Apparently the confusion about the Coalition’s climate policy is about to end. Brendan Nelson has told The Australian the Coalition is close to finalising its emissions trading policy and that Prime Minister will be wrong-footed because he has failed to read the mood of the electorate.

Putting the spin aside, the hints provided thus far indicate the Coalition’s ‘new’ position is unlikely to be significantly different from its pre-election position. It wants a slow start to the national emissions trading scheme, opposes measures that will increase fuel prices, wants to prevent competitive distortions in the trade-exposed/emission-intensive sectors, and opposes any move to substantially reduce domestic emissions until there is a comprehensive international agreement that covers major emitters, including China and India.

At present, these issues do not provide a strong point of separation with the Government. The Green Paper on the Carbon Pollution Reduction Scheme indicates that the Government’s preferred position is to provide free permits to prevent carbon leakage and unfair competition in the trade-exposed sectors. International aviation and shipping, which exhibit many of the characteristics of the trade-exposed sectors, will be exempt from the scheme.

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The Coalition’s concerns about fuel prices have been covered by the Government. The transport sector will be included in the scheme, but the price effects will be offset by a reduction in the fuel excise. Measures will also be instituted to ensure imports and exports of transport fuels will not be adversely affected.

The Government’s position on caps and the pace at which emissions will be reduced is unclear. The official position is that the public will be given an ‘indicative national emissions trajectory’ for the period from 2010 to 2013 in late 2008. The caps to 2015 will not be released until 2010. Notwithstanding this, the Government has given a clear indication that the scheme will start slowly, with high caps and low prices in the early years.

There will be a price cap until 2015. There will be subsidies to coal-fired generators. The trade-exposed industries will be provided with free permits. The agricultural sector will be excluded from the scheme and the Government has not expressed any appetite to introduce a tax to suppress demand for meat products. Land clearing is excluded. Biomass and biofuels are excluded. The forestry sector’s inclusion is voluntary. These aspects of the scheme make a slow start almost unavoidable.

As for not getting ahead of the major emitters, the infamous Garrett incident in October 2007 has clarified where the ALP stands on this issue. In a media interview, Peter Garrett suggested that developing countries’ participation in a post-2012 agreement may not be a deal breaker for the ALP. Hours later he retracted the statement, saying the ALP would require ‘binding commitments from both developed and developing countries’ in the post-2012 agreement.

If any ambiguity remained, the rhetoric from the Government since it took office has eliminated it. In their introduction to the Green Paper, the Prime Minister, Treasurer and Minister for Climate Change tipped their hat in this direction when they stated that:

The Government will take account of the evolving state of international negotiations in determining the path we set to meet our target of reducing Australia’s carbon pollution by 60 per cent below 2000 levels by 2050.

In the pre-election period the ALP focused on the ‘grave danger’ the planet faces from climate change and the proactive role Australia could play in addressing the issue. The focus is now on comparative positioning in international negotiations.

The Coalition is struggling to find a way into the climate debate. The Government has left little room to its political right, providing the business lobby with most of what it wanted. It has also taken care of the populist route by offsetting transport fuel effects and offering assistance to low and middle income households. There is political space to the Government’s left, but the Coalition doesn’t want to go there. With few options remaining, it has opted for trying to paint the Government as radicals. Yet a good look at the content illustrates that there are few substantive points of difference between the parties. This is unlikely to change in the near future.

Andrew Macintosh is Associate Director of the ANU Centre for Climate Law and Policy

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Peter Fray
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