The ten-year battle over how Australia addresses climate change is now concluded, and taxpayers, and the economy, are the losers.
Labor’s energy policy for the coming election entirely abandons market-based mechanisms for reducing carbon emissions, in favour of taxpayer investment in additional generation and transmission capacity and household-level storage. The Clean Energy Finance Corporation will be the vehicle for additional capacity investment, accompanied by a miniature version of the Greens’ 2016 storage subsidy policy: $200 million program for batteries in 100,000 homes, designed to accelerate the growth of battery production.
The CEFC will have the role of underwriting new power capacity in accordance with the ACCC’s recommendation to increase competitive pressure on the big three gentailers — which is the recommendation the Coalition is exploiting as a way to fund new coal-fired power stations and bind future parliaments to prevent any emissions abatement policies. The benefit of using the CEFC is that, unlike the Coalition’s desire to fund coal-fired power, Labor doesn’t need legislation to do it — it already exists.
Those government-funded programs will be the mechanisms to achieve Labor’s more realistic emissions reduction target of 45% reduction on 2005 levels by 2030 (compared to the Liberals’ hopeless, Abbott-era 26-28% target). There will be no market mechanism of any kind — no carbon tax, or emissions trading scheme, or emissions intensity scheme, or Clean Energy Target. Even the fifth-best regulation-based policy of Malcolm Turnbull, Scott Morrison and Josh Frydenberg, a national energy guarantee incorporating emissions targets, which was endorsed by the Coalition joint party room, won’t be embraced by Labor unless the opposition Coalition agrees to it after the election.
The climate denialist rump of the Coalition will thus continue to dictate policy even from the opposition their actions consigned them to. It’s a stunning achievement and brings to an end the policy war over climate action mechanisms that flared in the Liberal rebellion against Malcolm Turnbull in 2009. Abbott and co have won, even if they have now retreated to an even more extreme position of outright denialism of climate change at all.
It’s also a retreat by Labor from its 2016 position, when it gave the finger to both the commentariat and the Coalition by proposing not one but two emissions trading schemes — an intensity-based one for electricity producers and one for other industries. It was an act of signal policy bravery, in effect daring the Coalition and News Corp to run as big a scare campaign as they could; in the end, it played no role at all in the election outcome.
With Labor odds-on to win the coming election, there’s no big-target strategy this time, but an embrace of the kind of big-government, tax-and-spend ideology on emissions abatement Tony Abbott had the Liberals commit to in 2010. The government is already insisting that Labor’s higher targets will mean higher electricity costs for consumers, but in the absence of any kind of market mechanism from Labor, that logically can’t happen, not with renewable-based power now consistently cheaper than coal and gas. That won’t stop the government and Energy Minister Angus “The Invisible Man” Taylor, or the government’s allies at News Corp, from claiming it incessantly, but it’s taxpayers who will bear the cost of Labor’s emissions abatement, not consumers.
Oh, wait — they’re mostly the same thing. But voters don’t know that. They think governments spend, not taxpayers. That’s why in poll after poll, voters — even conservative voters — say they want governments to invest more in renewable energy, while being far more divided over market-based mechanisms like carbon prices and emissions trading schemes. They’re happier for tax dollars to be spent building renewable energy — a kind of victimless crime, as far as they can see — rather than the shift to renewable energy being done far more efficiently, and at much lower cost, via a market mechanism, which may lead to slightly higher prices for consumers. It’s a lesson in behavioural economics, really: voters prefer not to see they’re paying for something, even when they are, and paying more than they should.
Oddly, at a time when neoliberalism is being belted by even the Liberal party, a market mechanism to reduce carbon emission was a great example of neoliberalism fulfilling its promise: we had a carbon pricing scheme from 2012-14, it reduced emissions, and it did so even more cheaply than expected — far more cheaply than will happen after the next election, either way.
Look, its a bloody start. They can introduce a tax later. But if they ran on marrket-based plans now they’d get demolished by the Abbot “great big tax” line that was so damaging last time. Let them win an election and ramp things up from there.
At least they have a plan. It’s not a good plan, but it’s a lot better than the government’s got.
Hear hear!
I agree. The politics of the possible, as opposed to the politics of the preferable.
Totally agree with the above comments as well. Unfortunately Bernard has a tendency to let his Green Party bias overpower the logic section of his brain in these matters. We need to embrace what is currently achievable, and anything that vaguely smells of a carbon tax is still electoral poison. At least we’ll be driving down the correct highway for the first time in 6 years, even if we’re not doing so in the fast lane, and in a hybrid rather than a fully electric car.
Its not Green Party bias, Brian. He has shown himself to be all too enamoured of the Librorts Party. Who else but a rusted on Librorts supporter could call Gladys a competent premier?
Agreed. If the taxpayers hadn’t kept on voting for Abbott and Joyce’s scare campaigns they wouldn’t have to foot as big a bill. Unfortunately, Bernard, you continue to be more intrigued by how the politics are playing than actually seeing a major party make real progress on the most profound policy challenge of our time.
Well, Bernard, maybe if you & your mates hadn’t sided with Abbort against Gillard, then we’d still have a market based mechanism right now. It’s the ultra-biased media & the scare-mongering if the Librorts Party that has brought us to this pass. For all we know, Labor may well just be releasing the stuff they know cannot be misrepresented by biased journalists like yourself. Still, at least they HAVE a policy to deal with energy prices & emissions. Morriscum still has some pathetic thought bubble that may, in fact, be entirely illegal…..& which will have the very likely consequence of forcing smaller energy retailers out of business in the short term.
Why don’t you pick on the Greens Party for failing to back Labor on an ETS.
How about we pick on the *real* villains? The Far Right, Climate Change denying COALition Party, & their media sycophants. We had a perfectly good Carbon Pricing Scheme that was destroyed by rampant fear-mongering.
Good point jk
Because it was a job creation programme for spivs, crooks & third world despots?
Krudd refused all entreaties from the Greens which could have made it worthwhile – by making it into a carbon tax.
Precisely, AR. Krudd’s scheme was a total joke.
Too right AR. The ETS was a scam masquerading as a plan. Carbon tax should have been proposed first time and might still be going today if it was. Rudd used up all his political capital for no result.
Once Labor are at the helm they can be as extreme as they like with climate change & power policies.
The Greens will then have to support Shorten & Co because the alternative is too grim to contemplate (ie: the status quo).
That didn’t stop them the last time. If you remember the ETS, they voted for the status quo instead of any step in the right direction.
Here’s hoping they learnt the lesson from that.
lmao. oh for sure
No, the ETS was a step in the *wrong* direction. It was designed for the benefit of the Liberal Party, not the Greens-& definitely not the environment. Billions of dollars worth of free certificates for the worst polluters, little to no compensation for ordinary house-holders & an emissions reduction target that was fixed for years to come. Greens tried to negotiate, but Rudd was not for changing.
Somewhat disappointing that Labor are (apparently) not reinstating the ETS, which delivered the biggest emissions reductions for reasonable cost to the community.
It is nonetheless a true observation that using government revenues to pay for reform programs is somehow seen by many voters as a “no cost” option.
After all, the electorate totally bought Tony Abbott’s so-called “positive action” plan, without ever once considering where the funding was going to come from. They chose not to concern themselves over the cutbacks in government services that would inevitably be needed to pay for the program.
Yeah but labor never implemented an ETS. It was a carbon levy, which you rightly point out worked a treat.