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Bill Shorten can make Tony Abbott look silly on carbon pricing

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The first major policy decision from the new Labor Party leader Bill Shorten will likely be one that helps define his leadership: He has pledged to fight the new conservative government’s proposed repeal of the carbon price, and he should have plenty of ammunition to do it.

Tony Abbott has only been in power for a little over a month, but he is already looking increasingly isolated – both on his home turf and in the international arena – in his stubborn insistence on repealing a market price for carbon.

Somehow, the new conservative government imagines itself being a major international player -  using its rotating presidency of the G20 to bring China and the US to the table and thrash out a long term climate treaty.

But to achieve that it needs credibility: and becoming the first government in the world to end a carbon price, and possibly the first in the world to reduce a renewable energy target, means it will have none.

So far, the new government has failed to move beyond election sloganeering and is  struggling to produce any other coherent argument to support the move. Even today, Environment Minister Greg Hunt could find no other justification for repealing other than to say that Abbott had said he would.

The decision by Shorten to stick to the party’s signature policy means that the Coalition will have to rely on a rag-tag group of independent senators who will sit in the Senate from July next year, and whose support will likely be subject to a range of eccentric and self-interested outcomes.

Critically, there is no certainty that the substitute policy, Direct Action and an emissions buyout fund, will be approved by the Senate, given that the minorities – and many within the Liberal and National Parties – don’t accept their science of climate change.

That creates the bizarre and untenable scenario that Australia seek to broker a deal between China and the US on the importance of climate action while having no policy of its own.  Climate policy and carbon pricing is not Labor’s Achilles Heel, it is most certainly Abbott’s.

In just the past week, the world’s major international economic institutions have lined up firmly in favour of a carbon price. China, Australia’s biggest trading partner, is headed down the same path.

The OECD says consistent carbon pricing must be the cornerstone of government actions to tackle climate change. “In our view, any policy response to climate change by any country must have at its core a plan to steadily make carbon emissions more expensive while, at the same time, judiciously giving non-fossil energy and energy efficiency an advantage at the margin. This is fundamental,” said Angel Gurria, the secretary of the OECD.

The OECD’s position was supported by both the International Monetary Fund and the World bank. IMF chief Christine Lagarde said the key to addressing the problem is to “get the pricing right” and to gradually phase out and remove energy subsidies that amount to $485 billion globally. “If the price of fossil fuel is right – because it incorporates the negative externalities (a carbon price) – then it encourages investment in cleaner fuels without the need for subsidies,” she said.

Even the World Bank president Jim Yong Kim weighed in, saying that technology developments have improved so much that economies were capable of both robust growth and a low carbon future. This last bit is critical, because the only person the Coalition can find to support its policy is the “climate confusionist” Bjorn Lomborg, who contends that there is no technology that can cheaply reduce the use of fossil fuels and cut emissions. It is a position that is hopeless out of date.

China, Australia’s biggest trading partner, recognizes the truth of this and is implementing trial schemes for carbon pricing in preparation for a national scheme as early as 2020. A survey by the Australian National University suggests that China will have introduced a nationwide emissions trading scheme (ETS) and a carbon tax by the end of the decade.

The Australian government should not doubt the ambition of this, because China has also made clear that it will put a cap on coal consumption that will be equivalent to even the most ambitious climate reduction targets envisaged by the IEA and the UN. If asked how Australia would move its commitment beyond a 5% per cent target, the new government simply has no answer.

As the Climate Institute’s John Connor said today: “Australia’s minimum 5 per cent target is not a fair contribution to avoiding dangerous climate change. The United States, for instance, is targeting around a 20 per cent reduction in emissions by 2020 and China is putting in place carbon prices and limits to drive an industrial clean energy future. That is a lot more than we’d be doing under the Government’s policy.”

It should be remembered that the US leadership also supports carbon pricing, but is only prevented from doing so by the extreme right of the Republican Party, the Tea Party nut cases, and those that owe their position to backing from the fossil fuel industry. It is from these ultra conservative groupings, and their local equivalents in his own party, Australia business and the media, that Abbott takes his cue.

The Coalition government will try to bully its repeal through the parliament, but without the support of Labor will have to count on the support of minority parties in the new Senate.

The Palmer United Party, according to The Australian today, says the support of its three Senators will be dependent on the government refunding revenue from the carbon tax to all polluters and households. Palmer’s Queensland Nickel is currently fighting a $6.2 million charge from the clean Energy Regulator after refusing to pay its share of the carbon tax in the last financial year.

