Net zero: The Coalition's slow, tortured path to a climate compromise

As other countries raced to lift climate targets and phase out coal and gas, Morrison boasted that Australia would show the world how technology could help the resources and heavy manufacturing sectors survive in a carbon neutral world.

"I call this the Frank Sinatra approach," Morrison told a room filled with executives from the nation's biggest miners, before loosely paraphrasing one of the American singer's most famous songs.

"We're going to do it our way in Australia, the Australian way".

The Australian way, or the Morrison way, is an approach forged through compromise, shaped in the tussle between the powerful global forces pulling the government in one direction and the domestic and internal political realities dragging it in the other.

The federal government is next week expected to unveil a long-awaited plan to decarbonise the Australian economy, just in time for the start of next month's UN Climate Conference in Glasgow.

The government's long-favoured "low emissions technologies", in particular green and "blue" hydrogen, will do the heavy lifting. There will be no carbon tax, in that name or under another guise.

Much of the political debate on this highly technical and complex policy area has coalesced around a two-pronged question; will Scott Morrison's Liberals and Barnaby Joyce's Nationals agree to commit Australia to reaching net zero emissions by 2050, and if so, under what conditions.

The question doesn't have an answer - yet.

Almost 130 countries have made the commitment. It is not a controversial position on the world stage, in fact it's seen as a bare minimum aspiration as global attention shifts to accelerating emissions cuts this decade amid warnings the Paris temperature targets could soon slip beyond reach.

But the proposition of a firm date to reach carbon neutrality has split Australia's government, a little over three years since infighting over another energy policy - the National Energy Guarantee - sparked the coup which ended Malcolm Turnbull's prime ministership.

Morrison will not seek to legislate a net zero target, meaning he'll avoid the prospect of recalcitrant MPs threatening to cross the floor of parliament in the months before an election.

But that doesn't mean there won't be fireworks.

At one extreme of a divided Coalition is a group of predominately inner-city Liberals who, under pressure from voters worried about global warming and facing challenges from Greens and independents, have pushed for stronger targets.

At the other is a small band of Nationals, led by Queenslanders Matt Canavan, who are outright opposed to policies they insist will wreck the economy.

Joyce was, while on the backbench, a lead member of that band.

His willingness to countenance a net zero deal with the Liberals, let alone lead a party which signs up to one, suggests that either his view has drastically changed or that options are on the table which give him comfort that the clean energy transition can be made at no cost to regional jobs, communities and industries.

In other words, a plan which cuts emissions but somehow protects the industries which generate them.

Joe Biden's triumph over Donald Trump in the November 2020 US election changed the dynamic in the global climate fight. Biden rejoined the Paris Agreement in one of his first acts of businesses and placed climate action at the centre of his presidential agenda.

What cover the Trump administration provided the Morrison government to resist international pressure to go further on climate was blown off by Biden. The UK's Conservative Prime Minister Boris Johnson has pledged a 68 per cent 2030 target, proving that climate action is not only the domain of progressive parties.

Morrison maintained throughout late 2020 that his government aimed to achieve net zero in the "second half of this century".

But in a speech to the National Press Club on February 1 outlining his priorities for 2021, he adjusted that ambition, if only slightly.

"Our goal is to reach net zero emissions as soon as possible, and preferably by 2050," he said.

The modest step forward sparked a major backlash, led by Joyce and another fallen (since returned) minister Bridget McKenzie.

In an opinion piece for The Australian week after Morrison's speech, Joyce wrote that if the Nationals supported net zero emissions they would " cease to be a party that could credibly represent farmers".

Rumblings over whether then leader Michael McCormack would cave to Morrison on climate policy reached fever pitch in the first fortnight of June. McCormack was asked directly in a podcast on June 16 to confirm that the Nationals would not "embrace" a net zero target.

His response: "Correct".

The assurance didn't help. He was dumped as leader on the morning of June 21.

Joyce's resurrection was framed as a hammer-blow for the net zero cause.

But in his first press conference after the spill, flanked by McKenzie and David Littleproud, he laid down the foundations for a possible deal.

"I'll be talking with my party room, about what they believe is best for them, and then fighting on that premise," he said.

"This is not Barnaby's policy, it's the Nationals' policy."

Polls conducted by environmental groups are often dismissed or ignored on the conservative side of politics.

But the results of an Australian Conservation Foundation-commissioned poll on August 30 caught the attention of Liberal backbencher Jason Falinksi, one of the main climate action agitators inside the Coalition.

The poll of more than 15,000 people found that voters in all 151 federal electorates believed the federal government could do more to tackle climate change. Just under a quarter of Coalition supporters said climate policy would decide their vote at the next election.

For Falinski, the results confirmed a shift in sentiment that had become apparent in conversations with his colleagues.

He says a Queensland MP who once politely told him that "climate change was bullshit" and no one raised it with them had, 12 months ago, conceded that it was an issue voters were concerned about.

Three months ago, that same MP confided that he now believed a net zero promise would win votes in his regional electorate where once it would have surely cost them.

The message that climate change was an issue not just for voters in inner-city Melbourne and Sydney was being heard at the highest levels of Liberal Party.

"Where the difference has been made is not for people like me, Dave [Sharma] and Trent [Zimmerman], we've been on about this from day one," he told The Canberra Times.

"What's changed is that in seats in Queensland, [MPs] who are not climate change warriors, who are not left wingers, who are not moderate at all ... they have come to the conclusion that this is actually something that the community cares about."

