John Hewson
Make the polluters pay

Most governments don’t think, plan and manage with a view to the longer term – but Treasurer Jim Chalmers has claimed the latest intergenerational report is the basis for action. These reports, typically published every five years to provide an outlook on the next few decades of economic challenges, are pointless if their conclusions aren’t reflected in annual budgets and other policy initiatives. This was a consistent failure of previous Coalition governments.

This IGR, released just two years after the last one, seeks to make up for past omissions. It’s distinguished by its extensive focus on the costs and opportunities of climate change, which were barely mentioned in prior reports. The Albanese government claims a world-leading response to climate, given its legislated emissions reduction targets, its adoption of the safeguard mechanism, the establishment of the Net Zero Authority and its international engagement leading to various cooperation agreements, the most recent being with California.

But the challenge ahead is clear. The latest report on greenhouse gas emissions published by the Department of Climate Change, Energy, the Environment and Water included preliminary data showing levels rose 0.9 per cent in the year to June 2023. The data will be finalised in the November report. The final data on emissions for the year to March showed little change compared with the previous year. Reductions in emissions from electricity and other categories were offset by increases from transport and agriculture. Overall, emissions were 24.4 per cent below the Paris 2005 baseline.

The recent article in The Monthly by Joëlle Gergis, an Australian climate scientist who worked on the latest United Nations Intergovernmental Panel on Climate Change (IPCC) global assessment report, emphasises the risks for us ahead this summer. “As the northern hemisphere summer comes to an end and the El Niño ramps up in the Pacific, it will be the south’s turn under the climate blowtorch,” she writes.

This raises the question as to just how many more of the inevitable extreme weather events must we endure before the government recognises the need for additional action and more informed preparations? Inexplicably, the prime minister has refused to release the report on how the climate crisis will affect our national security, using the weasel words that “the content and judgements of the assessments are classified”. This report may offer helpful insights into the impact of global heating on our Pacific neighbours, and the flow of refugees fleeing its effects.

Clearly the government needs to take the electorate more into its confidence with some truth-telling on the climate risks we face, and to begin an education campaign about the need for more urgent action. Following a decade of enormous damage done by the so-called climate wars, and the escalating climate disasters around the globe, isn’t it now time for the government to seize on this new acknowledgement in the IGR report and initiate a genuine rethink of the adequacy of the policy responses to date?

The chief scientist, Dr Cathy Foley, said in a recent broadcast of the ABC’s Q+A that Australia needed to reduce emissions by about 16 megatonnes a year, instead of the current two megatonnes.

The response from Minister for Climate Change and Energy Chris Bowen in a subsequent interview with Patricia Karvelas on ABC Radio National was most instructive, and somewhat at odds with Chalmers. Naturally, Bowen criticised the previous Coalition governments for failing to deliver a sensible energy policy. He also criticised “a couple of newspapers” that claimed his targets were too ambitious, that he wouldn’t achieve the 2030 goals of 82 per cent share of renewables in the electricity grid, nor the overall reductions in emissions of 43 per cent below 2005 levels. Bowen argued their targets were ambitious but he thought them “achievable” even in the limited time remaining.

However, a couple of years ago I chaired the Climate Targets Panel that concluded, using the then government’s data and declared carbon budget, that the 2030 target would need to be in excess of 70 per cent to be consistent with the commitment to net zero emissions by 2050. In these terms, the government’s 2030 target is not ambitious but clearly inadequate, suggesting it is not doing enough to respond to the climate challenge.

Perhaps the most damaging aspect of the climate wars from the point of view of our national interest was the totally dishonest and contrived campaign run by then Liberal Party leader Tony Abbott from opposition against then prime minister Julia Gillard’s introduction of a carbon price – which had to be renamed a tax rather than a price, for short-term populist political reasons. This was the fundamental element of Abbott’s overarching strategy to destroy the Rudd/Gillard governments. Unfortunately, on winning government and attributing his success to his campaign against a carbon price, Abbott then eliminated the price and its mechanism and also set out, with the support of one of our major gentailers, to close down the renewables sector. He also attempted to undermine key climate institutions such as the Australian Renewable Energy Agency and the Clean Energy Finance Corporation that had been introduced by the Rudd/Gillard governments.

I have been appalled in recent days to see the promotion by Sky News of a new podcast putting the band of Abbott and his former chief of staff, Sky host Peta Credlin, back together, to commemorate the so-called “greatest political victory of all time”. Really? A victory based on ignoring our national interest?

Although ill-conceived in its form – as it started with an artificial fixed price, planning to move in time to a market-determined price – the Gillard carbon price did nevertheless work to reduce emissions, being our best result outside the year of the pandemic’s enforced shutdowns. And of course we shouldn’t forget former prime minister Kevin Rudd’s attempt to introduce a carbon price by establishing an emissions trading scheme, which was effectively blocked by the Greens. More recently the Greens have attempted to rewrite history, denying that obstruction and taking credit for supporting the Gillard carbon price.

This coming and going on the carbon price has been a national tragedy. It is no exaggeration to say most economists would agree with Ross Garnaut’s argument in his 2008 Climate Change Review that a market-determined carbon price is the most cost-effective response to the climate challenge. Yet it has been off the political agenda as a no-go toxic policy proposal since Abbott’s damaging run.

To have genuine climate and reform credibility, the question for the Albanese government is whether it has the political courage to resurrect a carbon price as fundamental to its climate armoury.

Surely it’s important for our society to ask why polluters shouldn’t pay. Why should those who burn fossil fuels in power generation and in transport face no consequences or penalties, despite potentially horrific health impacts? It has been demonstrated transport emissions kill more people than the annual road toll – that’s in addition to their damaging contribution to global heating. This is clearly at odds with the existing situation whereby if you were to, say, pollute a river or drop asbestos on your neighbour’s front lawn you would face serious charges and penalties.

In addition, the government also needs to find the political courage to oppose any future fossil fuel projects and to end fossil fuel subsidies.

In turn, for these policy steps to be credible, the Net Zero Authority would need to develop deliverable transition pathways for the workers, businesses and communities that are likely to be most affected.

The recent IGR is a vast improvement on its predecessors, but the Albanese government would be unwise to rest on the laurels of its legislated targets, the safeguard mechanism, its transition authority and its cooperation agreements with other countries. These are not an adequate total response to the challenge, especially if the government wants to effectively contain emissions and to reap the considerable potential benefits it has identified in renewable energy, mining of critical minerals and in high-value manufacturing. Just as the climate issue defined the last election, so it will the next, and particularly if the government’s policy response is seen as inadequate.

This article was first published in the print edition of The Saturday Paper on September 2, 2023 as "Make the polluters pay".

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