The federal government wants to convince us that its new carbon price package creates a “clean energy future” for Australia. If you’re wading through Sunday’s avalanche of announcements in search of a clear policy signal to this effect, though, you won’t find it. The incentives in the package pull the economy in contradictory directions. But searching for policy coherence is a misguided exercise. It’s better to think of the package as the chaotic aftermath of the first real battle in a long war over the future composition of Australia’s economy and environment in a warming world.

I say the first real battle because, although various political parties and social groups have always held visions for our collective future that differ fundamentally from the political mainstream, the negotiations over the carbon package mark the first occasion in which such an alternative vision has been expressed through a political party with sufficient power to influence a major economic and environmental reform, at least at the federal level.

Until the Greens took the balance of power in the House of Representatives (along with some green-minded independents) and the Senate (in their own right) at the last election, the battle for Australia’s future was a one-sided bloodbath. Labor, the Coalition and Australia’s business and policy elite have long shared a basic commitment to the rapid and far-reaching expansion of fossil fuel consumption and production — for domestic use and for export — in Australia. During the “debate”, such as it was, over the Carbon Pollution Reduction Scheme, none of these parties or groups challenged this deep brown vision for Australia’s future. Rather, the issue was whether or not to give it a green-tinged veneer through the adoption of a weak emissions trading scheme so riddled with loopholes that its only notable effects would have been to entrench the fossil-fuelled status quo, waste more than $20 billion of taxpayers’ money in unjustified handouts to the biggest emitters, and distract from Labor’s commitment to double Australia’s coal exports over the next decade or so.

Unsurprisingly, Labor’s strategic commitment to a brown Australia has not changed in the 18 months since the demise of Kevin Rudd’s scheme. Before the last election, Prime Minister Gillard ran on a “no carbon tax” platform. She had to be dragged into carbon policy negotiations by the Greens as the price of their support to form government. Since they’ve been at the negotiating table, it is no secret that Labor has fought for: a low carbon price; an early switch to a cap and trade scheme with a low emissions reduction target of 5% below 2000 levels by 2020; ludicrously high compensation to the “big polluters” it now pretends to demonise; the exemption of petrol from the scheme; extensive reliance on less-secure land sector credits from the Carbon Farming Initiative; and insubstantial (if any) new complementary measures for renewable energy. Most importantly, Labor has maintained its commitment to allow Australian emitters to “outsource” their emission cuts (to rely on imported carbon credits from abatement activities in other countries, which are expected to be significantly cheaper than Australian carbon permits, to acquit their carbon liabilities) so they can keep polluting here.

The key difference this time is that the Greens were on the battlefield fighting for a different vision: a genuine clean energy future for Australia. They have, accordingly, fought for measures that would spark a structural transformation of the Australian economy: a well-designed carbon price scheme with a higher carbon price during the fixed price phase, as well as scientifically credible emissions targets and stringent caps on outsourcing during the cap-and-trade phase. They have also advocated investing the (necessarily higher) projected revenues from such a scheme into essential complementary measures to develop renewable energy industries, establish 21st-century infrastructure, improve our woefully poor energy efficiency record and conserve our natural environment and biodiversity.

In the resulting package, there is no clear winner. The mish-mash of carbon pricing, tax changes, grants schemes, investment bodies, commissions and inquiries reflects gains and losses on both sides.

Labor’s vision is more apparent in the carbon price mechanism itself — with the early switch to cap-and-trade based on the default 5% target that will allow extensive international and land sector offsets — and in the industry compensation package which, at more than $22 billion over the next six years alone (including the “government-only” measures for gassy coal mines) is arguably more wasteful than the CPRS. The Greens’ main mark on the scheme is evident from its governance arrangements — particularly an independent Climate Change Authority, which will recommend emissions targets, and Productivity Commission reviews of industry compensation and fuel tax arrangements. These innovations will enable, and build political pressure for, deeper cuts and less wasteful compensation in the future.

In the package of complementary measures, however, it is the Greens that have emerged ascendant. With a $10 billion clean energy investment corporation, a new agency to administer $3.2 billion worth of renewable energy grants, funding for a negotiated closure of 2 gigawatts of the dirtiest power plants, and a prohibition on using any of these agreed funds for carbon capture and storage projects, the Greens have peeled back the coal industry’s fig leaf and tipped the balance of low-emissions technology development in favour of renewables.

*Read the rest of this post at Inside Story.