!

! ! ! Lost!in!transition:!! competing!discourses!and!! 's!energy!future!

Bevan!Warren!

A!thesis!in!fulfilment!of!the!requirements!for!the!degree!of!!

Doctor!of!Philosophy!

University!of!New!South!Wales!

School!of!Biological,!Earth!and!Environmental!Sciences!!

Climate!Change!Research!Centre

June!2015!

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ORIGINALITY STATEMENT

‘I hereby declare that this submission is my own work and to the best of my knowledge it contains no materials previously published or written by another person, or substantial proportions of material which have been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in the thesis. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis. I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project's design and conception or in style, presentation and linguistic expression is acknowledged.’

Signed

Date: September 30, 2015

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COPYRIGHT STATEMENT

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I also authorise University Microfilms to use the 350 word abstract of my thesis in Dissertation Abstract International (this is applicable to doctoral theses only). I have either used no substantial portions of copyright material in my thesis or I have obtained permission to use copyright material; where permission has not been granted I have applied/will apply for a partial restriction of the digital copy of my thesis or dissertation.'

Signed

Date: September 30, 2015

AUTHENTICITY STATEMENT

‘I certify that the Library deposit digital copy is a direct equivalent of the final officially approved version of my thesis. No emendation of content has occurred and if there are any minor variations in formatting, they are the result of the conversion to digital format.’

Signed

Date: September 30, 2015

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Abstract(

! ! ! This!thesis!critically!examines!Australia’s!efforts!to!transform!its!electricity! regime!along!ecologically!sustainable!lines.!To!carry!out!this!analysis,!it! traces!the!evolution!of!climate!and!energy!policy!at!national,!State!and!local! levels!through!primary!interviews!and!secondary!documentary!analysis!since! the!emergence!of!the!Toronto!Target!in!1988.!Drawing!on!insights!from!the! sustainability!transitions!literature!and!combining!this!with!a!neoOGramscian! perspective,!this!thesis!exposes!and!deepens!our!understanding!of!the!power! relations!that!enable!and!constrain!sustainability!energy!transitions.!! To!date,!Australia!has!made!little!progress!toward!‘greening’!its! electricity!regime.!Nevertheless,!analysis!of!Australia’s!sustainability!energy! transition!narrative!reveals!significant!patterns!in!climate!and!energy! discourse!and!policy!formation.!Over!the!last!25!years!configurations!of! material,!institutional!and!discursive!forces!have!led!to!moments!of!policy! innovation,!which,!particularly!from!2007!onwards,!have!shifted!the!policy! landscape.!The!first!formal!attempt!by!the!Federal!government!to!introduce! an!emissions!trading!scheme!(2008!to!2010)!offered!a!new!path!for!energy! futures.!Ultimately!this!effort!was!defeated!with!relative!ease,!exposing!the! contingent!nature!of!sustainability!energy!transitions!in!Australia.!The! second!attempt,!which!sought!to!introduce!a!carbon!tax!(2010!to!2013),! proved!more!successful.!A!minority!Labor!government!O!provoked!and! supported!by!the!Greens!O!developed!a!new!and!important!overarching! institutional!structure,!paving!the!way!for!significant!reforms.!! These!breakthroughs!notwithstanding,!institutionalising!a! sustainability!energy!transition!has!proven!extremely!challenging.!This!thesis! finds!that!climate!policy!and!energy!policy!in!Australia!have!been!dissociated! from!one!another.!This!failure!of!policy!coordination!and!integration!is! reflected!in!the!diverging!goals!and!paths!of!each!policy!domain,!and!is! caused!in!part!by!attempts!to!reconcile!competing!neoliberal!and!weak!

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ecological!modernisation!discourses.!This!clash,!played!out!within!the!policy! domain!through!key!institutions,!actors,!and!special!interests,!has!led!to!a! range!of!ad!hoc!and!often!contradictory!policy!pathways.!The!inability!of! Australian!governments!to!define!and!articulate!a!coherent!narrative!around! a!sustainable!energy!future!has!constrained!Australia’s!progress!towards! electricity!decarbonisation.! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

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Acknowledgements(

! ! ! There!are!a!number!of!people!who!have!contributed!to!and!enriched!this! thesis.!Donna!Green!has!been!with!me!from!the!very!beginning!of!this! journey,!offering!support,!direction!and!perhaps!most!importantly,! encouragement!and!freedom!to!pursue!my!research!interests.!Her!patience! with!me!is!something!to!be!admired.!I!am!also!indebted!to!Peter!Christoff! who!has!provided!invaluable!feedback!on!a!number!of!drafts.!In!addition,! Peter!introduced!me!to!the!Melbourne!University!‘Climate!Change!Reading! Group’,!which!I!was!warmly!welcomed!into!by!Peter!Ferguson.!A!PhD!can!be! an!isolating!experience,!perhaps!more!so!as!an!external!student,!and!so!I! looked!forward!to!these!gatherings!and!learnt!much!from!the!discussions! that!took!place.! This!thesis!would!of!course!not!have!been!possible!without!the!time! and!effort!of!the!interview!participants.!While!these!people!have!remained! anonymous,!their!input!has!been!greatly!appreciated.!Also,!to!all!of!my! friends!who!would!regularly!ask!Mim,!in!my!absence!from!social!events,! ‘how’s!Bev!going?’!I!thank!them!for!their!kind!words!and!support.! My!parents!have!played!an!immense!role!in!the!completion!of!this! thesis!and!I!am!lucky!to!have!such!a!supportive!family!network.!Lastly!to!my! inner!circle,!Mim,!Noah,!and!Eva.!Their!love!and!companionship!has!been!a! constant!source!of!inspiration!and!I!thank!them!dearly!for!helping!me!see!this! through.! ! !

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Table(of(Contents(

! Abstract!...... !iv! Acknowledgements!...... !vi! Table!of!Contents!...... !vii! List!of!Figures!and!Tables!...... !xi! List!of!Acronyms!...... !xii! ! Chapter!1:!!!!!Introduction!!...... !1! Introduction!...... !1! Thesis!context!...... !2! Aim!and!research!questions!...... !3! Scope!...... !5! Significance!...... !10! Thesis!structure!and!outline!...... !11! ! Chapter!2:!!!!!Sustainability!energy!transitions!...... !14! Introduction!...... !14! Setting!the!scene!...... !15! Socio%technical,systems,and,regimes!...... !16! Lock%in,dynamics!...... !19! Common,characteristics!...... !25! Approaches:!theory!and!practice!...... !28! The,multi%level,perspective!...... !28! Transition,management!...... !31! Challenges!...... !33! The,ambivalence,of,sustainable,development!...... !33! Uncertainties,in,sustainability,energy,transitions!...... !36! Conflict!...... !38! Gaps!in!knowledge!...... !39! Conclusion!...... !42! ! Chapter!3:!!!!!Sustainability!energy!transitions!and!the!dynamics!of!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!change!...... !44! Introduction!...... !44!

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Understandings!of!power!...... !45! Agency,and,structure!...... !45! Distributed,power!...... !49! Towards!a!strategic!conception!of!power!in!sustainability!energy!! transitions:!the!neoOGramscian!approach!...... !52! Hegemony!and!discourse!coalitions!...... !55! Processes!of!change:!incrementalism!and!revolutionary!change!...... !61! Passive,revolution,and,the,advent,of,ecological,modernisation!...... !62! War,of,position!...... !67! Final!considerations!...... !70! Conclusion!...... !71! ! Chapter!4:!!!!!Research!design!...... !73! Introduction!...... !73! Case!study!choice!...... !74! Analytic!approach!...... !77! Methods!of!data!collection!...... !78! Framework!for!analysis!...... !83! Conclusion!...... !86! ! Chapter!5:!!!!!In!the!national!interest:!early!framing!of!Australia’s!! !!!!!!!!!!!!!!!!!!!!!!!!!!energy!future!...... !88! Introduction!...... !88! Early!movements!...... !89! The,Latrobe,Valley!...... !91! The,SECV,and,greenhouse,policy!...... !96! The,National,Greenhouse,Response,Strategy!...... !100! Changing!landscapes!...... !102! The,SECVs,second,discussion,paper!...... !103! The,privatisation,of,'s,electricity!...... !107! Solidifying!and!entrenching!the!fossil!fuel!regime!...... !115! Conclusion!...... !122! ! Chapter!6:!!!!!Climate!responsibility!and!subOnational!responses:!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!assessing!Victoria’s!climate!and!energy!strategy!...... !124! Introduction!...... !124!

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The!Labor!years!...... !124! Phase!one!2000!to!2004:!Victoria's!period!of!institutional!innovation!...... !127! The,Greenhouse,Challenge,for,Energy!...... !130! Carbon,pricing,debates,and,the,role,of,the,NETT!...... !139! Phase!two!(2005!to!2007):!policy!realignment!and!the!advent!of!! ‘clean!’!...... !146! Lost,opportunity:,the,2005,Hazelwood,Power,Station,extension!...... !148! Changing,constellations,of,actors,and,institutionalising,clean,coal!...... !154! Phase!three!(2008!to!2010):!Victoria’s!greenObrown!hybrid!...... !156! Brumby’s,climate,of,opportunity!...... !157! Clean,coal:,carbon,capture,and,storage!...... !162! Sub%national,versus,national:,who’s,responsible?!...... !166! Conclusion!...... !170! ! Chapter!7:!!!!!Local!visions:!carbon!pricing!and!the!Latrobe!Valley!...... !173! Introduction!...... !173! The!Rudd!government:!a!new!course!in!climate!politics?!...... !174! The,Garnaut,Review:,redefining,the,national,interest!...... !175! The,retreat!...... !180! Bringing!the!local!back!in!...... !184! The,Latrobe,City,Council!...... !184! The,Rudd,government,and,the,Council!...... !189! The,Gillard,government,and,the,Council!...... !196! Conclusion!...... !202! ! Chapter!8:!!!!!Diverging!paths:!climate!and!energy!policy!under!the!! !!!!!!!!!!!!!!!!!!!!!!!!!!Gillard!government!...... !205! Introduction!...... !205! Australia's!climate!strategy!and!the!minority!government!...... !206! Negotiating,a,price,on,carbon!...... !207! Australia's!energy!strategy:!transformation!or!preservation?!...... !216! The,EWP,and,the,export,agenda!...... !217! Steering!towards!sustainability!...... !224! Australia’s,RET:,the,‘new’,threat,to,incumbents!...... !224! A,case,for,a,phase%out,strategy?!...... !229! Compatible!agendas?!Making!sense!of!Australia's!climate!and!energy!! policies!...... !234! Conclusion!...... !239! !

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Chapter!9:!!!!!Conclusion!...... !241! Introduction!...... !241! Revisiting!the!research!questions!...... !243! Research,question,one!...... !243! Research,question,two!...... !250! Research,question,three!...... !256! Concluding!comments!and!directions!for!further!research!...... !261! ! Appendices!...... !265! Appendix!1!...... !265! Timeline,of,key,climate,and,energy,policy,events,relating,to,Australia’s, sustainability,energy,transition!...... !265! Appendix!2!...... !269! Participant,Information,Statement,and,Consent,Form!...... !269! Appendix!3!...... !271! Interview,schedule!...... !271! ! References!...... !273! ! ! (

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List(of(Figures(and(Tables(

! ! Figure!1:!PresentOday!brown!coal!mines!and!associated!power!stations!! !!!!!!!!!!!!!!!!!!in!the!Latrobe!Valley.!...... !92! ! Figure!2:!New!governance,!regulatory!and!legislative!NEM!framework.!...... !121! ! Figure!3:!Schematic!illustration!of!the!NETT.!...... !142! ! Figure!4:!Memorandum!of!understanding!between!the!LVTC!and!state!! !!!!!!!!!!!!!!!!!!and!federal!ministers.!...... !198! ! Figure!5:!Modelled!electricity!generation!mix!to!2050.!...... !219! ! Figure!6:!Australia’s!emissions!in!the!core!policy!scenario.!...... !239! ! Figure!7:!State!and!federal!governments!1988O2013.!...... !253! ! ! ! Table!1:!Relationship!between!SET!characteristics,!indicators,!and!! !!!!!!!!!!!!!!!!!probing!questions.!...... !84! ! Table!2:!Coal!Councils!of!Australia.!Typology!of!potential!negative!! !!!!!!!!!!!!!!!!!impacts!on!regional!communities.!...... !192! ! Table!3:!Australia's!demonstrated!economic!energy!resources!(2009!! !!!!!!!!!!!!!!!!!and!2010)!...... !222! ! Table!4:!Timetable!for!coalOfired!power!station!decommissioning!–!! !!!!!!!!!!!!!!!!!possible!phase!out!strategy.!...... !231! ! ! (

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List(of(Acronyms(

! ! ABARE!O!Australian!Bureau!of!Agricultural!and!Resource!Economics! ACA!O!Australian!Coal!Association!! ACLG!OAustralian!Council!of!Local!Governments!! AEMO!O!Australian!Energy!Market!Operator! AGO!O!Australian!Greenhouse!Office! AIGN!O!Australian!Industry!Greenhouse!Network!! AMEC!–!Australian!Minerals!and!Energy!Council! ARENA!O!Australian!Renewable!Energy!Agency!! AYCC!O!Australian!Youth!Climate!Coalition!! BAU!O!business!as!usual! BRCC!O!Business!Roundtable!on!Climate!Change!! BREE!–!Bureau!of!Resources!and!Energy!Economics! BZE!O!Beyond!Zero!Emissions!! CCA!O!Climate!Change!Authority!! CCS!O!carbon!capture!and!storage!! CCoA!O!Coal!Councils!of!Australia!! CEFC!O!Clean!Energy!Finance!Corporation!! CEFP!O!Clean!Energy!Future!Package!! CFCs!O!chlorofluorocarbon! COAG!O!Council!of!Australian!Governments!! COP!O!Conference!of!the!Parties!! CPRS!O!Carbon!Pollution!Reduction!Scheme!! DIICCSRTE!O!Department!of!Industry,!Innovation,!Climate!Change,!Science,!! Research!and!Tertiary!Education!! DoI!O!Department!of!Infrastructure!! DNRE!O!Department!of!Natural!Resources!and!Environment!! DPI!O!Department!of!Primary!Industries!! DSE!O!Department!of!Sustainability!and!Environment! DPC!O!Department!of!Premier!and!Cabinet! DRET!O!Department!of!Energy,!Resources!and!Tourism!! EES!O!environmental!effects!statement!! EV!O!Environment!Victoria! EITE!O!emissionsOintensive,!tradeOexposed!industries!! EWPORG!O!EWP!Reference!Group!! ERIG!O!Energy!Reform!Implementation!Group’s!! EWP!O!Energy!White!Paper!! ESAA!O!Energy!Supply!Association!of!Australia!! ETS!!O!Emissions!Trading!Scheme! ETIS!O!Energy!Technology!Innovation!Strategy!! ESD!O!Ecologically!Sustainable!Development!! GFC!O!Global!Financial!Crisis! GGAS!O!Greenhouse!Gas!Abatement!Scheme! GNP!O!gross!national!product!!

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GRP!O!gross!regional!product! GSP!O!gross!state!product! GWh!O!gigawatt!hours! IEA!O!International!Energy!Agency!! IPT!O!Interim!Planning!Target! IP!O!International!Power!! LETAG!O!Low!Emissions!Technology!Advisory!Group!! LNG!O!liquid!natural!gas! LRET!O!the!LargeOScale!Renewable!Energy!Target!! LULUCF!O!Land!use,!land!use!change!and!forestry! LVMT!O!Latrobe!Valley!Ministerial!Taskforce!! LVTC!O!Latrobe!Valley!Transition!Committee!! MCA!O!Minerals!Council!of!Australia!! MPCC!O!MultiOParty!Climate!Change!Committee!! MCE!O!Ministerial!Council!on!Energy! MLP!O!multiOlevel!perspective!! MT!O!megatons,!one!million!tonnes!! MW!O!megawatts,!one!millions!watts!! MRET!O!Mandatory!Renewable!Energy!Target!! MWh!O!megawatt!hour! MW!O!megawatts! NCP!O!National!Competition!Policy!! NEM!O!national!electricity!market!! NEMCO!O!National!Electricity!Market!Management!Company! NEPP!O!Dutch!National!Environmental!Policy!Plans!! NETT!O!National!Emissions!Trading!Taskforce!! NGOCC!O!NonOGovernment!Organisation!Roundtable!on!Climate!Change!! NGRS!O!National!Greenhouse!Response!Strategy!! NGER!O!National!Greenhouse!and!Energy!Reporting!! PV!–!photovoltaic!(solar)! R&D!O!research!and!development! RDV!O!Regional!Development!Victoria! REC!O!renewable!energy!certificate! RET!O!renewable!energy!target!! SCOT!O!social!construction!of!technology!perspective!! SEAB!O!Sustainability!Energy!Authority!Victoria!! SECV!O!State!Electricity!Commission!of!Victoria!! SET!O!sustainability!energy!transition! SRES!O!SmallOScale!Renewable!Energy!Scheme!! TM!O!transition!management! UNFCCC!O!United!Nations!Framework!Convention!on!Climate!Change! VEET!O!Victorian!Energy!Efficiency!Target!! VENCORP!O!Victorian!Energy!Networks!Corporation! VRET!O!Victorian!Renewable!Energy!Target!! WBGU!O!German!Advisory!Council!on!Global!Change! !

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Chapter(1((

Introduction(

! ! Deep!down!it!is!not!only!about!negotiating!an!effective!reduction!of! emissions!through!transforming!our!energy!and!production!systems,! but!rather!it!is!about!a!negotiation!that!will!affect!economic!and! social!systems,!and!the!balance!of!power.! ! Juan!Mayr,!former!Environment!Minister!for!Colombia,!on! Why,Has,It,Not,Been,Possible,to,Reach,Agreement,on,Climate, Change., , , Introduction( ! In!order!to!reduce!the!likelihood!of!dangerous!climate!change,!developed! countries!will!need!to!reduce!their!carbon!dioxide!emissions!80!to!95!per! cent!below!1990!levels!by!2050!(IPCC,!2007).!Given!the!current!trajectory! of!global!carbon!dioxide!emissions!and!projected!businessOasOusual!(BAU)! trends,!these!appear!challenging!targets.! The!policy!narrative!of!how!to!best!tackle!climate!change!is! characterised!by!conflict,!complexity!and!uncertainty.!Yet!within!this! narrative!there!is!growing!consensus!that!society!must!shift!towards!more! sustainable!forms!of!energy.!In!response,!many!countries!are,!or!claim!to! be,!undergoing!a!transition!towards!a!‘lowOcarbon’!future.!Yet!exactly!what! this!lowOcarbon!future!entails!remains!unclear:!what!kind!of!society!are! we!aiming!for,!and!in!particular,!how!is!this!to!be!achieved?!This!thesis! explores!the!challenges!of!transforming!energy!systems!towards! sustainability!through!a!case!study!on!Australia!and!its!response!to!climate! change.!

1! Chapter!1:!Introduction!

This!introductory!chapter!outlines!the!aim!of!this!thesis,!its!scope,! significance!and!structure.! ! ! Thesis(context( ! In!June!1988,!hundreds!of!scientists!and!policy!makers!from!46!countries! gathered!in!Toronto!with!the!goal!of!initiating!international!action!to! combat!climate!change.!This!conference!yielded!the!Toronto!Target,!the! first!emissions!reduction!target!put!forward!by!the!international! community.!It!proposed!an!initial!global!goal!of!a!20!per!cent!reduction!in! carbon!dioxide!emissions!O!below!1988!levels!O!by!2005!for!industrialised! countries.! Australia!adopted!the!Toronto!Target!in!1990,!stating,!‘…This! decision!puts!Australia!at!the!forefront!of!international!action!to!reduce! emissions!of!all!greenhouse!gases’!(Commonwealth!Government,!1990).! These!sentiments!were!reinforced!two!years!later!when,!upon!signing!the! United!Nations!Framework!Convention!on!Climate!Change!(UNFCCC),!Ros! Kelly,!the!Minister!for!the!Arts,!Sport,!the!Environment!and!Territories! announced,!‘There!is!no!greater!potential!problem!for!the!world!than! greenhouse!induced!climate!change!–!particularly!for!Australia!and!for!our! region!…!It!is!no!secret!that!this!Convention!does!not!go!as!far!as!Australia! wanted!in!terms!of!doing!something!about!the!problem,!but!I!recognise! that!we!have!to!start!somewhere’!(Kelly,!1992).!! In!sharp!contrast!to!these!stated!positions,!by!2005,!Australia’s! total!greenhouse!gas!emissions!O!excluding!land!use,!landOuse!change!and! forestry!(LULUCF)!O!had!increased!by!27!per!cent!over!1990!levels! (UNFCCC,!2013).1!This!was!predominately!driven!by!large!increases!in!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!Only!Cyprus,!Malta!and!Turkey!experienced!higher!percentage!increases!in!greenhouse! gas!emissions!over!this!period!of!all!Annex!I!countries.!Considering!Malta!and!Turkey!are! classified!as!Annex!I!‘economies!in!transition’!(EITs)!and!Cyprus!only!became!an!Annex!I!

! 2! Chapter!1:!Introduction! emissions!from!the!energyOsector,!Australia’s!largest!source!of!greenhouse! gas!emissions.!In!particular,!stationary!energy!emissions!increased!by!52! per!cent!between!1990!and!2010!(DIICCSRTE,!2013).!And,!whereas!in! 1989/90,!renewable!fuels!made!up!10!per!cent!of!Australia’s!electricity! generation!mix,!by!2009/10!their!contribution!had!fallen!to!nine!per!cent! (BREE,!2013a).2! Despite!the!limited!progress!in!terms!of!aggregate!emissions! reductions,!today!the!status!quo!of!the!fossil!fuel!electricity!regime!is! arguably!more!fragile!than!ever.!Over!the!past!25!years,!numerous! environmental!policy!breakthroughs!have!undermined!the!internal! stability!of!the!regime,!causing!some!to!question!its!ongoing!legitimacy.! This!dynamic!between!regime!stability!on!the!one!hand,!and!regime! instability!on!the!other!presents!an!intriguing!puzzle!for!those!seeking!to! determine!Australia’s!progress!towards!electricity!decarbonisation.!Could! it!be!that!Australia!is!further!progressed!than!the!figures!above!suggest?!! ! ! Aim(and(research(questions( ! The!aim!of!this!thesis!is!to!describe!and!analyse!attempts!in!Australia!to! transform!the!electricity!regime!along!ecologically!sustainable!lines,!here! termed!a!sustainability!energy!transition!(SET).3!It!does!so!by!examining!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! country!from!2013,!Australia!could!be!considered!the!worst!performing!Annex!I!country! in!terms!of!emissions!increases.! ! 2!Despite!this!there!has!been!some!growth!in!renewables!over!this!period,!particularly!in! wind!and!solar!energy!technologies.!This!growth!however!has!only!offset!the!decline!in! the!use!of!hydroOelectricity,!hence!Australia’s!overall!share!in!renewable!energy!input!has! remained!virtually!unchanged!over!the!last!20!years.! ! 3!This!thesis!draws!heavily!on!the!sustainability!transitions!literature,!which!is!why!this! specific!terminology!is!used.!The!term!‘lowOcarbon’!transition!is!broader!and!more!vague,! as!alluded!to!in!the!introduction.!This!could!include,!for!example,!a!transition!to!gas,!since! this!technology!has!a!‘lower’!carbon!emission!profile!when!compared!to!coal.!Given!this,!I! use!the!terminology!of!a!sustainability!transition!throughout!this!thesis,!rather!than!a! lowOcarbon!transition.!Nevertheless,!where!others,!either!through!official!documents!or!

! 3! Chapter!1:!Introduction! climate!and!energy!policy!developments!on!three!nested!levels:!the! national,!the!subnational!State!(Victoria)!and!the!local!(Latrobe!Valley,!in! Victoria),!over!the!period!1988!to!2013.4!Debates!around!energy!futures!in! Australia!have!been!particularly!acute!and!politically!fraught,!and!remain! so.!A!SET!narrative!has!utility!because!it!provides!insights!into!regime! stability,!while!also!offering!a!lens!through!which!to!consider!how!political! and!institutional!changes!emerge!and!shape!the!electricity!regime.!! Given!the!course!of!events!outlined!above,!the!logical!question!to! ask!is,!'what!happened?'!The!Australian!government's!early!position! favoured!action,!and!evidence!and!understanding!of!the!dangers!of!climate! change!has!only!grown!since!then.!So!why!has!the!share!of!fossil!fuels!in! the!electricity!regime!changed!so!little?! In!constructing!a!policy!narrative,!this!thesis!explores!these! dynamics!through!three!interrelated!research!questions.! ! 1.!How!has!Australia’s!approach!to!a!SET!changed!over!time!and!space! in!relation!to!the!evolution!of!climate!and!energy!policy?! ! 2.!What!does!Australia’s!SET!narrative!tell!us!about!the!dynamics!of! policy!change?! ! 3.!What!are!the!main!influences!that!have!constrained!the!acceleration! of!a!SET!in!Australia?!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! through!my!interviews,!have!used!the!term!lowOcarbon,!I!have!ensured!that!this!remains! the!same.! ! 4!The!term!‘State’!with!a!capital!‘S’!is!used!throughout!this!thesis!to!denote!the!geographic! and!political!entities!comprising!of!Victoria,!New!South!Wales,!Queensland,!South! Australia,!Western!Australia,!and!Tasmania!that,!along!with!two!Territories!(Australian! Capital!Territory!and!Northern!Territory),!make!up!the!Commonwealth!of!Australia.!The! term!‘state’!without!capitalisation!is!used!more!broadly!and!is!here!defined!as!the! complex!set!of!institutional!arrangements!‘through!which!society!can!exercise!some! leverage!upon!itself’!(Poggi,!1982,!p.!351).!The!state!is!located!within!the!sphere!of! political!power!and!is!deeply!enmeshed!in!all!operations!of!social!life!(Lacey,!1989,!p.!2).!

! 4! Chapter!1:!Introduction!

! ! These!research!questions!generate!a!number!of!subOquestions!that! help!guide!the!analysis.!The!increase!in!Australia’s!electricityOrelated! carbon!dioxide!emissions!has!coincided!with!aggressive!neoliberal! policies.!This study's!approach!allows!us!to!examine!how!these!policies! affect!SETs,!and!more!generally!to!study!the!relationships!between! neoliberal!and!sustainability!discourses.!This!thesis!also!considers!how! SET!debates!have!emerged!in!Australian!political!discourse;!how!such! debates!have!been!defined!and!shaped!by!the!processes!and!strategies!of! conflict,!accommodation,!and!alliance!formation;!under!what! circumstances!shifts!in!the!climate!and!energy!policy!regime!occur;!and! finally,!the!influence!that!the!federal!political!system!has!on!these! dynamics.!In!exploring!these!questions!this!thesis!seeks!to!contribute!to! and!deepen!our!understanding!of!the!governance,!and!in!particular!the! politics,!of!SETs.! ! ! Scope( ! This!thesis’!interest!in!SETs!directs!attention!toward!changes!in!the! electricity!regime.!The!term!regime,!understood!here!as!the!dominant! practices,!rules!and!technologies!that!frame!particular!societal!domains,! has!a!specific!meaning!in!the!transitions!literature.!In!short,!the!electricity! regime!operates!within!the!broader!energy!sector,!and!these!are!linked! through!a!socioOtechnical!system.!This!‘system’!involves!interplay!between! both!technological!and!social!components.!As!Meadowcroft!(2007a,!p.!8)! explains,!‘technologies!are!embodied!in!physical!infrastructure,!but!they! also!involve!interactions!among!the!social!organisations!that!own!and! operate!facilities,!provide!finance,!furnish!equipment!and!services,! consume!outputs,!conduct!R&D,!train!personnel,!and!regulate!the!sector.’! From!this!perspective,!the!electricity!regime!is!used!somewhat!as!an!all!

! 5! Chapter!1:!Introduction! encompassing!term,!and!in!Australia!this!involves!a!range!of!dimensions! and!interests,!for!example,!different!technologies!and!fuels!(i.e.!fossil!fuel! and!renewable);!suppliers,!which,!in!Australia,!is!dominated!by!three! ‘gentailors’,!Origin!Energy,!EnergyAustralia,!and!AGL5;!transmission!and! distribution!networks,!involving!a!mix!of!government!and!private! ownership,!for!example!SP!AusNet,!TransGrid,!and!Powerlink;! independent!regulators,!including!the!Australian!Energy!Regulator!(AER),! the!Australian!Energy!Market!Operator!(AEMO),!and!the!Australian! Energy!Market!Commission!(AEMC);!government!bodies!such!as!the! Ministerial!Council!of!Energy!(MCE);!and!finally!user!and!lobby!groups,! such!as!the!Energy!Supply!Association!of!Australia!(ESAA),!environment! groups!and!unions.!! !Researching!how!electricity!regimes!change!is!a!complex!and!broad! area!of!study,!which!could!be!approached!from!multiple!angles.!Yet!as! Meadowcroft!notes,!changes!to!law!and!a!significant!expenditure!of!social! revenue!are!essential!to!encourage!sustainability!transitions:!such! changes,!‘can!only!be!engineered!through!political!processes,!and! legitimised!and!enforced!through!the!institutions!of!the!state’! (Meadowcroft,!2011,!p.!73).!From!this!point!of!view,!policy!change! precedes!regime!change.!Not!surprisingly!then,!interest!groups!direct! much!of!their!attention!and!resources!towards!governments!in!their! attempt!to!influence!the!direction!of!transitions.!This!points!to!the!policy! domain!as!a!crucial!unit!of!analysis!and!a!common!link!between!the! components!listed!above.6!The!issue!here,!in!Australia!at!least,!is!that!SETs! are!not!formally!integrated!into!the!policy!process!and!ownership!over! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!Gentailor!is!the!term!used!to!indicate!joint!ownership!of!generation!and!retailing! businesses.! ! 6!Burstein!(1991,!p.!328)!defines!a!policy!domain!as!a!component!of!the!political!system! that!is!organised!around!substantive!issues.!These!domains!are!where!actors!contest!and! attempt!to!influence!certain!policy!issues!in!pursuit!of!their!interests!(Howlett!&!Ramesh,! 1995).!

! 6! Chapter!1:!Introduction! policy!design!is!often!difficult!to!discern.!For!example,!Australia’s! Renewable!Energy!Target!(RET)!scheme!was!introduced!by!the! Department!of!Environment,!is!overseen!by!the!Clean!Energy!Regulator,! and!is!complemented!by!the!Australian!Renewable!Energy!Agency! (ARENA)!O!an!agency!linked!to!the!Department!of!Resources,!Energy!and! Tourism.!Identifying!Australia’s!SET!narrative!is!therefore!far!from! straightforward.!To!circumvent!this,!I!establish!a!set!of!SET!‘indicators’!O! which!have!emerged!from!the!sustainability!transitions!literature! (Chapter!2)!O!and!examine!shifts!in!both!climate!policy!and!energy!policy! and!how!these!in!turn!shape!Australia’s!electricity!regime.7!At!times!there! is!overlap!between!these!two!policy!domains!and!at!other!times!they!act!in! isolation,!however!both!remain!key!drivers!of!SET!development.!This! thesis!takes!the!position!that!a!SET!requires!changes!in!both,policy! domains.!This!is!explained!further!in!Chapter!2!through!the!idea!of!coO evolution.! This!thesis!is!also!concerned!with!the!governance!of!SETs!and!in! particular!the!role!of!the!state.!This!raises!a!number!of!issues!around!the! nature!of!power,!which!operates!on!multiple!levels!and!influences!the! policy!process!in!different!ways.!Some!researchers!place!a!greater! emphasis!on!one!of!these!levels!over!the!other.!On!the!micro!level!is!the! issue!of!agency!and!the!dayOtoOday!interactions!between!competing!actors! and!interests.!Lundqvist!(1980,!p.!viii),!for!example,!bluntly!wrote,! ‘background!factors!do!not!make!policy.!Policy!makers!do.’!The!term! policy!makers!can!be!used!in!either!a!narrow!sense,!to!denote!those!with! formal/direct!power!to!make!policy!(i.e.!elected!officials!and/or!appointed!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 7!Throughout!this!thesis!I!refer!generally!to!climate!change!policy!as!climate!policy.! However,!particularly!during!early!climate!policy!developments!in!the!late!1980s!and! 1990s!this!was!commonly!referred!to!as!greenhouse!policy!(in!Australia!at!least).!I!have! chosen!therefore!to!use!the!term!relevant!to!the!period!in!question,!meaning!that!there!is! some!interOchanging!of!terms,!though!both!represent!the!same!policy!area.! !

! 7! Chapter!1:!Introduction! official,!namely!bureaucrats),!or!it!can!be!used!more!broadly!to!encompass! those!in!society!who!influence!policy!in!a!less!formal!sense,!such!as! interest!groups!and!the!media.!Either!way,!this!focus!on!actors!is!what! Wilson!(2000,!p.!248)!categorises!as!political!process!and!decisionOmaking! approaches,!meaning!that!the!focus!is!on,!‘the!role!of!interest!groups,! political!leaders,!policy!makers,!agendas,!and!decisions!in!producing! public!policy.’!! ! This!actorOoriented!approach!though!does!not!provide!a!complete! picture!of!policy!influence.!That!is,!actors!are!enabled!and!constrained!by! institutional!and!structural!conditions.!As!Simeon!(1976,!p.!549)!points! out,!! ...!policy!study!has!become!rather!closely!linked!with!the!study!of! bureaucracy!and!public!administration.!Obviously,!bureaucratic! agencies!are!central!elements!in!the!policyOmaking!process,!and!no! study!of!policy!could!ignore!them.!But!bureaucrats!and!politicians! operate!within!a!broader!political!framework,!defined!by!such!factors! as!prevailing!ideologies,!assumptions!and!values,!structures!of!power! and!influence,!patterns!of!conflict!and!division,!and!so!on.!!! ! Therefore!one!needs!to!consider!not!only!the!‘micro’!level!of!dayOtoOday! decisionOmaking,!but!also!‘meso’!and!‘macro’!level!influences!(Davis!et!al.,! 1988;!Hill,!1997).!On!the!meso!level!is!the!matter!of!institutions,!which! include!the!political,!bureaucratic!and!legal!arrangements!that!govern!and! shape!the!policy!process.!One!of!the!central!tenets!of!federal!political! systems!is!the!formal!division!of!power!between!national!and!subOnational! levels!of!government.!In!Australia!it!consists!of!a!national!government,!six! State!and!two!Territory!governments.!This!federalist!arrangement!creates! both!challenges!and!opportunities!for!SETs.!Constitutionally,! responsibility!for!the!management!of!natural!resources!O!including!the! provision!of!electricity!services!and!decisions!over!power!generation! needs!O!rests!with!the!States.!However!the!creation!of!a!national!energy! market!has!complicated!this!arrangement,!and!led!to!a!mixedOmodel! energy!governance!structure.!Since!federation,!welfare!and!some!resource!

! 8! Chapter!1:!Introduction! policy!areas!O!such!as!health,!education,!and!energy!O!have!gradually! evolved!towards!a!more!centralised!(Commonwealth)!approach.!This! policy!environment!has!created!a!complex!and!often!confusing!guide!for! SET!governance.!At!the!same!time,!however,!these!dynamics!also!create! opportunities.!Because!the!subOnational!lies!at!the!crossroads!of!many!of! these!diverse!influences,!its!role!in!SET!governance!warrants!closer! examination.!The!State!of!Victoria!provides!an!instructive!case!study!for! examining!such!developments.! Lastly,!on!the!macro!level,!is!the!role!of!structures!and!discourse.! From!this!perspective,!certain!discourses!lend!‘legitimacy!to!particular! organisations,!practices,!and!distributions!of!resources’!(Levy!&!Egan,! 2003,!p.!810).!According!to!Geels!(2010,!p.!499),! two!macroOagendas!and!discourses!currently!struggle!for!the!future! of!the!21st!century:!(1)!neoOliberalism!and!globalization!(with! associated!notions!such!as!international!competitiveness,!economic! growth,!limited!regulation,!marketObased!processes,!privatization,! individual!responsibilities),!and!(2)!sustainable!development!and! social!transformation!(ecological!modernization,!risk!society,! stronger!government!roles,!corporate!social!responsibility,!public! participation,!democratization).!While!the!first!macroOagenda!has! dominated!since!the!1980s,!sustainability!transitions!may!require!a! shift!towards!the!second!agenda.! ! The!prevailing!logic!in!Australia's!policy!discourse!is!one!that!adheres! strongly!to!the!ideals!of!neoliberalism.!The!view!is!that,!‘the!first!priority! should!be!a!healthy!economy,!and!that!problems!can!always!be!solved! using!the!wealth!created’!(State!of!the!Environment!Advisory!Council,! 1996,!p.!15).!This!is!reflected!in!Australia's!technological!approach!to! reducing!emissions!(IEA,!2005),!which!preferences!the!role!of!markets.! There!is!scope!therefore,!in!Australia,!to!interrogate!the!role!of!the!state! visOàOvis!the!market!and!whether!or!not!current!policy!measures!and! approaches!to!SETs!are!effective.!! Perhaps!the!most!important!point!to!note!here!is!that!the!role!of! interests,!institutions!and!discourse!do!not!and!cannot!act!in!isolation.!

! 9! Chapter!1:!Introduction!

Analysis!must!take!into!consideration!all!three!components! simultaneously.!To!this!end,!the!thesis!builds!a!conceptual!framework!that! draws!on!the!transitions!theory!(Chapter!2),!which!is!complemented!with! a!neoOGramscian!understanding!on!the!nature!of!power!(Chapter!3).!The! latter,!it!is!argued,!through!its!interpretation!of!hegemony,!provides!a! useful!lens!through!which!to!consider!both!exogenous!and!endogenous! dynamics!in!processes!of!change.!! ! ! Significance( ! As!the!international!community!enters!the!second!commitment!period!of! the!Kyoto!Protocol!(2013O2020),!attention!is!now!shifting!to!a!postOKyoto! framework.!Many!states!are!now!in!the!process!of!formulating!their!postO 2020!emissions!reduction!targets!in!the!lead!up!to!the!Conference!of!the! Parties!(COP)!meeting!to!be!held!in!Paris!in!late!2015.!Australia!is!yet!to! submit!its!postO2020!target!to!the!UNFCCC.!This!thesis,!with!its!focus!on! SETs!as!a!framework!for!achieving!‘deep’!cuts!in!emissions,!is!timely!given! that!many!studies!are!now!suggesting!that!the!two!degree!limit!O!based!on! current!policies!O!is!beyond!reach,!and!the!more!likely!scenario!is!a!three! to!six!degree!temperature!increase!by!the!end!of!the!century!(see!for! example,!IEA,!2011;!Peters!et!al.,!2013;!PwC,!2012;!Sherwood,!Bony,!&! Dufresne,!2014;!World!Bank,!2012).! Although!there!have!been!significant!developments!in! sustainability!transitions!theory!in!the!past!decade,!virtually!all!of!this! work!has!emanated!from!and!focused!on!states!within!the!European! Union.!As!Markard,!Raven,!and!Truffer!(2012)!have!identified,!there!exists! a!European!bias!in!academic!work!on!sustainability!transitions.!Moreover,! Smith,!Stirling,!and!Berkhout!(2005,!p.!1503)!have!noted!that!‘the! construction!of!consensus!tends!to!be!presumed!as!unproblematic!…![and]! …![q]uestions!of!trust,!partnership!and!coalition!building!in!processes!of!

! 10! Chapter!1:!Introduction! change!are!rarely!considered’.!This!leaves!considerable!scope!for!learning! from!places!outside!Europe.!Given!Australia’s!adversarial!political!culture! and,!for!the!most!part,!overt!social!contests!over!sustainability!more! generally,!an!Australian!case!study!has!much!to!offer!sustainability! transitions!research.! ! ! ! Thesis(structure(and(outline( ! This!introductory!chapter!has!outlined!the!research!aim,!scope!and! significance!of!this!study.!Chapters!2!and!3!consider!the!analytical!and! theoretical!issues!of!relevance!to!this!thesis.!Chapter!2!introduces!and! explores!the!notion!of!a!sustainability!transition.!It!begins!by!outlining!the! key!features!of!sustainability!transitions,!including!the!issue!of! technological!lockOin,!which!has!become!a!common!and!persistent!feature! of!many!large!socioOtechnical!systems,!such!as!electricity.!The!chapter!then! moves!on!to!examine!the!main!theoretical!approach!used!in!the!study!of! socioOtechnical!transitions!O!the!multiOlevel!perspective!O!highlighting!both! its!advantages!and!disadvantages.!! ! ! !Chapter!3!then!addresses!a!consideration!underexamined!in!the! literature!on!sustainability!transitions!–!the!role!of!power.!This!is!dealt! with!in!two!ways.!First,!the!theme!of!governance!is!used!to!illuminate!the! complexities!around!distributed!power!and!agencyOstructure!interactions.! Second,!a!neoOGramscian!perspective!is!introduced!to!better!account!for! the!dynamics!of!regime!change!in!SETs.!Taken!together,!Chapters!2!and!3! yield!the!conceptual!framework!used!in!this!thesis.!Chapter!4!then!details! both!my!research!orientation!and!the!methodology!used,!including!how! the!conceptual!frame!is!employed!throughout!this!thesis.! ! ! Chapters!5,!6,!7!and!8!present!a!policy!history!and!also!the!thesis’! analysis!of!Australia’s!attempts,!over!the!last!25!years,!to!transform!its! electricity!regime!along!ecologically!sustainable!lines.!Chapter!5!covers!

! 11! Chapter!1:!Introduction!

Australia’s!early!response!through!to!2007.!It!considers!how!SET!debates! have!emerged!on!the!political!agenda!and!how!the!electricity!regime!has! evolved,!particularly!in!response!to!the!rise!of!neoliberal!policies! throughout!the!1990s.!In!Chapter!6,!a!case!study!on!the!State!of!Victoria! (1999!to!2010)!is!used!to!examine!the!role!of!the!subOnational!in!SET! governance.!This!chapter!has!a!particular!focus!on!the!institutional! capacities!of!the!Victorian!government!in!response!to!the!SET!goal.! Chapter!7!examines!the!events!surrounding!the!Rudd!government's!failed! Carbon!Pollution!Reduction!Scheme!(CPRS),!and!introduces!into!the! analysis!the!often!forgotten!role!of!the!local!as!a!shaper!of!policy! responses!and!directions.!Chapter!8!then!explores!the!Gillard! government’s!Clean!Energy!Future!Package!through!both!the!Energy! White!Paper!(EWP)!and!policy!to!introduce!a!price!on!carbon.!These! chapters!strive!to!expose,!discuss!and!evaluate!competing!claims!about! energy!futures!in!Australia.!! Chapter!9!concludes!this!thesis!by!drawing!together!and! synthesizing!the!research!findings.!Through!the!Australian!SET!narrative,! it!reveals!significant!patterns!in!climate!and!energy!discourse,!and!policy! formation.!Over!the!last!25!years!configurations!of!material,!institutional! and!discursive!forces!have!led!to!moments!of!SET!policy!innovation,! which,!particularly!from!2007!onwards,!have!shifted!the!policy!landscape.! Nevertheless,!despite!these!‘policy!windows’,!institutionalising!a!SET!has! proved!particularly!challenging.!The!core!finding!in!this!thesis!is!that! climate!policy!and!energy!policy!in!Australia!have!been!dissociated!from! one!another.!This!failure!of!policy!coordination!and!integration!is!reflected! in!the!diverging!goals!and!paths!of!each!policy!domain,!and!is!caused!in! part!by!attempts!to!reconcile!competing!neoliberal!and!sustainable! development!discourses.!This!clash,!played!out!within!the!policy!domain! through!key!institutions,!actors,!and!special!interests,!has!led!to!a!range!of! ad!hoc!and!often!contradictory!policy!pathways.!This!has!clouded!

! 12! Chapter!1:!Introduction!

Australia’s!SET!vision!and!fuelled!a!policy!culture!of!scepticism,!with! actors!unclear!as!to!the!‘real’!direction!of!policy.!The!result!is!that! sustainable!energy!policies!are!particularly!susceptible!to!changing! government!ideologies,!making!longOterm!goals,!such!as!a!SET,!difficult!to! implement!and!maintain.!As!such,!Australia’s!SET!remains!stalled!at!the! takeOoff!phase.

! 13! !

Chapter(2(

Sustainability(energy(transitions(

! ! We!are!thus!in!a!major!transition!towards!a!world!with!different! values,!a!transition!that!cannot!wait!for!spontaneous!change!to! happen,!but!that!must!somehow!be!socially!and!collectively!guided! with!a!sense!of!urgency!(Perez,!2010).! ! ! Introduction( ! This!chapter!introduces!and!explores!the!concept!of!sustainability! transitions.!In!doing!so,!it!seeks!to!identify!the!relevant!analytical!and! conceptual!features!that!will!help!guide!the!thesis’!inquiry.!! According!to!Rotmans!and!Loorbach!(2010,!p.!128),!‘a!transition! implies!that!an!essential!change!of!generally!shared!assumptions!and!role! distribution!must!take!place’.!It!is!quite!clear!that!the!generally!shared! assumptions!and!understandings!of!how!we,!as!a!society,!produce!and!use! electricity!are!now!being!challenged.!The!reasons!are!many:!improved! scientific!knowledge!has!elucidated!the!causes!and!impacts!of!climate! change;!technological!innovation!has!offered!more!efficient!electricity! production!and!systems;!societal!shifts,!notably!sustainable!development's! emergence!as!a!discourse!and!its!integration!into!policy!agendas;!the!peakO oil!phenomenon;!political!and!regulatory!shifts!that!disrupt!power! relations!and!prompt!changes!in!companies'!behaviour;!and!substantial! increases!in!electricity!prices!that!affect!consumer!confidence!in!the! regime.1!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!This!is!particularly!true!when!combined!with!the!rapid!decrease!in!costs!of!some! renewable!technologies.!For!example,!in!Australia,!electricity!prices!have!increased!

! 14! Chapter!2:!Sustainability!Energy!Transitions!

To!suggest!that!the!shared!assumptions!in!current!electricity! regimes!are!being!challenged,!however,!does!not!necessarily!imply!that!a! SET!will!be!successful.!They!remain!open,!undecided,!and!unpredictable! phenomena.!Nonetheless,!in!order!to!be!able!to!locate!a!SET!narrative,!as! this!thesis!attempts!to!do,!certain!criteria!are!necessary!if!we!are!to! ‘measure’!and!assess!Australia’s!progress.!This!chapter!establishes!these! boundaries.!It!begins!by!introducing!the!notion!of!a!socioOtechnical!system! and!regime,!which!much!of!the!transitions!literature!is!based!on,!before! outlining!the!issue!of!‘lockOin’,!what!Unruh!(2000)!describes!as!a!process! of!technological!and!institutional!coOevolution!caused!by!path!dependency.! It!then!moves!on!to!define!the!characteristics!of!sustainability!transitions.! Next,!it!outlines!two!common!approaches!to!sustainability!transitions,!in! relation!to!both!theory!and!application,!which!are!the!multiOlevel! perspective!(MLP)!and!transition!management!respectively.!From!this,! several!challenges!are!highlighted!and!explored!through!the!themes!of! ambivalence,!uncertainty!and!conflict.!The!chapter!concludes!by! identifying!and!summarising!the!main!criticisms!found!in!the!transitions! literature.!These!knowledge!‘gaps’!forms!the!basis!for!a!more!critical! discussion!of!SETs,!which!is!undertaken!in!Chapter!3.!!! ! ! Setting(the(scene( ! Dutch!National!Environmental!Policy!Plans!(NEPPs)!have!played!a!key! role!in!the!transitions!storyline!by!broadening!the!analytical!frame!and! moving!beyond!a!focus!on!individual!technologies!and!ways!in!which! cleaner!alternatives!have!been!hindered!or!promoted!(Smith,!2003).!The! first!such!plan!(NEPP1)!in!1989!echoed!weak!forms!of!ecological! modernisation!that,!‘promoted!cleaner!technology,!marketObased!policies,!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! dramatically,!primarily!due!to!increased!network!costs,!making!solar!pv!cost!competitive! with!coal!at!the!retail!level!(Parkinson,!2012).!

! ! 15! Chapter!2:!Sustainability!Energy!Transitions! environmental!management!systems,!and!voluntary!agreements!between! state!and!industry’!(Smith!&!Kern,!2009,!p.!79).!Subsequent!plans,!NEPP2! (1993)!and!NEPP3!(1998),!further!institutionalised!this!approach! (Keijzers,!2000).!However,!the!policy!language!of!NEPP3!began!a!shift! from!an!incremental!innovations!mindset!to!one!more!concerned!with! radical!innovations.!Nevertheless,!as!Smith!and!Kern!(2009)!highlight,! NEPP3!persisted!with!a!neoclassical!economic!framework.! Notwithstanding!this!framework,!this!plan!provided!a!foundation! from!which!radical!innovations!could!be!conceived.!This!shift!was!evident! with!NEPP4,!at!least!in!discursive!terms.!This!plan!employed!a!transitions! approach!that!emphasised!the!reconfiguration!of!entire!socioOtechnical! systems,!such!as!energy,!transport,!and!agriculture.!According!to!NEPP4:! Solving!the!major!environmental!problems!requires!system! innovation;!in!many!cases!this!can!take!on!the!form!of!a!long!drawnO out!transformation!process!comprising!technological,!economic,! socioOcultural!and!institutional!changes.!The!period!until!such!a! transformation!is!complete!can!be!seen!as!a!transition!(VROM,!2001,! p.!30).! ! The!transitions!approach,!as!Smith!and!Kern!(2009)!argue,!was! originally!conceived!as!an!explicit!attempt!to!reinvigorate!policy!for! ecological!modernisation.!More!importantly,!it!was!an!attempt!to!bring!the! analytical!focus!back!to!the!regime!and!socioOtechnical!systems!level,!away! from!the!individual!technology!perspective!that!dominated!much!of!the! 1990s!(Smith,!2003).!While!the!microOdynamics!are!still!considered! important,!the!‘causal!emphasis!(for!transitions)!is!more!on!the!broader! societal!selection!environment!than!on!the!internal!drivers!of!niche! innovations’!(Geels!&!Schot,!2010,!p.!27).!! ! Socio%technical,systems,and,regimes, ! A!common!starting!point!for!transition!researchers!is!that!crises!such!as! climate!change!are!considered!as!symptomatic!of!deeperOlying!crises,!

! ! 16! Chapter!2:!Sustainability!Energy!Transitions!

‘rooted!in!the!disbalance!between!unsustainable!consumption!and! production!patterns’!(Grin,!Rotmans,!&!Schot,!2010,!p.!1).!Consequently,!it! is!not!possible!to!solve!the!climate!crisis!solely!through!technological! innovation;!it!is!as!much!a!social!problem!as!a!technological!one.!Based!on! this!premise,!socioOtechnical!transitions!have!emerged!as!a!relatively!new! and!growing!area!of!research.! Understandings!of!the!relationship!between!society!and!technology! have!been!around!for!many!years.!The!socioOtechnical!concept!emerged! from!the!works!of!Eric!Trist!and!Fred!Emery,!who!sought!to!explain!the! diffusion!of!innovative!work!practices!and!organisational!arrangements!in! the!British!coal!mining!industry!during!the!early!1950s.!The!best!approach! to!studying!work!organisations,!it!was!argued,!was!to!consider!the! requirements!between!both!the!social!and!technical!elements!in!the! workplace,!rather!than!as!a!social!system!alone.!Highlighting!the!interplay! of!technical!and!social!elements,!Emery!(1978,!p.!41)!states!that,!‘the! technological!component,!in!converting!inputs!into!outputs,!plays!a!major! role!in!determining!the!self!regulating!properties!of!an!enterprise.’!! As!a!new!field!of!inquiry!(Trist,!1981),!this!approach!heavily! influenced!subsequent!approaches!to!social!and!technological!relations,! such!as!the!large!technical!systems!concept!(Hughes,!1987),!and!the!social! construction!of!technology!perspective!(SCOT)!(Pinch!&!Bijker,!1987).! Hughes’!(1983)!seminal!study!on!the!electrification!of!Western!society! drew!on!this!socioOtechnical!concept!and!greatly!influenced!transition! scholars.!Hughes!saw!the!electricity!sector!as!a!socioOtechnical!system! comprising!aspects!of!electricity!production,!transformation,!distribution,! and!consumption.!The!interdependencies!between!a!system's! technologies,!such!as!generators,!cooling!towers,!and!transmission!lines,! extend!to!the!wider!community.!Transitions!are!therefore!about!shifting! entire!‘systems’.!These!systems!operate!at!the!level!of!societal!domains,!

! ! 17! Chapter!2:!Sustainability!Energy!Transitions! such!as!energy,!transport,!and!agriculture,!and!they!are!embedded!in! society!and!culture!(Grin!et!al.,!2010).! Building!on!neoOinstitutional!theory,!Geels!(2004)!developed!this! social!component!further!by!incorporating!the!concept!of!regimes.!For! Geels!a!socioOtechnical!regime!acts!as!a!metaOcoordination!of!other! regimes,!such!as!a!policy!regime,!scientific!regime,!and!technological! regime.!A!socioOtechnical!regime!links!the!various!different!social!groups! that!carry!and!reproduce!socioOtechnical!systems!through!three!types!of! rules.!These!are!cognitive!rules!(belief!systems,!guiding!principles,!goals,! and!problem!definition);!regulative!rules!(regulations,!standards,!and! laws);!and!normative!rules!(values,!and!behavioural!norms).!Importantly,! since!regimes!require!legitimacy,!including!the!concept!of!regimes!obliges! the!literature!to!focus!more!explicitly!on!the!role!of!political!institutions,! ideologies,!and!power.!From!this!perspective!the!socioOtechnical!regime! represents!the!‘deep!structure’!of!the!socioOtechnical!system!(Geels,!2004).! ! This!understanding!of!a!regime!broadly!fits!with!the!international! relations!interpretation!of!a!regime!as!the,!‘implicit!or!explicit!principles,! norms,!rules,!and!decisionOmaking!procedures!around!which!actors’! expectations!converge!in!a!given!area!of!international!relations’!(Krasner,! 1983,!p.!2).!Geels!asserts!that!these!rules!account!for!stability!of!socioO technical!systems.!Similarly,!Hughes!(1986)!refers!to!a!‘seamless!web’,! whereby!all!the!different!interdependent!elements!coOevolve,!so!that!as! one!system!grows!the!others!do!too.!The!result!is!structural!patterns!that! shape!innovation!and!create!trajectories!of!social!development!(Smith,! Voß,!&!Grin,!2010,!p.!440).!This!relates!to!the!concept!of!‘lockOin’,!which! requires!further!explaining!before!moving!forward!to!define!the! characteristics!of!sustainability!transitions.!! ! ! !

! ! 18! Chapter!2:!Sustainability!Energy!Transitions!

Lock%in,dynamics, ! The!failure!to!address!the!climate!crisis!has!increasingly!called!into! question!how!nation!states!approach!and!attempt!to!deal!with!such!crises.! Policy!solutions!tend!to!be!either!market!or!regulatory!measures.! Naturally!both!types!of!measures!can!be!used,!although!in!general,! emissions!trading!schemes!remain!the!favoured!option!in!most!OECD! countries.!However,!the!experience!of!the!European!Union’s!(EU)! Emissions!Trading!Scheme!(ETS)!points!to!the!realisation!that,!‘financial! instruments,!such!as!subsidies!and!taxes,!although!needed,!may!be! insufficient!to!alter!current!paths!of!technological!development’! (Safarzyńska+&+van+den+Bergh,+2010,+p.+297).2!As!such,!new!forms!of! regulatory!regimes!are!emerging!in!countries!like!the!Netherlands,! whereby!transitions!are!‘microO!managed’,!primarily!by!the!state,!in!order! to!steer!towards!an!agreed!social!goal!–!in!this!case!sustainability.!This! emphasis!on!steering!in!the!literature!stems!from!the!existence!of!lockOin! dynamics.! It!is!difficult!to!exaggerate!the!extent!to!which!fossil!fuels!have! influenced!economic!development!in!the!20th!Century.!Combined!with! developments!in!other!technological!spheres,!such!as!computing!and! communication,!this!energy!source!opened!the!door!for!‘profound! possibilities!for!economic!growth’!(Scrase!&!Smith,!2009,!p.!711).!As!a! result,!particularly!after!World!War!II,!growth!in!energy!use!and!economic! growth!were!directly!coupled!and,!in!the!eyes!of!energy!ministries!at!least,!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!The!recent!downward!trend!in!emissions!in!the!U.S!has!also!reinvigorated!the! regulation!versus!market!policy!debate.!This!immediate!reduction!in!emissions!is!being! caused!by!a!shift!from!coal!to!gas,!which!is!being!driven!not!by!a!formalised!price!on! carbon!but!by!‘other’!economic!factors!(low!cost!of!gas,!falling!costs!of!renewables,! slowing!growth!in!electricity!demand,!rising!construction!costs,!and!rising!coal!prices),!as! well!as!new!regulatory!powers!of!the!EPA!through!their!Mercury!and!Air!Toxics! Standards.!In!2012!8,800!MW!of!coal!capacity!was!retired!and!between!2013!and!2022,! U.S!power!companies!have!formalised!plans!to!retire!around!28,000!MW!of!coalOfired! generating!capacity!(Niven!&!Powell,!2013).!

! ! 19! Chapter!2:!Sustainability!Energy!Transitions! this!relationship!was!presumed!to!be!an!unbreakable!and!linear!one! (Newell!&!Paterson,!2010).!! Consequently,!all!major!subOsystems!in!industrialised!societies!such! as!transport,!agriculture,!energy,!manufacturing,!and!construction! developed!a!strong!dependency!on!fossil!fuels,!which!‘lock!nations!into! certain!forms!of!electricity!provision’!(Scrase!&!Smith,!2009,!p.!711).!These! processes!have!complex!and!mutually!reinforcing!dynamics,!often!referred! to!as!lockOin!dynamics.! Much!of!lockOin!theory!stems!from!the!work!of!Paul!David!(1985)! and!Brian!Arthur!(1994).!These!authors!used!the!concept!of!path! dependence!in!order!to!understand!why!some!technologies!become! established!and!firmly!entrenched!over!others.!This!term!is!predicated!on! the!observation!that,!‘technology!generally!advances!based!on!past! investments!in!knowledge!through!accumulated!R&D!and!learning! through!experience!in!the!use!of!the!technology’!(Unruh,!1998,!p.!59).! The!QWERTY!keyboard!is!an!often!cited!case!of!‘path!dependence’! (David,!1985).!In!early!preOcommercial!typewriter!models,!alphabetically! ordered!keys!suffered!from!jamming!when!struck!in!rapid!succession.!The! solution!was!to!slow!down!the!typist!by!separating!commonly!used!letters.! This!led!to!the!QWERTY!layout.!The!issue!for!David!was!why,!particularly! given!the!advent!of!the!electronic!keyboard,!has!the!QWERTY!design! persisted!when!more!efficient!alternatives!designs!existed.3!Here!David! introduces!the!concept!of!path!dependence,!arguing!that!the!continued! dominance!of!the!QWERTY!design!is!due!not!to!its!technological! usefulness!but!to!the!entrenched!knowledge!that!enables!typists!to!type! faster.!The!acquisition!of!knowledge!is!cumulative!O!past!events!have!an! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3!One!such!design,!according!to!David!(1985),!was!the!Dvorak!Simplified!Keyboard!(DSK).! In!his!study!of!path!dependency,!David!cites!two!sources!that!reinforce!this!view.!The! first!was!by!Apple!advertising!copy,!who!purported!the!DSK!to!be!20O40%!faster.!The! second!was!by!the!U.S.!Navy!whose!experiments!showed!that!the!increased!efficiency!of! the!DSK!model!would!recoup!the!cost!of!retraining!typists!within!the!first!ten!days!of! their!full!time!employment.!

! ! 20! Chapter!2:!Sustainability!Energy!Transitions! important!bearing!on!future!technological!directions.!This!may!favour! some!designs!and!disadvantage!others.!In!the!case!of!the!QWERTY! keyboard,!social!convenience!and!efficiency!conspired!to!produce!the!path! that!determined!future!design.!Path!dependency!can!lead!to!strong! feedback!mechanisms:!as!one!technology!gains!ascendency,!resources!will! then!flow!towards!that!design,!increasing!its!dominance.!! Arthur!(1994)!outlines!four!ways!that!technologies!can!generate! increasing!returns:!economies!of!scale;!learning!economies;!adaptive! expectations;!and!network!economies.!Economies!of!scale!refers!to!the! reduced!costs!per!unit!as!fixed!costs!are!spread!over!an!increased!number! of!goods.!Learning!economies!entail!knowledge!and!specialised!skills! gained!through!production!and!market!experience,!which!generally!have! the!effect!of!reducing!costs!(Arrow,!1962).!Adaptive!expectations!are!the! increased!confidence!in!quality,!performance!and!longevity!that! accompany!increasing!adoption!and!the!concomitant!removal!of! uncertainty!(Arthur!&!Lane,!1991).!The!final!term,!network!economies,! refers!to!the!interrelations!between!technological!systems!and!their!users.! That!is,!as!the!primary!network!grows,!so!too!does!the!value!of!the!subO systems!associated!with!it!(Unruh,!2000).!! Arthur!(1989)!and!David!(1997)!argue!that!technologies!can!become! lockedOin!as!a!result!of!these!various!types!of!increasing!return!and! efficiency.!Increasing!returns!provide!important!insights!into!the! dynamics!of!lockOin,!particularly!from!an!economic!viewpoint.!However,! the!socioOtechnical!systems!perspective!suggests!a!broader!notion!of!lockO in!is!required.!As!already!described,!socioOtechnical!systems!emerge! through!coOevolutionary!processes!of!economic,!technological,! institutional,!and!socioOpolitical!dynamics.!These!systems!develop,!‘webs! of!interdependent!relationships!with!buyers,!suppliers,!and!financial! backers!…!and!patterns!of!culture,!norms!and!ideology’!(Tushman!&! Romanelli,!1985,!p.!177).!SocioOtechnical!systems!then!are,!‘structurally!

! ! 21! Chapter!2:!Sustainability!Energy!Transitions! constrained!by!historically!established!commitments!embodied!in! infrastructures,!networks,!institutions,!practices!and!discourses’!(Smith!&! Stirling,!2007,!p.!355).!This!suggests!that!lockOin!occurs!on!a!range!of! different!levels!and!from!a!variety!of!sources.!These!relate!to!one!another! and!create!‘[a]!commitment!to!particular!configurations!of!the!socioO technical!system!in!question’!(Smith!&!Stirling,!2007,!p.!354).!! These!configurations!can!be!described!as!overlapping!material,! institutional,!and!discursive!commitments!to!the!incumbent!regime,!which! require!the!coordinated!mobilisation!of!actors!and!resources!(Smith!&! Stirling,!2007).!On!the!material!level,!these!commitments!entail!capital! investments,!sunk!costs,!legallyObinding!contracts,!and!government! policies!and!practices!such!as!regulatory!protection,!subsides!and!R&D! investments!(Walker,!2000).!! When!present,!these!commitments!hinder!the!emergence!of!rival! technologies!in!several!ways.!Regarding!investment,!the!majority!of! investment!capital!is!funded!through!companies’!internal!cash!flow! (Henwood,!1998),!and!new!technologies!have!little!if!any!such!funds.! Furthermore,!when!making!loans,!financial!institutions!generally!give! preference!to!companies!with!collateral!and!proven!ability!to!service!debt! (Unruh,!2000),!in!other!words,!dominant!designs.!Funding!for!emerging! designs!often!comes!from!venture!capital,!or!government!research! programs,!but!these!have!much!stricter!conditions!or!higher!costs!(Unruh,! 2000).!Moreover,!sunk!costs!and!contracts!create!disincentives!because!to! abandon!these!commitments!would!create!economic!losses.!Certain!types! of!government!policy,!such!as!financial!subsidies!for!fossil!fuel!production,! make!certain!investment!decisions!less!risky!than!others.4!For!example,!as! Ayres!(1991)!points!out,!most!businesses!facing!market!risk!insist!on!a! rate!of!return!of!around!25,!yet!the!real!rate!of!return!for!electric!power! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4!Riedy!and!Diesendorf!(2003)!estimated!this!subsidy!to!be!around!$6.5!billion!per!year.! In!more!recent!studies!the!ACF!(2011)!has!valued!this!figure!at!$12!billion.!!

! ! 22! Chapter!2:!Sustainability!Energy!Transitions! plants!in!the!US!ranges!from!five!to!10!.!Nevertheless,!these!investments! are!made!virtually!risk!free!through!a!range!of!government!subsides! (Ayres,!1991).! In!addition,!interactions!between!governments!and!professional!and! social!networks!create!lasting!institutional!commitments.!For!example,! Pearse!(2005)!documented!how,!in!Australia,!fossil!fuel!lobbyists!had! infiltrated!government!to!become!fully!engaged!in!policy!making.!The! problem!here,!as!outlined!by!Walker!(2000),!is!one!of!‘information! management’.!Their!influence!over!governments!effectively!permits!lobby! groups!to!gain!‘control!over!the!kinds!and!quantities!of!information!that! enters!government,!which!is!then!released!into!the!public!domain’! (Walker,!2000,!p.!842).!Conversely,!government!officials!would!end!their! terms!in!office!and!transition!to!employment!in!companies!they!had!been! regulating!(Pearse,!2007).!This!is!a!process!Unruh!(2000)!refers!to!as!the! ‘revolving!door.’!These!practices!entrench!government!agencies!in! continuing!to!develop!policies!that,!at!best,!could!be!described!as! sympathetic!to!the!interests!of!those!companies!they!are!empowered!to! regulate!(Lowi,!1979).!For!example,!in!Australia!in!the!late!1990s,!a!seat! on!the!steering!committee!of!the!government!agency!the!Australian! Bureau!of!Agricultural!and!Resource!Economics!(ABARE)!cost!$50,000! (Hamilton,!2007),!leading!to!an!overOrepresentation!of!corporations.!Not! surprisingly,!ABARE!has!been!a!strong!advocate!for!fossil!fuel!industries! (Pearse,!2007).!Perhaps!an!even!more!blatant!abuse!of!governmentO business!relations!is!the!donation!patterns!to!political!parties.!The! Cormack!Foundation,!in!Australia,!for!which!the!CEO!of!Western!Mining! Corporation!(WMC)!served!as!a!director,!raises!money! ...!!from!some!of!the!biggest!fossil!fuel!companies,!including!BHP,! Wesfarmers!and!Rio!Tinto,!and!in!2004O05!it!was!the!single!biggest! donor!to!the!Liberal!Party,!giving!$1.9!million.!Since!1998!it!has! donated!a!total!of!$10.64!million!to!the!party!(Hamilton,!2007,!p.! 133).! !

! ! 23! Chapter!2:!Sustainability!Energy!Transitions!

These!developments!are!driven!by!discursive!commitments,!often! revolving!around!economic!growth!and!employment,!or!more!broadly! speaking,!neoliberal!discourses.!In!terms!of!climate!and!energy!policy,! these!discursive!commitments!have!helped!coordinate!action!in!support!of! the!incumbent!fossil!fuel!regime.!They!have!been!articulated!through!five! prominent!storylines:!they!directly!challenged!the!science!of!climate! change;!they!argue!that!reducing!emissions!would!pose!considerable!costs! and!therefore!threaten!national!economic!interests;!national!emissions! reductions!would!have!little!effect!on!a!global!level;5!international! agreements!should!only!be!made!with!the!participation!of!all!countries!–! including!developing!countries;!and!reducing!emission!would!result!in! massive!job!losses.! The!mutually!reinforcing!dynamics!outlined!thus!far!all!contribute!to! the!stability!and!lockOin!of!socioOtechnical!systems.!One!of!the!great! challenges!of!transitioning!electricity!regimes!towards!sustainability! hinges!on!the!capability!to!escape!such!conditions!(Safarzyńska+&+van+den+ Bergh,!2010).!This!requires,!as!Smith!and!Stirling!(2007)!suggest,!strategic! governance!intervention.!To!this!end,!transition!management!has!emerged! as!fruitful!policy!tool!O!as!detailed!later!in!this!chapter.! First!though,!this!thesis!considers!the!specific!characteristics!common!to! sustainability!transitions.!These!characteristics!are!particularly!important! in!helping!to!identify!Australia’s!SET!narrative.!! The!socioOtechnical!transitions!literature!draws!on!theoretical! insights!from!a!range!of!disciplines,!including!innovation!studies!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!This!storyline!is!particularly!strong!in!Australia!where!national!emissions!equate!to!1.5! per!cent!of!global!emissions.!In!this!scenario!Australia!ranks!as!the!fifteenth!largest! emitter.!An!emerging!storyline!based!on!carbon!footprint!though,!which!entails!both! domestic!emissions!and!exported!emissions!from!coal,!argues!that!Australia’s! contribution!to!global!climate!change!is!far!greater!than!reflected!in!the!1.5!per!cent! figure.!In!the!carbon!footprint!model!Australia’s!contribution!represents!around!4!per! cent!and!becomes!the!sixth!largest!emitter!globally.!See!for!example;!Green!and!Finighan! (2012);!Christoff!(2012). !

! ! 24! Chapter!2:!Sustainability!Energy!Transitions!

(Jacobsson!&!Bergek,!2011),!complex!systems!theory!(Rotmans!&! Loorbach,!2009),!sociology!and!institutional!theory!(Geels,!2004),! evolutionary!economics!(van!den!Bergh!et!al.,!2006),!and!governance! theory!(Meadowcroft,!2005;!Smith!et!al.,!2005).!Taken!together,!these! different!lenses!have!brought!a!distinctive!flavour!to!thinking!about! sustainability!transitions,!that!is,!transitions!oriented!towards! sustainability,!and!what!they!entail.!I!classify!these!insights!below!into!five! core!characteristics.! ! Common,characteristics, ! The!first!characteristic!is!that!sustainability!transitions!are!macroscopic.! As!outlined!above,!the!empirical!focus!of!transitions!occurs!on!a!systems! level.!This!means!analysis!is!directed!at!‘organisational!fields’!(Geels!&! Schot,!2010).!According!to!DiMaggio!and!Powell!(1983,!p.!148)!these!fields! represent!those!organisations!that!‘constitute!a!recognised!area!of! institutional!life:!key!suppliers,!resource!and!product!consumers,! regulatory!agencies,!and!other!organisations!that!produce!similar!services! or!products’.!The!virtue!of!this!unit!of!analysis,!as!DiMaggio!and!Powell! argue,!is!that!it!‘directs!our!attention!not!simply!to!competing!firms!…!,!or! to!networks!of!organisations!that!actually!interact!…!,!but!to!the!totality!of! relevant!actors’!(p.!148).!Sustainability!transitions!are!therefore!multiO dimensional.! The!second!characteristic!of!sustainability!transitions!is!that!they! involve!processes!of!coOevolution.!This!points!to!the!mutually!reinforcing! dynamics!between!economic,!cultural,!politicalOinstitutional,!technological,! and!ecological!subsystems!that!can!lead!to!irreversible!patterns!of!change! and!can!coOdetermine!a!transition!(Grin!et!al.,!2010,!p.!4).!The!coOevolution! concept!has!been!particularly!useful!for!explaining!the!stability!of! incumbent!regimes.!!

! ! 25! Chapter!2:!Sustainability!Energy!Transitions!

The!third!characteristic!of!sustainability!transitions!concerns!the! role!of!visions.!Sustainable!development!is!an!ambiguous!and!contested! concept!and!so!agreement!over!the!‘right’!course!of!action!is!virtually! impossible.!Moreover,!the!‘end!game’!is!not!necessarily!known.!This!begs! multiple!questions.!How!should!we!transition?!What!kinds!of!policies! might!be!most!effective?!What!are!we!transitioning!from!and!what!are!we! transitioning!to?!Are!we!talking!about!a!shift!from!fossil!fuels!to! renewables,!or!towards!lowOcarbon!technologies!that!retain!fossil!fuels!as! pivotal!energy!system!components!(i.e.,!carbon!capture!and!storage! [CCS])?!Or!does!this!transition!entail!a!shift!from!a!centralised!to!a! distributed!energy!system?!The!answer!is!that!there!is!no!universally! agreed!or!right!SET;!definitions!are!open!to!interpretation!and!transitions! can!take!many!paths.!A!major!challenge!to!initiating!and!sustaining!a!SET! is!creating!some!kind!of!shared!vision.!Transition!researchers!take! particular!interest!in!the!dynamics!of!how!this!vision!takes!concrete!form,! that!is,!how!different!discourses!shape!these!visions.! The!fourth!characteristic!of!sustainability!transitions!is!that!they! require!‘steering’,!due!to!the!nature!of!lockOin!dynamics.!It!is!true!that! most!systems!trapped!on!subOoptimal!paths!eventually!collapse!and!die,!as! Rotmans,!Loorbach!and!van!der!Brugge!(cited!in!Rotmans,!2005)!contend.! However,!the!science!of!climate!change!suggests!that!society!cannot!wait! for!this!to!happen.!Hence,!the!theme!of!governance!is!central!to! sustainability!transitions.!This!invokes!a!range!of!challenges!and! complications!and!calls!into!question!the!nature!of!power!and!in!particular! the!role!of!the!state.!Not!surprisingly!then,!transitions!are!political.!As! Lasswell!(1950)!famously!wrote,!politics!is!about!‘who!gets!what,!when! and!how?’!In!this!sense,!politics!is!not!confined!only!to!the!realm!of! government!and!its!members!(i.e.!politicians,!bureaucrats!etc.).!Rather,!the! term!is!used!here!more!broadly!to!denote!the!social!contests!between! state!and!nonOstate!actors!that!occur!in!the!process!of!governing.!It!is!

! ! 26! Chapter!2:!Sustainability!Energy!Transitions! political!circumstances!and!the!social!relations!of!power!that!influence!and! determine!what!is!possible.! The!fifth!characteristic!of!sustainability!transitions!is!that!they! evolve!through!multiple!phases.!As!Geels!(2011,!p.!25)!notes,!‘most! “sustainable”!solutions!do!not!offer!obvious!user!benefits!(because! sustainability!is!a!collective!good),!and!often!score!lower!on! price/performance!dimensions!than!established!technologies.’!It!is! therefore!unsurprising!that!sustainability!transitions!are!characterised!by! resistance,!uncertainty,!turmoil,!and!fear!(Grin!et!al.,!2010,!p.!1).!The!result! is!that!sustainability!transitions!experience,!like!many!emerging! technologies,!periods!of!acceleration,!stagnation,!and!even!decline.!Thus,! SETs!are!unlikely!to!follow!linear!paths.!The!multiOphase!concept! describes!transitions!over!time!as!a!sequence!of!four!alternating!phases.! These!are!the!preOdevelopment!phase,!whereby!changes!in!the!status!quo! of!the!system!begin!to!occur!but!are!not!yet!visible;!the!takeOoff!phase!in! which!structural!change!picks!up!momentum;!the!acceleration!phase,! whereby!structural!change!becomes!visible;!and!the!stabilisation!phase,! whereby!a!new!equilibrium!is!achieved.!These!phases!are!a!manifestation! of!the!soOcalled!‘SOcurve’.!However,!in!practice!transitions!are!complex!and! uncertain!and!therefore,!‘the!degree!of!predictability!is!relatively!small’! (Grin!et!al.,!2010,!p.!5).!Nevertheless,!defining!these!four!phases!has!utility! for!both!researchers!and!those!seeking!to!influence!transitions!(i.e.,!policy! makers).!Different!phases!are!likely!to!be!associated!with!different!power! dynamics,!implying!that!certain!conceptual!tools!and!policies!will!be!more! appropriate!than!others!at!any!given!transition!phase.! Having!established!the!common!characteristics!of!SETs,!this!thesis! now!considers!the!main!theoretical!approach,!the!multiOlevel!perspective,! and!how!this!has!been!applied!to!the!policy!process!using!the!transition! management!model.!

