Morrison’s ‘Australian Way’ climate plan is criminally irresponsible
Feb 3, 2022
The Coalition’s worship of fossil fuels and inept policymaking are leaving Australia defenceless against its greatest threat: climate change.
In August 2019, Prime Minister Scott Morrison addressed the leaders of the Australian public service, emphasising that:
“Under our system of government it must be ministers who set the policy direction. And it is why, having set that direction, they will have high expectations of the public service when it comes to implementation and delivery of the government’s agenda.”
Or as the ABC’s Laura Tingle subsequently put it:
“Public servants are now supposed to be the facilitators of policy rather than its authors, but in fact they have often become little more than post boxes for the outsourcing of contracts to the private sector.”
The emasculation of the public service has been in train for years, particularly under conservative governments, resulting in the undermining of its core capabilities and the increasing influence of inexperienced, ideologically blinkered political advisers. The ability to offer “frank and fearless advice” has long since diminished, with diplomatic skills being replaced by political “intuition”. The results do not impress, as the recent AUKUS debacle and deteriorating relationships with China, France and our Pacific neighbours demonstrate.
The logical extension of this process is the ever-growing use of consultants, which has taken the country into dangerous territory. The federal government’s “Australian Way” long-term emissions reduction plan to achieve net zero emissions by 2050 (NZE2050) – released immediately before the Glasgow COP26 climate meeting – is one of the worst examples, although that passed unremarked in media commentary at the time.
The plan was modelled by the Department of Industry, Science, Energy and Resources, complemented by analysis from consultants McKinsey & Co. In addition, Emissions Reduction Minister Angus Taylor appointed an expert panel, chaired by consultant Dr Brian Fisher, to provide independent advice on modelling assumptions and results.
The government’s utopian view is that the plan will achieve NZE2050 voluntarily, via “technology not taxes”, with “expanded choice, not mandates”, without requiring “coal or gas production or exports to shut down” or “the displacement of productive land”, and with “no loss of jobs” or “any cost to the Australian community”.
Not only will coal and gas production not shut down, it will be expanded with a massive reliance on emission offsets, such as carbon farming and carbon capture and storage (CCS), until market demand disappears, and all to be achieved with no impact on society at large.
CCS is technology that has promised much but delivered little despite major investment over three decades. Further, the assertion that there will be no cost to the Australian community makes a mockery of the historical conservative paranoia around the supposed high cost of climate action and its disastrous economic implications – propounded for years, not least by Dr Fisher.
But of greater concern, the plan makes clear that:
“The modelling and analysis assesses the economic and emissions impacts of changes in technology and action to reduce emissions by Australia and other countries. It does not assess the costs or impacts of climate change or the benefits of avoided warming associated with different global emissions trajectories.”
Objective risk management has long recognised that climate change is now the greatest threat to the human security of the Australian community. A plan to address this threat which ignores its potential impact is grossly irresponsible. The damage to the community from bushfires, floods and storms is already substantial and projected to increase dramatically even in the next decade, to the point that major social and economic disruption is inevitable unless Australia becomes far better prepared to handle climate impacts – as the 2019-20 bushfires have shown on a smaller scale.
This requires recognition and acceptance of climate risk, which the government deliberately refuses to assess despite the overwhelming scientific evidence that emissions must be reduced far faster than a leisurely runup to NZE2050. Ideally net zero emissions must be reached by 2030 if potentially catastrophic and irreversible climate impacts, and the associated damage to the economy, the financial system and society, are to be minimised.
Adopting the populist target of NZE2050 is soft denial, kicking the can down the road for others to deal with, particularly when the 2030 target remains wholly inadequate at the 26-28 per cent reduction on 2005 levels the government submitted to the 2015 Paris climate meeting.
The Morrison government’s plan is little more than a techno-utopian forecast which does not even meet its supposed objective of achieving NZE2050. Taylor makes great play of the potential for non-linear acceleration of innovation delivering faster emissions reduction, completely ignoring the fact that even faster non-linear changes in the climate are already wreaking havoc here and globally.
The plan’s principles are fundamentally flawed, particularly the mantra of “technology not taxes”, meaning the government will not introduce a politically toxic price on carbon. However, the fine print discloses that the modelling actually assumes a “marginal abatement incentive” of $24 per tonne of carbon dioxide equivalent to encourage the process to work. It is a carbon price by any other name, but paid by taxpayers as a subsidy to emitters rather than being paid by emitters themselves, as it should be under a sensible market-based approach.
