Grading The ALP’s Climate Policy

Should Gillard have introduced a carbon price before the election? There are plenty of reasons to criticise Labor’s climate policy but the timing may not have been right for such a difficult reform, argues Ian McAuley

One technique in teaching public policy is to present students with a case which puts the decision-maker in a difficult situation. The initial — and understandable — first reaction from students is to say, “She shouldn’t have allowed herself to get into such a situation”. And then the teacher responds, “Point taken, but the question is what should she do now?”

Following this system, the Prime Minister’s climate policy would have to earn at least a passing grade.

Introducing a carbon price five weeks before an election was never going to be an option for Julia Gillard — particularly when the Opposition had so clearly defined a carbon price as a “big new tax”. Yes, there is strong support for government action on climate change but the specifics of a carbon price are hard to sell — inevitably it means higher prices for gasoline, gas and electricity and these costs will flow through to all products in time.

That is not to say it cannot be done. Australian governments have driven through some very difficult reforms in recent history, such as the Hawke/Keating tariff reductions and the Howard tax changes. These reforms certainly had their opponents, and, like a carbon tax, they were subject to deceitful misrepresentation — but they didn’t ultimately incur any electoral cost for the governments introducing them.

The key thing to note here is that these reforms were introduced with good timing in relation to the electoral cycle. Research confirms that almost any change meets with initial resistance. It takes time for electorates to accept reform.

To give the Government its due, it did have a strong plan to deal with climate change before the Abbott putsch destroyed any fantasy of consensus.

It is easy in hindsight to criticise Rudd for relying on bipartisan support, but few people were saying that when Turnbull was opposition leader. There is nothing unusual about bipartisan consensus on serious issues threatening national security; in fact, what is unusual is for a party to try to undermine a government on such an issue.

It is also easy to say Rudd should have called a double dissolution election. To do so overlooks the mathematics of the Senate. Labor gained a good base in the half-Senate election of 2007, and hopes to build on this in the coming half-Senate election. In a double dissolution it would have had to re-contest the whole Senate, and thus would have run the risk of single issue or small constituent minorities holding the balance of power. Remember that in a half-Senate election, 7.7 per cent of the vote gains a quota. A double dissolution clears a few blocked bills, but it runs the risk of erratic government for a further six years.

The Government’s more serious error, however, was to announce the abandonment of its climate policy in April this year.  Political advisors can explain the reasons in terms of marginal seats, for it is clear that the costs of a carbon price will fall disproportionately on people already struggling to make ends meet, and who have already faced an 18 percent rise in electricity prices and a 9 per cent rise in gasoline prices over the last year — a point missed by some of Gillard’s critics. Those who are well-off have the means to adjust to a carbon price by investing in domestic solar power, improving their insulation, and upgrading their cars — but such options are simply not available to those trying to balance each month’s cash flows. Any government would introduce compensation packages, as the Howard Government did for the GST, but these take time to develop.

It is the marginal seat obsession, perhaps, which is responsible for such a timid approach to the issue. A hard-headed political strategist would have taken the attitude that it’s quite sensible for a party to sacrifice some seats in order to secure a net gain — but this isn’t the way politics works. No member of parliament wants to sacrifice his or her hard-won seat in order to give the party an opportunity to pick up seats elsewhere. Also, as research shows, decision-makers are influenced by loss aversion: we value what we have more than what we may gain.

So long as we have single-member electorates we can expect parties to pursue marginal seat strategies. We know these strategies don’t always work: this election would be unusual if there were not quite a few seats defying the trend, but that won’t change parties’ behaviour.

In the meantime the best hope we have for climate change is Abbott’s warning that Labor will bring in a carbon tax; he may be doing the Government a favour. The measures announced so far — connecting the grid to remote sources of renewable energy, modernising the car fleet, and supporting cleaner power stations and greener buildings — are all useful and practical interim initiatives.  In any event, even if Labor is re-elected, it will continue to face a hostile Senate until July 2011. There is no point in even trying to bring in a carbon tax earlier, particularly in light of the way the media portray a Senate rejection as a failure by the elected government.

In any event, even if Labor is re-elected, it will continue to face a hostile Senate until July 2011. There is no point in even trying to bring in a carbon tax earlier, particularly in light of the way the media portray a Senate rejection as a failure by the elected government.

The risk we face, however, is that those who are disappointed by Gillard’s policy will be so strident in their criticism that they drive voters to the Coalition, which has nothing more than a few token (and expensive) interventions to offer, and which is highly dependent on support from the National Party, which has made clear its attitude to climate change policy.

It is right that the disappointed should criticise Labor, but unless they also identify and criticise those who have so effectively blocked a response to global warming they are give Labor no room to expand their policies. Indeed, Gillard’s loudest critics run the risk of an even worse outcome: the election of a government headed by one who has described climate change as “absolute crap”.

More Than Luck is a collection of ideas for citizens who want real change edited by Mark Davis and CPD Executive Director Miriam Lyons. A to-do list for politicians looking to base public policies on the kind of future Australians really want, More Than Luck shows what’s needed to share this country’s good luck amongst all Australians – now and in the future. Click here to find out more. Like what you’ve read? Donate to help make good ideas matter.

