Incumbent Resistance to Carbon Pricing in Australia, 1989-2011

Enacted inertia: incumbent resistance to carbon pricing in Australia, 1989-2011

A thesis submitted to the University of Manchester for the degree of Doctor of Philosophy in the Faculty of Humanities

2018

Marc S.R. Hudson

Alliance Manchester Business School

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Contents

Contents 3 List of Tables 6 List of Figures and Diagrams 6 List of Abbreviations 7 Abstract 9 Declaration 10 Copyright Statement 10 Acknowledgements 11 Dedication 12 The Author 12 Chapter 1: Introduction 13 1.1 Introduction 13 1.2 Research topic 14 1.3 Importance of study 16 1.4 Research Questions 18 1.5 Audience 18 1.5 Outline of thesis 19 Chapter 2: Literature Review and Conceptual Framework 22 2.1 Introduction 22 2.2 The need for a sea-change. Sociotechnical transitions 23 2.2.1 Sustainability sociotechnical transitions 25 2.2.2 Politics and power in sociotechnical transitions 26 2.3 Public Policy Theories 28 2.3.1. Punctuated Equilibrium 29 2.3.2 Advocacy Coalition Framework 32 2.3.3. Multiple Streams Approach 36 2.3.4 Overview of public policy theories 42 2.4 Institutional entrepreneurship and institutional work 44 2.4.1 Policy entrepreneurship 45 2.4.2 Institutional entrepreneurship 46 2.4.3 Institutional work 46 2.4.4 Disruptive Institutional Work 49 2.4.5 Relational institutional work 50 2.5 Research questions and conceptual framework 50 2.6 Conclusion 53 Chapter 3: Methodology 55 3.1 Introduction 55 3.2 Discussion of case study 56 3.2.1 Sequential/nested case study justification 58 3.3 Sources and analysis 60 3.3.1 Types of sources 61 3.4 Data analysis 66 3.5 Presentation of results 67 3.6 Conclusion 69 Chapter 4: “Formative Battles.” Channelling the floodwaters: incumbents learn 70 to control the direction of flow in the 1998-92 policy window 4.1 Introduction 70 4.2 The Streams 73 4

4.3 Coupling 77 4.4 Policy Window 78 4.4.1 Before hostilities commenced (April - August 1990) 79 4.4.2 The first battle: Ecologically Sustainable Development (April-August 81 1990) 4.4.3. The second battle: International commitment? The Toronto target 83 4.4.4 The third battle: Within and alongside the ESD process 84 4.4.5 The fourth battle: taxes and Rio 89 4.4.6 The fifth battle: Toronto revisited 95 4.5 Post-window events 98 Chapter 5: “Winning the rematch”: the 1994/5 Carbon Tax Battle, in which 100 incumbents defend their gains with superior firepower 5.1 Introduction 100 5.2 The Streams 103 5.3 Coupling 106 5.4 Policy Window 107 5.4.1 Phase 1: September – November: issue minimisation, cost emphasising, 108 disruptors attempt to cohere 5.4.2. Phase 2: December 1994- January 1995: a flood of reports and a spill- 111 over danger 5.4.3 Phase 3: February 1995: the roundtables 116 5.5 Window closure and aftermath (March 1995- 2006) 120 Chapter 6: “Subverting rather than averting”: Incumbent activity changes 123 climate change from perfect storm to perfect disaster (2006-2009) 6.1 Introduction 123 6.2 The Streams 126 6.3 Coupling 129 6.4 Policy Window 132 6.4.1 The Shergold Report and the 2007 Federal election 132 6.4.2 2008 - the year of intensive lobbying 135 6.4.3 2009 – consolidating the gains 140 6.5 Post -window events 145 Chapter 7: “The full court press”: incumbents turn to the public(s) to win policy 146 battles (2010-2011) 7.1 Introduction 146 7.2 The Streams 149 7.3 Coupling 153 7.4 Policy Window 154 7.5 Post-window events 164 Chapter 8: Discussion 165 8.1 Introduction 165 8.2 Twenty-two years of policy battles: analysis of the four windows 166 8.2.1 Pressures which built within the streams prior to couplings 167 8.2.2 The differing styles of coupling 169 8.2.3 The characteristics of the four windows (not merely their length, but the 172 fierceness of the battles, the types of window) 8.2.4 The “closure of the windows and the residues that flowed from it. 174 8.3 Incumbent resistance strategies – maintaining and defending the regime 181 through institutional work (Research Question 1) 8.3.1 Incumbent institutional work and how it changed over time 181 5

8.3.2 Persistent and episodic institutional work 183 8.3.2.1 Across all four windows (persistent institutional work) 185 8.3.2.2. Work found only in particular windows (episodic institutional work) 185 8.4 Forms of relational institutional work undertaken by incumbents to initiate, 186 maintain and defend their positions in response to changing patterns of disruptive behaviour (Research Question 2) 8.4.1 Lobbying of politicians 187 8.4.2 Building new organisations 188 8.4.3 Message discipline 190 8.4.4 Tactical incorporation 191 8.4.5 Control of opposition organisations 192 8.5 Transitions and regime resistance 195 8.6 Conclusion 197 Chapter 9: Conclusion 199 9.1 Introduction 199 9.2 Contributions 199 9.3 Limitations of the study and further work 201 Appendix 1: Interviews 204

References 205

Final word count: 73,118 words

List of Tables Table 2.1. Summary of strengths and weaknesses of public policy theories. 43 Table 4. 1 Tasman reports pertaining to Greenhouse policy in the period 1990-1992. 80 Table 4.2 Tasman seminars doubting climate science 89 Table 4.3 Anti-carbon tax economic modelling reports, 1991-1992. 90 Table 5.1 Industry reports challenging proposed carbon levy, Sept 1994 - Dec 1994. 112 Table 6.1 Economic modelling by government, incumbents and disruptors 142 Table 8.1 Pressures in the streams 168 Table 8.2 Coupling compared 169 Table 8.3 Couplers, the pressures they were under/exploited and their motivations 171 Table 8.4 Comparison of window characteristics 173 Table 8.5 Types of policy window 174 Table 8.6 Comparison of window closure 176 Table 8.7 Summary of types of incumbent action in chronological categorisation 183 Table 8.8 Forms of symbolic and material institutional work 186 Table 8.9 Summary of types of incumbent action based on types of institutional work 193

List of Figures Figure 2.1 Graphic representation of punctuated equilibrium. 30 Figure 2.2 Equilibrium and punctuation in relation to a policy’s image. 31 Figure 2.3 Advocacy Coalition Framework 33 Figure 2.4 Multiple Streams Approach. 36 Figure 2.5 MSA from temporal perspective 36 Figure 2.6 Five stream framework 42 Figure 2.7 Institutional work into a policy window and its precursors. 52 Figure 2.8 Learning between windows 53 Figure 4. 1: overview of the chapter’s policy window 72 Figure 4.2 Advert in Business Council Bulletin 87 Figure 5.1 1994-5 Policy Window 102 Figure 5.2. Sydney Morning Herald 12 December 1994 114 Figure 5.3 Front page of the Melbourne Age, 9 February 1995 119 Figure 6.1 2006-2009 Policy Window 125 Figure 6.2 Screengrab of cutemissionsnotjobs.com.au video 144 Figure 7.1 2010-2011 policy window 148 Figure 7.2 Abbott, (with microphone), at 23rd March rally 156 Figure 8.1 Schematic representation of longitudinal study 167

List of Abbreviations AAC Australian Aluminium Council AAS Australian Academy of Science ABARE Australian Bureau of Agriculture and Resource Economics ABC Australian Broadcasting Corporation ABS Australian Bureau of Statistics ACA Australian Coal Association ACARP Australian Coal Association Research Programme ACF Australian Conservation Foundation ACF Advocacy Coalition Framework ACTU Australian Council of Trade Unions AEMO Australian Energy Market Operator AGA Australian Gas Association AGO Australian Greenhouse Office AIGN Australian Industry Greenhouse Network AGW Anthropogenic Global Warming ALP Australian Labor Party AMEC Association of Mining and Exploration Companies AMEEF Australian Minerals and Energy Environment Foundation AMIC Australian Mining Industry Council (became MCA in 1995) APP Asia-Pacific Partnership on Clean Development and Climate APPEA Australian Petroleum Exploration Association ATIA Australian Trade and Industry Alliance BCA Business Council of Australia BOM Bureau of Meteorology CCS Carbon Capture and Storage CEDA Committee for Economic Development of Australia CEF Clean Energy Future (legislative package) CFF Commission for the Future CFMEU Construction Forestry Mining Energy Union CIS Centre for Independent Studies C02 Carbon Dioxide COAG Council of Australian Governments COP Conference of the Parties (UNFCCC annual conferences) CPRS Carbon Pollution Reduction Scheme CRC Cooperative Research Centres CSIRO Commonwealth Science and Industrial Research Organisation EITE Emissions Intensive Trade Exposed ESD Ecologically Sustainable Development EUETS European Emissions Trading Scheme IE Institutional Work INC Intergovernmental Negotiating Committee IPA Institute for Public Affairs IPCC Intergovernmental Panel on Climate Change IPT Interim Planning Target LE London Economics MCA Minerals Council of Australia MPCCC Multi Party Committee on Climate Change MRET Mandatory Renewable Energy Target 8

MSA Multiple Streams Approach NERDCC National Energy Research and Development Council NETT National Emissions Trading Taskforce NGAP National Greenhouse Advisory Panel NGGI National Greenhouse Gas Inventory NGAP National Greenhouse Advisory Panel NGRC National Greenhouse Response Committee NGRS National Greenhouse Response Strategy NIEIR National Institute of Economic and Industry Research NGO Non-governmental Organisation NGRS National Greenhouse Response Strategy NSW New South Wales NSWCA New South Wales Coal Association NSWMC New South Wales Minerals Council OECD Organisation of Economic Co-operation and Development ppm parts per million QRC Queensland Resources Council PE Punctuated Equilibrium RET Renewables Energy Target ST Sustainability Transitions TWS The Wilderness Society UNCED United Nations Conference on Environment and Development UNEP United Nations Environment Program UNFCCC United Nations Framework Convention on Climate Change

Abstract

This thesis examines the behaviour of incumbents when faced with persistent advocacy of a policy that would potentially undercut their position. The problem is considered from a longitudinal perspective, with examination of four specific periods of policy contestation for the actions of incumbents and the development of strategies over time. The case study focusses on Australia, and the work of incumbents to defeat proposals for a carbon price.

The conceptual background of this thesis, which makes contributions to the study of power within socio-technical transitions, draws principally on John Kingdon’s seminal work on policy windows, as well as on the more recent development of Institutional Work by neo- institutional theorists such as Thomas Lawrence and Roy Suddaby. By combining these theories, alongside insights from other public policy theories, it is possible to identify the evolving actions undertaken by incumbents through the course of a prolonged set of policy battles. This leads to a set of insights about how incumbent strategies have changed over time, in response to growing pressures and changing dynamics among proponents of the pricing of carbon dioxide (via either a tax or an emissions trading scheme).

For each of the four periods, the researcher drew on materials from newspapers, magazines, memoirs, trade publications, websites, interviews with participants and upon other scholarly works (especially where researchers had privileged access to incumbent actors). The thesis’s findings show that incumbent strategies have not been static over the thirty years of contestation over carbon pricing, and that patterns of incumbent activity can be discerned. In detecting and explaining these patterns, it makes a contribution to the debate over the role of policy and political conflict and incumbent resistance during a still-unfolding socio-technical transition.

Declaration

No portion of the work referred to in the thesis has been submitted in support of an application for another degree or qualification of this or any other university or other institute of learning;

Copyright Statement i. The author of this thesis (including any appendices and/or schedules to this thesis) owns certain copyright or related rights in it (the “Copyright”) and s/he has given The University of Manchester certain rights to use such Copyright, including for administrative purposes. ii. Copies of this thesis, either in full or in extracts and whether in hard or electronic copy, may be made only in accordance with the Copyright, Designs and Patents Act 1988 (as amended) and regulations issued under it or, where appropriate, in accordance with licensing agreements which the University has from time to time. This page must form part of any such copies made. iii. The ownership of certain Copyright, patents, designs, trademarks and other intellectual property (the “Intellectual Property”) and any reproductions of copyright works in the thesis, for example graphs and tables (“Reproductions”), which may be described in this thesis, may not be owned by the author and may be owned by third parties. Such Intellectual Property and Reproductions cannot and must not be made available for use without the prior written permission of the owner(s) of the relevant Intellectual Property and/or Reproductions. iv. Further information on the conditions under which disclosure, publication and commercialisation of this thesis, the Copyright and any Intellectual Property and/or Reproductions described in it may take place is available in the University IP Policy (see http://documents.manchester.ac.uk/DocuInfo.aspx?DocID=24420), in any relevant Thesis restriction declarations deposited in the University Library, The University Library’s regulations (see http://www.library.manchester.ac.uk/about/regulations/) and in The University’s policy on Presentation of Theses

Acknowledgements

Thanks to my supervisors, Andy McMeekin and Mike Hodson, for sticking with this through thick and thin. Thanks for your patience, insights and encouragement. There were times, I am certain, when we all doubted it would ever see the light of day. Fortunately we never all thought that at the same time.

For support at a crucial juncture, when it was very much needed and even more appreciated – David Evans, Damian O’Doherty, Jen O’Brien, James Evans, Bruce Tether and especially Stuart Hyde, Ronnie Ramlogan, John Rigby, Sylvia Massini and Philippe Laredo.

Thanks to colleagues at the SCI – especially Joe Blakey, Alison Browne, Katrina Farrugia, Susan Hogan and Julie Kasmire

Thanks to all the nameless librarians at University of Manchester (especially document supply!), British Library, University of Adelaide, University of Melbourne (special collections), the State Libraries of South Australia, Victoria and New South Wales, and especially the magnificent National Library of Australia.

Thanks to all my (anonymous) interviewees and especially Richard Denniss, Ian Dunlop Clive Hamilton, Alan Pears and Christopher Wright.

Thanks for support, ideas, encouragement, permission to quote and other random acts of kindness. Flor Avelino, Peter Burdon, Jez Green, Myra Gurney, Guy Pearse, Caetano Penna, Cameron Roberts, Marc Roberts, Miles ten Brinke, Heather Smith and Sandy Wordern,

For proof-reading and encouragement, special thanks to Peter Burdon, Sam Gunsch and Chloe Jeffries. Of course, all remaining typographical errors remain my responsibility

My parents for proof reading, games of scrabble and letting me bludge at Chateau Grumpy for what added up to half a year through the course of this PhD.

Of course, my brilliant, kind, funny wife, Dr Sarah Irving. I cannot believe how lucky I am.

Dedication

To Sarah, for everything. It’s a cliché, but none less true for that – I could not have done this without you. Thank you.

To all the future generations and species that will suffer because of the incumbent resistance to transformation, and the failure of the social movements to overcome that resistance. Sorry – we tried, but nowhere near hard or smart enough.

The Author

Marc Hudson has worked as an aid worker, telephone operator and physiotherapist (specialising in amputee rehabilitation) activist (especially on climate change issues) before beginning his PhD in 2014. He has published in peer-reviewed journals including Energy Research and Social Science, Technology in Society, Environmental Politics (the last of which he is the social media editor for), and other journals. He has a chapter in a forthcoming Palgrave Macmillan publication. He has also had over fifty articles published on The Conversation, drawing on the research for this thesis and beyond.

Chapter 1: Introduction

1.1 Introduction

Wednesday 7th December 2016 was another momentous day in the tortured history of Australian climate politics. The Prime Minister of Australia, Malcolm Turnbull, stood before assembled journalists at Sydney’s Fish Market and made a short, deadly announcement.

Turnbull had been leader of the Liberal Party Opposition in 2008/9 when the governing Australian Labor Party (ALP) was trying to pass legislation that would put a price on carbon through the creation of an emissions trading scheme. Turnbull was in favour – if only so as not to give Labor a stick with which to beat the Opposition. In October 2009 Turnbull had visited David Cameron in London, then an opposition Conservative Party leader himself, and returned to Australia more convinced than ever that a price on carbon was the right thing, both politically and environmentally. He declared on a radio programme that he would not lead a party that was not as committed to climate change as he was (ABC, 2009). Six weeks later Tony Abbott, a politician who had declared himself ‘a bit of a weathervane’ on climate policy, toppled Turnbull from the Liberal leadership.

Turnbull retreated to the backbenches, labelled Abbott’s replacement policy for climate pricing ‘bullshit,’ and even spoke at the launch of a ‘Beyond Zero Emissions’ report which called for the replacement of Australia’s coal-fired power station fleet. In 2011, despite the adamantine opposition of Abbott and vocal resistance from big business (see chapter 7), the ALP government passed legislation for an Emissions Trading Scheme (ETS). It began on 1st July 2012, but did not last long. When Abbott became Prime Minister in September 2013, he set about repealing the ETS. Abbott was toppled as Prime Minister - by Turnbull - in September 2015.

All this history was known to the journalists assembled to listen to Turnbull in December 2016, but their attention was focussed on the last 48 hours. On the morning of Monday 5th December Turnbull’s Environment Minister, Josh Frydenberg, had announced the details of the government’s long-awaited Climate Policy review during a radio interview. Frydenberg had outlined the various topics of investigation, and then uttered a few explosive words. He said that "We know that there's been a large number of bodies that have recommended an 14 emissions intensity scheme, which is effectively a baseline and credit scheme, we'll look at that."

The response had been swift. A prominent Liberal party back bencher, Cory Bernardi, called it "one of the dumbest things" he had heard and warned there would be political costs (Belot, 2016). On the afternoon of Tuesday 6th Frydenberg hoisted the white flag. He claimed that: “I didn't mention an emissions intensity scheme, it's not in any document that the Coalition has put out, in relation to this review" (Belot, 2016). Later on Tuesday Turnbull deflected questions about Frydenberg’s initial comments: "You will have to ask Josh Frydenberg that.” This was not enough for their opponents. They wanted to hear it from the Prime Minister’s own mouth, to read his lips saying: “no new tax.”

Turnbull obliged. At the Fish Market, on the 27th anniversary of the beginnings of Australian climate policy, he told the journalists: The one thing I want to be very clear about, we are not going to take any steps that will increase the already-too-high cost of energy for Australian families…. We will not be imposing a carbon tax and we will not be imposing an emissions trading scheme, however it is called. An emissions intensity scheme is an emissions trading scheme — that is just another name for it (Chang, 2017).

1.2 Research topic

How had it come to this? How had what should have been a relatively uncontroversial policy - to put a price on a public bad – become so politically impossible? (In 2018, even further beyond the scope of this thesis, the quality of discourse had sunk even further; a backbench group of MPs calling itself the Monash Forum is lobbying for state-funding to build new coal-fired power stations (Hudson, 2018).

The puzzle is this – Australia was an early and active proponent of climate change action. Even before the issue burst onto the public policy agenda of the world’s capitals in 1988, Australian policy entrepreneurs (scientists, politicians, ‘activists’) had begun ‘sensitising’ work. In 1989 Australia was recognised by the United Nations Environment Programme as the most advanced nation – in terms of public awareness – on what was then known as the 15

‘Greenhouse Effect’. Trades Unions, television stations and community groups were all advocating for action. In November 1989, before the OECD had released its first report on the need for a global carbon tax to speed climate action, one of the policy entrepreneurs (Science Minister Barry Jones) had publicly mooted the need for a price on carbon. In October 1990, the Federal Government of Australia – following the lead of several state governments - had announced an ‘Interim Planning Target’ of a 20% reduction in carbon dioxide emissions by 2005, with the implication that further reductions would occur after this (for further details and citations, see chapter 4). Australia was an early ratifier of the United Nations Framework Convention on Climate Change (UNFCCC), and produced a ‘National Greenhouse Response Strategy’ by the end of 1992. However, under both nominally left- and right-wing governments climate action faltered, and the issue only returned to the headlines consistently in 2006, as both domestic and international factors combined. Between 2006 and late 2009 there was a brief, fragile period of bi-partisan support for a carbon price followed by seven years of brutal political battles, and policy whiplash, culminating in the Fish Market announcement.

From the (normative) perspective of someone committed to significant action to reduce emissions, one could ask “what went wrong?” But this could be turned around, and - adopting the perspective of the owners of the coal-fired power stations, and the investors in the coal mines that even by 1988 were exporting ever more coal to the hungry economies of East Asia - the question would be “what went right?” How was disaster – in the form of policy that could be ratcheted up, and would provide market and moral support to competing technologies - averted? How was policy subverted?

We know that systems – whether they go by the label “economic”, “political” or “socio- technical” -- have enormous inertia, but the opponents of climate action were not so careless and arrogant as to rely on this inertia. They understood that inertia must be enacted and were both motivated and competent in creating, maintaining and defending that inertia.

The how of that enaction is the topic of this thesis. Who does the enacting? How does the make-up of that ‘who’ change over time? Why does it change? What new actions do new configurations of actors undertake? Under what circumstances are some repertoires of resistance abandoned, temporarily or permanently?

1.3 Importance of study

We know from past research that socio-technical transitions unfold over decades, and are a contest – or rather a series of contests – between societal actors (Coenen et al, 2012). These actors can - using the Multi-Level Perspective (MLP) (Geels, 2012) - be categorised broadly as regime actors (incumbents) or niche actors. We know that incumbents are able to use the inertia of existing cognitive, regulatory and normative systems (or institutions) to their advantage, and that niche actors and other challengers (not all challenges come from niches) must have both luck and skill to marshal and focus their probably inferior forces if they wish to change the status quo.

What has been less well-studied so far are the interactions between the incumbent actors and those who would disrupt the incumbency (whether they come from niches or regimes), and the precise mechanisms by which incumbents mobilise against disruptors in both the short and long term. (How) Do the actions of incumbents change, in response to changes in the background factors and in response to disruptors’ learning and innovation? (How) Do incumbents form formal and informal coalitions, (how) do they learn from past successes and failures, and select strategies to defend their incumbency? What are the origins of a struggle?1

To study these questions empirically I use the roughly 20-year period during which climate policy (and carbon pricing) were under active consideration by Australian policymakers. Conceptually, the thesis deploys an innovative mix of public policy theories (elements of Advocacy Coalition Framework, Punctuated Equilibrium Theory but primarily the Multiple Streams Approach - for references and further discussion, see chapter 2) in combination with the more recent concept of ‘institutional work’ and collective institutional entrepreneurship to discuss the above periods and draw out the strategies and relationships of incumbents, defined here as the owners and operators of the energy companies, their trade associations and business umbrella groups; their allies and supporters both within the apparatus of the

1 Although there is an extensive literature describing Australia’s experience, there are blind spots. In an otherwise excellent paper, Simshauser (2018: 699) erroneously states “Australia's climate change policymaking cycle can be traced at least as far back as 1997 when Australia signed the Kyoto Protocol.” As chapters 4 and 5 show, this is a misleading statement. Similarly, in asking “what is holding Australia back” from a transformation of its energy systems Cheung and Davies (2017) make barely a reference to organised incumbent resistance.

17 state, and sympathetic opinion-formers in the media and civil society and small but determined numbers of citizens. Crucially, what becomes progressively more important are the relationships of mutual support among these incumbents.

Smink (2015: 15) notes that “the term ‘incumbents’ is sometimes used synonymously with ‘regime actors’ (e.g. Berggren et al., 2014) or ‘powerful regime actors’ (e.g. Kern et al., 2014), signaling that incumbents are not only perceived as established actors, but also as powerful actors.” More thoroughly, Lowes et al (2016) take ideas from disciplines including economics, politics and innovation, and propose a definition of incumbency in relation to sustainability transformations, “which suggests that incumbents are actors already present in a specific socio-technical system, who are likely to be involved with unsustainable practices, and who possess the capacity to affect system change.”

Further to this, incumbents possess the capacity to prevent, or at least seriously hamper, other actors who – for whatever reasons (normative, economic, political) – seek to change the system from within or without. Crucially, in my reading the incumbency is not static, but rather constantly reforming and being reformed, with coalitions created, maintained or discarded as circumstances change. Incumbency is processual, with core actors relatively static, but others being, through relational institutional work, tactically incorporated and de- incorporated over time (as captured in the temporal aspect of the MSA).

This topic matters because anthropogenic climate change and its impacts loom ever larger in the 21st century. At the 2015 UNFCCC meeting in Paris, the world’s nations agreed to take steps that would keep average global warming below 2 degrees above pre-industrial averages. However, climate change has been on the public policy agenda since 1988, and little progress has been made in agreeing and then implementing effective policy, at either national or international level. Anthropogenic emissions of carbon dioxide continue to climb, and a low- carbon technological innovation revolution is not unfolding at the speed that will reduce emissions sharply. The need for this transformation2 – a ‘sustainability’ socio-technical transition (SST) -- is broadly agreed, but as Fuenfschilling and Truffer (2014: 772) mournfully note “in most cases, transformation is slow or even failing.”

2 For a discussion of the distinction between transition and transformation, see Hölscher, Wittmayer and Loorbach ( 2018) 18

1.4 Research Questions

Given this background, and following a review of the literature (see Chapter 2), the following research questions emerge.

1. What actions do incumbents use to resist, or shape, radical policy innovations?

2. What relationships do incumbents create, maintain and defend in response to changing patterns of disruptive behaviour?

The empirical focus of this work is on political flashpoints, or moments of overt contestation as a means of discussing incumbent power. We can learn from these periods where the assumptions that ‘run’ society are forced out into the light and challenged. Although there was a prolonged battle to get a federal carbon price within Australia (from 1989 to 2011), the focus is on flashpoints rather than the periods in which the battles were quieter or behind-the scenes. The advantage of this choice is that the public-facing strategies of incumbencies can be more easily examined. The primary disadvantage is that it may over-emphasise the unusual/public contestation whereas the ‘normal’, non-contested means by which the status quo is maintained are left under-examined. Conceptual approaches which prioritise the nature of state –capital interactions (such as Gramscian political economy) would be of greater use to study those so-called “quiet” periods.

1.5 Audience

The primary audience for this thesis is scholars of sustainability socio-technical transitions, especially those working on the politics of transitions. By this, I mean the methods by which incumbents are able to block, delay, and shape responses – political, technological – to suit their own (perceived) needs (the actions of disruptors are covered in this thesis insofar as they contextualise incumbents’ efforts). Power and agency have become ‘hot topics’ (e.g. Avelino et al. 2016; Hoffman, 2013), and the proposed typology of strategies and tactics may aid comparative work and further theoretical insights.

A second audience is public policy theorists, especially those seeking to use Multiple Streams Approach, Punctuated Equilibrium Theory and Advocacy Coalitions Framework to study environmental policy, its agenda-setting, or its (lack of) implementation. Scholars using Multiple Streams Approach (MSA), which has been criticised for its lack of focus on institutions (Zohlnhofer and Rub, 2016: 8), may find the conceptual combination of MSA with institutional work useful.

A third audience might be historians of the recent past, especially those working on environmental history and societal responses to global threats. Australia is an ‘extreme,’ but by no means unique, case against which other countries’ responses could be compared and contrasted.

Beyond that, activists who are seeking to accelerate the long-overdue transition from high- carbon to low-carbon energy sources will perhaps benefit from an improved and theoretically-grounded understanding of the strategies and tactics of one set of incumbents. In a study of the US coal industry’s response to recent regulatory moves in the US, Downie, (2017: 22) lays out his questions – “what are the preferences of business actors in these industries toward efforts to limit emissions from coal? How are they determined? And importantly, could divisions within and between these industries be exploited by governments seeking to enact climate change regulations.” This thesis could help scholars and citizens tackle these questions.

1.6 Outline of thesis

The thesis proceeds as follows. Chapter 2: Literature Review and Conceptual Framework explains the conceptual basis of the thesis. The need for a sustainability socio- technical transition is outlined. Recent work on the politics of sustainability socio-technical transitions is both described and critiqued. I conclude that while there is progress, there are ongoing issues around the question of agency, especially in the policy arena. Therefore it is necessary to describe several dominant public policy theories. These are Advocacy Coalition Framework, Punctuated Equilibrium and Multiple Streams Approach. These are described, and recent developments outlined, with a focus on how they do (or do not) help describe the role of incumbents, the role of agency more generally and the way that they address 20 prolonged contestation of multiple iterations (the climate case has been with us – unsolved – for thirty years, which is not long in transitions-terms, given that they often take many decades or even centuries). However, public policy theories have lacunae of their own, especially around the question of agency and the position of incumbents. They also have a bias towards explaining stability. Therefore, it is necessary to deploy the more recent concept of “institutional work” (Lawrence and Suddaby, 2006). One fruitful form of institutional work is that of ‘defensive institutional work (Maguire and Hardy 2009), and this is fed back into the public policy theories to attempt to arrive at a set of guidelines that will assist with the collection and analysis of data. Another important form is ‘relational institutional work’ (Hampel et al. 2017), and this too is outlined in some detail. Chapter 3: Methodology justifies my choice of a case-study approach and explains the selection of an ‘extreme case.’ It then justifies the choice of analytic focus, before considering the advantages, disadvantages of various primary and secondary sources, which in this thesis are a mix of secondary accounts, newspaper articles, and a small number of interviews, before discussing the steps that can be taken to compensate for these shortcomings. It concludes with explaining the means of analysis and presentation. Four empirical chapters follow. Chapter 4: “Formative battles” explains the coming of the climate issue (1989-1992) and how the incumbents were initially on the back foot, but through careful and forceful work were able to score important early ‘containment’ victories. It explains how through a mix of lobbying, well-timed economic modelling, the creation of new organisations and the judicious temporary incorporation of a trade union into their ranks, incumbents were able to defeat proposals for a carbon tax. Chapter 5: “Winning the rematch” explains incumbent-disruptor interactions in the Carbon Tax Battle of 1994/1995, during which organisations initiated by the incumbents in the previous window proved their worth as co-ordinators of activity and discourse. As with the previous window, incumbents used a mix of lobbying and economic modelling to attack proposals, and again incorporated a trade union into their strategy. In this window, however, incumbents were judicious in eschewing the use of climate denial arguments and in proposing an alternative (purely voluntary) policy. Chapter 6: “Subverting rather than averting” is similarly structured around the battles over the Labor government’s ultimately doomed Carbon Pollution Reduction Scheme (CPRS) in the years 2008-9. Incumbents had by this time become comfortable with – or resigned to – a form of carbon pricing. Having successfully defeated a tax, they now concentrated on lobbying and modelling to win 21 extensive concessions to weaken and neutralise the CPRS. In addition, they acted to minimise competing industry voices in favour of other (renewable) technologies. The final empirical chapter is Chapter 7: “The full court press” explains the novel forms of work performed by incumbents upon finding that their previous tactics of either blocking or weakening legislation were not working. It demonstrates that they resorted to an expensive public relations campaign attempting to use publics to pressure the government to weaken or delay its proposed legislation. It shows that for once the incumbents did not succeed (in the short term), with carbon pricing legislation passing in November 2011. Chapter 8: “Discussion” draws the empirical threads together and weaves them into a conceptual tapestry that displays new insights into the nature of incumbency and its processual nature. It abstracts from the four empirical chapters to present patterns of the waxing and waning of specific strategies deployed by incumbents, before turning to the ways in which relations between incumbents and other actors shifted over time. It then offers a set of propositions about power within sustainability transitions, with further contributions to the MSA, suggests sub-divisions of relational institutional work, Chapter 9 concludes the thesis,with a discussion of its limitations and suggestions for further work.

Chapter 2: Literature Review and Conceptual Framework

2.1 Introduction

How are incumbents able to sustain existing arrangements which are of benefit to them? This chapter outlines how I intend to tackle this question, by introducing a conceptual framework that can then be mobilised to collect data for analysis. It opens with an explanation of the imperative for a change towards sustainability. So vast is that change, above the level of individual behaviour change and consumption choices, that there is a need to examine theories of socio-technical change. The literature around “socio-technical transition” is therefore outlined, with a subset of these transitions – sustainability socio-technical transitions (SSTs) – being particularly relevant. While much attention has been paid to SSTs over the last decade, there is growing awareness that the question of how incumbent actors within regimes react to radical policy proposals has been under-investigated. Recent work on this is outlined.

Given that incumbents must seek to influence (and prevent others from successfully influencing) the policy-making process, public policy theory obviously warrants attention. Three prominent public policy theories – Punctuated Equilibrium, Advocacy Coalition Framework and Multiple Streams Approach - are examined, with a focus on their ability to explain incumbent behaviour in the face of challenging policies. An overview of the strengths and weaknesses of all three with regard to these questions of change and the prevention of change follows.

One key finding is that all three theories pay insufficient attention to the question of who is acting to achieve goals of maintaining the status quo. Secondly, the use of public policy theory can constrain the researcher into too tight a focus on policy battles, with insufficient attention paid to broader cultural battles – and enlistment of allies - around the policy process. To remedy this, two further concepts are mobilised. Firstly, “institutional entrepreneurship” is outlined. Secondly, the additional concept of institutional work, subdivided into creative, maintenance and disruptive work, is outlined (Lawrence and Suddaby, 2006). The crucial extension of this by Maguire and Hardy (2009), to include defensive institutional work, is then explicated. Recent work that investigates transition through the lens of institutional work is outlined. 23

With these building blocks – of public policy theories and institutional work – in place, the chapter then announces the two research questions that this thesis tackles. Having done this, the final section of the chapter explains how elements of the previously explicated theories are combined to create a novel conceptual framework to enable data collection and analysis, which is the subject of the following (methodological) chapter.

2.2 The need for a sea-change: Sociotechnical transitions

The Australian governor-general was blunt as he addressed the assembled scientists: When civilized man looks out from the padded cell of urban life what a destruction of the human environment he would see if only his eyes had not become too narrowly focused on his house, motor car, golf course, his cocktail bar and his television set. If man looked out he would see a countryside despoiled, wild life being exterminated, vegetation withered, air and sea polluted, rivers made foul, green fields turned into rubbish dumps for old model cars and the night and day made hideous with a blasphemous blaze of uncontrolled noise (Price, 1970).

The only surprising fact about this quotation is the year; Governor-General Paul Hasluck was speaking in August 1969, at the annual conference of the Australian and New Zealand Association for the Advancement of Science. Almost two generations later, at the 2015 UNFCCC meeting in Paris, the world’s nations agreed they would take steps that would keep average global warming below 2 degrees above pre-industrial averages.3 However, climate change has been on the public policy agenda since 1988,4 roughly two thirds of the half- century since the governor-general’s warning, and little progress has been made in agreeing and then implementing effective policy at either national or international level. Anthropogenic emissions of carbon dioxide continue to climb, and a low-carbon technological innovation revolution is not unfolding at a speed that will reduce emissions sharply.

3 For a critique of this as a putatively ‘safe’ limit, see Shaw, (2015). 4 Warnings of planetary boundaries date back half a century, predating the publication of The Limits to Growth in 1972.

If we accept that enormous changes - far beyond individual consumption patterns - are required, then theories of larger-scale, longer-term change must be deployed. Over the last twenty years academic interest in ‘socio-technical transitions’ (STs) has grown sharply. The term refers to reconfiguration processes between technology development and broader adjustment processes in science, industry, markets, policy, and culture (Geels and Schot, 2007). The most commonly understood examples would include the transitions in transport: from sailing ships to steamships, from the horse and cart to motor cars, and in energy: from wood and whale blubber to centralised fossil fuel generators (Hughes, 1983), and other spheres.

STs involve institutional change (of both formal and informal institutions), and a series of interactions between technologies, technological systems and social systems. They unfold over decades, or even centuries. This temporal aspect is crucial to understand: a too-tight focus on a short period can lead the unwary researcher to offer explanatory power to an artefact – a given technology, or a particular policy decision. If we are to understand transitions and their dynamics, it is both within and because of the longue durée.

Distinct but often overlapping theories have been developed to explain and analyse STs (and to influence them). These include the Multi-Level Perspective, Transitions Management, Strategic Niche Management and Practice Theory (Sorrell, 2018; Kemp, 2010 Schott and Geels, 2008; Shove and Walker, 2010). Of these the MLP has arguably received the largest amount of attention. It posits a landscape of long term trends (around demographics, consumption patterns) and large influential events (wars, collapse of empires) and niches in which experimentation and innovation takes place. Between these two levels sits the ‘regime’ in which large and powerful actors interact in competitive and co-operative manners. This interplay between the levels (and within a regime) generates a dynamic stability.

However, the MLP has been criticised for providing a heuristic but without sufficient ontological grounding to usefully separate questions of power and agency (Sorrell, 2018; Svensson and Nikoleris, 2018). The question of power – of how change happens, or is prevented from happening – is of increasing interest to transitions scholars (Geels, 2014, Avelino, 2018). There is a pressing need to examine how the dynamic stability (or – from another perspective – inertia) of regimes is achieved. What do actors do? How do they co- ordinate? Geels, (2018: 230) notes that “existing regimes can provide formidable barriers for 25 low-carbon transitions. Incumbent actors can resist, delay or derail low-carbon transitions…” This thesis contributes to that strand of research.

The pathways by which transitions unfold have also been the subject of academic interest (Geels and Schot, 2007). Crudely put, we can argue that there are competing (but not necessarily mutually exclusive) views of who the crucial actors in a transition are. One view will have incumbents as the crucial innovators, who adopt new technologies and new institutional frameworks in order to sustain their power, even if they must ‘learn new tricks’ in the process. The opposite pole is that innovation – technological, social – comes from the margins, from niche actors who overthrow the existing incumbents and become a new set of regime actors. However, any given actor in a transition exists within temporal, spatial, political, economic and cultural webs of meaning and power – expecting or concentrating on a few ‘heroic’ actors can mislead.

2.2.1 Sustainability sociotechnical transitions

The examples of STs given above were all from relatively low carbon sources (wind, animal muscle power) to high carbon. With those STs has come an enormous increase of our species’ economic activity, and – in lockstep – anthropogenic greenhouse gas emissions, with the consequence that global temperatures are rising. Previous sociotechnical transitions have been ‘unguided’ and unfolded over very long time periods. The pressure now is for guided and shorter-term sociotechnical transitions that create new “low” or even “zero carbon” systems of provision of energy, food, transport and so on. This process – as yet either hypothetical or incipient – is captured by the term ‘sustainability socio-technical transitions’ (SST).

The need for a ‘sustainability’ socio-technical transition (SST) is broadly agreed. Researchers are asking ‘how long will it take? (Sovacool, 2016). American activist Bill McKibben (2017) has observed that “winning slowly is the same as losing.” But within SSTs there are at least two potential biases for the unwary traveller. The first is the very understandable desire among researchers to want to study success stories – an “optimism bias.” Related to, and reinforcing, this is the fact that it is simply easier to study success – participants and interview subjects are generally happier to speak and the documentary record is richer.

Secondly – and related – there is an undue focus on the roles of niche actors and radical innovations. There are two problems with this niche-bias. Firstly, given that the ecological crisis is now very urgent, there is simply not enough time for niche innovations – be they technologies or policies - to diffuse rapidly enough to reach the emissions reductions targets that would give an acceptably high chance of keeping below two degrees of global average temperature rise above pre-industrial levels. Secondly, this focus obscures the fact that radical action is not necessarily only coming from niches: some incumbents are innovating/trying to respond to the challenges (see for example Elon Musk’s stated objective of replacing fossil fuel energy sources with renewables).

2.2.2 Politics and power in sociotechnical transitions

Attempts to guide (and accelerate) sociotechnical transitions towards sustainability objectives have had a chequered track record. For instance, the Transitions Management approach has not delivered discernible results. While sustainability socio-technical transitions (SST) are a popular (or even dominant) way of looking at this need for a change, scholars have raised concerns about the lack of an analysis of politics and power in both transitions management (TM) and the multi-level perspective (Meadowcroft, 2011; Hess, 2014; Avelino et al., 2016; Hoffman, 2013). This is especially the case around the question of how those who are benefiting from the status quo – incumbents – attempt to sustain it. Pesch, (2015:379) argues that, among the conceptual and theoretical problems hampering SSTs is the “lack of attention for the role of agency in sustainability transitions” (see also Rauschmayer, et al. 20155).

In a survey of TM, Scrase and Smith (2009) argue that “framing conflicts” have only recently begun to be considered (p709). They argue that this may be due to its development in consultation with policy-making elite. This meant that political challenges which were inherent in the advice of TM proponents

5 “In its current elaborations, transition management does furthermore not cover individual agency as potential driver of transitions. We therefore suggest complementing transition management approaches with the more descriptive practice theory and the more normative and individualistic capability approach. We suggest a heuristic combination that places individuals back into the study of sustainability transitions.” (Rauschmayer, et al. 2015: 211)

had to be downplayed in order to gain assent from policy elites. Thus TM ideas are presented, as the name suggests, as managerial governance rather than politics. Some political tactics can be discerned, but political strategy is erased from the discourse. More recently Kenis et al. (2016: 570) observe that TM fails to fully acknowledge power relations, radical pluralism and the possible constitutive role of conflict in society. Insofar as conflict or disagreement get a place, they are framed in terms of a market-oriented setting stimulating innovation.

