Cool heads needed to calm dissent on climate reform

Having settled on the pragmatic position of a technology-led, unofficial net-zero emissions target, possibly by 2050, Scott Morrison now must navigate the volatile forces within his own side of politics. Giving comfort to his Nationals Coalition partners and farmers is the first substantial challenge. Nationals leader Michael McCormack has told the Prime Minister that key members of his partyroom have warned they will not support any climate package that fails to include protections for agriculture, mining and manufacturing. The Deputy Prime Minister cited the exemption of farm sector emissions in New Zealand’s carbon-neutral pledge for 2050.

All of Australia’s earlier climate policies, from the Howard government’s proposed emissions trading plan to the Gillard government’s carbon tax, have included exemptions for high-emissions, trade-exposed industries such as cement-making and aluminium smelting. The issue of carbon leakage, where high-emissions industries shift countries to avoid emissions penalties, is still an issue that must be considered. Nothing has been proposed by Mr Morrison on climate that would require a vote in parliament. But if the Prime Minister fails to acknowledge the internal concerns and to act to quell any dissent, he could face the same destabilising forces that have toppled other leaders on the issue of climate, including Malcolm Turnbull, Tony Abbott, Julia Gillard and Kevin Rudd.

Ironically, the position carved out by Mr Morrison and solidified in his address to the National Press Club last week should have avoided any need for debate on the issue. Mr Morrison effectively accepted a net-zero carbon dioxide emissions target but said its timing was dependent on technology providing a clear pathway for how this could be achieved. Mr Morrison says the bottom line is there will be no tax measures, either a carbon tax or an emissions trading scheme, to push along the timetable for net zero. Under the thinking set out by Energy Minister Angus Taylor, low-emissions technologies ultimately will be taken up by industry when they are the cheapest and best option available and therefore more profitable than the status quo. The argument is this will deliver greenhouse gas emissions savings and possibly a net-zero goal by 2050 regardless of whether government sets a mandate. The difficulty is that with climate change politics, everything is fluid.

Setting a net-zero target has become a global benchmark that many leading nations have adopted, including Australia’s key trading partners such as Japan and South Korea. The fine print is that Japan’s net-zero target is conditional on a revival of nuclear energy and South Korea’s target is non-binding. Nonetheless, Australia is under pressure to declare a net-zero target for 2050 as opposed to some time in the second half of the century, which it had agreed when it signed the Paris Agreement. Mr Morrison’s recent comments have laid the groundwork to make it possible to announce a net-zero target for 2050 if it is considered politically prudent to do so. The first real pressure will come at a special meeting called by US President Joe Biden for April and later at the UN Framework Convention on Climate Change’s COP26 meeting in Glasgow on November 1.

The relentless incrementalism of climate pledges is underscored by the New Zealand experience. When the net-zero target was announced in 2019, agriculture — which makes up about half of NZ’s total emissions — was exempt. However, last October NZ Prime Minister Jacinda Ardern said farmers had a five-year period to reduce emissions or face higher taxes. During that five-year period the agricultural sector is expected to develop a farm-level pricing mechanism separate from the nationwide emissions trading scheme. If a new scheme is not established, agriculture will be folded into the New Zealand ETS by default in 2025. If the Ardern government does not think farmers are moving quickly enough, the carbon cost measures can be brought forward to next year.

Peak farm groups in Australia say they are already working to be carbon-neutral. Meat & Livestock Australia has set a target to be carbon-neutral by 2030. This target means that, by 2030, Australian beef, lamb and goat production — including lot-feeding and meat-processing — will make no net-release of greenhouse gas emissions into the atmosphere. Politically, however, the issue is sure to play differently among individual farmers and regional towns and electorates. The Morrison government already is investing heavily in reform measures that will make it easier to reward farmers for improving productivity by sequestering more carbon in their soils. Breakthroughs in technology such as feed additives to limit greenhouse gas emissions from livestock should help the MLA make progress on its 2030 target.

By ruling out price subsidies for electric vehicles this week the federal government has been consistent in its message that cutting greenhouse gas emissions must come with a proper cost-benefit consideration. This same measure must be applied to farming and other industry groups as the government seeks to widen greenhouse gas emissions savings from sectors outside of electricity generation. Rumblings from the Nationals partyroom show there is still a long way to go.