The most carbon-dependent nation on earth, Saudi Arabia, this week announced a plan for a post-oil economy. "We have an addiction to oil," said the kingdom's de facto ruler, Deputy Crown Prince Mohammed bin Salman. "This is dangerous. It has delayed development of other sectors."
The superpower of the oil world has decided that the most prized commodity of the 20th century is a big risk in the 21st. It's attempting a decisive break under a plan called Vision 2030.
Saudi Arabia is not an admirable country and it's not any kind of model for Australia.
But in demonstrating the risks of fossil fuel addiction, it is more than the proverbial canary in the proverbial coal mine. It is the coal mine, and the coal mine is acknowledging openly that it's in terminal decline.
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| As the Saudis act urgently to escape the grip of fossil fuel addiction, what is Malcolm Turnbull's "agile and innovative" Australia doing? Photo: AP |
As the Saudis act urgently to escape the grip of fossil fuel addiction, what is Malcolm Turnbull's "agile and innovative" Australia doing?
Australia has been one of the great powers of the energy sector in the carboniferous era thanks to its high-quality, low-cost coal endowments.
But it has the potential to be a superpower in the next phase of the global energy revolution, the move into renewables. "Australia's advantages in renewable energy are even greater than in fossil fuels," the eminent economist and climate policy expert Ross Garnaut has noted repeatedly, "and the sooner we start establishing the economic and business foundations the stronger our advantages will be."
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| Illustration by Rocco Fazzari |
Malcolm Turnbull himself, who once campaigned passionately in favour of more decisive action on climate change, started campaigning emphatically against it.
The Labor renewables policy will be one of the defining points of this year's election, partly because it defines Labor. But more powerfully because it illuminates Turnbull and what he has become as he opposes more and more of what he once believed.
It brings his transformation from Malcolm Turnbull to Tony Abbott closer to completion.
Greg Hunt "is going around basically telling lies" about Labor's plan to drive up electricity prices by 78 per cent.The economist and former Liberal leader John Hewson says that Turnbull's response is "very damning, actually". He says that if Turnbull were serious about innovation, jobs and growth he'd support some of Labor's plan, not oppose it.
John Hewson
"Bill Shorten can run a new industry on these commitments with new jobs and a new industrial base for the country. Labor has taken a bit of a risk and gone out in front on this," Hewson tells me, "and it's being constructive and they are still pretty moderate in terms of the task ahead of Australia over the next 30 years.
"Labor's carbon emissions target, I think, is realistic and it's getting closer to where it should be" if Australia is serious about its commitments to the Paris climate accord.
"It's all right for Malcolm Turnbull to talk about innovation but to make it happen, it's not just designing apps.
"This country has a poor record of commercialising new technology. You need a broad based movement," says Hewson, who is a renewables entrepreneur these days.
Labor's target? Its new plan has two more ambitious aims than the government's. One is to cut Australia's carbon emissions faster. Instead of government's current commitment to cut emissions by 26 to 28 per cent by 2030, Labor proposes cutting 45 per cent over the same time.
That'd be bigger than the EU target of 34 per cent, identical to Germany's 45, and smaller than Britain's 49.
The other new Labor proposal is to create a new renewable energy target for the decade ending in 2030.
At the moment, Australian law requires electricity companies to work towards generating 23.5 per cent of their power from renewable sources by 2020.
Labor wants to enlarge and extend this to a target of 50 per cent renewables by 2030. This goal, naturally, would help to achieve the first goal.
To hit its carbon target, Labor's policy also includes two emissions trading schemes. One would be a broad scheme for major emitters that put out over 25,000 tonnes a year.
This scheme would put a cap on total emissions but no fixed price on them. The cap would shrink as the years passed and the price of emitting would rise. Labor estimates that the scheme would cost big emitters about 30 cents per tonne of carbon in the initial phase. Big emitters who face international competition would pay about 3 cents a tonne. For reference, the Gillard government's carbon tax imposed a price of $23 a tonne on emissions.
The other would be an emissions trading scheme for the electricity industry only. This scheme would be designed to make the power companies meet their proportionate share of cuts in total national carbon emissions.
Two further elements: New emissions limits on new cars; and limits on how much land clearing state governments could permit farmers to conduct.
