Get all your news in one place
100’s of premium titles. One news app. Zero ads. Just $10 per month.

As Labor enacts its emissions reduction target, will the climate truce survive?

Chris Bowen
Climate change and energy minister Chris Bowen ‘has pinned his ears back, and he’s going for it, assuming the brisk and breezy affect of a performance coach’. Photograph: Bianca de Marchi/AAP

Innocent civilians who avoided conscription during Australia’s climate wars would have detected nothing memorable about a picture shared on the social media accounts of Anthony Albanese and Chris Bowen on 16 June.

But for veterans, it was a remarkable image. The picture featured a new prime minister and climate change minister in the cabinet suite holding Australia’s updated nationally determined contribution to be lodged with the United Nations. Australia’s new emissions reduction target for 2030 would be a 43% cut, not the 26-28% target submitted by the Morrison government.

The target wasn’t a surprise. Labor’s climate plans had been in the public domain since last December. The surprise was the high-powered endorsement squad applauding at the back of the picture.

Arrayed behind Albanese and Bowen were lobbyists representing big business, including Jennifer Westacott from the Business Council of Australia, Innes Willox from the AiGroup and Sarah McNamara from the Energy Council of Australia, as well as the trade union leadership and renewable energy advocates.

If you are struggling to understand why this tableau is in any way remarkable, I’m here to help. As recently as the 2019 federal election, the BCA castigated Labor’s 45% emissions reduction target as “economy wrecking”. That deeply unfortunate intervention was the apotheosis of the decade-long campaign waged by Australia’s carbon-intensive industries and their lobbyists against serious climate policy.

It’s not only Australia’s business community with a case to answer when it comes to the critical lost decade on climate action. A swathe of the Australian media was an accessory to an obscenity by elevating performative rent-seeking to the status of just crusade when the gravity of the issues required journalism: interrogation of the substance of the arguments and disclosure of the motives of the players.

Given that execrable history, if I were Albanese and Bowen, I would have won an election and staged a peace treaty too, post haste, particularly if I’d spent a campaign telling voters the climate wars will end if you vote Labor.

Call the choreography insurance. Call it banking hard lessons from the trenches. Because here’s the truth: nobody knows whether the climate wars are over or not.

It is possible Australia has turned the corner. Labor and the officials who have been serving this cause since the late Howard era certainly feel the wind at their back for the first time since 2009, and they are enjoying that feeling. There has been a significant shift in business circles over the past five years, with corporates and their financiers either actually on board with the transition, or greenwashing like their profits depended on it.

But it’s equally possible war will resume once the post-election honeymoon ends and Bowen wades more deeply into translating hypothetical election commitments into concrete regulations. In any case, Bowen has pinned his ears back, and he’s going for it, assuming the brisk and breezy affect of a performance coach.

The new parliament will sit at the end of the July. During the opening two weeks there will be legislation enshrining the new 2030 target and the commitment to achieve net zero commitment by 2050. That bill will also authorise the Climate Change Authority to provide regular progress assessments. This independent report-back mechanism is a structural discipline keeping the transition on the rails, because no minister will want to front a negative performance assessment. A second piece of legislation will cut tariffs and the fringe benefits tax on cheaper electric vehicles, which is the opening gambit of a strategy to reduce transport emissions.

There has been a lot of focus over the past couple of weeks on whether Bowen will get this first tranche of legislation through the parliament, given Peter Dutton says the Coalition will oppose 43% and the Greens favour more ambition.

This looming political tumble turn is a signpost to somewhere. But it’s not the true litmus test of war or peace.

The real test will play out in increments over the next 12 or 18 months as the government reboots the Abbott-era safeguard mechanism to (wait for it) actually drive emissions reduction. Related to the safeguard mechanism reboot, Bowen on Friday asked Australia’s former chief scientist Ian Chubb to review Australia’s system of carbon credits.

I understand these nuts and bolts feel arcane for a lot of readers. The reason I spell them out is because, collectively, we need the fluency. These things are the difference between delivering an emissions reduction target of 43% and Australia failing to deliver. Given we are in an actual, observable, measurable, climate crisis – given the downside risks are no longer hypothetical – the detail matters and the stakes are high.

If you’ve never heard of a carbon credit, here’s the simple explanation. Australia can either reduce emissions by actually reducing emissions, or governments and businesses (through carbon credits) can buy pollution reduction already undertaken by somebody else to meet their targets. Bowen has asked Chubb to review the system because credible concerns have been raised about the integrity of some carbon credits. If credits are junk, that undermines the whole policy objective, which is to mitigate the risks of runaway global heating.

So that’s credits. Now, the safeguard mechanism. Labor will reboot the existing framework to put emissions from the industrial sector on a downward trajectory. Sounds simple, but this is a big task and we’ve wasted a lot of time. Emissions from heavy industry have increased by 25.5% since 2005, mostly because Australia is riding the boom times for gas exports.

The safeguard mechanism covers 212 facilities, including oil and gas, manufacturing and mining. According to market analysts RepuTex, facilities covered by the safeguard were responsible for 27% of national emissions in 2020-21, or 137m tonnes (Mt) of CO2-equivalent pollution. These facilities will have to cut emissions by 170Mt between 2022 and 2030 to align with a net zero emissions trajectory.

RepuTex is the firm that modelled Labor’s climate policy, and they’ve undertaken new work for the Carbon Market Institute, which was released this week. The latest analysis sets out all the fine-grained questions Bowen will have to resolve in coming months. Will emissions reduction be linear, or a slow start followed by a catch-up? (RepuTex tells us the latter course is more expensive). Will measurement happen at the facility level or through industry averages? Will anyone be exempted? Will some players need more assistance?

It’s a safe bet to assume facilities will chase government assistance, but the value of the new RepuTex work is that it demonstrates the case for handouts isn’t that compelling. It notes that because of its design features, the safeguard mechanism is already more generous to big emitters than the carbon pricing scheme Tony Abbott repealed in 2013.

As well as navigating safeguard granularity, Bowen will have to sort out arrangements for the national electricity market, including overseeing a massive engineering exercise to build new transmission – and he’ll have to fashion a transport strategy. Interestingly, the new minister has left open the option of using vehicle emissions standards as part of his tool kit – these would be the rules Scott Morrison falsely categorised as a “war on the weekend”.

Since the government was sworn in just over a month ago, Albanese has been using his climate policy to reset a bunch of important relationships in the region and around the world. The higher 2030 target has opened doors in the Pacific, the United States and Europe. In the net zero world, climate action is considered the core of effective statecraft.

But at home, things are always more fraught. An optimist would be inclined to hope the war is really over. I really hope it is.

But the tortured history of climate policy in this country tells us to temper ebullience with realism.