! ! 27! Chapter!2:!Sustainability!Energy!Transitions!

Approaches:(theory(and(practice( ! The,multi%level,perspective, ! Sustainability!transitions!are!inherently!complex,!as!the!characteristics! outlined!above!show.!They!involve!interplay!between!technologies,! politics,!economics,!and!culture!O!all!of!which!occur!across!spatial!and! temporal!scales.!According!to!Geels!(2011,!p.!25)!‘researchers!therefore! need!theoretical!approaches!that!address!firstly,!the!multiOdimensional! nature!of!sustainability!transitions,!and,!secondly,!the!dynamics!of! structural!change.’!The!MLP!(Geels,!2004;!Rip!&!Kemp,!1998)!emerged!as!a! fruitful!approach!in!this!regard,!and!it!remains!highly!influential!in!socioO technical!transitions!research.!!!!!! ! The!MLP!describes!the!dynamics!of!transitions!through! interactions!between!three!analytical!‘levels’!or!frames:!macro,!meso,!and! micro.!These!respectively!refer!to!landscape!(the!context!provided!by! larger!and!longer!term!exogenous!trends),!regime!(the!more!immediate! structure!framing!policy!and!action),!and!niche!(the!interstices!within! regimes!that!provide!room!for!innovative!practices).6!According!to!the! MLP,!transitions!occur!only!when!developments!on!all!three!‘levels’!link! up!and!positively!reinforce!one!another.!! These!three!‘levels’!are!conceived!as!functional!relationships!(rather! than!spatial!or!temporal!‘spaces’)!conceived!as!a!nested!hierarchy!O!with! niches!embedded!in!regimes,!and!regimes!in!landscapes.!They!represent! degrees!of!structuration!involving!actors,!rules,!and!structures!(Grin!et!al.,! 2010).!The!levels!differ!in!terms!of!their!stability!(Geels!&!Schot,!2010):!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 6!According!to!Geels!(2011,!p.!28),!exogenous!trends!on!the!landscape!level!involves!not! only!the!material!and!technical!backdrop!but!also!changes!in!demographics,!political! ideologies,!societal!values,!and!macroOeconomic!patterns.!In!their!studies!on!policy! change,!both!Hall!(1993)!and!Wilson!(2000)!have!emphasized!the!importance!of!such! factors,!pointing!out!that!these!exogenous!factors!can!serve!as!both!stresses!and!enablers! on!regimes.!

! ! 28! Chapter!2:!Sustainability!Energy!Transitions! the!“higher”!the!level!(i.e.!the!more!tightlyOknit!and!deeply!embedded!the! configuration),!the!greater!the!inherent!resistance!to!transition.! Based!on!Giddens’!(1984)!notion!of!structuration!as!a!duality!of! action!and!structure,!regime!rules!(cognitive,!normative,!and!regulative)! are!understood!as!simultaneously!a!medium!and!an!outcome!of!action.!In! this!way!actors!enact,!draw!upon,!and!subtly!modify!regime!rules!through! everyday!use!to!advantage!themselves!in!some!way!or!another.!At!the! same!time,!these!rules!configure!the!actions!of!actors.!From!this! perspective!the!regime!level!stabilises!the!socioOtechnical!system.!! The!niche!level!provides!‘protective!spaces’!for!the!evolution!of! alternative!technologies.!These!spaces!are!characterised!by!discourses!and! networks!of!actors!that!are!small!and!generally!unstable,!although!they! can!survive!through!various!subsidised!R&D!and!demonstration!projects.! One!key!to!the!success!of!niche!experiments,!according!to!Späth!and! Rohracher!(2010),!hinges!on!whether!powerful!actors!become!involved,! that!is,!actors!who!can!mobilise!widespread!social!legitimacy.!This!alone! does!not!necessarily!foster!change!at!the!regime!level,!however,!it!does! generate!pressure!on!the!regime.!Regime!members!and!the!institutions,! networks,!and!organisations!that!operate!within!them!have!significant! advantage!over!those!‘outside’!of!the!regime.!As!such,!innovation!generally! moves!in!an!incremental!manner.!! Changes!at!the!‘landscape’!level!O!changes!in!economic!patterns,! political!ideologies,!cultural!values,!scientific!paradigms,!and! demographics!O!occur!over!long!periods!of!time!and!operate!on!a!larger! and!wider!scale.!Depending!on!their!dynamics!and!timing,!landscape! changes!can!either!reinforce!or!put!pressure!on!regime!trajectories!and! can!exacerbate!tensions!within!regimes.!Niches!may!exploit!any!such! tensions!from!‘within’!the!regime.!! Implicit!in!the!MLP!approach!is!the!concept!of!coOevolution.!The!MLP! rejects!linear!causality!and!instead!frames!socioOtechnical!transitions!as!a!

! ! 29! Chapter!2:!Sustainability!Energy!Transitions! process!whereby!different!elements!involving!policy,!institutions,!culture,! knowledge,!markets!and!technology!repeatedly!influence!each!other! reciprocally!(Rotmans,!2005).!This!is!important!because!it!draws!attention! to!different!aspects!of!transitions!and!their!interOlinkages.!As!Geels!and! Schot!(2010,!p.!96)!summarise:!! The!global,!overall!explanation!provided!by!the!MLP!is!about! alignments!and!linkages!between!different!processes.!Within!levels! this!explanation!follows!a!socioOtechnical!logic,!investigating! interactions!between!heterogeneous!elements!and!actors!(weaving!a! seamless!web).!The!focus!is!on!coOevolutionary!interactions!between! ongoing!trajectories:!developments!in!one!trajectory!(e.g.! regulations)!may!hinder!or!stimulate!developments!in!another! trajectory!(e.g.!technology!or!markets).!Positive!and!negative! feedbacks!play!a!role!here.! ! The!appeal!of!the!MLP!lies!in!its!conceptual!linkages!between!microO level!dynamics!of!innovative!practices!and!macroOlevel!dynamics!of! structural!change.!This!can!create!a!relatively!straightforward!analytical! framework!for!understanding!transition!dynamics.!In!simple!terms,!a! transition!is!considered!more!likely!if,!and!when,!niches!display!signs!of! maturity!simultaneous!to!landscape!pressures.!Timing!therefore!becomes! crucial.!The!introduction!of!a!price!on!carbon!price,!as!occurred!in! Australia,!could!be!an!example.!If!a!landscape!change!such!as!this!takes! place,!and!niche!technologies!are!not!yet!fully!developed!and!ready!for! largeOscale!deployment,!the!likely!result!will!be!more!of!a!regime! reorientation!or!reconfiguration!rather!than!a!transformation.!In!energy! terms,!this!may!take!the!form!of!increased!diffusion!of!newer!or!less! carbon!dioxideOintensive!fossilOfuel!technologies!(compared!to!coal)!such! as!gas,!coal!seam!gas,!coal!gasification!or!even!CCS.!! This!timing!dynamic!raised!by!the!MLP!suggests!that!multiple! transition!paths!are!possible.!If!this!is!the!case,!the!issue!then!becomes!one! of!directionality.!That!is,!how!is!a!transition!path!decided!–!if!at!all?! According!to!Grin!(2010,!p.!229)!‘coOevolution!is!possible!because!the!

! ! 30! Chapter!2:!Sustainability!Energy!Transitions! actors!involved!share!a!particular!orientation’.!This!is!where!shared!or! guiding!visions!become!particularly!important!since!they!act,!in!theory!at! least,!as!a!means!of!coordination.!These!visions!then!function!as!a! ‘framework!for!formulating!shortOterm!objectives!and!evaluating!existing! policy’!(Rotmans,!Kemp,!&!Asselt,!2001,!p.!23).!Hence!they!have!the! potential!to!frame!and!guide!transitions!in!terms!of!pace!and!direction,!so! from!a!governance!perspective,!visions!play!an!important!role.!One!of!the! challenges!for!policy!makers!then!is!how!to!turn!competing!visions!into!a! shared!vision.!The!transition!management!model!has!had!some!success!in! this!regard.! ! Transition,management, ! According!to!Kemp!and!Loorbach!(2006,!p.!109),!transition!management!is! an!attempt!to,!‘influence!the!direction!and!speed!of!transitions!by! coordinating!and!enabling!the!processes!that!occur!at!different!levels!in!a! more!systemic!and!evolutionary!way.’!They!note!that!this!model!is!not! merely!a!‘theoretical!fancy’,!but!a!policy!tool.!It!has!been!applied!by!the! Dutch!government!in!four!different!transition!contexts:!sustainable! energy;!sustainable!mobility;!sustainable!agriculture;!and!biodiversity!and! natural!resources.!Implicit!in!this!approach!is!an!appreciation!of!the! complexity,!uncertainty,!and!chaos!of!systemOlevel!change.!No!immediate! solutions!present!themselves!–!at!least!not!politically!or!socially!in!terms! of!mobilising!the!kind!of!legitimacy!required!for!such!largeOscale!changes.! The!emphasis!is!therefore!placed!on!‘goalOoriented!modulation’.!This! entails!searching,!learning,!and!experimenting,!as!opposed!to!‘traditional’! policy!methods!whereby!predefined!outcomes!are!enacted!through! planning!and!control!(Kemp!&!Loorbach,!2006).!LongOterm!change!is! realised!through!shortOterm!steps!guided!by!goals!and!visions.!This!draws! parallels!to!Lindblom’s!(1999)!ideas!of!planning!for!change,!which!argue! that,!‘an!endless!succession!of!short!and!fairly!rapid!steps’!(p.!48)!is!more!

! ! 31! Chapter!2:!Sustainability!Energy!Transitions! effective!than!a!single!big!step.!The!integration!of!longOterm!versus!shortO term!goals!is!a!key!feature!of!the!transition!management!approach.! Transition!management!seeks!to!address!the!problem!of!subOoptimal! technological!lockOin,!a!problem!primarily!driven!by!shortOterm!costs.!The! challenge!is!to!incorporate!longerOterm!perspectives!into!policy!planning.! This!entails!several!features!and!activities,!as!follows.!First,!transition! arenas!are!developed.!These!represent!new!institutions!that!bring! together!groups!of!actors!with!diverse!knowledge,!backgrounds!and! interests.!Their!goal!is!to!create!an!open!and!dynamic!network!that!allows! different!opinions,!values!and!agendas!to!be,!‘confronted,!discussed!and! aligned!where!possible’!(Kemp!&!Loorbach,!2006,!p.!111).!Second,!the! group!or!network!begins!to!define!a!problem!or!a!set!of!problems;!these! are!not!regarded!as!‘easily!solvable’!since!the!central!unit!of!analysis!is!on! persistent!systemic!problems.!Third,!visions!and!goals!are!determined.! This!is!a!crucial!step!in!the!transition!management!processes,!since!the! longOterm!visions!serve!as!a!guide!for!both!the!shortO!and!longOterm!goals.! Fourth,!multiple!transition!paths!are!developed!and!interim!objectives!set.! The!aim!is!to!develop!a!range!of!possibilities,!so!as!to!avoid!choosing! premature!frontOrunners,!thereby!avoiding!subOoptimal!lockOin.!Fifth,! programs!and!practical!experiments!are!designed!to!explore!these! pathways.!These!also!help!create!networks!and!coalitions!of!support.! Finally,!there!is!an!emphasis!on!evaluation!and!learning.!In!transition! management,!this!is!often!referred!to!as!learningObyOdoing!and!doingObyO learning!(Meadowcroft,!2005).!! Transition!management!is,!proponents!argue,!a!form!of!reflexive! governance!built!on!a!cyclical!and!iterative!design.!In!theory!the! foundations!of!transition!management!are!appealing,!but!in!practice! several!concerns!have!been!identified,!some!logistical,!some!theoretical.! Naturally!there!is!an!overriding!assumption!that!society!can!be!steered,! which!brings!its!own!set!of!problems.!The!Netherlands'!experience!of!

! ! 32! Chapter!2:!Sustainability!Energy!Transitions! transition!management!highlights!numerous!deficiencies!and!raises! important!questions,!such!as,!what!are!we!steering!towards?!And!how!do! sustainability!transitions!remain!on!track,!given!the!uncertainty!and!multiO decadal!timeframes!involved?!These!questions!are!explored!below! through!the!themes!of!ambiguity,!uncertainty!and!conflict.!! ! ! Challenges( ! The,ambivalence,of,sustainable,development, ! SETs!differ!from!many!other!transitions!in!that!they!are!intentional!and! goalOoriented,!and!these!goals!entail!notions!of!sustainability.!Multiple! competing!definitions!of!sustainability!O!Dobson!(1996)!counts!at!least!300! O!further!complicate!the!task!of!transforming!electricity!regimes.!If!and! when!these!goals!are!even!agreed!upon,!they!are!often!intentionally!left! vague!(Voß!et!al.,!2007,!p.!196).!Despite!this!complexity,!understanding! and!interpreting!sustainable!development!is!of!particular!interest!to! transition!scholars!and!this!thesis,!because!this!helps!inform!what!is! possible!and!impossible!in!terms!of!a!SET.!The!concept!of!sustainable! development!therefore!warrants!careful!examination.! The!concept!of!sustainable!development!grew!out!of!environmental! debates!beginning!in!the!1960s,!through!the!work!of!Rachel!Carson!(1962)! and!Paul!Ehrlich!(1968).!The!concept!intensified!through!influential!texts! including!The,Limits,to,Growth!(Meadows!et!al.,!1972)!and!Gaia:,A,New, Look,at,Life,on,Earth!(Lovelock,!1979).!The!1970s!saw!a!growing!tension! between!economic!growth!and!environmental!concern.!Many!viewed!the! two!as!incompatible!and!held!that!the!continued!pattern!of!exponential! growth!would!ultimately!lead!to!social,!economic,!and!(or)!environmental! catastrophe.!Although,!with!the!Brundtland!Report,!Our,Common,Future,! published!by!the!World!Commission!on!Environment!and!Development!

! ! 33! Chapter!2:!Sustainability!Energy!Transitions!

(WCED)!in!1987,!this!perception!changed!considerably.!!The!dichotomy!of! growth!versus!environment!was!effectively!sideOstepped!by,!‘emphasising! the!reorientation!of!growth!to!meet!the!urgent!needs!of!the!world's!poor! and!to!reduce!the!impacts!of!economic!activity!on!the!environment’! (Lafferty!&!Meadowcroft,!2000,!p.!11).!As!the!WCED!state:! Sustainable!development!is!development!that!meets!the!needs!of!the! present!without!compromising!the!ability!of!future!generations!to! meet!their!own!needs!(WCED,!1987).! ! Five!years!later!sustainable!development!was!formerly!endorsed!as!a! policy!objective!at!the!1992!Rio!Earth!Summit!along!with!five!major! agreements:!the!Rio!Declaration!of!Environment!and!Development;!the! Framework!Convention!on!Climate!Change;!the!Convention!on! Biodiversity;!a!statement!of!Forest!Principles;!and!Agenda!21.!Sustainable! development's!acceptance!on!the!international!stage!emerged!primarily! through!an!apparent!resolution!of!the!conflict!between!economic!growth! and!environmental!concerns!(Lafferty!&!Meadowcroft,!2000).! For!Meadowcroft!(1999),!sustainability!is!an!ensemble!of!four! expressions:!sustainable!yield,!environmental!sustainability,!sustainable! society,!and!sustainable!development.!Sustainable!yield!is!the!most! straightforward!of!the!four!terms.!It!focuses!on!a!single!quantifiable!flow! of!resources!that!can,!in!principle,!be!managed!and!maintained! indefinitely.!Environmental!sustainability!is!more!ambiguous.!It!can!be! viewed!as!either!the!sustainability!of!the!natural!environment!or!the! sustainability!of!social!institutions!and!practices!with!an!environmental! dimension.!Meadowcroft!highlights!a!contradiction!here:!many!social! activities!are!incompatible!with!the!preservation!of!many!natural!systems! and!environments.!A!sustainable!society!refers!to!one!that!has!learned!to! live!within!its!ecological!limits.!Sustainable!development,!an!accumulation! of!these!expressions,!is!further!complicated!by!the!inclusion!of!the!word! development.!Rather!than!sustain!a!particular!social!form!or!

! ! 34! Chapter!2:!Sustainability!Energy!Transitions! environmental!feature,!it!is!development!that!is!sustained.!And! development!implies,!‘improvement!or!advance,!an!increase!in!human! welfare,!the!betterment!of!material,!cultural!and!moral!circumstances!–!in! a!word!progress’!(Meadowcroft,!1999,!p.!15).! Meadowcroft’s!four!terms!raise!multiple!questions,!many!of!which! are!captured!in!the!following!passage!by!Luke!(1995,!pp.!21O22):! …!sustainability!is!fraught!with!unresolved!questions.!Sustainable!for! how!long:!a!generation,!one!century,!a!millennium,!ten!millennia?! Sustainable!at!what!level!of!human!appropriation:!individual! households,!local!villages,!major!cities,!entire!nations,!global! economies?!Sustainable!for!whom:!all!humans!alive!now,!all!humans! that!will!ever!live,!all!living!beings!living!at!this!time,!all!living!beings! that!will!ever!live?!Sustainable!under!what!conditions:!for! contemporary!transnational!capitalism,!for!lowOimpact!Neolithic! hunters!and!gatherers,!for!some!spaceOfaring!global!empire?! Sustainable!development!of!what:!personal!income,!social! complexity,!gross!national!product,!material!frugality,!individual! consumption,!ecological!biodiversity?! ! In!energy!terms,!using!coal!in!electricity!generation,!for!example,! becomes!particularly!problematic!from!a!sustainable!development! perspective.!One!could!argue,!as!have!many!within!the!fossil!fuel!industry,! that!the!effects!on!the!climate!of!burning!coal!are!questionable;!and!its! reliability!and!low!costs!versus!other!fuels!allow!society!to!more!easily! pursue!other!social!welfare!goals,!such!as!alleviating!poverty.!While!this! statement!would!probably!be!considered!extreme!today,!it!highlights!how! sustainable!development's!vagueness!essentially!led!to!abuse!of!the!term! itself.!Corporations!and!governments!around!the!world!are!well! acquainted!with!the!term,!and!where!their!interests!are!threatened!by!the! sustainability!discourse!they!‘wrap!themselves’!in!the!language!of! environmentalism!and!sustainability!to!ensure!their!continued! profitability!and!economic!growth!(Dryzek,!1997).! Given!these!pitfalls,!the!success!of!sustainable!development!as!an! environmental!policy!approach!is!varied.!For!Lafferty!and!Meadowcroft! (2000),!sustainable!development!postOWCED!and!Rio!has!led!to!broader!

! ! 35! Chapter!2:!Sustainability!Energy!Transitions! and!deeper!understanding!of!the!dependency!between!development!and! environmental!priorities.!The!mere!fact!that!governments!talk!about!these! issues!is!positive.!Equally,!though,!these!authors!state!that!it!is!unclear! whether!sustainable!development!will!end!up!merely!serving!established! economic!interests!at!the!expense!of!ecological!and!equity!issues.!! Clearly,!the!extent!to!which!sustainable!development!can!actually! lead!to!deep!ecological!and!structural!change!is!questionable,!and!depends! on!how!one!interprets!the!concept.!Jacobs!(1999)!finds!that!sustainable! development!has!a!continuum!of!interpretations.!These!range!from!‘weak’,! whereby!environmental!protection!is!desirable!but!should!not!impede! economic!activity,!to!‘strong’,!which!emphasises!environmental!limits!and! living!within!these!limits!at!all!costs.!According!to!Jacobs!(1999)! governments!and!business!interests!view!sustainable!development!from!a! weak!perspective.!This!will!make!it!difficult!to!transform!current!fossil!fuel! electricity!regimes!along!more!ecologically!sustainable!lines,!unless!this! transformation!can!deliver!economic!benefits.! ! Uncertainties,in,sustainability,energy,transitions, ! The!next!problem!discussed!here!relates!to!the!role!of!uncertainty!in!SETs.! This!uncertainty!exists!on!different!levels!and!can!be!teased!out!in!two! ways:!first,!uncertainty!pertaining!to!why!we!even!need!a!transition;!and! second,!uncertainty!associated!with!the!effects!of!steering!society!in! particular!directions.!Both!dimensions!are!discussed!below.! As!to!why!we!need!a!transition,!most!evidence!to!support!this!claim! is!based!on!climate!change!science.!This!is!problematic!firstly!because!of! inherent!uncertainties!in!climate!science.!These!stem!from!complex! ecological!causeOandOeffect!and!feedback!mechanisms.!A!second! problematic!aspect!relates!to!society’s!understanding!of!science.!Science! has!long!been!closely!associated!with!objective!inquiry,!deciphering!fact! from!fiction,!and!delivering!claims!of!truth.!Misunderstanding!and!

! ! 36! Chapter!2:!Sustainability!Energy!Transitions! misinterpretation!of!uncertainties!in!climate!change!science!allowed!those! opposing!SETs!to!question!the!role!of!science!in!decisionOmaking! processes.!This!has!in!turn!opened!the!door!for!new!actors!to!enter!this! space!at!the!expense!of!scientific!knowledge.! Uncertainties!associated!with!steering!the!transition!also!create! problems!for!SETs.!First,!there!are!uncertainties,!‘about!the!effects!of! intervention!and!the!longOterm!effects!of!socioOtechnical!transformations,! in!part!because!the!effects!depend!on!contingencies’!(Kemp,!Rotmans,!&! Loorbach,!2007,!p.!317).!These!uncertainties!are!particularly!acute!in! regions!likely!to!be!adversely!affected!by!such!a!transition,!such!as!those! dependent!on!fossil!fuels.!This!can!give!rise!to!powerful!vetoOcoalitions.! Second,!it!is!uncertain!which!technology!will!prove!most!effective!at! achieving!a!transition!towards!an!ecologically!sustainable!future.!As! Meadowcroft!(2007a,!p.!203)!points!out,!‘it!is!impossible!to!know!in! advance!which!technologies!will!prove!to!be!‘winners’!and!which!will! result!in!failure.!Encouraging!leads!may!go!nowhere,!while!an!area!of! enquiry!that!has!been!stagnant!for!years!may!suddenly!come!to!life.’!Third,! structural!uncertainty!exists!in!the!sense!that!the!preferences!and!needs!of! citizens!and!society!are!subject!to!change!(Kemp!et!al.,!2007).!This!means! the!question!of!what!we!are!transitioning!towards!will!always!be!in!a!state! of!flux.! Voß!et!al.!(2007)!outline!two!criteria!that!help!distinguish!between! different!degrees!of!uncertainty:!the!heterogeneity!of!interacting!factors;! and!the!feedback!loops!and!emergent!dynamics.!Based!on!these!criteria,! SETs!rate!very!high.!In!terms!of!heterogeneity,!SETs!entail!interactions! between!nature,!technology,!and!society,!and!concern!structural!change!on! a!societal!level,!rather!than,!say,!a!company!or!the!firm!level.!! As!to!feedback!loops,!SETs!involve!multiple,!unpredictable,!and!nonO linear!feedback!dynamics.!Part!of!the!problem!is!that!steering!for! sustainable!development,!‘transgresses!traditional!knowledge!domains’!

! ! 37! Chapter!2:!Sustainability!Energy!Transitions!

(Voß!et!al.,!2007,!p.!197).!Yet!even!if!it!were!possible!to!acquire!perfect! knowledge,!transitions!could!only!be!understood!in!retrospect.!The! dilemma!here,!as!noted!by!Kemp!et!al.!(2007,!p.!317),!is!that,!‘the!capacity! to!shape!a!new!development!is!greatest!at!a!time!when!we!know!the!least:! when!the!effects!become!apparent!it!is!difficult!to!alter!the!course!of! development!because!of!sunk!investments!and!interests!vested!in!the! continuation!of!the!path!of!development’.! The!final!problem!relating!to!uncertainties!in!SETs!is!political!myopia! (Kemp!et!al.,!2007;!Smith!et!al.,!2010).!Transitions!span!at!least!25!years! or!one!generation,!meaning!that!they!must!persist!across!multiple!political! cycles.!Two!factors!are!therefore!very!important!to!achieve!transitions:! policy!makers!and!politicians!must!accept!the!need!for!a!transition;!and! for!politicians!to!accept!this!they!must!be!convinced!that!a!problem!exists! that!requires!fundamental!change,!which!in!turn!requires!time!(Kemp!et! al.,!2007,!p.!318).!Considering!the!obstacles!and!complexities!SETs!face,! this!is!most!challenging.! ! Conflict, ! As!Smith!et!al.!(2005)!note,!society!is!crowded!with!special!interest!groups! and!stakeholders,!each!with!different!ideas!and!visions!about!the!future! direction!of!change.!This!makes!conflict!and!incoherence!an!unavoidable! aspect!of!transitions.!How!then!should!forums,!such!as!transition!arenas,! as!advocated!by!transition!management,!deal!with!such!conflict!and!agree! on!a!set!of!unified!visions!and!goals?!Even!the!act!of!establishing!a! transition!arena!is!a!powerOladen!process,!since!'who'!is!involved!is! invariably!a!political!decision.!In!her!studies!on!transition!management!in! the!Netherlands,!Hendriks!(2008)!found!Energy!Transition!Programs! (ETP)!were!heavily!dominated!by!industry!and!government!elites,!and! environmental!and!consumer!groups!and!the!broader!public!were!less! prevalent.!Smith!and!Kern!(2009)!found!a!similar!pattern!in!their!analysis!

! ! 38! Chapter!2:!Sustainability!Energy!Transitions! of!the!Dutch!energy!transition!networks;!these!consisted!mainly!of! industrialists,!public!officials!and!in!particular!employees!of!large!energy! companies.!The!result!was!transition!funding!that!tended!to!follow!prior! institutional!conventions!–!towards!supplyOside!infrastructure!or!market! regulation.!As!such,!transition!policy!tended!to!perpetuate!technocratic! routines!in!energy!policy!at!the!expense!of!social!innovation!(Smith!&! Kern,!2009).!Nevertheless,!as!Meadowcroft!(2007a,!p.!18)!outlines,! [although!the]!particulars!of!this!approach!(transition!management)! might!be!hard!to!reproduce!in!a!country!that!does!not!have!such!a! ‘consensusOoriented’!and!‘planningOfriendly’!political!culture,!the! fundamental!impulse!of!transition!management!is!of!general! significance.!For!the!establishment!of!networks!involving!novel! constellations!of!public!and!private!groups!focussed!on!innovation!in! the!energy!domain!is!vital.! ! While!this!is!undoubtedly!true,!we!must!be!aware!that!transitions! have!purposeful!actors.!This!means!the!formation!of!networks!and! coalitions!is!a!strategic!process!in!itself.!From!an!actor’s!point!of!view,! socioOtechnical!transitions!are!rife!with!conflict!with,!‘technological!and! economic!rivals!disputing!the!course!of!development!and!resistance! coming!from!those!on!whom!the!costs!of!change!are!to!be!imposed’! (Meadowcroft,!2005,!p.!488).!Hence,!the!notion!of!power!is!always!present! in!transition!studies!O!yet!power!is!precisely!the!component!that! approaches!such!as!transition!management!and!the!MLP!have!largely! neglected.!This!chapter!concludes!by!considering!how!understandings!of! power!have!been!dealt!with!in!the!transitions!literature.! ! ! Gaps(in(knowledge( ! According!to!transition!management!and!the!multiOlevel!perspective,! socioOtechnical!systems!change!because!of!tensions!and!misalignments! between!the!three!functional!levels!(niche,!regime,!landscape).!The! various!actors!create!these!tensions!and!misalignments!via!strategic!

! ! 39! Chapter!2:!Sustainability!Energy!Transitions! moves.!Geels!(2004)!draws!an!analogy!with!gameOlike!dynamics,!whereby! actors!compete!to!achieve!their!aims!or!increase!their!resource!position.! The!different!actors!do!not!have!equal!power,!this!is!a!given.!They!have! unequal!resources!(access!to!capital,!knowledge,!and!tools),!and!also! unequal!opportunities!to!realise!their!goals!(Geels,!2004).!SocioOtechnical! transitions!therefore!encompass!conflicts!and!power!struggles,!yet!as! Smith!et!al.,!(2005)!point!out,!the!sustainability!transitions!literature!has! tended!to!view!the!construction!of!consensus!as!a!conflictOfree!process.! Späth!and!Rohracher!(2010)!echo!this!sentiment,!suggesting!more! attention!should!be!paid!to!the!struggles!for!discursive!hegemony!and! authority.!Consequently,!many!authors!call!for!a!more!explicit!focus!on!the! role!of!power!(Berkhout,!Smith,!&!Stirling,!2004;!Genus!&!Coles,!2008;! Hendriks!&!Grin,!2007;!Smith!&!Stirling,!2007;!Voß!et!al.,!2007).!! Geels!(2011,!p.!30)!defends!the!multiOlevel!perspective!arguing!that! agency!has!always!been!part!of!the!approach.!! Because!the!MLP!is!based!on!crossOovers!between!evolutionary! economics!and!STS!(constructivism),!it!aims!to!bridge!the!socialO science!divide!between!‘materialist’!and!‘idealist’!theories.!From! evolutionary!economics!it!includes!materialist!aspects!(such!as! prices,!capital!stocks,!investments,!resources,!competition,!market! selection,!struggle!for!survival)!and!from!STS!it!includes!idealist! aspects!(such!as!interpretations,!visions,!beliefs,!networks,!framing! struggles,!debate).!So,!the!MLP!accommodates!agency!in!the!form!of! bounded!rationality!(routines,!search!activities,!trialOandOerror! learning)!and!interpretive!activities.! ! At!the!same!time,!however,!Geels!concedes!that!certain!types!of!agency,! power!struggle!processes!and!cultural!discursive!activities,!are!less! developed!within!the!transitions!literature!(Geels,!2010).!Yet!one!cannot! understate!the!importance!of!examining!relations!between!economic!and! political!powers!and!the!broader!networks!of!actors!in!the!socioOtechnical! system.!Of!interest!is!how!they!interact,!how!alliances!are!made,!how! consensus!is!created,!and!how!different!actors!mobilise!resources!to! secure!their!end!(Meadowcroft,!2007b;!Smith!et!al.,!2005).!Transition!

! ! 40! Chapter!2:!Sustainability!Energy!Transitions! studies!must!focus!greater!attention!on!agency!and!power!in!the! governance!of!sustainability!transitions!because!the!legitimisation!of! forcing!O!or!blocking!O!change!depends!on!power!relations!across!the! networks!of!actors!involved!(Smith!et!al.,!2005).!! Recent!contributions!in!this!area!include!attempts!by!Avelino!and! Rotmans!(2009)!and!Grin!(2010)!to!incorporate!a!more!explicit! conceptualisation!of!power!into!transition!studies.!These!studies!regard! power!as!multiOdimensional.!This!means!there!are!different!forms!of! power!exercised!at!different!levels!and!different!time!points.!Furthermore,! there!are!different!ways!in!which!power!can!be!exercised.!Empirically,! Elzen!et!al.!(2011)!have!used!social!movement!theory!and!political!science! to!analyse!how!normative!pressures!(framing,!resource!mobilisation,!and! political!opportunity!structures)!influence!existing!regimes.!Likewise,! Geels!and!Verhees!(2011)!have!used!social!movement!theory!and!insights! from!cultural!sociology!and!discourse!theory!to!explicitly!focus!on!the! MLP's!cultural!dimensions.!Their!discursive!approach!views!cultural! change!as!a!contested!process,!whereby!actors!attempt!to!influence!the! attitudes!and!opinions!of!relevant!audiences.!! The!theoretical!foundations!of!the!multiOlevel!perspective!are! important,!but!part!of!the!problem!is!that!this!is!a!static!concept.!To! elaborate,!it!explains,!in!a!relatively!systematic!way,!the!origins!of! transitions!and!where!and!how!they!arise!through!its!functional!scale! levels.!But!it!does!not!explain!the!dynamic!patterns!of!a!transition! (Rotmans!&!Loorbach,!2010,!p.!133).!Moreover,!transition!studies!still!lack! a!means!to!analyse!how!state!and!nonOstate!actors!influence!transitions! via!changing!roles!and!power!relations.!From!a!governance!perspective! this!is!crucial.!As!research!into!governance!teaches!us,!policy!formation!is! not!exclusively!the!work!of!government.!It!involves!a!diverse!range!of! actors,!both!state!and!nonOstate,!with!different!interests,!trying!to! influence!or!dominate!the!policy!domain.!How!these!actors!relate!to!one!

! ! 41! Chapter!2:!Sustainability!Energy!Transitions! another!and!define!transition!contexts!should!take!central!place!in! understandings!of!SET!governance.!According!to!Geels!and!Schot!(2010,!p.! 19),!the!MLP!needs!to!be!complemented!with!more!specific!theories!that! ‘specify!precise,!substantive!mechanisms!of!interactions!between! technology,!culture,!politics,!economics,!science,!etc.’!Chapter!3!takes!up! this!challenge!by!incorporating!the!concept!of!power!more!explicitly!into! understandings!of!regime!change.! ! ! Conclusion( ! This!chapter!has!reviewed!the!literature!on!socioOtechnical!transitions!and! positioned!this!thesis!in!the!context!of!SETs.!The!electricity!regime,! understood!here!as!part!of!the!broader!energy!system,!is!embedded!in! society!and!culture,!making!regime!transformation!particularly!difficult.! This!is!further!complicated!by!the!existence!of!lockOin!dynamics,!which! emphasises!the!inherent!momentum!and!stability!associated!with!large! socioOtechnical!systems.!The!chapter!moved!beyond!the!earlier! technocratic!interpretations!of!lockOin!to!consider!more!broadly!the! stability!of!incumbent!regimes!through!various!material,!institutional,!and! discursive!commitments.!! Having!dealt!with!the!key!features!of!socioOtechnical!systems,!this! chapter!then!defined!five!core!characteristics!of!sustainability!transitions:! multiOdimensional;!coOevolution;!visions;!steering;!and!multiOphase.!Given! the!complexity!and!multifaceted!nature!of!regime!change,!the!multiOlevel! perspective!is!identified!as!a!useful!conceptual!framework!for!the!study!of! transitions,!which!has!influenced!strategic!policy!approaches!such!as! transition!management.!Both!of!these!approaches!have!been!detailed!in! this!chapter.!! ! A!major!theme!to!emerge!from!the!literature!is!the!failure!to!deal! explicitly!with!the!role!of!power!in!transitions.!This!is!problematic!since!

! ! 42! Chapter!2:!Sustainability!Energy!Transitions! the!study!of!sustainability!transitions!stipulates!a!governance!approach,! more!specifically!governance!for!sustainable!development.!Implicit!in!this! approach!is!a!sense!of!urgency!required!to!steer!society!towards!more! sustainable!practices.!This!in!turn!invokes!a!range!of!challenges!involving! the!ambivalence!of!sustainable!development,!the!uncertainties!involved!in! longOterm!change,!and!conflict.!These!are!difficult!to!reconcile!since,!as! Meadowcroft!(2007b,!p.!305)!notes,! Goals!are!vague,!ambivalent!or!conflicted.!We!are!plagued!by! uncertainties!and!ignorance.!And!power!is!distributed,!among!many! actors!and!across!many!subsystems.!In!other!words,!we!are!not!sure,! or!we!cannot!agree,!exactly!where!we!want!to!go.!We!do!not!fully! understand!complex,!evolving,!and!interlinked!natural!and!social! systems,!and!power!is!so!broadly!dispersed!that!policy!makers!lack! the!ability!to!make!things!happen.! ! There!are!two!points!to!note!here.!First,!as!Meadowcroft!points!out,!these! problems!have!always!confronted!political!leaders.!The!problems! associated!with!climate!change!and!energy!transitions!in!contemporary! societies!may!be!more!acute!and!complex!than!those!faced!by!previous! generations!of!decision!makers,!but!as!we!know,!governments!still!get! things!done.!Second,!although!the!dominance!and!stability!of!large!socioO technical!systems!has!been!highly!emphasised,!changes!to!energy! production!regimes!can,!and!have,!occurred!in!different!regions!around! the!globe.!The!Scandinavian!countries!that!successfully!introduced! significant!amounts!of!renewable!energy!to!their!electricity!grids!are!a! testament!to!this.!The!task!of!transitioning!electricity!regimes!towards! sustainability!therefore!requires!a!more!nuanced!view!of!the!dynamics!of! change.! This!chapter!has!identified!the!analytical!and!conceptual!features! of!sustainability!transitions!and!set!the!boundaries!for!a!more!critical! discussion!of!regime!change.!Chapter!3!proceeds!to!discuss!the!concepts!of! governance!and!power!in!relation!to!SETs,!building!on!the!thesis’! conceptual!framework.

! ! 43! !

Chapter(3(

Sustainability(energy(transitions(and(the(dynamics( of(change(

! ! At!the!root!of!the!environmental!crisis!are!the!culture!and!structure! of!western!industrial!society!as!they!were!shaped!over!two!or!more! centuries.!All!attempts!to!remedy!the!problem!without!basically! questioning!the!overall!structure!and!culture!are!bound!to!fail!(Mol!&! Spaargaren,!2000,!p.!35).! ! ! Introduction( ! Chapter!2!set!the!scene!for!the!thesis!through!its!wideOranging!discussion! of!sustainability!transitions.!This!chapter!advances!the!thesis’!conceptual! framework!by!examining!the!nature!of!power!and!its!role!in!SETs.!This!is! dealt!with!in!two!ways.!Given!the!emphasis!on!steering!in!the!transitions! literature,!part!one!considers,!from!a!theoretical!perspective,!the!question! of!who!governs,!and!how.!As!already!noted,!many!contemporary!crises!are! outcomes!of!unsustainable!consumption!and!production!patterns.!These! patterns!are!embedded!in!societal!structures.!To!succeed,!transitions!and! system!innovations!must!go,!‘beyond!established!practices!and!the! structures!which!have!coOevolved!with!them’!(Grin!et!al.,!2010,!p.!1).! Governing!the!task!of!transitioning!electricity!regimes!towards!more! sustainable!solutions!raises!two!key!questions!or!dilemmas:! ! O How!does!one!steer!in!new!directions!when!they!are!conditioned! by!the!structures!they!seek!to!change?!! O Who!undertakes!this!steering?!! !

! 44! Chapter!3:!Sustainability!Energy!Transitions!

With!respect!to!‘who’!governs,!this!chapter!highlights!the!importance!of! the!interaction!between!state!and!nonOstate!actors!engaged!in!SETs.!! The!question!of!‘how’!SETs!are!governed!is!more!problematic.!It!requires!a! thorough!understanding!of!the!dimensions!of!power!and!its!relationship! with!agency.!Using!the!theme!of!governance,!these!two!questions!are! explored!here!through!consideration!of!key!issues!for!each!question,! namely!those!of!agencyOstructure!interactions!and!distributed!power.! ! Part!two!focuses!on!the!dynamics!of!regime!change,!which!is! somewhat!underdeveloped!in!transition!literature.!It!considers!the!kind!of! change!required!for!electricity!regimes!to!transition!towards! sustainability,!including!how!this!might!emerge.!Drawing!on!insights!from! neoOGramscian!analysis!in!particular,!it!addresses!issues!of!instability!and! change!in!regimes!and!allows!us!to!move!beyond!some!of!the!more! technocratic!descriptions!of!technological!lockOin!found!in!the!literature.! This!chapter!argues!that!a!more!conceptually!rich!account!of!the!dynamics! of!SETs!can!be!achieved.!This!account!encompasses!both!stability!and! instability,!and!places!power!and!politics!at!the!centre!of!sustainability! transitions.!! ! ! Understandings(of(power( ! Agency,and,structure( ! Agency!refers!to!the!work!of!actors!who!seek!to!shape!events.!This,!in!turn! requires!the!exercise!of!power!(Giddens,!1984,!p.!14).!The!two!are! intimately!related.!In!relation!to!this!thesis,!the!interaction!between! agency!and!power!determines!the!ability!to!intervene!and!steer!electricity! regimes!along!more!ecologically!sustainable!paths!–!or!to!block!or!resist! such!changes.!As!Litfin!(1994,!p.!18)!outlines,!these!power!relations!can!be! described!along!a!spectrum,!!

! ! 45! Chapter!3:!Sustainability!Energy!Transitions!

...!ranging!from!those!most!rooted!in!domination!and!control!to!those! characterised!by!mutuality!and!intersubjective!understandings.!At! one!end,!we!would!find!force,!where!a!powerful!actor!removes!the! effective!choice!to!act!otherwise.!Following!force!might!be!coercion,! where!one!actor!threatens!another;!then!manipulation,!where!some! level!of!depict!is!involved;!then!authority,!where!an!actor!is! recognised!as!having!either!a!legal!or!moral!right!to!impose! decisions.!Finally,!the!knowledgeObased!power!of!persuasion!relies! upon!evidence!and!argumentation.! ! Power!itself!is!not!a!resource:!an!actor!can!never!own!it.!Meanwhile,! resources!are!important!as!they!are!the!‘media!through!which!power!is! exercised’!(Giddens,!1984,!p.!16).!The!theorisation!of!power!has!evolved! over!recent!decades.!Dahl!(1957)!conceived!of!power!as,!'the!ability!of!A!to! get!B!to!do!what!B!otherwise!would!not!have!done'.!This!definition!is!most! commonly!explained!by!the!level!of!material!and!ideational!resources!at! A's!disposal!in!relation!to!B's.!From!this!point!of!view,!power!facilitates! agency.!This!type!of!power,!understood!as!the!first!‘face!of!power’,!is!based! largely!on!pluralist!interpretations.!Its!advocates!include!both!Robert!Dahl! and!Nelson!Polsby.!Their!approach!to!power!focuses!on!decisionOmaking! processes,!that!is,!‘who!participates,!who!gains!and!loses,!and!who! prevails’!(Polsby,!1963,!p.!55).!As!Gaventa!(1980)!outlines,!this!approach! includes!three!implicit!assumptions:!that!grievances!are!acted!upon;!that! participation!in!decisionOmaking!reflects!an!open!system;!and!that!because! of!this!openness,!leaders!are!regarded!as!spokespeople!for!the!masses.!The! result!is!that!nonOparticipation!of!the!masses!is!neither!a!political!concern! nor!a!problem.!However,!as!Schattschneider!(1960,!p.!105)!writes:! Absenteeism!reflects!the!suppression!of!the!options!and!alternatives! that!reflect!the!needs!of!the!nonparticipants.!It!is!not!necessarily!true! that!people!with!the!greatest!needs!participate!in!politics!most! actively!–!whoever!decides!what!the!game!is!about!also!decides!who! gets!in!the!game.! ! In!this!sense,!power!can!also!circumscribe!agency!(Smith!et!al.,! 2005).!This!leads!to!the!second!‘face!of!power’.!Bachrach!and!Baratz! (1962,!1963)!associate!this!form!of!power!with!the!ability!to!control!

! ! 46! Chapter!3:!Sustainability!Energy!Transitions! agendaOsetting!and!exclude!potential!issues!and!conflict!from!the!political! process.!This!second!face!of!power!informed!Mathew!Crenson’s!study!and! subsequent!book,!The,Un%Politics,of,Air,Pollution!(1971).!Comparing! responses!on!air!pollution!issues!from!51!States!in!America,!Crenson! found!that!the!steel!industry!was!able!to!prevent!the!issue!from!being! raised!in!industrial!regions!for!a!number!of!years,!but!once!the!issue!did! surface,!industry!heavily!influenced!the!framing!of!the!debate.!As!Crenson! writes,!‘where!business!and!industrial!development!is!a!topic!of!local! concern,!the!dirty!air!problem!tends!to!be!ignored’!(Crenson,!1971,!p.! 165).!Yet!this!was!not!simply!a!matter!of!industrial!towns!ignoring!the! issue!due!to!employment!or!economic!reasons,!it!was!also!a!result!of!those! with!power!exercising,!‘considerable!control!over!what!people!choose!to! care!about’!(Crenson,!1971,!p.!27).!! Lukes!(1974)!adds!a!third!‘face!of!power’,!arguing!that,!‘the!most! effective!and!insidious!use!of!power!is!to!prevent!such!conflict!from! arising!in!the!first!place’!(p.!20).!This!is!achieved!through!persuasion,! whereby!the!preferences!and!subjectivities!of!actors!are!shaped!via!values,! norms,!and!ideologies.!In!this!way,!those!who!suffer!disadvantage!become! unaware!they!are!even!suffering!at!all!(Smith!et!al.,!2005).!Moreover,!as! Lukes!(1974,!p.!22)!continues,!‘the!bias!of!the!system!is!not!sustained! simply!by!a!series!of!individually!chosen!acts,!but!also,!more!importantly,! by!the!socially!structured!and!culturally!pattered!behaviour!of!groups.’! What!is!clear!from!this!discussion!is!that!power!is!expressed!in!and! through!social!relations!in!a!range!of!different!ways.!However,!none!of! these!‘faces’!appears!to!reconcile!the!structureOagency!dichotomy.!Put! another!way,!while!these!understandings!of!power!shed!light!on!the! dynamics!of!stability!(i.e.!how!dominant!structures!remain!dominant),!they! offer!little!in!the!way!of!understanding!how!certain!types!of!disruption! may!enable!regime!change.!The!structureOagency!relationship!is! paramount!to!this!issue!because,!as!stated!earlier,!one!of!the!main!

! ! 47! Chapter!3:!Sustainability!Energy!Transitions! challenges!of!SETs!lies!in!escaping!the!structural!constraints!of!lockOin.!In! other!words,!‘power!to’!understandings!of!power!must!in!some!way!be! integrated!into!‘power!over’!understandings!of!power.! Giddens’!(1984)!structuration!theory!arguably!represents!the!most! thorough!attempt!to!date!to!integrate!structure!and!agency!under!the!one! framework!of!power.!Central!to!Giddens’!thesis!is!the!duality!of!structure.! This!is!based!on!the!premise!that!structures!do!not!work!‘objectively’!or! ‘deterministically’,!but!instead,!structures!work!through!the!actions!of! agents.!Structures!are!both!enabling!and!constraining,!such!that!structure! can!shape!conduct!as!the!agent!draws!upon!it;!and!conduct!shapes! structure,!meaning!that!actors!and!structures!mutually!presuppose!each! other!(Geels!&!Schot,!2010).!Relating!this!back!to!SETs,!structuration! theory!suggests!that!the!lockOin!dynamic,!although!powerful!in!that! transitioning!from!the!incumbent!regime!is!difficult,!is!not!above!and! beyond!strategic!intervention.! Stewart!(2001)!has!criticised!Giddens’!structuration!theory!on!the! basis!that!power,!for!Giddens,!relies!on!the!acquisition!and!use!of! resources,!which!Stewart!contends!ultimately!depend!upon!existing! structures!of!domination.!The!crux!of!the!problem!is!that!analysis!of! ‘power!to’!prior!to!‘power!over’!is!impossible!and!subsequently!‘power!to’! is!effectively!reduced!to!‘power!over’!(Stewart,!2001).!! It!is!true!that!actors!draw!on!existing!structures!(surely!they!cannot! draw!on!past!or!future!structures).!However,!perhaps!the!difference! between!the!two!authors!lies!in!the!extent!to!which!structures!are! perceived!as!‘allOpowerful’!forces.!Stewart,!either!deliberately!or!not,! refers!to!‘structures!of!domination’.!This!appears!to!overlook!or!dismiss! the!subtlety!of!Giddens'!notion!of!structure!as!something!created,! maintained!and!changed!through!social!actions.!Structures!have! directionality!through!the!actions!of!actors!who,!‘make!R&D!investments,! place!products!on!the!markets,!buy!products,!issue!new!regulations,!

! ! 48! Chapter!3:!Sustainability!Energy!Transitions! maintain!infrastructures!and!fight!struggles!in!court!…![and]!…![T]hese! actions!change!aspects!of!existing!social!systems’!(Geels!&!Schot,!2010,!p.! 45).!To!talk!about!these!as!structures!of!domination!partially!rejects! Giddens’!duality!of!structure.! Stewart!may!have!been!alluding!to!actors'!unequal!ability!to!draw!on! structures!in!a!way!that!advantages!their!particular!needs.!This!crucial! point!in!debates!on!power!highlights!what!is!perhaps!the!obvious! observation:!power!is!never!equal.!The!assumption!that!those!whose! interests!align!with!the!‘dominant!structure’!are!generally!able!to!exert! greater!influence!is,!however,!a!simplification!at!best,!and!requires!some! caution.!Giddens!(1984)!argues!that!power!should!be!viewed!in!nonOzeroO sum!terms,!suggesting!that!power!is!diffuse!and!resides!in!multiple! locations.!! Alternatively,!Hayward!(1998)!stresses!that!one!should!avoid!the! notion!of!powerfulness!and!powerlessness.!Instead,!she!views!power!as,! ‘social!boundaries!that,!together,!define!fields!of!action!for!all!actors’!(p.! 12).!An!employer,!for!example,!does!not!have!absolute!power!or!complete! domination!over!their!employees,!since!employees!have!the!power!to! withhold!their!labour!(i.e.,!through!an!organised!strike).!Both!actors!can! therefore!shape!the!boundaries!that!define!what!is!possible;!power!comes! in!via!the!different!constraints!on!actors!that!allow!this!to!happen.! The!challenge!for!SET!governance!therefore!lies!in!understanding! how!subordinate!actors!(those!not!directly!associated!with!the!fossil!fuel! regime)!are!able!to!pursue!goals,!influence!or!steer!electricity!transitions! towards!sustainability.! ! Distributed,power, ! Rotmans!and!Loorbach!(2010,!p.!149)!state,! In!pluriform!societies!control!cannot!be!exercised!from!the!top.! Control!is!distributed!over!various!actors!with!different!beliefs,!

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interests!and!resources.!Influence!is!exercised!at!different!points,! also!within!government,!which!consists!of!different!layers!and!silos,! making!unitary!action!impossible.! ! That!power!is!distributed!across!society!is!not!surprising.!As!Meadowcroft! (2007b,!p.!303)!points!out,!this!is!an!axiom!of!contemporary!political!life.! Nevertheless,!it!begs!the!question,!who!is!in!charge?!From!a!governance! perspective!on!SETs,!the!answer!to!this!question!partly!requires!an! empirical!analysis!of!a!specific!case!study!(as!undertaken!in!this!thesis).! However,!this!section!explores!the!question!of!who!is!in!charge!on!a! theoretical!level.!The!aim!is!to!highlight!the!complexities!and!challenges! that!distributed!power!brings!to!the!study!of!governing!SETs.!! Governance,!on!a!very!general!level,!refers!to!the!practices!through! which!societies!are!governed!(Meadowcroft,!2007b,!p.!300).!These! practices!comprise!political!structures,!institutions,!and!policyOmaking! processes.!These!have!become!increasingly!diffuse!in!modern!societies,! due!to!the!following!factors.!After!the!economic!recession!of!the!1970s,!the! welfare!state!had!to!adapt!more!effectively!to!changing!international! economic!patterns,!while!simultaneously!improving!the!legitimacy!of! governmental!policies!(Grin,!2010,!p.!239).!The!result!was!a!hollowing!out! of!the!state,!through!processes!of!decentralisation,!agentisation1!and! privatisation!of!government!and!government!services!(Meehan,!2003).!! This,!in!turn,!led!to!new!modes!of!policyOmaking!reliant!on!partnerships! and!networks,!in!particular!publicOprivate!partnerships!between!the!state! and!market.!These!new!forms!of!decisionOmaking!arrangements!are! generally!portrayed!as!a!shift!from!government!to!governance!(Jessop,! 1997;!Rhodes,!1997).!! It!would!be!unwise,!however,!and!indeed!incorrect,!to!equate!this! shift!to!a!loss!of!state!power.!As!MacLeod!and!Goodwin!(1999,!p.!522)! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!Agentisation!refers!to!the!transformation!of!government!departments!into!quasiO commercial!agencies.!This!involves!separating!service!delivery!requirements!from!the! policy!aspects!of!government,!with!agencies!responsible!for!the!former!(DESA,!1999).!

! ! 50! Chapter!3:!Sustainability!Energy!Transitions! argue,!a!hollowing!out!of!state!form!does!not!necessarily!translate!to!a! hollowing!out!of!state!power.!To!assume!this!was!so!would!be!to!miss!the! point!almost!entirely,!since!power,!as!outlined!above,!is!never!zeroOsum.! As!Newell!(2008)!outlines,!state!authority!has!actually!increased!in!some! cases!through!the,!‘acquisition!of!new!bureaucratic!functions!of!pollution! monitoring!and!enforcement!that!are!associated!with!membership!of! global!accords’!(p.!513).!! The!point!is!that!this!governance!shift!highlights!new!forms!of! decisionOmaking!processes.!It!likewise!highlights!the!complexity!and! interwoven!nature!of!power!between!the!three!institutional!pillars:!the! state,!the!market,!and!civil!society.!None!of!these!pillars!is!autonomous,! which!means!the!state!is!embedded,!‘within!wider!networks!in!civil! society!and!market!systems’!(Smith!et!al.,!2005,!p.!1498).!The!relationship! between!state!and!nonOstate!actors!is!therefore!central!to!an! understanding!of!governance.! Returning!to!the!question!of!who!is!in!charge,!the!answer!clearly!lies! in!a!configuration!between!state,!market,!and!civil!society!relations.!Yet! the!distributed!nature!of!power!makes!this!configuration!more!complex,! with!centres!of!power!within!these!institutions!that!are!multiple!and! fragmented.!Political!institutions!consist!of!both!vertical!and!horizontal! layering!(Meadowcroft,!2007b).!This!spreads!power!over!local,!regional,! national,!and!international!levels!of!governance!(vertical);!and!also! between!departments!(horizontal)!such!as!climate!change,!energy,!and! Treasury!–!all!of!which!creates!overlap.!The!economic!and!civil!society! realm!is!similarly!complex,!with!an!array!of!different!interests!including! firms,!industries,!social!groups,!trade!unions,!and!religious!groups.!Each! has,!‘specific!power!resources!that!can!be!applied!in!certain!contexts!to! influence!the!course!of!events’!(Meadowcroft,!2007b,!p.!304).!However,!as! Meadowcroft!(2007b,!p.!306)!notes,!!

! ! 51! Chapter!3:!Sustainability!Energy!Transitions!

...!before!we!go!too!far!down!the!road!of!bemoaning!this!dispersal!of! power,!and!the!plethora!of!societal!actors!with!which!modern! governments!must!engage,!we!should!pause!to!consider!the! alternatives.!Instead!of!being!distributed,!power!might!be! concentrated!–!either!exclusively!in!the!hands!of!political!authorities! or!perhaps!those!of!private!interests.!Would!this!make!the!situation! any!better?!The!experience!of!the!twentieth!century!suggests!not.! Whenever!political!and!economic!powers!have!been!fused,!or!power! has!been!monopolized!by!concentrated!political!or!economic!elites,! all!sorts!of!abuses!proliferated.!Certainly!the!environment!did!not! fare!well.!So!probably!we!should!be!reasonably!content!that!power!in! modern!societies!is!somewhat!diffuse.! ! Meadowcroft!(2007b)!goes!on!to!argue!that!distributed!power,!in!many! ways,!can!and!should!be!associated!with!the!positive!features!of! development,!primarily!because!it!allows!for!multiple!sources!of!feedback! and!intervention.!Although!it!would!certainly!be!unwise!for!a!transition! towards!sustainability!to!be!placed!in!the!hands!of!only!one!type!of!actor,! this!would!be!easier!to!administer.!Distributed!power!makes!SETs!more! challenging!to!coordinate!from!a!governance!perspective,!even!if!the! outcomes!are!likely!to!be!more!‘just’!(itself!a!negotiated!term).!The! problem!here!is!a!time!issue:!more!time!spent!deliberating!between!actors! to!‘get!it!right’!reduces!the!likelihood!of!ever!achieving!economically,! socially,!and!ecologically!just!outcomes.! ! ! Towards(a(strategic(conception(of(power(in(sustainability(energy( transitions:(the(neoFGramscian(approach( ! With!respect!to!SETs,!the!questions!of!where!power!lies!and!why!are! critically!important!to!understand!the!speed!and!direction!at!which! transitions!unfold.!As!Gramsci!(1971,!p.!172)!wrote,!! The!active!politician!is!a!creator,!an!initiator;!but!he!neither!creates! from!nothing!nor!does!he!move!in!the!turbid!void!of!his!own!desires! and!dreams.!He!bases!himself!on!effective!reality,!but!what!is!this! effective!reality?!Is!it!something!static!and!immobile,!or!is!it!not! rather!a!relation!of!forces!in!continuous!motion!and!shift!of! equilibrium?!

! ! 52! Chapter!3:!Sustainability!Energy!Transitions!

! A!neoOGramscian!approach!draws!on!Gramsci’s!analysis!of!the!relations! between!state,!capital,!and!social!forces.!These!insights,!it!is!argued,!can! enrich!the!MLP!and!more!generally,!understandings!of!the!governance!of! SETs.!This!section!begins!with!a!brief!overview!of!the!neoOGramscian! approach!and!then!specifically!considers!Gramsci’s!notion!of!hegemony.!It! directs!attention!to!the!processes!and!dynamics!of!bargaining,! compromise,!and!alliance!formation!in!actors’!struggle!for!power.!To! explore!and!elaborate!on!this,!the!concept!of!discourse!coalitions!(Hajer,! 1995)!is!introduced!in!order!to!help!explain!how!hegemony!is!maintained! while!at!the!same!time!locating!these!‘strategic’!processes!within!state,! capital,!and!civil!society!relations.!The!analysis!then!turns!to!Gramsci’s! understandings!of!counterOhegemony!and!the!types!of!strategies!that! drive!social!change.!Included!in!this!discussion!is!the!discourse!of! ecological!modernisation,!which!has!the!potential!to!initiate!regime! change.!First!though,!I!provide!a!brief!discussion!of!the!neoOGramscian! approach.! In!1981,!Robert!W.!Cox!laid!the!foundations!for!the!neoOGramscian! approach!when!he!argued!for!a!critical!study!of!international!relations! (IR).!This!contrasted!with!the!more!traditional!problemOsolving! approaches!evident!in!IR!theory!at!the!time.!ProblemOsolving!theory!takes! institutions!and!power!relations!as!givens!and!attempts!to!identify! solutions!and!strategies!that!maintain!or!restore!a!system’s!equilibrium.! Critical!theory,!on!the!other!hand,!calls!these!relations!into!question!by! seeking!to!understand!their!origins!and!how!and!whether!they!might!be! undergoing!change!(Cox,!1981).!! Gramsci’s!concepts!were!subsequently!used!to!identify!new! conditions!of!existence!in!the!global!political!economy.2!For!instance,!the! neoOGramscian!approach!has!been!applied!to!climate!change!governance! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!See!for!example!the!works!of!Stephen!Gill!(1990,!2003;!1993).!

! ! 53! Chapter!3:!Sustainability!Energy!Transitions! as!an!alternative!to!the!stateOcentred!regime!theory!approach!evident!in!IR! studies!(Levy!&!Newell,!2002;!Newell,!2008;!Okereke,!Bulkeley,!&! Schroeder,!2009).!Like!Cox,!these!authors!propose!a!more!criticallyO oriented!approach,!arguing!that!the!limitation!of!regime!theory!lies!in!its! inability!to!move!beyond!the!regime!itself.!This!limitation!means!that!the! analysis!excludes!those!outside!the!dominant!regime.!In!the!context!of! climate!change,!regime!theory!therefore!fails!to!locate!environmental! degradation!within!the!wider!global!political!economy!(Ford,!2003;! MacLeod!&!Goodwin,!1999).! The!neoOGramscian!approach!is!not!exclusive!to!IR!studies.!It!has! been!used!to!explore!labour!in!the!workplace!(Burawoy,!1979),!race!and! ethnicity!(Hall,!1986),!the!workings!of!Thatcherism!(Hall,!1988),!the!social! status!of!women!(Sassoon,!2000),!neoliberal!development!in!postO apartheid!South!Africa!(Peet,!2002),!and!urban!governance!(Jessop,!1990;! MacLeod!&!Goodwin,!1999;!McGuirk,!2004).!The!central!feature!of!a!neoO Gramscian!approach!lies!in!its!mode!of!analysis!of!relations!between!state,! capital,!and!social!forces.!These!are!explored!through!the!interface! between!three!interrelated!categories!of!forces:!material!capabilities,! ideas,!and!institutions.!! These!reciprocal!forces!create!a!configuration!that!does!not! necessarily!determine!actions!directly,!but!instead!imposes!pressures!and! constraints.!At!the!same!time!it!allows!individuals!and!groups!to!resist!and! oppose!such!forces!(Cox,!1981).!Material!capabilities!represent!the! economic!realm!of!production!and!consumption,!which!can!either!enhance! or!constrain!technological!and!organisational!capabilities.!! For!Cox!(1981),!ideas,!or!discursive!elements,!can!be!separated!in! two!ways.!First,!there!are!intersubjective!meanings,!or!shared!norms.! These!tend!to!perpetuate!habits!and!expectations!of!behaviour.!Second,! there!are!collective!images!that!represent!the!differing!views!of! established!power!relations.!These!differing!views!represent!important!

! ! 54! Chapter!3:!Sustainability!Energy!Transitions! sources!for!change!since!the,!‘clash!of!rival!collective!images!provides! evidence!of!the!potential!for!alternative!paths!of!development!and!raises! questions!as!to!the!possible!material!and!institutional!basis!for!the! emergence!of!an!alternative!structure’!(Cox,!1981,!p.!136).!Institutions!are! regarded!as!stabilising!forces.!They!encourage!collective!images!that!align! with!the!prevailing!power!relations!and!are!therefore,!‘particular! amalgams!of!ideas!and!material!power!which!in!turn!influence!the! development!of!ideas!and!material!capabilities’!(Cox,!1981,!p.!137).! ! ! Hegemony(and(discourse(coalitions( ! Gramsci’s!views!on!fascism!and!the!emergence!of!an!alternative!form!of! state!and!society!drew!from!a!range!of!theorists!and!philosophers,! including!Machiavelli,!Lenin,!Hegel!and!Benedetto!Croce.!Gramsci!was!by! no!means!an!orthodox!Marxist.!He!was!greatly!influenced!by!Croce,!who! was!largely!responsible!for!reOestablishing!idealism!in!the!early!2Oth! Century.!Croce’s!idealism!opposed!the!reduction!of!human!activity!to! mechanical,!naturalistic!impulses!(Martin,!1998),!and,!in!a!similar!way,! Gramsci!also!rejected!the!deterministic!and!economistic!interpretations!of! Marx.!! For!Gramsci,!ideational!superstructures!were!not!simply!reflections! of!the!economic!base.!Rather,!culture!and!ideology!represented!somewhat! autonomous!forms!(Levy!&!Egan,!2003),!meaning!that!neither! presupposed!the!other.!Although!Croce’s!emphasis!on!the!importance!of! culture!and!ideals!in!historical!change!appealed!to!Gramsci,!he!criticised! Croce’s!approach!for!its!reluctance!to!deal!with!social!conflict!(Martin,! 1998).!Gramsci!was!particularly!concerned!with!social!change!and,!‘had! more!to!say!about!moments!of!crisis!and!transition!…!than!about!political! domination!in!general’!(Martin,!1998,!p.!169).!The!processes!of!conflict,!

! ! 55! Chapter!3:!Sustainability!Energy!Transitions! resistance!and!accommodation!in!social!change!are!therefore!central!to! Gramsci’s!concepts.!! Gramsci’s!notion!of!hegemony!is!arguably!his!most!significant! contribution!to!political!theory!today.!The!term!itself!had!been!used! elsewhere,!in!particular!by!Lenin!to!denote!the!political!leadership!of!the! working!class!in!revolutionary!change!(i.e.,!in!the!Bolshevik!Revolution! and!creation!of!a!Soviet!Socialist!State).!However,!Gramsci!extended!this! understanding!by!applying!it!to!the!bourgeoisie.!Gramsci!blamed!ideology! for!the!failure!of!Italy's!socialist!revolution!in!the!early!twentieth!century! as!much!he!did!violence!and!political!and!economic!coercion.!By!projecting! values!that!the!working!class!could!identify!as!their!own,!capitalism’s! ruling!elite!were!able!to!maintain!the!status!quo!–!in!effect!suppressing!the! need!for!revolution.!For!Gramsci,!hegemony!entails! ...!not!only!a!unison!of!economic!and!political!aims,!but!also! intellectual!and!moral!unity!…!the!development!and!expansion!of!the! (dominant)!group!are!conceived!of,!and!presented,!as!being!the! motor!force!of!a!universal!expansion!…!In!other!words,!the!dominant! group!is!coordinated!concretely!with!the!general!interests!of!the! subordinate!groups!(Levy!&!Newell,!2002,!p.!87).! ! ! Simply!put,!the!dominant!class!or!group!establishes!its!own!moral,! political!and!cultural!values!as!conventional!norms!of!practical!behaviour! (Femia,!1981).!Importantly,!hegemony!is!not!simply!a!form!of!coercive! control!via!a!small!elite.!Rather!it!is!built!on,!‘coalitions!and!compromises! that!provide!a!measure!of!political!and!material!accommodation!with! other!social!groups,!and!on!ideologies!that!convey!a!mutuality!of!interests’! (Levy!&!Egan,!2003,!p.!805).!The!pursuit!of!and!ability!to!maintain! hegemony!requires,!in!part,!‘the!articulation!of!discourse!into!a!coherent! ideology!and!an!array!of!institutions!that!project!the!moral!and!intellectual! leadership!of!dominant!elites’!(Levy!&!Scully,!2007,!p.!977).!This! articulation!of!interests!(or!discourses)!is!important!in!understanding! hegemony.!!

! ! 56! Chapter!3:!Sustainability!Energy!Transitions!

How!and!why!are!environmentOenergy!related!issues!constructed?! How!do!new!networks!and!coalitions!form?!And!how!are!policy!solutions! defined?!These!are!important!questions!regarding!the!nature!and!analysis! of!SET!governance.!They!draw!attention!to!the!power!relations!within! dominant!narratives.!! Discourse!analysis,!now!a!widelyOused!tool!for!understanding!global! environmental!change!(Dryzek,!1997;!Hajer,!1995;!Litfin,!1994),!offers! valuable!insights!here.!Hajer’s!(1995)!concept!of!storylines!and!discourse! coalitions!complements!a!neoOGramscian!approach.!Although!discourse! coalitions!cannot!alone!explain!outcomes,!they!nonetheless!help!capture! some!of!the!dynamics!of!governance!through!their!focus!on!coalition! formation!and!interaction.!! Dryzek!(2005,!p.!9)!defines!a!discourse!as:! ...!a!shared!way!of!apprehending!the!world.!Embedded!in!language,!it! enables!those!who!subscribe!to!it!to!interpret!bits!of!information!and! put!them!into!coherent!stories!or!accounts.!Discourses!construct! meanings!and!relationships,!helping!to!define!common!sense!and! legitimate!knowledge.!Each!discourse!rests!on!assumptions,! judgements,!and!contentions!that!provide!the!basic!terms!for! analysis,!debates,!agreements,!and!disagreements.! ! Discourses!are!understood!here!as!social!processes!that!condition! interests,!values,!and!actions.!They!represent!important!vehicles!of!power! (Litfin,!1994),!which!can!be!related!to!Gramsci’s!notion!of!hegemony.! Hajer!considers!the!policy!process!to!involve,!‘a!struggle!for!discursive! hegemony!in!which!actors!try!to!secure!support!for!their!definitions!of! reality’!(Hajer,!1995,!p.!59).!This!‘argumentive!game’,!as!Hajer!puts!it,!is! determined!by!three!factors:!credibility,!acceptability,!and!trust.!Yet!these! cannot!be!understood!in!isolation!since!these!qualities!are!themselves!a! product!of!power.!To!acquire!or!posses!these!qualities,!someone!or!some! group!will!need!some!degree!of!significant!material!capability!and! institutional!support.!In!other!words,!the!struggle!for!discursive!hegemony!

! ! 57! Chapter!3:!Sustainability!Energy!Transitions! does!not!take!place!in!a!social!vacuum!but!in!the!context!of!existing! institutional!practices!(Hajer,!1995,!p.!60).!! Because!the!emergence!and!acceptance!of!a!hegemonic!narrative! requires!a!broad!base!of!support!that!makes!others!see!the!problems! according!to!those!pursuing!such!a!narrative,!and!positions!other!actors!in! a!specific!way,!coalitions!are!important!(Hajer,!1995).!A!discourse! coalition!is!a!group!of!actors!that!share!particular!sets!of!storylines.!These! storylines!draw!on!different!discursive!categories!but!combine!to!provide! actors!with!a!common!understanding!of!a!given!problem!(Hajer,!1995).! Discourse!coalitions!are!not!necessarily!based!on!shared!interests!or!goals! (although!they!can!be),!but!on!shared!‘ideas,!concepts,!and!categories! through!which!meaning!is!given!to!social!and!physical!phenomena’!(Hajer,! 2006,!p.!67).!This!means!they!are!producers!of!discourse.!! Importantly,!discourse!coalitions!can!attain!legitimacy!by! articulating!and!sharing!resources,!knowledge,!meaning,!and!argument! (Bulkeley,!2000,!p.!734).!This!can!then!lead!to!‘discourse!structuration’! (Hajer,!2006),!a!term!which!describes!how!a!discourse!begins!to!dominate! the!way!people!conceptualise!the!world.!If!this!discourse!is!then!translated! into!policy!action,!replacing!previous!understandings!of!an!issue,! ‘discourse!institutionalisation’!is!said!to!occur!(Hajer,!2006).!If!both! conditions!exist!then!a!discourse!is!hegemonic!(Hajer,!1995).!It!is! debatable,!however,!as!both!Dryzek!(1995)!and!Bulkeley!(2000)!note,! whether!a!discourse!coalition!can!actually!change!institutionalised! understandings!of!natureOsociety!relations!on!its!own.!Here,!discourse! coalitions!are!used!alongside!a!neoOGramscian!approach!to!provide!a!more! conceptuallyOrich!account!of!SET!dynamics.! Christoff!(2013a)!outlines!five!discursive!fields!relevant!to!national! climate!debates:!scientific;!ethical;!economic;!technological;!and!

! ! 58! Chapter!3:!Sustainability!Energy!Transitions! political/legal.3!It!is!within!these!discursive!fields!that!discourse!coalitions! compete!for!authority!and!legitimacy,!and!out!of!this!process!dominant! discourses!arise.!In!her!analysis!of!Australian!climate!policy,!Bulkeley! (2001)!examined!the!responses!of!the!resourceObased!discourse!coalition! and!the!greenhouse!action!discourse!coalition.4!Charting!the!evolution!of! ‘noOregrets’!as!the!guiding!principle!for!policy!development,!which! emerged!from!and!was!contested!within!the!economic!discursive!field,! Bulkeley!found!that!the!resourceObased!coalition!has!had!a!profound! impact!on!Australia’s!climate!change!response.!Fossil!fuel!related! industries!have!secured!their!interests!more!effectively!than!their!nonO fossil!fuel!competitors.!This!result!can!partly!be!explained!in!terms!of!the! structural!power!of!capital,!Newell!and!Paterson!(1998)!argue.!! The!basis!of!this!argument!is!that!capitalist!societies!depend!on! capital!accumulation!and!therefore!on!corporations!for!tax!revenue!and! employment!(Gill!&!Law,!1993).!The!state!should!therefore!not!be! regarded!as!a!neutral!actor.!Importantly,!this!argument!suggests!that!SET! governance!emerges!through!strategic!state!selectivity!in!the!form!of! political,!social,!and!discursive!practices!(McGuirk,!2004).!Fossil!fuel! energy!has!been!an!essential!component!in!capitalist!development,! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3!Christoff!(2013a)!also!describes!a!sixth!field!–!lived!reality!–!which!is!both!framed!by! and!mediated!through!the!other!five!fields!outlined!above.! ! 4!The!resourceObased!discourse!coalition!included!scientific!sceptics,!U.S.!resourceObased! interests,!Department!of!Foreign!Affairs!and!Trade,!Department!of!Primary!Industries! and!Energy,!Australian!Bureau!of!Agriculture!and!Resource!Economics,!National! Greenhouse!Advisory!Panel,!energy!and!transport!government!departments,!Australian! Greenhouse!Industry!Network,!EnergyAustralia,!Business!Council!of!Australia,!Electricity! Supply!Association!of!Australia,!Australian!Coal!Association,!resource!companies,!and! CSIRO.!The!greenhouse!action!discourse!coalition!included!the!IPCC,!international! environmental!NGOs,!insurance!industries,!InterOgovernmental!Committee!on! Ecologically!Sustainable!Development,!Department!of!Environment,!Sport!and! Territories,!National!Greenhouse!Advisory!Panel,!EPA,!!Sustainable!Energy!Development! Authority,!Australian!Local!Government!Association,!Environs!Australia,!Sustainable! Energy!Industry,!EnergyAustralia,!ACF,!Greenpeace,!Australian!Greens,!Wilderness! Society,!WWF,!CSIRO,!Australian!Medical!Association,!and!the!National!Greenhouse! Advisory!Council!(note!some!occur!in!both!discourse!coalitions).!See!Bulkeley!(2001).!

! ! 59! Chapter!3:!Sustainability!Energy!Transitions! particularly!throughout!twentieth!century.!The!industries!that!control! these!resources!(or!at!least!the!lobbyists!acting!on!their!behalf)!have!been! able!to!develop!close!relationships!with!government!(Newell!&!Paterson,! 1998;!Pearse,!2007).!This!has!provided!fossil!fuel!industries!with!certain! privileges!over!‘other’!energy!alternative!competitors,!e.g.!renewables,!and! enabled!them!to!frame!debates!on!climate!and!energy!policy!to!a!large! degree.! However,!the!success!of!these!resource!and!fossilOfuelObased! coalitions!is!not!simply!a!reflection!of!the!economic!power!they!can!exploit! (Levy!&!Newell,!2002).!To!assume!so!would!miss!the!point!that!both! Gramsci!and!Hajer!were!making.!The!relations!between!state!and!capital! are!important,!but!Gramsci’s!political!analysis!reminds!us!of!the!crucial! role!played!by!civil!society!in!hegemony.!For!Gramsci,!‘supremacy’!is! manifest!in!both!coercion!and!consent,!the!latter!representing!‘intellectual! and!moral!leadership’.!This!means!that!social!control!consists!of!‘external’! and!‘internal’!processes!(Femia,!1981).!! The!external!agent!is!most!commonly!associated!with!the! bureaucratic!and!coercive!machinery!of!the!state.!The!internal!dynamic!of! consent,!however,!was!crucial!in!Gramsci’s!understanding!of!hegemony.! This!places!the!relationship!between!state!and!nonOstate!actors!centrally! in!Gramsci’s!analysis.!Consent!takes!place!within!the!institutions!of!civil! society!(Okereke!et!al.,!2009).!According!to!Gramsci,!this!meant!the!notion! of!the!state!needed!to!be!enlarged!–!from!one!bounded!by!the!formal! mechanisms!of!government,!to!one!that!included!the!underpinnings!of!the! political!structures!in!civil!society!(Cox,!1983).!! Here,!civil!society!acts!as!a!terrain!for!the!construction!of!political! identities,!where!strategies!are!contested!(Sassoon,!2001).!At!the!same! time!it!provides!the!legitimacy!necessary!to!pursue!hegemonic!projects,! such!as!GDP!growth,!capital!accumulation,!and!neoliberalism.!From!this! perspective,!fossil!fuel!interests!dominate!not!simply!through!their!

