Going back to go forward? The road to climate bi-partisanship in the 2016-19 Parliament

The 2016-19 Federal Parliament will play a major role in defining Australia’s long-term climate policy framework, with the major parties expected to work towards policy bipartisanship, and market certainty, as the last parliament prior to the conclusion of the Kyoto Protocol in 2020.

Should the government be returned, a RET-style compromise on climate policy may be within reach between the ALP and Coalition. While the major parties are divided on the most effective mechanism to reduce Australian greenhouse gas emissions, the influence of expected kingmaker Nick Xenophon, may support this process, with Xenophon’s 2009 ‘baseline and credit’ policy (adopted by then opposition leader Malcolm Turnbull) potentially creating a bridge between the ALP’s proposed ETS framework, and the government’s safeguard mechanism.

Agreement on a preferred policy structure may – in theory – be readily achieved, with the similarity of the Coalition, ALP and Xenophon policy frameworks able to provide a platform for compromise between the parties. Notably, the existing design of the ALP and Coalition policies, including separate schemes for the power and industrial sectors, a low ambition first phase prior to 2020 and greater ambition in the post-2020 period, suggests that Australia may already be surprisingly close to climate policy bipartisanship. In this context, the willingness of the parties to engage, and the ability of the Prime Minister to find consensus within his own party room, are likely to be greater roadblocks than policy design.

In this update, we take a closer look at the platform for bipartisanship in the 2016-19 parliament and the potential structure of a compliance market formed between the Coalition, ALP and Nick Xenophon Group. We also analyse timing scenarios for the implementation of policy, amid speculation that a returned Coalition government may explore a “fast tracked” policy review process in order to establish a more workable climate policy earlier than expected.

 

Restricted Access

This is a subscriber report. Please login to access this content.

Not a subscriber?

To learn more about our research services for the Australian energy and emissions markets, click the button below, or email our subscriptions team.

Sign up for regular insights

LATEST UPDATES

  • UPDATE: Short- and long-term ACCU spot price impacts of COVID-19

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    International carbon prices have tumbled amid fears that a COVID-19 induced economic downturn will curb […]

    Analyst Alerts, Research Insights | March 26th, 2020
  • ALERT: COVID-19 service continuity and client support information

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Dear Subscriber, As the COVID-19 situation evolves, we will continue to provide our regular research […]

    Research Insights, Service Alerts | March 24th, 2020
  • ALERT: Inclusion of AEMO “Step Change” scenario in Australian Electricity Outlook (AEO) service

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Dear Subscriber, Following the release of AEMO’s draft 2020 Integrated System Plan, the Alternative Case […]

    Research Insights, Service Alerts | March 13th, 2020
  • WEBINAR: The Australian Carbon Price and Net-Zero Emissions – Where to next?

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    As pressure builds for Australia to develop a more ambitious long-term emissions target ahead of […]

    Research Insights, Webinars | February 25th, 2020
  • OUTLOOK: Long-term carbon price, supply and demand outlook (Q3 FY19-20)

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The Safeguard Mechanism covers greenhouse gas emissions from Australia’s largest emitting facilities, extending to 450 […]

    Outlook, Research Insights | February 11th, 2020
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone