My column in yesterday’s Fin (over the fold) advocating agreement between Labor and the Greens on a short-term carbon price was rendered obsolete almost immediately by Julia Gillard’s speech (as it happened, I was in the building next door when she gave it).
Gillard’s non-policy represents a failure of leadership. The best that can be said for it is that the delay generated by this process is only supposed to last for 12 months, and that 150 randomly selected Australians could scarcely do a worse job on this vital issues than our political leaders have done.
But, as is so often the case, Abbott is even worse, offering an anti-policy that would represent an obstacle to any real action. I’m feeling happy about my decision to vote for the Greens. With rather less enthusiasm than before, I’ll still give Labor my second preference.
Column for Thursday 22 July 2010
The speed and efficiency with which the Labor and Green machines have concluded a preference deal has substantially improved the odds for the government’s re-election, and virtually ensured a Senate in which the Greens hold the balance of power from 2011 onwards. The paradox in this is that, if Labor and the Greens had managed similar efficiency in settling their policy disagreements, the election would have been held under very different, and more favorable circumstances.
The key issue here is climate change. Labor’s failure to deal effectively with the issue brought an end to Kevin Rudd’s generally successful Prime Ministership and brought the government itself to the brink of defeat. And despite the centrality of the issue to the Greens, they have been unable so far to exercise any real influence on climate policy.
Both sides have blamed the other for this debacle. Labor’s central exhibit is the Senate vote on the Rudd-Turnbull deal for a heavily modified ETS. Two Liberal Senators, Sue Boyce and Judith Troeth, crossed the floor to vote for the deal, so if the Greens had also supported the bill, it would have passed.
The Greens argument, supported by many in the environment movement who had initially supported the ETS, was that the deal was so compromised as to be worse than useless, and that it would be better to start again from scratch. This calculation may turn out to be mistaken, most obviously if the conservative parties are returned to office on a platform of ‘delay and do little’.
But sooner or later the steadily accumulating evidence on climate change will force even the most reluctant government to act. At that point, being locked into a policy that effectively guarantees polluters of more than full compensation would be a major obstacle.
Regardless of how blame is assigned for the failure of the Rudd-Turnbull deal, it is clear that Labor lost the plot from then on. The government had a number of options – negotiation with the Greens and dissident Liberals on an ETS package that might pass the Senate, a double dissolution based on either its original proposal or the Rudd-Turnbull deal, or a switch to a carbon price fixed in the short run. It chose to do nothing, letting support ebb away, and then, even more disastrously, to abandon the whole idea.
This decision, forced on Kevin Rudd by the backroom operators who had previously opposed any action on climate change, was fatal to his leadership, and almost fatal to the Labor government. The injustice of this outcome is evident, and is still doing damage to Labor’s chances, but it was the culmination of a long series of mistakes.
Looking forward, Labor’s position remains ambiguous. In the long term, if there is to be any effective action on climate change, it must come through co-operation between Labor and the Greens. Given that revival of the ETS has been ruled out for some time to come, the best option would be to introduce a carbon price set to rise gradually over the next few years.
It could, for example, start at $10/tonne (about 1 cent extra for a kilowatt hour of electricity or 2.5 cents for a litre of petrol) and rise gradually to $20/tonne. Once such a price was in place, the doomsayer claims of economic catastrophe would be shown up for the nonsense they are.
But, unless it is forced to act, there is no sign that the Labor government will do so. In these circumstances, the only reasonable choice for voters concerned to see serious action on climate change, is to give their first preference to the Greens in both houses, and their second preference to Labor. The more Greens are elected, the sooner both Labor and the Greens will realise the benefits to be obtained from co-operation. Particularly if the Greens win Lower House seats, Labor will realise that its core supporters can’t be taken for granted. And if the Greens clearly hold the balance of power, a ‘purist’ strategy that leads to inaction will carry a high political price.
Even for voters who aren’t concerned primarily with climate change, there are some good reasons to consider voting Green. The conservatives, under the leadership of Tony Abbott and (effectively) Barnaby Joyce, are utterly unfit for government, and have shown themselves more interested in stunts and cheap populism than in serious policy formulation. There is no sign that this will change in the future, except in the unlikely event that the Liberals return Malcolm Turnbull to the leadership. In these circumstances, the sooner Labor and the Greens learn to co-operate effectively, the better for all of us.