! ! 60! Chapter!3:!Sustainability!Energy!Transitions! economic!might,!but!also!because!they!form!coalitions!and!exert!power! through!the!consent!of!civil!society.!This!is!done!by!aligning!fossil!fuel! interests!with!perceptions!of!what!is!‘good’.!For!example,!to!increase!GDP! growth,!so!the!saying!goes,!energy!consumption!must!also!increase.!! So!as!Gramsci!puts!it,!‘one!might!say!that!state!=!political!society! (formal!government!institutions)!+!civil!society,!in!others!words,! hegemony!protected!by!the!armour!of!coercion’!(Gramsci,!1971,!p.!263).! The!crucial!point!is!that!relations!between!state!and!nonOstate!actors!are! paramount!to!understanding!the!dynamics!of!power,!both!in!the!creation! of!hegemony!and!in!moments!of!change,!to!which!this!thesis!now!turns.! ! ! Processes(of(change:(incrementalism(and(revolutionary(change( ! In!an!attempt!to!understand!how!society!could!overcome!or!escape!carbon! lockOin,!Unruh!(2002,!p.!323)!concludes!that!the!most!likely!route!is,!‘to! wait!for!a!focussing!event,!such!as!a!reorganised!climate!crisis.’!Such! exogenous!forces!are!important!with!regards!to!systemOlevel!change,!but! the!MLP!highlights!a!number!of!forces!and!dynamics!on!different!levels! that!must!occur!and!align!if!permanent!change!is!to!eventuate.!Unruh’s! neglect!of!endogenous!dynamics!involved!in!change!in!many!ways! overlooks!important!insights!into!the!nature!of!power!detailed!thus!far.! Indeed,!Gramsci’s!understanding!of!hegemony!was!that!it!was!never! complete;!it!is!always!contingent!and!unstable!(Levy!&!Newell,!2002).!This! suggests!that!causes!and!processes!of!change!involve!more!than!simply! external!events.! Somewhat!similar!to!the!concept!of!lockOin!is!Gramsci’s!notion!of! historic!blocs:!dominant!configurations!of!material,!institutional,!and! discursive!forces.!The!processes!of!accommodation,!resistance,!and! conflict!are!central!in!the!creation!of!these!historic!blocs,!Gramsci! emphasises.!These!negotiations!require!knowledgeable!agents,!as!opposed!

! ! 61! Chapter!3:!Sustainability!Energy!Transitions! to!‘cultural!dopes’!who!passively!follow!rules!(Geels,!2010).!This!draws! attention!to!the!endogenous!dimensions!involved!in!policy,!or!indeed! regime,!change.! Gramsci!described!two!types!of!methods,!or!strategies,!drawn!upon! in!social!conflicts:!a!passive!revolution!(change!from!above);!and!a!war!of! position!and!war!of!movement!(change!from!below).!! ! Passive,revolution,and,the,advent,of,ecological,modernisation, ! A!passive!revolution!represents!a!strategy!to!managing!change!whereby! the!essential!components!of!the!social!structure!remain!intact.!This!can! lead!to!real!gains!for!wide!sections!of!society,!however,!overall!the!full! potential!for!progressive!change!is!generally!undermined,!particularly!for! those!already!marginalised!(Sassoon,!2001).!! In!many!ways!ecological!modernisation!resembles!a!passive! revolution.!From!Hajer’s!(1995,!p.!32)!point!of!view,!ecological! modernisation!can!be!seen!as!a!strategy!for!political!accommodation!of!the! 1970s!radical!environmentalist,!along!with!alignments!with!neoliberal! trends!in!the!1980s.!Ecological!modernisation!has!led!to!significant! industrial!reforms!and!environmental!gains!in!many!areas.!In!general! terms,!ecological!modernisation!represents!a!shift!in!environmental!policy! and!politics!from!the!midO1980s!onwards.!This!shift!generated!broad! appeal!because!it!appeared!to!reconcile!environmental!concerns!with!the! associated!economic!costs!of!addressing!these!concerns.!Put!simply,! environmental!problems!were!framed!as!opportunities.!As!Dryzek!(1997)! points!out,!at!the!core!of!ecological!modernisation!is!the!idea!that!money! can!be!made!from!environmental!protection.!The!reasoning!is!that!since! pollution!is!waste,!less!pollution!should!equate!to!more!economically! efficient!forms!of!production.!Similarly,!if!solving!environmental!problems! is!delayed!to!some!point!in!the!future,!solutions!may!prove!more!costly!

! ! 62! Chapter!3:!Sustainability!Energy!Transitions! than!preventing!the!problem!in!the!first!place.!In!addition,!there!is!a! market!for!pollution!prevention!and!green!goods.! As!a!concept!and!a!theory,!ecological!modernisation!encompasses!a! range!of!interpretations.!Murphy!and!Gouldson!(2000)!identify!three!in! particular.!On!a!general!level,!ecological!modernisation!reflects!lateO modern!society’s!response!to!an!increased!awareness!and!anxiety!about! the!ecological!risks!arising!from!industrialism!(Beck,!1992;!Giddens,! 1991).!On!an!empirical!level,!both!Hajer!(1995)!and!Weale!(1992)!used! the!concept!to!analyse!and!explain!changing!environmental!policy! discourses.!And!on!a!theoretical!level,!ecological!modernisation!has!been! used!to!explore!society's!potential!ability!to!shift!towards!more! ecologicallyOfriendly!patterns!or!modes!of!production!and!consumption! (Gouldson!&!Murphy,!1997).!This!last!use!of!the!concept!is!of!particular! interest!here.!Can!ecological!modernisation!encourage!and!promote!the! kinds!of!radical!structural!change!required!for!SETs?!Before!answering! this!question,!further!elaboration!on!the!foundations!of!ecological! modernisation!is!needed.! Ecological!modernisation!is!thought!to!have!emerged!from!a!number! of!interrelated!developments!on!the!international!and!national!level!(some! of!them!quite!specific!to!OECD!countries).!All!of!these!developments! centre!on!the!changing!relations!between!state!and!market!actors.!By!the! 1980s,!and!after!the!onset!of!stagflation!in!the!prior!decade,!the!welfare! state's!effectiveness!in!terms!of!protecting!common!interests!and!goods! was!being!seriously!challenged.!A!rapid!acceleration!of!economic! globalisation!ensued.!In!broad!terms,!the!result!was!either!neoliberal! programs!that!emphasised!privatisation!and!deregulation!(as!in!Australia,! the!USA,!Canada,!and!the!UK),!or!neoOcorporatist!structures!(more! common!to!European!countries).!Both!types!of!structure,!to!an!extent,! redefined!state!operating!procedures!(Bulkeley!&!Mol,!2003,!p.!145).!!

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At!the!same!time,!from!an!environmental!perspective,!stateObased,! commandOandOcontrol!methods!evident!in!the!1960s!and!1970s!were! proving!insufficient.!These!methods!primarily!used!endOofOpipe!solutions! that!were!unable!to!deal!with!the!global!nature!of!environmental!problems! (Beck,!1992;!Mol,!2000).!In!this!sense,!the!nation!state!had!effectively! failed!to!reduce!and!prevent!environmental!risk!and!degradation,!and!was! unable!to!promote!technological!innovations!(Bulkeley!&!Mol,!2003,!p.! 145).!New!forms!of!environmental!governance!arose,!with!new!alliances! between!state!authorities!and!economic!actors!(Bulkeley!&!Mol,!2003).!! These!changes!in!policy!style!were!thought!to!better!reflect!the! changing!nature!of!contemporary!environmental!crises,!which!had! international!and!even!interOgenerational!dimensions!(Bulkeley!&!Mol,! 2003).!At!the!time,!the!move!to!a!more!integrated!and!preventative! approach!seemed!a!logical!course!of!action!to!many.!As!Murphy!and! Gouldson!(2000)!outline,!the!thinking!was!that!prescriptive!dimensions!of! ecological!modernisation!could!address!prevailing!environmental! problems!within!the!framework!of!modernity.!They!would!do!so!largely! through!the!actions!of!the!state!and!industry,!with!the!result!of! encouraging!further!economic!growth.!! Two!features!of!this!understanding!of!ecological!modernisation! stand!out.!First,!as!Hajer!(1995,!p.!31)!notes,!it,!‘assumes!that!existing! political,!economic!and!social!institutions!can!internalise!care!for!the! environment.’!Second,!this!understanding!originates!in!the!economic! sphere!(Spaargaren,!1997).!Such!interpretations!result!in!an!efficiencyO oriented,!technicist,!and!marketOdriven!paradigm!(Lafferty!&! Meadowcroft,!2000).!This!paradigm!views!environmental!problems!as! opportunities,!hence!the!term:!pollution!prevention!pays.!From!this! perspective!ecological!modernisation!is!‘fundamentally!a!technical!costO minimising!strategy!for!industry!and!an!alternative!to!labourOsaving! investment!–!a!form!of!“ecological!rationalisation”’!(Christoff,!1996,!p.!

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480).!Here!the!environment!is!not!the!impetus!for!change!but!simply!a! means!to!an!end.! Nevertheless,!as!its!proponents!would!argue,!this!kind!of!ecological! modernisation!has!led!to!significant!environmental!gains.!These!gains! encompass!(energy)!efficiencies!and!standards,!but!also!responses!to!acid! rain!and!chlorofluorocarbons!(CFCs),!successes!commonly!cited!in!the! ecological!modernisation!literature.!A!strength!of!ecological! modernisation!lies!in!its!ideological!shift!and!broad!appeal,!which!opens! up!new!spaces!for!political!representation!as!well!as!new!alliances! (Bostrom,!2003).!In!many!respects,!this!led!to!greater!inclusivity!in! environmental!governance!structures!and!more!socially!just!outcomes,! regardless!of!whether!they!were!incidental!or!not.5!! The!key!to!these!successes!(i.e.,!energy!efficiencies,!acid!rain,!and! CFCs),!however,!does!not!lie!so!much!in!the!ecoOmodernist!paradigm's! ability!to!internalise!and!initiate!radical!technological!innovations!based! on!altruistic!ecological!motives.!Rather,!addressing!these!environmental! problems!did!not!overly!disrupt!the!incumbent!regime.!Considering!the! systemic!problems!that!climate!change!alerts!us!to,!this!is!an!important! consideration.!It!raises!the!question:!to!what!extent!can!the!prescriptive! and!normative!features!of!ecological!modernisation!generate!the!kinds!of! changes!required!for!SETs?! The!answer!to!this!question!depends!on!what!type!of!ecological! modernisation!we!refer!to.!The!kind!detailed!so!far!certainly!seems!to! preference!incremental!over!radical!change;!and!it!says!little!about!issues! of!social!justice!or!societyOnature!relations!(Murphy!&!Gouldson,!2000).! Yet!unless!these!fundamental!issues!are!brought!to!the!fore,!there!would! appear!to!be!little!need!for!radical!structural!change.!This!is!because!the!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!For!example,!pollution/waste!is!often!located!in!poor!regions!(Allen,!2003).!Hence,! improvements!in!pollution!control!have!simultaneously!improved!living!conditions!in! many!disadvantaged!areas.!

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‘system’,!or!more!generally!capitalism!and!the!current!modes!of! production!and!consumption!would!not!be!considered!the!root!cause!of! the!problem.!! This!explains!why!some!authors!define!two!variants!of!ecological! modernisation.!Hajer!(1995)!describes!a!technoOcorporatist!ecological! modernisation!and!a!reflexive!ecological!modernisation.!The!former!is! increasingly!dominated!by!an,!‘efficiencyOoriented!logic!that!prioritises! economic!rationality!and!technocratic!input!while!marginalising! normative!debate!and!diminishing!scope!for!collective!(political)!decisionO making’!(Lafferty!&!Meadowcroft,!2000,!p.!45).!The!latter!form!points,!‘to! the!practices!of!social!learning,!cultural!politics!and!new!institutional! arrangements’!(Mol!&!Spaargaren,!2000,!p.!20).!Similarly,!Christoff!(1996)! highlights!differences!between!what!he!labels!weak!ecological! modernisation!(economicOtechnological)!and!strong!ecological! modernisation!(institutionalOdemocratic).!He!bases!these!alternatives!on! the!different!possible!applications!of!the!concept,!which!can!range!from! technological!adjustment,!policy!discourse,!and!new!ideological! constellations,!to!deeply!embedded!and!ecologically!selfOconscious!forms! of!cultural!transformation.!! To!summarise,!these!authors!are!among!those!who!suggest!that! strong!and!reflexive!ecological!modernisation!could!bring!about!the! changes!required!for!rapid!SETs.!This!begs!the!next!question,!is!such!an! ecoOmodernist!paradigm!possible!in!practice?! The!experiences!of!the!ecological!modernisation!experiment!just! described!from!around!the!turn!of!21st!Century!suggest!this!is!not!possible.! As!Newell!and!Paterson!(2010,!p.!77)!argue,!‘climate!politics!are! increasingly!conducted!by,!through!and!for!markets’.!If!these!ties!are! strengthened!further,!they!may!simply,!‘serve!to!legitimise!the!continuing! instrumental!domination!and!destruction!of!the!environment’!(Christoff,! 1996,!p.!497).!They!may!also!recreate,!‘a!neoliberal!hegemony!that!

! ! 66! Chapter!3:!Sustainability!Energy!Transitions! empowers!those!pragmatists!who!are!willing!to!engage!whilst! simultaneously!disempowering!its!critics!and!locking!out!approaches!that! could!lead!to!deeper!change’!(Bailey,!Gouldson,!&!Newell,!2011,!p.!700).! From!an!energy!perspective!the!type,of!fuels!used!has!remained!virtually! the!same,!and!so!ecological!modernisation!to!date!has!avoided! fundamental!question!regarding!production!and!consumption!patterns,! and!the!ecological!harm!these!patterns!generate.!Any!change!that!has! occurred!has!done!relatively!little!to!improve!the!lives!of!those!already! disadvantaged.!The!challenge!lies!in!transcending!this!apparent!impasse.! ! War,of,position, ! To!understand!revolutionary!change,!or!more!rapid!and!radical!change,! Gramsci!learnt!much!from!Russia's!Bolshevik!Revolution.!The!Bolsheviks'! success,!according!to!Gramsci,!was!due!to!an!underdeveloped!civil!society,! which!enabled!the!working!class!to!overpower!the!state!with!very!little! resistance!in!what!he!termed!a!war!of!movement!(Cox,!1983).!This! represented!a!rapid!frontal!assault!on!the!adversary’s!base!(Femia,!1981).! However,!Gramsci!argued!a!strategy!like!this!would!prove!useless!in! developed!capitalist!societies!unless!the!battle!within!civil!society!could!be! won!first.!As!Gramsci!wrote:! In!Russia!the!State!was!everything!and!civil!society!was!primitive!and! amorphous;!in!the!West!there!was!a!proper!relation!between!the! State!and!civil!society,!and!when!the!State!trembled!a!robust! structure!of!civil!society!was!at!once!revealed.!The!State!was!merely! an!outer!trench,!behind!which!there!stood!a!powerful!chain!of! fortresses!and!casemates,!more!or!less!numerous!from!one!State!to! the!next!(Femia,!1981,!p.!54).! ! Gramsci!therefore!used!the!term!war!of!position!to!denote!a,!‘longer! term!strategy,!coordinated!across!multiple!bases!of!power,!to!gain! influence!in!the!cultural!institutions!of!civil!society,!develop!organisational! capacity,!and!to!win!new!allies’!(Levy!&!Egan,!2003,!p.!807).!To!describe!

! ! 67! Chapter!3:!Sustainability!Energy!Transitions! how!actors!engage!in!such!a!strategy,!Gramsci!drew!comparisons!with! Machiavelli’s!The,Prince.!The!revolutionary!party,!which!Gramsci!termed! ‘The!Modern!Prince’,!was!not!a!real!person!but!an!organism,!‘a!complex! element!of!society!in!which!a!collective!will,!which!has!already!been! recognised!and!has!to!some!extent!exerted!itself!in!action,!begins!to!take! concrete!form’!(Martin,!1998,!p.!91).!Gramsci!believed!the!creation!of!a! counterOhegemonic!narrative!within!civil!society!could!outmanoeuvre!the! historic!bloc,!thereby!leading!to!a!new!form!of!state.!In!other!words,!the! Modern!Prince’s!task!was!to!create!hegemony!prior!to!the!seizure!of!state! power!(Martin,!1998).!This!involves!though!changes!to!underlying!ideas,! beliefs,!and!values.!So!how!do!such!changes!come!about!and!what!are!the! processes!by!which!these!shifts!evolve?! The!notion!of!a!policy!paradigm!shift!is!useful!in!this!regard.!Hall! (1993)!defines!a!policy!paradigm!as!‘a!framework!of!ideas!and!standards! that!specifies!not!only!the!goals!of!policy!and!the!kinds!of!instruments!that! can!be!used!to!attain!them,!but!also!the!very!nature!of!the!problem!they! are!meant!to!be!addressing’!(p.!279).!Shifts!from!one!policy!paradigms!to! another!are!made!particularly!challenging!because!the!policy!paradigms! itself!is!largely!taken!for!granted!and!therefore!unamenable!to!scrutiny!as! a!whole!(Hall,!1993).!Moreover,!change!is!not!dependent!only!on! competing!actors’!interests,!‘but!on!their!positional!advantages!within!a! broader!institutional!framework!…!and!on!exogenous!factors!affecting!the! power!of!one!set!of!actors!to!impose!its!paradigm!over!others’!(Hall,!1993,! p.!280).!The!process!of!policy!paradigms!change!then,!for!Hall,!involves!a! number!of!steps.!First,!an!accumulation!of!anomalies,!which!the!existing! paradigm!cannot!explain,!begins!to!emerge.!Second,!attempts!are!made,! through!policy!experimentation,!to!absorb!and!dispel!such!anomalies.! Third,!if!the!paradigm!is!incapable!of!reconciling!the!anomalies,!policy! failures!occur!which!undermined!the!existing!paradigm!and!its!advocates.! Fourth,!this!results!in!a!shift!in!the!locus!of!authority!over!policy,!initiating!

! ! 68! Chapter!3:!Sustainability!Energy!Transitions! a!wider!contest!between!competing!paradigms.!Finally,!a!new!paradigm!is! institutionalised!once!its!carriers!and!advocates!secure!positions!of! authority!such!that!they!are!able!to!rearrange!the!organisational!and! decisionOmaking!procedures!in!their!favour.! Also!drawing!on!the!notion!of!paradigm!shifts,!Wilson!(2000)! develops!a!policy!regime!model!to!explain!stability!and!change.!Similar!to! Hall,!Wilson!outlines!five!processes!involved!in!regime!change.!These! include:!stresses/enablers,!which!involve!external!factors!such!as! international!events,!natural!disasters,!demographic!changes,!or!a!new! discoveries!or!scandals,!all!of!which!create!conditions!that!enhance!the! possibilities!for!change;!this!can!then!lead!to!paradigm!shifts;!a! combination!of!these!two!dimensions!may!then!produce!a!legitimation! crisis;!this!results!in!power!shifts;!the!process!ends!with!changes!in! policy!implementation!process!and!in!policy!goals.!! What!these!policy!studies!demonstrate,!through!their!case!studies,!is! that!change!is!dependent!on!exogenous!and!endogenous!dynamics,! specifically,!the!interplay!and!alignment!between!the!two.!Gramsci’s!point! was!that!an!external!event!(i.e.!rapid!frontal!assault)!on!its!own!would! prove!futile!unless!the!internal!dynamics,!led!by!policy!entrepreneurs!are! what!Gramsci!termed!organic!intellectuals,!but!organised!in!such!a!way! that!they!were!ready!to!exploit!opportunities.!Analysis!must!therefore!be! directed!to!how!endogenous!and!exogenous!processes!caused!fractures!in! the!regime!as!well!is!how!actors!respond!to!external!shifts,!such!as!those! outlined!by!Sabatier!(1987),!including!changes!in!the!socioeconomic! conditions,!technology,!governing!coalitions,!or!policy!decisions.! ! Regarding!change!more!generally,!it!is!necessary!to!clarify!the! difference!between!incremental!and!radical!change.!Transitions!are! characterised!by!radical!change!in!that!they!are!about!changing!shared! assumptions!and!role!distributions.!However,!because!transitions!require! 25!to!50!years!to!accomplish,!they!are!not!radical!in!terms!of!pace.!

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Gramsci’s!notion!of!a!war!of!position!is!a!form!of!incrementalism,!but!it! could!still!be!deemed!radical!in!some!sense.!! The!distinction!between!radical!and!nonOradical!change!outlined! here!depends!on!the!overriding!longOterm!goals!of!change.!This!means! that!incrementalism!can!take!both!radical!and!nonOradical!forms.!For! example,!incrementalism!as!a!strategy!to!maintain!dominant!power! relations!or!hegemony!(i.e.,!weak!ecological!modernisation!or!a!passive! revolution),!should!be!regarded!as!nonOradical.!On!the!other!hand,! incrementalism!designed!to!change!dominant!power!relations!(i.e.,! Lindblom’s!incrementalism,!transition!management,!and!Gramsci’s!war!of! movement!or!war!of!position)!certainly!is!about!radical!change.!Yet!radical! change!could!occur!even!within!weak!forms!of!ecological!modernisation!or! a!passive!revolution.!This!is!because!concessions!made!to!maintain! hegemony,!such!as!businessOenvironmental!partnerships,!could!open!up! possibilities!for!change.!! Why!are!these!distinctions!relevant?!First,!efforts!to!understand! radical!change!should!not!altogether!dismiss!incremental!forms!of!change.! Second,!asking!‘what!kind!of!change?’!calls!into!question!the!motives!and! strategies!of!actors.!And!third,!relating!longOterm!goals!to!radical/nonO radical!change!can!provide!insights!into!possible!directions!and!pathways! that!SETs!may!take.!This!in!turn!may!help!explain!certain!actions!and! activities!in!the!climate!and!energy!policy!domain.!! ! ! Final(considerations( ! One!final!general!point!concerns!the!usefulness!of!Gramsci’s!concepts!in! this!study.!His!concepts!require!some!careful!interpretation,!considering! that!his!most!influential!work!was!incomplete!and!written!while!he!was! imprisoned!(Germain!&!Kenny,!1998;!Levy!&!Egan,!2003).!As!with!any! interpretation!of!past!thinkers,!there!is!a!risk!that!the,!‘historical!roots!of!

! ! 70! Chapter!3:!Sustainability!Energy!Transitions!

Gramsci’s!ideas!are!obscured!and!that!they!are!transferred!on!to! inappropriate!objects’!(Sassoon,!2001,!p.!7).!Compared!to!the!1930s,!the! ‘contemporary!environment!is!economically!more!expansive,!culturally! more!diverse!and,!as!a!result,!politically!more!complex!and!less! autonomous!than!Gramsci!could!have!ever!imagined’!(Martin,!1998,!p.! 171).!The!freedom!with!which!industrial!enterprises!move!around!the! globe!compels!states!to!compete!internationally!for!capital!investment.! This!reduces!the!state’s!regulatory!capacity.!! However,!as!Hall!(1986)!suggests,!if!Gramsci's!approach!were! abandoned!in!response!to!these!arguments,!we!might!overlook!important! theoretical!insights!into!the!analysis!of!political!and!ideological!aspects!of! social!formations.!What!Gramsci!was!studying!was!structurally!complex.! For!him,!politics!was!a!relatively!autonomous!form!that!needed!to!be! studied!in!its!own!right!with!its!own!distinctive!concepts!(Hall,!1986).! ! ! Conclusion( ! This!chapter!has!advanced!the!thesis’!conceptual!framework!by!examining! the!nature!of!power!and!its!role!in!SETs.!Part!one!of!this!chapter!focused! on!two!important!questions!centred!on!the!governance!of!SETs,!that!is,! who!governs!and!how.!This!is!explored!through!agencyOstructure! interactions!and!issues!of!distributed!power.!This!analysis!highlights!the! need!for!a!more!nuanced!interpretation!of!power!in!sustainability! transitions.!! ! This!chapter!argues!that!insights!from!a!neoOGramscian!analysis! offer!a!fruitful!way!forward.!In!particular,!it!is!well!placed!to!capture!the! complex!processes!that!both!enable!and!constrain!action!in!Australia’s! climate!and!energy!policy!domain.!Using!the!concept!of!hegemony,!neoO Gramscian!analysis!understands!power!as!a!configuration!of!forces! involving!material!interests,!institutions!and!discursive!elements,!which!

! ! 71! Chapter!3:!Sustainability!Energy!Transitions! helps!overcome!the!agencyOstructure!dichotomy.!Moreover,!this!approach! views!regime!change!as!an!exogenous!and,endogenous!process,!thereby! avoiding!the!conceptualisation!of!regimes!as!monolithic!structures!that! are!impenetrable!and!virtually!impossible!to!transform!(Geels,!2014).!! ! Combining!insights!from!a!neoOGramscian!perspective!with!those! from!the!transitions!literature!(Chapter!2),!it!is!argued,!can!highlight!and! open!up!the!strategic!nature!of!power!in!SETs.!This!approach!achieves!a! more!thorough!conceptualisation!of!who!and!what!influences!the! orientation!of!SETs!‘inOtheOmaking’,!and!how!they!influence!it.!The!manner! in!which!this!approach!is!employed!as!an!analytical!and!conceptual! framework!is!outlined!in!Chapter!4.! ! ! ! !

! ! 72! !

Chapter(4(

Research(design(

! ! Introduction( ! This!chapter!details!the!research!methodology!used!in!this!thesis.!In! particular,!this!section!relates!the!approaches!taken!to!the!aim!of!this! thesis!and!its!research!questions.!! ! ! First,!recall!that!the!aim!of!this!thesis!is!to!describe!and!analyse! attempts!in!Australia!to!transform!the!electricity!regime!along!ecologically! sustainable!lines,!in!relation!to!climate!and!energy!policy!developments!on! three!nested!levels:!the!national,!the!subnational!State!(Victoria)!and!the! local!(Latrobe!Valley,!in!Victoria),!over!the!period!1988!to!2013.!This!is! explored!through!three!research!questions:! ! 1.!How!has!Australia’s!approach!to!a!SET!changed!over!time!and!space! in!relation!to!the!evolution!of!climate!and!energy!policy?! ! 2.!What!does!Australia’s!SET!narrative!tell!us!about!the!dynamics!of! policy!change?! ! 3.!What!are!the!main!influences!that!have!constrained!the!acceleration! of!a!SET!in!Australia?! ! ! The!thesis’!research!questions!evolved!through!interaction!with! academics,!stakeholders,!and!the!literature.!As!Maxwell!(2005)!highlights,! wellOconstructed!research!questions!arise!from!an!interactive!design! process.!!

! 73! Chapter!4:!Research!Design!

Given!the!research!aim!and!questions!above,!what!then!is!the!most! appropriate!course!of!action?!How!should!we!study!this?!Who!does!it! involve?!What!does!it!involve?!And!which!methods!should!be!used?!An! emphasis!on!the!politics!of!SETs!only!complicates!this!further.!As!Williams! and!Matheny!(1995,!p.!38)!point!out,!‘we!must!learn!to!live!with!the! ambiguity!that!flows!from!the!impossibility!of!arriving!at!a!final!agreement! over!the!“best”!and!most!accurate!way!of!understanding!politics.’! Nevertheless,!researchers!must!establish!boundaries!on!what!they!study! to!avoid!overly!broad!generalisations!lacking!in!clarity!and!analytical! clout.!This!chapter!defines!these!boundaries!and!justifies!why!the!specific! methods!used!in!this!thesis!were!the!most!appropriate!under!the! circumstances.!This!provides!transparency!in!the!research!methodology,! but!also!demands!a!reflexive!strategy!that!continually!questions!the!best! approach!and!why.!This!is!pivotal!to!a!coherent,!efficient!research!design.! ! ! Case(study(choice( , This!thesis!employs!a!case!study!approach.!The!case!study!combines!two! types!of!approach,!which!Stake!(2000)!refers!to!as!intrinsic!and! instrumental.!The!intrinsic!approach!finds!a!case!worthy!of!exploration!as! an!intriguing!phenomenon!in!its!own!right.!The!instrumental!approach! aims!to!reveal!a!generalisable!insight!that!can!advance!understanding!of! the!wider!issues!(Stake,!2000).!Although!the!term!‘generalisable’!must!be! approached!with!some!caution,!detailed!case!studies!can!nonetheless! provide,!‘a!heuristic!device!for!exploring!possible!conjectures’!(Litfin,! 1994,!p.!5).! The!choice!of!case!study!is!a!crucial!step!in!any!research!design.! This!choice!should!be!made!based!on!exemplary!cases,!those!from!which! we!can!learn!the!most!(Stake,!2000).!Given!that!this!thesis!is!concerned! with!the!political!challenges!of!transforming!electricity!regimes!towards!

! ! 74! Chapter!4:!Research!Design! sustainability,!an!Australian!case!study!has!much!to!offer.!Australia!has!a! structural!economic!reliance!on!fossil!fuels!(with!domestic!and!export! dimensions),!it!is!one!of!the!highest!per!capita!emitters!of!carbon!dioxide,! 90!per!cent!of!its!electricity!is!sourced!from!fossil!fuels,!and!it!is!the! world's!largest!coking!coal!exporter!and!secondOlargest!thermal!coal! exporter!(RBA,!2011).!Furthermore,!Australia!is!on!track!to!become!the! largest!exporter!of!liquid!natural!gas!by!2017!(DRET,!2012).1!Given!that! these!structural!conditions!exist!simultaneous!to!the!threat!of!climate! change,!climate!and!energy!policy!formation!in!Australia!is!highly! conflictual!and!for!the!most!part!overtly!political.!Thus,!it!is!well!placed!to! expose!the!social!contests!and!relations!of!power!that!enable!and! constrain!SETs.!! An!Australian!case!also!has!the!potential!to!contribute!to!the! literature!on!the!topic!of!SET!governance.!As!a!federated!state,!attention! needs!be!given!to!the!role!of!subOnational!and!local!governments!in!the! formation!of!climate!and!energy!policy!(Bulkeley,!2000).!This!is! particularly!true!if,!as!O’Riordan!and!Jäger!contend,!climate!action!is! taking!place!within!a!‘more!decentralised,!disjointed!and!opportunistic’! environment.!According!to!the!authors,!‘the!bulk!of!climate!change!politics! may!have!to!devolve!to!the!local!level,!if!policies!are!to!become!effective!in! informal!institutional!dynamics!of!individuals!and!households’!(O'Riordan! &!Jäger,!1996,!p.!358).!These!arguments!complement!those!contained!in! Agenda!21,!which!similarly!calls!upon!local!government!to!play!a! substantive!role!in!sustainable!development,!reOemphasising!the! importance!of!the!local!in!issues!of!climate!policy.!As!Trisolini!(2010,!p.! 746)!suggests,!‘local!governments!have!a!critical,!though!clearly! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!While!the!focus!of!this!study!revolves!around!electricity!generation,!the!influence!of!the! energy!export!market,!economically,!politically,!and!discursively,!cannot!be!discounted.! Any!attempts!to!shift!away!from!coal!in!the!generation!sector!is!likely!to!be!perceived!as! an!‘attack’!on!the!broader!fossil!fuel!industry.!For!this!reason,!all!components!of!the!fossil! fuel!regime,!domestic!and!international,!must!remain!open!when!trying!to!understand!the! drivers!and!constraints!on!climate!and!energy!policy.!!

! ! 75! Chapter!4:!Research!Design! nonexclusive,!role!to!play!in!efforts!to!reduce!greenhouse!gas!emissions!…! The!collective!potential!and!the!ease!of!implementation!of!local!policies! warrant!their!serious!inclusion!in!a!comprehensive!national!programme’.! Consideration!of!the!State!of!Victoria!and!its!policy!links!with!the! Latrobe!Valley!inserts!this!subOnational!element!into!the!Australian!SET! narrative.!The!Latrobe!Valley,!located!in!the!State!of!Victoria,!remains!vital! for!fossil!fuelObased!power!generation!in!Australia!O!its!brown!coal! resource!would!last!another!500!years!at!current!extraction!levels.!Hence,! developments!in!the!Latrobe!Valley!are!likely!to!impact!Australia’s!SET! trajectory!more!generally.!The!Latrobe!Valley!electricity!generation! industry!is!estimated!to!be!directly!linked!to!over!3,000!jobs!and!the! sector!contributes!21!per!cent!to!Latrobe!City’s!Gross!Regional!Product! (GRP)!(Latrobe!City!Council,!2010).!It!also!supplies!90!per!cent!of! Victoria’s!electricity,!which!has!helped!underpin!the!State's!economic! growth!base!(largely!through!a!strong!manufacturing!sector).!! Moreover,!Victoria!is!a!net!exporter!of!electricity!into!the! Australian!National!Electricity!Market!(NEM),!supplying!around!one! quarter!of!Australia’s!total!electricity!needs.!At!the!same!time,!since!1990! the!State's!greenhouse!gas!emissions!have!increased!by!five!times!the! national!rate!(VCES,!2008).!In!this!instance,!SET!issues!at!the!national,! State!and!local!level!are!intertwined.!That!is,!any!changes!in!the!Latrobe! Valley!will!be!monitored!closely!by!State!and!Commonwealth! governments.!Correspondingly,!any!policy!changes!at!the!national!level! will!undoubtedly!affect!Victoria!and!the!Latrobe!Valley.!This!dynamic! makes!interrogating!and!exploring!national!and!subOnational!government! connections!in!climate!and!energy!politics!especially!important.! Taken!together!these!different!characteristics!mean!that!an! Australian!case!study!is!well!placed!to!capture!emerging!and!competing! discourses!around!SET!governance.! !

! ! 76! Chapter!4:!Research!Design!

Analytic(approach( ! Sustainability!transitions,!given!their!multiOdimensional!nature,!can!be! studied!from!various!angles!by!different!disciplines!(Geels,!2010).!How! one!choses!to!conceptualise!and!study!complex!social!phenomena!depends! on!their!philosophical!assumptions!about!the!nature!of!the!world! (ontology)!and!how!it!is!understood!(epistemology)!(Kuhn,!1970).!This! study!is!guided!by!constructivist!assumptions.!Rather!than!seek!to! uncover!empirical!truths!(as!positivist!approaches!seek!to!do),!this!thesis! instead!provides!insight!into!how!Australia’s!SET!narrative!has!evolved!O!! through!social!contests!between!the!multitude!of!actors!involved!O!and! then!offers!explanations!as!to!why.!For!constructivists,!knowledge!is!not! an!external!material!reality!to!be!simply!discovered!but!is!socially! constructed.!This!assumes!a!shared!understanding!between!both!subject! and!object.!While!objects!do!exists!outside!of!our!existence,!it!is!only!when! our!consciousness!engages!with!them!that!meaning!emerges!(Crotty,! 1998).!This!puts!the!focus!on!the,!‘role!of!ideas,!norms,!knowledge,!culture,! and!argument!in!politics,!and!stresses!the!role!of!collectivelyOheld!or! ‘intersubjective’!ideas!and!understandings!on!social!life’!(Finnemore!&! Sikkink,!2001,!p.!392).! There!is!no!universally!agreed!or!right!SET;!definitions!are!open!to! interpretation!and!transitions!can!take!many!paths.!Since!changes!in! policy!may!lead!to!regime!change,!the!climate!and!energy!policy!domains! represent!a!site!of!political!struggle!whereby!actors!or!coalitions!of!actors! attempt!to!exert!their!dominance.!This!raises!the!importance!of! stakeholders'!interests!and!their!responses!and!strategies!as!factors!that! determine!policy!agendas.!By!examining!how!certain!actors!attempt!to! influence!the!policy!domain!and!the!reasons!why,!we!can!acquire!a!more! thorough!understanding!of!the!drivers!and!constraints!on!SETs.!A! quantitative!approach,!such!as!a!survey,!was!not!considered!appropriate!

! ! 77! Chapter!4:!Research!Design! for!data!collection!because!of!the!difficulties!of!capturing!the!nuances!of! change!processes!through!simple,!closed!statements!or!questions.!For! these!reasons,!a!qualitative!approach!was!the!preferred!method!of! research!in!this!thesis.!! ! In!addition,!analytically,!this!study!combines!both!inductive!and! deductive!reasoning!(Layder,!1998).!While!it!is!common!for!qualitative! studies!to!be!associated!with!inductive!approaches!(and!quantitative! studies!with!deductive!ones),!a!reflexive!design!uses!both!in!practice.! Maxwell!(2005)!outlines!how!collecting!and!analysing!data,!developing! and!modifying!theory,!elaborating!or!refocussing!the!research!questions,! and!identifying!and!addressing!validity!threats!are!all!ongoing!processes! that!involve!‘tacking’!back!and!forth!between!the!different!components!of! the!research!design.!So!while!I!have!encouraged!themes!and!patterns!to! emerge!from!the!empirical!data!where!necessary,!which!reflects!an! inductive!approach,!this!does!not!imply!that!this!research!strategy!is! isolated!from!theoretical!concepts.!On!the!contrary,!understanding!and! explaining!why!various!responses!and!actions!have!occurred!relies!partly! on!deductive!elements.!This!is!where!the!conceptual!framework!becomes! particularly!important!since!it!is!used!to!help!abstract,!simplify,!discuss,! and!analyse!the!data!(Crowley,!1999,!p.!51).!How!this!conceptual!frame!is! employed!is!explained!below!in!the!section!‘framework!for!analysis’.!As! Bryman!(2004)!notes!though,!inductive!and!deductive!reasoning!rarely!act! alone!and!both!are!employed!in!this!study.!! , , Methods(of(data(collection( ! The!next!consideration!in!the!research!design!was!determining!what!kind! of!data!to!collect.!Methods!are!required!to!generate!the!data!needed!to! answer!these!research!questions.!Which!methods!are!most!appropriate!for! constructing!a!SET!policy!narrative!in!Australia?!!

! ! 78! Chapter!4:!Research!Design!

Commonwealth,!State!and!local!governments!in!Australia!at! various!different!times!over!the!last!25!years!have!emphasised!the! importance!of!transforming!the!electricity!regime!away!from!a!reliance!on! fossil!fuels,!and!they!have!been!quick!to!highlight!the!positive!steps!taken.! These!include,!for!example,!investments!in!renewable!technologies,!the! implementation!of!renewable!energy!and!energy!efficiency!targets,!and! more!recently!a!price!on!carbon.!Many!of!these!measures!are!outlined!in! formal!policy!documents,!statements,!briefings!and!so!on.!Yet,!in!Australia,! a!SET!is!not!an!official!policy!as!such!–!certainly!not!in!the!way!it!might!be! considered!in!Germany!for!example.2!Nor!is!it!confined!to!a!single! ministerial!portfolio!or!department.!It!is!problematic!to!rely!on!policy! documents!and/or!pieces!of!legislation!alone!because!it!is!unclear!who!the! major!decision makers!are!in!these!scenarios.!Consequently,!these!sources! would!yield!little!insight!into!why!and!how!decisions!were!made;!this! would!make!it!difficult!to!discern!processes!of!conflict!or!determine!which! voices!are!marginalised.!! ! With!these!considerations!in!mind,!the!most!appropriate!course!of! action!was!deemed!to!be!a!documentary!analysis!in!conjunction!with!oneO onOone!interviews.!Although!questionnaires!and!surveys!could!elicit! information!about!a!range!of!stakeholder!strategies,!these!would!most! likely!lack!the!detail,!nuance!and!contextual!data!necessary!for!this!study.! Their!results!would!tend!to!yield!descriptiveOtype!analyses!rather!than!the! critical!‘thick!description’!needed!to!answer!the!research!questions!of! concern!here.3!Compared!to!standardised!questionnaires,!interviews!are!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!In!Germany!the!Energiewende!(translation!energy!transition!in!English)!represents!a! formal!component!of!the!Federal!Government’s!energy!policy!portfolio.!Fixed!in!law,!this! involves!the!phase!out!of!nuclear!energy!by!2022,!and!an!80!per!cent!renewable!energy! target!by!2050!for!electricity!supply.! ! 3!The!term!‘thick!description’!was!first!coined!by!anthropologist!Clifford!Geertz.! According!to!Denzin!(1989,!p.!33),!it!involves!four!components,!or!characteristics:!it!gives! the!context!of!an!act;!it!states!the!intentions!and!meanings!that!organise!the!action;!it!

! ! 79! Chapter!4:!Research!Design! generally!a!more!effective!way!to!capture!participants'!perceptions,! attitudes,!and!motivations!(Kidder!&!Judd,!1986).!! Nevertheless,!an!interview!approach!must!take!certain! considerations!into!account.!As!Weiss!(1994,!p.!119)!states,!‘you!can!get! away!with!phrasing!questions!awkwardly!and!with!a!variety!of!other! errors!…![but!what]!…!You!can’t!get!away!with!is!failure!to!work!with!the! respondent!as!a!partner!in!the!production!of!useful!material.’!This! highlights!the!researcherOparticipant!relationship:!an!interviewer!must! have!a!professional!relationship!with!the!participant,!one!with!good! rapport!and!trust,!to!produce!effective!data.!! Some!material!in!this!research!may!be!considered!sensitive!or! confidential,!and!this!raises!two!obvious!concerns.!First,!this!study!relies! on!access!to!key!stakeholders.!Second,!participants!may!be!deliberately! misleading!or!untruthful,!and!many!are!likely!to!express!their!biases.! These!are!legitimate!concerns,!but!they!are!not!insurmountable.!Regarding! the!first!concern,!in!the!author's!experience!one!benefit!of!choosing!a! topical!and!‘live’!case!study!is!that!most!people!were!willing!to!discuss!a! range!of!issues!relating!to!SETs.!The!political!landscape!for!climate!and! energy!policy!in!Australia!is!currently!very!active!and!volatile,!creating!a! competitive!environment!in!which!everyone!wants!his!or!her!voice!heard.! This!leads!to!the!second!concern:!many!may!participate!because!they!feel! they!could!influence!the!research!in!some!way,!or!seek!to!promote! themselves!or!their!organisation.!Triangulation!of!data!is!an!important! strategy!to!avoid!such!pitfalls!because!it!provides!measures!to!reduce! misinterpretations!in!case!study!projects!(Stake,!1995).!! Triangulation!was!approached!on!a!number!of!levels.!First,!the! literature!review!identified!the!theoretical!and!conceptual!themes!relevant!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! traces!the!evolution!and!development!of!the!act;!it!presents!the!action!as!a!text!that!can! then!be!interpreted.!It!is!therefore!both!a!descriptive!and!interpretive!methodological! tool!(Geertz,!1973).!

! ! 80! Chapter!4:!Research!Design! to!this!study,!which!helped!frame!and!guide!the!narrative.!Second,!the! interviews!were!crossOreferenced!(transcripts!were!compared!with!one! another!where!relevant).!Third,!the!interview!material!was!crossO referenced!with!the!documentary!analysis.!These!texts!included!policy! documents!from!government!and!nonOgovernment!organisations,!media! commentaries,!parliamentary!inquiries,!notes!from!stakeholder!and! community!seminars!and!meetings,!and!a!range!of!other!stakeholder! documents!such!as!annual!reports!and!submissions.!Taken!together,!these! different!processes!helped!establish!a!more!reliable!and!accurate!SET! storyline.! Ethical!considerations!were!also!deemed!important!and!taken!into! account.!Some!material!may!be!deemed!confidential!or!sensitive,!and! without!appropriate!measures!to!ensure!some!form!of!anonymity,! participants!would!be!unlikely!to!talk!openly!and!honestly.!To!address!this! concern,!all!interview!material!used!in!this!thesis!has!been!coded!to! protect!and!conceal!the!identities!of!all!interviewees!involved.!The!ethics! approval!for!this!research!project!therefore!served!two!purposes:!it! ensured!researched!integrity!by!adhering!to!the!relevant!codes!of!ethical! research!including!those!outlined!by!the!NHMRC’s!National!Statement!on! Ethical!Conduct!in!Research!Involving!Humans;!and!it!enhanced!the! reliability!of!the!data!by!assuring!participant!confidentiality.!Consent! forms!were!generated!for!all!interview!participants!(see!Appendix!2).! !!!!!!!!!!!!!!!The!next!step!was!to!determine!whom!to!interview.!Snowball! sampling!was!the!primary!technique!used!because!it!provided!an!effective! way!to!identify!potential!informants.!This!technique!works!through!a! system!of!referrals!and,!as!Atkinson!and!Flint!(2001)!outline,!provides! several!advantages!for!qualitative!research.!One!is!trust,!since!referrals!are! made!by!acquaintances,!and!an!‘ascending!methodology’,!which!can!be! useful!to!help!fill!gaps!in!knowledge!by!locating!those!who!were!either! overlooked!or!hidden.!In!conjunction!with!snowball!sampling,!networking!

! ! 81! Chapter!4:!Research!Design! in!the!climate!and!energy!policy!domain!was!necessary!to!develop! relationships!and!contacts.!This!involved!attending!a!range!of!meetings,! seminars,!and!conferences.4!Additionally,!media!reports!were!useful!in! helping!to!identify!key!issues!in!the!climate!and!energy!policy!domain!over! the!period!1988!to!2013.! !!!!!!!!!!!!!!!The!danger!with!such!an!approach,!particularly!a!referralsObased! one,!is!sample!bias.!Early!decisions!were!made!to!canvass!a!diverse!sample! of!participants!(in!terms!of!their!background!and!interests)!to!capture! Australia’s!pluralist!and!adversarial!political!culture.!From!this! perspective,!power!is!diffuse!and!the!policy!process!is!multiOlayered!and! complex.!To!understand!how!different!policies!are!mediated,!formed,!and! implemented,!a!range!of!participants!were!sought,!including!State!and! federal!bureaucrats,!politicians!and!their!staff,!stakeholders!from!the! energy!sector,!environmental!NGOs,!community!and!union! representatives,!and!academics!with!direct!involvement!in!the!policy! process!(i.e.,!an!advisory!role).!Ultimately!selection!was!based!on! participants'!ability!to!provide!the!most!valuable!and!relevant!information! for!this!study.!Rather!than!adhering!to!a!set!formula!such!as!ensuring! equal!representation!from!the!different!groups!listed!above,!these!groups! served!mainly!as!a!guide.! !!!!!!!!!!!!!!!In!total,!52!inOdepth!interviews!were!conducted!for!this!research.! Of!these,!12!were!undertaken!at!an!early!stage!throughout!2011.!Although! notes!were!taken,!these!interviews!were!not!included!in!the!analysis,! rather,!they!were!designed!to!help!identify!key!issues!and!actors!relevant! to!this!thesis.!Of!the!remaining!40!interviews,!which!occurred!between! July!2012!and!April!2013!(see!Appendix!3!for!an!interview!schedule),!all! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4!These!included!meetings!with!the!Latrobe!City!Climate!Change!Consultative!Committee! and!the!Gippsland!Climate!Change!Network,!as!well!as!seminars!run!by!the!Melbourne! Energy!Institute:!‘The!Future!of!Cities!in!the!Low!Carbon!Economy’,!‘The!Future!of!Coal! and!Gas!in!Australia’,!‘The!Future!of!Electricity!Demand!in!Australia’,!‘The!Future!of! Carbon!Pricing!and!the!Australian!Electricity!Market’;!and!the!Committee!for!Economic! Development!of!Australia!(CEDA):!‘Latrobe!Valley!–!Powering!Towards!a!New!Economy’.!

! ! 82! Chapter!4:!Research!Design! were!recorded!and!transcribed!for!analysis.!This!figure!was!not! predetermined,!rather,!once!the!storylines!began!to!confirm!and!repeat! themselves!a!decision!was!made!to!cease!interviewing.!The!interviews! ranged!from!23!to!165!minutes!in!duration!(58!minutes!on!average).!! ! ! Framework(for(analysis( ! A!common!misconception!regarding!qualitative!data!analysis!is!that!very! little!structure!exists!in!the!way!the!analysis!is!conducted.!True,!many! qualitative!researchers!are!concerned!with!emerging!themes,!which!itself! can!be!a!rather!vague!term.!The!purpose!of!this!section!is!to!explain!how! the!analytical!and!conceptual!features!identified!in!Chapter!2!and!Chapter! 3!relate!to!one!another!and!inform!the!thesis’!inquiry.!The!framework! used!in!the!analysis!involved!two!key!stages.!The!first!was!to!establish!a! SET!narrative.!The!second!was!to!interpret!the!narrative.!! ! The!purpose!of!collecting!documentary!and!interview!data!was!to! help!construct!this!narrative.!As!outlined!at!the!beginning!of!this!thesis,! there!has!been!little!change!in!the!overall!structure!of!the!electricity! regime!in!terms!of!the!types!of!fuels!used!for!generating!electricity.!In! other!words,!one!needs!to!critically!interrogate!government!claims!of! ‘greening’!the!electricity!regime!and!establish!whether!or!not!Australia!is! in!fact!undergoing!a!SET.!To!do!this!certain!criteria!or!‘indicators’!were! required!in!order!to!measure!and!assess!its!progress.!For!this!I!used!the! characteristics!of!SETs,!identified!in!Chapter!2,!as!an!analytical!frame!to! locate!Australia’s!SET!narrative.!In!doing!so!I!examined!to!what!extent! these!characteristics!O!multiOdimensional!(including!multiOphase),!coO evolution,!visions,!and!steering!O!were!evident!in!Australia’s!climate!and! energy!policy!‘story’!(see!Table!1!below).! !

! ! 83! Chapter!4:!Research!Design!

Table!1:!Relationship!between!SET!characteristics,!indicators,!and! probing!questions! ! SET!Characteristic! Indicators/probing!questions!

MultiOdimensional! Indicators:!changes/shifts!on!the!niche,!regime,!and!landscape! (MultiOphase,!multiO levels!towards!sustainability.!These!are!not!just!in!terms!of! level)! technology,!but!include!shifts!in!policy,!public!opinion,!discourse,! and!so!on.!Moreover,!this!occurs!across!and!within!levels!of! government!(i.e.!national/subOnational).!For!example!under! different!governments!there!may!be!different!policy!‘styles’,! different!priorities,!departments/portfolios!etc.!! Probing!questions:!how!have!each!of!these!‘levels’!changed!over! time?!What!impact!has!this!had!on!the!direction!of!the!electricity! regime?!What!are!the!causes!of!instability?! CoOevolution! Indicators:!integration!and!coordination!(i.e.!integrative! capacity)!between!the!different!elements!that!influence!and! shape!the!electricity!regime.!! Probing!questions:!to!what!extent!are!climate!and!energy! policies!compatible?!Do!they!mutually!reinforce!or!oppose!one! another?!Is!there!coordination!between!different! departments/ministers?!

Visions! Indicators:!longOterm!policy!goals/pathways,!for!example!CO2! targets!for!2020,!2050!etc.!! Probing!questions:!what!are!the!visions!of!the!different!actors! involved?!How!are!these!visions!formulated?!To!what!degree!are! the!political!institutions!capable!of!building!consensus?!For! example,!is!there!evidence!of!‘open’!forums/roundtables!(i.e.! transition!arenas)?!Are!certain!actors!excluded?!Where!are!the! conflicts?!With!whom?!What!are!the!challenges?! Steering! Indicators:!regulatory!measures/government!intervention! designed!to!‘speedOup’!a!transition!(i.e.!beyond!technological! innovation!trajectories).!! Probing!questions:!who!is!in!charge!of!the!policy!process?!Who! should!be!in!charge?!What!is!the!role!of!the!state!vis!a!vis!the! market?!What!are!the!most!effective!policies!for!transforming! the!electricity!regime!towards!sustainability?!

! ! 84! Chapter!4:!Research!Design!

! The!interview!questions!were!guided!by!the!analytical!frame.!That! is,!the!four!SET!characteristics!outlined!above!in!Table!1!formed!the!basis! of!interview!questioning.!Within!each!of!these!four!areas,!certain! indicators!and!probing!questions!are!outlined,!each!of!which!are!derived! from!the!review!of!the!sustainability!transitions!literature.!In!general,! interviews!started!on!a!broad!level,!using!the!template!above,!before! narrowing!to!focus!on!the!participant’s!specific!knowledge!area.! Therefore,!each!interview!was!tailored,!to!a!degree,!so!as!to!capitalise!on! the!individual’s!expertise!and!experience.!The!interviews!were!also! iterative,!in!that!they!built!on!one!another;!very!often!what!was!learnt! from!one!interview!could!be!applied!to!the!next.!In!this!way!the!interview! questions!constantly!evolved,!since!the!data!analysis!occurred! simultaneously!with!the!data!collection.! ! In!light!of!these!considerations,!interviews!were!semiOstructured,! meaning!that!although!guided!by!themes!relevant!to!the!research! questions,!the!interview!questions!themselves!were!generally!openOended! (Flick,!2009).!The!rationale,!in!line!with!the!research!methodology,!was!to! allow!new!and!emergent!themes!to!evolve!if!necessary,!rather!than! prescribe!a!strict!course!of!inquiry!and!influence!interviewees’!responses.!! ! Of!the!40!recorded!interviews!in!this!study,!all!were!transcribed! and!analysed!as!soon!as!possible!after!the!interview.!To!analyse!such!large! amounts!of!data,!computerOassisted!qualitative!data!analysis!software! (CAQDAS)!was!deemed!the!most!appropriate!and!logical!choice!(Creswell,! 2007).!The!NVivo!software!used!by!this!study!provided!an!effective!way!to! store!and!analyse!data.!The!main!tool!provided!by!NVivo!is!coding,! whereby!a!code!represents!a!certain!concept!or!theme.!This!technique! provided!an!efficient!way!to!reduce!the!amounts!of!relevant!data!while! simultaneously!providing!valuable!insights!into!patterns!and!relationships! between!various!codes.!Note!that!NVivo!is!an!organisational!tool,!it!does! not!provide!analysis.!The!process!of!identifying!themes!and!determining!

! ! 85! Chapter!4:!Research!Design! those!data!most!relevant!remains!entirely!up!to!the!expertise!of!the! researcher.!Codes!were!identified!according!to!ideas!from!the!literature! review!as!well!as!new!ideas!identified!in!the!documentary!data!and!the! transcripts!themselves.! ! The!second!stage!of!the!analysis!was!to!interpret!the!narrative.!As! Geels!(2011,!p.!35)!points!out,!although!narratives!‘can!capture!complex! interactions!between!agency!and!changing!contexts,!time,!event! sequences,!making!moves!in!a!game,!and!changing!identities’,!they!need!to! be!guided!by!conceptual!frameworks!that!specify!a!certain!plot.!The!two! ‘literature!review’!chapters!(Chapter!2!and!3)!have!built!a!conceptual! framework!around!SETs,!drawing!on!the!sustainability!transitions! literature!as!well!as!insights!from!a!neoOGramscian!approach.!Taken! together,!the!conceptual!framework!points!to!a!variety!of!analytical! components,!such!as!those!outline!above,!which!involve!different!levels!of! influence,!namely!material,!institutional!and!discursive!forces.!The!point!to! note!is!that!these!different!elements!do!not!act!in!isolation.!Rather,!the! narrative!presented!continually!draws!on!these!different!elements,!which! are!interwoven!through!the!analysis,!as!opposed!to!presenting!discrete! objects!of!analysis!whereby!each!chapter!represents!a!different! component!of!the!electricity!regime!or!a!different!level!of!influence.!From! this!perspective!the!conceptual!framework!informs,!rather!than!overtly! structures!the!analysis.! ! ! ! Conclusion( ! This!chapter!has!outlined!the!key!approaches!to!obtaining!the!evidence! necessary!to!answer!the!thesis’!research!questions.!This!thesis!employs!a! qualitative!case!study!to!examine!Australia’s!efforts!in!transforming!the! electricity!regime!along!ecologically!sustainable!lines.!Given!the!multiO dimensional!nature!of!transitions,!and!the!fact!that!Australia!is!a!federated!

! ! 86! Chapter!4:!Research!Design! state,!analysis!traverses!national!and!subOnational!levels!of!politics!and! influence.! ! Documents,!relating!to!the!climate!and!energy!policy!domain,!and! interviews!provide!the!empirical!material!for!analysis,!which,!as! illustrated!in!this!chapter,!are!informed!by!the!concepts!identified!in!the! literature.!As!Janesick!(2008)!points!out,!one!of!the!keys!to!effective! qualitative!research!is:!how!well!the!research!design!relates!to!the!subject! and!the!questions!under!investigation;!and!how!well!the!explanations!fit! the!data!provided.!This!chapter!has!sought!to!demonstrate!that!each! component!of!the!research!design!is!informed!by!sound!methodological! assumptions!that!work!seamlessly!together.!! What!follows!is!a!policy!history!of!Australia’s!efforts!to!transform! its!electricity!regime!along!ecologically!sustainable!lines!(Chapters!5!to!8).! These!chapters!trace!SET!developments!on!national!and!subOnational! levels!over!the!period!1988!to!2013.

! ! 87! !

Chapter(5(

In!the!national(interest:(early(framing(of( Australia’s(energy(future(

!

Introduction( ! This!chapter!examines!the!early!developments!in!Australian!climate!and! energy!policy!over!the!period!1988!to!2007,!as!a!background!against! which!to!then!analyse!more!recent!SET!debates!in!Australia.!It!begins!with! the!Hawke!Government’s!adoption!of!the!Toronto!Target!in!the!late!1980s! and!the!early!response!of!the!State!Electricity!Commission!of!Victoria! (SECV)!in!the!Latrobe!Valley!to!global!warming!issues!and!the!need!for! transition.!! The!Latrobe!Valley!plays!a!critical!role!in!energy!transition! dynamics!in!Australia.!This!single!municipality!supplies!around!25!per! cent!of!Australia’s!electricity!and!employs!over!1800!people!directly! (Weller,!Sheehan,!&!Tomaney,!2011).1!As!a!region!well!attuned!to!the! challenges!of!SETs,!the!Latrobe!Valley!offers!valuable!insights!into! electricity!regime!dynamics.!By!1992!the!SECV!had!shifted!its!approach!on! greenhouse!policy,!or!at!least!became!more!overtly!sceptical!of!the!energy! changes!required!to!meet!the!Toronto!Target.!Initially!caught!off!guard,! the!fossil!fuel!regime!had!quickly!adapted!to!this!changing!political! environment,!although!this!challenge!had!clearly!left!the!regime! vulnerable.!Two!key!shifts!at!the!landscape!level!subsequently!worked!to!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!This!employment!figure!includes!electricity!production!and!coal!mining.!The!inclusion! of!‘electricity!dependent’!industries!(i.e.!manufacturing)!increases!the!size!of!this! workforce!to!3121.!See!Weller!et!al.!(2011).!

! 88! Chapter!5:!In!the!National!Interest! reOlegitimise!and!entrench!the!fossil!fuel!regime!in!Australia,!thwarting! any!early!gains.!These!shifts!were!an!aggressive!neoliberal!agenda,!and!the! conservative!Howard!government's!rise!to!power.!! This!chapter!is!structured!around!exploring!two!questions:!how! have!SET!debates!emerged!in!Australia?!And,!how!has!the!electricity! regime!evolved!in!response!to!the!rise!of!neoliberalism!in!the!late!1980s?! While!2007!is!commonly!referred!to!as!the!year!in!which!climate! change!dominated!Australia's!political!agenda,!concerns!about!global! warming!are!far!from!new!in!Australia.2!Equating!these!more!recent! events!with!the!beginning!of!climate!change!as!a!public!policy!problem! overlooks!nearly!two!prior!decades!of!discursive!struggles!over!policy! agendas.!It!also!excludes!understanding!of!how!the!electricity!regime! evolved!in!response!to!those!debates.!This!historical!context!provides! insights!into!why!SETs!have!proven!so!challenging!for!Australia.!To!this! end,!this!thesis!must!consider,!as!Crowley!and!Walker!(1999,!p.!3)!suggest,!! ‘nonOdecisions!as!well!as!decisions;!the!issues!that!have!been!ignored!and! repressed,!as!well!as!those!that!have!been!taken!up!with!enthusiasm’.! ! ! Early(movements(

Climate!change!emerged!as!a!public!policy!issue!in!Australia!in!the!late! 1980s.!Guided!by!notions!of!global!responsibility!and!equity,!a!relatively! strong!environmental!movement,!and!a!Prime!Minister!predisposed!to! ecological!values,!Australia's!initial!response!has!been!described!as!one!of! naive!altruism!(Christoff,!2005).!Australia!was!considered!a!leader!in! international!attempts!to!address!climate!change!(Taplin,!1995).!The! springboard!was!the!1988!Toronto!conference!where!more!than!300! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!Certainly!in!the!lead!up!to!the!2007!federal!election!climate!change!awareness!grew! rapidly!due!to!increased!media!coverage!and!embrace!by!the!RuddOled!Labor!Party.!As! Burgmann!and!Baer!(2012)!suggest,!the!2007!Australian!federal!election!was!quite! possibly!the!world’s!first!climate!change!election.!

! ! 89! Chapter!5:!In!the!National!Interest! scientists!and!policymakers!from!48!countries!came!together!to!call!for! urgent!action!on!climate!change!(Hamilton,!2001).!This!led!to!the!Toronto! Target,!an!international!goal!to!reduce!global!carbon!dioxide!emissions!to! 20!per!cent!below!1988!levels!by!the!year!2005.! Australia’s!response!was!constructive!and!enthusiastic.!The!year! after!the!Toronto!conference,!Australia!signed!the!Declaration!of!the! Hague,!which!recognised!the!global!significance!of!climate!change.!Gareth! Evans,!Australia's!Minister!for!Foreign!Affairs!at!the!time!described,! ‘climate!change!and!the!protection!of!the!atmosphere![as]!the!biggest! problem,!the!biggest!challenge,!faced!by!mankind!in!this!or!any!other!age’! (McDonald,!2005,!p.!221).!! In!the!same!year!the!Federal!government!established!a!National! Greenhouse!Advisory!Committee!made!up!of!scientific!advisers,!along!with! a!Prime!Ministerial!Working!Group!to!assess!achievable!targets!(Hamilton,! 2001).!By!October!1990!the!Australian!government!had!committed!itself! to!an!Interim!Planning!Target!(IPT)!that!sought!to!reduce!carbon!dioxide! emissions!to!1988!levels!by!2000,!and!by!a!further!20!per!cent!by!2005.! One!of!the!most!stringent!targets!announced!at!the!1990!World!Climate! Conference!in!Geneva,!it!was!exceeded!only!by!those!of!Germany!and!the! Netherlands,!which!had!committed!themselves!to!stricter!targets!by!the! midO1990s!(McDonald,!2005).! This!early!enthusiasm!for!action!on!climate!change,!irrespective!of! whether!the!targets!lacked!detail,!was!a!warning!sign!for!Australia's!fossil! fuel!electricity!regime.!Until!then!this!regime!had!remained!largely! unchallenged.!Questions!around!Australia's!future!electricity!supply!were! quick!to!emerge!since!stationary!energy!represented!half!of!Australia's! emissions.!! These!discussions!were!particularly!critical!for!the!SECV.!As!a! business,!the!SECV!was!the!source!of!90!per!cent!of!Victoria's!electricity,! and!Australia's!single!largest!emitter!of!carbon!dioxide!and!half!of!

! ! 90! Chapter!5:!In!the!National!Interest!

Victoria's!carbon!dioxide!emissions.!In!1989!the!SECV!owned!and! operated!electricity!generation!assets!totalling!around!6,000!megawatts! (MW),!5,000!MW!of!this!located!in!the!Latrobe!Valley!through!the! Hazelwood,!!W,!Loy!Yang!A,!and!Jeeralang!power!stations.! Transitioning!the!SECV!towards!sustainable!technologies!clearly!posed! extreme!challenges!for!the!incumbent!regime!and!directly!threatened!its! existence.!The!high!importance!of!electricity!generation!to!the!SECV!and! Latrobe!Valley!led!to!highly!contested!debates!about!transitioning,!debates! with!both!national!and!subOnational!considerations.!This!demonstrates! why!the!Latrobe!Valley!is!a!useful!focal!point!from!which!to!explore!and! analyse!the!dynamics!of!SETs.! In!many!ways!the!Latrobe!Valley!is!the!epicentre!of!fossil!fuel! electricity!generation!in!Australia.!It!was!developed!expressly!to!provide! electricity!and!has!performed!this!task!exceptionally!well.!Nevertheless,! this!region!was!prone!to!conflict,!mainly!between!power!station!workers! and!owners,!but!also!with!the!broader!public!over!the!fate!of!the!Yallourn! township!within!the!Latrobe!Valley.!These!conflicts!have!relevance!for! transitional!issues!today.!For!context,!a!brief!historical!account!of!the! Latrobe!Valley!and!the!rise!of!the!brown!coal!industry!follows.! ! The,Latrobe,Valley,

Victoria’s!Latrobe!Valley!lies!150!km!east!of!Melbourne!and!is!well!known! for!its!brown!coal!reserves!(Figure!1).!It!is!hard!to!overstate!the! importance!coal's!role!in!the!development!of!society:!it!fuelled!the! Industrial!Revolution!and!continues!to!be!a!key!source!of!power!in!the! world!today.!Early!leaders!in!Victoria!were!well!aware!of!the!value!of!this! commodity.!They!sought!to!break!free!from!reliance!on!coal!from! neighbouring!New!South!Wales!(NSW)!and!achieve!selfOsufficiency.!This! led!to!the!formation!of!the!SECV!on!10!January!1921!under!the!leadership! of!Sir!John!Monash.!The!decision!to!appoint!Monash!was!strategic.!He!was!

! ! 91! Chapter!5:!In!the!National!Interest! a!Victorian!and!trained!as!a!professional!engineer.!He!was!also!highly! regarded!for!leadership!qualities!he!forged!during!World!War!I,!when!he! commanded!the!Australian!Imperial!Forces!(AIF)!in!Europe.!Germany!was! most!experienced!in!the!use!of!brown!coal!for!generation,!a!new! technology!at!the!time,!and!Monash’s!experience!with!it!could!help! advance!Victoria’s!brown!coal!interests.!!! ! Figure!1:!PresentOday!brown!coal!mines!and!associated!power! stations!in!the!Latrobe!Valley.!

! Source:!Fairbrother!et!al.!(2012). ! ! Brown!coal!was!mined!in!the!Latrobe!Valley!prior!to!the!SECV's! formation,!with!almost!half!a!million!tonnes!privately!mined!from!the! Great!Morwell!Coal!Mine!(Mudd,!2009).!However,!in!the!1920s!the! Victorian!government!became!involved!and!mining!at!Yallourn! commenced,!boosting!the!region's!coal!production.!Yallourn!coal!had!an! average!moisture!content!of!65!per!cent,!compared!to!46.5!per!cent!for! coal!from!the!Old!Morwell!mine!(Martin!et!al.,!1993).!This!inferior! Yallourn!coal!caused!the!power!plant!boilers!to!fail!but!authorities!were! undeterred;!as!an!interim!measure!they!combined!Yallourn!coal!with! better!quality!Yallourn!North!coal.!By!1927,!betterOengineered!boilers! coped!with!the!poorerOquality!Yallourn!feed.!Electricity!was!first!

! ! 92! Chapter!5:!In!the!National!Interest! transmitted!from!Yallourn!to!Melbourne!on!24!June!1924,!three!years! after!the!SECV!had!formed.!! The!town!of!Yallourn!deserves!particular!attention.!In!her!book! Digging,People,up,for,Coal,!Fletcher!(2002)!describes!the!foundations!of! the!garden!town!below:3! The!excitement!of!electrification,!the!machine!aesthetic!of! modernism!and!the!iconic!status!of!a!new!engineering!undertaking! were!important!contributions!to!shaping!the!town.!They!were! combined!with!garden!city!planning!principles!and!notions!of! company!town!control.!Harmony!and!unity!could!be!imposed! through!the!physical!fabric!of!the!town,!where!planning!control! resulted!in!cohesion!through!architecture!and!landscaping.!It!could! be!achieved!through!design!and!ownership!of!domestic!spaces,!which! would!create!ideal!living!conditions!and!result!in!a!loyal,!compliant! workforce.!The!town!would!be!a!tool!fabricated!by!engineers.!By! reproducing!the!hierarchy!of!the!workplace!in!the!town!and!placing! engineers!at!the!apex,!unity!could!be!achieved!through!social! structure!(p.!19).! ! This!desire!for!a!loyal,!compliant!workforce!underpinned!the!SECV’s! employment!philosophy.!They!had!witnessed!the!events!at!NSW!mines,! where!disgruntled!workers!and!subsequent!strikes!negatively!affected! productivity.!The!SECV!sought!to!avoid!a!discontented!workforce!by! providing!the!workers!of!Yallourn!with!excellent!living!conditions.!The! town!planning!was!extremely!detailed,!right!down!to!the!location!of!roses! in!the!gardens.!Many!Yallourn!residents!took!pride!in!their!environment,! marked!by!treeOlined!streets,!parks,!landscaped!gardens,!and!other!social! amenities.!However,!an!obsession!with!control!continued!to!drive!the! SECV.!! The!SEC!was!particularly!concerned!to!establish!control!over!public! space!and!used!this!dominance!to!mould!Yallourn!into!the!type!of! town!it!desired.!The!control!of!information!and!institutions,!coupled! with!notions!of!identity!and!belonging,!were!used!at!Yallourn!to! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3!The!garden!town!stemmed!from!the!ideas!of!British!social!reformer!Ebenezer!Howard! and!were!aimed!at!creating!a!fairer!society!while!countering!the!appalling!conditions!in! industrialised!cities.!This!was!achieved!through!town!planning,!providing!decent!homes,! gardens!and!parklands.! !

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achieve!that!‘harmonious!whole’,!‘unity!of!purpose’!and!‘totality!of! gesture’!considered!essential!for!the!machine!aesthetic.!The!SEC! controlled!where!people!shopped!and!what!they!could!buy,!where! and!how!they!worshipped!and!where!they!drank.!The!SEC!censored! what!could!be!printed!on!the!pages!of!the!local!newspaper,!and! decided!which!political!meetings!could!take!place!on!SEC!territory.! As!the!town!became!increasingly!established,!the!Yallourn! administrators!shifted!from!securing!a!contented!workforce!and!a! smooth!articulation!between!the!workplace!and!the!living!places,!to! tightening!and!entrenching!their!own!power!(Fletcher,!2002,!p.!84).! ! Yet!dissent!was!an!everOpresent!feature!of!the!town.!The!more!the! SECV!tightened!its!grip,!the!more!the!people!resented!certain!aspects!of! life!in!Yallourn.!The!region!was!by!no!means!a!stranger!to!hardships,! downturn!and!unrest.!The!early!years!of!the!SECV!saw!six!major!work! stoppages!(during!the!period!1924!to!1926),!which!resulted!in!power! rationing!and!thousands!of!job!losses!in!Melbourne!(Fletcher,!2002).!In!the! 1930s,!the!severe!economic!depression!and!widespread!floods!in!the! summer!of!1934!caused!the!Yallourn!openOcut!mine!to!close!temporarily.! World!War!II!dramatically!changed!this!picture:!demand!for! electricity!rose!70!per!cent,!and!not!even!the!bushfires!of!1944,!which! interrupted!coal!supply,!could!prevent!the!SECV!from!meeting!the!State’s! power!needs,!albeit!with!the!help!of!their!briquette!factories.!Demand! continued!to!grow!at!a!rapid!rate!after!the!war,!and!with!this!came!a! deeper!reliance!on!coal.!In!1948,!plans!for!the!Morwell!openOcut!mine! were!approved!to!increase!coal!supply!to!the!Yallourn!power!station.4!This! led!to!the!development!of!the!Hazelwood!power!plant,!which!is!adjacent!to! the!Morwell!open!cut.!Operational!in!1967,!Hazelwood!greatly!increased! the!SECVs!electricity!generation!capacity.! ! Brown!coal!had!become!an!absolute!necessity!for!Victoria.!The! State!premier!from!1950!to!1952,!Sir!John!McDonald,!described!it!as,!‘vital! to!the!wellbeing!and!happiness!of!the!people!of!this!state’!(McDonald,! 1953).!In!pursuit!of!this!vital!resource,!SECV!management!was!prepared!to! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4!Formally!known!as!the!Maryvale!South!Open!Cut.!

! ! 94! Chapter!5:!In!the!National!Interest! destroy!the!symbol!of!its!initial!benevolent!vision!–!the!town!of!Yallourn.! The!planning!this!destruction!entailed!was!secretive,!calculated!and! methodical,!and!showed!a!callous!disregard!for!the!town’s!history!and!the! emotional!attachment!its!residents!felt!for!it.!! ! In!1969,!a!SECV!press!release!announced!that!the!town!of!Yallourn! would!be!cleared!due!to!winnable!coal!beneath!the!town.!This!coal!was! needed!to!supply!the!newly!proposed!power!station!at!Yallourn!W,!which! would!ensure!Victoria's!continued!growth!in!demand!for!electricity!was! met.!Latrobe!Valley!manager!J.!W.!Schultz!wrote!that,!‘it!was!well!known! from!the!town’s!inception!that!it!would!need!to!be!removed!at!a!later!date’! (Schultz,!cited!in!Fletcher,!2002,!p.!167).!The!SECV!event!went!so!far!as!to! commission!a!film!on!Yallourn!called!Born,to,Die,!but!it!was!never! screened.!! The!decision!to!move!Yallourn!was!strongly!opposed,!most!notably! by!the!Save!Yallourn!Campaign.!However,!given!the!SECV’s!control!over! the!region!and!its!monopoly!on!knowledge!of!the!brown!coal!reserves,!this! movement!could!not!muster!credible!technical!or!economic!arguments!to! save!the!town.!An!alliance!between!unions!and!environmental!groups! managed!to!stall!the!process,!but!the!eventual!dismantling!of!the!town!was! complete!by!the!1980s.!The!result!was!a!loss!of!place,!identity,!and! belonging!(Fletcher,!2002).! ! In!the!meantime,!another!major!advance!in!coal!mining!and!power! generation!took!place:!Loy!Yang,!the!region's!third!major!openOcut!mine! and!power!station!(after!Yallourn!and!Morwell),!gained!government! approval!and!began!generating!electricity!in!1983.!These!mines!and! subsequent!power!stations!dominated!the!Latrobe!Valley!visually,! economically,!environmentally,!and!socially.!! This!background!on!the!Latrobe!Valley!has!two!purposes:!to! detail!how!the!brown!coal!regime,!via!the!SECV,!rose!to!prominence! through!both!coercive!forms!and!persuasive!forms!of!power;!and!to!

