Election 2016: Behind The Battlelines There's Surprising Agreement On Climate Change

Fairfax - Peter Martin

Every so often elections matter. The last one mattered big-time for carbon emissions.
In 2013, we voted to end the carbon tax. In its two years of life, emissions from electricity generation fell an exceptional 10.6 per cent. We now know that in the 21 months since they've climbed 5.6 per cent.

Illustration: Joe Benke

The extraordinary turnaround is appallingly timed for a country which in April signed the Paris Accord agreeing to attempt to hold the increase in global temperatures to between 1.5 and 2 degrees.
Pitt&Sherry energy analyst Hugh Saddler, who compiled the figures, says they are the result of an abrupt change in the mix of electricity generation "away from hydro and back to brown and black coal as removal of the carbon price changed the relative costs".
And a change in attitudes. The political messages that we helped create assured us that saving energy was no longer that important.

Illustration: John Shakespeare

"Many energy consumers appear to have lost interest in taking further steps to use energy more efficiently," Saddler says. "The impact of political leadership is not confined to policy decisions on carbon prices or renewable energy targets – it has an effect on energy consumption behaviour that should not be underestimated."



In Paris we agreed to work towards cutting net global emissions to zero by the second half of the century. Although our first offering was only to cut Australia's emissions to 26 to 28 per cent below 2005 levels by 2030, the Paris process ensures that we will be asked to repeatedly revise it in line with what other countries are doing to meet the overarching target.

Steam rises from stacks at the Hazelwood power station, Latrobe Valley. Photo: Arsineh Houspian

Which means we need the means to achieve those reductions. "Direct Action", handouts from the $2.55 billion emissions reduction fund, won't do the trick. For one thing, a process by which bureaucrats assess grants and hand out money for worthy projects is inherently non-scalable. If we end up needing three times or 10 times or 20 times as many grants we would need three times or 10 times or 20 times the decision-making time. Even if we had it, the decision makers would get snowed by "anyway projects". They've no way of telling whether they are paying for work that would be done anyway. Upgrading lighting and increasing fuel efficiency makes sense and would happen whether or not the Commonwealth doled out money for it.
To its credit the Coalition is onto it. It'll review its emissions reductions policies next year, shortly after the election. It has more to work with than its rhetoric about direct action suggests. Buried within the Coalition's legislation, and to date dormant, are the bones of an emissions trading scheme. Big firms that emit more than a baseline will be required to buy credits from groups that are planting and conserving forests to suck emissions back in. A few simple tweaks would enable them to buy credits from competitors that had cut their emissions below the baseline and from overseas. It would be emissions trading as envisioned by the Rudd government and now being forwarded by Bill Shorten. If the baseline was progressively reduced as Labor proposes it would be indistinguishable.
But it wouldn't be enough, and Labor to its credit now recognises this. Its policy is to cut emissions to 45 per cent below 2005 levels by 2030 in accordance with advice from the Climate Change Authority. Whereas the Labor of old, and its climate change advisor, Ross Garnaut, thought all that would be needed would be to gradually tighten targets and let prices work their magic, it now recognises that in the real world that means firms closing, people suddenly losing their jobs, and lobbying to remove the scheme at the next election.
That's why its policy includes all sorts of other measures to ensure emissions fall more quickly and with more certainty than trading alone would achieve. Some borrow from direct action. In order to build renewables up to 50 per cent of generation by 2030 it will consider reverse auctions, where firms bid for a government-guaranteed price in order to build, the firms that ask for the lowest price winning. And it'll pay the dirtiest brown coal-fired power stations to close, although out of a levy placed on other power stations rather than its own funds.
It'll identify the regions likely to lose jobs (Victoria's Latrobe Valley is a prime candidate, housing Hazelwood, perhaps the world's dirtiest power station) and work with other employers to create alternative jobs ahead of time.
The Climate Institute's John Connor calls the approach "scaffolding". It is designed to ensure emissions come down predictably, rather than suddenly and frighteningly as the target date for zero net emissions approaches.
What's odd about the election we're in is that each side appears to have learnt from the other and each is likely to introduce a similar mix of policies should it find itself in office, assuming each genuinely supports the agreement signed in Paris.
There's less to vote about, but more chance of achieving lasting progress.


Election 2016: Opponents in agreement. The major parties seem to agree on something this election as The Age's Economics Editor Peter Martin explains.

Links

• This Is The Climate Change Election, Despite What Turnbull Or Shorten Say
• Why Has Climate Change Disappeared From The Australian Election Radar?
• Election 2016: What Are Our Leaders Really Thinking About Climate Change?
• Election 2016: Climate Change Policy A Vote Winner For Majority Of Australians