Lawmakers defeated the Australian Government's climate change bill in a vote in the Federal Senate, driven by unusual political circumstances and parliamentary rules governing something called "a double dissolution election."
The Rudd government has maintained that it is essential for the nation's climate bill to be passed before UN climate negotiations in Copenhagen, but its efforts to have the bill passed in time are being thwarted.
The Carbon Pollution Reduction Scheme (CPRS) is the centerpiece of the Rudd Government's climate and energy policy agenda. It seeks to implement a national cap-and-trade scheme with an 'unconditional' emissions target of 5% below 2000 levels by 2020. A more ambitious 25% cut will be established if a 'strong' global agreement can be reached in Copenhagen this December.
By comparison, the EU has agreed to reduce emissions 20% below 1990 levels by 2020, and will cut them by as much as 30% if other developed countries make comparable efforts. Pending U.S. legislation calls for cuts of 17% below 2005 levels by 2020, and 83% by 2050.
Rudd's centre-left labor government faces opposition in the Senate, where it must win the support of either the conservative Liberal and National parties, or a combination of the Australian Greens and two independent senators to pass the legislation.
But each party has divergent views on national climate policy, and despite recent polling that shows a majority of Australians support the government's legislation, public opinion has failed to encourage compromise. Australia is the biggest per-capita carbon polluter in the developed world, relying primarily on coal for about 80% of its power generation.
The eventual passage of the bill is further complicated by the possibility of a 'double dissolution election'. When the Senate rejects a government's bill on two occasions—which is a much-discussed possibility for the CPRS legislation—a special election is held for all members of parliament in an attempt to break the deadlock.
A double dissolution election would benefit some political parties and would disadvantage others, and the prospect has increased the hostility between the government, opposition, and minor parties.
While the Rudd Government will struggle to secure the passage of the CPRS, it finds itself in the paradoxical position to benefit significantly if it fails again. Welcome to climate politics, Australian style.
The most recent electoral polling suggests that an election would favor the government since considerable electoral losses are anticipated for the Coalition parties. With twice the number of seats contested, a double dissolution is particularly advantageous for the Greens who support climate policy but refuse to back the government bill. As the proportion of votes required to win senate representation is halved under this scenario, electoral support for the Greens will likely translate into an increase in parliamentary representation.
The pending bill seeks to implement a cap-and-trade scheme, but in a political maneuver designed to put pressure on the Greens, the Rudd Government controversially included a national renewable energy standard in the legislation. This means that the fate of the renewable energy standard is tied to the support for the emissions trading bill.
The Federal Opposition, comprised of the Liberal and National parties, voted against the Rudd Government's climate bill but is yet to adopt an alternative policy position. Agreement on climate policy has proven too difficult for the embattled Opposition Leader Malcolm Turnbull, but the defeat of the bill gives the leader a few more weeks to establish a policy position.
In an attempt to stave off government attacks on the lack of policy, Mr. Turnbull released economic modeling for an alternate emissions-trading scheme based on the so-called 'baseline and credit' model. The model drew harsh criticism from Climate Change Minister Penny Wong, who branded the policy a 'mongrel' during her address to the National Press Club. Minister Wong added that such a model made poor sense given that the US is joining European nations by implementing a cap and trade policy.
Minister Wong also criticized the Greens for 'playing politics' with the climate bill, citing Greens Senator Christine Milne 'talking up' the prospects of Greens candidates in a double dissolution election.
While the Australian Greens support efforts to price carbon through the implementation of a cap-and-trade scheme they have called for much stronger targets of 40% below 1990 levels by 2020. The Greens' main line of attack is that the CPRS legislation, as it stands, would 'lock in failure'.
The Government has sought to counter this claim by releasing a report through the Department of Climate Change that forecasts Australia's emissions to increase 120% by 2020 in absence of the CPRS.
The Rudd Government's is expected to reintroduce the climate bill to the Senate in November setting the trigger for a double dissolution election. With electoral fortunes on the line, Australian climate policy is sure to be high stakes for the foreseeable future.