A policy of ‘indirect action’ may be one way Malcolm Turnbull can hang on to the reins of the Coalition while keeping his emissions reduction dream alive. By Mike Seccombe.

Malcolm Turnbull rethinks climate strategy

Malcolm Turnbull speaks at December’s Knowledge Nation Summit in Sydney.
Malcolm Turnbull speaks at December’s Knowledge Nation Summit in Sydney.

John Howard only ever pretended to believe in the need to combat climate change. He was not concerned about the future of the planet, only about the future of his government.

We know this because he finally confessed his pretence in a speech entitled “One Religion is Enough”, given to an assemblage of fossil fuel industry-funded climate change deniers in London, on November 5, 2013.

Howard confirmed he had always been, and still was, “agnostic” about the science of climate change. His public conversion to the cause, and his endorsement of an emissions trading scheme in the latter days of his prime ministership, was taken entirely for political reasons. 

He faced a “perfect storm” of factors – he enumerated protracted drought, Al Gore’s film An Inconvenient Truth and healthy public finances – that had moved a majority of the electorate to believe Australia should and could afford to take serious action about climate change. He was motivated not by science but by opinion polling.

Howard told his London audience he believed the issue of climate change played a “significant role” in his 2007 election loss. He went on to speak approvingly of the fact the “fashionable” concern about climate change had subsequently declined. And he lionised the newly elected prime minister, Tony Abbott, for helping turn the tide.

Howard stressed the “centrality” of Abbott’s position on global warming in the conservatives’ subsequent return to power: “how crucial a part it played in changing Australian politics and the courage that he demonstrated in bringing that about”.

This speech is recounted for a couple of reasons, the first of which is to serve as a reality check for those swept up in the hope that the Coalition government has undergone some fundamental conversion in its views on the subject.

John Howard has left the parliament but he still represents the conservative heartland far more than Malcolm Turnbull does.

It’s worth remembering that the government’s adoption of Turnbull, like Howard’s adoption of an ETS, was a poll-driven phenomenon. They didn’t want him: they were forced to accept him by a year-and-a-half of terrible opinion polls.

It’s worth noting, too, the polls on the issue of climate change. In 2006 – not coincidentally about the time of Howard’s big shift – the Lowy Institute surveyed responses to this question: “Global warming is a serious and pressing problem. We should begin taking steps now even if this involves significant costs.”

Sixty-eight per cent of people said yes.

But in subsequent years, as the issue became ever more politically partisan, those numbers slid. In 2009, when Tony Abbott wrested the party leadership, in large measure because Turnbull wanted to take a bipartisan position on emissions reduction, it was down to 48 per cent. In 2012, concern bottomed out at 36 per cent.

It has since lifted again, more or less in tandem with the pall of negativity cast by Abbott. When Lowy polled in February–March this year, it was back to 50 per cent of respondents wanting action, even at significant cost. And in October–November, 52 per cent. 

But despite this shift, the government’s response so far has been mostly symbolic.

Prime Minister Turnbull, his deputy Julie Bishop and Environment Minister Greg Hunt talked a good game in Paris, but they stuck with the hand-me-down carbon reduction policy of the Abbott regime.

A detailed analysis of Australia’s domestic and international policy, the carbon intensity of the economy, actual and projected emissions, and deployment of renewables, conducted by Germanwatch, the Climate Action Network Europe and other affiliated environment groups, scored Australia third last among 58 countries, ahead of only Kazakhstan and Saudi Arabia.

Our leaders paid lip-service to the more ambitious goal of reducing global warming to just 1.5 degrees, but refused to join dozens of other countries in committing to promote the phase-out of subsidies for the use of coal, gas and oil. The National Party and Liberal conservatives would not countenance it.

Furthermore, as the CEO of the Australian Conservation Foundation, Kelly O’Shanassy, told The Saturday Paper from Paris at the time: 

“The deal was that in return for endorsing the 1.5-degree target, Australia gets the accounting rules it wants, which makes sure land-use measures are included, so we can keep increasing emissions from industry. Over here we’re saying the right thing, while back home we’re trying to dismantle policies to encourage renewables, we’re building great big new coalmines.” 

And there’s no mystery about why, O’Shanassy says: “To become PM, Turnbull made promises to the Nationals and the right of the Liberal Party and traded off climate change action.” 

