Coalition's weird climate rhetoric says one thing, its modelling says another

Extract from The Guardian

Post-Abbott, the Coalition is still claiming its own policies can cut emissions with almost no cost while wildly exaggerating the cost of alternatives

Labor has flagged a much tougher greenhouse target than that promised by the Coalition – a 45% cut in emissions by 2030 from 2005 levels. Photograph: Bloomberg via Getty Images

Lenore Taylor Political editor

@lenoretaylor

Friday 27 November 2015 14.48 AEDT 

Remember how Malcolm Turnbull promised to respect the intelligence of the Australian people if he became prime minister?
Some of his ministers seem to have missed that memo, because they are now recycling the same discredited Abbott-era claims about the cost of more ambitious climate change action, while ignoring their own up-to-date economic modelling that says deeper emission cuts would come at far lower additional costs.
After Bill Shorten announced that Labor was likely to adopt a much tougher greenhouse target than that promised by the Coalition – a 45% cut in emissions by 2030 from 2005 levels – treasurer Scott Morrison immediately dusted off the Coalition’s claim that the independent climate change authority had found such a cut would “cost” the economy $600bn. Education minister Christopher Pyne said it was a “mad” policy that would “smash” the economy.
Environment minister Greg Hunt tweeted his old “$600bn carbon Bill” press release.

— Greg Hunt (@GregHuntMP) November 26, 2015

If Labor wants to use CCA target, they should use CCA modelling. It'll be Shorten's $600bn hit on the economy https://t.co/d6pfjFzakd

But the former head of the Climate Change Authority (CCA), Bernie Fraser, has described that $600bn claim as “weird” and “misleading”. And wrong.
And the government has its own, much more recent, modelling from leading economist Warwick McKibbin, which found that the difference in economic growth between the government’s target and Labor’s target would be far, far lower.
The government first started using the $600bn figure when the former prime minister Tony Abbott unveiled the new goal of reducing emissions by between 26% and 28% on 2005 levels by 2030.

One day before that announcement, the Daily Telegraph revisited modelling done in 2013 for the CCA of a 40% to 60% emissions reduction target, in a front-page story headlined “ALP’s $600bn carbon bill”. The paper argued the cost was attributable to Labor because the party has said it would base its long-term targets on up-to-date advice from the CCA. Labor had at that time not announced its preferred 2030 target.
The CCA tried to correct the record straight away. Fraser, the authority’s chairman and a former Reserve Bank governor, immediately issued a statement saying the claim that CCA modelling showed a 40% to 60% target would cost $600bn was “wrong”.
In an interview with Guardian Australia at the time, he explained why.
“Some people who don’t understand modelling draw inferences that really can’t be drawn,” he said. “This is a good illustration of the difficulties modelling can create when misinterpreted to derive misleading meanings.”
“This $600bn figure is not drawn from any logical process and it becomes weirder and weirder the more that you look at it.
“It compares a scenario where Australia has a 44% target by 2030 and the rest of the world is taking very strong action, with a scenario where Australia has no target and does nothing and the rest of the world does very little, almost nothing at all. It is the inferred cost difference between those two scenarios.
“If you wanted a figure with some logical credibility or relevance you would model the cost of the government’s 26% target and a 40% target for 2030 and look at the difference between those two.”
And in fact the recent McKibbin modelling for the government does exactly that.
It showed the government’s 26% target would shave between 0.2% and 0.4% from continued growth in Australian GDP in 2030, and based on similar assumptions, a 45% target would cut between 0.5% and 0.7% from continued economic growth. That means the difference in the economic cost of the Coalition’s 26% cut and Labor’s 45% cut is about 0.3% of GDP in 2030. The Coalition’s $600bn figure, comparing 45% with doing nothing and then adding up the cumulative costs, finds an extra GDP cost in 2030 of more than 2%.
In a way the “weird and misleading” modelling is a perfect microcosm of the weirdness of the Coalition’s climate rhetoric – pretending its own policies can do the job with almost no cost while wildly exaggerating the cost of alternatives.
Let’s go back to what Malcolm Turnbull said on that day of drama when he launched his leadership bid.
“We need a style of leadership that explains those challenges and opportunities, explains the challenges and how to seize the opportunities,” he said.
“A style of leadership that respects the people’s intelligence, that explains these complex issues and then sets out the course of action we believe we should take and makes a case for it. We need advocacy, not slogans. We need to respect the intelligence of the Australian people.”
Quite. So why is his party ignoring its own up-to-date modelling with relevant assumptions and continuing with exaggerated cost claims?
At this rate we’ll soon be back to the $100 lamb roast.