“Labor’s emissions trading scheme” was the headline the AFR’s editors slapped on an account of the climate policy released by Labor this morning. It was a peculiar description given the article by Phil Coorey didn’t once mention emissions trading.
A charitable interpretation is that the economic rationalists in charge of the Fin cling to the view that an emissions trading scheme is the most economically efficient and lowest-cost means of reducing carbon emissions, and were engaging in wishful thinking that Labor would bravely go to another election with such a policy.
Alas, it’s not to be. There’s no emissions trading scheme here, at least not a meaningful one. Labor proposes to extend the government’s pissweak (to be generous) “Safeguard Mechanism” which purports to threaten a tiny number of companies with absolutely no consequences if they exceed the ridiculously high average industry emission levels. Labor will increase the number of companies affected — from its current number of around 140 — by lowering the emissions threshold at which it applies, but will also allow them to carry over credits for undershooting the industry average, sell those to firms that overshoot, and allow the latter to buy cheap international credits.
But as the number of firms caught indicates, this isn’t much of an “emissions trading scheme”. For a start, the energy sector, which is 52% of Australia’s emissions, isn’t subject to it. So, scratch more than half of our emissions. Next, the agriculture sector, which is responsible for 14-15% of emissions depending on conditions, isn’t subject to it either. So, scratch two-thirds of emissions. And when it comes to transport, which is Australia’s second-biggest source of emissions, around half of that sector’s emissions, or about 9.5% of all emissions, comes from passenger vehicles. So scratch three-quarters of all emissions.
But wait, there’s more: Labor will also give special treatment to “emissions intensive trade exposed sectors (EITEs), such as steel, aluminium and cement.”
Apart from being trade-exposed and massive and astonishingly inefficient users of energy, those industries are also our most heavily protected and represent a deeply unhealthy intersection of union power (via the AWU and the AMWU), business self-interest and state and federal economic nationalism on both sides. EITEs, famously, got a sweet deal under all of the iterations of Labor’s emissions abatement schemes when in government.
So to the extent that there’s anything resembling a trading scheme of any kind, it’s going to apply to perhaps a fifth of Australia’s emissions, and pretty much none of our biggest sources of them. Instead, Labor has a policy patchwork approach. The energy sector policy centres on several billion dollars in extra funding for renewables and returning to the National Energy Guarantee when the Coalition sees reason on energy (stop laughing). There’s to be an electric vehicle target, backed up with government fleet purchases and incentives for business fleet purchases, plus the introduction of vehicle emission standards, where Australia is a shocking laggard internationally. There’ll be a return to proper restrictions on land-clearing. The government’s ineffably silly Soil Magic handout scheme will be scrapped for a more rigorous Carbon Farming Initiative.
Back when the Gillard government announced its carbon pricing scheme, it had some of the same flaws as Kevin Rudd’s Carbon Pollution Reduction Scheme — like indulging inefficient EITEs — but was buttressed with supporting measures extracted by the Greens like extra investment in renewables (that was the origin of the Clean Energy Finance Corporation) as well as existing measures like the Renewable Energy Target. Ideally, a comprehensive economy-wide carbon pricing scheme should have made such add-ons redundant, but we were never going to get that, so the add-ons became crucial.
Under Labor, there’ll be nothing but the add-ons; there is only the buttressing, not the actual structure. The party that bravely took another emissions trading scheme (one for energy, another for the rest of the economy) to the 2016 election has retreated to a patchwork of sector-specific policies.
Undoubtedly it represents a significant improvement on the non-policy of a climate denialist Coalition, and in service of more realistic emissions abatement targets than the Abbott-era ones Scott Morrison has committed to. But it’s still policy Australian-style, with vested interests, key donors and favoured sectors looked after.
“Undoubtedly it represents a significant improvement on the non-policy of a climate denialist Coalition“
Crazy brave to try and do more from opposition. The LNP will bag it as going too far and the opportunists on the far left will bagbir for doinfvtoo little.
