The Finkel Review is well and truly out and the protagonists of this Australian story are limbering up for a tedious sequel to the climate war. The plot is so not original. An energy crisis in South Australia, driven in part by extreme heat events and a lack of investment in base load gas generation, itself the victim of a climate policy vacuum, led to the Review.
The political dynamics in Canberra has to-date prevented rational, lowest cost climate measures from being considered. The politics require no disadvantage be imposed on any industry, community or constituency. But this inadequately acknowledges the cost to the next generations of unbearable heatwaves, super storms and deluges. The costs of a transition to a carbon free future must not be imposed on this generation, especially when the sceptics believe projections are questionable, and the mitigation ineffective.
The sceptics think carrots alone will entice this climate beast to change course. No stick waving. The beast is imagined and not real anyway. Even if it is real, no stick is big enough to make a difference. They have all their bases covered.
Compromise is the cornerstone of diplomacy. But in these polarised times, a diplomatic solution is a weak one. It may seem the best possible deal. But will the medicine cure the patient?
The Greens are clear in what they think: A Clean Energy Target (CET) that doesn't penalise coal will not drive decarbonisation fast enough to meet the Paris Agreement objectives; the current government commitment for a 28 to 30 percent greenhouse gas (GHG) reduction against 2005 levels is not consistent with the ambitions of Paris (which would require a reduction closer to 45 percent); and a CET that is based on those inadequate targets is by default not good enough.
Those on the other side of the fence reject the report, ostensibly for the damage it would unleash on the fossil fuel industry and the impact this would have on communities, national competitiveness and, ultimately, voters who keep our politicians in power.
They are also correct. Economic transition is never easy or pain free. Like a diet, the outcome may be desirable but the journey is, to many, unthinkable. The vulnerable in the community will be at greatest risk to the consequences of climate change and will need protection. The communities that will suffer from the decline of industries from which their livelihoods are derived must be adequately supported through the painful period of change.
But change we must. At the heart of all this drama and an often missed point, climate change is real and is driven by human activity. The science is undeniable. The forecast for our planet, the environment and our communities is not pretty. We don't want to go there. Some cope by denying any of this is happening. But the longer we dither, the harder others will need to work to slow the pace of change. And the more we will need to pay to repair the damage and compensate victims. The business community accepts this and many organisations are at varying stages of factoring climate policy and physical risks into strategy and risk responses.
So back to Finkel.
It has been called a very shrewd solution to the political deadlock. I really hope so. It has been called a cop out- ineffective, benign. I disagree. It may not be as strong as needed to be on par with Paris, but not many countries' policy settings currently enable alignment. Paris acknowledges and encourages the ramping up of ambition gradually.
We have to get back on the road of bipartisan climate action first. We can debate about how hard to step on the pedal tomorrow, but please let's get this show on the road today. I really don't mind if this sequel to CPRS, ETS or Carbon Tax is boring or tedious. If we can do this and provide investment certainty, then maybe we could crack this energy trilemma.
But we must get out of this ‘try-lemma’ paralysis now. It's not good for our businesses, our people or our planet and we all need to talk to our representatives in government to make our views clear.
This article originally appeared in the KPMG NewsRoom.
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