Australia's Changing Climate-Change Climate

Costly cap-and-trade legislation isn't the political winner it once was.

THE WALL STREET JOURNAL APRIL 29, 2010  By TOM SWITZER



It was always going to be an uphill battle for the U.S. Congress to pass comprehensive climate and energy legislation in an election year. But with Senator Lindsey Graham's likely decision to withdraw his support from the landmark bill, the prospects are now virtually zero.



That is not just because Mr. Graham had been the only Republican senator to endorse a broad approach to tackling global warming. It's because the climate, politically speaking, has changed dramatically since June when the House of Representatives narrowly passed a climate cap-and-tax bill. President Obama's decision to make immigration reform a higher priority in the Senate legislative calendar is a recognition of this reality: Cap-and-tax is dead. And not just in Washington either.

Costly cap-and-trade legislation isn't the political winner it once was.

All over the globe, politicians of different ideological stripes are reconsidering the costs of slashing greenhouse gases to combat the speculative problem of global warming. In France, the government of President Nicolas Sarkozy has shelved its carbon-tax plans. In Canada, cap-and-trade is stalled in legislative limbo. In Japan, Prime Minister Yukio Hatoyama is struggling to pass an emissions trading scheme. In China and India, leaders insist they won't sign a global agreement to cap emissions, which they see as an economic suicide pact. Even in New Zealand, pressure is building on the conservative government of John Key to delay the implementation of a cap-and-trade plan.

The changing climate is most evident in Australia. This week, the Labor government of Prime Minister Kevin Rudd decided to shelve its own proposed cap-and-trade for three years. Mr. Rudd had discovered that after the Senate had twice rejected his centerpiece policy of cutting carbon emissions by 5% to 15% from 2000 levels by 2020, it would defeat the bills in a third vote in several weeks. It is believed that Labor's retreat from climate change will save Canberra about 4 billion Australian dollars ($3.7 billion) in the federal budget on May 11.



Mr. Rudd's backflip not only amounts to what the nation's leading political commentator Paul Kelly describes as "one of the most spectacular backdowns by a prime minister in decades." It also represents a victory for conservatives who have opposed what the center-right Liberal leader Tony Abbott says is "great big tax to create a big slush fund to provide politicized handouts, run by a giant bureaucracy." Put simply, they did not follow the Canberra press gallery's script that Australia, which accounts for 1.4% of global greenhouse gases, should lead the world on emissions reductions.



This marks a big shift in the intellectual winds—not to mention political strategy—swirling around this issue. Since the election defeat of Liberal Prime Minister John Howard in November 2007, the climate debate had been conducted in a heretic-hunting, anti-intellectual atmosphere. Not only was it impermissible to question the science of man-made global warming, it was deemed blasphemy that anyone dare question the government's policy response. Conventional wisdom held that if the Liberals opposed cap-and-trade, it would lead to a massive backlash against the opposition parties at the ballot box.



This argument increasingly fell apart after the collapse of December's Copenhagen Summit attempt to agree to a world-wide framework for emissions cuts. Suddenly the Liberals started to look more like part of the global mainstream than Mr. Rudd. He had, after all, once declared climate change the "great moral challenge" of our time, and only months ago linked climate "deniers" with "conspiracy theories" and "vested interests." Fewer world leaders agreed with him than he had apparently reckoned.



Credit goes to Mr. Abbott. By subjecting Labor's agenda to impose potentially crushing costs on business and consumers to some much-needed scrutiny, the center-right leader has helped change the political climate down under. To be sure, other factors have been in play: Wall Street's meltdown, record northern-hemisphere winter snowstorms, climategate and glaciergate, and not least the Copenhagen failure. But by spelling out in the most forceful and coherent language how cap-and-trade amounted to economic pain for no environmental gain, Mr. Abbott has comprehensively wrong-footed Mr. Rudd.



In the process, the conservative Liberal warrior is setting a global trend. Although he opposes emissions trading and a carbon tax, his case is not an appeal to do nothing. Indeed, he champions environmental measures with a A$3.2 billion direct-action plan that includes planting 20 million trees, putting solar cells on a million roofs by 2020 and providing incentives for industry and farmers to reduce emissions through measures such as storing carbon in soil. Meanwhile, he downplays the overheated claims of rising sea levels, melting glaciers and disappearing polar bears. It seems climate scepticism is cool now.



All of this has consequences for the next round of global climate talks in Mexico City in December, where world leaders hope to map out a successor treaty to the Kyoto Protocol which expires in 2012. Judging by Messrs. Rudd's and Obama's rapidly changing priorities in recent days, hopes for any verifiable, enforceable and legally binding agreement to reduce greenhouse gases—and to include developing nations such as China and India that are polluting their way to prosperity—are a chimera. The climate is indeed changing.



Mr. Switzer is a research associate at the United States Studies Centre at the University of Sydney and editor of the Spectator Australia.