Step up Greens

The Australian Greens Party has finally made some noise in the Emissions Trading Scheme debate by unveiling 22 amendments to the Rudd Government’s ETS legislation. Proposals from the Greens are typically derided as being extremist and unrealistic, yet the Greens are firmly rooted in mainstream economic and scientific orthodoxy on climate change. Their proposed 25 per cent emissions cut for example, is not a number chosen simply because it is more ambitious then the Government’s. It is the minimum cut in emissions as recommended by the best available scientific data to keep the climate “safe” stabilizing under a Co2 concentration of 450 ppm. As well as keeping in line with the science, the Greens’ proposed amendments burrow heavily from the Garnaut report (the Government commissioned economic study into an ETS). In particular the proposals to limit compensation for the big polluters, to require greater transparency in carbon accounting and to remove the ridiculously low $10 carbon permit price cap. Furthermore the Greens try and address some of the fundamental problems in the scheme, such as the fact that voluntary emissions reductions by individuals and small businesses only serve to subsidise the big polluters. They propose to appoint an expert body “to estimate the level of additional abatement for a year” from these individuals and then require the Climate Change minister to reduce the national emissions cap by that amount each year. While this would be difficult to practically administer, it at least shows that one political party is trying to solve these fundamental flaws in emissions trading schemes. Most cogently, the Greens argue that the Productivity Commission should play a key role in regulating and reviewing the scheme when passed into law, particularly in relation to industry assistance and the actual rate of “carbon leakage” or job losses. Strong collaboration with the Productivity Commission in the running of the ETS would make it much harder for the big polluters to make unqualified claims about potential job losses and present dodgy economic modelling.

Unfortunately, despite the quality and economic rationality of these amendments, they are nothing more than political stunts. The Government will never negotiate with the Greens because, as Ben Eltham succinctly puts it in the New Matilda today “why would Kevin Rudd negotiate with the Greens, when merely threatening a double-dissolution election on climate change is just about tearing the Liberal Party apart? Or to put it another way, why let the little matter of the future climate of the planet get in the way of party political advantage?”( http://newmatilda.com/2009/10/13/last-some-realistic-climate-policy-ideas). Indeed while there is the prospect that the Greens could get Independent senator Nick Xenaphon on board, but they would in addition require the vote of either Steve Fielding (a proudly self-described “climate change sceptic) or the vote of a Coalition senator which just doesn’t seem realistic at all.

This doesn’t render the Greens’ contribution irrelevant however. What is important is that they are out there in the news-cycle hammering home their talking points and discrediting the positions of the other parties. Since their proposed scheme is demonstrably more efficient as proven by the Government’s own economic modelling in the Garnaut Report, the Greens have an ideal platform with which to display their economic credentials to the public and with which they can simultaneously to criticize the major parties for handing out compensation to big polluters. When Parliament returns next Monday, the Greens need to focus heavily on the issue of compensation for big polluters because it has the potential to be a really sensitive issue for the Government. Giving taxpayer money to big polluters is never going to be popular in the electorate, especially when the Garnaut Report recommended against it. The Greens can criticize the cosy relationship between Government and the big polluters in a populist manner and have the economic evidence to back it up with. Raising the issue so that Government ministers are forced to justify the compensation in interviews will be enough to make their strategists nervous.

The Greens’ amendments will sadly never be passed but arguably that is not the point of releasing them. The reason for releasing them is to provide an authorities platform with which to expose the potential political weaknesses of the Government’s ETS in particular the free compensation for big polluters. The Greens need to make it very clear to the public that the scheme the Government proposes is both economically inefficient and beholden to vested interest groups as the evidence clearly shows. The Greens must also make clear that their amendments are not the result of a quasi-religious environmentalist stance but rather the product of the best available economic and scientific data. After all, people expect the Greens to call for tougher measures, what they don’t usually expect is for those measures to be economically responsible. In short, the Greens through their amendments, have earned the right to describe their climate change policy as the most economically rational and efficient of all the parties. They now need to make sure everyone knows it.

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