The enhanced greenhouse effect is arguably the most dangerous environmental problem and the most difficult political issue to be faced by the world in the 21st century.
It is threatening biodiversity, human health, social equity, infrastructure and the economy. Over the past decade, there have been many signs that global climate change is occurring rapidly and may even be accelerating. The Arctic ice cap has been visibly shrinking, glaciers are melting and their flow rates are speeding up, permafrost is melting too, coral reefs are bleaching, strong hurricanes are more frequent, and heatwaves and wildfires are becoming fiercer. To bring these climate changes back under control, or at least to moderate them, some climate scientists are recommending a 50-60 percent reduction in global greenhouse gas emissions by 2050 and an 80-90 per cent reduction by 2100. The largest sources of global greenhouse gas emissions are electricity generation from coal, followed by transport based on oil. These are driven by economic structures and associated lifestyles that are intensive in their uses of resources, by population growth and by inappropriate choices of technologies.
As the saying goes, ‘the future is not somewhere we are going, but something we are creating’. To do this, we have to identify the barriers to change and then propose new policies, strategies and action plans to overcome these barriers. Thus barriers and policies are two halves of the same coin.
With such a wide range of formidable barriers, there is no single magic bullet to drive the transition to a sustainable energy and transport future. Rather, there is a need for several different types of policy instruments to overcome different types of barriers and to complement one another. The main types of policy instruments are economic, regulatory, educational, institutional and community participation.
These involve both market-based instruments – such as a carbon tax and emissions trading – and non-market instruments – such as grants, fees, rebates and subsidies. For non-market instruments, the federal government should fund a new Cooperative Research Centre on renewable energy, expand R & D grants for renewable energy technologies and remove subsidies to the production and use of fossil fuels. State governments must also remove subsidies, for example, to the use of airconditioners. In practice, a sharp line cannot be drawn between market and regulatory instruments, since all market-based instruments exist in regulatory and institutional settings. Examples are the laws that establish limited liability for corporations, the National Electricity Code and rules, and the rules for the ‘market instrument’ of tradable emission permits.
Laws, regulations and standards
Despite the modern tendency of governments of both wings, under the influence of neoliberal economics, to minimise the importance of laws, regulations and standards, law-making is still the prime task of parliaments. The real issue is to choose the circumstances under which regulatory approaches are the most effective instruments of change and can be readily implemented. Where markets fail or prices cannot modify behaviour sufficiently, it is feasible for governments to set energy performance standards and labelling requirements for buildings, equipment, appliances, industrial processes and motor vehicles. Governments can also legislate to require electricity utilities to pay specified prices for electricity fed into the grid from specified renewable sources, as in Germany.
Research, education, training and information
Research and teaching about efficient energy use, renewable energy and energy policy must be strengthened in schools, TAFEs, universities, Cooperative Research Centres and community information centres. This requires resources from federal and state governments and business.
To foster efficient energy use, a market for energy services is needed to replace the existing markets for energy supply. This means creating conditions under which energy service companies can flourish, dramatically shrinking transaction costs and making economic benefits real to consumers. Institutional change is also vital for restructuring our cities, in order to reduce automobile dependence. Particularly in the state government sphere, urban planning must be integrated with transport planning, and this combined portfolio must be given the power to create ‘subcities’ that are ‘transit cities’ within the whole city, and town centres and local centres within each ‘transit city’. In such vital restructuring, a strong and genuine program of community participation is needed, to increase public understanding of the reforms and to give the people a stake and a role in shaping the process.
A key step in increasing community participation in decision-making, is to create a culture of openness and transparency and to expose the power of vested interests. This can be achieved by:
- implementing strong Freedom of Information legislation;
- requiring the publication of all political donations over, say, $1000 – unfortunately, recent legislation by the federal government increases the limit to $10 000;
- allowing public parliamentary enquiries;
- tightening constraints on concentrations of media ownership – legislation in 2006 weakens the constraints;
- fostering open debate and investigative reporting in the media, by giving sufficient funding to our national broadcaster, the Australian Broadcasting Corporation.
None of the above five types of instruments of change is very effective on its own. Education and information cannot create much change when prices give the opposite message. Price signals, regulations and standards only work when clean energy alternatives and infrastructure are available and consumers have the knowledge required to purchase them from appropriate institutions and use them. Market imperfection, and indeed market failure, is endemic in the energy sector, and so economic instruments, while necessary, are not sufficient for driving major changes. Businesses will not reduce greenhouse gas emissions unless there are clear price signals, while government departments will require regulations to make them act.
There are pathways forward towards a sustainable energy future, but first we must identify the barriers to change and then develop policies and strategies for all spheres of government and business for overcoming the barriers and implementing sustainable energy. However, we must also recognise the big gap between proposing a way forward and getting it implemented by those bodies that hold political and economic power. Closing that gap will require concerted action by socially responsible citizens.