John Connor | CEO, The Climate Institute

In the same week that China and the US finally decided to enter into negotiations with the rest of the world for a single, legally binding climate agreement by 2015, public and private investment in renewable energy, energy efficiency and low-carbon technology officially topped $US1 trillion ($980 billion).

Big ticket investments include bio-mass co-generation in Brazil, wind farms in China, Mexico and Europe, solar-thermal in Morocco, electric vehicles and solar thermal in the US, biodiesel in Germany and maturing renewable energy projects in India.

According to Bloomberg New Energy Finance, which has kept records since 2004, annual global investment has risen fivefold over seven years from $US52 billion to $US243 billion last year, with another record surge expected next year and beyond. In no small part this will be driven by emissions trading schemes starting in California, South Korea and seven Chinese provinces by 2015.

With so many countries now deeply invested, it is perhaps no coincidence that a global agreement to put the brakes on climate change is finally within reach. An overarching legal framework is a logical next step.

The old certainties are now under assault, with the inevitability of a single, binding agreement plus the recognition by all countries that stronger action needs to be taken to meet the common goals of keeping global warming to 2 or 1.5 degrees above pre-industrial levels.

Countries meeting in Durban noted with “grave concern” the dire reality that the total of all the world’s efforts to cut carbon pollution to date would not be enough to limit a temperature rise to 2 degrees or less.

The momentum arising from a pivotal week in climate negotiations brings with it greater uncertainty for the future of fossil fuel investment, already being outstripped by renewable energy investments.

High carbon investment becomes an increasingly risky business when estimates reveal that only 20 per cent of fossil fuel reserves on asset books can be used should the world get serious about the 2 degree goal, and technologies like carbon capture and storage are neglected. That’s some carbon bubble.

It is simply wrong to sit back with the old certainties that China and other countries aren’t taking action or seeing the opportunities in the emerging global clean energy economy. A trillion dollars has not been invested just to feel good.

As well as for concern about the climate, these investments are made for reasons of self-interest in local pollution, energy independence and for positioning in the global clean energy economy.

The cost curves on clean energy are dropping swiftly and the safe havens of times past exist on borrowed time.

Australia has made a solid start with the introduction of a carbon price that will morph into an emissions trading scheme by 2015 and begin to link up internationally with other schemes.

Both major parties are committed to reducing carbon pollution by 5 to 25 per cent by 2020, based on pollution levels in 2000. Both had the 5 per cent in frame as an unconditional target if the rest of the world took no action. This is no longer credible. The Gillard government’s policy allows for a 25 per cent reduction, and Australia will need to explore ways to at least reach a target of 10 to 15 per cent, which has been deemed a fair contribution to current global efforts by the government’s climate change adviser, Ross Garnaut, and others.

The Coalition’s policy of direct action has very little hope of reaching a 5 per cent pollution cut in its current form.

There is a still a lot more work to be done on the home front to enhance our credibility as Australia angles for more secure, properly regulated carbon markets governed by an international agreement.

There is no question a global agreement will spur investment, but while we wait, the global network of domestic policies and investments are powering ahead. Whether we can collectively ramp them up quickly enough to avoid the effects of dangerous climate change is the challenge of this decade.

John Connor | CEO, The Climate Institute

John Connor | CEO, The Climate Institute

The successful conclusion of Durban’s UN climate convention should draw to a close not just those negotiations but also phony debates here in Australia about a lack of international action, laying to rest once and for all a persistent argument against acting on climate change.

Durban represented real progress in climate negotiations for three reasons.

First, all countries have agreed to negotiate by 2015 a single, legally binding global agreement that will cover all major carbon pollution emitters including, most importantly, China and the United States. It’s a big step. Never before have all major emitters agreed to have pollution commitments captured by a single, legally enforceable agreement.

This removes a massive stumbling block in climate negotiations which had nations like the US and, for a while, Australia, refusing to sign up to legally binding commitments because other major polluters like China and India weren’t subject to similar legal consequences.

It’s been a lame but pivotal excuse. Why act according to different obligations if every country isn’t similarly covered? There’d be no global trade whatsoever if you applied the same argument, but that hasn’t stopped the use of that excuse. Thankfully, now gone.

Secondly, countries have agreed to establish a Green Climate Fund and a work plan to unlock billions of dollars of additional investment for clean energy and adaptation in the world’s poorest nations.

While cumbersome and difficult to achieve, at the end of the day bedding down effective global solutions requires mulit-lateral institutional architecture.

As such, making good on commitments to help the most vulnerable countries, many in our Asia Pacific region, is not only a smart investment in sustainable regional economic growth but also critical to progress on climate action.

