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Aug 11 2013

Scrutinizing the business lobby’s election agenda

Australia’s federal election is fast approaching (recently rescheduled for 7 September). Recently the Business Council of Australia (BCA) released an “Action Plan for Enduring Prosperity”. Given the disproportionate influence of the business lobby on the non-green political parties, the BCA Action Plan deserves as much scrutiny as the policy documents released by political parties.

The Plan starts from the assumption that indefinite economic growth is the answer to all problems and the cause of none. There’s some handwaving about a need to balance it with a fairer distribution of wealth (if only to limit political opposition to the business lobby), but this principle does not seem to be reflected in any of the recommended policies. GetUp! has already highlighted some of the BCA’s self-serving demands: cutting company tax from 30% to 25%, increasing and expanding the goods and services tax, reducing the minimum wage and penalty rates, and restricting the rights of employees.

Here I want to focus on the BCA’s intentions for climate change and the environment. The Plan acknowledges a need for sustainable use of resources (as an afterthought in a section about ongoing shifts in the Australian and global economy). Yet when you read the chapter on energy policy, you discover the BCA’s main priority is growing the fossil fuel industry, and its most immediate priorities are weakening climate change and environmental policies.

The BCA’s energy policy demands are:

  • Return energy to the forefront of energy policy, instead of having climate policies that work against the BCA’s paramount objective, which is…
  • Develop “our energy resources” and “energy export industry”. These energy exports and resources are primarily fossil fuels, which by their very nature destabilize the Earth’s climate, yet the BCA meaninglessly insists they can be developed “in a sustainable and responsible manner”.
  • Drive growth of fossil fuel exports, which the BCA claims are essential to the Australian economy. In reality, phasing out coal exports would only delay GDP growth by a couple of years.
  • Foster a stable policy environment, to encourage long-term investment. This might sound good, but the investment which the BCA wants to occur would lock in fossil fuel infrastructure that would last decades. It would be better to have a few more years of policy uncertainty than policies which give certainty of an undesirable outcome. I might add that much of the policy uncertainty is being caused by business lobby groups like the BCA who are trying to sabotage climate policies.
  • Limit the strength and costs of Australia’s climate and environmental policies to no more than the efforts of most other countries, to ensure Australia’s economy remains globally competitive and emissions-intensive production does not leak offshore. In reality, global efforts are catastrophically inadequate, Australia’s wealth and high emissions mean we have the capacity and responsibility to lead the world, and in future it will be the countries least reliant on fossil fuels who will be most competitive.
  • Cut Australia’s greenhouse gas emissions only at the lowest possible cost, through a market-based mechanism. (As usual, the definition of “Australia’s emissions” excludes emissions from the burning of exported fossil fuels and includes imported international offsets.) Such a light-touch cheap approach is dubious because climate change is caused by a market failure in the first place, and the cost of climate action is mainly paid by polluting companies.
  • Do not favour any particular technology through subsidies or targets, because this means a higher cost than if the market is allowed to choose which technologies are appropriate. Policies should allow all forms of “clean energy” including nuclear and carbon capture and storage, both of which cannot be deployed at scale in time. This is similar to the energy policy advocated by Paris Hilton. The problem with this approach is, to paraphrase George Monbiot, it is like dieting by eating an extra salad while also eating all the junk food that is making you sick in the first place.
  • Reduce the carbon price to no more than the international carbon price.
  • Scrap the annual reduction in the percentage of carbon permits which certain polluting companies get for free. This reduction is already miniscule, allowing the total number of free permits to rise over time. In my view there should be no free permits, because they dilute the carbon price signal.
  • Reduce the Renewable Energy Target (RET) to account for falling demand, to “minimize the cost to consumers and ensure that the target is not exceeded”. This would effectively halt renewable energy deployment around 2016. Furthermore, the BCA would prefer the RET be abolished entirely, arguing the carbon price will cut emissions at lower cost and in a technologically-neutral way.
  • Invest in “clean energy” research and development. That’s all well and good, but we already have the technologies needed to power Australia with 100% renewables and don’t have time to wait around for cheaper ones to be invented. We urgently need to deploy existing renewable energy technologies.
  • Get the Productivity Commission to review the impact of climate policies on Australia’s competitiveness. The Productivity Commission invariably recommends the weakest possible climate policies.
  • Facilitate $230 billion of planned investment in energy resource projects.
  • Fast-track fossil fuel project approvals and reduce project costs.
  • Scrap federal environmental approval processes, which the BCA claims merely duplicates state-level processes.
  • Develop a National Gas Strategy to develop natural gas domestic and export industries.
  • Erect no barriers to the oil industry.
  • Design energy markets for a balance between reliability and cost. Um, what about greenhouse gas emissions?
  • State governments: Complete the process of electricity market deregulation and privatize the remaining state-owned energy assets. This will supposedly make the electricity market more efficient, but in the past electricity deregulation has increased emissions.

None of this is surprising coming from the BCA. The major parties are already onboard with much of their agenda. The only party who supports the urgently-required phaseout of fossil fuels is the Greens.

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