Election climate

Voters object to paying the bill for climate fixes 

Australian voters showed some enthusiasm for the environment in the last election, but this election has shown that their enthusiasm stops well short of paying to fix its supposed problems.

For voters in marginal seats, confronted with major price increases for the electricity required to heat and cool their homes, even before any of the major environment initiatives have come into effect, do not like the idea of having to pay more for these policies. At the same time a much smaller but still significant fraction of the electorate remains wedded to doing something about the environment and, for one reason or another, care much less about their energy bills.

The major parties are well aware of this and the campaigns of both parties have shifted accordingly. Prime Minister Julia Gillard is making noises about the environment, producing silly ideas such as referring the issue(s) to a committee of 100 randomly selected Australians, but basically pushing away the possibilities of a carbon tax or an emissions trading scheme without killing the proposals.

Opposition leader Tony Abbott has linked electricity bills to the carbon tax proposal but has not gone in as hard as he might – although his opinion of whether industrial activity has induced climate change is well known – possibly because he does not want to alienate the preferences of the more moderate green-leaning voters.

But whatever happens at the election or afterwards, the Australian version of an emissions trading scheme, the Carbon Pollution Reduction Scheme, is unlikely to see the light of day. As has been pointed out several times, lately by former Federal Labor leader Mark Latham in the Australian Financial Review (AFR July 29, 2010), the focus groups regularly run by the Labor party (as well as by the Liberals) of voters in marginal electorates, have identified distinct voter disquiet, even anger, over the likely cost of a CPRS. For electricity bills have gone through the roof, since Labor came into power.

A check of the CPI figures collected by the Australian Bureau of Statistics shows that since mid-2007 the CPI has increased by about 8 per cent, but electricity prices have increased 40 per cent. Just why prices have increased so much before the renewable energy targets legislated by the Rudd (now Gillard) government have started to bite, or before the CPRS is even in legislation, is difficult to establish. Some of the increase is due to changing expectations, such as the networks having to build capacity for an increasing number of air conditioners all being turned on at once on those few, very hot days. But some of it is due to the need to remake the network to accommodate intermittent alternate energy, or reduce emissions in conventional power stations. Further, there have been public statements about additional increases that can be expected if a CPRS becomes a reality.

On top of that, and despite the media being prominently on the global warming message, the alternate story that climate change may be part of a natural cycle, is beginning to filter down to the mass of voters too busy with their own concerns to know much of the issue beyond news grabs. With dollars going out of their back pocket, they are more prepared to stop and listen to the sceptics case.

This infuriates the deep-dyed greens who simply cannot understand why anyone bothers to listen to the sceptics or why the CPRS has been cast aside (technically deferred). Internet sites are full of articles from this or that activists complaining that the government has thrown away what they see as a major weapon in the fight against climate change. They further allege that Kevin Rudd’s dumping of the scheme, almost without consultation or even bothering to inform key members of his government, led to his demise.

A more likely scenario is that Rudd deferred the scheme, despite an obviously deep commitment to climate change issues, because the results from the focus groups showed that voters in marginal electorates were so against it he had no choice. His own dumping, in turn, would have had more to do with the fact that he took important decisions, such as deferring the CPRS and introducing a resource super profits tax with hardly any consultation.

Under that much more likely scenario no Australian government is going to introduce an emissions trading scheme or perhaps even a carbon tax, nor is any other government. New Zealand has a limited scheme up and running but proposals for schemes in Canada and the US have gone nowhere and a French proposal for a carbon tax has been blocked.

This may be just as well, even within the logic of activists, as the one and only example of a working emissions trading scheme worthy of the name for which we can check results, the European ETS (the NZ scheme is too new to assess), cannot claim to have achieved any reductions. For that matter, no advanced economy anywhere has managed to cut carbon emissions in their industrial sector, outside of events that would have happened anyway. Emissions in Britain were reduced when its power industry switched from coal to gas, to take advantage of the North Sea gas fields. Germany managed reductions by modernising its unified economy after the fall of the Berlin Wall.

In other words, efforts to seriously reduce carbon emissions are a waste of time, but activists simply will not see this. The only sensible response of the two major parties in this election campaign is to make noises about the environment but avoid committing themselves to any concrete policy that promises increases in electricity prices. The real problem for Labor will come if they are forced into coalition with the Greens who will insist on an emissions scheme. Labor will have to turn on some fancy political footwork to avoid putting one in place.

Mark Lawson is a senior journalist on the Australian Financial Review who has written A Guide To Climate Change Lunacy – bad forecasting, terrible solutions (Connor Court, $29.95).