(Image: Mitchell Squire/Private Media)

On Friday afternoon after the final sitting week of the year, Opposition Leader Anthony Albanese dropped Labor’s long-awaited climate policy, committing to a 43% reduction in emissions by 2030.

It’s a goldilocks plan, aimed at lowering emissions while avoiding Coalition scare campaigns and retaining support of workers in the fossil fuel sector who deserted the party at the last election.

A 43% cut is less ambitious than the 45% reduction Bill Shorten took to the electorate in 2019. It’s also lower than that of the Greens and environmental groups (obviously) and the business lobby (less obviously) are calling for. But it is more closely aligned with existing targets both at a state level — the NSW Liberal government has committed to a 50% reduction by 2030 — and internationally. By strengthening the medium-term emissions target, unlike the Coalition, Labor will make good on the COP26 pact. 

Key to Labor’s plan is mobilising the safeguard mechanism, a part of the government’s climate policy architecture, which aims to make big polluters keep emissions in check. The opposition also promises to drive down electricity prices, make electric vehicles cheaper and, importantly, create 64,000 direct jobs and a further 540,000 indirect ones by 2030. This is based on modelling conducted by energy consultants RepuTex, which unlike the government’s was released with the announcement.

It’s a policy that is somehow both brave and cautious. But will it work?

The response

The initial political response was unsurprising. On the left, there was Greens Leader Adam Bandt who claimed it was a sign the party had “given up” on climate. The Greens want a 75% reduction in emissions by 2030, and net zero by 2035. This target is recommended by the Climate Council, which on Friday called Labor’s policy a “step in the right direction”. A more ambitious target would likely be the only way to limit warming to between 1.5C and 2C.

But Labor must grapple with a political reality in which a decade of Coalition scare campaigns have made greater ambition on climate toxic to large swathes of the electorate it needs to win to form government. Morrison was quick to frame Labor’s plan as one which would “drive up electricity prices and drive out jobs”.

Morrison and Energy Minister Angus Taylor will hammer Labor with another scare campaign pitched at voters in places like the Hunter and regional Queensland. Labor’s energy spokesman Chris Bowen, who will front the National Press Club today, says he expects the government to lie about Labor’s policy. 

This time, though, the scare campaign faces two challenges. First, the world and, importantly, the domestic business community have shifted on climate. In 2019 the Business Council of Australia called Labor’s 45% target “economy-wrecking”. Now it wants a more ambitious 50% reduction by 2050, but has welcomed Albanese’s target. With moderate Liberals in urban electorates facing pressure from independent candidates over the government’s lacklustre climate approach, the Coalition must also be wary about attacking Labor’s ambition.

Second, this time Labor’s plan has been carefully modelled from the outset, which it hopes will negate attacks it faced at the last election about its climate policies not being adequately costed.

Does the modelling work?

But the modelling underpinning Labor’s plan has come under fire from within the party’s tent. Writing to The Australian, former MP Jennie George — who represented a blue-collar electorate in the Illawarra — questioned the assumptions behind Labor and RepuTex’s claim of 604,000 total jobs.

Whether that projection comes true depends on the multiplier — or how those direct jobs in the renewables sector would lead to indirect jobs. University of New South Wales economist Richard Holden tells Crikey there is “a paucity of really good evidence around job multipliers”.

“A number like four is the sort of number from direct to indirect jobs that we generally use at a total economy level,” he said. “That’s the accepted number, and I think that’s roughly consistent with what [Labor is] doing.”

Holden says he was encouraged that Labor’s plan uses a market mechanism to lower emissions, while going beyond the politically safe option of simply matching the government’s target.

Giles Parkinson, founder of energy news service Renew Economy, says although the headline target was modest, the assumptions in the modelling about renewable energy use and electric vehicle uptake were ambitious and encouraging. Labor’s plan forecasts 82% of electricity will come from renewable energy by 2030, with electric vehicles making up 89% of new car sales.

“The modelling is quite reasonable, and it’s refreshing that a major party is talking this way, and making those sorts of assumptions,” Parkinson said.

“In the past, such predictions were bandied as being completely fanciful and unrealistic. Now it’s from a major party, and based on pretty solid stuff.”

It’ll be years before we know whether those jobs will appear, or whether those forecasts about the growth in renewables hold up. Before that, Labor must withstand the scare campaign, and sell its plan to a divided electorate.