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Indirect inaction insufficient

By Andrew Leigh - posted Tuesday, 22 October 2013

Australians just experienced a winter of discontent; the hottest on record.

We are bracing ourselves for a shocking summer. It has been too hot in NSW to even continue property-saving hazard reduction. Climate change is a clear and present danger to the nation.

This is no time to be playing political games on climate change. But, alas, Environment Minister Greg Hunt seems to be doing just that: putting up repeal legislation without a detailed alternative plan to tackle climate change.


The Coalition’s vague Direct Action policy will do less and cost more than a carbon price. It’s hard to find a serious economist who will argue otherwise.

In May 2011, Malcolm Turnbull pointed to the flaws in Direct Action: “Liberals reject the idea that governments know best. Schemes where bureaucrats and politicians pick technologies and winners. Doling out billions of taxpayers’ dollars is neither economically efficient nor will it be environmentally effective.”

Turnbull later described Direct Action as having the “virtue” of being easily terminated.

“If you believe climate change is going to be proved to be unreal, then a scheme like that can be brought to an end.” Not much consolation after the hottest 12 months on record.

My colleague Mark Butler was spot on when he said last week that the legislation the government would present to the parliament in November was simply duplicitous:

“(It) presents parts which he (Greg Hunt) thinks are attractive to the parliament very quickly and leaves those bits which he knows have failed over three years to attract one single significant supporter from the climate science or the economics field.”


In 2009, Turnbull wrote: “It is not possible to criticise the new Coalition policy on climate change because it does not exist. Mr Abbott apparently knows what he is against, but not what he is for.” Today the same is true. Just as they have played “hide the boats” and “hide the ministers”, the Coalition is now playing “hide the legislation”.

Negativity and secrecy were hallmarks of the Coalition in opposition. Not much has changed in government.

Coalition members should remember that a mandate means people who campaign on a platform should vote that way on the floor of parliament. For example, the Coalition took a carbon pricing plan to the 2007 election, so failed to recognise their mandate when they voted down carbon pricing in 2009. What a mandate does not mean is that parties should abandon their election pledges if they lose.

Sure, Mr Abbott’s life would be easier if my Labor colleagues and I turned into rubber stamps, but that’s not how democracy works. Mr Abbott should instead focus on the approach for which both parties have a mandate: ending the fixed price period on July 1, 2014, and moving immediately to an emissions trading scheme.

If he did that he could still claim that he had “axed the tax”, but we would be left with a low-cost alternative. Instead, households will end up paying thousands of dollars a year to pay polluters: in a bizarre command-and-control scheme that won’t do the job.

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This article was first published in The Australian.

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About the Author

Andrew Leigh is the member for Fraser (ACT). Prior to his election in 2010, he was a professor in the Research School of Economics at the Australian National University, and has previously worked as associate to Justice Michael Kirby of the High Court of Australia, a lawyer for Clifford Chance (London), and a researcher for the Progressive Policy Institute (Washington DC). He holds a PhD from Harvard University and has published three books and over 50 journal articles. His books include Disconnected (2010), Battlers and Billionaires (2013) and The Economics of Just About Everything (2014).

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