The Greens Senator for Tasmania tells Climate Spectator editor Giles Parkinson that Australia will end up a global 'backwater' unless we act quickly on climate change and embrace the opportunities of a green economy.

Giles Parkinson: Senator Milne, the polls suggest that the Greens will have the balance of power after the election, but they also suggest the possibility of an Abbott victory.  Have you begun planning on how you might negotiate with a Coalition government?

Christine Milne: Look, it’s absolutely critical that the Greens get balance of power at this election regardless of which party forms government, because there needs to be a strong advocacy voice in the Senate for deep cuts in greenhouse gas emissions and for the transformation in the economy to a 100 per cent renewables as quickly as possible; plus all the energy efficiency measures and protection of the carbon stores, transformation of the transport fleet, and so on.  

I’ve worked in balance of power with a Labor minority government and a Liberal minority government and in those cases we achieved quite substantial reforms. In the Labor minority government we achieved the protection of the Tasmanian wilderness world heritage area. We doubled that. In the case of the period of Liberal minority government we achieved a lot of social reform. We achieved gay law reform, gun law reform and the apology to the Stolen Generations. My experience has been that we have been able to achieve significant reform because we maintain a strong policy position and we’ll negotiate with both sides.

If the Liberals were in government, Labor is likely to be more courageous in opposition than they’ve proved to be in government, so they would be more likely to work with the Greens to drive a stronger agenda than they’ve been prepared to lead with. On the other hand, we would be dealing with a government, in that case, that has no intention whatsoever of reducing fossil fuel emissions. 

GP: Yes, but …

CM: It will clearly take some action on land use, which may or may not reduce emissions, but they won’t address coal exports, coal-fired power or fossil fuels. So, it’s going to be a difficult few years, regardless of who is in government. On the other hand, if Labor is in government, we will drive the agenda with them and if the Greens have the balance of power in our own right, it will remove the Prime Minister’s ability to say that they can’t do something because they don’t have the numbers in the Senate. It will be them trying to justify why they won’t move having said they believe it’s a critical agenda. 

GP: But how…

CM: Either way we will drive change.

GP: But how will you drive change? Because it doesn’t seem to be on the political agenda at the moment? It’s absent from the election campaign.

CM: Well, the natural world is driving the agenda. You only have to read the news to see that  California has just experienced horrendous fires, Russia has just experienced or is experiencing a deep and prolonged drought and wild fires, a 20 per cent loss of its grain crops. Pakistan’s worse flooding ever, 14 million people displaced, and those extreme weather events are going to keep on around the planet and the level of urgency is going to have to drive governments. And I am confident that governments will move. I guess you’d say there is a complete lack of consistency at the moment between what the natural world is doing and what governments are doing.

GP: How do you envisage the actual balance of power working, in regard to climate change policy? Isn’t it just as possible for Labor and Liberal to get together and nut out a compromised policy as they did last time?

CM: Look, it’s going to be a decision of the government of whichever persuasion to decide who they want to work with to get a climate outcome. One thing I was surprised about with the new Prime Minister Julia Gillard, that she said she had learned from the mistakes of Prime Minister Rudd, but that clearly means she didn’t believe that his collapse in popularity was related to his complete back flip on climate change. And as a result, when she did exactly the same thing, by saying she wouldn’t do anything on climate change until 2013, she also collapsed in the polls and has been struggling ever since. And so at some point they both have to realise that the country recognises that they’re not taking it seriously.

So, it will be up to the Prime Minister of the day and, if it’s a Labor Prime Minister, to decide early on whether they want a serious climate policy – in which case they will work with the Greens – or whether they want to fudge, in which case they will work with the Coalition, and the community will see it for what it is. And I think Labor is really going to have to make that decision when it gets elected, but I think the community is making it pretty clear now that they want Labor to work with the Greens for a decent outcome and not with the Coalition to brown it down.

GP: Given what you’re saying about the electoral slip-ups for Rudd and then for Gillard, and also what you’re saying that the natural world is telling us, can you explain why climate change seems to have faded as an issue in this campaign?

CM: Look, it’s very clear that neither the government nor the Coalition want to talk about climate change in the election campaign. It is the elephant in the room. Neither of them wants to talk about it because neither of them has got decent policies on it and if either attacks the other, then it just highlights how pathetic both their policies are. So, there’s almost a conspiracy of silence between the major parties. The Greens are running hard on climate change, but this is being run as a 'presidential election' and it has been difficult to break that two-party nexus on climate, but if you actually go and talk to people on the street, that’s a reason why the Greens are increasing our electoral appeal. Because so many young people, in particular, want serious action on climate change and they know that 5 per cent targets, with 100 per cent permits and and leaving coal-fired generation as it is is just not acceptable.

