Tim McDonnell joined Climate Desk after stints at Mother Jones and Sierra magazine. He remains a cheerful guy despite covering climate change all the time. Originally from Tucson, Tim loves tortillas and epic walks.
There was a somewhat surprising announcement this week from a country with one of the world's worst climate reputations: Australian Prime Minister Tony Abbott's office declared that his government is committed to signing on to the next major international climate accord, set to be hammered out in Paris later this year.
In a statement, the PM's office said that "a strong and effective global agreement, that addresses carbon leakage and delivers environmental benefit, is in Australia’s national interest."
I have no idea what "carbon leakage" is. Presumably it's something similar to carbon dioxide emissions, which are the leading cause of global warming. (Update: Carbon leakage is "the term often used to describe the situation that may occur if, for reasons of costs related to climate policies, businesses were to transfer production to other countries which have laxer constraints on greenhouse gas emissions," according to the European Commission.) Regardless, the announcement is a welcome sign from an administration that was recently ranked as the "worst industrial country in the world" on climate action.
The Paris summit is meant to elicit strong commitments to reduce carbon pollution from all of the world's leading economies, so it's a good thing Australia is willing to play ball. The country gets 74 percent of its power from coal (that's nearly twice coal's share of US energy generation). Australia has the second-largest carbon footprint per capita of the G20 nations (following Saudi Arabia), according to US government statistics.
Whether or not Australians liked their carbon tax, new data show it absolutely worked to slash carbon emissions.
But let's not get too excited. Although Abbott hasn't yet specified exactly what kind of climate promises he'll bring to the table in Paris, there's good reason to be skeptical. Here's why: In the run-up to the talks, developed countries are keeping a close eye on each others' domestic climate policies as a guage of how serious they each are about confronting the problem. It's a process of collectively raising the bar: If major polluters like the United States show they mean business in the fight against climate change, other countries will be more inclined to follow suit. Of course, the reverse is also true—for example, the revelation that Japan is using climate-designated dollars to finance coal-fired power plants weakens the whole negotiating process. That's one reason why President Barack Obama has been so proactive about initiating major climate policies from within the White House rather than waiting for the GOP-controlled Congress to step up.
So, on that metric, how are Australia's climate policies shaping up? It looks like they're going straight down the gurgler.
Almost a year ago, Australia made a very different kind of climate announcement: It became the world's first country to repeal a price on carbon. Back in 2012, after several years of heated political debate, Australia's parliament had voted to impose a fixed tax on carbon pollution for the country's several hundred worst polluters. The basic idea—as with all carbon-pricing systems, from California to the European Union—is that putting a price on carbon emissions encourages power plants, factories, and other major sources to clean up. Most environmental economists agree that a carbon price would be the fastest way to dramatically slash emissions, and that hypothesis is supported by a number of case studies from around the world—British Columbia is a classic success story. (President Obama backed a national carbon price for the US—in the form of a cap-and-trade system—in 2009, but it was quashed in the Senate.)
In Australia, the carbon tax quickly became unpopular with most voters, who blamed it for high energy prices and the country's sluggish recovery from the 2008 global recession. Abbott rose to power in part based on his pledge to get rid of the law. In July 2014 he succeeded in repealing it.
Now, new data from the Australian Department of the Environment reveal that whether or not you liked the carbon tax, it absolutely worked to slash carbon emissions. And in the first quarter without the tax, emissions jumped for the first time since prior to the global financial crisis.
The new data quantified greenhouse gas emissions from the electricity sector (which accounts for about a third of total emissions, the largest single share) in the quarter from July to September 2014. As the chart below shows, emissions in that same quarter dropped by about 7.5 percent after the carbon tax was imposed, and jumped 4.7 percent after it was repealed:
It's especially important to note that the jump came in the context of an overall decline in electricity consumption, as Australian climate economist Frank Jotzo explained to the Sydney Morning Herald:
Frank Jotzo, an associate professor at the Australian National University's Crawford School, said electricity demand was falling in the economy, so any rise in emissions from the sector showed how supply was reverting to dirtier energy sources.
"You had a step down in the emission intensity in power stations from the carbon price—and now you have a step back up," Professor Jotzo said.
…[Jotzo] estimated fossil fuel power plants with 4.4 gigawatts of capacity were been taken offline during the carbon tax years. About one third of that total, or 1.5 gigawatts, had since been switched back on.
In other words, we have here a unique case study of what happens when a country bails on climate action. The next question will what all this will mean for the negotiations in Paris.