Similarly, as noted previously, there is a persistent critique of the MLP for underplaying the role of politics within transitions (see for example, Meadowcroft, 2009; 2011; Genus and Coles, 2008 Shove and Walker 2007; Smith, 2005; Hendricks, 2009). A counter to this criticism of the MLP argues that the very concept of the regimes and their maintenance is intrinsically a discussion of power. As Turnheim et al. (2015: 241) observe: Regimes will be reproduced via prevailing regulatory, normative and behavioural practices, but also through active defence and resistance strategies of dominant market players. Market and political power (of incumbents) are major sources of resistance to change that will get in the way of transitions efforts.

This power of incumbents to resist is seen as a significant inhibiting factor for progress towards sustainability. Dusyk et al. (2009:389), in a study of energy policy in British Colombia, propose that “destabilization of existing regimes is essential to opening up a development path to change.” Recent work (e.g. Grin, 2010; Avelino, 2011; Geels, 2014; Avelino et al., 2016; Avelino and Wittmayer, 20166) has begun to address this, identifying actors and types of power which are deployed. Nonetheless, as Hess (2014: 279) argues: “although research on the politics of STs is growing, it has not yet fully analyzed situations in which organizations associated with the incumbent regime mobilize to halt a nascent or growing ST.”

Meanwhile, there is burgeoning work on the political economy of transitions (see for example, Scoones et al. (2015), Sovacool (2017), Baker et al. (2014), Phillips & Newell (2013)) which looks at the role of incumbents, governments and challengers in a variety of geographical settings.

6 See also the recent special issue of Journal of Environmental Policy and Planning, Vol. 18, (5) 28

Having explained the need for a sustainability transition, and one of the significant gaps (around incumbent resistance) in academic conceptualisation on how this transition is happening or could happen, I now discuss theories that seek to explain radical policy change.

2.3 Public Policy Theories

Act 4 of Shakespeare’s Julius Caesar sees a (temporarily) successful challenger to the eponymous incumbent observe that timing matters. Brutus, having joined the conspiracy to kill Caesar, argues

There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life Is bound in shallows and in miseries. On such a full sea are we now afloat, And we must take the current when it serves, Or lose our ventures.

It is this sense – of timing, of the coming or bringing together of forces and the seizing of opportunities before they pass – that underpins three public policy theories under discussion in this section.

There are only certain periods when a radical policy innovation can be proposed, as successful ‘policy entrepreneurs’ well understand. Given the ‘bounded rationality’ (Wall, 1993) of policy-makers and the limited space on societal agendas, those who would pursue radical policy objectives must be both brutal and Brutus-ian in their timing. This section briefly discusses the academic literature around business lobbying on climate change before turning to three public policy theories.

There has been academic interest in the business lobbying around climate change dating back to the mid-1990s, when the US industry-funded Global Climate Coalition was in its pomp (see for example Hatch, 1993). Newell and Paterson (1998) outlined the way that fossil fuel 29 companies were able to secure their interests in state policies on global warming, arguing that their ability to do this was “best explained in terms of the structural power of capital, deriving from the role of the state within capitalist societies.” Kolk & Pinkse (2005) began to identify emergent strategies in business responses to climate change, and Kolk, Levy & Pinkse (2008) further investigated the institutionalisation of reporting on greenhouse gas emissions (“carbon disclosure”). Interest in business trade association lobbying and corporate strategies has grown steadily since then, whether in the EU (Gulberg, 2008), Australia (Pearse, 2005), New Zealand (Collins & Roper 2005) or more broadly on topics such as elite framing strategies (Schlichting, 2013).

Within the three public policy theories - Punctuated Equilibrium (PE), Advocacy Coalition Framework (ACF), and Multiple Streams Approach (MSA) - there are tensions over how much power actors have to manoeuvre, influence and innovate within the wider structures which (de)limit them.

This section outlines the basic components, strengths and limitations of three prominent public policy theories, especially around the role of incumbents and the maintenance of incumbency. Each theory is discussed in turn, and then a comparison drawn. Ultimately, this study illustrates that no single theory is adequate, but that MSA comes closest to delivering a temporal possibility which fits the goal of examining long-term change. PE has useful ideas around policy monopolies. ACF has useful observations on both “hurting stalemates” and the work performed by incumbents to create and maintain a coalition. However, both PE and ACF – and ACF especially – are too focussed on policy outcomes in the ‘real world,’ where incumbents are also fighting significant battles with their opponents, not merely building a coalition for a decisive attempt to lobby a policymaker who will make a permanently binding decision.

2.3.1 Punctuated Equilibrium

As its name suggests, Punctuated Equilibrium (PE) focuses on the circumstances in which an established and stable policy is suddenly replaced by another (not necessarily in the direction of increased sustainability) (figure 2.1). The theory’s initiators, Baumgartner and Jones (1993), posit “policy monopolies” - a stable community of actors that is able to keep the 30

‘peace’ with one another via incremental change/give and take, and to make life very hard for new actors to gain power.

Figure 2.1 Graphic representation of punctuated equilibrium. Source: (Jolicoeur, 2018:1)

A policy monopoly protects a “policy image” – the shared idea(s) about the shape of the issue, how it should be interpreted, and the appropriateness of a given solution. For Baumgartner and Jones (1993), policy change happens when a new policy image is able to gain traction, in part because the existing policy monopoly is unable to enforce its power. This can be because proponents of the new image have found different venues (legislatively, or in the public sphere) in which to press their case, thus undermining the old image, which loses credibility. This loss of credibility can result from incremental problems and one or more external shocks with which the existing monopoly actors have been unable to deal (Figure 8.2).

Figure 2.2 Equilibrium and punctuation in relation to a policy’s image. Source: Joliceur, 2018:7)

As Walgrave and Varone, (2008:367) put it: “policy monopolies collapse, high politics gets temporarily heavily involved until the policy domain at stake is contracted out again to a small group of experts and stakeholders; a new policy monopoly gets established.” What is less well-considered in PE is that a policy monopoly might rebound from partial defeats and re-assert itself in the aftermath of a seeming defeat, as has occurred in Australia since 2012 (which extends beyond the scope of this PhD).

In terms of its usefulness to an explanation of policy stasis, Cairney (2013) observes in his discussion of PE that “policymakers are unwilling to focus on certain issues for ideological and pragmatic reasons e.g. some solutions may be too unpopular to consider.” This hints at the possibility of a broader strategy open to incumbents – they can create ideological, pragmatic and ‘popularity’ reasons for an innovation to be discounted. Niche innovations – be they technological or social - are by their very definition experimental and prone to higher costs and failure rates while actors learn how to use them and integrate them into their broader set of behaviours.

The role of incumbents within this theory is straightforward – they act as defenders of an existing policy monopoly which is beneficial (or at very least neutral) to them and their allies, trying to prevent disruptors from gaining either traction in the public sphere or access to venues from which they might be able to overthrow the monopoly and replace it with another.

There are several criticisms of PE. One is that there is little discussion (and difficulty in conceptualising) what happens between punctuations, what sorts of actions are taken by actors defending policy monopolies to sustain their position and their capacity to resist/diminish external perturbations which would threaten their position. More seriously Givel (2010), surveying recent research on forest policy, tobacco policy and auto-efficiency policy in the US, found no punctuations, and questions whether the analogy between biology and policy holds. Givel argues: “significant differences exist between biological and public policy punctuated equilibrium theory including time frames for change, what constitutes outside disturbances of equilibrium, venues of punctuated equilibrium, levels of analysis for change, and patterns of change” (Givel, 2010: 187).

With regard to the theory’s ability to explain policy reversal, PE is weak, unable to conceptualise the defeat of a new policy ‘monopoly’.7

2.3.2. Advocacy Coalition Framework

The Advocacy Coalition Framework of Sabatier and Jenkins-Smith (1993, 2007) was developed to describe the specifics of the policy formation phase (once a problem had become an issue), and coalitions began to be formed to contest the appropriate policy responses. One of its advantages is its accommodation for the influence of actors who were previously not regarded as effective policy actors – especially scientists and journalists.

To follow the figure (2.3) below from the right-hand side, an issue exists within a ‘policy subsystem’ made up of one or more coalitions. The coalitions are made up of actors – policymakers, trade bodies, think tanks, journalists, social movement organisations, inventors

7 The PE may contain under-examined teleological assumptions 33 and entrepreneurs - who share many (but by no means all) deep core beliefs, core policy beliefs and – to a lesser extent - ‘secondary aspects’ which relate to policy evaluation. This last, evaluation, is prone to change and or bargaining about what has counted as ‘success’.

Figure 2.3 Advocacy Coalition Framework. Source: Weible et al, 2011: 352.

Crucially, a coalition must be able to mobilise resources. The ultimate goal of the advocacy coalition is to get a policy acceptable to its members adopted and enacted by state-based authorities (the “decisions by government authorities” aspect of the subsystem). To do this it will have to maintain internal ‘discipline’ and defeat the strategies of the opposing coalition(s). A ‘policy broker’ may emerge to negotiate between the coalitions and the relevant governmental authorities. However, in some cases issues may either not be resolved – and the status quo is maintained - or else the issue becomes ‘hot’ and breaks out of the subsystem and comes to the attention of ‘macro-political actors’ (such as the President or Prime Minister). At this point a different policy solution might be imposed on the coalitions. The policy 34 outputs produce impacts which feed back into ‘external (system) events.’ These may feed back into the short-term constraints and resources of subsystem actors (e.g. if the policy output was funding for work by civil society groups or scientists), but there are other, longer term factors acting on the subsystem as well.

Compared with PE, the ACF has a much richer understanding of how incumbents interact, at least with each other. Coalitions have different size (raw number of members) and also variable ability to mobilise the material and ideological resources of their members in pursuit of their goals. Coalitions made up of dominant actors may appear overwhelmingly “powerful”, but they still need to be able operationalise that power. Size and stability come with challenges and strengths that may become weaknesses. A large coalition may struggle to agree on a goal, and then to maintain discipline to achieve that goal. (This work is difficult, but not impossible, as shall be seen in chapter 5, on the 1994/5 carbon tax battle. At that time a large coalition of powerful status quo actors formed and agreed to refrain from questioning climate science. They did this because overt climate change denial would have both endangered their access to elite policy-makers and gifted their opponents a useful weapon.)

As with any intellectual tool, there are criticisms. ACF can be hard to operationalise (Leifeld, 2013) – identifying coalitions and collecting reliable data (surveys, questionnaires, in-depth interviews) is extremely time-consuming, with attendant problems of access, hindsight bias and so on.8 It can also be hard to identify the overlaps in the actions and beliefs of coalitions. Nor, as Shlager (2007) points out, it is always clear how coalitions form, how they are sustained, and what happens to defectors.

There has been some work on the ACF’s ability to explain incumbent resistance and policy stasis. Hirschi and Widmer (2010) examine policy stasis and find that a dominant advocacy coalition was able to prevent Swiss foreign policy change towards South Africa. In a study of Israel’s water sector, Menahem and Gilad (2016) combine ACF with Narrative Analysis (NA), claiming that “NA provides a link missing in the ACF that is required for the transformation of ‘necessary’ conditions—like external and internal shocks to the system— into ‘sufficient’ conditions for policy persistence or change.”

8 For the purposes of a long-term historic overview, these questions of access and retrospective bias would be amplified enormously. 35

The key ACF term for the purposes of this thesis is “hurting stalemate,” in which neither side can win, but “both coalitions perceive the status quo as unacceptable and perceive no alternate venues for achieving their objections other than negotiations” (Ingold, 2011:439). Such stalemates can only be broken by a policy-broker. Policy-brokers are only able to operate when trusted by all sides to be ‘fair-dealers.’ If that trust has been eroded, then a stalemate can persist. It may well be that although one coalition is ‘hurting’ it regards the alternatives – compromise and perceived defeat – as even more painful: Steffen, (2016) argues that the oil and gas industry are in such a situation.

ACF has been used by scholars of sustainability. Recently Markard et al. (2016) examined Swiss energy policy through the lens of ACF, finding that despite an external shock (the 2011 Fukushima disaster), the advocacy coalitions within Swiss energy policy have remained largely stable. Wagner and Yla-Antilla (2018) found that “institutionally important or economically powerful organisations, particularly those involved in the agricultural sector” were able to achieve legislation that excluded binding emission reductions targets at a time when similar laws introduced in other European countries had mandatory targets. Aamodt (2018) compared two Brazilian policy outcomes – reduction of greenhouse gas emissions from the forestry sector and the energy sector – arguing that a constellation of factors – “strong climate-coalition unity, unambiguous scientific knowledge, economic growth, and international pressure” - was present in the former case, leading to success, and absent in the latter, which ended in failure. This sort of multi-factorial situational explanation has great potential.

2.3.3. Multiple Streams Approach

The MSA was introduced by Kingdon (1984) as a response to the previous ‘incrementalist’ approach, to explain both incremental change and periods of rapid upheaval. Given that I have adopted this approach in my thesis, I will explain it in more detail than the previous policy frameworks. The approach posits three independent streams; the problem stream, politics stream and policy stream. The streams have their own internal logics and sub-components (see figure 2.4 below). 36

Figure 2.4. Multiple Streams Approach. Source: Robichau and Lynn, 2009)

However, this figure does not capture the temporal nature of MSA. Three streams, running in parallel, are occasionally coupled, forming a policy window. After a window, a policy settlement is reached. This is captured in figure 2.5.

Figure 2.5 MSA from temporal perspective. Source: author 37

Problem stream The Problem Stream consists of four sub-components – load, indicators, focussing events and 'feedback'. Load refers to the capacity institutions have for dealing with problems. As Jones et al (2016: 15) note, if there are numerous or hugely significant problems already on the macropolitical agenda then “a new problem’s ability to nudge its way into the purview of policymakers is negligible.”’ Indicators refer to how actors are able to first identify and then monitor problems, including their severity. It includes unemployment rates, inflation or more specific metrics). Focussing Events are, as the name implies, events that make it easier for a problem to become an issue. They tend to be “jarring and sudden… attached to particular problems, providing powerful impetus for action or change.” Finally, feedback refers to reviews, reports or other ‘warning systems which monitor the problems and the effects of government policies” (Jones et al., 2016:15).

Politics stream The politics stream contains parties and politicians, who are engaged in constant battles, jostling for power and position, always with an eye on the next election. Its subcomponents are political ideology and the ‘national mood,’ which Kingdon saw as distinct from the results of opinion polls. Beeson and Stone (2013: 3) explain that the politics stream is not a smooth flow, but rather consists of “flows and ebbs” which reflect “changes in the national mood, the influence of public campaigns of interest groups, administrative or legislative turnovers and changes of allegiances of politicians in parliaments.”

Policy stream The policy stream, which Kingdon likened to a ‘primeval soup,’ is made up of policy ideas that have been propounded in the past and used or discarded. Kingdon drew on Cohen et al.’s (1972) the ‘garbage can’ model, in which policy-makers do not start from first principles when confronted with a problem, but instead reach for past policies which were deployed to solve similar-seeming problems.9

9 Recently (and too late to be included in the conceptual underpinnings of this thesis) scholars have developed work on groupings within the policy stream – so-called “Instrument constituencies” (Beland, et al. 2018). 38

The three streams are largely independent of each other10. Crucially, policy change is only possible when the three streams come together. This happens when activity in one of the streams grows and ‘spills over’ into the others (see Winkel and Leipold, 2016) to form a “policy window.”

Coupling The three streams can continue to flow without coming into contact. That is to say, a “problem” can continue to exist, even grow markedly, but if it is does not capture the attention of the public and/or policymakers, then no window will form.11 Coupling describes the action undertaken by policy entrepreneurs (see following section) in bringing streams together (or taking advantage of their coming together) in order to open policy windows. Zahariadis (2003:139) argues that there are two kinds of coupling, which he labels consequential and doctrinal. Consequential coupling refers to cases in which “policymakers, first identify a problem and then search in the solution space for the appropriate solution.” Zahariadis drily notes that sometimes solutions are chasing problems to which they can be attached. He labels this as doctrinal coupling, in which “the ideology of the ruling party rather than the problem itself guides the selection of solutions.”

In a study of Dutch water management Brouwer and Biermann (2011) identified four strategies used to achieve coupling - attention and support seeking strategies, linking strategies, relational management strategies, and arena strategies (see also Petridou, (2014).

Policy entrepreneurs Key to all notions of change are the individuals, organisations and coalitions which ‘make it happen’. In MSA terminology, these are policy entrepreneurs, who must exploit focussing events, build coalitions, and use ‘salami tactics’ to neutralise opposition (Cairney and Zahariadis, 2016: 102), coupling the three streams and so creating a policy window.

10 Winkel and Leipold (2016) contest this independence of the streams. 11 Much policymaking, around regulations, even legislation, occurs without ever reaching ‘policy window’ status. In those circumstances incumbents do not generally have to launch large scale public- facing efforts to defeat unwelcome or threatening proposals 39

As Jotzo and Hatfield-Dodds (2013: 497) observe these policy entrepreneurs must work across all the streams, “leveraging their expertise to establish the problem and articulate a policy strategy, and drawing on their networks and communication skills to broker a workable political compact.”

Botterill, (2013: 99) argues that policy entrepreneurs are to be found “in and around government and include bureaucrats, interest groups and researchers, within and outside academia.” She argues that policy entrepreneurs share three important characteristics. Firstly, they have some form of legitimate claim to be heard by decision makers and other stakeholders— due to who they represent, the authoritative position they occupy, and/or because of the particular expertise they hold. Secondly, they have considerable political connections or negotiating skills. Finally, they have tenacity and persistence.

Successful policy entrepreneurs are also aware that policy windows do not stay open indefinitely. As Zahariadis, (2016) observes: “many ‘windows of opportunity’ for major policy change open, but most close before anyone has the chance to exploit them.” Saetren (2016) gives a compelling account of how a bold policy entrepreneur was able to exploit a brief policy window to achieve an outcome that had failed to occur during two previous policy windows.

Policy windows Policy windows occur – usually relatively briefly - when all three streams converge. It is at this point that it is possible for a skilled (set of) policy broker(s) (in ACF terminology) to convince government decision-makers to push through a new policy, overturning the policy image (in PE terminology) and creating a new one. Recently Zahariadis (2016:9) has argued that there are two kinds of policy window – recurrent and episodic. Recurrent windows are “embedded in the temporal repertoire of institutions, such as national elections or budget negotiations.” Episodic windows are, on the other hand, “externally or internally imposed by say, judges or natural catastrophes.”

Cairney and Zahariadis (2016) argue that windows must be seen in a broad context, against the backdrop of other political priorities. They argue that windows are “fleeting opportunities” within which policy entrepreneurs can push their favoured proposals further up the agenda. They argue that “agendas are not set in contextual vacuums. Rather the fact 40 that an issue rises on the agenda at one time and not another depends largely on what is happening at that time” (Cairney and Zahariadis, 2016: 100).

There have been several interesting attempts to use and modify the MSA for studying sustainability transitions. One notable work attempting to synthesis MSA with transitions theory (or more specifically the MLP) is that of Elzen et al. (2011). In a case study on Dutch pig husbandry, they ask “How, when and why is normative contestation of existing regimes effective in influencing the orientation of transitions in the making?” (Elzen et al. 2011: 263). They modify Kingdon’s approach by suggesting four streams - problem, regulatory or policy, technology, and market. They suggest that within a market stream “dynamics in the system can be affected by consumer preferences (households or businesses). If normative concerns and cultural discourses lead to changes in consumer preferences, then normatively oriented transitions become more likely.” However, as they warn, stated consumer preferences, as collected in opinion polls, may not reflect behaviour: “while citizens may publicly express concerns about normative problems, such as animal welfare, they often buy the cheapest products as consumers” (Elzen et al. 2011: 266). The fourth stream, technology, is the one in which potential technical solutions from Research and Development activities and innovation projects are generated. Drawing on innovation studies, Elzen et al. (2011: 266) observe that “mainstream researchers with close ties to the regime tend to generate incremental innovations, while researchers that deviate from established regime rules tend to focus on more radical innovations.”

Other recent applications of MSA to sustainability policy include Brunner (2008) who, in a study of emissions trading in Germany, found empirical support for the opening of policy windows, but argued that the influence of multi-level governance structures, learning processes and networks are all under-accounted for in the basic MSA approach. Carter and Jacobs (2014), in a study of UK climate and energy policy making, argue that a policy window around climate or energy policy stayed open for an unusually lengthy period in the UK (from 2006 to 2010). They ascribe this to a “competitive consensus between major parties” (Carter and Jacobs, 2014: 126) and point to policy entrepreneurship from senior government ministers, with the issue becoming part of their “narrative identity” (2014: 125). Lorenzoni and Benson (2015) combine MSA with discursive institutionalism to study the same event as Carter and Jacobs – the passage of the UK Climate Change Act 2008. They argue (2014: 10) that: “by examining discursive interventions, in addition to more structural 41 determinants, significant new insight can be generated into the conditions under which change can occur.” They state that their results “have implications for theorising radical institutional innovation and also engage in wider debates on governing complex sustainability issues such as climate change.” Smith et al (2017) .identify a case in which policy reversal occurred at a local level, with regards to river dredging: Local political activists mobilized a wider campaign with the help of social media and capitalized on national political sensitivities to successfully promote dredging. What is less clear is the longevity of the policy reversal, given funding constraints. Bundgaard and Vrangbæk (2007) in a study on the Danish policy processes criticize the MSA for not providing tools for a meso-analysis or microanalysis of the three streams, and call for a closer examination of the coupling process (Rawat and Morris, 2016: 621).

In a similar vein as the MLP and recent work on its underpinning ontology (Sorrell, 2018, Svensson and Nikoleris, 2018), there have been several recent critical overviews of the MSA. In a damning-with-faint-praise assessment of ‘the MSA at 30,’ Rawat and Morris (2016: 610) state that “while it is possible to argue that Kingdon’s work fails to meet the standards of “good theory …., the work remains quite popular among both students and scholars of policy.” Similar concerns - about the seductive but “theoretically ambiguous” nature of the central metaphors and the ease with which they can be (partially) deployed - are echoed by Winkel and Leipold (2016: 113). Both MLP and MSA are easy to grasp in the basics, have a seductive quality but, alongside this ease, are less useful as analytic tools on their own, requiring supplementary tools.

Cairney and Jones (2016) agree with these criticisms, but defend MSA and suggest three rules which would help retain the flexibility of MSA while also allowing the accumulation of empirical insights and encourage development of further insights. These are firstly to “demonstrate proficiency with MSA” (that is, many studies are incomplete in their use of the 6 core elements discussed above); secondly to “speak to MSA” (i.e. many studies only cite the foundational Kingdon book (1984/1995); and “speak to broader policy research.” This thesis strives to meet these criteria.

As with the other public policy theories discussed, there are weaknesses in explaining policy reversal or failure. MSA, without its further modifications, is more adept at the agenda setting phase of public policy. Recent attempts to extend it throughout the policy process - 42

Mukherjee and Howlett (2015) and Howlett et al. (2017) – have met resistance, with Breunig et al. (2016: S131) arguing that this adds needless complication. Howlett et al (2016) attempt to extend the multiple streams approach throughout all stages of policy, from agenda-setting through to policy evaluation (see figure 2.6). To do this they create two new streams - program and process. But, concluding a scathing satirical piece, punningly titled “Knot Policy Theory,” Breunig et al. warn that “uniting complex policy theory under a grand unified vision is more likely to tangle than to clarify.”

Figure 2.6. Five stream framework Source: Howlett et al. (2016).

2.3.4 Overview of public policy theories

I now turn to how these three public policy theories can be mobilised as part of a conceptual framework that will answer the research questions and provide new insights into power in 43 sociotechnical transitions. To do so, I focus on three facets: how each theory deals with incumbent resistance to change, how they each explain policy deadlock or reversals, and how (multiple) iterations of policy battles over the same issue could be dealt with.

Unlike PE and ACF, there is no clear place for incumbents within the three streams, coupling or the window itself. Nonetheless, policy actors are – thanks to their connections, accumulated skill and resources – more likely to be able to take advantage of events in the problem stream or policy stream to achieve coupling, create a policy window, and shape outcomes while that policy window is open. The table below (table 2.1) summarises the findings.

Punctuated Equilibrium Advocacy Coalition Multiple Streams Framework Approach Role of agents PE is weak on this, though Creators and Policy entrepreneurs try –especially allows for challengers to sustainers of to couple streams, (or incumbents consciously “venue shop” coalitions. prevent the coupling of and attack a policy Policy brokers try to streams, and then close window. help coalitions in a policy window). deadlock find a way forward (or, conversely, maintain a hurting stalemate). Explanation of Defenders of the policy ACF’s strength here Window does not policy monopoly are able to exert is in the notion of the occur, because streams failure/stasis/ control or successfully “hurting stalemate” – are not coupled (either deadlock defend the policy image. caused by the lack of outright lack of a policy /reversal a policy broker, entrepreneur or success equally matched of those who resist a coalitions, or the lack policy entrepreneur) or of macro-political does not result in appetite/ability to substantive policy deal with an issue, in (policy entrepreneur which case it returns failure). to the policy subsystems. Ability to Weak – seems to assume Relatively weak. Potentially strong, if conceptualise that change will come, and Focus is on the streams are seen to multiple that this change will culmination in a reform and flow iterations endure. policy decision by a separately after a around same senior policymaker. window, and be issue couplable at a later date.

Table 2.1. Summary of strengths and weaknesses of public policy theories. 44

Each of the theories has, on these criteria, particular strengths and weaknesses. There are two concepts from ACF which are of use for the purposes of this thesis. The first concept is the ‘hurting stalemate’ in which there is no policy broker and no macro-political decision-making is possible. Secondly, the work done by actors in stitching coalitions, or allowing themselves to be stitched into them: albeit this work tends to be second order, building capacity rather than directly contesting policy proposals of policy entrepreneurs, and focussing too closely on the policy apparatus itself.

Combining these theories’ strengths - PE’s observation of well-defended policy images and MSA’s temporal advantages and distinction between types of controversy - helps the researcher to categorise the work done by actors (incumbents in dialectical relationships with challengers) and explain the so-far successful resistance of incumbent actors to a socio- technical transition.

Further, using MSA over a prolonged (multi-decadal) period, with windows opening and closing, and a later recoupling opening new windows, is promising as a temporal heuristic. Given that transitions unfold over decades, this makes MSA particularly well-suited to the examination of incumbent behaviour.

To use elements of these theories effectively, the next section examines a promising set of concepts – institutional entrepreneurship and institutional work -- that allow a more detailed and nuanced way of exploring incumbent resistance to pressures for change that threaten to upset the status quo.

2.4 Institutional entrepreneurship and institutional work

This section looks at policy entrepreneurship and institutional entrepreneurship before turning to the broader concept of institutional work. Within institutional work three subcategories – disruptive, defensive and relational work - will be discussed.

2.4.1 Policy entrepreneurship

Mackenzie (2004: 368) defines policy entrepreneurship as the “the actions, behaviour and qualities of dynamic policy actors in pursuit of policy change.” The concept of policy entrepreneurship provides a useful tool for retaining agency within public policy frameworks and theories, which otherwise risk becoming overly schematic, deterministic and teleological, focussing on ‘historical forces’ or ‘economic interests’ without ever being able to allow for accidents, or explain the circumstances of successful incumbent resistance.

However, policy entrepreneurship on its own leaves the analyst with a tight focus on the policy-making process itself, and battles over specific policies. It leaves the wider questions, of how the institutional assumptions (‘core beliefs’, in the terminology of the ACF) are shaped, shifted and reshaped in the longer-term, under-examined.12

Botterill (2013: 99) touches upon this when arguing that policy entrepreneurs “engage in a process of ‘softening-up’ the policy community in order to gain acceptance for their interpretation of problems and their available solutions.” Nonetheless, there is still a need (or opportunity) to widen the scope from a tight focus on specific policy battles. The focus needs to broaden to include both actions which occur facing broader publics, and also actions which occur between periods of overt policy contestation – that is to say, on the broader institutional arrangements (discussed below).

Answering those questions will require a focus on how participants in these struggles secure the resources to act. What do they do to sustain relationships with policy-makers and other important actors? What ‘horizon-scanning’ do they do, beyond the specific policy issues with which they have been dealing? More broadly, what work are they undertaking to defend or disrupt the broader institutional arrangements – cognitive, regulatory and affective - that maintain largely stable13 sets of arrangements which lie underneath any given policy.

To answer these questions, which are crucially important for understanding the kinds of

12 Or at least under-accounted for, since proponents of ACF would retort that advocacy coalitions can seek to shift ‘core beliefs’ of wider society as part of their general search for prolonged dominance of a policy subsystem, even while conceding that this is difficult, and will be met with resistance by actors with little interest in specific policies, but who wish to defend the institutional pillars. 13 Stable, but that does not mean they are immune to drift. 46 radical change involved in all socio-technical transitions, but especially those that are normatively-guided and relate to sustainability, two further analytic tools are of use – institutional entrepreneurship and institutional work.

2.4.2 Institutional entrepreneurship

DiMaggio (1988) was the first to propose the concept of institutional entrepreneurship (IE). Maguire et al. (2004: 657) argue that “institutional entrepreneurship represents the activities of actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones.” Similarly, Greenwood and Suddaby (2006: 28) add that “institutional entrepreneurs are ‘interest-driven, aware, and calculative.’” Hoffman (1999) used the framework to study the US chemical industry and the way in which institutional entrepreneurs were able to take advantage of uncertainty in existing institutional order and act strategically to seek institutional change through a political process (Jolly and Raven 2015: 1000).

As such, IE would appear to be an obvious ‘fit’ with public policy theories (especially MSA). However, IE is not without its critics. It has been challenged for being too focussed on the ‘heroic’ entrepreneur, and does not capture the collective nature of the effort: that institution building and defending happen with constellations of actors, not individuals.

2.4.3 Institutional Work

Although study of institutional entrepreneurship is clearly long-standing, the label of “institutional work” was introduced more recently, by Lawrence and Suddaby in a review essay (2006). In the 2006 paper (p.217) they point out that “[institutions] require the active involvement of individuals and organizations in order to maintain them over time.” These activities are called ‘institutional work,’ which they define as “the purposive action of individuals and organizations aimed at creating, maintaining and disrupting institutions.’” In a later paper (Lawrence et al., 2011) they argue that research around institutional work helps researchers re-examine the relationship between agency-institution relationship, which they 47 see as a “permanent recursive and dialectical interaction between agency and institutions” (Lawrence et al., 2011: 55).14

Beunen and Patterson, (2016) observe that institutional work helps draw attention to the role of actors in “creating, maintaining, or disrupting institutional structures.” They argue that it “opens up new possibilities for unpacking the longstanding challenge of understanding institutional change in environmental governance.” Farla et al. (2012: 995) note that innovating actors “deliberately create or modify institutional structures (system resources) in order to build-up a supportive environment (innovation system) for an emerging technology.” Obviously, defenders of the status quo are likely to become aware of – and try to block – such work by these innovating actors.

Crucially, institutional work is not centrally organised. It is a distributed phenomenon: from an institutional work perspective agency “is something often accomplished through the coordinated and uncoordinated efforts of a potentially large number of actors” (Lawrence, et al. 2011: 55). This chimes with the notion of ‘collective institutional work’ (Sarasini, 2013: 48) “whereby an industry sector works for the most part collectively to contribute to the institutionalisation of climate/energy policy.”

Introducing the concept of defensive institutional work, Maguire and Hardy (2009) in a study of how DDT went from ‘wonder-product’ to pariah in the space of a decade, introduce the concept of defensive institutional work (DIW). They define this as “the purposive action of individuals and organizations aimed at countering disruptive institutional work.” With regards to their specific case, they found that “certain actors— most notably in industry— sought to defend the institutional pillars by producing their own texts countering assertions of negative impacts, the inappropriateness of practices, and the need for regulation” (2009: 169).

There is an extent to which the terminology of “defensive institutional work” is simply new wine in old bottles. Desai, (2011: 265) notes that defensive institutional work is actually akin to Oliver’s (1991) typology of the manner in which external constituents’ expectations are manipulated. Oliver provided a typology of actions taken by organisations to manage dangers to their legitimacy.

14 Fuenfschilling and Truffer, (2014: 776) concur, arguing “actors are constrained, but also enabled by institutional structures, which in return, are socially constructed by them.” 48

There are relatively few academic articles that have picked up the concept of DIW. They fall into two broad camps, one focussed on ‘micro-politics’ (tied to practice theory) and one that is more explicitly related to broader policy battles. The former, while interesting, is arguably less capable of explaining structural change or stasis.

Turning to more explicitly policy-focussed defensive institutional work, Micelotta and Washington, (2013: 1138) examine how Italian legal professionals whose autonomy was threatened by an EU edict: reinstated the status quo by engaging in work aimed at (1) re-asserting the norms of institutional interaction; (2) re-establishing the balance of institutional powers; (3) regaining institutional leadership; and (4) reproducing institutionalized practices.

Herepath and Kitchener (2016) examine institutional repair work by a state actor in their study on the role of government enquiries into the National Health Service. They argue that the rhetoric deployed in these enquiries: “communicate aligned ethos, logos, and pathos appeals in a tactical buttressing manner that simultaneously harnesses maintenance, adapted creative and disruptive modes of institutional work” (p.1113). Further, they subdivide this into elaborative and eliminative institutional work. For Herepath and Kitchener, these result in incremental refinements, thus creating a dynamic form of institutional maintenance, in which an institution which has been damaged is able to evolve and endure. They argue that: “[I]n the former refinements to aspects of the breached institution’s constituent pillars enhance and relegitimate the rules, normative behaviours, and taken for granted beliefs. In the latter, the opposite manifests” (pp.1133-4).

Luyckx and Janssens (2016), in a study of the legitimation techniques used by multinational corporations, posit the creation of actor images that are deployed to either legitimise incumbents or delegitimize their opponents. They propose that the nature of discursive legitimation can change over time and introduce discursive antagonism and discursive co- optation as two different forms of legitimation. Discursive antagonism is “explicit dispute, confrontation, and refutation of criticism” (Luyckx and Jannsens, 2016: 1612, emphasis added).

Mellahi et al. (2016), in a review of the ‘nonmarket strategy literature,’ group mechanisms into buffering and bridging activities, which are not mutually exclusive. In bridging firms seek to adapt their activities to conform with external expectations. In buffering, a firm protects itself from the external environment (Mellahi et al. 2016:150). Further, they argue that Buffering mechanisms involve both defensive and proactive activities on the part of focal organizations to gain influence and control over their external nonmarket environments. These include lobbying, campaign contributions, public relations campaigns, and building personal and organizational ties to sociopolitical institutions and actors (Sun et al., 2012) (Mellahi et al. 2016:150, emphasis added).

These concepts within defensive institutional work – containment work, restoration work, discursive antagonism and discursive co-optation, buffering mechanisms - can be combined with insights from institutional entrepreneurship to thicken an understanding of the strategies and tactics adopted by incumbents in their quest to maintain beneficial status quo positions.

2.4.4 Disruptive Institutional Work

Disruptive institutional work is exactly what it says – it is work which attempts to problematize existing regulations and laws, or social norms (both affective and cognitive). It is the sort of work that a policy entrepreneur, in the MSA terminology, must undertake within one or all of the three streams so as to be ready if and when a policy window opens – or indeed in trying to open a window. This is the kind of work undertaken by those who would apply pressure on an incumbent’s preferred institutional arrangements. It is conducted by ‘issue entrepreneurs’ such as scientists, social movement organisations and crusading journalists who all use framing and dramatizing strategies to create public and policy-maker awareness and concern around an issue that is either new or had previously have been considered unproblematic.

However, this thesis is not focussed on the types of disruptive work conducted by those who would undermine or overthrow the existing institutional pillars, except insofar as an understanding of how this disruptive work impacts upon other actors. The focus of this thesis is the defensive work conducted by incumbents to counter, prevent and pre-emptively minimise disruption to the institutional arrangements that incumbents wish to preserve. 50

2.4.5 Relational institutional work

Creative, maintenance, disruptive and defensive institutional work are all elements of the outcomes-based typology. In a 2017 article, Hampel et al introduce a means-based based typology, with three overarching types of work: symbolic, material and relational. Relational work “is concerned with building interactions to advance institutional ends” and “how actors can influence institutions through their interactions with others” (Hampel, 2017: 570/572). In order to answer research question 2, this thesis will use relational institutional work as a concept, since it helps to capture the kinds of work that incumbents engage in while trying to build coalitions and networks to sustain the (dynamic) status quo. Little work has so far been published on relational work (see Topal, 2015), and one contribution of this thesis is to help expand the scope of relational work, and indicate new avenues of investigation (see chapters 8 and 9).

Having explained the potential of the concepts of institutional entrepreneurship and institutional work the research questions can now be introduced. Following that is a section outlining the manner in which the two main literatures (public policy and institutionalism) will be combined.

2.5 Research questions and conceptual framework

We know from past research that socio-technical transitions unfold over decades, and are a contest – or rather a series of contests – between societal actors. These actors can, using the Multi-Level Perspective, be categorised broadly as incumbents or niche actors. We know that incumbents are able to use the inertia of existing cognitive, regulatory and normative systems (or institutions) to their advantage, and that niche actors and other challengers15 must have both luck and skill to marshal and focus their probably inferior forces if they wish to change the status quo.

What so far has been less well studied are the interactions between the incumbent actors and the challenging actors (whether from regime or niche), and the precise mechanisms by which

15 Not all challenges come from niches. 51 both try to assert dominance within arenas of contestation, how these arenas are constructed and chosen, and what tools are used by actors at various times within the decades-long struggle. (How) Do these tools change in efficacy in response to changes in the arena and learning by opponents that render them less effective? (How) Do actors attempt to select or shape arenas, strategies and tactics, and undercut each other’s ability to form coalitions, or learn from past successes and failures?

In order to study this, it is necessary to select a specific case study and then trace the arenas in which the (public policy) battles are fought, the types of actors involved, and the weapons that they use to combat one another in their attempts to either maintain the status quo or shift policy and, more broadly, the perceptions and material interests of both policy-makers and broader publics.

Given the pressing need for a series of sustainability sociotechnical transitions in multiple domains (energy, food, transport, housing etc.) and the certainty that there will be prolonged and powerful incumbent-led resistance to attempts at creating favourable conditions for these transitions, there is clearly a need for studies of what strategies, tactics and actions are deployed by (constellations of) incumbents. Turnheim et al. (2015, 240) argue that:

Effective governance of transitions needs to be appreciative of complexity, uncertainty, emergence and asymmetries of power, it needs to mobilise deep analysis and timely data, and involve a broad variety of actors in processes of learning, experimentation and adaptive adjustment as new facts and perspectives become available.

Therefore the research questions for this study are as follows:

1. What actions do incumbents undertake to resist, or shape, radical policy innovations?

2. What relationships do incumbents create, maintain and defend in respond to changing patterns of disruptive behaviour?

Having explained the relative strengths and weaknesses of public policy theories and institutional work and the research questions, it is now time to introduce the novel (hybrid) 52 conceptual framework which will guide the narrative of the empirical chapters and enable a level of conceptual clarity amidst mountains of data.

So, for a single policy window, we have the three preceding streams, the moment of coupling and the window itself. Figure 2.7 represents the fact that within each of these streams different actors are battling for position, performing different kinds of institutional work. Incumbents performing creative, maintenance and defensive work as represented by red arrows pointing downwards into the streams, during coupling and during the window, while challengers, by definition, perform disruptive work – represented by green arrows.

Figure 2.7 Institutional work into a policy window and its precursors. Source: author

However, taking the temporal aspect of policy battles seriously leads to a realisation of sequential windows, with learning occurring between windows, on the part of both policy entrepreneurs and their opponents (figure 2.8). 53

Figure 2.8 Learning between windows. Source: author

What this framework captures is both ‘short-term’ institutional work, but also longer-term changes, as actors learn from their previous interactions, and as pressure around an issue (re)grows.

Further to this, this thesis explores the ways in which some actors are ‘invited inside the tent’ during periods of intense contestation, if their interests overlap with more enduring incumbent actors. This is referred to in this thesis as ‘tactical incorporation.’ It is a tactical rather than strategic effort, since there is no effort towards– or expectation of – an enduring relationship or alliance, since on many other important issues the interests of the incumbents and those being incorporated do not overlap, and indeed may be in fundamental conflict.

2.6 Conclusion

This chapter has given an overview of the problem – in its widest sense – that this thesis addresses. It argued that – if we accept that “sustainability” requires not just macro-political change (policies and regulations), but institutional change, then we must direct analytical 54 attention both to institutional change, in the sense of institutional norms, and also to the resistance to change from those who benefit from the maintenance of the status quo.