! ! 95! Chapter!5:!In!the!National!Interest! draw!attention!to!historical!conflict!in!the!region.!This!historical! legacy!fostered!deep!regional!connections!to!the!fossil!fuel!energy! regime.!But!it!also!fostered!an!aversion!to!further!structural!change,! a!legacy!of!Yallourn's!creation!and!destruction.!Later!privatisation! (discussed!below)!added!another!layer!of!complexity!to!the!Latrobe!

Valley's!transitional!issues.! , The,SECV,and,greenhouse,policy,

In!1989!the!SECV!released!a!discussion!paper!titled!The,SEC,and,the, Greenhouse,Effect.!It!outlined!three!electricity!supply!scenarios!out!to! 2005:!Scenario!1!was!a!base!case;!Scenario!2!met!the!Toronto!Target;!and! Scenario!3!almost!met!the!Toronto!Target.!The!discussion!paper!emerged! from!the!Australian!and!Victorian!governments'!early!embrace!of!climate! change!as!a!serious!issue.! The!SECV's!modelling!used!a!moderate!load!projection!that! assumed!two!per!cent!annual!growth!to!2002,!and!2.2!per!cent!thereafter.! Under!these!assumptions!Victoria's!carbon!dioxide!emissions!would! increase!26!per!cent!by!2005!compared!to!the!base!case!(i.e.,!from!40.6!Mt! in!1988!to!51!Mt!in!2005).!To!meet!the!government's!objective!of!a!20!per! cent!reduction!by!2005!(i.e.,!80!per!cent!of!40.6!Mt)!would!require! reducing!carbon!dioxide!emissions!to!no!more!than!32.5!Mt!(36!per!cent! below!businessOasOusual!projections).!Outlined!below,!these!scenarios! include!measures!such!as!energy!conservation,!renewable!energy,!fuel! substitution,!efficiency!improvements,!and!advanced!technologies.! Scenario!1,!the!base!case,!illustrated!one!way!to!meet!generation! requirements,!but!ignored!the!Toronto!Target.!It!envisioned!a!mixture!of! new!gasOfired!generation!(unspecified)!and!brown!coalOfired!generation! (Loy!Yang!B!consisting!of!four!x!500!MW)!with!moderate!demand! management!initiatives.!The!existing!generation!plants!remained! operational!for!their!normal!life!expectancy,!meaning!that!Morwell!closed!

! ! 96! Chapter!5:!In!the!National!Interest! by!2003,!Hazelwood!by!2005,!Yallourn!W!stage!1!by!2014!and!Yallourn!W! stage!2!by!2022.!Seeking!to!improve!the!emissions!reduction!potential,!the! SECV!listed!a!range!of!factors!that!could!be!built!into!such!a!scenario,! including:! ! ! more!aggressive!demand!management! ! more!extensive!use!of!natural!gas!for!electricity!generation! ! use!of!renewable!sources! ! deferring!new!brown!coalOfired!generation! ! reducing!energy!losses!in!generation!and!transmission! ! retiring!old!brown!coalOfired!plant!early! ! tree!planting! ! reducing!interstate!exports!of!electricity.! ! Taking!these!into!consideration,!Scenario!2!provided!a!possible! pathway!to!meet!the!Toronto!Target.!This!entailed:! ! ! an!aggressive!demand!management!program! ! a!new!500!MW!combined!cycle!gasOfired!plant! ! a!new!200!MW!gas!turbine! ! slightly!reduced!outputs!from!existing!gasOfired!plants! ! use!of!renewables!(50!MW!small!hydro,!375!MW!large!hydro,!650! MW!wind)! ! the!retirement!of!Morwell,!Hazelwood,!and!Yallourn!W!power! stations!(meaning!the!only!brown!coalOfired!electricity!generation! would!come!from!Loy!Yang!A!&!B)! ! the!tree!planting!program,!which!covers!0.6!per!cent!of!the!State.! ! Although!it!presented!this!scenario,!the!SECV!stated!clearly!that!it! did!not!support!it.!Specifically,!the!SECV!asserted!that!early!closure!of! Yallourn!W!would!be!‘very!wasteful!of!resources’!(SECV,!1989,!p.!12).!

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Instead,!the!SECV!presented!a!similar!pathway!in!Scenario!3.!But!instead! of!closing!Yallourn!W!earlier!than!expected,!in!this!scenario!only!half!of!the! plant!would!be!retired!by!2005,!and!the!other!half!closed!in!2015.!This! scenario!also!entailed!delaying!Loy!Yang!B,!which!was!yet!to!be!built.!The! first!two!units!of!Loy!Yang!B!(originally!designed!to!be!4!x!500!MW)!would! proceed!as!planned,!with!the!last!two!units!delayed!until!the!final!closure! of!Yallourn!W!in!2015.!Under!this!scenario,!total!carbon!dioxide!emissions! would!be!constrained!in!2005!at!33.6!Mt!(16!per!cent!below!1988!levels),! and!the!Toronto!Target!met!by!2015.!As!with!Scenario!2,!the!SECV!argued! against!supporting!this!scenario,!noting!there!would!be!material!effects!on! Latrobe!Valley!employment!associated!with!closures!and!delayed!projects,! and!consequences!for!the!Victorian!government’s!economic!strategy!and! energyOintensive!industries.!! The!SECV!stopped!well!short!of!committing!itself!to!any!carbon! dioxide!reduction!targets,!but!its!discussion!paper!was!instrumental!in! drawing!attention!to!the!challenges!ahead!for!the!fossil!fuel!regime.!The! paper!recognises!and!shows!an!awareness!of!climate!change!issues,!but! also!demonstrated!a!willingness!to!engage!with!these!issues!through! reasonably!detailed!and!well!thoughtOout!transition!pathways.!At!the!time,! this!approach!was!quite!unique.!! Notions!of!transition!didn't!just!start!three!or!four!years!ago.!In!fact! the!SEC!was!quite!advanced!in!its!conceptualisation!of!what!it!needed! to!do!because!really!issues!of!climate!change!have!been!around!for!a! very!long!time.!We!started!getting!warnings!from!scientists!in!a!very! deeply!concerning!way!back!in!the!1970s!and!1980s!and!the!SEC! started!developing!transition!plans!in!a!quite!formalised!way!(utility! advocate!interview!#27).! ! In!concluding!their!discussion!paper,!the!SECV!formulated!a!NineOPoint! Action!Plan:! ! !

! ! 98! Chapter!5:!In!the!National!Interest!

1. Encourage!and!promote!energy!efficiency!in!the!use!of!electricity! by!customers.! 2. Encourage!and!promote!the!use!of!coOgeneration!and!renewable! energy!by!customers.! 3. Ensure!that!new!power!stations!are!designed!to!optimise!their! thermal!efficiency!and!decrease!carbon!dioxide!emissions!from!the! stations!and!from!the!generating!system.! 4. Investigate!the!economics!of!reducing!carbon!dioxide!emissions!by! decreasing!the!use!of!brown!coal!and!substituting!low!carbon! dioxide!emitting!fuels!in!the!existing!system.! 5. Increase!efficiency!in!the!generation,!transmission!and!distribution! of!electricity!in!the!existing!system.! 6. Investigate!revegetation!programs.! 7. Inform!the!public!of!the!issues!involved!and!the!greenhouse!effect.! 8. Monitor!and!support!scientific!understanding!of!the!greenhouse! effect,!its!effect!on!climate!and!resultant!social,!economic!and! environmental!issues,!possibly!on!an!industryOwide!basis.! 9. Ensure,!in!conjunction!with!other!government!agencies,!that! energy!and!use!in!Victoria!is!performed!to!take!into!account!the! need!to!minimise!carbon!dioxide!emissions!from!primary!fuels.! ! These!initiatives!were!reinforced!at!the!State!level!through!the! Victorian!government’s!1990!Greenhouse!Strategy,!Greenhouse:,Meeting, the,Challenge.!This!strategy!led!to!a!number!of!important!institutional! developments.!Most!relevant,!a!Greenhouse!Unit!was!established!and! located!within!the!Department!of!Conservation!and!Environment.!It!was! designed!to!coordinate!the,!‘development!and!implementation!of! greenhouse!policy,!(which)!promotes!awareness!and!community!action,! monitors!developments!in!greenhouse!research!and!liaises!with! Commonwealth!and!State!government!agencies!on!greenhouse!issues’!

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(DCE,!1990,!p.!6).!A!newly!created!Renewable!Energy!Authority!replaced! the!Solar!Energy!Council,!and!was!given!expanded!responsibilities!for! energy!conservation!and!renewable!energy.!

The,National,Greenhouse,Response,Strategy,

Key!federalOlevel!events!were!also!occurring!around!the!time!the!SECV! began!debating!the!possible!implications!of!carbon!dioxide!targets.!In! 1990!the!Australian!Minerals!and!Energy!Council!(AMEC)!released!a! report!Energy,and,the,Greenhouse,Effect.!This!report!reiterated!the! importance!emissions!reductions!in!the!energy!sector:! ...!current!forecasts!of!the!possible!impacts!if!greenhouse!induced! climate!change!occurs!suggest!that!all!areas!of!Australia!will!be! affected,!with!significant!implications!for!Australia's!economy!and! lifestyle.!Therefore,!regardless!of!the!state!of!scientific!knowledge!on! the!causes!and!impacts!of!greenhouse!induced!climate!change,!the! risks!involved!show!that!there!is!a!clear!need!for!Australia!to!seek! ways!to!limit!its!emissions!of!all!greenhouse!gases.!Australia!is! currently!developing!a!comprehensive!national!response!strategy! covering!all!aspects!of!the!greenhouse!issue.!The!energy!sector! recognises!the!key!role!that!energy!will!play!in!the!development!and! implementation!of!such!a!strategy!and!the!need!to!reduce!all! greenhouse!gas!emissions!(AMEC,!1990,!p.!1).! ! This!report!refers!to!a!national!response!strategy!that!was! formulated!through!two!distinct!processes!by!the!Ecologically!Sustainable! Development!(ESD)!Working!Groups!and!the!Industry!Commission.!The! ESD!process!consisted!of!nine!sectorial!groups!covering!agriculture,!forest! use,!fisheries,!manufacturing,!mining,!energy!use,!energy!production,! tourism,!and!transport,!as!well!as!an!interOsectoral!Greenhouse! Coordinating!Group.!Asked!by!the!Hawke!government!to!report!on!the! costs!and!benefits!of!taking!action!to!achieve!the!IPT,!the!Working!Groups! canvassed!members!of!the!bureaucracy,!industry,!trade!unions,!scientific! community,!and!environment!groups.!Despite!a!history!of!antagonism! between!such!groups!(Riedy,!2005),!the!ESD!process!yielded!a!remarkable! degree!of!consensus!(Bulkeley,!2001,!p.!159).!Conducted!between!1990!

! ! 100! Chapter!5:!In!the!National!Interest! and!1992!through!a!consensual!roundtable!process,!the!Working!Group! found,!‘that!there![were]!a!large!range!of!actions!which!would!be!costO effective!on!energy!grounds!alone,!so!that!additional!benefits!in! greenhouse!gas!reduction!would!be!free’!(Wilkenfeld,!Saddler,!&!Hamilton,! 1995,!p.!9).!In!total,!more!than!500!recommendations!were!made.!These! were!expected!to,!‘form!the!basis!of!a!National!Greenhouse!Response! Strategy’!(ESDWGC,!1992,!p.!158).! Around!this!time!the!government!also!requested!input!from!the! Industry!Commission.!The!Commission's!findings,!tabled!in!their!report! Costs,and,Benefits,of,Reducing,Greenhouse,Gas,Emissions,!diverged! significantly!from!the!Working!Groups’!findings,!partly!due!to!the! Commission's!interpretation!of!uncertainty!in!climate!change!science.!As! Industry!Commissioner!Tor!Hundloe!stated,!‘economists!cannot!measure! impacts!if!scientists!cannot!tell!them!what!the!impacts!are!likely!to!be!…! the!Commission!can!only!go!so!far!in!analysing!and!making! recommendations!on!environmental/sustainability!issues’!(Hundloe,! 1992,!pp.!483,!488).!Derived!via!an!inquiry!process!involving!input!from! interested!parties!through!submissions!and!public!hearings!(Taplin,!1994,! p.!145),!the!Commission!estimated!that!achieving!the!Toronto!Target! would!reduce!national!output!by!1.5!per!cent.!This!would,!they!argued,! adversely!affect!most!sectors!of!the!economy,!in!particular!the!coal! industry!(Industry!Commission,!1991b,!p.!4).!The!report!argued!that! unilateral!action!by!Australia!was!therefore!not!in!the!national!interest.! Throughout!1992,!a!National!Greenhouse!Steering!Committee! comprising!State!and!federal!bureaucrats!deliberated!the!findings!of!both! the!Working!Groups!and!the!Industry!Commission.!By!December!1992!the! Council!of!Australian!Governments!(COAG)!had!endorsed!the!National! Greenhouse!Response!Strategy!(NGRS).!The!strategy!disappointed!many! environmental!groups,!with!one!environmental!representative!on!the!ESD! Greenhouse!Coordinating!Group,!Dr!Mark!Diesendorf,!labelling!it!‘the!

! ! 101! Chapter!5:!In!the!National!Interest! bureaucratic!betrayal’!(Taplin,!1994).!The!strategy’s!conservative! orientation!reflected!how!it!had!been!influenced!more!by!the!findings!of! the!Industry!Commission!than!the!ESD!Working!Groups!(Bulkeley,!2001).! However,!the!strategy!provided!considerable!scope!to!reduce!greenhouse! gas!emissions!in!Australia.!According!to!Hamilton!(2001,!p.!34),!the!range! of!voluntary!low!and!noOcost!emissions!reduction!measures!contained!in! NGRS,!‘if!prosecuted!with!vigour,!would!have!made!a!significant!impact!on! emissions!growth.’! This!chapter's!first!section!has!provided!an!account!of!how!climate! change!issues!emerged!on!the!Australian!political!agenda,!and!how!the! fossilOfuel!electricity!regime,!particularly!the!SECV,!responded.!Christoff! (2005)!calls!this!period!a!high!point!for!climate!change!policy!in!Australia;! it!has!important!implications!for!understanding!how!SETs!may!emerge.! Two!features!clearly!stand!out!from!the!above!discussion:!the!importance! of!leadership;!and!an!alignment!of!policy!goals!on!the!national!and!subO national!level.!The!Hawke!government's!early!embrace!of!the!climate! debate!and!its!commitment!to!the!Toronto!Target!encouraged!a!political! environment!in!which!concepts!of!ecological!sustainable!development! could!flourish,!across!national,!State!and!local/industrial!levels.!Actually! implementing!the!measures!required!to!achieve!this!was!the!challenge.! The!ability!to!do!so!became!increasingly!constrained!as!political!agendas! changed!and!the!fossilOfuel!discourse!coalition!became!more!organised! and!overtly!antagonistic.!The!remainder!of!this!chapter!details!these! changes!and!their!implications!for!SETs!in!Australia.! !

Changing(landscapes(

A!mood!shift!took!place!between!1988,!when!climate!change!emerged!as!a! public!policy!issue,!and!1992,!when!the!NGRS!was!released.!This!shift! partly!explains!why!climate!change!policy!was!less!ambitious!than!

! ! 102! Chapter!5:!In!the!National!Interest! expected!by!the!ESD!Working!Group!participants.!First,!a!leadership! change!within!the!Labor!Party!saw!Hawke!replaced!by!Paul!Keating!as! Prime!Minister.!Key!here!was!Keating's!predisposition!towards!neoliberal! policies!and!his!dismissiveness!of!environmental!issues,!which,!according! to!Hamilton!(2001)!bordered!on!contempt.!Second,!although!fossil!fuel! industries!may!have!initially!been!caught!offOguard,!they!had!now!had!a! few!years!to!reflect,!regroup!and!realign!their!interests.!These!were! managed!through!discursive!attempts!to!redefine!the!meaning!of!‘no! regrets’!policies!such!that!no!single!industry!should!be!adversely!affected.! At!the!same,!the!industries'!proponents!used!modelling!to!highlight!the! negative!costs!associated!with!reducing!emissions.!The!fossil!fuel! discourse!coalition!effectively!used!these!strategies!to!limit!climate!change! discourse!to!a!debate!around!the!immediate!economic!impacts!(Christoff,! 2005,!p.!32).!Third,!under!Keating's!leadership,!environmental! responsibility!devolved!to!the!States.!Yet!achieving!carbon!dioxide! emissions!reductions!tended!to!conflict!with!traditional!State! developmentalist!agendas.! These!changes!conspired!in!different!ways!on!State!and!federal! levels!to!impede!SETs,!but!importantly!they!complemented!and!reinforced! each!other.!The!second!half!of!this!chapter!is!concerned!with!these! changes.!In!particular!it!discusses!the!rise!of!the!neoliberal!policy!agenda,! the!privatisation!of!Victoria's!electricity!sector,!and!a!change!in!the!Federal! government!in!1996.! ! The,SECVs,second,discussion,paper,

In!June!1992!the!SECV!released!its!second!discussion!paper!on!greenhouse! policy!(SECV,!1992).!A!noticeable!shift!was!evident!in!the!language!used,! compared!to!the!first!discussion!paper,!to!a!more!reluctant!and!cautionary! approach!to!greenhouse!policy!in!general.!Following!the!Industry!

! ! 103! Chapter!5:!In!the!National!Interest!

Commission’s!lead,!discussions!around!uncertainty!and!economic!cost! featured!prominently!in!this!second!report:! ...!there!is!now!little!dispute!about!whether!the!enhanced!greenhouse! effect!exists.!There!is,!however,!considerable!debate!on!whether! climatic!changes!resulting!from!the!increasing!concentrations!of! greenhouse!gases!will!be!significant!and!by!when.!This!uncertainty! makes!it!hard!to!assess!how!quickly!we!should!move!to!limit! greenhouse!gas!emissions.!If!we!move!too!fast!and!the!effect!turns! out!to!be!less!serious!than!currently!predicted,!we!may!cause! considerable!economic!and!social!hardship!(SECV,!1992,!p.!3).! ! The!SECV!thereby!adopted!a!noOregrets!policy!approach.!The!noOregrets! approach!emerged!out!of!the!ESD!process!but,!as!Bulkeley!(2001)!notes,! what!followed!was!a!discursive!struggle!over!its!interpretation.!For! participants!of!the!ESD!Working!Groups,!noOregrets!measures!were!ones! with!economic!benefits!that!also!achieved!greenhouse!gas!emissions! reductions!(Commonwealth!Government,!1992).!This!meant!that,!‘some! industrial!decline!and!closure,!and!some!restructuring,!would!be! necessary!to!achieve!cuts!in!greenhouse!gas!emissions!but!that!this!would! be!countered!by!growth!in!industry!oriented!towards!energy!efficiency! and!renewable!energy’!(Taplin,!1996,!p.!391).!This!approach!emphasises! net!benefits,!or!no!net!economic!loss.!However,!industry!interpreted!noO regrets!measures!at!a!more!granular!level,!with!each!measure!assessed!on! its!own!merit.!The!SECVs!position!was!such!that:! ...!no!regrets!policy!means!doing!what!we!can!reasonably!do!now!to! reduce!carbon!dioxide!emissions!in!ways!which!are!costOeffective! undercurrent!business!conditions.!This!means!pursuing!options! which!provide!a!range!of!environmental!as!well!is!economic!benefits.! The!results!obtained!from!a!’no,regrets’!approach!of!that!is!in!the!best! interests!of!the!community,!irrespective!of!the!outcome!of! greenhouse!issues!(SECV,!1992,!p.!1).! ! Aware!of!differing!interpretations!of!no!regrets,!the!SECV!went!on!to!say! that:! ...!some!others!have!proposed!‘no,regrets’!approaches!which!imply! actions!that!are!costOeffective!under!less!restrictive!economic! conditions.!The!difference!in!greenhouse!mitigation!achieved!

! ! 104! Chapter!5:!In!the!National!Interest!

between!our!policy!(which!is!consistent!with!the!approach!used!by! many!companies!and!individuals!in!assessing!spending)!and!the!less! restrictive!approach!is!a!matter!for!consideration!by!government!in! developing!an!appropriate!national!level!of!response!to!greenhouse! issues!(SECV,!1992,!p.!1).! ! So!what!caused!this!shift?!Clearly!the!SECV!had!more!time!to! digest!the!issues!at!hand!and!survey!other!responses,!such!as!the! Industry!Commission’s.!The!result!was!a!more!calculated!position.! Whereas!their!first!discussion!paper!had!sought!to!gauge!initial! perception!on!greenhouse!policy!and!what!it!meant!for!their! business,!the!second!paper!was!more!strategic!in!its!design.!As!the! second!paper!noted,!‘the!Australian!government!is!currently! preparing!its!position!for!the!United!Nations!Conference!on! Environment!and!Development!in!Brazil!this!June,!the!soOcalled! ‘Earth!Summit’,!where!greenhouse!limitation!strategies!will!be! considered!for!implementation’!(SECV,!1992,!p.!1).!The!importance! of!the!Rio!conference!cannot!be!overstated;!both!industry!and!green! groups!were!well!aware!of!its!potential!implications.!From!this! perspective,!the!SECV's!position!in!1992!should!be!viewed!as!a! deliberate,!discursive!attempt!to!influence!the!Federal!government! and!the!position!that!it!took!to!Rio.!!! Despite!this!discursive!shift,!the!SECV!remained!active!in!the! greenhouse!debate!and!continued!to!explore!a!range!of!options!that!would! satisfy!the!Toronto!Target.!The!SECVs!second!discussion!paper!presented! four!scenarios!(two!base!case!scenarios;!and!two!carbon!dioxide!reduction! scenarios,!for!a!10!per!cent!and!20!per!cent!reduction).!Similar!to!the!1989! scenarios,!they!entailed!delaying!new!brown!coal!fired!generation,! retirement!of!older!lessOefficient!brown!coalOfired!stations,!aggressive! demandOmanagement!programs,!more!extensive!use!of!natural!gas!for! electricity!generation,!introduction!of!renewable!energy!sources,!

! ! 105! Chapter!5:!In!the!National!Interest! reduction!of!energy!losses!in!generation!and!transmission,!and!an!increase! in!tree!planting!programs.!! The!only!real!differences!between!the!1989!and!1992!scenarios!were! that!in!the!second!paper:!only!two!units!at!Loy!Yang!B!(originally!planned! to!consist!of!4!x!500!MW!units)!would!proceed;!Yallourn!W!would!be! retired!by!2005!rather!than!2017;!new!brown!coal!technologies!would! emerge!(between!330!MW!and!1,000!MW!depending!on!the!carbon! dioxide!reduction!required);!and!660!MW!of!solar!thermal!would!form! part!of!Victoria's!electricity!generation!mix!by!2005!(a!proposal!not! previously!included!in!any!of!the!1989!scenarios).!These!scenarios! illustrated!that!in!order!to!achieve!the!Toronto!Target,!most!of!the!existing! brown!coalOfired!generators!(Hazelwood,!Yallourn!W,!and!the!final!two! units!of!Loy!Yang)!could!not!exist!beyond!2005.!Modelling!conducted!by! ABARE!presented!similar!results,!suggesting!phase!out!of!the!brown!coal! industry!by!2005!would!be!required!to!meet!the!Toronto!Target!(ABARE,! 1991).! The!second!SECV!paper!also!included!a!brief!discussion!on!possible! policy!instruments,!‘to!bring!about!structural!changes’!(SECV,!1992,!p.!36),! namely!uniform!regulatory!limits,!tradable!emissions!permits,!and/or! carbon!taxes.!It!acknowledged!that!such!measures!would!impose!costs!on! the!SECV!and!on!end!consumers,!but!also!noted!a!number!of!positive! aspects.!If!uniform!emissions!reductions!were!adopted,!the!SECV! explained,!Victoria!would!meet!this!task!more!easily!from!a!cost! perspective,!compared!to!other!States,!because!brown!coal!is!a!more! carbon!dioxide!intensive!fuel!source.!Concomitantly,!lower!electricity!tariff! increases!would!be!expected!in!Victoria,!thereby!improving!its! competitiveness.!This!logic!could!also!be!applied!to!tradable!emission! permits.!The!SECV!suggested!that!since!Victoria!would!more!easily!reduce! emissions!than!other!States,!it!would!likely!become!a!net!seller!of!permits.! This!revenue!could!then!be!used!to!fund!new!low!carbon!dioxide!intensity!

! ! 106! Chapter!5:!In!the!National!Interest! generation!sources.!Finally,!as!far!as!a!carbon!tax!was!concerned,!the!SECV! pointed!out!that!! ...!the!purpose!of!a!carbon!tax!need!not!be!to!simply!raise!energy! prices!as!a!vehicle!for!reducing!demand!but!also!to!provide!a!source! for!the!necessary!funds!for!research,!development!and! implementation!of!new,!more!efficient!means!of!producing!and!using! energy.!As!such,!it!could!be!argued!that!the!carbon!tax!payable!by! energy!utilities!could!be!offset!against!any!incremental!costs!incurred! by!the!utilities!in!independently!implementing!measures!to!reduce! carbon!dioxide!emissions!(SECV,!1992,!p.!37).! ! The!SECV's!willingness!to!constructively!engage!with!the!greenhouse! issue!highlighted!an!industry!that!was!not!only!aware!of!the!challenges! that!lay!ahead!and!the!changes!required!but!also,!to!some!extent,! seemingly!open!to!such!changes.!Clearly!those!in!the!SECV!were!driven!by! personal!motives,!but!they!were!also!influenced!by!the!presence!of!strong! national!leadership,!supported!at!the!State!level,!within!a!growing!global! awareness!and!response!to!climate!change.!While!it!must!be!noted!that! little!change!actually!occurred,!the!SECVs!initial!response!in!the!period! between!1989!and!1992,!as!a!significant!carbon!dioxide!emitter,!was! encouraging.!However,!in!subsequent!years!this!early!willingness!to! engage!with!greenhouse!concerns!had!all!but!evaporated!as!aggressive! neoliberal!policies!came!to!dominate!political!agendas!from!the!1990s! onwards.!

The,privatisation,of,Victoria's,electricity,

Throughout!most!of!the!world!in!the!last!century,!the!electricity!industry! was!characterised!by!governmentOowned,!verticallyOintegrated! monopolies.!Australia!was!no!different!in!this!respect;!businesses!were! protected!from!competition,!and!from!the!consumers'!perspective!there! was!no!choice!of!supplier.!But!after!a!range!of!microeconomic!reforms!in! the!1980s!under!the!Hawke!government!(i.e.,!reducing!tariffs!and!floating! the!Australian!dollar)!companies!were!soon!exposed!to!international!

! ! 107! Chapter!5:!In!the!National!Interest! competition.!As!a!result!businesses,!particularly!tradeOexposed!industries,! sought!to!obtain!advantages!through!lower!electricity!prices!so!they!could! better!compete!in!the!international!economy!(Fels,!2002).!As!Chester! (2007,!p.!983)!notes,!by!the!late!1980s!the!conventional!wisdom!of! verticallyOintegrated!monopolies!in!the!electricity!industry!‘was!being! strongly!challenged!by!new!paradigms!that!asserted!the!need!for!greater! competition!and!less!government!involvement’.! The!microeconomic!reforms!introduced!under!the!Hawke! government!in!the!1980s!had!a!significant!and!lasting!effect!on!the! Australian!economy.!For!the!electricity!regime,!these!reforms!signalled!the! beginning!of!what!is!now!a!national!electricity!market!(NEM)!in!Australia.! In!a!speech!on!Labor’s!fourthOterm!microeconomic!policy!agenda,!Prime! Minister!Hawke!stated!that,!‘Labor’s!plans!comprehensively!dominate!the! debate!about!microeconomic!reform!in!the!1990s.!Ours!is!an!ambitious! but!achievable!agenda!that!covers!10!areas!of!critical!importance!to! Australia's!economic!future’!(Hawke,!1990,!p.!2).!These!10!areas!consisted! of:!aviation,!telecommunications,!industry!policy,!shipping,!the!waterfront,! electricity!generation,!railways,!export!of!services,!international!trade,!and! education!and!the!labour!market.!! By!this!stage!the!Federal!government!(through!the!thenOTreasurer,! Paul!Keating)!had!already!sought!the!Industry!Commission’s!advice!on! reforming!the!electricity!generation!and!distribution!sector.!Prime! Minister!Hawke!argued!this!reform!would!serve!as,!‘a!powerful!weapon! with!which!to!combat!resistance!to!reform!from!State!and!other!interests! [and]!particularly,!we!will!examine!the!private!provision!of!electricity!to! industry,!as!recommended!by!Garnaut’!(Hawke,!1990,!p.!5).5!By!1991!the! Industry!Commission!released!their!Energy,Generation,and,Distribution! report,!which!called!for!immediate!structural!changes!in!the!electricity!and! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!Garnaut!at!that!time!was!the!principal!economic!adviser!to!the!Prime!Minister.! !

! ! 108! Chapter!5:!In!the!National!Interest! gas!industries!to!increase!competition!and!improve!efficiency!(Industry! Commission,!1991).!This,!it!argued,!would!require!more!than! administrative!change.!The!report!recommended!‘separating!ownership!of! key!functions!in!each!industry![electricity!and!gas]!and!progressively! selling!much!of!the!publicly!owned!generation!and!distribution!assets! [which]!would!result!in!a!considerable!diminution!in!the!dominant!role! traditionally!played!in!Australia!by!publicly!owned!vertically!integrated! energy!utilities’!(Industry!Commission,!1991,!preface).!In!doing!so,!the! report!claimed,!savings!on!the!order!of!$2.4!billion!could!be!achieved.! Following!this!report's!release,!a!Special!Premiers'!Conference!in! 1991!agreed!to!establish!a!National!Grid!Management!Council!to:! ...!encourage!and!coordinate!the!most!efficient,!economic!and! environmentally!sound!development!of!the!electricity!industry!in! eastern!and!southern!Australia!having!regard!to!key!national!and! State!policy!objectives.!This!represents!an!important!step!forward!in! advancing!cooperation!in!the!electricity!industry,!the!absence!of! which!has!cost!the!nation!dearly!in!terms!of!excessive!generation! capacity,!inappropriate!plant!mix!and!in!flexibility!of!fuel!use!(NCC,! 1997,!p.!45).!! ! By!1998!Australia!had!established!a!NEM,!which!encompassed!Victoria,! New!South!Wales,!Queensland,!South!Australia,!and!the!Australian!Capital! Territory!(ACT).!These!early!developments!were!reinforced!by!the!highly! influential!1993!Hilmer!Report!on!National!Competition!Policy! (Independent!Committee!of!Inquiry!into!Competition!Policy!in!Australia!&! Hilmer,!1993),!which!largely!defined!the!Keating!period.!! The!HawkeOKeating!government!may!have!pioneered!neoliberalism! in!Australia,!however,!Victoria's!Kennett!government!embraced!such! measures.!It!even!took!the!reins!and!led!by!example,!as!highlighted!by!its! restructuring!of!the!Victorian!electricity!industry.!Nearing!the!end!of!its! term!in!1992,!the!Kirner!Labor!government!hired!a!retired!NSW!Treasury! official,!Don!Nicholls,!to!report!on!Victoria’s!finances.!While!the!report! found!relatively!moderate!levels!of!State!debt!and!liabilities,!one!of!the!

! ! 109! Chapter!5:!In!the!National!Interest! first!acts!of!the!incoming!Kennett!(Liberal)!government!was!to!appoint!a! new!Commission!of!Audit!in!1993!to:! ...!investigate!and!report!upon!the!condition!of!Victoria!State!public! finances;!to!comment!generally!upon!the!causes!of!the!present! condition;!to!recommend!policies,!management!reforms!and!other! measures!to!improve!efficiency,!effectiveness!and!the!State’s! financial!position;!and!to!recommend!measures!to!safeguard!against! future!recurrence!of!policies!and!practices!likely!to!have!adverse! effects!on!the!State!(VCA,!1993,!Appendix!A).!! ! The!Commission!was!also!invited!to,!‘identify!opportunities!for! contracting!out,!corporatisation,!privatisation!and!other!actions!to!secure! the!public!benefit’!(VCA,!1993,!Appendix!A).!The!Commission!found,!by! using!an!alternative!calculation!technique,!an!additional!$36!billion!of!debt! compared!to!the!figure!reported!only!a!few!months!earlier!(Walker!&! Walker,!2000).!In!total,!Victorian!government!liabilities!were!estimated!at! $69.8!billion.! ! Around!the!same!time,!in!1993,!the!Victorian!AuditorOGeneral’s! Office!prepared!a!report!on!openOcut!production!in!the!Latrobe!Valley.!The! findings!drew!attention!to!numerous!inefficiencies.!Specifically,!it! determined!that:!employee!numbers!could!be!reduced!by!up!to!50!per! cent!in!open!cuts;!there!were!work!practices!between!employees!and! unions!not!conducive!to!efficient!openOcut!operations;!enforcement!of! fixed!mining!agreements!was!resulting!in!excessive!manning!levels,!the! manning!of!nonOoperational!plant,!and!substantial!costs!associated!with! the!necessary!replacement!of!absent!employees!by!other!employees!at! overtime!rates!(Victorian!AuditorOGeneral,!1993).! The!results!of!both!the!Commissioner’s!and!the!Auditor!General’s! report!strongly!supported!the!Kennett!government's!political!philosophy! and!subsequent!intentions.!As!English,!Guthrie,!and!Carlin!(2000)!note,! these,!‘revolved!around!the!value!of!individual!liberty,!individuality!and! free!enterprise,!and!a!belief!that!a!sound!economy!and!the!prosperity!it!

! ! 110! Chapter!5:!In!the!National!Interest! brings!is!most!likely!to!produce!the!best!quality!of!life!and!social!benefit! for!citizens’!(p.!5).!! With!State!debt!so!high!and!the!SECV!in!need!of!an!overhaul,!the!sale! of!the!SECV!for!$22.5!billion!appeared!to!many!a!sensible!and!rational! economic!decision.!Importantly,!however,!it!was!this!paradigm!of! competition!and!increased!privateOsector!involvement!that!completely! restructured!the!Victorian!electricity!industry.!Chester!(2007)!describes! these!changes!as!comprising!three!dimensions.!The!first!is!that!vertically! integrated!companies!were!separated.!This!entailed!not!only!a!separation! of!generation!and!retail!from!transmission!and!distribution,!but!also! horizontal!separation!of!generation!and!retail.!The!second!was!the! commercialisation,!corporatisation,!and!privatisation!of!companies,!which! significantly!changed!management!practices!and!organisational!forms.! The!third!was!a!change!of!the!sector's!regulatory!regime!such!that,!‘new! forms!of!regulation!and!institutions!have!been!created!to!operate! wholesale!and!retail!markets,!oversight!access!to!transmission!and! distribution!networks,!determine!the!pricing!of!monopoly!activities,! monitor!the!performance!of!electricity!companies,!and!represent! consumer!interests’!(Chester,!2007,!p.!983).! In!1993!management!of!the!Victorian!electricity!sector!was! separated;!transmission!and!distribution!followed!suit!the!following!year.! By!1994!an!interim!Victorian!wholesale!market!commenced!and!a! regulator!was!established.!In!1995!generation!was!horizontally!separated! and!within!two!years!most!related!assets!were!sold!to!foreign!investors.! Whereas!in!1989/90!there!were!8,481!employees!in!the!Latrobe!Valley! electricity!industry,!by!1994/95!there!were!3,661!(Kazakevitch!and!Stone,! 1997,!cited!in!Cameron!&!Gibson,!2005).!The!SECV's!eventual!privatisation! led!to!population!loss,!some!of!the!highest!rates!of!unemployment!in! Australia,!and!an!overarching!sense!of!despair!in!the!Latrobe!Valley! (Cameron!&!Gibson,!2005).!The!residents!most!likely!to!leave!the!region!

! ! 111! Chapter!5:!In!the!National!Interest! were!skilled!adult!males!able!to!earn!higher!wages!elsewhere.!This!left!the! valley!with!a!disproportionate!number!of!low!income!families!(Forth,! 2003,!cited!in!Rainnie!et!al.,!2004).!This!feature!of!the!shift!was!clearly! reflected!in!the!Valley’s!increased!reliance!on!governmentOfunded!welfare.! Between!1991!and!1999,!unemployment!benefit!payments!rose!by!78.2! per!cent,!and!disability!pensions!even!more,!by!118.5!per!cent!(Rainnie!et! al.,!2004).!Not!surprisingly,!today!many!in!the!Latrobe!Valley!greet!with! scepticism!transitional!issues,!such!as!those!associated!with!sustainability! energy!transitions:! This!community!clearly!remembers!what!happened!in!the!80s!and! 90s!when!the!industry!was!privatised;!unemployment!at!20!per!cent! and!brick!veneer!homes!at!$25,000,!so!that!is!in!the!back!of!people's! minds!(Latrobe!City!Council!interview!#15).! ! All!those!people!have!been!through!privatisation!and!Kennett!stood! up!and!said!we’ll!look!after!you!and!bring!all!this!industry!down!here! but!nothing!happened!and!there!are!people!…!there!who!lost!their! jobs!from!privatisation,!45!to!50!year!olds!and!only!had!casual!jobs! since!they!had!secure!well!paid!employment!and!they!just!crashed!to! a!very!poor!existence!(CFMEU!interview!#6).! ! The!Latrobe!Valley!represents!a!very!strategic!component!of! Australia's!NEM,!and!its!history!makes!transitioning!more!challenging!for! Victoria,!and!for!wider!Australia!as!well.!However,!would!SETs!be!easier! had!Victoria's!industry!not!been!privatised?!This!question!is!virtually! impossible!to!answer,!but!evidence!from!other!Australian!States!where! electricity!utilities!have!not!been!privatised!would!not!necessarily!suggest! so.!Indeed,!as!one!former!energy!policy!bureaucrat!explained:! When!it!is!in!private!hands!governments!are!much!more!prepared!to! contemplate!externalising!the!risk!of!carbon!policy!to!capital!markets! right.!So!had!it!been!our!own!asset!a!revenue!source!would've!been! taken!out!of!the!State's!books.!I!think!you!would!have!found!us! struggling!with!a!conflict!of!interest!(exOenergy!policy!bureaucrat! interview!#9).! ! Victoria's!privatisation!experiment!did!two!things!in!relation!to!SETs.! First,!it!increased!the!relative!power!of!the!private!sector!(compared!to!

! ! 112! Chapter!5:!In!the!National!Interest! government)!to!control!the!electricity!market.!This!is!not!surprising;!it!is! an!expected!outcome!of!neoliberal!policies.!However,!rather!than!remove! government!altogether!from!energy!decisionOmaking,!it!drew!it!even! closer,!in!many!ways!legitimising!the!relationship!between!government! and!private!capital.!This!is!partly!because!electricity!is!an!essential!service,! implying!that!governments!will!always!be!involved!in!some!form!of! regulatory!capacity.!These!reforms,!and!neoliberalism!more!generally,! should!not!necessarily!and!automatically!be!associated!with!the! withdrawal!of!state!intervention.!Rather,!as!Jessop!(2002)!notes,!the! capitalist!state's!involvement!is!crucial!in!the!production!and!maintenance! of!a!neoliberal!economy.!The!privatisation!of!the!Victorian!electricity! sector!demonstrates!this!point!through!its!reliance!on!the!coercive!powers! of!the!state!(Cahill!&!Beder,!2005).!The!direct!outcome!of!this!dynamic!was! that!subsequent!energy!policy!negotiations!were!more!likely!to!occur!as!a! conversation!between!government!and!business,!at!the!expense!of! environmental!groups.!Indirectly,!privatisation!has!altered!the!life! expectancy!of!power!plants!in!the!Latrobe!Valley!and!the!subsequent! emissions!trajectory!of!Victoria!(an!issue!explored!further!in!Chapter!6).!! The!second!major!effect!of!the!Victorian!privatisation!experiment! was!to!effectively!stall!greenhouse!policy!through!the!narrative!of! competition!and!efficient!energy!markets:! Under!the!Kennett!administration!climate!change!sustainable!energy! completely!disappeared!from!the!agenda!for!the!first!three!or!four! years!in!as!much!as!that!government!came!in!with!a!highly! articulated!program,!an!intrusive!program,!a!major!downsizing!of!the! public!sector,!a!deregulatory!program,!a!privatisation!program,!and! that!took!precedence!over!all!else! (exOgreenhouse!policy!bureaucrat!interview!#4).! ! The!Kennett!government!did!not!operate!in!isolation.!Importantly,!its! actions!were!reinforced!by!the!Keating!government’s!own!National! Competition!Policy!(NCP)!reform!agenda.!But!the!emphasis!on!neoliberal! policies!and!economic!rationalist!approaches!to!reduce!carbon!dioxide!

! ! 113! Chapter!5:!In!the!National!Interest! emissions!fundamentally!changed!the!orientation!of!energy!reform!in! Australia.!Initially!it!was!concerned!with!structural!change,!and! reconciling!and!integrating!economic!objectives!and!environmental!values! into!policy.!But!it!ultimately!became!more!focused!on!shortOterm! economic!costs,!competition!and!efficiency,!and!voluntary!action.!! Federally,!it!was!clear!that!the!NGRS!was!having!little,!if!any,!effect! on!carbon!dioxide!emissions!in!Australia.!A!review!of!the!NGRS!by! Wilkenfeld!et!al.!(1995)!found!that!it!had!‘failed!to!make!any!impact!on! Australia's!greenhouse!gas!emissions.!After!two!years!of!its!operation,! there!is!no!evidence!that!even!one!tonne!of!carbon!emissions!has!been! saved!as!a!result!of!the!NGRS’!(Wilkenfeld!et!al.,!1995,!p.!1).!The! government's!National!Greenhouse!Advisory!Panel!also!found!a!range!of! shortcomings!in!the!implementation!of!the!NGRS.!Debate!emerged!once! again,!led!by!Labor!Senator!John!Faulkner,!over!the!introduction!of!a! carbon!tax.!But!this!option!was!quickly!shot!down!by!the!fossil!fuel! industry.!In!response,!the!Keating!government!introduced!the!Greenhouse! Challenge!Program,!which!formed!part!of!the!Federal!government's! Greenhouse!21C!initiative,!a!cooperative!effort!by!industry!and! government!to!reduce!greenhouse!emissions!through!voluntary!industry! action.!It!also!had!very!little!impact!on!emissions!growth.! In!1997,!the!Hazelwood!power!station!joined!the!other!brown!coalO power!generators!in!the!Latrobe!Valley!in!signing!the!Greenhouse! Challenge.!This!was!cited!as!a!‘valuable!opportunity!to!audit!and!assess! available!actions!to!improve!performance.!The!business!has!adopted!a! dual!approach!to!the!Greenhouse!Challenge:!technology!improvements!to! increase!plant!efficiency!and!mitigation!strategies!to!further!reduce! environmental!impacts’!(Hazelwood!Power,!1999,!p.!4).!This!effort!did!not! represent!an!attempt!to!reduce!total!emissions!though,!but!instead!to! merely!constrain!predicted!growth!of!emissions.!It!was!foremost!about! efficiency!and!performance,!that!is,!reducing!the!emissions!per!unit!of!

! ! 114! Chapter!5:!In!the!National!Interest! production.!The!Hazelwood!Power!Station!predicted!its!emissions!would! increase!by!5.65!million!tonnes!of!carbon!dioxide!between!1995/96!and! 2000.!Their!action!plan!suggested!this!growth!could!be!reduced!by!0.7! million!tonnes,!still!allowing!for!a!60!per!cent!increase!(Low!et!al.,!2005).! In!other!words,!the!plant!made!no!attempt!to!challenge!the!rate!of!increase! in!production!(Bulkeley,!2001),!and!any!questions!about!the!validity!of!the! fossil!fuel!regime!itself!seemed!to!virtually!disappear.!! International!climate!change!negotiations!served!to!remind! Australia!of!the!fragility!of!its!position.!The!fossil!fuel!regime!had!been! challenged!since!1988!and!remained!vulnerable.!What!it!lacked!in!the! current!political!climate!was!legitimacy.!This!changed!considerably!when! the!conservative!Howard!government!came!to!power!in!1996.! !

Solidifying(and(entrenching(the(fossil(fuel(regime(

Not!long!after!it!was!elected!in!1996,!the!Howard!government!moved!to! put!their!stamp!on!climate!policy.!As!Oberthür!and!Ott!(1999,!p.!71)!note,! ‘while!Australia!had!certainly!not!been!a!climate!activist!under!the! previous!(Keating)!Labor!government,!the!attitude!of!the!incoming!Prime! Minister!Howard!towards!climate!policy!was!almost!hostile’.!This!shift!was! consolidated!in!two!major!statements,,In,the,National,Interest!and, Safeguarding,the,Future,!both!released!in!1997!(Christoff,!2005).!Both! were!unequivocal!in!their!support!for!fossil!fuels,!which!in!turn!clearly! indicated!the!Australian!government's!intended!position!at!the!Kyoto! negotiations:! Australia!is!a!leading!exporter!of!energy,!especially!coal!and!liquefied! natural!gas,!reflecting!its!competitive!advantage!and!reliability!as!a! supplier.!The!government!will!work!to!ensure!that!Australia! maintains!these!advantages!(DFAT,!1997,!p.!28).! ! Since!its!election!the!government!has!addressed!the!critical!issue!of! global!warming!in!a!way!that!effectively!promotes!Australia's! national!interests.!Those!interests!lie!in!both!protecting!Australian!

! ! 115! Chapter!5:!In!the!National!Interest!

jobs!and!Australian!industry!whilst!ensuring!that!Australia!plays!her! part!in!the!worldwide!effort!needed!to!reduce!greenhouse!gas! emissions.!From!the!start,!we!have!made!it!plain!that!Australia!would! not!accept!an!unfair!share!of!the!burden.!We!have!rejected!and!will! continue!to!reject!mandatory!uniform!targets!which!advantage!many! developed!countries!to!the!distinct!disadvantage!of!Australia.!We! have!also!made!it!plain!that!we!are!not!prepared!to!see!Australian! jobs!sacrificed!and!efficient!Australian!industries,!particularly!in!the! resources!sector,!robbed!of!their!hardOearned,!competitive!advantage! (Howard,!1997,!p.!1).! ! Interestingly,!the!Howard!government's!opposition!to!uniform! targets!stands!in!stark!contrast!to!the!SECVs!own!admission!in!1992,!as! noted!earlier!in!this!chapter,!that!the!relative!costs!of!meeting!such!targets! would!be!lower!for!Australia!due!to!the!more!carbon!dioxide!intensive! nature!of!our!energy!system.!Arguably!the!most!effective!strategy!used!by! Howard!government!to!legitimise!its!position!was!linking!fossil!fuel!use! with!both!economic!strength!and!employment,!which!in!many!ways! personalised!the!debate.!Drawing!on!modelling!conducted!by!ABARE!the! Prime!Minister!argued:! some!industries!fundamental!to!the!health!of!our!economy!would!be! hardest!hit.!The!nonferrous!metals,!iron!and!steel!and!coal!industries! would!be!seriously!affected,!and!future!investment!and!employment! growth!would!be!significantly!jeopardised.!Even!establishing!our! emissions!at!1990!levels!would!put!at!risk!$68!billion!of!energy! intensive!projects!and!tens!of!thousands!of!potential!jobs!for! Australians!that!go!with!them!(Howard,!1997,!p.!8).6! ! During!their!tenure!the!Howard!government!took!an!antagonistic!and! obstructionist!approach!to!international!climate!change!negotiations! (Christoff,!2005;!McDonald,!2005).!This!was!evident!in!their!role!during! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 6!The!modelling!conducted!by!ABARE!has!been!the!source!of!much!criticism!due!to!its! financial!links!with!the!fossil!fuel!industry.!In!the!year!1996O97,!it!was!revealed!that!80! per!cent!of!the!funding!for!the!research!came!from!fossil!fuel!industries.!These! organisations,!which!included!the!Australian!Coal!Association,!Business!Council!of! Australia,!Australian!Aluminium!Council,!BHP,!CRA!Ltd,!Statoil,!Electricity!Supply! Association!of!Australia,!Exxon!Corporation,!Mobil!Oil!Australia!Ltd,!and!Texaco! Corporation,!all!paid!$50,000!annually!(except!for!Aluminium!Council!and!CRA!O!$25,000)! for!a!seat!on!the!steering!committee.!See!Hamilton!and!Quiggin!(1997)!for!a!detailed! commentary.! !

! ! 116! Chapter!5:!In!the!National!Interest! the!third!Conference!of!the!Parties!(COP!3)!negotiations!over!the!Kyoto! Protocol.7!The!Howard!government!also!astutely,!if!only!partially,! deflected!tensions!and!criticisms!aimed!at!their!position!on!climate!change! through!a!range!of!concessions.!Among!them!was!the!Australian! Greenhouse!Office!(AGO),!the!world's!first!government!agency!dedicated! to!cutting!greenhouse!emissions,!and!the!Mandatory!Renewable!Energy! Target!(MRET)!with!a!target!of!9,500!GWh!of!new,!renewable!energy!by! 2010.!Notwithstanding!the!importance!of!these!initiatives,!the! government's!insatiable!appetite!for!the!resources!sector!meant!that!their! potential!(at!least!under!the!Howard!government)!was!never!realised.! Instead,!the!fossil!fuel!discourse!coalition!grew!in!stature!and!became!a! powerful!and!influential!lobby!force!on!climate!and!energy!policy! direction!in!Australia!(Hamilton,!2007;!Pearse,!2005).!! The!MRET!exceeded!expectations,!but!renewable!energy! technologies!stood!little!chance,!as!demonstrated!by!leaked!documents! from!a!2004!meeting!between!Prime!Minister!Howard!and!the!Low! Emissions!Technology!Advisory!Group!(LETAG).!The!group,!handOpicked! by!government!and!consisting!of!fossil!fuel!interests,!expressed!concern! about!the!wind!industry's!success;!and!Industry!Minister!Ian!Macfarlane! stated!that!this!industry!‘had!got!away!from!us’!(Walsh,!2004).!Measures! were!taken!to!limit!the!growth!of!renewable!energy!technologies,!and! instead!promote!emissions!reductions!through!what!the!Prime!Minister! labelled!a!‘Super!Dooper!technology!process’!(Walsh,!2004).!The!MRET! was!not!expanded,!despite!the!recommendations!of!the!2003!Tambling! Review!to!increase!the!target!to!20,000!GWh!by!2020:!At!the!launch!of!the!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 7!Under!the!Kyoto!Protocol!Australia!negotiated!an!emissions!reduction!target!of!108!per! cent!on!1990!levels.!It!was!one!of!only!three!countries!to!obtain!an!increase!in!emissions! on!1990!levels.!Importantly,!this!included!the!‘Australia!clause’!O!the!inclusion!of! emissions!from!land!clearing!in!the!baseline!calculations!O!which!has!allowed!Australia!to! meet!its!Kyoto!target!with!relatively!little!effort.!For!an!inOdepth!examination!of!this! process!see!Christoff!(2005);!Crowley!(2007);!Lyster!(2004).!

! ! 117! Chapter!5:!In!the!National!Interest! government’s!Energy!Statement!at!the!National!Press!Club!on!15!June,! 2004!Prime!Minister!John!Howard!argued!that:! ...!expanding!MRET!would!impose!substantial!new!costs!on!the! economy!and!would!benefit!too!few!technologies.!A!better!path!is!to! directly!promote!the!development!and!demonstration!of!a!broader! range!of!low!emission!technologies!and!tackle!the!impediments!to! the!uptake!of!renewable!energy!(Howard,!2004).! ! This!led!to!a!$500!million!Low!Emissions!Technology!Demonstration! Fund,!a!headline!policy!initiative!of!the!2004!Energy!White!Paper.!As!the! Paper!outlines:! These!technologies!must!have!the!potential!to!lower!Australia’s! emissions!by!at!least!2!per!cent!in!the!long!term!at!a!realistic!uptake! rate,!and!be!commercially!available!by!2020!to!2030.!The!fund!is! designed!to!facilitate!private!sector!investment!of!at!least!$1!billion,! and!provides!a!path!by!which!industry!can!invest!in!a!lowOemissions! future.!The!fund!is!aimed!at!supporting!technologies!at!the! commercial!demonstration!stage,!when!required!investments!are! large!and!risks!remain!high.!Particular!consideration!will!be!given!to! technologies!that!could!underpin!Australia’s!resource!base!and/or! promote!leadingOedge!technology!capacity!in!Australia!(DPMC,!2004,! p.!144).!! ! Defining!lowOcarbon!technologies!in!this!way!has!had!significant! ramifications!for!SETs!in!Australia.!It!effectively!formalised!and! legitimised!the!incumbent!fossil!fuel!regime's!place!in!a!carbonO constrained!future,!predominantly!through!technologies!such!as!carbon! capture!and!storage!(CCS).!Of!the!five!projects!to!receive!funding!from!the! Low!Emissions!Technology!Demonstration!Fund,!four!were!fossil!fuel! projects!(Diesendorf,!2012).! A!Senate!Inquiry!into!the!budgetary!and!environmental! implications!of!the!2004!Energy!White!Paper!found!a!general!overO reliance!on!the!development!of!geoOsequestration!as!a!carbon!abatement! technology.!In!its!response!this!inquiry!recommended!that!abatement! targets!for!projects!seeking!funding!through!the!Low!Emissions! Technology!Development!Fund!be!raised.!This!was!done!to!ensure!that!a! greater!proportion!of!the!fund!would!be!made!available!to!technologies!

! ! 118! Chapter!5:!In!the!National!Interest! that!could!provide!emissions!reductions!in!the!short!term!(ECITARC,!2005,! p.!vii).!! Arguably!it!was!not!the!technology!that!was!the!problem!but! instead!the!Howard!government!regime,!and!specifically!the!EWP,!which! lacked!any!clear!emissions!targets!or!timeframes,!crucial!components!of!a! SET.!Goals!are!vital!to!help!define!the!type!of!innovation!required!and!its! development!pace.!! The!presence!of!lowOemissions!fossil!fuel!technologies!in!a!SET! clouds!what!an!ecological!sustainable!future!may!look!like!and!how!it! might!be!achieved.!This!does!not!imply!a!mandate!to!abandon!all!lowO emissions!fossil!fuel!technologies,!but!neither!should!there!be!a!mandate! to!suppress!renewable!energy!technologies.!However,!portraying!SETs!as! a!fossil!fuel!versus!renewable!scenario!is!not!only!an!oversimplification,!it! is!also!a!misleading!line!of!argument.!! What!is!important!is!the!policy!(less!so!the!technology)!and,!in! particular,!policy!stability!to!provide!a!generally!agreed!pathway.!As!Brad! Page,!the!CEO!of!the!Energy!Supply!Association!of!Australia!(ESAA),!the! peak!lobby!group!for!incumbent!generators,!told!the!EWP!Senate!Inquiry,! ‘we!need!a!single!greenhouse!policy!to!tell!us!what!we're!all!trying!to! achieve!over!the!next!40!to!50!years!because!the!kind!of!investments!we! make!in!this!industry,!particularly!power!generators,!have!lives!of!40!to!50! years’!(ECITARC,!2005,!p.!44).! But!while!various!sectors!of!industry!and!the!community!voiced! concern!over!the!Howard!government’s!climate!policy!regime,!the! government,!by!and!large,!was!able!to!manage!these!conflicts,!or!at!least! withstand!them,!via!strategic!levels!of!accommodation.!The!Howard! government!effectively!articulated!a!hegemonic!narrative!around!the!use! of!fossil!fuels!that!emphasised!the!shortOterm!economic!costs!of!climate! policies.!In!so!doing,!it!entrenched!incumbent!energy!technologies.!!

! ! 119! Chapter!5:!In!the!National!Interest!

Moreover,!by!elevating!competition!and!efficiency!above! environmental!concerns,!energy!policy!in!Australia!became!consumed! with!the!reliability!and!affordability!dimensions!of!electricity!supply.!The! result!was!that!SETs!were!effectively!removed!from!the!energy!policy! agenda!at!the!expense!of!energy!market!reform.!This!was!consolidated!by! the!shift!of!energy!policy!towards!the!Commonwealth,!which!begun!under! the!Keating!government!and!was!reinforced!by!the!Howard!government.! The!nationalisation!of!energy!policy!began!to!take!concrete!form!after!a! COAG!meeting!in!2001!titled!Towards,a,National,Energy,Policy,Framework.! It!agreed!to!establish!the!Ministerial!Council!on!Energy!(MCE),!which! became!the!prime!governing!body!for!energy!policy!in!Australia.!The!MCE! comprised!the!Commonwealth!Energy!Minister!along!with!all!the!State! and!Territory!Energy!Ministers.!The!MCE's!agreed!objectives!were:! ! O!Encouraging!efficient!provision!of!reliable,!competitively!priced!energy! services!to!Australians,!underpinning!wealth!and!job!creation!and! improved!quality!of!life,!taking!into!account!the!needs!of!regional,!rural! and!remote!areas;!!

O!Encouraging!responsible!development!of!Australia's!energy!resources,! technology!and!expertise,!their!efficient!use!by!industries!and! households!and!their!exploitation!in!export!markets;!and!!

O!Mitigating!local!and!global!environmental!impacts,!notably!greenhouse! impacts,!of!energy!production,!transformation,!supply!and!use.!!

This!important!institutional!development!for!energy!policy!in! Australia!had!the!potential!to!define!and!coordinate!a!clear!national!SET! pathway.!However,!despite!the!recommendation!by!the!2002!Parer!Report! to!introduce!an!ETS!(COAGOEMR,!2002),!Howard's!opposition!to!such! measures!meant!that!the!MCE!had!little!room!to!move!on!greenhouse!

! ! 120! Chapter!5:!In!the!National!Interest! matters.!This!was!primarily!because!other!measures!such!as!renewable! energy!targets!or!subsidies!were!considered!costly!and!contradicted!the! market!approach,!which!was!against!picking!technological!winners.! Almost!by!default!then,!the!MCE!focused!exclusively!on!energy!market! reform!issues.!After!the!Australian!Energy!Market!Agreement!in!2004,!a! new!governance,!regulatory!and!legislative!framework!for!the!NEM!was! established!(Figure!2).! ! Figure!2:!New!governance,!regulatory!and!legislative!NEM! framework.!

!

! Source:!Department!of!Primary!Industries!Victoria!website! ! The!failure!of!the!MCE,!and!more!specifically!the!energy!reform! narrative,!to!deal!effectively!with!carbon!dioxide!emissions!was!summed! up!by!Alan!Pears:! ...!we’ve!now!acknowledged!that!introduction!of!electricity!markets! has!increased!Greenhouse!gas!emissions!by!6!million!tonnes!of! carbon!dioxide!equivalents!per!year!above!the!predictions,!yet!the! restructuring!of!the!electricity!industry!was!the!centrepiece!of!the! 1992!National!Greenhouse!Response!Strategy!!At!that!time!

! ! 121! Chapter!5:!In!the!National!Interest!

supporters!of!electricity!reform!claimed!it!was!the!most!powerful! Greenhouse!strategy!we!could!apply!!(Findlay,!2000).! ! Despite!this!failure!however,!an!interesting!dynamic!was!emerging.!On! one!level,!energy!policy!was!moving!towards!the!control!under!the! Commonwealth,!yet!on!the!other,!the!Keating!and!Howard!governments! sought!to!devolve!Commonwealth!responsibility!over!environmental! matters!to!the!States!(Economou,!1999).!This!created!a!federal/State! tension.!In!some!instances,!as!detailed!in!the!following!chapter,!State! governments!such!as!Victoria!were!compelled!to!fill!the!sustainability!void! left!by!the!Commonwealth,!thereby!ensuring!that!SET!debates!did!not! completely!disappear!from!the!political!agenda.! ! ! Conclusion(

This!chapter!has!sought!to!provide!a!historical!account!of!how!SET! debates!have!emerged!in!Australia!and!how!the!energy!regime!has!evolved! in!response!to!early!developments.!Australia’s!initial!response!to!concerns! over!climate!change!was!that!of!a!global!leader,!which!led!to!constructive! debates!around!future!energy!scenarios.!Perhaps!most!importantly!this! position!was!reinforced!at!both!federal!and!State!levels!of!government!(as! was!the!case!with!Victoria).!By!1992,!however,!Australia's!position!began! to!shift.!Both!the!Keating!(federal)!and!Kennett!(State)!governments! enforced!aggressive!neoliberal!policies!that!altered!the!path!of!energy! reform!in!Australia.!Energy!reform!shifted!from!an!early!ecologically! sustainable!development!position,!to!one!more!focussed!on!competition! and!efficiency.!! It!was!the!Howard!government!that!reinforced!the!importance!of!the! fossil!fuel!regime.!By!emphasising!Australia’s!competitive!advantage,!the! Howard!government!empowered!the!fossil!fuel!discourse!coalition,!which! was!particularly!effective!at!reducing!climate!change!discourse!to!a!debate!

! ! 122! Chapter!5:!In!the!National!Interest! about!immediate!economic!impacts.!In!the!twenty!years!since!the!1992! Rio!Earth!Summit,!carbon!dioxide!emissions!from!Australia's!stationary! energy!sector!have!risen!by!over!50!per!cent!and!fossil!fuels!represent! about!80!per!cent!of!Australia’s!electricity!supply.!As!a!result,!the! emergence!of!a!SET!in!Australia!was!effectively!shelved.!Nevertheless,! federalist!dynamics!ensured!the!issue!did!not!disappear!altogether.!In!the! early!and!mid!2000s!the!Howard!government!faced!Labor!States!and! Territories!across!the!country!which,!for!political!reasons!or!otherwise,! helped!push!climate!change!high!on!the!agenda!once!again.!Chapter!6! examines!more!closely!the!State!level!response,!in!particular!Victoria’s! efforts!to!transition!the!fossil!fuel!electricity!regime.!

! ! 123! !

Chapter(6(

Climate(responsibility(and(subFnational(responses:( assessing(Victoria’s(climate(and(energy(strategy(

Introduction( ! As!outlined!at!the!beginning!of!this!thesis,!one!of!the!central!tenets!of! federal!political!systems!is!the!formal!division!of!power!between!national! and!subOnational!levels!of!government.!This!federalist!dynamic!creates! both!challenges!and!opportunities!for!SETs.!This!chapter!uses!Victoria!as!a! case!study!to!help!understand!the!role!subOnational!governments!can!play! in!SETs.!It!examines!how!the!Victorian!Labor!government!responded!to! and!attempted!to!deal!with!SETs!in!the!postOprivatisation!electricity! market!era.!! ! ! The(Labor(years(

After!seven!years!in!office!in!Victoria!(1992O1999),!the!Kennett!Liberal! government!was!replaced!in!1999!by!a!Labor!government!led!by!Bracks.! For!the!next!11!years!Labor!remained!in!power.!Despite!the!promotion!of! sustainable!development!in!its!policy!agenda,!Labor!had!achieved! relatively!little!physical!changes!to!the!electricity!regime!by!the!end!of! their!incumbency!in!November!2010.!! In!2000,!just!after!Labor!regained!government,!brown!coal! represented!93!per!cent!of!Victoria's!electricity!supply,!almost!all!of!this! produced!by!four!brown!coalOfired!power!stations!in!the!Latrobe!Valley.! By!2009!this!situation!was!virtually!unchanged;!brown!coal!generation!

! 124! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! represented!92!per!cent!of!Victoria's!electricity!supply!and,!importantly,! no!brown!coalOfired!power!station!had!been!closed!or!replaced.!This!begs! the!question,!how!much!do!States!or!their!policies!really!matter!–! particularly!given!the!Commonwealth's!more!recent!involvement!with!the! introduction!of!a!carbon!price.1! Emissions!levels!under!the!Kennett!government!reveals!that!in!just! four!years,!from!1995!to!1999,!carbon!dioxide!emissions!from!electricity! generation!in!Victoria!increased!by!31!per!cent.!This!increase!coincided! with!the!privatisation!and!deregulation!of!the!electricity!market!–!an! agenda!led!by!the!Kennett!government.!Clearly!then,!subOnational! governments!and!their!policies!do!matter.!! If!the!generation!mix!of!the!electricity!regime!has!changed!little! over!the!past!decade,!how!should!we!analyse!and!interpret!the!Victorian! government's!response!to!the!challenges!of!SETs!postOprivatisation?!Two! points!are!of!note!here.!First,!'nonOchange'!does!not!necessarily!represent! a!benign!policy!environment.!On!the!contrary,!perhaps!we!should!ask!why,! considering!a!rising!Green!vote!and!increased!media!attention!throughout! the!2000s,!the!Victorian!electricity!regime!changed!so!little.!Second,!as! outlined!in!Chapter!2,!sustainability!transitions!are!long,!drawnOout,!multiO phase!processes.!What!is!important!is!the!preOdevelopment!phase;! although!this!phase!does!not!necessarily!result!in!physical!changes!to!the! regime,!developments,!particularly!on!the!institutional!level,!may!still!be! evolving.!Consequently,!it!is!important!to!examine!how!contests!over!the! electricity!regime!influence!SETs.!This!means!we!must!consider!the! opportunities,!constraints,!and!especially!the!drivers!of!subOnational! government!policy!response!–!all!of!which!take!on!different!political!forms! under!the!private!ownership!of!the!electricity!sector.!As!noted!by!the! government:!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!In!2012!the!federal!government!introduced!a!price!on!carbon.!See!Chapter!8.!

! ! 125! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses!

The!private!ownership!of!much!of!Victoria's!energy!sector,!and!the! competitive!NEM,!means!that!different!approaches!to!greenhouse! abatement!in!the!sector!are!required!compared!to!those!that!might! have!been!pursued!in!the!past!when!the!sector!was!publicly!owned! and!operated!(DNRE,!2002,!p.!44).! ! This!chapter!identifies!and!details!three!phases!of!SET!policy! development!throughout!the!2000s!under!the!Bracks!and!Brumby! Victorian!State!Labor!government.!The!first!phase!(2000!to!2004)!was!a! period!of!institutional!innovation!that!served!as!an!important!source!for! SET!capacity!building.!This!innovation!was!driven!primarily!by!the! government’s!greenhouse!agenda.!Beginning!with!its!Greenhouse!Strategy,! two!developments!are!highlighted!here!as!influential:!The!Greenhouse! Challenge!for!Energy!and!the!creation!of!the!National!Emissions!Trading! Taskforce!(NETT).!The!second!phase!(2005!to!2007)!saw!the!fossil!fuel! regime!reassert!its!dominance!in!energy!policy.!This!is!explored!through! the!decision!to!extend!the!Hazelwood!Power!Station!in!2005,!along!with! the!changing!constellations!of!actors!in!the!energy!and!environmental! policy!domain.!The!third!phase!(2008!to!2010)!represented!an! amalgamation!of!the!previous!two!phases.!It!was!characterised!by!an! agenda!focussed!on!climate!change!that!simultaneously!continued!to! advocate!cleanOcoal!technologies.!Nevertheless,!by!the!end!of!its!term!in! 2010,!the!Labor!government!offered!a!pathway,!albeit!a!relatively!weak! one,!for!SETs!in!Victoria.! This!chapter!is!about!recognising!opportunities,!but!also!about!lost! opportunities.!This!case!study!concludes!with!a!discussion!on!the! importance!of!subOnational!policy!developments!towards!SET!capacity;! and!a!look!at!this!policy!realm's!limitations,!which!revolve!around!notions! of!responsibility.! !

! ! 126! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses!

Phase(one(2000(to(2004:(Victoria's(period(of(institutional( innovation(

By!the!end!of!the!1990s!it!was!clear!that!neither!the!federal!nor!State! conservative!governments!were!successfully!reducing!electricity!sector! emissions.!A!change!in!Victoria's!government!in!1999!potentially!offered!a! new!direction!for!the!State's!energy!sector.!The!incoming!Labor! government!brought!with!it!a!stronger!environmental!focus!(more!so!in!its! second!term)!that!sought!to!integrate!sustainability!and!greenhouse! concerns!into!government!core!objectives!and!decisionOmaking!processes.! In!the!government's!first!two!terms,!this!led!to!a!period!of!institutional! innovation!and!coOevolution!that!enhanced!the!State’s!environmental! capacity!but!also!reOopened!SET!debates!in!Victoria!that!were!closed! during!the!privatisation!years.! There!were!a!number!of!reasons!for!the!new!government's! approach.!Strategically,!it!sought!to!manage!economic!and!political!risk!as! much!as!environmental!risk.!The!Bracks!government!perceived!that! market!measures, such!as!a!carbon!price,!were!an!inevitable!outcome!of! international!attempts!to!address!climate!change.!Victoria's!reliance!on! brown!coal!for!electricity!generation!therefore!presented,!to!a!degree,!an! economic!liability.!This!perceived!economic!risk!to!the!State!played!a! considerable!role!in!shaping!Labor's!response!to!energy!reform.! At!the!same!time,!addressing!environmental!risk!had!shortOterm! political!benefits!for!the!Labor!government.!Electorally,!environmental! and!climate!change!concerns!were!gradually!emerging!as!increasingly! important!issues!for!voters.!The!rising!green!vote!became!apparent!when,! in!the!2002!Victorian!State!election,!the!Greens!polled!around!10!per!cent! of!the!primary!vote!StateOwide,!a!one!per!cent!increase!over!the!1999! election.!Addressing!environmental!concerns!would!allow!the!Labor!Party! to!appeal!to!a!wider!base!of!voters,!but!it!also!helped!their!federal!

! ! 127! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! counterparts!exert!pressure!on!the!CoalitionOled!federal!government!by! portraying!it!as!environmentally!neglectful.!In!many!ways!this!strategy! was!a!winOwin!one!for!Victorian!Labor;!it!could!pursue!environmental! objectives,!but!only!so!far!as!the!Federal!government!allowed.!In!other! words,!the!Federal!government’s!refusal!to!implement!a!price!on!carbon! could!be!blamed!for!a!lack!of!progress!on!the!State!level.! The!Bracks!government's!environmental!response!commenced! slowly.!This!was!unsurprising!given!that!it!was!a!minority!government! with!a!strong!regional!focus.!Most!major!developments!occurred!during! the!second!term,!when!the!aboveOnoted!rise!in!the!green!vote!in!2002,! coupled!with!Labor’s!landslide!victory,!delivered!the!party!a!strong! mandate!to!pursue!environmental!objectives!with!confidence.! One!of!the!most!important!institutional!developments!at!the!time! was!the!Bracks!government's!decision!to!split!the!Department!of!Natural! Resources!and!Environment!(DNRE)!into!two!separate!departments:!the! Department!of!Primary!Industries!(DPI)!and!the!Department!of! Sustainability!and!Environment!(DSE).!The!DSE!took!policy!responsibility! for!the!environment,!and!energy!was!moved!to!the!Department!of! Infrastructure!(DoI)!under!Theo!Theophanous,!the!Minister!for!Energy! Industries!and!Resources.!John!Thwaites,!the!Deputy!Premier!and!a! popular!politician,!was!given!the!environment!portfolio.!The!environment! department!not!only!had!autonomy,!but!was!also!assigned!to!a!very!senior! and!respected!Labor!Party!member,!giving!the!environment!portfolio! authority!and!legitimacy!within!Cabinet.! In!2002!the!Victorian!government!released!its!Greenhouse!Strategy.! It!had!three!core!objectives:!reducing!greenhouse!emissions;!sequestering! carbon!by!enhancing!greenhouse!sinks;!and!developing!and!implementing! a!range!of!strategies!to!adapt!to!climate!change.!The!manner!in!which!the! strategy!was!developed!and!its!comprehensiveness!were!promising!signs! for!developing!environmental!capacity.!The!final!strategy!benefited!from!

! ! 128! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! extensive!public!consultation!initiated!by!the!greenhouse!policy!unit,! established!within!the!DNRE!in!2000.!In!addition!to!this!public! consultation,!four!stakeholder!reference!groups!(energy!supply,!energy! use,!transport,!and!agriculture!and!sinks)!were!established!to!provide! representation!from!industry,!community,!and!local!government!(DNRE,! 2002).!This!relatively!open!policy!process!incorporated!broad!interests! and!longOterm!perspectives.!The!strategic!considerations!that!determined! the!strategy's!priorities!included:! • the!need!for!a!comprehensive!greenhouse!response;! • the!importance!of!seeking!the!best!environmental,!social!and! economic!outcomes!for!Victoria;! • the!need!to!take!a!longOterm!perspective!with!respect!to!climate! change!issues;! • the!need!to!recognise!that!action!to!address!climate!change!is!a! responsibility!of!all!Victorians;! • the!importance!of!ensuring!that!actions!implemented!under!the! Victoria!Greenhouse!Strategy!are!not!duplicative!of,!or!in!conflict! with,!actions!being!pursued!at!the!national!level.! ! The!monitoring,!reporting!and!review!processes!were!equally! impressive!in!their!attempts!to!build!environmental!capacity.!The! greenhouse!policy!unit!was!charged!with!coordinating!the!monitoring!of! Victoria's!greenhouse!gas!emissions.!Progress!on!implementing!the! strategy's!actions!was!covered!in!annual!reports!published!on!the! government's!dedicated!greenhouse!website.!Formal!reviews!were! conducted!biennially,!with!the!possibility!of!earlier!reviews!if!there!were,! ‘substantive!changes!in!national!or!international!policy!settings’!(DNRE,! 2002,!p.!25).! Detailed!descriptions!of!the!actions!required!to!implement!the! strategy's!priorities!were!provided!to!the!agencies!or!departments!

! ! 129! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! responsible!for!carrying!then!out.!For!the!energy!supply!component!this! mainly!fell!to!the!Sustainability!Energy!Authority!Victoria!(SEAV),! formerly!Energy!Efficiency!Victoria!(under!the!Kennett!government).!The! roles!of!SEAV!centred!on!supporting!and!promoting!renewable!energy! technologies.! The!Greenhouse!Strategy!did!not!specifically!address!the!challenges! of!transitioning!the!electricity!regime!towards!ecological!sustainable! development.!Nevertheless,!it!provided!a!comprehensive!framework!for! building!environmental!capacity!that!was!achieved!through!a!range!of! institutional!developments!and!carefully!formulated!strategic!directions.! This!laid!the!early!foundations!for!Victoria's!approach!to!energy!supply! challenges,!which!led!to!the!Greenhouse!Challenge!for!Energy!position! paper.! ! The,Greenhouse,Challenge,for,Energy,

The!2004!Greenhouse,Challenge,for,Energy!position!paper!(DoI!&!DSE,! 2004)!marked!a!significant!step!for!SET!debates!in!Victoria.!Unlike!the! previous!SECV!scenarios!(Chapter!5),!it!did!not!represent!a!detailed!plan! of!what!the!electricity!system!would!or!should!look!like!in!a!carbonO constrained!future,!or!prescribe!technologies.!Rather,!the!paper!provided! an!economic!case!for!change:! Our!high!per!capita!emissions!intensity!and!significant!reliance!on! fossil!fuels!makes!our!economy!particularly!vulnerable!in!a!carbon! constrained!world.!Recognising!the!potential!costs!and!opportunities! associated!with!future!adjustments,!the!Victorian!government! believes!that!action!on!climate!change!must!be!taken!now.!The! stationary!energy!sector!has!a!major!role!to!play!–!the!production! and!use!of!energy!accounts!for!more!than!half!of!Australia's!total! emissions.!Australia!stationary!energy!sector!faces!a!large! investment!challenge!over!the!coming!decades!to!meet!growing! demand,!and!the!industry!is!calling!for!greater!certainty!on! greenhouse!policy!from!governments.!Acting!now!to!provide!a!more! certain!policy!environment!means!that!costs!can!be!managed!in!the! National!and!Victorian!economies!given!time!to!adjust.!Delay!will!run!

