Climate Change at Allens

Durban talks produce another new roadmap

2011-12-13T10:56:00.000+11:00

The latest round of climate change talks, held in South Africa, resulted in an agreement to extend the Kyoto Protocol and a roadmap to guide future negotiations towards a comprehensive treaty.

Lawyer Fergus Green spoke to Boardroom Radio about what the outcome in Durban means for future climate change negotiations and the Australian carbon pricing scheme.

A look at the Draft Murray-Darling Basin Plan

2011-12-01T16:39:00.000+11:00

The Draft Murray-Darling Basin Plan, released this week, marks a major shift in the management of water resources towards providing more water for the environment, but significantly less than was proposed last year.

Partner Chris Schulz and Lawyer Fergus Green have written an examination of the plan, which is available at the Allens website.

Also, Partner Andrew Mansour has spoken to Boardroom Radio in a video interview, looking at the next steps before the plan becomes law.

Carbon price scheme becomes law – what to do next

2011-11-14T14:52:00.000+11:00

The Federal Parliament has passed legislation to establish an Australian carbon pricing scheme, which will operate initially like a carbon tax, with a fixed (but increasing) carbon permit price, and will then transition into a cap and trade scheme after three years.

Allens Partner Grant Anderson and Lawyer Fergus Green have written a detailed Focus article on this historic development.

The article is available from the Allens website.

Clean Energy package passed by Senate

2011-11-08T17:02:00.000+11:00

The Clean Energy Legislative Package passed through the Senate unamended today.

The Bills were passed with the support of Labor and the Australian Greens, 36 votes to 32. Voting ‘no’ were the Coalition, independent Nick Xenophon, and the Democratic Labor Party’s John Madigan.

House of Representatives passes carbon price legislation

2011-10-12T14:41:00.000+11:00

The House of Representatives today passed key legislation to set up a carbon pricing scheme.

Partner Grant Anderson speaks to Boardroom Radio about the next steps for the passage of the legislation and what businesses need to begin doing to meet the legislation's requirements.

Australia/Norway UNFCCC proposal

2011-10-11T10:29:00.000+11:00

By Senior Associate Charlie Harrison

The annual meeting of the Conference of the Parties (COP) to the UNFCCC* is scheduled to take place this year in Durban, South Africa from 28 November to 9 January. Last month, Australia submitted its plan for Durban and beyond to the UNFCCC, in a joint submission with Norway. It is obviously in the Government's interest that some international momentum is seen to be building at Durban this year, which makes the measured and patient plan set out in the submission somewhat of a surprise.

Firstly, a (very general) recap of where international negotiations currently stand.

The emissions reduction targets of developed countries under the first commitment period of the Kyoto Protocol, negotiated in 1997, are ending shortly (in December 2012). It is still unclear whether a second commitment period under Kyoto, covering post-2012, will be agreed or if another form of international agreement will take its place. The primary issue is the divide between developed and developing countries. The Kyoto Protocol only binds developed countries to mandatory greenhouse emissions reductions. Developing countries want to preserve this distinction beyond 2012, and therefore want to preserve the Kyoto Protocol framework (including the Clean Development Mechanism, a source of income for developing countries) with a new set of targets for a second commitment period. Developed countries are pushing for developing nations, particularly China, India and Brazil, to sign up to binding targets under a new treaty.

The submission from Australia and Norway, therefore, is for a new treaty to be agreed under the framework of the UNFCCC, including:

a global goal of holding temperature rise below 2 degrees Celsius (this goal was initially agreed at Copenhagen in 2009 and confirmed in Cancun in 2010);
binding mitigation commitments from both developed and developing countries, especially from major economies (this would include China, India and Brazil), but not necessarily from the least developed countries;
a formal way of capturing parties' targets and actions, including expected emissions outcomes;
clear rules and transparent information about the basis for accounting for mitigation undertakings, including rules for the accounting of market mechanisms that prevent double-counting; and
a periodic process for scaling up ambition levels and mitigation efforts over time.

The submission proposes that parties commit to negotiate such a new treaty at the Durban conference, but, with a probably realistic view of the speed of the UNFCCC negotiation process, sets 2015 as a deadline for finalisation of the proposed new treaty, following a review period without any binding international emissions reduction targets from 2013 to 2015. Such a review period, with an agreed timeline of required steps, will "provide time and space for countries to build confidence and capacity and ensure a robust outcome over time".

The submission states that the main practical priority for Durban is to get a more formalised record and understanding of the mitigation targets and actions put forward by countries since Copenhagen (including at Cancun last year), including, for each country:

the actual (ie, not contingent) mitigation target or action;
the base year, reference year or other reference value for the emission reduction target;
Global Warming Potential values (i.e. for converting other greenhouse gases into their carbon dioxide equivalents);
gases and sectors included in the mitigation targets;
the averaging or commitment period; and
any assumptions on rules that have been made in submitting the target (i.e. use of flexible mechanisms such as the Clean Development Mechanism).

The submission suggests that this information could be collected through providing a template or questionnaire for Parties to complete and include in updated annexes attached to decisions taken at Durban. This information would also be used for the development of a common accounting framework (another vital step discussed in the submission), and it could be updated on an annual basis through to 2015.

* The official title of the conference is COP17/CMP7. The COP17 indicates that it is the 17^th Conference of the Parties since the UNFCCC entered into force in 1995. The CMP7 indicates that it is the 7^th Meeting of the Parties to the Kyoto Protoc

Jobs and Competitiveness Program regulations released

2011-09-23T16:51:00.000+10:00

The Department of Climate Change and Energy Efficiency has released exposure draft regulations to establish the assistance program under which free carbon units issued pursuant to the carbon pricing scheme will be provided to emissions-intensive trade-exposed industries.

Partner Grant Anderson has written a detailed Focus article on the regulations.

National Carbon Offset Standard review and consultation

2011-09-22T16:07:00.000+10:00

The Australian Government Department of Climate Change and Energy Efficiency (DCCEE) is undertaking its first review of the National Carbon Offset Standard (NCOS). This review is timely given the recent passage of legislation for the Carbon Farming Initiative (CFI) (see our Focus article).

Proposed changes to the NCOS include linking it with aspects of the Carbon Pricing Mechanism.

As part of the review, DCCEE has released a discussion paper and draft NCOS version 2.0 for consultation. Among other changes, DCCEE proposes to:

revise the list of eligible offsets recognised under NCOS to include Australian Carbon Credit Units (ACCUs) generated under the CFI;
remove ‘audit’ requirements for recognised standards;
increase attention on scope 3 emissions as part of carbon footprint calculations; and
clarify the ways in which an organisation's footprint is calculated.

While NCOS version 2.0 attempts to clarify the treatment of activities that don’t clearly fall into the category of a product or organisation (for example, emissions from an event or major project) no attempt has been made to define an 'organisation' for the purposes of NCOS.

In workshops preceding the release of the discussion paper, the mutual recognition of alternative standards was raised with DCCEE as a matter that could appropriately be addressed.. Mutual recognition would mean that products and services accredited under other suitable standards would be automatically able to claim carbon neutrality against NCOS without further assessment. However, the Government has ‘parked’ this proposal for the 2012-13 review so that issues and lessons associated with aligning standards in the international arena can be considered further.

While ongoing revision and update is important for NCOS to retain currency, the proposed draft NCOS version 2.0 appears to have been hastily prepared. It lacks a definition of 'Carbon Price' (which is used in the new definition of 'Carbon Unit') and retains references to the Carbon Pollution Reduction Scheme in the definition of 'Additionality'.

At a minimum, these mechanical issues should be considered in updating and refining the existing NCOS and NCOS Carbon Neutral Program Guidelines.

Interested stakeholders are invited to provide feedback on the proposed changes to the NCOS by making a submission to DCCEE by close of business Wednesday, 12 October 2011.

Analysis of carbon pricing scheme legislation

2011-09-16T15:22:00.000+10:00

Following the recent release of both its climate change policy, Securing a clean energy future: The Australian Government's climate change plan, and exposure draft legislation to implement its proposed carbon pricing scheme, the Federal Government has introduced its clean energy legislation package into the House of Representatives.

Partner Grant Anderson reports on the principal differences between the exposure draft legislation and the legislation package as introduced into Parliament.

Meanwhile, Partner Martin Fry has spoken to Boardroom Radio on the tax aspects of the legislation and what businesses can do now to be ready.

Federal Government introduces clean energy package

2011-09-14T09:35:00.000+10:00

Yesterday, the Federal Government introduced its clean energy package, including the Clean Energy Bill 2011 (Cth) and 18 other related Bills (including a Bill setting up the government's steel transformation plan), into the House of Representatives.

The clean energy Bills have been amended following the release of the exposure drafts of the main Bills in late July, with more than 300 submissions considered and apparently taken into account by the Federal Government. It is intended that the Bills will undergo a month of consideration and will face a final vote by the House of Representatives on 12 October.

The most substantial change is the establishment of an opt-in scheme for liquid fuel emissions from 1 July 2013, enabling large users of specified fuels to voluntarily opt in to the carbon price mechanism in relation to such emissions instead of paying the equivalent carbon price under the fuel tax or excise systems (this was requested by stakeholders from the aviation industry as it will assist them to manage their liabilities for fuel emissions).

The Federal Government has also indicated that Bills establishing the Australian Renewable Energy Agency and the Clean Energy Finance Corporation will be introduced in coming months.

We will be considering the revised Bills over the coming days, and will post links to our analysis on this blog.

Western Australia Unlikely to Meet Renewable Energy Target

2011-09-06T14:22:00.000+10:00

By Lawyer Melanie Rifici

Western Australia's Energy Minister Peter Collier has said that WA will struggle to meet its share of the national Renewable Energy Target (RET).

The RET is a federal government scheme which requires 20 percent of Australia's electricity to be produced from renewable energy sources by 2020. The federal government has set annual targets for each year of the scheme, which Australian electricity retailers and large wholesale purchasers of electricity are required to comply with. Compliance is demonstrated by surrendering renewable energy certificates, where one certificate is equivalent to one additional megawatt-hour of electricity generated from renewable energy sources (above a 1997 benchmark). Electricity retailers and wholesale buyers can either generate the electricity from renewable energy sources themselves, or purchase the certificates from others that have done so.

Mr Collier announced on 17 August 2011 that Synergy, WA's dominant electricity retailer, will buy up to 450 megawatts of electricity from a mix of renewable sources by 2020. However, the Financial Review reported that when this is combined with the existing 400 megawatts of renewable energy supplies in WA, the state will still only be deriving approximately 12 percent of its total electricity supplies from renewable sources by 2020.

A spokesperson for Federal Climate Change Minister Greg Combet said that Synergy could meet its obligations by buying renewable energy certificates from projects in other states, and that he is confident that the national target will still be met. However, if Synergy does fail to meet its share of the target, it will face a penalty of $65 per megawatt-hour, which could potentially amount to hundreds of millions of dollars given its potential shortfall.

Independent report argues carbon compensation excessive and 'protectionist'

2011-09-01T10:11:00.000+10:00

By Fergus Green

In a detailed report released this week, independent policy think tank the Grattan Institute argues that the compensation proposed to be given to the LNG, coal mining and steel production sectors under the Government's Clean Energy Future policy is unjustified and excessive.

The report traces the shift in the official rationale for providing government assistance to these and other emissions-intensive trade-exposed (EITE) industries away from 'avoiding carbon leakage' (defined as 'the movement of industry production offshore without any fall in carbon emissions') to the much broader rationale of 'levelling the playing field' (reducing incentives for industry to relocate overseas because Australian EITE industries face higher carbon costs to competitors in other countries).

The report explains that, for a given emissions reduction target, assistance based on the 'level playing field' rationale may be more fair to those industries relative to their foreign competitors, but it is also less fair to other (uncompensated) liable Australian emitters and to the community in general. This is because the subsidy to compensated industries effectively requires 'more work' to be done by other covered sectors to reduce their emissions in order for the economy-wide target to be met, which puts pressure on the carbon price. These carbon price increases in turn flow through to the rest of the Australian community.

The report's analysis of the carbon price impact on industry costs in the LNG and coal-mining sector concludes that even a carbon price of $40/tCO2-e (much higher than the initial starting price of $23/tCO2-e) is unlikely to affect LNG production or investment decisions in Australia and is unlikely to substantially affect the future production and expansion of Australian black coal mines. It also found that there is a case for targeted compensation to Australia's steel industry to prevent carbon leakage, but that the Government's proposed compensation for the industry will result in it receiving a windfall gain. 'In effect', concludes the report, the proposed compensation 'is protecting the Australian industry not from a carbon price, but from structural adjustments in the global steel industry'.

The report calls for greater transparency in emissions data and assistance arrangements in order that industry claims can be subjected to proper scrutiny, and for the amendment of the 'objects' of industry assistance in the draft Clean Energy Bill, which is particularly relevant to the Productivity Commission's mandatory reviews of industry assistance. The Commission, the report argues, should be directed to focus on the risk of carbon leakage as the key criterion for its reviews.

Carbon Farming Initiative legislation passed

2011-08-25T13:58:00.000+10:00

The Federal Parliament has passed legislation to implement the Government's previously announced Carbon Farming Initiative, under which landholders may establish land-based carbon abatement and sequestration projects that generate tradeable carbon credits.

Partner Grant Anderson and Lawyer Naomi Snyder have written a Focus article on the Carbon Farming Initiative.

Action needed now in climate's 'critical decade': professor

2011-08-16T17:32:00.000+10:00

By Lawyer Natasha McNamara

Leading climate scientist Professor Hans Joachim Schellnhuber views Australia's proposed carbon pricing scheme as a 'moderate, well-balanced package', and is surprised at the 'hot debate' it has stimulated in Australia.

Last month, Professor Schellnhuber presented at Melbourne University on the topic 'Climate Change: The Critical Decade'. The professor's presentation got off to a rocky start when protestors from the Citizens Electoral Council of Australia had to be forcibly removed from the Carrillo Gantner Theatre. Prof. Schellnhuber maintained his calm, but said the protest against 'green fascism' was an example of the hostility climate scientists must endure.

Prof. Schellnhuber stated: 'I can more or less guarantee you that a life in dignity for 10 billion people under a four degrees or more scenario is impossible.' If global emissions continue at current levels, the global temperature will increase by 3-4˚C by 2100 and by 6-8˚C by 2300. He also argued for further scientific investigation of the more extreme possible effects of climate change, such as the 'runaway greenhouse effect' and the release of methane hydrates as a function of an increase in ocean temperatures.

Prof. Schellnhuber's message is that the need for action on climate change is urgent. Emissions must peak before 2020 for a 2˚C limit on temperature increases to be achievable. Prof. Schellnhuber argued that once the cost of the transition from reliance on fossil fuels is overcome, a less emissions-intensive global economy will be more cost effective than the status quo. Unlike the industrial revolution, where ad hoc change was driven by individuals and fuelled by coal, the 21st century revolution necessary to deal with climate change had to be co-ordinated and guided by insight. He made a plea for policy to transcend national boundaries and be guided by the interests of future generations.

Taxing the Carbon Pricing Scheme

2011-08-12T15:40:00.000+10:00

The Federal Government has released draft legislation containing the tax implications of its proposed carbon pricing scheme. Partner Martin Fry reports on the key income tax implications for entities when acquiring, holding, surrendering and trading in carbon units.

Who will be liable under the carbon pricing scheme?

2011-08-04T12:12:00.000+10:00

Partner Grant Anderson has written a detailed Focus article on the liability provisions outlined in the Federal Government's draft legislation for setting up its proposed carbon pricing regime.

The article is available at the Allens website.

Carbon price draft legislation: what's in it and what comes next

2011-07-29T09:19:00.000+10:00

Partner Grant Anderson has spoken to Boardroom Radio about some of the major details contained in the suite of legislation released yesterday that is designed to set up the proposed carbon price regime.

To hear Grant's interview, go to the Allens website.

Draft carbon pricing legislation released

2011-07-28T13:41:00.000+10:00

The draft legislation setting up the Federal Government's proposed carbon pricing regime was released today.