John Quiggin is an ARC Federation Fellow in Economics and Political Science at the University of Queensland.
John Quiggin 
PrQ said:
Sorry PrQ, I don’t follow the reasoning there. The ALP will be elected on a policy of delay and do little and indeed, even that is better than do a lot of harm to the scheme by turning it into a slush fund that privileges big polluters for a decade over those doing the right thing
See for example, the Grattan Institute discussion.
I remember hearing (at Copenhagen) that Labor was quite worried about Abbott on climate, rather than wanting to use climate as an issue to attack Abbott. If they had been willing to take on the Coalition, we would be in a very different situation right now.
That said, there is one tiny thing to like about this announcement, that future coal plants be carbon capture ready. If implemented, that would rule out new coal plants forever. There will never be such plants. It’s simply not feasible at less than $100 per tonne and that’s not happening soon.
One suspects the policy will exempt all currently planned projects, so this is probably moot.
Imagine if, as soon as Garnaut was released, Rudd had simply announced that he would legislate on that basis with, at worst only minor technical changes (see Grattan for example).
At that stage, Turnbull was leader, the opposition was deeply divided and Abbott was favouring running dead on the issue. They’d have tried haggling, Rudd could have said take it or leave it and we have to have certainty. They’d almost certainly have caved.
And if they had dug in their heels, then Rudd simply says: fair enough. I believe it is clear that I secured a mandate on November 2007. Both parties ran on having an ETS. The coalition denies there’s a mandate. Let us have an election for the HoR and half the senate right now. This is the greatest moral challenge of our generation after all.
He’d have run on carrying out his promise against an opposition who had decided to mindlessly oppose everything, including policies they took the the last election and even sensible action to protect the economy. There would have been no issues running against them and they’d have been totally unprepared for an election. Tuckey would have been slamming Turnbull and Abbott would have been all over the place.
Can there be any doubt but that the ALP would have romped home and got a senate majority with The Greens against such a rabble?
Rudd would have gone to Copenhagen a hero and would now be in an impregnable position. He played the game incredibly poorly and now we are all worse off.
Even at a paltry $10 a tonne some large companies will scream blue murder or they will want large credits for things their minuscule tree planting schemes. James Hansen says that AGW will be so undeniable within a decade that we will accept carbon constraints voluntarily. Stable door etc. Arguably we could levy coal exports an equivalent amount ($24 for thermal black coal) to raise an impressive $6-7 bn. Overseas customers could ask for the money back if they promised to spend it on clean tech.
Of course if the citizens panel chose that other energy source the heat would off the government as the people had spoken. Even if they insist on wind and solar which I doubt can make a dent in coal burning then a rushed NBN scale program should be implemented to see how it goes. Just do something, anything, in the first term.
I’m normally against general purpose citizen’s assembly galah events but in this case of dealing with single issue it actually might be a good (ie not completely stupid) idea. The science is clear for the science literate, but it might be good to lock a bunch of ordinary people up in a large room and not let them out until they’d asked enough questions to come to agreement. There’s some pretty powerful vested interests that have to be dealt with and if a bunch of regular people could come up with a near unanimous position this might provide an arming narrative that assists the political process.
My personal preference – having observed the debacle over the last couple of years – would be for a revenue-neutral producer carbon tax that is not returned to polluters but to consumers as reduced tax and increased pensions and ramps up over the next decade or so. This would avoid the “big tax” sound bite and keep enough people happy while providing the right incentive for lower and cleaner energy use. The big end of town approach can be deemed a failure and paying polluters to pollute was always desperate. An international regime seems some way off but a local carbon tax could integrate with it, if and when.
Hopefully the anti-science wing of the Liberal Party will get well clobbered by this election and they can move along, or aside. Abbott can get a job running a gym or something where he can’t do much real damage.
after this shifty non-policy, perhaps time is better spent on assessing whether the Greens will have the balance of power in the senate.
if the greens are to the left of labour, why do you assume the ALP will not go right on the important issues assuming they win?
