SCIENCE AT THE SHINE DOME canberra 7 - 9 may 2008

Symposium: Dangerous Climate Change: Is it inevitable?

Friday, 9 May 2008

Mr Roger Beale
Senior Associate with The Allen Consulting Group
Former Australian Federal Environment Department Secretary

Roger Beale has a degree majoring in history and law from the University of Queensland, studied economics at the Australian National University and completed a Master of Industrial and Labour Relations (Economics) at Cornell University. He has broad experience at the most senior levels in national economic and environmental policy, as well as in corporate governance and leadership. He has been directly engaged with climate change policy since the early 90s. He was one of the chief negotiators at Kyoto and a lead author for the Intergovernmental Panel on Climate Change (IPCC) Working Group 3. Since joining Allen’s he has undertaken major climate projects for the Australian Government, state emissions trading schemes, BHP Billiton, and a major superannuation fund. More recently he was co-chair of the Population, Climate Change, Sustainability and Water Group at the Australia 2020 Summit. Roger was a Harkness Fellow from 1973 to 1975 and was made an Officer of the Order of Australia in 2006 in recognition of his contribution to national environmental policy.

The challenge to Australia

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I want to talk about some things that I see as close to inevitabilities, and how we are going to grapple with those.

Climate matters a lot to us, because we are already dry and our climate is variable, we rely on sectors that are very exposed to the climate, we have large subtropical and tropical settlements, many of our trading partners are in the great delta regions – you look at China and you look at where their economic engines are, and you realise they are in the deltas – and we already live in an arc of instability which is going to become more unstable as climate pressures add to others.

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Critical challenges: first, how do we encourage a global agreement that averts the worst risks of dangerous climate change? At the end of the day, this is going to have to be an agreement that is sufficiently global to get action from most of the major players, at least the top dozen, probably, and we are right on the edge of that top dozen. This is an issue, a problem of the commons, and there is a real risk of a prisoner's dilemma approach – in game theory terms – where we don't actually cooperate to create the sort of change that we need.

Domestically, we have got to work out how we transition from a carbon-intensive economy to one that is going to operate under carbon constraints.

And, finally, I think there is no question at all that we have to be mitigating and adapting. They are not alternatives.

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Talking about the global challenge: this is from the IPCC Working Group III report. (I was privileged to be a member of Working Group III.) What it really focuses on for us, what it does, is to link the global mean temperature increase to the year when, if we are going to achieve it, you need to peak global emissions and begin to turn them south, and then the total reductions by 2050 that you would expect to achieve. And I want to draw your attention particularly to the segments highlighted here in yellow.

Many people have talked about 2–2.4° as being a desirable objective. However, to have done that you need to have turned global emissions south before 2015. Even for 2.8–3.2°, where many of us would be pretty uncomfortable about the risks raised for eco-systems, human systems and for positive feedbacks to further climate change, the same thing has to happen by 2010–30. Let's translate that sort of global picture and ask: what does it mean for particular groups of countries?

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Now, 450 ppm, which is the first scenario here, is equivalent to 2–2.4°C increase. That requires a reduction, on average, for Annex 1 countries – countries like us – of -25 to -40 per cent in our emissions by 2020. It requires substantial deviation in Latin America, the Middle East, East Asia and centrally-planned Asia. And by 2050 you are talking about -80 to -95 per cent.

For 550 ppm, which is equivalent to 2.8–3.2°C, those numbers drop: only 10 to 30 per cent down on 1990 levels by 2020 for developed countries.

For 650 ppm, 3.2–4.0°C, at which point we're all getting very uncomfortable about the climate risks, for the developed countries you have still got to be somewhere back to or significantly less than 1990 levels by 2020.

Our business-as-usual projections, with all the measures we have in place, would see us pushing 110 or 120 per cent of 1990 levels by 2020 – in fact, a little more than that.

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I have just talked about the IPCC report, but we have just heard from a whole range of people who have suggested that maybe things are a bit more urgent. Everything we have seen has been at the top end of those bands, both with respect to climate sensitivity and in terms of the economic forecasts, which is more my interest, that underpin the growth in emissions. IPCC has perhaps not really captured what is going to happen in China and India.

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As I said earlier, this is essentially a problem of the global commons. It will need a global solution.

I was one of the negotiators of the Kyoto Protocol, and it was much easier, if the world wanted a consensus, for Australia to negotiate hard and get a comfortable target than it will be for us to move the big players to take on board more ambitious emissions reductions targets.