Today's release of the 13 draft Bills begins a period of public consultation, in which interested stakeholders are invited to make submissions between today and 22 August 2011.

To view the draft legislation, go to the Department of Climate Change and Energy Efficiency website.

What companies should be doing now - part three

2011-07-20T17:09:00.000+10:00

By Grant Anderson, Charlie Harrison and Fergus Green

In the third of our posts on what businesses need to do to be ready for the carbon tax, we look at issues that will keep directors up at night.

Under the ASX Listing Rules, once a listed company becomes aware of any information that would reasonably be expected to have a material effect on the price of its listed securities, it is required to immediately disclose that information to the Australian Securities Exchange. A failure to do so attracts sanctions under the Corporations Act 2001 (Cth). During the course of the development of the carbon pricing scheme, various companies have made public statements that the imposition of a carbon price will cause them to close existing operations or not proceed with planned projects. Given the level of detail that has now been disclosed in relation to the carbon pricing scheme, and that the scheme seems to have the support of the necessary numbers in Parliament, these companies (and others that are likely to be materially affected by the carbon pricing scheme) will need to consider whether they should be making disclosures to the market regarding the likely affect of the carbon pricing scheme on their operations.

Directors are required to exercise their powers and discharge their duties with reasonable care and diligence. Accordingly, the directors of companies that are liable under the carbon pricing scheme are under a duty to ensure that the company has in place strategies to manage that liability including by introducing lower-emissions technologies and processes and implementing purchasing and hedging strategies to mitigate the company's carbon costs.

Additionally, it is expected that, as with the CPRS, the executive officers (ie directors and senior management) of a company that is liable under the carbon pricing scheme may be exposed to personal liability if the company fails to comply with the carbon pricing scheme legislation and that officer, being in a position to do so, fails to take reasonable steps to prevent the contravention. The implementation of an effective compliance and education program will be an important part of an officer's defence in such a case. This is in addition to the obvious benefit of a compliance program – which is to minimise the risk of any breach by a company of its carbon pricing scheme obligations in the first place.

Australian Financial Services Licence

Because carbon permits will be 'financial products' for the purposes of the financial services regulatory regime under the Corporations Act and the Australian Securities and Investments Commission Act 2001 (Cth), entities that wish to trade in such permits will typically be required to hold an Australian Financial Services Licence. While trading is likely to be limited during the fixed price phase, carbon permits for the floating price phase will be auctioned during the fixed price phase with the aim of creating a forward price curve. Accordingly, potential traders should consider applying for the necessary licence (or a modification of their existing licence if required) in preparation of the commencement of the carbon pricing scheme.

Posts one and two in this series are available on this blog.

Liability and the impact on joint ventures

2011-07-19T14:14:00.000+10:00

An opinion piece by Partner Grant Anderson was featured in today's business section of The Age. The piece discusses the possible impact of the new carbon price regime on joint ventures and how the new definition of liability differs from that outlined under then Prime Minister Kevin Rudd's Carbon Pollution Reduction Scheme.

The article can be read at The Age website.

The ACCC and the carbon tax

2011-07-18T15:45:00.000+10:00

Allens Competition Partners Fiona Crosbie and David Brewster have written a Focus publication on the new dedicated 20-person Australian Competition and Consumer Commission team that will be formed to investigate false and misleading claims by businesses in relation to the impact of the carbon tax on their prices.

The article examines the competition risks for businesses.

To read the article, go to the Allens website.

What companies should be doing now - part two

2011-07-15T12:21:00.000+10:00

By Grant Anderson, Charlie Harrion and Fergus Green

In the second of our posts on what businesses need to do to be ready for the carbon tax, we look at pass through of carbon costs.

Both directly liable entities, and other entities that (while not directly liable under the carbon pricing scheme) supply or purchase energy-intensive or emissions-intensive goods or services, should review their existing contracts to determine the extent to which they will be able to pass through (or resist the pass through) of costs associated with the carbon pricing scheme. There are two pass through mechanisms that are commonly included in contracts:

• change in tax clauses; and
• change in law clauses.

Despite the carbon pricing scheme commonly being referred to as a 'carbon tax' it is not, in fact, a 'tax' but an emissions trading scheme (albeit one that operates as a fixed price permit scheme for the first three years). Accordingly, it should not be assumed that a supplier will be able to rely on a change in tax clause to pass through to its customers the costs it incurs under the carbon pricing scheme. Having said this, change in tax clauses sometimes extend to 'levies, charges and imposts' and it is conceivable (although by no means certain) that at least a fixed permit price might be regarded as coming within these terms.

While the introduction of the carbon pricing scheme will clearly constitute a change in law, change in law clauses are not necessarily ideally suited to the pass through of costs associated with a scheme such as the carbon pricing scheme.

The first reason for this is that change in law clauses are predicated on being able to identify an upfront and once-off cost adjustment arising from a legal obligation that can be spread across the unit price for the remaining term of the contract. However, at least during the flexible price phase, it will be very difficult to predict the permit price for more than a few years in advance, which will mean that a once-off adjustment to the unit price is likely to either over or under compensate the supplier for the costs it incurs under the carbon pricing scheme in purchasing carbon permits.

The second limitation of a typical change in law clause is that, because it assumes that it is possible to quantify a fixed total cost for pass through, it provides little incentive for the supplier to manage that cost. However, under the carbon pricing mechanism, a liable entity will be able to manage to some degree the cost of the carbon permits that it is required to surrender. For example, the supplier will be able to hedge against the carbon price by the forward purchase of carbon permits.
These limitations suggest that contract counterparties should consider negotiating amendments to their existing long term contracts, or including in new contracts, tailored carbon pass through clauses that, for example:

• provide for the periodic assessment and pass through of carbon costs (eg every few years during the contract term);
• incentivise the supplier to manage the cost of its carbon permits (eg by deeming the cost of permits for pass through purposes to be an average long term carbon price, which will encourage the supplier to hedge those costs) or provide for the purchaser to acquire permits to acquit the supplier's liability (so that the purchaser is able to control the carbon costs that it bears); and
• properly take into account any free carbon permits that the supplier receives or is entitled to receive in respect of the emitting activities so that the supplier does not make a windfall gain out of the carbon cost pass through.

Where the contract is not with an entity that is directly liable under the carbon pricing scheme, a cost pass through clause will typically not permit the pass through of increased input prices where that increase results from the imposition of a legal obligation to surrender permits which is imposed on an entity further up the supply chain. Nonetheless, a supplier may wish to provide for a price adjustment to reflect carbon-related input price increases. In these circumstances, the supplier can be incentivised to manage its upstream costs by the price increase being linked to the average input price increases of its competitors rather than its actual price increases. Given the once-off increase in CPI resulting from the carbon pricing scheme, such parties may also wish to 'stagger' any CPI-indexed price increase across a few quarters.

The Government has flagged that, just as with the introduction of the GST, the Australian Competition and Consumer Commission will be empowered to investigate price gouging in the context of the pass through of carbon costs, and so businesses will also need to comply with yet to be released pricing guidelines relating to this matter.

Finally, as discussed above, even though transport fuels and certain synthetic greenhouse gases (hydrofluorocarbons and sulphur hexafluorides) are not covered by the carbon pricing scheme, an effective carbon price is to be imposed on them in certain circumstances through adjustments to the fuel tax credit/excise system and import/manufacturing levies. Participants in these industry sectors will therefore need to consider whether they are able to pass through such increased costs under their existing contracts and to provide for the pass through of these costs under new contracts.

Taxing the carbon tax – a messy business?

2011-07-14T15:44:00.000+10:00

Allens Tax Partners Cameron Rider, Martin Fry and Ross Stitt have written a Focus publication that outlines the tax details of the carbon pricing scheme, including guidance on the income tax and GST treatment of the carbon permits that are the linchpin of the carbon tax.

The publication is available from the Allens website.

What companies should be doing now - part one

2011-07-14T14:47:00.000+10:00

By Grant Anderson, Charlie Harrison and Fergus Green

In a series of blog posts starting today, we will look at what businesses need to be thinking about or doing now to make sure they are ready for the carbon tax. Today, we look at what entities that expect to be directly liable should be considering in order to manage or structure their liability under the scheme.

We have all heard that it is expected that only 500 businesses are expected to be directly liable under the scheme. A business will be directly liable if they undertake an activity in:

• the stationary energy sector (eg, electricity generation);
• the industrial processing sector (eg, aluminium smelting);
• the fugitive emissions sector (eg, emissions from coal mine seams) other than from decommissioned coal mines ;the solid landfill sector; or
• the waste water treatment sector,
which activity or facility produces annual direct greenhouse gas emissions in excess of 25,000tCO2-e, and the greenhouse gas emissions take the form of carbon dioxide, methane, nitrous oxide or perfluorocarbons (a lower threshold of 10,000tCO2-e applies to landfills that are located close to large landfill facilities); or
• they are a natural gas retailer.

As we have heard, emissions from the agriculture and land sector and emissions from transport fuels have been excluded from the scheme. If a business expects that it may be directly liable under the scheme, it should be thinking now about how to manage its predicted carbon liability – that is, to which company within their corporate group the liability should be allocated, how that liability is to be acquitted (eg the strategy that is to be adopted to enable the acquisition of the necessary carbon permits in the most cost effective way) and whether the costs associated with that liability can be passed through to customers. The carbon pricing scheme will impose the liability to surrender carbon permits on the entity that has operational control over the emitting facility (although provision will be made for that liability to be transferred to another company within the group under a liability transfer certificate mechanism). An entity will have 'operational control' over an activity where it has the authority to introduce or implement operating, health and safety, or environmental policies for the activity or (if more than one entity has such authority) the entity has the authority to introduce and implement operating and environmental policies for the activity.

If an unincorporated joint venture has operational control over the emitting activity, liability for those emissions will be allocated between the joint venturers in proportion to their joint venture interests. It appears that, where the operator of an unincorporated joint venture (as opposed the to joint venturers) has operational control over the joint venture activities, that operator will also have the ability to transfer its liability for joint venture activity emissions to the joint venturers (as the financial controllers of those activities) in proportion to their joint venture interests.

In addition to considering how to structure their carbon pricing scheme liability, entities that are eligible for structural adjustment assistance, eg under the Jobs and Competitiveness Program or the coal-fired electricity generation assistance package, should be aware of the information that they will need to provide, and the procedures that they will need to follow, in order to qualify for such assistance. Of course the carbon pricing scheme will also present significant opportunities for companies to improve their competitive position by managing their emissions intensity and energy consumption, and for companies in low-emissions industry sectors, such as gas-fired and renewable energy generation. As part of assessing the impact of the carbon pricing scheme, it is important that companies look not just at the risks, but also the opportunities.

Talking the carbon tax scheme

2011-07-11T09:13:00.000+10:00

Partner Grant Anderson has spoken to Boardroom Radio about the Federal Government's carbon tax scheme and what businesses should be looking to do now in the lead up to its introduction.

To hear Grant's interview, go to our website.

Don't forget Victoria – New Victorian Climate Change Act enters into force

2011-07-08T12:23:00.000+10:00

By Fergus Green

With all the attention on federal climate politics at the moment, developments in climate regulation at the state level have largely gone unnoticed. So, before all our blogging attention is diverted to the federal scheme to be announced on Sunday, we thought we'd take a quick look at Victoria's new Climate Change Act 2010, which came into force last week.

The Act sets a target for the reduction of Victoria's greenhouse gas emissions of 20% below 2000 levels by 2020 (though the Premier has indicated that it is an 'aspirational' target) and requires certain Government entities to take climate change issues into account when making decisions under various environmental, water, transport and public health statutes.

The Climate Change Act also introduces a new regime for recognising and transferring legal interests in carbon sequestered in trees and soil. This regime will facilitate participation by Victorian land-owners and carbon investors in Australian and international voluntary carbon markets – most important among which is the Federal Government's impending Carbon Farming Initiative.

Perhaps most significantly, the Act empowers the Environment Protection Authority to regulate greenhouse gas emissions, including by considering such emissions when issuing works approvals under the Environment Protection Act 1970. However, much of the detail is yet to come: it is expected that the Authority's regulatory powers over greenhouse emissions will be elaborated in new policy guidelines, changes to State Environment Protection Policies (which are currently being reviewed), and/or amendments to environment protection regulations such as the Environment Protection (Scheduled Premises and Exemptions) Regulations 2007.

It seems that, like everyone else, the Victorian Government is waiting for the Feds.

Carbon price announcement imminent - climate change law season begins

2011-07-06T16:58:00.000+10:00

By Fergus Green

After seven long months of negotiations it was announced this week that the Multi-Party Climate Change Committee has reached an agreement on the details of a new Australian mechanism to price carbon emissions. The Federal Government will announce these details on Sunday, with a view to introducing legislation to establish the new scheme – one of the most significant economic and environmental reforms in Australia's history – sometime in September/October. We, Allens' specialist climate change law team, are marking this important milestone by reviving our blog, Climate Change Law at Allens.

In recent weeks, the plethora of reports and inquiries that the Gillard Government had commissioned on carbon pricing have been arriving thick and fast: the Climate Change Commission's excellent summary of sobering developments in climate science and their implications; Professor Ross Garnaut's eight Update Papers and Final Report containing recommendations for the design of the new scheme; the Productivity Commission's report into the cost of carbon cutting measures in eight key countries; and the Treasurer's summary of soon-to-be-released Treasury modelling of the macroeconomic impacts of a carbon price. The reports have been important inputs into the Multi-Party Committee's more detailed negotiations since it announced the bones of the nascent scheme in February (see our detailed analysis).

We've been busy analysing all of these and other developments in climate change law and educating our colleagues and clients about the likely implications of a new carbon price. But with the pace of developments about to accelerate steeply as the details of the new scheme emerge, it's now time for us to re-enter the blogosphere. Partner Grant Anderson, Senior Associate Charlie Harrison and I will be posting regular detailed commentary on developments in climate change law and policy in the months ahead. A number of our colleagues will also be posting brief updates on climate policy and clean-tech updates from around the world that are relevant to developments in Australia.

Until now, Australia's climate policy debate has been dominated by reports, inquiries, negotiations, aspirations and frameworks. From here on in, it'll be about laws, regulations, details, implications and compliance.

We hope you'll join us as we help you to navigate your way through it.

Allens' Climate Change publications

2011-04-14T15:18:00.001+10:00

For the latest in Climate Change commentary please visit Allens' Climate Change publications page.

Carbon farming consultation paper

2010-11-24T10:36:00.000+11:00

The Federal Government has released a consultation paper on the design of a scheme for the creation of tradeable land-based carbon credits.

Allens Partner Grant Anderson has spoken to Boardroom Radio about how the scheme will work.

The Science of Climate Change

2010-11-18T14:53:00.000+11:00

Allens Arthur Robinson, together with the United Nations Association of Australia (Victorian division), recently hosted a panel of eminent scientists (comprising Professors John Zillman, Ian Enting and David Karoly) who spoke about the current state of climate change science. The presentation centred on the recently released publication by the Australian Academy of Science, The Science of Climate Change: Questions and Answers, which 'aims to summarise and clarify the current understanding of the science of climate change for non-specialist readers'.

As Partner Grant Anderson commented in his introductory remarks, at 16 pages this report is certainly far more manageable for the layperson than the 2000-plus page IPCC fourth assessment report! This report is an important contribution to informing the public about the science underlying climate change and its likely consequences: any government that wishes to impose a carbon price, which will necessarily increase the prices of every day necessities such as electricity, gas and petrol, needs to be able to persuade voters that there is a problem that has to be addressed in the first place.

The conclusion of the report makes it clear that there is such a problem: a continuation of business as usual emissions is expected to produce global warming of between 3 to 7 degress celsius by 2100. Of course obtaining the buy-in of the public to the science is just the first step. As the past three years have shown, developing policies that address the resultant challenges involve politically contentious economic, social and environmental trade offs.

