Nicholas Rowley. Cleaning up the mess on climate policy.

Oct 9, 2015

It is one of the rarely considered consequences of the sad story of Australia’s national policy response to climate change, that many of our finest public servants have sadly wasted years of analysis and effort to dutifully serve the demands of their political masters.

More than ten years ago analysis by Ken Henry under then Treasurer Peter Costello recommended a national emissions trading scheme. The advice was ignored. In 2006 John Howard asked Peter Shergold, then Head of the Department of Prime Minister and Cabinet, to examine the most effective ways to achieve the emissions reductions required. He too concluded an emissions trading scheme was necessary. Wanting to adopt his own approach, the advice was ignored by incoming Prime Minister Rudd.

Then in 2010 Kevin Rudd’s Carbon Pollution Reduction Scheme hit the buffers of the Copenhagen outcome and Prime Ministerial hubris; Malcolm Turnbull, then Leader of the Opposition, lost his job over his climate policy stance and the political debate declined to resemble the name calling so prevalent at second rate Polytechnics in North London circa 1970: all dominated by toxic gesture.

Despite Prime Minister Gillard’s noble efforts to achieve some modicum of policy stability and continuity, her government’s initially fixed carbon pricing system was swiftly dismantled by Prime Minister Abbott, together with attempts to either abolish or thwart the work of new organizations doing important, tangible work and investment such as the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA).

It is a sad and sorry story. Much like looking into the teenager’s bedroom, the temptation is take a brief look and walk away from the mess.

But we can’t. Largely because the issue won’t go away: the dynamics behind the problem are fixed, and the decisions taken by Australia’s major allies and trading partners will come to effect our economy whether we like it not. As the current Governor of the Bank of England said so succinctly last week in a speech at Lloyds in London “with climate change, the more businesses invest and change with foresight, the less they will regret in hindsight.” It is a speech that is well worth reading in full, and would no doubt be of great interest to Turnbull, formerly an investment banker.

And what is true for businesses is also being recognized by China, India, the European Union and the United States. No longer is climate change a niche concern: it has increasingly become part of the policy and business mainstream.

Malcolm Turnbull’s ascendancy to the Prime Ministership is potentially a vital circuit breaker. From the moment his predecessor came to office “climate” and “change” were two words that could not be used together in the Commonwealth bureaucracy. Simply with Abbott’s removal those working in the central agencies, the CEFC and ARENA can breath a collective sigh of relief.

Clearly the Prime Minister has (understandably) gained power on a number of promises including that the existing ‘direct action’ policy will remain untouched. But this is not a great problem for Turnbull. He knows that effective climate policy must send clear, stable and continuous messages across the economy about the important and economically rational imperative of reducing emissions.

Direct action doesn’t do this. It is relevant only to the businesses who receive public money to do things that otherwise they wouldn’t. It is wasteful, and most likely so costly to be unsustainable beyond a few years.

And with the government committed to the reductions stated in its Intended Nationally Determined Contribution (INDC) submitted to the United Nations to reduce greenhouse emissions by 26-28 per cent below 2005 levels by 2030, Turnbull is going to need new policies to achieve it.

If he manages an election victory next year, then my sense is that there will be a renewed sense of creativity and urgency amongst our leading public servants to finally achieve a sensible national approach to reducing the risks of climate change. At the risk of stretching a concluding metaphor, Prime Minister Turnbull might just be the adult Prime Minister who will walk into that bedroom and clean up the climate policy mess left by his teenage predecessors.


Nick Rowley is an Adjunct Professor at the University of Sydney and represents Robertsbridge in Australia and southeast Asia. Previously he advised Prime Minister Tony Blair on climate change and sustainability and helped initiate the seminal Review into the Economics of Climate Change undertaken by Lord Nicholas Stern of Brentford.


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