Climate Summit Held by Business and Green Groups to End Six-Year Policy War

The Guardian - Lenore Taylor

Exclusive: mirroring the Turnbull government’s tax debate with all options ‘on the table’, six different climate policies are canvassed at closed-door summit

The experts believe the Coalition’s Direct Action policy needs substantial modification to reach Australia’s 2030 emissions reduction target. Photograph: David Crosling/AAP

Leaders from business, welfare, the conservation movement, the electricity sector and the union movement have moved to try to fill Australia’s climate policy vacuum by starting a new slogan-free debate to help political parties find workable greenhouse policies.
Mirroring the Turnbull government’s tax debate, in which all policy options are back “on the table”, the groups commissioned major consultancies to present on six climate policy options at a special closed-door summit this week. They intend to publish the results in a back-to-the-drawing-board policy “primer” to be released next year.
Indicating the extent to which six years of bitter climate policy war have forced wide-ranging discussion outside the political arena, advisers to environment minister Greg Hunt, resources minister Josh Frydenberg and Labor environment spokesman Mark Butler, as well as advisers to state governments, all attended the workshop as observers.
The experts believe the Coalition’s Direct Action policy needs substantial modification to reach the 2030 emissions reduction target that the government will pledge at the Paris climate change meeting next month.
Malcolm Turnbull has refused to be drawn on climate policy in the early months of his prime ministership, suggesting any reconsideration of Direct Action would happen in the review scheduled for 2017.
Beyond promising that it will propose some form of emissions trading scheme and an “aspirational” goal to reach 50% renewable energy, Labor has not yet released specific policies.
John Connor, chief executive of The Climate Institute, said the workshop had “started from the view that there has to be a new maturity in this policy discussion to meet Australia’s goals”.
“Everyone there acknowledged that we can’t make advances if we are stuck in our policy, ideological or technological trenches and also that we don’t currently have policies on the table to get to our longer-term climate change goals.”
The roundtable heard presentations on the pros and cons of baseline and credit trading schemes (from the Centre for International Economics), cap and trade emissions trading schemes (Ernst and Young), regulation to reduce emissions (Acil Allen), a straight carbon tax (Deloitte), other electricity sector schemes (PWC) and Direct Action-style schemes where governments buy abatement (Baker and McKenzie).
Many participants still saw a full emissions trading scheme as the most efficient policy option, but politically difficult, and a straight carbon tax – which the Australian debate has historically confused with an ETS – as even more politically dangerous.
Acil Allen is understood to have argued regulation was a relatively inefficient and high-cost way to force change, but that it might be useful where emissions were hard to measure, like agriculture, or where there were high transaction costs.
Some energy companies, such as AGL, have suggested the government follow a Canadian-style policy of imposing age limits on Australia’s oldest brown coal-fired generators, to force their earlier retirement and soak up some of the oversupply in the east coast electricity market.
It was seen as an advantage that the Coalition’s Direct Action policy had been designed so that it could be transformed into a baseline and credit trading scheme, but with the scheme best fitting the electricity sector rather than the whole economy. The government has refused to confirm that this is its intention.
Abatement auctions – such as those conducted under Direct Action’s $2.5bn emissions reduction fund – were widely seen as useful in limited circumstances, but not able to be scaled up to provide the large reductions in greenhouse emissions required for Australia’s 2030 target.
“We all know there has to be a change of direction from the Coalition after the next election, either ratcheting up Direct Action or changing it entirely,” one rountable participant said.
“We all know Labor is still working on the details of their policy. We want to try to reopen up the space for them to move, to look at things logically.
“We did not put one policy above another, we just discussed the pros and cons of all of them. We want to restart a sensible debate.”
Among the groups who formed the climate roundtable last year were the Australian Aluminium Council, Australian Industry Group, the Climate Institute, Australian Conservation Foundation, the Business Council of Australia, WWF Australia, the Australian Council of Social Service, the Energy Supply Association of Australia, the Australian Council of Trade Unions and the Investor Group on Climate Change.
The meeting also heard a presentation from climate scientist Graeme Pearman about the implications of the global target to limit warming to 2C.