Home > ALP, Corporation > Rudd’s Climate Change Policy Back Flip on the ETS Appeases Big Business

Rudd’s Climate Change Policy Back Flip on the ETS Appeases Big Business

Paul Kelly is not my favourite cup of tea, but every now and then he offers up pretty good analysis. His latest essay, in today’s The Australian, on Rudd’s ETS back flip is definitely in the latter category.

He calls this the most damning back flip by a Prime Minister in decades. Kelly would be accused of exaggerating a tad, but I don’t think so. Kelly correctly points out that Rudd defined the issue in very stark moral terms, even in terms of survival. Climate change is the leading moral issue of our times, so Rudd’s argument went.

The mismatch between the back flip, for reasons of political expediency, and the declared moral stakes does indeed raise core issues about the credibility of both Rudd and the government he leads. Kelly might have added that the same applies to his intellectual cheerleaders.

But, of course, maybe Paul Kelly doesn’t understand things properly. You see for Robert Manne, who knows better, Rudd is “an intellectual in politics.”

However Kelly, and most other commentary in the corporate media, makes one major error. It is true that the back flip is due to political expediency. This is how Kelly explains it in his article

In truth, Rudd has lost his nerve. This is a political and policy retreat. He says the ETS remains “the most effective and least expensive” means of combating greenhouse gas emissions. His tacticians will call this smart and they may be right. But it betrays a government weak to its core. Understand what this is about: it is giving Rudd a political strategy to maximise his re-election by removing the only mechanism he had to deliver his ETS policy. He has chosen safe politics over policy delivery. Any voter who believed Rudd was genuine about climate change needs to reassess

Polls actually indicate that support for an ETS type policy remains high even following the failure of the Copenhagen summit. Take a report in today’s The Age on the ETS back flip by Michelle Grattan

A Lowy Institute poll, released yesterday, found 72 per cent agreed ”Australia should take action to reduce its carbon emissions before a global agreement is reached”. But 33 per cent were not prepared to pay anything extra to help solve climate change. An Essential Research poll showed 57 per cent rated the government’s performance as ”poor” in handling introduction of a scheme

Those figures are fairly consistent with Rudd’s previous climate change policy; put in the ETS at a low CO2 cap and then wait for the rest of the world to move as well and then raise the cap. I don’t want to argue here whether Rudd’s policy was the way to go or not.

The point here is that it is consistent with public opinion. Rudd couldn’t have ditched a core policy so easily based on fear of a public backlash pre-election. This gives Abottman too much credit. Not even Rudd is this brittle.

What has happened here is that Rudd is appeasing big business, especially the Australian Industry Group and the Australian Chamber of Commerce. You can see that when you take on board the tail end, the most important end, of Grattan’s article

But the Australia Industry Group said industry remained committed to reducing emissions. The Australian Chamber of Commerce and Industry said the delay was a ”step in the right direction”

The Chamber hasn’t really been on board with Rudd from the start. Since Copenhagen the AIG has gone cold on the ETS. It’s true that energy sector companies are not happy due to investment uncertainty but the Chamber and the AIG outweigh them, especially the latter.

Rudd wants to lock in the support of big business pre-election. He understands that Abottman has faltered with big business, so the two are now engaged in a competitive race to secure the backing of the big end of town.

This race will determine the outcome of the election. The ETS back flip should be seen in this context.

It will be interesting to see what Rudd’s leading kiss asser in academia will write in the next edition of The Ruddly.

Kelly liked to take pot shots at Grattan in his work of comedy, The March of Patriots, but she is way better than he.

Categories: ALP, Corporation
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