The new Labour Government is committed to the introduction of a "cap and trade" Emissions Trading Scheme (ETS) with a long-term emissions reduction target, subject to the findings of the Garnaut inquiry into the economic impacts, to be finalised in 2008.
Research commissioned for the March 2007 "Equity in our National Response to Climate Change Roundtable" in Melbourne (organised by the National Welfare Rights Network, Brotherhood of St Laurence, Australian Conservation Foundation and the Climate Institute Australia) indicates that low income and disadvantaged people will be disproportionately adversely affected by the impact of climate change.
Other research commissioned for the Roundtable also indicated that placing a price on carbon in any form is "regressive" as energy costs constitute a larger proportion of the weekly budgets of low income earners even though they use substantially less energy than high income households.
In responding to climate change it is therefore essential that the policies we adopt are not only as efficient and effective as possible in both environmental and economic terms but that they are also as fair and as equitable as possible. Otherwise, low income and disadvantaged Australians will not only miss out on the opportunities that our responses to climate change will provide, but they will also be further disadvantaged and will not be able to contribute to our effort to reduce greenhouse gases.
Aiming for a win / win outcome
If however, we do get the equity equation right, then a price on carbon through an Emissions Trading Scheme could result in a win / win outcome: a win for the environment through the introduction of energy efficiency measures in low income households resulting in reduced energy consumption and carbon emissions, and a win for low income and disadvantaged households through reduced expenditure on energy resulting from those efficiencies.
This "triple E" approach demands policy attention to:
* energy pricing mechanisms to cushion low income households from the full impact of energy price increases;
* the provision of substantial dollars to fund the large scale retro-fitting, and other energy efficiency measures, to reduce the energy expenditure of low income and disadvantaged households; and
* the design and implementation of appropriate compensation mechanisms to offset the impact on those who miss out.
Playing catch up--learning from overseas
Given the long tenure of the previous Federal Government, Australia is a long way behind in both formulating a national response to climate change and therefore in addressing the components of this "triple E" approach.
One of the few advantages of being so far behind is that we can look to those ahead of us and learn lessons so that we can take some short cuts. In this regard, the "Equity in our National Response to Climate Change Roundtable" commissioned a study from Prof. Gill Owen on the key measures and lessons in the UK. The study not only made it clear just how far behind we are in Australia, but also gave some good pointers to what we need to do.
Lessons from the UK
The UK has been developing policy responses to climate change since the early 1990s. Its target under the Kyoto Protocol is to reduce greenhouse gas emissions by 12.5% below 1990 levels by 2012 and it should achieve this.
The UK has also set itself the more challenging target of a 20% reduction by 2010--on current trends it is less likely to achieve this. The longer term aspiration is a 60% reduction by 2050. This aspiration is likely to be enshrined in legislation through the Climate Change Bill.
In support of its energy policy goals, the UK Government has developed a range of policies and programmes, which are particularly designed to have an impact on emissions. …