Labor's Climate Change Policy Explained: Here's What We Know

The Guardian - Katharine Murphy

As the partisan debate roars back to life with Coalition claims of ‘carbon tax 2.0’, these are the facts

Bill Shorten charges an electric car after launching Labor’s climate change policy in Canberra on Monday.
Photograph: Mick Tsikas/AAP 

Just days before the federal election is called, Labor has released the final component of its climate change policy. Scott Morrison has promptly declared it is carbon tax 2.0 and the regulations will impose massive costs on Australians. Given this partisan debate, which has paralysed Australian politics for a decade, has been characterised by hyperbole and misinformation, let’s work through this latest policy instalment, sector by sector, and then consider the implications.

Energy
Labor says if it wins the coming election it will try to implement the national energy guarantee abandoned by the Coalition, with a higher emissions reduction target – 45% by 2030. The government’s electricity target was 26%. If the Coalition in opposition declines to support the Neg, Labor will pursue plan B. Plan B involves topping up the Clean Energy Finance Corporation to the tune of $10bn and a new $5bn fund to modernise ageing transmission infrastructure. The objective of the intervention is to drive higher take-up of renewables in the grid. Labor has a target of sourcing 50% of electricity from renewables by 2030. Coupled with this, a Just Transition Authority will be established to help manage the retirement of the coal fleet, with generators required to give three years’ notice of closure.

Heavy industry
As well as reviving the national energy guarantee, Labor is borrowing another existing Coalition policy to bring down industrial pollution. It will use the current safeguard mechanism, which is part of the Direct Action scheme, but will extend coverage so that more companies are captured. The scheme works like this: companies are allocated baselines, and if they pollute above that level, they need to buy carbon credits (more about this is in minute), which imposes a cost on their business. Labor says it will reduce pollution in the covered entities by 45% on 2005 levels by 2030, but is planning to consult with firms on what their baseline should be, and about the specific emissions reduction trajectory for each entity. It is also planning to assist emissions-intensive trade-exposed companies with the transition.

Transport
The approach in transport is two pronged. Labor is proposing to introduce vehicle emissions standards “in line with” 105 grams of CO2 pollution per kilometre, which is the same as the US. The standard is imposed on car retailers (not manufacturers), which means car dealers will have to offset sales of high-emissions vehicles with sales of low-emissions vehicles. Coupled with this, Labor is setting targets for the take up of electric vehicles. It wants a national EV target of 50% of new sales by 2030, and a government fleet target of 50% of new sales by 2025, and it will also allow businesses to claim deductions if they buy EVs valued at more than $20,000. It will also require all federally funded road upgrades to incorporate EV charging infrastructure.
Given Labor will impose significantly tougher pollution rules than the Coalition, it also wants to boost the supply of carbon offsets. With this market becoming more important, Labor is flagging a new certification framework to ensure that carbon credits are sufficiently high quality. It will also strengthen the Carbon Farming Initiative, which allows farmers and landholders to generate carbon credits which they can sell on the carbon market. It will also allow heavy emitters to use international permits to meet their pollution reduction requirements, but Labor is not yet saying what limits might apply. It will not use carryover credits from the Kyoto period, which the Morrison government intends to use to help meet the Paris target.

Agriculture
Farmers are largely off the hook in Labor’s policy. On the positive side of the ledger there are opportunities to generate carbon credits, which generates income. The sting is land clearing. Labor is signalling it wants to extend the Queensland regime to other jurisdictions, working through the Council of Australian Governments process. That’s a principle though. There’s no detail beyond that in the policy.

Will the policy cut pollution by 45% on 2005 levels by 2030?
This is the big question. Unsurprisingly, given the toxic history, the Morrison government has resumed hollering about carbon taxes and environmental regulations that will bring Australia to its knees, but the fact is we don’t have a number of important details that would allow anyone to make fact-based conclusions. Labor says we’ll have a new vehicle emissions standard, but hasn’t said when that will apply, or the specific level of emissions reduction from transport it is factoring in as a consequence. Similarly Labor is arguing it will achieve a 45% cut from heavy emitters while allowing caveats like consultations on baselines and trajectories. Labor is not planning to release a carbon budget, which would make transparent estimates about the level of pollution cuts it is factoring-in in each sector. It is unable to say how carbon trading between the energy and industrial sectors might work because the proposed regulatory frameworks are conceptual rather than fully fleshed out. Given there are stakeholders sitting on the sidelines ready to go to war, and the Coalition is hoping that calling something that isn’t a carbon tax a carbon tax (again) represents a sound political strategy with an election in sight – the vagueness from Labor is deliberate. But there are significant unanswered questions here.

Will this policy happen, even if Labor wins?
Another big question. The Coalition is not showing any sign of having a substantial conversion on climate change. Labor will likely need the Greens to get various changes legislated and the Greens will want a higher level of ambition than is evident in this policy. The Greens will want Labor to execute a faster transition away from coal, and they are already saying no to the use of international permits. So it’s entirely possible that the long unproductive deadlock will continue. We have a long way to go.

Links

• 50% of new cars to be electric vehicles by 2030 under Labor climate change policy
• Coalition promises one-off energy payments as Labor pledges to 'reset' budget
• Labor's Emissions Trading Scheme
• Greens blast key part of Labor's climate policy as 'fake action'
• Labor's climate change policy explained: here's what we know
• Labor to tighten emissions regime as it draws climate battle-lines
• Morrison government seeks to divide Labor and unions over emissions
• Coalition says Labor must use Kyoto credits – but also that they make little difference
• Australian government backs coal in defiance of IPCC climate warning
• Richard Di Natale: I will work with Labor to get action on climate change
• Greens electric car push: end sale of petrol and diesel vehicles by 2030