A symbol of hope in the battle against climate change.

A symbol of hope in the battle against climate change. Photo: Glenn Campbell

WITH EVERY additional gloomy report on greenhouse gas emissions and climate change, I get the impression an increasing number of people are throwing up their hands in despair and concluding nothing can be done.

I have no public opinion survey or focus group research to back this impression, only my assessment of talkback radio and personal encounters.

But the despondency is understandable. All the reports seem to tell us the situation is getting worse. There is next to no good news on the airwaves or in the papers.

But positive things are happening, and they even show up in the statistics the federal government collects on greenhouse gas emissions.

Take the case of Queensland Nitrates, a fully integrated ammonium nitrate facility based near Moura in central Queensland, producing ammonium nitrate for explosives in the mining industry.

In 2011-12, the company reported emissions equivalent to 398,046 tonnes of carbon dioxide. But the following year this dropped dramatically to 178,182 tonnes - a 56 per cent decline.

And the drop wasn't due to a fall in the company's production of ammonia and ammonium nitrate. It was due to the introduction of new technology.

In the discussions on greenhouse gases, we hear a lot about carbon dioxide but not too much about nitrous oxide, a gas that per tonne has 300 times the impact on global warming.

In the normal course of production, Queensland Nitrates - along with other manufacturers of ammonium nitrate - traditionally produce significant quantities of this gas, but in planning a plant upgrade in 2010, the company decided to do something about its climate emissions.

General manager David Armstrong told Fairfax Media part of the design of the new reactor was targeted at some of the emerging abatement technologies. The company invested quite heavily in its research to find the technologies, and engaged with potential providers. The new technology was installed as an integral component of a new reactor in November 2011, at considerable cost.

This was followed by the selection and installation of a separate catalyst in the reactor to convert the nitrous oxide into compounds not contributing to greenhouse gas emissions.

The whole process cost money, not only for the initial capital expenditure but for the payment of fees to third-party providers and ongoing maintenance. But the designers were thinking ahead, well aware a carbon pricing mechanism or a carbon tax was in the offing.

''There was knowledge some form of tax was coming, or some form of legislation, and that was on the radar at that time,'' Mr Armstrong said.

While Queensland Nitrates' timing has been good, giving the company a bit of a head-start on others in field, it is not alone in such developments.

Globally, engineers are tackling the greenhouse gas emissions problems, something the Intergovernmental Panel on Climate Change recognises is essential if we are to limit the planetary mean temperature rise to 2 degrees above pre-industrial levels.

The stimulus given to this process by a carbon tax or a carbon pricing mechanism is well recognised by the major international institutions looking into the issue.

The International Monetary Fund reported last month that stabilising atmospheric concentrations of greenhouse gases would require a radical transformation of the global energy system to take place over coming decades.

''Fiscal instruments (carbon taxes or similar) are the most effective policies for reflecting environmental costs in energy prices and promoting development of cleaner technologies, while also providing a valuable source of revenue (e.g. for lowering other tax burdens),'' the IMF said.

This last point is often forgotten in the debate over this important issue in Australia.

Labor in government and in opposition failed to get the revenue input across to the public, allowing the Coalition to bash it over the head with the negative cost impact of the carbon tax.

As the IMF points out, the positive effect is that the tax helps to pay for government services. Take it away and either government services have to be cut, another tax has to be found, or the budget deficit blows out.

While making much of its policy of abolishing the carbon tax, the Abbott government will happily collect about $7 billion from it this year. We are now getting a good indication that the way the government intends to make up for the loss of this tax is to cut a wide range of public services.

Even worse, the Coalition intends to try to tackle the climate change problem by paying polluters to reduce their emissions. This is not only widely regarded as a less effective policy, it adds to the budget deficit and requires a host of bureaucrats to administer. Currently we have no indication of what the government will do if a company breaches its baseline emissions. Will the government seek to fine the recalcitrant operator and create yet another bonanza for lawyers? Or will it simply turn a blind eye, in which case the policy will be meaningless.

It seems clear the government believes the shutdown of our manufacturing industry will enable it to achieve the overall 5 per cent reduction in our greenhouse gas emissions from 2000 levels by 2020 without any other action.

But this is hardly a good news story. It would be far preferable if we had good companies operating in industries that were finding new ways to produce their goods with lower greenhouse gas emissions.

That's the incentive a carbon tax delivers.