Policy is one important feature of this, and three policy theories - Advocacy Coalition Framework, Punctuated Equilibrium and Multiple Streams Approach – have been examined for the tools that they provide for discussion of incumbent resistance, around research question one. However, while new policies can help create new social norms, incumbents benefitting from existing norms and policy arrangements can be expected to resist transitions to new socio-technical systems. However, these on their own do not offer enough guidance for a close study of precisely how incumbents behave in periods where institutional pillars are tottering, and those whose place in the world is dependent upon them fear the pillars might be toppled. A second set of concepts – institutional entrepreneurship and institutional work – are therefore needed to help demonstrate the breadth of incumbents’ work around institutional change and stasis. Incumbents co-ordinate their actions, and so a further type of institutional work – relational work – was introduced.

The following chapter outlines the methodology, and the following four chapters reveal the fruits of the conceptual framework and methodology.

Chapter 3: Methodology

3.1 Introduction

This chapter presents the methodology of my thesis. It has three core aims. Firstly it explains the operationalisation of the research questions derived from the literature review, demonstrating how the concepts within Multiple Streams Approach and institutional work are mobilised in a research design to answer my research questions. Secondly, it will justify the use of a case study approach, since - as Hyett and Dickson-Swift (2014) warn - if case studies are published without sufficient detail for their readers to understand their design, and without supplying a rationale for key methodological decisions, then the research may be regarded as lacking in quality or credibility. Thirdly, it provides a justification of the use of an “extreme” case (Flyvbjerg, 2006), in this case Australian policy (and cultural) battles over carbon pricing, which began as a policy battle and then evolved into broader cultural conflict. This sequential, single case study, with four episodes within a broader timeframe, is described and justified: comparing and contrasting the episodes can reveal fresh insights into the evolution of incumbent resistance over (extended periods of) time.

A discussion of data collection and analysis follows. It begins by discussing the various sources in terms of both their strengths and weaknesses and how they are mobilised to address the research questions. It then turns to the methods used to analyse the data collected, together with a justification of the selection of the four episodes within the broader period. The Australian case study is then outlined, showing where the four selected episodes of contestation fit within the broader period. The chapter concludes with discussion of the limitations of the study (especially around generalisability) and the criteria by which it might be regarded as a success or failure.

The overall aim of the study is to allow us to examine how incumbents respond to policy initiatives which they perceive as threatening (whether they are radical or not – discussed below), and if and how incumbent responses, and the constellation of actors, shift over time.

3.2 Discussion of case study

This section first answers the question of why a case study approach is appropriate to address the research questions, before turning to the specific choices of Australia and carbon pricing as the subject of study.

Yin (1994:3) argues that the distinctive need for case studies “arises out of the desire to understand complex social phenomena.” Given that a contested socio-technical transition is surely a complex social phenomenon, a case study approach is appropriate. Yin further argues that case studies allow investigators to examine “the holistic and meaningful characteristics of real-life events such as individual life cycles, organizational and managerial processes, neighbourhood change, international relations, and the maturation of industries.”

Case studies are often used to study situations of complex and contestational interactions. As Levy and Egan (2003) note, case studies are useful when the focus of study is “the complex relations among the actors and the focus on historical processes. Case studies can provide the breadth and depth of information to allow descriptive, causative, and inductive analysis to be performed.” Hyett and Dickson-Swift (2014) observe that “case study research has a level of flexibility that is not readily offered by other qualitative approaches such as grounded theory or phenomenology.” Additionally, Micelotta and Washington, (2013:1144), in an article about the defensive institutional work conducted by incumbents, argue that longitudinal case studies have a richness of data which can provide a firm basis for examining the activities of incumbents to maintain the status quo.

This case study uses theoretical frameworks (a mix of public policy theories and institutional work) to provide not merely a description but an explanation of particular cases. Thus it will lead to an evaluation and refinement of these theories. This interpretation will contribute to the understanding of incumbent resistance within socio-technical transitions, and the means by which that inertia is enacted by incumbents, often acting in coalitions.

Flyvbjerg (2006) outlines four strategies for selecting cases - extreme or deviant cases, maximum variation cases, critical cases or paradigmatic cases. Penna (2014: 113) notes that the first of these, an extreme case, is one that either clearly (‘extremely’) illustrates the theory 57 being tested or is unusual.16 Hess (2014: 279) has noted that “although research on the politics of STs is growing, it has not yet fully analyzed situations in which organizations associated with the incumbent regime mobilize to halt a nascent or growing ST.” Given this identified need, the selection of an “extreme case” of policy reversal serves to throw the most light on the strategies and behaviours of incumbents. As this thesis argues, one extreme case is that of Australia and its climate change mitigation policies between 1988 (the birth of climate change as a public policy issue) and the end of 2016, when, after abolishing a short- lived carbon pricing scheme, the federal government emphatically ruled out even the discussion of a renewed, and sector-specific, price on carbon (POC). A less extreme case, which would have revealed different knowledge, would have been the EU, where an explicit carbon tax was successfully opposed by business in the early 1990s (Wise, 1992), but a Europe-wide emissions trading scheme was ‘successfully’ introduced the following decade.

Single case studies allow a deeper and richer exploration of material, teasing out more subtle interactions between incumbents and disruptors, in which we are more likely to be able to fully describe, contextualise and explain incumbent strategies. However, this comes with the risk that the examples are from a specific context and therefore may not be representative phenomena (Micelotta and Washington, 2013; Siggelkow, 2007). Care must therefore be taken before making wider claims, and the conclusions of a single case study can only be suggestive, signposting to further research possibilities. As such, extreme caution must be used when making claims to universalizability. Other nations and regions’ battles over carbon prices will throw up different findings, given different cultures, influences and relationships. If a single case study approach is to be chosen, then an extreme case may be the best for throwing issues into stark contrast (although this of course has implications for generalisability).

Australia has been selected as the subject of the case study for the following reasons. It is one of the highest per capita carbon dioxide emitters in the OECD (The Climate Institute, 2015). It has vast quantities of coal and natural gas, which are used both for domestic energy

16 The other three types of case are described thus: “A maximum variation case strategy aims at choosing two opposing cases in one dimension, holding constant another dimension. A critical case is the one that has crucial importance in relation to the topic under study and allows for inferences of the kind ‘If this is (not) valid for this case, then it applies to all (no) cases’: it is a ‘least likely’ or ‘most likely’ case. Finally, the paradigmatic case is the one that represents an ‘exemplar’ for the phenomenon under study and so develops a new metaphor or a new theoretical line of enquire (sic). (Penna 2014: 112-13). Each leads to different types of knowledge, different kinds of insight. 58 generation and sold as export-earners (Australian Government, 2017). It also has bountiful renewable energy sources (especially wind, solar, geothermal and, to a lesser extent, hydro- electric). This is against a backdrop of Australia being one of the earliest countries to produce an emissions reduction pledge (in 1990) and also, in 2014, being the first nation to repeal carbon pricing legislation. As such, it appears a pertinent case to study incumbent resistance to radical policy innovations.

A comparative case study with other countries and their attempts to introduce a price on carbon would be useful, but would provide too wide a variety of strategies and tactics to create a detailed typology. In contrast, what a longitudinal study provides, if dynamics over time are traced, is processual understanding of changing configurations of incumbent relationships understood through MSA and institutional work.

3.2.1 Sequential/nested case study justification

The format of my case study is somewhat unusual, with a selection of four relatively short periods within a much longer timeframe. However, as Hyett and Dickson-Swift (2014: unpaginated) note, cases are selected to advance understanding of the object of interest and can be “studied as multiple, nested cases, observed in unison, parallel, or sequential order.”

While a purely sequential analysis that devotes roughly equal time to different time periods and battles throughout the entire period might be more traditional, it would come with several drawbacks. Firstly, it would make an implicit argument that all periods are equally important. Secondly, due to limits of time, cognitive capacity and word limits only a superficial analysis would be possible. However, a single case study approach, especially one spanning thirty years, and on a controversial subject can mean that - as noted by Blanchet and Depeyre (2016: 45) - there are too many actors and too many arenas, and so result “in general descriptions that provide little information about the complex dynamics at work.” They suggest “focussing on specific subjects that enable researchers to limit controversies both in time and space” and “dividing the overall controversy into smaller controversies.”

Therefore, there is a need to justify which periods are selected, judged on the criterion of which will likely reveal new insights into incumbent resistance and how it changes. I briefly justify four periods, and then explain why three other potential periods were not selected. The 59 four selected periods each have important features in and of themselves, but also allow an unfolding process to be studied. The first period, 1989-1992, covers the emergence of carbon pricing as a possible response to climate change. It also reveals that incumbents, while initially slow to respond, created several new organisations and began to co-ordinate. These organisations would play a crucial role in the next and further windows. The second period (1994-5) is selected because it was the first time that a carbon price was discussed by the Australian federal cabinet. It also demonstrates connection with the previous window, in that organisations and infrastructure created then became influential. The third and fourth windows (2006-2009 and 2010-11) represent the re-arrival of climate change as an uncontainable macro-political issue, with increasing numbers of actors and increased political and cultural salience. This five year period, with two linked windows, shows a steep escalation in incumbent mobilisation to resist a carbon price, with battles fought both in private and very publicly, providing a rich source of data.

This choice, of four particular periods of heightened contestation, allows thicker description and denser analysis and theory building. It also allows for exploration of possible path dependency effects, with actions and decisions taken earlier becoming constraints and guide- rails for policy actors at later dates, with or without their knowledge of this.

There is a positive case to be made for focussing on policy battles around a price on carbon, with three principal reasons. Firstly, since this is an environmental policy tool that has broadly been accepted by economists as ‘necessary but not sufficient’ for driving transformational change by industrial actors and (perhaps) consumers, the slowness of its arrival on the macro-political agenda, the repeated fierce battles that ensued and the ease with which it was abolished all merit attention. Secondly, given the emphatically ‘pro-market’ stances of both ‘right-wing’ and ‘left-wing’ governments in Australia since the 1980s around a host of public policy issues, a rational observer would have predicted that pricing carbon would have gained more traction than it has. Thirdly, while in and of itself – especially at the relatively low level proposed – a price on carbon would not in the short-term drive significant behaviour change, it seems to have been feared by fossil-fuel incumbents as ‘the thin end of the wedge’, and as a signal to investors that established assets (large-scale fossil fuel projects, both extractive and energy/material generating) could become stranded, and cause them to gravitate towards alternative low carbon technology development and deployment. 60

However, a focus on a price on carbon as an object of study raises the fraught question of the policy’s adequacy as a ‘transition’ policy. The discussion of the actual efficacy of a price on carbon as a policy driver for SST is beyond the scope of this thesis. It is enough to observe that incumbents have acted as if this were indeed an existential threat to them, rather than attempt to assess whether it actually would overturn the energy regime.

Within each of the four windows the focus will be on what powerful actors – politicians, business associations, well-connected think tanks and noisy civil society groups – do either in response to or in pre-emption of policy entrepreneurship in support of carbon pricing. To that end, announcements by industry associations, speeches by CEOs, press releases and reports – especially ones which seek to slow momentum towards carbon pricing – are of particular interest. In order to answer research question two, a focus needs to be upon attempts by incumbents to make ‘common cause,’ and to amplify each other’s messages, via the creation of umbrella groups, coalitions and the like.

3.3 Sources and analysis

This section outlines the primary and secondary sources I will use, and discusses the care that must be taken with each kind of source, and the overall methods that must be used to produce reliable knowledge.

Lawrence and Suddaby (2006: 239) argue that institutional work includes “composing legislation, telling stories, writing histories, making jokes and insults, writing memos and letters, writing legal opinions, writing and making speeches and making announcements.” This is a non-exhaustive list of the types of work that need to be examined when identifying the sorts of work incumbents undertake while trying to maintain status quo arrangements.

In accumulating evidence from the above categories, three principles of data collection derived from Yin (1994) were observed: usage of multiple sources of evidence; creation of a case study database; and maintenance of a chain of evidence. With regard to the first of these, Scott (1990; cited in Bryman, 2004: 381) argues that there are four criteria for assessing the 61 quality of documents. Together, these serve as a useful reminder of the need to handle data with extreme care.

 Authenticity. Is the evidence genuine and of unquestionable origin?  Credibility. Is the evidence free from error and distortion?  Representativeness. Is the evidence typical of its kind, and if not, is the extent of its untypicality known?  Meaning. Is the evidence clear and comprehensible?

Blanchet and Depevre (2016) caution the researcher that it is possible to get lost in abundant data. They argue that the methodological challenge is to gather rich and original data that are simultaneously coherent and manipulable. They propose five criteria: data intertextuality, data diversity, data temporality, data pluralism, and data relevancy as a way of winnowing data sources. These have been considered in selection of sources. I first turn to types of evidence I will discuss.

3.3.1 Types of sources

The distinction between primary and secondary sources can be subtle (for example, newspaper accounts written by active participants, or observers whose accounts can then in turn affect the narrative). In the following sub-sections I structure the discussion of both primary and secondary sources around the advantage and disadvantages for answering the two research questions, and ameliorative actions that can be taken. The primary sources that I draw upon – speeches, interview data, memoirs, trade journals and company/trade association reports, television/web-based advertising campaigns – are discussed below.

Incumbents often announce the kinds of work they are taking to sustain the status quo, boasting, for example, of their willing involvement in consultative exercises in the policymaking process, or the creation of multi-business collaborations. The use of the speeches by policy makers and policy actors has two advantages. They are usually accessible (via corporate and NGO websites, Hansard etc.) and they are not affected by hindsight bias (unless they have been edited). However, there are also clear disadvantages. Firstly, policymakers, especially in the heat of battle, are ‘spinning’ their stories. Secondly, policy- 62 makers will not necessarily admit, to themselves or others, exactly how incumbents applied pressure on the policy-making process and whether they were effective.

Moreover, speeches on their own are a dry and sometimes de-contextualised source. Some forms of institutional work, e.g. aggressive lobbying with ‘arm-twisting,’ are not advertised. To access these forms of work, it is necessary to go beyond the publicly available accounts of incumbents and to perform other forms of investigation, such as interviews. The primary advantage of conducting interviews is that they are first person accounts of observers and participants. They are often rich in empirical detail and ‘local colour,’ and can provide insights – both theoretical and empirical – which may not have been available from other documentary sources. Interviews can either be used to understand the landscape, become sensitive to the issues (so-called ‘helicopter interviews’) or to dig deeper into the perceptions and (inter)actions of actors in policy battles.17 .

There are, however, significant downsides to interviewing, beyond their labour-intensiveness. Firstly, there is selection bias inherent in access to elite policy makers. Access to elite actors, especially those still active, is often limited, and was in this research. Those willing to talk to an interviewer are a self-selected sample, and may have ‘axes to grind.’ This can become especially problematic if the researcher and the interviewee share ideological perspectives and normative commitments. Secondly, interviews are conducted with humans, who forget details and contexts, especially for events which happened years or decades ago. Thirdly, as Barley (1986: 81) notes, the mapping of ‘emergent patterns of action’ demands a detailed qualitative method — ‘retrospective accounts and archival data are insufficient for these purposes since individuals rarely remember, and organisations rarely record, how behaviours and interpretations stabilise over the course of the structuring process (emphasis added).

There is a certain irreducible dilemma in the use of interviews – if they are of very recent events, participants are ‘in media res’ and have not had a chance to reflect at length. If interviewed at a later date, they have created smooth narratives of their own behaviour which do not reflect the messy reality of a period of political contestation. However, the research questions do not explore the exhaustive unfolding of action, but instead broader brush-stroke

17 Ethical approval was granted by the University of Manchester. All interviewees, who were adults, gave informed consent 63 questions of strategies and tactics. Further, to reduce the bias from faulty memories and bias sliding towards outright deception, triangulation with documentary sources can be undertaken. Lorenzoni and Benson, (2015) triangulated interview data with documentary sources “acknowledging that the reliability of views can be limited by biased perceptions and memory recall. Where contradiction did occur written records were used as the final authority, as suggested by Davies” (See also Chubb, 2014). Overall, however, interviews are principally useful, at least in this study, in helping to situate the “meaning” of other documentary evidence and other events, and are used sparingly throughout the empirical chapters.

Not all participants in policy (and institutional) battles are easily accessible. Some, however, have written memoirs. While these are subject to some of the same biases listed above, they hold other advantages. There are three principle advantages to using memoirs as a data source. Firstly, memoirs partly sidestep the ‘access’ question present in conducting interviews. Secondly, they may give insight into the kinds of strategies and tactics used by incumbents, especially if the memoirist is now retired from politics. A third, empirical reason is that there is now a rich dataset, as many policy-makers have written accounts, especially of the tumultuous 2007- 2011 period. It seems both wasteful and churlish to ignore this resource, for all its problems. As with interviews, memoirs come with disadvantages. Some, such as hindsight bias and score-settling, are common to both. There is also a different kind of inherent selection/access problem towards politicians and away from businessmen and civil servants – most senior bureaucrats do not write books about their careers and the minutiae of the policy battles they participated in.18 These sources must not be used naively or uncritically; researchers must remember the warning of journalist Louis Heren: “When a politician tells you something in confidence, always ask yourself; Why is this lying bastard lying to me?" (Robinson, 2013: 285). In dealing with memoirs as a data source, it is important to read as broadly as possible, to seek out and read critical reviews of memoirs (especially by opponents) and to triangulate claims from sources genuinely independent of the memoirist. Where it is impossible to do so, the researcher should flag that they are reliant on a single source.

18 For a rare, and useful counter-example, see Behm, (2014). 64

Speeches/incumbent documents, interviews and memoirs are all worthwhile sources, but further documentation – from other perspectives – is needed to flesh out the accounts that these give. In addition, newspapers are often a locale for ‘score-settling’ and the selective leaking of information which would embarrass enemies and former allies. The Australian policy wars around climate change and economic responses to it have been fought for almost thirty years. Thanks to the use of MSA’s policy windows, focus can be directed onto four relatively brief periods (Dec 1989 -- Dec 1992; mid 1994 -- March 1995; November 2006 -- December 2009 and February – November 2011). This makes detailed use of newspapers feasible. I have decided to restrict my analysis to four main newspapers in Australia: the Australian Financial Review (the only national business paper), The Australian (the only national paper), the Sydney Morning Herald (a significant political force in the latter two windows, given the number of consequential scoops it managed to obtain), and the Canberra Times, which has been covering climate issues for thirty years, and is read by policy makers (and for which there is a complete digital archive that covers the first two windows). Three of these papers belong to Fairfax Media, with one (The Australian) owned by Rupert Murdoch’s Newscorp.19

As a source, newspapers have both formidable advantages and disadvantages. On the plus side, they are contemporaneous (removing the problem of hindsight bias), they are a rich documentary record, (especially in the business and quality press), and are a rough proxy of salience and public attention (if not of public opinion). Finally, they are well-accepted as a research tool, e.g. Boykoff and Boykoff (2004: 127) who used newspaper articles “randomly selected from four major US newspapers; the New York Times, the Los Angeles Times, the Washington Post and the Wall Street Journal.” 20

There are, inevitably, disadvantages. Journalists can fabricate stories (Bissinger, 1998). Journalists can be “captured” by their sources, either cognitively or by the threat of losing access in future. This is reflected in the remarks of an Australian journalist who started out as a researcher and was told that not having cultivated specialist sources would be a

19 Australian media ownership unusually concentrated, which has implications for transferability of findings to other contexts and cases. 20 Admittedly, they were studying media representations of climate change, but the principle remains the same. 65 disadvantage. She instead argued that the lack of close relationships with sources allowed reporting without fear or favour: Because I am not in bed, I don’t show favouritism and I don’t prejudge stories. I’ve had sports reporters say to me they come across these stories but they don’t break them because they’ll get nudged on the shoulder and contacts will say you can’t do that to me. They’ll burn bridges they can never rebuild (Meade, 2016).

More commonly, newspapers also just get it wrong without any malice intended, especially under influence of the tsunami of misinformation, disinformation and the short deadlines of the 24 hour news cycle. As Blanchet and Depeyre (2016: 47) observe, newspapers frame public problems, selectively report events, and may do so erroneously.

More sinister is the fact that, especially around the issue of climate change, newspapers, under pressure from their owners, can take very particular ‘lines’ on both the science and the policy at play (McKnight, 2016). Thus newspapers are by no means ‘clear mirrors’ through which the ‘real world’ is reflected without distortion.

As with all sources, problems remain. Firstly, researchers may gravitate towards particular sources (because of their track record of accurate scoops), and become unwittingly captured by a journalist or set of journalists. Secondly, the rich documentary detail can, siren-like, entice a researcher to get caught up in the minutiae, and so ‘fail to see the wood for the trees.’ Thirdly, digital access is not evenly distributed; The Australian, for example, was not digitised until 1997, meaning access to important articles is only available via microfilm.

In summary, used with care, newspapers are a valuable resource. As with other sources, though. it is necessary to triangulate. The ownership of a newspaper and the editorial “line” must be considered when facts which cannot be triangulated are being presented. Alongside incumbent documentation, memoirs and media accounts, other sources are available that offer additional broader (historical) analysis. Several books have been written about Australian climate politics (e.g. Hamilton, 2001, 2007; Pearse, 2007; Chubb, 2014: Taylor, 2015). These are useful sources for orientation and as examples of political manoeuvring and campaigning, but obviously require scrutiny and awareness of their authors’ normative commitments and also those of the publishers. For example, McGrail (2014) offers a cogent critique of Chubb (2014), pointing out that by focussing on information gleaned from 66 extensive interviews with policy actors, Chubb missed the broader strategic action field and its importance for a coherent analysis of the failure to legislate a carbon price in 2008-9. A growing range of academic articles are available on Australian climate and energy policy, especially with regard to the period 2007 to the present. Of particular use were a Master’s thesis (Wordern, 1998) and a PhD thesis (Pearse, 2005) which contained a great deal of relevant material, since both authors had excellent access to industry lobbyists active in what has been described as ‘The Greenhouse Mafia,’ thanks to their own previous employment as lobbyists.

Other sources include policy documents (which often have a preamble which explains the official narrative of the pressures which lead to the creation of the document), trade body annual reports, companies’ annual reports, trade journals and NGO/social movement organisation publications.

3.4 Data analysis

Having decided to focus on four particular episodes within the longer period, I placed data collected in the three streams of problem, politics and policy. I then made judgements on when coupling occurred, who was – in the terms of the MSA – the ‘policy entrepreneur,’ and the times at which policy windows could be said to have opened and closed. Within the four windows key events were be identified that helped sub-divide prolonged periods (three years, in the cases of episodes 1 and 3) into more manageable phases. An event might be either the result of planning by an incumbent or a challenger, or else a random occurrence which either incumbent or challenger must respond to, or that one or both seeks to turn to their own advantage, by framing the event.21 Key events within these periods were identified, based on the researcher’s judgements about the flow of events and the significance of the (inter)actions which took place, and identified as different forms of institutional work.

21 This framing might be, following Benford and Snow, diagnostic (what is the cause of the event), prognostic (what will happen next), or motivational (attempting to mobilise support for particular courses of action). An example of this could be the February 2009 bushfires around Melbourne, which killed 174 people. They were used by conservative commentators to attack environmental campaigners, on the basis that clearing undergrowth would prevent bushfires (see Chubb 2014). As Blanchet and Depeyre, (2016: 43) note, framing is always incomplete, fragile, and costly to set up. It therefore has a direct counterpart: overflowing (Callon 1998c) when positive or negative externalities arise. 67

This work of temporal subdivision allows the institutional work of both incumbents and disruptors to be more easily placed within the context of the time. All of this activity creates a narrative structure for each of the four case episodes, with timelines into which “events” are slotted. Events, occurring in the three streams, during coupling, during a policy window’s life or in its aftermath, can be a diverse range of occurrences, such as speeches, the publication of reports, the enactment of stunts, and other (public) efforts at influencing policy makers/decision makers, especially ones which draw an identifiable and concerted response from opposing actors.

3.5 Presentation of results

Blanchet and Depeyre (2016: 48) observe that researchers “must produce intelligible narratives that do not overwrite the debates, but preserve the wealth of connections … as well as the uncertainties that surround them.” There remains, of course, a fundamental problem with linear accounts which cannot fully capture the iterative and contingent nature of policy battles, or of the ebbs, flows and floods in a policymaking and policyunmaking process. That is beyond the scope of this thesis, which will present a narrative structured temporally by the MSA, with streams which are coupled to form a window which then is closed. Within those temporal divisions, the institutional work performed by incumbents will be presented and later analysed.

Having constructed the framework provided by the MSA/IW combination, which acts as a way of structuring my data, I will still be left with the task of analysing the data. The following section explains the dangers within analysis. According to Yin (1994: 102) this “consists of examining, categorising, tabulating, or otherwise recombining the evidence to address the initial propositions of a study.” Yin argues that there are “four dominant analytic techniques… pattern-matching, explanation –building, time-series analysis, and program logic models.” Blanchet and Depeyre (2016: 47) urge researchers to undertake internal critique of their sources, “challenging the pragmatic dimensions of their data. Who is talking? To whom? And with what objectives? Such critical thinking produces nuanced data analysis.”

Yin (1994:106) argues that if comparing “an empirically based pattern with a predicted one… the patterns coincide, the results can help a case study strengthen its internal validity.” Also studying incumbent behaviours, Smink et al. (2015) report that they created a “preliminary timeline of incumbent behaviour on the basis of newspaper articles and the incumbents’ annual report” and also included other materials such as government documents, websites and incumbents’ position papers. In the paper which introduced the concept of ‘defensive institutional work’ (Maguire and Hardy, 2009: 153)22 developed a narrative account by constructing an event history database that relied on descriptions from interviews and secondary sources, juxtaposing to ascertain convergence. Hedstrom and Ylikoski (2010: 53) counsel that the narrative approach “does not aim at an exhaustive account of all details but seeks to capture the crucial elements of the process by abstracting away the irrelevant details.” However, there are dangers in ‘writing narratives.’ As Skocpol, 1994: 332) notes: narratives can be structured in many, many ways. It takes powerful investigative (and justificatory) methods, as well as a rich array of ever-refined theoretical ideas to figure out what “structures” and “conjunctures” count, and which happenings are transformative as opposed to merely humdrum. Geels and Schot (2010: 98) argue that narrative explanations need to account for: the structure of the game, the important players and their cognitive frames and resources; the actors’ options and relations; the broader effects of actions; and finally whether structural changes are accepted and institutionalised (or ‘entrenched’, as Zietsa et al. (1999) would have it).

Micelotta and Washington, (2013: 1144) note that researchers with large amounts of longitudinal qualitative data face methodological challenges. They advocate following the practical suggestion of another author to “identify the main protagonist of the story, and position this central character at the front and center of [the] qualitative study.” This solution - especially when relying on speeches, memoirs etc. and (individual) actor-based detail – comes with the dangers that a researcher can become fixated on actors rather than the structures which both enable and constrain them (McGrail, 2014), and the relationships

22 Maguire and Hardy, (2009: 153) write that they developed a narrative account (Eisenhardt & Bourgeois, 1988) that “constructed an event history database (Van de Ven & Poole, 1990), using the interviews and secondary sources, chronologically ordering descriptions of the process leading to the abandonment of DDT and juxtaposing accounts from different sources to ascertain convergence.” 69 between actors. As While et al (2004: 560) note: “such agency-centred accounts can overlook the ways in which governing for sustainability is structured by the capacity to act.”

Throughout, I will be engaging in what Zundel et al. (2012: 107) refer to as “analytic abduction”, iterating between empirical data and emerging as well as pre-existing theoretical constructs and understanding (Orton, 1997), and am seeking to make analytic generalisations rather than statistical generalizations (Yin, 2012: 18).23

3.6 Conclusion

In this chapter I have explained my choice of a case study approach. I have then justified the choice of Australia as a relatively extreme case of incumbent resistance to sociotechnical transitions, and also justified the selection of carbon pricing as a policy to examine this resistance. I have explained the selection of the four episodes within the case study, and then turned to the sources I will use to construct my narrative, and the care which must be taken with various sources of evidence. I then explained my data analysis and its limitations. In the following four chapters I set out the empirical research which reveals the institutional work performed by incumbents in each of the four policy windows. This will be followed by a discussion chapter which brings the threads together and proposes a series of conceptual propositions about incumbent resistance. A conclusion chapter which lays out limitations of the study and scope for future work completes the study.

23 See also: “Seldom is an entirely new understanding reached but refinement of understanding is. Generalizations about a case or a few cases in a particular situation might not be thought of as generalizations and may need some label such as petite generalizations, but they are generalizations that regularly occur all along the way in case study” (Stake, 1995: 7). 70

Chapter 4: “Formative Battles”: Channelling the floodwaters: incumbents learn to control the direction of flow in the 1998-92 policy window

4.1 Introduction

The report was unequivocal; a carbon tax imposed to meet international obligations would “cripple Australia's coal exports and kill the country's aluminium industry by 2005” (Reuters, 1992). Its timing was crucial; in February 1992, the Federal Government was deciding its stance towards the June Rio Earth Summit. Industry groups, individual companies and even a trade union had come together to commission and publicise this “bombshell” study (Cribb, 1992), called The Impact of Global Warming Control Policies on Australian Industry. Mining giants BHP, Shell and CRA, two business associations - the Australian Coal Association (ACA) and the Australian Mining Industry Council (AMIC) - and (strange bedfellows) the communist-influenced United Miners Federation24 had hired a consultancy, London Economics (LE), to produce the study. Launching it, Brian Loton, BHP’s deputy chairman and president of the Business Council of Australia (BCA), made up of the CEOs of the 100 largest companies, argued that Australia, as a special case, must “develop policies which are based on its own special needs, not simply derived from the policies of another group of countries with totally different industrial bases and trade considerations” (Anon, 1992: 11 Feb).

Conceptually, the report can be seen as the culmination of a combination of meaning work, maintenance work, temporal work and – crucially – relational work by incumbents, aimed at restabilising a set of institutional assumptions about the role of the mining industry, coal and big business in Australia’s economy and society. Had the report been presented only by fossil-fuel companies, then it would have been easily dismissed as ‘vested interests speaking for themselves’ – unanimity but only of predictable opponents of a tax. The presence of an ‘odd man out’ made it much less vulnerable to this, adding to the impact of the relational work.

24 This union became part of the CFMEU – Construction, Forestry, Mining and Energy Union. In a 2015 interview one figure recalled: “They invited us to sit in on the steering committee. They were keen to have anyone else supporting their position. We wanted to see what was going on” (emphasis added). 71

Empirically, it can be seen as the climax of ‘economic costs’ framing efforts stretching back to September 1989. Incumbents had been trying, against the flow of domestic and international pressures, to close the climate policy window. Studies they had funded had shifted the climate debate away from moral and existential challenges, deflecting energy efficiency and renewable energy generation proposals while highlighting costs to specific sectors of Australia’s economy (see also Lowe,1994: 315-333; Hextall, 1992).

This chapter and the following three use the “Multiple Streams Approach” as a temporal heuristic to provide a narrative explanation of the work conducted by incumbents and disruptors within three streams, during coupling and throughout a policy window (figure 4.1). The 1989-92 window has five significant battles of contestation: over the meaning and scope of Ecologically Sustainable Development (ESD): the Federal government’s adoption of an emissions reduction target: the legitimacy of the ESD outcomes: the government’s international negotiating position: and – as a coda – an attempt to revisit the emissions target. Carbon pricing per se was not the central element of the policy window, since the issue was new to policymakers, and the ‘flotilla’ nature of policy was more marked in this initial window (Passey et al., 2012). Figure 4.1 gives an overview of the events described in the chapter, and will be articulated through the course of the chapter.

Figure 4. 1: overview of the chapter’s policy window 73

4.2 The streams

The problem stream had grown slowly. Scientific concern about the possible impacts of Anthropogenic Global Warming (AGW) increased slowly but steadily from 1958, gathering momentum and advocates especially from the mid-1970s onwards.25 “Related” issues, such as ozone depletion and deforestation, acted as amplifying opportunities for problem brokers.

The first mention in the Australian scientific literature came in 1969 (Slatyer, 1969). In late 1974, a senior bureaucrat in the Federal Government convinced the Science Minister to commission a scientific study on the possible impacts for Australia. The report (AAS, 1976) argued that there was no immediate cause for alarm. Environmental activists became aware of the problem (as seen in ACF’s publication ‘Habitat’), but did not campaign on it. In 1981 the Office of National Assessment, an intelligence body, produced a secret analysis, Fossil Fuels and the Greenhouse Effect, which warned of problems by the year 2000 (Hamilton, 2007: 44-46). Policy makers did not act. In the mid-1980s Federal Science Minister Barry Jones became concerned and collaborated with climate scientists to establish The Greenhouse Project (TGP) as part of his broader organization Commission for the Future (CFF). TGP was launched in September 1987, with workshops aimed at bureaucrats and industry. A scientific conference followed in November 1987.

Meanwhile, international developments raised the credibility of scientists. The ‘Ozone Hole,’ discovered in 1984, had increased concern about atmospheric damage. A 1985 scientific meeting in Villach, Austria indirectly led to the formation of the Intergovernmental Panel on Climate Change (IPCC) in 1988 (Pearce, 2005). Alongside that, the 1987 United Nations report Our Common Future (popularly known as the Brundtland Report) pushed

25 The broader question, of Australian awareness/acceptance of environmental limits, and the growing environmental awareness in the 1960s and 1970s, is fascinating, but falls outside the scope of this PhD (see Bonyhady (2002), Hutton and Connors (1999), Flannery (2010), Wright, (1977), Marshall, (1966)). The prevailing norms were classic extractivism: rip it up/tear it out and sell it off. That is the ‘institution’ incumbents defended from environmentalists’ disruption efforts.

74 environmental issues and sustainability onto the front pages of newspapers. Not everyone was convinced; senior Federal bureaucrats removed the ‘climate’ chapter from the 1988 Energy 2000 national planning document (Pearse, 2005: 328).

The problem stream, already growing because of related environmental issues and TGP, widened thanks to focussing events: two international and one domestic. The first was in the USA, in June 1988: problem brokers (Knaggard, 2016) arranged for climate scientist James Hansen to testify to the US Senate. The second took place a week later, in Toronto: a conference on The Changing Atmosphere: Implications for Global Security, attended by

Australian scientists. The conference statement urged developed nations to reduce their CO2 emissions by 20% by 2005, the so-called Toronto Target (hereafter ‘Toronto’).26 The main domestic focussing event was the second TGP undertaking – the November ‘Greenhouse 88’ conference held in 10 Australian cities, linked via satellite (then a novelty), with senior scientists, politicians and community voices calling for rapid action. This caught the media’s attention (Schneider, 1989), and green concerns became significant issues in ensuing years.

Incumbents were lead-footed. Despite an exhortation that “issue politics [were] no longer a spectator sport for CEOs” (Carnegie, 1988) business’s handling of public debate was – according to the Federal Liberal environment spokesman - “appallingly naïve…. With all its resources and skills and the very positive story the business community has to tell, it has allowed itself to be beaten hands down in the contest for the public’s hearts and mind” (Anon, 1989, July 11).27 This may have been caused by incumbent scepticism of AGW: Commonwealth Scientific Industrial Research Organisation (CSIRO) scientist Graeme Pearman observed that “People in the energy community at large are not really convinced that the problem exists and the only reason that they have acted is because they have been under political and community pressure” (Anon, 1989, August 8). In addition, senior figures in the coal industry assured colleagues technology would soon provide solutions to any hypothetical problems. For example, the executive director of the NSW Coal Association announced technology was being developed to cut emissions from new coal-fired power

26 NGOs wanted a stronger target during the conference. At the end of that year, at a conference in Hamburg, they called for a 50% reduction by 2005. 27 This is supported by an interview conducted by the author in 2014: “… the industry was clearly not comfortable with our messaging, but they were still I think quite laid back almost about the level of threat it posed. By about 1990 they’d suddenly realised this was a very serious business and they had to get organised. (Interview with Rob Fowler). 75 plants by approximately 25 per cent (Anon, 1989: Sept 26; see also bids for state funding by the Hunter Technology Group Anon, 1990: March 27; see also Anon 1991: October 29).

Within the politics stream, despite evidence of early awareness of AGW, politicians only evinced concern once the problem stream had thickened considerably, due to international and domestic factors. Internationally, the Reagan government was determined not to be ‘bounced’ by atmospheric scientists in the same way they felt that they had been over the ozone problem and pushed for the creation of an Intergovernmental Panel on Climate Change (IPCC) (Agrawala, 1998). Australian politicians paid more attention. In May 1989 Greens attained 15% of the vote in Tasmania’s elections. An August 1989 Melbourne Age editorial noted “Hardly a day goes by without a Government or Opposition spokesman at either the state or federal level expressing concern over air pollution, forest clearance, soil degradation, the ozone layer or the greenhouse effect” (quoted in Burgman, 1993:220). Parties wooed swinging voters. Both Labor and Liberals went to March 1990’s Federal election with ambitious greenhouse commitments. Ironically (given their later history of adamantine resistance), Liberal Party policy was stronger, aiming for a 20% emissions reduction by 2000. This ‘competitive consensus’ ended after that election, with conservative parties returning to their previous hostility to environmental concerns, believing themselves ‘betrayed.’

The policy stream was unsurprisingly, given the issue’s novelty,28 the thinnest. Existing policy options – around taxation and regulation – were unattractive to incumbents, who

28 Interviewed in August 2017, Clive Hamilton points out “And so you have to remember back in the early 1990s the policy world was undergoing a kind of profound cultural shift. It was being asked to accommodate, to incorporate this new way of thinking – ecologically sustainable development. I 76 would mobilize to produce reports and taskforces to inhibit their flow. There were uncertainties about what could or indeed should be done. Policymakers quickly realized that AGW had far more stakeholders and fewer easily-implementable technological solutions than CFC-caused ozone depletion. In addition, Australia’s economy had undergone rapid transformation over the previous half-decade, with tariffs abolished, the dollar floated, and a retreat from the norm that states could or should proactively address social (and environmental) issues (Kelly, 1994). Known at the time as economic rationalism this would now be called neo-liberalism. There was great uncertainty about Australia's economic future, amid concern about the 'current accounts deficit' (the imports/exports gap). This gave export- earning incumbent industries a powerful rhetorical weapon, which they enthusiastically wielded.

The first, glancing, mention of an economic response to AGW29 came in the mid-1989 Federal Government environment statement ‘Our Country Our Future. It argued: many of our environmental problems arise because market prices do not reflect the full costs of various human activities…. Changes can be made to royalties, charges, taxes and the assignment of property rights as knowledge about the environmental impact of human activity grows” (AGPS, 1989: 6). However, the first public acknowledgement that specific carbon taxes might be required came four months later, from Barry Jones (Anon, 1989: November 14, ‘Greenhouse gas’)30. Simultaneously the Federal Treasury – not known for its enthusiasm for new taxes or concern for environmental issues - also proposed price signals instead of regulation (Anon, 12 December). The stars were aligning.

mean we forget now, because it’s kind of got into the bones that this is what it means. But then it was kind of ‘whoa – what does this mean, where is it coming from? This sounds a bit crazy’.”

29 The idea of tax breaks for pollution-reduction technology dated back at least to 1969, in the Senate Committee on Air Pollution (see also Samuel, 1970). From 1973 onwards ACF sought a resource tax on petroleum to fund solar research (Lines, 2006: 140). Christoff (2015) notes that a 1980 National Conservation Strategy was “Australia’s first attempt to formulate a nationally integrated strategic approach to environment policy rather than an attempt at conflict resolution or to regain national control of the environmental agenda, as the Hawke government would try to do with its National Ecologically Sustainable Development Strategy process a decade later” (emphasis added). 30 As one interviewee notes (Coulter, 2017), the question of fundamental tax reform dated back to Henry George’s Land Tax.

Meanwhile, the mining industry, worried the Government might adopt ‘Toronto’ to gain green votes, sprang into action. CRA (later renamed Rio Tinto) commissioned academics to conduct economic modelling, as a form of defensive meaning work. The report The Feasibility and Implications for Australia of the Adoption of the Toronto Proposal for Carbon Dioxide Emissions appeared in September 1989. Unsurprisingly, it predicted enormous economic damage. It was much quoted over the coming years, until other modelling supplanted it.

More systemically, in an example of intra-industry relational work, the same month the BCA established an environment taskforce (Anon, 1989: September 19) to co-ordinate its environment policy, respond to government initiatives, and engage in policy battles.31 Its chair soon argued Governments were “too nervous about environmental issues” and conservationists were “over-emotional” (Anon, 1989, November 7: Governments nervous). He characterised disruptors as manufacturing “needless anxiety and kneejerk solutions to very complex problems” and warned that if “Government cannot be trusted to abide by its standards and will overturn established planning processes, then the window for investment in Australia is likely to close with a resounding crunch.” Before the report and taskforce, incumbents had been on the back foot, waiting for green enthusiasm to evaporate. A contemporary article (“Business-green conflict rising”) observed “Business and governments are becoming more vocal, because until now the greens have had almost all the publicity to themselves” (Anon, 1989, Dec 12). This would change once the window opened.

4.3 Coupling

31 At a state level, the Queensland Confederation of Industry also created a taskforce of executives to launch a “massive campaign” to put its side in the environment debate (Anon, 1989, October 17 Industry Groups).

