"The world is moving away from carbon taxes and emissions trading schemes."
Tony Abbott on Tuesday, July 9, 2013 in a press conference at Garlo's Pies in Sydney
Home alone: is the rest of the world moving away from carbon pricing?
[Update: In addition to the nations listed below, we have been made aware that the UK is placing a floor price on carbon to "ensure that the price paid for carbon by electricity producers in the UK is around £15.70/tonne CO2e in 2013 rising in a straight line to £30/tonne CO2e in 2020 and £70/tonne CO2e in 2030"]
The fear of being alone isn’t confined to our private lives: it’s a pivotal factor in politics. Opponents of carbon pricing in Australia have long argued that we shouldn’t act alone on climate change, or be out of step with what other countries are doing.
Tony Abbott believes Australia is surging ahead with carbon pricing despite the rest of the world backing away. Today he told reporters: "The world is moving away from carbon taxes and emissions trading schemes, not towards it."
We’ve already examined whether Australia’s carbon tax is "the world’s biggest", as the Coalition has claimed, and gave that a "half true". We felt the statement was partially accurate because the tax was relatively big on a number of measures, but not the absolute biggest on any one measure.
In that piece, we identified a number of jurisdictions who have recently implemented or announced a carbon pricing system.
Canada – Quebec commenced a cap-and-trade system in January 2013, beginning with 80 industrial sites and expanding over the coming few years. Quebec is a member of the Western Climate Initiative, which joins states in the US and provinces in Canada in a "common approach to addressing climate change". British Columbia, which is also part of the Initiative, implemented a carbon tax in 2008. It started at $10/tonne and increased by $5 each year, as scheduled, to $30/tonne in 2012.
China – a pilot emissions trading scheme has begun in Shenzhen, a major hub with a population in excess of 10 million. It is one of seven pilot schemes planned by the Chinese government.
Japan – a mandatory cap-and-trade system started in Tokyo in 2010, administered by the Tokyo Metropolitan Government. It covers approximately 40 per cent of the city’s commercial carbon emissions and has reduced annual emissions by 23 per cent, according to a recent report.
New Zealand – began phasing in a trading scheme in 2008. Initially it covered 50 per cent of emissions and will increase to around 85 per cent, taking in waste, synthetic gases and agriculture.
South Korea – plans to begin an emissions trading scheme in 2015 which will cover the country’s 470 biggest polluters and 60 per cent of all greenhouse gas emissions.
California – a cap-and-trade system began in January 2013 in California, that, if it were a nation, claim to be the world's ninth-largest economy. When fully implemented, it will cover 85 per cent of the state’s carbon emissions. It has recently been linked with Quebec’s emissions trading scheme.
In his press conference, Abbott referenced Malcolm Turnbull’s remarks on last night’s episode of Q&A. Turnbull talked about Barack Obama’s recent speech on US climate change initiatives. "An Emissions Trading Scheme is not part of them," Turnbull said. "The measures he announced are more like the Coalition's policies, in fact."
Obama intends to regulate the amount of carbon emitted by the nation’s power plants, fund renewable energy and fortify vulnerable areas against storm and drought.
Turnbull’s assessment is fair enough, and we note that it's been given a 'correct' by our fellow fact-checkers at The Conversation, but it’s worth remembering that Obama only stepped away from a cap-and-trade system in 2010 because it could not pass Congress.
We asked Abbott’s office to provide us with further examples of where the world is moving away from carbon pricing, but did not get a response.
Richard Denniss, executive director of The Australia Institute, told us there was growing doubt over the European Union’s ETS, driven mainly by the price – which is diving rather than floating.
"A large number of NGOs have been critical of emissions trading in Europe, saying it’s not working," he said.
But that doesn’t mean the EU will be backing away from the scheme. Denniss said a floating or fixed price can be used in tandem with other measures to drive down emissions.
"It’s only politicians who say you have to choose between regulation and a carbon price."
John Wiseman, the deputy director of the Melbourne-based Sustainable Society Institute at the University of Melbourne, also disagrees with Abbott's assessment.
"The trend in key European countries like Germany, and in China and California, is to strengthen rather than reduce the effort to reduce fossil fuels," he said.
He also said the Obama plan is not entirely consistent with the Coalition's Direct Action policy, and contains a much stronger emphasis on regulation.
There is little doubt this debate will move on, and there will be changes in approach, from country to country.
The Economist has been skeptical of Europe’s system, although it supports emissions trading in principle. In April the European Parliament voted against a plan to take some carbon allowances off the market until demand increases.
The influential journal said that would make a global price harder to achieve, but noted that the trend toward carbon trading continues.
"Over the past few years more than a dozen countries and regions have followed the EU in establishing or proposing cap-and-trade schemes," it said.
The US will not implement a cap-and-trade system because it is politically too hard. The EU’s carbon price has plunged but could recover in tandem with global markets.
Does that mean the world is "moving away" from emissions trading? We think the evidence collated above indicates the opposite.
We rate Abbott’s statement False.
Published: Thursday, July 11, 2013 at 9:01 a.m.
ABC Q&A transcript, July 8, 2013
Carbon Tax Review and Carbon Tax Overview, British Columbia Ministry of Finance
ETS, RIP? The Economist, April 20, 2013
International examples of emissions trading, New Zealand climate change department
Phone interview with Richard Denniss, executive director of The Australia Institute on July 9, 2013
The Carbon Market, Quebec government
Tony Abbott press conference at Garlo’s Pies in Sydney, July 9, 2013
Update on Tokyo: Year two results from the world’s first urban cap-and-trade program, C40 Cities Blog, February 17, 2013
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PolitiFact Australia wants to help keep our politicians honest. We fact-check the accuracy of claims by elected officials and other influential people in the Australian political debate.
We research and rate statements with our Truth-O-Meter. Its goal is to reflect the relative accuracy of a statement. The meter has six ratings, in decreasing level of truthfulness:
TRUE - The statement is accurate and there's nothing significant missing.
MOSTLY TRUE - The statement is accurate but needs clarification or additional information.
HALF TRUE - The statement is partially accurate but leaves out important details or takes things out of context.
MOSTLY FALSE - The statement contains an element of truth but ignores critical facts that would give a different impression.
FALSE - The statement is not accurate.
PANTS ON FIRE - The statement is not accurate and makes a ridiculous claim.