Monday, July 14, 2008

Emissions trading. Time for leadership.

"Ultimately, a political party must develop policies it believes are in the best interests of Australia."

Ahead of Wednesday's green paper my colleague Shane Wright writes in the West Australian:

"The Economist magazine featured a small article this week on the mountain pine beetle and the damage it is causing to Canada’s magnificent Pacific coast forests.

The beetle, no bigger than a grain of rice, has managed to destroy an area of lodgepole pine forests the size of England in recent years and is now marching eastward. It’s now eyeing off swaths of jack pines that have no natural resistance to it.

The Canadian Forest Service, doing what it can to stop the march of the beetle, argue that climate change is a major reason for the pest’s success. Harsh Canadian winters normally kill the beast, but since the 1980s they just have not been cold enough to do the business.

But it seems the beetle’s march across Canada’s boreal forest may be completed before the Federal Opposition works out its position on an emissions trading scheme.

Brendan Nelson called a press conference last week to explain the Opposition’s ETS stance.

You’d have thought that, having a position, and then articulating it to the genteel and reasonable members of the Canberra press gallery, would be relatively easy.

Unfortunately for him and the coalition, it wasn’t and a veritable who’s who of the Liberal Party has been rolled out to explain exactly what the leader meant...

The key problem was Dr Nelson suggesting that the coalition backed an ETS by 2012, only if big polluters such as China and India came on board.

“We should not start an emissions trading scheme in Australia until we’re absolutely confident that the rest of the world has a start date for dealing with climate change itself,” he said.

In other words, it’s a conditional ETS.

That position, however, puts him at loggerheads with the policy that the coalition took to the last election, and at loggerheads with even the position John Howard managed to finally agree upon.

Julie Bishop was the first senior Liberal forced to try to explain that what Dr Nelson actually meant was that the Opposition backed a 2012 start-up for an ETS, condition-free.

But then the party’s defence spokesman Nick Minchin backed the leader, saying Australia should not “push the button” on its ETS if China, India and the US have not given an indication on what they will do. That forced climate change spokesman Greg Hunt to take issue with that position.

And then Dr Nelson piped back up, saying Australia should not be moving without “firm commitments from the rest of the world in terms of what they are going to do”.

Malcolm Turnbull, who remember was the environment minister in the Howard government, tried to argue that the Opposition’s policy was clear. But he also added what amounted to be an admission that while Ms Bishop and Mr Hunt knew what they were talking about, the leader might not.

“We have been through it with him this week, Julie Bishop, Greg Hunt and I have both been speaking about it we have been through it very clearly and I can assure you that our position is that our policy is as it was last year subject to that change with the respect to no net increases in taxes on fuel.”

The Opposition leadership, at best, is appearing hugely confused about an issue that is shaping as the most important economic change to face Australia. At worst, it looks like a group of climate change denialists who want to put their head in the sand and hope it all goes away.

In Japan, Kevin Rudd got a special invite to talk with the G8 about issues such as climate change, oil prices and the global food crisis.

So you’ve been left with the picture of Kevin Rudd mixing it with those nations which will be key to any global solution to greenhouse gases, and Dr Nelson tying himself in linguistic knots over this party’s position on an event that might be four years hence.

The fact crowds of people have been turning out to listen to Professor Ross Garnaut talk about his draft paper on the ETS should be taken as a warning inside Opposition tactics central that the Liberals risk losing all relevance on this debate.

On Wednesday Climate Change Minister Penny Wong will release the Government’s green paper on the ETS. It will run through a huge variety of options that will ultimately feed into a white paper and final position.

As The West Australian revealed this past week, one of the key elements will be how the scheme interacts with the tax system. Depending on how the scheme is structured and defined, the States could gain a huge windfall in GST revenue.

While that might be great for the bottom line of Alan Carpenter and Eric Ripper, that windfall would come in the guise of a large increase in taxation on the economy which would be coming to terms with the price changes flowing through it due to the ETS.

It’s not clear whether Canberra is prepared to hand over so much more cash to the States and Territories while at the same time compensating households and businesses for the financial shocks caused by finally putting a price on greenhouse gas emissions. The problem is that the GST issue might of itself require extra compensation to households and businesses on top of what they will need to get to cope with the impact of the ETS.

But the coalition is too busy to focus on these type of issues because it’s worried about who might or might not be prepared to cut greenhouse emissions in 2012. It’s also cut off a policy option by its position on petrol in an ETS.

Ultimately, a political party must develop policies it believes are in the best interests of Australia. The Opposition, by getting into a debate over what other countries might or might not do about greenhouse gases, is drifting away from that cornerstone of politics and policy.

At this rate, Brendan Nelson risks becoming another lodgepole pine facing an avalanche of mountain pine beetles."