Vested interests shaping government policy

You have to hand it to the Greenhouse Mafia, aka the Australian Greenhouse Industry Network (AGIN). In their submission to Professor Ross Garnaut, among their justifications for doing as little as possible to address climate change, they drop little pearlers such as: "leaving aside the moral dimension of the issue" and the "Interim Report’s initial views on equity are of concern". To the AGIN, the issue is only about least-cost abatement and the economic impacts of an Emission Trading Scheme (ETS). They also took a swipe at the Mandatory Renewable Energy Target (MRET) when they stated it had “features that should not be repeated” in an ETS. Their simple suggestion: leave it to the markets to discover the solutions.

It's not that we would expect them to say any different. However, the worrying aspect is that this industry lobby group may have just as much clout in shaping policy under a Rudd Labor Government as they did under the climate sceptic-riddled Howard government. In their submission, AGIN suggest that the Productivity Commission be the official body responsible for examining which of the existing climate measures should be axed once an Emissions Trading Scheme commences, such as the MRET.

It was the Productivity Commission that attempted to discredit the 2006 Stern Review earlier this year. Among its claims, the Commission pointed to "value judgments and ethical perspectives" that distorted Stern’s analysis and said that Stern had “exaggerated” the likely impacts of increasing greenhouse emissions while giving "little attention to more optimistic views". Further in the Commission’s critique was the claim that Stern’s Review was “as much an exercise in advocacy as it is an economic analysis of climate change”.

Well, it’s undeniably true that the Stern Review stimulated and progressed public and policy debate on the imperative to address climate change. Even more recent scientific and economic analysis leads us to the conclusion that Stern was, if anything, too conservative. The Productivity Commission is in denial, even in the face of stronger scientific evidence, about the likely impacts of climate change and seems engaged in its own biased climate policy advocacy.

The Commission’s chairman Gary Banks recently also singled out the MRET in language remarkably similar to that of the Australian Greenhouse Industry Network. In his March speech Banks described the MRET as being inconsistent with an ETS and that the "apparent special status accorded the MRET needs to be rethought". Banks argues that the MRET is expensive and that lower-cost abatement will be best delivered by an ETS.

Energy abatement does and will continue to provide important energy savings, however it does not provide baseload energy into the grid. Proven baseload technologies like wind and solar-thermal power will deliver clean energy into the national energy grid. Renewable energy industries rely on the long-term policy price signals that an MRET delivers to drive investment, while allowing those same industries to develop the economies of scale that will reduce their long-term overall costs.

Climate change is an economic, social and environmental issue. Focusing on economics alone is to suggest that the market can “sort it all out”. Clearly the market hasn't, can't and won't sort it out. An integrated solution to climate change will require governmental and business investment additional to least-cost options and regulation to drive the deep emission cuts that are required to transition away from a carbon-based economy.

To deliver such profound changes, Kevin Rudd and Penny Wong will need to root out any remaining bureaucracies infected with climate sceptics - such as those in the Productivity Commission. Erasing these sad remnants of the Howard legacy will begin to diminish the Australian Greenhouse Industry Network’s influence over Australian climate policy. That will allow those who know what the real solutions to climate are to start delivering the emission reductions we need to see.