Green loan fiasco tarnishes Rudd's moral authority

Don't expect talk about the moral challenge of climate change from the PM any time soon

ENVIRONMENT Minister Peter Garrett is bleeding on the frontline of the climate change wars but he's not the only one in trouble. The fiasco of Canberra's attempt to encourage households to "go green" will only accelerate broader public scepticism about what good intentions on climate change policy actually produce.

This is just what Kevin Rudd doesn't need as he attempts to dejargonise his emissions trading scheme and fend off the aggressive Tony Abbott assault on "a great big new tax".

Little wonder the opposition has rushed to attack this new area of vulnerability. "If you can't run a pink batts program and a green loans program, there is no way you can run the most complex emission trading scheme in the world," sniped opposition spokesman Greg Hunt. Ouch.

The government is facing problems with its drive for greater renewable energy in a range of areas rather than only in the emotive debate over unnecessary deaths. It demonstrates how much more difficult it is to implement change than to promise it, even when the government is willing to pay the bill. And all these problems are becoming evident at what should be the relatively straightforward household level let alone the grand restructuring of the economy originally planned under the ETS.

Inadequate safety standards meant that about 45,000 houses, mainly in Queensland, became potential firetraps because of the use of foil in the subsidised insulation program.

But this has to be added to a separate spectacular miscalculation in the government's $175 million green loans scheme involving a drastic underestimation of how many individuals would train to become assessors of household sustainability plus a huge overestimation of how many households would then apply for green (low interest) loans to help them change.

Combine that clumsy error with the $850m cost blowout and the unintended consequences from the solar power rebate program. The additional cost is awkward enough to explain away. But the rush to encourage people to invest in solar rooftop panels is also doing damage to the government's ambitions for its renewable energy target of 20 per cent of Australia's energy coming from renewables by 2020.

That requires investment from big commercial generators such as wind farms building industrial-scale projects. Instead, thanks to the residential solar power program, the market has been flooded with the renewable energy certificates that are supposed to make these bigger projects viable. The result is their price has spiralled from about $50 to about $30.

Climate Change Minister Penny Wong firmly insisted in a debate at the national press club last Wednesday that climate change was an issue that defied politics and political timetables.

"Its impact spans generations and a credible response to it demands a political will that few can muster," she declared.

But she knows better than anyone how much the politics of an election will define the issue in Australia this year and that the government's political will is dwindling faster than a deflating balloon despite its protestations that it is pressing ahead.

Of course, the messy result of the government's various direct action programs should also warn voters off accepting the opposition's assurance that its direct action scheme will be any simpler or more effectively managed.

But in the past two months Abbott has had more success than the Rudd government expected in leveraging off the public's view that the government's ETS is impossible to understand.

It means the government is now caught in a political pincer movement between the changed mood internationally in the wake of Copenhagen and the changed mood domestically.

Big business groups such as the Business Council of Australia have publicly pulled back from their earlier support of the government scheme, with new president Graham Bradley warning last week that Canberra had to

alter its approach in the absence of international agreement or bipartisan support.

More significantly for the government's peace of mind, voters are increasingly seduced by the opposition argument that there is no point going it alone on emissions trading and damaging the Australian economy.

In that sense, Abbott's direct action plan follows a similar approach to the Labor opposition attack on the Howard government in 2007 over everything from interest rates to grocery prices. His breezy confidence that his scheme will reduce emissions by 5 per cent by 2020 is more a matter of faith than fact.

But the Liberals know to their cost that glib promises from opposition can work if they feed off a general distrust or dissatisfaction with the incumbent.

While the government is yet to decide whether to proceed with a double dissolution election on the ETS, that option is looking increasingly unlikely.Climate change no longer offers an easy symbolic advantage to Labor.

"The pressure is building on Kevin Rudd to drop this whole crazy scheme and I expect him to quietly slither away from this," Abbott declared.

Rudd is unlikely to walk away, if only because it would give Abbott a huge political victory and allow him to make that gibe right through the election campaign. But nor will Labor want to fight an election on far more treacherous territory than it ever anticipated. More probable is that the government will incorporate its scheme into its general agenda for the future and its broader attack on the risk to the Australian economy from a reckless Abbott-led opposition. It's one more reason why the government has been so focused on attacking finance spokesman Barnaby Joyce.

Labor is determined to cripple the opposition's credibility on economic management and waiting to pounce on any careless words. Most federal ministers can't quite believe that the opposition is being taken seriously by the public although they are slowly coming to terms with the reality that Abbott is not the static target they expected. They still expect him to implode somehow.

But while the government remains far ahead in polls, it is becoming more nervous that its claims to have saved the Australian economy and jobs does not guarantee reflexive support from a grateful public right through to the election and beyond.