Tuesday, October 17, 2017

Today by Sean Kelly

Declaring victory
A good day for the PM – though not quite as good as he claimed

Josh Frydenberg

Josh Frydenberg urged media to focus on the good news at the launch. Supplied by ABC News

Today the nation got a new energy policy, and the word on everyone’s lips was “certainty”. You heard it from Malcolm Turnbull. You heard it from his energy minister, Josh Frydenberg. You heard it from the great array of regulators gathered for the occasion, who together make up the Energy Security Board, which recommended the new policy.

Nor was “certainty” just a buzzword. It was the main reason given for the prediction that power prices would fall, by an average of $115 a year, starting in 2020 – an important part of the government’s sales pitch. There were some other reasons given, which differed from participant to participant, but that was the one constant thread. By delivering policy certainty, this new policy would make sure investors started investing again, and that would drive prices down.

The logic appears to be that simply because the government has announced a policy, certainty is automatically delivered. But all of these highly educated, very knowledgeable people seem to have missed something. By that logic, we had policy certainty in 2009, when Kevin Rudd had an emissions trading scheme. We had certainty again in 2012, when Julia Gillard announced her carbon price. Certainty blessedly deigned to visit us again in the form of Direct Action in 2013. Every couple of years we get a new burst of certainty. God knows why investors haven’t come to the party by now.

To get to the point: we will never have certainty in climate policy until both major parties agree. You don’t just get to declare victory when you feel like it, as George Bush jnr learned. That’s true whether you’re Malcolm Turnbull or Bill Shorten.

You can have an argument over whose policy is better – but if half your argument is that your policy is better because it will deliver a cut to prices based on “certainty”, then the other half of your argument better be pretty damn good.

As far as short-term certainty goes, Malcolm Turnbull doesn’t actually need Shorten. His new policy, the national energy guarantee, depends on existing rules, and requires the agreement of premiers. So it might be possible for the government to negotiate an agreement with the states, which a possible prime minister Shorten would have difficulty winding back. Or, alternatively, that agreement might not be forthcoming – the Victorian premier certainly doesn’t seem very kindly disposed [$] – or future premiers may well disagree with their predecessors.

Which brings us back again to the sticking point: real certainty will only exist when Labor and the Coalition agree.

Speaking of words that have drifted away from their meanings, one of the most important things to note in this ragged debate is how dominant particular phrases can become, completely independent of the policies they represent.

In the case of the national energy guarantee, it would be possible to conclude from those who immediately cheered it that it’s terrible. Craig Kelly, government MP and noted climate sceptic, or at least sceptic-friendly. Pauline Hanson. And Labor will make that point.

But it’s not necessarily true, because this assumes a level of nuanced understanding that doesn’t exist. The far-right of the Coalition, and One Nation, long ago drifted away from a rational approach to climate policy. For them it is all about particular trigger words, such as “renewables” or “clean energy”. The national energy guarantee allows the prime minister to say he’s not subsidising renewable energy anymore, which gets the right onside – when in fact this policy is absolutely subsidising renewable energy (more of this in a bit).

Labor understands the policy, but has its own vocabulary-based mysticism, also based around the “clean energy target”. The opposition had already compromised in moving towards a clean energy target (CET), and has been reluctant to adopt anything but a CET. And it is loudly making the point that Turnbull’s failure to adopt a clean energy target is a sign of his capitulation to Tony Abbott.

Labor is absolutely correct on this. If Abbott and George Christensen hadn’t threatened to cross the floor against a clean energy target, there is a good chance Turnbull would have passed one by now – with Labor’s support, thereby delivering actual certainty. And so of course Labor is making that point. But it’s important to note that in setting up the CET as the test for Turnbull, the Opposition is able to avoid grappling with whether the policy on the table is any good.

So, is the policy any good?

There are definitely problems with it, most notably that it doesn’t do what Turnbull says it does.

The national energy guarantee basically does two things. It forces retailers – power companies – to buy certain amounts of reliable energy, like coal. And it forces them to buy certain amounts of low emissions energy, like renewables.

