A way forward with Labor’s climate change legislation

Jul 22, 2022
Planet Earth clock
Image: Public Domain Pictures

Effective action against climate change requires Labor’s legislation. Hopefully the compromise necessary to pass this legislation can be achieved if the target set is for the minimum reduction in carbon emissions required.

Labor’s climate change legislation is likely to be the principal legislative item on the agenda for the opening of the new Parliament next week.

Clearly this legislation is very important. Man-made climate change induced by rising carbon emissions presents an existential threat to life on this planet. But for more than a decade the “climate wars” between the opposing political parties have prevented effective action to limit these carbon emissions and thus restrain the extent of global warming.

Australia cannot afford to continue these climate wars, and agreement on a legislated target for the reduction in carbon emissions is a key part of achieving the necessary agreement to move forward.

In the recent election Labor promised to legislate a 43% reduction in carbon emissions, compared to a 2005 base-level, by 2030. However, the recalcitrant Coalition says that it will continue to oppose effective action to limit climate change. Therefore, for this legislation to pass the Senate it will need crossbench support from the Greens and at least one other independent senator.

The Greens are, however, objecting. While indicating that they are prepared to compromise on their target of a 75% reduction by 2030, the Greens would understandably like to see more ambition. Also the key independent Senator, David Pocock, backed a 60% reduction target in the election, although he might be prepared to compromise and support the Labor target.

Of course, most of us would prefer to reduce carbon emissions as fast as we can. But setting targets is one thing; realising that target is another. It doesn’t really help if there is no credible plan governing how carbon emissions will be reduced consistent with meeting the target.

Thus, a key feature of Labor’s target is that it is backed by a plan based on detailed modelling. We can see how Labor proposes to achieve its target and can therefore judge how realistic it is. Business can then plan and make the necessary investments with confidence, based on Labor’s plan once it is backed by legislation.

Importantly, Labor’s plan for emissions reduction sets a target for as much as 82% reduction in carbon emissions by the electricity industry by 2030. This is quite ambitious, and it is difficult to see how more could be achieved by that key industry in the timeframe.

Certainly, the Greens have not provided any indication, let alone modelling, of how they intend to achieve their target of a 75% reduction in carbon emissions over this period.

So there are good reasons for supporting Labor’s target, but what scope is there for further compromise between Labor and the Greens and Independents, so that the legislation is passed?

Adam Bandt has been reported as saying that the draft legislation shows a “legal ceiling” on the target as well as allowing “future climate-wrecking governments to announce lower targets”.

Possibly in response to Bandt’s remarks, the PM, Anthony Albanese, has said that while the Government has a mandate for its position, its target “is a floor, not a ceiling.” Following up the PM, The Minister, Chris Bowen, has been reported as suggesting that there will be a ratchet mechanism, which would enable Labor’s 2030 target of a 43 per cent reduction over 2005 levels to be lifted without legislation.

In short, a key element in reaching a compromise might be for the Government’s legislation to set a target for a minimum reduction in carbon emissions of 43% by 2030, rather than an explicit reduction of only 43%. Certainly most green support groups appear willing to support Labor’s carbon target legislation as long as the target is a genuine “floor” on ambition and there is the possibility of ratcheting it up later.

That would, however, still leave the other main point of contention between the Government and the Greens, which is that the Greens want to stop opening any more coal mines or gas wells. Here it is very difficult to imagine how the Government could intervene to stop any new development of fossil fuels.

First, all the expert opinion is that Australia will need to access gas to maintain the security of the electricity supply at least to 2030 and probably a bit beyond. In my view, nothing would be more damaging to support for reducing carbon emissions than for the lights to be turned off.

Second, realistically Labor cannot intervene to close down coal mines. That would risk the same reaction to what would be seen as a broken promise that dogged the Gillard Government a decade ago. Instead, there is a very good chance that if we leave it to market forces, coal mining will cease in the not-too-far distant future, purely because it will be uneconomic.

But the Government would have more credibility if it had a realistic plan to help workers transfer out of fossil fuels as they are forced out by declining markets. That transition assistance would reduce the possibility of future intervention to protect mining jobs.

In sum, Labor should be able to compromise by changing its 43% carbon emissions reduction target to a minimum reduction of 43%. It would also help if there was a credible plan to help workers transition out of fossil fuels over time. Hopefully this elaboration of Labor’s policies would be sufficient to get the legislation passed by the Senate, while remaining consistent with Labor’s election promises and principles.

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