ALP is trapped on climate by legislative target haste

The Albanese government quickly is discovering the consequences of legislating a 43 per cent cut in carbon dioxide emissions by 2030 without first having agreed a firm plan for how to achieve it. By taking the unnecessary route of legislating a target, the government has left itself hostage to the extreme demands of the Greens, who want to stop development of the energy resources that have helped to make Australia a rich nation and that will be needed to keep the lights on for many years to come.

No one should be surprised that the Greens are demanding an end to coal and gas developments. It was the party’s major policy in the federal election campaign and it has been at the centre of all of the Greens’ public pronouncements. But it is a demand the federal government must reject as impractical, unreasonable and against the national interest. Rather than certainty for business that Anthony Albanese said a legislated target would deliver, the result has been to produce another chapter of divisive climate change politics. As with the Rudd-era carbon pollution reduction scheme, the Greens are showing themselves to be incapable of compromise.

Demanding the unachievable fits the character of a protest party that will never be called on to govern. But it takes on more significance given the Greens effectively hold the balance of power in the Senate. Greens defector senator Lidia Thorpe is unlikely to throw the government a lifeline on fossil fuels or any other practical issue. Greens leader Adam Bandt is playing the government at its weakest point. He says the Greens don’t like many aspects of the safeguard mechanism reforms because they are not tight enough and do not go far enough to punish the sorts of industry he does not like. But he is willing to overlook these issues for now as long as the government agrees to commit economic suicide and compromise future energy security. Mr Bandt’s sights are set firmly on stopping development of the Beetaloo gas field in the Northern Territory, the one area of freedom the federal government has to operate on gas without the co-operation of recalcitrant states.

Despite protests to the contrary, the set against coal is getting worse under Labor. Environment Minister Tanya Plibersek used the federal Environment Protection and Biodiversity Conservation Act to scuttle a Clive Palmer-sponsored project in Queensland. Mr Palmer subsequently withdrew his appeal to a Queensland Land Court ruling that recommended against another Waratah Coal project in part because of its potential impact on climate change and the breach of human rights this would entail. The Land Court decision was made on the facts and does not necessarily set a precedent for other projects but it is an indication that lawfare from green groups will continue to stymie development in the coal-rich Galilee Basin. Labor already has broken faith with the resources industry by imposing price and export controls on gas and coal. If the Greens get their way this will be only the beginning.

There is a lot of negotiation still to go on the government’s safeguard mechanism, its signature climate policy that will require big companies to reduce their carbon dioxide emissions by about 5 per cent each year or buy tradeable permits to cover them. The safeguard mechanism was introduced by the Coalition but it is being greatly toughened by Climate Change and Energy Minister Chris Bowen to speed the decarbonisation of industry. Mr Bowen has accused the opposition of hypocrisy for saying it would team up with the Greens to block the safeguard plan. But Peter Dutton says the safeguard under Labor is an unreasonable tax and the opposition will not support it. The Opposition Leader no doubt is calculating that rising costs will make voters think about how much they are prepared to pay for action on climate change. It is inevitable, too, that at some point government must face up to the fact that coal-fired power will be leaving the grid before replacement supplies are in place.

Industry groups are warning the expected decline in production from existing gas fields is already faster than the expected reduction in local demand as gas users lift efficiency, electrify or adopt clean hydrogen. On Wednesday, former ACTU secretary and federal Labor MP Jennie George gave an accurate description of what is happening. She said the recent shelving of a liquefied natural gas import terminal at Newcastle heightened concerns about possible energy shortages in NSW. The common theme is a rush to retire coal without having a back-up plan in place. Confirmation of further lengthy delays in construction of the Snowy 2.0 pumped hydro scheme underscores the inability of government to deliver. Similar delays can be expected in the myriad renewable energy projects that are on paper but not yet in existence. Former Greens leader Bob Brown has signalled his objection to the proposed 427-turbine Whaleback Ridge wind farm project in the Meredith Range Regional Reserve in Tasmania because it would compromise the natural values underpinning the reserve status. When coupled with advice to government from the Productivity Commission that state electric vehicle policies represented an abatement cost for carbon dioxide of about $10,000 a tonne, the picture is one of complete disorganisation.

For business groups that have supported the emissions-reduction push, the outlook is one of worse to come. The Australian Industry Group has joined Australian Workers’ Union boss Dan Walton to warn of history repeating. Mr Walton said by spoiling any attempt at action on climate the Greens had “pound for pound” done more to worsen climate change than any other entity in the nation. Ideological confrontation over the safeguard mechanism is emblematic of the bigger picture on climate change action.

High ambitions and good feelings are no substitute for proper planning and credible delivery. Contrary to Mr Albanese’s protestations during the election campaign that Labor would not be hostage to the extreme demands of the Greens when in government, that is exactly what is happening. Things can only get worse if events conspire to rob Labor of its slim majority in the House of Representatives and it is forced to deal with teal independents. Teals, like the Greens, have shown themselves to be narrow-interest politicians unconstrained by the realities of the big picture. The best hope is that Labor and the Coalition can work together to find a pathway that cuts out the extremes.

Mr Dutton owes Labor nothing on this issue and no doubt is correct in his reasoning that in times of economic stress voters will not be willing to write a blank cheque on climate action or punish the industries that provide jobs and economic security for the nation. The clock is ticking for Labor also to get the message.