In Part 1 of this article, I proposed that the Liberal Party, at least at federal level, has been ideologically unanchored ever since it rejected carbon pricing as a key climate action mechanism late in the 1990s. Putting the conservatives at odds with their own pro-market belief system. Part 2 went back to briefly recap how any hope of political consensus on climate action in Australia fell apart, between 1997 and 2014. Part 3 brings us to 2024, and a wrong-for-the-times nuclear power crusade.
The good news in this sad saga of political and policy failure, and the great irony, is renewable energy.
Remember Australia’s initial, tiny 2 per cent Renewable Energy Target (the “RET”)?
It was first breathed into life by then Liberal Prime Minister John Howard, as part of his political fix late in the 1990s to sideline a price on carbon, first proposed by our US uber-allies.
Now, in 2024, it is now being pushed by the Labor Government to a target of 82 per cent renewables by 2030 for electricity in Australia. Nearly 100 per cent before 2035 is a realistic objective!
Technology evolution, propelled by the financial markets and popular support, has made renewables a 21st century winner.
Yet the ideologically-unanchored Liberals are now fighting this, branding it “reckless renewables”.
They want to slow or halt its rollout, while we wait for “new nuclear” technologies that the markets, including Australia’s major energy companies, are publicly distancing themselves from.
As an electricity generation source, nuclear is globally associated with big cost blow-outs, big safety failures and big government, being too risky for the markets to touch without extensive underwriting with taxpayers’ money.
Not to mention that nuclear power isn’t even legal in Australia (having been banned by the Liberals themselves, in 1998, in a voting deal with the Greens, under none other than Howard).
Oh, irony piled on irony.
If the Liberal-National Coalition succeeds, and there’s a federal election due by May 2025 at the latest, the biggest winners would be fossil fuel coal and gas electricity generators. They could expect to keep operating for longer than under the current fast-tracked renewable buildout scenario.
A nuclear boondoggle as a political Trojan Horse? Many think so! (Giles Parkinson at Renew Economy does a great job of explaining this here.)
Global capital markets, meanwhile, have whole-heartedly embraced renewables, and are pouring investment trillions into their rapid and accelerating build-out.
As have the Chinese Communist Party, which has stolen a very long march on the West when it comes to industrialising solar panels, wind turbines, lithium batteries and now electric vehicles.
The US under President Biden has the $1.2 trillion Inflation Reduction Act (IRA), including half a billion dollars to play industrialisation catch-up with China for the clean energy transition.
Europe, which substantially embraced carbon pricing, is well on its way to erecting carbon trade barriers and has its own Green Deal and European CHIPS Act.
Now the Albanese Government is pushing an Australian version, the Future Made in Australia Act, with more detail to come in Treasurer Jim Chalmers’ Budget 2024 next week.
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The federal Liberals, however, self rendered intellectually bereft on energy and carbon policy, are gearing up to fight this every step of the way with their National Party sidekicks.
Perhaps hoping for a “drill baby drill” Trump revival in the US Presidential elections this November? Dog-whistling to ultra-conservatives and the anti-woke brigade. Kite-flying comprehensively unviable nuclear power ambitions that carry with them dangerously perverse outcomes: slowing renewables and extending coal, gas and oil. Which is exactly what fossil fuel vested interests want, but humanity can no longer afford and natural ecosystems cannot tolerate.
The political consequences are insidious.
By comprehensively denying the Prime Minister Anthony Albanese-led Labor government reasonable bipartisanship on key climate action policy measures, the Liberals, the alternative mainstream party of government, persistently hold back the escalating action we need.
The Labor Party, of course, has its own fossil fuel addictions, contradictions and internal arguments. It simply won’t risk it all electorally to go out on a contested political limb for carbon pricing, or any other major climate action policy.
So the Liberals, by disqualifying themselves from competing for any genuine policy high ground on climate action, undermine third-party efforts to force a lot more action, much faster, consistent with the science.
Look no further than the recent watering down of long-needed fuel efficiency standards in Australia, a prerequisite for accelerating uptake of electric vehicles. The Liberals and Nationals leapt into a “death of the ute” fear campaign, and Labor compromised within weeks.
Meanwhile, in the Pacific, Australia and the US are competing with China for crucial influence and strategic relations with climate-threatened island states. Yet our nation’s greatest geo-political vulnerability is being recklessly aggravated by weak carbon and climate policy over recent decades.
It was always what insightful Americans call a “Nixon to China thing”.
The best electoral chance of embedding carbon pricing in Australia was for it to be introduced by a conservative government, the misnamed Liberals, leveraging their side’s traditional electoral reputation for being the better economic managers, then supported and hopefully enhanced by more progressive parties.
Just as in the early 1970s, an arch-conservative Republican US President in Richard Nixon was far better placed to open up world-changing American trade and diplomatic ties with Communist China than his more (small ‘l’) liberal Democrat rivals.
Or, an Australian example, tough gun ownership reform after the infamous 1996 Port Arthur massacre in Tasmania was pushed through by none other than Howard, which gave the right-wing pro-gun lobby nowhere to go.
Shame climate, an existential gun at the nation’s head, didn’t get the same consideration with carbon pricing.
So here we are. No carbon price in 2024. Talk about pro-market political failure!
FOOTNOTE: The battlelines are being drawn for Election Australia 2025. It’s not impossible it could be pulled forward by PM Albanese, before the end of 2024, but that’s unlikely. There will be a stark contrast between energy and climate strategies for Australia’s next 25 years to 2050 and beyond. There will be a double down on electrification and renewables with battery and pumped hydro firming with Labor or pull back on that and swap in a nuclear push with the Liberal National coalition.
With the Greens belting Labor from the left for not doing enough, however much the incumbent government is doing, and the teals offering progressive former Liberal voters a non-nuclear refuge for their ballots. Should be interesting!
Murray Hogarth is an independent guide to business and other organisations, specialising in positioning strategy, stakeholder engagement, thought-leadership and storytelling for sustainability and the energy transition. Find him on LinkedIn.