The construction site of a Japanese-financed coal plant in Kudgi, India
Japan is at it again. Back in December, the country got caught trying to pass off $1 billion worth of investments in coal-fired power plants in Indonesia as "climate finance"—that is, funding to fight climate change. Coal plants, of course, are the world's single biggest source of carbon dioxide emissions.
Japanese officials now say they are also counting $630 million in loans for coal plants in Kudgi, India, and Matarbari, Bangladesh, as climate finance. The Kudgi project has been marred by violent clashes between police and local farmers who fear the plant will pollute the environment.
Tokyo argues that the projects are climate-friendly because the plants use technology that burns coal more efficiently, reducing their carbon emissions compared to older coal plants. Also, Japanese officials stress that developing countries need coal power to grow their economies and expand access to electricity.
Putting aside Japan's assumption that developing countries need coal-fired power plants (a view still under much debate by energy-focused development economists), the real issue here is that there isn't an official, internationally recognized definition of "climate finance." In broad strokes, it refers to money a country is spending to address the problem of climate change, through measures to either mitigate it (i.e., emit less carbon dioxide from power plants, vehicles, etc.) or adapt to it (building sea walls or developing drought-tolerant seeds, for example). But there remains little transparency or oversight for what exactly a country can count toward that end.
The reason that matters is because climate finance figures are a vital chip in international climate negotiations. At a UN climate meeting in Peru late last year, Japan announced that it had put $16 billion into climate finance since 2013. Likewise, President Barack Obama last year pledged $3 billion toward the UN's Green Climate Fund, plus several billion more for climate-related initiatives in his proposed budget. Other countries have made similar promises.
Each of these commitments is seen as a quantitative reflection of how seriously a country takes climate change and how far they're willing to go to address it, and there's always pressure to up the ante. And these promises from rich countries are especially important because in many cases the countries most affected by climate change impacts are developing ones that are the least equipped to do anything about it—and least responsible for the greenhouse gas emissions that caused global warming in the first place. But the whole endeavor starts to look pretty hollow and meaningless if it turns out that "climate finance" actually refers to something as environmentally dubious as a coal plant.
These numbers will take on increasing significance in the run-up to the major climate summit in Paris in December, which is meant to produce a wide-reaching, meaningful international climate accord. So now more than ever, maximum transparency is vital.
Earlier this month, Senate Majority Leader Mitch McConnell (R-Ky.) proposed a bold solution for any state that doesn't like President Barack Obama's flagship plan to slash carbon emissions: Just ignore it. The new rule, issued under the Clean Air Act, aims to reduce the nation's carbon footprint 30 percent by 2030. It would require every state to devise a plan to cut the carbon intensity (pollution per unit of energy) of its power sector. By simply ignoring the mandate, McConnell reasoned, states could delay taking steps like shuttering or retrofitting coal-fired power plants until the rules get killed by the Supreme Court (even though the chances of that happening are pretty remote).
Last week, McConnell justified his unusual suggestion that state regulators deliberately ignore federal law by arguing that the rules themselves are illegal. And yesterday, he took his campaign to a new level by introducing—on behalf of GOP co-sponsors Rob Portman (Ohio), Roy Blunt (Mo.), Tom Cotton (Ark.), and Orrin Hatch (Utah)—an amendment to the Senate's massive budget bill. It would allow any state to opt out of the rule if that state's governor or legislature decides that complying would raise electric bills, would impact electricity reliability, or would result in any one of a litany of other hypothetical problems. The amendment could get a vote later this week.
Meanwhile, over in the House, Reps. Ed Whitfield (R-Ky.) and Fred Upton (R-Mich.) have introduced a bill along essentially the same lines, which is set to to be debated by the Energy and Power Subcommittee, which Whitfield chairs, next month.
Republicans are pitching these proposals as necessary steps to protect Americans from the power-hungry, climate-crazed Obama administration. But if passed, they might do more to protect the interests of coal companies. In fact, the Portman amendment introduced by McConnell explicitly allows states to opt out if the rules would "impair investments in existing electric generating capacity"—in other words, if they require the early retirement of any power plants. The apparent justification is that in order to comply with the Environmental Protection Agency, states will have to quickly implement sweeping changes to their power system that could leave residents with expensive, unreliable power.
In reality, many energy economists (not to mention utility companies themselves) have found that the range of options states have to comply with the EPA—such as mandating better energy efficiency and building more renewable energy—are more than enough to keep the lights on and bills stable, while simultaneously burning less coal. (Meanwhile, regardless of any new EPA rules, coal is already on a precipitous and probably irreversible decline thanks largely to the recent glut of cheap natural gas.)
