Published by the ABC, Australia’s National Broadcaster.
Linking the demise of the Labor party’s electoral fortunes to its decision to defer the CPRS, as Sara Phillips has argued, is correct. But that doesn’t mean that emissions trading will be the focus of the next Australian government, no matter who it is. Whether our next PM is Julia Gillard or Tony Abbott, climate policy will focus on less contentious proposals than putting a price on carbon in the near term.
The formation of Coalition minority government is the worst possible outcome for proponents of carbon pricing. Abbott is a climate sceptic. His ascension to the Coalition leadership was on the back of opposing the Rudd government’s Carbon Pollution Reduction Scheme that he branded ‘a great big tax‘. While Abbott has flip-flopped on issues before, he is unlikely to change his mind. The strong rejection of carbon pricing is a source of power within the Coalition and represents a clear difference between himself and alternative party leader Malcolm Turnbull. As such, an Abbott Prime Ministership would rule out such measures in next term of government.
Labor, meanwhile, is committed to a scaled-down climate policy agenda. Its record of supporting emissions trading offers a glimmer of hope for carbon pricing advocates, however it will be difficult for a Gillard minority government to pass emissions-trading legislation. In any attempt, the Greens in the Senate will push the government for a stronger cap-and-trade scheme than the CPRS v1.0, but this will not necessarily win the support of independents in the house. While Oakeshott has previously voted for the Rudd government’s trading scheme, Bob Katter and Tony Windsor appear to have reservations about carbon taxing and trading. And this is before we account for Labor’s lack of political capital and risk aversion.
Any attempt by Labor to revive the CPRS or adopt the Greens’ interim carbon price proposal will compel Abbott to challenge Gillard’s legitimacy. He will argue the close election result shows that the ALP doesn’t have a mandate for a carbon pricing agenda.
However, if it adopts a nation-building approach to climate change policy, a Labor minority government could provide a chance for strong action on climate change. A Labor government can invest in the vital infrastructure we know we need to build the foundation of a clean energy economy. Baseload concentrated solar thermal demonstration plants, a renewable electricity grid, and perhaps even high-speed rail will help Australia decarbonise our economy now, rather than waiting for an ETS and the invisible hand of the market to deliver them at some point in the future.
This approach can win the support of the independents and Green representatives. According to Alan Kohler, Tony Windsor seems to think that renewable energy is more important than a price on carbon. Windor said as much in a recent 7.30 Report interview. Bob Katter has previously shown support for a clean energy corridor from Townsville to Mount Isa. New Greens MP Adam Bandt supports renewable energy investment and is behind a Melbourne to Sydney high-speed rail link.
When it comes to the senate, The Greens would support the measures. After all, they supported Labor’s stimulus package, support high-speed rail feasibility studies, and propose multi-billion dollar loan guarantees to help large-scale renewable energy projects get off the ground. The Greens are pragmatic and will support investment-centred policy while continuing to push for carbon pricing in the long term.
The Coalition will of course argue that the initiatives are nothing more than pork barrelling. The government would have some insulation form these attacks. Research conducted by Beyond Zero Emissions and the University of Melbourne Energy Institute provides an evidence-based case for the siting of concentrated solar thermal baseload power plants and new transmission lines.
Labor can make the approach work politically. It can leverage Abbott’s commitment to ‘direct action’ to support investment in climate-friendly infrastructure projects. If Abbott argues that the investments are adding to national debt the ALP can pin the blame on the Coalition who thwarted the ETS which would have made the ‘polluters pay’.
Implementing nation-building climate policy prior to carbon pricing legislation would help Labor avoid the pitfalls Rudd’s short-lived attempt to tax miners. A key reason why the Resources Super Profits Tax failed to win public support is that it wasn’t directly linked to measures that benefited Australians and potential allies. There is a similarity here between the mining tax and the CPRS: efforts to tax (‘punish’) specific sectors of our economy will meet stiff opposition. To increase the prospects of carbon pricing, the policy should be preceded by investments in tangible projects.
When taking the leadership, Gillard pledged to ‘reprosecute the case’ for emissions trading. With government investment kick-starting projects around Australia, Labor will be able to point to a clear rationale for renewed debate on carbon pricing. How to pay for new renewable energy infrastructure will become the central question.
Public investment and carbon pricing are complementary policies that are not mutually exclusive. But regardless of whether you support the government using Australia’s common wealth for the common good, or implementing legislation to make polluters pay for action on climate change, public investments will have to precede carbon-pricing reforms.