In the process leading up to the Senate’s rejection of the government’s Carbon Pollution Reduction Scheme, no one has covered themselves with glory. Starting with the Independents, there’s little that can be said about Fielding except that the sooner he is sent home to nurse his delusions, the better. Nick Xenophon has unfortunately followed his customary line of trying to come up with his own alternative scheme. At this stage of the game, this position is not much different, in practice, from Fielding’s, though it offers more chance of a rethink on the second round. The Nationals have pretty much followed the Fielding line, and the Liberals have been all over the shop, as usual.
That leaves Labor and the Greens, neither of whom can be particularly proud of themselves. In the absence of a disaster, they will control the Senate between them in the next Parliament and will have little choice but to make deals on climate policy. As a leadup to this, it would be great if they could have reached an agreement on an improved, if still imperfect, CPRS. But Labor is more interested in wedging the Libs, and the Greens are more interested in political purity.
What would an improved CPRS look like? First, as I’ve argued already, the government’s conditional target of 25 per cent is about right. There’s no way Copenhagen will produce a number much larger than this – the US is offering 17, and the EU 30 with an asterisk (a choice of start date that makes them look particularly good). The 5 per cent target could be higher, but really, if we don’t get a global agreement, nothing Australia does really matters. The big flaws in the CPRS are the excessive giveaways of free permits (and the correspondingly limited compensation for households and displaced workers) and the fact that the design negates the benefits of any voluntary reductions (I initially thought the changes announced in March addressed this point, but they don’t).
Looking ahead, the politics seem reasonably promising for the government, promising but risky for the Greens and the Nationals, mixed for the Independents, and disastrous for the Libs. The government would be crazy not to take the opportunity of a double dissolution: given the resounding win that seems almost certain, they would be able to pass the legislation in a joint sitting without any outside support. That would create a “fact on the ground” which would make it life more difficult for the Greens; they could scarcely block legislation required to fix problems with an existing scheme as they emerged, and would be stuck with making incremental changes. Against that, they would have the balance of power in the Senate, and the chance of taking a couple of inner city seats from Labor (remote in my view, in the context of a double dissolution). The Nats would be able to demonstrate some independence and perhaps stave off their extinction for another election or two. As for the Independents, Fielding should never have been elected (thanks, hardheads at the Vic ALP for the deal that got him in!) and won’t get back. On the figures from last time, Xenophon could be re-elected with a running mate. I doubt that would happen. He’d probably get back in, but the numbers in the new Senate would leave him on the sidelines.
As for the Libs, the idea of a double dissolution in November fought on an issue where they can’t keep a consistent line for more than a day at a time, seems appalling. They’d be better off backing down and passing the government’s legislation. But if they are going to cave in November, why didn’t they make a serious attempt at cutting a deal this time around? Like Mr Micawber, they are hoping that somethng will turn up, but they are likely to be disappointed.