As a description of what’s wrong with the Carbon Pollution Reduction Scheme (CPRS), it’s hard to go past Deakin University academic
Scott Burchill’s comment on the global financial system pre-meltdown:
"We've devised a financial system which is far too complex, too opaque, containing too many mysterious instruments for policy makers to manage and even for regulators to keep up with."
A look at the CPRS draft legislation, crisply described by Greens Senator Christine Milne as "thick as a telephone book and full of wrong numbers", suggests that complexity, opacity and mystery are to be ours in abundance if Canberra adopts the legislation.
(That's not likely, because the draft CPRS has managed to cheese off tree-hugging greens and cigar-chomping industry in equal measure, and please no-one. But that's another story.)
The idea of emissions trading was born in a pre-meltdown world, when globalisation and markets were manifestly imperfect but apparently worked.
Emissions trading was a way to get the world joining hands to fight climate change, using money, the tool we understand best.
As an innovative concept, emissions trading gets a gold star. It provides a mechanism that progressively makes greenhouse gases more costly to emit, steadily nudging industries, and societies as a whole, toward more wholesome technologies.
Its great merit over a carbon tax is that it allows international linkages, so that emissions can become a global currency that flow where they are most in demand.
The reality, as it appears in the Government's draft legislation, carries enough bureacratic overhead to negate most of the emissions it might prevent.
That complexity isn't useful in the current environment, in which markets have revealed feet of clay and globalisation has lost its savour.
Even without the accounting overhead, a global ETS looks a lot less do-able, certainly in time for the 'Kyoto II' round of talks.
If the world doesn't adopt a global ETS, then there is much less point in Australia adopting a domestic one.
Then it will be time to move to Plan B. Is there a Plan B?
Should the CPRS get up, with the world on board or not, the spotlight then shines unwaveringly on agriculture, from 2010 the only major emittor not gripped in the scheme's steady emissions squeeze.
Experience may prove the CPRS as easy to digest as the GST: agriculture may slip into the scheme without missing a beat. It's unlikely, though.
The GST is an accounting system designed to deal with money: that’s what accounting systems do. The CPRS is an accounting system designed to deal with gases in the biosphere. That's a currency not so easily accounted for.
Economics has been famously poor at accounting for nature. The rundown in ecosystems everywhere is testament to repeated failure to get real environmental costs woven into economic systems.
Farming, as NFF president David Crombie tirelessly points out, is a biological system. Accurately accounting for the emissions in a kilo of beef involves some mind-boggling variables. Location—even at the paddock-to-paddock level—seasons, and management, all influence the final result in endless permutations.
An ETS may be perfect for industries that readily fit the accounting framework. However you angle it, agriculture doesn't readily fit.
Bryan Clark, the Grain Growers Association climate change specialist, commented to me at a recent conference: "The object of policy ought to be how to manage atmospheric CO2 in a desired range, not whether we have a CPRS and whether every industry fits into it."
In other words, broaden the question from how agriculture will fit into a CPRS, to how it might play a part—any part—in reducing greenhouse gas emissions.
Looked at objectively, independently of current politics, emissions reduction is generally a positive step for agriculture.
As Agriculture Minister Tony Burke observed at the same conference, emissions are wasted energy that agriculture would do well to capture as productivity.
No sector has more to lose from the increasingly variable climate that is forecast under climate change, or more to gain from sequestration of carbon in soil and plants.
But reducing emissions poses one challenge; the CPRS has thrown up a different set of challenges altogether.
Emissions trading may ultimately prove too complex to execute, and/or too simplistic to reckon with the complexities that come from agriculture's interface with nature.
Unfortunately, it's the most workable idea on an otherwise bare table.
Has anyone got a better solution for agriculture than the scheme that Ross Garnaut described as a "diabolical dilemma"?
I think we’d be all keen to hear it.
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