Both bills also work on the assumption that the rules grossly overstep the EPA's authority by extending beyond coal-fired smokestacks to the whole power system. That question is likely to be at the heart of the inevitable court battles over the rule. But as leading environmental lawyer Richard Revesz testified to a House committee this month, wide-reaching plans like this have been successfully implemented under the Clean Air Act for other pollutants like sulfur and mercury throughout the legislation's 40-year history.
In any case, giving states the option to opt out of federal air quality rules essentially undermines the entire premise of the Clean Air Act, probably the most powerful piece of environmental legislation ever passed. As Natural Resources Defense Council policy chief David Doniger put it yesterday: "These bills would force us back to the dark days half a century ago when powerful polluters had a free hand to poison our air, because states were unwilling or unable to protect their citizens."
Under current utility pricing schemes, a poor family of four in California's AC-dependent Central Valley can end up paying rates far above the national average—while a Google-employed bachelor millionaire gets a bargain.
Power companies' beef with solar boils down to a clever payment system that was largely responsible for bringing about the solar boom in the first place—a practice known as net metering. Most solar homes aren't actually "off the grid": They stay connected to transmission lines, using regular power when their panels aren't operating (like at night). But they also feed electricity into the grid when they produce more than they can use.
Sounds great, right? Not really, say the power companies. They pay solar homeowners for their excess kilowatts—but argue homeowners aren't paying their fair share for grid maintenance. That has utilities in revolt, and the fight has reached a fever pitch in Northern California, where the state's largest utility, Pacific Gas and Electric, serves more residential solar homes than any other.
Like many utilities, PG&E charges customers on a multitiered price scheme—the more electricity you use, the more you pay per unit. That can incentivize power hogs to conserve, but it can also mean that a poor family of four in California's AC-dependent Central Valley can end up paying rates far above the national average (and what it actually costs PG&E to serve them), while a Google-employed bachelor millionaire gets a bargain. If that tech dude decides to install solar panels, he pays even less—even though he still uses the grid.
To be fair, customers who generate their own electricity also save the utilities money, causing less wear and tear on transmission lines and less power lost along the way. But a study commissioned by California's Legislature found that in the Golden State at least, these benefits do not fill the hole left by lost revenue. Net metering cost the state's privately owned utilities $254 million in 2012, a price tag estimated to jump to $1.1 billion per year by 2020 as an estimated 500,000 more homes go solar.
The solar industry shot back with a study of its own, arguing that those costs are minor compared with the roughly $32 billion that California'smajorutilities earned in 2013 and that, for PG&E, the problem is not really caused by solar but by the huge gap—about threefold—between the company's lowest and highest rate tiers. Since solar is attractive to high-tier customers, who stand to save the most money, each one who saves by installing a system is a big blow to the utility's bottom line. Smooth out the rate tiers, the study suggests, and the problem disappears.
In the future, utilities will have to act more like grid managers, connecting power from a host of sources—like data flowing into a server from many places.
In 2013, California lawmakers told the state's utilities to do just that. PG&E's proposed solution, set to be voted on by state regulators in the spring, would reduce the number of price tiers and add a fixed monthly grid maintenance surcharge. The problem is that the fixed charge will erode the cost advantages of going solar, since you can't avoid it just by using less power from the grid. Sanjay Ranchod, a policy analyst for the solar installer SolarCity, sees the change as a sneaky way for the utilities to kneecap the competition. Imposing a fixed monthly charge, he says, is "one way you can inhibit the growth of distributed solar."
Similar battles are playing out from Utah to Wisconsin, as utilities fight to roll back net metering, restructure their rate systems, or impose special fees for solar users—and it's easy to see why power companies are sweating. The American Society of Civil Engineers estimates that the gap between the cost of maintaining the US grid and the available funds will grow by $11 billion per year through 2020, since the revenue streams utilities have traditionally relied on to pay for those costs—investments in big power plants they can recover through increased sales—are drying up.
John Farrell, a program director at the Minneapolis-based Institute for Local Self-Reliance, argues that to succeed down the line, utilities will have to act more like grid managers, connecting power from a host of sources (much like data flowing into a server from many places) and investing in technology that helps consumers use power more efficiently. "There's no outcome 10 or 20 years from now that looks anything like what utilities have been before," Farrell says. "It's going to happen anyway, and you just have to choose whether you're gonna like it or not."