The black hole in Tony Abbott’s frat party climate policy

It’s been a week full of insight into the future of Australian politics. First, Opposition leader Tony Abbott adds “sex appeal” to the CV of one of his leading candidates. Then he challenges Kevin Rudd “to be a man” and do what he did and put the Greens last on the ballot paper.

In Abbottville, to be a real bloke, you need to reject the “fringe” economic policies of the Greens, and plump instead for another minor party – presumably coal baron Clive Palmer, Bob Katter, the Shooters Party, or Pauline Hanson. As Tad Tietze writes in The Guardian, even micro-parties that flirt more or less openly with fascist policies, are “in principle” preferable to the Coalition than the Greens.

The emergence of “frat party” politics shouldn’t be a surprise to those who have read of Abbott’s student history and the circumstances of his rise to the leadership of the Coalition.

It was a political hat-trick borne out of the need of vested interests to kill the carbon price. It’s hard to find anyone who takes its proposed replacement policy, Direct Action, seriously – based as it is around one known constant – a 15,000 strong, litter-collecting green army. (Although, as Sydney Morning Herald cartoonist Alan Moir suggests, the green army could be put to other uses).

But, as the polls now suggest Abbott will form the next government – and may well be dependent on the “loony right” – the policy is worth a serious look. And the Climate Institute has done just that.

The TCI analysis – prepared by Monash University and SKM-MMA – reveals Direct Action to be what most suspected: a lot of hocus pocus that fails on just about every conceivable measure, the sort of policy designed by and for people who don’t actually believe in the science of climate change. Or as Climate Progress write today, for people who can’t stand the solution.

The analysis punctures several large holes in the Coalition’s rhetoric on Direct Action: it does not, as the Coalition claims, reduce Australian emissions; it would still rely on heavy purchases of international permits; it would be incredibly expensive; probably impractical; would provide an effective $50 billion subsidy to polluters; and would set the country at a massive competitive disadvantage in a low-carbon global economy.

The analysis suggests that Direct Action is simply not capable of reaching even the minimum 5 per cent reduction target – and would require an extra $4 billion by 2020 (on top of the $3.2 billion budgeted by the Coalition) to get there. Contrary to the Coalition’s claim, Australian emissions under Direct Action would rise 10 per cent, rather than fall. To reach the bipartisan upper cap of a 25 per cent emission reduction target – which depends on the scope of international action – would require a further $15 billion.

Over the longer term, the picture is even worse, as Malcolm Turnbull has warned previously. To meet 2050 targets would require an extra $88 billion, but still Australia’s emissions would be 45 per cent more than what they are now. “Australians would emit nearly three times the global average under 2°C climate scenarios under the Coalition’s modelled policies,” the report says.

Ironically, if the Coalition wants to meet its targets with Direct Action, it will likely have to reinforce some of the “complementary” policies it is trying to unravel. Not only would it have to spend taxpayer’s money on international permits, it would be forced to take other measures – such as raising the renewable energy target to 50 per cent by 2030 (rather than dilute it as its boosters hope it will), or set strict emissions standards that would force coal-fired power stations out of the market.

In effect, the survey is suggesting that Abbott would have to take the sort of action proposed by Barack Obama, setting absolute pollution caps on coal-fired power stations and the like. Obama admits that regulatory action is more expensive and less efficient, but the only way forward given the Tea Party Republicans won’t allow a carbon price. Abbott’s team, which takes its cue from the same think tanks that inform Tea Party rhetoric, is imposing its own restrictions – paying the price, in Abbott’s world, of being a real man.

This excerpt from TCI’s report is particularly damming of Direct Action:

“This (Direct Action) implicitly subsidises current emitting activities and does not create a broad-based incentive for firms and individuals to invest in low emission technologies and behaviours.

“Using a similar approach to that used by the International Monetary Fund, which factors in a conservative estimate of the climate damage of every tonne emitted, The Climate Institute calculates that this subsidy equates to around $50 billion to 2020. This allows emission intensive activities to out-compete cleaner technologies for a longer period of time.”

As Abbott told radio 2GB in another telling remark yesterday afternoon: “Conservatives tend to hasten slowly. We tend to think that if something has proved the test of time, it is worth persevering with.” To apply this to climate and energy policy, Abbott seems grimly determined to persevere with the status quo, the fossil fuel generation, and the interests of incumbents, despite overwhelming evidence of the need to do otherwise.

There are other problems. Australia’s carbon productivity, a key measure of future economic competitiveness, which already lags under both the government scenarios (Australia ranks low – 17^th among the G20 nations) is worse under the Coalition’s policies, which has economic output per unit of carbon emissions at around a third the improvement driven by the current carbon laws.

And it creates the risk that Australia would return to an obstructionist position in international negotiations – which TCI says would run counter to the national climate interest.

“As a country highly vulnerable to the impacts of climate change, it’s in our own interest for the world to limit temperature rise to less than two degrees above pre-industrial levels,” TCI CEO John Connor says.

“The next couple of years are crucial in helping boost global efforts. In this context, policies that demonstrably cannot meet our own targets do nothing for Australia’s credibility and will get short shrift overseas.”

The Greens said that the TCI estimates were overly generous to the Coalition policies because they assumed a “best case” scenario in the emissions reduction fund. The TCI agrees that it painting as rosy a picture of Direct Action as it can – assuming that all emissions bought by the fund are additional, that the “baselines” that will be set by the fund for purchases are lower than current levels, that the abatement is actually achieved, and that companies are not gaming prices. Greens leader Christine Milne describes Direct Action as the worst policy that the Coalition has ever produced.

The Coalition has so far provided no details of how the fund would actually work. It does not intend to do so until at least six months after the election, after inviting submissions to a white paper.

It promises to make moves to repeal the carbon price from the first day in government, and still threatens a double dissolution if it is rejected by parliament. The Climate Institute recommends that rather than creating a policy vacuum, the Coalition should maintain the carbon price at least until it has formulated a policy, and provided details of how the fund would achieve a 25 per cent reduction in emissions by 2020.

And, it says, it should remove the legislated 2014 review of the Renewable Energy Target and focus the 2016 review on post-2020 policy settings – i.e. what would be needed to meet longer-term targets.

In fact, TCI suggests that the Coalition policy – to ensure that it doesn’t “end at the beginning” – will need to consider a 50 per cent clean energy target by 2030, stringent emission performance standards to ensure that the most emissions-intensive power generation is decommissioned by 2020, and a raft of energy efficiency actions to ensure Australia boosts its energy productivity by 30 per cent on 2010 levels by 2020.

Of course, none of those would be palatable to the business interests that want Abbott in power. But as TCI makes clear, if the Coalition wants to dump the carbon price, and deliver on the international commitments it has already signed up for, it will have no alternative.