The defeat of Australia’s climate plan is not bad news for cap-and-trade
It may be tempting to view the Australian Senate’s defeat Wednesday of climate change legislation as a portent of things to come as the U.S. Senate prepares to take up a cap-and-trade bill.
Courtesy Wikimedia CommonsBut the rejection of the Australian legislation reflects the peculiarities of Aussie politics rather than the viability of cap-and-trade. More importantly, it could trigger what might be the world’s first national election fought over climate change — an election that could give the ruling center-left Australian Labor Party a renewed mandate and perhaps the cojones to strengthen what is widely viewed as a weak emissions-trading scheme packed with perks for Big Coal and other carbon polluters.
But first, a short primer on politics Down Under.
After a decade in the wilderness, Labor returned to power in 2007 under the leadership of Kevin Rudd, a technocrat from Queensland who falls on the charisma scale somewhere between Michael Dukakis and John Kerry. Ousted Prime Minister John Howard, a once-popular politician despite having the demeanor of a constipated koala, lost his own seat in Parliament and the Liberals (as the conservatives are called) replaced him as party leader with Malcolm Turnbull.
Rudd promptly signed the Kyoto Accord (something Howard refused to do) and Turnbull, a former Sydney merchant banker who served as environment minister in the last Howard government, reversed the Liberals’ opposition to cap-and-trade. But here’s the catch: The Liberals, whose power base is among urban conservatives, depend on an alliance with the rural National Party (a partnership called, what else, the Coalition), whose stronghold is Queensland’s coal-and-cattle country. The two parties vote together as a block.
The Nationals resolutely oppose any climate change legislation, which threatens to rend the Coalition asunder. (Think Obama and the Blue Dogs.)
The Labor plan already gives away carbon allowances to the industries that would be the most hard-hit by the legislation, which would only require a 5 percent reduction in greenhouse-gas emissions below 2000 levels by 2020. Turnbull wants to cut industry even more slack, and thus the Liberals’ vote Wednesday (Thursday in Australia) against Labor’s cap-and-trade bill. The Greens also voted against the legislation, albeit because they deemed it a giveaway to corporate polluters.
(Under Australia’s hybrid Westminster-American system, the majority party in the House of Representatives controls the government and legislation is passed on strict party-line votes. But Labor does not have a majority in the Senate and needs votes from the Coalition or minor parties like the Greens to pass bills.)
Labor looks set to reintroduce the climate change legislation within three months. If the Coalition scuttles the bill again in the Senate, Rudd can ask that Parliament be dissolved and early elections called. Australian commentators expect Turnbull to try to negotiate a further watered-down bill rather than face the voters. But if Rudd is feeling particularly confident, he could go to the polls and seek a renewed mandate — and control of the Senate — to enact an even stronger cap-and-trade system.
But don’t hold your breath, mate. If coal is viewed in some quarters of the United States as an industrial atavism, it remains king in Australia. Coal-fired power plants supply about 86 percent of the country’s electricity, and mining the black stuff for export is a huge domestic industry. It’s one reason why Australia’s 20 million people have the highest per capita carbon emissions in the world.
Coal’s throne sits in Queensland, the “Deep North” of Australia. I’ve spent quite a bit of time in central Queensland’s coal belt in recent years, and though the global recession has dampened things a bit, the coal economy continues to boom. Mountains of coal are piled alongside railroad tracks and coal trains seem to run 24/7 between central Queensland strip mines and the coast, where ships are stacked offshore waiting to transport Australia’s black gold to China.
In sun-blasted Rockhampton — “the cattle capital of Australia” — miners pulling in six-figure salaries tool around in new Land Cruisers and pony up half a million dollars for suburban tract homes that might have been worth a tenth the price not too many years ago. On my way into town from the airport recently, the taxi driver lamented that she and her husband passed up the opportunity to buy for $10,000 a house in one of the company mining towns where they used to work; today those homes sell for $300,000. (When I visited a cattle station a couple hundred kilometers out of Rockhampton, a mining company was present to do exploratory drilling for gold under the property. “If they find coal, that would be even better,” the ranch owner told me.)
Australia’s commodity-dependent economy will limit how far the Rudd government will push on climate change. So far, his environmental policies have generally been a disappointment to enviros.
Exhibit A has been the spectacle of Environment Minister Peter Garrett — the ardent environmentalist and former frontman for agit-prop rockers Midnight Oil — biting his tongue and approving environmentally destructive projects and policies ordered up by the party. As I was driving through Queensland last month, Garrett — a longtime anti-nuclear activist who ran for Parliament in 1984 on the Nuclear Disarmament Party ticket — appeared on the radio to announce the approval of yet another uranium mine for Australia.
There is one particularly apt lesson to be learned as Australia’s grapples with reforming its economy for a carbon-constrained world. After watching politicians spend a decade debating what, if anything, to do about climate change and renewable energy, some of Australia’s green-tech entrepreneurs have decamped for greener pastures, mainly Silicon Valley, where they’ve been welcomed by venture capitalists eager to fund their startups.
On one flight alone from Sydney to San Francisco, you could have found David Mills, co-founder of solar power plant developer Ausra, and Danny Kennedy, a veteran Greenpeace activist heading to Berkeley to start Sungevity, an innovative solar company. (Disclosure: Kennedy’s and my kids attend the same elementary school.)
While the Obama administration has moved to energize green technology with government funds and loans, some of the best and brightest here may start looking further afield unless Washington adopts legislation that will create certainty and a dynamic market for renewable energy. In other words, to countries like China.