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Credibility & climate change policy

An important effect of the recent Rudd backtrack on climate change  policy is that it has reduced the credibility of government climate change policy. As Laura Tinkle remarks today ‘One thing that is certain is that the changes this week have not helped rebuild any solid and noisy base of support for the government’s emissions trading scheme’ (AFR p.63).  

Why is credibility important? Why is it important to know that the government will have the backbone to take tough decisions on climate change in the face of determined opposition and to carry through with its stated policy intentions?

1. Credibility is important because the intention of raising charges on GGEs is not only to penalise the GGE emitters of energy users to induice less consumption. These charges are also intended to have supply-side effects that encourage energy suppliers, industries and consumers to undertake substantial investments that longer-term will switch the economy away from being reliant on carbon fuels.  In many cases these investments are sunk costs – they cannot be retrieved once made. Hence investors will be fearful of half-hearted attempts to deal with climate change that will later be revised once these sunk investments are made.  Investors will reason that GGE emmision charges will remain politically unpopular and that governments will hasve incentives to encourage sunk conservation investments and then relax the charges.

Kevin Rudd’s actions in caving in to the polluters has plausibly increased such fears and reduced the prospect that such investments will be made.

2. Credibility is important in seeking global greenhouse controls in Copenhagen this year. The more countries that have clearly committed to take strong action to switch away from carbon-based energy supplies the greater the prospect of a global agreement to control emissions.  Australia carries a voice in such negotiations that goes well beyond its contribution to emissions. If a major international energy exporter makes clear its own determination to take determined action that sends a significant signal to other countries.

One path to develop a credible climate change response is to remove emissions control from the political arena entirely.  An independent agency could be set up to achieve the emissions cutbacks that have been agreed to by politicians at minimum cost.  Generally that will involve sticking to an emissions trading scheme in the face of ongoing pressures on government to relax or dismantle it.

It is important too for pressure groups such as the Greens and the Australian Conservation Foundation to act as a cohesive force in opposing policy backtracks.  You want what Laura Tingle calls a ‘noisy base’.

The Greens have done what they could this week but the apologetics from Don Henry and Ian Lowe from the ACF make me wonder whether these people have, perhaps inadvertently, shifted into the Labor cheer squad.  I wonder how they would have reacted had it been a Government led by Malcolm Turnbull who announced the policy backflip.

4 comments to Credibility & climate change policy

  • Uncle Milton

    I think Australia’s influence in these international negotiations is not as big as some of us would like to think. The Howard government’s refusal to ratify Kyoto because the Bush administration refused to ratify made us a bit of a joke. But this wasn’t the only problem. The sneaky way in which we got avoided land clearing included in the original Kyoto deal (when land clearing had peaked anyway in the base year, 1990) also did little for our credibility.

    Rudd’s ratification of Kyoto was necessary to get a seat at the table but even then everyone knows we have absolutely no intention of cutting our coal exports by a gram. It just isn’t in our national interest to cripple a $30 billion a year export industry. So just because we are a major energy exporter doesn’t mean we have extra influence. On the contrary, our position can be taken as a given by the major players.

  • gianni

    The Greens have done what they could this week but the apologetics from Don Henry and Ian Lowe from the ACF make me wonder whether these people have, perhaps inadvertently, shifted into the Labor cheer squad.

    As a member of the ACF, I feel badly let down by Don Henry and Ian Lowe. However, I don’t think it can attributed to a sudden desire to be part of the Labor cheer squad.

    I can only assume they’ve looked at how successful the greenhouse industry lobbyists have been in achieving a policy outcome that, from their point of view, is little different from the position under the Howard government.

    Fearing that with every day the debate runs, the more inconsequential the ‘reduction’ bit of the CPRS will become, the ACF et al. decided to hold their noses and get what they could out of the Rudd government.

    Guy Pearse’s Quarterly Essay #33, “Quarry Vision”, lays out the reach and effectiveness of the greenhouse lobby is depressing detail.

    One needs only to look at how mitigation measures and mechanisms have been progressively watered or abandoned as the policy evolved from Ross Garnaut’s initial report, through to his final report, to the Green Paper, the White Paper and the latest revision, to see where the debate is going to go. And the public can only look on, bewildered, at what’s happening. At this rate we’ll be paying explicit subsidies to the major polluters to keep using the electricity from our coal-fired generators.

  • And speaking of credibility – what would Malcolm do?

  • Ken Fabos

    I didn’t think Rudd’s gov’t had any credibility, from before he told the UN that Carbon Capture and Storage needed speeding along – which could only be interpreted as “we will keep mining selling and using coal without restriction”, through to this latest, “lets put things off till the economy is in better shape” which is a bad precedent given that climate change is a serious cause of harm to our economy. Will we have to put off action on climate change because we’re getting more heatwaves, droughts and urgently need coastal levee banks with razor wire and minefields to cope with the inundations climate change will bring us?
    No-one outside the Greens are even prepared to say aloud that Climate change requires the planned demise of the coal industry. The world’s no.1 coal exporter can’t continue to be a major exporter of coal and claim to be serious about climate change.

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