Garnaut’s Back with a vengeance & Gillard’s Getting the Message

Over eight days this month, Australia’s noted economist Ross Garnaut released three detailed reports, each updating a key part of his exhaustive 2008 Climate Change review for the then Rudd government. Another five will be published in March, followed by a book tying all the ends together before the end of May. All indicators show that something fascinating is happening to the Gillard Government’s climate change argument.It’s replacing morality with economics.

Adam Morton in The Age (19 February 2011):

ROSS Garnaut hasn’t seen the 1993 Bill Murray comedy Groundhog Day, but he knows how it goes. A TV weatherman rises every morning to find it is the same as the last. He is stuck in a maddening loop, having to repeat the same job each day while people around him carry on, oblivious.

Garnaut laughs when the film is raised in an interview in his Melbourne University office; The Age is not the first to suggest similarities between its plot and the return of the veteran economist to the public stage advising the government on climate change policy.

Over eight days this month, Garnaut released three detailed reports, each updating a key part of his exhaustive 2008 review for the then Rudd government. Another five will be published in March, followed by a book tying all the ends together before the end of May.

Each will be underpinned by his messages that the threat of climate change is clear, that many other countries are taking steps to combat it, and that the economic cost of delaying action locally or unnecessarily compensating big business will be great.

None will answer a key question: how much sway does this 64-year-old professor, an architect of some of the major economic reforms of the 1980s, have within Canberra after being ignored by the government on crucial points the first time around? That will come later.

Garnaut paused momentarily when Climate Change Minister Greg Combet asked him to revisit his 2008 review, but signed on once it was clear that the Greens and independent MPs would join the government in “another serious crack” at introducing a policy to lower emissions.

“Like a lot of Australians, I was disappointed we didn’t get a result last time,” Garnaut says. “So although it was hard to welcome a return to the intensive effort on the same topic, the chance of contributing to Australia getting a result on this important policy area made the case for my re-engaging.”

For the Gillard government, Garnaut’s return to the fold – he is updating his review and advising the multi-party climate committee working on a plan to introduce a carbon price – is a potential double-edged sword.

He is in newspapers and on the airwaves emphatically making the case for forcing businesses to start factoring in the cost of greenhouse pollution. It is likely he will reach a large audience; in 2008 he packed town hall meetings around the country, and about 100,000 people downloaded his initial report on the day it was released, jamming the computer system of the Victorian Premier’s Department. But experience suggests he won’t let the ALP off the hook if it fails to take the steps he believes are necessary.

Somewhere between Garnaut’s commissioning in early 2007 and the publication of his report 18 months later, Labor appeared to slowly step away from him. Initially portrayed as the central figure in Kevin Rudd’s plan to tackle “the moral challenge of a generation”, he was later described as merely “an input”.

When Rudd rejected key parts of Garnaut’s advice, the professor hit back. Writing in The Age on December 20, 2008, he condemned the government’s failure to leave open the possibility of a 25 per cent cut in national emissions by 2020 if a strong global deal was reached. (Labor had opted for a target of between 5 and 15 per cent, depending on the level of agreement inUnitedNations negotiations.) And he argued there was no justification for handing out a proposed $3.9 billion to the owners of fossil fuel power plants.

As the compensation bill was increased to $7.3 billion in an ultimately failed attempt at a deal with the Coalition, Garnaut damned the process as “one of the worst examples of policy-making we have seen on major issues in Australia”.

Private reactions within the government ranged from annoyance to anger. Some Labor MPs not involved in the climate committee are dismissive of their chief climate adviser; one said he was unrealistic. While Combet has been effusive, it is not clear that Garnaut would have been asked back if the government did not need to do a deal with crossbenchers who wanted him in the room.

These days, Garnaut’s strongest public support comes from the Greens and independents Rob Oakeshott and Tony Windsor. Oakeshott says he speaks with Garnaut as often as he can, believes the government should have accepted his initial recommendations and will argue within the committee for his advice to be heeded. “Hopefully, colleagues are reading, hearing and reflecting on what he is doing,” he says.

According to the man himself, the level of bad blood with the government has been overplayed. His relationship with Rudd remained cordial, even after his strongest criticisms. Less than three weeks after his attack on Labor’s climate policy was published, Garnaut was invited to Kirribilli House to talk through their differences. It was just the PM and the professor, discussing climate change and cricket while watching a young Australian pace attack run through the South African lower order to win a thrilling Test at the SCG.

“We had a good yarn,” Garnaut says. “We talked it over … It finished up with Kevin thinking about it. It was a congenial day. I can’t pretend that I wasn’t disappointed, but I’ve been around the policy process in Australia and other countries for a long time. I never had a difficult personal relationship with senior people in the government.”

Three months after the meeting, the government changed its 2020 target range to leave open the possibility of a 25 per cent goal under certain conditions. Garnaut does not claim credit, acknowledging pressure was applied from inside and outside government, but it was concession enough for him to back Rudd’s emissions bill as worth passing through Parliament despite its flaws.

Garnaut’s criticisms of Labor were striking given his stature in the party as an architect of the removal of tariff barriers in the 1980s, when he was a senior adviser to prime minister Bob Hawke. He left Canberra in 1985 when he was appointed ambassador to Beijing.

The period shaped the economist’s understanding of how the epicentre of growth in the global economy  would shift into the 21st century, and has continued to inform his academic work. In recent years, Garnaut’s time has been split between the Australian National University in Canberra and Melbourne University, where he is a vice-chancellor’s fellow and professorial fellow of economics. He lives in Melbourne’s inner north with his wife, Jayne, squeezing in time with his grandchildren in his few less busy moments.

