Abbott can win on carbon: here's how

The election will be won and lost on 'boats' and 'carbon' policy. Abbott should let the media do his work on Rudd's 'PNG solution', but has one huge opportunity on carbon.

Kevin Rudd’s plan to crush Tony Abbott and move swiftly to the polls is faltering. Rudd has made a number of miscalculations in his attempt to outflank the Coalition, and there are opportunities for Abbott (who is still marginally ahead on Newspoll figures) to thwart ‘Rudd 2.0’. 

Before getting into those, let me reiterate a point I have made before: that the ‘carbon’ and ‘boats’ topics dominating the media at present have become obsessions blown out of all proportion. 

The post-minerals boom structural transformation of the Australian economy – the rebalancing of manufacturing, services, agribusiness, mining and energy industries – should be front page news. 

That should mean more debate on industrial relations, education and training, tax reform and so on. 

However, since it is much easier to write headlines about boats and carbon, those issues will continue to dominate, and will determine the next election. 

The boats disaster

While many predicted a snap election on August 31, that looks far more unlikely now that Rudd’s ‘PNG solution’ is in place. Dennis Shanahan of The Australian makes a strong case 

for the election now being on September 21, or October 12. It could be pushed back even later – for reasons outlined below.

Early indicators suggest the Papua New Guinea policy is a disaster. Former prime minister Malcolm Fraser has labelled offshore camps “Australian gulags” and the flow of boats to Christmas Island seems to continue apace – with the tragic consequence of yet more drownings, including a number of infants.

But the political effect is that Rudd cannot now rush to the polls. He needs to show that the flow of boats actually slows as refugees and unauthorised migrants baulk at handing over thousands of dollars to get to PNG rather than Australia. 

‘Economic migrants’ are unlikely to pay to take that trip, but genuine refugees will. As awful as the camps in PNG are likely to be (if reports out of Nauru are anything to go by), genuine refugees will not understand that PNG’s economy is a basket case, that its streets teem with violent ‘Raskol’ gangs, and that they may end up in the ‘Australian gulags’ for much longer than they think. 

The illusion of permanent resettlement is likely to keep real refugee boats coming, but there may be a noticeable decline in the overall number of boat arrivals – if, as Foreign Minister Bob Carr suggests, many Iranians, Sri Lankans and some others are not fleeing persecution at all. 

If overall numbers fall substantially, Rudd will claim his plan is working. But that will take time, and push the election date out further. (And let’s not forget that this brutal, wasteful policy might ‘work’ up to election day, but in the long term is not a true ‘regional solution’ to the genuine refugee crisis on our doorstep. It's effectively a uni-lateral quick-fix.)

A growing carbon problem

In the meantime, even if Rudd wins public hearts and minds on the boats issue, he will now be on the defensive on the carbon issue. The debate started by Origin Energy’s chief executive Grant King on Business Spectator on Monday will make sure of that. 

King and others have criticised Rudd’s carbon pricing rejig on two counts: firstly, that it makes meeting the bi-partisan policy of the Renewable Energy Target proportionally more expensive, and secondly, that it introduces business uncertainty for firms wishing to invest in, or buy the power capacity of, renewable projects (mainly wind power).

Because the RET legislation was created with fixed target for the amount of gigawatt-hours that must be bought by energy retailers from renewable power generators, Australia’s surprise decline in electricity use has pushed the ‘20 per cent by 2020’ target up closer to 28 per cent according to some critics of the scheme. 

And because coal-fired power looks to be getting cheaper – as supply outstrips demand and as a much lower carbon price is on the cards if Rudd is re-elected – the difference in the cost of renewable energy over and above coal energy is increasing.

So King has called for RET to be radically rewritten. 

It’s unlikely that Rudd will be willing to do this. Many Labor voters are hugely pro-renewables and the fact that we may end up with 28 per cent renewable power in 2020 (there is disagreement in the industry as to whether that much capacity can be built in time) rather than 20 per cent will be an electoral plus for Labor. Rudd has already done one carbon backflip and is unlikely to want to do another. 

And this is where a huge opportunity opens up for Abbott. To simplify the proposition, and its context, here are a few of its elements in point form:

– Abbott needs to talk carbon, not boats. Abbott needs to minimise discussion of his own ‘tow-backs’ policy and allow Rudd’s ‘gulag’ policy to be demonised in the media. The more Abbott mentions his own policy, the more voters will realise that it’s really no better than Rudd’s. 

– It looks likely we are a couple of months off from an election, and that the RET/carbon pricing issue will grow in significance in voters’ minds.

– RET and carbon pricing are fundamentally different approaches to reducing our per-capita carbon emissions. RET is ‘direct action’ regulation, whereas the ETS is a market-based scheme.

– Abbott is already committed to a plan of ‘direct action’ on carbon and is still, at present, committed to the ‘20 per cent by 2020’ RET plan. 

The 'no-backflips' carbon solution

Out of those points a picture begins to emerge of how Abbott could, if he chooses, change the debate on carbon emissions. 

Any debate on carbon emission reduction is meaningless without also discussing what the alternative generation capacity will be. For Labor and the Coalition, shutting down coal generators and opening more gas capacity is the right way forward. 

However, the Greens have told me in the past that it is “too late for gas”. Because they focus more on the science of climate change, and less on the realpolitik of what is achievable in our democracy at the present time, they can make this assertion – and virtually nobody listens. 

But what would it do to the debate if Abbott put more of his Direct Action budget into renewable energy, as less into shonky ‘soil sequestration’ or a ‘standing green army’ planting trees across the landscape? 

At present, the Direct Action policy plan includes “investing $100 million each year for an additional one million solar energy homes by 2020”.

“To accelerate the rollout and uptake of renewable energy right across Australia, 125 mid-scale solar projects will be established in schools and communities and 25 geothermal or tidal power ‘micro’ projects will be established in suitable towns.

“To support the development of larger scale renewable energy generation, a proportion of incentives provided through the Renewable Energy Target will be reserved for bigger projects.”

But the budget for Direct Action over forward estimates would be $3.2 billion. It’s a marvellous piece of socialist policy, smuggled into the Coalition’s midst by disguising it with one of Tony Abbott’s trademark blue ties.

With some rejigging, Direct Action could be skewed heavily towards building, co-investing in or subsidising renewable capacity to meet the existing RET target. 

Yes, that would be ‘picking winners’, but then so is most of the current Direct Action package. 

Abbott needs to pick a winner that will appeal to wavering Labor and Greens voters. And that winner would be to outflank Rudd on renewables and say “let’s ensure we have 28 per cent renewables by 2020”. 

No more wavering. Solid direct action on climate change that would actually work. And all done without the hint of a backflip.