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Judith Sloan

Anthony Albanese’s emissions olive branch comes with prickles

Judith Sloan

Last week, Anthony Albanese wrote to Scott Morrison, ostensibly offering to reach a bipartisan agreement on energy and climate policy. The proposal was not genuine but rather based on the absurd idea that the Coalition should adopt Labor’s policies. The Opposition Leader’s aim was to harness the popularity of bipartisanship between the federal and state/territory governments seen during the pandemic — well, at least some of the time.

By hitching Labor’s wagon to that star, the electors of Eden-Monaro might be persuaded to vote for Labor’s candidate. The Queensland election later in the year was also a consideration.

Albanese also needs to paper over the cracks within his party between the divergent energy and climate policy positions held by Mark Butler and his followers, on the one hand, and Joel Fitzgibbon and his followers.

Astonishingly, Butler remains the opposition spokesman for climate change and energy, having made a disproportionate contribution to Labor’s electoral defeat last year. Fitzgibbon, whose seat is in the Hunter Valley, is the opposition spokesman for agriculture and resources. Their views on policy are diametrically opposed, particularly in relation to the role of coal.

Of course, Albanese has been in politics too long to believe that the Prime Minister would take the bait and enter into serious negotiations with Labor on this matter. But Albanese will claim that he tried to reach agreement and that Morrison has just been obstinate.

Labor and those activists, commentators and rent-seekers claiming the government hasn’t had an effective energy and climate policy since 2013 are really saying that the government doesn’t have the policy they want. And their policy involves substantial ongoing subsidies for renewable energy, particularly now the renewable energy target has been met.

Albanese claims Labor accepts the technology road map that Energy and Emissions Reduction Minister Angus Taylor has developed. That’s if it doesn’t involve nuclear energy or the continuation of the Emissions Reduction Fund or the use of existing public funds for carbon capture and storage. And Labor’s commitment to net zero emissions by 2050 must also be met. This set of demands is not a good starting point. (On zero emissions by 2050, it should be noted this is not part of the Paris agreement. The reference in that agreement is to the aspiration for net zero emissions sometime in the second half of this century.)

To underscore Albanese’s insincerity, he spent time at his National Press Club last week slagging off members of the Coalition. He singled out senator Gerard Rennick, “who thinks the Bureau of Meteorology is part of global conspiracy”, and the comments made by Deputy Prime Minister Michael McCormack challenging the link between climate change and the bushfires.  “Mention the Enlightenment to these people and they reach for the dimmer switch. It is embarrassing, but not surprising. When it comes to listening to science, this government has been conveniently ignorant.”

Albanese’s speech resembled a poor Year 11 essay designed to impress the progressive science teacher. He asserts that renewable energy is cheap, clean and the future — if so, then it’s not clear we even need a road map: renewable energy will come to dominate the market without intervention.

His references to “the science” are also laughable. “A Labor government will be guided by the science; it will set its emissions reduction target based on the science. As Labor understands instinctively, you can only get the policy settings right when you listen to and respect the science. That’s why we’ve always supported renewable energy.”

What does that mean, apart from revealing Labor wants to continue to subsidise renewable energy? The science tells us that only global emissions matter and that Australia’s contribution is negligible. Will Albanese be guided by this scientific fact?

The trick that Albanese is trying to pull off is to link more subsidisation of renewable energy to more investment and more jobs. He knows that the recent past provides no evidence on this connection. Indeed, the reverse has been the case.

Massive subsidised investment in renewable energy has been associated with escalating wholesale and retail electricity prices. The number of jobs in renewable energy is trivial, particularly given most its hardware is imported. And jobs have been lost elsewhere because of energy costs. The broader backdrop has been very low productivity growth, particular in the energy sector.

In Albanese’s letter to the Prime Minister, he gives the game away by immediately referring to the recent slump in investment in renewable energy generation. But if Labor believes in being genuinely technology agnostic, this fact alone shouldn’t be of concern.

Albanese continues: “(I) am suggesting we meet on an energy investment framework that will deliver the modernisation of our energy system. Like industry and the experts, Labor is open-minded about the specific investment framework to be adopted. It must be flexible and it must be enduring. An enduring energy policy is one that can adjust to different emission targets.”

Here’s the dilemma for Albanese. He knows that he cannot repeat the climate and energy policy mistakes of last year’s election.

He cannot stick with the 45 per cent emissions reduction target by 2030. He needs to ditch all that talk about imposing electric vehicle targets. Demonising the role of coal is electoral death in some parts. Putting a price on carbon is electoral death in those parts and many others.

At the same time, he has to make sure that his party doesn’t splinter on the issues lest open disagreements erode Labor’s chance of electoral success.

The most likely outcome is Labor going it alone — the government won’t be negotiating with Albanese, particularly in the context of the technology road map being out for public consultation – using the vague commitment of net zero emissions by 2050 as a guiding principle. Luckily, 2050 is sufficiently in the future to mean today’s decisions are not especially critical, even though some potential new energy installations might last decades.

Whether this approach by Labor will be enough to resonate with most voters is unclear. It will almost certainly play badly in the inner-city seats replete with woke, climate-obsessed voters demanding high short-term targets, a ban on coal and more subsidies for renewable energy.

Albanese will just have to live with policy compromises even if he occupies one of those seats.

Read related topics:Anthony AlbaneseClimate Change
Judith Sloan
Judith SloanContributing Economics Editor

Judith Sloan is an economist and company director. She holds degrees from the University of Melbourne and the London School of Economics. She has held a number of government appointments, including Commissioner of the Productivity Commission; Commissioner of the Australian Fair Pay Commission; and Deputy Chairman of the Australian Broadcasting Corporation.

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Original URL: https://www.theaustralian.com.au/commentary/anthony-albaneses-emissions-olive-branch-comes-with-prickles/news-story/f6a7a5a0fdb21f15720adb2ccb71337c