Garnaut Review to be updated

2010-11-15T10:41:00.000+11:00

On 11 November Climate Change Minister Greg Combet released the terms of reference for commissioning Professor Ross Garnaut to update his 2008 Garnaut Climate Change Review (the 2008 Review).

This update was commissioned in the context of the Multi-Party Climate Change Committee that was established following the recent federal election to consider options for moving to a carbon price.
The update will update elements of the 2008 Review where:

significant changes have occurred, or the sum of expert knowledge has increased, since the original analysis for the 2008 Review was undertaken; and
such changes or improvements in expert knowledge could have significant implications for the key findings and recommendations of the 2008 Review, such that they should be updated.

The terms of reference specify that the update should consider the following particular issues:

international developments on climate change mitigation efforts;
developments in climate change science, and understanding of climate change impacts;
previous proposals to develop a carbon price in Australia, and the ensuing public debate;
domestic and international emissions trends;
changes in low emissions technology costs and availability;
the potential for abatement within the land sector; and
developments in the Australian electricity market.

Since the 2008 Review, negotiations on a comprehensive international climate change agreement have stalled, yet a number of major policy developments in key countries demonstrate that considerable action to mitigate greenhouse gas emissions is progressing in earnest. This more complicated policy environment will render Professor Garnaut's policy analysis task more difficult this time around. In this context, it will be interesting to see whether Professor Garnaut advocates a pure emissions trading scheme or a hybrid scheme with a rising fixed price that effectively functions as a tax on emissions (or, for that matter, a pure carbon tax), and whether he advocates an economy-wide scheme or a narrower scheme – perhaps focused on stationary energy, with different measures to be applied to other emissions-intensive economic sectors.

Further stakeholder consultation will occur throughout the preparation of the update and public forums will be held in capital cities and regional centres around Australia. The other expert advisers to the Multi-Party Climate Change Committee will also be invited to contribute directly to the Review Update.

Between November 2010 and March 2011, Professor Garnaut will produce a series of papers which will address international mitigation progress, climate change science, development of a carbon price, domestic and international emissions trends, emissions reduction technologies, abatement in the land sector and developments in the electricity sector.

A draft report will be released for public consultation and a final report is to be presented to the Government by 31 May 2011.

Armies and cash: the Coalition's climate campaign

2010-08-11T16:54:00.001+10:00

By Fergus Green

If you happened to nod off for a split second during Tony Abbott's campaign launch last Sunday, you may have missed his brief mention of climate and environmental policy. But there it was, in paragraph 31 – wedged between a promise to reinstate Temporary Protection Visas and a commitment to a new 'national violent gangs squad'.

'Within three months, preparations for an emissions reduction fund will be under way and the first recruiting for the Green Army will be about to start', proclaimed Abbott, with Churchillian fervour. According to the Opposition Leader, the combined mobilisation of $1.2 billion in taxpayer funds to 'buy' emissions abatement and a '15,000 strong' brigade of volunteer tree-planters will ensure the Coalition 'will definitely meet [its] 2020 emission reduction target … particularly through soil improvements and tree planting'. This target is the 5 per cent reduction on 1990 emissions levels by 2020 outlined in the Coalition's Direct Action Plan, released earlier this year, which describes the Emissions Reduction Fund in greater detail.

Through the Fund, the Coalition will call for tenders for additional emissions reduction projects (ie. projects that would not have occurred without finance from the Fund), providing businesses with a direct financial incentive to reduce their emissions below a baseline level. According to the Plan, the Coalition estimates that its fund will achieve 140 megatons of abatement by 2020, about 60 per cent of which will come from 'soil carbons' and the rest from a combination of electricity generation, industry, forestry, coal-seam methane, transport, landfill, green buildings and energy efficiency. But the Plan provides no detail as to how these figures were derived and, when the policy was released earlier this year, many commentators expressed scepticism that this level of abatement would be achieved.

On top of the Fund (and the Green Army), the Coalition proposes to:

• expand existing rebates for rooftop solar panels and solar hot water systems (with the goal of having 'one million additional solar energy roofs on homes by 2020');
• allocate funding to 'solar towns', 'solar schools', and 'geothermal and tidal towns';
• commit '$2 million' for a 'major study' into the use and application of high voltage direct current transmission within Australia;
• study the effectiveness of algal biofuels;
• revive the Greenhouse Friendly program; and
• plant an additional 20 million trees by 2020.

The fundamental problem with the Coalition's policy is that it does not put a price on carbon and, without one, there is no constraint on emissions increases wiping out whatever emissions reductions might otherwise be achieved through these initiatives.

Victorian Government White Paper on climate change

2010-08-03T10:10:00.001+10:00

Partner Grant Anderson, Senior Associate Charlie Harrison and Law Graduate Natasha McNamara have written an article on the Victorian Government's Climate Change White Paper.

Victoria plans to reduce its carbon emissions by 20 per cent compared to 2000 levels by 2020, decreasing greenhouse emissions generated by brown coal power plants by up to four million tonnes by 2014.

In the absence of a federal Carbon Pollution Reduction Scheme, the Brumby Government claims that the strategies in its Wite Paper will make Victoria the national leader in addressing the challenges associated with climate change.

Power to the people? Government unveils climate change policy

2010-07-26T17:28:00.002+10:00

By Grant Anderson and Fergus Green

Well into campaign mode, the Gillard Government has released the first tranche of its new climate policy.
While no one was expecting that the Government would commit to a carbon price, the Government's policy position is now to establish a Citizens’ Assembly of 'real Australians' to examine the evidence on climate change, the case for action, and possible consequences of introducing a market mechanism to reduce emissions. Instead of leadership and independent, expert input, the Government looks like it is outsourcing decision-making about one of the most complex, consequential and urgent issue of our time to a randomly selected group of Australians.

There doesn’t seem to be much of a hurry in establishing the Assembly, either: it wouldn’t meet before 2012 and would deliberate over the course of a year. Necessarily, this means Kevin Rudd’s proposal to reconsider an ETS in 2013 effectively remains the Government’s position, albeit now for a different reason ('community consensus') than for the two reasons given by Rudd in April (lack of bipartisan support and insufficient international action).

The PM’s policy announcement also included a grab bag of other 'direct action' measures, including:

$1 billion over 10 years to better connect the electricity grid to renewable energy generation;
$100 million over four years into a new 'renewable energy venture capital fund';
A commitment that emissions baselines for a putative carbon scheme will remain set at 2008 levels, meaning companies that cut emissions early will not be prejudiced if a carbon price is (ever) introduced;
New carbon efficiency standards for power stations (these would only apply to new projects, not to existing power stations or to those that have already received environmental approval);
Mandatory minimum fuel efficiency standards for cars (vehicles would need to be 14% more efficient from 2015 and 30 per cent more efficient by 2024);
A 'cash for clunkers' scheme that would give $2000 rebates to drivers who trade-in pre-1995 fuel-inefficient vehicles for more efficient models;
A one-off 50% tax deduction for commercial building energy efficiency upgrades; and
The establishment of an independent commission to better explain the science behind climate change and report on international action.

Grant and Fergus will also be reviewing the climate change policies of the Coalition and the Greens once they are released.

Blowing in the wind: The future of Australia's renewable energy sector

2010-05-24T11:39:00.000+10:00

By Fergus Green

In his latest column for Business Spectator, Allens Partner Paul Quinn reflects on the future of renewable energy in Australia, considering the effect that this relatively small injection of new money may have in light of the Government's existing renewable energy commitments and the absence of a carbon price. His conclusions, in short, are:

Wind power will continue to expand under existing policies, so long as the Government is able to pass its Bill to split the Mandatory Renewable Energy Target scheme into separate large-scale and small-scale schemes;
The new large-scale RET scheme is likely to be subscribed predominantly by wind-power, meaning other forms of renewable energy will have to rely on direct subsidies in the absence of a carbon price;
Large-scale solar energy is being encouraged to some extent via existing direct subsidies – primarily the Solar Flagships Program;
The growth of less mature renewable technologies (such as geothermal, wave and biomass) will rely on piecemeal funding from the various programs now administered by Renewables Australia and the funding announced in the latest budget. These industries would benefit from smarter policy measures – such as feed-in tariffs, tax incentives and loan guarantees – to provide financial certainty as they progress research, development and feasibility studies; and
Conflicting, poorly targeted or badly timed direct policy interventions could stunt the growth of Australia's renewables sector, meaning careful policy coordination will be critical.

Government's climate contortions dazzle but don't deliver

2010-05-21T16:26:00.002+10:00

By Fergus Green

Since its CPRS backflip late last month, the Government has made a number of announcements and cobbled together some dollars in the budget for alternative climate policy initiatives. All in all, it amounts to a fairly lacklustre attempt to fill the CPRS-sized hole in Australia's climate policy infrastructure.

Renewable energy and energy efficiency, it seems, will be the two pillars supporting the whole edifice. As we discussed in the first two pieces in our series of Focus articles on energy efficiency (article one and article two), a number of discrete energy efficiency policies are being introduced into federal Parliament and by the states and territories pursuant to COAG's National Strategy on Energy Efficiency.

Meanwhile, the federal Government is awaiting the report of the PM's Energy Efficiency Task Force to inform it about further measures to make Australia more energy efficient. Such measures will presumably be funded through the $652.5 million Renewable Energy Future Fund announced in last week's budget, a portion of which is to be used 'to enhance Australia's take-up of energy efficiency'.

The rest of that new budget money will, as the name of the fund suggests, be allocated to renewable energy. In the context of the CPRS backflip, this paltry injection of renewable energy money will do little to transform Australia into a low-carbon economy. Moreover, as Allens partner Paul Quinn concludes in his latest column for Business Spectator, the Government's newfound enthusiasm for direct policy interventions at the expense of carbon price mechanisms carries a risk that policy interventions in favour of particular technologies will be ill-timed and poorly coordinated, to the detriment of the sector overall.

The other climate policy commitments announced in the budget are similarly underwhelming (though the spin is top-notch):

Household energy efficiency programs will be 'modified' – money allocated to the Home Insulation Program and other household efficiency subsidies will be redirected to rectifying the myriad problems wrought by the bungled roll-out of those schemes;
The troubled Green Loans Program will be 'redesigned' – an extra $102.7 million will be allocated for home sustainability assessments, while the 'green loans' component of the Green Loans Program will be discontinued (one can only speculate whether the name of the program will also be 'redesigned');
Some $330 million over four years will be allocated to help developing countries reduce emissions from deforestation and other sources and to adapt to the impacts of climate change. This funding purportedly fulfils the Government's climate financing commitment under the Copenhagen Accord , however it is unclear whether the funding will be 'new and additional' as required by the Accord, or whether it is simply re-badged aid money.

Conspicuously absent from the budget were any changes to fossil fuel subsidies – such as the fringe benefits tax subsidy that encourages company car use – despite the recommendations of the Henry Review and the Government's promise to wind back such perverse subsidies at the Pittsburgh G20 summit last year.

But my favourite budget item is the $30 million over two years for a marketing campaign 'to educate the community on climate change, including climate change science'. With a budget like this, it would appear to be the Government itself that's most in need of a climate change education.

Audio Update: Renewable Energy Future Fund

2010-05-13T14:57:00.004+10:00

The Federal Government announced this week the formulation of a Renewable Energy Future Fund.

Allens Partner Anna Collyer has spoken to Boardroom Radio about the possible impact of the fund on the renewable energy industry.

To hear Anna's interview, go to http://www.aar.com.au/med/audio.htm

Government abandons emissions trading policy, leaves nation in lurch

2010-04-30T16:11:00.000+10:00

By Fergus Green

The Rudd Government this week announced plans to delay its Carbon Pollution Reduction Scheme (CPRS) until at least 2013. In a Focus article published today, Partner Grant Anderson and I interrogate the Government's rationale for the delay and consider its implications for various industry sectors, state and territory governments, the international climate change negotiations and the future of climate change policy in Australia.

In a series of interviews this week, it was revealed that the Government now proposes to reassess its commitment to an emissions trading scheme after the expiration of the Kyoto Protocol's first commitment period, at the end of 2012, meaning the implementation of emissions trading would be delayed until 2013 at the earliest.

The Government has cited two reasons for the delay: slow progress in international climate negotiations and Senate opposition to the Scheme. In our Focus article, we conclude that these reasons are not sufficient to justify a delay of the Scheme until 2013. This conclusion is not merely of academic or political interest; the credibility of climate policy signals matters greatly to a large number of Australian businesses. Seeing as the Government has not articulated any credible reasons for the long delay, or explained the circumstances in which the Government's climate policy would be revived, the only thing the business community has to go on is an arbitrary claim that the CPRS will be 'reassessed' at the end of 2012. Companies will need to make their own judgments about the credibility of that claim.

Reports in Australian media sources have suggested that the Government has dropped the Scheme to save money in the budget (axing the CPRS from the four-year forward estimates in the budget would apparently save $2.5 billion in projected CPRS outlays) and to ward off a political scare campaign by the opposition about the Government's 'great big new tax on everything'. For what it's worth, the Government has rejected these claims.

Nonetheless, culling the CPRS from the budget will save the Government money whether that is used to fund its health promises or not, and it is patently obvious that election politicking influenced its decision. Interesting, then, that dropping the CPRS, with its bountiful compensation, from the budget would achieve two things that would appear to be utterly contradictory: save money on outlays and head off opposition claims that it will be whacking Australians with a giant new tax. Scrapping a 'tax' to save money. What a farce the Australian climate policy debate has become.

Promoting energy efficiency

2010-04-16T15:55:00.000+10:00

New legislation was introduced into Federal Parliament recently which, if passed, would impose energy related disclosure obligations on those offering to sell, lease or sub-lease office buildings of 2000m2 or more.

Allens Partner Chris Schulz and Lawyer Nadia Harrison have written a Focus article on the Federal Government's policies to promote energy efficiency.

This article will be the first in a series analysing these policies.

Victorian coastal climate change – issues and options paper

2010-03-16T16:52:00.000+11:00

The Victorian Government's Advisory Committee on Coastal Climate Change has published an issues and options paper to stimulate debate about how the land use planning system should respond to climate change on the coast.

Partner Chris Schulz and Senior Associate Meg Lee have written an article on the paper.

The Advisory Committee is required to follow a process consisting of a review of all submissions received, an appropriate program of hearings and workshops and then submitting a final report to the Minister by December 2010.

The deadline for submissions to the Committee is 26 April 2010.

Changes to Renewable Energy Target scheme

2010-03-05T13:50:00.004+11:00

The Federal Government announced last week changes to the Renewable Energy Target scheme.

The changes mean that the RET scheme will have two parts from 1 January 2011 – the Small-scale RET scheme and the Large-scale Renewable Energy Target.

Allens has produced a range of material on these changes, including a Client Update, an Audio Update and a media release.

The future of international climate policy – what the 'experts' think

2010-02-17T11:16:00.001+11:00

By Fergus Green

In our previous post, we highlighted the uncertain outlook for climate change policy in 2010 in light of the contradictory Copenhagen outcome and the changed domestic political dynamics in Washington. Recently, the Guardian asked 39 politicians, climate negotiators, scientists and NGO representatives for their views on the direction of international climate policy and the likelihood of a global deal emerging in 2010.

Despite the calibre of observers surveyed, I was struck by the superficiality and vagueness of many of their observations. Few seemed to grasp the structural reasons behind the failure of existing international institutions such as the UNFCCC, and the Copenhagen conference in particular. Consequently, many express the need for more intense activity in the same general (wrong) direction.

Some of the article's more thoughtful and, in my view, discerning contributions are those of sociologist Professor Anthony Giddens and Simon Retallack of IPPR. Giddens argues that the failures of international climate policy are symptomatic of a broader crisis of global governance:

We live in a far more interdependent world than any previous generation – climate change is the negative expression of that interdependence. Yet the institutions of trans-national governance have not advanced in tandem with it. The United Nations is regularly paralysed by the very divisions that sunk the hopes entertained at Copenhagen.

