First, Tony Abbott predicted the carbon tax could “wipe out” Whyalla. Then he envisaged it squeezing the life out of the economy, like a python. The political rhetoric has been colourful, to say the least, but the Coalition and Labor actually share a quiet consensus on climate change.

Both parties have committed to unconditionally cutting Australia’s greenhouse gas emissions by 5 per cent below 2000 levels by 2020. And both say they will increase the target to 15 or 25 per cent depending on international climate action.

Tony Abbott inspects a soil carbon project in 2010.

Tony Abbott inspects a soil carbon project in 2010. Photo: Simon Chamberlain

But, while the parties agree on the short-term emissions targets, there is bitter disagreement about the best way to get there. Abbott has “pledged in blood” to axe Labor’s carbon price – in place since July 2012 – as his first act as prime minister.

Advertisement

He would replace it with the Coalition’s direct-action climate policy, unveiled in February 2010.

Labor, meanwhile, has pledged to move a year earlier to an emissions trading scheme, with a price set by the market.

The stakes are high. Investment decisions made during the term of the next Parliament will determine which energy and industry projects are up and running before the 2020 emissions target deadline. And policy uncertainty changes what kinds of projects are backed.

“It’s really the next couple of years that are important,” says Oliver Yates, the chief executive of the Clean Energy Finance Corporation, an agency the Coalition has vowed to dismantle.

“If we have uncertainty, it increases the cost of all projects because all lenders have to account for higher risks. . . . Efficiency increases with certainty.”

Australia faces a significant challenge to cut emissions. The economy and power sector are highly carbon-intensive and emissions for each person have historically been the highest in the developed world.

To meet the 5 per cent target, the government estimates we must cut about 750 million tonnes of greenhouse gas emissions between 2013 and 2020. If a 25 per cent cut was adopted, it would be 1.26 billion tonnes.

continue reading All the dirt on carbon.