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the!risk!that!the!future!abatement!task!will!be!larger!and!the!costs! will!be!much!higher!(DoI!&!DSE,!2004,!p.!1).! ! This!strategy!was!seen,!at!least!on!the!government’s!behalf,!as!important! for!winning!over!support!for!a!transition.!In!simple!terms,!by!emphasising! the!positive!economic!dimensions!of!transitioning,!the!government! attempted!to!shift!ownership!of!the!debate!from!one!commonly!regarded! as!a!‘greenie’!issue,!to!an!economic!issue,!thereby!engaging!a!wider! electorate.!! The!economic!modelling!was!undertaken!by!the!Allen!Consulting! Group!(2004),!and!was!guided!by!two!questions:! ! 1. What!policy!approach!would!best!position!the!Victorian!energy! sector!and!wider!economy!for!a!carbonOconstrained!future?! 2. Is!it!better!for!policy!action!to!be!taken!now!or!to!wait!until!greater! certainty!is!available!with!respect!to!international!policy! developments!and/or!until!the!Federal!government!takes!the!lead!to! introduce!a!national!emissions!trading!scheme?! ! The!report!looked!at!a!range!of!policy!options,!including!an!ETS!with! and!without!complementary!measures,!a!generator!efficiency!standard! placed!on!existing!and!new!generators,!and!an!emissions!intensity! requirement!scheme,!such!as!the!existing!New!South!Wales!Greenhouse! Gas!Abatement!Scheme!(GGAS)!(Allen!Consulting!Group,!2004).!The! objective!was!to!see!if!the!early!introduction!(i.e.,!2008)!of!such!measures! would!be!advantageous!for!Victoria!in!the!long!run.!To!determine!this,!the! economic!impacts!of!these!policies!were!assessed!over!two!periods:!2008! to!2012,!the!first!Kyoto!commitment!period;!and!postO2012.!Results!were! modelled!against!BAU!for!the!former!period.!From!2012!onwards!four! scenarios!were!modelled:!a!reference!case!using!a!$5!carbon!price!as!a! proxy!for!the!continuation!of!current!domestic!policy!impacts;!a!conflict!

! ! 131! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! world,!using!a!$5!carbon!price!but!also!including!a!marked!increase!in! global!oil!prices!that!resulted!in!a!boost!for!Australia's!natural!gas!export! value;!greenhouse!action,!assuming!a!moderate!global!price!on!carbon! reaching!$30!per!tonne!carbon!dioxide!by!2023;!and!greenhouse!crisis,! which!assumed!a!global!carbon!price!would!rise!to!$75!per!tonne!carbon! dioxide!by!2018.!! The!results!varied!with!the!policies!and!scenarios!in!question.!They! showed!that!an!ETS,!complemented!by!measures!to!drive!energy!efficiency! improvements,!was!the!most!costOeffective!policy!approach.!Under!this! approach,!the!period!2008!to!2012!experienced!a!slight!reduction!in!the! growth!rate!for!gross!state!product!(GSP).!However,!this!reduction!was! offset!by!economic!benefits!realised!across!all!four!scenarios!for!the!postO 2012!period.!In!other!words,!there!was!a!positive!net!present!value!for! GSP,!including!a!positive!net!impact!on!employment.!As!such!the!report! concluded!that,!‘on!the!basis!of!the!analysis!contained!in!this!report,! adoption!of!an!ETS!scheme!over!the!2008O2012!period!would!lead!to!a! modest!rise!in!energy!prices!and!a!slight!decline!in!economic!activity,!but! could!have!significant!benefits!for!economic!welfare,!particularly!if! concerted!greenhouse!action!eventuates!beyond!2012’!(Allen!Consulting! Group,!2004,!p.!175).! Based!on!these!findings,!along!with!stakeholder!responses!to!the! Greenhouse!Challenge!for!Energy!Consultation!Paper,!a!fiveOpoint!policy! package!was!proposed,!including:! ! 1. a!national!emissions!trading!scheme;!! 2. emissions!reporting!and!disclosure!requirements!for!large!emitters;! 3. a!Victorian!Energy!Technology!Innovation!Strategy!(ETIS);! 4. a!Victorian!Renewable!Energy!Strategy;! 5. a!Victorian!Energy!Efficiency!Strategy.! !

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These!strategies!would!go!on!to!form!an!important!component!of!the! Victorian!government’s!overall!approach!to!energy!transitioning.!For! example,!the!push!for!a!national!ETS!led!Victoria!and!New!South!Wales!to! form!an!interOjurisdictional!working!group!on!emissions!trading!in!2004,! which!in!turn!reOopened!national!debates!about!an!Australian!ETS.!This! placed!considerable!pressure!on!the!Commonwealth!government!to! respond.!Also,!the!renewable!energy!strategy!outlined!in!the!discussion! paper,!which!at!the!time!was!a!verbal!commitment!to!a!10!per!cent! renewable!energy!target!by!2010!(DSE,!2003),!became!formalised!as!the! Victorian!Renewable!Energy!Target!(VRET)!in!2006.!Finally,!the!energy! efficiency!strategy!led!to!the!Victorian!Energy!Efficiency!Target!(VEET),! legislated!in!2007.!From!this!perspective,!the!policy!formation!process! undertaken!in!the!Greenhouse!Challenge!for!Energy!proved!a!key!moment! for!the!development!of!SET!capacity!in!Australia.!! While!the!resulting!policies!were!obviously!significant!outcomes,!it! was!how!they!were!formulated!that!was!most!impressive.!How!was!the! government,!on!the!face!of!it!least,!able!to!effectively!incorporate! environmental!values!into!the!energy!policy!domain?!This!question! demands!a!closer!examination!of!how!the!institutions!and!the!actors! responsible!for!environmental!and!energy!policy!dealt!with!the! Greenhouse!Challenge.!Here,!insights!from!environmental!capacity! building!processes!could!yield!valuable!lessons!for!SET!capacity.! Several!attributes!of!the!Greenhouse!Challenge!for!Energy!process! stand!out.!These!include!a!strong!sustainability!focus!across!government! (i.e.,!topOdown,!such!that!it!filtered!both!horizontally!and!vertically! through!government!departments!and!agencies);!legitimacy;!the!presence! of!a!well!resourced!environmental!department!with!the!capacity!to!carry! out!its!objectives;!and!an!integrated!and!open!policy!process,!meaning!that! policy!is!formulated!through!a!range!of!mediums!involving!government! and!nonOgovernment!actors.!!

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These!attributes!can!be!located!within!Janicke’s!broader!notions!of! environmental!capacity!(Jänicke,!2002).!Jänicke!provides!an!analytical! framework!for!environmental!capacity!building!whereby!the!capacities!for! pursuing!environmental!policy!outcomes!are!constituted!by,!‘the!strength,! competence,!and!configuration!of!governmental!and!organized! nongovernmental!proponents!of!environmental!protection!and!the! cognitiveOinformational,!politicalOinstitutional,!and!economicO technological!framework!conditions.’!The!utilisation!of!these!capacities! then!depends!on,!‘the!strategy,!will,!and!skill!of!proponents!and!their! situative!opportunities’,!which!is!in!turn!related!to,!‘the!kind!of!problem:! its!urgency,!its!complexity,!and!the!power!resources!and!options!of!target! groups,!their!allies,!and!supporters’!(Jänicke,!2002,!p.!7).! Here,!the!focus!is!on!the!government!level!and!the!institutions! charged!with!responsibility!for!environmental!and!energy!policy.! Christoff’s!(1998)!public!sector!environmental!capacity,!which!is!similar!to! Jänicke’s,!is!a!useful!framework!for!conducting!such!analysis.!Christoff! outlines!four!interrelated!components!of!public!sector!environmental! capacity:!! ! 1. Integrative!capacity:!!the!existence!of!agencies!and!decisionOmaking! processes!that!enable!ecological!principals,!practices!and!goals!to!be! integrated!into!public!and!private!sector!activity.! 2. ConsensusObuilding!capacity:!the!existence!of!styles!and!forums!for! agenda!setting!and!policy!development!that!enable!open! deliberation!of!options.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3. Strategic!capacity:!the!ability!to!recognise!environmental!problems! and!develop!rational!policy!responses!that!lead!to!ecologically! sustainable!outcomes.! 4. Implementation!capacity:!staffing!levels!and!skill!base!which!are! able!to!react!to!new!challenges!and!learn!from!previous!experiences,!

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and!budgets!appropriate!for!effective!implementation!of!policy! initiatives.! (Christoff,!1998,!p.!11).! ! ! The!overwhelming!strength!of!the!Greenhouse!Challenge!for! Energy!process!was!its!ability!to!reconcile!the!values!of!the!DSE!and!the! DoI,!i.e.!environment!and!energy.!This!was!achieved!through!an! integrative!approach.!The!position!paper!was!a!formal!collaboration! between!the!two!departments,!and!the!Allen!Consulting!Group!research! was!overseen!by!an!InterOdepartmental!Committee!that!included!the!DSE,! DoI,!DPI,!SEAV,!EPA,!Department!of!Treasury!and!Finance,!Department!of! Premier!and!Cabinet!(DPC),!and!Regional!Development!Victoria!(RDV).!! As!stated!earlier,!when!DSE!was!created,!energy!policy!was! transferred!from!the!Department!of!Treasury!and!Finance!(under! Kennett),!then!briefly!to!the!DNRE,!and!finally!to!the!DoI.!Responsibility! for!energy!and!environmental!policy!fell!to!different!departments,!but!the! Greenhouse!Challenge!for!Energy!indicated!the!government's!willingness! to!foster!an!integrative!approach!to!policyOmaking!that!emphasised!the! importance!of!coOevolution.!Under!the!guise!of!sustainable!development,! this!approach!led!to!a!cross!sectoralOlike!strategy!evident!throughout!the! Greenhouse!Challenge:!‘the!package!continues!the!Bracks!government's! commitment!to!pursue!policies!and!programs!that!achieve!economic,! environmental!and!social!goals!and!integrated!way’!(DoI!&!DSE,!2004,!p.!i).! In!many!ways!the!Greenhouse!Challenge!was!a!vehicle!to!link! environmental!policy!and!economic!objectives.!A!largely!cooperative! approach!was!evident!between!two!departments!that!had!traditionally! been!antagonistic!towards!one!another.! This!cooperation!was!pivotal!to!progress!the!SET!debate!beyond! the!environmentOversusOeconomy!dichotomy.!The!process!was!also! considerably!improved!by!external!integration!and!a!range!of!

! ! 135! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! communication!and!consensusObuilding!channels.!The!DSE,!for!example,! shared!knowledge!and!resources!with!numerous!environmental!agencies! and!groups,!including!but!not!limited!to!the!EPA,!SEAV,!Parks!Victoria! (PV),!and!the!Commissioner!for!Environmental!Sustainability!O!a!Bracks! government!initiative!introduced!in!2003.!The!DoI's!work!on!energy! focussed!more!specifically!on!statutory!bodies!including!the!Victorian! Energy!Networks!Corporation!(VENCORP)!and!the!National!Electricity! Market!Management!Company!(NEMCO),!as!well!as!a!number!of!industry! groups!and!associations.2!Taken!together!these!policy!networks!ensured! diversity!and!an!adequate!skills!base,!which!is!crucial!for!complex!policy! problems!such!as!transitioning.!These!policy!networks!were!then!opened! to!both!business!and!civil!society!groups!through!an!extensive! consultation!process.!This!included!a!2003!roundtable!comprising!80! representatives!from!environmental!groups,!electricity!generators,! academia,!and!local!government!(DoI,!2003).! Policy!networks!alone!do!not!guarantee!environmental!or!SET! capacity.!The!presence!of!policy!networks!does!little!to!explain!how! environmental!values!were!successfully!incorporated!into!the!Greenhouse! Challenge,!or!why!there!was!a!degree!of!policy!harmony!amongst!these! networks.!As!Smith!(1993,!p.!7)!notes,!policy!networks!are!a!mechanism! for!enhancing!mutual!power.!This!power!can!be!used!to!push!specific! agendas,!but!also!to!block!or!lock!out!other!nonOcomplementary!opinions.! This!is!where!a!government's!strategic!capacity!becomes!important,!since! party!ideology,!in!particular,!can!initiate!change!and!create!new!paths!and! forums!for!new!actors!(Marsh!&!Rhodes,!1992,!p.!95).!! As!noted!above,!this!goes!back!to!the!Bracks!government's! environmental!agenda.!Responding!to!an!electorate!increasingly!aware!of! environmental!issues,!it!strengthened!its!strategic!direction!by!reO !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!Both!VenCorp!and!NEMCO!now!fall!under!the!Australian!Energy!Market!Operator! (AEMO).!

! ! 136! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! establishing!a!standalone!environmental/sustainability!department!led!by! an!individual!genuinely!interested!in!environmental!issues,!Thwaites.3! Moreover,!the!Victorian!Greenhouse!Strategy,!described!by!one! interviewee!as!the!magnum,opus!of!the!Bracks!government!(exO greenhouse!policy!bureaucrat!interview!#4),!laid!the!strategic!foundations! for!government!action,!including!departmental!policy!directions.! Finally,!a!range!of!measures!bolstered!the!government's!capacity!to! implement!the!policies!of!the!Greenhouse!Challenge.!Most!importantly,! green!and!sustainable!energy!voices!were!injected!into!the!policy!process! and!given!responsibility!and!resources.!As!one!example,!SEAV!was! charged!with!carrying!out!a!range!of!energy!efficiency!and!renewable! energy!programs.!Under!the!Bracks!government!its!staffing!and!funding! levels!increased!dramatically.!Staffing!and!funding!levels!for!the! 1998/1999!financial!year!were!33!and!$3.3!million,!respectively,!annual! reports!show;!by!2000/2001!the!workforce!had!nearly!doubled!to!60,!and! funding!increased!almost!fivefold!to!$14.5!million,!reaching!$19.5!million! in!2004!and!remaining!steady!thereafter.!The!government!adhered!to!the! belief!that!institutional!reforms!would!amount!to!little!unless!the! responsible!institutions!had!sufficient!capacity!to!carry!out!their!tasks.! Notwithstanding!this!increase!in!environmental!capacity,!the! government's!approach!led!to!little!material!change!to!the!fossil!fuel! regime.!So!how!effective!was!the!Greenhouse!Challenge!for!Energy!in! progressing!SET!debates!in!Victoria?!This!question!is!especially!pertinent! given!the!government!was!clearly!unwilling!to!explicitly!address!the! possible!phase!out!of!brown!coal!–!at!least!not!from!a!regulatory! perspective.!!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3!Standalone!environment!departments!had!existed!prior!to!the!election!of!the!Kennett! government.!Under!the!Cain!Labor!government!(1982O1990)!a!Department!of! Conservation,!Forests!and!Lands!existed.!This!later!became!the!Department!of! Conservation!and!Environment!under!the!Kirner!Labor!government!(1990O1992).!

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The!processes!undertaken!in!preparing!the!report!were!very! important,!and!led!to!significant!institutional!learning.!They!better! positioned!the!State!to!deal!effectively!with!SET!challenges!by!combining! longOterm!visions!(i.e.!a!60!per!cent!reduction!in!emissions!by!2050)!with! shorterOterm!policies!and!goals,!such!as!those!outlined!in!the!Greenhouse! Challenge.!The!Greenhouse!Challenge!catalysed!the!creation!of!the!VRET! and!VEET,!and!provided!the!critical!impetus!for!a!national!ETS,!detailed! below.!In!transitional!terms,!these!processes!constituted!the!preO development!phase:!they!were!designed!to!alter!the!rules!of!the!electricity! regime!game.! Goals!and!targets!are!important!when!it!comes!to!implementation! capacity,!but!more!decisive!measures!were!clearly!required!to!shift!the! regime.!The!government!was!well!aware!of!this;!it!could!choose!to!employ! an!interventionistOtype!approach!(i.e.!forced!shutdown)!or!a!marketObased! approach,!to!complement!its!Greenhouse!Challenge!policies.!Given! government’s!emphasis!on!energy!market!reform!over!the!two!decades! prior,!it!was!not!surprising!that!market!mechanisms!were!deemed!to!be! the!preferred!option.! An!interventionist!approach!would!have!conflicted!with!the! privatisation!market!logic!that!all!governments,!irrespective!of!political! persuasion,!were!keen!to!protect:! After!decades!of!neoliberalism!they’d!(government)!be!loathed!to! turn!round!and!say!we're!going!back!in,!we!going!to!intervene! because!we!think!this!is!the!best!solution!…!to!reduce!carbon! emissions.!No,!they!want!a!market!solution!(Energy!White!Paper! Reference!Group!interview!#1).! ! Although!the!Victorian!government!was!keen!to!move!forward,!at!the! federal!level!the!Coalition!government’s!opposition!to!an!ETS!presented!a! major!hurdle.!The!Victorian!government!had!no!intention!of!developing!a! StateOwideOonly!ETS.!Although!Victoria's!push!for!an!ETS!reflected!a!

! ! 138! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! component!of!environmental!concern,!there!was!also!clearly!a!strong! economic/investment!component.! All!the!States!and!Territories!at!that!time!were!going,!well!hang!on!a! minute,!that!position!of!never!never!just!isn't!sustainable!and!we've! got!people!knocking!on!the!door!going!'is!there!going!to!be!a!carbon! price!at!one!point!or!not!because!we!need!to!know!because!we!are! planning!on!building!power!stations!and!we!would!quite!like!to!know! what!you've!got!planned'!(Climate!Change!Authority!interview!#18).! ! Frustrated!by!the!Howard!Coalition!government's!position,!the! States!sought!to!break!the!stalemate!by!developing!their!own!national!ETS! without!federal!involvement.!This!created!an!advantage!for!the!Labor! States!in!that!it!was!seen!as!a!potential!electoral!policy!–!an!opportunity!to! wedge!the!federal!Coalition!government!and!assist!their!federal!Labor! colleagues.!In!2004!an!InterOjurisdictional!Working!Group!on!Emissions! Trading,!subsequently!called!the!National!Emissions!Trading!(NETT)! taskforce,!was!set!up.!All!Australian!States!and!Territories!participated,!led! by!the!Victorian!and!New!South!Wales!governments.!This!development! was!important!for!two!reasons:!it!laid!the!foundations!for!the!existing! carbon!pricing!mechanism!now!in!place!in!Australia;!and!perhaps!more! relevant!to!this!discussion,!it!illustrates!the!importance!of!strong!subO national!environmental!policies,!and!the!potential!power!of!subOnational! governments!in!SET!debates.! With!this!in!mind!–!noting!the!central!importance!of!carbon!pricing! for!SETs!!–!this!discussion!turns!to!the!evolving!policy!context!of!carbon! pricing!in!Australia,!with!a!focus!on!the!NETT's!role!in!such!developments.! ! Carbon,pricing,debates,and,the,role,of,the,NETT,

The!carbon!pricing!debate!has!a!long!history!in!Australia.!The!Industry! Commission!first!mooted!the!possibility!of!a!price!on!carbon!in!1991! (Industry!Commission,!1991b),!and!since!then!recurrent!debates!on!this! issue!have!become!increasingly!politically!polarised.!Four!periods!can!be!

! ! 139! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! identified!in!the!evolution!of!carbon!pricing!as!an!issue!in!Australia.!The! first!period!(1998!to!2000)!was!one!of!institutional!learning,!led!by!the! Australian!Greenhouse!Office!(AGO).!The!primary!focus!of!this!period!was! not!implementation!but!instead!initiating!discussion!and!thinking!about! how!a!possible!Australian!ETS!might!look.!During!the!second!period!(2004! to!2006)!the!NETT!was!created,!a!key!moment!for!carbon!pricing!in! Australia.!This!push!by!the!States!and!Territories!helped!shape!federal! developments!on!carbon!pricing.!The!events!of!the!third!period!(2006!to! 2010)!occurred!on!the!federal!level,!as!the!outgoing!Howard!government! shifted!its!position!on!carbon!trading,!and!the!incoming!Rudd!government! proposed!the!Carbon!Pollution!Reduction!Scheme!(CPRS).!The!fourth! period!(2010!to!present)!has!resulted!in!a!national!carbon!price!effective! from!July!2012.! This!chapter's!main!focus!is!not!carbon!pricing!per!se!(a!topic! worthy!of!extensive!analysis!in!a!different!setting),!but!rather!exploring! the!of!role!subOnational!governments!in!SETs.!For!this!reason,!the!main! focus!is!on!the!second!period!(2004!to!2006)!of!carbon!pricing!in! Australia.!Periods!three!and!four!are!discussed!in!detail!in!Chapters!7!and! 8!respectively.! Not!long!after!the!Kyoto!conference!in!1997!(COP!3),!the!Howard! government!established!the!AGO.!Despite!having!a!questionable!overall! influence!on!policy!(Christoff,!2005),!the!AGO!was!the!central!agency!for! greenhouse!policy!and!pioneered!the!early!discussions!on!carbon!trading! in!Australia.!These!discussions!were!initiated!by!a!request!from!the! Environment!Minister,!Robert!Hill,!to!investigate!the!regulatory! arrangements!needed!to!support!a!market!in!greenhouse!gas!emissions! (Australia!Parliament.!House!of!Representatives.!Standing!Committee!on! Environment,!1998).!Subsequently,!throughout!1999,!the!AGO!released! four!discussion!papers!on!emissions!trading:!Establishing,the,boundaries! (AGO,!1999a);!Issuing,the,permits!(AGO,!1999b);!Crediting,the,carbon!

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(AGO,!1999c);!and!Designing,the,market!(AGO,!1999d).!An!additional!fifth! paper!by!the!Allen!Consulting!Group,!commissioned!by!the!AGO,!focused! on!permit!allocation!(Allen!Consulting!Group,!2000).!Despite!a!muted! response!from!the!Federal!government,!these!discussion!papers!provided! fertile!ground!for!others!(like!the!NETT)!to!draw!from!and!build!on.!! From!that!time!until!2004,!carbon!pricing!debates!had!been!kept!at! bay!by!the!Howard!government.!In!particular,!Howard!himself!was! determined!not!to!see!such!measures!introduced!(Pearse,!2007).4!By!the! early!2000s!the!political!environment!in!Australia!had!changed.!All!States! and!Territories!were!by!then!under!Labor!leadership,!and!this!provided!a! political!opportunity.!In!2004!thenOPremier!of!New!South!Wales,!Bob!Carr,! contacted!the!Victorian!Premier,!Steve!Bracks,!with!the!aim!of!setting!up! the!NETT.!Carr,!who!had!already!introduced!a!baseline!and!credit! greenhouse!gas!scheme!in!New!South!Wales,!was!particularly!keen!to!push! for!a!national!ETS,!as!was!the!Victorian!government.!From!there!a!small! but!highOlevel!team!was!set!up,!which!included!Roger!Wilkins!(Chair),! Richard!Bolt,!Ian!Porter,!and!Anthea!Harris!(Secretariat).5! The!team!placed!a!strong!emphasis!on!consultation!as!evidenced!by! the!processes!undertaken!(Figure!3).! !

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4!According!to!Pearse!(2007,!p.!86),!in!2003!an!ETS!had!the!support!of!the!Prime! Minister’s!department!and!at!least!five!key!senior!ministers!and!their!departments:!Peter! Costello!(Treasury);!David!Kemp!(Environment);!Ian!Macfarlane!(Industry);!Warren! Truss!(Agriculture);!and!Brendan!Nelson!(Science).!Nevertheless,!when!the!proposal!for! an!ETS!went!to!cabinet,!Howard!rejected!it.! ! 5!Roger!Wilkins!was!formerly!the!head!of!the!Cabinet!Office!in!the!New!South!Wales! government!and!is!now!the!Secretary!of!the!Attorney!General's!office;!Richard!Bolt!was! the!head!of!energy!policy!in!the!Victorian!DoI!and!became!the!Secretary!of!the!Victorian! DPI;!Ian!Porter!was!the!manager!of!greenhouse!policy!in!the!Victorian!DNRE!and!later!the! executive!director!of!climate!change!in!the!Victorian!DSE;!and!Anthea!Harris!helped! design!and!implement!the!New!South!Wales!Greenhouse!Gas!scheme.!She!has!since! worked!as!the!chief!adviser!in!the!Department!of!Climate!Change!and!Energy!Efficiency! and!is!now!the!CEO!of!the!Climate!Change!Authority.!

! ! 141! Background to this Discussion Paper ______

In March 2005 First Ministers released a joint communiqué outlining work to date and issues for further consideration. In September 2005 the Taskforce released a paper, The Background Paper for Stakeholder Consultation into Emissions Trading (the ‘Background Paper’), seeking stakeholder views on the 10 design propositions. In total, 70 submissions were received. The Background Paper provided a basis for stakeholder forums that were held in Perth, Adelaide, Melbourne, Sydney and Canberra during the period October 2005 to February 2006. Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! The Taskforce also engaged consultants to estimate the likely impacts of a NETS on the electricity sector and the broader economy.

Figure!3:!Schematic!illustration!of!the!NETT.! Figure A. Illustration of the NETS design process

•High level concepts Ten key design High level concepts •Broad design principles and principles. propositions •Key constraints/boundaries (March 2005) Consultation. •Stakeholder views

Development of •Investigation of approaches approaches and •Development of integrated design modelling of impacts. •First pass economic modelling Changes Discussion required Discussion Paper Paper (August 2006) •Extensive consultation process Consultation. •Further detail on approaches Assessment of and possible alternatives possible design. •Decisions on chosen design

If States & Territories agree to proceed with further development of scheme design

•Specification of scheme design Development of •Detailed economic modelling Policy Position detailed design. •Drafting of legislation & rules Paper •Consultation on detailed design

•Establishment of institutions •Detailed procedures, allocation Implementation. Scheme algorithms, permit auctions, commences reporting, verification, Registry !

Source:!NETT!(2006,!p.!iii).! ! These!processes!organised!both!industry!and!environment!stakeholder! iii roundtables,!which!were!considered!an!important!way!to!develop!support! for!the!scheme.6!That!is,!some!level!of!agreement!was!needed!between! industry!and!environment!groups!if!the!scheme!was!to!have!any!influence! on!the!Federal!government.!According!to!participants,!this!was!a!strength! of!the!design!process.! We!would!argue,!and!others!may!disagree,!but!I!think!it!is!true!that! we!got!140!stakeholders!ranging!from!Alcoa!to!the!ACF!to!agree!with! the!basic!model!of!carbon!pricing!that!has!endured!to!the!scheme! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 6!These!involved!the!Business!Council!for!Sustainable!Energy,!Investor!Group!on!Climate! Change,!Energy!Users!Association!of!Australia,!A3P,!Auswind,!Energy!Retailers’! Association!of!Australia,!National!Generators’!Forum,!Renewable!Energy!Generators! Australia,!Energy!Supply!Association!of!Australia,!Energy!Markets!Reform!Forum,! Minerals!Council!of!Australia,!Insurance!Council!of!Australia,!Australian!Coal!Association,! Australian!Industry!Greenhouse!Network,!Australian!Aluminium!Council,!National! Association!of!Forest!Industries,!APPEA,!Cement!Industry!Federation,!Australian! Chamber!of!Commerce!and!Industry,!Plastics!and!Chemicals!Industry!Association,! Australian!Industry!Group,!Total!Environment!Care,!WWF,!Australian!Conservation! Foundation,!Environment!Victoria,!Friends!of!the!Earth,!Greenpeace,!and!Climate!Action! Network!Australia.!

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that!Gillard!got!past!…..!we!had!got!every!power!generator!in!the! bloody!Valley!to!accept!they!were!going!to!have!full!exposure!to!a! carbon!price!and!they!were!just!going!to!bat!like!hell!for!their!fair! share!of!permits!to!keep!their!asset!value!up.!But!they!knew!that! their!operating!regimes!would!be!forever!altered,!that!they!would!be! closing!early,!generating!less;!they!knew!it,!the!modelling!showed!it! and!they!knew!it.!And!we!got!them!there!and!that's!a!hell!of!a!change! that!cannot!be!underestimated!(exOenergy!policy!bureaucrat! interview!#9).! ! The!outcome!of!the!NETT!process!was!the!2006!discussion!paper!Possible, Design,for,a,National,Greenhouse,Gas,Emissions,Trading,Scheme!(NETT,! 2006).!It!proposed!a!2010!starting!date!and!was!bounded!by!a!60!per!cent! cut!in!emissions!from!2000!levels!by!2050.7!All!six!major!greenhouse!gases! were!included.!However,!only!the!stationary!energy!sector!was!to!be! covered:!in!other!words,!the!scheme!accounted!for!only!around!half!of! Australia's!emissions.!For!permit!allocation,!the!scheme!proposed!a! combination!of!auctioned!and!free!permits!to,!‘offset!the!impacts!of! increased!energy!prices!on!trade!exposed,!energy!intensive!industries’! (NETT,!2006,!p.!xxviii).!Revenue!raised!from!auctioning!the!remaining! permits!could!be!returned!to!the!State!and!Territory!governments.!They!in! turn!could!use!this!revenue!to!help!offset!the!impact!on!households,! regions!and!small!businesses.!From!an!environmental!and!SET!perspective! the!scheme!was!relatively!weak;!by!2030,!20!years!after!its!introduction,! the!discussion!paper!predicted!that!coalOfired!electricity!generation!would! still!make!up!54!per!cent!of!electricity!supplied.! Arguably!the!most!important!outcome!of!the!NETT!process,!which! began!in!2004,!was!the!considerable!pressure!it!placed!on!the!Federal! government!by!building!momentum!for!a!CommonwealthOled!national! emissions!trading!scheme.!This!was!by!no!means!the!only!pressure.! Fractures!amongst!the!fossil!fuel!discourse!coalition!and!tensions!within!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 7!At!the!time!60!per!cent!was!considered!the!norm!by!government!standards.!This!has! since!increased!to!80O90!per!cent!as!emissions!have!continued!to!grow!and!the!onset!of! climate!change!has!continued!to!intensify.!

! ! 143! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! the!Howard!government!on!climate!policy!had!been!slowly!emerging!since! the!late!1990s.!As!Hamilton!(2001)!notes,!in!1999!the!Australian!Gas! Association!moved!to!distance!itself!from!the!coal!sector!by!promoting! itself!as!a!superior!fuel!in!terms!of!generation.!This!was!reinforced!in! 2000,!when!the!gas!company!AGL!came!out!urging!the!ratification!of!Kyoto! along!with!the!introduction!of!an!emissions!trading!scheme.!Not!long!after,! BHP!followed!suit,!also!calling!for!a!domestic!ETS.!Despite!attempts!by! successive!environment!ministers!within!the!Howard!government!to!ratify! Kyoto!(Christoff,!2005),!Howard!himself!remained!firmly!opposed.! Labor!control!of!all!the!States!and!Territories!from!2000,!and! specifically!their!active!pursuit!of!climate!policies,!also!placed! considerable!pressure!on!Howard.!The!NETT!emerged!as!the!States’!main! strategy!to!isolate!the!Howard!government.!By!the!time!the!NETT!report! was!released!in!August!2006,!the!Howard!regime!was!looking!increasingly! vulnerable!–!particularly!given!the!introduction!of!the!European!Union! (EU)!ETS!in!2005.!Howard's!problems!were!exacerbated!by!the!Australian! Business!Roundtable!on!Climate!Change,!which!also!advocated!a!national! ETS.8!One!month!after!the!NETT!report!was!released,!Al!Gore's!An, Inconvenient,Truth!was!released!in!Australia!and!in!the!following!month!of! October,!the!Stern!Review!(2006)!was!published.!All!of!these! developments,!along!with!extreme!climate!events!such!as!hurricane! Katrina!in!2005!and!Australia's!worst!drought!on!record!in!2006,! contributed!to!the!eventual!shift!in!the!Howard!government's!position!on! emissions!trading:! He!(John!Howard)!came!out!on!Four!Corners!and!he!attacked!it!with! gusto,!wreck!the!economy!etc.!...!what!he!got!in!response!to!this! attack!was!deafening!silence,!all!of!the!cheer!squad!that!helped!him! wrecked!the!thing!in!2003!didn't!say!anything!…!they!didn't!come! out,!no!one!came!out!and!that!led!to!a!process!I!can!remember!now!to! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 8!This!was!a!collaboration!between!the!ACF!and!a!handful!of!large!industryOrelated! businesses!calling!for!a!price!on!carbon.!Conducted!in!2006,!it!involved!BP!Australia,! Insurance!Australia!Group,!Origin!Energy,!Swiss!Re,!Visy!Industries,!Westpac!and!the!ACF.!

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Howard!establishing!his!own!task!group!on!emissions!trading.!It!had! a!whole!lot!of!august!personalities.!We!went!and!briefed!them!on!the! NETT!and!they!simply!looked!through!all!of!our!recommendations! and!said!we!like!that!like!that!like!that!add!this!recommendation.!And! they!basically!took!the!whole!scheme!repackaged!it!shamelessly,!they! didn’t!try!to!hide!what!they!were!doing,!and!within!six!months!or!so! Howard!had!done!a!complete!aboutOface!and!accepted!the!thing!that! he!attacked!Four!Corners!(exOenergy!policy!bureaucrat!interview! #9).! ! Clearly!a!number!of!factors!extended!over!a!period!of!time!to!play!a! role!in!this!shift.!The!NETT,!while!only!one!factor,!was!pivotal!from!a! political!perspective!because!the!involvement!of!all!State!and!Territory! governments!ensured!a!degree!of!legitimacy!in!the!debate.!After!conceding! defeat!regarding!emissions!trading,!Howard!established!his!own! Emissions!Trading!Task!force!headed!by!Peter!Shergold!(Secretary!of!the! Department!of!Prime!Minister!and!Cabinet).!The!scheme,!as!alluded!to!in! the!passage!above,!closely!resembled!that!of!the!NETTs.!Critically,!the! StateOled!NETT!created!in!2004!contributed!significantly!to!subsequent! developments!on!the!national!level.!This!demonstrates!that!the!subO national!level!serves!as!an!important!source!of!SET!capacity!building.!Or,! to!put!it!another!way,!subOnational!governments!do!have!power!(relative! to!national!governments)!that!they!can!deploy!for!the!betterment!of!SETs.!! This!section!about!Phase!One!has!detailed!a!period!of!subnational! and!national!institutional!innovation,!most!evident!in!the!Victorian! government’s!approach!to!transitioning!towards!ecologically!sustainable! solutions.!Specifically,!these!were!attempts!to!reconcile! energy/economy/environmental!values!through!a!range!of!sustainability,! energy!efficiency,!and!renewable!energy!strategies,!as!well!as!through!the! development!of!an!ETS.!!All!of!these!strategies!went!some!distance!toward! recognising!and!dealing!with!the!longOterm!challenges!of!transitioning.! ! !

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Phase(two((2005(to(2007):(policy(realignment(and(the(advent(of( ‘clean(coal’(

By!2007,!three!years!after!the!Greenhouse!Challenge!for!Energy!position! paper!and!the!establishment!of!the!NETT,!Victoria's!strategic!policy! direction!had!shifted.!The!operating!life!of!the!Hazelwood!Power!Station,! which!some!regarded!as!the!least!carbonOefficient!power!station!in!the! OECD!(WWF),!had!been!extended;!the!VRET!timeline!had!been!delayed! and!pushed!out!to!2016;!energy!policy!had!been!transferred!to!the!DPI;! and!clean!coal!was!the!favoured!longOterm!policy!option.!The!language!of! transitioning!was!still!used,!but!influence!was!increasingly!coming!from! different!quarters,!namely!the!industry!sector.!Much!of!the!momentum! gained!under!the!Bracks!government!was!lost.! This!section!covers!the!second!phase!of!the!Labor!government’s! response!to!energy!transitions!in!Victoria,!and!asks,!how!and!why!these! shifts!occurred.!It!covers!the!decision!to!allow!Hazelwood!Power!Station! access!to!new!coal!reserves,!and!the!changing!constellations!of!actors!in! the!energy!and!environment!domain.!These!factors!contributed!to,!and! consolidated,!Victoria's!strategic!energy!policy!shift!towards!clean!coal.! The!outcome!of!the!NETT!was!a!strong!platform!from!which!to! launch!a!national!ETS.!This!was!undoubtedly!a!positive!step!for!SETs!in! Victoria!and!elsewhere!in!Australia.!Nevertheless,!as!the!debate!shifted! towards!implementation,!and!the!risks!associated!with!a!carbon!price! became!more!immediate,!the!policy!process!became!more!insular.!It! increasingly!focused!on!governmentOindustry!relations,!particularly! around!issues!of!compensation:! You!can!say!'yes'!to!what!you!give!Alcoa!and!others,!you!can!say!'yes'! to!what!you!give!Hazelwood!and!others!–!that!you!give!them! something!–!but!when!you!start!actually!saying!how!much!that!is,! then!there!will!be!an!arm!wrestle!and!they!will!try!to!take!you!to!the! cleaners.!And!you!will!have!to!try!to!figure!out!just!how!much!is! enough,!and!where!you!say!that's!just!bleating!!

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(exOenergy!policy!bureaucrat!interview!#9).! ! At!the!heart!of!this!dynamic!was!the!issue!of!risk:! If!there's!one!thing!that!frames!our!entire!conversation!from!an! industry!perspective!in!this!whole!space,!government!and!industry,! and!that!is!one!word,!risk.!So!how!is!risk!managed!and!where!does! risk!sit!and!who!accepts!what!risk,!carbon!risk!and!market!risk?!(exO Origin!Energy!interview!#5).! ! This!risk!dimension!plays!out!on!multiple!layers.!First,!technical!risk!exists! with!any!new!or!unproven!technology.!Second,!financial!risk!may!affect! both!public!and!private!capital.!This!is!not!just!about!the!risk!of!financing! new!technologies!or!projects,!but!also!applies!to!existing!assets,!which! industry!naturally!tries!to!protect.!Third,!sovereign!risk,!given!the!political! partisanship!over!climate!change!in!Australia,!presents!a!particularly! challenging!component!for!SETs.!This!relates!directly!to!investor! confidence.!New!technologies!find!it!difficult!to!enter!the!market!because! of!political!instability.!At!the!same!time!government!is!afraid!to!turn!its! back!on!(large)!existing!industries!(via!shutdown!or!phase!out)!because! this!could!send!a!negative!message!to!future!investors,!which!could!in!turn! threaten!the!government's!capital!accumulation!agenda.!Fourth,!security! of!supply!risk!is!an!issue!all!governments!are!keen!to!avoid.!Finally,!there! is!the!risk!of!not!acting.!This!can!encompass!environmental!risk,!but!also! social!and!political!risk,!in!terms!of!global!responsibility.!It!may! furthermore!involve!economic!risk;!not!acting,!for!example,!could!result!in! political!backlash!or!future!additional!economic!costs.! Together,!these!debates!about!risk!have!exacerbated!tensions! between!the!fossil!fuel!discourse!coalition!and!the!greenhouse!action! discourse!coalition,!which!both!compete!for!supremacy!in!the!energyO environment!domain.!The!debate!over!the!Hazelwood!Power!Station! extension!in!2005!epitomised!these!contests.!!

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Lost,opportunity:,the,2005,Hazelwood,Power,Station,extension,

By!2003!it!was!apparent!to!International!Power,!the!owners!of!the! Hazelwood!Power!Station,!that!they!could!not!sustain!operations!beyond! 2009!without!access!to!new!supplies!of!coal.!This!led!to!their!West!Field! proposal,!a!$380!million!expansion!that!would!provide!access!to!an! additional!92!Mt!of!coal!outside!of!their!existing!mining!licence!zone.!This! would!secure!Hazelwood's!operation!until!at!least!2031.! In!an!opOed!piece,!after!the!State!government!had!approved!IPs! application,!Alan!Moran!of!the!Institute!of!Public!Affairs!(and!former! secretary!of!the!Department!of!Energy!under!Kennett)!wrote!that!the! decision!should!have!been!an!automatic!sign!off!(Moran,!2005).!After!two! years!of!negotiations!the!government!and!International!Power!emerged! with!a!deal!that!would!see!very!little!deviation!from!BAU.!The!‘greenhouse! deed’,!as!it!was!called,!approved!the!extension!in!return!for!a!guaranteed! cap!on!its!greenhouse!gas!emissions!at!445!Mt!over!the!plant's!remaining! life,!a!reduction!of!34!Mt!on!predicted!BAU!output.!This!meant,!as!Berger! (2007)!points!out,!that!the!Hazelwood!Power!Station!could!continue! operating!until!2030!with!no!improvements!whatsoever!before!reaching! its!cap,!since!there!were!no!binding!timeframes!for!reductions.!Even!more! astonishing,!the!government!was!effectively!paying!for!the!Hazelwood! Power!Station!to!meet!these!obligations.!In!2006,!both!the!federal!and! Victorian!governments!contributed!$80!million!towards!coal!drying! technologies!at!the!Hazelwood!Power!Station,!as!well!as!a!pilot!CCS!project! at!the!plant.!Both!would!count!towards!satisfying!the!greenhouse!deed! (Berger,!2007,!p.!172).!This!begs!the!question,!why!didn't!the!government,! as!Alan!Moran!put!it,!automatically!sign!it!off?! The!Bracks!government!was!seeking!to!maintain!the!environmental! integrity!it!had!worked!so!hard!to!establish!over!its!first!two!terms.!It! certainly!needed!to!be!‘seen’!as!doing!something.!This!Hazelwood!Power!

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Station!deal!was!considered!a!private!negotiation!between!the! government!and!International!Power!(exOpolitician!interview!#22).!It!was! not!about!creating!new!policy,!instead!it!was!viewed!simply!as!a! commercial!agreement.!For!this!reason!environmental!groups!were!shut! out!of!the!negotiations!and!decision!making.!Nevertheless,!environmental! groups!had!allies!within!government,!particularly!the!DSE!and!its!Minister,! John!Thwaites.!While!negotiations!were!conducted!primarily!between! International!Power!and!Minister!Theophanous,!John!Thwaites’!standing! within!the!Labor!Party!–!he!was!Deputy!Premier!at!the!time!O!ensured!at! least!some!environmental!component!at!the!table.! There!is!no!doubt!that!there!was!a!huge!amount!of!argument!within! the!government!about!whether!this!made!sense!or!whether!it!was!a! considerably!silly!investment!in!a!piece!of!plant!that!should!have! been!closed!years!before!…!The!Environment!Department!and!its! Minister!the!Deputy!Premier,!and!the!Industry!Department!and! Minister!Theo!were!at!loggerheads!over!that!decision!…!It!was!a! massive!internal!brawl,!huge!amounts!of!time!and!effort.!You!know!I! can!remember!conference!room!after!conference!room!with!maps!on! tables!and!blood!on!the!walls,!it!was!a!long!and!brutal!internal! struggle!within!government!(exOgreenhouse!policy!bureaucrat! interview!#4).! ! Despite!being!shut!out!of!the!negotiations,!environment!groups! attempted!to!influence!the!decision!via!alternative!means.!One!strategy! was!to!offer!visions!of!alternative!pathways,!such!as!the!Clean!Energy! Future!Group’s!Towards,Victoria's,Clean,Energy,Future!report!(Diesendorf,! 2005).!This!discourse!coalition!comprised!the!Australasian!Energy! Performance!Contracting!Association,!Australian!Business!Council!for! Sustainable!Energy,!Australian!Gas!Association,!Australian!Wind!Energy! Association,!Energy!Australia,!Renewable!Energy!Generators!of!Australia,! and!WWF!Australia.!In!collaboration!with!Environment!Victoria!(EV),!this! coalition!proposed!a!combination!of!supplyOside!and!demandOside! measures!that!could!substitute!for!both!the!capacity!and!energy! generation!of!a!1,600!MW!baseload!coalOfired!power!station!(i.e.!

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Hazelwood)!by!2010.!However,!the!issue!of!energy!security!was!a!major! concern!of!government.!It!feared!the!political!ramifications!of!blackouts,! and!so!was!reluctant!to!act!on!Hazelwood,!particularly!after!the!blackouts! in!2000,!which!occurred!not!long!after!the!Victorian!Labor!government! took!office:!‘…!that!sort!of!event!sets!the!tone!of!the!government,!and!so! climate!change!was!always!balanced!against!energy!security!for!the!next! four!or!five!years!of!that!government’!(exOgreenhouse!policy!bureaucrat! interview!#4).!This!played!a!significant!role!in!the!eventual!decision!and! partly!explains!why!the!government!showed!little!interest!in!alternative! plans.!! There!was!obviously!the!issue!of!security!of!supply,!some!of!the! green!groups!were!saying!just!close!Hazelwood!but!they!represented! 25%!of!Victoria's!power!and!having!been![there]!when!the!power! went!off!I!had!a!clear!understanding!that!people's!desire!for!security! and!electricity!is!greater!than!their!concern!about!longOterm!climate! change!(exOpolitician!interview!#22).! ! ! Another!strategy!employed!by!environment!groups,!and!one! potentially!very!damaging!to!the!review!process!of!International!Power’s! proposal,!was!to!turn!to!the!courts.!International!Power’s!West!Field! extension!project!comprised!of!two!components:!the!mining!licence! application,!which!fell!under!the!responsibility!of!Theophanous;!and!the! planning!permit,!including!the!environmental!effects!statement!(EES),! which!fell!under!the!responsibility!of!the!Minister!for!Planning,!Mary! Delahunty.!! This!separation!of!responsibility!caused!confusion!within! government.!Through!the!terms!of!reference,!Delahunty!instructed!the! panel!charged!with!investigating!the!West!Field!project's!environmental! effects,!‘not!to!consider!matters!related!to!greenhouse!gas!emissions!from! the!Hazelwood!Power!Station!–!these!issues!are!being!addressed!through!a! separate!process’!(VCAT,!2004,!p.!4).9!Thus!the!panel!refused!to!consider!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 9!This!separate!process!was!the!negotiations!between!Theophanous!and!IP.!

! ! 150! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! submissions!concerned!with!the!emissions!and!climate!change!impacts! that!would!result!from!the!plant's!extension.!In!October!2004,!the! Australian!Conservation!Foundation!(ACF),!Climate!Action!Network! Australia!(CANA),!EV,!and!WWF!Australia!challenged!this!decision!in!the! Victorian!Civil!and!Administrative!Tribunal.! The!tribunal!ruled!in!favour!of!the!environmentalists,!with!Justice! Morris!stating!that,!‘there!is!no!power!for!the!Minister!to!issue!terms!of! reference!to!a!panel!in!relation!to!its!duty!to!consider!submissions!about! an!amendment!to!a!planning!scheme’!(VCAT,!2004,!p.!11).!Justice!Morris! further!found!that!! ...!the!approval!of!Amendment!C32!will!make!it!more!probable!that! the!Hazelwood!Power!Station!will!continue!to!operate!beyond!2009;! which,!in!turn,!may!make!it!more!likely!that!the!atmosphere!will! receive!greater!greenhouse!gas!emissions!than!would!otherwise!be! the!case;!which!may!be!an!environmental!effect!of!significance! (VCAT,!2004,!p.!10).!! ! This!was!an!important!win!for!the!environmentalists,!but!it!did!little!to! alter!the!course!of!events.!In!March!2005!the!panel!released!their!revised! report.!It!arrived!at!the!same!conclusion!as!before,!to!allow!the!expansion! of!the!mine.! Among!the!range!of!factors!that!contributed!to!this!outcome,!the! issue!of!sovereign!risk!ranked!as!the!most!significant.!As!the!panel!noted! in!its!report,! ...!from!the!submissions!made!it!is!clear!that!industry!views!the! current!approval!process!as!something!of!a!test!case!and!sees!an! outcome!favourable!to!its!views!as!essential!to!the!maintenance!of! Victoria's!reputation!for!having!negligible!sovereign!risk!(Saunders,! Angus,!&!Evans,!2005,!p.!183).! ! Spokesperson!for!International!Power,!Neal!Lawson,!confirmed!this! sentiment:! ...!what!business!is!going!to!want!to!invest!in!generation!capacity!in! Victoria!if!the!current!investor!which!has!invested!$3!billion!into! maintaining!Victoria's!competitive!advantage!can't!be!allowed!to!

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continue?!…Victoria's!reputation!as!a!place!to!do!business!was!firmly! on!the!line!(Lenaghan,!2005).!! ! Furthermore,!as!outlined!during!an!interview!by!a!policy!bureaucrat!who! had!been!involved!in!the!process:! A!lot!of!the!discussion!hinged!on!a!letter!that!had!been!received!by! the!corporation!under!the!Kennett!government,!saying!that!there! was!no!reason!why!they!should!not!have!their!licence!extended.!And! from!their!perspective!it!was!potentially!a!massive!piece!of!sovereign! risk!which!would!be!seen!to!damage!the!government!in!terms!of!its! support!for!investment!in!not!just!coal!but!a!lot!of!the!other!sectors! (exOgreenhouse!policy!bureaucrat!interview!#4).!! ! The!issue!of!sovereign!risk!was!compounded!when!the!negative! impacts!associated!with!the!closure!of!the!plant!were!taken!into!account.! Different!storylines,!which!centred!on!employment,!the!economy,!and! energy!security!featured!prominently!in!the!media!at!the!time.!John!Parker! from!the!Gippsland!Trades!and!Labour!Council!suggested!that!‘if!the! power!station!was!to!close!it!would!not!only!mean!a!couple!of!thousand! jobs,!but!there!will!be!a!couple!of!thousand!families!that!would!have!to! relocate!out!of!the!Latrobe!Valley’!(Bell,!2005).!The!Victorian!Employers’! Chamber!of!Commerce!and!Industry!CEO!Neil!Colson!pointed!out!that! ‘Victoria!has!a!500Oyear!supply!of!competitively!priced!brown!coal!–!as!an! economic!asset,!it!is!Victoria's!equivalent!of!the!North!West!shelf’! (Hopkins,!2005).!And!Tim!Piper!from!the!Australian!Industry!Group! argued!that,!‘from!an!industry!perspective,!what!it!does!is!it!provides!us! with!certainty!of!supply,!which!is!paramount!of!course,!and!certainty!of! reasonably!priced!electricity!into!the!future’!(Bell,!2005).!These!storylines! resonated!strongly!with!the!government!(and!continue!to!do!so).!When! announcing!the!decision!in!Parliament,!Premier!Steve!Bracks!stated,! The!deed!announced!today!provides!for!the!$400!million!Hazelwood! Westfield!project!to!proceed,!ensuring!that!Victoria’s!baseOload! power!needs!are!secured!well!into!the!future.!It!also!secures!the! future!of!some!800!Hazelwood!workers!and!their!families,!which!is! also!extremely!important.!I!am!very!pleased!that!this!decision! enshrines!and!keeps!those!workers!and!their!families!in!place!as!part!

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of!this!new!development.!It!also!provides!for!greater!stability!in!and! the!continued!economic!development!of!the!Gippsland!region!of! Victoria!(Bracks,!2005,!p.!527). ! Environment!groups!were!scathing!in!their!response.!Marcus!Godinho! from!Environment!Victoria!summed!up!the!general!mood!when!he! labelled!the!outcome!as!a!‘gutless,!tragic!decision!by!Steve!Bracks.! Hazelwood!was!the!Premier’s!number!one!environmental!test.!He!has!now! failed’!(Fyfe!&!Tomazin,!2005).!While!the!State!government!promoted!the! outcome!as!a!win!for!the!economy!and!the!environment,!International! Power!had!strategically!positioned!itself!in!the!event!a!carbon!price!might! be!introduced.!Contained!within!the!greenhouse!deed!was!clause!3(f):! To!the!extent!that!it!is!able!to!do!so,!the!State!will!ensure!that!the! obligations!of!IPRH!under!this!deed!are!reasonably!taken!into! account!in!the!design!of!any!Future!Greenhouse!Gas!Abatement! Scheme!and!IPRH!is!treated!equitably!under!such!a!scheme,!including! without!limitations,!by!making!representations!to!the! Commonwealth!where!relevant.!IPRH!acknowledges!that!this!clause! 3(f)!is!not!intended!to!constrain!the!State!in!the!design!or!operation! of!a!Future!Greenhouse!Gas!Abatement!Scheme!(DoI,!2005,!p.!8).! ! On!the!one!hand!this!was!a!remarkable!outcome!for!Australia’s!most! carbonOintensive!coalOfired!generator,!which!was!built!in!1971!and!set!to! be!decommissioned!in!2005.!It!was!symbolic!of!the!generators'!power!and! influence!over!the!direction!of!energy!policy;!this!feature!was!noted!in!the! Victorian!Auditor!General's!(2011)!report!on!the!facilitation!of!renewable! energy!development!in!Victoria:! The!2007!timeframe!to!increasing!the!share!of!Victoria's!electricity! consumption!from!renewable!sources!to!10%!was!extended!from! 2010!to!2016!…!The!extension!occurred!primarily!to!alleviate!the! concerns!of!brown!coal!generators!that!the!10%!target!would!deliver! too!much!renewable!energy!generation!to!quickly,!which!would! reduce!wholesale!electricity!prices!and!adversely!affect!existing! generators!(Victorian!AuditorOGeneral,!2011,!p.!11).!

Yet!at!the!same!time,!this!was!not!simply!a!case!of!business!exerting!its! influence!over!a!benign!government.!The!government!itself!made!a!

! ! 153! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! calculated!decision.!The!following!passage!by!the!Premier!provides!insight! into!this!strategy.! I!believe!this!agreement!gets!the!balance!right!between!the! environment!and!the!economy,!securing!our!economic!future!and! providing!for!a!sustainable!environment!in!Victoria.!We!are!working! hard!to!make!the!transition!to!a!lowOcarbon!economy.!Part!of!that!is! the!leadership!we!are!showing!in!working!for!a!national!emissions! trading!scheme,!which!Victoria!has!signed!on!to!and!which!other! States!and!Territories,!I!am!pleased!to!say,!have!signed!on!to.!We!are! continually!pushing,!hoping!that!the!Australian!government!will! agree!to!that!as!well!(Bracks,!2005,!p.!527). ! In!other!words.!the!government’s!decision!to!grant!International!Power!an! extension!while!pursuing!an!emissions!trading!scheme!on!the!national! level!was!a!way!to!free!itself!of!any!responsibility!should!the!power!station! close.!This!is!how!the!Victorian!government!reconciled!its!climateOenergy! dynamic.! ! Changing,constellations,of,actors,and,institutionalising,clean,coal,

Several!key!changes!to!personnel!and!agency!structure!took!place! between!the!Bracks!government's!reOelection!in!November!2006!and!July! 2007.!Thwaites!became!Victoria's!inaugural!Climate!Change!Minister,!and! an!Office!of!Climate!Change!was!created!within!the!Department!of!Premier! and!Cabinet.!However,!in!July!2007!both!Bracks!and!Thwaites!resigned! from!politics!and!Treasurer!John!Brumby!became!Premier.! From!a!SET!perspective,!the!move!to!appoint!Richard!Bolt!as! secretary!of!the!DPI!in!November!2006!was!critical.!This!saw!energy!policy! responsibility!transferred!from!the!DoI!to!the!DPI.!Bolt!had!a!long!history! in!energy.!He!had!worked!in!the!office!of!the!Regulator!General!(now!the! Essential!Services!Commission)!and!in!1995!was!the!director!of!the! Electricity!Regulation!Commission.!He!was!an!advisor!to!the!Democrats!in! energy,!and!had!been!a!principal!adviser!on!energy!policy!for!the!Victorian! government!since!2001,!heading!up!the!energy!and!security!division!in!the!

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DoI,!and,!as!previously!mentioned,!was!a!member!of!the!NETT.!Bolt!was! regarded!as!one!of!the!leading!energy!bureaucrats!in!Victoria,!to!the! significant!advantage!of!the!DPI.!! The!transfer!of!energy!policy!to!the!DPI!was!detrimental!for!SET! progress!in!Victoria.!By!placing!energy!policy!within!a!department!with! strong!fossil!fuel!networks!and!a!culture!predicated!on!the!continued!use! of!brown!coal,!it!eroded!much!of!the!SET!capacity!built!up!over!the!early! 2000s!–!irrespective!of!Bolt’s!personal!position!on!climate!change!and!the! need!to!introduce!an!ETS.! By!August!2007!the!DPI!released!its!first!major!energy!policy! report!since!assuming!energy!policy!responsibility,!an!issues!paper!titled! The,strategic,policy,framework,for,near,zero,emissions,from,Latrobe,Valley, brown,coal!(DPI,!2007).!The!Energy!Minister’s!foreword!recognised!the! adverse!effects!of!greenhouse!gases,!but!underscored!the!government's! views!on!clean!coal:! Victoria!has!a!momentous!opportunity.!It!is!an!opportunity!that! brings!with!it!an!extraordinary!challenge.!Victoria!is!endowed!with! an!almost!unfathomable!bounty!of!brown!coal!–!a!subterranean! mountain!estimated!at!33!billion!tonnes!waits!barely!scratched!just! beneath!the!Latrobe!Valley!floor.!Currently,!in!one!year,!Victoria!uses! 0.2%,!or!65!million!tonnes,!of!this!vast!natural!energy!warehouse…! There!may!be!a!great!opportunity!to!secure!this!natural!resource!as! our!supply!of!clean!energy!for!the!near!future!(DPI,!2007).! ! More!blatantly,!the!issues!paper!went!on!to!say!that,!‘given!Victoria's! opposition!to!nuclear!power,!deep!cuts!can!only!be!achieved!with!CCS’! (DPI,!2007,!p.!4)!A!comparison!of!this!document!with!the!2004! Greenhouse!Challenge!for!Energy!report!highlights!how!support!for!clean! coal,!particularly!CCS!technologies,!had!grown.!In!2004!CCS!was! mentioned!only!briefly!in!the!summary!section!of!The,Greenhouse, Challenge,for,Energy!discussion!paper,!which!stated!that,!! ...!new!low!emission!energy!technologies!are!being!developed!which! show!promise!of!being!competitive!with!current!technologies!within! 10!years.!Ultimately,!however,!carbon!capture!and!sequestration!will!

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be!required.!While!this!technology!appears!technically!feasible,!it!is! still!commercially!unproven!in!relation!to!the!capture!and!storage!of! emissions!from!electricity!generation!–!based!on!current! technologies,!it!would!result!in!substantially!higher!electricity!prices! than!those!from!gas!and!renewables!using!current!technologies!and! fuel!prices.!The!relative!merits!of!brown!coal!power!may!change! substantially!in!coming!decades!if!promising!new!technologies!are! further!developed!and!commercialised!(DoI!&!DSE,!2004,!p.!21).! ! Despite!limited!developments!in!clean!coal!in!the!three!years!to!2007,! these!technologies!had!nonetheless!become!the!primary!strategic!policy! direction!of!Victoria's!energy!future.!This!was!a!period!in!which!the!fossil! fuel!regime!reOlegitimised!its!standing!in!electricity!generation!in!Victoria,! consolidated!by!the!DPI's!stranglehold!over!energy!policy!and!its!ability!to! set!and!drive!the!political!agenda!on!energy.!

Phase(three((2008(to(2010):(Victoria’s(greenFbrown(hybrid(

The!elevation!of!Brumby!to!Premier!had!some!in!the!environmental!camp! concerned.!He!was!a!member!of!Labor!Unity!(right!faction)!and!previously,! as!Treasurer,!was!purported!to!have!been!a!strong!advocate!for!the! Hazelwood!extension!(Moran,!2005).!Nevertheless,!by!September!2010! and!two!months!before!the!State!election,!the!Brumby!government!passed! the!Climate,Change,Act!(Victorian!Government,!2010).!At!the!centrepiece! of!this!legislation!was!a!20!per!cent!(minimum)!emissions!reduction!target! by!2020!compared!to!2000!levels.!It!was!the!most!ambitious!target!of!any! government,!State!or!federal,!in!the!country!at!that!time.10!Not!surprisingly! it!elicited!strong!responses.! It!was!the!strongest!piece!of!State!policy!work!I!have!ever!seen.!It! contained!legislative!targets,!it!contained!a!massive!commitments!to! retrofitting!of!low!income!housing,!it!contained!the!strengthening!of! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 10!In!more!recent!times!more!ambitious!policies!have!been!implemented!elsewhere.!For! example,!in!October!2010!the!ACT,!under!a!LaborOGreen!government,!legislated!a!Climate! Change!and!Greenhouse!Gas!Reduction!Act,!which!included:!zero!net!greenhouse!gas! emissions!by!2060;!peaking!per!capita!emissions!by!2013;!40!per!cent!reductions!on! 1990!levels!by!2020;!and!80!per!cent!of!1990!levels!by!2050.!

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…!the!Victorian!Energy!Efficiency!Target!and!white!certificates,!a!five! per!cent!solar!target!with!the!proposed!feed!in!tariff!to!back!it!up!(exO greenhouse!policy!bureaucrat!interview!#4).! ! This!is!a!con;!the!whole!thing!is!a!con.!Today!we!are!in!Parliament!of! Victoria!wasting!our!time!on!something!that!is!largely!an!invention!of! the!left!(Finn,!2010).! ! Another!widely!held!view!was!that!this!legislation!was!simply!an! electoral!grab,!a!political!strategy!to!woo!innerOcity!Melbourne's!green! voters.!The!new!Act!would!have!undoubtedly!helped!bolster!Labor’s! chances!in!those!seats,!but!this!view!overlooks!a!range!of!prior! developments.!It!also!excludes!important!insights!into!normative!shifts!–! particularly!regarding!the!role!of!government!regulation!in!SETs.!! This!section!examines!the!events!leading!up!to!the!Climate!Change! Act!and!questions!why!and!how!the!State!government’s!Climate!Change! White!Paper,!which!served!as!a!framework!for!the!Act,!emerged,!and!what! it!meant!for!SETs!in!Victoria.!

Brumby’s,climate,of,opportunity,

With!Thwaites’!resignation,!and!the!DPI's!increasing!influence!over!energy! policy,!it!was!difficult!to!see!how!the!climate!space!could!impact!upon!the! energy!domain.!Nevertheless,!the!climate!policy!space!grew!rapidly! between!2008!and!2010!in!Victoria,!led!by!Brumby!himself.!A!number!of! factors!explain!this.! First,!Brumby!attended!the!Conference!of!the!Parties!to!the!UNFCCC! (COP!13)!in!Bali!in!December!2007.!Upon!returning,!he!had!the! government!set!about!developing!a!comprehensive!climate!change! strategy!that!included!some!important!new!avenues!for!SETs!in!Victoria.! On!a!personal!level,!the!decision!by!the!premier!to!go!to!Bali!appeared! pivotal:! !

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I!think!some!people!like!to!say!he!was!once!a!climate!change!sceptic.!I! don't!think!that's!true.!I!think!when!he!was!Treasurer!he!had!a!very! narrow!focus!and!he!was!treasurer!for!a!very!long!time,!nine!years.! He!was!very!good!at!that!and!he!had!a!very!specific!focus!on!making! of!the!sums!add!up.!And!I!don't!think!he!was!doing!a!lot!of!wide! reading!on!topics!like!climate!change!and!sustainability!...!And!then! to!go!to!this!thing![Bali]!where!for!a!couple!of!days!he!was!immersed! with!all!these!people!kind!of!talking!about!it!all!the!time!and!people! who!he!respected,!people!like!Nicholas!Stern,!who!he!really! respected!as!someone!who!spoke!his!language,!you!know!numbers,! risk!factors,!economic!implications,!insurance!policies!against! disaster,!people!who!felt!like!him,!talking!to!him,!speaking!his! language,!that!was!pretty!influential.!Because!the!immersion!stuff,! that!kind!of!made!it!real!for!him,!it’s!this!big!thing!going!on,!it’s!not! just!some!French!thing,!it’s!a!whole!lot!of!smart!people!here!from! every!field!of!life!that!are!all!saying!the!same!thing,!which!is!that!we! have!to!do!something.!That's!probably!when!he!shifted!from!being! someone!not!strongly!in!the!debate!to!sort!of!realising!you’re!pretty! crazy!if!you!don’t!at!least!treat!this!as!a!benefitOofOthe!doubt!issue! where!we!have!to!kind!of!act!on!this.!And!I!think!that!started!the! rollercoaster!(exOclimate!change!advisor!interview!#21).! ! Second,!Brumby's!main!strategy!to!drive!the!climate!agenda!was!to! centralise!policy.!The!presence!of!(semi)!autonomous!departments,! environment!or!energy,!is!regarded!by!many!as!a!necessary!precondition! to!enhancing!capacity.!However,!given!the!divisive!nature!of!issues!that! fell!under!these!two!departments,!Brumby's!strategy!sought!to!foster!a! more!balanced!approach!through!the!Office!of!Climate!Change:!! Environment!people!and!the!energy!people!used!to!fight!like!cats!and! dogs!and!the!central!agency!would!always!have!to!broker!that,!me! and!my!team!were!sort!of!a!neutral!ground!(climate!policy! bureaucrat!Interview!#18).! ! Third,!the!federal!political!landscape!had!changed!considerably!by! the!end!of!2007,!with!the!election!of!the!Rudd!Labor!government.!As!his! first!act!of!government,!Rudd!ratified!the!Kyoto!Protocol.!Work!was! already!underway!on!a!national!CPRS,!conducted!by!economist!Ross! Garnaut.!There!appeared,!at!the!time!at!least,!an!inevitability!around!the! introduction!of!carbon!pricing.!As!a!State!reliant!on!brown!coal,!Victoria! was!presented!with!considerable!risk,!of!which!Brumby,!as!former!

! ! 158! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! treasurer,!was!well!aware.!The!Brumby!government!employed!a!strategy! that!it!portrayed!as!a!winOwin:!a!climate!of!opportunity.!The!goal!was!to! align!environmental!objectives!with!economic!growth!and!prosperity,! promulgated!through!the!government's!green!jobs!narrative:! I!believe!that!our!State!is!well!positioned!to!be!a!leader,!not!just!in! the!debate!about!climate!change,!not!just!in!the!debate!about! sustainability,!but!in!leading!the!way!in!practical!actions!to!reduce! our!environmental!footprint!and!at!the!same!time!create!the!jobs!for! the!future…!We've!got!to!turn!this!debate!into!a!climate!of! opportunities!for!our!State,!creating!new!technologies,!creating!new! jobs,!creating!and!developing!new!ways!of!doing!things!(Brumby,! 2010).! ! Interestingly,!Ron!BenODavid,!who!headed!up!the!Office!of!Climate! Change!in!the!Victorian!DPC,!was!also!part!of!the!Secretariat!to!the! Garnaut!Review.!This!ensured!these!issues!maintained!a!certain!degree!of! proximity!to!the!Premier,!which!reinforced!them.!Together,!these!factors! helped!give!impetus!to!the!Brumby!government's!opportunity!to!address! not!only!climateOrelated!concerns,!but!also!carbon!dioxide!emissions!from! the!electricity!sector.! The!Climate!Change!White!Paper!was!an!outcome!of!a!sevenOstep! process.!This!began!with!the!Premier!attending!COP!13!(step!1).!On!return,! in!April!2008,!the!Brumby!government!hosted!a!Climate!Change!Summit!at! Parliament!House,!which!brought!together!100!delegates!from!industry,! NGOs,!peak!bodies,!local!government,!community!groups!and!regional! Victoria.!The!outcome!of!this!Summit!was!a!discussion!paper!titled!A, Climate,of,Opportunity,!(step!2).!Between!May!2008!and!November!2008! the!government!conducted!consultations,!seeking!ideas!and!input!into! their!Climate!Change!Green!Paper!(step!3),!which!was!published!in!June! 2009!(step!4).!The!Green!paper!then!went!through!another!consultation! process!between!June!2009!and!September!2009!(step!5),!which!also! included!a!review!of!its!climate!change!strategy!(step!6).!In!July!2010!the! government!released!its!Climate!Change!White!paper!(step!7).!

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! An!important!addition,!which!occurred!within!step!3,!was!the! establishment!of!the!Premier’s!Climate!Change!Reference!Group,!chaired! by!climate!scientist!David!Karoly.11!The!Reference!Group's! recommendations!on!emissions!were:! ...!advocate!for!a!peak!in!total!national!greenhouse!gas!emissions!by! 2010,!a!national!emissions!reduction!target!of!25!to!40!per!cent! below!1990!levels!by!2020!and!an!‘aspirational’!national!emissions! reduction!target!of!at!least!80!per!cent!below!1990!levels!by!2050.!In! the!absence!of!national!targets!that!meet!these!standards,!the! Victorian!government!should!commit!to!these!targets!at!the!State! level!(DPC,!2009,!p.!15).! ! The!government’s!subsequent!White!Paper!on!climate!change,! Taking,Action,for,Victoria’s,Future!(DPC!(Department!of!Premier!and! Cabinet),!2010),!adopted!some!of!the!Reference!Group’s! recommendations,!but!many!measures!were!watered!down,!as!outlined! below:! ! ! legislated!emissions!reduction!target!of!20!per!cent!by!2020! compared!to!2000!levels!(including!a!commitment!to!advocate!for!a! national!target!of!at!least!80!per!cent!by!2050!in!the!context!of!a! global!agreement);12!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 11!This!was!in!some!respects!an!unexpected!appointment!given!Karoly’s!open!opposition! to!coalOfired!power!generation.!For!example,!he!was!involved!in!the!HRL!VCAT!case!in! 2012,!acting!pro!bono!for!the!Environmental!Defenders!Office,!and!he!had!called!for!the! complete!closure!of!the!Hazelwood!power!station!(Karoly,!2010).!According!to!one! interviewee,!regarding!the!appointment!of!David!Karoly!to!the!Climate!Change!Reference! Group,!‘some!people!suggested!that!the!Victorian!government!was!keen!to!have!someone! that!wasn't!seen!to!be!in!some!sense!a!lackey!of!the!government!…!someone!who!was! challenging!their!views!on!coalOfired!power!stations’!(climate!change!advisor!interview! #23).! ! 12!According!to!Christoff!(2014),!the!inclusion!of!a!20%!target!only!came!after!a!critical! meeting!that!he!was!involved!in!between!Brumby!(Premier),!Jennings!(Minister!for! Climate!Change)!and!others!from!the!government,!and!representatives!of!the!Victorian! environment!movement.!! !

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! expansion!of!the!regulatory!powers!of!the!EPA!to!introduce!an! emissions!intensity!standard!for!new!power!stations!of!0.8!t!carbon! dioxideOe/MWh;!! ! doubling!of!the!energy!efficiency!target;! ! a!five!per!cent!largeOscale!solar!target!by!2020;! ! a!peak!in!emissions!by!2014;! ! closure!of!two!units!at!Hazelwood!Power!Station;! ! commitment!to!embed!climate!change!considerations!into! government!decisionOmaking.! ! Nevertheless,!these!proposed!initiatives!offered!some!valuable!avenues!to! set!Victoria's!energy!future!on!a!more!sustainable!path.!Interestingly,! particularly!from!a!governance!perspective,!several!of!these!initiates,! namely!closing!one!quarter!of!the!Hazelwood!Power!Station!and!the!EPAO enforced!emissions!intensity!standard!for!new!power!stations,!revealed!a! shift!in!the!government’s!approach!to!regulation,!vis!a!vis!marketObased! policies.!It!highlights!the!government's!acknowledgement!that!more!direct! regulatory!measures,!as!well!as!an!ETS,!were!required!in!Victoria!to!take! the!SET!from!its!preOdevelopment!status!to!the!takeOoff!phase.!! What!caused!this!shift?!Two!likely!factors!stand!out.!Regarding!the! first,!EV!had!campaigned!intensely!for!Hazelwood's!closure!in!the!lead!up! to!the!November!2010!State!election;!this!and!the!aforementioned!innerO city!Melbourne!dynamic!meant!that!the!government!keen!to!quickly!lock! in!significant!emissions!cuts!so!as!to!shore!up!the!Green!vote.!The!second! factor!most!likely!resulted!from!attempts!by!the!DPC!and!the!Office!of! Climate!Change!to!mediate!the!contrasting!views!of!the!DSE!and!the!DPI:! There!are!some!clear!ideological!differences!over!things!like!the!role! of!government!regulation.!So!Treasury!and!the!DPI!are!quite!similar! and!take!a!very!ruthless!approach!to!anything!that!involved! regulation!of!the!electricity!sector,!whereas!DSE!aren't!in!love!with! regulating!things!but!they!don't!have!a!reflexive!negative!view!of! regulating!things.!And!so!you!had!problems!where!over!a!number!of!

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years!where!energy!ministers!and!energy!bureaucrats!would!be! going!to!these!kind!of!national!forums!like!what!used!to!be!MCA! which!is!now!SCER,!and!signing!up!to!these!national!agreements! which!were!about!supporting!competition!and!deregulation!in!the! energy!space.!And!they!come!back!with!these!documents!and!say,! 'see!we!agreed!we!were!never!going!to!reOregulate!anything'.!But! then!the!Premier!was!saying!'well!I!want!to!act!on!climate!change!so! how!do!I!do!that?'!And!DSE!would!be!saying,!'well!we!can!regulate! this!and!could!put!a!rule!on!that'!and!it!would!drive!all!these!changes.! And!the!DPI!would!say!we!just!told!people!we!wouldn't!be!doing!that! we’ve!signed!this!agreement!that!said!we!would!never!do!that!so! that’s!completely!contrary!to!Victoria's!position!…!the!DPC!cleverly! positioned!themselves!as!kind!of!in!the!middle!of!all!those!debates!so! they!weren’t!the!pure!zealots!on!leastOcost!abatement!and!they! weren’t!total!zealots!about,!you!know,!no!regulation!or!anything!ever.! And!that!meant!they!got!in!their!mind!they!could!play!off!all!sides! against!each!other!by!saying!'well!I!agree!with!you!on!this!argument! but!I!agree!with!him!on!that!argument'!and!they!tried!to!kind!of!have! friends!everywhere!(exOclimate!change!advisor!interview!#21).! ! Up!until!this!point,!the!normative!pressures!of!neoliberalism!had! ensured!that!market!mechanisms!remained!governments'!preferred!policy! option!of!address!emissions!reductions.!However,!the!presence!of!a! central!agency!in!this!case!seemed!to!help!the!government,!if!only!briefly,! transcend!the!regulationOversusOmarketOmechanism!debate!that!had! polarised!and!constrained!SET!progress.!This!opened!new!avenues!for!SET! developments.!

Clean,coal:,carbon,capture,and,storage,

As!the!Brumby!government!embraced!the!logic!of!climate!change,!it! simultaneously!reinforced!its!commitment!to!clean!coal.!This!position!was! consolidated!in!the!government’s!energy!statement!Victoria's,Energy, Future,!where!it!reinforced!the!importance!of!CCS,!labelling!it!a!technology! of!global!importance,(DPI,!2010a).!In!2009!the!Brumby!government! created!a!new!agency,!Clean,Coal,Victoria!(CCV)!to!help!drive!this!agenda.! It!also!initiated!the!CarbonNet!Project,!a!largeOscale!CCS!network!designed! to!bring!together!multiple!carbon!dioxide!capture!projects!in!the!Latrobe!

