Yesterday, it was reported BHP Billiton chief executive Marius Kloppers supports a price on carbon. The news was a welcome development for climate change advocates, particularly for those who prefer carbon pricing as the key mechanism for reducing Australia’s carbon emissions.
While it’s true that Kloppers did discuss a carbon price and make recommendations for such a policy in his address to the Australian British Chamber of Commerce, the widely circulated soundbite–‘BHP Boss calls for carbon price’–does not adequately reflect Mr Kloppers’ broader comments about change policy.
In addition to his remarks about carbon pricing, Kloppers discussed the challenging nature of climate change (emphasis added):
Transitioning to a lower carbon economy carries a number of special considerations that make it different from the typical problems that countries face:
Firstly, it is a long-dated problem and the nature of long-dated problems normally means that a single silver bullet does not exist to cure the ills. There are many moving parts, technology being only one of them that will change over time. Instead, governments will need to take incremental steps that build upon each other to create a mosaic of initiatives that collectively achieve the desired result.
He added that:
The combination of a long-dated problem that can only be tackled with many initiatives, and the different capital constraints and discount rates show clearly that a single encompassing trading system and the academically elegant economics surrounding it is not the solution.
We need to instead reconcile ourselves to a multifaceted solution, involving a combination of regulations, initiatives and market-based measures.
‘BHP boss calls for carbon price’ is an ironic headline for Kloppers’ speech, given that the high-profile business figure challenged the notion of a ‘silver bullet’ fix for climate change (carbon pricing is often presented this way) and identified the need for ‘multifaceted’ solutions. Sure the headline could have been ‘BHP boss calls for multifaceted solutions to climate change’ or ‘Business leader says a single ETS is no solution’, but these aren’t as catchy and would disrupt the dominant discourses of climate policy in Australia.
It’s a shame that Marius Kloppers’ considered comments on climate change have been obscured. Climate advocates might have used them to spark debate about climate and energy policy priorities in the early days of the recently formed Gillard government.
There is an opportunity cost of a narrow focus on pricing carbon: alternative climate and energy policies do not receive due consideration. If Greens staffer Tim Hollo is right, then the current focus risks squandering ‘the best opportunity for renewables we may ever get.’ In a recent blog Hollo argued that:
…this parliament can and should deliver the most exciting, ambitious renewable energy policies Australia has ever seen. The next two years may be the best opportunity for renewables we ever get, so let’s start working to grab it.
Later in the post Hollo suggests:
…we have the perfect opportunity for bold, ambitious renewable energy action, an opportunity that may not come again.
Parenthetically, this is not to say we should give up on a carbon price – that is still a priority for many of us. But I believe it will take longer and is still most likely be more compromised. Renewables action this term can be much more ambitious than a carbon price is likely to be and can drive faster climate action.
Tim Hollo’s assessment is sound. The independents MPs Wilkie, Katter, Windsor and Oakeshott, plus Green Adam Bandt all support the increased deployment of renewable energy. The composition of the House of Representatives coupled with the Greens balance of power in the Senate does present a unique opportunity for action on the renewable energy front.
The Parliament pursuing an ambitious renewable energy agenda will depend, in part, on the national climate change advocacy groups reorienting their message to help drive the policy debate. The way some climate advocates shoehorned Marius Kloppers’ broad comments into the carbon pricing model begs the question: Are climate advocates able and willing to adapt to new political conditions?
And another thing…
Marius Kloppers correctly notes the difficulties with the Kyoto/Copenhagen-style approach to negotiating an international treaty on climate change. To paraphrase Klopers, the process needs a rethink. The same can’t be said of his recommendation that governments should avoid using carbon pricing revenues to invest directly in renewable energy and other clean technologies. Using the carbon pricing revenue to fund renewable energy and cleantech demonstration projects and encourage deployment can be good politics and good policy.