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Editorial: January 2008
Green Labor or blue-collar betrayal?
A new progressive era?
That Labor’s return to office would be framed in grandiose terms, as a
watershed shift from social conservatism to progressivism, was easy to
predict. ‘But could this election portend a new progressive era?’, asked
Andrew West, hopefully.
Predictable perhaps; but also delusional. Certainly, some symbolic
‘firsts’ have cascaded for the benefit of myth-makers: first female
deputy prime minister, first openly gay minister who also happens to be
of Chinese origin, first ministry containing so many women, and
signing-up to Kyoto as a first item of business. The voters who
mattered, though, were moved by more
WorkChoices, the cost of living, interest rates and John Howard’s long
time in office were
The new government’s own longevity depends on how well they remember
‘The voters who mattered’ were concentrated in those crucial suburban
and regional electorates which changed hands. Once they were solid Labor
supporters. Then they morphed into Howard battlers. Now they’re just
swinging voters who’ll support whichever party appeals to them. They
aren’t so many prodigal sons and daughters returning to their ‘natural’
party. A realignment - or more accurately, a disalignment - did occur in
1996. But it was Paul Keating who fractured Labor’s base. Howard just
did a good job of holding on to a slab for so long.
Thereafter the old Whitlamite strategy was doomed. No stable majority
can be forged by grafting middle class progressives onto a more
conservative working class. In today’s shifting and fragmented
landscape, a government with Whitlamite ambitions would be at serious
risk. Judging by their campaign style, none of this is news to Kevin
Rudd or senior party operatives.
Still, things could go wrong on another level.
Look at how things work in the information society. Across social policy
fronts, networks of institutions, ‘experts’, activists and media
gravitate toward lines of conventional thinking, often progressivist in
tendency. This is underpinned by some long-term trends. Workforce
polarisation between a growing class of knowledge workers and the broad
mass of (blue and white collar) routine workers; socio-economic
disparities between inner-urban and outer-suburban or rural regions; the
pervasive reach and conformism of communications media - these, to name
a few, are narrowing the social sources of our politics.
Acting as gatekeepers, such networks aim to define the limits of
acceptable discourse. Some of the new ministers are from their ranks.
Others will slide into well-established policy tracks, without due
attention to alternatives. All the while, conventional thinking is
liable to clash with sentiment out in the suburbs and regions.
The greatest moral challenge?
Let’s dwell on climate change, which dominated the government’s early
colour and movement. Kevin Rudd likes to call it one of the greatest
moral challenges of our time. He may regret raising the bar so high. In
choosing this style of language, Mr Rudd takes his cue from the
environment movement, which insists on framing the issue in terms of
moral culpability. They never tire of carping about Australia’s high
emissions per capita and ‘inaction’ over the last eleven years. As the
public will come to understand, neither of these mean much. The volume
of our emissions is too small. Nor are most Australians guilt-stricken
about our industrial progress over the last century. Whether or not
global warming is a by-product, industrial capitalism lifted millions
out of poverty in the developed world, and now does so throughout
We need not atone for any crime. To start with, Mr Rudd should step off
the moral pedestal and keep it real (as Ali G would say).
To date, high emitting nations have adopted a consistent approach to
climate change, best described as pussyfooting around. The outcome in
Bali was more of the same. None are prepared to inflict real pain on
their peoples for the sake of global warming. The big-talking Europeans
are short of their Kyoto targets, and it’s easier for them than
countries like the US and Australia. Many EU states switched to cleaner
energy sources, like nuclear, decades ago (for reasons unrelated to
climate) and they’re not major energy exporters. The Americans are
entitled to doubt their bona fides. A lot of Europe’s cuts, such
as they are, accrued from dismantling clapped-out industrial plant in
the former eastern bloc. Still, Europeans as a whole are making a meal
of it, and their emissions trading scheme is a joke. As for the British,
while they claim to have met their Kyoto targets, unlike the continent,
a team of Oxford economists led by
Dieter Helm dismisses such
claims as ‘illusory’.
In the meantime, China and India, leading the developing pack, cling to
the UN’s ‘common but differentiated responsibilities’ formula, meaning
they plan to take a back seat, however much their rocketing emissions
exceed ours. Stuck on the moral pedestal, they blame the developed
world. Naturally enough, the Americans refuse to play on an uneven field
or pay what amount to green reparations. They are also right to draw a
distinction between developing countries advanced on the path to
industrialisation like China, and others mired in misery like most
African states. Nor can it be assumed that the US position will change
easily after Bush’s term. Even if a Democrat enters the White House, the
next UN protocol needs to get past the senate (where
Republicans have just
issued a strongly greenhouse-sceptical report). And in Bali a core of
other important countries, including Canada, Japan and Russia were
grudging on any kind of targets.
Agitation over climate change resembles a parallel universe. In the
first place, while delegates sweltered in Bali, the European Central
Bank joined the US Federal Reserve in pumping billions of dollars into
the world’s banking system to stave off a downturn in the American
economy (on which world growth depends) and, here, Treasurer Wayne Swan
lambasted port infrastructure constraints impeding coal exports from
Queensland. In the second place, European and Australian delegations in
Bali favoured (only in principle) near-term developed country targets
which would hobble the American economy and put a dent in the
international coal market. The first of these actions happened in the
real world; the second on fantasy island.
It‘s easy to explain this outbreak of foot-dragging. Consider that the
IPCC forecasts global average temperatures rising by a range of 1.8
degrees to 4 degrees over the coming century, and its worst case
scenarios are based on
about growth rates and the world’s adaptive capacity. Political leaders
are left weighing up a remotely possible chance of climate cataclysm
against an absolutely certain prospect of damage to their economies.