Coupling was a prolonged process; a first, ‘heroic,’ attempt failed, and a second attempt was successful thanks to an impending Federal election and combative stakeholders. Environment Minister Graham Richardson made that first coupling attempt. At May’s Cabinet meeting his ‘Toronto’ advocacy was defeated by Treasurer Paul Keating (Dunn, 1989; Anon, 1989, 25 July). Incumbents could not rely on Keating's blocking indefinitely. Business sought to speak with one voice. Nine peak bodies combined in October to decry environmentalism’s progress (Anon 1989: November 7); eleven did the same in December (Anon, 1989 December 12: Gill, 1989: 5 December). Stung by criticism, Prime Minister Bob Hawke held a meeting on 7th December with industry, union, farming and green groups. Afterwards he announced an “ecologically sustainable development” (ESD) policymaking process (Gill and Davies, 1989; Seccombe, 1989, December 8).

Thus opened an environmental policy window, which included issues like forestry and fishing. It closed exactly three years later on 7th December 1992, when the Federal and state governments agreed the National Greenhouse Response Strategy (NGRS), comprising entirely voluntary measures. In MSA terminology, this was a ‘consequential’ coupling (oriented from a problem) rather than a ‘doctrinal’ coupling (in which a policy solution goes in search of a problem).

4.4 The Policy window

The policy window saw open and sustained conflicts between incumbents and disruptors over the fundamentals of the Australian Federal Government response to AGW. They fought five battles around three issues – the ESD (twice), international targets (twice) and over domestic responses (tax versus voluntary measures). The first (April-August 1990), was an “agenda- setting” battle, over having an ESD process per se – which stakeholders would be “in”, what limits would be set? The second (May 1989 - October 1990) was over an emissions reduction target: should Australia commit, and with what (if any) caveats? The third (November 1990 - December 1992) was over policy formulation – the process and outcomes of ESD, stretching through the working groups process and its aftermath. The fourth was two-fold: around the potential adoption of a particular policy instrument – a carbon tax -within Australia, and the negotiating position of the Federal Government at the Rio Earth Summit. This battle was fought especially intensely from September 1991 until victory in March 1992. The fifth, a 79 desultory attempt to repeal the emissions target, was lost. The final months of the window were a ‘mopping up’ operation.

4.4.1 Before hostilities commenced (April - August 1990) A ‘phoney war’ preceded the first battle; a Federal election was fought, and an extremely important organisation, the Tasman Institute (hereafter Tasman), was launched. At the time a strong domestic climate policy response seemed likely. One informed journalist (Anon, 1990, March 13) opined: By 1992 it is likely that Australia will have to agree to a global carbon tax to promote alternative fuels and provide funds to bribe developing countries to develop less- polluting technology. The government elected on March 24 must start preparing legislation immediately to enable us to meet such a tax. Some big industries, such as coal, oil, motor cars and electricity will suffer…. That Federal election, narrowly won by Labor with green voters’ preferences, had consequences. Environment Minister Graham Richardson was replaced by Ros Kelly, who lacked his Cabinet heft. Secondly, the Liberals – believing the Australian Conservation Foundation (ACF) had promised not to support Labor – felt betrayed, and became unremittingly hostile to green groups and concerns (Kelly, 1994: 543), ending the ‘competitive consensus’ over climate targets. At this time, incumbents were already wary of a carbon tax. A business press journalist reported that industry leaders were “moving to head off possible moves by Australian conservationists to take up the European push for “carbon taxes” on resources industries” (Massey, 1990: 3).

Wanting to be seen as responsible corporate citizens, BCA engaged with the policy process. Its Environmental Taskforce issued an environment statement in April, sounding a warning that “unless rapid steps are taken to remedy the situation we risk double jeopardy -- the loss of development opportunities and a piecemeal, inadequate response to critical environmental concerns” (Craig, 1990). This Taskforce was a vector of defensive institutional work - a source of studies which could be cited by CEOs in speeches to shareholders, or given to journalists and newspaper columnists seeking (big scary) numbers for front page stories and fulminations.

Given public cynicism about vested interests, ideally defensive work’s vectors will be ‘independent.’ In June 1990, a privately-funded think tank, Tasman Institute was launched. 80

Its backers included press baron Rupert Murdoch, retail baron Baillieu Myer, the ANZ Bank, BHP, CRA, AMIC and ACA (Anon, 1990: 8 June). Tasman started producing analysis immediately. It attacked disruptors over energy efficiency and carbon taxation. It counter- punched, arguing markets and privatisation of the environment would provide better outcomes (see table 4.1).

Table 4. 1: Tasman reports pertaining to Greenhouse policy in the period 1990-1992.

Tasman also sponsored research which was “crucial in challenging conventional views on the nature and extent of warming in Australia” (Moran 1992: 4), and built relationships with journalists in order to get its ‘sky-will-fall’ studies into newspapers (e.g. Lynch, 1991). Peter Kinrade, a former ACF analyst, reflected that “we knew that the Tasman Institute… was being funded by industry, who rather than them coming out directly and criticising they would take the position of funding the Tasman Institute or IPA [Institute of Public Affairs] to do the work for them….” Clive Hamilton (interview, August 2017) explains that he established the progressive think tank The Australia Institute “in large measure in response to the activities of the Tasman Institute and the IPA.” It and the pre-existing Institute of Public Affairs (IPA) were “extremely effective players in the environment debate. Very destructive.” Engaging in defensive work that sought to demonize disruptors, the IPA ran a steady stream of articles and op-eds doubting AGW, co-funding US climate sceptic Fred Singer’s 1990 Australian speaking tour, and challenging teaching materials used in schools (Anon, 1991: Feb 26). It tried to get a British documentary, “The Greenhouse Conspiracy” aired on ABC (Stone, 1991), and began a public campaign suggesting that there was no scientific consensus (Lowe, 1994: 321). Another think tank, the Centre for Independent Studies (CIS), published articles in its (well-distributed) journal Policy arguing for a 'wait- and-see' approach on AGW (e.g. Walker, 1989). 81

Defensive institutional work was not solely the preserve of think tanks and trade associations. Companies such as BHP, Du Pont and 3M developed positions ranging from trying to reconcile sustainable development and profit “to more aggressive endeavors to tackle, on scientific grounds, the claims made by environmentalists” (Uren, 1990). Corporations made submissions to parliamentary inquiries: BHP and ICI told a senate inquiry the costs of addressing AGW might sorely disadvantage Australian industries (Anon, 1990, July 10 'What ICI').

4.4.2 The first battle: Ecologically Sustainable Development (April-August 1990)

In an agenda-setting battle, incumbents and disruptors fought over whether the policy process Hawke had initiated should be labelled “ecological.” In February 1990 Graham Richardson had observed that sustainable development was: the new buzz word for the ‘90s. This marvellous elastic concept stretches itself across the political landscape in such a way that it is welcomed by the Mining Industry Council, welcomed by the forest industries and welcomed by the Wilderness Society. I suspect it will have worn out its welcome pretty soon, given that kind of result (Anon, 1990, Feb 13).

The struggle was crucial because environmentalists were arguing for Government to support fundamental structural change in the Australian economy. In a joint (ACF, Greenpeace, WWF et al) criticism of the Government's June ESD discussion paper, disruptors argued: we must make fundamental changes in the way in which we relate to the natural world and the resources upon which we depend... the process of achieving ecological sustainability will involve economic structural adjustment, with some sectors declining in size and even disappearing, while new ones are created and growing (Hare, 1990, emphasis added). 82

State level politicians used this view to accuse greens of “plotting the destruction of key industries and employment groups” (Anon, 1990, September 18). That government discussion paper, alongside some ministerial attitudes, left green groups underwhelmed, threatening to boycott the process (Lamberton, 1990). Even Ros Kelly declared herself “not thrilled” (Anon, 1990, July 3). Meanwhile trade associations took differing stances. The BCA welcomed it as a clear rejection of the ‘no growth’ path for Australia. A month later it opened a new front, arguing the word ‘ecologically’ was prejudicial, and that going beyond the “generally understood and internationally accepted” term sustainable development could bias the debate towards the environment movement, and that the government needed to “help avoid the sort of unbalanced and, at time, hysterical debate we have witnessed over the past 12 months” (Anon, 1990: 28 August).32

Beyond this discursive skirmish over the word “ecologically” the BCA said it had “serious reservations about the under-representation of business and industry in the proposed working groups” (Anon, 1990: July 24 Clear Consensus). The miners’ peak body, AMIC, was more aggressive, arguing a sectoral approach (of individual working groups for mining, fisheries, agriculture etc.) was “crazy” (Garran, 1990, 20 June). In August, deploying public choice rhetoric, AMIC denounced “elitist green lobbyists” and “power-hungry politicians” for stifling progress (Anon, 199, August 28 ‘Miners attack’; Anon, 1991, Nov 19). The following week Ros Kelly returned fire, saying AMIC’s idea of a sustainable industry was: one in which miners can mine where they like, for however long they want. It is about, for them, sustaining profits and increasing access to all parts of Australia they feel could be minerally profitable, even if it is of environmental or cultural significance (Anon, 1990: Sept 4).

Such was their antipathy to the term ‘ecological’ that some incumbents resolutely referred to ESD as ‘sustainable development’ in newsletters and public pronouncements (see for example NSWCA, 1990; ACA, 1990 November).

32 A year later the BCA had not let go of the bone. An anonymous author wrote :”Adding “ecologically” to the UN’s “sustainable development” was a concession to the environmental movement which overseas governments do not appear to have found necessary” (Anon, 1991, ESD A Truly Heroic Quest p.6). 83

4.4.3 The second battle: International commitment? The Toronto target

International AGW pressures were building, with various countries declaring they would reduce emissions by 20% by 2005. The prospect of Australia following raised incumbents’ hackles; they fought a rear-guard action and won the insertion of crucial caveats.

After Richardson’s failed 1989 bid various state governments adopted ‘Toronto’ (Hudson, 2015). Ros Kelly revisited a Federal commitment for two reasons. Firstly, she needed an eye-catching proposal to take to the Second World Climate Conference. Secondly, green groups were delaying ESD participation until the government set an ambitious emissions target (Cockburn, 1990).

Incumbents performed “outside” and “inside” defensive work. The outside work was twofold: highlighting the possible costs, while diluting the narrative that such cuts were achievable cheaply. AMIC labelled Ros Kelly’s claim that Toronto was easily achievable as “nonsense” (Anon, 1990: September 11). Meanwhile ACA urged caution, since comparable nations had not committed (Anon, 1990: September 18). The inside effort was simple – have allies (bureaucrats and politicians) acutely sensitised to potential economic costs. These allies, aware that some target was inevitable, adopted a ‘fall-back’ position, inserting caveats which would be useful in later battles. On 11th October Cabinet agreed to ‘Toronto’, but with caveats: …the Government will not proceed with measures which have net adverse economic impacts nationally or on Australia’s trade competitiveness in the absence of similar action by major greenhouse-gas-producing countries (Australian Government 1991).

ACA was satisfied While believing it was irrational to commit to any form of target until the completion of the work of the Industry Commission and the Sustainable Development working groups, the [ACA] support the undertaking not to damage Australia’s national economy and export competitiveness. 84

In issue minimisation mode, they added “The burning of coal contributes 0.25 per cent of greenhouse gases” (Anon, 1990, October ACA welcomes Toronto decision).

Despite winning this compromise, incumbents continued to emphasise the economic costs of mitigation, and re-contested Toronto after the Earth Summit (battle 5).

4.4.4 The third battle: within and alongside the ESD process

After the Toronto compromise, ACF, WWF and Greenpeace agreed to participate in the ESD (Greenpeace later withdrew). ESD was much wider than just climate change, looking at forestry, agriculture, fisheries, tourism and other sectors. Nine working groups, consisting of state and federal bureaucrats, representatives of industry and green groups were formed. A Greenhouse group was added part-way through the process (complementing the Energy Production and Energy Use groups). The groups met several times between late 1990 and mid-1991, alongside public hearings, while Liberal politicians derided ESD as “an endless saga – serv[ing] only to delay important government decisions” (Anon, 1991, June 18).

Incumbents and disruptors squared up for a fight within these groups. Incumbents blocked unwelcome policy proposals whenever possible. Peter Kinrade (interview 2017) recalls that “virtually all of the policy proposals came from the environment groups. Essentially the response from industry was to block, where they could. Occasionally they’d put modified versions, or alternatives….”

In November 1989, CSIRO had put forward a “polluter pays” levy for environmental research (Anon, 1989, November 14). ACF, which had been calling for R&D support for renewables since the mid-70s, proposed specific policies (including carbon pricing and direct renewable technology support). Kinrade recalls: we felt there needed to be investment in alternatives, to accompany the price signal. The price signal alone wouldn’t be sufficient. ... By having a hypothecated levy you could put it at a relatively low level and raise a fair bit of revenue. 85

This was partly inspired by the September 1989 CRA study; Kinrade (interview, 2017) saying “in a sense this was part of our response to that.”

Instruments such as a levy, although initially small, could cause incumbents real problems. Once established, policymakers might gradually increase its size, such that it became a (growing) cost to producers, and a source of revenue to disruptors. Additionally, from a discursive perspective, a tax sullies commodities’ image. Kinrade recalls that incumbents

(both bureaucrats and industry) derided the proposed levy ($2.20 per tonne of CO2): “basically it was laughed at. There was no chance it was ever going to get up…. I put it on the table and someone said to us ‘oh, you’re off with the fairies’.”

Ultimately, three ESD groups argued a carbon tax warranted further investigation (Norton, 2004: 313). Incumbents had lost the argument in the policy subsystem. They responded by discrediting the process with what one journalist called “a chorus of objections.” The BCA bemoaned that: Despite nine months of work, the government is still faced with the question of whether radical environmentalists will continue to be allowed to stand in the way of further developments of resource based industries (Anon, 1991: 13 August). BCA’s executive director soon after minimized the issues and attacked disruptors, saying: I do not know whether the greenhouse issue is going to be a major problem for the world, or the catastrophe some are predicting. In point of fact, no one does, despite the religious fervour with which some have embraced it (Anon, 1991: Oct 29).

Defensive relational work continued. Ten industry groups – including the BCA, AMIC, ACA, the Chamber of Manufactures, the Gas Association, and Institute of Petroleum – met and called on the ESD working group chairs to allow 10 working days for the final reports to be considered properly by business representatives (Garran, 1991: 23 September). They claimed the process was ‘flawed’ and hinted at withdrawal if their demands were not met (Peake, 1991).

Although industry lobbied intensively between the release of the drafts and the final reports, the main reason for watering down of the proposals was that the ESD process was set up to provide consensus findings: the August 1990 charter letter from Prime Minister Hawke to the chairs included the instruction 86

There may be matters on which [consensus] does not prove possible, and alternative views may need to be put. I would hope that such cases could be kept to a minimum. Australia has suffered too much already from excessive polarisation of views (Hawke, 1990).

To minimise the risk of strong policy proposals gaining traction in the wider policy network, incumbents fought within, but also ‘outside’ the ESD process, targeting policymakers and the public. The Australian Institute of Petroleum released a policy paper Global warming: Alternative Policy Instruments (AIP, 1991) in May, which advocated 'no-regrets' actions until a global agreement eventuated. ‘No regrets’ actions were, in the eyes of incumbents, ones that would have no net costs to an industry or company. More significantly, the BCA was organising conferences such as Business and the Environment Forum (figure 4.2), inviting corporations to shape initiatives, rather than remain reactive.

Figure 4.2 Advert in Business Council Bulletin (reprinted with permission)

Such conferences helped to create policy norms (as a subset of social norms) and the ‘right’ regulations, an alternative agenda that would either defeat ESD altogether or modify it into harmlessness. This conference was exquisitely timed, given the outrage other government decisions provoked. In August 1991, uranium mining in Kakadu National Park was banned, on Hawke’s authority. This shocked miners. Fearing Hawke, in ‘legacy mode’, might make strong AGW commitments they formed the Australian Industry Greenhouse Network (see chapter 5).

Incumbents drew upon competing policy processes to bolster their efforts. During the Toronto battle, Keating had tasked the Industry Commission (IC), a quasi-independent arm of the state, with investigating mitigation’s economic consequences. It held hearings throughout 1991, released its draft report in September and its final report in November. Incumbents’ peak bodies made submissions: the BCA and ACA argued that the aluminium industry would emigrate (IC 1991, p168) and warned the current account deficit would balloon if coal’s growth was curtailed by “undue emphasis” on carbon dioxide (Anon, 1991: April 16). The IC concluded that “there are major uncertainties in each of the many facets of the greenhouse effect.” BCA and others used those uncertainties to argue for delay, stating that focussing on Toronto had “diverted the Australian debate from a considered policy process” and that instead government should “concentrate on reducing the uncertainty surrounding the enhanced greenhouse effect” (Anon, 1991: October).

Beyond policy networks incumbents wooed the broader public. The mining industry, in particular, had long known it was not popular. In January 1991 AMIC conducted a ‘pushpoll’ that purported to show that 80% of the population was in favour of mining (Anon, 1991, January 22). In May it launched a $1.4 million advertising campaign, featuring television and print adverts under the banner “Mining, It’s Absolutely Essential.” The adverts took ‘everyday items’ (such as mirrors and toothbrushes) to argue that mining underpinned not just the economy but the Australian ‘way of life,’ valorising and mythologizing the industry.

The final ESD reports were released in early December. Garran (1991) noted that “The groups have avoided the most controversial proposal in the draft reports, released in June, for a "carbon tax" to discourage the use of fossil fuels.” Few were happy. The sheer volume was off-putting, with “over 1,800 pages of non-recycled paper … used to produce the reports which include over five hundred references” (Moffatt, 1992: 227).

The BCA asked if ESD was A Truly Heroic Quest? (Anon, 1991, September). AMIC, as usual, went further in proposing an alternative vision. It commissioned a widely-distributed report to “look at sustainable development and how Australia might achieve a higher standard of living” (AMIC 1992: 9). While incumbents were horrified to have lost ESD battles, the proposals they loathed gained no traction in the macro-political arena. Incumbents are able to lose battles and then recover later. Disruptors, generally, have to win throughout a policy process. 89

However, moving from agenda-setting to implementation is a monumental task. With an acute awareness of bureaucratic inertia John Coulter, leader of the Democrats, then the third largest party in Federal politics, warned: "nothing would happen" if implementation were left to government departments. "There is bureaucratic hostility to ESD which will only be blunted by direct community pressure, which requires a permanent ESD process to be set up" (Iffland, 1991). Coulter and green groups were to be proved correct. The Department of Prime Minister and Cabinet promptly set up 37 separate committees to take ESD ‘forward’ - these were abolished months later (Taylor1992: 29 Feb). Defensive institutional work is sometimes conducted by allies of industry within the state, and disruptors’ inability to force the state apparatus to take ESD seriously is indicative of the larger mismatch of forces in the field.

4.4.5 The fourth battle: taxes and Rio

With the ESD process underway and (partially) under control, incumbents faced another danger – the growing international pressures around the 1992 Earth Summit. Hawke announced he would attend the Summit, urged other Commonwealth leaders to do likewise, and sought their help in exerting “maximum pressure for a world approach to environmental problems” (Anon, 1991: October 29). Incumbents’ surge in economic modelling - moving from assertions to ‘proof’ of the coal industry’s importance and vulnerability - should be seen against this backdrop.

Incumbents attacked domestic and international ends of the problem discursively for six months, until a negotiating position for Rio was finalised. In May 1991 the BCA’s Environment Task Force released a report, Energy Prospects, co-sponsored with BHP, CRA, 90

ACA, AMIC and AGA. It purported to prove ‘Toronto’ unachievable by energy efficiency alone. By extension, (high) carbon taxes would be inevitable (BCA, 1991; Anon, 1991: 28 May). This repertoire – a report co-sponsored by businesses and trade associations attempting to create norms around policy goals – would be repeated with the LE study. With the ‘renewables are inadequate’ point promulgated, the work of painting a concomitant tax as enormous and devastating was made, via economic modelling. ‘Big scary numbers’ from the modelling were circulated to journalists and sprinkled into CEOs’ speeches, think-tank seminars and other outlets. Journalists had long been a particular target of relational institutional work: As Burgman (1993: 58-9) observes: The practice of mining companies sending well-placed journalists on junkets to visit mining sites helps ensure that the media takes its cues from the mining industry; urban whites are encouraged to identify with the interests of white mining companies and many do, though not to the extent claimed by the media, which has in some instances gone so far as to distort the results of public opinion surveys (See also Thompson, 2010).

In June 1991 a Sydney Morning Herald journalist observed eight major reports on the impacts of reducing emissions had agreed that the crucial step was to change energy use. Seven of these argued “economic benefits from reducing energy use and carbon dioxide emission to meet the Toronto Target, ranging from small to up to $6.5 billion annually” (Burton, 1991: 15 June). Over the coming months incumbents would redress that ‘imbalance’ (see table 4.3).

At this point, the policy window was fully open, with incumbents and disruptors desperately fighting for supremacy, propounding competing visions of what Australia could and should do in response to AGW. One observer noted that “The development-versus-environment war that has been brewing since the green movement found a voice and a say in politics broke out with full force last week and is likely to escalate” (Anon, 1991: October 1). Escalate it did. Tasman excelled at this time, holding a number of seminars featuring (mostly US) scientists who promulgated an issue minimisation/denial line with regard to climate change (see table 4.2).

Date Speaker Title 29th November 1990 Fred Singer The Greenhouse Effect and Global warming: Fact or Fiction? 24th September 1991 Brian O’Brien Greenhouse Myths and Messages 18th October 1991 Fred Singer The Greenhouse Effect and Global Warming: Fact or Fiction? 10th December 1991 Professor Robert Balling Global Warming: The Facts behind the Heat 26th May 1992 Professor Ro 15th July 1992 Richard Lindzen Global Warming: Facts and Fallacies.

Table 4.2 Tasman seminars doubting climate science Source: Tasman Institute Annual Reviews 1991/1992)

Incumbents initiated a surge of reports based on economic modelling. An early shot was fired by ACA. Its spokesperson argued that the cheapest method of hitting ‘Toronto’ would result in all coal-fired power stations closing, with more than 40% of Hunter Valley coal “having to battle to find international markets.” She also drew on an ABARE study which put the cost of switching from coal to natural gas at $18.9bn, and argued that this figure “did not account for the social or wider economic costs of the change” (Anon, 1991, September 10). Respected economics writer Brian Toohey (1994: 150) argued that some organisations putting forward modelling, such as IC, were part of the 'official family’ or, like ABARE, “can usually be regarded as members of the extended official family.” The reports (see table 4.3) below are a minimum list of work by the official family, the extended official family and incumbent- funded groups such as Tasman (discussed above).

Table 4.3. Anti-carbon tax economic modelling reports, 1991-1992.

At this juncture a new industry-burnishing incumbent organisation appeared. On 24th October, the long-planned33 Australian Minerals and Energy Environment Foundation (AMEEF) was launched by the Director General of the World Conservation Union. AMIC supported AMEEF and argued it would “promote excellence in research, community education and training on environmental management within the mining and energy industries” (AMIC, 1992: 9). For the next ten years it held award ceremonies and extolled the mining and energy industries’ green credentials.

33 It was mentioned in AMIC’s 1989 annual report (pp.6-7) 93

Alongside these reports and organization building, elite lobbying continued. For example, in January the BCA wrote an open letter to new PM Paul Keating, urging him to cut taxes and resolve “the confusion over the environment, and the layers of bureaucracy that have been put in the way of developing our natural wealth” (Anon, 1992, March). However Keating, in the eyes of one attendee at a crucial ESD meeting with him, “had little appetite for this kind of reform” (Garrett, 2016: 207-8)

In early 1992, with the campaign against the carbon tax and Rio commitment underway, and with the ESD’s potential impact unclear, industry (mining in particular), felt under attack. This is exemplified by the March 1992 cover of the trade publication The Australian Journal of Mining (AJM), which headlined “Mining and Environment: Industry advances in environment protection and sustainable development as Governments prepare ‘Greenhouse Effect’ attack.” AJM ran no environmental policy stories for the rest of 1992 – circumstantial evidence of the success of incumbents’ counter-attack.

The aforementioned studies painted both regulation and carbon pricing as disastrous for the Australian economy. The most forceful of these was the LE study. It received front page coverage in The Australian, under the headline “Greenhouse tax ‘would destroy steel industry’” (Cribb, 1992: 6 February). Steel was a major customer of the coal industry, both for thermal coal (energy production) and coking coal (alongside bauxite, a necessary ingredient for steel manufacture). Days later Cribb (1992: 10 February) said this coalition had “detonated an economic and employment time bomb under the Federal Government’s plan to cut greenhouse emissions.” In an early example of the usefulness of allies enlisted during relational work, the General Secretary of the Miners Federation acknowledged that while it may seem we have chosen strange bedfellows, our union makes no apology.... the introduction of a carbon tax would be devastating for the coal industry and the UMFA is not about to stand idly by and see the seeds of destruction planted in our industry (Wilkes, 1993).

LE’s report did not suggest alternatives for dealing with the environmental effects of carbon emissions, or take into account how the tax revenue might be used (Anon, 1992: Feb 11; Lowe, 1993). A senior ACF figure accused “big business of trying to scare coal-miners and politicians by making unrealistically high estimates of the cost of reducing greenhouse gas 94 emissions.” ACF’s spokesman said that incumbent pronouncements over the previous two weeks had argued only a huge carbon tax could slow global warming but that: “The environment movement had not advocated such a huge carbon tax, which was simply a straw man set up to be easily knocked down” (Garran, 1992, 12 February).

Two reports by ACF and Greenpeace, released a week before LE’s, on the prospects for ‘Green Jobs’ gained little media traction (Sorenson, 1992). Shortly afterwards, nine industry associations wrote to Federal ministers “begging them to hold fast to caveats protecting Australian economic interests, rather than negotiate them away in efforts to achieve an agreed draft convention” (Thomas 1992).

All these reports anticipated a crucial Cabinet decision on Australia’s negotiating stance for the Rio conference (Cribb, 1992: 11 February). This precise form of institutional work, best seen as defensive – a flurry of reports produced in the lead up to a key decision - was deployed to even greater effect in 1994/5. At the end of February the ESD Greenhouse Report was released. It advocated the immediate introduction of ‘no regrets’ policies (also supported by industry (Stephens, 1992)) and a carbon tax, but only following an international agreement on AGW (Anon, 1992: March 3). Days later, Cabinet agreed to a stabilisation target (of 1990 levels by the year 2000) for Rio rather than an actual reduction. The Resources Minister assured industry a carbon tax was not under consideration (Anon, 1992 “No carbon tax”). This mattered to industry: CRA’s relieved external affairs chief adviser said a strong Rio commitment would have created “political pressure domestically from some parts of the community” (Anon, 1992 May 26). Keating then released an anodyne ESD statement fiercely criticised by ACF as having “the hallmark of a government that has a myopic pre-occupation with economic issues but has failed to realise that ecologically sustainable development is about integrating ecology in some overall planning process” (Anon, 1992: 10 March).

Tasman then showed its keenness to counter disruptor efforts. The Commission for the Future released a report on 13th March called “Energy Futures: Efficient Energy Scenarios to 2020.” Within a month, a rapid rebuttal – “Carbon Abatement: Is there a ‘Costless Target?” – showed its determination and capacity to dam disruptor propositions for aggressive policy action. This was defensive institutional work par excellence.

Alongside shaping Australia’s negotiating position, Australian business lobbies acted internationally on the UNFCCC process. In December 1991 unions, the BCA and ‘key resource companies’ used their membership of the Trade Development Council (a ministerial advisory group) to put forward a report arguing that: “The Australian government should do all it can to ensure that the international political response to the greenhouse challenge does not gallop ahead of rational evaluation and prejudice the national interest,” pointing to academic contestation of AGW (Stevens, 1991). In February 1992 the BCA and AMIC joined with American business lobby groups to release a statement warning against strong commitments at the Summit (AJM, 1992). AMIC and BCA were both involved in the Business Council for Sustainable Development, which lobbied Summit negotiators (AMIC, 1992: 9; Anon, 1992, ‘No regrets option”). An ACA representative even attempted – unsuccessfully - to soften IPCC advice to the impending Earth Summit (Leggett, 1999).

In May BCA released two more studies (Duncan, 1992: 13 May) seeking to further dilute government ambition ahead of Rio. By then, it was clear that the war against strong domestic and international commitments had been won. Both CRA’s Mark Emerson CRA and ACA’s Meredith Hellicar, the two business figures most actively involved in the preliminary talks, were “so little concerned about the treaty that they have decided not to attend the conference but to remain in Australia” (Garran, 1992, 1 June). Keating announced he would also not attend (Anon, 1992: March 31); Australia was the only OECD nation whose head of state was not present. At Rio, Ros Kelly was an eager signatory, but upon her return lacked power to prevent the Government from de-funding energy efficiency measures. The reason given was ‘severe budget problems’ (Luker, 1992).

4.4.5 The fifth battle: Toronto revisited

Once it was clear the Rio agreement would not include targets and timetables congruent with Toronto, business re-contested Toronto. BCA’s spokeswoman attacked “our arbitrary targets. We say we simply can’t achieve the targets we set for ourselves and the international 96 community also seems puzzled.” ACA’s said “In the light of the international agreement it is unrealistic for us to maintain our target, especially as the Government has no idea about how they will reach it” (Taylor, 1992: 12 May). However, this effort soon petered out.

Most of 1992 was, in essence, an incumbent ‘mopping up’ operation. As disruptors feared, ESD proposals disappeared into a bureaucratic maw. A front page story in The Australian in March 1992 stated that “Federal and state governments are taking an extremely cautious and gradual approach to national targets for reducing greenhouse gas emissions” (Taylor, 1992: 18 March). The leadership change from Hawke to Keating proved fateful, allowing incumbents’ allies within the state great latitude. Keating “hated everything Bob Hawke had done at a really intense level, and … didn’t understand climate in any way.” He “killed off the ESD process by allocating all of it to be reviewed by 37 departmental committees” (interview Pears; see also Luker, 1992: June 30; Anon, 1992: 22 September). In August a much delayed ESD conference was staged. Environmentalists walked out en masse early on the first morning (Chamberlin, 1992). Hutton and Connors, (1999: 244-5) observe public servants had weakened or ignored recommendations, and not produced action plans or timelines. … Several of the conservation representatives on the working groups later related that they often found industry representatives, despite their vested interests, easier to work with than the bureaucrats. In a phenomenon seen many times in environmental disputes, bureaucrats in industry facilitation departments were even more committed to cutting corners on the environment to ensure short-term industry profitability than were the industries themselves (emphasis added).

After Rio, ABARE released a study which propounded “benefits in deferring greenhouse action” insofar as the less ambitious Rio target “could also allow a more gradual and managed transition to a less fossil-fuel-dependent economy” (Garran, 1992: 2 July). BCA released a ‘Principles of Environmental Management’ document (Anon, 1992: August 11 ‘Top lobby’).

Despairing, green groups threatened direct action (Anon, 1993: August 19), but did not deliver. ACF, perhaps seeking to replicate industry’s co-ordination, called a meeting of green groups to discuss the lack of progress (Anon, 1992, November 3) without discernible impact. Meanwhile Tasman, perhaps with an eye to future battles, released a report arguing a 97

$424 per tonne of carbon tax would be needed merely to meet the Rio target, doubling electricity prices and increasing petrol prices by 40% (Anon, 1992, “Markets and the Environment”).

The window finally closed on 7th December, when the National Greenhouse Response Strategy (NGRS), containing only voluntary measures, was agreed. Taplin (1997) observes that a committee of state and federal bureaucrats, the National Greenhouse Steering Committee (NGSC), had watered down the recommendations of the ESD Greenhouse Report and produced a draft NGRS. Taplin argued that only “lip-service consultation” was made with ESD representatives, with “little response” to criticism. She observed that the NGRS’s guiding principle had changed the meaning of ‘no regrets’ in proposing that any industry sector (for example, the mining, chemical, or petroleum sectors – all large greenhouse producers) or any single geographic region should not be economically burdened. This differs from the ESD Greenhouse Report, which reasoned that some industry decline and closure and some restructuring would be necessary to achieve cuts in greenhouse gas emissions but argued that this would be countered by growth in industry orientated towards energy efficiency and renewable energy (Taplin, 1997: 130-1) emphasis added).

In late December government ratified the Framework Convention. By this time, public attention had shrunk from its 1988-90 peak due to ‘issue fatigue,’ competing concerns (the economy, the first Gulf War), the end of the bipartisan support for climate action, and leadership battles within the government (Wanna, 1991). ACF’s new CEO feared ESD had set a precedent for industry to gain more leverage than environmentalists in major decisions. She lamented that ESD was a two-edged sword and observed: we have definitely had our fingers burned by concentrating our efforts on a process which has not progressed any of the issues – not one of them. It has taken up a huge amount of our resources that might have been spent on independent campaigning and highlighting the issues to the public rather than closed rooms (Anon, 1992: December 8). This lost energy, and lost opportunity to build organizational capacity for future battles, would be exposed within two years.

4.5 Post-window events

The policy settlement was not long-lasting. NGRS soon came under concerted attack and the evolving UNFCCC process gave disruptors new leverage. However, the industry had learnt important lessons about how to counter green proposals. In this window they had – after a slow start – learned the crucial importance of relational work (creating and maintaining broad coalitions, especially with groups that had more legitimacy than themselves, e.g. trades unions) and temporal and meaning work (well-timed ‘independent’ economic modelling for maximum impact).

Incumbents’ initial response to disruptive pressures is instructive. Various formal organisations were formed to co-ordinate industry responses, to attack policy entrepreneurs and to burnish a subset of the incumbency (mining). Some of these organisations would disappear, others would be long-lasting. Incumbents worked hard to co-ordinate their responses and present a relatively united front in situations where the Federal Government might conceivably have taken stronger action. .

Understanding this window is crucial for a complete view of incumbent strategies in response to radical policy innovations. Incumbents – the large fossil-fuel actors (extractors, generators, manufacturers, allies in the media and political class) – had, by the end of the window, defeated carbon pricing proposals, gutted ESD as a policy programme, and had begun creating a set of organisations and institutions (in the sense of norms) which would prove extremely powerful over the next 30 years. This initial incumbent victory was based on several tactics. Their main discursive victories at this stage were in establishing a consensus that the costs of abatement would be enormous, and that Australia should not be “ahead of the pack.” They also tried to forge a consensus that Australia is a special case (this was muted at the time) and began defining ‘no regrets’ as no harm to specific sectors (Bulkeley, 2000; Mercer, 2000). Many of the incumbents’ strategies and institutions would be tested in the first major carbon pricing policy window, in 1994/5. Chapter 5 deals with this, revealing that their relational institutional work moved into much higher gear, as they both consolidated their 99 own network and also continued and expanded the tactical alliance with the coal-miners’ trade union.

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Chapter 5: “Winning the rematch”: the 1994/5 Carbon Tax Battle, in which incumbents defend their gains with superior firepower

5.1 Introduction

The general manager of environmental affairs for mining giant Rio Tinto was blunt. Addressing a mining industry workshop months ahead of a crucial international climate conference, she warned

The less proactive industry is, the more we will invite unwelcome government intervention at home – and the more pressure the government will come under in Berlin… In terms of greenhouse policies, governments have a big stick behind their back and we need to give them every reason to keep it there… For that reason a large group of company and industry association people have said to the government that we support industry voluntarily entering into cooperative agreements to abate emissions or enhance (gas absorption) sinks (Wordern, 1998: 121).

This lengthy quote neatly summarises incumbents’ core institutional work before and during the 1994/5 policy window – the determined protection of the regulatory institutional pillar by shoring up the cultural-cognitive and normative pillars, using purposive relational work to deflect disruptors’ proposals. Incumbents, acutely aware of their 1992 victory’s fragility, had cause to worry: disruptors had propitious circumstances. Renewed concern about environmental issues, international pressures (the March/April 1995 Berlin climate conference) and budgetary problems made the ALP government at least theoretically amenable to a carbon tax. A finely-balanced political situation gave minor parties – the Democrats and the Greens – the balance of power in the Senate. Disruptors exploited a new venue: the Budget process. The window can be summarised thus: disruptors mobilised around the twin narratives of ‘moral responsibilities’ and ‘opportunities for sunrise industries’, while incumbents combated the disruption in three ways. Firstly, they remained silent on their climate science doubts. Relatedly, they cultivated a common and relatively ‘responsible’ and emollient voice. Thirdly, they co-ordinated and cohered around a ‘minimal ambition’ regulatory proposal.

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This chapter will use MSA as a structuring device on ‘what happened’ in the streams (January 93 - June 94), how coupling was achieved (April - July 1994), and how incumbents out-fought disruptors in the policy window from September 1994 to March 1995. Budget proposals and problem framing/counter-framing culminated in two roundtables with selected cabinet ministers held in February 1995. It explains how the window closed days later when Environment Minister John Faulkner withdrew his proposal and the NGRS was essentially re-booted with additional industry involvement. Finally, the ten year aftermath of the 1994/5 window is sketched (see figure 5.1).

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Figure 5.1 : overview of the chapter’s policy window

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5.2 The streams

The problem stream was less full than 1989 – AGW had moved from the front pages after the Rio summit – but not empty. Both incumbents and disruptors suspected another policy battle was coming, and the failure of the previous policy solution for the problem became part of the renewed problem stream. Disruptors amplified concern about the climate problem via domestic and international arguments. Internationally they echoed the February 1994 meeting of the Intergovernmental Negotiating Committee where delegates from 130 countries demanded actual emissions reductions, beyond the Earth Summit’s ‘stabilisation at 1990 levels by 2000’ aspiration (Anon, 1994: Feb 25).

The UNFCCC was ratified by the requisite 50 nations at the end of December 1993, quicker than expected. Its first meeting (COP1) would be in Berlin in March-April 1995. Before and at Berlin developing nations would insist developed nations accept binding emissions reduction targets. If Australia lacked credible domestic policies, it would have little leverage against uniform mandatory emissions reductions. Disruptors highlighted the studies which showed Australia trailing other OECD nations on pollution abatement (Anon, 1994, Feb 18, p.16) and ranking 18th out of 21 in a ‘sustainability’ league table (Anon, 1994 Feb 18 p. 4). The incumbent’s Tasman Institute performed rapid rebuttal, (if not refutation) work against these studies (Tasman, 1994).

Incumbents saw the gathering storm clouds. For example, at ABARE’s February 1993 conference, attended by fossil fuel company CEOs, ABARE economist Brian Jones warned delegates that the federal government would need to take much tougher action, including a carbon tax, to meet its greenhouse gas reduction targets (Anon, 1993, Feb 9).

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Previously US intransigence on targets and timetables had offered diplomatic cover: this evaporated in April 1993 when newly elected President Clinton pledged to stabilise US emissions by 2000. This, a BCA figure noted, “would dramatically change the complexion of talks on global climate change” (Garran, 1993, 23 April). Environment Minister Ros Kelly, who had previously ruled out a carbon tax, said Australia “would watch closely the international trend towards an energy tax and the effect such a tax would have on curbing greenhouse gases” (AAP, 1993).

The politics stream steadily grew. Keating’s Labor government unexpectedly retained office after the March 1993 election. There were three significant consequences for climate policy. Firstly, Keating - who abolished Cabinet’s sustainable development committee immediately after the election (Anon, 1993, March 30) – had made tax-cutting/increased-spending promises in the campaign which would leave him desperate for additional revenue streams. Secondly, the Senate changed: Labor now had 27 senators, the Opposition 36, the Democrats 7 and the Greens 2. The Democrats and Greens – both favouring a carbon tax – had leverage. Labor invited both to put forward 1994 budget process proposals (AAP, 1994; Ellis, 1994). However, the Keating government “basically ignored their suggestions” (Davies, 1994, 3 Dec). Thirdly, relations deteriorated between Keating and some senior industry figures (those who had publicly supported the defeated Liberals). Keating’s ally, Environment Minister Kelly, perhaps conscious of this animosity, established a Government-Industry Environment Forum, meeting bi-annually from October 1993, with ten chief executives from manufacturing and resources industries, tourism and farming (Luker, 1993: Oct 19), attempting to maintain the regulatory pillar.

Meanwhile, the Environment portfolio was mired in turmoil; scandals brought down two ministers in quick succession in early 1994 (Anon, 1994: 1 March). The new minister, John Faulkner, was regarded as more ‘left wing’ (and accessible to environmentalists), leaving 105 incumbents worried. The Liberal Party, believing itself betrayed during the 1990 Federal election, abjured its previously pro-climate action positions and remained hostile to peak environmental bodies (Anon, 1992). The Liberals could not enunciate any climate position due to chronic leadership turmoil. Nonetheless, they joined industry in predicting huge costs of international commitments.

