Last week, in Room K at Melbourne’s Parliament House, Victorian Premier John Brumby officially launched the state chapter of the Labor Environmental Action Network, “a network of grassroots Labor Members who are committed to action on climate change and sustainability.”

Brumby broadly backed the group’s goals — a “Green New Deal” to create jobs, skills and businesses for a low carbon future and a significant cut in emissions in excess of Penny Wong’s current policy.

Alongside Brumby, other Labor luminaries lining up behind LEAN include Tom Uren, John Thwaites, Kelvin Thompson and Mike Rann and Victorian Environment Minister Gavin Jennings. It seems that internal environmental debate in the Labor Party, if not quite as rigorous as the federal Coalition’s, is at least headed in the right direction.

But behind the green curtain the Victorian government has substantial environmental ground to make up.

As Crikey readers know, the ALP is already rent by simmering tensions, with cross-factional, sub-factional, and intra-factional flare-ups threatening to wreak havoc at every turn. The spate of knifings caused by the divide between left and right masks a more fundamental cleavage over the environment, that rather than converging, is being exacerbated by the GFC.

Two weeks’ ago, Jennings was rolled by the so-called “browns” on the issue of logging at the ironically-titled Brown Mountain Creek. The minister was so peeved over the outcome, that permitted old-growth logging despite the presence of the long-footed potoroo, that he quickly took to Twitter to denounce the defeat, seemingly in breach of Cabinet solidarity.

A similar dispute emerged in March over solar panel subsidies. Jennings had been batting hard against Energy Minister Peter Batchelor for a gross tariff — a rebate on all energy generated through solar panels. After a long to-and-fro Jennings capitulated, accepting the weaker net tariff pushed by Batchelor’s Department of Primary Industries.

In the Victorian Public Service, the split between the Jennings’ Department of Sustainability and Environment and his “dry” opponents at DPI is legendary, with mandarins consistently at loggerheads over policy detail.

Dissidents describe an “virulent anti-green sentiment” in Victorian Labor stretching back to the early 1980s and rivalling the Tasmanian Bacon government for hostility. The actions of green-tinged ministers like Jennings are the only force standing between a resurgent brown takeover, they say.

Dr Nick Economou from Monash University says the spat has escalated in the wake of the GFC:

“In the past, under state and federal governments, it has not been uncommon for pro-conservation departments to be at odds with each other war. It happened in Tasmania, the Department of Enregy would be cheering on the Hydro Electric Commission and the Department of Parks and Wildlife would be seeking to increase the size of the state’s national parks.

Now, with the Victorian government trying to maximise econmic activity and growth conservationists are finding it harder to defend their case.”

The brown mindset revolves around the issue of “jobs” — usually unionised ones linked to manufacturing that provide ministers with their pre-selection punch. But rather than manage an orderly transition towards green collars, the official strategy has often been to double back behind the choked-up status-quo.

The divide was exacerbated by the aggressive anti-green electoral tactics of departing state secretary Stephen Newnham. Newnham used precarious ALP majorities in Melbourne, Brunswick and Northcote to justify general offensives against any operative who dared don a Kathmandu jumper.

Newnham was unapologetically feral — the “Green-Liberal deal” in 2006 mimicked the dubious “vote for Les Twentyman is a vote for the Liberals” strategy at the Kororoit by-election two years’ later.

Still, there is a marked difference between attacking the Greens and abandoning the environment. And in some key respects, Newnham was right to be worried.

Electorally, the Greens threat to Labor shows no signs of subsiding. Insiders point to the recent ballot box spurts at the Fremantle by-election and council elections in NSW as ominous precedents. But with the 2010 state election campaign about to kick off, the question remains — will the Victorian ALP choose to co-opt some modest Greens goals, backed by the power of government to pull policy levers, or will it continue to be bound by naked opportunism?

Premier John Brumby is on record as saying he wants to eradicate Newnhamism. But persisting with the coal-fired status quo could also paint the party into a dirty corner.

Despite initiatives like LEAN, upper house Greens say significant ALP policy reform is unlikely. They say the link between Labor and the browns has its roots in Steve Bracks’ 1999 electoral triumph — ever since, the party, in addition to its concern for fictional “battlers”, has become addicted to rural preference deals with brown allies that it claims represent a regional majority.

In the lead-up to the 2006 state poll, incoming Agriculture Minister Joe Helper posed for photos with the shooting lobby. One week later, the party announced deals to ensure it received Alliance preferences where it needed them, including in Helper’s marginal seat of Ripon, which takes in swathes of Western Victoria. At the time, the “cash for preferences” scandal received short shrift in the media.

(The ALP maintains it offered the Greens a global preference swap in 2006. That offer was rejected, they say, forcing the party to go elsewhere).

The Greens also claim that without Shooters Party preferences, Richard Di Natale would have been elected to the Federal Senate in 2007 ahead of David Feeney, a claim hotly disputed by Labor (and seemingly confirmed by AEC data).

Amid the Green threat, Brumby has at least two options, insiders say. He could promise substantive investment in the public sector, especially housing and education, without significant green-friendly structural reforms.

But the Premier could actively co-opt the Greens’ substantial body of policy work, backing popular initiatives that would tap into Victoria’s emerging green consensus. This could mean rejecting “clean coal”, encouraging new technologies (fully-subsidised solar panels would be a start) and auspicing a new body to co-ordinate public transport contracts.

With the Liberals well and truly off the electoral radar, now would seem a rare opportunity to end the internal wars and make a concrete break from the party’s brown-tainted past.