Wishful thinking, or timely intervention?
After reading Grattan Institute's checklist of changes needed to get the economy from the fiscal cliff to modest recovery, you might think Anthony Albanese's bid for a climate change consensus is destined to end up in the “wish list” the former Grattan boss John Daley is warning us about.
But in the current rapidly changing political environment, I wouldn't be so sure.
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| Well ahead in the polls: If Joe Biden were comfortably elected, the global politics of climate change and emissions reduction could change quite quickly. Bloomberg |
Trump's position is looking dire. He is trailing Joe Biden in most of the national polls, with younger members of his 2016 support base reportedly turning away from him. His approval rating, which peaked in April at 50 per cent, has fallen to the low 40s.
That, the Brookings Institution's William Galston points out, is dangerously close to rates of popular disapproval that preceded the defeats of incumbent presidents Jimmy Carter and George Bush snr.
A Republican pollster quoted in London’s Financial Times did not attempt to put a gloss on the President’s position: “If the election were held today, it is pretty obvious that Joe Biden would be elected president, comfortably.”
If Biden were comfortably elected, the global politics of climate change and emissions reduction could change quite quickly. The Democratic nominee's promise is to achieve a "100 per cent clean energy economy” with net zero emissions by 2050.
Australian voters would recognise that we would have no choice but to follow the US lead.But to protect US competitiveness and jobs, he also plans to “use every tool of American foreign policy to push the rest of the world to raise their ambitions alongside the United States”.
“We can no longer separate trade policy from our climate objectives,” his policy documents say. “The Biden administration will impose carbon adjustment fees or quotas on carbon-intensive goods from countries that are failing to meet their climate and environmental obligations.”
Brutal choice
The European Union has been considering a similar border carbon tax. Together the world’s two largest export markets could be presenting their trading partners with a brutal choice: either pay a carbon tax to yourselves, or pay it to us.
The governments of Brazil and Malaysia have accused the EU of a new form of colonialism. Biden’s campaign documents talk about putting the US “back in the driver’s seat”.
Strong US leadership has been the key missing ingredient in the climate policy debate in Australia and elsewhere.
Australia is too small to unilaterally make a significant difference to the quantity of global carbon emissions. The argument for Australia making economically damaging emissions cuts has had to rest on the hope of leading international change by example.
Under the Biden policy, Australia would be contributing to a far more reliable emissions reduction strategy. Moreover, Australian voters would recognise that we would have no choice but to follow the US lead, especially if it was seen as an important contribution to Australia’s wider strategic association with the US.
Of course, with coal representing a major part of Australia’s comparative advantage, emissions reduction will be a big economic adjustment and a huge political challenge.
However, Biden would, in effect, be giving the Morrison government political "cover". It would be an opportunity for the Coalition parties to win back a generation of Australian voters and to embrace an economically efficient and cost-effective emissions reduction policy.
Research by the Productivity Commission early last decade found that a carbon price, imposed as an emissions trading scheme or a tax, would cut emissions at a fraction of the cost of the policies then in place.
This is a crucial issue. As the emissions cuts deepen, the cost of meeting our climate policy obligations will rise exponentially. Last year, the International Monetary Fund estimated that Australia would need a carbon price of more than $US75 ($109) a tonne to meet the Abbott government’s Paris emissions reduction commitments.
On the Productivity Commission’s evidence, alternative non-price measures would be far more expensive.
Morrison government ministers have rejected the IMF estimate, but the government has an obvious interest in fudging the cost of emission reduction, as does the Opposition Leader. Albanese now also claims that a carbon price is no longer necessary.
So far, they have got away with it.
But, thanks to President Trump’s incompetence, Australia’s political game of climate change may be about to become more demanding.
Links
- The plan meant to unite Biden and Bernie voters on climate is finally here
- Can we follow the French out of gridlock on climate?
- Greens announce ambitious new emissions targets in line with Paris
- Australia must hit net zero by 2050 to meet Paris: scientists
- Australia's emissions reductions falling short of climate commitment
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