The other noticeable weakness in Abbott’s climate plan is that it has already brought two key elements of Australia’s low carbon economy to a complete halt.

Investment in large scale renewables has been suspended while the industry waits for the government to deliver on its promise to review the renewable energy target yet again. That review will not start till next year and may not be finished for another 12 months.

The renewables industry is trying to short-circuit that delay, but that will likely involve major concessions to the fossil fuel industry, including possible buyouts of coal-fired capacity that a new report from UNSW says will be counter-productive.

The other key element that is grinding to a halt is new investment in carbon abatements. Rather doing it as part of a broader market signal (via a carbon price) the companies are now downing tools and ceasing new commitments to projects to wait and see if they can qualify for a government handout from the emissions reduction fund. As pointed out last week, this goes to the very question of “additionally” – i.e. will the Coalition hand out money simply to companies who would be doing stuff anyway. If so, it is pointless.

In the narrow prism of self-interest that governs the actions of Australia’s major business lobby groups, that may be a satisfactory outcome.  But in the international sense, it may mean that Abbott has to continue his “apology tour” a little while longer. He may regret is pledge to ‘axe the tax’ more than any other of his three-word slogans.

Even the Daily Telegraph editorialised today in support of a market based mechanism, contradicting its most rabid commentators such as Andrew Bolt, Miranda Devine and terry McCrann, accepting that the IPCC report showed that “there is almost no doubt that climate change is occurring, and very little (doubt) that human activity is a contributor.”

The key, said the Tele, “is to facilitate a market-based mechanism which does not punish producers at a delicate time for our economy but rather enhances competition and encourages new technologies that in time can deliver clean and affordable electricity for consumers.”

We already have one of those, and Shorten has plenty of ammunition to make the case to keep it.

 

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  • Keith

    Nice summary Giles,
    I note that in Sydney the weather also seems to be making things difficult for climate denial (which in the lead up to the election Tony Abbott once again aligned himself with.. his 3 reasons for not worrying about climate change being i) Copeghagen failed; ii) the drought has broken; iii) the science is in question???). 43 cars up in flames in suburban Sydney is a hint of the coming summer. I wouldn’t underestimate community understanding that it is a time to act, not to dismantle a whole range of well targeted programs.

  • willowbel .

    can people not see that carbon is NOT the cause on climate change, look towards the sky people where does the heat come from! you cant tell me that with what we as humans put into the earths atmosphere is the cause..just think about how much the oceans and volocano’s put into the atmosphere then line that up with what humans put in the atmosphere and I can assure you, our contribution is a drop in the ocean to what volcano’s and oceans spew out!! Wake up and see the figures WE CAN NOT BEAT THIS..climate change is a natural process, humans seem to think that the earth and its 4 season have to reamin constant EVERY YEAR..life does not work that way, its a natural cycle and it wont cause any destruction on us or the earth!!

    • David Hamilton

      Willowbel, I think that what you are saying is that the earth is so huge, that humans cannot possibly be influencing the climate of a whole planet. I wish that were true, but alas it is not. I will try to explain.

      Firstly, there is no doubt that additional carbon dioxide in the atmosphere traps additional heat in the atmosphere. I studied atmospheric physics at the University of Adelaide in 1974, and the staff of the Physics Department had no doubt about carbon dioxide’s heating role – that physics had already been known and agreed for decades.

      So the carbon dioxide we are putting into the atmosphere traps just a bit more heat – so what? This is an example of a small change to a system that had been in balance, and to illustrate it I will draw on an analogy used by the late Stephen Schneider. Imagine a water tank with a large pipe going into it, and a large pipe going out from it. Somewhere between 1500 and 2000 liters of water an hour pour into the tank, and exactly the same amount of water leaves the tank. The level in the tank does not change – it is in dynamic equilibrium. Now a person walks up to the tank and starts running a hose into it. The hose delivers about half a litre of water an hour into the tank; nothing else changes. What will happen? The level in the tank will rise. Not fast – but it will rise; and while nothing changes, the rise will not stop.

      If you substitute heat for the water and the extra hose the extra heat from our additional carbon dioxide, you can see that a small change to a system that was previously in balance (heat arriving at and leaving the earth used to be in balance) will inevitably change it – and that is what is happening.

    • Keith

      Willowbel,
      On your analysis the earth is also flat (hard to see the curvature).