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Valley.!These!would!share!a!pipeline!to!transport!the!carbon!dioxide!to! offshore!storage!sites.!CCV!and!the!CarbonNet!Project!are!both!managed! through!the!DPI.! The!clean!coal!approach!to!energy!transitions!offers!an!appealing! pathway!for!the!Victorian!government.!This!is!because!of!its!supposedly! favourable!geological!storage!sites!(Garnaut,!2008),!which!are!located! relatively!close!to!the!coal!reserves,!and!perhaps!most!significant!is!that!it! does!not!require!regime!change.!This!means!that!a!shift!to!CCS!would! maintain!wellOestablished!and!powerful!business!interests.!! In!considering!the!political!economic!conditions!of!government! support!for!CCS,!Torvanger!and!Meadowcroft!(2011)!raise!a!number!of! important!factors,!which!need!to!be!taken!into!account.!Many!of!these! revolve!around!the!potential!of!CCS.!For!example!the!authors!pose!several! key!questions!such!as:!How!much!energy!can!CCS!provide?!How!much! emission!reduction!could!it!deliver?!To!what!extent!can!it!generate! economic!benefits:!jobs,!markets,!and!so!on?!And!is!it!significant!for! regional!development!interests?!The!answers!to!these!questions!tend!to! work!in!favour!of!CCS!technology.!That!is,!the!Latrobe!Valley!has!one!of!the! world’s!richest!sources!of!brown!coal,!meaning!that!its!potential,!as!far!as! the!questions!above!are!concerned,!is!relatively!high.!! At!the!same!time,!the!authors!also!identify!a!number!of!challenges! facing!CCS,!in!particular!those!around!financing,!acceptability!and! legitimacy.!In!terms!of!the!economics!of!CCS,!several!issues!stand!out.!The! first!is!that!governments!avoid!picking!technological!‘winners’!and! therefore!spread!their!finances.!This!is!reflected!in!the!investment! decisions!made!by!the!Victorian!government,!which!divides!funds!between! renewable!projects!and!low!carbon/CCS!research!and!development!and! pilot!projects.!Between!2002!and!2008,!a!total!of!$244!million!had!been! funded!on!‘clean!coal!investment’,!primarily!through!the!Energy! Technology!Innovation!Strategy!(ETIS)!administered!by!DPI!(Premier!of!

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Victoria,!2008).13!In!comparison,!the!Victorian!government!has!invested! around!$160!million!towards!sustainable!energy!technologies!(DPI,! 2010c).14!At!the!same!time,!the!government!is!cautious!not!to!overspend! tax!payer!money!on!an!as!yet!unproven!technology,!and!even!if! technological!and!regulatory!hurdles!are!overcome,!CCS!remains!one!of! the!more!expensive!low!to!zero!carbon!options!(see!for!example!BREE,! 2013b).15!! The!second!issue!is!that!this!conflicting!approach!limits!the! involvement!of!private!capital.!! CCS!is!difficult!…!it’s!not!really!clear!what!the!direction!of!that!policy! will!be!and!what!government!is!willing!to!fund!and!how!the!private! sector!can!play!a!role!in!the!absence!of!any!commercial!prospects!for! that!technology!at!the!moment.!And!if!you!look!at!the!forecasts! around!the!future!energy!mix,!the!future!generation!mix!that!the! modelling!that!the!government!has!done!and!others!have!done,!then! we!don't!really!see!CCS!coming!in!in!a!commercial!way,!and!assuming! all!the!assumptions!are!correct,!until!the!2030s.!So!it's!a!long!way!out! and!so!how!CCS!gets!developed!in!Australia!in!that!context!is!difficult! we!don't!know!…!So!we’re!in!this!space!where!I'm!not!sure!the! government!knows!exactly!where!it!wants!to!go!and!we!can't!really! move!too!much!in!the!absence!of!that!policy!clarity!because!it’s!not! commercial,!we!rely!on!a!fairly!clear!policy!framework!to!do! anything.!So!it!is!difficult!(TRU!Energy!interview!#33).! ! This!conflicting!narrative!is!exacerbated!by!the!position!of!the!fossil!fuel! industry.!The!fossil!fuel!industry,!while!advocating!CCS,!is!simultaneously!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 13!This!has!included,!for!example,!$110!million!towards!establishing!new!largeOscale,!preO commercial!CCS!demonstration!projects,!$50!million!towards!the!new!HRL!Power! Generation!Plant,!$30!million!for!a!CCS!project!at!Hazelwood!Power!Station,!and!$12! million!towards!clean!coal!research!and!development!projects!(DPI,!2010b).! ! 14!The!classification!of!sustainable!energy!technologies,!according!to!the!Victorian! government,!is!not!restricted!to!purely!‘renewables’.!For!example,!of!this!$160!million,! $29!million!was!directed!to!the!Centre!for!Energy!and!Greenhouse!Technologies!(CEGT),! which!includes!investments!in!fossil!fuel!energy!generation.! ! 15!Costs!for!CCS!are!difficult!to!gauge!at!this!stage!since!no!current!largeOscale!plant!exists! in!operation.!Costs!also!depend!on!the!type!of!fuel!(i.e.!coal!or!gas),!the!process!(i.e.! combined!cycle,!subcritical,!IGCC,!oxyOcombustion),!and!whether!or!not!it!is!applied!to! new!or!existing!plants!(i.e.!retrofit).! !

! ! 164! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! the!chief!protagonists!against!the!introduction!of!a!high!carbon!price!–! which!is!exactly!what!is!required!in!order!to!send!a!signal!to!the!market.16! The!problem!here!is!that!a!high!carbon!price!would!severely!impact!many! of!the!companies!developing!the!technology,!which!could!lead!to! widespread!closures!of!fossil!fuel!generation!assets.! Taken!together,!these!different!dynamics!equate!to!uncertainty,! which!has,!to!date,!limited!the!potential!for!CCS!development.!While!all! new!and!emerging!technologies!involve!uncertainty,!arguably!the!biggest! challenge!for!CCS!lies!in!its!social!acceptance!and!legitimacy!in!a!carbonO constrained!future.!Indeed,!as!Torvanger!and!Meadowcroft!(2011)!point! out,!an!important!question!facing!governments!is!how!this!technology!fits! within!transition!pathways!to!a!carbon!emission!free!energy!system.!For! many,!CCS!is!seen!as!a!political!strategy!to!buy!time!and!avoid!the!difficult! policy!decisions!that!need!to!be!made!today.!Manne!(2008,!p.!32)!for! example,!likens!the!quest!for!clean!coal!as!Australia’s!new!Lasseter’s!Reef,! a!mirage!that!‘operates!as!a!permanent!alibi,!as!an!excuse!for!not!changing! our!ways’.!This!appears!partially!true!given!that!Martin!Ferguson,!the! federal!Minister!for!Energy,!reportedly!said!in!an!address!to!the!Lavoisier! Group,!‘Labor![is]!going!to!wait!for!clean!coal!technology!to!come!along! before!doing!anything!to!the!coal!industry’!(Pearse,!2009,!p.!50).!! These!views!relate!to!how!one!interprets!the!nature!of!the!SET,! which!reinforces!the!importance!of!establishing!a!shared!vision!in!helping! to!define!transition!paths.!Currently!this!vision!is!scattered!and!unclear.! However,!as!the!world!moves!closer!towards!the!twoOdegree!threshold!set! by!the!international!community,!and!the!urgency!becomes!more!apparent,! these!visions!may!coalesce!and!CCS!may!find!a!place!in!a!transition! strategy.!Until!this!happens!however,!CCS!faces!an!uphill!battle!to!move!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 16!Estimates!by!the!Global!CCS!Institute!suggest!that!a!carbon!price!of!between!$23!and! $92!would!be!required!in!order!for!CCS!to!become!commercially!viable.!Others!such!as! Middleton!and!Brandt!(2013)!suggest!this!figure!to!be!of!the!order!of!$110!per!tonne.!

! ! 165! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! beyond!the!demonstration!phase!and!into!the!commercialisation!phase!O! in!the!short!term!at!least.!! , Sub%national,versus,national:,who’s,responsible?,

The!global!carbon!budget!model,!as!developed!by!the!German!Advisory! Council!on!Global!Change!(WBGU),!provides!a!visual!tool!for! conceptualising!remaining!CO2!emission!quotas,!whist!also!offering!a! framework!to!consider!issues!around!climate!and!emissions!reduction! responsibility.!It!works!on!the!premise!that!to!limit!global!warming!to! below!the!twoOdegree!level,!the!amount!of!carbon!dioxide!that!can!be! emitted!between!now!and!2050!is!finite.!This!quantity!is!on!the!order!of!1! trillion!tonnes!of!carbon!dioxide,!which!would!equate!to!a!75!per!cent! chance!of!staying!with!the!twoOdegree!threshold,!based!on!year!2000!as! the!baseline!(Steffen!&!Hughes,!2013).!The!world!used!391!billion!tonnes,! or!around!40!per!cent!of!this!budget,!over!the!first!13!years!of!this!century,! leaving!a!budget!of!600!billion!tonnes!for!the!next!37!years.!Under!a!BAU! scenario!of!2.5!per!cent!annual!emissions!growth,!this!global!budget!would! be!used!up!by!2028.! This!model!has!recently!been!applied!in!the!Australian!context! (Green!&!Finighan,!2012;!Steffen!&!Hughes,!2013).!But!how!would!the! State!of!Victoria!fare!using!such!a!model?!This!depends!on!how!the!carbon! budget!is!divided.!The!simplest!method!would!be!to!divide!it!equally! amongst!the!world's!population.!If!this!were!the!case,!using!2010!as!the! start!date,!Victoria!would!be!allocated!around!470!Mt!between!2010!and! 2050.17!Since!the!year!2000!the!State's!emissions!have!remained!relatively! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 17!This,!as!Christoff!(2013b)!notes,!is!not!necessarily!the!‘fairest’!option!though!of! dividing!up!the!carbon!budget!as!it!does!not!take!into!account!national!wealth!(and! therefore!the!ability!to!reduce!emissions),!population!projections,!or!historical!emissions.! In!other!words!a!designated!carbon!budget!of!470!Mt!for!Victoria!would!be!considered!by! many!to!be!an!extremely!favourable!amount.!For!an!informative!discussion!on!the!ethical! dimensions!of!climate!change!see!Moss!(2009).! !

! ! 166! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! stable,!at!around!120!Mt!carbon!dioxide!per!year;!if!these!rates!were! maintained,!Victoria!would!use!up!its!share!of!global!emissions!within!four! years.18! The!carbon!budget!concept!raises!the!issue!of!responsibility!as!a! central!feature!of!SET!governance.!That!is,!who!is!responsible!and!for! what?!For!governments!(both!national!and!subOnational)!in!federal! systems,!the!answer!is!far!from!straightforward.!In!Victoria's!response!to! the!greenhouse!challenge!over!the!last!decade,!an!inherent!federalist! tension!was!present.!The!Victorian!government!was!never!entirely!sure! whether!it!was!responsible,!or!whether!it!wanted!to!or!should!take!the! lead!on!greenhouse!policy.! You!know!the!biggest!obstacle!to!reducing!Australia's!and!Victoria's! greenhouse!gas!emissions!is!the!Federal!government's!insistence!on! firstly,!not!signing!Kyoto,!and!secondly,!their!absolute!opposition!to! an!emissions!trading!scheme,!which!would!deliver!real!reductions! across!the!board!in!greenhouse!gas!emissions!(Theophanous,!2005).! ! This!position!stems!primarily!from!an!economicOrationalist!approach! to!policyOmaking,!which!emphasises!leastOcost!abatement!measures!in! dealing!with!SET!issues.!Any!action!taken!must!fit!within!this!narrative.! There!were!quite!a!few!ministerial!discussions!where,!over!and!over! again,!there!was!this!kind!of!reaffirmation!of!leastOcost!abatement!is! the!frame.!We!want!to!do!big!things!and!we!want!to!support! renewables!or!want!to!do!these!things!that!are!popular,!but!we! accept!that!the!frame!of!this!is!least!cost!abatement.!And!I!don’t!think! Ministers!at!the!time,!I!don't!think!they!fully!appreciated!at!the!time! just!how!departments!were!lining!that!up.!So!they!were!like!'okay! you!can!have!whatever!you!want',!so!at!the!top!of!your!list!you!write! you!want!an!increase!renewable!energy,!etc.!But!then!you!have!to! sign!the!paper!at!the!bottom!which!says!from!a!process!perspective! we!will!approach!this!from!the!leastOcost!abatement!frame!…!I!don't! think!there's!anything!wrong!with!saying!leastOcost!abatement!is!a! frame!to!consider!options.!But!if!you!think!it's!a!test!which!must!be! met!then!you'd!never!do!anything!in!the!renewable!energy!space,!it’s! never!leastOcost!abatement,!not!in!the!early!stages!of!a!transition!(exO climate!change!advisor!interview!#21).! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 18!Using!2000!as!the!start!year,!Victoria!would!have!already!used!up!its!quota!by!2007! meaning!that!we!are!already!in!carbon!debt.!

! ! 167! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses!

! The!problem!from!a!subOnational!perspective!is!that!most!of!the! significant!measures!that!can!reduce!carbon!emissions!(i.e.,!ETS,!RET,!or! indeed!closures)!do!not!easily!fit!a!StateObased!leastOcost!abatement! narrative.!That!is,!such!measures!are!more!effective!and!costOefficient!if! employed!at!the!national!level.!This!policy!mindset!erodes!the!legitimacy! of!StateObased!action!and!results,!at!least!in!Victoria's!case,!in!halfOhearted! government!policy!not!fully!committed!to!implementation.!This!explains! why,!despite!the!Victorian!government's!good!intentions,!the!2010!Climate, Change,Act!included!a!trigger!mechanism:! If!a!Bill!is!introduced!into!a!House!of!the!Parliament!of!the! Commonwealth!for!an!enactment!to!provide!for!a!national!emissions! trading!scheme!in!Australia,!the!Minister!must!undertake!a!review!of! this!Act!without!delay!(Victorian!Government,!2010,!p.!17).! ! This!review!essentially!provided!a!means!for!the!government!to!opt! out!should!it!feel!this!was!necessary.!Four!months!after!the!federal! government!introduced!the!Clean!Energy!Future!legislation,!the!Liberal! Victorian!government!abandoned!the!20!per!cent!reduction!target!stating! that,!‘the!role!for!State!and!Territory!governments!in!Australia!to!legislate! for!emissions!reductions!is!significantly!reduced’!(Victorian!Government,! 2012,!p.!3).!! For!many!this!was!a!logical!response.!Maintaining!a!StateObased! emissions!reduction!target!alongside!a!national!emissions!reduction!target! is!cumbersome!and!costly!since!they!are!not!complementary!policies.!If! this!makes!sense,!from!an!economic!viewpoint,!it!implies!that!subOnational! governments!have!only!a!limited!role!in!emissions!reduction!policies.19! The!danger!here!is!that!if!the!national!government’s!actions!are! inadequate!(and!in!many!cases!they!are)!and!the!subOnational!government!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 19!In!fact,!most!respondents!suggested!that!subOnational!governments!should!only!play!a! very!minor!role!in!emissions!reduction!policy.!Some!even!suggested!they!should!just!‘get! out!of!the!way’.!

! ! 168! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! is!not!deeply!involved,!the!overall!response!can!only!be!weak!at!best.!From! this!perspective,!the!federalist!dynamic!in!Australia!has!impeded!a!SET!by! clouding!the!nature!of!the!problem!and!who!must!solve!for!it.!It! emphasises!the!national,!but!this!is!not,!at!least!in!Australia,!written!into! the!Constitution.!So!in!reality!this!dynamic!results!in!endless!negotiations! between!the!States!and!the!Commonwealth!(which!are!formerly!played! out!through!COAG)!over!issues!of!responsibility.! At!the!same!time,!this!responsibility!conundrum!in!the!Australian! federalist!system!also!creates!opportunities.!That!power!does!not!reside! entirely!with!the!Commonwealth!is!a!fact!that!has!helped!ensure!SET! issues!remained!on!the!political!agenda!during!periods!of!inaction,!such!as! when!the!Howard!Coalition!government!was!in!power.!The!actions!of!the! Victorian!Labor!government!were!crucial!during!that!period.!So!almost! irrespective!of!whether!or!not!the!Victorian!government’s!policy!response! was!rhetoric!or!not,!the!possibility!that!the!State!could!introduce,! implement!and!legislate!an!ETS!or!a!RET,!played!an!important!role!in! holding!the!Commonwealth!to!account!and!pressuring!it!to!act.!! The!addition!of!StateObased!activity!allows!for!experimentation,! trialling!certain!schemes!before!their!implementation!at!the!national!level.! The!Australian!RET!is!an!example!of!how!StateObased!policies!can!enhance! national!policy.!As!most!States!introduced!10!per!cent!RETs!throughout! the!2000s,!the!Federal!government's!two!per!cent!MRET!became! increasingly!difficult!to!justify.!The!Federal!government!was!compelled!to! outbid!its!State!counterparts!and!in!2010!a!new!national!RET!was! legislated!to!provide!a!20!per!cent!target.! This!discussion!demonstrates!that!federalist!dynamics!can!both! constrain!and!enable!SET!policy.!SubOnational!governments!can!play!an! important!and!positive!role!in!shaping!SETs,!contrary!to!certain!economic! reasoning.!As!such!State!involvement!should!not!necessarily!be!dismissed! or!discouraged.!However,!federalist!systems,!like!all!liberalOdemocratic!

! ! 169! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! political!systems,!are!subject!to!regular!political!change!and!these!changes! can!easily!work!against!the!promotion!of!SETs,!which!often!depends,!in! Australia,!on!party!ideology.!! This!chapter!concentrated!on!one!specific!period!in!time,!and!on!a! dynamic!that!involved!a!State!Labor!government!and,!for!the!most!part,!a! Liberal!Coalition!government!at!the!federal!level.!StateObased!policies!from! 1999!to!2010!under!the!Victorian!Labor!government!were!influential!in! maintaining!pressure!on!the!federal!government.!The!election!of!a!Labor! Federal!government!in!2007!changed!this!dynamic!considerably.!Since! this!time,!SET!developments!for!both!Victoria!and!Australia!have!shifted! towards!the!federal!level.!Chapter!7!explores!these!dynamics.!

Conclusion(

From!2000!to!2010,!Victoria's!greenhouse!gas!emissions!from!electricity! generation!rose!by!four!per!cent.!If!compared!to!the!31!per!cent!increase! for!the!period!1995!to!1999,!many!would!consider!this!a!good!outcome!for! the!environment.!Much!of!this!was!due!to!the!government’s!specific!focus! on!greenhouse!issues,!which!resulted!in!several!important!developments! including!a!renewable!energy!target!and!an!energy!efficiency!target.! However,!Victoria's!electricity!regime!has!actually!undergone!little! structural!change.!How!then!should!we!judge!Victoria's!progress!towards! a!sustainable!energy!future?!Considering!emissions!alone!is!too!simplistic! since!transitions!are!long,!drawnOout!processes!subject!to!multiple! dynamics.!Instead,!a!more!relevant!analysis!seeks!to!answer!why! emissions!stayed!relatively!stable,!or!how!the!regime!avoided!change.! Focusing!on!the!Victorian!government's!response!to!greenhouse!issues,! three!phases!of!SET!policy!development!were!identified.! Phase!one!(2000!to!2004)!represented!a!period!of!institutional! innovation.!Driven!by,!‘possible!international!emissions!abatement!

! ! 170! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses! requirements!beyond!the!first!commitment!period’!(DNRE,!2002),!and!the! desire!to!ensure!the!longOterm!viability!of!the!economy,!the!Victorian! government!adopted!a!greenhouse!agenda!articulated!through!the! discourse!of!sustainable!development.!This!agenda!strengthened!a!range! of!environmental!institutions,!in!turn!helping!to!shape!a!number!of! important!SETsOrelated!policy!developments.!Arguably!the!most! important!feature!of!this!phase!was!the!government’s!willingness!to! integrate!climate!and!energy!goals,!thereby!offering!avenues!for!coO evolutionary!processes.!This!included!partnerships!between!the!DSE!and! the!DoI.! During!phase!two!(2005!to!2007)!the!fossil!fuel!regime!reasserted! its!authority!over!energy!policy.!The!politicalOeconomic!importance!of! brown!coal!to!Victoria!was!a!major!factor!here.!But!phase!two!differed! from!the!one!prior!in!that!there!were!more!immediate!challenges!to!the! fossil!fuel!regime.!The!debate!over!the!Hazelwood!Power!Station!sparked!a! strong!response!from!industry.!Although!this!response!employed! numerous!storylines,!most!of!them!emphasised!the!shortOterm!economic! impacts,!energy!security!and!sovereign!risks!associated!with!the!plant's! closure.!This!message!resonated!strongly!with!government!and!its! neoliberal!orientation.!The!subsequent!decision!to!extend!the!Hazelwood! Power!Station!reinforced!the!strong!links!between!government!and!the! fossil!fuel!industry,!further!consolidated!through!a!shift!of!energy!policy! responsibility!to!the!DPI.!Within!this!phase!the!separation!between! climate!policy!and!energy!policy!became!evident.! During!phase!three!(2008!to!2010),!the!State!government! attempted!to!reconcile!the!outcomes!of!phase!one!and!two.!It!maintained! the!importance!of!clean!coal!as!a!central!policy,!but!also!provided!several! new!avenues!for!SET!developments.!Interestingly,!these!included!direct! regulatory!measures,!which!emerged!as!a!response!to!electoral!influences! and!to!a!centralisation!of!climate!policy!within!government.!

! ! 171! Chapter!6:!Climate!Responsibility!and!SubOnational!Responses!

Early!gains!(and!to!some!degree,!late!gains)!were!made!in!terms!of! building!SET!capacity,!and!these!helped!to!ensure!Victoria's!greenhouse! gas!emissions!did!not!rapidly!escalate.!However,!these!gains!were! overshadowed!by!the!inability!to!shift!the!fossil!fuel!regime.!! Victoria's!inability!to!shift!its!fossil!fuel!regime!notwithstanding,! the!role!of!subOnational!governments!is!important.!The!Victorian! government,!through!its!agendaOsetting!power,!was!a!crucial!source!of!SET! capacity.!The!importance!of!this!power!cannot!be!overstated:!if!States! choose!to!flex!their!muscles,!then!they!can!do!so.!At!the!same!time,! however,!the!Victorian!government!was!constrained!by!federalist! dynamics,!and!was!never!fully!committed!to!StateObased!mitigation! policies.!From!this!perspective,!Victoria's!response!was!more!about! pressuring!the!Federal!government!than!about!developing!and! implementing!smart,!effective!StateObased!policy.! !

! ! 172! !

Chapter(7(

Local(visions:(carbon(pricing(and(the(Latrobe(Valley(

! ! Introduction( ! This!chapter!continues!its!investigation!into!subOnational!level!politics,! however!it!deals!more!explicitly!with!the!relationship!between!national! and!subOnational!levels!of!government!and!how!these!interactions!shape! Australia’s!SET!narrative.!To!this!end,!the!chapter!examines!the!issues! around!carbon!pricing!in!the!Latrobe!Valley!and!reflects!on!the!ways!in! which!the!Rudd!government!and!the!Gillard!government!dealt!with! competing!visions!on!the!local!level.!This!relates!directly!to!two!of!the!SET! characteristics!outlined!in!Chapter!2;!the!multiOdimensional!nature!of! transitions;!and!the!idea!of!shared!visions.!By!understanding!how!these! two!characteristics!have!‘played!out’!within!and!through!the!carbon! pricing!debate,!this!thesis!is!better!placed!to!assess!Australia’s!SET! progress.! ! The!chapter!begins!by!tracing!the!rise!and!fall!of!the!Rudd! government’s!key!policy!relating!to!a!SET:!the!CPRS.!When!asked!about! the!CPRS!policy!process,!the!government’s!climate!policy!advisor!Ross! Garnaut!described!it!as,!‘one!of!the!worst!examples!of!policyOmaking!we! have!seen!on!major!issues!in!Australia’!(Garnaut,!2009a).!Much!has!been! written!about!the!rise!and!fall!of!Kevin!Rudd!as!Prime!Minister,!including! about!the!failed!CPRS!and!role!that!powerful!domestic!corporations!and! actors,!namely!those!in!the!fossil!fuel!sector,!played!(see!for!example,! Chubb,!2014;!Crowley,!2012;!Curran,!2011;!Marr,!2010;!Pezzey,!Mazouz,!&! Jotzo,!2010).!Given!the!importance!and!potential!impact!of!the!CPRS!in!

! 173! Chapter!7:!Local!visions! transitioning!the!electricity!regime!towards!sustainability,!this!chapter! first!reviews!this!period!before!shifting!its!attention!to!the!role!that!the! Latrobe!City!Council!played!in!shaping!Australia’s!SET!narrative.!!! ! ! The(Rudd(government:(a(new(course(in(climate(politics?( ! Early!indications!from!Rudd,!even!before!he!became!Prime!Minister,!were! that!climate!change!would!serve!as!a!key!electoral!policy.!His!muchO publicised!statement!on!climate!change!as!‘the!great!moral!challenge!of! our!generation’!saw!the!Labor!Party!embraced!the!logic!of!this!issue!as!a! core!policy!objective.!It!effectively!used!this!logic!to!wedge!the!Howard! Coalition!government!in!the!leadOup!to!the!2007!election.!Almost! immediately!after!winning!office,!the!Labor!government!carried!its! election!momentum!to!the!Bali!Climate!Change!Conference,!(COP!13),! where!Rudd!received!a!standing!ovation!following!his!decision!to!ratify! the!Kyoto!Protocol.!Rudd!stated!that,!‘Australia's!official!declaration!today! that!we!will!become!a!member!of!the!Kyoto!Protocol!is!a!significant!step! forward!in!our!country's!efforts!to!fight!climate!change!domestically!and! with!the!international!community’!(Rudd,!2007a).!! The!bar!was!set!high!from!the!outset!and!the!public!was!responding! favourably.!Labor’s!twoOparty!preferred!vote!was!at!59!per!cent!compared! to!the!Coalition's!41!per!cent!(Newspoll,!2008a),!and!Kevin!Rudd!was!at!61! per!cent!as!preferred!Prime!Minister!compared!to!Brendan!Nelson!–!the! new!Coalition!opposition!leader!–!at!14!per!cent!(Newspoll,!2007).! Moreover,!96!per!cent!of!Australians!believed!that!climate!change!was! anthropogenic!in!its!causes,!with!more!than!60!per!cent!supporting!the! introduction!of!an!emissions!trading!scheme!by!2010,!irrespective!of!how! the!international!community!proceeded!(Newspoll,!2008b).! Alongside!signing!the!Kyoto!Protocol,!the!Rudd!government! created!a!new!Department!of!Climate!Change,!and!set!a!longOterm!2050!

! ! 174! Chapter!7:!Local!visions! goal!of!a!60!per!cent!reductions!in!carbon!dioxide!emissions!compared!to! 2000!levels.!The!primary!means!of!meeting!this!target!was!a!CPRS,!and!an! expanded!mandatory!RET,!which!the!Rudd!government!increased!to!20! per!cent!(legislated!as!45,000!GWh)!by!2020.!This!chapter!focuses!on!the! CPRS,!which!in!many!ways!defined!the!Rudd!government.!The!role!of!the! RET!is!explored!in!the!following!chapter.! ! The,Garnaut,Review:,redefining,the,national,interest, ! In!March!2007,!as!opposition!leader,!Kevin!Rudd!organised!a!oneOday! national!climate!change!summit!at!Parliament!House,!bringing!together! more!than!100!leaders!from!business,!science,!environmental!and! academia,!as!well!as!the!State!premiers.!The!purpose!was!to!help!build! momentum!for!the!upcoming!federal!election.! My!intention!is!to!harness!the!best!brains!and!talent!available!in!the! country!to!get!our!response!and!the!nation's!response!to!climate! change!as!right!as!possible.!To!do!that!we!have!to!begin!by! fashioning,!shaping!and!encouraging!a!national!political!and!policy! consensus!on!climate!change.!Our!job!is!to!listen.!But!subsequent!to! that!our!job!is!to!act!(Rudd,!2007b).! ! The!following!month!Rudd!and!the!State!and!Territory!premiers! commissioned!respected!economist!Ross!Garnaut,!‘to!examine!the!impacts! of!climate!change!on!the!Australian!economy,!and!to!recommend!medium! to!longOterm!policies!and!policy!frameworks!to!improve!the!prospects!of! sustainability!prosperity’!(Garnaut,!2008,!p.!xiii).!The!scope!of!this!review! draws!comparison!with!the!2006!Stern!Report.!The!Garnaut!Review! compared!three!scenarios!–!no!mitigation,!stabilisation!at!550!ppm,!and! stabilisation!at!450!ppm!–!by!modelling!the!economic!effects!of!climate! change!on!five!different!areas!of!impact:!primary!production;!human! health;!infrastructure;!cyclones;!and!international!trade.!Four!types!of! costs!were!identified:!Type!1!(modelled!median!outcomes!of!climate! change!impacts!on,!for!example,!GDP);!Type!2!(estimates!of!other!median!

! ! 175! Chapter!7:!Local!visions! outcomes!not!readily!measurable,!such!as!the!impact!on!the!tourism! industry);!Type!3!(insurance!value!against!severe!and!potentially! catastrophic!outcomes);!and!Type!4!(nonOmarket!values,!such!as!the!value! placed!on!environmental!amenity).!Although!only!the!first!two!cost!types! were!considered,!the!review!noted!that!type!3!and!4!costs!were!likely!to!be! very!significant.!Their!omission!justified!stronger!mitigation!than! suggested!by!the!review's!modelling!(Garnaut,!2008).! The!final!report!was!released!in!September!2008!after!an!earlier! interim!report!(February!2008)!and!draft!report!(July!2008).!It!found!that! the!cost!of!inaction!would!be!greater!than!‘responsible’!mitigation! measures.!In!the!550Oppm!scenario,!gross!national!product!(GNP)!would! be!higher!by!2100!compared!to!the!noOmitigation!scenario!based!on! avoided!cost!(Types!1!and!2).!Compared!to!this!scenario,!under!the!450O ppm!scenario!the!mitigation!costs!would!be!almost!a!percentage!point! more!(of!the!present!value!of!GNP!through!the!twentyOfirst!century).! However,!this!higher!mitigation!cost!would!be!justified!by!Type!3!and! Type!4!benefits!throughout!the!twentyOfirst!century,!and!by!much!larger! benefits!beyond!(Garnaut,!2008).!Under!the!noOmitigation!scenario,!by! 2100!real!wages!in!Australia!would!be!12!per!cent!lower,!and!agriculture! and!mining!sector!outputs!would!decline!by!20!and!13!per!cent,! respectively.! Based!on!these!economic!findings,!the!review!put!forward!three! national!emissions!targets!in!the!context!of!what!it!interpreted!to!be! Australia's!fair!share!of!reductions:! ! ! For!2020!under!a!450!ppm!scenario,!a!reduction!of!25!per!cent!in! emission!entitlements!from!2000!levels;!for!2050,!reductions!of!90! per!cent!from!2000!levels.!

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! For!2020!under!a!550!ppm!scenario,!a!reduction!in!entitlements!of! 10!per!cent!from!2000!levels;!for!2050,!reductions!of!80!per!cent! from!2000!levels.! ! If!no!comprehensive!global!agreement!were!secured!at!Copenhagen! in!2009,!Australia!should!commit!to!reduce!its!emissions!by!five! per!cent!from!2000!levels!by!2020!and!60!per!cent!by!2050.! ! The!Garnaut!Review!states!that,!‘Australia's!longOterm!interests!lie!in! the!pursuit!of!global!action!to!return!greenhouse!gas!concentrations!to! 450!ppm!or!less’!(Garnaut,!2008,!p.!278).!Despite!this,!the!review! advocates!a!550Oppm!target,!arguing!that,!‘exclusively!focusing!on!a!450! ppm!outcome,!at!this!moment,!could!end!up!providing!another!reason!for! not!reaching!an!international!agreement!to!reduce!emissions’!(p.!279).! Instead,!‘an!achievable!agreement!built!around!550!ppm!provides!a! staging!platform!for!more!aggressive!reductions!at!a!later!date’!(p.!279).! The!report!continues!that!‘this!conclusion!is!not!the!triumph!of!despair.!It! is!the!Review's!appraisal!of!what!might!be!achievable!when!the!sum!of!the! parts!must!come!together!to!form!a!successor!to!the!Kyoto!agreement’!(p.! 279).!! To!meet!these!targets!the!review!advocated!a!national!ETS!with! broad!coverage,!starting!in!2010.!During!the!first!two!years,!up!until!the! end!of!the!first!Kyoto!commitment!period!(2008O2012),!there!would!be!a! fixed!price,!after!which!there!would!be!no!price!caps.1!Within!the!scheme! there!would!be!limited!use!of!international!offsets!and!no!free!allocation!of! permits.!On!this!last!point!Garnaut!was!particularly!blunt.! Free!permit!allocation!would!be!highly!complex,!generate!high! transaction!costs,!and!require!valueObased!judgements!regarding! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!The!initial!fixed!price!would!start!at!$20!and!rise!by!4!per!cent!(plus!the!percentage! increase!of!the!consumer!price!index)!each!year.!According!to!the!Review,!this!was! equivalent!to!the!price!path!that!would!be!expected!if!there!were!an!effective!global! agreement!directed!towards!stabilisation!of!global!greenhouse!gas!concentrations!at! 550ppm.!!

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who!is!most!deserving!…!The!complexity!of!the!process,!and!the!large! amounts!of!money!at!stake,!encourage!pressure!on!government! decisionOmaking!processes!and!the!dissipation!of!economic!value!in! nonOproductive!rent!seeking!behaviour…!The!review!concludes!that! there!are!no!identifiable!circumstances!that!would!justify!the!free! allocation!of!permits!(Garnaut,!2008,!pp.!331O332).! ! The!review!suggests!that!of!the!revenue!generated!from!the!sale!of! permits,!50!per!cent!should!be!allocated!to!households;!30!per!cent!as! structural!adjustment!for!business,!in!particular!emissionsOintensive,! tradeOexposed!industries!(EITE);!and!20!per!cent!for!lowOemissions! technology!R&D.! The!Garnaut!Review!received!a!mixed!response.!Perhaps!not! surprisingly,!much!of!industry!claimed!the!targets!were!too!strong,!while! many!environmental!groups!lamented!the!review!for!being!too!weak.!As!to! meeting!the!targets,!Mark!Diesendorf,!from!the!Institute!of!Environmental! Studies!UNSW,!highlights!that,!‘sections!of!the!Garnaut!report!place! excessive!weight!on!coal!power!with!carbon!capture!and!sequestration,!a! technological!system!that!does!not!yet!exist,!and!not!enough!on! renewables’!(Healy,!2008).!More!generally,!Hamilton!(2008)!criticised!the! review!for!failing!to!take!into!consideration!the!timeframe!necessary!to! avoid!dangerous!climate!change.!He!suggested!that!taking!a!550Oppm! scenario!to!Copenhagen!would!only!reduce!global!expectations!of! appropriate!targets.!However,!Hamilton!also!pointed!out!that,!! ...!unlike!all!previous!official!reports!on!climate!change,!it!recognised! the!true!implications!of!what!the!scientists!are!trying!to!tell!us.!For! the!first!time,!the!analysis!of!emission!reduction!targets!and!the! international!structures!required!to!achieve!them!were!linked!closely! to!the!climate!science!(Hamilton,!2008,!p.!1).!! ! This!issue!highlights!one!of!the!shortcomings!of!the!review,!which! Christoff!(2010)!refers!to!as!the!chasm!between!climate!science,! economics!and!politics,!in!that!proposed!targets!are!not!commensurate! with!the!climate!science.!Christoff!argues!that!the!Garnaut!Review’s! targets,!if!adopted,!were!unlikely!to!avert!dangerous!climate!change.!

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The!strength!of!the!Garnaut!Review!lay!in!its!discursive!power.!It! framed!climate!change!in!economic!terms,!not!unlike!the!Howard! government,!but!shifted!the!focus!away!from!the!shortOterm!risks!that! prevailed!under!Howard,!toward!the!longerOterm!economic!impacts.!This! helped!the!Labor!government!frame!their!argument!on!climate!change.!It! also!helped!shape!the!growing!proOclimate!action!political!discourse!in! Australia.!The!Rudd!government!initially!managed!quite!successfully!to! turn!on!its!head!Howard's!rejection!of!multilateral!climate!action!based!on! a!national!interest!that!favoured!shortOterm!economic!effects.!The!Garnaut! Review!demonstrated!that!the!threat!to!the!economy!was!not!climate! mitigation!but!instead!a!lack!of!mitigation.!! Rudd's!portrayal!of!climate!change!as!a!moral!challenge!helped! create!a!sense!of!urgency.!In!particular,!this!framing!drew!on!three! powerful!storylines!centred!on!risk!and!opportunity.!First,!it!established! an!economic!argument,!highlighting!as!Garnaut!did!(and!Stern!before! him),!the!economic!risks!associated!with!unmitigated!climate!change.!At! the!same!time!though,!the!Rudd!government!emphasised!the!positive! economic!dimensions!of!action!(i.e.,!growth!in!jobs,!wages,!and!lowOcarbon! technology!export!possibilities).!!As!Curran!(2009)!notes,!this!highlighted! the!Rudd!Labor!government’s!ecological!modernisation!approach!to! climate!policy.!Second,!the!government!invoked!geopolitical!concerns!by! portraying!Australia!as!a!laggard!state!in!terms!of!climate!policy!and!so!a! country!not!well!respected!on!the!international!stage.!Hence,!to!argue! against,!or!withdraw!support!from!the!international!climate!negotiation! process!under!the!UNFCCC,!would!further!threaten!Australia's!current!and! future!standing!in!the!global!economy.!Third,!the!government!securitised! climate!change!by!linking!it!with!national!security!(McDonald,!2012).! Over!the!long!term,!climate!change!represents!a!most!fundamental! national!security!challenge!for!the!long!term!future.!Less!attention! has!been!given!to!the!security!implications!that!climate!change!could! bring!to!Australia!compared!with!other!traditional!security!threats.!

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Significant!climate!change!will!bring!about!unregulated!population! movements,!declining!food!production,!reductions!in!arable!land,! violent!weather!patterns!and!resulting!catastrophic!events.!This!is!an! area!of!emerging!consequences!which!will!require!the!formal! incorporation!of!climate!change!within!Australia’s!national!security! policy!and!analysis!process!(Rudd,!2008,!p.!26).! ! Together,!these!storylines,!backed!up!by!the!Garnaut!Review,!helped! build!legitimacy!for!the!government.!With!support!for!action!on!climate! change!and!the!Rudd!government!remaining!at!nearOrecord!levels!in!the! polls!throughout!2007/2008,!policy!change!appeared!inevitable.!! ! The,retreat, ! Sixteen!months!after!the!release!of!the!CPRS!White!Paper!the!government! shelved!the!scheme,!which!had!been!twice!rejected!by!the!Senate.!While! no!single!defining!factor!led!to!the!eventual!abandonment!of!the!CPRS,!this! period!was!associated!with!intense!domestic,!and!to!some!extent!global,! political!dynamics!that!accelerated!the!government's!decision.! The!onset!of!the!global!financial!crisis!(GFC)!undoubtedly!bolstered! the!business!case,!which!called!for,!at!the!very!least,!a!delay!in!the! scheme's!commencement!(see!for!example,!ACCI,!2009;!AI!Group,!2009;! Hart,!2008).!The!environmental!community!was!also!critical!of!the!White! Paper!(see!for!example,!Arup,!2008;!Yaxley,!2008).!As!a!result,!the!CPRS! faced!an!uphill!battle!to!get!through!a!Senate!where!the!Greens!held!the! balance!of!power.!! Cognisant!of!this!opposition,!the!government!announced!a!range!of! changes!to!its!proposed!CPRS.!These!included!a!delayed!start,!additional! assistance!to!industry,!and!a!deeper!conditional!emissions!reduction! target!of!25!per!cent!below!2000!levels!by!2020!(up!from!15!per!cent).! Neither!of!the!opposing!forces!were!overly!impressed!with!these!changes,! although!the!ACF,!WWF,!the!Climate!Institute,!the!Australian!Council!of!

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Trade!Unions!(ACTU),!and!the!Australian!Council!of!Social!Service!(ACOSS)! came!out!in!support!of!the!revised!CPRS!(Pearse,!2011).!! The!findings!and!recommendations!of!the!Senate!Select!Committee! on!Climate!Policy!played!an!influential!role,!in!particular!its!first! recommendation,!which!stated:! The!committee!notes!that!the!Treasury!modelling!was!conducted!in! economic!circumstances!that!were!markedly!different!to!those!in! which!the!legislation!is!proposed!to!now!be!introduced.!Since!the! modelling!was!conducted!the!global!financial!crisis!has!led!to!a! marked!deterioration!in!the!shortOterm!economic!outlook.!Whilst!the! CPRS!package!has!been!revised!on!two!occasions,!the!modelling! continues!to!fail!to!take!into!account!the!impact!of!these!changed! economic!circumstances.!The!committee!considers!the!modelling! undertaken!by!Treasury!to!be!inadequate!and!recommends!that!the! government!direct!Treasury!to!undertake!further!modelling.!The! further!modelling!should:! O!consider!in!detail!the!shortOterm!adjustment!costs;!! O!respond!to!criticisms!made!of!Treasury's!initial!modelling! including:!! O!taking!into!account!the!deterioration!of!the!Australian!economy!! O!the!likely!effect!of!the!CPRS!upon!jobs!and!upon!the!environment!! O!the!absence!of!any!modelling!of!the!impact!of!the!CPRS!on!regional!!! !!Australia.!! ! ! ! ! (Commonwealth!Government,!2009,!p.!ix).! ! These!committee!recommendations!led!to!further!economic! modelling!by!Frontier!Economics!on!the!economic!impact!of!the!proposed! CPRS.!Their!results!suggested!that!with!some!simple!amendments,!namely! further!concessions!to!industry,!the!CPRS!could!be,!‘twice!as!green!and!one! third!cheaper’!(Frontier!Economics,!2009,!p.!vii).!Soon!after!these!results! were!released,!in!August!2009,!the!Senate!rejected!the!CPRS.! As!the!Labor!government!grappled!with!its!climate!policy,!so!too! did!the!Coalition.!Malcolm!Turnbull,!who!took!over!the!Coalition! leadership!in!September!2008,!personally!supported!an!ETS!as!the!most! efficient!way!to!reduce!carbon!emissions.!However,!he!faced!intense! internal!divisions!within!his!party,!with!the!Nationals!and!various!rightO wing!members!strongly!opposed!to!the!scheme.!Turnbull!persisted,!

! ! 181! Chapter!7:!Local!visions! perhaps!fearing!the!prospect!of!a!double!dissolution.!He!stated!that!there! was,!‘very,!very!strong!support!for!the!constructive!approach!I’m!taking!to! this!issue!from!the!party!room’!(Taylor,!2009).!! Without!majority!in!the!Senate,!the!Labor!Party!had!to!negotiate!its! CPRS!policy!with!either!the!Greens!or!the!Coalition.!It!chose!the!latter.!On! 24!November,!the!Labor!Party!and!the!Coalition!agreed!on!a!deal!that!saw! assistance!measures!dramatically!ramped!up!once!again.!These! concessions!included:!permanently!incorporating!the!‘global!recession! buffer’!for!EITE!industries;2!more!than!doubling!the!Environmentally! Sensitive!Areas!Schemes!(ESAS)!from!$3.3!billion!to!$7.3!billion!over!10! years;!and!doubling!the!transitional!assistance!for!the!coal!sector,!from! $750!million!to!$1.5!billion.!! When!Turnbull!took!the!revised!package!to!his!party!room!a! leadership!spill!ensued!and!Tony!Abbott!was!installed!as!the!new!Coalition! leader.!Abbott!immediately!opposed!the!scheme,!and!the!CPRS!was!once! again!rejected!in!the!Senate.!The!government!was!now!left!with!little!room! to!manoeuvre,!since!both!the!Greens!and!the!Coalition!refused!to!support! the!CPRS.!As!one!senior!bureaucrat!observed:! In!2009!the!CPRS!fell!over!because!everyone!in!the!debate! overplayed!their!hand!on!the!assumption!that!the!deal!would!not!fall! over.!And!so!what!happened!was!industry!pushed!really!hard!on! assistance!levels!because!they!thought!it!can!happen,!but!I!really! want!to!lock!in!the!best!deal!I!can.!Environment!groups!pushed! incredibly!hard!on!the!nature!of!the!targets!and!against!levels!of! compensation.!And!the!consequence!is!that!when!the!opposition! changed!its!position,!they!were!able!to!characterise!it!as!no!one!likes! this!package!because!everyone!overplayed!their!hand!(Department! of!Climate!Change!and!Energy!Efficiency!interview!#40).! !

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!This!involved!an!additional!5!per!cent!free!permits!for!EITE!activities!eligible!for!90!per! cent!assistance,!giving!an!effective!rate!of!assistance!of!almost!95!per!cent!to!these!highly! emissionsOintensive!tradeOexposed!activities!in!the!first!year!of!the!scheme,!and!an! additional!10!per!cent!free!permits!for!EITE!activities!eligible!for!60!per!cent!assistance,! giving!an!effective!rate!of!assistance!of!66!per!cent!to!these!moderately!emissionsO intensive!tradeOexposed!activities!in!the!first!year!of!the!scheme.!

! ! 182! Chapter!7:!Local!visions!

Internationally,!the!failure!of!the!UNFCCC!Copenhagen!climate! conference!(COP!15)!was!widely!reported!in!the!media.!This!further! eroded!confidence!and!support!for!the!Rudd!government!and!its!CPRS.! The!Labor!government's!decision!to!shelve!the!CPRS!in!April!2010!was! damaging!not!just!politically!but!also!personally!for!Rudd,!who!in!2007! had!promised!so!much!on!the!issue!of!climate!change.!As!political! commentator!David!Marr!put!it,! ...!when!he!abandoned!the!ETS!in!late!April,!relegating!it!to!the! Siberia!of!his!late!second!term,!scorn!poured!down!on!Rudd’s!head.! He!was!clearing!the!decks!for!the!elections;!he!had!a!brawl!on!his! hands!with!the!mining!industry;!he!had!a!new!national!health! agreement!to!bed!down!and!a!budget!to!introduce!–!but!the!decision! to!abandon!the!ETS!was!greeted!with!contempt.!He!collapsed!in!the! polls.!The!conviction!politician!was!seen!as!a!man!of!empty!words.! His!love!affair!with!the!Australian!people!–!always!more!respectful! than!romantic!–!has!hit!a!rough!patch.!For!the!first!time!since!he! became!Labor!leader,!the!people!are!thinking!of!voting!for!the!other! side!(Marr,!2010,!p.!82).!! ! Two!months!later!Rudd!was!deposed!by!his!own!party!and!replaced! with!Julia!Gillard.!It!was!the!second!instance!in!Australia’s!political!history! of!a!Prime!Minister's!removal!by!their!own!party!prior!the!end!of!the!first! term.!Crucially,!the!government!missed!a!political!opportunity!to!break! the!fossil!fuel!hegemonic!bloc!and!instead,!arguably,!left!Australia's!clean! energy!future!more!uncertain!than!when!it!had!first!entered!government.! ! This!period!in!Australian!politics!has!attracted!much!scholarly! attention,!as!detailed!here.!While!these!studies!offer!valuable!insights!into! the!constraints!on!climate!policy!in!Australia,!none!of!them!explicitly! address!the!failure!of!the!CPRS!within!a!SET!framework.!In!employing! such!a!framework,!as!this!chapter!(and!thesis)!does,!it!finds!that!the! inclusion!of!‘local’!dynamics!provides!a!more!conceptuallyOrich!account!of! why!the!Rudd!government!was!so!hesitant!and!constrained!in!its!pursuit! of!carbon!pricing.!The!following!section!examines!the!implications!of!local!

! ! 183! Chapter!7:!Local!visions! level!involvement!through!the!actions!and!response!of!the!Latrobe!City! Council.! ! ! Bringing(the(local(back(in( ! The!shifting!political!environment!at!the!federal!level!in!2007!was!a! significant!driving!force!that!shaped!the!Victorian!Brumby!government’s! climate!and!energy!policy!strategy!between!2008!and!2010!(Chapter!6).! These!effects!also!filtered!down!to!the!local!government!level;!the!Latrobe! City!Council!became!actively!involved!in!climate!and!energy!policy.!The! Council’s!present!discussions!about!transitioning!differed!from!earlier! debates!under!the!SEC!(Chapter!5).!The!electricity!generators!were!now! privately!owned,!and!this!changed!the!governance!characteristics!of!how! to!approach!and!deal!with!a!potential!energy!transition.!Although! privatisation!had!reduced!the!influence!of!local!government,!the!Latrobe! Valley!community!remained!a!major!stakeholder!that!would!face!sizeable! impacts!associated!with!transitioning.! Latrobe!City!has!been!identified!as!a!community!likely!to!be!exposed! to!significant!structural!adjustment!pressures!as!a!result!of!the! introduction!of!greenhouse!gas!mitigation!schemes,!such!as!the! Australian!governments!proposed!CPRS.!It!is!anticipated!that!the! introduction!of!these!schemes!will!decrease!the!competiveness!of!the! brown!coal!fired!generators!that!are!located!within!the!Latrobe! Valley,!which!would!then!impact!on!the!local!economy!and! employment!growth!(Latrobe!City!Council!2010,!p.!4).! ! Not!surprisingly,!the!Latrobe!Valley!occupies!a!strong!presence!in!national! SET!debates.!! ! The,Latrobe,City,Council, ! The!Latrobe!Valley!Community!and!the!Latrobe!City!Council!are!not!new! to!transitional!issues!(Chapter!5).!The!Victorian!government!was!aware!of! the!challenges!inherent!in!a!reliance!on!the!brown!coal!industry!in!1983,!

! ! 184! Chapter!7:!Local!visions! when!it!established!the!Latrobe!Regional!Commission!(LRC).!It!sought!to! help!diversify!and!strengthen!the!regional!economy.!As!the!LRC!notes,!! ...!the!development!of!the!Latrobe!Region!has!been!characterised!by! peaks!and!troughs!of!activity!associated!with!the!development!of! brown!coal!and!other!natural!resources.!The!cyclic!pattern!of! accelerated!development!followed!by!periods!of!slow!growth!or! decline!has!paralleled!the!development!of!power!stations!and!is!a! characteristic!of!resourceObased!communities!(LRC,!1990a,!p.!6).!!

The!LRC!had!some!success!through!initiatives!such!as!its!Image! Project,!which!was!designed!to!promote!the!region's!arts!and!culture.!It! also!attracted!nonOelectricity!generation!businesses,!such!as!a!dataO processing!centre!for!the!Australian!Securities!Commission,!hailed!by!the! LRC!as!a,!‘landmark!in!diversifying!the!region’s!economy’!(LRC,!1990b,!p.! 4).!However,!in!1995!the!Kennett!government!repealed!the!LRC!Act!and! pursued!an!aggressive!neoliberal!agenda!(Chapter!5).!This!led!to! significant!structural!adjustment!in!the!Latrobe!Valley,!albeit!with! outcomes!very!different!from!the!objectives!pursued!by!the!LRC.! In!late!2000,!a!year!after!its!election,!the!Bracks!Labor!government! set!up!the!Latrobe!Valley!Ministerial!Taskforce!(LVMT).!With!a!brief! similar!to!that!of!the!LRC,!its!terms!of!reference!stated!the!taskforce’s!main! goal!was!to!identify!actions!to!support!selfOsustained!growth.!This!work! fell!under!three!objectives:! ! ! boost!business!and!community!confidence!in!the!valley;! ! facilitate!longerOterm!economic!growth!in!the!valley!as!a!whole;! ! improve!economic!and!social!opportunities!for!those!most! disadvantaged!in!the!Latrobe!Valley.! ! Considering!the!current!socioOeconomic!profile!of!the!Latrobe!Valley,!it! would!be!fair!to!say!that!the!LVMT!has!had!limited!success.!In!a!study!by! Compelling!Economics!on!the!economic!importance!of!coal!and!electricity! generation!to!the!local!economy,!a!report!commissioned!by!Latrobe!City!

! ! 185! Chapter!7:!Local!visions!

Council,!it!was!found!that!electricity!generation!accounts!for!21!per!cent!of! GRP,!and!for!every!10!jobs!in!the!electricity!sector,!an!additional!eight!jobs! were!found!to!be!sustained!in!the!local!economy!(Latrobe!City!Council,! 2010).!According!to!ABS!census!data,!around!11!per!cent!of!jobs!are! directly!linked!to!electricity!generation!and!coal!mining!activities.! Unemployment!figures!are!relatively!high!compared!to!the!rest!of! Australia.3! The!latest!phase!of!transitioning!in!the!Latrobe!Valley!was!brought! on!by!the!Federal!government’s!shift!in!climate!policy.!As!such!it! represents!a!different!kind!of!transition!from!previous!attempts!by!the! LRC!and!the!LVMT.!The!LRC!and!the!LVMT!were!both!endogenous! processes!in!that!it!was!the!region!wanting!to!diversify.!Importantly,!there! had!been!no!immediate!threats!to!the!economy!itself;!the!generators! under!private!ownership!were!considered!secure.!The!difference!under!a! possible!carbon!price!was!that!the!transition!process!would!be!largely! exogenous.!It!would!be!forced!on!the!region!and!would!specifically!target! what!many!consider!to!be!the!regional!economy's!most!valuable! component:!the!electricity!generation!sector.!From!this!perspective,!one! could!argue!the!current!phase!is!more!similar!to!the!privatisation!period! than!to!the!LRC’s!and!the!LVTC’s!attempts!at!transitioning.!Not! surprisingly,!this!process!has!become!highly!conflictual.! At!the!same!time!this!exogenous!process!has!motivated!the!local! government!to!become!proactive,!to!ensure!the!best!outcome!for!its! community!and!avoid!the!kinds!of!effects!suffered!after!privatisation.! I!think!what!happened!was!that,!you!know,!we!went!through!the! whole!privatisation!of!the!SEC!and!everyone!said!you!know!we!are! not!going!to!let!that!happen!again!because!it!was!the!community! came!as!an!afterthought.!The!privatisation!happened!and!then!there! was!all!these!impacts!on!the!community.!And!then!the!government! said,!'Oh!we!need!to!do!something!now'.!So!as!a!council!we!decided! we!needed!to!get!on!the!front!foot,!we!knew!it!was!coming.!At!that! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3!See!ABS!Census!Data!O!Employment!figures!for!2001,!2006,!2011.!

! ! 186! Chapter!7:!Local!visions!

stage!it!was!an!ETS!which!was!being!discussed!and!we!knew!what!it! could!do!to!our!community!because!we'd!been!through!it!before.!So! we!were!determined!not!to!let!that!happen!again!and!that!we!would! get!on!the!front!foot!this!time.!And!we!would!pressure!the! government!to!actually!start!thinking!about!us!before!it!actually!took! place!instead!of!after.!So!I!think!that's!how!we!have!got!involved! (Latrobe!City!Council!interview!#31).! ! The!Latrobe!City!Council’s!policy!position!paper!Positioning,Latrobe, City,for,a,Low,Carbon,Emission,Future!(Latrobe!City!Council,!2009),! epitomises!its!proactive!approach.!The!report!identified!eight!themes,! each!listing!a!range!of!policy!actions!that!needed!to!be!taken,!which! underpinned!its!policy!approach.!The!eight!themes!were:!regional! leadership!and!strategic!partnerships;!engagement!with!government;! community!education!and!capacity!building;!enhancement!of!the!Latrobe! city!profile;!sustainable!use!of!natural!resources;!enhancement!of!Latrobe! city!infrastructure!and!services;!expansion!and!growth!of!industry!base;! and!contingency!planning.!An!emphasis!on!developing!partnerships!was!a! particularly!strong!component!of!the!council's!plan.! Our!push!for!a!long!time!was!that!this!had!to!be!a!partnership! approach!to!manage!the!transition!and!not!just!the!partnership! between!the!three!levels!of!government!but!also!industry!and!the! unions!and!the!community!(Latrobe!City!Council!interview!#15).! ! The!Council!initiated!this!process!by!identifying!several!focus!areas,! then!targeting!the!relevant!departments!and!government!ministers.!On!the! federal!level!this!included:!the!Climate!Change!Action!Fund!transition! assistance!O!Department!of!Climate!Change!and!Energy!Efficiency!(Penny! Wong);!regional!infrastructure!and!economic!development!and!local! government!engagement!–!Department!of!Infrastructure,!Transport,! Regional!Development!and!Local!Government!(Anthony!Albanese);! sustainable!land,!water!and!natural!resource!management!–!Department! of!Environment,!Water,!Heritage!and!The!Arts!(Peter!Garrett/Penny! Wong);!Communications!infrastructure!–!Department!of!Broadband,! Communications!and!the!Digital!Economy!(Stephen!Conroy);!and!lowO

! ! 187! Chapter!7:!Local!visions! emission!technologies,!alternative!uses!for!coal!–!Department!of! Resources,!Energy!and!Tourism!(Martin!Ferguson).!! On!the!State!level!this!included:!sustainable!land!and!natural! resource!management,!low!emissions!technologies,!alternative!uses!for! coal,!energy!policy!and!strategy,!sustainable!development!of!coal!resource! –!Department!of!Primary!Industries!(Joe!Helper/Peter!Batchelor);! community!support!programs!–!Department!of!Planning!and!Community! Development!and!Department!of!Human!Services!(Peter!Batchelor/Daniel! Andrews);!and!regional!economic!development,!attracting!new! investment!–!Department!of!Innovation,!Industry!and!Regional! Development!(Jacinta!Allan/Martin!Pakula).! The!Council’s!approach!aimed!to!ensure!the!Latrobe!Valley!was!in!a! good!position!to!take!advantage!of!any!transitional!arrangements!that!may! arise!due!to!the!introduction!of!a!carbon!price.!In!this!way,!the!Council’s! support!was!strategic.!Nevertheless,!when!the!Latrobe!Valley!local! government!and!the!Victorian!government!supported!the!Federal! government’s!carbon!pricing!policy,!it!created!a!pivotal!moment!for!the! Rudd!government!to!build!SET!capacity.!This!was!not!just!an!opportunity! for!the!Latrobe!Valley,!but!also!for!Australia!more!generally,!given!the! Latrobe!Valley's!importance!in!the!NEM.!This!threeOtiered!government! agreement!on!carbon!price!implementation!helped!to!shift!what!was,! under!the!Howard!government,!a!highly!antagonistic!debate!over!the! merits!of!climate!change!and!its!science,!to!one!more!focused!on!the! specifics!of!how!to!deal!with!an!energy!transition.!The!Latrobe!City! Council’s!policy!position!and!willingness!to!engage!transitioning!in!a! constructive!manner!was!crucial,!particularly!coming!from!a!traditional! coal!community!that!many!expected!would!be!highly!resistant!to!carbon! pricing!(Latrobe!City!Council!interview!#15).!! The!policy!implications!of!this!relationship!between!the!local!and!the! national!is!examined!below!by!comparing!both!the!Rudd!and!Gillard!

! ! 188! Chapter!7:!Local!visions! government’s!approach!towards!carbon!pricing!issues!in!the!Latrobe! Valley.! ! The,Rudd,government,and,the,Council! ! The!Prime!Minister!was!particularly!keen!to!emphasis!this!portrayal!of! alignment!between!government!levels.!Even!before!his!election,!Kevin! Rudd!presented!himself!as!a!committed!federalist,!stating!that,!‘a!properly! functioning!federation!can!advance!the!cause!of!progressive!politics!in!this! country!O!not!retard!it’!(Rudd,!2005,!p.!15).!He!reOemphasised!this!stance! immediately!after!being!sworn!in,!by!calling!a!meeting!of!State!and! Territory!leaders!to!outline!‘a!new!framework!for!cooperative! Commonwealth!–!State!relations’!(Rudd,!2007c).!! Rudd's!reform!agenda!was!principally!carried!out!through!COAG.!As! Anderson!and!Parkin!(2010)!note,!by!the!end!of!his!second!year!in!office,! COAG!had!met!nine!times,!whereas!under!the!Howard!government's!first! two!years,!COAG!met!only!twice!(and!a!total!of!fourteen!times!over! Howard's!eleven!years!in!office).!The!Rudd!government!also!sought!to! involve!local!governments!and!ensure!they!had!a!more!effective!voice!at! COAG!through!the!creation!of!an!Australian!Council!of!Local!Governments! (ACLG).!These!measures!did!not!necessarily!reduce!conflict!in!the!policy! decisionOmaking!process,!as!was!evident!in!issues!related!to!health,! education,!and!the!Murray!Darling!Basin.!! The!perception!of!the!Rudd!government!as!collaborative!and! respectful!of!the!States’!role!was!somewhat!contradicted!by!its!emphasis! on!COAG,!‘itself!an!instrument!of!cooperative!centralism!that,!in!the!end,! reinforces!the!dominant!role!of!the!Commonwealth!at!least!as!an! instigator!and!coordinator!and!frequently!as!a!policy!driver’!(Anderson!&! Parkin,!2010,!p.!111).!Although!the!Rudd!government!seemed!intent!on! involving!State,!Territory,!and!local!governments,!this!was!not!

! ! 189! Chapter!7:!Local!visions! accompanied!by!any!real!distribution!of!decisionOmaking!power;!instead! this!power!remained!firmly!with!the!Commonwealth.! On!the!issue!of!energy!transitioning!for!the!Latrobe!Valley,!the! Council!clearly!felt!that!the!Federal!government!did!not!live!up!to!its!hype! on!the!importance!of!collaboration.!There!was!a!sense!that!the!community! concerns!were!not!being!heard.! (There)!was!a!recognition!that!we!had!been!able!to!engage!fairly!well! at!the!State!level!both!with!the!previous!government!and!the!new! government!and!there!was!a!pretty!clear!understanding!that!Victoria,! in!particular,!Latrobe!Valley!would!be!impacted!by!whatever!carbon! pollution!reduction!scheme!might!be!put!in!place!and!we'd!been!sort! of!trudging!up!to!Canberra!for!three!or!four!years!knocking!on!doors! and!all!that!sort!of!stuff!trying!to!get!some!level!of!engagement!from! the!fed’s.!And!that!had!proven!to!be!very!difficult!(Latrobe!City! Council!interview!#15).! ! Very!early!in!the!piece!…!in!2009!we!went!to!Canberra!…!and!we!said! you!need!to!think!about!the!community.!Because!you!know!this! discussion!around!the!ETS!was!being!held!at!this!global!level!and!we! felt!that!there!was!no!thought!about!what!about!the!people!who!its! going!to!impact!(Latrobe!City!Council!interview!#31).! ! These!sentiments!were!reinforced!in!the!Council's!position!paper.!It! noted!perceived!weaknesses!in!that!networks!with!relevant!Federal! government!departments!had!not!been!established.! To!date,!Latrobe!City!Council!has!not!been!able!to!establish! communication!channels!with!the!Federal!government!agencies!on! CPRS!but!is!continuing!to!work!to!develop!communication! mechanisms!…!Ongoing!dialogue!with!Federal!government!is!needed! so!that!partnerships!can!be!developed!between!all!levels!of! government!to!manage!the!CPRS!transition!in!Latrobe!City!(Latrobe! City!Council,!2009,!p.!14).! ! This!lack!of!localOnational!engagement!and!communication!had!an! overall!constraining!effect!on!the!CPRS!policy.!In!fear!of!being!left!out! completely,!the!council!turned!to!those!with!complementary!interests.!It! formed!a!strategic!alliance!with!six!other!local!councils,!subsequently! called!the!Coal!Councils!of!Australia!(CCoA),!all!of!which!were!likely!to!be!

! ! 190! Chapter!7:!Local!visions! adversely!affected!by!the!introduction!of!a!carbon!price.4!Their!aim!was!to! facilitate!a!clear!and!consistent!message!to!federal!and!State!policy! makers.!They!would!help,!‘the!local!government!areas!that!have! communities!with!coal!mining,!coalOfired!power!generation!and!coal! export!areas!to!better!access!the!government's!proposed!$200!million! structural!adjustment!scheme!from!the!climate!change!action!fund’!(City!of! Newcastle,!2009,!p.!1).!! So!whereas!the!Latrobe!City!Council!had!initially!thrown!its!support! behind!a!carbon!price,!which!it!maintained!in!word!at!least,!CCoA’s!overall! message!focussed!on!the!scheme's!adverse!effects.!To!highlight!their! concerns,!CCoA!used!a!report!prepared!by!Scott!Hargraves!and!Associates,! titled!The,Scope,for,Cooperation,by,Municipalities,Potentially,Affected,by, the,CPRS,(Hargraves,!2009).!This!drew!on!two!separate!reports:!The, Impact,of,an,ETS,on,the,Energy,Supply,Industry!by!ACIL!Tasman!for!ESAA;! and!The,Employment,Effects,in,the,Australian,Minerals,Industry,from,the, Proposed,Carbon,Pollution,Reduction,Scheme,in,Australia!by!Concept! Economics!for!the!Minerals!Council!of!Australia!(MCA).!The!councils!also! drew!on!the!Australian!Coal!Association’s!(ACA)!submission!to!the!Senate! Select!Committee!on!Climate!Policy.!! Not!surprisingly!these!reports!found!that!the!CPRS!would!have!range! of!devastating!effects!on!the!mining!and!power!generation!sectors.!For! example,!under!a!10!per!cent!carbon!dioxide!emissions!reduction!scenario,! three!of!the!Latrobe!Valley’s!four!power!stations!would!close;!replacing! this!coal!generation!capacity!would!require!nonOcoal!energy!investment!of! abound!$20!billion!(ACIL!Tasman,!2008).!The!negative!impacts!on!the! affected!communities!were!categorised!according!to!five!types.! ! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4!The!Coal!Councils!of!Australia!consisted!of!Latrobe!City!Council!(Victoria),!Wellington! Shire!Council!(Victoria),!Muswellbrook!Shire!Council!(New!South!Wales),!Whitsunday! Regional!Council!(Queensland),!Central!Highlands!Regional!Council!(Queensland),!and! Isaac!Regional!Council!(Queensland).!

! ! 191! Chapter!7:!Local!visions!

Table!2:!Coal!Councils!of!Australia.!Typology!of!potential!negative! impacts!on!regional!communities.!

! CPRS! Impacts! Type! Description! 1! Reduction!in!activity!and!employment!in! the!power!stations,!as!they!close!and/or! reduce!manning!levels!and!maintenance! levels!as!a!response!to!lower!production! and!shortened!lifespans!attributable!to!the! changed!dynamics!of!the!NEM,!and/or!the! loss!of!smelters!and!customers!due!to!Type! 4!impacts.! 2! Reduction!in!employment!in!mines! supplying!the!power!stations!affected!by! Type!1!impacts.! 3! Reduction!in!employment!in!mines!with! high!levels!of!fugitive!emissions,!which! might!have!to!close!altogether!(some!of!this! lost!employment!could,!perhaps,!be! recouped!in!other!mines,!though!not! necessarily!in!the!same!region).! 4! Reduction!in!employment!levels!in! ‘downstream’!processing!industries! including!EITEs,!particularly!minerals! processing!activities!such!as!smelting.! 5! Secondary!effects!through!the!regional! economy!as!reduced!economic!activity! from!type!1O4!impacts,!above,!work!its!way! through!the!sectors!which!provide! economic!services!to!mining,!electricity! production!and!minerals!processing.! ! Source:!City!of!Newcastle!(2009,!p.!32)! ! The!challenge!for!CCoA!lay!in!ensuring!that!these!concerns!were! heard.!This!was!not!easy!since!the!councils!were!not!directly!involved!in! the!policy!process.!However,!there!were!good!reasons!why!these!councils! should!be!considered!important!and!so!be!included.!The!coal!industries! associated!with!these!councils!represent!significant!contributions!to!the! national!economy,!either!through!employment,!export!value,!the!provision! of!lowOcost!electricity,!or!energy!security.!This!suggests!that!CCoA’s!views! would!at!least!be!considered!in!the!process!of!designing!the!CPRS!policy.! But!there!was!also!a!discursive!component!to!this!picture.!People!of!

! ! 192! Chapter!7:!Local!visions! regional!Australia!more!generally!typify!the!proverbial!‘Aussie!battlers’!–! those!that!work!persistently!hard!against!the!odds!–!who!form!a!part!of! Australia’s!national!identity.!Excluding!regional!Australia!(and!in!this!case! the!local!councils)!can!be!a!particularly!risky!and!damaging!electoral! move,!as!recent!governments!have!become!acutely!aware.5!Some!have! even!argued!that!the!neglect!of!regional!Australia!played!a!significant!role! in!the!rapid!rise!of!Pauline!Hanson’s!One!Nation,!which!appealed!to! disillusioned!regional!voters,!predominantly!in!Queensland,!by! symbolising!the!struggles!of!the!Aussie!battler!(see!for!example,!Clyne,! 2005;!McManus!&!Pritchard,!2000;!Tonts!&!HaslamOMcKenzie,!2005).!! Yet!these!factors!still!do!not!guarantee!a!voice!at!the!table,! particularly!since!the!Rudd!government!was!in!such!a!comfortable! electoral!position.!Here!the!link!between!regional!communities!and! industry!was!crucial!in!shaping!the!CPRS!policy.!Industry!was!somewhat! subdued,!or!at!least!less!overt!in!their!rejection!of!climate!policy!measures! in!the!early!years!of!the!Rudd!government.!According!to!Hamilton!(2009,! p.!2),!they!nevertheless!remained!active.! It!was!apparent!early!in!2008!that!behind!the!scenes!the!fossil!fuel! lobby!was!organising.!They!martialled!their!troops!and!rearmed! themselves!with!arguments,!fighting!funds,!lobbyists!and!dodgy! economic!studies.!They!rebuilt!their!networks!in!government!and!the! public!service,!insinuated!themselves!into!policy!processes,! schmoozed!backbenchers!and!dined!privately!with!ministers!and! their!staff.!They!whispered!about!how!important!the!old!energy! industries!are!to!the!economy,!how!Labor!voters!value!their!jobs,!and! how!they!will!take!their!business!offshore.! ! Industry!concerns!are!typically!well!received!by!government,!in!that! business!generally!occupies!a!privileged!position!in!government!relations! (Matthews,!1993;!Newell!&!Paterson,!1998).!However,!this!time!industry! came!up!against!the!primary!climate!policy!adviser,!Ross!Garnaut,!who! had!very!clearly!stated!his!opposition!to!the!provision!of!free!permits,! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!For!example!regional!dynamics!played!a!significant!role!in!the!1998!federal!election,! and!also!the!1999!Victorian!state!election.!

! ! 193! Chapter!7:!Local!visions! advising!the!government!to!hold!its!nerve!(Garnaut,!2013).!To!emphasise! and!reinforce!their!concerns,!industry!strategically!used!the!spectre!of! community!loss!to!highlight!the!inequities!of!the!CPRS.! It!is!imperative!that!EITE!industries,!and!the!communities!they! support,!continue!to!grow!in!Australia!through!sustaining!and! expansion!investment!(…)!Alcoa!is!a!major!employer!supporting! 7200!direct!jobs!–!including!6200!employees!and!around!1000!fullO time!contractors.!Most!of!these!jobs!are!located!in!local!communities! in!regional!Australia.!The!stability!and!longevity!of!Alcoa’s!operations! provides!stable,!longOterm!jobs!for!local!communities!(Alcoa,!2008,! pp.!1,!6).! ! This!strategy!to!link!the!CPRS!to!the!livelihood!of!regional!Australia,!aided! industries’!own!business!concerns!while!simultaneously!drawing! attention!more!directly!to!the!concerns!of!regional!communities!like!the! Latrobe!Valley.!Hence!it!was!a!mutually!beneficial!alliance.!This!powerful! discourse!coalition!was!formed!around!the!storyline!of!adverse!effects.! This!discourse!coalition!ran!deeper!than!just!community!and! industry.!It!had!important!links!with!a!number!of!politicians!who!had!close! ties!to!regional!Australia!and!lobbied!on!their!behalf.!In!the!Latrobe!Valley,! Russell!Northe!(State!Member!for!Morwell)!and!Darren!Chester!(Federal! Member!for!Gippsland),!both!National!Party!members,!have!been!strong! advocates!for!the!region!and!have!continually!emphasised!the!adverse! effects!of!a!carbon!price.! My!record!in!relation!to!the!climate!change!debate!is!clear!for!all!to! see.!I!spoke!on!this!topic!during!my!maiden!speech!and!told!the! House!that!Gippslanders!are!at!the!pointy!end!of!the!climate!change! debate.!It!is!the!families!who!rely!on!incomes!from!industries!such!as! power!generation!at!Latrobe!Valley!and!farming!who!will!bear!the! brunt!of!any!decisions!for!Australia!to!go!it!alone!without!a! worldwide!agreement.!I!repeat!my!earlier!remarks:!given!our! nation’s!contribution!to!global!emissions!is!less!than!two!per!cent,! any!policy!that!sacrifices!jobs!in!my!region!will!be!met!with!strong! resistance!by!the!local!community!(Chester,!2009).!! ! The!Victorian!government!also!used!the!adverse!effects!storyline!to! advocate!on!behalf!of!the!region.!

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While!Victoria!notes!that!there!is!potential!for!many!regions!to!be! adversely!affected!by!the!CPRS,!and!not!all!will!relate!solely!to! electricity!sector!adjustment,!economic!modelling!done!to!date! repeatedly!indicates!that!the!Latrobe!Valley!will!likely!be!the!most! strongly!affected!region!in!Australia.!Victoria!believes!there!is!a! strong!case!for!taking!preOemptive!action!in!the!Latrobe!Valley!to! achieve!the!best!structural!adjustment!outcomes!(Victorian! Government,!2008,!p.!13).! ! Some, but!not!all,!members!of!this!discourse!coalition!knowingly!and! deliberately!undermined!the!credibility!of!a!carbon!price.!This!had! significant!implications!for!the!Federal!government's!proposed!CPRS.!As! the!process!evolved,!particularly!between!the!release!of!the!CPRS!Green! Paper!and!the!White!Paper,!the!government!cautiously!and!subtly! distanced!itself!from!the!Garnaut!Review.!As!Macintosh,!Wilkinson,!and! Denniss!(2010)!note,!although!the!Garnaut!Review!began!as!one!of!the! primary!inputs!into!decisions!on!mitigation!targets!and!the!ETS,!it!was! downgraded!and!became!merely!one!of!a!number!of!inputs!into!the!policy! process.!! The!two!volume!CPRS!White!Paper!was!released!in!December!2008.! Volume!one!outlined!the!design!of!the!CPRS,!and!volume!two,!its! assistance!measures,!which!covered!EITE!industries,!stronglyOaffected! industries!and!communities,!and!households.!Under!the!scheme!the!most! emissionsOintensive!industries!would!receive!90!per!cent!of!their!permits! for!free.!For!coalOfired!power!generation!industries,!there!was!an! electricity!sector!adjustment!scheme!worth!$3.8!billion!over!the!first!five! years!of!the!scheme.!In!total,!industry!assistance!was!estimated!to!be!more! than!$16.4!billion!over!the!first!five!years!(ACF,!2009).!This!level!of! assistance!was!designed!not!only!to!protect!business!in!terms!of!asset! value,!but!also!to!guard!against!industry!closures.!This!would!protect! resourceOdependent!communities,!including!the!Aussie!battlers!and!their! jobs.!These!concessions!severely!compromised!the!scheme's!efficiency,! which,!in!conjunction!with!those!factors!outlined!above,!namely!the!lack!of!