Make no mistake, the sort of targets pushed by the UN entail economic
pain. Hence the big talking and pussyfooting around. This is also
Australia’s position. As things now stand, the government has deferred
everything until economist Ross Garnaut reports in
June. This was a convenient let-out in Bali. A person of integrity,
Garnaut laid it on the line from the start. The world’s response to
climate change, he says, could end the
‘Platinum Age’ of
accelerated world growth over recent years.
Indeed, repeated claims by the
Climate Institute and
others that we can enact deep cuts - even achieve carbon neutrality -
while barely noticing are nonsense. Worse, they’re a cruel hoax. The
pain will be felt most deeply by blue-collar workers, and other
riff-raff who don’t seem to matter.
Dr Philip DAdams of Monash
University estimates that an emissions trading scheme will cost us 1.3
per cent of GDP by 2030, ‘equivalent to a reduction of around $21.5
billion a year in today’s dollars’. And as reported by Alan Mitchell in
the Australian Financial Review (12 December 2007), former ABARE
director Dr Brian Fisher says Labor’s renewable energy target alone,
aside from anything else, will cost the economy $1.5 billion and 3600
jobs in 2020. Rosy scenarios ignore the danger of sectional dislocation,
even if the aggregate growth outcomes look benign.
Commentator Ross Gittins also wears rose-coloured glasses. He is the
author of Gittinomics, which should have been called ‘gentronomics’,
since it’s about arranging the nation’s affairs to suit inner-suburban
professionals. Gittins opened a
column last June with
this gruff declaration: ‘next time you hear someone advocating some
project or policy change on the grounds that it would create jobs, close
your ears.’ Let them eat cake indeed. Turning recently to
climate change he says,
dismissively, that any cost to GDP won’t be ‘an absolute loss, just an
opportunity cost’. Just an opportunity cost for him, but lost job
opportunities for thousands of working people. There are few better
illustrations of the commentariat’s smug arrogance on this issue.
A worse offender, though, is the Climate Institute, which calls on
Australia to step up as a world ‘leader’ in emissions reductions. While
concedes that this
entails lower growth for some industries, they typically fail to
quantify these impacts or express any concern for the losers. Such
adjustments will hurt real people, even if they live beyond the magic
(The Institute has too much influence for comfort. Labor’s illogical
pairing of a mandatory renewable energy target with carbon trading
appears to have been lifted from
them. According to Alan
Mitchell, Brian Fisher describes this combination as ‘one of the worst
pieces of public policy you can ever imagine’).
Green flacks like the Institute may demand that Australia set the pace.
These shadowy fanatics would happily cut a swathe through some of our
most important industries. But our minuscule share of global emissions -
only 1.4 per cent and set to fall in relative terms even if we do
nothing - ill befits us for an avant garde role. It’s a bit like
expecting Luxembourg to have led the recent EU treaty negotiations.
There’s no reason why we should take the plunge while the world just
dips its toes. Nor should our workers be offered up as guinea pigs. Our
touchstone should be prudent and cautious engagement.
The price ain’t right
Fear-mongering, abetted by political opportunism, however, have now spun
the energy industry into a state of uncertainty and investment
paralysis. In the interests of certainty, prudent and cautious
engagement are about to be tossed aside for early action. We have been
collectively frog-marched down this dubious route. Despite bipartisan
commitment to carbon trading in the form of a
‘cap and trade’ scheme, a
deal of respected opinion is ebbing away from this approach. Some prefer
carbon taxes or hybrid trade-tax schemes, others old-fashioned research
and development subsidies.
Last November, for instance, the venerable Committee for the Economic
Development of Australia (CEDA) published a
collection of papers
which ‘questions the common view that a carbon trading system is better
than alternatives such as a carbon tax or a hybrid scheme.’ The
contributors include world authorities on climate economics from here
and overseas. Similar views have been promoted by Bjorn Lomborg, the
When Kyoto’s agenda took off more than a decade ago, the objectives were
to cut energy consumption in absolute terms and induce shifts to cleaner
sources. Carbon trading was thought to achieve both. Time has brought
the first objective into sharper relief, however. As climate change
policy moves from the fringes to the mainstream, concerns about the
implications for growth and living standards have come to the fore.
Hence the surge in scepticism about carbon trading. There is rising
interest in ways to stimulate cleaner technologies without the
accompanying clamp on consumption. Contributors to the CEDA collection
propose different ways to price carbon, but some creative thinkers are
challenging the need for any type of carbon price.
Writing in the Harvard Law and Policy Review, authors
Michael Shellenbergerand Ted Nordhaus, and
others, explain in detail why carbon trading won’t induce the new
technologies we need. They argue instead, putting it simply, that public
investment in clean technologies, on a large enough scale, will trigger
similar investments from the private sector. The carrot of public
investment makes the stick of a carbon price redundant. Not only is this
course more compatible with dynamic growth, they say, but it is saleable
Power generation produces 36 per cent of Australia’s carbon emissions.
Say we chose to secure our energy industry with a plan combining public
investment in research and development with a phased timetable,
consistent with technological progress, for the retro-fitting or
replacement of old plant and the deployment of new sources. Would this
approach damage our growth prospects less than carbon trading? Would it
have a less dislocating impact on vulnerable workers? We will never
know. The idea won‘t get a hearing. We’re stuck with an agenda conceived
by ponderous UN bureaucrats and green ideologues.
Sleepwalking to carbon trading may turn into a rude awakening if the
shockwaves reverberate through critical suburban and regional
electorates. Then voters will ask why their communities are losing jobs
while higher emitting countries do nothing. They’ll ask why they’re
paying higher power bills, and why the better-off aren’t paying more.
They’ll question what any of this has to do with the world’s climate,
drought and water shortages. Ultimately, they’ll demand to know why
their government colluded in this trahison des verts and sold out