Is this the cleverest "climate" policy yet?

Plan to rescue the world's forests



AUSTRALIA will form a global fund to fight illegal logging and forest destruction worldwide with the aim of halving the rate of deforestation and achieving greenhouse gas emission reductions 10 times greater than under the Kyoto Protocol. Along the lines of the AP6 Asia-Pacific climate pact, the $200 million Australian initiative will operate outside the Kyoto climate change protocol and will be funded by other developed nations to help developing nations preserve forests.

Germany, Britain and the US are expected soon to contribute to the fund, which will have Indonesia as its prime target. The UN has identified Indonesia as having the world's highest rate of forest clearing. Yesterday, British economist and climate change expert Nicholas Stern said Indonesia ranked third in the world as a greenhouse gas emitter, after the US and China, because of the destruction of forests.

The new world fund - with a similar structure to the six-party Asia-Pacific Partnership on Clean Development and Climate created early last year - will give John Howard momentum on the climate change issue as Labor paints him as negative and reluctant on global warming. Labor yesterday peppered the Prime Minister with questions on global warming and promised a $50 million program to subsidise solar panels on homes to cut power consumption and greenhouse emissions.

Mr Howard responded in parliament by pointing to a split between the state Labor governments and federal ALP over compulsory targets for solar and wind power. Mr Howard and Kevin Rudd yesterday both met Sir Nicholas, who said in his report on the effects of climate change last year that deforestation in developing countries was one of the greatest contributors to global warming. Sir Nicholas's report for the British Government predicted dire consequences unless immediate steps were taken to cut greenhouse gas emissions.

Mr Howard will announce the start of the global fund today as the Government attempts to take the political initiative on climate change. The forest fund, to be managed by the World Bank, is designed to help developing countries start sustainable forest industries, plant new forests, stop illegal destruction of rainforests, provide monitoring of forest production, education in forest management and help communities dependent on illegal rainforest timber find alternative jobs.

Deforestation accounts for 20per cent of global greenhouse gas emissions and it is estimated that a tonne of CO2 can be sequestered - or taken out of the atmosphere - through tropical reforestation for just $US2, a fraction of the cost of other technologies. The World Bank has estimated the mismanagement of forests costs the global economy $US10billion a year and says 85 per cent of the world's forests are not managed in a sustainable way.

In its submission to the Prime Minister's taskforce on global warming and emissions trading, the National Association of Forest Industries says forests "can play a significant role in addressing climate change concerns through the benefits of carbon sequestration and managed native forests and plantations".

Mr Howard told parliament yesterday that Australia would work towards achieving its target in cutting greenhouse gas emissions under the Kyoto Protocol but said he would not adopt policies that cost jobs. "Whilst there are quite a lot of things in Stern's report and in his work that we agree with, we will take decisions in the national interest," Mr Howard said. "History is littered with examples of nations having overreacted to presumed threats to their great long-term disadvantage."

Mr Howard highlighted a split between the state Labor governments and federal ALP over the policy on renewable energy to combat climate change. In a submission to the Prime Minister's taskforce, the state governments have recommended that mandatory targets for generating power from solar, wind and other renewable sources be phased out when anemissions trading system is introduced. The states say a market-based system of encouraging greenhouse gas reduction through emissions trading is not compatible with mandatory targets. The federal ALP's policy "supports a mandatory renewable energy target which will promote the growth of renewable energy industries such as solar and wind power". "Labor will ensure a genuine and substantial increase in the percentage of Australia's energy generated from renewable sources," the policy says.

But the states have recommended mandatory renewable energy schemes be discontinued or not renewed. When asked about renewable energy targets in parliament, Mr Howard said that as he was being asked to expand mandatory targets the states wanted to phase them out. "This is at the heart of this debate - you cannot run power stations on renewables. Yet the Leader of the Opposition and those who sit behind him believe you can," he said.

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Stern warnings on climate consensus: The thinking man's climate change extremist hits town

An editorial from "the Australian" below

BRITAIN'S climate change emissary, Nicholas Stern, has left something for everyone in his lightning visit to Australia to warn of the likely costs of not taking precautionary action on global warming. The federal Government was given a tick for considering nuclear energy as an answer to cutting carbon emissions. Labor was given encouragement for setting a target to reduce the emissions. The coal industry was assured it was a logical long-term player in the world energy business and that Australia was perfectly placed to research clean coal technology, which would make a profound impact if it proved viable.

