Hot Air Rising: The erratic state of affairs within Australian climate change politics

It’s no longer business as usual – extreme weather events as a result of climate change are costing the Australian economy close to 8 billion dollars a year in productivity loss and absenteeism. In a scenario where no meaningful action is taken against climate change, the Garnaut Review, a study commissioned by the Commonwealth government to investigate the impact of climate change on Australia, paints a gloomy picture – it stipulates a 92% decline in irrigated agricultural production in the Murray-Darling Basin, a near complete coral bleaching of the Great Barrier Reef, and the complete destruction of snow-based tourism by 2100.

To this, the Australian government’s response has been inconsistent, erratic and piecemeal. To illustrate the recent history of Australian climate change politics, here is a brief timeline of relevant policy action since 2007:

Red: Legislation-related policy action
Blue: Department & agency creation policy action
White: International engagement policy action

The Australian climate change debate is, in short, a mess. Australia is the first and only nation in the world that has gone back on legislated climate change, by repealing the Carbon Price Mechanism during Tony Abbott’s administration. As outlined in blue in the timeline. above, the Australian government seems to focus on persistently abolishing and restructuring departments and agencies whenever there is a change in government way to mask inaction, while undermining the continuity of their work.

Playing Taboo

Climate change is a touchy issue featuring disagreements across the aisle and divisions within both Labor and Liberal, but most worryingly, there is no clear leadership promoting forward-looking policy. Evidenced by the 2009 ousting of Malcolm Turnbull as Liberal leader and Kevin Rudd’s removal as Prime Minister, partly attributed to their positions on Emissions Trading and the CPRS, it has become political suicide to mention anything that sounds remotely like “emissions trading” or “carbon tax”.

Recently, Energy Minister Josh Frydenberg went on record during an ABC interview to say that the government is looking into an emissions intensity scheme, “effectively a baseline and credit”, which was supported and recommended by the CSIRO, Australian Energy Market Commission (AEMC) and the Australia Energy Market Operator (AEMO). This was quickly criticised and dismissed by Liberal backbenchers as well as Malcolm Turnbull, who aggressively ruled out any possibility of a carbon tax or an emissions trading scheme, which had already ended his first stint as Liberal leader in 2009.

Emissions Reduction Fund (ERF)

Perplexingly, the Emissions Reduction Fund (ERF), introduced in 2014, as well as the safeguard mechanism that came into play in 2015, recycles many elements of a “baseline and credit” emissions trading scheme, despite its name.

The ERF works by purchasing reductions in emissions from large industrial facilities and issuing Australian Carbon Credit Units (ACCUs) in exchange. The scheme’s safeguard mechanism establishes an emissions baseline for 140 industrial facilities, which they are not permitted to exceed. This baseline excludes any reductions the government will pay them for. The ACCUs received can then be sold to other facilities which are struggling to meet their baseline targets.

This makes the ERF highly resemble a baseline and credit emissions trading scheme. Even though the Turnbull administration publicly denies any possibility of an emissions trading scheme, it has sneaked its key elements into the Coalition government’s current strategy to limit the impact of climate change.

Moving Forward

How is Australia to move forward from this? The government disowns, denies and repeals policies tainted by previous debate, while secretly co-opting elements into new legislation. When questioned, the Australian government justifies inaction or inconsistency with rhetoric about achieving balance between care for the environment and economic efficiency. The government’s unpredictability and lack of commitment to a long term climate-change policy has resulted in a tepid response from stakeholders who, in the face of uncertain policy, are reluctant to make any investment in emissions reductions or sustainable energy.

If written into policy, even low-cost reduction policies such as encouraging households to take up solar energy and battery storage could save taxpayers up to $100 billion a year [7]. The emissions intensity scheme, recommended by industry experts yet denied by Malcolm Turnbull and Liberal backbenchers due to fear of a political backlash, has the potential to save the average household $216 yearly.

It is important to recognise that environmental sustainability is a symbiotic component of long term economic growth. The Garnaut Review concludes that by 2100, environmental degradation will become a severe impediment to food security, productivity, and economic growth [2]. Resolving climate change is a long term fight – there is a strong need for enduring, bipartisan support for a policy that delineates long term goals and focuses on a continuity of strategy across the three-year electoral cycle. The Australian government must take swift and decisive action to ensure that the overheated rhetoric of the past decade does not continue to fuel the overheating of our planet.