But the other group of people who are really hardening their resolve and who I think will have the courage to speak out after the election, although not in an election campaign, is business. Progressive business in Australia needs certainty and we now have a critical mass of companies around Australia that depend on getting a carbon price as quickly as possible in order to make investment decisions, and that goes on everything from the renewables through to energy efficiency. Just about every company you can think of is wanting to know which way the wind is going to blow in terms of the carbon price and they want one sooner rather than later because they know it’s inevitable and they’re feeling in no-man’s land at the moment.

GP: Were you a bit a disappointed with their lack of voice during the last debate and do you expect them to become more vocal this time around?

CM: I was really disappointed. When we released a compromised position in January this year, what was very obvious was that business didn’t come out and support it, but equally they didn’t come out and reject it either. They just decided to say nothing to see where it went. There was not a strong opposition to it because it was based on Professor Garnaut’s model. Everybody could see it had the benefit of not locking in a target and therefore not locking in failure, but putting in place the architecture of emissions trading, so that when we eventually got to a decent target, we could move immediately into trading.

Business heard the Prime Minister say, at that time, that he would talk to the Greens and I think they thought that there would be a serious negotiation, so people sat back and waited to see how that went. Instead of that, what the business community didn’t know, and the Greens didn’t know at the time, was that the government was at the same time talking to the mining industry and working out its mining super profits tax and it was talking to the Greens and, in my view, trying to keep all the balls in the air at the same time until such time as they decided whether to go with the mining tax or carbon tax and which one they were going to dump. They ultimately decided on the mining tax and dumped the carbon tax and I think that came as quite a shock to a progressive business who really thought that they wouldn’t do that.

I think business was caught napping a bit and, once the election is over, I think we’re going to see a lot of progressive business out there supporting the environment movement because the compromised position also has the 100 per cent support of the environment movement and that is something the government certainly didn’t have. The environment movement rejected the CPRS as being ineffectual and a waste of $22 billion. I really think that people have hardened in their resolve in recognising that we have to act and there’s an increasing recognition that Australia’s competitiveness is at stake and our vulnerability is increasing by the minute as we stay locked into being a quarry, while other countries start gaining competitive advantage in the technologies of the green economy.

And with India now having imposed a carbon tax on coal and China having announced it will go to emissions trading within five years, the writing is on the wall for Australia. We will end up as a backwater unless we get moving very quickly on, you know, developing a manufacturing sector in this country for the new technologies.

GP: Do you think becoming a manufacturing sector is a realistic aim for the Australian economy though?

CM: When I first started working on climate change and brought out my first major report on it, Re-energising Australia, in 2006, I said that, contrary to what Peter Costello was saying and journalists were saying at the time – that it was all rivers of gold, manna from heaven, you know a rich country – that we were actually extremely vulnerable; that basically we had a terrible current account deficit, that we’d hollowed out the manufacturing sector, that we’d become totally dependent on a few resources as exports and we’d completely underinvested in education – and that that added up to a very poor position competitively, in a competitive global environment. And that one of the advantages of implementing a deep cut in greenhouse gas emissions was that it would drive innovation and investment in research and development, commercialisation and manufacturing for jobs that go with that. And I still believe that’s true, but I think it’s a window of opportunity that is rapidly closing because we’ve already lost a lot of our best brains overseas, working in other countries to commercialise the technologies that they developed here. In my view, we need to do this quickly or else we are condemned to being a quarry for a very long time.

GP: The Greens’ policies got a really good endorsement from the Reserve Bank board member, Warwick McKibbin, who was speaking in a private capacity I think, but he did say that the Greens had the closest to what business required as far as climate change policy goes. That’s not a view that’s actually taken hold, though, across the electorate. The Greens still have that problem, don’t they, of not being recognised as a credible business voice.

CM: Yeah. It’s ironic that, at the moment, the Greens have got a market-based mechanism to deal with climate change. We are the ones driving for the carbon price and a whole lot of policies again that are market mechanisms; with the white certificate trading scheme for energy efficiency, the loan guarantees and other things. But the other parties have an ad hoc, purely regulatory, government grants system which demonstrates very poor economic management – and you only have to see the complete mismanagement of the grant schemes with the insulation and the green loan scheme and the whole management of the solar hot water rebate and so on to see that the government has made a complete mess of even administering the grant schemes that they’ve got. So, we have the Coalition and the government who claim that they are economically responsible, engaged in regulatory and total government intervention in an ad hoc and unpredictable way, and the Greens with a very clear strategy for business that would provide certainty and would reduce emissions at the lowest price.

