OVER the past four years, I’ve been very critical of our local MP and Environment Minister Greg Hunt’s management of climate change issues. So I was surprised and pleased recently to read Alan Kohler’s article in The Australian, “Australia’s secret ETS starts in five weeks”.
Kohler wrote: “The whole process has been a remarkable strategy by Hunt: he has effectively steered an emissions trading scheme into Australia’s response to climate change through a ferociously polarised political debate.”
I was considering changing my view of Mr Hunt; however, his response to the Post’s request for clarification about the article has left me wondering where he stands.
The background: like most of my generation, I worry about climate change not for myself but for future generations. It will really bite my grandchildren’s generation. That worries me, along with the impotence of the average person in getting realistic action about this global problem.
Mr Hunt’s Direct Action program seems to me to be a contrarian Abbott attempt to do anything but what Labor was doing; simply a point of difference. A scheme that picks winners rather than trusting market mechanisms to efficiently allocate resources in the economy, Direct Action should have been anathema to a free-enterprise party.
Alan Kohler’s article in The Australian states that from July 1 the Coalition’s “safeguard mechanism” within its Direct Action Plan will come into force.
- One-hundred and fifty companies, representing about 50 per cent of Australia’s total carbon emissions, will be capped by legislation at their highest level of emissions between 2009-10 and 2013-14.
- If they emit less than their caps, they will get credits, called Australian Carbon Credit Units (ACCUs), which were created by the Gillard government’s 2011 legislation; if they emit more, they have to buy ACCUs on the market.
- The caps specifically include the electricity sector and the ACCUs are “financial products” under both the Corporations Act and the ASIC Act, and can be traded, so an ETS market will be established from July 1.
“It is, in short, a classic cap-and-trade ETS, similar in effect to the one legislated by the ALP in 2011, but which unwisely started with a fixed price that could be labelled a carbon tax, and was repealed on July 17, 2014 by the Abbott government, with high fives and champagne,” Kohler wrote.
While allowing that it was not yet in the legislation, Kohler went on to say that the caps would start to reduce from next year, making it “even more similar in some ways to the Gillard government’s Clean Energy Act 2011”. He states that the price paid for emissions reduction through Direct Action has been $12.10 per tonne, so the ETS may in fact become the central plank in its emissions reduction efforts.
“That’s because the government almost certainly can’t afford to pay for enough abatement under the auction system to meet its Paris commitments, given the state of the budget.”
Now the statement that made me reconsider my opinion of Mr Hunt was: “He made it a condition of his appointment by Tony Abbott that the science of climate change would be accepted and the emissions reduction target would not change”.
Apparently Mr Hunt had never discussed the approach in Cabinet so on becoming Leader Mr Turnbull was “pleasantly surprised, but decided to maintain radio silence, as part of his broader efforts to keep the conservatives onside.
“The whole process has been a remarkable strategy by Hunt: he has effectively steered an emissions trading scheme into Australia’s response to climate change through a ferociously polarised political debate.”
I was more than happy to acknowledge the achievement, but when the Post asked Mr Hunt whether the Kohler article was substantially correct, things were not as clear-cut.
In a response he sent to The Australian, he did not deny the essence of the article; perhaps he briefed Kohler himself to generate the article. He stated: “I am pleased at the recognition that the Coalition has a comprehensive system designed to reduce Australia’s emissions.”
He proceeded to argue that the Government’s system was not an ETS but if it was, it wasn’t as bad as Labor’s. “To be clear, the safeguard mechanism is not a carbon tax or an emissions trading scheme. Our policy position against this is crystal clear. We abolished the carbon tax. It won’t come back under us. It will come back under Labor.
“As proof of this, our policy is not budgeted to raise a single dollar of revenue. By contrast, Labor’s carbon tax raised more than $15 billion in just two years. This was a major hit on the economy and increased electricity prices.”
Actually crystal clear is not something that occurs in politics these days. Why can’t we have clarity in these matters? Why not a straight answer, especially when it is an issue of great importance to so many people? Why is the Government choosing to keep the lid on an approach that many people would welcome, especially those who were relieved when Turnbull took over but have since felt disappointed?
The concerns of many are summed up by Michael Gordon, political editor of the Age: “The other factor that has buoyed him (Shorten) is the perception that, rather than pull the Liberal Party towards the centre, Turnbull has been dragged to the Right since toppling Tony Abbott in September.”
If Kohler is right, why are Turnbull and Hunt hiding their light under a bushel? Gordon’s point above is one explanation: the right wing might rebel, and that would be an end to the “small l” liberal pipe-dream that once Turnbull can win in his own right he will have the authority to move the government back to the moderate centre of politics.
Do you take the risk? Bet on an unmade promise?