Climate change is about to dominate the national political agenda as the Senate prepares to vote on the Carbon Pollution Reduction Scheme Bill which will create an emissions trading system within Australia. At one level, opposition to the bill from the Coalition and minor parties has highlighted the ongoing political divisions on climate change.
In addition, the ETS also raises fundamental issues as to how Australia is meeting its international obligations under the Kyoto Protocol, and the approach it will adopt at the December Copenhagen climate change negotiations.
To an extent the ETS is the Rudd Government's attempt to catch up and remedy Australia's failure to put in place a comprehensive climate change regime at the time of the Kyoto ratification in 2007.
But here is the quandary.
Kyoto effectively expires in 2012 and what follows is still up for negotiation at Copenhagen. This raises two fundamental legal and related policy issues.
Is an Australian response legally required at this time, and is it wise for Australia to even have new climate laws in place prior to Copenhagen?
First, from the perspective of Australia's response to Kyoto the ETS is relevant but legally is not required for Copenhagen. The reality is that the ETS is in something of a twilight zone caught between Kyoto and Copenhagen.
Any climate regime adopted prior to Copenhagen will inevitably need subsequent adjustment to ensure that Australia is meeting its international climate obligations.
As to the second question, Climate Change Minister Penny Wong argues that an Australian response pre-Copenhagen is essential because it will demonstrate how serious Australia is about reducing its greenhouse emissions and encourage other nations to make similar commitments.
It is also asserted the ETS will inspire business confidence and encourage future investment decisions in a newly carbon-constrained economy.
Alternatively, the Coalition argues for delay of the ETS until after Copenhagen, advocating a ''wait and see'' approach in the belief that the shape of any new climate protocol, as well as other national responses such as that in the United States must be known before Australia's response can be finalised. Both sides of the debate would do well to appreciate the international law-making process which is under way. International climate law has developed in response to the global scientific concern over climate change and the need for a collective response.
Governments engage in a negotiating process until international agreement is reached, after which they implement domestic laws and policies to honour their international obligations. The Rudd Government effectively wishes to reverse this process, enacting its domestic ETS first, before attempting to shape an international agreement around it at Copenhagen. This approach fails to appreciate a very obvious point. By definition the object of an international negotiation is to negotiate. The danger of the Rudd Government's approach is demonstrated by considering the current negotiations regarding the adoption of international emissions reduction targets.
Australia has indicated its willingness to reduce its greenhouse emissions by 5 to 25 per cent by 2020 on year 2000 base levels. The final target will hinge upon the commitments adopted by other nations, however the current bill would cement this target range in Australian law. The result is that politically Australia will be effectively bound at Copenhagen to any targets it has already legislated. Of course, this is only a problem if the government's targets are inadequate. And this is where the real issue lies. The 2007 Bali Roadmap which initiated the Copenhagen negotiating process indicated that, collectively, developed nations would need to reduce emissions by a minimum 25 to 40 per cent by 2020 on 1990 levels.
This figure takes into account both scientific necessity and equity considerations. Since Bali, however, key players like China are demanding a minimum 40 per cent emissions cut from developed nations.
A number of developing countries have also quantified the individual targets developed nations would need to adopt. The Philippines, for example, allocates Australia a target of more than 40 per cent. What this highlights is that every nation involved in the Copenhagen negotiations will adopt a bargaining position and seek to advance its national interest. The Rudd Government clearly believes that its current target will make a fair contribution to a future protocol. The problem is that Australia may not be able to convince other nations that this is the case.
Labor asserts that an effective global agreement on climate change is strongly within Australia's national interest and Australia has much to lose economically, socially and environmentally if dangerous climate change is not avoided.
While the desire to enact an ETS prior to Copenhagen appears to be well intentioned, if the Government wishes to truly engage in the climate negotiations in good faith it must delay legislating its target, otherwise Australia may find that it has compromised its negotiating position and diminished the prospects of achieving a Copenhagen agreement.
Owen Cordes-Holland and Professor Donald R. Rothwell teach and research international and Australian climate law at the Australian National University's College of Law.