Are the Greens really back-pedalling on carbon?

Whether or not reports of a carbon price rethink are true, both the Greens and Labor should be looking for a new carbon road map that won't decimate them, nor destroy Australia's reduction goals.

It's hard to know what to take from reports this morning that Labor and the Greens are seriously considering altering the terms of the carbon floor price that will operate when Clean Energy Future legislation switches from the sale of non-tradeable carbon permits, to a tradeable permit scheme in 2015.

At face value, reports in News Ltd and Fairfax papers suggest that Labor and the Greens have finally realised that voter dissatisfaction with the carbon tax leaves them, to use the most polite term possible, buggered.

For Labor the equation is simple – Tony Abbott's relentless attack on the carbon tax has, month after month, reduced the number of seats the ALP can win at the next election. This week has seen a number of Labor candidates put on notice that they will face rank-and-file preselection ballots to help 'democratise' the party, with 'democratise' here meaning 'give the party at least a cat's chance in hell of retaining the seat'.

For the Greens, the motivation to return to negotiation is two-fold. First, by helping to disperse some of the carbon stink that has followed Labor these past months, the Greens can help preserve something like a decent opposition when Tony Abbott sweeps to power. Secondly, they will be all too aware that disenchanted Labor voters will only remain 'Greens' while some progress is being made on environmental issues.

A scheme with a too-high starting price ($23/tonne), and a too-high floor price from 2015 ($15/tonne) will leave both Labor and Greens stranded on a tiny atoll of electoral support, at risk of disappearing under a rising sea of conservative votes.

Then again, the reports could all be hot air.

We shall see. Independent Rob Oakeshott has openly called for a lowering of the floor price to ensure the Australian carbon pricing regime can join carbon permit trading with the EU scheme in 2015 – EU permits traded yesterday at €8.26 ($A10.06).

But that does not mean Labor will decide that back-pedalling is in its best interests electorally (it would look a teensy bit weak) or that the Greens can overcome their stubborn insistence that our renewable energy revolution must be achieved in just a few years.

That last point is important. The Greens have told me a number of times that they do not see gas-fired power generation as an option for Australia. Gas-fired stations emit roughly 50 per cent of the CO2 per megawatt-hour as 'dirty coal' power stations, which is a big step forward. However Greens policy is currently driven by science, not economics or political pragmatism.

I know the Greens will object to that last statement. In the long term, there is no disagreement between economics and environmentalism – sorting out climate issues now, rather than later, is in fact cheaper in the long term. From an inter-generational perspective, we should be winding back carbon emissions as quickly as possible, building renewable energy capacity and then getting on with being prosperous.

That kind of logic is driving China's approach to climate change policy. And in a one-party state, the government has the option to choose policy that accords with both climate-science and the long-term economic view.

Things work a little differently in a democracy, even one as flawed as our own (and is there any democracy doing it better?). The jump from 'dirty coal' to a renewable utopia just looks impossible. That means we cannot reduce our carbon emissions as rapidly as scientists tell us we should.

The pragmatic middle way, in which gas-fired power eases the transition to a renewable future is, to my mind, better than simply giving up.

And the strangest things can happen on the runaway train of Australian democracy – getting a carbon trading system in place may actually begin to change attitudes and allow for the deeper carbon cuts that the Greens, on the overwhelming advice of climate scientists, desire.

To return to my original point, it's difficult to know if today's reports of a carbon-price or floor-price rethink by Labor and the Greens are to be believed.

But they should be true. The parties should be looking for a road map to some kind of carbon pricing that will not decimate both of them at the next election and that might actually lead Australia towards meeting its international carbon-reduction responsibilities.

The same reports also suggest that Labor and the Greens might be contemplating switching to an ETS earlier than 2015. The political value in that is that Labor did, in fact, take an ETS with a short fixed-price period to the 2007 election. The 'carbon tax' – a term Labor rolled over and accepted far too quickly – would then be shorter and the ETS more easy to sell at the next election (and a bit less of a 'lie').

Meanwhile, speculation is building that Tony Abbott's entire anti-carbon-tax campaign has been a semantic trick – that he intends to repeal the 'carbon tax' (the fixed-price period) and retain the ETS part of the Clean Energy Future package – not least because a survey of business leaders by the Australian National University's Crawford School of Public Policy shows that while more than half of respondents thought the 'carbon tax' will be repealed, 80 per cent expected an ETS to be functioning by 2020.

The politics of carbon pricing is shifting. One can only hope that pragmatism, in all three parties, wins the day.

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