Australia’s emissions reduction targets

There has been some criticism from environmental groups that the Australian Government’s recently unveiled emissions targets are far too low (the government white paper on the emissions reduction scheme is available here, and includes emissions targets). While these criticisms may be accurate, or the environmentalists may be underestimating the economic impact of government policy on the matter, discussion of the exact limits is probably misguided. More important is ensuring that the emissions reduction scheme for Australia has the characteristics I discussed in my post earlier today: transparency, accountability, and adaptability.

If these characteristics are inherent in the scheme, emissions targets can be modified in an ongoing manner in response to public opinion, economic effects, and environmental concerns. It is clear that the scheme has some incorporated flexibility, with targets changing depending on international cooperation. However additional thought might be given to add accountability with regards to emissions permits for ‘emissions-intensive trade-exposed’ and ‘strongly-exposed’ industries. It would be foolish to make the same mistake as made in the first round of emissions trading in the European Union, where too many permits were given to highly-polluting industries, resulting in the trading system being ineffectual.

Discussion should focus, for the time being, less on exactly how much emissions should be reduced by, and more on creating a long-term system allowing for effective control of Australia’s emissions in a changing future. The proposed scheme is mostly a step in the right direction. It may need to aim higher, as argued by the environmentalists, but more importantly, it needs to be ensured that the system is robust and not open to subversion by special interests.