ALP’s green deal short on details

Two exasperating years under a president they despise has driven American socialists to the verge of insanity.

That’s the conclusion one draws from the Green New Deal, a US house resolution to which 68 representatives have attached their names.

Its champion is Alexandria Ocasio-Cortez, the economically subliterate 29-year-old socialist who refers to tax cuts as costs and believes that capitalism is just a passing phase.

She claims her deal will solve not only climate change but other “related crises” such as wage stagnation, social immobility, public sector underfunding, the racial wealth divide and the gender earning gap.

The old Left claimed to represent the working class. The new Left, immersed in identity politics, champions “indigenous peoples, communities of colour, migrant communities, de-industrialised communities, depopulated rural communities”, and so on, hereafter referred to as “frontline and vulnerable communities”.

Ocasio-Cortez’s Green New Deal is not a policy in any ­accepted sense. It is a rallying cry for a fresh assault on the moral high ground.

How long will it take to raise the injured souls from the quagmire of oppression and heal the ghastly wounds of a maimed and exhausted planet? A mere 10 years. The utopia will be upon us before Ocasio-Cortez turns 40.

How much will it cost to transform the US economy?

“My answer to that is: just hold on,” says New Green Deal architect Rhiana Gunn-Wright. “We can have this conversation later.”

Bill Shorten also has a deal for us, albeit one that stops short of Ocasio-Cortez’s ambitions. Yet even Shorten’s 45 per cent ­reduction in greenhouse gases in the space of 11 years will push our economy to breaking point.

The cumulative cost to the economy will be $472 billion ­according to the best available modelling. That’s assuming Shorten is able to fight off pressure from his party’s green Left, which, driven by hair-shirted logic, wants to leave spare Kyoto credits sitting in the bank.

Cuts of this size cannot be made within the energy sector alone. Farming, transport, construction and manufacturing will be obliged to share the pain. A ­reduction in output and loss of jobs is inevitable.

The economy will adapt to the extent that it can. But investment and innovation requires capital and policy certainty, commodities that are in short supply in any sector touching on climate.

Life was so much simpler for Labor when the climate change debate was, in Kevin Rudd’s words, the greatest moral challenge of our generation. Labor’s inflated ambition, however, has forced the debate to move from morality to economics, a field in which Labor has become noticeably deskilled in recent years.

The Opposition Leader is struggling. His discomfort was ­apparent at a doorstop last week when journalists began to probe the details.

“Um,” he began unpromis­ingly, “we will announce our climate policy before the election.” Would he use the spare Kyoto credits? “We’re still looking at that one.”

Would the 45 per cent cut apply to transport and agriculture? “We’ll announce that as we finalise our policy.”

But how will you get to 45 per cent across the board if you don’t? “Guys, our climate change policy will be for the … I know you guys want me to do the whole campaign launch today. I said we’re going to announce it before the election.”

Labor, like the US socialists, has badly underestimated the scale of the transformation ­required to meet its targets. The level of political and bureaucratic skill required to execute their ­policy has been ignored. Julia Gillard at least acknowledged there were costs attached when she introduced a carbon tax. Shorten is fooling the voters, and possibly himself, in pretending it can be done for free.

He needs to get used to difficult questions about a policy that ­appears to have been scratched on the back of an envelope and modified on the run, an approach to public policy perfected in the Rudd government, with predictable consequences.

How did Labor arrive at the figure of 45 per cent, for example, when the Paris Agreement ­demands a cut of 26 to 28 per cent? Did the party become locked in a bidding war with the Greens?

Undermining Brian Fisher’s modelling, the source of the most useful forecasts, will not be easy since Fisher could hardly be better credentialed. He was the former head of the Australian Bureau of Agricultural and Resources Economics. His forecasts are drawn from an updated version of the model developed by ABARE that government agencies have used for years.

Labor’s own modelling, on the other hand, was commissioned by Greenpeace and is wholly inadequate for the task. Labor’s claim that energy prices will fall by a quarter under its scheme is based on the farmgate of renewable ­energy, not the cost to consumers once transmission, disruption and investment costs have been included.

Behind Shorten’s bolted-on smile this week lies the nervousness of a schoolboy turning up for the exam when he knows he hasn’t done his homework.

The press gallery should keep probing. This one isn’t over yet.

Nick Cater is executive director of the Menzies Research Centre.