a case against the European Union’s law to reduce emissions from aviation pending in the European Court of Justice, a U.S. House-passed bill to prohibit airlines from complying with the EU law, and a recent UN International Civil Aviation Organization (ICAO) Council meeting where disagreements flared over the EU law.

To push regulatory efforts of ICAO and the UN's International Maritime Organization (IMO) forward, Parties to the UNFCCC need to send a clear signal in Durban that these two agencies must not delay in designing and implementing a multilateral approach to reduce greenhouse gas emissions from their sectors. However, it is crucial countries do so in a manner that does not jeopardize national or regional policies to reduce emissions from aviation and shipping, such as the EU aviation directive.

‪Negotiations on emissions from planes and ships came to a standstill in Cancun, but were resurrected at meetings earlier this year, with the slight hope of fruitful negotiations in Durban.  But the UNFCCC’s role in regulating these emissions is limited, ever since the UNFCCC booted decisions on reducing emissions from aviation and maritime to the sectors’ respective UN agencies – ICAO and IMO – nearly two decades ago. Since then, countries have yet to produce any policy solutions in these forums as they struggle over how to reduce emissions from international aviation and maritime shipping.

Legal Architecture of a UN Climate Agreement

Though many nations remain committed to an international framework for reducing greenhouse gas emissions and limiting global warming, the legal architecture of such an agreement or agreements – how it could be spelled out or structured in legal terms – is in great flux.

EDF supports a continuation of the Kyoto Protocol architecture, with as many countries as possible participating with their own binding commitments, and the option for other countries to link with their own national systems at a later point.

Regardless of the outcome at Durban, the fundamental infrastructure and principles of the Kyoto Protocol have proven successful.  Many aspects of the Kyoto Protocol are now being incorporated into national systems, including:

  • Binding caps on emissions
  • Flexible market mechanisms to meet these caps
  • Accountability

We strongly encourage nations to enshrine these principles in a legally binding framework that is open to any country willing to participate. Disagreements between major emitters or a lack of universal agreement on a legal format should not impede nations that are willing to be climate leaders from moving forward from  Durban with an architecture that supports environmental integrity and predictability for markets.

Measurement, Reporting and Verification (MRV)

In Cancun last year, nations agreed to develop new rules for keeping track of global warming emissions and emissions reductions in both developed and developing countries.

Robust and transparent measuring, reporting, and verification (MRV) is essential for building the trust necessary for countries to take action and compare efforts in reducing emissions, and for creating a structure that would encourage  investment, innovation, and finance for low-carbon development.

In negotiations since Cancun, nations have already produced preliminary guidelines for reporting to be undertaken by developing and developed countries, as well as mechanisms for analyzing the results and providing support to improve future efforts.

In Durban, they have the opportunity to strengthen provisions for transparency and accountability to ensure environmental integrity and improve the quality of carbon markets.  EDF also supports proposals that allow major-emitting developing countries to step up to a higher level of MRV.  Parties will also work on resolving such issues as timelines for reporting, and the proper role of NGOs in ensuring transparency and accountability in national reporting.

If the Kyoto Protocol's history is a guide, Durban is likely to yield a foundation that leads to tighter standards on MRV over time.  It took two or three years from the time Kyoto was agreed to when nations sorted out some of the regime's accounting rules.  We may expect a similar timeline for working out the kinks of Cancun's MRV agreements.

Closing Observations

Eyebrows sometimes get raised at the size and scope of the UNFCCC’s large annual gatherings, which bring together not only delegates from more than 190 countries, but a host of other participants, many of whom never see the inside of the official conference venue, much less buttonhole a negotiator.  This is especially the case in years with modest negotiating ambitions.

But it's important to remember that these annual COPs also host the lower profile working meetings that implement the various existing agreements and provide support and education to the parties.  And over the years they have taken on almost a medieval fair aspect, becoming the annual meetings of a de facto global trade association of climate change professionals, activists, and their supporters.  The city will serve up a rich smorgasbord of official and unofficial “side events”,  receptions, and hallway conversations where participants share exciting new ideas, launch reports, and recount progress and problems taking place outside the UN's auspices.

The annual gatherings also are important for helping keep the pressure on countries, refocusing international media attention on climate change, and serving as crucial action-forcing events.  It’s not a coincidence that Australia passed its carbon price just weeks before Durban, or that South Africa, as the host country, released its own climate plan last month.

Making Durban a success is a daunting challenge, and even more so for the conference's hosts, South Africa –  logistically, substantively, and diplomatically.  They are hosting a huge gathering of ministers, negotiators, myriad environmental, labor, business, agricultural and other stakeholders, activists, indigenous peoples, and youth, all while wearing three distinctly different hats:  neutral COP chair, member of the BASIC major emerging economies bloc (with Brazil, India and China), and representative of the Africa Group of countries, whose members include the some of the most vulnerable, least developed nations.

