Power Failure

12 June 2014 — As he worked on Power Failure, an analysis of climate policy under the Rudd and Gillard governments, Philip Chubb watched the traffic accident of ALP policy-making progress to its inevitable denouement, and the subsequent rise of denialism triumphant in the Abbott government.

From where he sat, it appeared the ALP had no one to blame but itself for losing the hard-won consensus on dealing with climate change, as the blackmail of coal-fired power interests and a determined Coalition opposition leveraged the weaknesses of badly managed dialogues both within the ALP and with community and stakeholders.

Speaking with The Fifth Estate from his office at Monash University where Chubb is head of journalism, the Walkley award-winning journalist says one of the big things that went wrong was that the ALP never had a policy that was “clearly and rigorously developed for how much to pay industry”.

“Industry’s claim of damage was never judged against government ideas,” Chubb says.

“The campaign industry ran was endless, and the more money they threw at it, the more it demanded. The government never said to them, ‘You get this much, and no more’. There was no threshold policy.”

Chubb also says there was awareness within the government the money being paid to the coal-fired generators was “hush money”, handed out under a policy he describes as “arbitrary”.

“I took particular note of the brown coal industry in Victoria in the book, because it is the most extreme case in terms of carbon emissions and also ran the most extreme campaign for more money,” Chubb says.

Philip Chubb

An industry knowingly taking a risk

Chubb explains that industry based its argument on a studied position of ignorance as to the future risks to their investment in the coal-fired operations. It is, he says, one of the hazards of the Victorian government privatising them in the first place.

“The generators claimed they paid for the business in good faith but had the grounds for that investment cut out from under them by government action. The problem with that argument is the dangers of climate change were well known [before they bought the assets]. The Victorian State Electricity Commission was so aware of the impacts of climate change it had instituted a world-first carbon reduction policy in the Latrobe Valley power stations.

“It just cannot be believed that the power station’s new owners did not know that their power stations would be called into question. And if they bought into them, and knew [of the risks], there is no reason to compensate them.

“They knew the value of their assets would be reduced over time because of climate change.”

Blackmail and bluster

Chubb put together evidence during his research that shows the power companies in a highly unflattering light, with threats made of blackouts if any form of carbon pricing mechanism was instigated, and more threats of blackouts when further compensation was sought. In all, the coal-fired generators were handed $5.5 billion over five years.

“Governments need to take account of the fact it is a whole new ballgame when these assets get privatised. The power companies are quite willing to hold the power supply to ransom,” Chubb says.

“It is very easy for companies to threaten a blackout. But what would happen if the government decided not to submit to the threats, and steps in and takes it over?”

He speculates that a response like that might result in the community having to endure a few relatively short blackouts, but that the longer-term result would be a shift in the balance of power away from the generators and back to the public interest.

“But while governments allow themselves to be blackmailed on the basis of threats to the power supply, then we create situations such as we had,” he says, adding that the amount of money the power companies got away with is “hard to justify, given what we know about how they operate”.

The other impact the campaign of the coal interests had was the creation of what Chubb describes as “massive confusion” in the community.

“The average person is thinking the government is going to cause blackouts, which resulted in reduced support for action on climate change,” he says.

Rudd goes into the silo with the policy

Meanwhile, Chubb says Kevin Rudd became more isolated in his approach to his own party and advisors, and by 2011 was also unaware of the pressures that were building up within the Liberal Party.

By interviewing all the major players in policy development, including Senator Penny Wong, Julia Gillard, Kevin Rudd, Wayne Swan and Greg Combet, as well as senior public servants and ministerial staff, Chubb developed a picture of an increasingly erratic prime minister who closed off from advice and laid the government open to attack from an organised and focused Opposition.

“Abbott – who had no real view on climate change [in 2007] – and had described himself as a ‘weathervane’ to Malcolm Turnbull, had by 2011 nailed his flag to the mast of climate change denial,” Chubb says.

From that point, things went rapidly downhill. Julia Gillard replaced Rudd as prime minister, and made what Chubb describes as a good attempt to formulate a workable policy, but a lack of straightforwardness, the damaging power of the opposition and other pressures on her leadership meant the consensus on climate change crumbled further.

Eat meat, burn coal

By 2013, when Abbott swept to power claiming a mandate to “axe the carbon tax”, the stage was set and forces aligned to dismantle every part of the ALP government’s climate change initiatives.