The climate is a globally shared resource, the economy is globally interdependent (and therefore so are emissions-intensive production and consumption activities), yet politically, the world is governed by a constellation of sovereign states. How to overcome this disjuncture to solve global ecological and economic problems such as climate change?
Giddens doesn't say, exactly. Nevertheless, he is optimistic that the required innovation – 'economic, social and political as well as technological' – will emerge in the decade or so ahead, albeit from somewhere other than the formal channels of multilateral treaty negotiations.

Retallack highlights the obvious yet underappreciated reality that international climate policy depends less on the interactions that occur between states at meetings such as Copenhagen and more on the self-determined interests and priorities of governments in key countries:
the national political conditions in the countries that matter most on climate change just weren't conducive to a deal in Copenhagen and if anything they have become worse since.If we're to make progress at all, we will need to overcome the deep concerns that exist in both the US and China about the impact of action to reduce or limit emissions on economic prosperity.

Transforming the priorities and commitments of domestic governments through bottom-up, domestic action will indeed be critical to overcome the disjuncture between problem and authority identified by Giddens, though Retallack says nothing of the role of international policy. Surely the lesson of past failures is not to abandon international cooperation, but to develop more effective international institutions to guide and support domestic policy developments and foster trust and confidence among countries. The UNFCCC may not be the right approach, but some kind of international cooperation will be necessary if the global response to climate change is to be more than a patchwork of domestic efforts.

I'd like to hear from the experts about alternative models of institutionalised international cooperation.

An uncertain future for Australian climate change policy

2010-02-03T10:20:00.003+11:00

By Grant Anderson and Fergus Green

Australian climate change policy faces an uncertain future. Although the Government has vowed to persist with its existing emissions trading model and targets (a Carbon Pollution Reduction Scheme with a 5-25 per cent reduction target by 2020), stagnating international negotiations, changed political dynamics in the United States and uncertain political circumstances at home mean that the scope – and possibly even the nature – of Australia's carbon pricing policy will remain unclear for some time.

Internationally, the future of climate change policy remains as uncertain as it did after Copenhagen. Countries accepting the Copenhagen Accord were obliged to submit their 2020 emissions reduction targets (in the case of developed countries) and 'mitigation actions' (for developing countries) by 31 January. When the Accord was negotiated in the final days at Copenhagen, this was generally understood to require developed countries to submit their final 2020 targets, and developing countries to submit the mitigation actions that they would be internationally bound to undertake. To do anything less, it was thought, would be a waste of time, given that developed countries had already announced their conditional targets (eg the US) or their conditional target ranges (eg Australia and the EU) and developing countries had already outlined the mitigation actions and goals that they would implement. Signing up to final targets and internationally binding actions by 31 January was always going to be challenging given the uncertain international policy outlook after Copenhagen. Nonetheless, this was – apparently – the bargain that countries struck when negotiating the Accord.

In the cold light of dawn, however, countries' enthusiasm for these commitments seems to have waned. Of the 40 or so parties (including the EU) that have associated themselves with the Accord, or are likely to do so, the major developed ones have simply restated their existing conditional targets (or ranges) and the major emitting developing countries have submitted the 'actions' to which they were already committed (official submissions are available; see this list for a useful summary of commitments). The so-called BASIC countries (Brazil, South Africa, India and China) also stressed that their mitigation actions were 'voluntary', not internationally binding. Accordingly, the submissions process under the Accord hs turned out to be a hollow formality; in substance there has been virtually no progress on countries' mitigation commitments since before the Copenhagen conference even started.

The Rudd Government has unequivocally affirmed its commitment to the Accord. However, despite giving the impression in Copenhagen that it would submit its final 2020 target by January, the Government, along with other developed countries, ultimately just resubmitted its existing conditional target range of 5-25 per cent below 2000 levels (with the Government being committed to meeting the 5 per cent target no matter what other countries do). Senator Wong's media release announcing Australia's Accord submission is more notable for its articulation of new conditions for moving to the upper end of its target range. While the old conditions, outlined in May last year, were premised on the possibility that a comprehensive treaty would be agreed at Copenhagen, its new conditions are based on the post-Copenhagen reality that such a treaty is unlikely to be agreed any time soon – and may never emerge at all. According to Senator Wong's media release, the Government will not increase its ambition beyond 5 per cent until:

the level of global ambition becomes sufficiently clear, including both the specific targets of advanced economies and the verifiable emissions reduction actions of China and India;
the credibility of those commitments and actions is established, for example, by way of a robust global agreement at the next United Nations Climate Change Conference in Mexico, or commitment to verifiable domestic action on the part of major emitters including the United States, India and China; and
there is clarity on the assumptions for emissions accounting and access to markets.

If these matters are not resolved in 2011, the Government says it will set scheme caps consistent with the 5 per cent target 'to provide business certainty for the commencement of the first year of full trading under the [CPRS] from July 2012'.

Four shifts in the Government's position are noteworthy. First, these conditions are much less prescriptive than the old ones, leaving the Government great flexibility in interpreting whether they have been met (eg what does 'sufficiently clear' mean?). Second, whereas the previous conditions referred to 'major developing economies', these conditions single out China and India explicitly. Third, the Government has shifted its plan to announce the first suite of annual scheme caps under the presumptive CPRS from July 2010 to an unspecified time in 2011. And fourth, agreement on a formal, legally binding international treaty seems no longer to be a precondition of higher Australian targets – so long as 'the credibility of [countries'] commitments and actions is established' somehow. The examples given of what would constitute a sufficient establishment of credibility suggest the Government is open to addressing international questions of mitigation in institutions and processes outside the UNFCCC system. To those who believe the latter to be fundamentally flawed, this is welcome news.

There has been little indication, however, of where the international process might actually go from here. How and by when will countries' Accord commitments be finalised, incorporated into a credible international agreement or institutional process, and implemented? Will countries revert to the UN process and spend another few years hammering out a comprehensive treaty in painstaking negotiations? Or will the signatories to the Accord attempt to build on its shaky foundations through more immediate cooperation in other international fora? No-one seems to know. The international community seems to have entered a post-Copenhagen holding pattern.

Meanwhile, some key countries seem to be going backwards. The legislative agenda of the Obama administration, including the cap-and-trade legislation that underpins the United States' proposed mitigation target, has been confounded by the election of Massachusetts Republican Scott Brown to Ted Kennedy's former Senate seat. In his State of the Union address last week, President Obama reaffirmed his administration's commitment to steering comprehensive climate legislation through the Congress this year. But having lost the 60-seat supermajority in the Senate they previously enjoyed (which is needed to avoid a filibuster), the Democrats' climate and energy agenda will be a lot tougher to implement. Some kind of energy reform package may eventually scrape through the legislative process, and the possibility of that including a comprehensive, economy-wide carbon price (such as the emissions trading scheme that was passed by the House of Representatives in June last year) remains real. But that possibility now appears more remote than it did a month ago.

This setback has two important implications for Australia. First, we may have to wait longer than previously hoped to know the final mitigation commitments of the United States and, therefore, of other major emitters (most of whom are unlikely to finalise their targets until the US has done so). This reduces the likelihood that the Government's conditions for higher targets will be met by its 2011 deadline.

Second, assuming US energy legislation is eventually passed, the new-found uncertainty over the scope (which sectors are covered) and design (emissions trading, tax, hybrid, direct regulation or other) of US climate policy may affect the design of Australia's scheme. While emissions trading remains the Rudd Government's instrument of choice, that choice is partly based on assumptions about the future direction of US and international climate policy. Those assumptions now look much shakier and the Government is already facing calls to revisit some of the most fundamental elements of its policy design.

The Opposition yesterday launched its climate change policy (and here is the more detailed version): a multibillion taxpayer-funded 'Emissions Reduction Fund' that would see the Government pay for Australian emissions reductions through a system of incentive payments to firms for emissions abated below their 'business as usual' baseline (and penalty payments levied on firms that emit above this baseline). It appears that this policy will not require the Government to purchase all emissions reductions below the applicable baseline, but that these emissions reductions will be selected on the basis of a tender process. Potential projects include a grab bag of soil sequestration, forestry, the generation of electricity using waste coal mine gas, energy efficiency, landfill management, composting, recycling and the use of alternative transport fuels. In addition, the Opposition is proposing that the Government should fund a range of smaller renewable energy initiatives.

Adding to the debate last week, Professor Garnaut proposed the incorporation of an initial indexed $20 fixed-price into the CPRS, so that the scheme would effectively function as a carbon tax until the international policy environment becomes sufficiently clear for Australia to move towards a target-based ETS. The Australian Greens are advocating a similar version of this policy, proposing a two-year fixed carbon price of $20/tCO2e under the CPRS commencing July 2010, before moving to full market trading in 2012. Other alternatives abound.

The Government's CPRS still remains the most likely policy proposal to be implemented. But in the current political climate, it seems as though just about anything's possible.

Stagnation or renewal? The options for climate change policy in 2010

2009-12-24T08:52:00.001+11:00

By Fergus Green (thankfully no longer in Copenhagen)

Just a quick note with the link to the op-ed I published on ABC Unleashed on Wednesday, which I foreshadowed on Tuesday. It considers the global implications of the Copenhagen outcome, for the UN process and for international climate change politics and policy in the new year.

Merry Christmas and best wishes for 2010!

Fergus, signing off for 2009.

Copenhagen - a (small) step forward

2009-12-23T11:32:00.000+11:00

After years of planning, months of great expectation, weeks of negotiation, days of drama and a crucial few final hours of exasperated deal-making, world leaders emerged late last Friday with a tentative political accord that sets out the broad framework from which a comprehensive treaty to address climate change may eventually emerge.

Grant Anderson and Fergus Green have written an article on the outcome of the Copenhagen Conference and its implications for Australia.

Now what? Reflections on a contradictory Copenhagen compromise

2009-12-22T15:38:00.007+11:00

By Fergus Green (still) in Copenhagen

In case anyone logged on to the blog yesterday hoping for some post-Copenhagen analysis, I’m sorry to have left you hanging. Alas, I’m still here in the Danish capital – and still at my laptop (in fact, I think it may have become melded to my fingers).

I won’t recount the tumultuous events of Friday and Saturday as the conference concluded, suffice it to point you to some excellent sources that give full accounts of the concluding meetings.

The Whitehouse has released a fascinating account of the frantic arrangements leading up to the crucial meeting between Obama and the leaders of China, India, Brazil and South Africa that sealed the Copenhagen Accord. The train-wreck that followed Obama’s announcement of the Accord in the Closing Plenary is captured in the conference minutes (footage is available under 'plenary').

In the days since the dramatic climax to the Copenhagen talks, I’ve been trying to analyse its implications, both for Australia and for the world.

As I argued in this opinion piece with Greg Picker in Monday’s Australian Financial Review (note the tautologous and sensationalist headline was not of our choosing), Australia faces some immediate choices and challenges in responding to the contradictory Copenhagen outcome. The Copenhagen Accord is a political agreement that was not even formally adopted by the Conference of the Parties, meaning Australia is not bound by its terms. Yet the agreement encapsulates tangible and valuable progress towards concrete emissions reduction measures by the world’s most powerful developed and developing economies, and Prime Minister Rudd, Minister Wong and Australian negotiators were deeply involved in the process of its formation. As such, the Government has created a public expectation that it will implement its terms – and the Government has already committed (on the Prime Minister's website and the Government's climate change website) to doing so. This means Australia will have to settle on its final 2020 emissions reduction target by 31 January 2010 – a decision made more difficult by the uncertain future of the negotiations.

In an Allens Focus article to be published tomorrow, Partner Grant Anderson and I explain the outcomes of the Copenhagen conference and their legal status in more detail, and consider the factors that will influence Australia’s decision regarding its 2020 target in light of the progress made during the negotiations. We also explain the progress made in relation to financing for developing country mitigation and adaptation, and outline the next steps in the international process.

In a piece hopefully to be published on Wednesday, Greg Picker and I consider the global political implications of the conference. I’ll outline our argument in more detail in a subsequent post if and when the piece is published, but essentially we argue that it is too early to determine whether the Copenhagen outcome reflects staggering failure or cautious success, and that much depends on what happens in the months ahead.

The controversial conclusion to the conference could very easily provoke a downward spiral of disagreement and obfuscation in international climate talks that could set back urgently needed progress for many years – time that we simply do not have to waste if the best scientific projections about the potential for runaway planetary warming prove to be accurate (ominously, the latest evidence suggests that those projections are in fact too conservative). On the other hand, the Copenhagen Accord could spark a much-needed round of political progress toward the implementation of concrete policies to reduce emissions and help vulnerable countries adapt to climate change, which could in turn build the trust and confidence needed to agree a comprehensive treaty (or treaties) in the next 6-18 months.

This may sound hyperbolic, and maybe the lack of sleep is making feel inappropriately bold, but I believe that the first weeks and months of 2010, as governments are pulled in opposite directions amid the fallout from Copenhagen, will be a critical period not only in the short history of Australian climate change policy-making, but in the long sweep of human civilization.

I look forward to continuing the conversation with you via the blog in the new year, as we watch it all unfold.

Late nights all ’round

2009-12-18T15:15:00.001+11:00

By Fergus Green in Copenhagen

In solidarity with the negotiators, I’m working well into the night here in Copenhagen. Talks are proceeding to a punishing schedule in the Bella Centre as the Friday deadline looms. Though formally scheduled to finish on Friday, as is usual at these affairs it is highly likely that negotiations will stretch well into Saturday (and maybe even Sunday) as leaders and officials scramble to reach a deal.

Solidarity aside, in truth I’m up late producing some final pre-outcome blog posts. The high point for me was this sublime address by US Senator John Kerry – quite simply one of the best speeches on climate change I’ve ever heard (I had the privilege of attending in person – unfortunately I haven’t seen a video of it on the net yet, but I encourage everyone to have a read of the transcript). In this post for the Lowy Institute’s blog, The Interpreter, I use Kerry’s speech as a model for thinking about the Copenhagen outcome in a different way – not as a be-all-and-end-all outcome for the planet, but as part of an ongoing and (hopefully) intensifying conversation between governments, markets and ordinary citizens that builds confidence and leads to the concrete steps we need to avert climate catastrophe.

I’ve also voiced some thoughts on the current state of play and the potential outcome in the Boardroom Radio interview, linked in the post below this one.

As always, I welcome your comments on all of these posts in the comments section, below.

I’ll rejoin you on Monday for an analysis of the outcome.

The final moments in Copenhagen: what will happen?

2009-12-18T11:51:00.000+11:00

As the Copenhagen conference draws to a close, our man on the ground, Fergus Green, speaks to Boardroom Radio about the second week of the conference and what could still happen in its final hours.

To listen to the interview with Fergus, go to the Allens website.

To 'take' or 'undertake' (emissions reductions in the developing world)?

2009-12-17T12:07:00.001+11:00

By Fergus Green in Copenhagen

That is the question – apparently, or at least one of them – exercising the minds of negotiators as the climate talks move into the High-Level Segment today in Copenhagen (amid NGO sit-ins and tear-gas-throwing anti-riot measures being deployed a few metres away outside the conference venue).

Negotiations yesterday stretched well into this morning as officials, hammering out the issues in smaller groups, laboured to agree on as much text as possible before the leaders and ministers take primary control of the negotiating process. When the results of yesterday’s negotiations were plugged back into the draft negotiating texts, the texts revealed some progress on some issues, but the key sticking points remain sticky as ever.

I know I’ve gone on about developing country emissions reductions (particularly from the major-emitting emerging economies of Brazil, South Africa, India and China – the so called BASIC group), but I can’t emphasise enough how important this has been, continues to be, and will be in the coming days. The key issue is no longer whether and by how much the BASIC countries will reduce the growth in their emissions. Each of these countries made voluntary pledges in the weeks leading up to Copenhageneither to reduce their absolute emissions, restrain their emissions growth and/or cut the carbon intensity of their economy. These domestic commitments were widely welcomed by developed countries and seem to be roughly commensurate with the cuts developed countries were expecting in terms of their nature and extent.