We wish the South African hosts well, and urge all the gathered nations to work hard and negotiate in good faith.  They must deliver on the modest expectations they have set themselves; our planet's future cannot afford anything less.

Posted in Aviation, Deforestation, Durban (COP-17), Forestry, Indigenous peoples, REDD, UN negotiations|: | 2 Responses

Australia's landmark legislation will put price on carbon pollution, create world’s second-largest carbon-price system

As expected, Australia’s upper house of Parliament voted yesterday to adopt a carbon price, which will compel Australia’s largest polluters, beginning July 1, 2012, to pay for their carbon pollution.

Australia will have the largest carbon-price system in the world outside Europe's, after its upper house approved the Clean Energy Future package of bills Nov. 8.  The package of bills aims to cut emissions from coal-dependent Australia 80% by 2050 from 2000 levels. (Image: freeaussiestock.com)

The legislation’s passage will give Australia, which has the highest per capita emissions of any developed country in the world and uses even more coal than the United States, the largest carbon-price system in the world outside of the European Union.  (That is, the largest outside the EU until California’s program takes effect in January 2013; California last month approved the largest, first-ever economy-wide carbon market in North America, which could eventually link to other sub-national, national and regional markets around the world.)

EDF applauds Australia on its leadership on the vitally important problem of climate change.  This vote is another indication that more and more countries around the world – with the U.S. being a notable exception – are taking climate change seriously.  The legislation also  backs Australia’s international commitment to reduce emissions by between 5 and 25 per cent by 2020 from 2000 levels.

The Clean Energy Future Package

The Clean Energy Future package is made up of 18 bills that will assign a price to carbon starting July 1, 2012 and cut Australia’s emissions 5% below 2000 levels by 2020 (though the target can be strengthened based on science or international action), and 80% below 2000 levels by 2050.

Australia’s 400-500 largest emitters will be covered by the carbon price, which will take the form of a fixed price (starting at A$23 per metric ton) for the first three years, and shift to a carbon market emissions trading system in 2015.

As we mentioned when Australia’s lower house passed the clean energy legislation on October 11, the Clean Energy Future package will shift Australia’s energy towards cleaner and renewable sources by:

  1. Placing a price on carbon.
  2. Creating a market-based system with plans to link it with ‘credible international carbon markets or emissions trading schemes in other countries’ – like New Zealand and Europe – after 2015.
  3. Giving a big boost to renewable energy research and development and deployment through a new $10 billion financing vehicle, the “Clean Energy Finance Corporation.”

(The Southern Cross Climate Coalition has some more details on the legislation in its analysis, as does Natural Resources Defense Council’s Jake Schmidt in his post Congrats Australia! Law passed which will require mandatory carbon pollution reductions for major polluters.)

Climate groups in Australia welcomed the passage of the laws, as did:

Australian Prime Minister Julia Gillard, who told reporters:

Today we have made history. … This is about what's right for the nation's future.

Deutsche Bank Australia carbon analyst Tim Jordan, who said:

This is a very positive step for the global effort on climate change. It shows that the world's most emissions-intensive advanced economy is prepared to use a market mechanism to cut carbon emissions in a low-cost way.

CEO of The Climate Institute John Connor, who said:

This is a vital cog in Australia's pollution reduction machinery with the potential to help cut around 1 billion tonnes of carbon pollution from the atmosphere between next year and 2020.

This vote means Australia now brings greater credibility going into international climate negotiations starting later this month in South Africa. It also puts wind in the sails of other jurisdictions about to introduce, or considering, emissions trading schemes which similarly price and limit carbon pollution.

The G20 Cannes Action Plan for Growth and Jobs even highlights the Australian legislation as an example of how members will “enhance competition and reduce distortions” in its plan to create “sustained, broad-based reforms to boost confidence, raise global output and create jobs.”

What’s next for Australia

Now, the Government moves into implementation mode, which means it will take to:

  • Establishing new institutions, including the Climate Change Authority (to recommend on future emissions targets); the Clean Energy Finance Corporation; and the Clean Energy Regulatory to oversee the market;
  • Finalizing contracts next year to close 2000 MW of brown coal power generation;
  • Working with New Zealand and EU officials on linking schemes after 2015.

Linkages to international carbon markets that are built into the system will also see Australia become a key player in the international offset market.

And Australian officials will be able to hold their heads high at the UN climate conference in Durban at the end of this year, as they promote their joint proposal with Norway for a roadmap to a 2015 global climate treaty.

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