Chubb observes that the sustainability sector is now in a very difficult position in terms of an ability to show leadership.

“It is very difficult for industry when it has a government which is resolutely not interested,” he says. “The current government is doing an enormous amount of damage to our international reputation and Australia’s future.

[Climate change denial] is a cultural issue for the Coalition. It’s nothing to do with rationality or reason or the future or business – it’s tribal. While this government is in power we can’t recreate the consensus.

“[Climate change denial] is a cultural issue for the Coalition. It’s nothing to do with rationality or reason or the future or business – it’s tribal.”

“For this government burning coal to make electricity is the equivalent to eating red meat – if you don’t, you’re a sissy. So this government will never have sympathy for making renewable energy – only sissies do that. The government has attempted to shut down everything to do with renewable energy.”

Revenge, tribalism and well-flung mud

He believes there is also something of a revenge motivation at work, where climate change is one of the issues that reminds the current government of the ousting of the Howard government in 2007, as Chubb says it was only when Howard realised he would lose the election that he agreed to the bilateral position on climate change that became Rudd’s platform.

He points out that the Royal Commissions into the insulation scheme and unions are both elements of a revenge that “knows no bounds”.

“A little mud [from the Royal Commissions] will stick, and in the run up to the 2013 election Abbott showed himself to be a truly gifted flinger of mud,” Chubb says.

Asked what his investigations had revealed about the relationship between the Institute of Public Affairs and the Coalition, Chubb describes the relationship as “tribal”.

“The IPA is part of the tribe; it gives the government emotional support, mateship and sustenance, and also from time to time maybe a bit of intellectual support,” Chubb says.

“The IPA and the Coalition are fighting the so-called culture wars every day from the moment they wake up to when they go to sleep.”

“It is an echo chamber for the government. The IPA are very enthusiastic supporters of everything the government does.”

He contrasts this 100 per cent supportive position with the tendency of the small “l” liberal left to not give wholehearted support to, and in fact even criticise, what their government does.

“The IPA and the Coalition are fighting the so-called culture wars every day from the moment they wake up to when they go to sleep,” he says.

Studying denial

On the appointment of four business people who also happen to be climate change deniers to key roles, Chubb drily observes it must have been quite hard to find four people who disbelieve the science to fill the positions.

“I think they have convinced themselves the science is flawed or are able to convince themselves,” he says.

“One of the things highlighted by this situation is the difference between intelligence and cleverness. It is very unintelligent to believe that all those scientists are wrong, but if you have cleverness you can dream up ways of doubting the science, and then you can run around, and consult the echo chamber, and give each other mutual slaps on the back.

“Any person of any reasonable intelligence would understand we are duty bound for the future and especially for those on the coast who might see their land disappear to take this seriously.

“Even if in five years we somehow find out the threat was less than expected, we still wouldn’t have been wrong to take climate change seriously. For us as a generation to make the world less habitable is unethical.”

The rise of apathy

Chubb lays the fault of the lowering of levels of concern in the general community at the feet of the Rudd and Gillard governments and the way communication on the issues missed its mark.

“The biggest thing Rudd failed to do was tell the people the truth. People need to know the science is not divided, even though deniers are in such enormous positions of power in media, industry and politics,” Chubb said.

“The majority of people support action on climate change but they might not be willing to pay for it.”

The way forward

Chubb says at this point, he is “deferring optimism” about climate change measures, describing the current policy situation as a “ridiculous and expensive mess”.

“We barely have a climate change policy, and no one can tell us what it is or how much it will cost,” he says.

“The reason we’re in this mess in terms of possibly the most important problem the planet has ever faced is we were driven there by the built in conflict in the [two party] political system,” he says.

Chubb sees two possible ways in which progress could occur. One is the leadership being shown by Barack Obama, because as Chubb observes, policy in the USA tends to have an influence on policy in Australia.

Another possibility is the impacts themselves force action, with a series of weather events that can be fully and indisputably attributed to climate change.

“Unfortunately we [may] need more horrible things to happen,” Chubb says.

Power Failure – the inside story of climate politics under Rudd and Gillard was published in May 2014 by Black Inc, an independent Melbourne-based publishing house.

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  1. What an excellent article about excellent piece of research.

    It is important to document this, since when, inevitably the sooties change their position and try to revise the history, there will be documents like this.

    Anyhoo, it will be interesting to see what the AMC puppets say when they descend on the comments section.