Most of the teal independents who won seats on Saturday want a 60 per cent cut and Greens are demanding a 75 per cent drop, a goal that experts warn would cause considerable short-term economic pain.
Financial markets, including stocks of companies potentially exposed to any unexpected swings in climate policy expectations, took Saturday’s election outcome in their stride, despite victorious Greens and teal independents clinching a parliamentary “super-majority” for greater action.
Flush with the success of picking up three extra Senate seats, Greens leader Adam Bandt said on Monday that there was obligation on Labor to work with him to tackle the climate crisis.
“That starts with coal and gas,” he said. “We’ve been very clear that in this parliament we have to come up with a plan for coal and gas. This has to be the year that Australia’s pollution starts peaking and that we keep coal and gas in the ground.”
Former WA Premier Colin Barnett told the Financial Review that WA’s vast Scarborough gas project crystallised the dilemma of Saturday’s election outcome for Prime Minister Anthony Albanese.
“If it’s approved, there will be an outcry from the Greens,” he said.
“But climate change is what people talked about and Labor talked about [at the election] so it will be difficult to achieve a tougher target for 2030 when you’ve got a big project like Scarborough.
“The project needs to happen, but it’s going to be a dilemma for Albanese because a lot of people would say he’d be breaking his word – the emissions out of Scarborough dwarf everything else.”
Labor doesn’t need the Senate
But Labor sources said that the Greens would not divert the new government from its agenda and that Mr Bowen should call their bluff given almost all of his climate agenda could be implemented without legislation. That includes the upgraded emissions reduction target and planned tweaks to the Coalition’s safeguard mechanism to force more cuts by big emitters.
Resources giant Whitehaven Coal said Labor had “previously confirmed its support for Australia’s coal and gas export industries and the many thousands of workers it employs right across the country”.
“Given the new government’s concerns around budget repair, we see our booming export industries playing a major role in paying down Australia’s burgeoning debt so we can more responsibly rise to meet the challenges we face as a nation,” Whitehaven CEO Paul Flynn said on Monday.
“To do this, it is essential the government supports the competitiveness of our export industries, including our more emissions-intensive sectors.
Devil in the detail on safeguards
“This is why we have called for further detail around proposed changes to the safeguard mechanism, and we look forward to consulting with Labor ahead of any further policy design and implementation.”
Minerals Council of Australia chief executive Tania Constable said in a written statement on Monday: “The MCA regularly engages with the major political parties on policy issues and our position is well known and on the public record.”
Despite Labor’s assurances, some inside the resources sector privately say they are concerned about the “devil in the detail” to changes such as the safeguard mechanism.
Labor’s promise to consult and protect trade-exposed industries were a loophole big enough to “drive a truck through”, said one source.
Barnaby Joyce hinted that the National Party might dump its support for net zero after Saturday’s defeat, saying that would be an issue for the party room “in the next fortnight”.
“In all things after an election, on all policy, there’s a discussion. That’s not saying that you are going to drop it, or you’re going to stick with it,” he said.
“It says that we allow people in the dignity of our room to reflect on what was pertinent in their electorates, and I’ll be letting them have that discussion rather than speaking from a pulpit about what they should say.”
Outgoing Coalition resources minister Keith Pitt said Australians “will soon see how much” the shift away from fossil fuels would cost the nation.
Meanwhile, David Pocock, the Wallabies legend on the cusp of knocking off Liberal Zed Seselja in the ACT Senate race, was asked whether he would push Labor to be more ambitious, and said he would back calls for a 60 per cent emissions cut by 2030.
“The economics have changed so much over the last decade. We have to get on with it,” he said.
“It has got broad backing and from there, I think we will find this is a massive opportunity for our economy but also for households to save money, get off foreign oil. There are so many benefits.”
Bandt wants to halt new projects
Mr Bandt insisted the new parliament would need to halt new oil and gas projects.
“There’s no basis on which you can say, from a climate perspective – or even from an economic perspective – that any new coal and gas mines stack up,” he said.
“The International Energy Agency, the world’s scientists, the United Nations Secretary-General, have all said that to meet net-zero goals, there can be no new coal, oil or gas projects starting from now.
“That is the environmental and economic reality. That is something that we will be pushing for in the next parliament.”
The muted response on financial markets to Labor’s win was partly because businesses are already adopting more aggressive net-zero policies, according to Forager Funds chief investment officer Steve Johnson.
“The biggest change is probably climate-related, and it’s generally uncertain as to what that will look like. The impact on business is a long way down the track, so the immediate outlook is not dramatically different,” he said.
Mr Barnett, who was WA premier between 2008 and 2017, said a big problem with the pre-election debate was that it was mainly about “targets instead of actually getting on with the job”.
He warned that any decision to kill the Scarborough project would be a “massive disappointment” for WA, where Labor picked up four extra seats on Saturday.
“It’s a major project. It guarantees the continuance of the Northwest Shelf at its current production levels and allows the expansion of Pluto.”