Finally, the Durban agreement recognises “with grave concern” that existing commitments to cut pollution are not enough to hold increases in global temperature below the 2 °C or 1.5 °C above pre-industrial levels that all countries have agreed is the common objective.

Existing action and commitments are inadequate because, as UN experts reported during the talks, the likely result will be global warming of three to four degrees. This would still lead to catastrophic and potentially irreversible consequences. (NB. taking no action under a business-as-usual scenario would likely deliver seven degrees of warming.)
With this prospect in mind, the Durban agreement states countries “shall raise the level of ambition” and build on existing actions.

The commitments and actions already in place in many countries are being driven by economic self interest and not just by climate concerns. Clearing up local air pollution, creating energy independence and grasping commercial opportunities in the emerging global clean energy economy are proving powerful incentives and can only continue to gather pace under a global agreement.

Carbon prices and emissions trading schemes already legislated cover around 567 million people. With California and seven Chinese regions starting emissions trading schemes, around 900 million people may be covered by 2015.

As negotiators finalised the deal in Durban, clean energy recorded its trillionth dollar of investment since Bloomberg records started in 2004. Annual investments in renewable energy now compete with fossil fuel energy sources.

These investments and actions make a mockery of claims that Australia is somehow at risk of leading the world.

The inevitability of a global legal agreement should also put an end to any expectation that reducing Australia’s emissions by a modest 5 per cent is a viable 2020 target for Australia.

Under both the Government’s conditions, lodged with the UN, and the Coalition’s Direct Action Plan, the 5 per cent figure is contingent on inaction elsewhere.

Professor Ross Garnaut, the ANU and The Climate Institute argue Australia’s 2020 target should be between 10 and 15 per cent, based on a reasonable assessment of current global action.

A target of at least 25 per cent, which both parties have in their range, is considered our fair share towards a 50/50 chance of achieving the commonly agreed two degree temperature limit.

Under the Clean Energy Future legislation, crunch time on that target will come in 2014 when the independent Climate Change Authority, chaired by Bernie Fraser, makes its recommendations.

For the Gillard Government, maintaining climate credibility here and abroad means strengthening the new policies and keeping open the possibility of a 25 per cent target, at least.

For the Coalition, Durban has opened the door to a dignified departure from the blood oath to remove the carbon pricing legislation. The Direct Action policy cannot achieve Australia’s 5-25 per cent international targets  without billions of dollars of extra cost on the Australian economy.

The Durban Climate Convention has delivered real progress that should not only lead to stronger ambition and action but also a much smarter debate here at home, at least.  Should.

This op ed was originally published in ABC The Drum.

Say YES 'Time Capsule' speech
John Connor, CEO, The Climate Institute
Canberra, 8 November 2011

Fellow citizens, it’s evolution time!

Some two and a half years ago The Climate Institute stood here with representatives of the workers, the ACTU.

With those representing the less well off, the Australian Council of Social Service.

With those representing the environment movement with the Australian Conservation Foundation and World Wildlife Fund for Nature. 
We stood here amidst a pack of dinosaurs seeking to put off the evolution.

We said then that it was time for Australia to evolve, time to evolve into a clean energy and low carbon future, time to evolve with tools like a renewable energy target and a price and limit on carbon pollution.

Well we achieved the renewable energy target of 20% renewable energy by 2020 and that still has multi-party support today and that is welcome.
But the dinosaurs and others meant that we postponed that part of evolution that included a price and a limit on carbon pollution.

Today in the Senate, Australia has just passed into law a legislative package that achieves just that.

The Hollywood blockbuster 2012 is based on the premise that the end of that year was destined to be the end of the world.

Since the full spectrum of Hollywood hyperbole has been levelled against the carbon pricing legislation passed in the Senate yesterday, it's probably appropriate that the Clean Energy Future machinery begins smack in the middle of next year. Some claims have foreseen the package destroying whole industries. Others have suggested that it will single-handedly mark the shift to clean energy in Australia.

The true story is more complex.

This machinery and supporting policies can, between 2012 and 2020, help deliver pollution reductions of between 680 million and 1 billion tonnes.

The only "end of the world" scenario likely in 2012 is an end to our major companies producing carbon pollution for free. All the hard evidence shows the real-world impact of a $23-per-tonne starting price will be a nudge to inflation of less than 1 per cent. It will not halt overall jobs and economic growth.

Public Policy, Citizenship and Investment in the era of Post Truth Politics

University of Notre Dame, 28 September 2011

John Connor, CEO, The Climate Institute

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