One of Turnbull’s big claims is that he is ending subsidies to renewables. But as the Guardian’s environment reporter, Michael Slezak, put it, “What Turnbull is describing is very clearly two new subsidies – one for low emissions generation, and one for dispatchable generation.” That’s because if a government forces companies to buy from a particular area, they are propping up that area. If they didn’t do so, the companies would just buy the cheapest thing they could. So it’s a subsidy whether you want to call it that or not.

The second major issue is that the policy doesn’t ask the electricity sector to do as much of the work in cutting emissions as you might expect. The reason that matters is that other areas – transport, industry – are presumably going to have to pick up the slack. Frydenberg was asked directly about this today. His answer was poor: let’s leave that for another press conference and focus on the good news, he said. But the concerns raised are a direct result of the policy he announced today. That really wasn’t good enough.   

The question Frydenberg refused to answer also leaves open the possibility – I’d guess probability – that Australia will not meet its Paris commitments on reducing emissions. Again, there is a difference between declaring it will happen and actually making it happen.

As more details emerge in coming weeks, we will get a greater sense of how significant these objections are. While it is a political capitulation, it may not be a terrible policy. The regulators today argued there was merit in mandating reliability and emissions at the same time. If that is the case, it is possible that Labor, having carpeted Turnbull for a while, ends up agreeing. If that happens, Turnbull will get a significant victory, and the “certainty” he was recklessly declaring today.

It does seem likely at this point that at the very least Turnbull got a victory over Tony Abbott. Abbott had warned his enemy not to rush the policy through the party room – but in the meeting itself Abbott found himself isolated. That may change in weeks to come, but it was definitely a positive sign for the prime minister.

And that, in a nutshell, is where Turnbull is at. Today was no major political victory. It was merely a very important sidestepping of disaster. But that is Turnbull’s aim for the rest of the year, and should be acknowledged. Victories will have to wait until next year.  

In other news


Bender’s choice

Tasmanian salmon, from farm to court

Claire Konkes

“Tasmania’s salmon industry is worth about $700 million at the farm gate and employs more than 2000 people, notably in regional areas. Other than a handful of smaller operators, three companies, Tassal, Huon Aquaculture and Petuna, dominate the industry with business models stretched across hatcheries, sea farming and processing. Until recently, these three were on
co-operative, though competitive, terms and enjoyed considerable government support as major employers and ambassadors for Brand Tasmania. But the business of farming salmon is changing and relations have soured. Bender is at the fulcrum, using media and the law to leverage change.” read on


The art of the hustle in the Safdie Brothers’ ‘Good Time’

The lo-fi New Yorkers take on a Robert Pattinson–starring genre thriller

Harry Windsor

“Pattinson has always seemed to me an actor with more taste than talent, making hay while he can by working with directors such as David Cronenberg and Claire Denis, but invariably more committed than convincing. But he’s a revelation here, funny and frantic and displaying none of the ‘I’M ACTING!’ histrionics of, say, Jake Gyllenhaal in Nightcrawler, another study in sunken cheeks and bladed cheekbones. Even better is Benny Safdie, who looks like he’s doubled his body weight and suffered through a scarifying peel in preparation for the role, his face red and blotchy and swollen. Even though he’s out of the picture for much of the film, the wrenching scenes in which Nick tries to communicate, to understand and be understood, are the ones that give the film its emotional – and not just sensory – power.” READ ON

‘Artists in Conversation’

Readers in Victoria can register for free tickets to artist conversations as part of Melbourne Festival, led by the editorial team of The Saturday Paper and the Monthly.

The conversations will feature Melbourne Festival’s artistic director, Jonathan Holloway, and artists from the festival program, to discuss their work and its place in the world. The conversations will take place at the Forum Theatre on Saturdays from 12.30 pm.

To register, simply click the link below and enter your details in the form provided. More details on the conversations and terms and conditions can be found here.

Saturday, 21 October – A Chronicle of Life

Hosted by Nick Feik, editor of the Monthly, Jonathan Holloway, and artists from Germinal and EVER.

Sean Kelly

Sean Kelly is a columnist for The Sydney Morning Herald and The Age, and was an adviser to Labor prime ministers Julia Gillard and Kevin Rudd.



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