The key dispute now relates to the definition and formalisation of these commitments in an international treaty and the consequences associated with them. The first point of contention relates to exactly what developing countries will be legally bound to do under a new agreement. Paragraph 21 of the latest draft text under the Convention track is the central battleground here (note that square brackets indicate points of contention, and that the whole paragraph is bracketed!):

[Developing country Parties shall [under]take nationally appropriate mitigation actions, enabled and supported by finance, technology and capacity-building and [may undertake] autonomous mitigation actions, together aimed at achieving a substantial deviation in emissions [in the order of 15-30 per cent by 2020] relative to those emissions that would occur in the absence of enhanced mitigation, and prepare low-emission development plans, recognizing that the extent of enhanced mitigation by these countries depends on the level of available support …]

As a side-note, one can usually deduce the reasons (and hence the parties) behind certain proposals and bracketed options, though I’m rather bemused to see that '[under]take' is contentious. Given that it is preceded by 'shall', I can’t really see the legally significant distinction between 'take' and 'undertake' in the context of the first sentence. When one considers that one could drive a truck through the loopholes in the rest of the paragraph (see below), the distinction does seem rather academic. (Perhaps it is more significant in the Chinese translation – not yet available!)

More seriously, though, if the aim is to provide certainty about developing countries’ emissions reduction commitments, then the draft paragraph has some serious flaws. These include:

Developing countries are, under one option, only bound to undertake mitigation actions that are supported by finance and technology transfers from developed countries ('supported mitigation').
Even if 'may undertake' is deleted, so that developing countries 'shall' also undertake 'autonomous' mitigation actions, they would only be bound to undertake autonomous and supported mitigation: because that action merely has to be 'aimed at achieving a substantial deviation in emissions', developing countries would not be bound to actually achieve any particular level of reductions (even if the 15-30% reduction figure were included, the legal character of the obligation would not change).
Finally, because there is no delineation of the required reductions from supported as compared with autonomous mitigation actions, and because the extent of supported mitigation actions is tied to the receipt of support from developed countries, the text as currently drafted would seemingly allow developing countries to do nothing beyond those actions for which they receive international support.

Given the vagueness of this proposal, one can readily see why developed countries have insisted that it remain bracketed!

Interestingly, though, this paragraph has not been the main bone of contention (at least if countries’ rhetoric outside the negotiating halls is an accurate reflection). What has proven more contentious is the questions of if, when and how these developing country mitigation actions are to be scrutinised by the international community.

Developed countries, particularly the United States, insist that the BASIC countries produce comprehensive, transparent and accurate accounting inventories of their greenhouse gas emissions and reports on their mitigation policies and measures, in accordance with international standards (as developed countries must do currently) and that they submit these regularly to international institutions for peer review.

The broad reason given for this insistence is that robust, international measuring, reporting and verification ('MRV', as it is known in UN-speak) is needed to give other (ie developed) parties confidence that developing countries are actually doing what they say they will do. The US big guns have really stepped up the rhetoric on this in the last few days. The top US negotiator, Todd Stern, has been talking about it for a while now, Secretary of State Hilary Clinton emphasised it in an op-ed yesterday, and Senator John Kerry explained it lucidly in his speech today (which, incidentally, I got in to see – it was quite simply one of the best speeches on climate change I’ve ever heard). Most importantly, many fence-sitting US Senators, currently deliberating over the passage of the all important cap-and-trade bill, are demanding that China be held accountable for its emissions reduction commitments in the same way that America would be under a new treaty.

However, the BASIC countries continue to resist the notion of subjecting their domestic mitigation policies to international MRV. The only international MRV they are willing to accept is in respect of supported mitigation actions; their 'autonomous' actions, they say, are their business. In China’s case, given that most of its mitigation will be self-funded (and much of it is already in train, this arrangement would mean that most of its future emissions reductions would not be subject to international MRV. Developed countries won’t stomach that.

In some ways it seems odd that the BASIC countries are so defensive about these formal and technical issues when they’re already committed to doing the more difficult job of actually changing their domestic policies to cut emissions. There are a number of possible reasons why this is the case. They worry that enshrining their domestic commitments in a new treaty would depart from existing norms, could be the thin end of the wedge, and could entail material and reputation-related consequences for non-compliance. Part of the reason is cultural: jealous guardians of their sovereignty, many developing countries see international MRV as an intrusion into their internal, sovereign affairs. Maybe it’s the cynic in me, but I can’t help but think that, in the end, it is largely a savvy negotiating tactic: if the BASICs dig their heels in on something that the developed world really wants (and that the Obama Administration really needs), they can extract more concessions on other issues in the final days of the conference (eg on finance, developed country targets or legal form).

It’s difficult to know which issues will be linked in the final hours of horse trading, but given that the main impasses look set to be MRV and finance, the fate of a Copenhagen deal may ultimately come down to a question of how much developed countries are willing to pay developing countries to let a few foreigners poke around their emissions accounts.

It’s a funny old game, saving the planet.

Marching to a climate deal, two-by-two

2009-12-16T10:42:00.002+11:00

By Fergus Green in Copenhagen

Negotiations are in a twilight zone today as delegates grapple with a mix of technical and political issues. Officials are trying to tie up the technical matters while a throng of Ministers are working the corridors on the political sticking points, such as finance and developing country mitigation, as the high-level segment gets underway.

The Chair of the Conference, Danish Climate Change Minister Connie Hedegaard, has organised Ministers into thematic strike-teams to cajole parties on sticky issues, pairing a developing country minister with a developed country minister.

In one pairing, UK Climate Minister Ed Miliband and Ghana’s Environment Minister Hani Sherry Ayittey have been briefed to build consensus on the controversial issue of long-term financing to help developing countries adapt to climate change and reduce their emissions. There have been some developments on proposals for equitable principles to govern this new 'climate finance', but there has been no movement on the actual amounts that developed countries should provide during the period 2013-2020 (as previously noted; a proposed 'fast-start finance' package of US$10 billion per year for the 2010-2012 period is drawing hard pledges from developed nations, but the longer-term funding dispute is a different story).

Developing countries have called for finance from developed countries of upward of $200 billion per year, though it is virtually inconceivable that developed countries will cough up that much. It is even doubtful whether individual developed countries will reveal their final pledges at all in Copenhagen – it will take a lot simply to get them to agree on a collective pot for long-term funding, let alone their individual contributions to it (or the way these will be determined).

Figuring out where the funds will go is at least shaping up to be a little easier than agreeing on where they will come from. It was reported on Sunday that a Chinese negotiator had conceded that China would not seek any of the climate finance to be doled out into the future because poorer and more vulnerable countries needed it more. These reports sounded a little too good to be true – and they were. It appears the delegate was referring only to China’s forebearance in claiming a cut of the $10 billion fast-start package. It is highly unlikely that China will be so selfless when it comes to the tens (if not hundreds) of billions likely to be on offer as part of a longer-term, post-2012 finance package.

Nonetheless, it was good to hear such a clear acceptance by China of the principle that the least developed and most vulnerable countries should get priority access to any new funds – not only is this a key demand of African and small island countries, but developed countries will find it easier to manage the domestic politics surrounding new public aid transfers if the dollars go to vulnerable neighbours rather than emerging superpowers.

Meanwhile, some of the other ministerial marriages are proving to be more acrimonious than the Danish match-makers might have hoped. Australian Climate Change Minister Penny Wong was paired with Indian Environment Minister Jairam Ramesh, only to be left partner-less when Ramesh pulled-out of a meeting the two were supposed to co-chair with a view to resolving the deadlock over developing countries’ emissions reduction commitments under a new agreement – the thorniest thorn of them all. India (along with other developing countries) continues to insist on retaining the Kyoto Protocol and minimising the mitigation burden on developing countries.

The ministerial teams may help to mend the bridges destroyed in fierce fighting during the first eight days of the conference, but so far it seems that last week’s official-level disputes are simply being replayed higher-up in the command chain.

Still, at least the matchmaking exercise is providing some humorous fodder for observers. I, for one, am envisaging some other potentially fruitful developed-developing country leadership pairings. I’m particularly excited at the prospect of Barack Obama and Mahmoud Ahmadinejad spearheading a group on the global role of nuclear technologies in reducing greenhouse emissions.

The fog of war: confusing combat in Copenhagen

2009-12-15T09:04:00.001+11:00

By Fergus Green in Copenhagen

Confusion was the order of the day here in Copenhagen, as the crucial second week of talks got underway this morning – sort of. The Bella Centre today feels more like a live battlefield than a negotiating venue: parties are locked in fierce combat over key sticking points, the situation is fluid, and good intelligence is hard to come by. No-one seems to be sure exactly what is going on.

African countries, backed by the G77 & China Group of which they are a part, yesterday used the bluntest weapon in their arsenal – the 'staged walk-out' (also known as a 'tantrum') – forcing the suspension of formal talks under the Convention Track (which is negotiating the emissions reduction commitments of developing countries under a new agreement) and refusing to participate in informal meetings. As with a similar walk-out in Barcelona, these developing countries remain irate over the failure of developed countries to agree on hard numbers for emissions reduction targets under a second Kyoto Protocol commitment period in the context of the ongoing negotiations under the Kyoto Track. They continue to resist what they see as attempts by developed countries to 'kill Kyoto' by pushing for an entirely new treaty that would incorporate emissions reduction commitments for developing countries alongside those of developed parties.

Developed countries then returned fire in kind, forcing the suspension of formal talks under the Kyoto Track until talks under the Convention track resumed. Developed countries insist that the two sets of negotiations must occur in parallel, for they are not prepared to accept new targets without certainty that developing countries will also be held internationally accountable for their emissions reduction efforts.

A ceasefire was negotiated this evening after informal consultations between the protagonists. Developed countries reportedly gave assurances that they were not conspiring to dilute their emissions-reductions commitments and that all issues would be discussed during the remaining four days of negotiations. Developing countries agreed to return to all of the discussions.

With time rapidly running out before leaders arrive and complex issues still to be resolved, many delegates expressed frustration that negotiations were being held up by theatrics. Let’s hope that the fog will recede tomorrow and that the pathway to a viable deal becomes a little clearer.

Half full or half empty? The mid-way point in Copenhagen

2009-12-14T12:58:00.001+11:00

By Fergus Green in Copenhagen

The first week of the international climate change conference in Copenhagen began with reports that talks were in disarray due to the slow pace of progress and the leaking of a privately prepared draft negotiating text; it ended with new proposals flying from all directions and negotiators up to their necks in draft negotiating texts.

As environment and climate change ministers from around the world fly into the Danish capital for week two (the 'high-level segment'), they will descend into a situation that is in some respects refreshingly dynamic yet, in others, frustratingly static.

Earlier in the week I discussed how the traditional, bottom-up negotiating process was being supplemented by efforts by smaller groups of parties to drive a 'top-down' approach to the negotiations with a view to finalising some kind of a tangible accord. On Friday, the chairmen of both of the ad hoc working groups mandated to negotiate the bottom-up process released draft texts consolidating the work that had been done by all countries (much of it last week). A number of contentious issues (including detailed 'numbers' for emissions reduction commitments) are still bracketed and placeholders sit where entire issues remain unresolved, so there is still a long way to go. But at least there has been some progress: one of the group’s texts, which was over 180 pages long going into Copenhagen, has been pared down to seven pages.

Whereas these texts reflect all of the points of convergence and (through the brackets and omissions) divergence between parties, top-down approaches allow like-minded groups of countries to publish their preferred solutions in a coherent document and circulate them to everyone else. A text prepared by a group of developed countries, spearheaded by the Danish hosts, has been circulating for some time, small island countries released their preferred text on Friday, and a group of high-emitting developing countries began touting its own wishlist on the weekend.

All of this activity is a welcome change from the head-bashingly slow pace at which talks have progressed to date, and suggests that most delegations are determined to achieve something meaningful in Copenhagen. Progress has also been made on some of the more technical issues.

Compromise on most of the key sticking points, however, is as elusive as ever. The most significant point of contention relates to the commitments of developing countries – particularly the major emitters – under a new international climate change regime. Developing countries continue to resist any binding, quantifiable and internationally verifiable commitments, while developed countries continue to insist that the absence of such commitments would be a deal-breaker for them. The bottom-up draft text dealing with this issue proposes a diplomatic fudge that has left all sides unhappy – particularly the United States.

The scale of emissions reductions from developed countries also remains contentious. This week, countries focused on negotiating the emissions accounting rules that would be used to determine compliance with the eventual targets. Rules relating to the accounting of emissions sources and removals in the agricultural, land and forest sectors have proved particularly contentious, as the content of these rules has a big effect on the ease with which countries like Australia could meet their targets (developing countries worry that generous land-sector accounting rules will allow countries to 'cook their books' and effectively meet their targets without reducing their energy, transport and industrial emissions). The aim has been to finalise these issues early so that Ministers and leaders can focus on final targets in the week ahead. Australian negotiators have reportedly revealed that Australia would only sign on to the upper-end of its emissions reduction target range (5%-25% below 2000 levels by 2020) if these rules are resolved favourably to Australia. This issue will be one to watch in the coming days.

Deep divisions also remain over the amount of finance that developed countries should provide to developing countries (to help the latter reduce emissions and adapt to the effects of climate change) and the institutional arrangements by which it should be governed. A developed world consensus has emerged that US$10 billion dollars of 'fast-start' finance should be provided to developing countries as an interim measure to bridge the gap between now and 2013 (when any new medium-term climate agreement would take effect). Developed countries have started pledging contributions toward this fund, but they remain silent on the amount of medium- to long-term funding that would be provided (ie from 2013 onwards) as part of a new agreement, as do the various texts that are flying around. One person who is anything but silent on this issue, however, is the Sudanese negotiator who speaks on behalf of the G77 & China Group of developing countries in the negotiations – he has dismissed the $10 billion fast-start package as 'no finance whatsoever' and is demanding vastly greater sums as a precondition for developing country participation in a new climate regime.

Finally, the seemingly intractable dispute over the legal form of a new agreement, which I discussed on Friday, remains unresolved. The Tuvaluan proposal to establish a smaller group merely to discuss this issue hadn’t even been resolved by the weekend, leaving Tuvalu’s lead negotiator at his wit’s end on Saturday morning.

As we head into the second and final week in Copenhagen, it is extremely difficult to predict what will happen. If the first week is anything to go by, there is little prospect for a meaningful agreement. But the presence of ministers and, at the end of the week, more than 110 heads of state and government, could start to loosen long-entrenched positions. If that can’t do it, what will?

Audio update: Copenhagen talks progress despite leaked 'Danish text'

2009-12-11T13:39:00.001+11:00

Fergus Green has spoken to Boardroom Radio about the first week of the Copenhagen conference, the impact of the leaked 'Danish text' on the conference and what is expected to happen there in the next week.

To listen to the interview, go to the Allens website.

Earlier in the week, Partner Grant Anderson spoke to CNBC about what could be expected from the conference. To view this interview, go to the CNBC website.

A developing split?

2009-12-11T11:27:00.000+11:00

By Fergus Green in Copenhagen

Tuesday’s kerfuffle over the leaked Danish draft text (see previous post) highlighted tensions between the developed and developing countries. But as the dust from this silly row has receded, a more important, but less discussed, division – that within the developing world – has come into focus, triggered by a superficially innocuous procedural motion to create a negotiating group to discuss the legal form that a new climate pact might take. This might sound eye-glazingly bureaucratic, but it set alight a long-ticking timebomb within the main developing country bloc (known as the G77 & China group), which threatens to blow that Group apart in a way that could have profound implications for the Copenhagen outcome.

The G77 & China group is a group of some 130 developing countries, but there are other, smaller developing country groups whose membership consists partly or entirely of G77 countries. These other groupings include the OPEC countries, the African Group, the Least Developed Countries Group (LDCs), and the Alliance of Small Island States (AOSIS). Then there is the so-called BASIC group – Brazil, South Africa, India and China – which is not a formal grouping so much as a collection of the major-emitting emerging economies that are being pressured to start pulling their weight when it comes to reducing their emissions.

