In July 2014, after years of political debate, Australia became the world’s first nation to repeal its carbon laws that put a price on greenhouse gas emissions. John Connor, CEO of The Climate Institute, says this repeal is just the beginning.
Australia’s repeal of its carbon laws is the culmination of some sorry chapters in Australian politics and policy, but is by no means the end of the story.
The repeal represents a tragedy for our politics, a travesty for public policy, and a train wreck for climate action. But there are significant remnants among the wreckage.
The last decade has seen our politics dominated by greed, self-interest, poor judgment, and rotten luck. Despite this, a working and credible climate policy emerged.
By establishing a bipartisan consensus for emissions trading in July 2007, then-Prime Minister John Howard responded to years of growing climate concerns and business calls for greater carbon policy certainty.
Putting that political consensus into action was destined to be challenging in Australia’s economy, which has historically depended on coal for power and export.
Despite winning the “world’s first climate-change election” in late 2007, Kevin Rudd delayed legislating emissions trading. Given his relentless commitment to the Copenhagen climate negotiations, it is churlish to suggest that he did not take climate action seriously. However, his government rightly stands accused of using it to wedge a troubled coalition in 2008 and 2009. That this turned into a terminal reverse wedge issue in 2010 is an epic irony.
Rudd’s government failed to adequately reach out to the Greens, but they bear some responsibility for the downfall of the carbon laws and our current malaise. The Greens, along with some environmental organizations and progressive think tanks, relentlessly attacked Rudd’s framework, which offered a flexible system of limits on pollution. They let the perfect become the enemy of the good.
Post Copenhagen, when Rudd backed down on prosecuting for emissions trading, his political authority collapsed and, in 2010, Julia Gillard replaced him as prime minister.
The 2010 election allowed a miraculous triangulation of politics in which Australian Labor Party and Green hostility could be mediated by two country-based independents with conservative backgrounds. Despite – or perhaps because of – their backgrounds, Tony Windsor and Robert Oakeshott agreed on the need for climate action. Working with Greens MP Adam Bandt, they made carbon pricing a condition of supporting a Gillard minority government.
However, in early 2011, in what she later recognized as a mistake, Prime Minister Julia Gillard disastrously labeled their joint work on carbon pricing “in effect a carbon tax” – something she had ruled out introducing during the election campaign. This opened extra opportunities for political opposition while turbocharging scaremongering and rent-seeking from many in politics and business.
The scaremongering was almost completely without substance. Mining leaders openly acknowledged that the debate had moved beyond rational discourse, and others described the emergence of “post-truth politics” in Australia. That reaped its final bitter harvest upon repeal.
Repeal of the carbon laws is a travesty of policy because it is clear from the government’s own reports and independent data that for the two years they were in place, the carbon laws were working.
Pollution is declining in a growing economy. The latest National Greenhouse Gas Inventory showed the greatest emissions decline on record. A government report calculated that two years of the carbon laws would reduce pollution by 40 million tonnes. Independent analysts predicted that annual default emission limits in the laws would see Australia reduce pollution by at least 15 percent by 2020, compared to 2000 levels.
Meanwhile, the economy continued to grow, employment was largely unaffected, and inflation impacts were exactly as predicted at a fraction of one percent.
It was rotten luck that these reforms coincided with the impact of massive investment in electricity transmission poles and wires. This has been the true driver of most price increases.
In a cruel twist, much of this appears unnecessary. Energy efficiency measures, the Renewable Energy Target, economic changes, the carbon laws, and perhaps even the response to the scare campaigns surrounding those laws, saw an unprecedented decline in overall demand.
Now, Australia is left with a train wreck of climate action, without a policy framework that can credibly deliver the minimum five percent reductions off 2000 levels by 2020, let alone the up-to-25-percent that both major parties support.
To its credit, the government retains that range in international agreements. International focus is now shifting to the even larger post-2020 reductions needed. The United States, the European Union, China, and other major emitters will come forward with stronger emission targets over the next 12 months.
All of us bear some responsibility in this sorry saga. We should have better engaged across society and business, and communication could have been more consistent and better targeted. However, the biggest collective failure was allowing climate policy to fall so deep into cultural and partisan trenches.
Some prospects for a renewable-energy policy, if not a climate policy, appear to have been salvaged from the wreckage. The focus will continue to be on emissions trading schemes, which price and limit carbon pollution, as well as on international action. It looks like we may keep the Climate Change Authority, an independent body that has already verified significant, if not sufficient, global climate action and suggested that Australia increase its emissions reduction target to at least 19 percent.
The repeal of a broad national policy now unfortunately necessitates greater regulation at all levels of government. Nationally, the Renewable Energy Target, the government’s business “safeguard mechanisms,” and the inevitable need to permanently close some existing coal-fired power stations will likely be key domestic flash points. There will also be added pressure for businesses and investors, as there is an overdue but growing incorporation of climate and carbon policy risks in investment decisions.
The risks and realities of climate inaction will continue to grow, as will the opportunities for taking action. While all political parties acknowledge the need for climate action, there are unavoidable human, economic, and political risks. Let’s hope Australia manages them better in the months and years ahead.