But it’s not surprising, given that we’ve taken a very strong interest in how to deal with climate change over a long period of time and have learned from the experiences overseas. And there’s no doubt that the growth feed-in tariff is what has driven the renewables in Europe and it still frustrates me that we don’t have a national growth feed-in tariff system consistent across the entire country, simply because the government and the Coalition will not do it and have left us, now, with an ad hoc mess.

GP: Your policy announcement yesterday about $5 billion of loan guarantees to bring new technologies to realisation, now that’s been used quite effectively in the United States. But how would this be funded in Australia and, or how, would it sit in the books?

CM: Well, basically, it’s really the government taking on the risk for the loans and enabling, then, the financial sector to have the confidence to make the loans. In some cases, you know, government could actually put up some of the money for the loans, but it is more likely that you would be acting as a guarantor for the private sector to do that. We’d combine that round two of the solar flagship program and the connecting renewables initiative to have $1.75 billion of grants and then that would be complemented with the loan guarantee schemes with those funds available up to, well, guaranteeing funds up to $5 billion.

GP: Ok. Because a carbon price just doesn’t seem to be part of the debate and it doesn’t seem to be on the agenda of either mainstream political party at the moment, do you regret at any time not allowing the CPRS to go through when it was possible late last year?

CM: No, not at all, because it didn’t do the two things that it needed to do. It didn’t reduce emissions and it didn’t transform the Australian economy – and then thirdly it locked in a scheme that did neither of those things, out beyond 2020, which is beyond the tipping points. So, it wasn’t scientifically effective, it wasn’t economically efficient and it condemned us to failure in terms of climate challenge. And I’m not in the Senate to condone a policy that was effectively greenwash on the climate. And so, from my point of view, what we’ll now have is a discussion about what we do that will be effective, and I’m confident we will end up with a much more effective response to climate change which will reduce emissions. 

The Treasury papers showed that there would be no reduction in energy emissions until 2034 and only then if carbon capture and storage was commercialised. So, it was basically a scheme to guarantee the ongoing contribution of coal generation in Australia for a very long time and that is not transformative. Where was the price signal to drive the transformation to renewables, to efficiency in transport, or anywhere else? It was a failure of a scheme and it would have been morally reprehensible, as well as a waste of money, to pass something for the sake of having something that didn’t actually do what it was meant to do.

GP: Yeah. But do you really think we can get a better outcome at the next sitting of Parliament?

CM: Yes, I do. 

GP: How?

CM: Let me tell you. My experience in politics is that you put on the table what needs to be done.  It is rejected by the major parties until there is a crisis and then, in a crisis, the people with the ideas that will actually work put them on the table, and that is inevitably what is adopted. And that is what will occur. I believe that the world will move on the climate and Australia will have to catch up and, when it does, we have got a comprehensive set of policies across all areas of government and ...in the absence of either the Coalition or the government having a whole of government approach to climate change, the Greens will have that mechanism right across on the table and we’ll get the support of business to implement it, as well as the environment movement and the community.

GP: So, the business community would actually have to come to the fore to make that case for the government?

CM: Yes. And that’s really the challenge, I think, for business in Australia. They’ve sat back because they don’t want to get offside with the government of the day. But it is reaching the point that their future profitability and competitiveness depends on getting certainty, and a carbon price, and when realisation sinks in, they will have to become active.

GP: What about the possibility of working through the states? Victoria has announced a reasonably ambitious emissions reduction package. Is there much hope we’ll be able to work through the states, as I guess is happening in the US in the absence of a federal legislation there?

CM: Look, yes, that’s right. And we’ll work with whoever we can to drive change. But I have to say it’s the second-best option. Working with the states is fine to try and drive the federal government, whichever persuasion, to a better position on climate and on a carbon price, but the problem we might have is the failure of leadership at the Commonwealth level has meant all of the states have now developed different rules, different incentives, entirely different timeframes and the result is business is left trying to deal with six or seven regimes at any one time, and that is highly inefficient. It’s setting us back, in terms of actually getting a consistent level of investment and business knowing where the future is for them, in this area of renewables and efficiency.

GP: Senator Milne, thank you very much.

CM: Thank you.