Looked at objectively, each of these smaller groups has unique interests. While developing countries have similar positions on some issues, the interests of the smaller groups conflict in certain key respects – most fundamentally over mitigation. AOSIS countries want the most ambitious possible emissions reductions from all countries and, though they tend not to say it explicitly (their rhetoric focuses on developed country emission reductions and global emissions reductions), the sorts of goals and targets they advocate require precipitous cuts in emissions from their higher-emitting developing country colleagues (ie the BASIC countries). Due to their vulnerability to the effects of climate change, the interests of the LDCs and the African Group in ambitious global mitigation are similar to AOSIS in this regard. At the other end of the spectrum, OPEC countries are interested in avoiding, delaying and weakening the international climate change regime, so that the world doesn’t wean itself off the oil they want to keep selling. The BASIC group sits somewhere in the middle of this spectrum: they have an interest in strong mitigation (as they too are vulnerable to climate change) and recognise the reality that they will have to make a contribution to the solution, but they staunchly resist the idea of being legally bound at the international level to their domestic mitigation commitments, and they want the developed world to shoulder the vast bulk of the mitigation effort.

In practice, the G77 & China group position on mitigation tends to reflect the interests of its more powerful members (ie the BASIC countries), while these policy tensions remain latent under the veil of solidarity. On occasion, however, certain issues provoke them to flare-up. Now is one of those occasions, and the issue is 'legal form'.

Essentially, developed countries want any new climate deal to take the form of a new treaty that would replace the Kyoto Protocol – incorporating key elements from it but adding to it in critical ways, such as by including a framework for emissions reduction commitments from developing countries (particularly the major emitters). The G77 & China group, on the other hand, has fervently resisted such an approach. They favour retaining the Kyoto Protocol, which effectively entrenches their right to keep on emitting, and simply updating it with new emissions reduction commitments for the developed countries (possibly supplemented by decisions from the COP to address issues not covered by Kyoto). Thus the dispute about “legal form” is really a proxy war over sharing the mitigation burden – the fundamental sticking point in the negotiations.

AOSIS states and other vulnerable countries thus have an interest in this dispute being promptly resolved, and in a way that incorporates both more ambitious commitments from developed countries and genuine commitments from the BASIC countries. With a view to such a resolution, Tuvalu (which is an AOSIS member but is not a member of the G77) yesterday announced its preference for a two-treaty outcome – an updated Kyoto Protocol plus a 'Copenhagen Protocol' dealing with the non-Kyoto issues (see my earlier post for some background on the two negotiating tracks). Tuvalu then proposed the establishment of a formal 'contact group' (smaller negotiating groups that try to resolve specific issues outside of the larger plenaries, but which remain publicly accessible and transparent) to negotiate the issue of 'legal form'.

This is when the sparks started to fly. The COP President proposed that such a contact group be established and a long list of AOSIS countries and LDCs spoke up in support of the Tuvaluan proposal. But the proposal was blocked by China, India, and a number of oil-exporting countries. The COP President proposed to resolve the impasse by conducting immediate informal consultations on the issue, but Tuvalu spoke against this halfway measure, insisting that negotiations under the COP (the main negotiating forum) be suspended and no other items discussed until a formal contact group was established and the ultimate issue resolved. The COP was so suspended, leaving the President with no choice but to conduct informal consultations throughout the evening and into this morning. In this morning’s COP/MOP, the parallel main plenary that resumed today (the COP is the plenary for the Convention, the COP/MOP is the plenary for the Kyoto Protocol), the whole affair was repeated, with an equivalent Tuvaluan proposal meeting the same fate. The issue remains unresolved.

Negotiations under the permanent and ad hoc subsidiary bodies (which do the bulk of the negotiating legwork) remain on foot, but the suspension of the COP over this issue has real significance, having highlighted the tensions in the developing country bloc over key elements of a Copenhagen outcome. Time will tell whether the G77 countries are able to resolve this dispute internally and agree a common position, but the issue could possibly lead to the de facto fracturing of the developing country bloc, which would have major implications for the remainder of the Copenhagen conference. If Tuvalu’s determination encourages such a split, the BASIC countries and the OPEC blockers will be exposed and isolated, no longer able to hide behind G77 solidarity. This would change the political dynamic substantially, as it would open up possibilities for new issues-based alliances between developed countries and vulnerable developing countries and focus political pressure on the BASIC and OPEC countries, while taking some of the heat off the 'developed-developing' divisions.

Ultimately, this could lead to more dynamic and transformative changes in negotiating positions and, ultimately, the Copenhagen text, in the second week of the conference, particularly as ministers and then leaders arrive. This is precisely what is needed to overcome the incrementalism and inertia that plagues negotiations when the G77 is united by the only thing that binds them: their opposition to and mistrust of developed countries. That dynamic would also be risky, though, as it could make the negotiations more chaotic and render consensus impossible.

We’re still a while away from all of that yet, and the G77 has overcome internal ruptures plenty of times before. But Copenhagen might be different – and if it is, that would really shake things up.

Nevermind ClimateGate, bring on 'GuardianGate': myth and reality in the Danish draft text fiasco

2009-12-09T14:51:00.007+11:00

By Fergus Green in Copenhagen

After the sun had set on what had been a relatively uneventful day 2 at Copenhagen (admittedly, the sun sets at about 4pm in Denmark), the Bella Center was jump-started back to life by a late-breaking media report that has caused a stir among developing countries and NGOs and put developed countries on the back-foot. The offending article was from the UK’s The Guardian newspaper, which reported late this afternoon on a leaked copy obtained by it of a 'secret' draft climate change agreement – the so-called 'Danish Text' – that the Danish Government has purportedly been shopping around to delegates in the back halls of the conference while the formal negotiations proceeded in earnest.

There is legitimate scope for criticism of some elements of the Danish text and the process by which it has been produced. However, the Guardian story is overhyped, misleading and, in parts, plain wrong. Moreover, the storm it has generated (much of it unjustified) could hamper negotiations when they resume tomorrow.

First, a bit of background – notably absent from most reporting on the issue – is necessary. Normally, climate change agreements materialise in a bottom-up fashion, whereby countries hammer out consensus on each issue and gradually build a comprehensive text that addresses every country’s interests. Naturally, this is a cumbersome process that tends to drag on for years. The Bali/Copenhagen process has been no exception, and virtually everyone recognises that this process will not conclude in Copenhagen – meaning that a comprehensive agreement to extend or replace the Kyoto Protocol will not be produced, ready for signature by leaders, by the end of this conference.

Yet such a 'halfway' outcome would be incommensurate with the soaring political expectations for Copenhagen, and the more than 100 world leaders now confirmed to attend the final days of the conference are keen to have something to show at the end of it, even if it’s not a comprehensive agreement. But the desire for tangible results in such a short timeframe necessitates a more 'top-down' approach to negotiations whereby a small group of countries proposes an overall text, which all countries then modify with a view to achieving consensus.

The task of preparing such a framework has fallen to the Danes, as Chair of the conference. News that they were considering such an approach originated a couple of weeks ago when the Danish PM flew to Singapore to present APEC leaders with a proposal for a short-term, political agreement in Copenhagen (coupled with a mandate to continue negotiations on a comprehensive agreement). Since then, and particularly since the beginning of the Copenhagen conference this week, rumours about the existence of a secret draft document embodying the Danish proposal have been flying thick and fast. And it was these rumours that were confirmed via the Guardian story this (Tuesday) evening.

Seizing on the Guardian article more so than the Danish text itself, developing countries and the NGO community are crying foul about numerous elements of the text and the process surrounding it. But an independent reading of the draft text reveals the Guardian article to be incorrect in a number of respects.

First, the article claims that the draft text would 'force developing countries to agree to specific emission cuts and measures that were not part of the original UN agreement'. Well, it’s only a draft text and no country can be 'forced' to do anything (remember the consensus rule?). Moreover, the fact that something in the draft text for a new treaty wasn’t in the original UN agreement (presumably they mean the UNFCCC or the Kyoto Protocol) is hardly a surprise – what would be the point of having a new agreement if you just agreed on things that were in the old treaty? The Danish text in fact proposes a framework for incorporating emissions reduction commitments from developing countries (except those from the Least Developed Countries group) into a new treaty – an issue that is already squarely on the Copenhagen agenda (and on which countries have been negotiating for two years). While such a proposal has always been controversial among developing countries, this controversy is nothing new.

Second, the Guardian article claims that the Danish text would 'not allow poor countries to emit more than 1.44 tonnes of carbon per person by 2050, while allowing rich countries to emit 2.67 tonnes'. The Danish text contains no such provision – in fact, it says nothing about per capita emissions reduction targets (a moment’s reflection would surely lead one to question why the text’s architects would ever be so brazenly greedy as to proclaim that developed country citizens have a greater right to emit greenhouse gases than citizens of poor countries). It is unclear where these numbers came from or how (and using what assumptions) they were calculated. One can only assume that they must have been provided by the 'developing countries' on whose 'confidential analysis of the text' the Guardian appears to have relied.

Third, the Danish text, according to the Guardian, 'hands effective control of climate change finance to the World Bank' (developing countries object to such an approach because the governance of finance managed by that institution is weighted toward the interests of donor states) and would 'weaken the UN's role in handling climate finance'. Actually, the draft text contains no mention of the World Bank whatsoever. On the contrary, it proposes the establishment of a financial mechanism (ie for distributing funds from developed countries to help poorer countries undertake emissions reduction projects and adapt to climate change) that would be managed by the Conference of the Parties (the existing institutional structure established under the UNFCCC, which is dominated by developing countries) – which is precisely what developing countries have been asking for. In other words, the Danish text would do the exact opposite of what the Guardian article says it would do.

Fourth, the Guardian claims the text would 'divide poor countries further by creating a new category of developing countries called "the most vulnerable"'. The quote makes it sound as though the text is proposing a new official designation of countries, which it is not. The text merely proposes to direct financing for climate change adaptation to the most vulnerable countries as a matter of priority. The connotation in the text is that vulnerability to climate change would simply be a key criterion for allocating funding. Not only is such a prioritisation of adaptation financing entirely reasonable, it is in fact being advocated by blocs representing developing countries that are especially vulnerable to climate change, including the Alliance of Small Island States, the Least Developed Countries group and the African Group. The only countries that might object to such a prioritisation are the wealthier developing countries, who want a large chunk of the adaptation financing pie for themselves.

Fifth, the article claims the Danish text 'would make any money to help poor countries adapt to climate change dependent on them taking a range of actions'. Again, this is misleading. Funding for developing country mitigation (emissions reductions projects) would be contingent on developing countries actually undertaking mitigation actions (hardly unreasonable), but funding for adaptation would not be contingent on any 'range of actions' – rather it would be directed primarily to poorer and more vulnerable countries.

The only vaguely valid criticism the Guardian makes of the Danish text related to the process by which it has been produced. The text does appear to have been produced primarily by developed countries (apparently including Australian Prime Minister Kevin Rudd), as it incorporates a number of developed countries’ long-held demands that are still staunchly resisted by many developing countries, including: an Australian proposal to incorporate developing country commitments into a new agreement via 'schedules of commitments'; a developed country preference for a single legal agreement rather than an extension of the Kyoto Protocol combined with a separate new agreement covering non-Kyoto issues; the developed country preference to depart from the Kyoto Protocol and its rigid separation of obligations between developed and developing countries; and developed countries’ proposed (and contentious) goals of limiting temperature rise to 2°C above pre-industrial levels and to reduce global emissions by 50% below 1990 levels by 2050.

But the article overhypes the 'unfair process' angle, making the whole thing sound like an evil conspiracy by the developed world to trample on the interests of developing countries. The climate change debate is muddied by enough ludicrous conspiracy theories as it is, thank you very much. It is also worth bearing in mind that some form of 'top down' approach will be essential if countries want to have anything tangible to take away from Copenhagen.

As the text and the hype surrounding it have reopened old wounds and undermined trust between developed and developing countries, talks at Copenhagen may well be hampered when they resume tomorrow. This is a very unfortunate development and an entirely unnecessary distraction from the main game - which should be squarely focused on tackling the very real challenges that climate change poses to all countries on both sides of the developed/developing country divide.

0.00: Countdown ends; Copenhagen begins

2009-12-08T13:37:00.005+11:00

By Fergus Green in Copenhagen

After all the expectations and hype, the Copenhagen conference finally kicked-off today in the Danish capital. The mood in the Bella Center was buoyant, as NGOs and businesses set up shop in the exhibition halls and delegates, observers and media assembled in the main plenary halls for the opening sessions.

The day’s events were limited mostly to decisions on procedural issues (eg agreeing the agenda and work program for the COP and the working groups) and formulaic (and decidedly uninspiring) opening statements from representatives of each negotiating group. The most entertaining and eventful part of the day was the Opening Plenary and the Welcome Ceremony, which featured some creative works – a video of a small child’s climate change nightmare and a performance by the Danish Girls’ Choir – and speeches from various dignitaries, including the Danish Prime Minister, the Mayor of Copenhagen, the Chairman of the Inter-Governmental Panel on Climate Change (IPCC) and the Executive Secretary of the UNFCCC Secretariat.

IPCC Chairman Dr Rajendra Pachauri delivered a punchy speech, grounded in science but directed at the politics of the day. In response to the senselessly over-hyped hacked emails scandal (which has been inappropriately dubbed 'climategate'), Pachauri delivered a staunch defence of the IPCC’s processes and the climate science community in general:

'The recent incident of stealing the emails of scientists at the University of East Anglia shows that some would go to the extent of carrying out illegal acts perhaps in an attempt to discredit the IPCC. But the Panel has a record of transparent and objective assessment stretching over 21 years performed by tens of thousands of dedicated scientists from all corners of the globe. I am proud to inform this conference that the findings of the [IPCC’s 4th Assessment Report] are based on measurements made by many independent institutions worldwide that demonstrate significant changes on land, in the atmosphere, the oceans and in the ice-covered areas of the Earth. The internal consistency from multiple lines of evidence strongly supports the work of the scientific community, including those individuals singled out in these email exchanges, many of whom have dedicated their time and effort to develop these findings in teams of Lead Authors in the series of IPCC Assessment Reports during the past 21 years. The IPCC assessment process is designed to ensure consideration of all relevant scientific information from established journals with robust peer review processes, or from other sources which have undergone robust and independent peer review. The entire report writing process of the IPCC is subjected to extensive and repeated review by experts as well as by governments. In the [4th Assessment Report] there were a total of around 2500 expert reviewers performing this review process. Consequently, there is full opportunity for experts in the field to draw attention to any piece of published literature and its basic findings that would ensure inclusion of a wide range of views.'

Pachauri also highlighted the consequences of unchecked climate change, based on past observations and future projections assessed by the IPCC, and reiterated the widely recognised reality that the costs of inaction would far exceed the costs of action. While welcoming the recent acceptance by the G8 countries of the need to limit global temperature rise to 2°C above pre-industrial levels, Pachauri reminded developed countries of the (unrealised) scale of mitigation required to reach that goal and of the dangers associated with even that seemingly ambitious objective – hinting at the most recent science, which suggests limiting temperature rises to below 1.5°C.

The Saudi delegation was unconvinced by Pachauri’s scientific pronouncements and defence of the IPCC’s processes. Speaking on behalf of the OPEC group during the Opening Plenary, the Saudi delegate seized on the email scandal to question the science on which the international climate change regime is based. The Saudis and other oil-exporting countries have long demanded that developed countries compensate them for the adverse effects that emissions reduction policies should (in theory) have on their oil-export-dependent economies. Effectively, OPEC countries demand that developed countries pay them for the oil that developed countries are not importing.