With the policy stream filling rapidly, disruptors and incumbents sought to increase their capacity. International carbon pricing developments created domestic opportunities. By mid- 1993 an opponent of carbon pricing, Trade Minister Peter Cook, conceded that carbon taxes had gained a “certain amount of intellectual respectability” in some quarters, largely because they were relatively simple to introduce. He noted that Italy had proposed all OECD members adopt such a tax (Anon, 1993: August 3). The Australian Chamber of Commerce and Industry’s head of trade and policy research wrote about economic instruments for environmental problems in a neutral/positive tone (Davis 1993), while ABARE released a study on tradeable emissions permits (Hinchy et al., 1993).

Although mining companies had other concerns – e.g. the Mabo High Court judgement around Aboriginal land rights34 – they did not ignore climate change. Foreshadowing Rio Tinto’s exhortations, the World Coal Institute’s CEO told the 1994 Australian Coal Conference that the industry should “get involved in the environment debate or risk being defeated by the ‘green lobby’” (Anon, 1994, May 20). The BCA established a working group, which kept the membership informed via publications (BCA, 1993; Beck, 1994) and

34 AMIC contested land rights ferociously. It lost access to policymakers, and credibility with the public. It hired an external consultant, who recommended restructuring and rebranding (Allen, 2011). In 1995 it became the Minerals Council of Australia (MCA). 106 conferences.35 More generally, the BCA co-ordinated the publication of various environmental policy documents.

When the UNFCCC was ratified in March 1994, the NGRS came under attack for its weakness (Anon, 1994: 22 March). The scene was set for a battle, with two competing proposals. The first, from industry, was to continue with NGRS. The second position, of the Democrats, Greens and ACF was to introduce a small carbon levy. ACF met Keating in March 1994, “proposing measures it said would save the Government between $ 1.4 billion and $1.9 billion next financial year” (AAP, 1994: 3 March).

5.3 Coupling

Coupling was short and simple compared to the previous window. On 24th April, new environment minister John Faulkner appeared on a political television programme. Questioned on a possible tax, he was guarded: “All I can say is that I've suggested already to some of my ministerial and Cabinet colleagues that I am interested in pursuing the issue of economic instruments” (Peake, 1994). In May, responding, a broad coalition of industry groups told environment and primary industry (DPIE) ministers that the Government was not approaching AGW in a “strategic manner.” Gill (1994: 27 May), in the first mainstream press mention of AIGN’s existence, reported its members (including manufacturers, coal miners, oil producers, farmers and foresters) had criticised the government’s recent ratification of an international convention on hazardous waste, and commissioned economic modelling about its impact.36

35 E.g. BCA organised a conference “Themes in Environmental Policy – Implications for Australian Business and Government” in Sydney, in November 1993. 36 The Industry groups then seem to have hired ACIL Economics to produce a ‘the-sky-will-fall’ economic modelling report that said the convention "could affect trade worth over $2,920 million - exports of $2,800 million and imports of $120 million" (Barker, 1994). 107

In December 1989 Prime Minister Hawke had met industry and greens and so opened a policy window. History repeated on 16th June 1994; Faulkner, together with Keating and Resources Minister David Beddall, met with over 100 NGOs, industry figures and state government ministers about emissions reductions (Moran, 1994).37 Keating stated his Government understood the "economic implications" of adhering to international emissions commitments. Ten business groups demanded government adopt measures that reflected Australian industry's greater use of energy before agreeing to further international targets (Dwyer, 1994: 17 June). A paper, prepared for the meeting by the ACA and AMIC, took a combative tone, arguing it was “high time we stopped mouthing undefinable expressions” and calling for more precision in a so-called “burden-sharing agreement” (Gill, 1994: 17 June). Incumbents’ discursive power would be wielded more emolliently over the following months. Meanwhile environmental groups mounted “a strong counter-attack, accusing the Government of not matching other countries’ efforts” (Cribb, 1994). On the day of the meeting, a letter from Keating to Faulkner which cast doubt on Australia’s ability to meet even its stabilisation target was leaked (the motivations of the leakers are not clear) (Middleton, 1994: 17 June).

A week later, Faulkner announced the long-delayed formation of a National Greenhouse Advisory Panel and then announced a carbon tax, alongside imposts such as user-pays strategies for heritage areas, would be considered; a departmental report would be ready by late 1994, ahead of potential Cabinet budget submissions (Dwyer, 1994, 29 June; Greenless, 1994, 29 June).

5.4 Policy Window

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The window which opened via this coupling closed on 10th February 1995, when Faulkner withdrew his proposal. Within it there were eddies, rapids and bottlenecks. While incumbents and disruptors produced reports, lobbied and nurtured their coalitions, the first significant event was the September release of a greenhouse gas inventory. In October disruptors combined to lobby Faulkner, maintaining pressure until early December. From late November through mid-December 1994 incumbents repeated their August 91-March 92 tactic of a flood of reports. Disruptors unsuccessfully attempted to split incumbents in January. In February, a roundtable battle saw incumbents victorious.

5.4.1 Phase 1: September – November: issue minimisation, cost emphasising, disruptors attempt to cohere

Disruptors received a boost on 7th September, when the NGRS received a dismal report card.

Australia’s first National Greenhouse Gas Inventory (NGGI) revealed net CO2 equivalent emissions had risen to 572 million tonnes, from around 548mt in 1988. Without new action emissions were forecast to rise to 654 million tonnes by 2000 (Anon, 1994, 7 Sept; see also Riley, 1994, 8 September).

Faulkner acknowledged that, on a ‘business as usual’ trajectory, Australia would miss its UNFCCC target (Anon, 1994, 3 Sept). He noted carbon taxation was being investigated, but was a policy that “historically government has been very reluctant to embrace indeed, and I don't think that reluctance is likely to change" (Anon, 1994, 7 Sept). Attempting to add pressure, Greenpeace argued that “the problems have not gone away, but Australia seems to be trying to escape the work needed to solve them” (Kelly, 1994, 7 Sept).

Incumbents responded quickly. The National Farmers Federation (NFF) argued the inventory was merely “rubbery figures based on questionable methodology” (Riley, 1994, 8

September). The government argued that Australia might be acting as a greater CO2 sink than previously thought (Gill, 1994, 8 September).38

Further defensive work followed on the regulatory, cultural-cognitive and normative pillars. On 22nd September the Electricity Supply Association of Australia (ESAA) released a

38 In the previous window the BCA consistently argued that Australia’s sinks should be more aggressively included in negotiations and policy statements. 109

$400,000 report, two years in the making, asserting that a carbon tax would devastate the economy. Echoing the 1992 LE study, it argued a $100/tonne tax (orders of magnitude higher than anything being proposed) would be required to achieve ‘Toronto,’ and would destroy two export industries – coal and aluminium (Gill, 1994, 22 Sept). ESAA’s was the first of a new round of ‘sky-fall’ reports.

In mid-September DPIE minister, Senator Bob Collins – echoing the leaked 17th June letter – wrote to Keating warning Australia would miss its reduction target, but that there was: considerable scope to improve our national effort in pursuit of international commitments without adversely affecting economic or trade interests…. A major way of doing this is to involve industry as active participants (Gill, 1994 30 Sept 1994).

Collins argued a co-operative approach between industry and government would improve its climate response and “thereby, enhance Australia's ability to influence the direction of international discussions on future commitments.”

Incumbents ramped up their relational work. They understood the importance of cultivating allies within the policymaking apparatus. Face-to-face lobbying of Collins and bureaucrats followed. To put its case on voluntary over mandatory actions AIGN representatives “met with senior officials from the departments of Primary Industries, Environment, Industry, and Prime Minister and Cabinet, in Canberra yesterday” (Gill, 1994: 30 Sept: emphasis added). Gill argued that the meeting represented a “major new tack” in the Government’s response to the climate issue. Incumbents still needed to discredit disruptors’ proposals. This required careful and co-ordinated action. In October AIGN established a Carbon/Energy Tax Taskforce. Chaired by Mobil Oil’s CEO, it focussed “on analysing the potential impact of carbon tax, to present those concerns to industry and government, and to marshal industry opposition” (Worden, 1998: 96 emphasis added). An interviewee told Worden, (1998: 105) [The taskforce] was established to provide a strategic approach to the compilation of the network’s evidence against carbon tax. As well as analysing existing research, the taskforce commissioned further research, including anecdotal evidence, from member companies on the potential impact the tax would have on their business. The taskforce actually formulated a questionnaire, or at least a set of questions, that we put to all our members, asking them to assess the impact of carbon tax and to report that 110

back to us. That worked quite well and we did get some very useful responses (Worden, 1998: 105, emphasis added). This taskforce was comparable to the BCA Environmental Taskforce in the first window, and this use of anecdote would recur in the 2008-9 and 2011 windows.

That same month the DPIE released a report on “opportunities for Australian industry to contribute to reducing international greenhouse emissions,” its cover boasting pristine chimneys. Simultaneously, the New South Wales Coal Association produced a flurry of publicity materials, including a document which defended its normative and cultural- cognitive position: “Coal: Why it’s not a dirty word.”

Tasman, by 1995 regarded as “one of the largest and most unashamedly conservative of Australia's think-tanks” (Grose, 1995, March), released reports arguing against a carbon price which had little media coverage, but were used in lobbying. Tasman’s 1995 review boasts that one author of a “widely released” October 1994 paper Comments on Carbon Taxes, Employment and the Economy presented it at an NFF workshop “attended by a number of officials working in the area, notably by the indirect tax branch of the Commonwealth Treasury.” He was then asked to address a March 1995 Department of Environment, Sport and Territories workshop on taxation and the environment in what Tasman purred was “a very direct example of the policy influence that quality work provides” (Anon, 1995).39

Nonetheless, disruptors gained a tactical advantage when Phillip Toyne, previously ACF’s CEO, became head of the Environment Department’s Environmental Strategies Directorate.40 Meanwhile, tax advocates succeeded in gaining some media attention (e.g. Hamilton, 1994). A new think tank The Australia Institute (TAI) made a submission to a parliamentary inquiry, arguing a carbon tax could increase employment (Anon, 1994: September 16). In an echo of

39 Tasman also reported: “Climate change policy has been a major research focus for 1994…. Issues examined include trading in carbon credits from forests, carbon taxes, sharing the costs of emission abatement more equitably amongst OECD countries, energy efficiency, and historical temperature trends. This research has been published in academic journals and has been widely distributed to senior people in government and industry” (Anon, 1995, emphasis added). 40 Toyne’s arrival changed the direction of travel. Callick (1995, 11 January) reported: “Thus industry – which, especially the mining sector, earns substantial revenues from exporting environmental equipment and techniques – believed until very recently it had won a consensus from government departments on a series of co-operative agreements on emissions, rather than a catch-all tax. Just then…. Phillip Toyne entered the scene as deputy secretary of the Environment Department and new chairman of the intergovernmental committee on the subject, and initiated a whole new consultation process focused on introducing a carbon tax.” 111

Tasman’s March 1992 instant response to a CFF study, this drew a rapid rebuttal – the above- mentioned paper.

Echoing previously deployed incumbent relational tactics, green groups combined to press the Federal Government for a green 1995/6 budget. Sixteen groups, grandly titled the ‘Peak Conservation Organisations’ gathered for a preliminary meeting (Anon, 1994: November 4) and then hand-delivered a 60-page submission to Faulkner (Anon, 1994: 29 October), in what was for many their first attempt to engage with the Budget process.

5.4.2. Phase 2: December 1994- January 1995: a flood of reports and a spill-over danger

Incumbents and disruptors faced off in December, but ultimately stalemated, before a related issue gave disruptors a perceived advantage. Both had long known that Faulkner’s proposal would come to Cabinet in December, and timed their influencing efforts accordingly. In the week before and after Cabinet met, incumbents released numerous studies. Based on economic modelling, these argued a tax would be catastrophic. Summaries were reported by sympathetic business journalists, and (presumably) used in lobbying efforts (table 5.1). These reports varyingly highlighting the presumed high quality of Australia’s coal, possible losses of jobs, export earnings or economy-wide damage.

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Table 5.1: Industry reports challenging proposed carbon levy, Sept 1994 - Dec 1994.

This extensive use of modelling did not pass uncriticised. An economist noted that “such modelling exercises [are] great propaganda tools in the hands of vested interests opposed to environmental measures. With them, all the emphasis is on costs; the likely benefits go completely unacknowledged” (Gittins, 1995 15 Feb).

AMIC began, sending its eight-point Case Against Carbon Tax to DPIE’s Minister Bob Collins on 2nd December (Worden, 1998: 92). In an already hoary argument, it extolled the nature of ‘high quality’ Australian coal. Burton (1994, 2 December) reported that Collins and 113

Resources Minister David Beddall would ask Cabinet to insist Australia should receive recognition for decreased emissions from countries such as China when they used ‘good quality’ Australian coal.

On 5th December disruptors, led by ACF, launched their proposals alongside a direct action stunt. Meanwhile another study, prepared for the mining industry, was released forecasting local coal prices would double and the entire export coal industry be rendered unprofitable if a tax eventuated (Dwyer, 1994, 6 December).

Alongside attacking disruptors’ regulatory proposals, incumbents burnished their own co- operative credentials. In mid-November 1994 the ACA launched its framework to reduce greenhouse emissions by better energy efficiency, trapping methane for electricity, re- afforestation and joint international projects (Dwyer, 1994, 28 November). On 6th December, the BCA pledged “active support” for no-regrets measures, presenting government representatives with a position paper on domestic greenhouse policy (Boreham, 1994: 7 December). It concluded Industry fully supports the current 'no regrets' approach to the abatement of greenhouse gas emissions and believes that considerable scope still exists within this framework to make an effective contribution to the global response on greenhouse. A "no regrets" approach would avoid policies that involved net costs to the nation. This paper succeeded in postponing Cabinet’s decision-making (Callick, 1995: 5 Jan).

The Cabinet meeting was fraught. Bita (1995: 15 Feb) reported that some ministers had asked major industry groups to propose voluntary agreements “that could be used as a bargaining chip in what one minister privately predicted would be the most rigorous debate in Canberra for a long time.” The Cabinet meeting had various proposals put forward, including “a separate submission from five ministers for a $10 million to $20 million greenhouse reduction plan” (Dwyer, 1994, 9 December), presumably a “spoiler” plan concocted to block Faulkner. Meanwhile, an insider (Pearse, 2005: 130) characterised the disruptors’ proposal as “just kind of like ‘back of the envelope’ sort of stuff.” The proposal could have died but, given the Government’s budget problems, Keating asked Faulkner to bring back a more detailed proposal (Garran, 1995: 15 February).

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Incumbents did not relent after their partial Cabinet victory. Days later, industry peak bodies threatened to withdraw from any co-operative agreements with the Federal Government if a tax were introduced (Dwyer, 1994, 12 December). On the same day another modelling report warned that a carbon levy could reduce Australia's GDP by 2 per cent. It became front page news of the Sydney Morning Herald (figure 5.4). The report began: “Reducing greenhouse gases to meet the targets set by the Federal Government through a carbon tax on industry would cost up to $8 billion and 3 per cent of the country's blue-collar jobs by 2005…..” (Jurman, 1994 13 December; see also Milburn, 1994: 13 December).

Figure 5.2 Sydney Morning Herald 12 December 1994 (reproduced with permission of Fairfax)

This was followed by the Taylor report on the Australian coal industry’s future. Although commissioned in response to industrial unrest, it also argued that a carbon tax would destroy the coal industry and that it was “folly to take action on greenhouse gas reduction which would strike at the comparative advantage which Australia receives from its abundant supplies of coal” (Dwyer, 1994, 14 December). Speaking at its launch Resources Minister David Beddall announced that the Australian government was not considering introducing a carbon tax to cut greenhouse gas emissions (Anon, 1994, 13 December; Thomas, 1994, 14 115

December). On same day an ABARE report concluded that “Most analysts assume for Asian economies that governments will not alter their plans for future coal use because of concerns about coal's contribution to greenhouse gas emissions” (Dwyer, 1994, 14 December), adding to the rhetoric of narrative ‘futility.’

These reports are examples of what Peeples et al., (2014) label “the industrial apocalyptic” – warnings of economic Armageddon by industry actors in response to environmentalists’ claims of impending ecological catastrophe. They combine to defend the regulatory pillar of an institution or set of institutions by twinning (or indeed conflating) with the normative pillar and then defending that.

Incumbents had broadened their relational work, lobbying state governments (Wordern, 1998: 86). Political opponents of the Labor Government, such as Western Australian Resources Minister (and later Premier) Colin Barnett, told a journalist (Wilson, 1994, 19 December) that: “suggesting a carbon tax is nothing more than an attempt to bolster up conservation group support.”41 Additional modelling reports were circulated in draft to sensitise policymakers and journalists ahead of their release (Maiden, 1995).

At this point a separate environmental issue - logging in national parks - briefly took centre stage. Logging conflicts long pre-dated climate change. Environmental groups found them far logistically and psychologically easier to campaign around.42 Resources Minister Beddall increased woodchip quotas, causing confusion. Forestry workers blockaded Parliament House. Keating had to intervene, and relinquished Commonwealth responsibility for protection of native forests (Staples, 2011: 128; Waston, 2002). During the dispute, the issue created enormous (and ultimately unmanageable) tensions between the green groups and the government (Greenless, 1995: 8 December). Industry feared government might introduce a small tax. Callick (1995, 11 Jan) reports that mining companies and other sectors which produced or consumed energy have since Christmas been sticking pins into wax images of David Beddall, the hapless Minister for Resources who by taking the permissive route on woodchips, threw to the

41 Federal Opposition Leader Alexander Downer said similar things. He resigned on 26 January 1995 and was replaced by John Howard. 42 Howe (2014) notes that climate change is a particularly difficult issue for environmental groups to campaign on. 116

environmental movement a massive effective IOU on behalf of the Government. The movement is now determined to cash this in for a carbon tax (emphasis added). Newly appointed AMIC CEO David Buckingham fretted “One of the major industry concerns is that a carbon tax, even if introduced at a modest level - current proposals may only raise $300 million in the first year – could easily be raised incrementally” (Callick, 1995, 5 January). Others bodies played ‘bad cop,’ e.g. the Australian Chamber of Commerce and Industry declared that tax would be “pandering to extreme environmental interests” (Anon, 1995, Jan 27), framing concessions as (political) cowardice.

Disruptors accused incumbents of exaggeration. ACF Executive Director Tricia Caswell urged policy makers Let’s put aside the hysterics and develop a comprehensive program that really addresses the issues, especially around energy production, transport and land clearance and management. The ACF’s proposal would mean only a meagre 2-3% increase in energy prices representing about 0.1% of industry overheads. Even the already heavily subsidised aluminium sector will not be significantly affected (Anon, 1995, Jan 27). This was as unsuccessful as its 1992 post-LE ‘calm down’ urgings (see Chapter 4). In January, disruptors tried to split incumbent opposition, proposing an exemption for exporters of coal, gas and oil (Anon, 1995, 10 January). This did “not deflect aluminium industry concerns” (Maiden 1995, 12 January).

5.4.3 Phase 3: February 1995: the roundtables and window closure

To prevent conflict over greenhouse replicating logging, two roundtables were announced; incumbents and disruptors would put their cases to senior ministers. These happened on 7th and 8th February, with the same ministers – Faulkner, McMullan, Collins and Beddall and Cook – hearing presentations and holding discussions. Ultimately, disruptors under- performed, and incumbents were helped enormously by prior co-ordination and the credibility of peak trade union body, the ACTU.

The AIGN and its allies were prepared. On 6th February, the day before the disruptors’ roundtable, they unleashed pre-emptive framing via co-ordinated media releases under the 117 banner “Carbon Tax Threatens Regional Jobs” targeting regions most likely affected by a tax (Worden, 1998: 87). The NSWCA release read “Coal industry slams budget carbon tax proposal.” The BCA, drawing on an ABARE report argued a tax “could jeopardise more than 47,000 jobs and $43 billion in production in the nation's export energy industries” and have “a serious impact on Australia's oil and gas, coal, metal products, petrochemicals, pulp and paper and cement industries” (Thomas 1995, 7 February).

The environmentalists’ roundtable involved 12 peak green groups, led by ACF, including Greenpeace and WWF (Gill, 1995, 8 February). They proposed a $2.20 per tonne carbon tax, the cancellation of diesel fuel rebates for mining and logging companies (which would raise $700 million) and a Sustainable Energy Authority (Skehan, 1995, 8 Feb). The disruptors lacked unity. The Australian Automobile Association (AAA) representative dissented on the tax and was told by proponents that: “those present should be speaking with one voice. Primary Industries Minister Bob Collins was outraged, and said so, leaving onlookers like [ACF] chief, Trish Caswell, looking somewhat sheepish” (Main and Stretton, 1995). Intriguingly, the AAA was then a member of the AIGN (Wordern, 1998:10); there is a strong possibility it was playing a deliberate spoiler role, given that the AAA was now headed by the former CEO of AMIC, Lauchlan McIntosh.

Some AIGN members thought that disruptors’ performance actually helped the industry case. One told a researcher The environmental movement lost the plot - they descended into rhetoric and hysterics on this issue… culminating in, for them, an absolutely disastrous roundtable meeting in Canberra … this meeting was a disaster in terms of its impacts on the ministers43 (Wordern, 1998: 107-8).

The business roundtable involved 23 business and industry groups, including representatives from BCA, AMIC and CRA.44 Crucially, the ACTU was present in what Callick and Gill (1995, 9 February) called a “powerful alliance.” Its alternative revenue-raising proposal was an income tax surcharge (Walker et al. 1995). A Worden interviewee (1998: 88) argued: I think it would be naive to think that the industry position alone was decisive. I think the fact that the ACTU, at the roundtable with industry, was able to argue the social

43 An attendee at the meeting (Kinrade) supports this. 44 Business lobbies have better media access, and therefore more accounts exist of this roundtable. 118

justice implications, the equity implications, and was quite categoric in its opposition to a carbon tax option was, with a Labor government, a very important consideration.

This capacity – consciously and conscientiously built through repeated meetings to resolve minor differences and present a coherent, simple and internally consistent case to busy decision-makers - was something disruptors did not have. One incumbent reflected : I think one of the reasons that industry was so effective in the roundtable was that the rough edges had already been knocked off in the intra-industry consultation leading up to the round table, so that the position being put by industry, in the end, was a pragmatic, moderate position that government could live with (Wordern 1998: 106-7: emphasis added). The following day, a front page story in The Age exemplified incumbents’ warnings. A carbon tax would endanger potential new projects including: Comalco's planned $730 million Boyne Island aluminium smelter expansion, A $1 billion alumina refinery at Weipa…. An expansion of steel production using CRA's `Hi-smelt’ technology. (See Figure 5.5.)

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Figure 5.3 Front page of the Melbourne Age, 9 February 1995 (reproduced with permission of Fairfax)

This warning, of what amounts to an investment strike, would also be repeated in later policy windows.

Reframing attacks occurred in the Australian Senate. On 8th February one Liberal, foreshadowing Opposition Leader Tony Abbott’s attacks in the period 2009-2011, stated: A tax is a tax is a tax. Senator Collins, you well know it is just another impost or way of putting a slug on the users. Do not get caught up with the language. You and I know that it is about making sure that ordinary Australian families pay a bit more for fuel. It has nothing to do with putting a tax on carbon. It has a lot to do with raising revenue to 120

get you out of a very big current account and budget deficit hole. We all know that you will not give any assurances that it will not be doubled after year one and doubled again after year two. In other words, it is just another device to raise money. That is understandable, from your agenda (Hansard, 1995).

After the roundtables Faulkner realised he lacked sufficient support. On Friday 10th February, responding to “the privately expressed reservations of other ministers,” he decided he would not proceed. The next Monday, at an interdepartmental committee meeting to formulate emissions reduction plans, Environment Department officials announced the tax would not be pursued (Chamberlain and Peake, 1995). This rapid withdrawal rendered state governments’ opposition – cultivated by the AIGN, in a tactic that would become more important in later windows – redundant, their open letters un-needed (see for example Hannam, 1995: 13 February).

While the environment movement buried its head in its hands45 government and industry negotiated a voluntary scheme. By the end of March, after further minor skirmishes and with disruptors arguing (presciently) that voluntary schemes would not drive down emissions, the government and industry launched a programme called Greenhouse 21C, of which an industry-focussed ‘Greenhouse Challenge’ agreement was a part. Faulkner flew to Berlin with it.

5.4 Window closure and aftermath (March 1995- 2006)

Incumbents had realised that the existing policy - the NGRS - would not provide a political solution to the problem of climate change. To head off stronger policy they co-ordinated among themselves and performed three key tasks. Firstly they demonised the proposed carbon tax through economic modelling, lobbying, tactical incorporation of state governments and a trades union, and an incipient advertising campaign. Secondly, they proposed an alternative policy – voluntary actions by corporations. Finally, they consciously avoided arguing about the existence of climate change. Wordern (1998) reports that this was due to the efforts of AIGN. Wordern (1998: 117) notes

45 McLean and Bita, (1995: 15 Feb) 121

The IGN realised, when it was developing the strategies for its carbon tax campaign, that it would be ‘sidelined altogether in the policy debate’ if it focused its argument on questioning the scientific validity of the global warming claims(1998: 117). This is backed up by contemporaneous accounts by knowledgeable journalists (Stevens, 1995: 15 February), who reported that during ‘crisis meetings’ over the previous six months it had been agreed “that business should not challenge the Government’s fundamental acceptance of the scientific basis of greenhouse – although several of the most powerful players regard it with unswerving scepticism.”

Incumbents’ victory created a policy image (domestically if not internationally) of Australia acting responsibly. The AIGN was able to defend its hard-won policy monopoly very effectively for a decade (see Pearse, 2005; 2007 for details), the victory in the 1994/5 period presumably increasing its credibility with its funders. AMIC successfully rebranded itself as the Minerals Council of Australia (MCA), and had a lengthy ‘kiss and make up’ meeting with Prime Minister Keating in May 1995 (Davis, 1995).

Greenhouse Challenge survived the change of government in March 1996 and became the main bulwark in the conservative government’s work to reject any form of carbon pricing. Sullivan (2005) in his investigation of the efficacy of voluntary arrangements, was told by an industry association representative that “The Greenhouse Challenge is really a bit of a joke.” Another interviewee said it served merely “to codify what companies would be doing …. anyway. It’s a bit more paperwork but if it helps us avoid carbon taxes or more regulations, it’s worthwhile” (Sullivan, 2008: 108 emphasis added; see also Hamilton, 2001).

For the next decade climate change was framed as a manageable threat requiring only incremental measures. The Howard government (1996-2007) used Greenhouse Challenge and economic modelling work begun under the Keating government in its domestic and international efforts to prevent anything more than tokenistic efforts on climate change. At the state level, a carbon pricing initiative slowly grew, under the stewardship of New South Wales premier Bob Carr, and would become important in the early stages of the 2006-2009 window.

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After this episode, a carbon tax was no longer pursued vigorously, with attention switching to emissions trading schemes as propounded by the Industry Commission, the Australian Greenhouse Office and other quasi-independent state bodies, as well as extra-state policy entrepreneurs. An ETS was proposed twice in Federal cabinet in 2000 and 2003, but defeated on both occasions.46 The capacity of civil society policy entrepreneurs (e.g. peak ENGOs) weakened, in part because of this defeat, but primarily due to the loss of access to elite decision-makers following the arrival of a conservative government in 1996. The potential alliance between workers and environmentalists did not survive the carbon tax disagreement. Norton (2004) notes that: ACTU and ACF documents from early 1995 until the end of the Labor government and the Accord in 1996 reveal no subsequent engagement by the peak union body with environmental issues, and no significant formal contact between the two peak organizations. Climate change would not become a significant issue again until 2006.

46 This is not a policy window, rather an (attempted) opening within the policy stream. 123

Chapter 6: “Subverting rather than averting”: Incumbent activity changes climate change from perfect storm to perfect disaster

6.1 Introduction

Interviewed for this thesis, Richard Denniss, The Australia Institute’s chief economist, savaged the Rudd government’s strategy for its Carbon Pollution Reduction Scheme (CPRS). To Denniss it seemed:

based on the idea that if they gave enough money to the people who hated it, the people who hated it would back off. When in actual fact, the more money they gave to people who hated it, the more those groups realised ‘the harder we kick, the more we get.’ So we started the scheme with Ross Garnaut and others saying ‘there would be no compensation, that was Europe’s problem’ and we ended with the biggest polluters getting 94% of their permits for free.

As Dennis notes, the primary incumbent strategy was to induce Rudd to make ever-larger concessions – and then to kick harder and more pointedly. Eschewing the previous ‘stop the policy in its tracks’ tactics, incumbents’ primary effort was to highlight costs and allow proxies to ‘issue minimise’. Incumbents were so successful in weakening the policy that when, in December 2009, CPRS relied on Green Party support for survival, they let it die.

This third policy window opened in late 2006 and closed on 1st December 2009. The period has been described as one of “partisan vitriolic mud-slinging” extraordinary “even by Australian standards” (Cook, 2010: 74), though 2011 would be worse. Its primary focus was the terms under which an ETS might be introduced – when would it start; what would the short and long-term emissions reductions targets be; how would ‘permits to pollute’ be allocated; what (if any) special arrangements or compensation would be made for high energy users and those groups particularly exposed to international competition?

In the background, other issues intermittently affected these discussions – what should happen to the Mandatory Renewable Energy Target (MRET)? What support should be offered for other carbon mitigation technologies, especially so-called ‘clean coal’ and carbon 124 capture and storage? And would a carbon tax, less efficient but also less prone to being undermined and evaded, be a better option?

The chapter first explains the events and institutional work that occurred within the three streams in the years leading up to coupling. The window itself can be divided into thirds. The first year saw incumbents shape the literal and metaphorical terms of reference around an ETS, and dispense with a carbon tax proposal. The year 2008 saw incumbents expend enormous political and financial capital to weaken Rudd’s CPRS, with considerable success. In 2009 the incumbents moved to ‘consolidation of gains’ mode, with further modelling and a well-timed publicity campaign asking the public to pressure political representatives over the issue, dovetailing with rising political opposition. The window closed (or, more poetically, the politics stream dried up), albeit for only nine months, when the fragile “competitive consensus” (Walgrave and Varone, 2008) under Liberal Party leader Malcolm Turnbull collapsed. Tony Abbott, who had recently decided to oppose the carbon pricing he had previously supported, replaced him.

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Figure 6.1 2006-2009 Policy Window

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6.2 The Streams

The problem of climate change was no longer an abstraction to Australians, merely polar bears and coral bleaching. This was principally due to the “Millennium Drought.” Water restrictions came to capital cities, and expensive desalination plants were built by state governments. Heatwaves intensified, with that in late 2005 overwhelming hospitals (Robotham, 2005).

In mid-2006 Al Gore’s An Inconvenient Truth was released, and performed very well in Australian cinemas.47 Gore himself visited Australia on two whistle-stop tours in late 2006 (Hogarth, 2007). Grassroots activism was also springing up. There were ongoing protests in Victoria about large power stations fuelled with brown coal. Throughout 2006 new ‘problem- broker’ groups sprang up to harness the alarm of ordinary Australians (e.g. Doctors for the Environment). On 4th November 2006, a Walk against Warming was held, with as many as 100,000 Australians marching in 288 locations (Greencross Australia, 2008). New television shows with titles like ‘Carbon Cops’ hit the airwaves, and comedy shows such as Kath and Kim had ‘environmental’ episodes.

At this stage ‘issue minimisation’ by incumbents was limited, though the Lavoisier Group, formed in 2000 and funded by mining interests, produced ‘Nine Lies about Global Warming’ in February 2006 (Lavoisier Group, 2006), and launched ‘Nine Facts about Global Warming’ (Lavoisier Group, 2007) on 28th February 2007 at Parliament House (Murphy et al., 2007).

47 Savva (2010: 218) wrote: “Gore had the biggest impact on Australian middle-class voter…. [He] is about as charismatic as a piece of fibro; but his movie managed to frighten the pants off millions of people.” 127

The politics stream thickened quickly. Reflecting in 2013, former Prime Minister John Howard recalled: In 2006 my government hit a ‘perfect storm’ on the issue. Drought had lingered for several years in many parts of eastern Australia, leading to severe restrictions on the daily use of water; not for the first or last time the bushfire season started early; the report by Sir Nicholas Stern hit the shelves, with the author himself visiting Australia, and lastly the former US vice president Al Gore released his movie An Inconvenient Truth. To put it bluntly ‘doing something’ about global warming gathered strong political momentum in Australia (Taylor, 2013).

There were international, federal and state-level developments. Internationally, Russian ratification brought the Kyoto Protocol into force in February 2005; non-ratifiers such as Australia and the USA were excluded from some UNFCCC discussions. The Asia Pacific Partnership on Clean Development and Climate the US and Australia had established in mid- 2005, did not provide the hoped-for insulation. Its January 2006 meeting in Sydney sparked noisy protests. Meanwhile, AGW appeared on G8 meetings agendas, notably in 2005.

Federally, Labor politicians such as Anthony Albanese and Kim Beazley repeatedly stated that a future Labor government would ratify Kyoto and commit Australia to a 60% reduction in emissions by 2050. In December 2006, Rudd replaced Beazley as Opposition leader, and used climate change to differentiate himself from Howard. At this time, most state governments were Labor, and had produced, or were producing, climate change and energy policies of their own, while expressing dissatisfaction with the Federal government’s stances on climate, energy and water. The Greens were becoming a significant electoral force, and their spokespeople were quoted (albeit often dismissively) in the media.

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As Howard had noted, the drought also changed the political dynamics. Dolan (2016) observes that it intensified long-standing rivalries between agricultural and environmental interest groups. This pressure splintered agricultural interests, weakening their influence on policy makers. Meanwhile, the involvement of international interests strengthened the forces pushing for attention to the environment [and]…. the impacts of the drought awakened new interest groups.

The policy stream also grew thanks to international, federal and state-level developments. Internationally, with specific reference to carbon pricing, three important developments occurred. On 1st January 2005 the European Union Emissions Trading Scheme (EUETS) came into existence, giving ‘proof of concept’ to emissions trading. Shortly afterwards Russia’s ratification turned Kyoto into law. Finally, in September 2006 former World Bank chief economist Nick Stern produced a report for the UK government on the economics of climate mitigation (popularly known as the Stern Review). All added to the sense that carbon pricing – and emissions trading – was not merely possible, but an idea whose time had come.

Domestically, state-level politicians, businesses and civil society acted. In 2004, led by NSW Premier Bob Carr, state governments created the National Emissions Trading Taskforce (NETT), to investigate a ‘bottom-up’ ETS which would be a de facto if not de jure national scheme. NETT released a major report in August 2006, as public concern escalated.

ACF convened a group of businesses, including banking, insurance and energy generation groups. In April 2006 it launched a report called the Business Case for Early Action on 129

Climate Change, arguing that a carbon price was not, contra Howard’s previous statements, anathema to all businesses.48 In late 2005 disruptors established a new NGO, the Climate Institute (TCI) dedicated purely to climate policy.

6.3 Coupling

There was huge volume and flow in all three streams. By mid-2006 traditional tools for managing climate politics were inadequate. Increasing numbers of individuals and organisations were attempting to link the issues of climate and energy. However, coupling of the streams only happened when senior figures within the Federal state apparatus acted. Kelly (2014: 73) identified the head of the Department of Prime Minister and Cabinet (Peter Shergold) and Treasury chief (Ken Henry) as having staged “one of the most assertive reform campaigns for a generation.”

After meetings with fellow bureaucrats, Shergold initiated a meeting of Howard and senior public servants. Giving a presentation, Shergold reached the bullet point advocating an ETS; Howard asked him: “What’s that doing there?”

It was the decisive moment; the next exchange was a classic in the advisory art. Henry said: “Prime Minister, I’m taking as my starting point that during your prime ministership you will want to commit us to a cap on national emissions. If my view on that is wrong, there is really nothing more I can say.” It was a threshold moment. “Yes, that’s right,” Howard said cautiously. Henry continued: “If you want a cap on

48 The chairman of Westpac was David Morgan, a former senior Federal bureaucrat, who has been married to former Environment Minister Ros Kelly since the mid-1980s. His awareness of climate policy dates back to at least to 1990. 130

emissions then it stands to reason that you want the most cost-effective way of doing that. That brings us to emissions trading, unless you want a tax on carbon.” Howard did not want a tax on carbon. (Kelly, 2014:73)

The other bureaucrats present pressed for an ETS. Kelly argues that the “ultimate sanction” came from the BCA’s president. Howard’s former chief of staff Arthur Sinidos said:

The switch by the business community was the key. This was the driver. When the BCA brokered their new position it was a tipping point for us. I think the country had reached tipping point (Kelly, 2014: 74).

On 13th November 2006, Howard made one of his largest policy U-turns. Speaking at the BCA’s annual dinner he announced his government would investigate the carbon pricing he had opposed adamantly for a decade. Two days later, Howard consulted with hand-picked fossil-fuel representatives from BHP, Rio Tinto, BlueScope Steel, Woodside and the BCA group (Grigg and Buffini, 2006).

On 4th December Kevin Rudd – who had written a widely-read article on the need for climate action (Rudd, 2006) – became Opposition leader. Climate change clearly was going to be an unavoidable electoral issue.

On 10th December Howard announced a taskforce – under Shergold. Its remit was "to tell us what the shape of a global emissions trading system might take, and it will be looked at against a background of preserving the natural advantages Australia has in areas like fossil fuels and uranium" (AAP, 2006: 10 December, emphasis added). Besides Shergold, it comprised bureaucrats and businessmen. Of the former were the secretaries of the Departments of Industry, Foreign Affairs and Trade, and Treasury, and the Department of the Environment. From business it included representatives from the airline Qantas, National (Australia) Bank, Xstrata (one of Australia's major coal exporters), BHP, and Alumina Limited. Disruptors attacked the taskforce’s legitimacy. Green MP Bob Brown was derisive, saying "The prime minister ... has made a choice between the coal industry and his grandchildren. He has chosen coal" (Rehn, 2006: 11 Dec). ACF called it “a stacked committee of big polluters and people who have a vested interest in looking after their own interest” (AAP 2006: 10 Dec). Greenpeace said “What this task force is all about is how can 131 we come up with a cosmetic carbon trading scheme that doesn't impact on the coal industry" (Rehn, 2006: 11 Dec). Former coal industry figure Ian Dunlop argued: “all the industry people … were there to minimise any possible impact it might have. They weren’t seriously interested in getting something moving” (interview, 2015).

What was less noticed was that the CEO of the AIGN, John Daley, was seconded to become a member of the joint-government business secretariat (Pearse, 2007: 262). On this, Dunlop, with laughter, said “AIGN were heavily in there; ‘we will help you with your problem’.” Clearly this was a successful attempt by the incumbents and allies to shape the terrain on which the policy battle would be fought – to channel and funnel discourse along selected valleys and riverbeds, rather than others.

The taskforce was given six months, conveniently preventing climate change being an issue within the Budget process.49 It would also appear at the beginning of the pre-election season; Howard presumably hoped this would help him neutralise the growing electoral threat of climate change. He faced significant costs in acceding to this coupling, becoming an easy target for journalists. In February 2007 ABC’s Tony Jones asked: “can you recall exactly when it was that you ceased being a climate change sceptic and became, in effect, a true believer?” (ABC, 2007). His political opponents highlighted the inconvenient fact that in 2003 he had over-ruled five of his Cabinet colleagues and personally vetoed an ETS. 50

49 Given how the Budget process had helped open a policy window in 1994/5, this was a wise move. 50 It should be remembered that there had been two previous efforts in the Federal cabinet to get an Australian emissions trading scheme accepted. In 2000 Environment Minister Robert Hill had brought an ETS to Federal Cabinet. This proposal was defeated, with Nick Minchin, a noted climate skeptic in the vanguard of the opposition. In 2003 a much larger push was made, involving five senior ministers, including the Treasurer Peter Costello and his secretary, Ken Henry. Prime Minister John Howard deferred the decision and consulted some of his favoured business contacts. At the next Cabinet meeting he announced he was vetoing the proposal. 132

6.4 The Policy Window

The policy window neatly falls into three year-long periods. The first year saw incumbents dominate the government’s policymaking, fight off tax proposals and face disruptors’ mockery. The second saw Rudd’s CPRS suffer the death of a thousand concessions. The final year saw political support shrink and evaporate as the drought broke.

6.4.1 The Shergold Report and the 2007 Federal election

In the immediate aftermath of coupling problem indicators proliferated. In February 2007 of the IPCC 4th Assessment Report stated that observed warming was almost certainly due to human actions, and that immediate steep emissions cuts were required. During a summer of bushfires, a number of major hydro and coal plants in eastern Australia had to reduce their output because of water shortages (Minchin and Murphy, 2007: 31 May); Howard advised people to pray for rain (AAP, 2007). One business journalist (Warren 2006, 11 Dec) had argued that: “It's likely to be a tough few months. Business has evolved to a position that accepts the inevitability of a future price on greenhouse gas emissions, and now seeks certainty in investment. They want to know when and how much.” Warren underestimated; it was to prove a tough decade.

Although Shergold’s Review did not become legislation, the machinations around it are covered in relative detail because they set the parameters for future action, and set the (highly abstruse and technocratic) tone that Rudd and others deployed.

