Extract from The Guardian
The Coalition has spent years warning of the costs of action. Now the Liberals are presenting net zero as an opportunity.
Last modified on Sat 9 Oct 2021 06.01 AEDT
Keith Pitt, the resources minister, made headlines this week when he opened the boondoggle bidding on net zero. Pitt told Phil Coorey at the Australian Financial Review if Scott Morrison wanted agreement from the Nationals on a net zero target ahead of the Glasgow climate conference, he should put $250bn on the table.
Yes, that’s “b” for billion.
According to Pitt, if this transition was actually on, Australians taxpayers should bear the risks. Pitt floated a cartoonishly bad idea where taxpayers would underwrite the financing and insurance of fossil fuels – including for overseas-owned companies – all because naughty Australian banks weren’t inclined to make bad bets.
If you’ve missed Pitt’s parable of the bad banks, let’s recap that quickly: bad banks are now more interested in virtue signalling to their obnoxiously woke inner-city clientele than backing salt-of-the-earth fossil fuel projects in the regions.
While opportunistic and often egregious corporate greenwashing is certainly at large across the lands – Pitt is dead right about that – commercial lending practices have nothing to do with slick marketing or social media hashtags.
Banks – hard-headed institutions that they are – are merely heeding the requirements of regulators, both local and international, to manage their exposure to carbon risk. But according to the Pitt Declaration, safeguarding the interests of shareholders and customers through prudent lending practices (like not sprinting to bankroll planet cooking industries in inexorable decline) is … unAustralian.
But before anyone could say Venezuela, Pitt’s Queensland Nationals colleague Matt Canavan – a former Productivity Commission economist now apparently estranged from capitalism – was out and about with a different parable.
Canavan told a mildly startled Kieran Gilbert on Sky News that Australians should be prepared to pay higher interest rates in order to stare down international financiers managing carbon risk in global markets. Canavan’s Big Idea™ was actually wilder than Pitt’s, but it attracted significantly less attention.
Before we get there, some necessary context. The precursor chemical for the Canavan Declaration was Josh Frydenberg stating the bleeding obvious a fortnight ago. In a speech outlining the economic case for net zero, the treasurer noted Australia is a net importer of capital to fund investment and growth, and global capital had already placed its bets on decarbonisation (given decarbonisation over the next three decades is the avowed policy of most governments – including Australia’s).
Frydenberg’s point was Australia can’t be King Canute.
Actually, that’s not quite right. His point was Australia can resist implementing the decarbonisation policy the Abbott/Turnbull/Morrison government signed up to voluntarily when it signed and ratified the Paris agreement five years ago – but self-defeating behaviour carries a measurable cost.
Canavan had a feeling this probably wouldn’t happen. But if it did happen, then we should tell international banks to “bugger off”.
“Some things are worth paying for,” the Queensland National declared.
“If we are asked to pay just a bit more on our mortgage, I think we should probably do that.”
Now there’s an election-winning slogan if I’ve ever heard one.A sure-fire winner in the southern states of Australia.
The point of starting here is to note the following: over the next week, or two, Scott Morrison is going to attempt to reach agreement with the Nationals on a net zero commitment.
The frenetic fan dance of the fools tells us we’ve finally reached crunch point.
Morrison has been setting this pivot up since Joe Biden won the presidential election in the United States. Over the last 12 months, Morrison has moved, increment by increment, to reframe a climate policy debate the Coalition has been weaponising to win elections for more than a decade.
The Coalition has spent years telling the Australian people climate change ambition would impose unmanageable costs on the community.
This was always absolute bullshit (sorry, I’d be polite, but the government’s unconscionable policy record does not warrant mercy).
Now, Morrison is presenting the transition as opportunity. Rather than Whyalla wipe-out, we have the new energy economy.
As well as that prime ministerial shape shift – which is an important starting point if the climate curse is ever to be lifted in Australia – there are conversations happening right across the government that would not have happened only a couple of years ago.
Liberals and Nationals are starting to tell the truth: we need this transition to happen because the driest continent on earth has a significant stake in reducing the risks of runaway global heating, and because a carbon intensive economy like Australia’s is completely stuffed if we don’t adapt to the new reality.
Sadly, this level of progress needs to be kept in perspective.
If Morrison can emerge from his discussions with the Nationals with a net zero commitment, viewed substantively, this “advance” is who cares on a number of levels.
While the Coalition has been busy building its bullshit complex on climate action to win domestic elections, much of the rest of the world has moved on from weighing mid-century commitments (that were actually agreed to in-principle when Paris was signed) to the imperative of driving urgent action this decade. Action now. That’s what the science tells us needs to happen.
Any net zero commitment Morrison emerges with will be rhetorical. There are no plans to legislate it.
The price of landing an in-principle agreement with the Nationals, on current indications, will likely be excluding agriculture from heavy lifting on abatement (but not from the income streams associated with carbon sequestration), and a bucket of sweet something or other for the resources sector – hopefully some distance south of Pitt’s coal bank of mum and dad.
The price will also be a rigid political narrative that technology (rather than caps on emissions and sensible market-based mechanisms to actually reduce them) is what delivers the decarbonisation by mid-century. The same Nationals who told their constituents in 2019 that they were all the way with fossil fuels and nothing needed to change can’t go back home three years later and say they were lying. They have to be able to say that technology is now the magic fairy dust that solves everything – you can have your fossil fuels, and decarbonisation too.
As well as all this lead in Morrison’s saddlebags necessitated by the demands of the junior Coalition partner – the requirement to negotiate with a factionalised, combustible party room that, like a bunch of lovelorn adolescents, either loves or hates Barnaby Joyce, as if this was a faultline that actually mattered – there is also the obvious contradictions in the Coalition’s positions.
Voters are absolutely entitled to ask just how real any mid-century decarbonisation commitment is, when the same government prepared to (sort of) promise net zero by 2050 is very obviously leaving all the heavy lifting on abatement to the states while presiding over new gasfields and new coalmines.
Right now, wrestling the Nationals on net zero looks hard enough. Nobody is entirely certain what will happen once the real negotiation starts.
People around Morrison say Joyce is an enabler not a saboteur, but fact is he returned to the Nationals leadership on a platform of blocking the Liberals and their climate policy pivot.
That was a core part of Joyce’s pitch: that Morrison would roll right over Michael McCormack, so you’d best restore me to the top job.
Shortly after he vanquished McCormack, Joyce discovered what to do about climate policy was actually a contested issue within his own ranks. The resurrected leader was told by a number of colleagues, forcefully, to pull his head in, and ever since, Joyce has fronted, by and large, as a humble if persistently incoherent vessel of the Nationals party room. Man for others. Living to serve.
So the trajectory of the next couple of weeks is genuinely hard to predict.
But this much is certain: if Morrison can’t land his proposition, if the mid-century target gets vetoed by the junior Coalition partner, the Nationals will be running the government’s climate policy, and everyone will know that.
That will weaken Morrison’s prime ministership, if not kill it – and that fact gives the prime minister every incentive to do whatever it takes.
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