Queensland independent Bob Katter has warned the government risked losing five seats in his state, and others in regional NSW, if it made a "criminally insane" net zero commitment.

But what electoral consequences would it face if it didn't, given Labor has pledged to legislate a 2050 target if elected?

Pro-climate action Liberals, including Katie Allen in Higgins and Trent Zimmerman in North Sydney, face challenges in their seats from Greens or independents. Two of the electorates the Liberals want to snatch from Labor to retain power - Eden-Monaro and Gilmore - take in parts of the NSW South Coast scorched in the devastating Black Summer fires.

The pressure on Morrison to make a 2050 commitment and lift Australia's 26-28 per cent emissions reduction target has intensified throughout the year. But it has been resisted at each turn.

There has been a procession of pre-Glasgow interventions from diplomats and heads of state, lobbying from business groups - including those representing big miners - and the release of research laying bare the risk of inaction.

The morning after the UN Intergovernmental Panel on Climate Change released a report warning that the 1.5 degree temperature threshold could be breached early next decade, Morrison fronted the media alongside Energy Minister Angus Taylor.

Morrison made four points which summed up the Sinatra approach. He acknowledged the seriousness of climate change; blamed big-emitters like China; sold technology, not taxes, as the solution; and vowed to protect the regions.

"I will not be asking people in the regions of this country to carry the burden for the country alone," he said.

What has emerged through the frenetic net zero debate of the past month is that a large chunk of the 21-member National party room is not outright opposed to a net 2050 target, as might have been - or at least appeared to have been - the case at the time of the Joyce coup.

Queenslanders Canavan, George Christensen are dead against it and Ken O'Dowd, Llew O'Brien and resources minister Kitt Pitt remain resistant. But most their colleagues are open to a discussion.

Gippsland MP Darren Chester, the only National to have publicly backed a net zero target, this week told his local ABC station that there was a "95 per cent" chance the party would fall into line with the Liberals. Chester is on a break from the party room due to tensions with Joyce.

But even those open-minded to a target place heavy caveats on their position.

No Nationals member is prepared to sign up to a policy which might cost jobs or drive up electricity prices in regional Australia. Some members have more particular barrows to push.

Country Liberal Senator Sam McMahon, for instance, says any net zero plan must consider nuclear energy, a view shared privately by a number of colleagues.

Joyce earlier this week said the Nationals entered any climate talks with apprehension after farmers were burned in policies which helped Australia meet its Kyoto targets.

The junior coalition partner has attempted to leverage its powerful negotiating position to extract funding and protections for the resources and agriculture sectors.

Pitt proposed the most dramatic measure; a $250 billion taxpayer-funded loan scheme to support mining projects unable to secure their own finance.

Sharma and Falinski's public rebuke of Pitt's proposal on the morning after it appeared in The Australian Financial Review exposed the wide chasm which separates the Coalition's left and right flanks.

So concerned were some Liberal MPs amid the Nationals' public posturing that they planned to write to Morrison. Instead, the Prime Minister agreed to brief them on the net zero roadmap in late September, which was attended virtually by MPs from across country.

Attendees left the session confident the Morrison would be able to secure a deal which included a net zero target. The Prime Minister is said to have extolled the virtues of Bill Gates' tech-focused approach to climate action.

A promise to protect

The business group which represents some of Australia's largest emitters - including AGL and BHP - timed its intervention for the final 10 days of negotiations.

Two years after it labelled Labor's 45 per cent 2030 target "economy wrecking", The Business Council of Australia last Saturday unveiled a net zero by 2050 roadmap which included halving emissions by the end of this decade.

The plan argued a "smooth" transition could inject $890 billion and create almost 200,000 jobs over the next 50 years.

"The purpose of our work is to move forward, not engage in an endless debate about issues the nation and the world has moved past," the council's president Tim Reed said.

By now, almost 50 ASX-listed companies have signed up to net zero by 2050, as has the National Farmers Federation. The Cattle Council has even more ambitious targets for the red meat industry.

The Minerals Councils of Australia, graced by Morrison's Sinatra speech in June, have also made the commitment.

The states and territories have all committed to net zero by 2050, if not earlier. Liberals premiers in NSW and Tasmania have chosen this week, of all weeks, to announce a new multi-billion dollar hydrogen plan and a new net zero target respectively.

Research published this week argued that the government's climate policies - or lack thereof - could see exports slapped with carbon tariffs, which would put at risk thousands of jobs and billions in income.

Treasurer Josh Frydenberg, a net zero by 2050 advocate, has warned Australia couldn't afford to be seen by global investors to be dragging the chain.

And yet, fewer than three weeks from the start of the Glasgow climate summit, the two sides of the Coalition are yet to reach a compromise.

The Nationals party room will meet on Sunday, after cabinet considered the plan on Wednesday. An announcement is expected next week.

The terms of any agreement have become clear in recent days. Taylor has this week offered a wink and a nod to the resources sector, saying more than once that "net zero" doesn't mean "zero emissions".

"For a country like Australia, this is the difference between destroying some of our greatest economic strengths versus defending and even strengthening them," Taylor said on Monday.

Compare this to the UK Prime Minister's declaration that the time had come for humanity to "grow up", listen to the scientists and acknowledge the planet was not an "indestructible toy".

But this is the Australian way, the Morrison way.

The Frank Sinatra approach.