“It crosses my mind that our generation may leave problems that are simply too hard for human society in the generations that follow,” he says. “The structures that separate civilisation from disorder are thin and fragile. [But] I am not gloomy by nature so don’t presume that the global community will fail the young people.”

Returning to cricket, he recalls Justin Langer’s greeting to Adam Gilchrist before they combined to win a 1999 Test match in Hobart against Pakistan from a seemingly hopeless position: “You never know”.

” ‘You never know’ will be true for future humanity as well,” he says. One of Garnaut’s goals this time around is to improve the public debate on climate change, hence the release of eight staggered papers to maximise exposure and allow feedback. So far his updates have focused on dramatic projections of emissions growth in the developing world, and the steps being taken elsewhere to reduce them.

China is the biggest threat, but also a cause for some hope. Beijing’s non-binding target to slow emissions growth submitted to the UN is calculated to be equivalent to Australia making a cut of 25 per cent, much more than Canberra is prepared to do at this stage.

The flipside is that China’s economy is expanding so quickly that before the decade is out it is likely to have to start cutting emissions outright, rather than just slowing their growth, for a meaningful solution to be possible.

Within the current debate, Garnaut differs most markedly from the government on compensation for the power industry. Little suggests the government has come around to his view – shared by the Greens – that large cash handouts are not warranted.

This month, Julia Gillard said there had been a lot of good work designing the compensation packages under the initial emissions scheme, and they would not simply be discarded. Politically, it is impossible to imagine a design under which Labor did not offer industry support. The sum and conditions that have to be met to receive it will, along with the starting carbon tax price, be among the most difficult terrain in the  negotiations.

Elsewhere, though, Garnaut has won out. Yesterday, the government presented the multi-party committee with a model for a hybrid carbon-pricing scheme based on a proposal in his initial report, later adopted by the Greens. A carbon tax would start in July 2012 and evolve into an emissions scheme that would allow businesses to bring in international carbon credits, effectively paying for cuts elsewhere to offset Australia’s domestic pollution.

Nothing was finalised yesterday, but Garnaut has confidence that there is enough political will this time around to suggest a compromise may be possible.

“I would be surprised if anyone who plays a role in the process, including myself, doesn’t go through some adjustment on the way,” he says. “I think there is a chance that the outcome will be one that everyone connected to the policy process thinks is better than the position they started from.”

Source: www.theage.com.au

By Annabel Crabb for ABC (3 February 2011):

In the new Gillard formulation, action on climate change is no longer something to which Australia is morally obliged regardless of the behaviour of other nations.

Something fascinating is happening to the Government’s climate change argument.

It’s replacing morality with economics.

Remember Kevin Rudd’s spirited lectures on “the greatest moral challenge of our generation”?

In the former prime minister’s hands, climate change was a prophecy to which one either subscribed or did not subscribe.

Doubters could be accused of anything from callous disregard for the lives of their own grandchildren to responsibility for the spread of beri-beri across far north Queensland, or the death of the Great Barrier Reef, or a catastrophic plague of storms and wildfires.

No doubt it was the messianic zeal of the former PM’s rhetoric that made his sudden vacation of the climate field, in April last year, quite so unsurvivable.

And his successor, Julia Gillard, has been inconsistent – first urging Mr Rudd to drop his climate plan, then throwing it back to the populace in the form of the short-lived “people’s assembly”, then promising not to enact a carbon tax, then deciding to go ahead with one anyway.

But in recent weeks, a new approach is emerging, and it’s one from which any notion of moral obligation has been carefully excised.

In the new Gillard formulation, action on climate change is no longer something to which Australia is morally obliged regardless of the behaviour of other nations; these days, it’s an economic race in which it would be perilous for Australia to fall behind.

“Hawke and Keating floated the dollar,” she told a CEDA lunch in Melbourne on Tuesday.

“We will price carbon.”

Greg Combet told The Age this morning that China and the United States were racing to build new low-carbon economies, and that Australia needed to keep up.

In both China and the United States, the argument from morality has also faltered; neither legislature has any intention of enacting externally-enforceable cuts to emissions, but markets in both countries are nonetheless creating a competitive demand for green technology.

And the Gillard Government has adjusted its pitch accordingly; it used to be that Australia was leading the world on climate change abatement because it was the moral thing to do.

Nowadays, the fear factor is not that your grandchildren will boil to death while snorkelling over the bleached skeleton of the Barrier Reef, but that the Australian economy will miss this chance for growth.

(Ironically, the reason you’re probably not hearing this message particularly clearly just now is that it’s perpetually interrupted by the flying debris and siren-wail of exactly the sorts of natural disasters that featured in Kevin Rudd’s Biblical prognostications. But that shouldn’t bother anyone; in Australia, we are accustomed to having a short memory about this sort of stuff. How else could we possibly, with a straight face, move so seamlessly from a near-apocalyptic national panic about water shortages to a tetchy exchange about why the hell nobody thought to build more dams for flood mitigation?)

Where does this shift leave the Opposition?

Well, in the sense that Julia Gillard has pared her approach back to the imposition of a simpler carbon price, it does permit Tony Abbott to keep his “Great Big New Tax” band together.

But Mr Abbott’s own plan on climate change, which the Coalition calls “Direct Action” but could well be subtitled “Fixing Climate Change While Still Reserving The Right For Half Of Us To Think It’s A Crock” – is itself still fairly confused.

And an approach that deliberately allows the market to find its own way around this problem is far harder for the Coalition to oppose than a Rudd sermon.

Annabel Crabb is ABC Online’s chief political writer.

Source: www.abc.net.au