Money Finance News Labor’s climate policy is second-rate – because the government’s policy is fifth-rate
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Labor’s climate policy is second-rate – because the government’s policy is fifth-rate

labor and coalition climate policies
"The Labor target of 50 per cent of new vehicles being electric in 2030 would be easily exceeded." Photo: AAP
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For all the hot air generated about the unknown cost of Labor’s climate policy, the bottom line is that it’s a second-rate effort only made possible by the government’s climate policy being third-rate.

No, make that fifth-rate.

Both sides are victims of the Tony Abbott era of opportunistic Total Opposition. The desire first to become opposition leader and then prime minister meant Mr Abbott and his accomplices forever poisoned the words “carbon tax” and “carbon price”.

The poison remains. The Coalition and Labor policies both contain an element of carbon pricing but tie themselves in knots to avoid actually saying it. Instead, it’s called “the Safeguard Mechanism”.

The Labor policy document specifically promises: “Labor will not introduce a carbon tax or a new carbon pricing mechanism and our reforms will not raise any government revenue.”

Never mind what’s best for the nation – just stay away from anything that could be claimed to be a “carbon tax” with its $100 leg of lamb.

The way the Safeguard Mechanism has been established and administered by a riven Coalition sets a very low bar.

Labor merely extends the number of companies subject to the mechanism’s effective cap-and-trade regime to about 250. Big whoop.

It then promises to negotiate exemptions with the usual plethora of lobbyists who have done a brilliant job of white-anting the weak Coalition policy.

Labor exempts the agricultural sector from the mechanism, while promising to continue to boondoggle carbon farming.

The mystery about Labor’s climate target isn’t the cost, but how it’s supposed to be achieved.

The commitment of “net zero pollution by 2050” is as wild and even further away than Liberal Party economic targets.

Australian politics means Labor doesn’t have to have a good and credible carbon policy, just one that is a little better and less incredible than the Coalition’s. Labor is only competing with a mob that’s throwing billions of dollars at a frequently gamed “direct action” Band-Aid.

The tragedy of the Abbott legacy is the political inability to run hard with carbon pricing – what every economist I’ve ever met says is the best option, the option that ends up being most efficient and least expensive, the option that clearly makes the most sense.

With better communication from credible leadership, “carbon tax” could not just be detoxified, but welcomed.

British Columbia did it 11 years ago. Price carbon, tax carbon pollution – but make the tax revenue neutral through income tax cuts and increased social welfare payments.

labor climate policy compared with coalition
“We are going to stand by our tradies and we are going to save their utes”: Small Business Minister Michaelia Cash said on April 9. Photo: AAP

Consumers and businesses would not be disadvantaged by the higher price of carbon-emitting goods – I could still afford to heat my house, drive my car and eat steak. I’d also have plenty of incentive to do it more efficiently, just as suppliers would have incentive to reduce emissions.

Economic sticks and carrots work best when they work together.

Some allowance would have to be made for businesses in the export- and import-competing sectors – the lobbyists would not be unemployed – but the big-ticket polluters of energy, fuel and agriculture would be covered at no net cost to the all-important voter.

It would make the various targets credible and the cost something only The Australian would try to headline.

Without a clear, big-picture policy, the bits and pieces and costings remain prey to sniping by climate sceptics and political opportunists.

The two climate kerfuffles to gain attention so far in this campaign have been the joke of “stealing tradies’ utes” and the confusion of impossible cost modelling and demanding a single cost figure.

The neatest explanation I’ve seen of why the Brian Fisher modelling can’t be taken too seriously came in two tweets:

“If I ask you to give me your food costs for next 10 years by switching from beef to kangaroo – you can’t. You don’t know what either will cost over period, so you can’t cost compare both,” tweeted Bass Lang.

“But if I ask what will it cost if I destroy your fridge, oven & cooker? That you can guess.”

“But if you knew that by NOT switching from beef to roo THAT would blow up your kitchen? Then the cost comparison of beef vs roo over 10 years suddenly becomes irrelevant because the cost of your kitchen is far greater than any cost variations in food bills. This is where we are.”

As for the alleged threat to the weekend and utes, I recently interviewed Rob Hyndman, Monash University’s Professor of Statistics and head of the Department of Econometrics and Business Statistics, as part of an upcoming Monash Business School podcast series.

Professor Hyndman stressed the likely degree of accuracy of a forecast is at least as important as the forecast itself. We happened to be talking as “Utegate II” was making headlines – he was very confident the Labor target of 50 per cent of new vehicles being electric in 2030 would be easily exceeded.

But never let facts get in the way of simplistic political scare campaigns.

One person’s forsaken HiLux is another’s $100 leg of lamb.

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