Don’t be fooled into thinking Labor has a detailed climate action plan after yesterday’s announcement by Bill Shorten and opposition environment spokesman Mark Butler. But it has still gone much further than the government, and it is continuing a high-risk approach of policy bravery.
There are multiple elements to Labor’s package, including vehicle emissions standards, federal intervention on land clearing laws and the silliness of “soil magic”, but the core elements are a commitment to significantly higher carbon emissions reduction targets and two separate, ill-defined emissions trading schemes.
In 2014, the Climate Change Authority recommended Australia adopt “a trajectory range for emissions reductions of between 40 and 60 per cent below 2000 levels by 2030”. Labor has committed to a 45% target based on 2005 levels — so barely within the CCA scale, but still almost double the Coalition’s target of 26-28% on 2005 levels. Labor has also promised a 2025 target by next year. Labor’s target is also significantly closer to the kind of abatement targets necessary to achieve the Paris Agreement target of 1.5 degrees Celsius.
To get there, Labor proposes another target — to ensure that “50 per cent of the nation’s electricity is sourced from renewable energy by 2030”. The language around this is now slightly harder than previously mooted by Labor, when words like “goal” were employed. The primary mechanism for this transition will be a trading scheme developed by the Australian Energy Market Commission based on an emissions intensity baseline applied within the electricity generation sector. This is very different to the emissions trading scheme established by the Gillard government. Generators with an emissions intensity above an industry baseline will need to buy emissions permits, while those below the baseline will have credits to sell, in a closed system that notionally means no requirement for significant electricity price rises.
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Exactly how the electricity sector trading scheme will work, however, remains unclear — it will be developed in consultation with the industry, starting with a “Electricity Modernisation Review” established by an incoming Labor government. And being Labor, another focus will be on minimising criticisms from affected unions. There’s a heavy emphasis on a “just transition” under which an advisory council of unions and employers will consult and recommend transitional assistance to communities and workers affected by the closure of emissions-intensive power generators.
There’ll also be some traditional Labor-style protectionist pork barrelling — there’ll be another taskforce, the “Strategic Industries Taskforce” and a $300 million “Strategic Industries Reserve Fund” for sectors of “critical strategic importance; industries like steel, cement, aluminium” which “must stay in Australia.” No evidence is produced by Labor for why these industries deserve protection that the rest of us don’t get — especially given Australian industries like aluminium smelting have long been not merely far less efficient but far more carbon intensive than newer foreign competitors.
That taskforce will also help advise on the development of a proper, non-electricity sector emissions trading scheme to commence after 2020; between now and then, there will only be a requirement for large polluters who exceed a pre-established emissions cap to buy (dirt-cheap) international permits.
It’s not a patch on the Gillard government’s highly effective carbon pricing scheme, which had a minimal impact on inflation — indeed, it is initially even poorer than the Rudd government’s rotten Carbon Pollution Reduction Scheme; no wonder industry (apart from the hardline denialists at the Minerals Council) cautiously welcomed it. A Labor government would give business and unions extensive opportunities to shape, weaken and undermine the emissions trading scheme to commence after 2020.
Even so, in both its targets and its commitment to not one but two emissions trading schemes, Labor is again inviting the Coalition to launch a scare campaign, just as it did with both negative gearing and with superannuation tax concessions, although sheer fiscal pressure has forced the Coalition to abandon its Abbott-era policy of attacking Labor on the super concessions and adopt its policy.
While high risk, there are two advantages to Labor pushing a more ambitious policy than the government. One is that it draws attention to the fact that the government simply doesn’t have a climate action policy. The absurd “Direct Action” policy cannot achieve even the Coalition’s low emission reduction targets. According to the Australian Industry Group — normally a reliable supporter of the Liberal Party — trying to reach the government’s own targets with the government’s own policy will cost between $100 billion and a quarter of a trillion dollars. But the government has yet to explain how it will bridge that hundred billion-dollar gap between Greg Hunt’s delusions and its own public commitments.
The other advantage is already playing out. An important part of Labor’s strategy against Malcolm Turnbull is to portray him as having sold out his principles for power, as being the captive of far-right forces aligned with Tony Abbott. Getting Turnbull uttering the same lines as Abbott on climate action — which he is already doing — will serve to make exactly the point Labor wants to convince voters of about the Prime Minister. That senior ministers continue to simply deny the existence of climate change helps in that regard.
Whether that’s enough to convince voters to ignore the government’s scare campaign — however ineptly run by Turnbull — remains to be seen. On both this and negative gearing, Labor’s is gambling that the electorate will be sceptical enough and smart enough to look beyond the scares. There isn’t much strong evidence — whether from 1993 or 2013 — that that is the case.
There’s another, longer-term advantage to Labor in this, which is worth little at the moment but might pay dividends in the next term. By offering risky, potentially unpopular policies, Labor is signalling to voters it is serious about governing well. As a brand, Labor has much work to do to recover from the debacle of the Rudd-Gillard years. Staying unified and concentrating on policy that falls into the category of “unpopular but worthy” will go much of the way to erasing the bad memories of 2010-13. If it loses on July 2, it will have lost in the best way, and in the way that leaves it well placed to renew its appeal to voters for 2019.