Climate Policy’s House of Cards

There are the pragmatists willing to compromise to get at least something, and then there are the idealists who stick to their principles and end up with nothing. Or so the argument goes.

This tired old binary has been used by various pundits to frame the division within the Climate Change Authority that saw the publication of a majority report and, last week, a minority report authored by Professor David Karoly and myself.

It’s all very noble, the pundits have been writing, to stick to what climate science demands, but in the real world of hard politics what we need now is a way through the political impasse. They praise the majority report because that is what it purports to give us. A solution.

So Ross Gittins, the Sydney Morning Herald’s economics editor, hailed the majority report as a potential breakthrough, ‘a bridge to a bipartisan climate change policy’. He is not one of those (like us, he implies) who believes ‘if you can’t have it all, you’re better off having nothing’.

Richard Denniss, chief economist at the centrist think tank the Australia Institute, believes the majority report has given the Coalition ‘a way out of the climate policy cul-de-sac’.

And after giving ‘the purist position’ a pat on the head, the Saturday Paper’s Mike Seccombe decodes the policy ‘toolkit’ of the majority report as the mechanism ‘by which the government might realistically address’ the biggest problem Australia faces.

But let’s stop and think about the pundits’ story, the political strategy that might allow the carefully crafted toolkit of the majority report to become a bipartisan way out of the climate policy morass.

The story goes like this. Prime Minister Malcolm Turnbull really wants to do something about climate change. But because of the power of conservatives in his party room he has to find a policy approach that will be both effective and somehow get past the sceptics.

Luckily for him (and his former environment minister Greg Hunt), the Climate Change Authority, with six new members, was in the process of reviewing Australia’s climate policy. Now it has produced a report showing how, with a bit of subterfuge, the government can make a start on a decent climate policy.

The majority report recommends keeping Tony Abbott’s Direct Action policy (which would helpfully provide political cover for the Prime Minister) but ‘enhances’ it. Instead of Labor’s big bang emissions trading policy that scared the electorate, it puts forward a suite of sensible measures.

They include a benign-looking emissions trading scheme in the electricity sector and a hybrid-ETS in other energy sectors, although in disguised form. And the words ‘emissions trading scheme’ have been banished.

The pundits could detect the genius of the majority report’s approach. It keeps enough of existing policy to prevent the backbench sceptics flaring up but it also overlaps sufficiently with the Labor Party’s platform that the Opposition will go along with it and so vote for it in the Senate.

After the nonthreatening toolkit has been pushed through parliament the Prime Minister would be able to ramp up the level of ambition of Australia’s emission cuts, and the momentum would (somehow) drown out his critics.

Hey Presto! We have the holy grail of a bipartisan climate policy that will make a difference.

But how credible is this story, the one that gives the pundits confidence that the majority report offers a real chance of a breakthrough? It asks us to believe a lot.

Firstly, it assumes that Malcolm Turnbull’s sceptical backbench is too dopey to realize that the strategy is a bait and switch. (The same goes for his Coalition partners – that piece of straw clamped between Barnaby Joyce’s teeth is a giveaway.) Mike Seccombe thinks they are, describing the majority report as ‘clever’ because it hides what needs to be done.

Second, does Malcolm Turnbull really want to do something about climate change? Since he became leader (possible only after signing a commitment to the National Party never to introduce an emissions trading scheme), the evidence is hardly encouraging. After all, he wants to abolish the Australian Renewable Energy Authority, and he did nothing when the CSIRO gutted its climate science capability.

Third, if he is serious, is the Prime Minister willing to spend his political capital pushing his climate change agenda through the Coalition party rooms? Perhaps more to the point after his election set-back, does he have any political capital to spend? Many commentators say ‘no’ and the ill-disguised challenges to his authority in recent weeks seem to confirm it.

Fourth, will the Labor Party decide that it’s in its interests to go along with the secret plan and give it bipartisan support? The signs are not positive. Labor’s climate change spokesperson Mark Butler praised our minority report. (Its suite of recommendations, including the targets we propose, are similar to Labor’s platform.)

Worse for the strategy, Environment Minister Josh Frydenberg’s reception of the majority report was somewhere between cold and dismissive. He’s new to the job, so perhaps the cunning plan has not yet been explained to him. After all, if he were in on it, wouldn’t he have welcomed the report and said the government would give it serious consideration?

The pragmatic pundits have invested their hopes in this delicate series of hypotheticals, viz., sceptical backbenchers are too dopey to realize what’s going on, Turnbull is still the old Malcolm, he has a lot of political capital, he will spend it on climate change, and Labor will go along with it all.

It seems to me that in their desire to see Australia have a serious climate policy the pundits are victims of wishful thinking. Their desire is noble, but maybe they need a bucket of cold political reality tipped over them.

I might note here that when at times I have expressed doubts about whether this elaborate chain of hypotheticals would hold together, I have been assured, with nudges and winks, that others had inside information that made them confident it would all unfold according to plan.

It was on the basis of this particular reading of the political tea-leaves that David Karoly and I were expected to put our names to recommendations that soft-pedalled on the science. I had reached the view that the realists’ story was in fact a fantasy, and it seemed to me that by signing I would be downplaying the science (and the Authority’s own earlier work) in exchange for a big slice of pie in the sky.

Now the pundits are saying that by putting forward an alternative set of recommendations based on the science we are being ‘purists’ or, in Richard Denniss’s phrase, more interested in protest than progress. All because we no longer believed in their hypothetical house of cards.

In a strong sense, however, the question of which political story you believe is a side issue. The pundits are entitled to advocate policies based on their judgements about what may or may not get the numbers in the current parliament. But as members of a Commonwealth statutory authority, with a legislated obligation to provide independent advice based on the best scientific and economic evidence, we are not.

David Karoly and I take this obligation seriously, and have done so since we were appointed over four years ago. In its first three years, the Authority built a fine reputation for its independence, with a series of excellent reports signed off by all members, often after sharp differences of opinion had been resolved through a consensus process overseen by Bernie Fraser.

In the legislation establishing the Authority, its independence is underlined. In the second reading speech at the time of the Authority’s formation in 2012 the Minister told Parliament:

‘The authority will be independent from government. … This means that climate change policy will be directed by evidence and facts, rather than fear and political opportunism. It will take the politics out of the debate.’

It is the pundits’ role to put the politics into the debate. But when they criticise us for refusing to do the same they are saying that statutory authorities should be regarded as merely another player in the political game. And that is very sad.

[This article is also published in the Canberra Times.]