Seriously, how long can Gillard keep this up? Give in to the miners (the major miners, not the minor miners that is!), appease the westies on asylum seekers and, now, pass off the third big issue to a bunch of unelected inexperts in the hope they will cobble together something feasible (the analogy of chimps, typewriters and Shakespeare comes to mind). It’s all a far cry from the heady days of 2007-08. At least Rudd led, for a while at least. I’m voting Green too, though a spoiled vote is looking increasingly tempting.
@Fran:
What she said was:
The thing is, any plant is capable of being retrofitted with carbon capture. The announcement is totally meaningless – it will have no effect whatsoever.
@SJ
Oh … fair enough then. Even now, I can’t help looking for a silver lining, but it seems that even this was cant.
There is a misapprehension in this blog about who the green voter is.
They are not the voters who invariable second preference the ALP. They are just the wayward who always come home.
The green voters are the 20% and growing who might second preference the liberals. The bigger is the green vote, the more who second preference the liberals.
Politicians worry about people who might vote against them, or might switch back to vote them, not those voters who always vote for them.
The green liberals – or are they liberal greens – tend to have children and to be poorer than the average green voter. These green liberals second preference the liberals more when the economy is down.
Gillard is courting the green liberals by talking about environmental issues, but only in tokenistic terms that will not cost the green liberals in the hip-pocket.
If you think this election might be close, imagine the next one where the ALP is getting a bit tired and smelly as incumbent governments always do and is even more desperate not to antagonise the green liberals and any other swinging voter. These political demographics preclude any unilateral action of global warming in the next and in the subsequent parliament.
A modest carbon tax on consumption could work, maybe.
@Rationalist
A factor that will give Gillard an incentive to do nothing is the U.S. Senate Democrats on Thursday abandoned efforts to put together a comprehensive energy bill that would seek to curb greenhouse gas emissions.
see http://www.washingtonpost.com/wp-dyn/content/article/2010/07/22/AR2010072203614.html?hpid=topnews
Gillard does not seem to want to lead from the front on climate change.
The USA draged its feet under both parties. Clinton never submitted the Kyoto protocol for Senate ratification. Obama has also declined to submit the protocol for Senate ratification, as far as I know.
Maybe Gillard’s convention will move the debate a long a little (I doubt it). But I think, more broadly, that this is one where the endless discussion of details obscures the real issues and facilitates obfuscation and delay. The tone of almost all the mainstream political debate (and most of the economic and other commentary) suggests that, even if the participants have grasped the science intellectually, they have not done so in any way that alters their other convictions about life – hence arguments over the costs of this or that option, calculations of “risk”, constant buck-passing.
The transition to a resource-constrained, environmentally-managed world will be neither cheap nor easy – I think JQ’s calculations leave out a lot of what has to be done.
On this one, hope for a few medium disasters early on. The alternative will be a lot of big ones later.
US Senate Democrats could yet pull together votes for a carbon price for the power sector. Some utilities there are calling for a price. Duke Energy’s CEO James Rogers says without a comprehensive climate policy, investment will go into gas-fired power plants and he says what’s the point of driving the economy to rely on yet another fossil fuel. If only we had that leadership from our utilities. If you ask Origin (who plan to make big bucks from coal seam gas) why they’re not out there investing in renewables they say they need more signals from consumers. Which seems to be Labor’s approach too. Am I and my friends supposed to go out and build a geothermal plant or 500 mw solar tower in the backyard?
Pr Q said:
Yes, if you build it, they will come.
Although surely you mean carbon tax, not carbon “price”? If the economics profession is finally switching from carbon trading to carbon taxing then it should start talking about the carbon taxing cost rather than carbon trading price.
Or is it tax such a dirty word that it is the concept that can’t be named?
Pr Q said:
I agree with this, although I quibble with the use of the term “conservatives” to describe a party that still wants to tear up century-old industrial awards and has an obstructionist attitude towards pollution control.
OTOH, Gillard’s “citizens consultative assembly” is the definition of “cheap populism” and political “stunts”. As always, the parties converge on politics and policy.
OTOOH, we have had two decades or more of expensive elitism in financial and cultural policies. So perhaps we should give “cheap populism” a go, given that it costs less.