Global warming activists, meanwhile, would be heartened by Sir Nicholas's view that Australia should sign the Kyoto climate change protocol and was morally obliged to act on cutting its carbon emissions, even though in real terms any cuts would have a negligible impact on the global situation.

Set against Al Gore's hyperbolic visions of doom, Sir Nicholas can appear to be almost a voice of reason. This is because, unlike Mr Gore, who may morph into a climate change- fuelled US presidential candidate at any moment, Sir Nicholas is a serious bureaucrat and former World Bank chief economist. This should not obscure the fact, however, that he was handpicked to undertake the review of climate change by British Prime Minister Tony Blair for political as much as altruistic reasons.

British politicians have seized on climate change with what appears an almost religious zeal. Both major parties are attempting to outbid each other with climate change responses that promise austere measures for British citizens including the possibility of rations and progressive taxes on air travel. While there have been criticisms of Sir Nicholas's research, including from this newspaper, he has succeed in engaging business in the debate. Where Mr Gore has adopted the rhetoric of zealotry and exaggeration, Sir Nicholas has employed the logic of an insurance actuary. He has persuaded business to accept it makes economic sense to address the issue of climate change now, because if the science proves true, the cost will be much higher the longer it is left. This precautionary principle is well understood by the business mind, which also sees the potential for profit in a carbon trading regime.

That said, Sir Nicholas has not been shy of indulging in a little headline-grabbing of his own, with warnings that the cost of responding to climate change will equal two world wars and a depression. However, he has not overdramatised the state of scientific confidence on the impact of global warming, or the human contribution to climate change, to the same extent as others, notably Mr Gore and Australian of the Year Tim Flannery. Nonetheless, Sir Nicholas's call for harsh carbon emission targets, with reductions of between 60and 90 per cent, are best viewed in the context of the continuing need to draw attention to the issue. A target will always only be a target, and success in meeting it will depend on the success of new technology and innovation.

In political terms, John Howard had little choice but to meet Sir Nicholas, but the Prime Minister has made it clear the Government's response would be guided by protecting jobs and safeguarding the economy. If the Opposition sees Sir Nicholas's visit as a welcome precursor to this weekend's climate change talkfest, it would be wise to take a leaf from the Stern book of diplomacy and ability to deal with business. Having succeeded in getting business to the table, Labor must now satisfying the diverse groups without wrecking its claim to economic credibility.

For a lesson in the art of clever climate change solutions and politics, it's hard to beat Mr Howard's plan to combat illegal global logging, which could deliver 10 times the carbon savings of Kyoto.

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Just another end-is-nigh climate guy?

Here's the headline news from Tim Flannery, Australian of the Year: The climate is changing much faster than we thought even a short time ago. These changes will be vast and certainly catastrophic if we do not act. Thousands of species -- including our polar bear -- are headed for extinction. The collapse of the Gulf Stream could trigger a new nuclear arms race and usher in a nightmare era of global conflict. Left unchecked, climate change could well bring about the end of our civilization.

Whew. Pretty grim stuff. Yet Mr. Flannery swears he's no alarmist. "Just because the news is alarming doesn't mean the messenger is alarmist." His book The Weather Makers is riding high on the international bestseller lists, and he's a hot commodity on the speaking circuit. (He's addressing a think-tank conference for Canadian politicians today.) In Australia, where a severe drought has pushed climate change to the top of the agenda, he's at least as influential as Al Gore. The two have other things in common. Both simplify the science, cherry-pick the evidence and play down the uncertainties. They make it seem as if massive action is a no-brainer.

Too right, mate. We all want to do something. But what? How? What kinds of policies make sense? And what about the rest of the world? China, the fastest-growing carbon emitter on the planet, is building a new coal plant every week. Why should it sacrifice its prosperity to save our polar bears?

Mr. Flannery confesses that he gave short shrift to the dilemma of big developing countries. "The reason I don't talk about that is that it's a perfect formula for doing nothing." The flip side of this end-is-nigh pessimism is a remarkably cheery faith in new technologies and the prospect of global co-operation. "There is quite a significant shift even in China," he says optimistically. "They're talking a lot about renewable energy. The richest man in China makes solar panels." One day, he predicts, China could be the supplier of cheap solar panels to the world.

Maybe so. But Mr. Flannery prefers to gloss over the unpalatable economic tradeoffs that people and their governments are probably not prepared to make. For example, he thinks Australia ought to get out of the coal business. Like Mr. Gore (and unlike David Suzuki, who believes we must drastically cut our standard of living in order to avert Armageddon), Mr. Flannery basically promises climate gain without pain. He's also partial to massive social-engineering schemes. For example, he argues that the only equitable way to reduce emissions is to grant every human being an equal "right to pollute" with greenhouse gases. Under this system, developed countries would have to buy enough carbon credits from poor countries to cover their emissions. This would have the added (in his view) advantage of redistributing wealth from the greedy West to the impoverished rest. Does such a scheme have a chance? Not on this planet.