For six months, stakeholders made submissions to Shergold’s taskforce. Most incumbents were broadly in favour of some form of carbon pricing. BCA said Australia should adopt 133 long-term targets, “allowing time for clean technologies to be proved and made commercially available” (Grigg 2007: 28 March). BCA leveraged the prospect of a national scheme to combat both the MRET and a states-based ETS. Kelly (2007: 7 April) notes that its submission presumed “the abandonment by Labor state governments of their own schemes along with the mandatory renewable energy targets cherished by Labor and the Greens.”

In a precursor of future battles over the allocation of permits, economist Peter Dixon, (co- author of the 1989 CRA-funded paper), said: To give [large emitters] permits would be like the Government having a carbon tax, collecting all the revenue, and instead of doing something worthwhile with it, giving it to the shareholders of electricity generating companies…Put like that, it's not all that attractive (Colebatch, 2007: 29 May).

Incumbents have no monopoly on exquisitely-timed reports based on economic modelling. Days before the Shergold Report’s release, The Climate Institute published a study arguing an 80% cut in electricity sector emissions was achievable by 2050, “through a mix of emissions trading, clean energy targets and energy efficiency” (Minchin and Murphy, 2007: 31 May).

Just as Shergold’s report was released, economists warned a poorly designed scheme could have too many loopholes. One, referencing a speech Howard had given days earlier, argued that he: seemed to leave the door open for fossil fuel industries to weaken the environmental and cost effectiveness of emissions trading and to grab windfall profits… Any future Labor government could also find itself under similar pressures (Minchin and Murphy, 2007: 31 May). This was prescient.

Shergold’s report, released on 31st May, called for an ETS beginning in 2012, but declined to set an emissions reduction target. Attempting to weaken incumbents’ flow, the Greens framed the report as: a Howard Government dog-whistle to the big polluters, particularly the coal and aluminium industries, giving the signal 'Vote for me and there won't be any action for 134

five years, and when I do act you will be sheltered and compensated.' It should fill the Liberal Party coffers accordingly (Milne 2007: 1st June).

On 4th June, Howard accepted the taskforce’s recommendations, saying that , if re-elected, he would legislate an ETS to start in 2012 (later brought forward to 2011). Labor retorted that its scheme would begin in 2010. Meanwhile, Kevin Rudd tried to regain disruptive momentum. Firstly, he held a National Climate Summit. Secondly, in April, combining with most state governments, he commissioned respected economist Ross Garnaut to produce a report on the economics of climate change.

Alongside the Shergold manoeuvres there was a less visible battle over policy instruments. Howard framed a tax as: a very crude, inefficient and potentially damaging way of dealing with it because it pays no proper regard to market forces. I'm not going to embrace an approach to climate change that damages our great resource industries and there's a danger if you start talking in an arbitrary fashion about carbon taxes that you do that (Probyn, 2007, 6 February).

Others, however, favoured a tax (see Hytten, 2013: 272-281 for details), including the libertarian think tank CIS (Humphreys, 2007) and, indeed, Tony Abbott as late as July 2009. Tax proponents pointed to the sharp decline in the price of emissions permits within the EUETS, reducing incentives for firms to limit their own emissions (see CEDA, 2007: Climate Change: Getting it Right , quoted in Sibillin, 2008: 17 January).

This year saw the rise of disruptive work, with new forms of mockery of government and industry stances, as well as some direct action. In February activists with Rising Tide spoofed the NSW Minerals Council’s advertising campaign. The Council responded with legal threats before backing down. Later in the year, after Howard’s government launched a television advertising campaign ‘Climate Clever,’ a new disruptor group ‘Get Up’ challenged this with a crowd-funded satirical response (Grattan, 26 September 2007). Incumbents tried to burnish their own credentials. In June mining giant BHP announced a revised climate change policy; ACF dismissed it as window dressing (Murphy, 2007: 19 June).

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The 2007 election was arguably the ‘first climate election’ (Rootes, 2008). For Howard, it was an election too far – his government was swept away. Crucially, however, Labor did not win control of the Senate, and its climate plans were inchoate. Rudd’s first official act was Kyoto ratification; soon after, he flew to the Bali UNFCCC meeting, where he received a standing ovation. While there, he resisted European diplomatic pressure to increase his 2020 emissions reduction target from 5% to 25% (Kelly, 2014).

6.4.2 2008 - the year of intensive lobbying

The year 2008 saw immense policy battles. Garnaut’s process ran in parallel to (and was gradually supplanted by) Rudd’s, leading to endless releases of reports and submissions, and a certain fatigue and confusion in many observers. Throughout, incumbents sought additional compensation and deferrals while the global economy tottered. On climate policy, Rudd fell from hero to zero.

Industry saw a chance to shape the political landscape. The BCA urged Rudd and state premiers to “agree to strict new operating rules to prevent the Council of Australian Governments from becoming bogged down and ineffective as it did under the previous Howard regime” (Taylor, 2007: 19 December). Industry told Labor that its promise of an ETS beginning in 2010 was too ambitious; John Daley, now returned to his role as AIGN’s CEO warned “Labor's proposal did not provide enough time to set up an effective, wide- ranging scheme” (Breusch, 2007: 3 Dec). The AIGN’s membership swelled, and it recruited new lobbyists, with better connections for a changed government (Pearse, 2009). Everybody knew a serious battle lay ahead.

In the lead-up to Garnaut’s interim report detailing how permits in an ETS might be allocated, various trade associations weighed in. While the AIGN was broadly supportive of Garnaut’s proposal of a long-term ‘carbon budget,’ others – the Australian Pipeline Industry Association (APIA) and ESAA - argued that Garnaut was ignoring “political reality” because such a budget could lead to higher carbon emissions in the short term, and so put great pressure on future governments to intervene in the market (Taylor, 2008: 30 January). Incumbents used the newsworthiness of Garnaut to attack renewables; the APPEA pre- empted his report with their own, attacking the MRET (Warren, 2008: 19 March; Pearse, 2008: 19 March). 136

In April the 2020 summit, a two-day invite-only jamboree, was staged during ‘peak optimism’ about the new government’s capacity to integrate community concerns into policymaking (Twomey, 2008). The environment was one of eight discussion streams. Although the summit was supposed to be a broad-ranging community-based event, several observers noted that it was dominated by business interests, especially around the questions of energy and climate policy. The BCA included a warning in its summit submission that the ETS’s design was the “most important and riskiest facing the Labor Government's moves to tackle climate change, because a poorly designed scheme could hammer the domestic economy” (Franklin 2008, 7 April). The summit appears to have had little impact on policy, and the results were only released two years later, when Rudd’s star had fallen considerably.

Meanwhile, the AIGN agitated for a price cap for permits, cutting across environmental groups’ lobbying for a tight emissions reduction target (Warren, 2008: 29 April), that is to say, opening up a different front rather than fighting on a topic put forward by disruptors. The political consensus also began to fracture. In July the Liberal Party Leader Brendan Nelson, refused to reaffirm support for the introduction of an ETS regardless of whether the world's major polluters acted or not, something Shergold had recommended. Nelson then renounced Shergold, saying acting before major polluters such as India and China were also committed would be “economic suicide” 51 (Coorey, 2008). Interviewed by Kelly (2014: 242) Turnbull said of this period: “Business was in favour of it. There wasn’t a business lobby telling us [the Liberals] to reject it.”

Two crucial policy documents – Garnaut’s report on an ETS’s economic impact, and the government’s CPRS Green Paper52 – were released in July. Incumbents pushed for free permits to accommodate further expansion of the trade-exposed sectors and warned of investment droughts. The aluminium producer Alcoa framed this as only "… a transitional measure until we have a level playing field with overseas competitors…. So what you could do is have a relatively flat Australian trajectory until we see what other nations are doing" (Breusch, 2008: 19 August). The MCA lobbied to increase the amount of free permits, arguing it would “avoid a lobbying frenzy.” They also tried to introduce a formula which

51 Exactly the same words were used by the Liberals in Jan/Feb 1995. 52 A Green Paper is a discussion paper, usually followed by a ‘White Paper’ which is a closer approximation of final legislation. 137 would compensate industries which could not easily forward their carbon costs to end customers (Taylor, 2008: 20 August). The CEO of Cement Australia warned a planned low- emission cement kiln would not happen (Breusch, 2008: 19 August). BCA’s president made a speech to business leaders, academics and economists at the venerable think tank CEDA in what Ryan (2008: 3 July) called a “pre-emptive strike,” arguing for delay to the scheme’s start-date and increased permit allocation.

Alongside intensive lobbying, incumbents attended and hosted countless public events. For example, in August, the chair of the MCA’s climate change committee spoke at a forum convened by Queensland’s Gladstone Area Promotion and Development Board (Thompson, 2008). These sorts of face-to-face encounters are crucial for building trust and building/enhancing relationships which then can be drawn upon during intensive ‘via-the- public’ lobbying efforts.

The most significant lobbying/economic modelling efforts came in August, following the CPRS Green Paper. The BCA released a report, Modelling Success: Designing an ETS that works, based on submissions from its members and predicting economic Armageddon unless the CPRS were further watered down (Mitchell, 2008: 27 August) (Figure 6.2). Echoing a 1994/5 tactic the report – peppered with anecdotes – predicted closure of firms, and the abandonment of proposed developments.

The lobbying worked. In late August Taylor (2008: 30 August) reported that after “weeks of escalating complaints about [the] emissions trading scheme” Martin Parkinson, the Department of Climate Change secretary, had “told a closed-door meeting the Government would work with business on different ways of distributing the allocated pool of free emission permits among those trade-exposed industries that cannot pass on the cost of carbon to their customers.”

Disruptors counter-punched, but it was too little too late. TCI attacked incumbents’ push for free emissions permits (see MMA, 2008). Various peak bodies, including the ACTU, the Australian Institute of Superannuation Trustees and the Property Council of Australia combined to counter-lobby for stronger targets and better low-emission technology investment via auctioned permits (Toohey, 2008: 6 December). Treasury modelling on the impact of different emissions reductions targets was finally released, after much delay 138

(Warren, 2008: 2 June), on 30th October. It showed almost no difference in the economic impact of a 10 per cent and 25 per cent reduction target by 2020. Incumbents were (pre-) prepared. Taylor, (2008: 1 Nov) noted that MCA released a report “even before the modelling was released.” Its author, Brian Fisher, previously with ABARE, challenged Treasury’s modelling assumptions and argued there was a “substantial risk” it had underestimated costs. Upon its release, others attacked. The head of the Australian Industry Group delegitimised the modelling saying "It's like a Dr Who, Tardis arrangement where you get in at 2010 and come out at 2020 with the nirvana of a whole lot of new industries established" and pressed for delay (ABC, 2008: 31 October; Dodson, 2008: 1 November).

Business peak bodies sought further discussions with the federal government. The Western Australian LNG industry pushed for an exemption from the scheme altogether, citing “analysis” by Concept Economics (headed by the ubiquitous Brian Fisher) for the APPEA, which argued “LNG output would be slashed 54 per cent by 2030 on what it otherwise would have been if Australia committed to an emissions reduction target of 20 per cent on 2000 levels by 2020” (Probyn, 2008). The APPEA also proposed that the Government should consider “establishing a new category of polluters — “cleaner global contributors” — who will get free emissions permits in recognition of LNG’s relative cleanliness compared with coal” (Probyn, 2008).

The Federal Opposition cited a zinc producer’s concerns over its Tasmanian and South Australian smelters. Liberal climate spokesman Greg Hunt said: "The government's plan will drive up unemployment and it will also drive up global emissions by sending Australian jobs overseas" (SBS, 2008: 13 November). In an echo of the 1994/5 carbon tax battle, the South Australian and Tasmanian state governments wrote to the Federal Government seeking exemptions; Queensland, Victorian and Western Australian Governments also raised concerns (Taylor, R. 2008).

Taylor (2008: 1 November) characterised the disputes as a “modelling war” arguing there had been a “sudden predilection to conduct policymaking through exhaustive process rather than exhausting ideological biff.” Overlooked in all this, but of significance for the next policy window, was the move by Australian bank Westpac. in a white paper submission, to urge government to pursue a strict trading scheme with tough reporting standards and limited 139 compensation for those companies seeking to shelter themselves (Irvine, 2008). This would not be forgotten by incumbents.

Disruptors’ modelling was further attacked in early December. With the release of the White Paper imminent, the Senate Select Committee on Fuel and Energy Committee (controlled by members of the Opposition) hired Brian Fisher to conduct an “independent review” of Treasury’s modelling (Keane, 2008: 8 December).53 Simultaneously, incumbents both issue- minimised and burnished their image. In November 2008, while lobbying fiercely for further concessions, the ACA launched a $1.5million advertising campaign and a $1million dollar interactive website called NewGenCoal. The ACA’s executive director predicted that carbon capture and storage would be commercially viable by 2017 (Colebatch, 2008: 13 November).

The CPRS White Paper, released on 15th December, was a vivid indicator of incumbent effectiveness and disruptor weakness. When Rudd launched it, protesters had to be ejected from Canberra’s National Press Club. Greens raged at the increased compensation to fossil fuel interests, and at loopholes which would both enable their emissions to increase while other sectors had to cut deeper, and would enable Australia to “cut” its emissions by buying international reduction permits (Colebatch, 2008: 23 December). Garnaut was scathing. In an article called “oiling the squeaks” (2008: 20 December) he pointed to the enormous giveaways and loopholes in the proposed legislation. Garnaut, surely in a position to know, argued this followed: “the most pervasive vested-interest pressure on the policy process since the Scullin Government54 and of the most expensive, elaborate and sophisticated lobbying pressure on the policy process ever.”

Steketee (2008: 18 December) captured the mood in his rhetorical questions: So why give heavy emitters an estimated 45 per cent of all permits by 2020, rather than the 30 per cent originally judged as adequate? Because the Government was not prepared to call their bluff. That applies not only to trade exposed industries. The Garnaut report found no justification for compensating electricity generators but the Government is kicking in no less than $3.9 billion to coal-fired generators following heavy lobbying.

53 This is a time-honoured tactic – which had been used by Labor in 1999/2000 when it produced a report (‘The Heat is On’) critical of the Howard Government. 54 The Scullin Government (1929-1931) was a Labor government brought down by economic crisis. 140

Incumbents sought more. Business groups pressed again for a delayed start date (Alexander, 2008: 16 December). MCA supremo Mitch Hooke was "profoundly disappointed” the White Paper was not “better aligned with progress towards a global agreement on reduction commitments, new low emissions technologies and emissions trading schemes in other countries" (Hart, 2008). Foreshadowing arguments made in 2011, he asserted that it would require Australian business to raise more than $8billion a year "during an unprecedented credit crunch… In the first three years, Australian business will have paid up to $30 billion for permits before a single European competitor has paid a single euro" (Murphy 2008: 16 December).

6.4.3 2009 – consolidating the gains

While 2009 would see further (political) drama, and further intensive ‘hearts and minds’ efforts by industry (described below), incumbents had defeated a meaningful carbon price. The year saw negotiations around the first attempt of CPRS legislation (April- May 2009), and a “hearts and minds” campaign run by the industry in September, as the legislation approached its date with destiny. Throughout the year industry kept telling various parliamentary inquiries that the economic disaster was imminent (e.g. James, 2009: 5 May).55

On 10th March the Federal Government released an ‘exposure draft’ of its CPRS bill (Pezzey et al. 2009). Horse-trading followed: climate minister Penny Wong met BCA Chief Greg Gailey and secured his support in exchange for a key concession – that the start date be pushed back a year (Taylor 2009: 23 May). Meanwhile, Rudd met peak environmental bodies, under the banner of the Southern Cross Coalition, and secured their acquiescence in exchange for a 25 per cent emissions reduction target for the year 2020, if a comprehensive global agreement occurred.56

The bill dismayed disruptors. James (2009: 6 May) observed that:

55 James (2009) wearily reports “The Australian reports two weeks ago Peter Coates told the Senate Select Committee on Climate Policy that coal mining output would be slashed by 35 per cent by 2020 if the ETS went ahead as planned. Last week the Steel lobby was making similar noises. Presumably next it will be the aluminium industry then the LNG industry.” 56 The exact wording is "if Australia is a party to a comprehensive international agreement that is capable of stabilising atmospheric concentrations of greenhouse gases at around 450 parts per million of carbon dioxide equivalence or lower". 141

The extreme complications and impossible conditionality built into the latest version of the government’s CPRS, with even more concessions to the polluting industries, appear to reflect an equally extreme pessimism that Australia can neither do anything meaningful to reduce our carbon emissions or that anything meaningful would bring apocalypse upon the economy via the collapse of the mining industry.

The insertion of caveats and concessions echoes the earliest window’s battles over both the Toronto Target and the NGRS. Reflecting on other reports, from 2006 and 2008, James (2009) asked “What happened to the analyses by Nicholas Stern and Ross Garnaut who showed that spending big on renewable energy could be a net benefit to the economy?”

Incumbents tried to frame the CPRS as a jobs destroyer. On 8th May the ACA released a report, based on ACIL-Tasman modelling, that 10,000 mining jobs would be lost and 16 coal mines closed by 2021 if the CPRS became law (AAP, 2009: 8 May).57 On 22nd May, the MCA released a report which argued: "approximately 23,510 fewer people will be employed in the Australian minerals industry due to the imposition of the proposed ETS, a fall in employment of 11 per cent compared to what otherwise would have occurred." As Berger (2009) noted, the devil was in the (omitted) detail; the modelling assumed technological improvements in production were impossible; further, the trumpeted "fall in employment" was actually a hypothetical reduction in projected jobs growth.

The CPRS legislation passed the House of Representatives on 4th June. On the same day a report, by Access Economics, commissioned by Australia’s state premiers,58 claimed the CPRS would leave a “collective $5.5bn hole in state budgets by 2020” (Arup, 2009: 5 June), with power bills increasing by more than $2bn per year by 2013 (O’Neill, 2009). This report was picked up by state and regional press, e.g. “Carbon plan to hit state in heart” (McDonald, 2009: 5 June). However, the modelling did not take into account changes the Government had included, such as a one-year delay in start-date, a fixed carbon price for the

57 According to AAP (2009: 8 May) Combet rejected that finding, accusing the industry of making an ambit claim for $10 billion in government assistance. "The industry has modelled the effects of the scheme on the assumption the government is seeking a 15 per cent reduction in emissions without an international agreement.” 58 Again, an echo of the not-needed but definitely arranged support of state premiers in the 1994/5 carbon tax battle. 142 first year and more industry assistance (Arup, 2009: 5 June). This was the last of the significant modelling efforts over the last two years (see table 6.1).

Table 6.1: Economic modelling by government, incumbents and disruptors

As expected, the CPRS legislation fell; the Government would need to reintroduce it before Rudd and his entourage decamped for December’s much-anticipated UNFCCC conference in Copenhagen. In the intervening months the power of opposition leader Malcolm Turnbull – 143 the man Rudd needed to shepherd reluctant and recalcitrant MPs to support carbon pricing – collapsed. In June 2009 Turnbull had carelessly believed a disgruntled public servant, and accused Rudd of corruption. A ‘smoking email’ was a forgery, and Turnbull was forced to retract. His opinion polling – and personal power – collapsed.

Incumbents continued lobbying, but also undertook a new tactic; a nation-wide advertising campaign, combining press adverts, regionally tailored stories and a website which would encourage employees and others worried about job losses to lobby their political representatives. This was signed off, unanimously, by “senior executives from the world's biggest coal companies” (Wilkinson et al. 2009: 7 November). ACA’s CEO said "It was ticked off by our board of directors, more than ticked off. It was enthusiastically endorsed.'' The campaign, Let’s cut emissions not jobs, started on 28th September 2009 (Maher, 2009, 29 Sept). Hillman painted it as an innocent and public-spirited exercise in filling an information deficit59: We decided to advertise after the ACA conducted extensive public research in regional Australia to gauge the level of community understanding and knowledge about the Federal Government's new carbon tax regime,” This research revealed that coal mining communities have not been properly warned of the damaging consequences of the Federal Government's scheme in its current form (Wratten, 2009).

The leading coal-miners’ union, the CFMEU, rejected claims that job losses were imminent (Taylor, 2009: 30 September), and other commentators felt the entire campaign overblown. For example Manning, (2009: 14 November) argued that: It is impossible to reconcile the association's doom and gloom with record planned investment in new coal mines and export infrastructure, and expectations that our exports of thermal and metallurgical coal are set to double, rising in volume and price.

59 This attempt to claim the status of ‘fair broker’ was contested by the Labor MP for Flynn on 16 November 2009, when he said in Parliament: “Before I close, I want to send a clear message to all the mineworkers of Flynn: please do not be fooled by the ‘Let’s cut emissions, not jobs’ scare campaign being run by the Australian Coal Association in my electorate. Our economy is good, our democracy is strong and many announcements have been made over recent months regarding new mines to be opened and others to be expanded, in Flynn alone. Thousands of new jobs will not be lost; thousands of new jobs will be created. I am deeply, deeply disappointed that the coal industry has sought to use its power, influence and money to publicly scare the wits out of our workers, including the mums and dads of my community of Flynn and the people I have grown up with” (Hansard, 2009). 144

Undaunted, the campaign continued. Its adverts encouraged people to visit a website – cutemissionsnotjobs.com.au – from which they could send their MP a personalised message.

Figure 6.2 Screengrab of cutemissionsnotjobs.com.au video. Source - https://www.youtube.com/watch?v=MaL2AJxwlk4

Leitch and Motion, (2009: 508) write that the campaign “led thousands of people to email their members of parliament in opposition to the ETS.” This is supported by Chubb (2014: 79). One of his sources – an “unnamed anti-emissions trading frontbencher” – said: “the party rank-and-file are on fire about this. You should see the emails I’m getting on a daily basis.”60

In October 2009, as Rudd tried to get CPRS legislation through parliament, he was approached by Turnbull’s chief of staff, seeking one-to-one negotiations.61 Rudd refused, and tasked his climate Minister Penny Wong to conduct negotiations with the Liberal Party’s negotiator, Ian Macfarlane. Kelly (2014: 251) argues that the Wong-Macfarlane deal: offered lots of ‘bait’ for Turnbull to exploit – an extra $1.28 billion over the forward estimates and $7 billion to 2019-20. Assistance to electricity generators was boosted. Emission-intensive trade-exposed industry won more help. The coal industry saw its support doubled to $1.5 billion.

60 It is very important not to claim, or insinuate, that ACA’s campaign ‘created’ discontent. In August 2009 , before the campaign started, National Party politician Barnaby Joyce observed: “The mood is changing. I am now getting hundreds of emails a day from people. They hate this policy. They just hate it. And they actually get the gist of it. They know it’s a new tax and they are asking: ‘How does putting another new tax on me change the temperature of the globe?’ Our constituency is demanding a position from us”(Kelly, 2014: 243-4). 61 (Kelly, 2014: 250) quotes Turnbull’s chief of staff as saying: “I think Rudd was enjoying Malcolm’s pain. It seemed Rudd was more intent on splitting the Coalition than ‘saving the planet’. It made no sense because unless he wanted a double dissolution he needed Malcolm to pass his climate change legislation.”

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However, before incumbents could assent or demur, another twist in the long-running political soap opera occurred; Turnbull faced challenges to his leadership. The eventual winner (by a single vote) was Tony Abbott, a self-described ‘weathervane’ on climate change (for accounts of the internal Liberal battles, see Kelly, 2014; King, 2014). Abbott now became an adamantine opponent of carbon pricing. Without the Liberals, Rudd would need Greens’ support, but he had been assiduously avoiding, even insulting, them. They refused to acquiesce to legislation which offered too much protection for fossil fuel incumbents and too little ambition. The legislation fell and the window closed.

6.5 Post-window events

After the CPRS legislation fell again, Rudd could have called a ‘double dissolution’ election in which all members of both houses would simultaneously face the voters. Upon his return from the failed Copenhagen meeting he was – according to the accounts of Kelly (2014) and Chubb (2014) – urged to do so by advisors. He refused. Nor did he respond to a proposal by the Green Party to institute an interim carbon tax until such time as an ETS could be reintroduced. In late April 2010 it emerged that – despite framing of climate change as a ‘great moral challenge’ on which failure to act would be ‘cowardice’ – Rudd intended to defer reintroduction of legislation until at least 2013. Rudd’s personal approval ratings collapsed. In mid-June, during a ferocious battle over a mining profits tax, Rudd was deposed by his deputy, Julia Gillard. Weeks later, she called an election. The following chapter picks up the story of her successful effort to price carbon.

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Chapter 7: “The full court press”: incumbents turn to the public(s) to win policy battles

7.1 Introduction

In February 2017 Peta Credlin, Tony Abbott’s chief of staff while he was Opposition Leader (2009-13) and then Prime Minister (2013-15), stated baldly of the 2010-11 events: Along comes a carbon tax. It wasn’t a carbon tax, as you know. It was many other things in nomenclature terms but we made it a carbon tax. We made it a fight about the hip pocket and not about the environment. That was brutal retail politics and it took Abbott about six months to cut through and when he cut through, Gillard was gone (Di Stefano, 2017: 12 February). During those six months Abbott spoke at a rally standing in front of signs which declared Gillard was a ‘witch’ and ‘Bob Brown’s bitch.’ He urged businesses to become political activists. He predicted economic Armageddon on a daily basis.

The 2011 policy window was a particularly vitriolic and personalised contest of policies and personalities, around issues of trust and the credibility of politicians, scientists and other advocates of a carbon price. Meanwhile, vociferous and experienced elements of industry mobilised financial resources to run extensive public advertising and “hearts and minds” campaigns both in favour of dominant industries and against the proposed policy. Economic modelling remained central to this.

This window was more politics than policy, partly because Gillard’s room to manoeuvre was so limited – industry regarded all concessions made under Rudd as non-negotiable. A journalist noted: What emerged as the Clean Energy Future package, in mid-2011, was a plan that has satisfied no one and angered many, and which was hatched behind closed doors in the face of one of the most intense campaigns seen in Australian politics (Priest, 2013: 27 April). The limited access to policy-makers – the roundtables that Gillard set up in parallel to the Multi-Party Committee on Climate Change (MPCCC) were not regarded as serious venues – meant that incumbent actors fought their battle on television screens, newspaper pages and indeed in the streets, with rallies, marches and convoys.

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This chapter recounts activity within the streams, coupling, and the events within the window, which opened on 27th September 2010, when Gillard announced a Multi-Party Committee on Climate Change (MPCCC). Tough negotiations followed, with speculations, leaks and uncertainty. Industry tried to lobby, but found access to and influence over members of the MPCCC a more difficult prospect.62 Incumbents combined to form the Australian Trade and Industry Alliance (ATIA) shortly before the 10th July release of the final set of policy proposals for the ‘Clean Energy Future’ (CEF) legislative package. A brief intense battle of television and newspaper advertisements followed from July to September, but CEF survived, passing the lower house on 12th September and the Senate on 8th November. Australia would, finally, have a nationwide carbon price, starting on 1st July 2012.

62 The Greens were now in a more powerful position than previously, and were unlikely to countenance additional industry support “compensation”. Meanwhile, Abbott and the LNP had self- excluded from the MPCCC. 148

Figure 7.1 2010-2011 policy window

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7. 2 The Streams

The major consideration in the problem stream was the softening of public support/concern. A Newspoll revealed an 11 per cent drop in belief in climate change and that: “In terms of belief in the human causes of climate change, the Australian Gallup Poll showed a drop from 52 per cent to 44 per cent,” with a ten percent increase in ascribing climate change to natural causes (Chubb, 2014: 33).

Outright denial of climate denial gained traction in the mass media (especially in the papers owned by Rupert Murdoch’s NewsCorp). The selective release of emails stolen from the University of East Anglia servers, the so-called “Climategate,” added to this,63 as did the failed Copenhagen meeting. In January 2010 minor errors were discovered in the IPCC’s Fourth Assessment Report (‘glaciergate’) and a prominent UK denier, Christopher Monckton, visited Australia. He met Abbott, who “parroted some of his views afterwards” (Chubb, 2014: 101). Chubb (op cit) argues they” jointly provided a major boost to the development of climate scepticism as a sophisticated movement in Australia.”

Finally the Millennium Drought, and water restrictions, ended. Gillard noted: “That made a big difference to public perception. For a lot of people in the Australian community the drought was climate change, climate change was the drought” (Chubb, 2014: 35).

63 The industry-funded denialist group Lavoisier Group produced a full colour bound edition of the Climategate emails. 150

The key politics stream events involve Rudd’s rudderlessness, Abbott’s aggression and Gillard’s coup. Accounts by various close observers and participants (Kelly, 2014; Chubb, 2014; Swann, 2014; Gillard, 2015) portray Kevin Rudd as deeply discombobulated by Copenhagen’s failure.64 Rudd threw himself at a different issue – health – criss-crossing the country visiting hospitals. Meanwhile, other issues destabilised his government, including problems with a housing insulation programme in which four workers had died (Smoleniec et al, 2017).

On 21st April the core group of Labor politicians decided, almost by default, to defer an ETS (Chubb, 2014; Ferguson, 2016). When it was revealed, on 27th April, that CPRS had been abandoned, the response was rapid. Chubb (2014: 112) argues that, despite Rudd’s failure to properly sell the CPRS over the last two years: “there was still a lot of support for the view that reform was owed to future generations. Now the leader had fled the field. The overwhelming response was profound shock. It seemed as though an entire country had fallen silent in disbelief.” Polling in early May revealed that the government had lost a million supporters in a fortnight, with the Coalition ahead in opinion polls for the first time since Rudd had become leader. Shortly afterwards another poll had Rudd’s approval rating plummeting from 59 to 45 per cent in a month, one of the sharpest declines for 40 years (Chubb, 2014: 112). Rudd threw himself into a campaign to introduce a Resource Profits Super Tax. Multinational and domestic mining companies and their trade associations responded with extremely well-funded campaigns, including Keep Mining Strong, which urged people to contact their political representatives to express their displeasure (Marsh et al. 2014). Six weeks and $22m later, Julia Gillard overthrew him. Two weeks later, Gillard called an election campaign. Meanwhile, new Liberal leader Tony Abbott started a relentless (and effective) campaign of attacking Labor’s policy difficulties and leaders’ legitimacy.

64 For contra view, see Ferguson (2016) 151

In the 2010 election the Greens prospered and gained a lower house MP. In the Senate they won a seat in each of the six states. Given that they already had three senators, they gained the balance of power in the Senate.

The policy stream was full to overflowing. In the aftermath of the failure of the CPRS,65 five policy proposals were propounded. Four were concrete and of varying possible efficacy. The fifth – ruling out a “carbon tax” – proved fateful for Julia Gillard and her government.

The first came from the Greens. In January they met with Climate Change Minister Penny Wong, proposing a two-year interim carbon tax of $20 until an ETS could be realistically reintroduced. Assistance to some firms and households would remain, but “compensation” for electricity generators eliminated. On this last point, which Wong thought unacceptable, they would not budge. But Wong admitted to Chubb (2014: 93-4) that the fundamental problem was a lack of direction: “I couldn’t say yes, but I also couldn’t say no… There were different views within government about what the way forward was. So I had authority to negotiate but I didn’t have authority to close the deal.”

The second came on 2nd February. Abbott announced the Liberal Party’s policy. It also committed to a 5 percent reduction in emissions by 2020, but rather than price carbon, it proposed a so-called “Direct Action” approach, with tree planting and energy efficiency measures and a $3.2 billion “Emissions Reduction Fund.”66 Malcolm Turnbull labelled it “bullshit,” and it gained no support from economists who regarded regulation as far less efficient than a market-mechanism.

65 It was in fact reintroduced into parliament in February 2010, allowing deposed Opposition Leader Malcolm Turnbull to symbolically cross the floor and vote with the government. 66 See Oakeshott, (2015) for critique of this, arguing that there IS an implicit carbon price in the DA scheme. 152

Thirdly, moves were afoot within the Federal bureaucracy. In February 2010, in the depths of the paralysis, the Department of Prime Minister and Cabinet (DPMC) made a proposal which applied “behavioural change techniques to climate policy….” Chubb (2014: 101). A month later, Rudd himself commissioned a briefing paper from a senior staffer, who drew on the DPMC suggestions. Rudd’s deputy (Gillard) and Treasurer (Swan) were completely underwhelmed (Chubb, 2014: 103).

Fourthly, during the election campaign, Gillard proposed a “citizens assembly” of 150 Australians, who would spend twelve months examining the climate issue and then put recommendations to her government (Boswell et al. 2013). This was widely derided, and seen as an attempt at kicking the issue into the long grass. The Greens’ Christine Milne acidly said “We already have 150 people being elected right now to debate and make decisions on climate change – it’s called Parliament.” Garnaut (2010: 5 August) said this “precipitated a collapse of political support that is reminiscent of the Rudd abdication.”

However, the real, inescapable damage to Gillard - which ultimately destroyed her government and her political career - came days before the election. Gillard had said throughout the campaign that if returned as Prime Minister she would “tackle climate change” even though the launch of Labor’s manifesto was conspicuously silent on the subject (AAP, 2011: 16 August, Brown). However, on 16th August, a day after 10,000 people marched in various Australian cities in favour of climate action (Kretowicz, 2010: 16 August), Gillard went further, telling a news programme "There will be no carbon tax under the government I lead” (AAP, 2011: 16 August PM Says). Six months later, these words – and her unwillingness to try to reframe her policy proposal – would doom her.

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7.3 Coupling

Coupling was purely political. The 21st August election resulted in a hung parliament. Gillard and Abbott wooed independent MPs (see Oakeshott, 2015 1-75). Unlike Abbott, Gillard acceded to demands of some independents for the introduction of a carbon price, and formed a government on 14th September.

On 27th September Labor and Greens held a joint press conference at which Climate Minister Greg Combet announced the formation of the MPCCC. It comprised himself, Gillard, Treasurer Wayne Swan, Greens leader Bob Brown and Senator Christine Milne, and independent Tony Windsor (another independent, Rob Oakeshott, joined later). Combet said he would write to Abbott, inviting him to nominate two representatives (The invitation 67 was rejected). There were also four independent experts, including Ross Garnaut, Will Steffen (a climate scientist) and Rod Sims (who had conducted BCA’s economic modelling during its 2008 assault on the CPRS). Further, Combet announced two roundtable groups – one comprising business representatives and the other environment, unions and non-government organisations representatives – “to provide advice to the Government on this and various other matters” (Parlinfo, 2010: 27 Sept). This approach was both distinct from the Shergold Taskforce (stacked with business interests) and included a far wider group of actors than Rudd had included in his policymaking attempt.

One journalist observed that: the morbid rhetoric is ramping up already, before next year's main game when the [MPCCC] tries to nut out a policy that will put a price on carbon, garner support from the business community and pass through a Greens-controlled Senate (Manning, 2010: 23 Oct). Incumbents were willing to participate in the roundtable, but feared it would be a talking shop at best. Manning noted that one commentator had “moaned [that] the government-appointed business roundtable on climate change was a "hanging committee" designed to "string up" the foreign owners of coal-fired power stations in Australia.” Incumbents had long been accustomed to writing climate and energy policy (between 1995 and 2006), or at the very least being able to dominate taskforces (Shergold, NETT) and then have politicians agree to

67 Oakeshott (2015) argues the invitation was possibly half-hearted. 154 what was ‘proposed.’ They now worried that they would not enjoy such dominance of MPCCC.

7.4 The Policy Window

The window opened on 27th September 2010 when Gillard announced a Multi-Party Committee on Climate Change (MPCCC). Business incumbents first participated in the official process, but decided their normal tools were ineffective. After a February press conference launching the legislative process, rally and counter-rally, advert and counter advert began. The details of the Clean Energy Future (CEF) policy – the overall emissions target, the price – were not released until July. Meanwhile, political opposition hardened. Industry incumbents moved from emphasising policy uncertainty to a $9m tsunami of advertising decrying the CEF’s purported consequences. Both sides tried to capture the high moral ground of representing ‘normal’ Australians. Incumbent lobbying continued, but on 8th November the battle ended, when the CEF package passed the Senate, its ETS component beginning on 1 July 2012.

In mid-February a leak to The Australian newspaper about the MPCCC, emanating from the Cabinet, made the government nervous; it accelerated its announcements (Oakeshott, 2015, Combet, 2015; 253-4; Behm, 2015)68. On 24th February Julia Gillard called a press conference to announce agreement in principle between Labor and the Greens on an ETS, with a 3 year fixed price, from 1st July 2012, followed by a flexible price and an emissions target starting as early as 2015. Kelly (2014: 362) writes that: “The Greens and the independents stood beside her in the prime minister’s courtyard, Bob Brown given virtually equal status. Gillard was making minority government work. In the process she signed her

68 Many blame Rudd, now back in Cabinet as Foreign Secretary. Rudd denies it. 155 death warrant as prime minister.” The real problem was not the optics (see Windsor, 2015: 137), but Gillard’s phrasing. Her speechwriter noted that in parliament an hour later Gillard described a carbon price as: ‘a scheme that would start with a fixed price for a fixed period, effectively like a tax’ – no lawyer language or weasel words, no hiding: she was going to make the case. I was one of those who thought it seemed like the best of a bad lot of options at the time. Instead, it became proof that she’d lied (Cooney, 2015: 87).

Minutes later, Abbott launched “one of the most brutal assaults by an Opposition leader in a generation….” (Kelly, 2014:362), characterising Gillard’s announcement “an utter betrayal of the Australian people…If the Australian people could not trust the Prime Minister on this, they can’t trust her on anything.”

Further damage occurred when Gillard told ABC’s 7.30 Report: “Oh, look, I'm happy to use the word tax… I understand some silly little collateral debate has broken out today. I mean, how ridiculous. This is a market-based mechanism to price carbon.” (ABC, 2011: 24 February). As Combet (2014: 252) recalled: Within twenty-four hours the ‘no carbon tax’ election pledge cut through the electorate like a scalpel. Every media interview for months was dominated by a broken promise that was falsely marketed as a ‘lie’. Debate on climate change and carbon pricing was derailed by the poisonous politics. Gillard’s approval figures plummeted. A Nielson poller said: “The new carbon tax is the most likely explanation for the change in attitudes towards her… It's being portrayed very much as something [that] will hit the hip pocket and also as a broken promise, so it's a double negative." Another poll showed support for a carbon price had fallen 11 points to 35% in the previous month. (Rourke, 2011: 16 March). The politics stream was drying up.

On the day of Gillard’s fateful pronouncement, the ACA fired its first salvo. Its CEO argued that introducing a pricing scheme meant Australia risked leaving its “powerful coal mining sector at a competitive disadvantage internationally” since it “could deal countries such as Colombia and Indonesia the upper hand in globally traded markets for coal” (Regan, 2011: 24 February). In an early example of the main incumbent argument for the coming five months, he emphasised policy uncertainty: "The real worry for us is that what we've got is half an announcement and the really difficult half has yet to be negotiated." Soon after, Rio 156

Tinto warned Gillard that any scheme would have to contain more generous compensation than the CPRS, given the post-Copenhagen uncertainty (Maher and Tasker, 2011: 7 March). The Government’s problem was that it was still negotiating, both within the MPCCC, but also consulting industry and experts. However, the uncertainty gave incumbents carte blanche to use previous modelling (from the 2009 period) to create fear, uncertainty and doubt. Gillard could assert that "every day that Mr Abbott is out there stoking fear, we'll meet it with reason, with facts," but as a journalist noted: “there are no facts on carbon price projections, because everything is an estimate” Crowe, 2011: 9 March).

Public anger, stoked by talkback radio “shock-jocks,” led to an anti-carbon tax rally in Canberra on 23rd March (Bass, 2011: 25 March). Abbott spoke, in front of placards which urged “ditch the witch” and described the Prime Minister as “Ju-liar …. Bob Brown’s Bitch” (figure 7.2).

Figure7.2 Abbott, (with microphone), at 23rd March rally (Permission to re-use granted by Andrew Meares / Fairfax Syndication)

Weeks later, ETS proponents put forward their case. On 13th April companies including GE, AGL, Linfox, Fujitsu, BP, Ikea, Alstom and Pacific Hydro put out a press release titled “Australian business leaders unite to back the carbon price.” It argued carbon pricing was essential in providing business certainty, unlocking jobs and investment “that will accompany the transition to a prosperous, cleaner and internationally-competitive economy.” They were not heard from again. As Ross Garnaut noted: 157

Those seeking to advance the national interest are handicapped by the free-rider constraints on collective action. None of the many diffuse beneficiaries of any particular act of good policy will have a strong interest in seeking good information on the effects of policy and persuading others of its merit (Garnaut, 2010).

Incumbents both lobbied and worked to overcome such collective action problems. ACA sent a letter to Combet, arguing that the figures being used to calculate the carbon tax were wrong, and that there was an assumption that: “the industry could use technology that did not exist "at commercial scale anywhere" and that unless the government changed its scheme the result would be "job losses and mine closures" (Taylor, 2011: 27 May). Taylor noted in the same report that sources had told her that money was being collected to launch an anti- pricing campaign.

