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Householders who ‘do their bit’ to reduce greenhouse emissions may be wasting their time, says one expert, who is concerned about Australia’s proposed emissions trading scheme.
Economist Dr Richard Denniss of the Canberra-based think tank, The Australia Institute, made the comments in the lead up to the government’s release of a white paper on a national Carbon Pollution Reduction Scheme.
Under the proposed emissions trading system, a cap on greenhouse pollution will be set and a limited number of tradeable emission permits will be allocated to big polluters.
By putting a price on carbon, the scheme aims to reduce emissions by increasing the cost of coal-fired electricity and petrol, and discouraging people from using these commodities.
But, says Denniss, emissions could be reduced even further if the scheme took into account people’s altruism when it comes to “doing their bit” for the environment.
“People are voluntarily spending a lot of money to buy a Prius, and they’re voluntarily spending a grand to put solar PVs on their roof,” he says.
If the emissions trading scheme does not include voluntary energy savings, then individual choices to use energy efficiency and renewable energy will not impact on Australia’s emissions, says Dennis, who outlines his concerns in a report released earlier this week.
Emission “floor”
Denniss says that while the scheme sets a cap on carbon emissions, it also sets a floor below which emissions can’t fall.
When someone reduces their emissions, they simply free up emission permits for someone else to use, he says.
Any energy savings made by households will be passed on to their energy supplier.
The energy supplier will use less emission permits, the demand for permits will fall and they will become cheaper to buy, says Denniss.
The end result, he says, is that ordinary people who take the initiative to reduce emissions themselves will simply subsidise big companies to pollute.
He says, the only way ordinary people can help reduce emissions is to buy permits and rip them up, thereby removing them from the system and lowering the cap.
Targets
Denniss says making individual action count is even more important if householders want to go beyond the targets for emission reductions set by the government.
He believes it is unlikely the target, to be announced in next month’s white paper, will go beyond a 10% reduction target (based on 2000 emissions) by 2020.
By comparison, climate change scientists are calling for more significant reductions of 20% to 30%, while the European Union is expected to push for a 40% reduction at international climate negotiations to be held in Copenhagen next year.
Denniss says the emissions trading scheme should be changed to ensure voluntary households reductions benefit the environment rather than simply freeing up extra pollution permits.
GreenPower
Economist and clean energy policy expert Chris Dunstan of the Institute for Sustainable Futures says previous experience with GreenPower shows voluntary efforts can have a significant impact, in addition to mandatory emission reduction targets.
He adds that if voluntary reductions are included this could enable the government to set a tougher emissions reduction target than it would otherwise.
He agrees voluntary reductions in energy use could be undermined if the emissions trading scheme it is not designed properly.
Petrea Bradford of electricity retailer Origin Energy, which buys and sells GreenPower says the debate is “timely”.
“[Denniss has] touched on an issue, which is of concern to quite a few people in the market at the moment that are selling and buying GreenPower,” she says.
“There’s a lot of good will around the GreenPower market in Australia at the moment and the last thing that anyone wants to do is disrupt that. They want it to keep going and keep growing.”
She says the industry and government are currently negotiating on the issue.
A spokesperson for the minister for climate change was unavailable for comment.
By Anna Salleh
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