While Australia's political leadership is confused about the direction the rest of the world is taking on Global Warming, the rest of the world is getting serious about it. ''There is no sign - no sign - that trading schemes are increasingly being adopted. If anything trading schemes are being discarded, not adopted,'' said PM Tony Abbott while in Canada recently. In fact, the World Bank reports that eight new carbon markets opened in 2013: California Cap-and-Trade Program, Quebec Cap-and-Trade System, Kazakhstan Emissions Trading Scheme, and five Chinese pilot emissions trading schemes (Shenzhen, Shanghai, Beijing, Guangdong, and Tianjin). And new carbon taxes were introduced in Mexico and France this past year. But the big news is that the three biggest emitters of greenhouse gases last week made game-changing moves on climate. China – Emitter No. 1 – announced it will set an absolute cap on its emissions from 2016. Setting an absolute cap instead of pegging them to the level of economic growth means they will be more tightly regulated, reports Reuters. China is now the second largest carbon market in the world. In America – Emitter No. 2 - the EPA announced a national standard to cut carbon emissions from coal fired power plants. US states can join cap-and-trade programs, building on the 10 states with market-based mechanisms, or start their own. In India – Emitter No. 3 - the people just elected as Prime Minister Narendra Modi, who pioneered incentives for large-scale solar power. He wants to use solar technology to supply electricity to 400 million people in India who do not have power.
These events make a new global climate treaty in Paris in December 2015 more likely. This will set dominoes falling in Australia which has set itself higher targets should the rest of the world fall into line, which now seems likely. We have already promised to reduce emissions by 5% of 2000 levels by 2020. The target increases to 15% if there is an international agreement where developing economies commit to reduce emissions and advanced economies take on commitments like Australia’s. China and India are classified as ‘developing economies’. The target increases to 25% if there is comprehensive global action capable of stabilizing CO2 levels at 450ppm or lower.