Mr. Flannery admits that emissions trading in Europe has been a flop (he blames the Italians for gaming the system, although they're not the only ones), and that the Kyoto targets are meaningless. He's for Kyoto anyway. "It's like a baby. It's useless when it's born. It needs nurturing, and then you can build it into anything you want it to be." He also points out that everything in his book is based on reputable scientific studies published in major journals, such as Nature.

What he doesn't say is that he tends to pick the most sensational studies and ignore the ones that contradict them. About the starving polar bears, he writes: "It looks as if the loss of nanuk may mark the beginning of the collapse of the entire Arctic ecosystem." Just one problem. The polar bear population is booming. And they've weathered climate changes far longer than humans have. Mr. Flannery was a bit defensive when I raised this. "You'll always find an expert to contradict any study."

Mr. Flannery is a very influential man. I hope his predictions of imminent catastrophe are wrong, because his ideas for tackling global warming are pretty lame. Do I have better ones? Nope. My point is, the real debates have only just begun.

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Leftists who want to cut income tax!

Another lurch to the Right from the Australian Left. They even endorse federalism over centralism!

A HIGH-LEVEL report prepared for the Labor premiers has raised the prospect of increasing the GST and lowering income taxes as part of a broader set of measures to overhaul federal-state relations. The premiers are being told that Australia could reap a "federalism dividend" of $86billion a year - or $4188 a head - if taxes such as the 10per cent GST and income tax rates were traded off to give the states greater financial freedom. To achieve the pay-off, Canberra must also stop playing politics with commonwealth grants to the states and reform the delivery of key government services such as health and education, where there is significant duplication of responsibilities.

The findings come in a new report for the premiers, Australia's Federal Future, which concludes that multi-tiered government, contrary to common perception, is an efficient model. It argues that the Australian federal-state system offers social and economic benefits that centralised government - such as in Britain and France - cannot. "Research suggests that federalism may have increased Australia's prosperity by $4507 per head in 2006 and that this amount could be increased by another $4188 or even more (totalling $86 billion) if Australia's system was more financially decentralised," it finds.

Co-authored by ANU professor of public policy Glenn Withers and University of Sydney associate professor in law Anne Twomey, the report will today be presented to the Council for the Australian Federation, set up by the premiers to co-ordinate policy at Council of Australian Government meetings. COAG meets on April 13 to consider issues such as control of the Murray-Darling Basin water system, global warming and setting education benchmarks.

But the Howard Government is likely to seize on the Labor premiers receiving a report that raises the spectre of tax changes. John Howard will press the point that changing the rate of GST requires the agreement of all states and the commonwealth, a more likely scenario if Labor wins the federal election.

Professor Withers told The Australian that to deliver the benefits of decentralisation, the states require more financial autonomy, and part of the solution is tax reform. "Australia needs to consider rebalancing its spending and income tax mix to both better support the states in what they can spend without ties and allow the income tax burden to be reduced," he said.

The report says "serious tax reform would recognise that Australia overtaxes incomes and undertaxes spending compared with other OECD economies". It concludes that the commonwealth has used its control of the GST revenue to impose its political agenda on the states. "Recent trends in Australian federalism show a shift from competitive and co-operative federalism to a system of 'opportunistic federalism', where the commonwealth uses its array of financial and legislative powers to intervene selectively in areas of traditional state responsibility to make ideological or political points," it says.

Professor Withers said Australia should be prepared to harness the advantages of a strong multi-tiered system of government, which provides greater scrutiny and limits opportunity for corruption, and encourages competition between the states to attract business and immigrants. "The common view is that several tiers of government create bloated public services, but this is a myth," he said. "Unitary states in the OECD employ nearly 11 per cent more public servants (as a percentage of overall employment) than us. In other words, if we hadn't had a federation we would have another 180,000 public servants."

The report advocates taking heed of other OECD countries that have streamlined the health and education sectors, and endorses last year's National Commission of Audit that called for the states to be responsible for preschool, primary and secondary education, and the commonwealth to take over responsibility for vocational training and higher education. Victorian Premier Steve Bracks said that the report "debunks some of the myths about our federation being expensive and the states being awash with cash".

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