At last, an Australian government has presented for public consideration an intelligently conceived framework for a national carbon emissions plan. Much work must be done over the next four to five months to flesh out the key elements, so it can be put to Parliament for approval as law.
Has Julia Gillard broken her pre-election 'no carbon tax' promise? Does it matter? Her promise was legitimately overtaken by events — the election outcome leaving Labor in precarious minority government, with the ascendant Greens and two interested Independent members (Tony Windsor and Rob Oakeshott) enjoying a powerful voice in climate change policy.
One may doubt whether this plan would have been put forward so soon in Gillard's first elected term, had her hand not been forced.
The election outcome reflected disenchantment with Labor's repeated climate change policy failures since 2007, and the resulting haemorrhage of Labor's youth and inner urban vote to the Greens. Even so, carbon emissions policy might have stayed in the too-hard basket for another term, if Gillard had had any parliamentary choice. She does not.
The incoming Minister, Greg Combet, made clear soon after the election that the Multi-Party Climate Change Committee (MPCCC) would study all policy options for setting a price on carbon.
The committee, whose proceedings are confidential, has now announced a hybrid package with a temporary fixed carbon price (or tax) starting in mid-2012, but with firm plans to move to an emissions trading scheme three to five years thereafter.
The plan to which Gillard has committed herself is an intelligent bid for Labor's political survival at the next election, as well as being entirely in the national interest.
The Greens and Labor may dispute parenthood of this jointly supported plan: actually it was first put forward in Ross Garnaut's 2008 Climate Change Review.
Tony Abbott is the bad fairy at this christening, determined to blight this baby's future. His confected outrage is opportunistic. He is trying to whip up the same alliance of climate change denialism and conservative business opposition that brought down Nelson, Turnbull and Rudd.
It is a tragic mistake for the Coalition that under Abbott's leadership they have abandoned any serious participation in national policy-making on climate change. Abbott will be remembered as a wilfully shortsighted obstructionist, who puts his own perceived tactical political advantage ahead of the national interest.
Fortunately, Abbott speaks here to a dwindling and increasingly discredited constituency.
There is no doubt that the mainstream electorate now better grasps the need to tackle climate change with effective national policies. A traumatic sequence of destructive extreme weather events, the manifest failure of tokenistic policies like coal industry carbon capture and storage, and the shelving of unattainably grandiose international carbon trading ambitions, have concentrated serious minds on things that are necessary and achievable at the national level.
Labor has learned lessons from its bad experiences in 2007–2010. It is focusing on issues more likely to unite than divide: the need for business certainty, and the importance of Australia not falling further behind the energy changes that are happening internationally. Combet and Christine Milne, with admirable pragmatism, are downplaying target-setting and climate change doomsaying.
What might go wrong now, apart from Labor losing office before the 2013 election through adverse by-election contingencies? After mid-2011, Labor and the Greens will together have numbers in the Senate for many years to come. Were the Coalition to win in 2013, it could still not legislate to end an already functioning carbon price law.
The next few months will see a messy but necessary debate involving all interested stakeholders to determine the final scope and numbers of the plan. This debate — which already began last weekend between the Prime Minister and Senator Milne over taxing petrol — will be partly played out in public and partly privately within the MPCCC, where Greens and Independents exercise real policy influence.
The Opposition will be quick to exploit any public evidence of rancour in the committee.
This is why government ministers, the Greens and the Independents must hold to the discipline of a civilised, contained debate. After the overblown rhetoric, false policy starts and humiliating backdowns to powerful interests over the past three years, Gillard and Combet need this year to get some real carbon policy runs on the board.
They can only do this by a process of patient, courteous but steel-willed negotiation. Any sign of policy weakness will be quickly exploited by enemies.
Here is a brief roadmap of the key issues.
First, the committee must agree and win public approval for an initial carbon price of between $20 and $30 a tonne.
The renewable energy and gas industries, as well as Greens and environmentalists, will argue that only an upper-end figure will send meaningful price signals to the coal power industry and to renewable energy industries waiting to go forward. The coal lobby and Labor's industrial conservatives will press for the lowest figure. I hope for something above $25.
Second, they must decide the scope of the coverage of the scheme. It would be prudent to limit it initially to the electricity generation sector — producing over 40 per cent of Australia's carbon emissions — while compensating flow-on domestic electricity price increases to poorer consumers.
This will maintain community support by sending an encouraging message that the tax is doing the job, as new non-polluting (wind, solar) or less polluting (gas-fired) power stations get underway.
Third, the vexed transport sector: the largest carbon emitter after electricity generation. Garnaut has warned that exempting fuel would undermine the scheme. But petrol price rises will directly hurt consumers already worried by petrol price hikes caused by Middle East unrest.
I would expect the Greens to stand firm on the principle that petrol must be included in the scheme. Labor should press the Greens to accept an interim fiscal compromise, initially offsetting the tax for a few years by reducing the existing fuel excise tax.
Fourth, when and how far to extend coverage to industry. Some industry processes of themselves emit carbon dioxide, e.g. Bluescope Steel's blast-furnace technology. There are fears that direct carbon taxing would further handicap such import-competing industries, threatening their sustainability and 'hiding' Australia's carbon pollution in expanded imports of manufactured goods.
It is an emotive argument, based on the value of industrial jobs at home and a fair playing field for our threatened manufacturers. The Greens would do well to respect such concerns.
Environmental groups and Greens will press for (and should get) complementary policy measures as well as a carbon price, to speed up movement to a renewables-based energy sector.
Agriculture, while relieved that its emissions will not come under the scheme, will press for positive incentives to carbon-conserving farming practices, and fair treatment for irrigators.
Last week's announcement was the important first step on a hard road. Now it will be up to the community to unite behind building an achievable multiparty consensus. Otherwise, Coalition troglodytes — weaker now, but still with capacity to divide and harm — will wreck Australia's best hope yet for a good carbon emissions policy.
Tony Kevin is the author of Crunch Time, a book exploring Australia's inadequate policy responses to the climate change crisis.