Pr Q said:
Tweedledumb and Tweedledon’t
The FoxNewsLtd sewer is already cranking up for the mother of all smear campaigns against the Greens.Just as the hottest year in recorded history, with country after country recording the highest ever measured temperatures and a massive coral bleaching caused by record high sea temperatures in many regions, unfold. The question must surely now be,’Why do the planet’s rulers either not care that humanity is almost certainly stuffed,or why do they want it to happen?’ To answer those questions we must embark on a murky journey into the study of moral evil and psychopathology. We have,in the wealth of Rightwing liars and disinformationists in the mainstream media, a wealth of subjects to study.
I think a couple of factors have cruelled the chances of getting through power price rises of the order of say 2c per kwh. First was the stuff up with the home insulation scheme resulting in doubts over the Fed’s competence. Second is the fact that pricing review tribunals have approved hefty increases all around Australia. The power companies appear to have argued they need to pay for infrastructure for the more difficult energy future ie more transmission lines, transformers and so on. Maybe so but nothing has really changed on the electricity generation scene apart from some new gas fired plants.
These price increases seem to be of the order of 40% over 3 years. My suggestion is since they have gotten ahead of themselves that the power companies absorb the first 1c per kwh of any carbon related cost increases. Again expect screams of blue murder. It may also demonstrate my belief that State governments are working in concert with the companies to undermine the intent of any carbon reduction scheme. If the price increase was 2c then consumers just pay half.
While all and sundry are belting the PM around the head re the climate change policy ask yourselves this;
Can this country afford another debate such as the first one? Vested interests , deniers, flat earthers all making sure that the science was buried in the noise? The Greens demanding what the economy has no chance of providing. The politics of sheer bastardry by the Opposition?
Can we go through this again and still end up nowhere? Can we afford to?
I think that this policy is sensible in that it basically saying;….let’s slow down, take a breathe and have a rational discussion. Who is going to be the first politician to claim that the concerns of average Australians are of no import.
The change to our way of life, the way we produce and manufacture is going to be immense and it can’t be done overnight. We have to be prudent. There is no other way.
Think about it.
It seems to me that we who are scandalised at the ALP’s reckless hostility to action on climate change can spend the next four weeks feeling angry and powerless or we can do something.
In my opinion we need to provoke ALP or Liberal members to jump ship and break the consensus within the parties. Those at greatest prospect of doing this are surely those on margins of less than 5%.
Over the next four weeks we ought to be identifying those who fit this description and letting them know that after the Greens, as we see no important difference between the parties on this crucial issue, we intend to give both parties the same numeric preference, effectively spoiling our ballots. We can be induced to change that if the member publically declares before the election that he or she will campaign for the inclusion of a serious interim price on carbon (at least $20 per tonne applied universally) in the 2011-12 budget. They must publish this in an authorised campaign leaflet not later than 14 August 2010. If they do so, we will circulate this fact amongst our peers and within the blogosphere under a title called “Friends of Action on Climate Change”.
We need to email them, phone them and slip letters under their electorate doors explaining no more than this (no long defences of the action — more letters/contacts with less in them is better).
We could of course accept the following as satisfying the above demand:
1: Abolition of all subsidies for use of fossil fuels (e.g. LPG conversion rebate, diesel fuel rebate)
2. Abolition of tax deductibility of dirty energy sources
as both of these would amply satisfy the $20 per tonne of CO2 price. Neither represents a carbon tax or an ETS.
What about if folks?
Note: I realise not all of you have the stomach to spoil your ballots. What you do in practice on August 21 is of course a matter for you. Bear in mind the following though:
In any seat where the Liberal secures more primaries than the Green but fewer than the ALP candidate, your preference will assist Tony Abbott. In any electorate where the Green secures more primaries than the Liberal but fewer than the ALP, unless Liberal or other preferences put the Green in front, the Green won’t win, nor can preferences to the ALP help the ALP defeat the Liberal as he or she has alrfeady been eliminated. So where you send your preferences is purely symbolic. They will be in practice useless to either of the major parties. You might want to reflect on what sort of symbol you want to send.
I’m in Bennelong and the Green will have zero chance of finishing ahead of the Liberal (es-pro tennis player, John Alexander).