We have got to move beyond the 'canny negotiator' role, which is what I would call our Kyoto approach – it was disappointing that we then failed to actually ratify the protocol that we had helped to create – to actually helping to build the confidence it will require to secure agreement at a global level. To do that, we really have to come to the negotiations with 'clean hands'. We have to demonstrate our bona fides by taking domestic approaches to reducing emissions as well as urging others to do so.

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Ross Garnaut has recommended 'contraction and convergence' as a framework that might get global agreement. This essentially says we have got to reduce our per capita emissions globally, but we have got to do it in a way that sees equal emissions entitlement per capita, at some stage during the century, at a much lower level. This gives room for developing countries to increase per capita emissions up until they equal those of low-emission developed countries.

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Garnaut, in his interim report, had this illustrative scenario. The key thing to note there is that the top line, which is the US and Australian per capita emissions, has to decline much more rapidly than is the case for other countries. China gets to grow for a while, but relatively soon has itself to begin to decline, whereas India has an opportunity for growth in per capita emissions for an extended period of time. Those things are quite relevant to how possible it is going to be to negotiate a deal on this basis.

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This framework obviously has some advantages. It recognises where we are now, it reflects population growth, allows for flexibility and addresses equity arguments.

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But it has got some big disadvantages as the basis of a text for treaty. The biggest is that it requires a long-term commitment from big players like China and the US that says, 'Well, we are going to see India growing in relative terms.' It requires the US to make room for China – including possibly through welfare transfers underpinned by emissions trading. If you consider the likely power contention between China the US and India over the time ahead, I find it implausible that they will agree to commit now to something that looks like a shift in relative welfare on this scale – US to China and India, China to India. No matter how moral or desirable, I find it hard to see these welfare transfers being explicitly agreed to through a treaty framework that baldly sets it out for all (including in particular the domestic political audience in the US) to see.

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Where are we more likely to end up? A long-term aspirational goal on stabilisation levels I think is probably doable, as are medium-term emissions reduction targets for developed countries, say set for 2020/2025, and an agreement on a graduation mechanism of some sort for developing countries that enables you to take into account per capita emissions and per capita GDP. And, frankly, I think you have got to have all technologies on the table. Just as we had discarded adaptation to some extent in the past, we have discarded nuclear as part of the solution here. I think we are just going to have to step beyond that. All of those technologies are going to have to be there. We will need adaptation as well as emissions mitigation.

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We have delayed our domestic adjustment too long. Remember, even if you were prepared to accept those higher stabilisation levels, you still required Australia to do a hell of a lot more than stabilising its emissions by 2020.

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The key issue is the target. Garnaut has suggested that medium-term targets to underpin the ETS [emissions trading scheme] should approximate the emissions budget likely to emerge from global negotiations. Well, if we took Ross's approach on contraction and convergence, that would suggest that we ought to fall faster and deeper than others. He has talked about a European target of -30 per cent by 2020. Do the maths: an equivalent per capita effort by Australia would give us a target of -18 to -20 per cent; that is allowing for somewhat higher population growth. But that is without any convergence – any of his idea that we actually have to decrease our per capita emissions faster than other countries. So the challenge, potentially, could be really quite dramatic.

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That is going to lead to some real political tensions. You have seen some of them already, in the negotiations with the New South Wales government over the impact this is going to have on the asset value of large slabs of our infrastructure if, as Garnaut suggests, there is no shareholder shock compensation. The costs could be high. I think the government is going to end up being very cautious. It is going to shelter the trade exposed in energy-intensive sectors; it is going to help the low-income people and help adjustment. But there are some real question marks there as well. The government will be cautious but at least it accepts the science, unlike some previous decision makers.

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Emissions trading is not going to be the full answer. Emissions trading is really good at getting new technologies off the shelf once they are there. It is not very good at addressing the market failure associated with investment in either pure science or the very early stages of commercialisation. So we really do need to press ahead on much more aggressive R&D support across a very broad portfolio, and to decide where we are going to be a global leader and we are going to be a fast follower.

We need to rethink domestic nuclear power, but hey, let's not talk about that now. Leave that issue until people are really concerned about climate change. And we need to tackle complementary areas like transport, which have so far received very little attention indeed.

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But as I think back to those big-picture tables and think about how likely it is that we will actually secure agreement from India, China, the US and others any time soon, I find myself – and perhaps I have spent too long in negotiating international agreements – pessimistic about our capacity to achieve stabilisation much below 535–590 ppm. And that is really 2.8–3.2°C. That puts us squarely in some of the higher-risk zones for temperature, drought, sea level, cyclone, severe weather and health.

