Will Rudd get to axe the tax before Abbott? | RenewEconomy

Will Rudd get to axe the tax before Abbott?

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Good luck guessing what the melt-down in Canberra means for climate and renewable energy policies. But one positive spin is that we are half way to the election everyone wanted. Expect an accelerated passage to an ETS, CEFC investments to depend on election timing, and a plea for Rudd to stop saying ‘we’re cooking with gas.’

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Good luck guessing what the extraordinary drama played out in Canberra last night means for climate change and renewable energy policies in Australia.

From a Starbucks café in the Mojave Desert, a short drive from the 392MW Ivanpah solar power tower project (an extraordinary sight that must represent Australia’s energy future, but more on that later), the events make as little sense as they would do from inside Parliament House. Or from inside the office of an investor contemplating putting money into new energy technologies.

But here’s the optimistic spin out of the events of Canberra in the last 24 hours: we are half way to getting the election choice that everyone has always wanted.

That, of course, would be a poll pitting Kevin Rudd against Malcolm Turnbull, the most popular politicians, and a scenario which would hold by far the best prospect of a real competition of ideas. Barring the unexpected, that’s not going to happen, and Rudd will (probably enthusiastically) be donning his populist hat to prepare for battle with Tony Abbott.

It’s pretty clear that the hung parliament may well remain the pinnacle of policy making in Australia, at least in the short term. The current suite of policies – carbon pricing, renewable energy target, the Clean Energy Finance Corporation, and the Australian Renewable Energy Agency – make Australia one of the most attractive destinations in the world (were it not for the imminent threat of repeal).

The only thing missing has been a national energy efficiency plan, and a recognition by the states that it is time to move forward.

Now, the principal actors that made this possible are stepping back. Gillard has paid the price for the manner of her appointment, a poisoned chalice that was amplified by an intolerance of having a woman in the top job. Like many others, she saved her best for her resignation speech, when she was no longer a politician.

The country independents, Tony Windsor and Rob Oakeshott are retiring, and Greg Combet, who has prosecuted the case for climate policies more effectively than any other minister, has resigned, presumably to position himself for a possible tilt at the head of the Labor Party should Rudd’s last-ditch bid fail.

This leaves only Greens leader Christine Milne, who faces marginalisation if her party loses the balance of power. The prospect of that, though, will recede if Rudd succeeds in rescuing Labor’s electoral prospects, even if he doesn’t win. This would be disastrous for the renewable energy industry. The last time a Coalition government trod on renewable developments, the only thing that saved the industry were supportive state governments. They no longer exist.

Good climate change and renewables policies were put in place because of the tenacity of a few strong individuals willing to act on principle. That drove the factions and the mainstream media mad. The reaction of the factions was entirely predictable. The reaction of the media has been a crushing disappointment.

As Windsor noted, the ambulance-chasing within parliament house, the media’s howling down of new ideas, and its meekness to industrial lobby groups means it has effectively abandoned its role as the fourth estate. And in that context it weakens our democratic institutions in favour of demagoguery. The media contribution to the question of gender, which plagued Gillard’s term as leader, is one of its more shameful episodes.

Quite where we go from here in the policy perspective is impossible to say. Rudd championed climate change in 2007 and got himself elected on the strength of it. But then he used it as a political wedge rather than a public policy pursuit. In the end his CPRS was an unsavoury compromise with the Opposition, and was ditched after pressure from Julia Gillard and Wayne Swan.

Rudd says now that he regrets the decision to dump his climate policies. But frankly, it is unclear whether Rudd sees that mostly in the prism of his own career or as a public policy issue. Renewable energy supporters would rather he didn’t keep saying “let’s get cooking with gas”.

The most immediate measure he may introduce is to move more quickly to a trading scheme, and so bring the price of carbon down to the European level. He has form on this, having cut the proposed fixed price in the CPRS negotiations, but the practicalities of the system now in place means he is unlikely to be able to deliver it from July this year, as he would like. But he could make a promise to do it by July, 2014.

The one saving grace is that Australian policy is now more likely to be influenced positively by what is happening in the two biggest economies and the two biggest polluters, the US and China. Their actions over the last few weeks – Obama’s commitment to circumvent Congress to deliver on the US climate targets; China’s imposition of equally strict pollution controls, and its experiments with carbon trading – show that they are serious. As HSBC points out in a report overnight, companies in those countries are preparing for tougher policies. The tragedy in Australia is that they might be expecting the opposite.

In the short term, however, most interest will be on the fate of the CEFC, and the numerous projects which are under consideration. An early election call – depending on the flow of events today – would mean that the caretaker period would start immediately, and the board of the CEFC would not be able to make any new decisions.

In the event of an Abbott victory, it would probably have to wait until after the election to make those announcements and continue on. It cannot stop work until its supporting legislation is repealed, and that is unlikely until next July. The CEFC is absolutely sure of its legality, but the rhetoric (and frankly the ignorance) of the Opposition might suggest some sort of challenge. But they may have other fish to fry.

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  1. Concerned 7 years ago

    Of course

  2. I can’t find anyone else who seems to know what they are talking about in relation to renewable energy, carbon tax, CEFC, Kevin Rudd, and the strange state of Australian politics.
    Therefore I have “borrowed” paragraphs from his article, as the first of my “Giles Parkinson Says” on my website http://www.antinuclear.net
    If this does not work for you, Mr Parkinson, please let me know, and I will remove this “borrowing”

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