There is an urgent need to set up an independent climate body, writes John Hewson.
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| We have Australian technologies to be a world leader in response to the climate challenge. Photo: Jonathan Carroll |
Three times in my life I have felt this to be the case, and advocated that responsibility for them be passed to an independent authority, and process.
The first was back in 1980, when I advocated an independent Reserve Bank, an initiative that grew out of my frustration from sitting as an adviser on the monetary policy committee of cabinet on the Fraser government, watching ministers struggle to set interest rates and our exchange rate – prices that were clearly too important to be left to politicians. The system and its management needed to be depoliticised – in this case, market-based and independently supervised.
The second was in the '90s, when I advocated the independent and professional management of the government's "unfunded liabilities", initially government employee and military superannuation entitlements, in a structure that became, initially, the Future Fund. This grew out of my concern that such liabilities would progressively hit the annual budgets. I felt this, too, could be depoliticised and better managed by setting money aside in a separate fund for professional management.
Most recently, I have been advocating a separation of the budget into its recurrent and capital components, with the latter, essentially infrastructure projects, to be separately funded using a long-term "infrastructure bond". The proceeds would be kept in a separate – professionally governed and managed – fund to be allocated as debt and/or equity to nationally significant projects, which would be financially assessed and ranked by an upgraded and more transparent institution such as Infrastructure Australia.
The recent budget's acknowledgment of "good" and "bad" debt was an important first step towards such a structure.
In all three cases, the policy challenges were longer-term and structural, and most unlikely to be dealt with effectively if left to short-term, day-to-day politics, which has become increasingly self-absorbed, adversarial, opportunistic, populist and mostly negative.
Today, it is now essential to address climate change – the most significant and urgent policy (and moral) challenge of this century – in a similar vein. This issue has been ignored and demeaned by short-term politics for the last several decades. The result has been that we don't have an effective national energy policy, and power costs are now almost prohibitive for both business and consumers, at a time when the globe is probably past any hope of achieving net zero emissions by 2050.
It is yet to be demonstrated effectively how we will achieve a mere 5 per cent reduction in emissions, off a 2000 base by 2020 (getting over the line only because of a Kyoto accounting wheeze), let alone meet our Paris commitments of a 26 to 28 per cent reduction by 2030, off a 2005 base, which was about half what the Climate Change Authority had recommended the target be.
In the absence of bipartisan support, it is now essential to establish, say, a Climate Commission, as a genuinely independent and well-funded authority. It would have an independent board and management, and take full responsibility for delivering the most immediate, cost-effective and fair transition to net zero national emissions by mid-century.
The tragedy is that we have an abundance of natural assets in sunshine and wind. We also have the Australian technologies for cost effective base-load, solar thermal and battery storage for both solar PV and wind projects to be the world leader in the response to the climate challenge. These would deliver both significant domestic "jobs and growth", as well as new export potential.
People now stop me in the street completely perplexed as to how our governments seem content to let the successive closures of coal-fired power stations, most recently at Port Augusta and Hazelwood, just "hit us", costing many hundreds, probably thousands, of jobs, and disrupting households, businesses and communities with absolutely no strategy moving forward. Further, there has been little planning for the inevitability that two-thirds of our power generation capacity will need to be replaced over the next few decades, let alone the essential transformation of our transport industries.
Unfortunately, the short-term "game" of politics has become an end in itself to the detriment of our national interests. It has left what is probably an insurmountable legacy to the detriment of our children and their children.
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