Time to knuckle down to make a choice, before it's too late
Sydney Morning Herald
Tuesday February 15, 2011
FOR a decade the main parties in Australian politics have been choosing expensive, dumb policies to reduce greenhouse emissions over the cheap, smart option of an efficiently designed carbon price.They've consciously picked ideas that cost 10 times more than the cheapest option of a carbon price, which they have repeatedly promised, only to change their minds.Now they stand just nine years away from 2020 - the year both Labor and the Coalition have pledged that Australia's emissions should be 5 per cent below what they were in 2000. Projections show the nation's emissions are on track to be 24 per cent above that benchmark.It's not like they haven't been warned. The former environment minister David Kemp and the former treasurer Peter Costello asked John Howard's cabinet for in-principle agreement for a carefully phased-in emissions trading scheme in 2003, on the basis that it was the cheapest way to achieve greenhouse gas reductions. After "consultations" with industry, the then prime minister knocked that plan on the head. In 2007, Howard's own Shergold review told him again that a "market mechanism" was the most efficient way, that he should not wait for a global agreement before carefully introducing one, and that "policies in the current mix impose significant economic costs for relatively modest outcomes". The Coalition accepted the advice, until Tony Abbott deposed Malcolm Turnbull to overturn it.In 2009 the former director-general of the NSW cabinet office, now secretary of the federal Attorney-General's department, Roger Wilkins, tried again in a report to the Rudd government."Climate change programs have evolved over time in the absence of a clear underpinning framework or strategy and at times without sufficient evidence. Programs have proliferated across a range of departments often with poorly defined objectives, inconsistent results and no exit strategy," Wilkins said, spelling out that an emissions trading scheme was a much better way to achieve greenhouse abatement than subsidies and grants.Rudd accepted the advice from Wilkins and Professor Ross Garnaut, until his ETS was voted down and - in part at Julia Gillard's urging - he lost his nerve.Now - as the Herald's analysis shows - Australia has got tragically little bang for $5.5 billion. As Rod Sims, expert adviser to the multi-party climate change committee, warns - public goodwill is running out because of the impact of the silly policies.As reported in the Herald two weeks ago, the Gillard government will propose to the multi-party climate change committee, which meets again on Friday, a "hybrid" model - a fixed carbon price moving over time to an emissions trading scheme - with the aim of legislating by the end of the year.There is an argument for so-called "complementary measures" - government subsidies or incentives that precede or run alongside a carbon price - but only if they are properly costed and have a clear purpose, like making sure low emissions technology is ready by the time a carbon price sends everyone looking for it.The purpose of climate policy in Australia has too often been muddled and confused. Even though the main parties say they support the same emission reduction targets under the same international circumstances, the domestic debate still confuses the means with the end.If we are agreed on the goal, it must finally be time to have a real debate about the most economically efficient way to get there.