The CPRS bill will finally be put to a vote in the Senate on Thursday, whereupon both the Opposition and the Greens are expected to vote it down.
The Greens have a clear position on climate change: they believe the CPRS as it stands does not go far enough. The science backs up this position.
The Opposition does not have anything like a clear stance on the issue. Some Senators obviously don’t believe that global warming is even happening, while many others believe the costs of the CPRS to jobs in heavily polluting industries will be too high. The economics of climate change abatement does not back up this position.
But that hasn’t stopped the Opposition from trying to spin its position. Today, Malcolm Turnbull released an alternative emissions reduction policy, commissioned by independent South Australian Senator Nick Xenophon in conjunction with the Coalition, and modelled by Frontier Economics.
The paper restates the "free rider" problem of reaching a global emissions reduction deal where some countries could benefit without cutting emissions, and then goes on to suggest two alternatives for Australian policy. The first is a "CPRS-Adjusted" model which retains the Government’s absurdly low reduction target of 5 per cent and extends free permits and other assistance to the so-called "energy-intensive, trade-exposed" industries. The second is a "CPRS-Intensity" model which includes the first idea (basically a "more free permits" approach), but attempts to smooth price rises for electricity generators, in a way it claims is roughly in line with the United States’ proposed Waxman-Markey bill.
Sadly, even a quick read of the report will show that we should dismiss this alternative policy. The reason is quite simple: this policy is not simply as weak on polluters as Labor’s CPRS — it is even weaker.
Frontier Economics claims that by abandoning Labor’s proposed subsidies for low-income households to help with their increased energy costs, the reduction in this "churn" will save bundles of money. And they’re right. But the reason costs will be lower under the Opposition proposal is not really that their scheme is more efficient. It is simply that it is less of a scheme.
Delve into the fine print and you quickly find that this model is simply a restatement of Coalition greenhouse policy, for instance by giving away 100 per cent free permits to polluting industries — including coal mining — and by bringing agriculture selectively into the scheme, so that farmers won’t have to buy permits for the methane their cows fart, but will be able to sell carbon credits for carbon they can lock away in soil.
As Ross Garnaut and many other economists have consistently made clear, the whole point of an emissions trading scheme is to force polluters to pay for the harm they do to the planet. If you don’t make carbon more expensive, then you won’t do this. The new Turnbull-Xenophon model abandons that idea and instead explicitly attempts to protect polluting industries, completely, from the costs of doing something about climate change. It will be cheaper, yes. But only because industry won’t have to do as much in terms of abatement.
Of course, some journalists won’t read through the fine print of this report, allowing Malcolm Turnbull and his dwindling band of supporters to claim that this model is better than Labor’s admittedly flawed CPRS.
All in all, Australia is at a particularly depressing moment in terms of energy and climate policy. As dismal as the Opposition’s belated response to the CPRS is, Labor’s ongoing obsession with digging things out of the ground continues to undermine its greenhouse credentials.
Take the Renewable Energy Target (RET), one of Labor’s most important prospective climate change policies. Passed already by the House of Representatives, this policy will legislate that 20 per cent of Australian electricity generation will come from renewable sources by 2020. While there is no doubt that this will mean most of that renewable capacity ends up being limited to wind power rather than taking full advantage of other promising technologies, it will nonetheless address Australia’s dismal current performance in generating renewable energy.
And yet, in a tactical ploy, Kevin Rudd and Penny Wong have linked the Renewable Energy Target bill to the CPRS bill. If the Senate votes down the CPRS, which it almost certainly will, that means the RET goes down too.
The problem with this clever parliamentary sleight-of-hand is that billions of dollars in investment decisions are riding on the RET: without a renewable target, and especially given that we still don’t have a price for carbon in this country, it makes no sense to build expensive wind farms and solar-thermal power plants. Thousands of jobs are likely to be at stake — not that the Coalition has noticed.
Meanwhile, did you know that Australia is developing a new energy policy? You can be forgiven if you didn’t, because hardly anyone has noticed. But Labor, under Resources and Energy Minister Martin Ferguson, is continuing to forge ahead (or perhaps we should say "dig deeper") towards a new energy policy that will be almost completely reliant on fossil fuels and other non-renewable resources — at least if the Government’s own "strategic directions paper" is anything to go by.
This little-heralded publication, released in March 2009, outlines the arguments underpinning the forthcoming Energy White Paper. While the CPRS gets a cursory mention, the document is heavy on the "economic opportunities" afforded by Australia’s resource endowments. "Maximising the value of energy resources will enhance Australia’s economic prosperity," it claims on page 8. "This is best achieved by expanding the production of Australia’s energy resources to meet domestic and international demand and by adding value to those resources where it is economic to do so." That doesn’t sound like a government committed to sustainability to me.
There is, however, one type of energy that isn’t directly carbon-based which the state and federal Labor governments are pushing through at top speed. That’s uranium mining. Since Labor abandoned its "no new mines" uranium policy, which capped the number of uranium mines in the country at just three, the Rudd Labor Government has approved the Four Mile uranium mine in South Australia, as well as an extension for the Ranger mine in the middle of Kakadu National Park in the Northern Territory. Meanwhile pressure is building on Queensland Premier Anna Bligh — including from Martin Ferguson himself — to change her stance on approving uranium mining in Queensland.
And then there’s the idea of Australia’s not simply exporting uranium, but perhaps also using it to generate nuclear power ourselves. Industry lobbying for a nuclear power industry in this country will inevitably continue to build, and exploit obvious arguments about climate change and the fact that Australia already mines so much uranium. An example is former nuclear scientist and Telstra boss Ziggy Switkowski’s statement in a recent speech to the 2009 Australian Uranium Conference: "[Y]ou’re not serious about overcoming global warming and transitioning to clean energy unless you include nuclear energy at the heart of the nation’s strategy." The uranium industry has won some allies in its campaign too: prominent climate scientist Barry Brook has swung heavily over to nuclear power, so alarmed has he become over the looming global climate catastrophe.
All of which leads you to wonder if our major party politicians ever get serious about energy that is not dug out of the ground. Judging by the current policy situation, the answer is No.
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