Abbott's carbon credibility is in tatters

The Coalition's break from the Greens may be less effective than it hopes, with Climate Institute's damning indictment of Direct Action policy handing the minor party crucial ammo in the fight for the seat of Melbourne.

Yesterday’s decision by Tony Abbott to make a ‘captain’s call’ to preference the Greens last in every lower house seat they contest, as well as in the Senate, puts huge pressure on the member for Melbourne, Adam Bandt.

Bandt defiantly told reporters yesterday that he would win the seat anyway, and that he was campaigning hard to raise his primary vote to the 50 per cent required to take the seat without preferences. 

He has potentially been handed the opportunity to succeed in this, in the form a new report from the Climate Institute that measures both Labor and Coalition carbon emission reduction policies – and finds the latter lagging badly. 

The Institute conducted the same ‘Pollute-o-meter analysis’ of the major parties’ schemes last election. It found that, though both parties had pledged to reduce emissions by 5 per cent of 2000 levels by 2020, Labor’s proposal would actually increase emissions by 19 per cent by 2020, with the Coalition policy allowing emissions to rise by 8 per cent.

At that election, Labor was vaguely promising a ‘citizens’ assembly’ to decide if an emissions trading scheme was a good idea. That idea was rubbished by most commentators (including this one), especially seeing as we already have a ‘citizens’ assembly’ – called ‘the parliament’. The concept was merely an attempt to railroad a ‘representative’ group of Australians into agreeing that the abandoned Rudd-Turnbull Carbon Pollution Reduction Scheme should be the basis of carbon pricing in Australia. 

The Coalition had the Direct Action plan, which is still its policy and which, according to the new Climate Institute report, will still allow emissions to increase. The updated study, based on modelling by Sinclair Knight Merz-MMA and Monash University’s Centre of Policy Studies, finds roughly the same results – emissions will rise under Direct Action by 9 per cent.

The difference now is that the Direct Action policy can be compared to the Labor/Greens-designed Clean Energy Future package. That package – the key battleground of the 43rd parliament – is still a cap-and-trade system (or emissions trading system), and so by default hits the target of a 5 per cent emission reduction by 2020. Just enough permits are issued to keep to the target figure.

That’s not terribly impressive in itself. Other nations are doing more, so even hitting the 5 per cent target will not boost Australia’s place in the G20 carbon competitiveness ranking – we are currently ranked 17th for carbon-emissions per unit of GDP.

The Clean Energy Futures package, tweaked by Kevin Rudd to end the fixed-price period (the ‘carbon tax’) a year earlier than planned, will shave a small amount from gross national product and job creation – 27,800 fewer jobs will be created by 2020 (1.20 million jobs created versus 1.23 million created under Direct Action) and GNP in Australia will be around $300 less per person than it would have been without carbon pricing. 

But the main point the Climate Institute makes about Labor’s plan is that the target will be hit, and that there is no net cost to the already-strained budget to get there. Permit revenue comes in, compensation and clean energy financing goes out, but the revenue equals the expenditure. 

By contrast, the Institute finds that the Coalition’s plan cannot hit the 5 per cent target without spending an additional $4 billion through to 2020. That substantially inflates the cost to the budget – just as Malcolm Turnbull warned it would back in 2011.

Direct Action is currently expected to cost $3.2 billion over forward estimates and the Coalition has pledged two things that will ensure its policy doesn’t hit the 5 per cent target. 

First, it has guaranteed it will not increase expenditure above that level. Secondly, it has pledged not to buy cheaper emissions permits in the EU market or elsewhere – even if it did, the Climate Institute thinks it would have to spend an extra $190 million through to 2020 rather than the $4 billion extra at present. 

So whereas the Coalition beat Labor on carbon abatement policy at the 2010 election, the Climate Institute makes Labor’s policy the clear winner this time around. 

What this means for the Greens cannot be overstated. 

Brandishing this report (which the Greens complain is too conservative in its assumptions, making it far too kind to the Direct Action policy), and several others already released, Adam Bandt and the Greens’ Senate candidates will pound the electorate with the message Christine Milne put out last night: “The Direct Action sham is one of the worst policies the Coalition has ever seriously proposed. It comes as absolutely no surprise that not a single Australian economist or industry group supports it. It casts massive uncertainty over Australian business and will cost jobs and investment. As we are in the midst of a global warming emergency Tony Abbott deserves to lose the election for this policy alone.”

Milne will be all too aware Abbott is unlikely to lose the election. And so what Bandt and friends want is continued representation in the lower house – and only Bandt’s seat gives them any chance of achieving this – and enough votes in the upper house to prevent the Abbott repeal of Clean Energy Futures. 

The Climate Institute has called on the Coalition to “maintain the current legislative framework at least until the completion of detailed policy development and further independent analysis of the potential of the Emission Reduction Fund to achieve up to a 25 per cent reduction in emissions by 2020.”

That ain’t going to happen unless Abbott is forced into it, and that can only be done if there are enough Greens and Labor senators to prevent the ‘carbon tax repeal’ that Abbott has promised for more than two years. 

And even if the Greens and Labor block the repeal, Abbott would then face the horrible choice of returning to the polls for a true ‘referrendum on the carbon tax’ (because the general election is no such thing), or finding some weasel words to explain why he has been forced to abandon his core promise in the run-up to the 2013 election.

In the seat of Melbourne, many voters would like to see Abbott pushed into that corner. Whether there are enough of them to get Bandt over the line will only be revealed on the night of September 7.

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