Personally, I don’t agree that the choice should be limited to helping John Alexander beat Maxine McKew or the reverse. If the neither of the above option is in practice a none of the above option*, that is the lesser evil, and I am bound to follow it.
*subject to my proposed deal above about declaring for a carbon price
@Fran Barlow
It is interesting that so many of the green voters on this blog who say where they vote seem to live in safe liberal seats and talk of pushing labour into third place.
Last time I looked, safe liberal seats were where the rich lived.
This reconfirms that status of green voters as the richest group of voters.
p.s. you might wish to read Antony green’s blog posting about a green senator sneaking into win the second Canberra senate seat on ALP preferences and who would be seated immediately, not on July 1, 2011.
http://blogs.abc.net.au/antonygreen/2010/07/the-act-senate-contest.html
Jack Strocchi, my reading of Gillard’s speech suggests she is giving the sceptics and deniers a chance to prove their case. But in reality it is a ploy to expose the Coalition illywackers for what they are (albeit a few sane liberals) frauds, and as we all know they will end up with egg on their faces when the ‘citizens assembly’ folds.
@Jim Rose
Bennelong is not a “safe Liberal seat”. It is a marginal ALP seat. We used to have this chap called John Howard as the member. He was fairly well-known but got beaten at the 2007 election. Perhaps you have heard of him?
My point stands.
Now that I have cooled down a bit, maybe we DO need to pause for breath because there is still no solution as to how to to deal with imports of goods with no carbon price included in them.
Australia is already flooded with cheap imports often produced under conditions which Australian producers would not be allowed to get away with. It would be silly to have Australian goods subject to a carbon price which encouraged an even greater flood of imports NOT subject to a carbon price.
The failure of leadership is still there, no less diminished by this. There are many other things which can be done to reduce Australia’s carbon footprint which aren’t being done to any great degree and the gabfest is still a fart in the head as far as I’m concerned.
@Salient Green
No, we don’t
It’s called a Border Tariff Adjustment and there is precedent in GATT for doing this.
Ah, but is a BTA part of the CPRS? I repeat, there are many other things which can reduce our carbon footprint without a price on carbon. The will just isn’t there. The pause for breath I was refering to was in regards to a carbon price only.
Obviously a BTA is not part of Government policy because the Food and Grocery council are concerned about it and want a seat at the gabfest.
http://au.biz.yahoo.com/100723/31/2ej19.html
@Salient Green
I doubt that we could get an international agreement on carbon without going through a stage of import taxes items that not carbon taxed in their source countries.
@Fran Barlow
One way to get the rancid right-wing populist elected PM is to get more wavering labour or liberal voters to vote first for the greens.
Ex-senator John Black and now market researcher regards the Greens as the DLP of 21st century politics.
The DLP were a conduit for new to the middle class Catholics to migrate to voting liberal without losing their working class roots and self-identity.
Vote DLP to stay true to your heart and your old class, and then follow your wallet and second preference the Liberals with a clean conscience. Voting DLP first was like going to confession to cleanse your sins and then starting afresh with the second preference for Menzies.
Green voters with children and on lower incomes trend to second preference the Liberals.
Voting greens in the Senate allow these light green voter with families to express their green identities and then follow their wallets in a recession and second preference the rancid right-wing populist in the House. Voting splitting is good for the soul.
If Green preferences drop from 80% to 70% ALP, the Liberals get an extra 1% on two-party preferred – more than enough to make many more elections much closer.
If you want the increasingly shifty centre-left populist to win, vote ALP.
One example of her shiftiness is treating East Timor as a suzerainty expected to on overnight notice pay its latest tribute in the form of hosting refugee processing camps.
Gillard’s real shiftiness is her citizens’ assembly on global warming.
An astute way of putting off the issue for all of 2011 and into early 2012 before any real decisons get to cabinet.
By early 2012, enough bills would have gone to the Senate to allow Gillard to size up the green cross-bench senators to see if they really hold the balance of power or they are just a left wing cross-bench party that is occasionally used as a stalking horse to win some or all of the Liberals over to a gilded compromise.
Being of the senate cross benches does not automatically make you the first port of call.
Both major parties are now of the view that green voters who swing to either party have a limited hip-pocket tolerance for anything more than environmental tokenism.
