How Labor rolled the Greens on Australia’s carbon price

March 27, 2012 at 4:45 am Leave a comment

The Greens were dead against the former Rudd Labor government’s Carbon Pollution Trading Scheme (CPRS) in 2009 and voted it down in parliament. Today, the Greens are champions of the Gillard Labor government’s carbon price.

A recent Greens brochure, “The Carbon Price Explained”, says it only “happened because of the Greens”.

The strangest thing is that the two carbon price schemes — Rudd’s and Gillard’s — are mostly the same.

In 2009, Greens Senator Christine Milne said: “The Greens oppose the CPRS as it stands not because it is too weak but because it will actually point Australia in the wrong direction with little prospect of turning it around in the timeframe within which emissions must peak. This is why we say it is not just a failure, but it locks in failure.”

Green amendments

The Greens moved several amendments to the CPRS in the Senate. These included lifting the scheme’s unconditional emissions cut target from 5% to 25%, cancelling compensation to electricity generators and abolishing the plan to give billions of dollars worth of free carbon permits to polluters. Labor rejected the amendments, so the Greens rejected the bill.

But PM Julia Gillard’s carbon price includes none of these amendments. The measly 5% target is unchanged. Australia’s big polluters still receive billions in government handouts, but for five years instead of the 10 years that Kevin Rudd’s scheme allowed.

Coal-fired power stations receive fewer handouts than they would have under the CPRS, but the liquefied natural gas industry gets more. The CPRS affected Australia’s 1000 biggest polluters. The new carbon price applies only to the top 500.

The Greens say they won a rise in the government’s long-term emissions cuts target — from 60% to 80% by 2050.

But the Greens know a promise for action 40 years down the track is not a breakthrough. It went to the 2010 elections with a policy that said “we have only 10-15 years … to address the crisis of climate change and to prevent catastrophe”.

In 2009, Milne said the CPRS “would be a horrendously expensive mistake to make, and it will be the community, not the polluters, who pay”.

Now, even though the key amendments it would not back down from in 2009 are absent, the Greens say the new carbon price “is the vital first step towards tackling the climate crisis”.

Treasury modelling for the carbon price says it won’t stop Australia’s emissions rising for the next 10 to 15 years.

Renewables

The Greens’ brochure says the carbon price package “invests $13 billion in renewable energy, and starts planning for a 100% energy future”. But $3 billion of this is not new funding — it refers to existing renewable energy projects.

Of the remaining $10 billion, only half is sure to be spent on renewable energy. The agreed legislation says the other $5 billion could be used to fund gas power projects too. The Greens’ renewables funding claim makes it sound far better than it really is.

The $5 billion guaranteed for renewable energy is still a step in the right direction. And it has nothing to do with carbon pricing.

Nobody forecasts that the price on carbon will cause a single wind turbine or solar energy station to be built. If it happens, it will be due to the $5 billion of direct public investment, not the carbon price.

This distinction is important because of the sleight-of-hand at work. The government and the Greens have made a political decision to present several very different policies together as a “carbon price package”.

The same is true with the Labor-Greens agreement to close down 2000 megawatts of coal-fired power by 2020. It’s a good policy and we need a lot more action like it. But the outcome will be due to government regulation, not carbon pricing.

Carbon trading

Direct public investment and strong government regulation are the best ways Australia could move quickly to a zero carbon economy and create tens of thousands of green jobs.

But grouping these different policies together as a “carbon price package” is misleading. It implies carbon trading itself will play a positive role when it actually can lead to very big problems.

Gas is one of those big problems. Even before the financial traders and speculators — also known as “the market” — are allowed full control of the carbon price in six years time, the fixed carbon price will not be high enough to close down any coal-fired power stations. But it may be just high enough to give the gas industry an edge.

The Labor government has insisted many times that the carbon price is designed to give a boost to gas. In April last year, climate minister Greg Combet told Lateline: “A carbon price will provide the certainty for those investors to make their decisions, organise their finance, commit the investments and get the baseload gas generation underway.”

Combet said gas is a “cleaner energy source”. But if the carbon price does deliver more gas, we’re in very deep trouble.

US climate scientist Ken Caldeira is the coauthor of a new study that says replacing coal with gas will actually increase greenhouse emissions for decades.

He told Climateprogress.com’s Joesph Romm on March 12: “If the goal is turn the Earth’s climate into something like what it was when dinosaurs roamed the Earth, natural gas is a good way to get there …

“If we are serious about solving this problem, we cannot be further entrenching a fossil fuel industry that depends on using the atmosphere as a waste dump.”

Bad deal

When the Greens told the incoming Gillard minority government that it wanted to renegotiate terms for an Australian carbon price, there could have been only two possible outcomes.

Either the Greens would wedge the pro-fossil fuel Labor Party and secure a much stronger deal or Labor would wedge the Greens and yank it across the line in the sand it drew with the CPRS.

If the goal is to cut emissions fast and roll out a lot of zero carbon energy, then there is no big difference between Rudd’s CPRS and Gillard’s carbon price. Both market-based schemes pay out to big polluters and allow Australia’s fossil fuel economy to rumble on for decades.

It was Labor that wedged the Greens.

But now the Greens is positioning itself to take credit for a carbon price scheme very similar to the one it opposed in 2009 as “beyond useless” and “worth than useless”.

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Entry filed under: Carbon trading scheme, Christine Milne.

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