Blog Comments

Perhaps someone needs to remind people that the elements that make up the “climate change” debate are not new the buzz word “climate change” may well be but the core elements are not. There are three main elements, pollution, food supply and nonrenewable resources. Whatever is decided on CO2 is just the tip of the iceberg and only fractionally addresses one of these main elements “pollution” . We once again have procrastination on the part of governments as they pander to the global resource juggernauts. Perhaps its time that the domestic and nonrenewable resource economies were decoupled so the juggernauts can no longer hold governments and the people to ransom, sedition may be an old concept but usury and intimidation are not, if there were a Back Bone Party they would have my vote.

The attacks on Labor, now at almost hysterical pitch, are absurd and politically suicidal. Labor took its ETS to the House and negotiated at length with the Opposition, with passion, integrity, commitment and urgency . Malcolm Turnbull and his Opposition party were on the cusp of acceptance when the Liberal climate-denier powerbrokers moved in and got Abbott elected as Leader by one vote. If you weatch the TV images on this evenings’ news you’ll see who they are. They’re still driving the agenda. The elephant in the room is Abbott, and yesterday’s men from the Howard era, not Julia Gillard!
That’s the core of the problem.
The 180 degree shift in the Coalition stance was an act of gross political vandalism. It utterly lacked integrity and denied Labor its rightful mandate to act on climate change. It was accompanied by a carefully orchestrated and strident media campaign to validate climate change denial, led by “The Australian”. The public mood shifted as it became clear that putting a cost on carbon was the key and that reducing carbon pollution couldn’t simply be done by “the government” but was a task for all and would cost all of us. To act now without consensus, in spite of the vociferous minority, would be poltical suicide. Everyone wants to save the world but few want to face what that really means when it affects them directly.
Very little of the disinformation was countered by the Rudd government. They seemed simply too busy to take the Australian people with them. Julia Gillard is right to raise awareness of climate science and its evidence. She is right to seek national consensus on climate change. Without it, as governments come and go, so will the best intentions and actions to combat this scourge. Only with national consensus will consistent policies and actions to curb climate change have any chance of being effective, c0herent and sustained.
Congratulations to Ian McAuley for re-injecting a little reality and reason into the debate.

It’s not perfect by a long shot and the assembly idea not only has to have a broad range of ideas it also has to be part of a range of strategies. The reality is that with the GFC climate change took a back seat and without the Greens support in the senate it was always going to be a problem. The reality is that any climate change policy is far more likely to get up with a Greens ALP alliance that if the Libs get in as they are, with a few notable exceptions ( Turnbull) climate sceptics.

No government which accepts the mainstream scientific opinion on climate change would lock us into 50 years of emissions by allowing new coal fired power stations that do not capture 90% of their emissions on day 1 of operation.

Gas peaking plants, wind power, concentrating solar thermal, maybe even some conversion of *brown* coal fired power stations should be the main thrust of policy.

Just ban new/additional/replacement coal fired power generating capacity and let the market do its work.

No new tax, no complicated trading schemes, no subsidies to polluters, no existing jobs lost in coal mining or power generation, just a transition over time to a non-polluting power generation industry.

Their ETS would not have resulted in any fall in Australian emissions until 2034 according to treasury moodeling (as opposed to buying abatement/offset certificates from overseas).

Based on what they have done and failed to do I have concluded that Labor is a fraud on climate change.

This makes excellent sense but is deeply troubling since it lends a false sense of “bide your time and it will all be OK”. If Tony Abbott wins then there will be no move on climate change for another 3 years at least.
The problem is that we do not have a lot of time to twiddle our thumbs with run away climate change just years away

As a Victorian it feels as if we are being completely ignored because we dont have enough marginal seats.
It worries me deeply that the only demographic the parties care about is the outer urban mortgage belts.

Surely we need some passionate speeches about the importance of Climagte Change, from Gillard and senior ALP figures.. Why cant she say that she really believes we need to make changes to the way we live, but that the senate and a few weasles in the Coalition have prevented real action!!! It has its risks but a gamble worth taking if the pollies had any guts. Great leaders bring everyone with them by carefully explaining why things are important. I have not seen any real effort to do this.

We do need a carbon tax. Having said that I agree that Julia Gillard could not have introduced it just before the election. In fact, I think nothing can be introduced just before an election. The spin doctors take over at such a time and they just have to run their course.

My concern in this campaign is not about issues, but the election/re-election of Julia Gillard, as the alternative is just too awful to even think of.

I don’t perceive JG to be ideologically driven, certainly not religiously driven, so she may be doing the pragmatic things – hopefully.

Introducing real reforms, whether tax reform, social reform, education reform etc needs to be thought through, carefully planned, phased in. Meanwhile, we, the electorate (the Citizens Assembly, hahaha), have to keep pushing – pushing for a carbon tax is a good start.

It must be noted that not everyone who opposed the ETS was against the government putting a price on carbon- they were opposed to the trading aspect because it is more about money-making than carbon reduction. This group of people much prefer the price on carbon to be a straight forward levy or tax on carbon related products.

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