Incumbents cultivated journalists. Writing of the Australian Petroleum Production and Exploration Association and its annual junket to the North West Shelf for business journalists, Fyfe (2011: 6 April) notes that “this year was different. This year it invited senior political reporters too. The reason, it turned out, was entirely political: the industry wanted to send a message to Canberra.” In the same article Fyfe observed that the strategy worked: And there it was in Monday's newspapers. The Sydney Morning Herald ran it on the front page. The story also led The Australian. Don Voelte, that article said, had declared a carbon tax could be the "breaking point" in deferring or cancelling $130 billion of gas investment. It was a plea and a threat: the liquefied natural gas industry, the political journalists reported, wanted out of Julia Gillard's carbon scheme.

Disruptors tried to gain public support. TCI announced a ‘National Week of Action’ (TCI, 2011: 13 May). It said its pro-ETS campaign - which consisted of a TV advert, newspaper adverts and rallies – would be run with almost $1m. On 28th May, a 30-second advert starring actress Cate Blanchett was released, urging Australians to ‘say yes to a price on carbon.’ The advert was derided from left and right. Tony Abbott said ''You do not give special weight to people who live half the year in Hollywood where there is no carbon tax'' (Coorey, 2011:31 May). It also “set alight talkback radio as well as a triggering a YouTube campaign attacking factual elements of the TV ad” (Canning, 2011: 6 June). The Murdoch-owned Sunday Telegraph devoted its front page to denouncing ‘Carbon Cate’ as a hypocrite (Hills, et al., 2011). 158

Incumbents successfully raised the costs of participating in the debate, leading to fewer disruptors entering the arena. The ferocious attacks on the advert, and Blanchett, had several consequences. One was that it: “turned off up to 30 per cent of donors” (Chubb, 2014: 177). A later evaluation said that “Potential corporate supporters… also withheld critical public support for the campaign out of fear that their brands and reputations might be the next target of News Ltd tabloids and the shock jocks” (Chubb, ibid). The Australian had recently run a front page story claiming that Westpac had “joined the carbon tax revolt” (Murdoch and Maher, 2011). In 2008 Westpac had urged Rudd to keep the CPRS compensation to a minimum (Irvine, 2008). Its CEO retorted this characterisation was “fundamentally wrong” (Twomey, 2011). Regardless, few businesses were willing to publicly support the CEF. Previously vocal business associations, such as Ai Group, were largely silent during the heightened period. Ai Group had tried to 'subcontract' its support for ETS to an international consultancy. This plan failed when the consultancy showed Coalition figures a draft of its report. The response was extremely vehement, and the consultancy, fearful of its future relationships with the Coalition, watered down its findings to meaninglessness (Mildenberger, 2015). When it was released the report was quoted by both proponents and opponents of carbon pricing.

According to then Treasurer Wayne Swan, within the business roundtable representatives caucused and adopted positions that allowed no compromise. For example, on 26 May, the BCA argued for a $10 initial carbon price, and 100% assistance for emissions-intensive industries (Swan, 2014: 339).

On 5th June ‘Say Yes’ rallies were held in towns and cities across Australia. The following day Abbott dismissed these as a meeting of a “few activists.” Meanwhile, the Herald Sun reported a national poll they had commissioned showed 58 per cent of people opposed the “carbon tax,” 28 per cent were in favour and 14 per cent uncommitted’ (Hudson, 2011: 6 June). Abbott urged businesses to enter the fray. On 1st June, in an off-the-cuff speech to a mining conference in Canberra, Tony Abbott said: I know none of you likes to be political activists... But I say to you that at this time you need to become political activists at least for a few months, at least for a couple of years, if you are going to be able to continue to be the miners that you want to be and that Australia needs (AAP, 2011: 1 June). 159

In the speech Abbott repeated the talking points he had been propounding tirelessly – that carbon price was a revenue grab which would cut jobs, destroy exporters, and end the coal industry. MCA’s CEO, Mitch Hooke, lauded the speech as “incredibly articulate, passionate and well-received” (Osborne, 2011).

Disruptors fought back. On 2nd June, thirteen leading business economists, coordinated by WWF, released an open letter supporting carbon pricing as a necessary economic reform. Signatories included economists from Westpac, Macquarie Bank, Citigroup, the Lowy Institute and the Melbourne Business School (Grattan et al. 2011: 3 June; see also Priest and Rollins, 2011; 2 June). It received minimal coverage, and failed to challenge the incumbents’ messaging. In a rare example of counter-personalisation, on 3rd June AMWU, the country's biggest manufacturing union, took out tabloid newspaper advertisements accusing Abbott of hypocrisy over his claimed concern about carbon pricing’s impact on manufacturing workers (Taylor, 2011: 3 June). On 6th June a Productivity Commission report on other countries’ climate policies was released. It said that the growth of Australia’s economy would not be impinged, presenting the same problem for incumbents as the October 2008 Treasury modelling.

Meanwhile, the mining industry moved to burnish its credentials. On 15th June the MCA launched a new campaign, Mining: This is Our Story. An echo of 1991’s Mining: It’s Absolutely Essential campaign it featured ‘ordinary’ Australians talking about the benefits they derived from employment in the mining industry (Mumbrella, 2011). It mentioned neither climate nor the ETS debate.

Alongside this, incumbents built a war chest for the coming battle. MCA sent an appeal for funds letter to its members. CEO Mitch Hooke warned: over the period of the past four years, there has been a profound shift in the manner of public policy development and implementation. The new paradigm is one of public contest through the popular media more so than rational, considered, effective consultation and debate. He informed member companies that they would be invoiced for the equivalent of half of their annual membership fees to help fund the campaign (Priest, 2011: 16 August). The Liberal Party also rattled its collection tin, with its federal director emailing members requesting a $52 donation to "mark the 52 weeks since Julia Gillard lied about her Carbon 160

Tax” (Priest, 2011: 16 August). Incumbents sought to stitch together their alliances. Alongside the Mitch Hooke letter and Tony Abbott’s 1st June speech, Anglo American’s Chief Executive “chided industry colleagues for not speaking out loudly enough against the imposition of ‘excessive taxation’ such as the Gillard government's carbon tax” (Wilson, 2011: 2 July).

Ross Garnaut contrasted the earlier period of 2008/09, when Hooke and other lobbyists had been able to succeed: “the secret deal was less prominent in 2011. They’d been disappointed in the private deal-making: they had to argue their case on rational grounds and weren’t doing so well in that, so were looking for new instruments” (Chubb, 2014: 180). Keane (2011: 16 August) noted Hooke was merely mistaking a development for a new paradigm: Pumping money into an advertising campaign to overturn a policy is simply a continuation of the idea that public policy is heavily influenced by the amount of money you can throw at your campaign, and an inevitable consequence of the Howard-era embrace of poll-driven lobbying.

Incumbents prepared for the launch of the MPCC’s deliberations on ‘Carbon Sunday’ (10th July). On 1st July they announced they would form a new umbrella group to contest the policy. A new alliance (as yet unnamed, but soon known as the Australian Trade and Industry Alliance - ATIA) listed its key objective was to ''build public opposition to the carbon tax so that it is either substantially modified or fails to pass the Parliament'' (Coorey 2011: I July: emphasis added). A campaign, involving radio, television print, the internet and social media would begin within a week of the government’s announcement, running until parliament considered legislation in late 2011. Reusing the tactics deployed in 1994-5 and 2008-9, a regional flavour was to be added. Coorey reported: “The campaign would be broad-based but also target particular regions where the vulnerability to the impact of the proposed carbon pricing scheme is high.'' Also echoing 1994/5, the campaign would “advocate 'a better way'' in which industries whose overseas competitors have no carbon price receive free permits until such international conditions exist” (Coorey (2011: 1 July).

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Kirk (2011: 1 July) reported on work being done to co-ordinate industry lobby groups. He quoted a source as saying: “it all hinges on stitching an alliance of the groups together.69 If that happens, the campaign's likely to get underway once the details of the carbon tax are out.” TCI tried to apply counter-pressure on one potential ATIA member, saying “the Food and Grocery Council should take into account the views of its members, such as Vegemite and the Fosters Group, which believed a price on carbon was needed.” (Coorey, 2011: 2 July)

On ‘Carbon Sunday,’ 10th July, the government released its CEF legislation, alongside Treasury modelling which argued the economy would continue to grow under a carbon price. The response was predictable, and exemplified by ACA’s claim it would “decimate the competitiveness of the Australian coal industry and send thousands of jobs overseas” (Wilkinson 2011).

Disruptors launched campaigns. The Say Yes coalition launched its campaign’s next phase (TCI, 2011: 11 July), announcing that from 1st August there would be a “fortnight of local events, conversations and activities, including door-knocking, public forums, letterboxing and street stalls” alongside national newspaper advertising starting on 12th July. On 17th July the Government started a $12m advertising campaign, with advertisements on television, radio and print featuring business owners, clean energy companies and the CSIRO (Anon, 2011: 17 July).

Simultaneously the ACA launched a regional media campaign in the Hunter Valley, based on economic modelling by ACILTasman. ACA claimed almost 5,000 mining jobs would be directly at risk and 18 coal mines at risk of closure. Climate minister Greg Combet pointed out: The facts are 19 new coal mines are committed or under construction, $70 billion worth of investment underway. When they're talking about job losses they are actually not talking about people losing their jobs. They've got some modelling commissioned that suggests there will be less jobs created then there might otherwise be but there

69 There was uncertainty about who exactly was in the alliance. Two groups initially named as part of ATIA – the Plastics and Chemical Industries Association and the Australian Logistics Council — dissociated themselves from the campaign (Duffy, 2011: 7 July). 162

would be nonetheless be very strong jobs growth (Anon, 2011: 18 July, emphasis added).

On 21st July the ATIA launched formally (Lane, 2011) with a $9m budget (Priest and Gardner, 2013: 2 Feb). Following on from the Blanchett attack, the ATIA campaign sought to frame carbon price resistance as “anti-elitist.” In a classic example of tactical incorporation70, a leaked casting brief for ATIA’s ads said that the actors "should ... be representative of a broad cross-section of Australia…. The viewer must care about them, relate to them or find them credible." (Priest, 2013: 27 April) and recommended “a mother out shopping, a vegetable seller in a market or a teacher standing outside a school.” Priest notes drily “The chief executives of some of Australia's largest companies paying for the ads are unlikely to appear, as are some of the more extreme characters who attend anti-carbon tax rallies” (Priest, 2011, 20 Aug). ATIA ran adverts in newspapers stating that Australia produces less than 1.5 per cent of global emissions and proclaiming “Carbon Tax pain but no climate change gain.”

Disruptors responded instantly. GetUp! with $60,000 crowdsourced from 1400 supporters, published a counter-ad the following day, mimicking the original’s layout. GetUp! also launched a website www.getcarbonpolicytruth.com.au. (now defunct)

ATIA played with rubbery figures. Its full page adverts, with the headline: "The world's biggest carbon tax by far” argued that “Australia's carbon tax is expected to raise $71 billion while the European Union's scheme raises just $4.9 billion. We're getting screwed!” Winestock, (2011: 30 July). These numbers were roundly criticised (Winestock, 2011: 30 July; Sartor, 2011: 17 August) for manipulating baseline years and making misleading comparisons.

Alongside media battles came mobilisation of people disgruntled by the tax. An anti-carbon tax rally was held in Sydney on July 1st. On the anniversary of Gillard’s ‘no carbon tax’ commitment, another rally was held in Canberra, addressed by Tony Abbott. The following week, on 22nd August, a “Convoy of No Confidence” arrived in Canberra, significantly

70 This term will be described and explored in the discussion chapter. 163 smaller than organisers had hoped, and was met with counter protests (Peterson, 2011: 22 August). Wear (2014) says the convoy was not astroturf, but others demur. Peterson, 2011: 22 August) quotes a climate activist as saying: We say with total confidence that the main organisation behind [the Convoy] is the [Australian] Trade and Industry Alliance … We know that to be the case because one of the organisers told us that was the case. It is a quasi-Tea Party situation, where rich and powerful interests attempt to organise ordinary Australians to protest.

Meanwhile, another, smaller umbrella group – Manufacturing Australia – briefly entered the fray with anti-tax adverts. Industry actors tried to “puff themselves up” to maximum possible size, the logos of ten bodies all prominently displayed on a lobbying document published in August.

On 18th September the government released Treasury modelling “to counter an opposition scare campaign claiming a carbon tax would impose a huge burden on struggling households” (Jones, 2011: 19 September). ATIA hit back with a report based on modelling which argued that almost a million workers in the manufacturing sector were in jobs which would be fully exposed to competition from companies in nations without a carbon price, or with a much lower one.

State government efforts to apply pressure were not always successful. On 22nd September the Victorian Government retreated from a claim that Victoria would be the state hardest hit by a national carbon price. The Premier had commissioned modelling consultants Deloitte Access Economics but it found that Western Australia, Queensland and NSW would be more affected by a carbon price that lasted to 2030. Prime Minister Julia Gillard was underwhelmed, saying: Premier Baillieu and his Liberal colleagues interstate would be better off sticking to their day jobs and actually doing what they should do as state premiers than doing Tony Abbott's bidding and being out there peddling false claims and fear (Arup and Morton, 2011: 22 September).

The CEF legislation passed the lower house on 12th October, with protestors shouting “no carbon tax” ejected from the public gallery. Tony Abbott declared a “blood oath” that he would get the legislation repealed. Business still felt that something could be done. BCA and 164 other industry groups sought amendments, such as a lower starting price. BCA undertook to write to all senators (Taylor 2011: 13 October). The Senate passed the legislation on 8th November, almost 22 years to the day after Science Minister Barry Jones, who had helped put climate change on the policy agenda, had first raised the possibility of a carbon price.

7. 5 Post-window events

Abbott continued his relentless attacks on Gillard and the “toxic tax based on a lie” (Marr, 2013). Kevin Rudd unsuccessfully challenged for the Prime Ministership in February 2012, and then retreated to the backbenches. The ETS came into effect on 1st July 2012. Combet and others had some fun at Abbott’s expense, highlighting the lack of signs of the predicted economic apocalypse. Rudd challenged again in June 2013, successfully. Gillard retired from politics, and Rudd followed upon losing the 2013 Federal Election to Abbott. For the first time since the UNFCCC process began, Australia did not send a minister to the COP meeting (in Warsaw), because the environment minister was too busy repealing the ‘carbon tax.’ That work, and Abbott’s “blood oath” was completed in July 2014. However, Abbott was unable to repeal other elements of Gillard’s CEF package, such as the Climate Change Authority, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency. Instead he turned to reducing their funding, stacking their boards with people who doubted climate change and changing their terms of reference. Abbott was himself overthrown in an internal Liberal Party spill by Malcolm Turnbull in September 2015.

Meanwhile, Australia’s emissions continued to climb, with the Abbott government’s ‘Direct Action’ policy failing to incentivise emissions reductions or innovation. The climate change minister, Greg Hunt, laboriously attempted to lay the groundwork for an emissions intensity scheme that would cover electricity generation. In December 2016, as the opening anecdote in the introduction of this thesis indicated, this came unstuck. Since then, with atmospheric concentrations climbing, the mid-2017 Finkel Review mired in controversy, and Australia’s Great Barrier Reef experiencing consecutive years of bleaching, there seems no obvious way in which the climate and energy policy wars can be resolved. At time of writing (July 2018), Australia is still without an economy-wide policy to reduce emissions.

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Chapter 8: Discussion

8.1 Introduction

Existing understandings of incumbent activity during sociotechnical transitions are inadequate. They are insufficiently historicised, underplaying both a regime’s “dynamic stability” and the sheer effort involved in sustaining it. This chapter draws together the empirical threads to investigate the work undertaken by incumbents in the state, business and civil society, and their efforts to build and maintain mutually supportive and flexible relationships, which evolve as pressures applied by proponents of change wax and wane. In response to these pressures, ‘membership’ of incumbency changes over time. What superficially may appear ‘static’ actually involves deep undercurrents and riptides, with fierce battles fought. Thus the focus of this chapter is the processual nature of incumbency, the keystone to understanding power in regimes over time.

The chapter mobilises the empirical data presented in the previous four chapters to answer the two research questions and thus a contribution to the study of incumbent resistance within sociotechnical transitions. It is divided into four sections. Firstly (8.2) it reinterprets the empirical data gathered for the period 1989-2011 at lower resolution and a higher level of abstraction. It compares and contrasts the characteristics of all four windows, including the content of the streams, the different types of coupling beforehand, and the residues after them. It describes the characteristics of the windows and their (partial) closures. Secondly (8.3) it covers the incumbent resistant strategies identified in the thesis, including the types of incumbent institutional work and how these changed over time, persistent and episodic institutional work that was found in all or some of the windows. Next (8.4) it answers research question 2 by looking at relational institutional work taken to initiate, maintain and defend their positions, such as lobbying of politicians, building new organisations, message discipline, tactical incorporation and control of opposition organisations. Finally (8.5) it returns to the broader question of the politics (broadly understood) of sustainability transitions (Roberts et al. 2018) by bringing the threads together to examine transitions and regime resistance.

8.2 Twenty-two years of policy battles: analysis of the four windows 166

This thesis has examined four specific windows of policy contestation over carbon pricing in Australia in order to examine shifting patterns of incumbent resistance to perceived-to-be radical policy. Pressures built, and skilful and/or powerful actors achieved coupling of the streams to form policy windows. Three of the four windows closed with what appeared to be an effective settlement but was in fact it was only a partial closure, renewed contestation beginning relatively soon afterwards. This section examines and compares: 1. Pressures which built within the streams prior to coupling 2. The differing types of coupling 3. The characteristics of the four windows (not merely their length, but the fierceness of the battles and the types of institutional work deployed by incumbents) 4. The “closure” of the windows and the residues that flowed from them.

First, a brief overview of the case study will help to orientate the findings. Fig 8.1 provides a schematic (i.e. not to ‘scale’) rendering of the four windows in the case study. Essentially, pressures built in the late 1980s and a November 1989 coupling led to a 3 year window in which climate policy ambition was gradually reduced. A settlement – the National Greenhouse Response Strategy (NGRS) – closed the window. A new window was quickly opened by policy entrepreneurs who used an impending international conference and the NGRS manifest failure to change the broader institutional arrangements around climate and energy policy. A much shorter battle in 1994-5, with firm co-ordination among business incumbents, led to a further voluntary strategy, ‘Greenhouse Challenge 21.’ The following decade saw several failed attempts to couple streams in the face of vehement Prime Ministerial support for fossil fuel incumbents. Pressures built again, now in all three streams, and a further coupling was forced upon a reluctant Prime Minister in November 2006. A further three year battle, with policy proposed and progressively watered down (as per window 1), occurred. This time it closed due to shifting political arithmetic, with no policy settlement reached. The following year the window was forced open again, and a further short battle occurred. Unlike the previous ‘second window,’ this was highly charged, with enormous expenditure of capital by both policy entrepreneurs and their opponents. In November 2011, twenty two years after the first coupling, a nation-wide Emissions Trading Scheme was finally legislated.

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Figure 8.1 Schematic representation of the longitudinal study

8.2.1 Pressures which built within the streams prior to couplings

This section gives overviews of the three streams, from the late 1980s through to the early 2010s. The focus is on the four windows (with a lengthy interregnum from 1995 to 2006, in which policy entrepreneurs repeatedly failed to achieve further couplings).

Problem stream overview: There was no gradual uninterrupted increase in public pressure/public salience around the issue of climate change. While a small number of scientists had been aware of the potential problem of accumulating carbon dioxide emissions, and this had seeped through into the publications of environmental organisations, the climate issue arrived in the public arena like a flash flood in mid-1988. It was also caught up with another atmospheric issue (ozone depletion) and broader environmental concerns (deforestation, pollution, extinctions), both global and local. By 1991 this had begun to fade as issue fatigue, the end of the Soviet Empire and the first Gulf War decreased public attention of the threat. In Australia, a sharp economic recession also limited public attention. This remained the case – despite the efforts of campaigning groups – until mid-2006, when a confluence of factors (described in chapter 6) brought the issue back onto the front pages and to the fronts of the minds of politicians. The period 2006-2011 also saw the rise of ‘mainstream’ climate denial, which had already taken root in large sections of the Coalition parties. By 2011, a variety of groups – many small but noisy – had gained prominence, and rallies, convoys and protests were a semi-regular occurrence.

Politics stream overview: There have only been two brief periods of ‘competitive consensus’ in Australia around climate policy. The first occurred in 1988-March 1990: after losing a Federal election, the Liberal Party retreated from its ambitious climate targets (for which they had not developed specific policy tools). In the period 2006-2009 there was an uneasy agreement that carbon pricing was necessary, because opposition would be electorally 168 damaging. Outwith those periods, the Liberal and National Parties have been hostile to climate policy in general, including carbon pricing and support for renewable energy, while the ALP has largely promulgated an ‘ecological modernisation’ line of support for market mechanisms and subsidies for renewables (Curran, 2009). The politics stream has grown more turbulent with the rise of smaller parties, including the Greens (especially over the period 2007 onwards), who demand stronger action, but largely within an eco-modernist perspective.

Policy stream overview: The initial policy responses to climate change centred on regulation and taxation (with a ferocious response to the latter, especially from incumbent businesses in Australia). In the first two windows this taxation was proposed primarily as a source of subsidy for research and development into renewables, rather than a signal to investors or as an economy-wide measure. After window 2, emissions trading schemes gradually gained favour with policymakers and policy entrepreneurs, both domestically and internationally, though residual carbon tax proposals were made during coupling in 2006/7 and again in 2010 (see chapters 6 and 7). The number of policy advocates – especially NGOs, consultancies and think tanks – grew enormously from 2005 onwards. Table 8.1 summarises the above description.

Pre-Window 1 Pre-Window 2 Pre-Window 3 Pre-Window 4 (1988-89) (1993-94) (2004-06) (2010) Problem Climate problem Mostly weak – loss Renewed public Public support Stream arrived like a flash of salience of salience (bursting dipping (fatigue, flood in 1988, with issue. Now open in mid-late coming of concerns expressed embedded in 2006. Millennium organised by scientists UNFCCC Drought, Al Gore, climate denial). (Hansen et al) and activism) politicians. Formation of IPCC. Politics Competitive Low salience of Liberal Party under Impossibly consensus in 1988- issue. Coming of a attack. Labor, keen finely balanced 89 with Liberals new Environment to attack Libs and and and Labor both Minister is ‘own’ a green personalised. claiming high consequential for issue, prioritises “Gillard versus moral ground. rise of the issue. climate policy. Abbott.” Policy Pre-existing ideas Tax (or R&D levy) Treasury has ETS seen as about taxation at is ‘main game.’ become supportive ‘only game in this stage. ETS still not of ETS, as have town’ (despite (Emissions trading mature (does not some sections of Green attempts 169

ideas discussed have supporters). Australian at a tax). from mid-way business. Opponents of through window). Main player: ACF. Nick Stern’s review ETS suggest Main player: ACF advocating price. Direct Action or (Others support a “nothing”. tax).

Table 8.1 Pressures in the streams

8.2.2 The differing styles of coupling

Having explored the changing nature of the streams, we can now turn to the nature of coupling – how the streams are brought together. This section first looks at whether the couplings are consequential or doctrinal (Zahariadis, 2003) and then, based on the four episodes, offers a typology of four different kinds of coupling. Given the importance of coupling to create a window, it is surprising that, with the exception of Zahariadis, very little attention has been paid by scholars to developing typologies of coupling, perhaps because few studies compare multiple windows, especially around the same issue. The typology below is therefore is a novel contribution to the literature.

Three of the four couplings are “consequential” in the sense that they arise from events in the problem stream. Window three is only a partial exception, in that coupling was only achievable for Treasury officials because of enormous pressure in the problem and politics streams (table 8.2).

Window 1 Window 2 Window 3 Window 4 Consequential Yes Yes Enormous Consequential problem and (on events in politics stream the politics pressures stream) Doctrinal No No Doctrinal in the Broad sense that it was agreement that preference for an an ETS is ‘best ETS over a tax option’ (literally – see Kelly, 2014)

Table 8.2 Coupling compared 170

In all of the four instances, coupling is performed by powerful state-based actors, either the Prime Minister or an Environment Minister. Although the relationality of incumbents and disruptors is centrally important within a window, windows are opened – at least in the four examples within the case study – by policy-makers, that is politicians, with the support of or under pressure from public servants. Put another way, the battle is fought by multiple configurations of actors, but the battle is joined – reluctantly or enthusiastically – by one. However, the amount of external pressure on a policy entrepreneur is variable. For instance, in the third window, public servants applied judicious pressure on a Prime Minister who was vulnerable because of rapidly escalating domestic and international concerns.

Each window’s coupling was slightly different. In chronological order, the couplings can be described as reactive, proactive, defensive and forced. The first coupling occurred in late 1989, when Prime Minister Bob Hawke brought business actors and environmentalists together, months before a Federal election, and proposed an Ecologically Sustainable Development process if he were returned. This kind of coupling – reactive coupling - is conducted by politicians in response to growing public concern and an imminent election, at which point it becomes necessary to show that an issue is now taken seriously and under active policy consideration.

The second window saw a new ALP Environment Minister, John Faulkner, more forcibly couple the streams in June 1994, drawing upon a future event (the first UNFCCC conference) and past policy failure to create a space for the proposal for a carbon tax. This proactive coupling is perhaps closest to the original sense of coupling in Kingdon’s formulation, in which a powerful policy actor sees an opportunity to bring together streams and push through a preferred policy in the window which results. In this case a new Environment Minister, with considerable credibility/authority within his own party, was able to – with other actors – open a window because of an impending (international) conference and the imminent release of information which cast the existing (voluntary) policy in a bad light.

The third (doctrinal) coupling was brought about by public servants, who had already tried twice to push a carbon pricing scheme through Cabinet. After years of successfully preventing a policy window from opening, in December 2006 John Howard came to a point where he saw that the costs of continuing to try to hold back the tide outweighed the benefits. 171

He chose, under pressure from Treasury officials, to countenance carbon pricing. This is an example of defensive coupling, occurring when a policy entrepreneur is acting against his or her preferred motives, but sees greater danger (electorally, ideologically), for himself and his allies, in continuing to resist any coupling. Defensive coupling attempts to set limits on the amount and kind of policy change that can then be discussed,

The fourth coupling was almost accidental, in that it resulted from delicate political calculations. After the partial closure of the third policy window, the political situation became extremely turbulent. In September 2010, Julia Gillard, with a minority in Parliament, was forced to make side deals with potential allies. Exploration of carbon pricing was the price of forming a government. However, this was against a backdrop of weakening public concern about climate change and decreasing appetite for any solution that might cost anyone any money. What occurred was a forced coupling, akin to a defensive coupling insofar that it is not was ‘free’ choice by the policy entrepreneur. In this kind of coupling the political consequences of failing to couple the streams is so great that the risks of future failure must be taken, and a Micawber-ish “something may turn up” optimism for the future is deployed. These four types of coupling are captured in table 8.3.

W1- reactive W2- proactive W3- defensive W4- forced coupling coupling coupling coupling Policy Prime Minister Environment Prime Minister Prime Minister entrepreneur Bob Hawke Minister John John Howard Julia Gillard (coupler of Faulkner the streams) Pressures Impending Impending Berlin International and Hung Federal Election, COP domestic parliament huge Minor pressures building environmental parliamentary (boxed into it by salience pressure Treasury officials) Motivation Federal election Seeking issue to Election coming Need to form a was coming and advocate, and government, needed to be seen also to achieve a needed support as ‘consensual’ necessary policy of independent reform MPs Table 8.3 Couplers, the pressures they were under/exploited and their motivations

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There are of course failed couplings (within the Australian case study there were two under John Howard – in 2000 and 2003 – in which policy entrepreneurs were simply defeated). Since 2015, with the arrival of Malcolm Turnbull as Prime Minister, other attempts at arranging a climate and energy policy have similarly been defeated.

The question as to why these couplings were different is harder to answer. Coupling clearly relies on “what is going on in the streams” – the types of activities being conducted by different actors and the salience they have, the social/political standing, and skill of the policy entrepreneur who is able to couple the streams, and their underlying motivation (to contain, control or expand the scope of decisions-to-be-made). Crucially, these elements do not exist in isolation from each other; the more ‘flow’ in the streams will quite probably increase the scope of action for policy entrepreneurs, and may change their motivation (in the sense of what they perceive as possible).

8.2.3 The characteristics of the four windows (not merely their length, but the fierceness of the battles, the types of window)

There is a noteworthy similarity between the two pairs of windows (see table 8.4). An initial coupling was conducted by a politician anxious to contain an issue that had the potential to cost votes and anger business ahead of an upcoming election, using an ostensibly ‘inclusive’ policymaking process. The coupling was followed by a prolonged (three year) window in which a large number of proponents and opponents battled over policies, with the result that a very weak final proposal was “on the table” (the first window closed with a strategy adopted, the third closed thanks to political contingency – the replacement of opposition leader Malcolm Turnbull with Tony Abbott). The pseudo-closure of this three year window was then followed by a brief lull in public activity (while forces realigned), and a sudden recrudescence of activity for a much shorter period (9 months to a year), climaxing in a decision by policymakers that aimed to finally resolve the issue. This rapid reopening may have resulted from the realignment of forces during and after the previous window. It may be that this pattern – of a larger primary window without final closure followed by a shorter secondary window where closure is achieved – repeats elsewhere, with the duration of windows related to the characteristics of previous windows’ closure. Further study is certainly warranted, on other issues and other countries. 173

Window 1 Window 2 Window 3 Window 4 Length Three years (with 9 months Three years (with 9 months two being two being crucial) crucial) Primary ESD policy Cabinet proposal Shergold Report MPCCC policy process (though and then two Garnaut Review process process/arena other venues roundtables’ (sidelined) created) CPRS process Centrality of Low (climate High High High climate was one among change other issues) Fierceness Low Medium High, but Extremely (emotional (conducted relatively civil. high, (toxic) content/levels fiercely, but of vitriol) largely civil)

Table 8.4 Comparison of window characteristics

However, there are three other, perhaps more meaningful, axes upon which policy windows can be plotted. Firstly, there is the question of whether the window is ‘diffuse’ or ‘concentrated,’ in that it is a dominant strand in public discussions (as measured, for example, by the number of front pages of major newspapers it garners in the period under discussion). Secondly, whether the window involves contestation over the ‘facts’ of the problem (a “problem window”) or whether the problem has become a relatively uncontested ‘issue,’ the existence of which is not contested by mainstream or significant policy actors, and the contestation is therefore largely/entirely given over to policy implications (a“policy window”). Finally, windows can be categorised on whether there is a specific policy being heavily pushed by policy entrepreneurs (a “single policy” window), which opponents are merely trying to water down, or else a ‘two policy window’ where two mutually exclusive policies are propounded (see table 8.5).

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Diffuse/concentrated Problem One or Comments or policy two policy W1 Diffuse “Problem Two The second policy – of purely voluntary and measures – was an ex post facto policy” concoction of state-based incumbents (bureaucrats). W2 Concentrated Policy Two The second policy option – of voluntary measures – was a joint enterprise of business and state-based incumbents (politicians). W3 Concentrated Policy One Although there were attempts by political incumbents to offer alternatives, almost all players focussed their energies on the Howard and then Rudd proposals. W4 Diffuse “Problem One* *Technically the political opposition and had an alternative policy- ‘Direct Policy” Action’- but it found little favour either with business or civil society wings of the incumbency and the Liberal Party was more intent upon destroying Gillard’s proposals than propounding an alternative (since many in their ranks believed that “climate change” was not a problem which actually needed any solution). Table 8.5 Types of policy window

A further disclaimer is necessary here: by arguing that a policy window was mostly “purely” about a policy, I am not claiming that policymakers’ proposals are somehow ‘value neutral’ and do not stand on cognitive and normative as well as regulative pillars. Policies and their champions are riven with emotional and ontological commitments (albeit often unacknowledged or even actively denied).

As Carter and Jacob (2014) note, the original formulation of policy windows was that they are always short periods of contestation – a matter of months. They explain why the UK experienced a four year climate policy window (2006-2010) in terms of building public pressures and competition between political parties. The Australian case study shows relatively long windows (which also revolved, at least in part, around a competitive consensus between parties and waxing and waning public pressures) and two short windows 175 which followed after an unsuccessful closure, with the tensions exposed and amplified in the larger windows unresolved.

8.2.4 The closure of the windows and the residues that flowed from it.

Having outlined types of coupling and types of window, I now turn to the opposite of coupling – closure. As with coupling, the closure of windows is somewhat under-theorised in the MSA. This case study, with its four windows, offers the opportunity to tease out four different mechanisms of closure (smothering, cauterising, withdrawal and legislative) and two types of closure (partial and full). These will be discussed in turn.

Given that one issue – climate change – should be unresolved for twenty-two years with frequent and ever-more vicious battles, and that the resolution reached was quickly swept aside, the cautious researcher will question the term closure, and either modify it with adjectives such as partial or temporary, or else opt for a term such as ‘pinching’ or occlusion. The four closures, which complicate the standard view of policy windows propounded by Kingdon (2011) and Carter and Jacobs (2014), are discussed below.

The first closure occurred thanks to a lessening in pressures (both domestic and international), a decrease in political access for proponents of strong action following a change in party leadership, and an exhausting bureaucratic watering-down process. The second closure was more succinct and definitive: disruptors simply lacked the numbers to overcome the resistance of incumbent-friendly politicians. This closure left a residue – in the form of a voluntary policy known as the Greenhouse Challenge – which helped shape the terrain and make further coupling efforts much more difficult for a decade. The third closure was the weakest of all four discussed here, occurring primarily for political reasons, and actually avoidable had Prime Minister Kevin Rudd been willing to call a double dissolution election. From one perspective, it would be possible to see the third and fourth windows as one (very long) policy window, with an occlusion from December 2009 to September 2010. However, the terrain changed markedly in that time (largely for the worse for policy entrepreneurs), and incumbent behaviour was markedly different too. Therefore the two periods are treated as analytically distinct.

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The fourth closure was ostensibly definitive – a legislative package shepherded through Parliament. However, the cloud of Tony Abbott’s “blood oath” to repeal it hung over it. Since the repeal of Gillard’s ETS in 2014, repeated attempts to push a policy – any policy, ever-weaker – have ended in defeat for policy entrepreneurs. The policy deadlock of the period 1995-2006 has returned, but the salience of the climate issue is much higher, now that physical impacts are clearer, renewable energy is becoming more attractive to both households and businesses, and energy policy is now dramatically tied to climate policy.

Two further points are worthy of note. Firstly, it seems there is no necessary relationship (linear or inverse) between the closure of a window and the amount of institutional work undertaken. Secondly, business-based incumbents were not, on their own, able to make a window close. The closest they came to this was in window 2, where their emollient position (backed with threats) made it difficult for policy entrepreneurs to gain sufficient traction to overcome incumbent-supporting politicians within the ALP (table 8.6).

Window 1 Window 2 Window 3 Window 4 Reason Change of Policy entrepreneurs The politics Gillard steered for leadership and lacked relational capital became untenable – the legislation closure decreased salience and social skills. the uneasy home. of issue, alongside Incumbents use of co- competitive international ordinative work and consensus under settlement, drained tactical incorporation to Rudd-Turnbull issue. A regulatory great effect to advocate collapsed, and agreement (NGRS) a voluntary policy. Rudd spectacularly reached). mishandled the aftermath. Type of Regulatory – Regulatory – semi- Non-closure – Legislative – closure temporary permanent (dramatic political ostensibly circumstances) permanent, but repealed in 2014 Residues NGRS shown Agreed policy The politics of Abbott quickly to be “Greenhouse challenge” climate change declared a completely acted as superb fig leaf/ became very “blood oath”. inadequate. place-holder for the personalised His behaviour Australia’s following ten years. (especially with from December ratification of Other incumbent Gillard’s ‘there will 2009 onwards UNFCCC was a resistance still required be no carbon tax’ has made the hostage to fortune, to maintain status quo, statement before politics of forcing further however. 2010 Federal carbon pricing action. election). basically impossible since then (to 2018). Table 8.6 Comparison of window closure 177

‘Partial’ closure occurs where the issue will be revisited because a policy settlement has not been reached, or is unstable. ‘Full closure’ occurs when a policy settlement is reached, or when the balance of incumbency-disruption forces undergoes a phase shift, or – a common subset of this - the political opportunities are closed off. (These are ideal types of closure; there will doubtless be ‘grey area’ cases).

However, ‘full’ should not be confused with ‘permanent’; as the events of 2012-2014 show, even a ‘full’ closure around an issue is not permanent. It is possible for a new government to reverse previous regulations (as the Trump Administration is doing with Obama’s Clean Energy Plan) and legislation (as the Abbott government did with Gillard’s Emissions Trading Scheme).

The first window was ended not with a stand-up dramatic fight, but simply through the standard ‘killed off in the committees’ death of a thousand cuts and delay methods famous to bureaucracies the world over. The state wing of the incumbency (with its committees, working groups, drafts and state-federal haggling over how low the lowest common denominator could be) was able to reduce the scope for disruptors to be disruptive, producing a purely voluntary ‘National Greenhouse Response Strategy.’ Incumbents simply smothered the opposition.

The second window was closed more definitively after an explicit and semi-public fight. Not only were the disruptors’ current efforts defeated after a ‘toe-to-toe’ battle, but a blockage put in place meant they would have to overthrow an actual existing ‘incumbent position.’ The status quo position was not merely restated, but heavily reinforced. In this instance, a voluntary policy (“The Greenhouse Challenge”), begun under the ALP government, proved to be useful to the next (Coalition) government in that it was part of a suite of measures the Coalition could point to in order to minimise disruptor strength in the politics and policy streams. This was combined with the Australian Greenhouse Office and the Mandatory Renewable Energy Target domestically. Internationally the Australian government liaised closely with other opponents of meaningful climate policy, especially the US and the Middle- Eastern oil producers. This cauterisation was a successful ‘full’ closure, albeit not a permanent one: eventually, after a decade, the increased flow in the problem, politics and policy streams breached the incumbent flood defences. 178

The third window closed (only partially), simply because of a change in the balance of parliamentary numbers. The Liberal and National Parties had always been reluctant participants in the push for pricing carbon. That reluctance grew (indeed was nurtured by civil society incumbents) through 2009. When the Liberal Party toppled its leader (Malcolm Turnbull) and replaced him with Tony Abbott, the fragile consensus was shattered. The window shrank markedly, or indeed closed altogether (this depends on an assessment of what options were available to Prime Minister Kevin Rudd).

Contingency must not be neglected, and this includes quotidian political miscalculation. In the months leading up to these events, Rudd had been intent on using climate change as a ‘wedge’ to make Opposition Leader Malcolm Turnbull’s position more precarious (e.g. Rudd rejected Turnbull’s offer to resolve outstanding issues in October/November 2009 via a face- to-face meeting). Meanwhile, Turnbull had destroyed his own credibility and authority by rashly using information from a public servant – later shown to be false –to accuse Rudd of personal corruption.

In November 2011, twenty years after it had first been mooted, and after multiple attempts, carbon pricing finally became a Federal reality. However, success in guiding legislation through parliament does not necessarily mean a policy becomes entrenched. While the issue was removed from the legislative agenda Abbott persisted in prognostications of doom. In September 2013 he became Prime Minister and in July 2014, he repealed the legislation. Australia was without a carbon price yet again. What had seemed like a definitive window closure was only an occlusion, with a residue that has lasted until the time of writing (July 2018).

This section has explained “what happened” to cause the four windows to come into existence and what kinds of policy windows were formed. The following two sections (8.3 and 8.4) deepen the understanding of the patterns analysed above. They examine the strategies and relationality of regime incumbency, and so answer the two research questions of this thesis by first (8.3) drawing out patterns around the incumbent behaviour in periods of policy contestation (streams, coupling, windows) and then (8.4) the relationality of incumbency over time. This is followed (8.5) by a broader analysis of the implications of the study for the study of incumbent behaviour within sociotechnical transitions. 179

8.3 Incumbent resistance strategies – maintaining and defending the regime through institutional work (Research Question 1)

This section provides answers to the first research question by taking first a chronological and then a “work”-based approach to the question of what actions – persistent and episodic – incumbents took to resist or shape radical policy.

8.3.1 Incumbent institutional work and how it changed over time

Seen from the vantage points of decades and multiple contestations, the institutional work of incumbents can be summarised as one of intense effort – largely within the policymaking sphere – to contain discussion of the climate issue (with decreasing direct contestation of its existence) and create a ‘common sense’ that a price on carbon would be disastrous for the Australian economy. One crucial component of this was ensuring intra-incumbency unity. Over time this ongoing institutional work came to be supplemented with increased attention to public opinion and the engagement of a wider range of proxies in a temporarily unsuccessful effort to defeat carbon pricing.

The four windows studied in this thesis demonstrate that while incumbents have some favoured means by which they resist or shape radical policy innovations, they are also able to adapt to changed circumstances, and modify their responses to achieve their goals. I first condense the four empirical chapters to describe incumbent activity in each period – in the streams, during coupling and during the window. Secondly I turn to a thematic examination, looking at forms of work which are present throughout the four windows or only present in some.