! ! 195! Chapter!7:!Local!visions! political!support!from!both!the!Greens!and!the!Coalition!under!the! leadership!of!Abbott,!made!it!particularly!difficult!for!the!Rudd! government!to!get!the!policy!through!the!Parliament.! ! The,Gillard,government,and,the,Council, ! The!local!as!a!constraining!force!on!transitioning!is!not!necessarily!an! inherent!feature!of!all!communities!dependent!upon!fossil!fuel!industries.! The!outcomes!just!mentioned!may!say!more!of!the!quality!of!the!process! used!by!the!Rudd!government!to!deal!with!the!local!as!it!sought!to!develop! national!policy.!The!subsequent!Gillard!government!appeared!to!have! more!success!balancing!the!localOnational!dynamic.!As!a!result!it!faced!a! less!hostile!local!force.!This!approach!was!driven!by!a!desire!to!achieve! community!consensus,!and!it!recognised!the!discursive!power!of!the! community.! I!was!concerned!that!if!you!were!going!to!do!something!as!big!to!your! economy!as!put!a!price!on!carbon,!with!the!economic!transfer!that! implies!...!you!need!a!lasting!and!deep!community!consensus!to!do!it! …!I!don't!believe!we!had!that!last!and!deep!community!consensus! (Gillard,!2010a).!! ! The!Gillard!government!adopted!a!more!'handsOon'!approach!to! addressing!community!concerns.!The!day!after!announcing!of!the!Clean! Energy!Future!package!on!10!July!2011,!Simon!Crean,!then!federal! Minister!for!Regional!Development,!visited!the!Latrobe!Valley.!Gillard! followed!five!days!later!saying,!! ...!the!perspective!I!am!bringing!to!change!as!we!go!about!pricing! carbon!and!dealing!with!the!2000!megawatts!of!the!dirtiest! electricity!generation!is!a!perspective!about!standing!alongside! communities.!Making!sure!we!work!with!communities,!we!listen!to! their!voice!and!we!generate!for!them!a!strong!economic!future!…! That's!why!I'm!here!today!to!start!a!conversation!with!this! community!with!an!assurance!that!we!will!keep!working!through! with!them.!It's!not!my!intention!to!leave!this!community!or!indeed! any!other!community!in!the!country!in!the!lurch!the!way!we!saw! them!left!in!the!lurch!in!the!era!of!privatisation!under!the!Victorian! Liberal!government!(Gillard,!2011).!!

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This!strategy!to!actively!engage!with!the!Latrobe!Valley!community! led!to!the!formation!of!Latrobe!Valley!Transition!Committee!(LVTC).!This! committee!consisted!of!the!deputy!secretaries!of!the!Department!of! Regional!Australia,!Regional!Development!and!Local!Government,!and!the! Victorian!Department!of!Planning!and!Community!Development.!The! committee!also!included!representatives!from!Latrobe!Valley!local! councils,!the!Regional!Development!Australia!Gippsland!committee,! unions,!industry,!education,!and!community!service!sectors.!The! committee's!diversity!was!considered!an!important!component!in! attempts!to!alleviate!community!concern!and!division,!but!it!also!assisted! in!developing!a!shared!vision.! We!were!able!to!get!this!Latrobe!Valley!Transition!Committee!going,! which!had!a!very!important!element,!which!we!have!maintained!to! this!day,!and!that!is!it!had!to!be!diverse!it!had!to!consist!of!academia,! which!it!does!with!Monash!Gippsland!up!here.!Of!course!it!consisted! of!unions,!power!station!owners,!environmentalists,!council! community!members,!forestry,!private!small!medium!enterprises.!So! this!is!a!very!diverse!group!of!people!that!we!got!started!with.!The! key!element!was!they!were!all!willing!to!forgo!their!personal!agendas! to!some!extent!for!the!greater!good!for!the!overwhelming!issue!that! affected!us!all.!And!that!has!been!the!outstanding!feature!of!our! campaign.!It’s!never!mentioned!in!any!great!detail!but!to!me!it!was!an! absolute!paramount!importance!that!we!didn't!get!bogged!down!in! some!group!saying!'we!want!likeOforOlike!jobs'!and!another!person! saying!'we!want!maximum!price!for!our!power!station'!or!another! group!saying!'no!biomass!is!the!answer'.!And!this!is!what!often! happens!in!the!past.!If!you!get!a!particular!overwhelming!issue! politically!it!ends!up!being!a!divisive!response!to!some!overwhelming! issue.!But!this!is!not!the!case!here!and!I!think!that!has!been!its!great! strength!without!a!doubt.!Consequently!partly!because!of!that!and!of! other!reasons!we've!been!able!to!attract!and!develop!relationships! very!significant!relationships,!with!State!and!federal!ministers! (Latrobe!City!Council!interview!#26).! !! Arguably!the!committee's!greatest!strength!was!its!involvement! with!both!State!and!federal!ministers,!formalised!through!an!MOU.!The! objectives!of!the!committee!had!remained!virtually!unchanged!from!the! LRC!two!decades!earlier,!but!its!governance!structure!evolved!to!better! reflect!complexity.!

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Figure!4:!Memorandum!of!understanding!between!the!LVTC!and! State!and!federal!ministers.!

!

! Source:!RDV!(2011).! ! This!process,!unlike!previous!committee!attempts,!was!structured!to! provide!the!Latrobe!Valley!with!a!direct!institutional!link!into!federal! political!decisionOmaking!processes.!Latrobe!Valley!transition!issues!were! now!formally!integrated!into!both!State!and!federal!regional!development! portfolios.!This!in!turn!took!the!Latrobe!Valley's!concerns!directly!to! Cabinet.!By!including!Liberal!State!and!Labor!federal!government members,!the!political!dynamic!that!created!the!LVTC!probably!helped!to! generally!depoliticise!the!issue!of!transitioning.! We’d!also!pushed!this!need!for!governments!of!whatever!persuasion! to!work!together!to!make!sure!we!got!the!transition!right.!So!then!a! number!of!things!flowed!from!that,!culminating!in!Crean!and!Ryan! agreeing!to!jointly!chair!this!overall!transition!group!and!agreeing!to! put!aside!their!political!differences!and!say!'well!okay,!whilst!we! disagree!with!the!carbon!tax!and!the!clean!energy!package!more!

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broadly!we!understand!that!support!for!this!region!will!be!required! from!both!State!and!Federal!governments!to!ensure!that!we!actually! get!a!smooth!transition!for!this!community'!(Latrobe!City!Council! interview!#15).! ! The!transition!committee!was!established!in!some!ways!to!try!and! manage!the!politics!around!the!transition,!to!recognise!the!politics! around!the!transition,!and!manage!it!well!in!order!to,!in!a!sense,!get! the!best!out!of!the!politics!of!it.!So!it!was!working!for!a!transition!not! against!the!transition!(Regional!Development!Victoria!interview! #19).! ! Although!the!committee's!participants!were!not!aware!of!the! transition!management!(TM)!model!used!in!the!Netherlands,!there!are! similarities,!specifically!in!terms!of!the!processes!involved.!van!der!Brugge! and!van!Raak!(2007,!p.!40)!describe!the!TM!process!as!a!cycle!between! four!activity!clusters:!the!establishment!and!development!of!a!transition! arena;!the!creation!of!a!shared!problem!perception,!longOterm!integrated! visions,!transition!pathways,!and!agendas;!the!mobilisation!of!actors,!and! knowledge!development!through!experimentation;!and!the!monitoring! and!evaluation!of!the!transition!process,!resulting!in!adjustment!of!the! problem!perception!and!potential!solution!paths!in!a!next!cycle.!Under!this! model!the!LVTC!resembles!a!transition!arena:!a!small!group!of!‘changeO agents’!from!diverse!backgrounds,!who!work!together!to!develop!a!new! and!shared!visionary!story!and!the!pathways!to!achieving!this!(Roorda!et! al.,!2012).!! The!LVTC!process!culminated!in!the!Latrobe!Valley!Industry!and! Employment!Roadmap!(RDV,!2012).!This!plan!set!the,!‘longOterm!strategic! framework!for!guiding!future!investment!and!collaboration!with!the! region's!local!governments,!businesses!and!communities!…!The!roadmap! includes!early!actions!and!intervention!to!create!employment!and! stimulate!new!investment,!ahead!of!restructuring!the!power!generation! sector’!(RDV,!2012,!p.!1).!This!framework!is!guided!by!seven!strategic! directions!and!actions,!as!outlined!in!the!Roadmap!(RDV,!2012,!p.!3):!

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1.!Transitioning!business!and!workers:!ensuring!workers!and! businesses!affected!by!the!economic!transition!have!employment! and!business!opportunities.! ! 2.!Strengthening!the!workforce:!ensuring!education!provision!and! local!industry!needs!are!better!aligned,!and!participation!in!training! and!higher!education!increases!are!in!line!with!future!industry! skills!demands.! ! 3.!Infrastructure!for!growth:!ensuring!governments!and!industry! plan!and!coordinate!infrastructure!to!support!industry!growth!and! diversification.! ! 4.!Strengthening!innovation!and!competitiveness:!ensuring! businesses!are!supported!to!increase!their!competitiveness!and! drive!innovation.! ! 5.!Attracting!and!facilitating!investment:!ensuring!existing! businesses!are!helped!to!expand,!and!new!businesses!are! encouraged!to!locate!in!the!Latrobe!Valley.! ! 6.!Enhancing!liveability:!ensuring!the!Latrobe!Valley!maintains!and! enhances!its!reputation!as!a!liveable!community.! ! 7.!Working!together!–!next!steps:!ensuring!governments,!business,! unions!and!other!regional!stakeholders!work!cooperatively!to! diversify!and!grow!the!region’s!economy.! ! Empirical!work!has!shown!that!transition!arenas!can!play!a! significant!role!in!developing!new!ideas!(see!for!example,!van!der!Brugge,! Rotmans,!&!Loorbach,!2005).!Given!this,!the!LVTC!appears!a!valuable! development.!Although!it!is!too!early!to!assess!the!committee's!

! ! 200! Chapter!7:!Local!visions! performance,!it!seems!to!have!had!some!political!success!in!fostering!a! more!cooperative!transitionOpolicy!environment.!In!his!analysis!of! regionalism!in!Australia,!Beer!(2006,!p.!131)!argues!that,!! Australian!federalism!lies!at!the!heart!of!the!failure!to!develop! appropriate!regional!policies!…!the!Australian!government!has!the! funding!that!would!empower!an!effective!regional!development! framework,!the!State!and!Territory!governments!have!the! constitutional!power,!and!local!governments!have!neither!the! funding!or!the!power,!but!have!the!commitment!needed!to!bring! about!change.!! ! The!Gillard!government!attempted!to!address!this!imbalance!by! using!the!LVTC!to!provide!the!local!dimension!with!a!voice.!This!reduced,! if!only!slightly,!discontent!within!the!community,!which!in!turn!weakened! the!adverse!affects!storyline.! Clearly,!as!this!discussion!highlights,!the!local!dynamic!in!the! Latrobe!Valley!occupies!a!prominent!role!in!national!SET!debates!in! Australia.!When!this!voice!is!excluded!from!the!political!institutional! process!of!transitioning,!disproportionally!affected!communities!tend!to! act!as!a!veto!coalition.!On!the!other!hand,!if!integrated!into!the!policy! process,!the!local!dynamic!can!improve!the!overall!efficiency!of!the! scheme;!this!finding!tends!to!support!the!claims!made!by!transition! management!advocates!in!that!an!integrative!and!reflexive!design!is!most! conducive!to!managing!complex,!longOterm!transitions.! However,!as!Kemp!(2005,!p.!2)!notes,!‘for!sustainability!transitions,! overall!frame!conditions!must!reflect!environmental!costs!–!prices!should! “speak”!the!environmental!truth’.!This!means!that!the!transition! management!model,!or!anything!similar,!is!only!as!strong!as!the!frame! conditions!permit.!These!frame!conditions!themselves,!as!Kemp!notes,!are! something!for!‘government!and!politics’.!So!while!this!local!dynamic!can! offer!insights!into!why!and!how!national!policy!is!shaped,!it!does!not! necessarily!decide!its!fate!and!is!only!one!of!many!aspects.!!

! ! 201! Chapter!7:!Local!visions!

! Conclusion! ! Using!the!Latrobe!City!Council!as!a!case!study!and!the!issues!around! carbon!pricing,!this!chapter!brings!into!focus!the!role!of!the!local!in! shaping!Australia’s!SET!narrative.!In!doing!so!it!has!explored!the!multiO level!nature!of!governance!and!how!competing!visions!were!dealt!with! and!integrated!into!the!policy!process.!This!SET!narrative!reveals! important!insights!into!policy!change.!It!finds!that!the!local,!when! excluded!from!the!policy!process,!acts!as!a!constraining!force.!Similarly,! when!integrated,!as!was!partially!the!case!under!the!Gillard!government! through!the!LVTC,!the!potential!for!policy!change!is!enhanced.! The!Australian!Labor!Party!sees!the!introduction!of!a!price!on! carbon!as!a!key!step!in!transitioning!the!electricity!regime!towards! ecological!sustainable!development.!The!Rudd!government,!after!being! elected!in!2007,!sought!to!establish!a!strong!narrative,!including!an! economic!case,!for!climate!action.!Initial!movements,!in!particular!ratifying! the!Kyoto!protocol!and!establishing!a!Department!of!Climate!Change,! indicated!marked!shift!on!climate!policy!by!the!new!government,! compared!to!the!previous!Howard!government.!Garnaut's!work!on!the! importance!of!an!ETS!was!highly!influential!during!this!stage.!When! combined!with!strong!leadership!at!the!federal!level,!Australia!appeared! to!be!positioning!itself!for!an!ETS!commencing!in!2010.!Importantly,!the! Rudd!government!had!overwhelming!support!from!the!electorate!to! introduce!an!ETS,!and!support!from!the!States!and!Territories,!all! governed!by!Labor!at!the!time.!This!marked!the!pivotal!moment!for!SETs! in!Australia!in!terms!of!policy!change!and!the!potential!to!guide!Australia! towards!an!ecological!sustainable!future.! However,!the!period!between!the!government's!Green!Paper!and! White!Paper!was!characterised!by!intense!disagreements!between!

! ! 202! Chapter!7:!Local!visions! stakeholders!and!government,!which!informed!the!translation!of!the!CPRS! into!policy.!The!resulting!CPRS!White!Paper!was!greatly!diluted!to!the! point!where,!if!implemented,!it!would!have!resembled!little!more!than! business!as!usual.!The!opportunity!for!strong!and!credible!climate!policy! appeared!lost.!This!outcome!was!largely!the!result!of!intense!lobbying!on! behalf!of!the!fossil!fuel!industry!(Garnaut,!2009b;!Marr,!2010;!Pearse,! 2009;!Pezzey!et!al.,!2010).!Lobbying!groups!though!had!to!shift!their! strategies!to!keep!emissions!trading!off!the!political!agenda.!Whereas! under!the!Howard!government,!resource!industries!only!needed!to! persuade!the!government,!under!the!Rudd!government,!industry!now! needed!to!convince!an!electorate!that!largely!supported!such!a!scheme.! As!detailed!in!this!chapter,!this!was!partly!achieved!by!drawing! attention!to!the!adverse!effects!of!carbon!pricing,!and!how!these!would!be! disproportionality!suffered!by!Australia's!many!resourceOdependent!local! communities.!This!strategy!of!portraying!the!local!as!the!victim!provided! industry!with!a!significant!ally!in!regional!Australia.!Although!the!interests! of!industry!and!local!community!may!differ!(i.e.!industry!is!concerned!with! the!value!of!their!assets,!and!communities!with!jobs),!these!stakeholder! groups!were!able!to!form!a!powerful!discourse!coalition!centred!around! adverse!effects!by!drawing!on!issues!of!equity!and!fairness.!This!discourse! played!a!significant!role!in!shaping!the!CPRS.!It!became!more!about! assistance!measures!and!lost!sight!of!its!primary!policy!objective,!to! reduce!emissions.!! From!this!perspective!the!inclusion!of!the!local!element!provides!a! more!nuanced!view!of!why!industry!was!particularly!influential!in!eroding! the!legitimacy!of!the!CPRS.!However,!as!illustrated!by!the!Gillard! government's!attempts!to!engage!local!community,!the!presence!of! disproportionately!affected!communities!need!not!always!be!a! constraining!force!on!climate!policy.!Engagement!does!not!remove! concern!altogether!but!it!does!play!a!role!in!alleviating!concern,!and!this!is!

! ! 203! Chapter!7:!Local!visions! something!the!Rudd!government!failed!to!do.!Ultimately!its!vision!was!not! a!shared!one.! ! The!Rudd!government!had!initially!attempted!to!define!a!new! national!interest,!by!elevating!Australia's!climate!laggard!status!to!that!of!a! more!globally!responsible!citizen.!But!the!government!was!unable!to! escape!the!aspect!of!national!interest!so!effectively!defined!by!the! previous!Howard!government:!the!competitive!advantage!of!our! resources.!This!old!national!interest!had!earlier!led!Australia!to! successfully!negotiate!an!increase!in!emissions!under!the!Kyoto!Protocol! (one!of!only!three!countries!to!do!so).!With!the!demise!of!the!CPRS! Australia!was!not!forced!to!innovate!its!electricity!regime.!The!fossil!fuel! hegemonic!bloc!remained!intact.!Nevertheless,!the!Rudd!government! represented!the!first!real!attempt!in!Australia!to!introduce!a!price!on! carbon,!and!although!it!did!not!succeed!it!laid!the!groundwork!for!further! attempts.!A!game!changer!was!needed,!and!this!came!in!the!form!of!a! minority!government.!

!

! ! 204! !

Chapter(8(

Diverging(paths:(climate(and(energy(policy(under( the(Gillard(government(

! ! Introduction( ! In!2011,!after!almost!two!decades!of!debate!over!the!merits!of!carbon! pricing,!including!thirtyOfour!separate!inquiries,!the!Australian!Parliament! passed!the!Clean!Energy!Act.!This!legislation!included,!among!other!things,! a!price!on!carbon,!which!came!into!effect!on!1!July!2012.!Then!in!2012!the! Australian!government!released!its!Energy!White!Paper,!which!outlined!its! longOterm!policy!framework!to!guide!the!transformation!of!Australia’s! energy!sector.!! This!chapter!draws!on!the!themes!of!coOevolution!and!steering,!two! key!characteristics!of!SETs,!to!assess!whether,!and!to!what!extent,!the! Gillard!government’s!climate!and!energy!policies!have!altered!the! trajectory!of!SETs!in!Australia.!In!doing!so!it!moves!beyond!climateO specific!and/or!energyOspecific!analyses!to!consider!how!these!two!policy! domains!have!coOevolved!with!one!another!to!shape!this!trajectory.! The!chapter!is!divided!into!four!parts.!It!begins!with!a!review!of!the! Gillard!government’s!climate!policies,!focusing!on!the!different!strategies! the!government!used!to!obtain!support!for!their!Clean!Energy!Future! Package!(CEFP),!in!particular,!their!policy!to!price!carbon.!Part!2!details! the!government’s!EWP!and!the!direction!of!energy!policy,!illustrating!the! emerging!tensions!between!industry!and!environment!groups.!Parts!3!and! 4!bring!into!the!analysis!the!themes!of!steering!and!coOevolution! respectively.!Part!3!examines!the!government’s!efforts!to!steer!the!

! 205! Chapter!8:!Diverging!Paths! electricity!regime!towards!sustainability,!focussing!on!the!role!of!the!RET! and!the!Contracts!for!Closure!scheme.!In!relation!to!the!latter,!analogies! are!drawn!with!Germany’s!nuclear!phaseOout!strategy!to!illustrate!the! potential!for!steering!regime!change!in!the!Australian!context.!Part!4! examines!the!nature!of!the!relationship!between!the!government’s!climate! and!energy!policies!and!analyses!what!this!might!mean!for!SETs!in! Australia.! By!using!these!SET!characteristics!as!a!guide,!this!analysis!reveals! important!insights!into!enabling!and!constraining!factors!of!regime! change.!Although!attempts!to!bring!about!change!through!civil!society! have!met!fierce!and!often!wellOorganised!opposition,!considerable!gains,! notably!the!introduction!of!a!price!on!carbon,!have!been!made.!!These! gains!were!possible!through!a!range!of!concessions,!which!led!to! contradictions!in!the!current!government’s!policy!position.!This!chapter! finds!that!attempts!to!reconcile!economic!and!ecological!values!has!led!to! diverging!climate!and!energy!policy!paths,!which!has!inhibited!the! progress!of!a!SET.! ! ! Australia's(climate(strategy(and(the(minority(government( ! When!Gillard!took!over!from!Rudd!as!Prime!Minister!on!24!June!2010!she! immediately!sought!to!reposition!Labor’s!climate!strategy:! ...!if!we!are!to!have!a!price!on!carbon!and!do!all!the!things!necessary! for!our!economy!and!our!society!to!adjust!we!need!a!deep!and!lasting! community!consensus!about!that.!We!don’t!have!it!now.!That’s!why!I! said!today!if!elected!as!Prime!Minister!at!the!forthcoming!election! then!I!will!take!the!time!to!reprosecute!the!case!with!the!Australian! community!to!develop!that!deep!and!lasting!consensus!(Gillard,! 2010b).! ! ! In!many!ways!this!was!a!safe!strategy.!It!did!not!reject! anthropogenic!climate!change!altogether,!yet!advocated!a!cautionary! policy!approach!that!appeared!to!keep!immediate!action!off!the!table.!

! ! 206! Chapter!8:!Diverging!Paths!

Climate!policy!had!loomed!large!as!a!factor!in!the!removal!of!past!political! leaders:!John!Howard,!Brendan!Nelson!(to!a!lesser!extent),!Malcolm! Turnbull,!and!Kevin!Rudd.!From!a!personal!longevity!perspective!at!the! very!least,!Gillard's!move!appeared!clever.!It!was!designed!primarily!to! take!the!heat!out!of!the!climate!debate.!! Despite!this!stated!position,!within!fifteen!months!the!Australian! Parliament!had!passed!the!Clean!Energy!Act!to!introduce!a!price!on! carbon.!Ironically,!considering!the!stated!emphasis!on!‘community! consensus’,!the!legislation!had!come!when!public!support!for!climate! action!was!well!below!levels!seen!during!Rudd's!term.!This!period!was! also!characterised!by!a!more!hostile!federalist!dynamic!since!most!States! had!shifted!to!conservative!governments.!This!further!eroded!the!potential! for!climate!action.!How!then!do!we!explain!this!shift!toward!policy! progress!on!carbon!pricing?!! The!2010!federal!election,!which!resulted!in!a!hung!parliament,! proved!to!be!a!decisive!moment!for!Australian!climate!and!clean!energy! policy.!This!section!details!this!volatile!yet!highly!innovative!policy!period,! concentrating!on!its!climate!policy!component.!! ! Negotiating,a,price,on,carbon, ! Immediately!after!the!2010!election,!the!Labor!Party!and!the!Coalition! each!sought!to!negotiate!a!deal!with!the!six!crossbenchers.!After!seventeen! days!of!deliberation,!independents!Tony!Windsor!and!Rob!Oakeshott! declared!their!support!for!Gillard!who,!having!earlier!received!the!support! of!Adam!Bandt!(Greens)!and!Andrew!Wilkie!(Independent),!had!now! acquired!four!of!the!six!crossbenchers.!This!allowed!Labor!to!form!a! minority!government.!The!Greens,!who!held!the!balance!of!power!in!the! Senate,!found!themselves!in!a!highly!advantageous!position!as!they!now! also!had!a!share!of!the!power!in!the!Lower!House!via!Bandt.!

! ! 207! Chapter!8:!Diverging!Paths!

With!Labor!left!with!little!room!to!manoeuvre,!the!Greens!took! advantage!of!a!rare!and!unique!political!opportunity.!This!led!to!a!formal! agreement!between!the!Labor!Party!and!the!Greens,!called!the!‘Parties’,!on! the!proviso!that,! Australia!must!tackle!climate!change!and!that!reducing!carbon! pollution!by!2020!will!require!a!price!on!carbon.!Therefore!the! Parties!agree!to!form!a!well!resourced!Climate!Change!Committee! which!encompasses!experts!and!representative!ALP,!Greens,! independent!and!Coalition!parliamentarians!who!are!committed!to! tackling!climate!change!and!who!acknowledge!that!reducing!carbon! pollution!by!2020!will!require!a!carbon!price!(Brown,!2010).! ! This!agreement!was!also!beneficial!for!the!Labor!Party.!It!allowed! them!to!form!government,!and!its!formal!alliance!with!the!Greens! provided!the!Labor!Party!with!a!favourable!passage!through!the!Senate,! which!they!could!then!use!to!pursue!their!own!reform!agenda.! Importantly,!this!alliance!led!to!a!markedly!different!trajectory!in!climate! policy!in!Australia.! ! Gillard's!community!consensus!and!proposed!citizens'!assembly! were!replaced!by!a!MultiOParty!Climate!Change!Committee!(MPCCC),! proposed!by!the!Greens.!This!committee!was!chaired!by!Gillard,!with!Greg! Combet,!the!Labor!Climate!Change!and!Energy!Efficiency!Minister,!and! Christine!Milne,!the!Greens!deputy!leader,!as!the!joint!deputy!chairs.1!Its! other!members!were:!Deputy!Prime!Minister!and!Treasurer!Wayne!Swan;! the!leader!of!the!Greens,!Senator!Bob!Brown;!and!two!Independents!who! had!given!their!support!to!the!Labor!Party,!Tony!Windsor!and!Rob! Oakeshott.!Advising!the!MPCCC!was!a!panel!of!four!experts:!Patricia! Faulkner,!Ross!Garnaut,!Rod!Sims,!and!Will!Steffen.2!Also!assisting!the! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!Christine!Milne!became!the!leader!of!The!Greens!in!2012.! ! 2!Each!of!these!members!had!a!history!of!working!in!government!and!each!brought! different!skills!and!knowledge.!Patricia!Faulkner!provided!advice!on!the!impacts!of! climate!change!policies!on!the!more!disadvantaged!people!in!community.!Will!Steffen! provided!advice!on!the!science!of!climate!change,!and!Ross!Garnaut!and!Rod!Sims! provided!advice!on!economic!and!energy!considerations!of!climate!policy.!

! ! 208! Chapter!8:!Diverging!Paths!

MPCCC!was!the!parliamentary!secretary!for!Climate!Change!and!Energy! Efficiency,!Mark!Dreyfus,!and!the!newlyOelected!Greens!member!Adam! Bandt.3! Where!the!MPCCC!differed!from!other!government!committees!was! its!direct!link!with!the!Cabinet!process.!Meetings!were!generally!held!in! the!Cabinet!room!with!the!Cabinet!division!of!the!Department!of!Prime! Minister!and!Cabinet!responsible!for!minute!taking.!All!discussions!and! findings!were!taken!to!the!Cabinet.!This!gave!the!Greens!a!degree!of! influence!in!the!Cabinet!policyOmaking!process,!but!also!directly!and! formally!brought!in!upOtoOdate!assessments!of!the!science!(from!the! Climate!Change!Commission,!the!Australian!Academy!of!Science,!the! Bureau!of!Meteorology!and!CSIRO,!and!other!eminent!bodies).4!As!one! interviewee!noted,!this!important!inclusion!remedies!what!had!been!an! area!of!concern:! Australia!doesn't!have!very!good,!how!would!I!say,!channels!for!the! science!advice!to!be!provided!to!policymakers!or!have!explicit! structures.!So!in!the!United!States!the!US!National!Academy!of! Sciences!can!be!commissioned!to!prepare!reports!by!the!executive! branch!by!the!President!or!by!the!House!of!Representatives!or! Congress.!It!also!exists!for!the!Royal!Society!in!the!UK.!But!it!doesn't! exist!for!the!Australian!Academy!of!Science!(climate!change!advisor! interview!#23).! ! The!Greens!made!a!further!attempt!to!reduce!the!influence!of!lobby! groups!on!climate!policy!and!ensure!future!independent,!scienceObased,! decisionOmaking.!The!Greens,!through!the!MPCCC,!successfully!argued!for! the!establishment!of!two!agencies:!the!Climate!Change!Authority!(CCA)! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ! 3!The!government!also!invited!two!members!from!the!Opposition!to!join!the!MPCCC!on! the!condition!that!they!agree!that!climate!change!is!real!and!that!a!carbon!price!is!needed.! The!Opposition!declined!with!the!Coalition!climate!change!spokesperson!Greg!Hunt! stating!that!‘This!committee,!which!was!announced!today,!is!repugnant!because!it!has!a! test!that!somebody!must!sign!up!to!a!preordained!outcome!…!I!am!not!aware,!and!we!are! not!aware,!of!any!such!belief!test!on!a!parliamentary!committee!in!the!last!110!years’! (Rodgers,!2010).! ! 4!These!details!are!outlined!in!the!terms!of!reference!of!the!MPCCC!(see!DCCEE,!2010).!

! ! 209! Chapter!8:!Diverging!Paths! and!the!Clean!Energy!Finance!Corporation!(CEFC).!The!CCA!is!chaired!by!a! former!Reserve!Bank!governor,!and!its!CEO!is!Anthea!Harris,!who!was!the! NETT!Secretariat.!The!role!of!these!agencies!is!to!provide!advice!and!make! recommendations!to!the!Australian!government!on!climate!change! mitigation!initiatives.!This!includes:!emissions!reduction!targets!and! carbon!budgets;!the!RET;!the!Carbon!Farming!Initiative!(CFI);!and!the! National!Greenhouse!and!Energy!Reporting!(NGER)!system!(CCA,!2012).! The!CEFC!is!a!$10!billion!fund!dedicated!to!investment!in!clean!energy!that! excludes!CCS!technologies.!Its!creation!was!a!significant!boost!for! renewable!energy!technologies!in!Australia.!The!CEFC!was!designed!to! complement!and!operate!alongside!the!newlyOestablished!$3.2!billion! Australian!Renewable!Energy!Agency!(ARENA).5!In!this!structure!ARENA! operates!as!the!R&D!and!demonstration!component,!while!the!CEFC! concentrates!on!the!commercialisation!stage!of!renewable!energy! development.! The!Greens!had!won!some!significant!climate!policy!concessions! from!the!Labor!Party.!This!put!Gillard!in!a!compromising!position.!She!was! well!aware!that!her!preOelection!promise,!‘there!will!be!no!carbon!tax! under!a!government!I!lead’,!was!likely!to!be!overturned!with!the! involvement!of!the!Greens,!which!would!damage!her!and!her!government! politically.!In!many!ways!this!dynamic!was!a!reversal!of!the!Rudd! government’s!predicament.!Rudd!had!a!mandate!for!a!price!on!carbon!but! lacked!a!clear!passage!through!the!Parliament.!Gillard,!on!the!other!hand,! had!effectively!negotiated!the!Parliamentary!dynamic!but!faced! diminishing!public!support.!The!government!knew!that!in!order!to!survive! more!than!a!single!term,!it!had!to!convince!those!outside,Parliament.!To! accomplish!this!the!Gillard!government,!separate!from!the!MPCCC,!set!up! an!array!of!consultative!and!communication!formats.!They!included!the! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!ARENA!assumed!responsibility!of!the!Australian!Centre!for!Renewable!Energy!(ACRE)! and!also!the!Australian!Solar!Institute!(ASI)!

! ! 210! Chapter!8:!Diverging!Paths!

Roundtables!on!Climate!Change!and!the!Climate!Commission!headed!by!a! former!Australian!of!The!Year,!scientist!Tim!Flannery.!The!roundtables! were!formed!to!help!advise!the!government!on!climate!policy,!but!more! broadly!they!were!a!strategy!designed!to!isolate!the!Coalition!and!blanket! criticism.!That!is,!the!government!hoped!that,!by!involving!industry!and! environment!groups,!they!could!establish!consensus!and!legitimacy!for!a! carbon!price.6! The!members!of!the!MPCCC!and!the!roundtables!broadly!accepted! and!agreed!on!the!need!for!a!carbon!price.!However,!the!elaborate!web!of! policy!governance!the!government!had!created!for!this!process!–!which! included!different!political!parties,!business!and!industry,!NGOs,!scientists,! and!the!Cabinet!–!proved!difficult!to!manage:! ...!it!was!simultaneously!conducting!three,!possibly!four,! conversations.!The!first!conversation!was!a!conversation!within! government!as!to!what!the!policy!should!be.!The!second! conversation!was!a!conversation!with!the!MultiOParty!Climate! Change!Committee,!what!policy!was!likely!to!be!acceptable!and!have! the!numbers!in!the!Parliament.!The!third!conversation!was!a! consultation!with!stakeholders.!It!is!very!hard!for!the!government!to! simultaneously!have!a!conversation!internal!to!itself!with!the!MultiO Party!Climate!Change!Committee!and!with!external!stakeholders,! while!keeping!goodOfaith!negotiations!particularly!with!the!MultiO Party!Climate!Change!Committee.!So!the!feeling!among!many!of!the! stakeholders!in!the!roundtables!is!that!they!weren't!really! negotiating,!they!were!being!told!the!outcome,!well!the!government! was!listening.!It!wasn't!doing!that!we!think,!we!could!do!this,!we! think!we!can!do!that.!Because!the!government!was!constrained!in!the! capacity!it!could!signal!what!it!intended!to!do,!because!it!didn't!want! to!prejudice!its!negotiating!position!with!the!MultiOParty!Climate! Change!Committee.!So!this!was!partly!the!thing!that!the!government! in!Australia!were!experimenting!with.!A!minority!government.!How! do!you!do!goodOfaith!negotiations!in!the!MultiOParty!Climate!Change! Committee!at!the!same!time!as!engaging!in!a!meaningful!way!with! the!business!community?!And!that!was!very!difficult!(Department!of! Climate!Change!and!Energy!Efficiency!interview!#40).! !

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 6!Much!to!their!disapproval,!the!Greens!were!refused!access!to!the!Roundtables,!which! heightened!tensions!between!the!two!parties.!See!for!example!Ryan!(2010).!

! ! 211! Chapter!8:!Diverging!Paths!

This!process!was!further!complicated!by!industry's!heightened! anxiety!over!the!LaborOGreens!alliance.7!Despite!Combet’s!assurance!that! compensation!would!‘be!one!of!the!most!important!areas!of!policy! difference’!between!Labor!and!the!Greens!(Taylor,!2010),!industry! nevertheless!feared!the!role!of!the!Greens.!The!roundtables!became!a!new! forum!for!venting!concerns!and!a!potential!platform!from!which!to! influence!policy.!The!roundtables!comprised!two!separate!groups:!a!NonO Government!Organisation!Roundtable!on!Climate!Change!(NGORCC);!and! the!Business!Roundtable!on!Climate!Change!(BRCC),!which!included!an! Industry!Transitional!Assistance!Working!Group!and!an!Energy!Sector! Working!Group.!The!industry!sector!drew!on!previous!narratives,!namely! negative!economic!costs,!loss!of!jobs,!decreases!in!asset!value!that!would! threaten!energy!security,!and!sovereign!risk!issues.!! One!of!the!chief!protagonists!was!the!Australian!Industry! Greenhouse!Network!(AIGN),!which!rose!to!prominence!during!the!latter! Howard!years!(Pearse,!2005).!Although!not!officially!involved!in!the! Roundtables,!AIGN!represents!more!than!90!per!cent!of!Australia's!mining,! manufacturing,!and!energy!transformation!emissions.!Hence!many!of!its! members!were!formally!involved.8!Among!the!AIGN's!criticisms!of!the! proposed!Clean!Energy!Future!legislation!package,!it!suggested!electricity!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 7!See!for!example!Yeates!and!Morton!(2011).! ! 8!Members!of!AIGN!include!Australian!Aluminum!Council,!Australian!Coal!Association,! Australian!Food!and!Grocery!Council,!Australian!Industry!Group,!Australian!Institute!of! Petroleum,!Australian!Petroleum!Production!and!Exploration!Association,!Australian! Forest!Products!Association,!Cement!Industry!Federation,!Federal!Chamber!of! Automotive!Industries,!Minerals!Council!of!Australia,!National!Generators'!Forum,! Plastics!and!Chemicals!Industries!Association,!Adelaide!Brighton!Ltd,!Alcoa!World! Alumina!–!Australia,!BlueScope!Steel!Ltd,!BP!Australia!Ltd,!Caltex!Australia,!Chevron! Australia!Pty!Ltd,!ConocoPhillips!Australia,!CSR!Ltd,!ExxonMobil!Australia!Ltd,!Incitec! Pivot!Ltd,!Inpex!Browse!Ltd,!International!Power!Australia,!Leighton!Holdings!Ltd,!Origin! Energy!Ltd,!Qenos!Pty!Ltd,!Rio!Tinto!Australia!Ltd,!Santos!Ltd,!Shell!Australia!Ltd,! Stanwell!Corporation!Ltd,!Sucrogen!Ltd,!Tomago!Aluminum!Company!Pty!Ltd,! Wesfarmers!Ltd,!Woodside!Petroleum!Ltd,!Xstrata!Coal!Australia!Pty!Ltd.! !

! ! 212! Chapter!8:!Diverging!Paths! generators!should!be!provided!with!$10!to!12!billion!in!assistance!over! the!next!15!years.!The!Energy!Supply!Association!of!Australia,!which! participated!in!the!roundtables,!shared!this!view:! The!Energy!Security!Fund!provides!around!$5.5!billion!in!nominal,! preOtax!terms!to!affected!generators!over!a!six!year!period.! Additionally,!the!government!may!negotiate!for!the!closure!of!around! 2000!megawatts!(MW)!of!highly!emissionO!intensive!(>1.2tcarbon! dioxideOe/MWh)!coal!fired!generation!capacity!by!2020.! ! This!sum!does!not!adequately!address!the!impairment!of!asset!values! across!the!electricity!sector.!It!provides!virtually!nothing!for!the! black!coal!fired!generation!community!–!both!State!government!and! privately!owned.!ESAA's!analysis!suggests!that!just!8!or!9!out!of!the! 31!baseload!coal!plants!that!provide!the!energy!security!the! community!takes!for!granted!will!receive!assistance.!Even!fewer!will! be!eligible!for!closure!payments.!This!could!only!be!rectified!by! increasing!the!quantum!of!assistance!rather!than!reweighting!the! distribution!of!the!existing!assistance.!The!Association!urges!the! government!to!increase!the!quantum!of!the!assistance!and!to! broaden!the!eligibility!criteria!to!address!the!impacts!on!existing! investments!and!minimise!the!costs!of!future!energy!requirements! (ESAA,!2011,!pp.!5O6).! ! In!addition!to!these!concerns,!there!was!a!very!strong!emphasis!on!‘fair! share’!and!international!comparison:! ...!what!the!opponents!of!climate!change!action!have!done,!they!have! created!almost!a!test!of!international!action.!And!the!test!of! international!action!has!two!parts.!The!first!part!is!there!is!no! international!action!unless!there!is!a!globally!legally!binding!treaty! that!includes!all!major!emitters.!When!they're!being!really!tough!they! say!that!requires!absolute!emissions!reductions!by!all!countries.! Where!of!course!we!tend!to!think!about!developing!economies!will! still!grow!emissions!for!a!while!but!they'll!deviate!from!business!as! usual,!they’ll!peak,!then!they'll!decline.!But!they'll!say!as!long!as! China's!increasing!emissions,!we!shouldn't!do!anything.!And!then!the! other!test!they!apply!now,!is!there!is!no!evidence!that!acting!unless! they!have!a!carbon!price!…!What!the!opponents!of!change!are!doing! is!essentially!saying!global!action!requires!a!carbon!price!in!every! country.!And!if!they're!being!particularly!aggressive!they'll!say!every! country!includes!any!competitor!for!any!particular!subsector!of!the! economy.!So!that!for!LNG!they'll!say!well!Qatar!is!our!biggest! competitor,!until!Qatar!has!a!carbon!price!we!don't!have!sufficient! international!action!(Department!of!Climate!Change!and!Energy! Efficiency!interview!#40).! !

! ! 213! Chapter!8:!Diverging!Paths!

A!number!of!participants!highlighted!these!concerns!in!their!submissions! to!the!Clean!Energy!Future!legislation!package:! The!BCA!believes!that!the!right!policy!for!Australia!should!include!a! slow!and!steady!start,!with!a!low!initial!greenhouse!gas!emissions! price!during!the!fixed!price!period,!to!allow!for!an!orderly!economic! adjustment!to!higher!energy!and!greenhouse!gas!emissions!costs.!It! must!also!enable!Australia!to!move!in!tandem!with!real!action!on!the! part!of!our!major!competitor!countries!and!should!ensure!Australia’s! tradeOexposed!industries!do!not!face!higher!greenhouse!gas! emissions!costs!than!competitors!(suggesting)!full!offsetting!of!any! cost!impost!on!tradeOexposed!industries,!including!coal,!until!at!least! 80!per!cent!of!relevant!competitors!in!the!industry!have!introduced! comparable!effective!greenhouse!gas!costs!on!the!industry!(BCA,! 2011,!p.!3).! ! (We)!cannot!support!the!Clean!Energy!Future!plan.!The!NGF!has! many!concerns!about!the!impact!of!the!plan!on!the!economy,!in! particular!the!electricity!generation!sector:! The!starting!price!of!$23!per!tonne!is!far!higher!than!any!comparable! international!carbon!price!and!poses!a!significant!risk!to!the!energyO intensive!Australian!economy!(NGF,!2011,!p.!1).! ! The!Greens!were!highly!critical!of!what!they!described!as!this!‘rent! seeking’!behaviour!by!industry;!they!opposed!any!compensation!to! electricity!generators.!However,!the!carbon!price!message!was!not!sitting! well!with!the!public:!30!per!cent!were!in!favour!and!60!per!cent!opposed! to!a!carbon!price!(Newspoll,!2011).!The!Coalition's!relentless!and! extremely!effective!antiOcarbon!tax!campaign!was!being!propagated! through!various!media!outlets.!The!Gillard!government,!like!its! predecessors,!bowed!to!industry!pressure.!It!offered!a!‘healthy’! compensation!package!to!fossil!fuel!industries,!totalling!over!$17!billion! (Swoboda,!Tomaras,!&!Payne,!2011),!with!electricity!generators!receiving! a!$5.5!billion!share.!The!Greens!opposed!these!measures,!particularly!in! the!absence!of!a!cap!on!emissions,!but!they!had!won!some!important! concessions.9!These!included!the!CCA!and!the!CEFC,!as!well!as!a!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 9!As!noted!by!Environment!Victoria!(2011),!the!absence!of!an!emissions!cap,!combined! with!electricity!generator!compensation,!was!a!particularly!concerning!feature!of!the!

! ! 214! Chapter!8:!Diverging!Paths! commitment!to!a!target!of!80!per!cent!emissions!reductions!by!2050!(up! from!60!per!cent).!Given!these!concessions,!the!Greens!were!reluctant!to! pass!over!this!opportunity,!especially!considering!their!political!position.!! On!8!November!2011,!the!CEFP!passed!through!the!Australian! Senate.!It!stipulated!a!fixed!price!of!$23!per!tonne!of!carbon!dioxide! emissions,!which!would!transition!to!an!ETS!on!1!July!2015,!and!covered! around!60!per!cent!of!Australia's!total!emissions.!The!80!per!cent! emissions!reduction!target!for!2050!was!introduced,!but!the!2020!target! remained!as!before:!a!five!per!cent!unconditional!emissions!reduction! target!on!2000!levels,!with!the!option!of!increasing!this!to!between!10!to! 25!per!cent,!depending!on!international!developments.!! Interestingly,!as!Bateman!(2011)!observes,!the!CEFP!carried!over! many!of!the!same,!or!at!least!very!similar,!measures!proposed!under!the! CPRS.!This!is!an!important!point.!It!suggests!that!the!CEFP's!success! should!be!viewed!not!only!as!an!outcome!of!the!minority!government! (which!was!crucial),!but!also!as!part!of!an!extended!debate!on!carbon! pricing!that!spanned!two!decades.!This!continuing!debate!resulted!in! significant!institutional!learning!through!the!AGO,!the!NETT,!the!Garnaut! Review!and!the!CPRS!policy!processes.!This!learning!has!ensured,!as! Crowley!(2013b,!p.!379)!notes,!that!policy!solutions!were!ready!when!the! right!political!circumstances!presented!themselves.!In!other!words!there! was!an!alignment!of!forces,!with!the!minority!government!presenting!the! final!piece.!What!is!clear!is!that!the!right!political!circumstances! unequivocally!required!the!Australian!Greens'!involvement.! The!fact!that!it!was!a!minority!parliament!means!we!are!now!further! progressed!than!we!would!have!been!if!Julia!Gillard!hadn't!got!in!in! her!own!right,!that's!how!much!we!know!for!sure!because!she!didn’t! want!one!(a!carbon!price)!…!because!of!how!badly!it!had!been! managed!over!the!Rudd!government.!Gillard!was!trying!to!walk!a! million!miles!from!it!and!put!it!off!for!two!years!and!was!committed! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Clean!Energy!Future!package!since!this!could!‘soften’!the!price!signal!and!lead!to!inferior! environmental!outcomes.!

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to!community!consensus!(climate!change!roundtable!participant! interview!#29).! ! But!while!the!Greens!had!changed!the!course!of!climate!policy!in!Australia,! their!influence!on!energy!policy!was!virtually!nonOexistent.!This!chapter! now!examines!the!government’s!energy!policies!before!turning!attention! to!the!relationship!between!the!two.! ! ! Australia's(energy(strategy:(transformation(or(preservation?( ! Despite!the!government’s!emphasis!on!energy!in!its!CEFP,!this!package! itself!did!not!specifically!address!energy!policy.!This!left!an!opportunity! for!the!government!to!formulate!its!longOterm!energy!strategy!and! consolidate!its!position!on!climate!change.!The!result!was!the!Energy! White!Paper!aptly!titled!Australia’s,Energy,Transformation!(DRET,!2012).!! In!late!2008,!under!the!Rudd!government,!plans!to!develop!an!EWP! had!been!under!way.!This!was!begun!with!a!Draft!Green!Paper,!but!then! abandoned!in!2010!due!to!the!pending!resolution!of!the!carbon!pricing! policy!and!the!outcome!of!the!federal!election!(DRET,!2011a).!After!the! 2010!election,!the!Gillard!government!reOopened!the!EWP!process,! proceeding!directly!to!the!Draft!EWP!stage.!! The!final!EWP's!release!in!2012!was!timely,!as!the!ESAA!noted:! significant!shifts!in!climate!policy,!energy!technologies,!the!economy,!and! scientific!understanding!had!transpired!since!the!previous!EWP!in!2004! under!the!Howard!government!(Chapter!5).!Perhaps!most!importantly,! Gillard's!EWP!coincided!with!the!introduction!of!a!carbon!price.!This! offered!the!government!a!rare!but!potentially!valuable!strategic!policy! development!setting,!whereby!a!truly!integrated!and!complementary! policy!approach!to!an!energy!transition!could!flourish.!This!was! undoubtedly!a!pivotal!moment!for!energy!policy!in!Australia.!The!

! ! 216! Chapter!8:!Diverging!Paths! following!section!examines!the!government’s!energy!policy!strategy! through!the!EWP!and!the!processes!that!fostered!its!development.!!!! ! The,EWP,and,the,export,agenda, ! The!EWP!policy!formation!process!differed!markedly!from!that!of!the! government's!CEFP.!The!Greens,!and!to!a!degree!the!Independents,!were! intimately!involved!in!the!development!of!government’s!climate!policy! through!the!MPCCC.!However,!the!EWP!was!developed!as!a!LaborOonly! policy,!not!through!a!‘multiOparty’!design.!Charged!with!designing!the! EWP,!the!Department!of!Energy,!Resources!and!Tourism!(DRET)! undertook!a!series!of!stakeholder!forums!involving!businesses,!industry! associations,!and!social!and!environmental!NGOs.!According!to!the! Australian!Youth!Climate!Coalition!(AYCC)!this!was!not!an!adequate! process:! AYCC!volunteers!and!members!have!tried!to!engage!in!the! consultation!process!on!the!White!Paper,!through!attending! consultation!sessions!in!various!States,!and!have!found!the!process! alienating!and!poorly!managed.!We!do!not!believe!there!has!been!a! decent!consultation!process.!There!has!been!poor!promotion!and! dismal!presentation!of!the!material!(e.g.!the!Minister!not!showing!up! and!his!representatives!being!unwilling!or!unable!to!answer! questions).!This!is!not!good!enough!–!the!community!needs!a!real!say! in!our!energy!future,!which!is!currently!not!being!provided!by!the! Department!or!the!Minister!(AYCC,!2012,!p.!5).!! !! In!addition!to!this!consultation!process!an!EWP!Reference!Group! (EWPORG),!consisting!predominantly!of!industry!elites,!was!formed!and! used!as!a,!‘source!of!highOlevel!strategic!advice!to!inform!the!EWP!process’! (DRET,!2011b,!p.!1).10!Yet!exactly!what!is!meant!by!‘advice’!and!‘inform’! was!perhaps!not!always!entirely!clear:!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 10!The!EWPORG!was!chaired!by!the!Secretary!of!the!Department!of!Resources,!Energy!and! Tourism!and!included!members!from!BHP!Billiton,!Rio!Tinto,!Xstrata!Coal,!Woodside! Energy!Ltd,!Caltex!Australia,!Origin!Energy!Australia,!TRUenergy!Pty!Ltd,!AGL!Energy,! Verve!Energy,!Qenos!Pty!Ltd,!AMCOR!Limited,!Geodynamics!Limited,!Credit!Suisse!

! ! 217! Chapter!8:!Diverging!Paths!

There!is!a!very!important!distinction!that!often!gets!blurred!between! negotiation!and!consultation.!So!you!go!and!talk!to!some!of!the!very! senior!business!people!and!they!will!often!use!the!language!of! negotiation.!And!in!fact!the!government!sometimes!uses!the!language! of!negotiation!and!I!think!that!that's!a!mistake!because!negotiation! implies!that!both!parties!have!to!agree,!that's!not!the!case!…!It!is!true! that!they!will!face!more!opposition!if!the!stakeholder!doesn't!agree.! But!at!the!end!of!the!day!the!government!is!consulting!with!the! stakeholder!to!better!understand!the!impact!that!any!change!will! have!on!the!stakeholder!…!It's!a!very!important!distinction!and! sometimes!some!of!the!backlash!you!see!about,!you!know,!business! unhappy!with!interaction!with!governments,!because!they!conceived! it!as!a!negotiation!and!said!'well!I!didn't!agree!on!that'.!The!point!is,! well,!you!don't!have!to!agree.!What!the!government!is!doing,!it’s! putting!forward!a!proposition!which!it!thinks!is!in!the!national! interest!and!ultimately!has!to!carry!the!debate!with!the!public.!And! whether!that's!in!the!national!interest,!that’s!the!ultimate,!that's!the! group!that!ultimately!have!to!agree.!The!consultation!process!is! mainly!to!ensure!that!the!government!is!fully!informed!about!the! perspectives!on!the!impact!as!seen!by!the!perspective!stakeholders! (Department!of!Climate!Change!and!Energy!Efficiency!interview! #40).! ! According!to!one!interviewee,!the!EWPORG!appeared!to!fall!in!to!this! category:!! ...!the!corporate!sector!clearly!demonstrated!they!don't!understand! the!processes!of!government,!they!don't!understand!the!process!of! decisionOmaking.!They!(the!EWPORG)!got!confused!I!think!as!a!group! what!their!advisory!role!was.!They!weren't!making!policy!but!some! of!them!thought!they!should!be.!And!some!of!them!felt!they!should! tell!the!government!what!was!good!and!bad!and!indifferent.!But!they! didn't,!I!think,!as!a!group!actually!respect!that!the!government!was! seeking!advice,!information,!this!was!not!a!matter!of!ticking!off! something!in!saying!'yeah!we!agree!with!it'.!But!some!saw!their!role! very!much!as!that,!and!the!fact!that!we!had!at!that!table!the!big! resource!and!energy!interests!represented,!I!think!said!a!lot!(Energy! White!Paper!Reference!Group!participant!interview!#1).! ! Indeed,!minimal!clean!energy!interests!were!represented!in!the! group,!which!was!somewhat!surprising!given!the!EWP's!emphasis!placed! on!transitioning!towards!a!carbonOconstrained!future.!And!considering! that!the!members!of!the!EWPORG!were!selected!to!broadly!cover!key!areas! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Australia,!Alinta!Energy,!SP!AusNet,!CSIRO,!and!independents!Ross!Rolfe,!Keith!Spence,! Ziggy!Switkowski,!Greg!Bourne,!Lynne!Chester,!Keith!Orchison!and!David!Maxwell.!

! ! 218! Chapter!8:!Diverging!Paths!

of!relevance!to!the!EWP!(DRET,!2011b),!one!could!deduce!that!renewable! energies!were!therefore!not!a!key!area!of!focus.!As!such,!the!composition! of!the!EWPORG!offers!a!useful!insight!into!the!tone!of!the!EWP!policy! process.! How!then!does!the!EWP!stack!up!from!the!perspective!of!a!SET?!In! particular,!how!does!it!envisage!Australia's!electricity!generation!future?! The!graph!below!shows!the!modelled!electricity!generation!mix!out!to! 2050.! ! Figure!5:!Modelled!electricity!generation!mix!to!2050.! Figure 6.1: Electricity generation technology shares to 2050

100

90

80

70

60 6 50 Per cent 40

30

20 Clean energy

10

0 2012 2020 2035 2050

Black coal Brown coal Coal—CCS Gas Gas—CCS Hydro Wind Solar—large Geothermal Bio-electricity Rooftop PV Oil ! ! Source: BREE (2012d). Source:!DRET!(2012,!p.!88).! Based on the recent Australian Energy Technology Assessment mid-point technology cost ! estimates, this suggests that clean energy technologies could provide around 40% of Australia’s electricityThis!modelling!shows!that!by!2050,!renewables!and!non generation by 2035 and up to 85% (or 305 TWh) by 2050, when fossil-fuel-firedOrenewables! generation with carbon capture and storage (CCS) would contribute 29%, large-scale solar 16%, wind energy represent!around!and household solar photovoltaic55!and!45! (solarper!cent PV) 13%!of!the!generation!mix,!respectively.! each, geothermal energy 9%, and hydroelectricity Of!the!nonand bioelectricityOrenewables,!the!EWP!predicts!that!by!2050!CCS!could! 5%. While these long-term estimates are heavily qualified and should be treated more as illustrations than predictions, they point to an enormous long-term change. ! ! 219! This ambitious transformation will be achieved from a currently modest but growing clean energy base: renewable energy (largely hydro-electric, wind and a small but growing component of household solar systems) contributed around 10.1% of electricity needs in 2010 (or 19.4 TWh) (BREE 2012a). The transformation may require more than $200 billion in new generation investment between now and 2050, including around $50–60 billion in gas, $100 billion in renewables and $45–65 billion in coal, nearly all of which is for CCS plants (SKM MMA 2011, ROAM Consulting 2011). To put this into context, we may need an additional 286 TWh of new clean energy capacity by 2050, but no significant Australian CCS, large-scale solar, ocean or geothermal generation systems are in operation today. Australia’s transport energy sector is likely to undergo a similar scale of transformation. By 2050 there will be significant growth in transport fuels and technologies that have little or no presence in the market today (see Box 6.1). Biodiesel could contribute around 13% of total transport fuel consumption, natural gas 12%, bio-derived jet fuel 8%, electricity for transport 5%,1 and synthetic

1 As a percentage of energy. Expressed as kilometres travelled, it may be significantly higher.

88 Energy White Paper 2012 Chapter!8:!Diverging!Paths! contribute!between!26!and!32!per!cent!of!fossil!fuel!electricity!generation,! ‘taking!clean!energy!to!over!80%!of!our!total!electricity!supply’!(DRET,! 2012,!p.!34).!In!this!scenario,!brown!coalOfired!generation!remains!steady! until!around!2030,!and!black!coalOfired!generation!steady!until!2040.!From! this!point!CCS!technologies!begin!to!emerge.!In!a!submission!to!the!draft! EWP,!the!ACF!captured!the!mood!of!many!environmental!groups,! suggesting!that!there!are:! ...!inconsistencies!in!the!treatment!of!renewable!energies!in!the!EWP! when!compared!to!the!importance!the!paper!puts!on!fossil!fuels.! With!this!sort!of!bias!against!clean!energy!technologies,!the!EWP! threatens!to!undermine!the!government’s!objectives!in!achieving!a! clean!energy!future!in!line!with!an!80%!emissions!reduction!by!2050! (ACF,!2012,!p.!4).!! ! Furthermore,!as!WWF!points!out!in!its!submission!to!the!draft!EWP,! the!EWP!does!not!discuss!or!consider!more!aggressive!renewable! pathways,!including!a!100!per!cent!renewable!scenario.!Yet!this!scenario! has!been!developed!for!Australia!several!times.11! The!most!striking!feature!of!the!EWP!is!not!its!emphasis!on!the! domestic!side!but!instead!on!energy!exports,!to!the!extent!that!it! prompted!the!MCA!to!suggest:!! There!is!an!oversight!of!coal.!Coal!is!acknowledged!as!important,!but! the!document!does!not!give!it!the!prominence!that!it!deserves.! Brown!coal,!in!particular,!is!given!scant!regard!…!policymakers! appear!to!see!more!value!in!exporting!energy!than!utilising!it!in! Australia!(MCA,!2012,!pp.!5O6).!! ! Indeed,!the!EWP!notes!that:! O!Australia's!LNG!export!capacity!is!expected!to!more!than!triple! from!24!Mt!to!over!80!Mt!per!year,!which!would!make!Australia!the! secondOlargest!exporter!of!LNG!by!2015,!and!potentially!the!largest! by!2021.! ! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 11!See,!for!example,!Wright!and!Hearps!(2010);!Seligman!(2010);!Elliston,!Diesendorf,! and!MacGill!(2012).!

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O!Exports!of!thermal!and!metallurgical!coal!are!expected!to!grow! strongly!to!between!527!Mt!and!689!Mt!a!year!by!the!middle!of!the! next!decade,!thereby!maintaining!Australia's!status!as!the!world's! largest!exporter!of!coal.! Themes!underpinning!this!export!strategy!combine:!Australia's! abundance!of!fossil!fuel!energy!resources!(see!Table!3!below);!and!global! energy!demand!forecasts,!which!are!predicted!to!grow!by!around!40!per! cent!to!2035!O!90!per!cent!of!this!growth!occurring!in!developing! economies,!particularly!China!(30!per!cent)!and!India!(16!per!cent)!(IEA,! 2011).!These!nations!are!two!of!Australia's!largest!energy!customers.! Australia!is!particularly!well!placed!to!capture!this!growing!demand,!with! $290!billion!of!energy!resource!projects!currently!in!planning!or!under! development,!dominated!by!LNG!projects!($164!billion).12! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 12!This!investment!in!fossil!fuels!goes!against!the!global!trend.!As!noted!by!UNEP!(2009)! and!Morales!(2011),!global!investment!in!renewables!has!now!overtaken!investment!in! fossil!fuels.!

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Table!3:!Australia's!demonstrated!economic!energy!resources!(2009! and!2010).!

! Australia! Share!of!world! Reserves!to! (petajoules)! (%)! production!(years)! Coala! ! ! ! Black!Coal! 1!255!470! 10.3! 128! Brown!coal! 384!689! 8.6! 517! Petroleum! ! ! ! Oil! 5!685! 0.2b! 9! Condensate! 12!413! n.a.! 38! Liquefied! 4!063! n.a.! 38! petroleum!gas! Gas! ! ! ! Conventional!gas! 113!373! 1.6! 66! CoalOseam!gas! 35!055! n.a.! 175! Uraniumc! 648!480! 33.0! 134! n.a.!=!not!available! a!Recoverable!resources! b!Crude!oil,!condensate! c!Reasonably!assured! ! at!31!December!2010! and!liquefied!petroleum! resources!recoverable!at! ! gas!combined! costs!of!less!than! ! US$80/kg!U.! ! ! ! ! ! ! ! !!Source:!DRET!(2012,!p.!15).! A!common!criticism!of!this!export!agenda!is!that!there!are!limits!on! future!emissions,!an!assertion!supported!by!the!carbon!budget!concept! (Chapter!6).!The!IEA,!in!its!2012!World!Energy!Outlook,!stated!that,!‘no! more!than!one!third!of!proven!reserves!of!fossil!fuels!can!be!consumed! prior!to!2050!if!the!world!is!to!achieve!the!2°!C!goal’!(IEA,!2012,!p.!3).! Environmental!groups!have!been!particularly!critical!of!Australia’s!export! agenda.!The!WWF,!ACF,!Greenpeace,!and!CANA!all!drew!attention!to!the! comments!made!by!the!IEA!in!their!submissions!to!the!draft!EWP.!Coal! development!in!the!Galilee!Basin!in!particular!has!come!under!fire!for!its! sheer!size!and!potential!to!contribute!to!global!emissions.!A!study!by! Greenpeace!Australia!Pacific!(2012)!estimates!this!to!be!around!700!Mt carbon!dioxide!per!year!if!all!nine!openOcut!mines!currently!proposed!

! ! 222! Chapter!8:!Diverging!Paths! were!to!proceed.!To!put!this!into!context,!the!UK’s!total!emissions!in!2011! were!549.3!Mt carbon!dioxide!(DECC,!2012).!! The!other!concern!is!that!projecting!such!large!volumes!of!fossil!fuel! exports!fails!to!account!for!the!mutual!dependencies!between!fossil!fuel! use!and!climate!change,!and!climate!change!and!vulnerability.!Advocates! of!fossil!fuel!exports!argue!that!these!fuels!promote!economic!and!social! development.!As!Australia's!Minister!for!Energy!Martin!Ferguson!said,!‘as! long!as!the!world!needs!our!energy!O!including!the!oneOinOfive!of!the! world's!people!who!have!no!access!to!electricity!today!–!Australia's! commitment!to!energy!exports!will!not!waiver’!(Ferguson,!2012).!! Fossil!fuels!are!thus!often!linked!to!alleviating!global!poverty.13! However,!burning!these!fossil!fuels,!regardless!of!where,!contributes!to! global!climate!change.!Those!most!affected!by!climate!change!are!those! who!are!most!vulnerable!(i.e.,!they!are!the!same!people!for!whom!these! resources!are!intended).!So!while!Australia’s!exports!help!alleviate!energy! poverty,!they!are!clearly!a!part!of!the!problem.!Rather!than!recognise!this! inherent!contradiction,!Australia!takes!advantage!of!the!UNFCCC! emissions!accounting!system!and!hides!behind!the!banner!of!energy! poverty,!while!at!the!same!time!arguing,!‘we!must!position!ourselves!well! to!retain!our!hardOwon!competitive!advantage’!(DRET,!2012,!p.!ix).14! These!selfOinterests!undermine!Australia’s!position!as!a!responsible!global! citizen!and!preserve!the!quarry!vision!doctrine.15!From!this!perspective! the!2012!EWP!has!much!in!common!with!its!2004!counterpart.! Having!dealt!with!the!Gillard!government’s!climate!and!energy! policy!strategy,!this!chapter!now!considers!how!the!government!has! attempted!to!steer!the!electricity!regime!towards!sustainability.!To!this! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 13!See!for!example!Williams!(2012).! 14!The!UNFCCC!emissions!accounting!system!only!requires!nations!to!account!for! emissions!produced!within!their!borders.! ! 15!For!a!detailed!insight!into!Australia’s!quarry!vision!see!Pearse!(2009).!

! ! 223! Chapter!8:!Diverging!Paths! end,!it!looks!at!two!types!of!regulatory!approaches,!the!government’s!RET! and!the!closure!of!coalOfired!electricity!generation!plants.! ! ! Steering(towards(sustainability(( , Australia’s,RET:,the,‘new’,threat,to,incumbents, ! Based!on!both!the!CEFP!and!the!EWP!modelling,!the!outlook!for!fossil!fuel! electricity!generation!remains!strong!and!relatively!stable!(as!shown!in! Figure!5!above).!However,!in!the!last!few!years!a!significant!and! unexpected!change!has!occurred!in!Australia’s!NEM:!despite!continued! economic!growth,!electricity!demand!has!fallen.!This!trend!has!challenged! virtually!all!existing!models.!In!addition,!the!looming!acceleration!of!LNG! exports!is!expected!to!increase!the!price!of!gas!considerably,!creating! uncertainty!about!the!future!role!of!gas!for!domestic!generation.!Given! these!changes!the!government’s!RET,!though!primarily!considered!a! climate!policy,!stands!to!have!a!sizeable!impact!on!the!electricity!regime!in! the!next!decade.!Not!surprisingly,!with!the!carbon!price!in!place!and!the! EWP!process!complete,!fossil!fuel!industries!have!turned!their!attention!to! the!RET,!which!arguably,!at!least!in!the!short!term,!poses!a!greater!threat! to!incumbents!than!the!carbon!price.!This!section!details!these!dynamics,! specifically!the!demand!and!LNG!components,!in!relation!to!the!role!of!the! RET.! Between!2008!and!2013,!electricity!demand!fell!by!almost!7!per!cent! (Saddler,!2013).!This!reduction!has!challenged!the!conventional!wisdom! of!the!relationship!between!GDP!and!electricity!demand,!which!historically! yielded!relatively!predictable!demand!forecasts.!This!is!not!the!case!now:! Australia!has!a!positive!GDP!growth.!We!have!had!for!21!years!in!a! row.!You!could!almost!mirror!our!energy!demand!and!GDP!growth.! For!the!last!three!years!this!hasn’t!been!possible!because!it’s!actually! diverged!away!(Zema,!2012,!p.!3).! !

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According!to!Matt!Zema,!CEO!of!the!Australian!Energy!Market!Operator! (AEMO),!this!is!due!to!a!range!of!factors:! We!put!about!half!of!it!down!to!drops!in!the!manufacturing!and! commercial!sectors,!and!a!lot!of!that!is!a!closure!in!manufacturing,! because!a!strong!Australian!dollar!is!basically!shifting!the!Australian! economy,!with!a!move!away!from!manufacturing!to!services.!The! other!half!we!actually!think!is!evenly!split!between!some!weather! correction,!the!cool!summers,!the!PV!cells,!in!efficiency!and!price.!The! real!challenge!for!us!now!is!that!in!the!past,!we’ve!actually!looked! backwards!at!our!modelling!to!predict!the!future.!I!don’t!think!we!can! do!that!now.!We!have!to!actually!stop!and!take!stock.!We’ve!only!got! three!years!of!actuals,!not!40!years!of!actuals,!to!try!and!predict!the! future!(Zema,!2012,!p.!3).! ! So!why!is!this!a!problem?!In!2009,!the!Rudd!government!expanded! the!Howard!government's!MRET!from!9,500!GWh!to!45,000!GWh!of! renewable!generation,!to!be!achieved!by!2020.!At!the!time,!based!on!2007! electricity!forecasts,!this!target!was!expected!to!equate!to!20!per!cent!of! total!generation.!However,!PV!was!taken!up!rapidly,!due!to!falling! technological!costs,!financial!incentives!through!the!Solar!Credits! multiplier,!and!State!and!Territory!feedOin!tariffs.!This!flooded!the!market! with!renewable!energy!certificates!(RECs),!depressing!the!certificate!price! and!discouraging!investment!in!largeOscale!renewable!projects!(CCA,!2012,! p.!6).!As!their!response,!in!2010!the!government!separated!the!RET!into! two!parts:!the!LargeOScale!Renewable!Energy!Target!(LRET)!and!the! SmallOScale!Renewable!Energy!Scheme!(SRES).!The!SRES!was!left! uncapped!and!the!LRET!was!set!at!41,000!GWh.!! The!reason!why!reductions!in!demand!are!of!concern!for!incumbent! generators!is!that!the!LRET!is!legislated!as!a!fixed!gigawatt!hour!target,! not!as!a!percentage.!If!slow!growth!in!electricity!demand!continues,!as! expected,!the!41,000!GWh!target!is!likely!to!considerably!exceed!20!per! cent:! ! !

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...!a!combination!of!the!renewable!energy!target!and!the!way!we! formulated!it,!41,000!GW!hours!from!largeOscale!plants,!and!the! dramatic!reduction!in!demand!growth!means!that!we!are!going!to! have!a!much!more!rapid!–!!and!the!carbon!price!raising!the!costs!of! coalObased!stuff,!especially!brown!coalObased!stuff,!if!the!carbon!price! and!the!renewable!the!energy!target!stay!in!place!in!their!current! form!–!big!if!–!but!if!they!do!we’ll!get!a!much!more!rapid! decarbonisation!than!any!of!my!modelling!or!the!Treasury!modelling.! We’ll!be!looking!at!the!renewables!accounting!for!high!20s!per!cent! by!2020.!So!that!will!go!well!over!20!per!cent,!high!20s! predominantly!wind.!Well!actually!if!you!take!into!account!the!smallO scale!solar!it!could!actually!go!beyond!30!(climate!change!advisor! interview!#11).! ! With!the!RET!reviewed!every!two!years,!a!new!battleground!has! emerged!over!the!target's!wording,!with!most!incumbents!calling!for!a! scaledOdown!GWh!target!that!better!reflects!a!20!per!cent!share:! In!light!of!growing!concern!about!increases!in!the!cost!of!energy,! against!a!backdrop!of!falling!energy!consumption,!and!given!the! challenges!associated!with!relying!predominantly!on!wind!power!to! meet!the!current!LRET!target,!Origin!believes!the!scheme!should!be! recalibrated!to!better!align!with!its!initial!goals.!As!such,!we!suggest! adjusting!the!target!to!track!the!original!20%!by!2020!goal!(Origin! Energy,!2012,!p.!7).! ! Some!even!suggested!that!because!a!price!on!carbon!has!been! introduced,!the!RET!should!be!removed!altogether!since!it!is!not!a! complementary!policy!(for!example,!see!IPART!submission!to!RET).! Opinions!differed!on!this!point:! ...!the!RET!and!the!carbon!price!had!been!designed!to!work!together! so!that!you!get!the!RET!driving!investment!in!these!early!years!while! the!carbon!price!is!fairly!low!and!renewable!energy!is!still!fairly! expensive!in!them!by!2020.!2030!as!renewable!energy!is!coming! down!in!costs!and!carbon!is!going!up,!and!electricity!is!going!up,!you! get!to!a!point!where!the!carbon!price!starts!driving!investment!in! renewable!energy.!And!I!think!Ross!Garnaut!said!something!similar! from!a!different!perspective,!where!he!was!talking!about! complementarity!of!the!RET,!and!the!need!to,!is!it!an!issue!having!it! alongside!the!carbon!price?!And!the!response!there!was!that!when! you!get!to!a!point!where!the!carbon!price!is!driving!investment!in! renewables!in!preference!to!fossil!fuels!or!other!alternatives,!then! even!if!you've!still!got!a!RET!permit!prices!will!be!pretty!close!to!0.!So! basically!it!takes!care!of!itself,!so!it!sort!of!selfOregulating,!sort!of!

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winds!itself!up!even!if!the!scheme!still!exists;!if!permit!prices!are! close!to!zero,!who!cares?!(Clean!Energy!Council!interview!#38).! ! Despite!pressure!from!large!segments!of!industry,!no!change!was! recommended!for!the!LRET!by!the!CCA,!which!is!charged!with!reviewing! the!RET.!Furthermore,!the!CCA!recommended!that!reviews!occur!every! four!years!as!opposed!to!every!two.!Perhaps!most!surprising!given! Coalition!opposition!to!most!Labor!Party!climate!policies!(including!the! carbon!price,!the!CCA,!CEFC,!ARENA,!and!the!Climate!Commission),!the! RET!continues!to!receive!bipartisan!support.!! This!demonstrates!a!significant!Coalition!policy!shift!on!renewable! energy!technologies!since!Howard's!infamous!LETAG!2004!meeting! (Chapter!5).!This!shift!and!the!biOpartisan!support!for!renewables!also! reflects!the!lessOstructured!and!lessOorganised!fossil!fuel!discourse! coalition!(compared!to!the!90s!and!early!2000s).!! This!development!owes!much!to!the!ongoing!debates!and! uncertainty!surrounding!carbon!pricing.!In!other!words,!it!took!more!than! two!decades!to!implement!a!carbon!price,!and!during!this!period!many! companies!that!were!invested!in!fossil!fuels!gradually!diversified!their! portfolios!to!minimise!their!economic!risk!and!exposure!to!possible! carbon!policies.!Australia's!three!big!‘gentailors’!–!EnergyAustralia,!Origin,! and!AGL!–!were!and!still!are!major!fossil!fuel!players,!but!they!are!also! major!investors!in!renewable!projects.!Interests!are!now!much!more! diverse!and!scattered.!For!example,!AGL!has!significant!investments!in! wind!energy,!and!were!in!favour!of!retaining!the!RET;!Origin!and! EnergyAustralia!both!argued!the!target!should!be!reduced.16!These! fractures!serve!to!destabilise!the!fossil!fuel!electricity!regime.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 16!Considering!Origin!Energy’s!investment!strategy!is!geared!towards!gas,!this!is!not!an! overly!surprising!position.!See!Greenpeace!Australia!Pacific!(2013)!for!a!commentary!on! Origin!Energy!and!the!RET.!

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Developments!in!the!gas!export!domain!are!a!second!reason!why!the! RET!could!have!a!greater!impact!than!intended.!As!outlined!in!the! discussion!on!the!EWP,!this!is!set!to!become!a!boon!for!the!Australian! economy.!Several!scenarios!are!possible!here,!but!uncertainty!is!high!since! these!dynamics!have!yet!to!play!out.!One!possibility!is!that!events!would! have!little!impact!on!BAU!projections!of!domestic!electricity!generation;!in! this!case!gas!remains!the!‘transitional’!fuel,!gradually!replacing!coal.!There! is!a!potential!complication!in!this!scenario:!initially!at!least!it!will!be!more! profitable!to!export!gas!than!use!it!domestically.!This!is!because!the! international!price!will!be!much!higher!than!the!domestic!one.!As!one! interviewee!noted,!! ...!you!can't!buy!longOterm!gas!contracts!now.!Why?!Because!of!the! international!parity.!Why!would!I!run!the!risk!of!locking!myself!into! $4!a!gigajoule!when!I!might!be!able!to!get!$10!a!gigajoule.!So!the! transition!to!gas!could!fall!flat!on!its!kisser!(Department!of!Primary! Industries!Victoria!interview!#16).!! ! This!scenario!suggests!that!as!prices!for!gas!trend!towards! international!parity,!it!is!unlikely!to!become!a!dominant!fuel!source!for! electricity!generation.!This!could!have!two!possible!outcomes.!First,!it! could!have!a!perverse!effect,!whereby!a!high!gas!price!cements!coal’s! market!share.!As!the!EWP!notes,!‘higher!gas!prices!will!support!incumbent! capacity’!(DRET,!2012,!p.!96).!Yet!considering!no!new!coalOfired! generation!licences!or!constructions!have!occurred!in!Australia!since!2003! (NGF,!2012),!it!seems!unlikely!that!coal!will!increase!its!generation!share! in!the!current!regulatory!economic!environment.!The!second!possibility,! one!favourable!to!a!SET,!could!see!the!transition!process!accelerated:! ...!the!growth!of!the!coal!seam!gas!export!industry,!the!export! industry!on!the!East!Coast!will!transform!the!gas!outlook!here.!It!will! raise!the!cost!of!gas!a!lot!and!we've!got!better!zero!emission! alternatives!than!other!countries.!So!Japan,!China!it!might!make! sense!for!them!to!be!using!our!gas!and!for!us!to!go!faster!to! renewables.!In!fact!that's!what!I!would!expect!to!happen!at!the!sort! of!gas!prices!that!now!look!likely!…!So!just!as!a!purely!practical!thing! I!now!don't!expect!to!see!a!transition!to!gas.!You!might!get!peaking,!