This is the second point of relevance of that speech of John Howard’s, the one that buoys the advocates of stronger climate change action. They think Turnbull is foxing, just like Howard was back in 2006. The difference being that Howard was pretending to the people he was more committed than he really was, while Turnbull is pretending the reverse.

Until Malcolm Turnbull has won an election, that is. Or so the theory goes.

They read hopeful signs of his intent. First was Turnbull’s acknowledgment in Paris that the ultimate goal of policy had to be net zero emissions of greenhouse gases.

“The important thing out of Paris,” says John Connor, chief executive of the Climate Institute, “is that we have signed up to regular reviews and ever stronger action. The government will review their [emissions reduction] target in 2017. It’s part of the strategy of bluffing through until after the election.”

Second are suggestions from both Turnbull and Hunt that the government’s widely derided “Direct Action plan” or Emissions Reduction Fund (ERF), whereby polluters are paid to reduce their emissions, could evolve into something much greater.

“To date, just falling across the line of the 2020 target [of a reduction of 5 per cent against 2000 emissions] has been the government’s preoccupation,” Connor says. 

But now they acknowledge we can’t rely on the emissions reduction fund to get to the new target (of 26 to 28 per cent). 

Of course, the government can’t move to the “cap and trade” the previous Labor government sought to implement and that Tony Abbott campaigned so successfully against – despite the benefits of such a system.

“An economy-wide cap and trade scheme is still considered the first best option by most economists,” says Tony Wood, director of the energy program at Turnbull’s preferred think tank, the Grattan Institute.

But there are many alternatives, as Wood points out in a study of the various options, released this week.

On the available evidence, it looks as though the current ERF will evolve into something called a “baseline and credit” scheme – a market-based scheme that would force polluters to either cut their pollution or pay for it through tradeable permits. Internationally tradeable permits.

“This looks like the way Turnbull and Hunt will take it if they get back in,” says Alan Pears, senior industry fellow at RMIT. “But they will be very careful about saying so before then, because they have so many crazy people in their party.” 

Even if the Direct Action plan does eventually mutate into something more useful, Pears says, the realities of Australian politics and the glut of international permits mean that “in the short term the carbon price will be a relatively modest factor in driving change”.

Thus we need to take what he jokingly calls “indirect action”. That is, a broad range of other measures that will reduce emissions in the meantime. All the policy wonks talk about the same thing – although they don’t name it so cutely. It is the main game for the near future. 

There is vast scope for greenhouse abatement in power generation, air transport, road transport and shipping.

Let’s take just a few examples, from the domestic sphere. 

Cars, for instance.

“The Climate Change Authority did an assessment that found improving emissions standards on vehicles was one of the lowest-cost ways to reduce emissions,” Tony Wood says.

“You could generate about 60 million tonnes of [carbon] abatement pretty easily and quickly.”

But Australia currently has no standards for carbon dioxide emissions from vehicles. The government is belatedly addressing this, perhaps because even industry is demanding reform. The Chamber of Automotive Industries is calling for national fuel standards, now well below those of other advanced economies, to be improved.

As for alternative-fuel vehicles, such as electric cars, Australia – unlike all of western Europe, the United States, Canada, Japan, China, even India – provides no incentives to buy them and no help in building the necessary infrastructure.

Then to housing.

Australia actually has a pretty good building code. But as a comprehensive report last year by the energy consultants Pitt and Sherry showed, they are not well enforced. And if homes are fitted with reverse-cycle airconditioning instead of electric space heating, they use between one-quarter and one-fifth as much electricity for warmth, says Pitt and Sherry’s Hugh Saddler.

Lighting, refrigeration, clothes washers and dryers, home insulation – there are vast savings to be made in both emissions and cost.

The trick, says Alan Pears, is to present change as something other than a climate measure. As “innovation”, perhaps.

“I did a study for the Australian government 10 years ago where I looked at all their innovation projects,” Pears says. 

“Not one of them mentioned saving energy as an objective, but significant energy savings were a result of a large number of them. I’m pretty sure that’s something Turnbull is hoping for from his innovation package.”

This is the game being played post-Paris. “The point is there is plenty of stuff that can be done, but it’s best not done under the guise of climate policy,” Pears says. “It can be done under another guise the conservatives might accept.” 

Sometimes, you have to pretend. As John Howard showed us.

This article was first published in the print edition of The Saturday Paper on December 19, 2015 as "Trading schemes".

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Mike Seccombe is The Saturday Paper’s national correspondent.

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