Gillard hints at support for emissions trading because of the rent-seeking opportunities on offer in who gets what upfront for free and which industries go first to extract support from business groups and the recipients of green jobs. Gillard will not risk a carbon tax with the 2014 election likely to be even closer than 2011.
@Jim Rose
What a rant! So much heat and so little light …
This backdown on climate is deeply disappointing: I suppose it could be viewed as a more honest representation of Labor’s position given they probably have just as many denialists (or at least ‘ it’s real but too hard’ views) in their ranks as Liberals do and are just as desperate to avoid commitment on this issue. Since the non-policies of Abbott are even worse I suppose they see this as opportunity to avoid hard decisions for another electoral cycle or two without serious loss of votes even if only by preferences. If the States can use the next few years building enough coal plants the whole issue of low-emissions infrastructure gets shifted from necessary to optional with a few green looking projects that make no real difference being what we’ll get.
Labor were far too willing to negotiate away climate policy effectiveness to get Turnbull’s Libs on side but were unwilling to deal with Greens to increase it’s effectiveness so no, I’m not that surprised that Labor lacks conviction.
Looks like both main parties are fielding candidates suited to a nation that aspires to be the world’s coal mine. Just don’t even mention the long term ire this will earn us from people and nations just as desperate as we are to find scapegoats and avoid responsibility for their own decisions and failures on this.
Suspicious of our pollies as I am, I do wonder if, during the recent behind closed doors discussions with the big miners Julia got handed their ultimatum – that they’ll do everything up to and including widespread economic destruction like they would to uppity third world nations should a carbon price stay on the agenda. I am deeply suspicious of backroom deals and this looks a lot like one. Part of the deal to get some agreement on mining taxes? Julia is showing herself to be more influenced by closed doors discussions than by the widespread public concern and overwhelming scientific concern over climate change.
2 decades of science being very clear that the accumulating costs of increased emissions will be huge beyond imagination and we have to vote for fringe parties to get policy that actually reflects reality? Do Gillard and Abbott really think lots of Aussie voters are largely idiots who don’t care? Sorry, an idiotic question; of course they do.
Just to avoid any confusion I’ve previously posted as Ken; there are other Ken’s who comment here.
@Jim Rose
I live in Murray Bridge, South Australia, and I am going to vote Green this time as a primary vote; it won’t be merely a protest vote, at least I won’t intend it as such. MB had close to the lowest average income by postcode in SA, only a couple of years ago, IIRC. Just up the road in Mypolonga, Salient Green will probably vote Green as well.
Fact is that Labor and Liberal either offer and slide away from delivery of climate policies as their strategy, or they do that out of poor execution of political strategy to get legislation enacted. The Labor government as elected in 2007 had strong community support for meaningful action on AGW (Anthropogenic Global Warming) and to hold credibility it had to delivery the legislation capable of changing human behaviour with respect to GHG emissions. They failed through a combination of watering down the targets, largely ignoring Garnaut’s report, caving into the high energy industries be they energy producers or energy consumers, having no plan B for dealing with a let down at Copenhagen, not negotiating with the Greens, failing to communicate in simple terms what an ETS is and how it works (a simple diagram could have conveyed the most important steps; it has been done before), and what distinguishes its effect from a “Carbon” tax.
The Labor policies of massive open-cut coal mines, and a default policy of high immigration on the one hand, and concerns of infrastructure stress and GHG emissions on the other hand, have led many voters to see Labor as holding paradoxical policy positions and that weakens Labor’s credibility on these issues. Further to that, Labor’s election promise to put $2k into new cars for those who trade in a pre-1996 clunker is funded by stripping money out of solar energy farms and wind farms. What kind of idiocy is that?!!
Given that conditions weren’t particularly favourable for a record breaking high global temperature this financial year just past, the fact that it happened should be a wake-up call to those who spent the last decade claiming that the temperature was falling…but it won’t be.
Vote Green, be Green.
@Donald Oats
thanks
If the major parties are unlikely to deliver on climate policies, and international agreement about effective global action is even less likely, what are your next set of options?
A key part of policy development after bringing out the first-best policy responses is remembering the bringing you down-to-earth question: that is not going to happen, so what are you going to do now?