Because the UN climate regime operates on the basis of 'consensus' (meaning decisions and treaty text are adopted only when no country objects), the Saudis' demands have to be taken seriously or else they can simply block negotiations. It is this consensus rule that makes the negotiations so painstakingly slow, because 192 nations must essentially agree on everything – and it is this long-windedness in the face of urgent threats that prompted the PNG delegation to make an unexpected intervention during an early part of the opening plenary that should have been a simple administrative matter of agreeing the procedures for the conference. Objecting that the 'lowest common denominator', consensus approach to climate change decision-making was hampering the action needed to ensure the survival and prosperity of their vulnerable nation, the PNG delegation proposed the adoption of a decision-making process based on ¾ majority voting. This proposal was politely dismissed by the COP President, but the PNG delegate was determined that it be addressed, making repeated interventions urging immediate discussion of the issue. Eventually, Saudi Arabia spoke up in defence of the consensus rule and a few other countries followed suit. Thus it became readily apparent that the PNG proposal to overturn the consensus rule would not succeed on the basis that – you guessed it – the proposal lacked consensus.

Welcome to climate change diplomacy, UN-style.

What now for the ETS?

2009-12-07T12:26:00.000+11:00

Last week saw the Federal Government's emissions trading scheme fail to get past the Senate. The Government has since indicated that it will seek to reintroduce the legislation when Federal Parliament resumes early in 2010.

Partner Grant Anderson has spoken to Boardroom Radio about the form the legislation will take when it is reintroduced and what the failure to get the ETS scheme passed means for Australia's position at the Copenhagen conference.

Grant's interview can be heard at the Allens website.

Political climate changing? The latest in the US and Australia

2009-12-02T11:29:00.000+11:00

It has been a fascinating past few days in Australian politics, with a change of leadership in the federal Liberal Party brought on by deep divisions within the party over the best way to deal with the Federal Government's emissions trading scheme legislation.

New Liberal Party leader Tony Abbott has already made it clear that the ETS legislation won't make it past the Senate before Christmas.

To make sense of what is happening in Australia and the United States, Partner Darren Murphy and Counsel from US law firm Vinson & Elkins Chris Carr have spoken to Boardroom Radio about the latest political developments in both countries surrounding climate change.

The interview can be heard at the Allens website.

Comprehending Copenhagen: Launch of a New Guide to the Negotiations

2009-12-01T11:16:00.007+11:00

By Fergus Green

Much as I enjoy blogging, many of you may prefer your Copenhagen analyses in more tangible form. To assist the public and the media follow along with the negotiations and understand the issues and processes involved, I have produced, with Dr Greg Picker, a new paper for the Lowy Institute for International Policy, Comprehending Copenhagen: A Guide to the International Climate Change Negotiations.

The paper is a plain-English, "follower's-guide" to the negotiations. It elucidates the key issues to be negotiated in Copenhagen and outlines the positions of the various countries and groups to each issue - from the expansion of international carbon markets to proposals for curbing tropical deforestation. The paper also explains the Conference’s processes, weighs the likely outcomes and considers its potential implications for Australia and beyond.

The paper can be freely downloaded from here. A podcast of the launch is also available for download. I welcome any feedback you may have.

No political bar to US power companies being sued for emitting CO2

2009-11-30T14:47:00.003+11:00

By Grant Anderson

The law relating to climate change litigation continues to develop. So far in Australia the role of the courts has largely been focussed on claims involving planning and the appropriate exercise of authority to approve or reject planning applications for mines, residential coastal developments and other projects that may impact on, or be impacted by, greenhouse gas emissions and global warming. However, lower courts in the United States have been entertaining claims framed under the common law of nuisance. Clearly a significant hurdle to successfully bringing a claim of this kind is the need to establish a link between the conduct of any entity, or group of entities, and particular climate events and associated damage. This has most recently been recognised by a series of Federal Courts of Appeal decisions in the United States. My colleagues, Partners Matthew Skinner and Annette Hughes and Lawyer Julie-Anne Pearce, review the latest such decision in their publication - Allens Focus: No political bar to US Power companies being sued for emitting CO2. It makes a very interesting read and is a reminder of the hurdles for any potential climate change plaintiffs.

The myths of Australia's climate change policy

2009-11-26T16:14:00.001+11:00

Grant Anderson has written a piece today for the Business Spectator, which examines the main myths of Australia's climate change policy.

In the piece, Grant dispels the argument that Australia is out on its own on climate change while other countries dither. In particular, he says: 'While the Australian (and New Zealand) debates have centred largely on their respective emissions trading schemes, an emissions trading scheme is not the only weapon in the climate change policy armoury. Indeed, it would simply not be practical to implement such a scheme in many of our developing-nation neighbours. But this does not mean that countries in our region are doing nothing.'

The article is available in full at the Business Spectator website.

Grant Anderson discusses climate change policies

2009-11-26T10:59:00.001+11:00

Companies operating in the Asia Pacific will need to monitor their compliance with potentially very different emissions trading and carbon reduction schemes.

Grant Anderson has spoken today to Boardroom Radio about a report by the firm, One Hat Does Not Fit All, a comprehensive policy comparison on what 13 countries in the Asia Pacific region are doing to deal with climate change.

Climate change report: Australia not out on its own

2009-11-25T10:30:00.001+11:00

By Grant Anderson

It is now fairly clear that the Copenhagen conference will result in, at best, a high-level political compact rather than a comprehensive international climate change agreement, with the details of any subsequent agreement to be hammered out over the next six to 18 months.

One of the key sticking points is the nature and extent of the commitments that countries should make to reduce (or, at least, moderate) their greenhouse gas emissions. A number of developing countries have called for developed countries to commit to reducing their greenhouse gas emissions by around 40 per cent from 1990 levels by 2020. Conversely, while it is generally recognised that developing countries (which are concerned that constraints on their emissions will prejudice their economic development) should not be required to commit to absolute binding emissions reductions, developed countries are concerned to ensure that developing countries also contribute to the emissions reduction task because most emissions growth will come from them in the foreseeable future.

It is against this background that Allens Arthur Robinson has prepared a report on the climate change-related policies that have been adopted, or are under serious consideration, in a number of the countries in our region: Australia, Cambodia, China, Indonesia, Japan, Malaysia, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Thailand, and Vietnam.

While much of the debate in Australia and New Zealand has focused on the development and implementation of their respective domestic emissions trading schemes, this survey reveals a variety of other measures that other countries in the region have adopted to promote 'greener' economies: targets and feed-in tariffs to support renewable energy generation, tax incentives, government funding, building, vehicle and electrical appliance standards, fuel price reforms, energy efficiency programs and forestry projects. This is instructive given the diversity of countries in the region, which include developed countries (such as Japan), relatively prosperous developing countries (such as China) and poorer developing countries (such as Cambodia).

A key message that emerges from this survey is that, understandably, countries adopt climate change initiatives that are compatible with their economic development goals and their individual circumstances. This in turn suggests that the current emphasis on national emissions targets is too simplistic.

As our Prime Minister has recently advocated, a more realistic alternative might be to append to any international agreement a schedule detailing the specific measures that countries agree to undertake to reduce or control their greenhouse gas emissions. This would enable countries to adopt measures that are more suited to their individual circumstances – measures that play to their strengths and that are consistent with other priorities such as economic growth and energy security. It would also make it easier to compare developing countries' proposed contributions for the purposes of the international negotiations and to monitor compliance with these commitments, and would enable the more effective targeting of the financial (and other, eg institution building) assistance that developed countries will need to provide to developing countries to assist them in their mitigation efforts.

Grant Anderson on Boardroom Radio

2009-11-20T15:06:00.003+11:00

Partner Grant Anderson has today taken part in a Boardroom Radio roundtable discussion, which examined a range of issues involving climate change in Australia. This included an update on the status of the Carbon Pollution Reduction Scheme legislation and the influence of the 'Copenhagen factor' on the domestic scene.

The roundtable discussion is now available to be accessed.

Sydney Presentation: Climate Change Responses for Engineers

2009-11-18T15:20:00.003+11:00

Tomorrow night at the Institution of Engineers Headquarters in Chatswood there is a presentation on Engineering Solutions in light of climate change.

The presentation will be by Arek Sinanian of Parsons Brinkerhoff. Arek is an international expert on greenhouse gas abatement, carbon accounting, cleaner production and sustainable development strategies. He is a member of the CDM Methodology expert panel for the United Nations Framework Convention on Climate Change (UNFCCC), advising on projects for clean development mechanisms submitted for registration under the Kyoto Protocol. He is also a member of the UNFCCC Joint Implementation Accreditation Panel that reviews ‘Independent Entity’ registration applications according to the Kyoto Protocol.

For more than 30 years, Arek has provided environmental management and sustainability advice to government and corporate clients. Most recently he has been exploring climate change responses by developing cleaner production methods and resource efficiency strategies that incorporate energy optimisation, water and waste minimisation and process efficiency improvements.

The presentation is at Engineers Australia Auditorium, Ground Floor, 8 Thomas Street, Chatswood. Refreshments commence at 6pm for a 6:30pm presentation start, finishing at 7:45pm. Dinner with the presenter is an option if you choose. If you would like to attend, please email me Lester.Miller@aar.com.au or Jim Vickery at Engineers Australia, JimVicOy@tpg.com.au. There is no charge for attending.

Grant Anderson on LawTV

2009-11-18T10:24:00.000+11:00

Grant Anderson will be appearing today on LawTV, Sky News' weekly legal affairs show, to discuss all thing Copenhagen and the passage of the emissions trading scheme legislation through Federal Parliament. The show begins at 2.30pm.

Australia's Sacred Cows

2009-11-16T16:34:00.007+11:00

By Fergus Green

Hindus, apparently, are not the only ones who revere cows. As the Government confirmed on the weekend, Australia's cows are also sacred – when it comes to the politics of climate change, at least.

In the context of ongoing negotiations with the Opposition over the Carbon Pollution Reduction Scheme, the Government announced that it had acceded to the Opposition's demand that non-energy/direct emissions from the agricultural sector be permanently excluded from liability under the Scheme. Owing to present difficulties in measuring such emissions (eg. from ruminant livestock and agricultural soils) at the farm level, the Government had originally proposed that a decision on whether or not to include agriculture in the CPRS would be made in 2013, following industry consultations. The earliest that emissions permits would have to be surrendered in respect of those emissions would have been 2015.

While details of the deal remain unclear, it appears that the Government remains open to allowing farmers to generate revenue from sequestering carbon in soils, but only if the relevant "offsets" can count towards Australia's international emissions reduction targets under any post-Kyoto agreement from 2013 onward (indeed, this is one of the issues on the Copenhagen agenda).

At some 15% of Australia's emissions, agriculture is Australia's second highest emitting economic sector, behind only stationary energy, and so the Government will need to find some other way of restraining emissions from this sector, eg. direct regulation.

The exclusion will need to be reflected in the CPRS legislation which, of course, can be amended at some future date. In a sense, this makes the Government's concession more symbolic than concrete, though it may prove politically difficult to reverse.

In exempting agriculture, the Government is effectively following the Europeans (who have excluded agriculture from the European ETS) and the Americans (agriculture was excluded from liability under the Waxman-Markey Bill that passed the US House of Representatives in June and it is inevitable that the Senate will exclude it in its climate bill, which is currently being negotiated). It will be interesting to see the effect of the Australian exclusion on New Zealand's climate change politics and policy. At present, the Key Government plans to include agriculture, which counts for nearly half of New Zealand's emissions, in the country's ETS from 2015 (with liability attaching at the fertiliser production and food processor level). The Key Government made a suite of business-friendly amendments to the NZ ETS earlier this year, a number of which were explicitly designed to bring its scheme into line with Australia's. It will now inevitably face further pressure from the country's powerful farming lobby to follow Australia's suit on agriculture, too.

Taking stock after Barcelona

2009-11-11T14:57:00.001+11:00

By Fergus Green

Better known for its colourful architecture and vibrant party scene, the Spanish city of Barcelona last week played host to a more sombre gathering – the final round of formal climate change negotiations before the Copenhagen conference next month. The culmination of these pre-negotiations provides a timely point to take stock of developments to date. In future posts, we will explore the prospects for a deal at Copenhagen and weigh the possible outcomes.

Countries have been negotiating for almost two years now on the content of a new climate change pact to extend or replace the Kyoto Protocol, the first commitment period of which expires at the end of 2012. Reflecting long-held disagreement over the legal form that a new treaty should take, countries have been negotiating along two 'tracks'.

The mandate for the 'Kyoto' track has been to negotiate extensions to and improvements on issues covered by the Kyoto Protocol, including new emissions reduction targets for developed countries to cover the 2013-2020 period, and the technical rules around how those targets would need to be met – particularly regarding the accounting of emissions from the agricultural, land-use and forestry sectors, and around the international carbon trading mechanisms (through which developed countries can effectively 'buy' emissions reductions occurring overseas).

The second, 'Convention' track, established at the Bali conference at the end of 2007, has a mandate to negotiate a broader range of issues than those addressed under the Kyoto Protocol, including commitments from developing countries to restrain the growth in their emissions, reducing emissions from deforestation, financial assistance to help developing countries reduce emissions and adapt to climate change, and measures to proliferate clean technologies in the developing world.

Negotiations under both tracks have proceeded at a glacial pace throughout the intervening two years, with countries putting forward wildly diverging proposals for addressing the issues on each track's agenda. Earlier this year, existing country proposals were incorporated into a draft negotiating text that sets out the range of proposals and options within each issue. Going into Barcelona, the text for the 'Convention' track stood at an eye-popping 200 pages and included thousands of square brackets indicating points of disagreement.

The aim in Barcelona was to continue whittling down these monstrous texts to something from which delegates and ministers will manageably be able to negotiate next month – paving the way for them to 'seal the deal' in Copenhagen. After a week of intense negotiations in Barcelona, however, the texts look pretty much the same.

The slow progress does not bode well for Copenhagen. A comparison with the negotiations over the Kyoto Protocol in 1997 is telling: before Kyoto, the draft negotiating text was a mere 30 pages long, and even then it required a marathon negotiating session to reach agreement on the final text during the Kyoto conference.

More worrisome than the length of the text, however, is the depth of the divisions that persist between developed and developing countries over the most critical elements of a new agreement.

First, developing countries remain dissatisfied with the emissions reduction pledges that developed countries have made to date. Simmering frustrations boiled over at Barcelona when the African Group held up negotiations under the Kyoto track for two days by insisting that the negotiations on developed country targets be dealt with ahead of the more technical issues. Their theatrics drew media attention to the cause of the African countries, whose already fragile nations will be battered particularly harshly by the effects of climate change in the years ahead, but little progress was achieved in the rest of the week's negotiations.

The major stumbling block to the settlement of developed country targets is the refusal of the US delegation to make any concrete pledges until the fate of the Kerry-Boxer cap-and-trade bill in the US senate is known. By the end of the Barcelona talks last week, delegates' BlackBerries buzzed with the news that the Bill had cleared the Senate Environment and Public Works Committee, injecting a welcome hit of optimism into the veins of otherwise dispirited negotiators. But the Bill has a long way to travel yet: it will be scrutinised and 'marked-up' by another five committees before it proceeds to the Senate floor for a full vote – a process which looks increasingly likely to drag on until early 2010, too late for Copenhagen.

Longstanding divisions between developed and developing countries also persist over the obligations of developing countries under a new agreement. Developed countries are adamant that at least high-emitting developing countries (such as China, India and Brazil) accept some form of binding obligations to restrain the growth of their emissions. But such developing countries, while in many cases pressing ahead with serious efforts to reduce their emissions at home, staunchly resist any proposals to enshrine their commitments in a legally binding treaty, which they fear would subject their domestic policies to international verification and compliance regimes.

The final key point of division relates to the provision of finance by developed countries to assist the developing world reduce their emissions and adapt to climate change already 'locked-in' as a result of past and current emissions. Such finance is seen as a form of 'climate reparations' for the damage inflicted on developing countries by the warming caused primarily from industrialisation in the developed world, and also as a means of encouraging developing countries to cut their emissions. Despite expectations that progress would emerge from the G-20 finance ministers' meeting last week, developed countries have continued to resist putting money on the table. How much money will flow, from which sources it will come, and how it will be governed and distributed, are all critical questions that remain unresolved going into Copenhagen.

Although there are plenty of other issues on the agenda that also remain far from resolution, these four issues – developed country targets, developing country commitments, the provision of finance and the governance of the financial mechanism – have long been flagged by the head of the UNFCCC Secretariat, Yvo de Boer, as the four central 'pillars' on which a Copenhagen outcome must ultimately stand.

