If you believe the Fairfax press today, the Australian Labor Party appears poised to abandon its decade-long commitment to carbon pricing. After spending years building one of the world’s most comprehensive and sophisticated carbon pricing packages, it now seems ready to abandon it on the assumption that the best way to counter the new government’s seven-point Post-It note climate policy is to have no policy of its own.
That has a certain logic about it, resistible as it may be. The driving force behind the ALP’s internal machinations has nothing to do with the details of sound climate policy: it has everything to do with messaging, something it has been unable to master since Kevin Rudd attempted to thrust the CPRS on the nation in 2009. It’s inability to distinguish between a tax and a traded price has cost it power.
To believe the Fairfax story, Labor has now decided that its best prospects lie in hiding behind bushes and throwing stones at Abbott’s Green Army. And then it will pretend that it stands by carbon pricing as the best means for achieving an ambitious climate target, despite having ditched the idea at its convenience three times in the previous four years. And all this a day after a survey confirms that economists believe Direct Action to be an expensive absurdity, and a day before the Climate Change Authority releases its long-awaited emissions caps and targets report.
It’s not exactly clear that Fairfax has got this right. But those who have watched the Labor Right in action, even from within the ALP, will not be surprised at all if it comes to pass. Here’s some reasons why it might happen, and some why it won’t.
Here’s why Labor would do a back-flip on carbon pricing:
They are truly hopeless at the messaging on climate change. From the CPRS to the carbon tax, they have managed to shoot themselves in the foot even before raising the details of the policy above the parapet. Climate Change spokesman Mark Butler highlighted that confusion last week when he said Labor would support a repeal of the tax if it meant introducing a traded scheme. Australia already has one of those. Its starting date can be brought forward.
They are scared of slogans. The “axe the tax” and the “toxic tax” slogans have proved effective. Now Abbott’s team has produced “Electricity Bill”. He’s made it personal, and Shorten won’t stand for it. He’ll run instead.
The Labor right wing was disenfranchised by the Greens and wants to settle accounts. It has never truly embraced the idea of carbon pricing, and probably not even the science of climate change, but now that it is in power it can exact its revenge.
Business is putting enormous pressure on the ALP to allow the carbon price to be repealed before June 30, warning that it could lose out in the rhetoric over the chaos that would be caused if the carbon price was to extend beyond July 1 and the government introduced a “retrospective” bill. This is particularly true of the electricity industry. Labor may think that the dumber the Coalition policy, the more damage that is afflicted on the ALP.
It would be best to extract a compromise from the Coalition rather than leave that to “Carbon Clive” Palmer and his gang of four.
And here’s why they wouldn’t
Direct Action is still just a series of 7 dot-points on a piece of paper – or a series of post-it notes as one described it. It’s a small target, but it’s an un-missable one, and just the mere concept has no credibility among economists, apart from those who don’t accept that man has a role in the science, or that Australia should be doing something
The politics of 2014-16 will not be the same as the past three years. Action is again accelerating, the IPCC report appears to have had a powerful impact, China and the US are taking decisive action on coal-fired generation, and there is renewed momentum for an international deal to be sealed by Paris in 2015. The Abbott government, as we pointed out, can me made to look stupid on carbon pricing, given that China is moving to adopt it and that no credible economist who accepts the climate science thinks Direct Action is anything but a really dump and expensive idea.
The Climate Change Authority will release its caps and targets analysis on Wednesday. This will almost certainly recommend a 2020 emissions reduction target well beyond the reach of Direct Action, Abbott’s Green Army, and the emissions reduction fund. Labor could use the opportunity to talk of climate change policies in terms of actually addressing climate change, rather than aiming for the lowest common denominator.
Someone should sit down with Labor and explain electricity prices. The reduction of the carbon price will be barely visible given the ongoing increases in network costs and retail margins that will surely accompany the next set of price settings. Or they could make a virtue of rooftop solar and distributed generation before someone in the Coalition steals their thunder.
It would be such an historical cop out that Labor could, and would, never be trusted on the issue again. And it would reinforce its growing impression as an ineffective, politically pointless organisation that – despite the lessons of the past two terms – it remains obsessed with micro-politics.