It’s gamesmanship, and we all lose
May 6, 2009
We are on the verge of a national failure of will to reduce our greenhouse gas emissions. It’s doubtful if Kevin Rudd’s revised proposal will get his carbon pollution reduction scheme passed by the Senate.
If his latest compromise fails, it will be because of an impasse between those decrying the scheme as too tough and those objecting it isn’t tough enough. Such a failure of will reflects no credit on any political party or interest group involved. All the political parties are playing games for their own short-term advantage.
Fortunately, however, if a scheme can’t be agreed, all will not be lost. Australia’s contribution to reducing global emissions will be unchanged – a truth the Government seems anxious to conceal from us.
The unavoidable truth is that the Rudd Government doesn’t have the power to implement any scheme, good or bad, because it doesn’t have the numbers in the Senate. It had to propose a considerable compromise, either with the preferences of the Coalition or with those of the Greens (plus two unpredictable and aggrandising independent senators).
Rudd decided from the start to avoid dealing with the Greens, believing they would insist on a scheme far too radical for business and the public to swallow. They seem to regard burning or exporting coal as an immoral act that should cease forthwith, deluding themselves that job losses would be instantly and painlessly overwhelmed by the far greater job opportunities created by the expansion of renewable energy.
What’s more, on an issue so central to their political justification for existing, the Greens could easily have preferred to stay pure and refuse any compromise.
So Rudd’s initial proposal was purpose-built to be irresistible to the Coalition. It adopted the lowest possible go-it-alone emissions reduction target – 5 per cent – and a pathetically low 15 per cent reduction in the event of an international agreement in Copenhagen in December.
It accommodated the demands of business lobby groups to an extent Rudd’s own expert, Professor Ross Garnaut, found repugnant. (At another level, however, the need to accommodate the Coalition’s biases was a convenient excuse for Rudd who, even if he’d had the Senate numbers, is unlikely to have had the courage to resist the business groups’ begging bowl.)
So Rudd offered the Coalition a scheme little different to the one it took to the last election (both schemes having been designed by the same bureaucrats). What was Malcolm Turnbull’s reaction? Nothing doing. He rejected it, contriving to claim it was simultaneously too weak and too tough.
Coming from the man who’d championed the Coalition’s scheme and had seemed genuinely committed, this was puzzling. The explanation was his tenuous grip on the leadership and loyalty of the Liberals.
In the vacuum left by the departure of the party strongman, John Howard, its climate change sceptics – led by the powerful Nick Minchin – asserted themselves. Worse, under the de facto leadership of the agrarian populist Barnaby Joyce, the Nationals rejected the carbon reduction scheme outright.
Turnbull’s strategy for staying at the head of this fractious rabble has been to oppose anything and everything the Government says or does. He’s applied that approach to the carbon scheme, with the additional motives that to have supported the scheme would have exposed the Coalition’s divisions for all to see, as well as emboldening his opponents within the party.
This is the background to Monday’s backdown by Rudd. It’s designed solely to increase the pressure on Turnbull. It does so by acting on many of the criticisms he was making, but also by winning some formerly absent support from the main environmental groups and, more significantly, the main business lobby groups.
The environmentalists were won over by the promise to up the reduction in emissions to 25 per cent by 2020, but under conditions about an agreement in Copenhagen so stringent they’re unlikely to be met. (Not that this matters, as we’ll see.) Environmentalists are suckers for empty symbolism.
The business groups were won over by a further big increase in handouts, plus the decision – in deference to the global recession – to delay the scheme by, in effect, two years, to July 2012.
The business lobbies have probably realised this is the most lenient deal they’ll ever con the pollies into. Their behaviour has been self-serving and short-sighted, using grossly exaggerated claims of how much they’ll suffer to persuade Rudd to shift the cost of adjusting to the scheme onto other industries – or better, onto consumers and taxpayers.
The lobbies have used misleading arguments about the need for “certainty” to achieve their goal of having a scheme locked in before Copenhagen so that, whatever deal emerges from that meeting, their contribution can’t be increased. This is the only convincing reason for Rudd’s insistence that the scheme be enacted this year despite the delayed starting date.
It’s possible the pressure business now applies to the Liberals to pass the revised scheme is sufficient to oblige Turnbull to capitulate. I doubt he will. In this affair he’s acting like all the other big players, putting self-interest well ahead of our grandchildren’s interests.
But if the nation can’t agree on a scheme, all will not be lost. Australia’s contribution to reducing global emissions will be unchanged. Why? Because our contribution to reducing global emissions will be determined by whatever international agreement is reached (or not reached) at Copenhagen. With all the big countries at the table, we’ll have little scope to say what we will or won’t accept. Our only (unthinkable) option would be to refuse to ratify the protocol.
Should we not have a domestic scheme to reduce our emissions sufficiently, we’d have to meet our international obligations by buying credits from other (probably developing) countries. The cost, which, roughly, could range between $5 and $10 billion a year by 2020, would have to be picked up by the taxpayer.
Ross Gittins is the Herald’s economics editor.