      Are you so unaware of the huge amount of science that your ignorance is genuine naivety? If so, there is so much material available that you should get up to speed quickly on the basic facts, which are not in dispute. (eg See David Hamilton’s explanation). Burning fossil fuel and releasing CO2 IS causing global warming.

      Or are you just a troll trying to confuse? I suspect the latter.

      Wake up, your life is at stake too.

    • RobS

      The fact that you think the Oceans “spew out” CO2 when in fact they are an enormous carbon sink tells me all we need to know about your degree of understanding of the issue.

      • willowbel .

        The oceans capture around 30 per cent of human carbon dioxide emissions and hide it in their depths. This slows the march of global warming somewhat. But climate records from the end of the last ice age show that as temperatures climb, the trend reverses and the oceans emit CO2, which exacerbates warming. And this just shows how little you study on the issue!!

    • GlennTamblyn

      willowbel

      ” look towards the sky people where does the heat come from!”

      From a Sun that has been cooling slightly over the last few decades.

      “just think about how much the oceans and volocano’s put into the
      atmosphere then line that up with what humans put in the atmosphere and I
      can assure you, our contribution is a drop in the ocean to what
      volcano’s and oceans spew out!!”

      Nope! According to the US Geological Survey (I think they know a bit about geology) Human emissions of CO2 are around 130 times greater than emissions from volcanoes. And the oceans are net absorbers of CO2, not emitters. We know how much CO2 humanity has added to the atmosphere – we have the economic statistics for coal oil and gas burned. We thus know that we are the source of the extra CO2.

    • Elizabeth66

      Willow bell, you are one of the ignorant people who voted for the Coalition government and now the country’s industries don’t work, people will be out of a job. It’s people like you who think like this, who will make our country so fabulouś to live in for the next few years. Enjoy the frying pan!

  • Chris Fraser

    Lol ! Well … he did make his pledge in blood, didn’t he ? We only have until July 2014 for that gem to come back, so for now we sit back and enjoy showtime ! Soon we’ll learn that a price on carbon will allow us to join the developed (and developing) world … and Direct Action only complementary to a carbon price.

  • suthnsun

    You have more respect for Abbott and Hunt than I Giles “He may regret is pledge to ‘axe the tax’ more than any other of his three-word slogans.”
    I think they are just playing a power game with no thought of the future, the wellbeing of people or other species, with no intention of being captive to ‘weak’ emotions like regret, conscience, ethics or decency and they will keep playing it that way. He started on this path with conscious intent from the beginning..

  • RobS

    I don’t see how it makes Abbott look silly, he campaigned openly and clearly on the policy, doing anything but repealing it would be the thing that would make Abbott look silly. The ones looking silly when it’s repealed will be those who voted for Abbott and by association all Australians in the world community’s eyes.

    • Venetta Lee

      Australia already looks silly for electing a climate change denier in the face of overwhelming evidence to the contrary, The fact that that evidence is rapidly becoming a tsunami just makes is worse. He needs to Man UP and admit they were wrong and do the right thing.

  • Ken Fabian

    Abbott is vulnerable on climate change although evidence of mainstream journalism having any real interest in pressing him or his team on the clear and obvious lies they tell – like claiming to accept mainstream science – is lacking. They could ask Abbott pointed questions about Ian Plimer or Joyce about Bob Carter and see if they can bring themselves to tell the Australian public to reject those rejectors of climate science and urge the community to take the IPCC and CSIRO and BoM seriously.

    It seems very likely they will unable to bring themselves to defend Australia’s or the world’s Climate Scientists and they won’t be able to help but to jump to the defense of their pet climate science manglers and slanderers. Of course it takes journalists who have done their homework.

    Too many Conservative politicians on Abbott’s team have not merely tolerated deliberate campaigns to undermine community trust in science on climate, but have actively participated in promoting egregious falsehoods to prevent Australia uniting in effort to address the problem head on.

  • Terry J Wall

    Everyone knows that trees are the answer because they are cheap to action and have so many life supporting of advantages, BUT
    How does a corporation make money out of it? IT DOESN’T!

    How do we monitor it? USE KNOWN inexpensive SATELLITE measuring technology.
    How do we enforce it? LEASE THE SE-QUESTED CARBON on a month by month basis; tied to a cash card. Trees get cut down, no lease payment. Trees grow fast; more dollars. Too easy eh

    Prime Minister Abbott is onto it – the man is a genius! Hopefully!