There were two immediate reactions to Wayne Swan’s referral of emissions trading to the House of Representatives Economics committee. Nats leader Warren Truss reckoned it was the start of the Government’s back-down on its ETS. Coalition senator Matthias Cormann, who is chairing a Coalition-established inquiry on fuel and energy, thought it was all about avoiding proper Senate scrutiny.

Probably it’s both. Once the Government introduces its ETS bill, it will be hard to argue that there should be another Senate inquiry when Cormann’s has been busy on the same issue and the Reps committee is carrying out its own. Still, that won’t stop it being referred to committee, especially since Cormann’s committee, which hired the least-credible “expert ” on climate change in Brian Fisher to review Treasury’s ETS modelling, might not be regarded as providing the most unbiased analysis.

However, the reference to the Economics Committee suggests the Government is at least preparing the ground in the event it decides its ETS — or more accurately its Carbon Pollution Reward Scheme — is too politically fraught to introduce in the middle of an economic slowdown or recession. The terms of reference are:

The Committee will inquire into the choice of emissions trading as the central policy to reduce Australia’s carbon pollution, taking into account the need to:

reduce carbon pollution at the lowest economic cost;

put in place long-term incentives for investment in clean energy and low-emission technology; and

contribute to a global solution to climate change.

The House Climate Change Committee, chaired by Jennie George, would have been the logical home for such an inquiry. Instead, the Economics Committee, chaired by Dobell MP Craig Thomson, has it. Thomson has been active in the past in raising concerns about the impact of rising sea levels on his low-lying coastal electorate, but that won’t count for much if he has riding instructions — and when Governments initiate inquiries, they invariably issue riding instructions.

You might also wonder whether those terms of reference weren’t more or less covered pretty effectively by the Garnaut Review. The answer to the question about whether an ETS is the lowest-cost way of reducing carbon emissions is 1. Yes and 2. But not the way the Government is doing it.

The sort of idiotic mentality driving the cravenness of the Government’s response was perfectly demonstrated by Dennis Shanahan in The Australian today. Shanahan found a Norwegian firm to conjure up an amount that Australia might have to pay if it fails to meets its Kyoto Protocol targets.

“Somebody has now put a price on the symbolic act of Kevin Rudd and Penny Wong flying to Bali within days of Labor’s election in 2007 and ratifying the Kyoto Protocol. It’s a potential extra $870 million from Australian taxpayers,” Dennis trilled.

The only fly in the ointment is that Australia is on track to meet its Kyoto obligations in 2012 with current abatement measures — not including any ETS. Still, $870m. Kyoto. Foreigners. The UN! Scary stuff.

Between that sort of rubbish and the steady drumbeat of whinging from major polluters who insist, with no independent-verified evidence, that they’ll pack up and leave the moment they stop being subsidised for their emissions, the Government’s only likely path is further retreat. Thomson and friends can prepare the way.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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