Dawn chorus: Political landmines ahead
Climate report plants political landmines for Labour Govt and councils, including killing our love affair with double cab utes and shutting Tiwai Pt without a big project to replace it
TLDR: The Climate Commission’s carbon budgets released yesterday were both ambitious and surprisingly cheap in an economic sense, but a closer look reveals some big political landmines for the Labour Government and councils to deal with quickly.
The Commission estimated costs of achieving the necessary reductions in emissions at just $2b-$4b a year from 2026-35, well below the ‘hundreds of billions’ suggested in previous reports. But that low cost depended on assumptions about phasing out petrol and diesel car and ute imports by 2035, shutting down the Tiwai Pt smelter to free up electricity to reduce retail power costs by 30%, and cutting cow numbers by 15% by mid-century. Those are big assumptions that ute buyers, car dealers, Rio Tinto, the big four power gentailers and farmers would push back very hard against, especially if the Opposition chose the politically obvious attack lines (ie ‘Labour wants to take away your manhood-double-cab-ute and force you to live in a leaky, quaky apartment.)
In the absence of widespread and similarly-priced electric alternatives to double-cab utes and a cooperative electricity sector (I can’t see either within the decade), this would force some very tough or expensive action from the Government, including subsidising electric utes, structural separation of power generation and retailing and spending $10b on big new dams, and helping councils pay for urban densification with big infrastructure and transport spending.
The Government/Treasury’s determination to reduce public debt (see below the usual anti-debt bias from the usual suspects) and Labour’s instincts to avoid the risks of a backlash from median voters in the suburbs will make all of those things very unlikely and difficult. So far, the Government has not shown an appetite to take those politically and financially difficult decisions.
Elsewhere, Australia reopened its one-way travel bubble with New Zealand last night, the EU appeared to ban Covid-19 vaccine exports to a range of countries over the weekend, including New Zealand and Australia, and New Zealand yesterday welcomed Britain’s request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Funny definitions of ‘Pacific’ and ‘Trans’…
Also, the AFR reports this morning UBS is running a sale process for Villa Maria Estates that may value the wine-maker at around A$200m.
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Have a great day
Kia Kite Ano
PS: Thanks to Paul Carrad for a great pic above!
