Coalition denial makes Labor seem reasonable on climate – but neither is ambitious enough

Treasury estimates a ‘disorderly’ energy transition would result in an Australian economy that’s $1.2tn smaller. Neither major party has the policies to prevent that

Only an ambitious government can reap the economic benefits of the net zero transition for the Australian people, and ambition is in short supply.

Labor continues to talk out of both sides of its mouth, setting a target range in line with its usual pragmatic caution, while simultaneously endorsing fossil fuel expansion despite the existential threat of climate change to the region.

No wonder Papua New Guinea and Vanuatu have reservations about signing exclusive security agreements with us.

At the same time the Coalition – or what’s left of it – is making it easy for the government to look reasonable, by again disputing the long-settled moral and scientific arguments about climate policy. It’s as if they don’t realise such discredited, antediluvian obscurantism has helped cost them two elections – each time by a greater margin.

Next, they’ll be telling us the Earth is flat and Copernicus got the movement of the planets wrong.

While her frontbench threatened to walk unless she dumped net zero by 2050, the opposition leader, Sussan Ley, touted the Coalition’s economic credentials in a recent speech.

This is a befuddling contradiction.

Ley says a key criterion of net zero is stable, reliable and affordable energy while her own Coalition continues to undermine the prospect of achieving those very things by destabilising investment in the energy transition.

With nuclear too slow and expensive, ailing coal-fired power stations not worth fixing, and the cost of gas weighing on consumers, business certainty and clear policy settings are critical to enable investment in renewable energy.

Yet the Coalition’s flip-flopping, which is underpinned by personal ambition by particular members of its front bench, is playing dangerous games with the Australian economy and with it the future prosperity of our nation.

That’s you, your kids and your grandkids; their safety, their national security, their jobs, their quality of life, not forgetting the disruptive consequences for our immediate neighbourhood.

That includes inundation of low-lying cities such as Bangkok and Jakarta and climate-related food shortages that could trigger instability across the region.

The horrifying, delayed and entirely unsurprising national climate risk assessment released last week backs this up.

As reported here, “everything will be affected” – the economy, food systems and communities, health, national security, First Nations people, transport, energy and the natural environment.

Well, duh. Anyone who has been affected by a flood, fire, storm or drought; had their insurance costs go up; experienced a transport delay, energy interruption or been unable to buy a banana due to a weather event knows this is already upon us. And that’s pretty much every Australian.

So, are we going to be stupid? Or are we going to be smart? And which leaders will reflect our choice?

Because it’s the cost of not doing it that we should be focused on.

As the CSIRO said in 2019: “Under a ‘slow decline’ scenario by 2060 where Australia fails to adequately address climate change and sustainability challenges, GDP is projected to grow at 0.7% less per year and real wages would be 50% lower than under an ‘outlook scenario’ where Australia meets climate change and sustainability challenges.”

To be clear, a “slow decline” in which Australia fails to adequately address the challenges identified will lead to poorer outcomes across multiple dimensions.

Treasury modelling released alongside the climate target range repeats this, estimating that a “disorderly transition” would result in an economy $1.2tn smaller.

That means fewer jobs that are less well-paying, lower standards of living for our kids and grandkids and the social disruption and dislocation that goes with it. Oh, and higher energy prices.

More “marches for Australia” anyone?

Before the release of the target, last week Deloitte modelling for a coalition of 500 Australian businesses suggested that a 75% emissions-reduction target by 2035 versus 65% could yield $227bn in additional GDP over 10 years, growing to $490bn over 25 years. This is in part due to the market forces that a decisive target would drive.

“In a competitive global environment, a 65% target is unlikely to drive the level of capital, innovation and jobs required for Australia to build new export industries.”

Will a politically calibrated “range” of 62-70% do that?

New research released a few weeks ago by the Investor Group on Climate Change confirmed “a significant gap between ambition and action” when it comes to corporate investment.

“Australia has the opportunity to lead in the transition, but without clear policy signals and adequate capital deployment, we risk being left behind and missing out on huge economic opportunities,” Richard Proudlove, IGCC director of corporate engagement said.

Neither the government nor the opposition are providing that clarity. Far from it.

Let’s hope action overtakes ambition.

Hope we can believe in.

Cover photo:  ‘Business certainty and clear Australian policy settings are critical to enable investment in renewable energy,’ writes Zoe Daniel. Photograph: Dave Hunt/AAP