The new politics of the global energy crisis

The events currently tearing the Liberal Party apart are indications of the new politics emerging out of the global energy crisis. Australia, with the highest per capita carbon emissions and heavy reliance on cheap fossil fuels, is ahead of the pack as the “business as usual” politics of the last few decades comes to an end.

Global warming and peak oil are but two of the aspects of the global energy crisis. Measures to cut carbon emissions, such as an ETS, along with peaking oil and gas resources will see all energy costs become increasingly volatile with a general and continuing upwards movement. The world economy will have to shift out of its heavy reliance on cheap fossil fuels and drastically cut energy usage as it attempts a transition to new energy sources.

As such, the ETS is just the beginning of the great changes on the way, and those political parties that fail to adjust to this hard fact will disappear.

At the time of writing, the Liberal Party is about to vote on its leadership which rests on the matter of whether or not the Party supports Labor’s Carbon Pollution Reduction Scheme (CPRS). It does matter who wins, since the choice is so stark (at least between Malcolm Turnbull and Joe Hockey - who will, apparently, be following Minchin and Abbott’s policy to vote against the CPRS), but either way the Liberal party faces eventual disintegration. The Nationals also face their demise, Labor has its own dilemma to deal with, and the Greens are the unalloyed winners in all this, although there are some traps ahead for them as well.

Political parties that endure do so because they represent the fundamental tensions in society. For the last 150 years - the period of mass industrial society - that tension has revolved around management of industrial growth, including the promotion of development and the distribution of the wealth generated.

In most industrially developed countries (the US is a bit more complicated), two basic parties arose. One was left of centre, essentially representing the lower part of society; the other was right of centre and represented the upper part. For a while there were genuine differences in policy, mostly manifest in issues like the adoption of socialism, welfare spending and the role of government in the economy.

In the 1980s, with globalisation really getting under way, neo-liberalism won out. In Australia, it was the Labor Party under prime ministers Bob Hawke and then Paul Keating that led this transformation. At this point, the main parties were adopting essentially the same economic blueprint, only differing on the role of unionised labour and then marginal issues like immigration. Both parties focused intently on the middle ground in elections.

The result was an increasingly moribund politics dominated by economic factors that turned voters off in droves. Increasingly, only the personalities mattered, a trend promoted by an increasingly unquestioning mass media.

While the economy seemed to be running along OK this vacuum of policy and “business as usual” politics hardly seemed to matter. As long as the major indicators - interest rates and unemployment rates - remained within basic parameters, the populace stayed largely unconcerned.

But now all that has changed. The global financial crisis destroyed the core assumptions of neo-liberalism, and the need to shift to a low-energy economy will demand a complete economic overhaul. The cost of carbon will rise for decades and the imminence of peak oil will cause price volatility as, first, speculators move in and then permanent high prices kick in. In the worst case scenario a country like Australia will be unable to get oil because the big users - the US, China, the EU, etc - will lock up the remaining supplies. The result of even the least of these changes will be a complete reconstruction of the economy as households, businesses and governments scramble to create a low energy economy.

The task of rebooting the Australian economy to minimise energy costs in a context of growing global instability will demand much more effective politics. The ETS is but the start of this new period, and while Labor certainly does not have all the answers, the question of just how to respond to global warming has already brought the Liberal Party undone.

Malcolm Turnbull is dead right when he says that the ETS issue will determine whether the Liberals continue into the 21st century. The Liberals’ problem is twofold: first, the new interventionist government role typified by the CPRS does not sit well with neo-liberal ideology; second, the Liberal Party has a number of people who are so conservative they do not even accept the role of science in determining the energy question.