The ETS decision announced by Malcolm Turnbull this morning is a sort of Frankenstein’s monster, sewn together from bits of National Party hostility, conservative climate scepticism and moderate enthusiasm to actually do something about climate change. As a consequence, the Coalition is now backing the Government’s 5-25% emissions targets on exactly the conditions the Government has set, wants to “defer” consideration of the Government’s ETS bill until after Copenhagen and, in particular, the US ETS legislation is finalised. In the interim, the Coalition wants a voluntary emissions trading scheme.

Beyond that, however, the details get a bit fuzzy. The more Warren Truss was questioned at his joint press conference with Malcolm Turnbull, the more opposed he seemed to any sort of emissions trading scheme. It’s clear that the Nationals are a long way from being in the tent and it’s hard to see Ron Boswell agreeing to any sort of 25% emissions target when he thinks the planet is getting colder.

The Liberals’ position isn’t a great deal clearer. Turnbull, under sustained questioning, refused to say that the Coalition would even accept a copy of the American legislation, which is likely to ensure no trade-exposed US industry faces any carbon price of any kind.

There is, it should be said, policy soundness to the Coalition’s position on timing. There is no actual reason for a vote on the ETS legislation now. It can wait until February next year, after Copenhagen. Business will have no more certainty with the bill passed or rejected now than it will in February. The Government is only rushing it to put the Coalition under pressure, although Malcolm Turnbull insisted, in a quite personal attack on Kevin Rudd, that it was entirely because of Kevin Rudd’s vanity.

But the “deferral” is a distraction, not a solution. It amounts to a refusal to pass the bill, and semantics won’t help if the Government elects to use it as a double dissolution trigger. For a start, it will need an outright majority in the Senate to successfully defer the Bill. Steve Fielding has said he is agreeable to deferral. Nick Xenophon is being cagey, initially saying he wanted to bring the vote on and then suggesting he might be changing his mind — he knows how to keep himself in the picture. The Greens want to bring the vote on now, too, and kill the scheme.

Assuming the Liberals do get a majority vote for deferral, it doesn’t matter anyway — a bill only has to “fail to pass” under s.57 of the Constitution to provide a double dissolution trigger if it is repeated in three months. There’s a good chance “deferral” for an extended period would constitute “failure to pass”.

“The meaning of ‘fail to pass’ is unclear,” Senate Clerk Harry Evans told Crikey, “but remember the Prime Minister only has to convince the Governor-General about a double-dissolution trigger. It’s not justifiable at that stage, although it would be down the track once bills are passed in a joint sitting.”

The broader problem for the Coalition is that “deferral”, perhaps as much as outright rejection, will play to the Government’s desire to paint the Coalition as holdouts who refused to do anything about climate change for twelve years in office and want to keep finding excuses to delay further. Rudd will make much of the fact that Turnbull has now set a new benchmark — the US legislation — as well as Copenhagen, before Australia does anything. “They’ll keep finding excuses to dither and delay,” Rudd will declare, and it will look a lot more plausible than some of the arguments he’s been offering lately.

The voluntary trading scheme proposal is an effort to defend against this charge, but as the Government has discovered, once you propose the detail of a trading scheme, you leave yourself open to constant criticism. A likely weakness is that Turnbull indicated the voluntary scheme would provide permits that could be banked for later use, meaning firms could purchase cheap permits under the voluntary stage of the scheme for use when the price rises under the Government’s ETS two years later, nullifying the price signal effect.

This stitched-together position, aimed at keeping a quite disparate collection of viewpoints together at least until early next year, is half-smart politics. It delays the fateful day when the Coalition’s tensions over emissions trading will be exposed, but also positions the Coalition where the Government wants them. At least if they rejected the bill outright, they could do so on the wholly correct basis that the ETS was so badly designed it wasn’t going to achieve any significant reductions in emissions, which is the Greens’ reason for rejecting it.

As it stands, the issue will be kept alive until February, and it’s not an issue the Opposition can ever win on. Alternatively, Kevin Rudd may decide to cleave open the divisions in the Coalition and call an election on the back of this.

Peter Fray

Save up to 50% on a year of Crikey.

This extraordinary year is almost at an end. But we know that time waits for no one, and we won’t either. This is the time to get on board with Crikey.

For a limited time only, choose what you pay for a year of Crikey.

Save up to 50% or dig deeper so we can dig deeper.

See you in 2021.

Peter Fray
Editor-in-chief of Crikey

SAVE 50%