Genuine carbon pricing is by far the most effective mechanism to reduce emissions; it is not a tax but the removal of the massive subsidy enjoyed by fossil fuel producers for decades because they do not pay for their externalities – the damage caused by fossil fuel use.
The IMF recently estimated this subsidy for Australia at around $60 billion annually, more than the defence budget. The refusal to price carbon already imposes a direct tax on the community as alternative ways to reduce emissions are undoubtedly more expensive. These are charged to the taxpayer via a mishmash of government policies such as the Emission Reduction Fund, which again pays polluters to reduce their emissions. In addition, the taxpayer carries the cost of climate damage from, among other things, storms, floods, drought and bushfires, exacerbated by the proposed expansion of the fossil fuel industry pouring more fuel on the climate fire.
The taxpayer also picks up the cost of the multiple subsidies which the government now lavishes on coal and gas producers to aid their expansion, such as $50 million to explore gas fracking potential in the Northern Territory’s Beetaloo Basin. There are also the substantial undisclosed costs of the agreement with the National Party whereby the Nationals allowed the government, in which they are the minority partner, to commit to NZE2050 in the first place. All told, taxpayers are footing a massive direct tax increase as a result of this nonsense while at the same time being exposed to even more climate damage.
It should be “technology and taxes”, not the reverse.
Another principle of the government’s plan, to “expand choices not mandates”, is negated by the government itself in mandating fossil fuel expansion. The plan is an extreme example of moral hazard: encouraging expansion of fossil fuel use now on the blithe assumption that technology like CCS will emerge some time in the future to handle the additional emissions that the expansion produces, while knowing that catastrophic climate impacts will get locked in long before the technology eventuates. In current circumstances, where expert opinion considers that radical emission reductions have to be achieved before 2030, the plan is criminally irresponsible, completely abrogating the government’s first responsibility to ensure the security of the Australian people.
It is the ultimate failure of imagination and leadership.
This failure is hardly surprising given that the public service, in line with the prime minister’s 2019 directive, has vacated the field on climate change. As the secretary recently confirmed, Treasury has done no modelling on climate change for years, an astonishing admission given that climate impacts will be one of the greatest dangers to economic stability even in the short term. The Department of Defence, in stark contrast to its counterparts in the US and UK, has no plan to handle climate change, indeed the words cannot be mentioned internally. In short, Australia is totally unprepared to handle its greatest threat.
Instead, the government has done everything possible to shore up the fossil fuel status quo and increase Australia’s exposure to climate risk. Ministerial offices are stacked with former fossil fuel executives. Institutions supposedly set up to handle climate change are similarly directed and staffed. Hence the government’s plan revolves around continuing expansion of fossil fuel-based infrastructure, whether coal gas or oil, reflecting the interests of major political donors and these advisers. The limited progress on emissions reduction is almost entirely due to private sector initiatives and to the states, although the federal government claims the credit despite being the biggest barrier to action.
In short, the plan confirms that the government has no intention of seriously addressing climate change despite the immense damage that it will cause to the Australia community whose interests the government is supposedly serving
What of the Opposition?
The Labor Opposition released its own climate policy, “Powering Australia”, after the Glasgow COP26 meeting, having held back until the government’s policy was declared. Unsurprisingly, given it does not have access to public service resources, the Opposition used consultants Reputex to carry out modelling of its policy’s economic impact. While aiming for the same NZE2050 target, the Australian Labor Party (ALP) put forward a 2030 emissions reduction target of 43 per cent relative to 2005 levels, still inadequate but substantially better than the government’s.
The ALP approach differs markedly from the government’s in that a more credible “bottom-up” analysis of specific energy and transport policies was used to demonstrate how emissions would be driven down, in contrast to the government’s “top-down” techno-utopia.
In common with the government, the ALP analysis also ignored consideration of climate risk and its impact throughout the period to 2050. It is understandable that the ALP, given its bad experience at the 2019 election, does not want to expose itself at this point to government criticism by adopting more stringent climate policies.
But it is a fundamental failing of our political system that neither party is prepared to honestly discuss with voters the greatest danger they face, namely climate change. As the 2022 election looms, this is unacceptable.
This is the first part of a two-part article. Read the second part tomorrow.
Ian Dunlop was formerly an international oil, gas and coal industry executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors. He is a member of the Club of Rome and Chair, Advisory Board, Breakthrough National Centre for Climate Restoration. Executive Committee member of the Australian Security Leaders Climate Group.
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