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Fundamentally, that puts us in the 2–3° zone, where a lot is shown here in red. Almost all of the Great Barrier Reef is bleached every year; 80 per cent of Kakadu's freshwater wetlands are lost; we get changes to India's annual monsoon patterns, and severe droughts; we have the impact in sea-level rises expected to exponentially affect storm surge – think of the impacts of that on the Pearl River delta, the Yangzi, the Yellow River deltas, think about how those deltas drive a lot of our exports – and so on.

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So the adaptation challenge is real and unavoidable. We have got quite a good program under way; it needs to be jazzed up, invested in more heavily, and pursued with a greater sense of urgency. We are not seeing enough appreciation from businesses and local government on their needs to get across the issues in a way that enables them to manage the risks that they are going to face.

I am a director of a number of corporations, and it is surprising that it wasn't until I came on those boards that they actually focused on climate change. Yet some of them are major infrastructure companies that have very big assets that are very close to sea level.

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Finally, if we are addressing this problem at the regional level, which is what we need to do, we have to integrate adaptation and mitigation stresses. The climate impacts – temperature, water, severe weather et cetera – and the exposure of those lead to a potential impact, but in the same region you will have carbon prices, water prices, impacts through regulation, impacts from standards, and subsidies and grants, as well as through the rationing of things like water if we don't get the markets right.

That is going to lead to sensitivities. Exposure and sensitivity will combine to give you a potential regional impact. You will then have an unaided capacity to respond to that, which might be more or less. You will have some climate winners, you will have some ready adapters; then you are going to have a bunch of people who are climate vulnerable or who are veiled winners, but where you need policy to intervene to actually help support their action.

You could actually write this larger. You could write this for our entire region as well. We need to be thinking not just about the Commonwealth of Australia, but about where we sit in the world.

Thank you very much.

Discussion

Question (Neil Hamilton): Roger, I would like to inject a slight note of caution into your use of the global average figures to provide an indication of what Australia should do. One of the difficulties of that is that the devil is in the region, and it is not just the Australian region. I pointed out this morning that global averages have no meaning whatsoever in the Arctic. We are already over 2° in the Arctic, and the global feedbacks from those regional changes that are not captured within the summary figures that are commonly used in policy making have regional and global implications. It is very important that we understand, in fact, what a global 5°…[inaudible]

Roger Beale: It's 9°, if you're in Greenland. I understand that entirely.

Question (cont.): Right, but it has important implications for Australia, as well.

Roger Beale: It is up to 8°, and 9° if you are in the centre. There is no doubt about that at all. But I was not saying what Australia should do, when talking about those global temperature mean outcomes. I was talking about what I think is likely to happen, and Australia has to operate within the context of what we believe we can sensibly expect to achieve with our relatively modest influence. I know we say we punch above our weight, but it is much easier to punch above your weight when you are defending your own corner than when you are actually trying to move the giants. And so, from my point of view, we just have to also plan for the fact that, unless the US picks up the baton in a huge way and manages to do it jointly with China, we are in for some extremely difficult times.

Question (Graham Farquhar): Roger, thanks very much.

Roger Beale: This question is coming from another member of the Kyoto delegation, by the way.

Question (cont.): I want to be a bit of a lone voice here and say that I am a bit concerned about one phrase that you used. I am sure you would qualify it in other fora, but when you said, 'The government accepts the science,' I really think it is important, especially in the Academy of Science, that we recognise that there are still many issues that are unresolved, many important issues, basic issues to do with climate science, that are unresolved. So I am a bit concerned when we hear phrases like that, that the government accepts 'the science', as if it is a single block.

I commend the presentation that Neville Nicholls gave this morning, when he was very frank about how far we had to go to really understand rainfall patterns in Australia, and they are obviously vital to us. But there is such a range of issues that I could run through very quickly where there are uncertainties, and we must not lose sight of that. We mustn't lose sight of it. I say this in your session because you are an influential man and it is really important to influence the government to support basic research in this area, right back to the very greenhouse effect itself.

For example, the downward long-wave radiation record that we have got in Australia is very short, but it is actually getting less rather than greater. There are all sorts of very fundamental issues of basic science that we need to fund, we need to have good observations continuing, and so on.

So I am just concerned when I hear, 'The government accepts the science.'

Roger Beale: Can I just say that I agree with you entirely. 'The science' is all of the science. And that includes the diversity, variety and uncertainty in the science. We can't say, 'The science is all done and dusted, off we go.' But I would say two other things.