Much detail for this plan is missing; Labor says that it would be for the next parliament to negotiate in 2016-2019 so that it could be put in place for the decade to follow.
Unexpectedly, the Business Council of Australia, the biggest of the big-business lobbies, a group that thundered against Gillard's carbon tax, embraced the Labor proposal this week as "a platform for bipartisanship" on climate change. Business, like most voters, is thoroughly disheartened by the way that the political system has mangled a national solution to the problem of climate change. Business cannot plan and cannot invest without stable and sensible policy.
The Turnbull government's response? To oppose both targets immediately, reflexively. And to scaremonger.
While the Greens leader, Richard di Natale, sought to ridicule the Labor plan because the initial carbon price in its emissions trading scheme was a risibly low 3 cents a tonne, the Coalition tried to inflate it into a giant job-eating monster.
"This is yet another economic handbrake that Labor is putting on our economy," said the prime minister. Labor would have to "very significantly increase the cost of energy, the cost of electricity and all other power." An emissions trading scheme, said Turnbull, would be "effectively another tax."
Treasurer Scott Morrison said it would amount to "a big, thumping electricity tax". Environment Minister Greg Hunt said that it was "Julia Gillard's carbon tax on steroids". He said that the wholesale price of electricity would soar by 78 per cent by 2030.
Sound familiar? This is Tony Abbott's scare campaign against Labor's carbon tax exhumed and sent into electoral battle once more. Nothing agile or innovative about that.
Labor knew it was coming - why did Bill Shorten take the risk? Because Shorten decided months ago that he had no choice but to take risks.
He concluded that Labor was such an underdog, that the Turnbull government was so ascendant, that there was no point in trying to present Labor as a "small target", avoiding criticism by avoiding action.
Labor has instead taken the initiative and the government's responses have exposed Turnbull. The movement in the polls has been all one-way – away from the Turnbull government.
John Hewson observes: "Shorten is a confidence player.
He's getting a lift in the last few weeks and now he's out there punching hard again, and I'm amazed that Malcolm can't see it."
Turnbull, he says, should have rejected some elements of Labor's plan but embraced some – the longer and larger renewables target, for instance.
Labor's renewables target, according to Bloomberg New Energy Finance, would require about $48 billion in new investment in solar and wind energy, the basis for a major source of new economic activity. Bloomberg's Kobad Bhavnagri told The Australian newspaper that electricity prices were unlikely to increase by much in the process because "Australia's power fleet is aging and needs updating and one way or another prices will have to rise to support new investment."
The difference will be whether Australia gets a thrusting new industry in the process. Or not. Bhavnagri again: "Without renewable policy, it is old coal that banks the higher prices and remains dominant. With renewable policy, the money instead goes to building new wind and solar farms."
Hewson is stinging on the government's scaremongering. Greg Hunt "is going around basically telling lies" about Labor's plan to drive up electricity prices by 78 per cent, he says.
In any case, that figure has been discredited before. It's predicated on a world where there is no policy response except a carbon price, and the carbon price goes to $209 dollars a tonne.
The government's claims of "a massive new tax are ridiculous" says Hewson. "There are already solutions around baseload solar with battery storage that are cheaper than current electricity prices."
Hewson still expects Turnbull to win the election, but his disillusionment with Turnbull is deep: "Malcolm said he'd give us advocacy, not slogans, and we'd get better politics.
"And here we are with slogans already. Labor's negative gearing policy is 'Labor's big housing tax'. Now he says Labor has 'a big new electricity tax'. He's trying to kill off debate in areas where he's exposed. The slogans are taking over."
While the Saudi reformists get to work on Vision 2030, Turnbull gets to work on Scares and Slogans 2016.
The old Malcolm once said that "climate change is the ultimate long-term problem", and that "it is always easy to argue we should do nothing, or little or postpone action." He also said on climate change: "Because if you believe in nothing why are you there?"
It's not that the new Malcolm believes in nothing, necessarily. What we're learning is that, contrary to old Malcolm, new Malcolm appears to believe in precisely what Abbott believed.
The overarching factor in this election is not which party runs which scare on which issue. It is the question of who is Malcolm Turnbull? Because voters will have to decide who they think he is before they decide whether to trust him.
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