The Climate Change Authority (CCA) released a vital report last week. The report, a critical milestone review into Australia’s progress in reducing greenhouse gas emissions, is known as the Targets and Progress Review. Its goal is to assess how Australia is going when it comes to decarbonising our economy, and whether we need to do more.
The CCA was one of the key planks of Labor’s climate policy, driven in no small part by the Greens and country independents that helped keep Julia Gillard in power. The CCA was intended to be a non-partisan, expert body, a little like the Reserve Bank or the Productivity Commission, that would review the best available scientific and economic evidence and recommend a consensus position on Australia’s carbon reduction targets.
Given the likely consequences of dangerous global warming — many of which are already with us — you might think the Targets and Progress Review would have been front-page news around the country. At the very least, you would think that Environment Minister Greg Hunt would be out and about, touting the government’s policies in responding to climate change. After all, reducing greenhouse gas emissions by 5 per cent by 2020 is the official policy of the Federal Government.
Of course, none of this happened. Apart from a few desultory reports in the ABC, Fairfax and the Guardian, the Climate Change Authority’s report was largely ignored by the media.
Greg Hunt didn’t exactly pull out all stops either. Normally ministers like to organise media stunts for this sort of thing, perhaps getting some friendly vision of the printed report being handed over the minister’s desk. Hunt didn’t even bother to schedule a media conference. Instead he simply issued a press release.
As media releases go, it was one of the most dishonest in recent memory. Hunt’s reaction to a complex and important public report was simply to blame Labor for the carbon tax.
“The Climate Change Authority's Targets and Progress Review Final Report shows the ineffectiveness of Labor's carbon tax,” he wrote in a statement. “In its first year of operation, the carbon tax was a $7.6 billion hit on the Australian economy and a direct hit on around 75,000 businesses — yet emissions reduced barely 0.1 per cent.”
There’s no polite word for this: it’s a lie. The report does not show that the carbon tax was ineffective. In fact, it argues precisely the opposite. On page 76, the report provides a list of “the main policy tools used to address climate change”. Top of the list are “market-based mechanisms”, including carbon taxes.
Even Hunt’s figures are wrong — and are not actually contained within the report. Labor’s carbon tax never came remotely close to raising “$7.6 billion”. The 2013 Budget Papers estimated a carbon tax revenue of around $4 billion. Joe Hockey’s own Mid-Year Economic and Fiscal Outlook forecasts that “revenue foregone” from abolishing the carbon tax will be only $2 billion next year, and $4.2 billion in 2015-16.
Nor were “75,000 businesses” affected. The carbon tax only ever applied to a few hundred of the worst polluting facilities in the country. As for Australia’s greenhouse gas emissions, Hunt has conveniently ignored the fact that an overall reduction in greenhouse gases represents something like a 2.5 per cent reduction compared with business as usual, because the economy grew by roughly that margin last year.
The reaction to the CCA's report is perhaps the most vivid demonstration of the disastrous politicisation of climate policy in this country. That’s because the CCA has actually given the government a potent political weapon on climate policy — if only they were smart enough to wield it.
The top-line announcement of the report was that the government should raise its emissions reduction target to 15 per cent by 2020, from the current 5 per cent. Of course, no credible policy analyst believes that the government’s subsidy-based Direct Action policy can achieve even a 5 per cent reduction, but let’s leave that aside for the moment. The report says that if the government really wanted to get up to 15 per cent, it could do so almost effortlessly.
How would it do so? By buying carbon reductions on global markets. Because of the collapse of the European carbon market, credible carbon reductions are now for sale on international markets for as little 50 cents a tonne. The report thinks that Australia could buy the roughly 427 million tonnes of carbon reductions necessary to raise the target to 15 per cent for “between $210 and $850 million.”
The political implications of this analysis are potentially profound. Even at the high end estimate, $850 million is still much less than the $1.4 billion the government will forego by reinstating the novated lease tax perk that Labor axed last budget. The CCA is saying that Greg Hunt could keep Direct Action, and triple Australia’s emissions reductions, just by buying more emissions reductions overseas.
Now, of course, you could quibble with the CCA's description of those overseas reductions as “high quality”. Although the report is frank about the potential risks of overseas reductions being rorted, it argues that certain schemes, like the Clean Development Mechanism, have “a high level of environmental integrity.” Many would disagree, but still, it is clear that a tonne of genuine carbon reduction is equally valuable wherever it happens. The current carbon tax acknowledges this: it allows for overseas emissions reductions to be purchased.
If Hunt wanted to, therefore, he could axe the tax, keep Direct Action, and triple the target. At a stroke, he could reframe the carbon debate in Australia. He could wedge Labor and give the government a powerful new rhetorical tool with which to combat the growing criticism of it as anti-science and anti-environment.
Will that happen? Of course not.
The Coalition’s hostility to genuine climate policies of any kind is well established. Far from heeding the advice of the Climate Change Authority, the government wants to abolish it. A bill has already been put to the Senate to that effect. It was voted down by Labor and the Greens last night.
That’s the tragedy of climate politics in Australia. The Coalition has bought into the worst aspects of the climate denial movement. It doesn’t believe in climate change. It doesn’t believe in protecting the environment. It doesn’t believe in reducing emissions.
The victims of this politicisation will be our children and grandchildren, who will have to live in a poorer, hotter and vastly more insecure world.
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