Firstly, we cannot allow – given the weight of evidence that is accumulating – the fact of those uncertainties on many dimensions to stop us from beginning to take action of a serious nature.

Secondly, our strategies have got to be act-learn-act strategies, so decisions have to be made in a robust decision making framework to allow us to preserve options for the future, decisions that don't burn bridges before we get to them but allow us to continually refine and respond to the science. And yes, we should support the science as actively as we did before.

Michael Dopita: I would like to add to the previous point that I think we have all been very disturbed to hear reports of the Bureau of Meteorology's monitoring networks being cut back still further, at precisely the time when we need higher-resolution, continuous monitoring across the Australian continent and the Southern Ocean.

Roger Beale: And Geoff Love [Director of Meteorology] would be extremely disappointed if I didn't join you in that sentiment.

Question: Roger, in a literal sense the proposal you put forward is actually a strategy for disaster. The reason for saying that is that the material we had early in the session indicated that we are already in a period of dangerous climate change, and so what is happening is that because of the Realpolitik as you understand it – and of course I understand how you come to understand it, you are saying, 'Well, we can't do better than that so we will have to start looking at 450 ppm and perhaps we might be ending up in the 500 ppm et cetera level.'

Can I suggest an alternative approach? I totally understand the limitations on politics as things currently stand. You would have to be a fool not to see that, and hopefully I am not that much of a fool. But it seems to me that we can't also advocate a policy for disaster, which is literally, technically, what you are putting forward. Therefore it seems to me we need to at least have a two-pronged strategy. We need to keep working within the limits as they currently stand, and do the best we can day to day, minute by minute, with the negotiations. But also I think we need to step back and say, 'Why don't we actually start working for a safe climate? Why don't we actually ask the scientists what it would take to specify what a safe climate would be?'

For example, can you have a safe climate without having the Arctic ice? I suspect not. I have not heard of any scientist who thinks it is a safe thing to do, to be absent the Arctic ice in the summertime. If that is true, then you can, in a sense, fairly simply say that at least we know that whatever conditions are required to restore the Arctic ice are something to do with the definition of a safe climate. Then somebody will say to you, 'Well, how do you achieve that?' and you can start to spell it out. And you soon find that you have got a devil of a job to actually solve the problem, but it is no more difficult, in a sense, than the problem that you are already talking about, a 90 per cent reduction in Australia. But if we don't directly address the actual issue of achieving a safe climate, then we constantly get ourselves drawn back into unfortunate and literally disastrous compromises.

Roger Beale: I must admit my proposal (if it was a proposal) was that we need to plan, at least so far as adaptation is concerned, on the expectation that the dismal outlook will actually happen – because if we failed to encompass that, I think we would be not adopting a prudent risk management strategy. However I did not say we should not be trying to do what we can to move global agreement forward - to chart us into safer waters.

Question (cont.): Not 'safer', safe. Our children need a safe future.

Roger Beale: 'Safe' if you wish. I am simply saying that I have got a lot of experience in this, and I think the selfish genes…[inaudible]

Question (cont.): I've got an 8-year-old and I've got a 14-year-old, and they need a safe future, not safer. What's happened is that people have been trying to avoid catastrophic, dangerous climate change. In order to untangle the politics, people have said, 'Okay, we know that disaster, catastrophe, is dangerous. Therefore we have to avoid that.' But politicians then say, 'Oh right, that means we can go to 550, which is a bit less than 650.' That is dangerous. By chasing the 'safer', as in less dangerous, we simply don't have our eye on what would actually be safe. Therefore the research on how to do it is not done.

Roger Beale: I wasn't suggesting that we chase the safer. I think we would be foolish, however, to ignore the possibility that this is where we come out. And we would be equally derelict in our responsibilities to our children if we failed to act on things that we can affect – which adaptation is part of – domestically. Having said that, I believe it is very important that people like you continue to argue for this first-best of all of the best possible worlds.

Michael Dopita: I think I must cut that off at this point. It is clear that we have to have activists – and I think that is what Roger was saying – who provide the impetus, who motivate public opinion, because public opinion is what then motivates, ultimately, governments to produce policy. Politics is the art of the possible, but we do know that if we don't succeed there, if we end up having abandoned diplomacy, the alternative is indeed war. And I think that war is a serious issue that we might be looking at in the longer term, in the global fight for resources.

But we won't solve this very complex issue here, and I think that Roger has put forward a very sensible approach to applying the issues in the political dimension. I think that we should thank Roger for his speech.