Incumbent work specifically around climate change in window 1 was initially low volume. Within the problem stream institutional work was at a minimum (the issue was mostly ignored, or minimised as another green scare). The lack of activity was even noted and criticised by a Liberal politician, who said that business was under-performing (see Chapter 4). One partial exception to this was the work of CRA (later Rio Tinto) in commissioning a team of academics to produce a report – the first of many – that argued the economic costs of 180 carbon abatement would be enormous. By the time of coupling, a major business meta- organisation, the BCA, had established an Environmental Taskforce (co-ordinative work- see 8.4 below), which then produced its own policy against which it could compare government policy. During window 1 incumbents undertook a large amount of lobbying (relational work), symbolic work (economic modelling), and co-ordinative work (engaging in the ESD process, and then in creating the AIGN). The dominant forms of work in this window were economic modelling and lobbying. Incumbents benefited enormously from the change in political leadership when Hawke was replaced by Keating.

Things had changed dramatically by window 2 – there was now an institutionalisation of incumbent responses. They (through the BCA, AMIC and the AIGN) were carefully monitoring the problem stream, sending delegates to international conferences and keeping track of the negotiations. They were well aware that the UNFCCC was likely to be ratified faster than previous expected, and that this could create turbulence in Australia. They prepared for and participated in the meeting Prime Minister Paul Keating called in June 1994, lobbying, so as to make politicians aware of their opposition to any carbon pricing; the Australian Coal Association prepared relatively aggressive documents attacking the government’s status quo. However, at the same time they worked in a co-ordinated fashion to prepare an alternative (voluntary) policy proposal, knowing a straightforward attack on the proposed tax – which they undertook via extensive economic modelling and related modelling – would be high-risk. The dominant forms of work in this window were once again economic modelling and lobbying conducted in a more strategic and coordinated way thanks to the existence of the Australian Industry Greenhouse Network. Related to this, there was a conscious eschewal of any argumentation over the existence or size of climate change as an actual problem, and also a repeated use of extra-incumbency allies (namely a trade union) to amplify the incumbents’ message and pre-emptively undermine the critique of ‘vested interests’.

Ten years separate the closure of the second window, with a policy settlement literally written by and for business incumbents, from the opening of the third. Climate policy had remained largely static, but not for lack of pressures from policy entrepreneurs. The appearance of stasis was thanks to effective countering work (of both external challengers and intra-incumbency challengers) by senior meta-organisation figures (within BCA, MCA, AIGN) and also the personal preferences of Prime Minister John Howard, who exercised a 181 personal veto against his Cabinet in July-August 2003 when they proposed an emissions trading scheme. In the same year the BCA moved from opposing Australian ratification of the Kyoto Protocol to neutrality, reflecting splits within the organisation. Within the problem stream, most incumbents had come to accept the existence of climate change, and realised flirtation with climate denial was now risky. Further, some erstwhile opponents of carbon pricing began to accept it as a policy proposal, with banking, insurance and gas industry actors in the forefront.

During window 3’s coupling the main incumbent work was involvement in the policymaking process, in an attempt to set ‘acceptable’ parameters (e.g. to oppose taxation as a viable option). In the wry words of a former insider, the incumbents said “we will help you with that…” (see Chapter 6). During the window itself there was an enormous amount of lobbying (relational work) and economic modelling. Further, there was attempted tactical incorporation (first of the coal union/elements of the environment movement), state governments, and then latterly “the public.” Contra window 2, incumbents made no significant attempt to provide an alternative policy, merely action to weaken the policy proposed by policy entrepreneurs. In this they were inordinately successful. Two other new forms of work emerged at this time – the propagation of techno-optimist narratives around what they labelled as NewGenCoal (a form of symbolic work that did not persist), and the capture of a disruptors’ meta-organisation in order to render it largely silent during important policy debates.

The final window, again a short one, shows a marked escalation of, but also innovation in, incumbent activities. The period of the streams is quite short (nine months) and the period contained an enormous amount of unpredictable activity – including the abandonment of the Rudd government’s carbon pricing scheme (only announced in April 2010), followed by a bitter campaign around a proposed resources tax, the toppling of Rudd by his deputy, and a Federal election campaign that then resulted in seventeen days without a government. During coupling, incumbents participated in the formal processes designed by policymakers (relational work) and prepared for the coming policy battle by commissioning further economic modelling. The window itself was a period of intense institutional work by incumbents. While they maintained their relational work with the state (lobbying extensively), they found access to policymakers and negotiations far more constrained than previously. The negotiations were now taking place in a Cabinet-level committee – the 182

MPCCC, which was almost hermetically sealed from the kinds of access and influence which marked the previous sets of negotiations. Incumbents also continued with other favoured forms of work, such as economic modelling, co-ordination with state governments opposed to Gillard’s carbon pricing and the like. There were three major novelties in this window in regards to incumbents’ institutional work. Firstly, there was an enormous effort to engage broader publics (tactical incorporation) once it was clear that normal channels of lobbying and economic modelling were unlikely to bring further concessions. This included not just speaking tours and advertising, but also rallies, convoys and other forms of work. Secondly, there was a major effort to corral other incumbent organisations (especially meta- organisations) into the “Australian Trade and Industry Alliance.” Thirdly, and far less visible, almost by definition, was the work of persuading erstwhile incumbents who were supporters of a carbon price that the costs of continuing to advocate for a carbon price were unduly high.

The progression of these types of incumbent institutional work is captured in the following table (8.7).

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W1 W2 W3 W4 Problem Ignore/deny/deri Minimise climate Accepting the Business incumbents stream de as “green denial problem (no accept. Political and scare” denial) civil society incumbents ambiguous/advocatin g climate denial Politics Assume Not assuming BCA signalling stream politicians will anything. Most to Howard that do as they relational work is they were have/told with ALP happy to accept pricing Policy Gradually begin Preparing for Support for Participate in stream to realise will future stuff – carbon pricing government need policy relational work by selected processes with ‘wait proposals/credib incumbents and see’ attitude ility Coupling BCA Sustained Participation in Not trying to push environmental relational work Shergold back against Gillard, taskforce Taskforce, set since she can’t afford producing tone to back down. strategy In Lobbying Lobbying; Lobbying; Lobbying; Window (relational); Economic Economic Economic Modelling; Flurry of modelling; Modelling; Tactical economic Co-ordination of Tactical Incorporation – modelling(symb incumbents; Incorporation – unions, state olic/quasi Tactical unions, state governments, public; material) Incorporation – governments, Co-ordination of unions and state public; incumbents ; governments Silencing of Silencing of erstwhile opponents incumbents (Capture of meta- organisation) For Able to rely on Provision of Zero (occurred Ongoing lobbying to Closure state ‘acceptable’ due to political weaken the inertia/bureaucra alternative factors) legislation cy

Table 8.7 Summary of types of incumbent action in chronological categorisation

8.3.2 Persistent and episodic institutional work

The discussion of forms of institutional work deployed by incumbents across the four windows will be divided (somewhat artificially) into sections. The first concerns forms of 184 institutional work that do NOT involve – as their primary focus – the building of relations with other actors. The second looks at relational work.

This is somewhat artificial for two reasons; firstly because much work is conducted by constellations of actors (see for example the coalitions which funded various instances and waves of economic modelling). Secondly, a sharp distinction between relational and symbolic/material forms of institutional work is analytically accurate, but empirically untenable – the reality is far messier, escaping neat conceptual categories.

I first deal with two forms of work found throughout the four windows, before turning to four forms of work that were only found in specific windows.

8.3.2.1 Across all four windows (persistent institutional work)

The distinction between different types of institutional work (maintenance and defensive) can be a fine one – both refer to attempts to sustain or prolong institutions. Maintenance work is the day-to-day ‘running repairs’ work, in response to the normal and non-intentional damage sustained by institutions (‘wear and tear’). Defensive work covers actions taken by incumbents in response to deliberate assaults by disruptors, requiring meaningful and conscious responses to prevent further damage which could give aid, succour and further motivation to disruptors.

There were two forms of symbolic/material work conducted by incumbents that were common to all four windows. The first of these was the discursive use of economic modelling (which was amplified through the cultivation of media sources – a form of relational work). The modelling was deployed to frame any carbon abatement strategy (whether a price on carbon or support for renewables) as inordinately expensive and damaging to the growth of the economy and to employment. Incumbents were from the outset skilled at timing the release of modelling in or around the release of any official statements or decision-making processes. Second, incumbents made implicit or explicit threats of an investment strike, in which largescale investors would withdraw their funds if the policy status quo were to shift markedly.

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8.3.2.2. Work found only in particular windows (episodic institutional work)

Five forms of symbolic/material work were only found in some windows. Issue minimisation was engaged in in the first window (and it should be remembered that there were significant uncertainties about the extent of global warming, as it was then called, in the late 1980s. Although there was a scientific consensus that there was a serious threat, there was debate about how quickly action needed to be taken).

Interestingly, issue denial/minimisation was consciously eschewed in the second window, for fear of losing access to policymakers and strengthening the hand and morale of carbon tax proponents. Forms of ‘soft’ denial returned only in the fourth window, and primarily from within the political sphere (the Liberal and National Party) and civil society (think tanks, grassroots groups and sections of the media). Relatedly, incumbents used speaking tours by experts only in the first and fourth windows. In the first window various think tanks (Tasman and IPA) hosted climate sceptics to events such as book launches – these were mostly aimed at an elite/policymaker audience. In the fourth window a number of speakers engaged in highly publicised tours that attempted to undermine support for carbon pricing.

Incumbents only mobilised strongly behind an alternative policy on one occasion – in Window 2. In window 1 the carbon tax proposals were successfully ‘killed off in the committees’ and did not need to be opposed with an alternative. In window 3 incumbent efforts were directed exclusively at softening a policy that had already been acquiesced to – an emissions trading scheme. In the fourth window no alternative policy was put forward by industry incumbents, although Tony Abbott did propose a so-called ‘Direct Action’ scheme.

Explicit hope for technology (be it new forms of energy generation, new-found efficiencies or other mitigation technologies) were a feature of the first three windows (peaking in the second and third), but were absent in the fourth (although hostility to renewables became vehement here). Finally, there was a sharp uptick in “personalisation” (attacks on individual policymakers or on the legitimacy of disruptor organisations). While this had been present in the first window (with the Australian Coal Association’s abrasive attacks on Environment Minister Ros Kelly), this took on a quantitatively and qualitatively different scope in the fourth window, as the media, think tanks and politicians attacked proponents of carbon pricing relentlessly. 186

Two caveats apply. Firstly, the relationship between maintenance and defensive work and persistent and episodic work is not linear – it is not the case that all “persistent” work is maintenance and all episodic work is defensive. Secondly, researchers must remember that a strategy’s meaning is situational – for instance, tours by climate sceptics sponsored by incumbents performed different functions in window 1 and 4; in the first instance tours were primarily a “treetops” activity, trying to persuade elites, while in the fourth window they were aimed more at tactical incorporation of publics (see table 8.8).

Window 1 Window 2 Window 3 Window 4 Attack proposal Enormous Enormous Enormous Large quantity with economic quantity, quantity, quantity, modelling carefully carefully timed carefully timed timed Threat of investment Yes Yes Yes Yes strike Issue minimisation Yes Deliberately No Yes (through to minimised denialism) Tours by climate Yes, to but No No Yes, but rabble sceptics purely to elite rousing: actors Christopher Monckton, Vaclav Klaus etc. Propose alternative No - just Yes – From From policy/solution didn’t see “Greenhouse incumbents no. politicians- climate as a Challenge” (Turnbull toyed (nobody takes problem with proposal ‘Direct Action’ seriously) Holding hope for No - argued Yes - now (CCS campaign, Absent, but technology/efficiency there were arguing there aborted because strong attacks savings none to be were major of GFC) on renewables) had efficiency NewGenCoal savings to be campaign made “Personalisation” Attacks by Minor attacks Largely Peak vitriol - (attacks on ACA on on ACF etc., eschewed (Carbon Cate, individual Environment but not (incumbents “Toxic Tax policymakers or on Minister Ros ‘picking a getting what based on a lie” the legitimacy of Kelly fight’ wanted) etc.) disruptor organisations)

Table 8.8 Forms of symbolic and material institutional work 187

Having outlined the persistent and episodic work of incumbents I now turn to the broader question of what kinds of relational work incumbents perform in periods of heightened policy contestation.

8.4 Forms of relational institutional work undertaken by incumbents to initiate, maintain and defend their positions in response to changing patterns of disruptive behaviour (Research Question 2)

Relational Institutional Work “is concerned with building interactions to advance institutional ends” (Hampel et al, 2017: 570). It involves creating, maintaining, disrupting or defending relationships with other actors or interrupting relationships between third parties. It can be assessed on a wide variety of axes. This section looks at five types of relational work conducted by incumbents and then abstracts to examine a variety of axes – who, what, how, when, where, why, whether it is direct or indirect – with examples given from the four policy windows discussed in this thesis.

In order to answer this question we need to focus on relational work (see Chapter 2). This thesis has identified five forms of relational work: lobbying policymakers; creating new organisations (for three different purposes); control of existing organisations; three forms of ‘tactical incorporation’ and control of disruptors’ organisations. These are dealt with in turn below (see also table 8.9). The following sections discuss each of these in turn.

8.4.1.Lobbying of politicians

Lobbying of politicians and public servants occurs routinely and persistently; it is not brought into existence by the rise in public salience of a given issue. What is clear, though, throughout the four windows, is that incumbents use face-to-face meetings (supported with symbolic/material work such as economic modelling) to put the case for their preferred policy settings. In the fourth window, although their access was limited (since the MPCCC met in private and its deliberations were bound by Cabinet secrecy), they persisted with this.

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8.4.2 Building new organisations

If lobbying is the epitome of “persistent and routine,” the building of new organisations – a time and capital-intensive process – is its polar opposite. During the four windows only a few organisations were founded with the explicit purpose of affecting climate and environment policy (though others were created in the long gap between windows 2 and 3, for example the climate denialist Lavoisier Group and the Latrobe Valley Generators).

Incumbents have built new organisations for three reasons which are distinct conceptually, but overlap in the “real world,” in that some organisations perform more than one function. These three reasons can be grouped under a) “intra-incumbency” relational work, which tries to co-ordinate and corral incumbents from passivity or hostility to active support or – failing that – neutrality. Tries to minimise the risk or impact of ‘incumbent defection.’ b) policy-maker facing relational work, which tries to ensure that policymakers will be supportive of incumbents’ arguments and needs. c) civil society- facing relational work, which tries to enlist allies (tactical incorporation) or counter the influence of opponents within civil society. Further, public relations campaigns aimed at the public may also influence policy-makers. Most of this kind of work has occurred in the opening window and again in the final window when influence over policymakers was weaker. Just as the first window opened, the Business Council of Australia formed an Environmental Taskforce. Later in the window, ironically following a decision that was not directly related to climate policy, incumbents (especially the BCA and AMIC) initiated the Australian Industry Greenhouse Network. This is an organisation which has provided information to other meta-organisations, and also a venue in which positions to put to policymakers can be debated and agreed (i.e. it is both a) and b) in the above formulation). Alongside this, businesses and trade associations funded the Tasman Institute, which both performed relational work towards policymakers and reputational work facing policymakers and publics in the first and second windows. Policymaker and public- facing reputational work was undertaken by various pre-existing trade associations (e.g. AMIC) in the first window. At the same time, new organisations (AMEEF and the short- lived Sustainable Development Australia) were also formed. In the final window, a new policy-specific organisation – the Australian Trade and Industry Alliance – was formed (with 189

MCA and ACCI as instigators), pressuring policymakers through a mobilisation of publics. All these organisations perform institutional work on behalf of incumbents.

Another way to look at these kinds of work is as forms of co-ordinating work. While opponents of a proposed carbon pricing arrangement might be large in number, they still need to be informed, mobilised and ‘disciplined’ in order to be an effective force in opposition to disruptive institutional work. This work – of forming or strengthening existing relationships between incumbent organisations (disparate companies and sectoral trade bodies) – is best labelled co-ordinating relational work. It includes relational work to overcome the temptation to free-riding. It involves the creation of taskforces and networks (the latter tending to be longer-lasting) which share information (reducing costs on individual entities) and arrive at acceptable negotiating positions, and so present a ‘united front’ to policymakers, with a couple of messages hammered home. Within the period of the thesis, this is particularly evident in windows 1 and 2 (with the creation of the BCA’s Environmental Taskforce and then the Australian Industry Greenhouse Network), and again in window 4 with the Australian Trade and Industry Alliance. Crucially, these organisations can try to perform ‘tactical incorporation,’ bringing in actors such as trades unions and aggrieved citizens, to help amplify their message and increase its power and legitimacy by claiming that it isn’t “only” vested interests speaking.

Thus far the forms of defensive institutional work teased out have largely – as befits the disruptor/incumbent dialectic which underlies defensive institutional work – been about public contestation. There is a final form of defensive work which straddles creative/maintenance/defensive and also reactive/proactive and other axes, the aforementioned inter-incumbency institutional work. As early as 1993 US fossil fuel incumbents were arguing that “Industry must avoid gas versus oil civil war,” (Leggett, 1999:124, quoting the headline of an editorial in The Oil and Gas Journal). This co- ordinative defensive institutional work is largely conducted behind closed doors, presenting fiendish methodological challenges to a researcher. If it ‘works’ – i.e. industry presents a united front to its opponents – then it is visible by its absence; the “dog that didn’t bark in the night-time.” This work is powerful, but time-consuming and relies on the ability of incumbency actors to convince potential defectors that the risks of defection outweigh the rewards. Over time it can become ineffective – certainly the ability of the fossil fuel incumbency to impose public ‘unity’ started to break down by 2003, at least around the 190 existence of the problem of climate change. What is intriguing is that the final window showed a return of co-ordinative defensive work, via the Australian Trade and Industry Alliance, and the effective silencing of those sectors of Australian industry (insurance, finance, agriculture) which might have been expected to engage vigorously in support of emissions trading.

8.4.3 Message discipline

Incumbents also perform relational work to control existing organisations, ensuring ‘message discipline’. The best examples of this come in window two, when very little advocacy of climate denial was made by incumbents. In the early 2000s a fierce battle was fought within the BCA between actors keen on ratification of Kyoto and a domestic emissions trading scheme, and those who supported the status quo. In window 4 the silencing work (distinct from message discipline, but with the same intent of creating or defending the appearance of business unity) was more subtle. The pro-carbon-pricing bank Westpac was misrepresented in the mainstream media (specifically The Australian), and the Ai Group’s attempt to support pricing by using a consultancy as its ‘stab-vest’ fell through when the consultancy showed a draft to the Liberal Party (see chapter 7).

This form of relational work can be dubbed corralling work: the relational work done to ensure that particularly passionate/aggrieved incumbent actors do not weaken the overall negotiating position by being too extreme, too aggressive and all-too-public. Two forms of it are discussed here – silencing work and cuckoo work. Left un-corralled, incumbents might a) directly alienate policymakers by being rude/aggressive (see especially windows 2 and 4); b) alienate other potential allies of the incumbency; c) make it more difficult/politically costly for policymakers to deliver; or d) mobilise (by enraging and providing mobilisation-fodder) disruptors.

Incumbents act to decrease the flow of disruptor discourse by engaging in silencing work and ‘cuckoo’ work, where an organisation is able to get another to unwittingly do its work, in the same kind of parasitical strategy used by cuckoos. Silencing work is conducted towards both fellow incumbent actors but also disruptors. These are discussed in turn. Firstly, incumbents facing other large businesses, especially those who had previously supported (or at least not 191 publicly opposed) the incumbency will have to work to minimise the risk of division. If incumbents-on-all-but-this-issue were to speak out in favour of a different set of institutional arrangements (i.e. a carbon price), this would undercut the incumbents’ powerful ‘business is united in opposition to the government’s policy proposals’ argument. This would also offer aid and comfort to those seeking new institutional arrangements (policy/institutional entrepreneurs). Within the thesis, the best examples of this are both in window 4 (2010-11). The first is the attack on the bank Westpac in The Australian newspaper (i.e. the mischaracterisation of its position). The second involves a business group (Ai Group) attempting to ‘subcontract’ support for an emissions trading scheme to a consulting firm. Upon witnessing the ferocity of the Liberal Party’s response to a draft version of its report the consultancy decided not to be Ai Group’s ‘stab vest,’ instead releasing a totally anodyne report that was invoked by both opponents and proponents of an ETS.

There was also an enormous amount of ‘silencing’ work conducted by incumbents, especially in the late 1990s and early 2000s, as a fierce battle was waged, largely behind closed doors. Silencing work is more evident in relation to those actors who openly and consistently challenge the legitimacy of the incumbency. One favoured tactic is the use of threats of legal action (for libel or copyright infringement) e.g. NSW Minerals Council versus the activist group Rising Tide in 2007 in response to the latter’s spoof advertising. More seriously, incumbents may seek to leverage state power (via political allies) to perform “venue denial” and economic warfare against challengers; for example, the Abbott government withdrew funding from the Environmental Defenders Office, and launched inquiries into the tax- exempt status of environmental campaigning groups.

A particularly significant subset of silencing work – which can be dubbed cuckoo work – is visible in the third window, with large fossil fuel companies taking control of and effectively silencing a trade body that nominally sought to lobby for renewables.

8.4.4 Tactical incorporation

Tactical incorporation is the author’s innovation, an attempt to label the phenomenon of previously ignored or combatted actors being (temporarily and tactically) adopted, or forming marriages of convenience, with dominant incumbent actors who have a temporary need of the legitimacy that the incorporated possess (i.e. unions, ‘grass-roots’ groups.) It is distinct from 192 the creation of astro-turf or front groups, which is a more expensive and higher risk strategy often pursued by incumbencies.

Incumbents, aware that their messages are vulnerable to accusations of being the self-serving pronouncements of vested interests, also strive to perform the tactical incorporation of other actors, especially those with different bases of legitimacy. Three particular actors have been subjects of attempts at tactical incorporation by incumbents during the battles over carbon pricing in Australia. These are state governments, unions and wider publics.

While state governments have their own institutional and historical suspicions and concerns about Federal government powers, they are also subject to tactical incorporation by incumbents. Incumbents have worked with state governments to question Federal moves towards stronger climate policy which would potentially undermine state prerogatives, in all four windows. The success of this tactic is in part dependent upon which parties are in power at state and Federal levels, of course. A state government controlled by the same party/parties as Federal is – all else being equal – less likely to make public pronouncements challenging Federal behaviour. Aware of the discursive power of trades unions (especially when ALP governments reign), incumbents were keen to have the coal-miners’ union involved in both its influential economic modelling in early 1992, and also at the roundtable in 1995. The coal-miners’ union was also involved in a 2008 technology-specific (CCS) coalition, along with the most business-friendly environment organisation (WWF).

A final form of tactical incorporation involves efforts by incumbents to either alarm or else actually mobilise mass publics to be part of their anti-carbon pricing activities. In the first window a regional campaign, highlighting jobs risks, was launched (but abandoned once the proposal was withdrawn). In window 3 a Lets Cut Emissions Not Jobs campaign sought to get members of the public to pressure politicians to soften the proposed CPRS. In the final window, with influence over policymakers at an historic low, incumbents pushed their publicity campaigns – already road-tested the previous year during the ‘Keep Mining Strong’ campaign – to historic highs.

In opposition to the Advocacy Coalition Framework, which assumes that coalitions must be made up of groups that share deep core beliefs and core policy beliefs (e.g. Ingold, 2014), tactical incorporation speaks to deliberate (cynical) ‘marriages of convenience”.

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8.4.5 Control of opposition organisations

As well as attempting to increase the amount of ‘pro-incumbent’ discourse via lobbying and forms of organisation-building, incumbents have also been proactive, moving beyond maintenance work to defensive work, in seeking to decrease disruptor discourse via relational work. One particular form of relational work, important but only seen in one window, is the control of the trade association of ‘disruptor’ technology – in this case the 2009 silencing of a clean technology group through the occupation of key positions (see chapter 6).

Window 1 Window 2 Window 3 Window 4 Lobbying of Federal Strong Strong Strong Strong - knew government it to be of limited value, but persisted. Did it viciously and incompetently (Behm, 2014) Building new Yes – BCA No new org, No No organisations for environmental but AIGN intra-incumbency taskforce and into the fore work then AIGN (ironically inspired by non-climate issue) Building new Yes – Tasman No (no need) No it was a No (no point, organisations for Institute ‘free for all’ really, given policy-maker facing lack of access) work Building new Yes, AMEEF No No (but ATIA organisations for and the short- advertising (Work policy-maker and lived campaigns by (conducted by public facing Sustainable existing groups MCA and (reputational) work Development and ACCI) Australia corporations) Tactical incorporation Minimal Yes Yes yes of state governments Tactical incorporation Yes Yes Attempted No of unions Tactical incorporation Nothing Only begun Late in window Television and of publics via public climate- in February – Let’s Cut radio campaigning and specific, but 1995, as Emissions Not campaigns support for industry battle Jobs, ‘grassroots’ groups burnishing climaxed NewGenCoal etc. Controlling existing Sort of a free Tight Not needed – Disciplining – 194

organisations/ensuring for all discipline everyone doing pushing ‘message discipline’ everything Westpac etc. (silencing work) from the arena. Controlling opposing No No Yes no bodies

Table 8.9 Summary of types of incumbent action based on types of institutional work

These forms of relational work, conducted properly, allow incumbents to achieve five diverse goals. Firstly it allows them to amplify a message (more voices saying the same thing) and to increase its credibility (actors who are not the ‘usual suspects’ saying the same things). Secondly it can create synergies where competing messages create or sustain a ‘common sense.’ Thirdly it can silence others who would undercut a message (e.g. forcing former incumbents who have come to favour a policy that other incumbents still oppose to be silent). Fourthly – and relatedly – it can maintain ‘message discipline’ in order to prevent disruptors gaining morale and/or momentum. Finally, it can de-dramatize an issue, and deny momentum to opponents (take the wind out of their sails).

Ultimately, what the changing relationships of actors displays is that there is a processual incumbency in operation. Actors that had been staunch supporters of the status quo in the first two windows (banks, manufacturers, insurers, large sections of the gas industry) had by the opening of the third window, changed their stance and agreed (reluctantly or enthusiastically) to the need for economic policy mechanisms to respond to climate change. While there was a core of actors who continued to oppose action (primarily the mining industry), the list of defectors had grown ever-longer, meaning the image of united business opposition to pricing would need to be restored through enormous amounts of work.

Intra-incumbency relational work might – if we take an outcome-based perspective – be intended to achieve one or both of two outcomes: a) Create or maintain incumbency: i.e. recruit to the incumbency by mobilising otherwise ‘passive’ incumbent actors who are tempted to ignore the issue as irrelevant, and/or to free-ride on the work of more committed/endangered incumbents. (This is distinct from tactical incorporation, which targets actors who are normally not considered part of an incumbency). b) Defend the incumbency by preventing defection. 195

There can be overlap between these two: if an organisation defects from the incumbency, it is not written in stone that it will then be both willing and able to join the disruptors: further (defensive) institutional work on the part of the remaining incumbency may raise the costs higher than the defecting actors are willing or able to tolerate (see for example the actions in the late 1990s of the head of MCA/AIGN in attempting to dissuade the Australian Gas Association from defecting, and actions against BP and the then BCA head, both of whom sought Kyoto ratification and a domestic emissions trading scheme).

This relational work has also involved material work (physical actions, persuasion, staging of field (re)configuring events, economic inducements etc.) and symbolic work (advertising, speeches, economic modelling etc.) The distinction between material and symbolic work is not always an easy one to make, or at least defend. A third category, relational work also needs to be considered. Hampel et al (2017) suggest that relational IW “is concerned with building interactions to advance institutional ends” (Hampel, 2017: 570) so that actors “can influence institutions through their interactions with others” (Hampel, 2017: 572). As this case study demonstrates, this influencing can, be undertaken to maintain, disrupt or defend institutions.

8.5 Transitions and regime resistance

Having explained and given an overview of the entire study, and answered the research questions, the final section of this discussion chapter suggests ways in which institutional work can be used to examine regime resistance within sociotechnical transitions in the context of radical policy change analysed through MSA. On the outcome based measure (of create/maintain/disrupt/defend), there are two ways in which incumbents can conduct relational work in order to maintain institutional arrangements. These are firstly to increase the flow of maintenance/defensive discourse (what can be labelled co-ordinating and corralling work): and secondly to decrease the flow of disruptive discourse, whatever its source (which can be labelled silencing or cuckoo work). These are dealt with in turn.

This final section now outlines a set of implications and contributions to the study of regime resistance in the context of long durational sustainability sociotechnical transitions, and frames my contribution in terms of the recently declared ‘political turn.’

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While transition scholars have started to use ideas from policy studies such as the MSA, Advocacy Coalition Framework, Punctuated Equilibrium and Institutional Theory, they have rarely combined these, and never over the timeframe of decades rather than years. That combination – of theories over time – is one novelty of this thesis.

Recent work that attempts to grapple with the questions of the nature of the state and of power within socio-technical transitions has begun to critique the (misplaced) concreteness of some of the conceptual categories that have had a great deal of success and influence to date. For example, in a recent paper, Johnstone et al., (2017: 157) note that:

incumbency of all kinds may be seen (in the general sense defined in the present paper), to be about concentration of power. And if power is understood relationally and processually (and in all its multifarious dimensions and contexts) as ‘asymmetrically structuring agency’, then it can readily be observed that these concentrations take place not just around set-piece categories like ‘the regime’ and ‘the niche’, but in fractal rhizomic patterns at every scale of political analysis or social action.

By unpicking and showing the gradual development of the incumbency – with its stops and starts, and intermittent expansion of the membership of an incumbency, followed by a falling away – I hope to have shown that terms such as ‘regime’ and incumbent must be historicised, problematized and seen processually. Researchers must pay close attention to the local and the specific (while also attempting to draw out underlying patterns). One example of this processual incumbency that has been uncovered in the empirical work of studying four policy windows is the work of ‘tactical incorporation,’ whereby alliances are formed – marriages of convenience almost – to shore up weaknesses in an incumbency’s public profile, offering it defence against challengers who would deploy the legitimacy-undermining label of ‘vested interests.’

The study has given a granular account of how incumbent resistance (through the lens of institutional work, be it maintenance and/or defensive), and also of how the types of work deployed have shifted over the decades in which Australian policy elites have grappled with climate change.

Put another way, incumbency does not exist in a vacuum. The shape of an incumbency, its 197 strategies and behaviours, exist in a dialectical relationship with challengers. Battles are fought, lessons are learnt, and an incumbency shifts its behaviours accordingly, as demonstrated in the empirical chapters and also the discussion above.

Surprisingly, within the field of sustainability transitions, little work has been done on assessing the longue durée of incumbent resistance to radical policy. The same applies to policy studies, which has a bias towards short time periods. This study, by identifying four specific windows within a three decade (and as yet unresolved) policy battle, has shown the value of such a ‘long view,’ in its ability to tease out an unfolding process of learning by (some) actors.

It has enabled us to see that our images of change, brought to us from policy studies theory via evolutionary theory, is not sufficient to explain what has happened in Australia, and arguably elsewhere in the world. What we witness is not an abrupt overthrow after a period of gradually building pressures, but much more a picture of oscillation without resolution. Crucially, what the study reveals is not a linear picture, as is seen in the lifecycle models typical in transition studies, or even simple ‘policy windows,’ where a problem is identified, a policy settled on, implemented and evaluated, but rather one of stops and starts, reversals and over-turnings (especially if the period immediately after the Gillard ETS is accounted for).

These types of relational work, performed by incumbents during the prolonged opposition to policy innovation, can contribute towards the ‘political turn’ in transitions studies (Johnstone and Newell, 2017; Roberts et al., 2018), helping us see the state as an object of study, but in relational terms. That is to say, a processual incumbency is constantly shifting in its memberships and tactics, attempting to influence the state through tactical incorporation as well as more traditional (lobbying, modelling) techniques. Researchers need to think – and study- in terms of assemblages, constellations, configurations and coalitions, rather than fixed entities and abstractions such as ‘the state,’ ‘the political class’ or ‘policymakers’.

8.6 Conclusion

This chapter has performed four functions. It has abstracted the case study’s empirical data into a narrative around the repeated opening and closing of an issue and the ways in which 198 incumbent responses (and incumbency itself) have shifted. It has provided a set of empirically-based answers to the question of incumbent responses to disruptive institutional work. Introducing the concepts of tactical incorporation and processual incumbency, it has provided answers to the second research question. Finally, using and expanding on the concept of relational institutional work, it has proposed a series of sub-types of institutional work conducted by incumbents as they face disruption. The final chapter recaps the study and explores the limitations of the thesis and scope for further work.

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Chapter 9: Conclusion

9.1 Introduction

On Friday 24th August 2018, Malcolm Turnbull addressed journalists on his last day as Australian Prime Minister. The proximal cause of his overthrow, at the hands of his own party, was the emissions reduction component of a ‘National Energy Guarantee’. Turnbull had launched this in October 2017, claiming it would end the climate wars.

Turnbull, with nothing to lose, pulled no punches. He had already described the overthrow of a sitting prime minister (the fourth such occurrence in eight years) as ‘a form of madness’ (Murphy, 2018, 23 August). Asked about energy and climate policy, Turnbull said what most Australians had already decided:

I think the truth is that the Coalition finds it very hard to get agreement on anything to do with emissions…. The emissions issue and climate policy issues have the same problem within the Coalition of ... bitterly entrenched views that are actually sort of more ideological views than views based, as I say, in engineering and economics (Karp, 2018).

Turnbull’s replacement, former Treasurer Scott Morrison, had, infamously, brandished a lump of coal during question time in parliament in February 2017. He has declared that he hopes new coal-fired power stations will be built in Australia and that he supports ‘fair dinkum’ power (i.e. not renewables). Meanwhile, senior Liberal Party figures and influential right-wing media outlets are urging the new government to follow the Trump administration and withdraw from the Paris Agreement. The climate war described in this thesis is not over. More battles will be fought. This final chapter briefly recapitulates the study – its motivation, methods and findings – and outlines the limitations of the research and the scope for future work.

9.2 Contributions

This thesis has set out to answer important questions about the nature of incumbent resistance to change during (attempted) sociotechnical transitions, as part of the broader ‘political turn’ 200 in transitions studies. To do so it has mobilised two theories – one of public policy (MSA) and one of institutional change and stability (Institutional Work) – and examined an extreme case, Australia. The overwhelming majority of studies that have examined Australia have covered the period from 2007 to the present. This short-time-frame choice is not restricted just to Australia, however: few studies of sustainability sociotechnical transitions and the policy battles that they involve take a ‘long view’. One novelty of this thesis is just that combination of the MSA and its ability to parse periods of intense activity and (seeming) somnolence with detailed study of the (shifting) work performed by incumbencies. A second novelty is its focus on incumbent behaviours during that prolonged time frame: while it is understood that transitions take a long time and that incumbents resist, a great deal of work has accepted these premises and then studied a particular (technological) niche, rather than engaging with the manners in which regime actors co-ordinate to restabilise regimes that are under attack. Further, the use of these lenses has forced a consideration of cycles rather than linearity, with the residues and overflowings (Callon, 1998).

9.3 Limitations of the study and further work

Abell (2001: 78) notes mournfully that when we "transmute the chronology into a narrative by the insertion of causal connections …. things get difficult. What is the plausibility of these connections in the absence of established general conjunctures?” He then quotes Griffin and Ragin (1994) who argued that “narrative analysis (and related approaches) appears to depend on the judgment of the analyst rather than deriving from any tested algorithm." There is, in any research precisely this question of judgement.

If we accept that the study of one nation’s climate and energy policies can shed new theoretical light, without comparisons, then there are still criticisms to be made of this study. By focussing on public battles, in which incumbents were forced to act publicly (and very publicly, in the case of the fourth policy window), the study has underplayed the battles fought between 1996 and 2006. This focus may have unduly foregrounded ‘gaudy’ actions, so missing the longer-term, slower means by which stability is maintained. Some of this work has been captured in the PhD of Pearse (2005), which covered the power of the incumbents to ‘reverse engineer’ climate policy under the Howard government.

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Under the Howard government there was a real, if relatively subterranean/elite-circles-only, effort to have a Federal carbon pricing scheme. This culminated in a cabinet battle in 2000, in which the anti-pricing forces were victorious. A second battle, with the same result, was fought in 2003. However, the documentary record is, for various reasons, more limited, and therefore an increased reliance on elite interviewees would have been necessary, with the problems implicit in this research method.

Subsequent to that, state governments attempted to stitch together a national emissions trading scheme ‘from below.’ The incumbent resistance to that was subtle, and revealing, but the study of both of these episodes would have required relatively unfettered access to elite actors, which would have been extremely difficult. A similar gap, with similar reasons, is the battles incumbents fought to make sure that as the National Electricity Market was created, between 1990 and 1998, that no emissions reductions commitment would be written into the foundational documents.

For a thesis that claims to show that ‘history matters,’ another obvious criticism was that there was no mention of “pre-climate change” relations between industry, state and civil society in the years 1967 to 1975 (a period in which climate change was in fact mentioned as a potential problem). This period was significant in shaping expectations and norms, and saw some enduring organisations formed. A study of this period would have further thickened our understanding of incumbents’ creative institutional work.

The thesis may not have given due importance to the importance of the mining industry and the “demonstration effect” of its Keep Mining Strong campaign in 2010. Finally, the thesis may not have given enough attention to the role of the media as mediator between policymakers and broader publics. More seriously, this is a study based on one country, albeit with four linked episodes. However, while the generalisability of findings/ propositions is easily challenged, the generalisability of framework itself – a temporal heuristic (MSA) and a theory that focuses on actors, their actions and relationality is more robust.

There are always difficulties in researching the exercise of incumbent power: access to elite actors, access to archives etc. This study has been no exception. A cross-country comparison would almost certainly have revealed different insights. In addition, issues besides climate 202 change will have different dynamics and different actors, who may use different strategies in response to similar pressures.

Of these limitations, conceptually the focus on one policy (carbon price) is the most serious. Proponents of action knew that carbon pricing on its own would not be an adequate response to climate change, from the earliest days through to Greens Senator Christine Milne in 2013, who said "I always said it is the carbon price plus plus plus…. The carbon price on its own will not do the job; there need to be complementary measures and it has to go beyond the RET" (Priest, 2013). This is a view supported by Tvinnereim and Mehling (2018). Meanwhile, Passey et al. (2012) have investigated ‘the inevitability of ‘flotilla policies’. A fuller study could have compared incumbent responses to other policies alongside pricing, such as regulation and technology support (and so captured incumbents’ unrelenting hostility to renewable energy subsidies and support programmes).

Given the urgency of climate mitigation, there is an urgent need to increase our understanding of the mechanisms of regime resistance to rapid transformation. The period from 2012 to 2018 in Australia – with the repeal of Gillard’s ETS, effective hostility to renewables, and the ongoing climate and energy policy paralysis - would be rich pickings for further work on institutional work and the recovery/retrenchment of incumbent power. This could contribute, more broadly, to further work on politics and transitions, with the state not black-boxed but seen as both something that is ‘fought over’ and a venue for struggle between competing factions of business and civil society. The use of a temporal framework such as MSA, combined with relational work, could help tease out the shifting assemblages, constellations, configurations, coalitions and flashpoints as incumbents and disruptors fight for pre-eminence. Nonetheless, the examination of the unfolding, reversal and reassertion of processual incumbency, including new forms of institutional work, provides some grist for further research into incumbent inertia and the means by which it is enacted.

When Barry Jones, Science Minister in the Hawke Government, first publicly raised the idea of a price on carbon dioxide in November 1989, the atmospheric concentration of carbon dioxide was a little over 350 parts per million. It now edges towards 410. Nothing that has been said or done in the last thirty years – in Australia or the wider world – has slowed the 203 increase in the thickness of the blanket that traps the sun’s heat. There have already been consequences for that (enacted) inertia. There will be more.

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Appendix 1: List of interviewees

Name Date Phillip Adams Prominent cultural figure, July 2015 journalist Peter Colley Union official (CFMEU) July 2015 John Coulter Retired politician (Senator July 2017 for Democrats) Richard Denniss Economist, NGO actor October 2015 (The Australia Institute, speaking in personal capacity) Mark Diesendorf Scientist, activist June 2015 Ian Dunlop Retired senior coal July 2015 industry figure Rob Fowler Environmental Lawyer August 2014 Clive Hamilton (x2) Academic, NGO actor July 2015, August 2017 Peter Kinrade Former NGO actor August 2017 (Australian Conservation Foundation) Kelly O’Shennessy CEO of ACF August 2015 Alan Pears Energy expert August 2015 Janet Rice Active politician, Green August 2015 Party Penny Wheaton Active climate scientist August 2015 Chris Wright Academic at University of July 2015 Sydney

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