Memo to the latter. You can’t legislate for anything from opposition
Spot on John – get hold of the levers first, get some progress started, then do the hard yards of selling the desperately needed hard changes.
+1 – Politics is the art of the achievable…not the wishful or wistful.
Agreed Fairmind. A fly in the ointment will be The Greens as they were last time Labor were in government with their all or nothing intransigence.
Sorry, but that is untrue. Gillard was able to successfully work with the entire Crossbench-& Senate-to get a much braver policy than Rudd was pushing for-& that includes the Greens. The simple fact of the matter is that Rudd’s ETS was worse than nothing, & more aimed at getting the Coalition on-board than The Greens.
Also, Greens didn’t take an “all or nothing” approach-that’s just typical pro-Rudd propaganda. Greens were prepared to accept the bill with merely 3 modest changes-increased compensation for individuals, reduced compensation for polluters & a floating rather than fixed emissions reduction target. Rudd arrogantly ignored every one of these amendments.
No, Gillard was forced to take that approach by the Greens as the price of their support for minority government, and it was hung around her government’s neck with the “Ju-LIAR” epithet for 3 years, and helped ensure a backlash because it was seen as a policy without a mandate from the voters.
Maybe they are taking a practical approach, devising a scheme that they have some hope of getting through the senate.
Though it is disappointing.
Dear Bernard,
Labor needs to win the election. What is the immediate attack from the Coalition on? A supposed Carbon Tax. Of course the Greens will have a ‘better policy’ but they won’t get elected. For heavens sake, be realistic. Your bias is disturbing.
If Labor gets applause for the “bravery” of some of their economic policies before an election, then shouldn’t they also be jeered when they go cowardly on Emissions policy?
Yes
Describing cowardly, is a subjective opinion.
How many times do Labor apologists trot this one out, not just on climate, but on, well, everything. It’s what’s brought us to the situation we’re in now, after decades of retreat before neoliberal lunacy and xenophobic nastiness. Because what always comes next is:
i) if labor lose: ‘we were too radical; let’s be even more pleasing to Rupert & co next time’
ii) if labor wins: ‘we got elected by promising not to do anything much; let’s build trust by not doing anything much so we don’t lose the next election, then we can do things’ (rinse and repeat)
iii) if labor wins and then loses: ‘it was all those crazy greens’ fault for making us do things’. (I admit that this is a new variation, but the labor hacks have repeated it so often it feels old already.)
Almost like you’re a fly on the wall of the Black Lubyanka of SussexSt where political parasites & apparatchik apologists get their riding instructions.
Less rinse & repeat than piss on the Deluded Believers from a great height.
When we’ve had executives of a number of major fossil fuel companies including BHP request a carbon tax I suggest Labor are running unnecessarily scared on the issue. Certainly looks like a majority of the population is over the absolute chaos of LNP climate policy and now realise that the only time Australia was reducing emissions and gaining credibility on world stage was during Julia’s sorta “carbon tax”. To my way of thinking it far better to have those companies pay a tax here than buy a credit from an overseas corporate.
And what happened in 2016, Bernard?
Press gallery types took a look at Labor’s emissions trading scheme policy, and the Coalition’s non-existent policy with a “trust Malcolm to sort it after the election” wink wink, and clamoured for Malcolm. How did that turn out?
Let’s get the ALP into office, get the ball rolling, and take it up from there instead of continually shitting on the ALP for trying to manage the possible, instead of the ideal-but-impossible, an act which only makes the “possible” even weaker.
As I said this morning, the Greens COULD have taken the high road and said something like “This is much better than the government’s offering, although we as the Greens would prefer it be taken further because we need to do more”, instead they went the low road and slammed it as a “dog’s breakfast” because the Greens are more interested in complaining and taking inner city votes off Labor than actually improving government policy. Well, you also went the low road. Maybe you too are more interested in complaining.