Less than a month out from Copenhagen, the pillars are looking rather flimsy.

Implications of Copenhagen for the Carbon Pollution Reduction Scheme

2009-11-09T15:01:00.002+11:00

By Grant Anderson

As part of the current debate on the Federal Government's proposed Carbon Pollution Reduction Scheme (CPRS), various parties (including the Federal Opposition) have argued that it is premature to consider or pass the legislation to establish the CPRS before the emissions reduction commitments that other countries will make are agreed at the Copenhagen conference next month. However, it is becoming increasingly evident that a comprehensive treaty is unlikely to emerge at Copenhagen and that a high-level political compact is a more likely outcome. There is simply too little time to bridge the considerable divisions not just between the so-called developed and developing countries but also within those country blocs, and the 200-page draft text is still riddled with more than 2000 square brackets that indicate points of difference. In addition, one of the key voices at the conference, the United States, is likely to be reluctant about committing to serious greenhouse gas emission reduction targets in advance of Congress deciding the fate of the Waxman-Markey and Kerry-Boxer Bills to establish a US emissions trading scheme.

Just as an agreement at Copenhagen on the commitments that developed and developing countries are prepared to make will strengthen the Federal Government's position that the CPRS legislation should be passed, a failure to agree such commitments is likely to entrench the views of those in the Federal Opposition who are opposed to the introduction of the CPRS. However, politicking aside, is an agreement at Copenhagen really of relevance to the CPRS?

Targets: The Federal Government has stated that Australia's national emissions target for 2020 will be between 5% and 25% below 2000 levels depending on the comprehensiveness of any post-Kyoto Protocol international agreement. The 5% target is an unconditional target (ie. it will apply whether or not an international agreement is reached) and the upper end target of 25% is predicated on there being a comprehensive international agreement that is capable of stabilising atmospheric concentrations of greenhouse gases at around 450ppm or lower (which is highly unlikely). This appears to give the Federal Government sufficient flexibility to accommodate any of the foreseeable emissions reduction targets that may emerge from Copenhagen. However, at least the annual scheme caps for 2011-12, 2012-13 and 2013-14 will need to be announced by 1 July 2010. It is not inconceivable that the international negotiations will extend more than six months beyond Copenhagen, in which case it may be difficult for the Government to set these caps by this time as such caps will be heavily dependent on Australia's 2020 international emissions reduction target. Subject to this qualification, assuming the assistance levels under the emissions-intensive trade-exposed assistance program are sufficient to prevent a substantial deterioration in Australia's international competitiveness (and this is clearly a matter of debate), the adoption of the 5% target could readily proceed in the absence of an agreement at Copenhagen.

International units: An important 'safety valve' in the CPRS is the ability of liable entities to use Kyoto units such as non-forestry CERs and ERUs to meet their obligations under the CPRS (indeed, this ability renders the concept of annual caps a little illusory). If a Copenhagen agreement resulted in the removal of CERs and ERUs or substantially restricted the creation of these units, that could result in a higher carbon price under the CPRS. While the Clean Development Mechanism is likely to be modified, and ideally should be reformed in such a way as to focus on encouraging emissions reductions in the least developed of the developing countries (including through avoided deforestation), it is highly unlikely that CERs and ERUs will cease to exist. However, it is not inconceivable that an international agreement might impose tighter restrictions on the number of international units that a country can surrender to meet its emissions reduction obligations under the agreement. The current requirement for supplementarity has been criticised as far too vague and capable of allowing developed countries to meet a very large proportion of their emissions reduction commitments by using emissions reductions achieved in developing countries.

Recognised offsets: A principal reason for the Federal Government's reluctance to permit a range of forms of biosequestration (such as soil sequestration and improved crop/grazing management practices) to generate carbon permits under the CPRS is that these kinds of offsets do not currently count towards Australia's international obligations. It is conceivable that an international agreement will recognise these kinds of offsets or, where they are currently recognised, will modify the rules relating to their inclusion in a country's emissions reduction commitments in a way that persuades the Federal Government to include them in its international emissions reduction targets. This will avoid the potential for any 'gap' between Australia's international obligations and the CPRS, and would enable the Government to expand the CPRS (with effect from 1 January 2013) to include such additional offsets.

Countdown to Copenhagen

2009-11-02T15:38:00.003+11:00

In just over 35 days, delegates from 192 nations – along with a motley cast of environmentalists, industrialists, journalists and others – will descend on Copenhagen, Denmark, for two weeks of pivotal negotiations on climate change. The purpose of the talks, formally known as the 15th Conference of the Parties (COP15) to the United Nations Framework Convention on Climate Change (UNFCCC), is to craft a new international agreement on reducing global emissions of heat-trapping greenhouse gases and on adapting to the climatic changes already underway.

Technically, the reason the Copenhagen conference is important is that it represents the end of the two-year period within which countries were to negotiate a new agreement, as per the timetable agreed in Bali in 2007. But a combination of ballooning global emissions, ever more frightening scientific observations and projections about the warming of the planet, unprecedented public concern and recent high-level political engagement have transformed Copenhagen into something of far greater moment than a mere UN talk-fest. It has come to be seen by many, rightly or wrongly, as an historic occasion for planetary salvation. Expectations are high, tensions are deep and the stakes are immense.

But what is Copenhagen really all about? What are the issues on the agenda and why are they important? Who are the main players and what are their interests? How are Australia's domestic climate change policies and laws, particularly the proposed Carbon Pollution Reduction Scheme, likely to be affected by the international negotiations? And what are the implications for Australian business?

In the weeks ahead, the Allens climate change team will be exploring these questions and many more here on our blog, as we follow Australian and international developments in the lead up to, during and after Copenhagen. Combining real-time reportage with informed analysis from some of Australia's leading authorities on climate change law and policy, we will help you navigate through the haze of arcane UN processes, obscure diplomatic jargon and impenetrable political spin. Our aim is to illuminate the issues that matter - from the expansion of international carbon markets to the curtailment of tropical deforestation - and to explain their significance for Australia.

My name is Fergus Green and I am a part of the Climate Change Group at Allens. I will be attending the Copenhagen conference for its duration (7-18 December) as an observer and as a volunteer with a project that is supporting a number of Pacific Island countries in the negotiations. In addition to blogging about my experiences and observations in Copenhagen, I will also be covering the pre-negotiations and other relevant events throughout November, along with the fallout from Copenhagen and further developments in the new year.

We welcome you to join us as we embark upon this venture by logging on regularly and we invite you to post any comments, questions and feedback you may have along the way.

We hope you find the blog to be accessible and insightful, and we look forward to participating in the conversation that we hope it will elicit.

Continental Crossing: Check

2009-11-01T21:59:00.007+11:00

Yesterday the last of the cars made it into Adelaide for the display in Victoria Square. There was an awards ceremony during which the energy levels and enthusiasm of all the participants were sky high. There were several categories of prizes including Design, Spirit, and of course 1st place overall. Tokai University were crowned the winners with an average speed of over 100km/h for the crossing of Australia. Their average was an impressive 10km/h better than their closest rival. UNSW, a team I observed for a day, although fourth overall, were first in their category. Their category was Silicon cells - they used normal cells which you might find on the roof of your house. The faster teams were using special compound cells.

An interesting award, which went to Michigan University (3rd place overall), was the Innovation award. It was given because of their novel way of boosting the output power from the solar cells. It involved little light reflectors under the solar cell array, inside the car, to reflect any residual sunlight back into the array. In this most recent WSC the maximum allowable solar panel was reduced from eight square metres to six, and this kind of innovation becomes important in extracting more energy from less.

Finally, each area of the Stuart Highway was fascinating for me, and I'll go back to Alice Springs to look at all the classically beautiful features there. It has been said to me that South Australia from half way down is unremarkable country, but even that had all that I came to see - every hundred kilometres or so the road rises to a vantage point from which you can really take in, in a way that's difficult to capture with a camera, the massive, absorbing sky and the country's shimmering vastness.

The Bloodwood and the Desert Oak

2009-10-29T19:46:00.007+11:00

I've seen the Holden wrecks and the boiling diesels steaming in 45 degrees, which the present Minister for the Environment and his bandmates sang about in "Beds are Burning". In the heat of the day, it is truly great to sit in the red dust and cool under a Desert Oak and listen to the wind sighing through its needled foliage.

The fastest teams have now finished the race. The fastest, by my quick calculations, averaged about 97km/hr for the whole way. But there is some Observing still to do. I've been with a High School team from Leeming, WA who spent the last few years building their own car using donations and support from the community and other sponsors. For them, it's been late nights welding and fabricating, as well as fetes, trivia nights and auction fundraisers galore. It's inspiring because they've seen it through for all that time, from conception to about 1000km under solar power. The kids, many of whom have never been camping outside before, are loving it.

There have been a few setbacks for Leeming (a few hot motor problems just off the start line) but they've been "solaring" since I've been with them, each day more kilometres than the last - today, more than 213km, a record for the team. We get along at about 60km/h which I think is a big achievement, and much more than you'd need getting around town. In the picture you can see the team manager cooling the solar cells for a quick charge at lunchtime. The cells convert light to electrical energy about 15% faster after a drink.

The interesting thing about Leeming and one or two other teams is that their cars have practical significance for the daily driver. They have two seats and enough internal volume for the car to mean something as transport of more than a size 0 supermodel. They could carry some camping gear, swags, and food for a week or two.

We're going to get as many solar km as we can tomorrow, and then on Saturday we'll join the cars on display in Adelaide.

Mparntwe (Alice Springs)

2009-10-28T10:22:00.014+11:00

Between Tennant Creek and Alice Springs I observed a Japanese team. They have a car which a bystander described as "a vision of how the year 2000 looked in the 1950s". It is certainly one of the most striking, and in silhouette looks more than a little like a flying saucer with three legs.

The car is not strictly racing, since it doesn't comply with this year's upright driver requirements of the WSC. However, they're a high school team and to their credit they're averaging about 80km/h and they're ahead of Stanford and Cambridge Universities, and many other heavily corporate-sponsored teams. Above, you can see the driver at a control stop wondering how he ever got into the cockpit.

In another photo you can see the team passing the Devil's Marbles.

I thought I might give you a break from solar cars for just a second and show another couple of aspects of the Northern Territory. This kind of travelling doesn't allow you to do too much sightseeing, but I've been fortunate to have seen more than others. Above is Heavitree Gap, a gap in the McDonnell Ranges at Alice Springs. The photo was taken while standing in the dry Todd River - the site of the Henley on Todd Regatta - the boat race that was cancelled in 1993 because the river was full of water. The site is sacred to the Arrernte people who have lived in this beautiful and complex area for 50,000 years.

The other is a shot of Mataranka Hot Springs - 400km west of the thriving metropolis of Numbulwar in Arnhem Land; the town is the setting for the memoir "We of the Never Never". The water here is clear, a bit sulphur-smelling, but a welcome rest from the heat of Darwin. We swam here in the evening and at midnight, just metres upstream from the freshwater crocodiles that snap at the local flying foxes who drop into the river to drink at sunset.

Darwin to Tennant Creek

2009-10-26T18:09:00.015+11:00

Soon, a scene like the one left may look normal: a solar car parked yesterday in a Darwin car park adjacent a Volvo station wagon. It might not be next week, though, because as all the drivers of the solar cars in this race know, there's barely any room in today's cars for their own legs, let alone the weekly shop! They emerge from two hours of driving a bit sore, dehydrated and weary.

We've had two days of racing and I'm in Tennant Creek. Many cars have been averaging 100km/h so efficiently that they're using less than a single kilowatt on a flat road - 1% of that which a standard 4-cylinder hatch uses.

The teams constantly check the cars' vital statistics as we go down the road - power going to the solar array, power being transferred from there to the battery, power being used by each motor, temperatures of everything. They listen and literally smell for any sign that anything might be using more one more joule of energy than it should be doing. They use that data to forecast and optimise battery life and to set current speed. A tech-lover's dream.

It hasn't been all silent feasting on kilometre after kilometre of straight desert highway, though. There have been some dramas, big and small. One Belgian team, which was a favourite in many minds, has spectacularly crashed into a tree due to a crosswind. The driver is safe thanks to a solid carbon fibre rollcage (see photo right).

Another time, while observing with a local university team, we heard the driver try to hold back a little panic while saying over the radio: "Control, something's wrong." She had heard a crack right behind her head and then the cockpit started to fill with the smell of burning rubber and haze. Immediately the solar car pulled over and it was found that an antenna mount had dropped into a gap between the suspension arm and the wheel. An easy fix with some gaffer tape saw them quickly on their way, but after seeing the serious consequences of seemingly simple real world issues that beset the Belgian team, it can be nerve-wracking to hear those initial words of warning from the driver.

At 5pm, until the restart after sunrise, the teams camp where they are and take the opportunity to charge the battery by aiming the array at the sun, as Stanford University were seen doing in the photo left this morning. It's life by the turning of the Earth, which means pre-dawn starts: bad for night-owls.

Hot Fuss

2009-10-24T12:40:00.007+11:00

I'm in the pits at Hidden Valley Raceway. There are trials for all the teams today - time around the course and a brake check.

The teams are anticipating breakdowns and working through all kinds of scenarios, trying to minimise the damage that all the frailties of their cars and the desert and the length of the race might bring up. They are jury rigging all kinds of spare parts to minimise down time if anything should happen. It's inspiring listening to engineers from Australia, Turkey, Japan, Britain, Germany, the US, The Netherlands, all working together and solving all kinds of other unforeseen problems.

While losing a quarter of my bodyweight in sweat I've heard David and Goliath stories of the teams that anticipate winning with cheaper and lesser materials than their opponents. I've seen teams sitting reverently around their cars seemingly praying for success. I've enjoyed seeing streamlined wheelspats, cockpit windows and even one car from Principia College, Illinois, which to me recalls the 1973 Chevrolet Corvette, from which I could never turn my eyes.

Leaving it all behind

2009-10-23T10:44:00.018+11:00

This is how my own fossil fuel-powered transport looked last night by Sydney Harbour. I have been wondering how they'll replace the addictive screaming howl at 9000rpm when we're all driving electric vehicles. Most likely, we'll all eventually look back and feel nothing but pity for all the people who had to put up with all that racket! (with thanks to Arthur Miller).

I'm about to board my flight to Darwin.

As Observers, we will be moved around between teams, jumping between them with our swags and gear at various control stops along the way. There are around 40 solar cars, with teams from 17 countries, and they range from high school teams, to universities and car manufacturers. The manufacturers include Holden, Ford, Suzuki, BMW mini and Skoda.

On Saturday there will be solar car time trials at Hidden Valley racetrack, and Observer briefings. The Observers I've met so far have varied backgrounds - PhD students, backyard inventors, teachers, engineers and enthusiasts from Germany, Australia, New Zealand and even some NASA scientists on holiday.

We're all looking forward to seeing the Red Centre, and to getting in the Enclosure to assess the favourites to win the race.

The Global Green Challenge: Darwin to Adelaide powered by the sun

2009-10-22T10:33:00.012+11:00

Hi everyone

The first focus of the Climate Change at Allens blog will be the Global Green Challenge. I'm Lester Miller, a Patent Attorney at Allens and an official Observer in the Challenge.

The Global Green Challenge is an event in which solar-powered, electric and hybrid cars travel 3000km across Australia from Darwin to Adelaide. It is designed to promote research into sustainable transport.

It starts on Sunday.

The solar car has come a long way in recent years - they now travel at around 130km per hour. I'll be travelling behind one of the team's cars in a support vehicle and recording what they do (eg driver changes, daily distance covered, breakdowns and other stops) and will be responsible for locking the battery up at night.

I'm really excited to be taking part in the event because I want to see an Australia I haven't seen before. The Challenge enables me to combine that with a love of technology and fast vehicles, and to me, it demonstrates that if motivated, we can do it all sustainably.

I'll get back to you soon with pictures and updates.