! ! 228! Chapter!8:!Diverging!Paths!

but!I!don't!expect!to!see!much!gas!baseload,!whereas!a!couple!of! years!ago!I!would!have!(climate!change!advisor!interview!#11).!! ! These!dynamics!further!erode!the!unity!of!the!fossil!fuel!discourse! coalition.!On!one!side,!the!exportOoriented!companies!are!strongly!in! favour!of!opening!up!Australia's!gas!to!international!markets.!On!the! other,!domesticOoriented!suppliers!and!large!industry!users!(i.e.,!those! reliant!on!cheap!gas)!are!concerned!about!shortages!in!gas!for!domestic! purposes.!Australia's!energy!regime!has!undoubtedly!entered!a!period!of! instability.!The!fossil!fuel!discourse!coalition!is!more!fractured,!and! opposition!to!climate!policies!is!far!more!complex!and!difficult.!! ! A,case,for,a,phase%out,strategy?, ! Australian!governments!have!toyed!with!the!idea!of!carbon!pricing!for! over!two!decades;!its!introduction!in!2012!was!a!critical!breakthrough!for! clean!energy,!but!it!alone!cannot!overcome!the!existing!technological,! institutional,!and!cultural!barriers!in!the!time!frame!required!to!avoid! dangerous!climate!change!(Safarzyńska+&+van+den+Bergh,+2010).!While! neoliberalism!remains!the!preferred!policy!approach!in!Australian! political!discourse,!the!escalating!trajectory!of!carbon!dioxide!emissions! and!associated!predicted!increases!in!temperature!and!extreme!weather! events!(IPCC,!2013),!suggests!that!more!aggressive!policy!approaches!may! be!required!to!initiate!a!rapid!phase!out!of!fossil!fuel!electricity!generation.! But!what!scope!is!there!for!such!an!approach!and!what!might!this!look! like?! A!useful!comparison,!based!on!the!scale!of!the!required!phase!out,! may!be!the!current!nuclear!phase!out!process!in!Germany.!Part!of! Germany's!Energiewander!(energy!transition),!this!process!calls!for!the! closure!of!19!plants!totalling!around!22!GW!(Mez!&!Piening,!2002),!and! their!replacement!with!new!renewables,!gas,!and!demandOside!

! ! 229! Chapter!8:!Diverging!Paths! management!programs.!By!comparison,!Australia!has!24!coalOfired! electricity!generators!totalling!around!27!GW.!! The!German!nuclear!phase!out!policy!emerged!after!the!1998! election!of!the!RedOGreen!government!(a!coalition!of!the!Social!Democrats! and!the!Greens).!After!one!and!a!half!years!of!negotiations!between!the! Chancellor,!the!ministries!of!economic!affairs!and!of!the!environment,!and! representatives!of!the!public!utilities!operating!the!nuclear!power!plants,! an!agreement!was!reached!for!an!orderly!phase!out!of!nuclear!power!(Mez! &!Piening,!2002).17!The!agreement!was!based!on!an!average!operating!life! of!32!years,18!which!meant!a!complete!phase!out!would!be!achieved!in!just! over!two!decades.!This!strategy!to!offer!the!utilities!an!‘operating!life’!was! central!to!avoiding!compensation!claims.!As!Rüdig&(2000,&p.&55)!notes,! An!immediate!shutOdown!of!the!nuclear!power!stations!was! dismissed,!simply!because!it!would!enable!utilities!to!go!to!the!courts! and!have!the!decision!reversed,!and!it!would!also!trigger!massive! compensation!claims!that!no!government!could!entertain.!The!only! realistic!option,!Baake!argued,!was!to!formulate!a!law!to!phase!out! nuclear!energy!that!was!safe!from!the!courts,!including!the!Federal! Constitutional!Court,!and!that!also!prevented!compensation!claims.! The!main!task!of!such!a!law!was!to!impose!a!limit!on!the!total! number!of!years!that!a!nuclear!power!station!could!operate.!This! would!mean!that!some!nuclear!power!stations!would!be!closed!down! immediately,!but!some!more!recently!constructed!reactors!would! continue!to!run!for!a!number!of!years.!This!would!avoid! compensation!claims,!as!utilities!would!be!given!a!reasonable!time!to! recuperate!their!investment.! ! So!how!might!this!kind!of!strategy!look!in!the!Australian!context?! The!discussion!below!considers!two!scenarios!for!plant:!a!30!and!40Oyear! operating!life.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 17!This!was!when!the!policy!took!concrete!form,!although!as!Rüdig!(2000)!points!out,!the! antiOnuclear!movement!has!occupied!a!strong!presence!in!German!politics!since!the! 1970s.!It!should!also!be!noted!that!Merkel’s!coalition!suspended!the!phase!out!only!to! reintroduce!it!following!the!Fukushima!meltdown!in!2011.! ! 18!This!wasn’t!defined!in!terms!of!calendar!years!though.!Remaining!lifespan!was! calculated!in!terms!of!electricity!produced!and!this!could!be!‘shifted’!from!one!reactor!to! another.!This!was!a!crucial!component!to!the!success!of!the!policy.!See!Rüdig&(2000).!

! ! 230! Chapter!8:!Diverging!Paths!

Table!4:!Timetable!for!coalOfired!power!station!decommissioning!O! possible!phase!out!strategy.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!ShutOdown!of!Power!Station!by!Operating!Limit19! Power!Station! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!30!Years!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!40!Years! ! ! ! Energy!Brix! 1986! 1996! Morwell! 1988! 1998! Playford! 1993! 2003! Collinsville! 1998! 2008! Anglesea! 1999! 2009! Liddell! 2001! 2011! Hazelwood! 2001! 2011! Gladstone! 2006! 2016! Wallerawang! 2006! 2016! Vales!Point! 2008! 2018! Eraring! 2012! 2022! Yallourn! 2012! 2022! Torong! 2014! 2024! Northern! 2015! 2025! Bayswater! 2015! 2025! Loy!Yang!A! 2015! 2025! Callide!B! 2018! 2028! Mount!Piper! 2022! 2032! Loy!Yang!B! 2023! 2033! Stanwell! 2023! 2033! Callide!C! 2031! 2041! Millmerran! 2032! 2042! Torong!North! 2033! 2043! Kogan!Creek! 2037! 2047!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 19!These!figures!do!not!consider!refurbishing,!upgrades!etc.,!which!would!undoubtedly! complicate!such!a!strategy.!For!example,!if!a!power!station!were!to!invest!in!CCS! technology,!as!many!do,!how!would!this!affect!a!phaseOout!strategy?!Would!they!be!given! a!further!lease!on!life!if!they!were!able!to!meet!certain!targets!in!terms!of!emissions! reductions!on!their!plants?!The!point!here!is!not!to!provide!definitive!answers!to!such! questions!but!to!simply!generate!a!discussion!on!potential!phaseOout!timelines.! !

! ! 231! Chapter!8:!Diverging!Paths!

Under!the!30Oyear!scenario,!a!complete!phase!out!of!conventional!coalO fired!power!generation!would!be!complete!by!2037,!23!years!hence.!This! is!virtually!the!same!timespan!as!the!German!nuclear!phase!out!(22!years).! However,!it!would!require!the!immediate!closure!of!just!over!half!(13)!of! the!plants.!Under!the!40Oyear!scenario!the!phase!out!would!be!complete! by!2047,!33!years!from!now,!and!would!require!the!immediate!closure!of! seven!plants.!Clearly!immediate!closures!are!not!practical,!which!implies! that!a!transitional!period,!as!was!proposed!in!the!German!case,!would!be! required.!But!how!plausible!is!such!an!approach?!! Recent!attempts!at!possible!closures!of!power!plants!in!Australia,! such!as!the!Contracts!for!Closure!scheme,!suggest!that!these!kinds!of! approaches!have!little!chance!of!success.!This!policy,!which!involved! seeking!the!closure!of!2000!MW!of!Australia’s!most!polluting!power! stations!through!a!competitive!tender!process,!was!developed!by!the! MPCCC.!However,!the!implementation!responsibility!was!given!to!DRET.! Initially!the!owners!of!Hazelwood,!Yallourn,!Energy!Brix,!Playford,!and! Collinsville,!all!expressed!interest,!but!after!a!year!of!negotiations!the! program!was!abandoned.!According!to!the!Energy!Minister!Martin! Ferguson,!this!was!due!to!‘a!material!gap!between!the!level!of! compensation!generators!have!sought!and!what!the!government!is! prepared!to!pay’!(Packham,!2012).!Part!of!the!problem!lay!in!the!design!of! the!policy.! …!contract!for!closure!is!pretty!far!down!the!list!in!terms!of!perfect! policy!options!for!shutting!a!power!station!like!Hazelwood.!Its!going! to!come!at!great!cost!and!if!it!doesn't!happen!it’ll!be!because!it!comes! at!too!great!a!cost!to!taxpayers!and!of!course!one!of!the!reasons!that! will!happen!is!because!we’re!throwing!money!at!the!power!stations! to!keep!them!open!(through!the!compensation!package)!…!as!well!as! paying!them!to!shut!at!the!same!time,!which!is!ridiculous! (Environment!Victoria!interview!#20).! ! The!Contracts!for!Closure!program!was!further!undermined!by!the! decision!to!link!Australia’s!carbon!price!to!the!EU!in!2015,!resulting!in!

! ! 232! Chapter!8:!Diverging!Paths! lower!forecasts!of!future!carbon!prices.!In!fact,!some!even!suggested!that! because!of!this,!along!with!a!reduction!in!electricity!demand,!the!Victorian! brown!coalOfired!generators!were!making!a!profit!(see!Mountain!(2013).! Christine!Milne!was!particularly!scathing!of!the!political!process:!‘Putting! Martin!Ferguson!in!charge!of!this!process!was!always!giving!the!fox! control!of!the!hen!house!and!he!is!now!responsible!for!the!first!serious! breach!of!faith!in!the!implementation!of!the!Clean!Energy!Act’!(Packham,! 2012).! As!difficult!as!such!a!strategy!may!appear,!it!has!obvious!benefits,! particularly!around!the!issue!of!uncertainty,!which!is!often!cited!as!a!major! barrier!to!generation!investment!and!hence!a!SET.20!By!providing!a! structured!timeline!for!power!station!replacement,!governments,! businesses,!and!communities!would!have!a!clearer!understanding!of!what! is!involved!in!transitioning,!including!when,!where,!and!how!much! targeted!assistance!would!be!required.!The!added!benefit!of!such!an! approach!is!that!it!allows!affected!communities,!such!as!the!Latrobe!Valley,! to!begin!planning!for!a!transition.!! This!contrasts!with!the!current!scenario!of!stalemate,!in!which! communities!are!reluctant!to!undergo!change!until!they!secure!funds!or! are!assured!of!assistance!measures.!Yet!government!is!unwilling!to!release! funds!until!these!regions!have!actually!been!adversely!affected.!And!all! governments,!bar!the!Kennett!government’s!privatisation!era,!have!tried! desperately!to!avoid!such!outcomes.!Carbon!pricing!policies!under!both! the!Rudd!and!Gillard!governments!were!coupled!with!substantial! compensation!payments!to!power!generators!to!avoid!any!closures,! thereby!compromising!an!effective!market!signal!and!ultimately!the! transition!process!itself.!The!result!is!that!regions!like!the!Latrobe!Valley! are!left!in!a!catchO22,!with!neither!party!willing!to!make!the!first!move.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 20!For!example,!see!submissions!to!the!2012!EWP!by!NGF,!TRU,!and!AGL.!

! ! 233! Chapter!8:!Diverging!Paths!

The!benefit!of!a!phase!out!strategy!is!that!it!would!compel!all!parties! (government,!business,!and!community)!to!come!to!the!table!and!begin!the! process!of!transitioning!–!an!outcome!that!the!market!logic!policy! approach!over!the!last!25!years!has!failed!to!achieve.!! Another!strategy!considered!by!the!Gillard!government!was!an! emissions!performance!standard!on!all!newly!constructed!coalOfired! power!stations,!to!be!set!somewhere!below!the!level!of!0.86!tCO2e/MWh! (see!Talberg!&!Nielson,!2011).!This!followed!similar!proposals!by!the! South!Australian!government!(see!Rann,!2010)!and!the!Victorian! government!(see!Morton,!2010).!However,!once!a!price!on!carbon!was! introduced,!these!proposals!were!abandoned,!highlighting!governments’! preference!of!marketObased!policies!over!regulatory!policies!to!reduce! emissions.! ! ! Compatible(agendas?(Making(sense(of(Australia's(climate(and( energy(policies( ! Given!the!role!fossil!fuels!have!played!in!20th!Century!capital! accumulation,!it!is!not!surprising!that!global!energy!policies!have!been! largely!predicated!on!unrestricted!access!to!these!fuels.!The!advent!of! climate!policy!in!the!latter!part!of!the!in!20th!Century!directly!challenged! this!prevailing!policy!norm.!In!fact,!in!many!ways!these!policy!domains! directly!oppose!one!another.!A!key!challenge!for!governments!pursuing! climate!agendas!is!to!manage!this!tension.!Building!on!the!outline!of!the! different!policies,!processes,!and!actors!involved!in!designing!the!CEFP! and!the!EWP,!this!section!examines!the!relationship!between!the! government’s!climate!and!energy!policies.!It!begins!by!considering!the! direction!of!each!policy!area,!before!examining!how!the!government!has! attempted!to!reconcile!these!two!policy!domains.!

! ! 234! Chapter!8:!Diverging!Paths!

The!Gillard!government’s!CEFP!reflects!elements!of!an!ecologically! modernist!approach!to!climate!policy!–!albeit!a!relatively!weak!one.!It! introduced!a!price!on!carbon!as!the!primary!mechanism!to!decarbonise! the!economy,!and!it!partially!rearranged!the!institutional!setting!by! establishing!the!CEFC!and!the!CCA!to!help!guide!this!process.!These!shifts! in!policy!were!the!outcome!of!forced!negotiations!with!the!Australian! Greens.!Nevertheless,!in!trying!to!promote!itself!as!an!ecologically!modern! government,!the!Labor!Party!attempted!to!reframe!the!issue!of!climate! change!and!its!possible!solutions.!That!is,!proponents!of!ecological! modernisation!must!shift!the!debate!on!the!economics!of!climate!change! from!the!shortOterm!to!the!longOterm.!This!requires!politically!sagacious! discursive!techniques.!The!Howard!government!was!particularly!adept!at! framing!ecological!problems!in!immediate!and!absolute!economic!terms.! The!Rudd!and!Gillard!governments,!however,!have!emphasised!the!longerO term!economic!implications!of!climate!change!by!drawing!on!the!language! of!ecological!modernisation:! The!Gillard!government’s!climate!change!policy!sets!in!train!a! fundamental!economic!transformation!that!will!increase!prosperity! while!it!reduces!carbon!pollution.!It!will!boost!employment.!It!will! boost!investment.!It!will!encourage!innovation!and!technological! development!(Combet,!2011a,!p.!14).! ! This!‘new’!economic!discourse!emphasises!the!future!costs!associated! with!climate!inaction!and!draws!heavily!on!the!normative!dimensions!of! climate!discourses.! Despite!the!broad!appeal!of!ecological!modernisation!through!its! winOwin!mantra,!it!was!not!an!easy!political!exercise!for!the!Gillard! government!to!sell!itself!as!ecologically!modern.!This!difficulty!reflects!the! inherent!tension!between!the!shortOterm/longOterm!dynamic!of!the! ecological!modernisation!discourse.!That!is,!the!winOwin!logic!of!ecological! modernisation!can!only!be!true!past!a!certain!point!in!time,!meaning!the! immediate!economic!costs!associated!with!ecological!restructuring!will!

! ! 235! Chapter!8:!Diverging!Paths! always,be!greater!than!business!as!usual.!The!time!it!takes!for!the! restructuring!to!become!economically!viable!varies,!depending!on!how! deeply!entrenched!the!fossil!fuel!regime!is.!Hence,!for!energy!importing! countries!with!an!alreadyOdiverse!energy!mix,!this!timeframe!is!greatly! reduced.!For!Australia!this!will!take!considerably!longer.!! To!balance!this,!the!government’s!energy!policy!is!pulling,!quite! successfully,!in!a!different!direction:!it!sees!Australia!as!a!fossil!fuel! superpower.!Witnessing!firstOhand!the!political!toll!of!climate!policy!on! past!leaders,!Gillard's!approach!was!to!seek!compromise!and! accommodation.!This!led!to!‘gains’!for!those!on!both!sides!of!the!climate! debate.!There!has!been!a!level!of!compromise!with!the!Greens,!which!has! resulted!in!real!policy!change;!there!has!also!been!accommodation! between!government!and!industry,!which!garnered!support!for!carbon! pricing!in!exchange!for!protection.!! The!result!was!extensive!amounts!of!compensation!to!coalOfired! generators,!in!particular!those!in!the!Latrobe!Valley,!justified!in!terms!of! protecting!asset!value!and!ensuring!energy!security.21!This!has! undermined!the!pace!of!structural!change.!This!approach!to!managing! longOterm!change!draws!parallels!with!Gramsci’s!concept!of!a!passive! revolution.!The!critical!feature!here!is!that!the!Gillard!government’s! incremental!reformist!agenda!did!not!overly!disrupt!the!dominant! relations!of!power.!Despite!some!concessions!(i.e.!a!carbon!tax),!fossil!fuel! hegemony,!based!on!the!government’s!own!modelling!(as!shown!in!Figure! 5!above),!looks!likely!to!remain!intact!for!at!least!the!next!decade.! ! In!addition,!this!approach!has!‘corrupted’!the!agents!of!climate! action!within!government,!further!eroding!the!government’s!climate! policy!pathway.!Even!the!former!Climate!Change!Minister,!Greg!Combet,! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 21!The!compensation!to!electricity!generators!came!out!of!a!$5.5!billion!Energy!Security! Fund.!In!the!first!year!of!the!carbon!tax!Hazelwood!Power!Station!was!set!to!receive!$266! million,!Yallourn!Power!Station!$257!million,!Loy!Yang!A!Power!Station!$240!million,!and! Loy!Yang!B!Power!Station!$117!million!(Drape,!2012).!

! ! 236! Chapter!8:!Diverging!Paths! who!was!charged!with!selling!the!climate!policy,!raised!the!old!economic! discourse!whereby!Australia's!competitive!advantage!lies!within!its!fossil! fuels:! The!coal!industry!has!a!sound!future.!Treasury!modelling!shows!the! Australian!coal!sector!more!than!doubling!its!output!by!2050!with!a! carbon!price!in!place.!This!is!supported!by!investment!decisions!coal! companies!are!taking!(Combet,!2011a,!p.!8).! ! This!contradiction!highlights!the!tensions!between!climate!and! energy!policy!in!Australia.!It!reflects!a!power!struggle!between!the!visions! of!Combet!and!Ferguson!and!their!corresponding!departments!(the! Department!of!Climate!Change!and!Energy!Efficiency;!and!the!Department! of!Resources,!Energy!and!Tourism).!Both!visions!look!to!the!future.!But! whereas!the!former!tentatively!aligns!itself!with!a!new!economic! paradigm,!the!latter!enshrines!itself!in!the!old.!This!divergence!highlights! the!lack!of!climate!and!energy!policy!integration!in!Australia.!It!results!in! breakdowns!in!the!policy!process!and!serves!to!cloud!and!complicate! Australia's!energy!transition!narrative.!A!clear!example!of!this!was!the! Contracts!for!Closure!program,!as!noted!above.!Perhaps!the!most! intriguing!aspect!of!this!dynamic!is!not!how!climate!and!energy!policies! are!pulling!in!opposite!directions,!but!how!government!legitimises!these! contradictory!policy!positions.!In!other!words,!how!is!it!that!the!Gillard! government!is!able!to!promote!itself!as!a!‘climate!conscious’!government,! while!at!the!same!time!protecting!the!future!of!coalOfired!power! generation?!Understanding!this!apparent!paradox!seems!particularly! important!for!explaining!the!dynamics!of!fossil!fuel!hegemony.!While! tensions!are!evident,!amidst!these!contradictions!there!is!in!fact!a!degree! of!policy!harmony.!This!occurs!through!two!mutually!reinforcing! storylines:!leastOcost!abatement!and!the!global!nature!of!climate!change.!! Australia’s!approach!to!emissions!reductions!is!guided!by!an! economic!rationalist!discourse,!which!places!an!overwhelming!emphasis! on!leastOcost!abatement!measures.!This!brings!into!question!the!role!of!

! ! 237! Chapter!8:!Diverging!Paths! international!abatement.!In!short,!because!of!Australia’s!emissionsO intensive!economy,!it!is!generally!cheaper!to!reduce!emissions!elsewhere! rather!than!domestically.!This!approach!though!requires!careful! explanation!and!justification,!since!most!people!would!expect!to!see! emissions!reduced!on!the!domestic!level.!Thus,!the!definition!of!climate! change!is!adjusted!accordingly;!as!far!as!the!problem!is!concerned,!the! prevailing!argument!presented!is!that!climate!change!is!a!global!problem! and!therefore!the!location!of!carbon!dioxide!abatement!is!irrelevant!O!as! several!of!the!interviewees!noted.! ...!we!were!having!a!conversation!last!night!–!can!Victoria!achieve!a! low!greenhouse!gas!future!or!a!lowOcarbon!emissions!future?!And!we! are!wondering,!well!why!is!that!the!question,!why!Victoria,!why!the! Latrobe!Valley,!…!where!do!you!draw!the!line?!What's!appropriate?! Really!the!issue,!and!this!is!one!of!the!unusual!characteristics!of! climate!change,!at!the!very!core!of!it,!it!is!a!global!problem!and!the! climate!doesn't!care!where!the!emissions!are!reduced!(exOOrigin! Energy!interview!#5).! ! ...!what’s!the!problem!we’re!trying!to!solve!for?!The!problem!we’re! trying!to!solve!for!is!global!emissions,!it’s!not!Australian!emissions,! and!it’s!not!Victorian!emissions,!it’s!global!emissions.!My!view!is!that! a!tonne!is!a!tonne!is!a!tonne,!and!what!matters!is!global!emissions,! and!Australia!must!do!its!part,!absolutely.!But!whether!or!not!that! equates!to!a!physical!reduction!in!Australia's!emissions!or!not!is! irrelevant!(Department!of!Resources,!Energy!and!Tourism!interview! #37).! ! The!government!likewise!holds!this!view:!‘The!atmosphere!knows!no! national!boundaries.!A!tonne!of!pollution!that’s!reduced!overseas,!credibly! done,!is!of!the!same!consequence,!the!same!utility,!the!same!importance!as! a!tonne!of!pollution!reduced!in!our!own!economy’!(Combet,!2011b).!In! applying!this!logic,!which!has!a!certain!degree!of!coherence!about!it,!the! government!can!effectively!sidestep!the!issue!of!domestic!emissions,!while! at!the!same!time!claim!to!be!addressing!global!climate!change.!! Taken!together,!these!storylines!have!significant!implications!for!the! pace!of!Australia’s!SET.! !

! ! 238! Chapter 5: Australia with carbon pricing

assume that Carbon Farming Initiative credits, worth 7 Mt CO2-e in 2020 and 22 Mt CO2-e in 2050, are sold back into the domestic carbon pricing scheme and help to reduce the abatement task.

Pricing carbon results in deep cuts in domestic greenhouse gas emissions. In the core policy scenario, the carbon price produces: around 58 Mt CO2-e of domestic abatement and Chapter!8:!Diverging!Paths! 94 Mt CO2-e of international abatement in 2020; and 463 Mt CO2-e of domestic abatement and 434 Mt CO2-e of international abatement in 2050. Despite these cuts, Australia’s domestic emission levels continue to rise for some time. In the core policy scenario, Australia’s domestic emissions!Figure! increase6:!Australia around ’s10! emissions!in!the!core!policy!scenario.per cent from 2010 to the late 2020s. They then fall! significantly as decarbonisation of the electricity sector accelerates. ! ! Chart 5.2: Australian emissions in the core policy scenario Mt CO -e Abatement 1200 2 2020 2050 152 897 1000

463 800 Domestic abatement 58

600 94

400 Internationally-sourced abatement 434 200

0 2010 2020 2030 2040 2050 Without carbon pricing With carbon pricing Including overseas abatement ! Note: Emissions without carbon pricing include CFI abatement. Source: Treasury estimates from MMRF. Source:!Department!of!Treasury!(2011,!p.!91)!

In! the high price scenario, carbon pricing produces significantly more domestic abatement in the shortAs!Figure!6!illustrates,!Australia's!domestic!e term, resulting in emission levels that are lower thanmissions!are!projected!to!rise! today’s levels in the first year and that decline thereafter. Around 130 Mt CO2-e of domestic abatement is achieved in 2020 and into!the!late!2020s,!even!though!net!emissions!are!gradually!reduced! 628 Mt CO2-e in 2050. Emissions are 8 per cent lower than today’s levels in 2020 and 44 per cent belowthrough!international!abatement.!In!other!words,!it!avoids!the!need!for! today’s level in 2050. In the high price scenario, the abatement task in 2050 is slightly smaller than in the core policy scenario because ambitious global action lowers demand for Australia’sany!significant!domestic!economic/energy!restructuring,!which,!in!terms! energy exports slightly and this reduces Australian emission levels slightly without carbon pricing. of!SET!progress!in!Australia,!paints!a!troubling!picture.! ! ! Conclusion( ! This!chapter!analysed!the!Gillard!government’s!climate!and!energy! strategy!in!relation!to!two!key!SET!characteristics:!steering!capacity!and! coOevolution.!It!finds!a!policy!environment!riddled!with!tensions!and! contradictions,!largely!characterised!by!a!newOversusOold!economic! discourse.!This!is!the!result!of!a!clear!separation!between!climate!policy! Page 91 goals!and!energy!policy!goals.!The!new!economic!discourse!guides!the! government’s!climate!policies,!which!reflects!elements!of!a!weak!form!of!

! ! 239! Chapter!8:!Diverging!Paths! ecological!modernisation.!The!ability!to!legislate!a!price!on!carbon!was! crucial!to!this!approach.!Ultimately!this!was!achieved!due!to!an! institutional!setting!that!required!the!participation!of!the!Australian! Greens.!By!incorporating!new!actors!into!the!policy!process,!the!minority! government!was!able!to!transcend!prevailing!social!relations!of!power.! This!highlights!the!importance!of!a!green!voice!in!government.! ! In!contrast,!the!government’s!energy!policies!are!guided!by!an!old! economic!discourse!that!emphasises!the!importance!and!value!of! Australia's!fossil!fuels.!This!position!is!legitimised!through!the!discursive! framing!of!the!global!versus!local!nature!of!climate!change,!and!an! emphasis!on!leastOcost!abatement!measures.!As!the!discussion!on!steering! capacity!shows,!this!discourse!tends!to!reject!regulatory!measures.!The! result!is!a!diverging!climate!and!energy!policy!pathway!that!creates! complexities!around!governance!arrangements!and!has!led!to!a!failure!of! policy!coordination.! Australia’s!SET!is!at!a!crossroad.!The!Gillard!government!initiated! changes!that!caused!fractures!and!tensions!amongst!the!fossil!fuel! discourse!coalition,!which!suggests!the!energy!regime!has!entered!a! period!of!instability.!Policies!and!programs!such!as!the!RET,!CEFC!and! ARENA!are!crucial!to!reinforce!these!shifts.!! At!the!same!time,!the!Gillard!government!employed!the!strategy!of!a! passive!revolution!to!manage!this!change,!which!preserves!the!dominant! relations!of!power!above!all.!From!this!perspective!structural!change! appears!unlikely!within!the!period!that!could!ensure!warming!stays!within! the!2°!C!threshold.!

! ! 240! !

Chapter(9(

Conclusion(

! ! The!Australian!electricity!market!–!like!others!around!the!world!–! finds!itself!at!a!fascinating!juncture.!A!carbon!price,!a!renewable! energy!target,!and!falling!technology!costs!have!combined!to!help! trigger!the!start!of!what!could!be!a!rapid!transition!from!fossil!fuels! to!a!new,!decentralised!system!that!relies!more!heavily!on! renewables!…!But!in!Australia,!the!incumbents!are!being!encouraged! to!resist!and!cherish!the!past!by!the!one!key!ingredient!that!is!likely! missing!from!the!domestic!equation!–!that!of!political!resolve.!! ! !!!!!Giles!Parkinson,!Origin,of,the,energy,species:,Will,our,utilities,, ,,,,,ever,evolve?! ! ! Introduction( ! The!aim!of!this!thesis!has!been!to!describe!and!analyse!attempts!by! government!to!transform!Australia’s!electricity!regime!along!ecologically! sustainable!lines!–!what!is!termed!here!as!a!SET.!In!reply,!it!has!traced!the! evolution!of!climate!and!energy!policy!on!three!nested!levels:!the!national,! the!subnational!State!(Victoria)!and!the!local!(Latrobe!Valley,!in!Victoria),! over!the!period!1988!to!2013.! Australia’s!initial!response!to!the!issue!of!climate!change!reflected!a! government!constructively!engaged!in!SET!debates!–!albeit!somewhat! indirectly.!In!1990!the!Commonwealth!government!had!committed!itself! to!an!Interim!Planning!Target!(IPT)!that!sought!to!reduce!carbon!dioxide! emissions!to!1988!levels!by!2000,!and!by!a!further!20!per!cent!by!2005.! However,!by!2005!Australia’s!total!greenhouse!gas!emissions,!excluding! land!use,!landOuse!change!and!forestry!(LULUCF),!had!increased!by!27!per! cent!on!1990!levels!(UNFCCC,!2013).!

! 241! Chapter!9:!Conclusion!

The!thesis!began!by!asking!the!question,!‘what!happened?’!Why,! given!the!early!ambitions!of!government!and!the!growing!threat!of!climate! change,!has!the!fossil!fuel!electricity!regime!displayed!so!little!change?! How!are!we!to!explain!and!understand!these!events!in!terms!of!Australia’s! SET!progress!and!potential?! The!core!finding!in!this!thesis!is!that!climate!policy!and!energy! policy!in!Australia,!both!at!the!federal!and!State!level,!have!been! dissociated!from!one!another.!This!failure!of!policy!coordination!and! integration!is!reflected!in!the!diverging!goals!and!paths!of!each!policy! domain,!and!is!caused!in!part!by!attempts!to!reconcile!competing! neoliberal!and!sustainable!development!discourses.!This!clash,!played!out! within!the!policy!domain!through!key!institutions,!actors,!and!special! interests,!has!led!to!a!range!of!ad!hoc!and!often!contradictory!policy! pathways.!This!thesis!argues!that!the!inability!of!Australian!governments! to!define!and!articulate!a!coherent!narrative!around!a!sustainable!energy! future!has!constrained!Australia’s!SET!progress.! Nevertheless,!despite!the!presence!of!a!hegemonic!neoliberal!policy! culture,!exogenous!and!endogenous!factors!have!combined,!at!times!over! the!last!25!years,!to!produce!moments!of!SET!policy!innovation.!These!are! most!notable!from!2007!onwards!as!successive!federal!Labor! governments,!one!of!them!a!minority!government,!pursued!the!policy!of! carbon!pricing,!which!reflected!elements!of!a!weak!ecological! modernisation!discourse.!However,!this!emergent!discourse!has!done!little! to!challenge!the!existing!policy!paradigm,!and!has!in!many!ways! exacerbated!the!gap!between!climate!and!energy!policy.!As!such,! Australia's!SET!is!likely!to!remain!constrained!unless!new!or!existing! institutions!can!adapt!and!find!new!ways!to!reconcile!and!integrate! climate!and!energy!policy!goals.! The!remainder!of!this!chapter!elaborates!on!these!findings,! specifically!addressing!each!research!question.!Finally,!it!reflects!on!the!

! ! 242! Chapter!9:!Conclusion! practical!and!normative!implications!of!this!research!and!areas!for!further! work.! ! ! Revisiting(the(research(questions( ! The!following!discussion!is!divided!into!three!sections,!corresponding!to! the!three!research!questions!outlined!at!the!beginning!of!this!thesis.! Section!one!identifies!four!key!phases!of!SET!development!over!the!last!25! years.!Using!these!phases,!section!two!discusses!the!characteristics!and! features!of!policy!change.!Section!three!then!outlines!how!the!various! social!relations!of!power,!namely!material,!institutional!and!discursive,! have!constrained!Australia’s!SET!over!time!and!space.! ! Research,question,one, ! How$has$Australia’s$approach$to$a$SET$changed$over$time$and$ space$in$relation$to$the$evolution$of$climate$and$energy$policy?$ ! Between!1988!and!2013,!the!percentage!contribution!of!fossil!fuels! towards!electricity!generation!in!Australia!has!remained!constant!at! around!90!per!cent.!In!terms!of!fuel!use!then,!the!electricity!regime!has! demonstrated!little!structural!change.!Nevertheless,!as!this!thesis!has! shown,!this!does!not!necessarily!indicate!a!regime!void!of!conflict.!On!the! contrary,!debates!about!the!ecologically!sustainable!nature!of!Australia’s! electricity!regime!have!been!well!established!in!policy!since!at!least!1990.! These!conflicts,!which!occur!between!actors!and!on!different!levels,!are! particularly!evident!in!the!processes!of!policy!formation!and! implementation.!It!is!within!the!policy!domain!and!through!these! processes!that!actors!and!organisations!struggle!to!assert!(or!reassert)! discursive!dominance.!Over!the!last!25!years,!Australia’s!climate!and! energy!policy!domain!reflects!these!contests,!albeit!with!varying! intensities!across!temporal!and!spatial!scales.!Using!the!multiOphase!and!

! ! 243! Chapter!9:!Conclusion! multiOlevel!characteristics,!this!thesis!finds!four!phases!of!SET! development.!These!are!outlined!below.! ! The!first!phase!(1988O1991)!emerged!following!the!Toronto! climate!conference!and!was!characterised!by!competing!ideas!about!what! an!energy!transition!might!entail!and!how!it!was!to!be!approached.!In! 1990!the!Hawke!government!adopted!an!Interim!Planning!Target!(IPT)!for! a!20!per!cent!carbon!dioxide!emissions!reduction!target!by!2005,!based!on! the!Toronto!Target,!triggering!a!range!of!energyOrelated!developments.! Significantly,!the!SECV,!which!was!owned!by!the!Victorian!government,! went!about!designing!a!sustainable!energy!pathway!that!could!allow!the! target!to!be!met.!This!pathway!entailed!a!combination!of!aggressive! demandOside!management,!fuel!substitution!(primarily!towards!gas),! injection!of!some!renewable!energy!technologies,!and!the!early!retirement! of!existing!brown!coalOfired!generation!plants.!Simultaneous!to!these! developments,!the!Federal!government!established!an!Ecologically! Sustainable!Development!(ESD)!framework,!which!involved!nine!working! groups,!two!of!them!energy!specific:!the!Energy!Production!Working! Group!(WG),!and!the!Energy!Use!WG!(ESDSC,!1992).!The!two!Energy!WGs! were!also!heavily!guided!by!the!Australian!government’s!IPT.!One!of!their! key!recommendations,!which!was!also!suggested!in!the!SECV’s!report,!was! that!a!marketObased!policy!designed!to!make!polluters!pay!was!necessary! (ESDWG,!1991).!! This!initial!phase!was!not!a!period!of!structural!reform,!nor!was!it! immune!to!conflict!and!resistance.!The!electricity!regime,!no!means!a! willing!participant,!was!highly!sceptical!of!the!proposed!emissions!target's! plausibility.!Nevertheless,!this!topOdown!model!triggered!a!period!of! policy!innovation,!which!was!reciprocated!at!both!the!State!(Victoria)!and! local!(Latrobe!Valley)!level.!! The!second!phase!(1992!to!2006),!in!terms!of!Australia’s!SET! trajectory,!was!one!of!retreat.!The!major!shift!was!caused!by!the!

! ! 244! Chapter!9:!Conclusion! aggressive!uptake!of!neoliberal!policies!designed!to!promote!greater! competition!and!efficiency!in!the!electricity!sector.!In!Victoria,!the!Kennett! Liberal!government!disaggregated!and!corporatized!the!SECV!during!1994! to!1995,!then!privatised!Victoria's!electricity!sector!throughout!1996!to! 1997.!Any!plans!to!restructure,!from!a!SET!perspective,!such!as!those! developed!by!the!SECV!in!the!late!1980s!and!early!1990s,!were!shelved.! On!the!federal!level,!under!the!Keating!Labor!government,!plans! were!underway!to!establish!a!National!Electricity!Market!(NEM).!This! process!centralised!energy!policy!and,!through!the!discourse!of!economic! rationalism,!prioritised!the!economic!dimensions!of!energy!policy:!namely,! those!that!would!enable!an!efficient!and!competitive!NEM.!This!reduced! the!scope!of!energy!policy!to!issues!of!energy!market!reform!and! deregulation!at!the!expense!of!environmental!dimensions!of!energy!policy.! Climate!policy!was!no!longer!a!priority.!! The!shifts!were!amplified!under!the!Howard!Coalition!government,! particularly!given!Howard’s!overt!scepticism!of!climate!science!and!refusal! to!accept!the!significance!and!urgency!of!humanOinduced!climate!change.1! Through!its!2004!Energy!White!Paper,!the!Howard!government!reinforced! the!position!of!the!fossil!fuel!regime.!The!effectiveness!of!its!policy! approach!was!underscored!via!the!links!created!between!Australia's! economy!(and!jobs)!and!the!fossil!fuel!sector.!By!emphasising!Australia's! ‘competitive!advantage’!the!Howard!government!empowered!the!fossil! fuel!discourse!coalition!and!reduced!climate!and!energy!discourse!to! debates!around!the!immediate!economic!impacts,!removing!altogether!the! consideration!of!longOterm!SET!goals.!! !

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!See!for!example!recent!comments!by!Howard!(2013)!at!the!Global!Warming!Policy! Foundation!lecture!in!London.! !

! ! 245! Chapter!9:!Conclusion!

Interestingly,!these!policy!shifts,!which!led!to!the!devolution!of! environmental!policy,!allowed!the!States!to!become!more!directly! involved.!This!proved!critical!for!SET!development!in!Australia.!This!third! phase!(2002!to!2006),!which!took!place!on!the!subOnational!level,!marked! the!second!preOdevelopment!phase.2!The!Australian!States!and!Territories,! all!of!which!were!controlled!by!Labor!governments!during!this!period,! helped!facilitate!and!develop!a!counterOhegemonic!narrative!around! climate!action.!This!situation!draws!parallels!with!Gramsci’s!concept!of!a! war!of!position.!For!Gramsci!the!support!of!civil!society!was!required!prior! to!any!assault!on!the!‘state’.!! The!States,!led!by!the!Victorian!Premier!Steve!Bracks!and!the!NSW! Premier!Bob!Carr,!began!to!develop!a!range!of!climate!and!energyOrelated! initiatives,!including!renewable!energy!targets,!which!built!on!the!existing! MRET!at!the!federal!level,!feedOinOtariffs!and!energy!efficiency!schemes.! These!initiatives!were!designed!to!undermine!and!isolate!the!Howard! government’s!position!on!climate!change,!whilst!also!attracting! investment!and!creating!jobs.!These!shifts!were!relatively!successful!in! that!they!helped!shape!the!investment!patterns!of!some!of!the!largest! private!energy!corporations.!AGL!in!particular!was!quick!to!respond!to! this!changing!regulatory!environment.!Prior!to!2001,!renewable!energy! generation!was!virtually!nonOexistent!but!by!2006!almost!40!per!cent!of! AGL's!generation!capacity!came!from!renewable!sources!(AGL,!2006).! Other!companies,!such!as!Origin!Energy,!while!not!as!aggressive!as!AGL!in! pursuing!renewables,!also!began!investing!in!renewable!projects!in!the! early!2000s.!Taken!together,!these!developments!led!to!policy!learning! and!technological!innovation!at!the!niche!level,!and!while!not!enough!to! challenge!the!incumbent!electricity!regime,!it!served!as!a!catalyst!in!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2!Note!there!is!an!overlap!in!times!here.!This!is!because!there!are!different!levels!(i.e.! Federal,!State!and!local)!involved,!meaning!that!a!shift!on!one!level!can!occur! simultaneous!to!a!shift!on!another.!

! ! 246! Chapter!9:!Conclusion! initiating!a!broader!discussion!of!the!benefits!of!renewables!visOàOvis!fossil! fuels.!! Another!important!development!during!this!phase!was!the!reO opening!of!the!carbon!price!debate.!In!2004!Victoria!and!New!South!Wales! formed!the!National!Emissions!Trading!Taskforce!(NETT)!to!research!and! develop!a!national!ETS.!This!initiative!had!the!support!of!all!the!other! State!and!Territory!governments.!Around!the!same!time,!through!a! separate!process,!the!ACF!formed!a!coalition!with!six!large!businesses!O!BP! Australia,!Insurance!Australia!Group,!Origin!Energy,!Swiss!Re,!Visy! Industries!and!Westpac!–!who!together!called!for!early!action!on!climate! change!and!the!introduction!of!a!national!marketObased!carbon!pricing! mechanism!(Australian!Business!Roundtable!on!Climate!Change,!2006).! With!business!and!civil!society!support!growing,!this!phase!generated! strong!momentum.!The!Howard!government!had!ruled!out!implementing! an!ETS,!on!the!grounds!that!such!a!policy!would!make!no!difference!to! global!carbon!emissions!and!would!only!disadvantage!and!threaten! Australia's!economic!advantage.!However,!with!Australia!increasingly! isolating!itself!from!the!international!climate!regime,!combined!with!the! growth!in!renewable!energy!technologies!and!increasing!consumer! awareness!on!the!domestic!level,!the!Howard!government's!position!on! climate!looked!volatile.!Importantly,!there!was!an!alternative!policy! paradigm!ready!to!take!its!place,!one!articulated!and!carried!by!a!variety! of!different!voices!across!state,!business!and!civil!society.!This!‘war!of! position’!strategy!by!the!states!during!the!second!preOdevelopment!phase! was!critical!in!helping!shift!SET!development!to!the!takeOoff!phase.!The! third!phase!did!not!change!the!policy!regime,!rather,!it!created!tensions! and!fractures,!which!opened!up!the!possibility!for!change.! ! The!fourth!phase!(2007!to!2013)!followed!the!election!of!the!Rudd! Labor!government!(2007!to!2010)!and!marked!the!beginning!of!the!takeO off!phase!for!Australia’s!SET.!Immediately!after!winning!the!election,!the!

! ! 247! Chapter!9:!Conclusion!

Rudd!government!established!a!new!Department!of!Climate!Change!and! Energy!Efficiency!and!ratified!the!Kyoto!Protocol.!In!addition,!the!MRET,! subsequently!called!the!RET,!was!expanded!from!9,500GWh!to! 45,000GWh,!which,!at!the!time,!equated!to!a!target!of!20!per!cent! renewables!by!2020.!Moreover,!the!Rudd!government!designed!a!national! ETS!(the!CPRS),!which!included!emissions!reduction!targets!for!2020!and! 2050.!These!developments!were!articulated!through!two!core!storylines.! The!first!drew!on!the!normative!and!ethical!dimensions!of!climate!change.! The!second!emphasised!the!positive!economic!dimensions,!meaning!that! rather!than!portraying!climate!action!as!a!cost,!as!had!the!Howard! government,!the!Rudd!government!used!evidence!from!both!the!Stern!and! Garnaut!reports!to!highlight!the!economic!dangers!of!climate!inaction.!! !While!the!Rudd!government’s!CPRS!ultimately!failed,!as!did!his! leadership!within!the!Labor!Party,!it!nevertheless!provided!a!template!for! future!efforts.!The!Australian!Greens!proved!to!be!the!dealObreaker!in! helping!turn!these!policy!aspirations!into!material!form.!The!2010!federal! election!resulted!in!a!hung!parliament!and!the!Labor!Party!negotiated!a! deal!with!the!Greens!that!would!see!the!introduction!of!a!price!on!carbon.! This!alliance,!albeit!a!fragile!one,!led!to!a!significant!period!of!policy! innovation!under!the!Gillard!government!(2010!to!2013).!The!resulting! Clean!Energy!Future!Package!included!a!price!on!carbon;!emissions! reduction!targets!for!2020!and!2050;!and!the!establishment!of!two!new! bodies,!the!Climate!Change!Authority!(CCA)!and!the!Clean!Energy!Finance! Corporation!(CEFC).!These!initiatives!formed!an!important!overarching! institutional!and!regulatory!framework!in!which!a!SET!could!progress.!! However,!during!the!same!period,!but!separate!from!the!formation! of!this!climate!strategy,!the!Labor!Party!developed!its!longOterm!energy! strategy,!which!culminated!in!the!2012!EWP.!Led!by!the!Energy!Minister! Martin!Ferguson,!it!emphasised!Australia's!competitive!advantage,!as! Howard!had!so!successfully!done,!once!again!coupling!Australia's!

! ! 248! Chapter!9:!Conclusion! economic!prosperity!and!security!with!the!exploitation!of!fossil!fuels.! Indeed,!despite!its!title!Australia’s,Energy,Transformation,!the!EWP!had! little!to!say!on!domestic!electricity!generation!matters,!instead!focussing! on!the!need!to!further!develop!its!fossil!fuel!exporting!capacities.!This! clouded!Australia’s!SET!vision.! With!the!media!preoccupied!with!the!dysfunctionality!of! Parliament!and!the!economic!implications!of!the!carbon!tax,!the! Opposition!mounted!an!extremely!effective!campaign!that!questioned! both!the!integrity!of!the!Prime!Minister!and!the!legitimacy!of!the!minority! government.3!Faced!with!diminishing!public!support!for!a!price!on!carbon,! which!had!fallen!to!30!per!cent,!the!government’s!response!was!to! virtually!remove!of!any!normative!or!ethical!considerations!from!the! climate!debate.!Instead,!the!government!chose!to!focus!almost!exclusively! on!compensation!payments!to!households!and!industry,!which! undermined!the!support!and!therefore!potential!for!structural!change.! This!thesis’!analysis!of!how!Australia’s!SET!narrative!has!changed! over!time!and!space!reveals!two!important!insights.!The!first!relates!to!the! multiOphase!concept.!The!multiOphase!concept!commonly!characterises! transitions!as!a!manifestation!of!four!alternating!phases!that!involve!a!preO development,!takeOoff,!acceleration,!and!stabilisation!phase.!It!is!widely! acknowledged!that!transitions!follow!nonOlinear!paths,!yet!even!then!there! seems!to!be!an!implicit!assumption!that!transitions,!once!on!the!preO development!path,!will!continue!on,!albeit!at!varying!speeds.!While!the! idea!of!lockOin!is!implied!within!this!framework,!less!is!understood!about! retreat.!That!is,!why!might!transitions!go!backwards?!Analysis!here! suggests!that!the!politics!of!SETs!plays!a!significant!role!in!transition!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3!This!attack!on!the!government!and!the!Prime!Minister!was!channelled!through!a! number!of!different!avenues!such!as!the!broken!promise!(with!regards!to!the!carbon!tax),! the!AWU!slush!fund,!and!the!Thompson!and!Slipper!scandals.!Between!August!2010!and! April!2012,!polling!on!the!‘personality’!traits!of!Gillard!showed!a!considerable!drop!in!her! approval!rating.!See!Newspoll!(2013).!

! ! 249! Chapter!9:!Conclusion! directionality.!The!second!insight!relates!to!the!multiOlevel!concept.!This! thesis!finds!that!the!subOnational!level!can!be!an!important!factor!in! change!dynamics.!This!is!important!because!it!‘opens!up’!different!phases! to!new!insights.!For!example,!much!of!the!literature!on!climate!policy!in! Australia!portrays!the!Howard!government!(1996!to!2007)!as!a!period!of! inactivity!and!even!decline.!While!it!is!certainly!true!that!the!Howard! government!did!little!in!the!climate!policy!space,!the!multiOlevel! perspective!reveals!important!developments!during!this!period!as!the! States!reacted!to!the!policies!of!the!federal!government.! ! Research,question,two, ! What$does$Australia’s$SET$narrative$tell$us$about$the$dynamics$of$ policy$change?$ ! The!study!of!socioOtechnical!transitions!has!given!much!attention!to! understanding!the!stability!of!regimes!and!the!dynamics!of!lockOin.!Much! less!has!been!said!though!of!the!factors!that!enable!policy!change!for!SETs.! In!other!words,!what!are!the!factors!that!cause!breakdowns!and! destabilisation!in!incumbent!regimes?!This!thesis,!through!its!SET! narrative,!provides!several!insights!into!this!area!of!study.!! At!first!glance,!Australia's!fossil!fuel!electricity!regime!has! remained!remarkably!stable!over!the!last!25!years!with!little!sign!of!a!SET! underway.!Nevertheless,!identifying!and!examining!these!four!phases,!as! outlined!above,!reveals!a!dynamic!and!at!times!volatile!climate!and!energy! policy!process.!The!benefit!of!defining!these!different!phases!is!that!it! provides!insight!into!the!characteristics!and!conditions!that!are!conducive! to!SET!development.! Over!the!last!25!years,!three!periods!of!policy!innovation!for!SETs! have!occurred:!1988!to!1991!(the!first!preOdevelopment!phase);!2002!to! 2006!(the!second!preOdevelopment!phase);!and!2007!to!2013!(the!takeOoff! phase).!These!periods!have!led!to!growth!in!SETs,!albeit!primarily!only!at!

! ! 250! Chapter!9:!Conclusion! the!discursive!level.!Of!interest!here!are!common!characteristics!across! these!periods,!in!other!words,!what!leads!to!and!creates!these!windows!of! policy!opportunity?4!According!to!Kingdon!(2011),!opportunities!to! change!are!often!caused!by!random!and!‘chaotic’!events.!Similarly,!Unruh! (2002)!suggests!that!in!order!to!overcome!carbon!lockOin,!we!may!have!to! wait!for!an!external!event.!It!has!been!shown!in!numerous!policy!studies! that!exogenous!factors!provide!a!strong!impetus!for!change!(see!for! example,!Hall,!1993;!Jenson,!1989;!Jones,!1994;!Sabatier,!1987).!This!is! certainly!the!case!in!Australia!where!key!international!climate! conferences,!such!as!those!held!in!Toronto,!Rio,!and!Copenhagen;!reports,! including!the!IPCC!Assessment!Reports!and!the!Stern!Review;!and!films,! such!as!Al!Gore’s!Inconvenient,Truth,!have!all!acted!in!some!way!or! another!as!triggers!for!initiating!policy!change!(Christoff,!2013a;!Crowley,! 2007).!While!these!external!forces!are!important,!this!thesis!has!paid! particular!attention!to!the!endogenous!dynamics!of!change,!as!outlined!in! the!neoOGramscian!approach!in!Chapter!3.! No!one!factor!is!likely!to!explain!these!causes!of!change,!rather,!a! variety!of!influences!prevail,!some!of!which!are!given!more!weight!than! others!at!any!point!in!time.!In!general!though,!several!characteristics,!or! preconditions,!appear!necessary.! The!first!relates!to!political!ideology.!In!particular,!personalities! matter.!The!analysis!presented!here!suggests!that!periods!of!policy! innovation!for!SETs!occur!only!under!Labor!governments.!While!climate! change!in!general!has!become!a!bipartisan!issue!in!Australia,!care!should! be!taken!with!such!conclusions.!First,!the!Keating!Labor!government!did! not!represent!a!period!of!policy!innovation!for!SETs.!Second,!Malcolm! Turnbull,!who!briefly!led!the!Coalition,!has!been!a!relatively!strong! advocate!for!introducing!a!price!on!carbon!to!address!climate!change.!And! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4!Kingdon!(2011)!uses!the!term!policy!window!to!denote!a!point!in!time!in!which! problems,!policies!and!politics!align!to!promote!policy!change.!

! ! 251! Chapter!9:!Conclusion! third,!given!that!the!25Oyear!period!of!this!analysis!featured!only!one! Coalition!Federal!government,!it!would!be!somewhat!premature!to! conclude!that!all!Coalition!federal!governments!are!incapable!of!policy! innovation!for!SETs.!So!while!LaborOled!governments!appear!more!likely! to!initiate!policy!change!for!SETs,!this!alone!provides!an!incomplete! picture.! ! A!second!class!of!condition!encompasses!political!interests!and!the! presence!of!an!electorally!strong,!green!political!party.!This!condition!is! based!on!the!assumption!that!politicians!in!power!seek!to!maintain!power.! All!three!periods!of!innovation!display!this!dimension.!Having!witnessed! the!influence!of!the!environmental!movement!on!the!Fraser!government! over!the!Franklin!Dam!campaign,!the!Hawke!government!was!keen!to! promote!its!green!credentials.!This!was!particularly!so!following!the!1989! Tasmanian!State!election,!which!saw!five!Independent!Greens!elected.!In! Victoria!an!electoral!swing!of!8.6!per!cent!toward!the!Greens!in!2002! prompted!the!Victorian!government!to!action.!Similarly,!swings!to!the! Greens!in!other!States!throughout!the!early!and!midO2000s!clearly!played! a!role!in!shaping!Rudd's!policy!agenda!(Tasmania!2002,!eight!per!cent;! New!South!Wales!2003,!4.4!per!cent;!Queensland!2004,!4.3!per!cent;!South! Australia!2006,!4.1!per!cent.!See!Figure!7).!Finally,!the!Gillard!government! shifted!its!position!on!climate!policy!in!order!to!form!a!minority! government,!which!involved!the!Greens.! !

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! ! ! 253! Chapter!9:!Conclusion!

The!third!type!of!condition!encompasses!favourable!institutional! conditions.!Australia's!federal!system!has!played!an!ongoing!role!in! creating!opportunities.!That!is,!periods!of!policy!innovation!for!SETs! appear!more!likely!to!occur!when!the!majority!of!the!States!are!under! Labor!control!(i.e.,!1989!to!1991!and!2001!to!2011).!Interestingly,!the!two! periods!most!successful!at!engaging!with!the!normative!dimensions!of! climate!change!–!both!the!Hawke!government!and!the!first!half!of!the! Rudd!government!(Christoff,!2013a;!Crowley,!2013a)!–!were!the!only!two! periods!over!the!last!25!years!that!Labor!had!power!in!the!majority!of! States!as!well!as!at!the!federal!level!(i.e.,!1989!to!1991!and!2007!to!2011,! see!Figure!7).!From!this!perspective!the!States!can!play!an!important!role! in!either!reinforcing!or!undermining!federalOlevel!agendas.!! The!makeOup!of!the!Parliament!also!provides!a!platform!for!change.! The!most!notable!example!here!was!the!dynamic!of!the!Gillard!minority! government.!Here!the!role!of!the!Greens!has!been!particularly!important.! They!were!able!to!use!their!political!power!to!bring!competing!knowledge! claims!from!those!acting!outside!the!regime,!directly!into!the!Parliament!O! an!important!medium!for!debating!and!generating!change.!One!example!is! the!push!for!a!100!per!cent!renewable!energy!electricity!grid,!which!has! commonly!been!dismissed!on!technological!grounds!(i.e.!renewables!are! intermittent!and!incapable!of!providing!baseload!electricity).!But!in!2010! this!renewables!storyline!gained!considerable!momentum!after!the! release!of!a!zeroOcarbon!stationary!energy!plan!by!Beyond!Zero!Emissions! (BZE).!This!report!illustrated!that!this!task!was!not!only!technically! feasible,!but!also!achievable!within!10!years.!ThenOdeputy!leader!of!the! Greens!Christine!Milne!described!the!report!as!an,!‘extremely!valuable! contribution!which!all!in!the!Parliament!should!be!looking!at!very! seriously’!(Wright!&!Hearps,!2010).!This!was!not!the!first!renewable! energy!plan!to!be!proposed,!but!it!benefited!from!a!politically!favourable! situative!context:!the!2010!minority!government!and!a!LaborOGreens!

! ! 254! Chapter!9:!Conclusion! alliance!on!climate!policy.!As!part!of!the!Clean!Energy!Future!package,!the! Greens!ensured!that!the!Australian!Energy!market!Operator!(AEMO)! undertake!a!feasibility!study!of!a!100!per!cent!renewable!electricity!grid.!It! found,!as!BZE!and!others!had!previously,!that!such!a!scenario!was!indeed! technically!possible!without!jeopardising!energy!security.!The!Greens!had! effectively!brought!an!outside!voice!into!the!policyOmaking!inner!sanctum.! This!did!not!lead!to!immediate!policy!change!(nor!was!this!ever!likely),!but! it!did!contribute!to!the!breakdown!of!certain!sets!of!ideas!that!support!and! protect!incumbent!regimes,!for!example,!the!storyline!that!only!fossil!fuels! can!ensure!security!of!supply.!! By!identifying!and!reflecting!on!these!periods!of!policy!innovation,! this!thesis!finds!that!endogenous!dynamics!play!an!important!role!in! regime!destabilisation.!In!Australia’s!case,!when!political!ideologies,! interests,!and!institutional!factors!combine!and!link!up!with!exogenous! events,!an!environment!more!conducive!to!policy!change!for!SETs! emerges.!Once!policy!changes!materialise!(i.e.,!the!RET!or!carbon!price),! the!potential!for!a!shift!in!the!social!relations!of!power!increases.!At!these! junctures!the!relative!power!of!those!outside!of!the!regime!(niche! actors/technologies)!increases!and!those!within!the!regime!work!to!reO position!themselves.!In!turn,!regime!fragmentation!can!occur!(Karltorp)&) Sandén,'2012),!making!regime!change!more!likely.!This!has!partially!been! the!case!since!2007!in!which!the!fossil!fuel!electricity!regime!has!entered!a! period!of!destabilisation.! Perhaps!most!intriguing!question!emerging!from!this!analysis!is! why,!given!these!alignments!existed!at!various!stages!over!the!last!25! years,!which!led!to!shifts!in!the!policy!regime,!has!there!not!been!a! significant!material!shift!in!technology?!To!answer!this!we!need!to! consider!the!different!forces!that!have!constrained!Australia's!SET.! ! !

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! Research,question,three! ! What$are$the$main$influences$that$have$constrained$the$ acceleration$of$a$SET$in$Australia?$ ! Over!the!last!two!decades,!renewable!energy!technologies!have!shown! limited!growth!in!Australia:!in!1989/90,!renewable!fuels!made!up!10!per! cent!of!Australia’s!electricity!generation!mix;!by!2012/13!this!contribution! rose!to!only!13!per!cent!(BREE,!2013a).!There!are!a!number!of!indicators! though,!particularly!post!2007,!pointing!to!an!emerging!framework!for! sustainable!energy!growth!in!Australia.!Certainly!the!renewed!focus!given! to!carbon!pricing!and!the!strengthening!of!the!RET!under!the!Rudd!Labor! government!and!the!Gillard!minority!government!have!been!key!elements! in!this!development.!Nevertheless,!this!thesis!suggests!that!this!postO2007! era!represents!more!of!a!policy!wobble!than!an!institutionalised!policy! shift,!which!is!caused,!in!part,!by!a!failure!to!integrate!and!coordinate! climate!and!energy!policy!goals.!Such!integration!failure!weakens! government!claims!of!greening!the!electricity!regime!and!it!clouds! Australia’s!SET!vision,!fuelling!a!policy!culture!of!scepticism,!with!actors! unclear!as!to!the!‘real’!direction!of!policy.!The!result!is!that!sustainable! energy!policies!are!particularly!susceptible!to!changing!government! ideologies,!making!longOterm!goals,!such!as!a!SET,!difficult!to!implement! and!maintain.!As!such,!Australia’s!SET!remains!stalled!at!the!takeOoff! phase.! ! A!central!feature!of!this!SET!impasse!is!Australia's!structural! economic!reliance!on!fossil!fuels,!which!is!in!part!caused,!and!exacerbated,! by!an!abundance!of!‘cheap’!fossil!fuels.!Australia's!climate!and!energy! response!has!been!built,!to!a!large!degree,!around!the!protection!and! exploitation!of!these!resources,!which,!as!argued!by!multiple!government! and!business/industry!leaders,!is!in!Australia's!‘national!interest’.!In! particular,!the!fossil!fuel!discourse!coalition!has!been!remarkably!

! ! 256! Chapter!9:!Conclusion! successful!at!reducing!the!debates!around!emissions!reductions!(and! therefore!SETs)!to!a!focus!on!shortOterm!economic!considerations.!This! dominant!definition!of!the!national!interest!is!then!exploited!to!lend! authority!and!legitimacy!both!to!the!regime!and!those!associated!with!it.!It! emphasizes!immediate!threats!to!the!economy,!certain!key!industries,! communities,!and!jobs.!This!interpretation!represents!an!important! element!in!climate!and!energy!analysis,!which!has!been!well!documented! in!previous!studies!O!particularly!those!on!climate!policy!in!Australia! (Curran,!2009;!Hamilton,!2007;!Pearse,!2007).!This!thesis!moves!beyond! interest!group!activity!and!incorporates!more!specifically!into!the!analysis! the!role!of!ideas!and!institutions!in!shaping!Australia’s!SET!vision,!and! what!this!means!for!its!pathway.!! Historically,!energy!policy!has!been!guided!by!two!core!objectives:! security!of!supply!(including!reliability)!and!affordability.!These!dual! objectives!have!been!reinforced!and!legitimised!through!a!neoliberal! ideology,!which!established!itself!in!Australia!in!the!late!1980s,!and! sustained!through!multiple!key!energy!policy!documents,!including!the! Industry!Commission’s!(1991)!Energy,Generation,and,Distribution!report! and!the!Parer!Report,!Towards,a,Truly,National,and,Efficient,Energy, Market,!(COAGOEMR,!2002),!and!more!generally!through!the!Hilmer! Report!on!economic!competition!policy!(Independent!Committee!of! Inquiry!into!Competition!Policy!in!Australia!&!Hilmer,!1993).!In!Victoria! this!neoliberal!agenda!resulted!in!the!sale!of!all!StateOowned!electricity! generation!assets,!along!with!the!SECV’s!demand!management!and! emissions!reduction!programs.!In!the!four!years!following!the! privatisation!of!the!SECV,!Victoria’s!emissions!from!electricity!generation! rose!by!31!per!cent.! ! Despite!the!overriding!influence!of!this!discourse,!its!failure,!either! through!markets!or!voluntary!action,!to!adequately!address!issues!relating! to!climate!change!has!periodically!opened!the!door!for!new!types!of!

! ! 257! Chapter!9:!Conclusion! regulatory!approaches!towards!climate!policy.!Guided!by!normative!and! ethical!dimensions!of!climate!change,!Australian!governments!have,!at! different!times!over!the!last!25!years,!drawn!on!the!storylines!of! multilateralism!and!justice!to!bolster!their!environmental!credentials.!This! has!led!to!a!number!of!important!policies,!some!of!which!reflect!elements! of!an!ecologically!modern!approach!to!climate!policy.!Nevertheless,! attempts!to!integrate!environmental/sustainability!dimensions!into! energy!policy!have!been!impeded!by!Australia’s!neoliberal!policy!culture! that!has!facilitated!the!marketisation!of!energy!governance!and!largely! excluded!interventionist!policy!measures!to!reduce!emissions!and! promote!a!SET.!! This!contest!between!these!two!macroOagendas!and!discourses!has! seen!the!dissociation!of!climate!goals!from!energy!goals!in!Australia.!This! dynamic,!sustained!since!the!emergence!of!climate!change!on!Australia’s! public!policy!agenda,!has!protected!the!twin!‘pillars’!of!energy!policy!O! security!of!supply!and!affordability!O!both!of!which!have!been!critical!to! twentieth!century!capital!accumulation!strategies.!The!result!is!that! sustainability/environmental!goals!have!been!excluded!from!energy! policy!and!linked!only!with!climate!policy,!allowing!energy!policy!to!act! virtually!independent!of!sustainability!considerations.!! At!times!this!separation!has!been!quite!overt.!For!instance,!in!1991,! when!the!Treasurer!Paul!Keating!asked!the!Industry!Commission!to! review!the!electricity!generation!and!distribution!sector,!he!subsequently! removed!Clause!3(i)!from!the!review’s!terms!of!reference.!Clause!3!(i)! required!the!Commission!to!consider!‘the!relative!efficiency!and!cost! effectiveness!of!options!to!reduce!the!environmental!impact!of!burning! fossil!fuels‘!(Industry!Commission,!1991).!This,!the!Treasurer!argued,!was! unnecessary!since!it!was!being!covered!through!the!Ecologically! Sustainable!Development!strategy!process.!The!review!of!the!Hazelwood! Power!Station!in!Victoria!in!2005!suffered!a!similar!fate!when!‘greenhouse!

! ! 258! Chapter!9:!Conclusion! matters’!were!excluded!from!its!terms!of!reference!(see!VCAT,!2004).!And! in!2007,!greenhouse!matters!were!considered!‘beyond!the!scope’!of!a! review!of!energy!markets!initiated!by!the!Council!of!Australian! Governments!(COAG),!(Energy!Reform!Implementation!Group,!2007,!p.! 18).!These!instances!represent!lost!opportunities!for!a!truly!integrated! approach!to!policy!design!and,!in!particular,!the!sustainability!of! Australia’s!electricity!regime.! ! This!parallel!track!approach!to!climate!and!energy!policy!has! created!confusion!about!where!responsibility!lies!for!their! interrelationship.!Australia’s!political!institutional!arrangements!have! encouraged!additional!failures!of!vertical!and!horizontal!policy! coordination.!Altogether,!these!conditions!have!eroded!the!potential!for!a! coherent!and!strong!SET!vision!to!emerge!in!Australia,!with!different! actors!often!pushing!and!pulling!in!opposite!directions.!!! Australia’s!adversarial!political!culture!and!federal!system!have! also!proved!obstacles!to!the!definition!of!a!consistent!SET!vision!between! national!and!subOnational!governments.!Since!the!late!2000s,!Australia’s! toxic!partisan!politics!of!carbon!pricing!has!further!eroded!the!potential! for!such!a!development.!! While!subOnational!governments!can!be!a!positive!force!for! initiating!SET!change!(i.e.!the!period!between!2002!and!2006),!their! commitment!and!capacity!to!implement!SET!policies!are!uncertain.!For! instance,!there!appears!to!be!a!widespread!belief!amongst!State!politicians! that!policies!such!as!carbon!pricing!and!RETs!should!be!administered!by! the!Commonwealth!government.!Meanwhile,!States!tend!to!react! parochially!to!national!policy!initiatives,!moving!to!protect!their!resourceO based!industries!O!as!the!Victorian!Premier!John!Brumby!did!in!2009!when! he!called!on!the!Rudd!government!to!increase!its!CPRS!compensation!to! the!Latrobe!Valley!electricity!generators!(Lewis!&!Ferguson,!2009;!Taylor!

! ! 259! Chapter!9:!Conclusion!

&!Hewett,!2009).!This!all!undermines!the!potential!for!constructive!and! coherent!forms!of!SET!governance.! Moreover,!energy!policy!governance!has!trended!towards!the! national!level,!which!has!often!complicated!FederalOState!relations!and! made!local!level!integration!more!challenging.!This!leads!to!further! problems!for!SET!governance,!particularly!given!the!increasing!number!of! smallOscale!(niche)!sustainable!energy!projects!at!the!community!level,! which,!according!to!Hargreaves!et!al.!(2013),!play!an!important!role!in! challenging,!and!possibly!replacing,!existing!unsustainable!socioOtechnical! systems.!When!the!local!level!is!increasingly!excluded!from!the!political! decision!making!process,!energy!dependent!regions!can!form!powerful! veto!coalitions!involving!industry,!unions!and!community!members,!which! can!then!link!up!with!institutional!veto!players,!i.e.!politicians,!with!the! power!to!block,!or!at!the!very!least!undermine!the!change!process.!Such! has!been!the!case!in!the!Latrobe!Valley!in!Victoria,!where!the!local!council! established!the!Coal!Councils!of!Australia!group!(an!alliance!of!seven!local! councils!from!around!Australia)!designed!to!facilitate!a!clear!and!constant! message!to!federal!policy!makers!regarding!the!adverse!effects!of!carbon! pricing!policy!on!their!communities.! ! Apart!from!this!vertical!fragmentation!of!power!and!responsibility,! there!is!also!a!horizontal!separation,!particularly!between!administrative! units!of!the!state.!Those!on!the!energy!side!argue!that!government!should! have!a!limited!role,!while!those!on!the!climate!side!see!room!for!additional! government!intervention!(i.e.!either!through!a!RET,!feed!in!tariffs,! subsidies/research!and!development!for!niche!technologies,!or!emissions! performance!standards).!This!has!led!to!different!patterns!of!climate!and! energy!policy!formation!and!implementation.!While!in!Australia!climate! policy!depends!on!an!open!issue!network!and!is!somewhat!accessible!to! nonOstate!actors!such!as!large!environmental!nonOgovernment! organisations!such!as!the!ACF,!Greenpeace!and!the!WWF,!by!contrast!the!

! ! 260! Chapter!9:!Conclusion! energy!policy!network!is!relatively!closed.5!Energy!policy,!in!seeking!to! promote!energy!security!and!affordability,!represents!what!Baumgartner! and!Jones!(1993)!term!a!closed!‘iron!triangle’,!involving!corporate,! political!and!technocratic!elites.!Others!such!as!Howlett!and!Ramesh! (1995)!have!referred!to!this!as!a!hegemonic!community,!or!policy! monopoly,!which!exists!when!‘state!and!societal!actors!are!in!general! agreement!about!the!parameters!of!the!problem!or!issue!and!there!is!a! clearly!identifiable!dominant!epistemic!community’!(Howlett!&!Ramesh,! 1995,!p.!130).!These!different!processes!can!lead!to!breakdowns!in!policy,! such!as!the!Contracts!for!Closure!program.!! Critically,!the!SET!narrative!presented!in!this!thesis!illustrates!that! the!forces!working!to!constrain!a!SET!in!Australia!have!been,!and!remain,! more!entrenched!and!powerful!than!those!working!to!enable!it.!Moreover,! it!shows!that!Australia!lacks!a!clear!SET!vision;!the!government’s!climate! and!energy!policies!are!not!integrated!and!coOevolving!with!one!another;! and!federal!and!State!governments!appear!unwilling!to!intervene!to!steer! the!electricity!regime!towards!sustainability.!Unless!these!obstacles!are! addressed,!Australia’s!SET!progress!is!likely!to!remain!dormant.!! ! ! Concluding(comments(and(directions(for(further(research( ! Australia!has!many!hurdles!to!overcome!before!realising!its!SET!potential.! The!divisive!nature!of!climate!policy!between!the!two!major!political! parties!is!particularly!problematic,!since!any!gains!made!by!one! government!are!often!wound!back!by!the!other.!At!the!time!of!writing!this! concluding!chapter!the!new!Coalition!government!had!outlined!its! intention!to!repeal!the!carbon!price,!dismantle!the!Climate!Commission,! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5!An!example!of!this!is!was!the!Energy!White!Paper!Reference!Group,!which!was!made!up! almost!entirely!of!fossil!fuel!interests.!This!‘high!level’!group!oversaw!the!strategic! direction!of!the!2012!Energy!White!Paper!through!the!Department!of!Resources,!Energy! and!Tourism.!For!details!of!group!members,!see!DRET!(2011b).!!

! ! 261! Chapter!9:!Conclusion! the!Climate!Change!Authority,!and!the!Clean!Energy!Finance!Corporation,! reduce!funds!to!ARENA,!and!undertake!a!review!of!the!RET,!which!many! believe!will!be!scaled!back.!This!kind!of!policy!oscillation!is!not!unusual!in! liberal!democratic!states,!but!it!does!not!imply!that!longOterm!goals!are! necessarily!out!of!reach.!Australia’s!commitment,!through!COAG,!to! electricity!market!reform!is!a!testament!to!this.!This!thesis!shows!that!the! challenge!for!a!SET!is!not!one!of!political!capability!but!instead!of!political! will.!! Not!surprisingly,!the!politics!of!sustainability!transitions!remains!a! vital!area!of!research.!The!addition!of!a!neoOGramscian!political!economy! framework!has!utility!for!future!studies!on!transitions,!particularly!those! concerned!with!dimensions!of!power.!First,!this!approach!is!embedded!in! critical!theory.!Rather!than!taking!existing!power!relations!and! institutions!as!a!given,!critical!theory!calls!them!into!question!(Ford,! 2003).!A!critical!discourse!approach!is!well!placed!to!capture!the!complex! processes!that!both!enable!and!constrain!action.!Second,!a!neoOGramscian! approach!opens!up!the!‘blackObox’!nature!of!the!state!(Okereke!et!al.,! 2009).!It!achieves!this!through!its!widened!notion!of!the!state,!which! consists!of!both!‘political!society’!and!the!‘civil!society’.!This!approach! thereby!captures!the!dynamics!between!state!and!nonOstate!actors!that! shape!the!institutions!of!governance!(McGuirk,!2004).!Gramsci’s!insights! provide!an!important!component!for!understanding!change!because!they! highlight!the!structural!and!strategic!selectively!of!the!state!(Jessop,!1990),! meaning!those!that!identify!with!hegemonic!interests!are!privileged!over! others.!Third,!power!is!relational!in!a!neoOGramscian!approach.!The!power! to!change!does!not!reside!in!or!with!any!one!specific!entity!but!is!a! configuration!of!forces.!In!its!conception!of!power,!a!neoOGramscian! approach!attempts!to!overcome!the!structureOagency!dichotomy!by! emphasising!social!identities!just!as!much!as!structural!forces!(Okereke!et! al.,!2009).!Fourth,!hegemony!is!contingent!and!unstable.!It!involves!a!

! ! 262! Chapter!9:!Conclusion! struggle!between!a!variety!of!collective!identities!for!representation!and! legitimacy!(Jenson,!1989)!and!is!therefore!never!complete.!As!such,!change! occurs!through!dynamic!processes!of!‘contradictions,!competing! ideologies,!and!active!agents!ensure[ing]!that!the!terrain!of!economic!and! political!contestation!is!forever!unfolding’!(Levy!&!Newell,!2002,!p.!94).! Importantly,!Gramsci’s!views!on!regime!change!point!to!the!interplay! between!endogenous!and!exogenous!process.!Gramsci’s!notion!of!the! Modern!Prince!and!his!ideas!on!revolutionary!change!draw!on!concepts! such!as!war!of!position,!war!of!movement!and!passive!revolution.!They! direct!our!attention!to!the!strategies!of!actors!engaged!in!the!construction! of!hegemony.!Fifth,!a!neoOGramscian!approach!focuses!our!attention!on! the!processes!of!coalition!building!and!alliance!formation.!These!dynamics! provide!valuable!insights!into!counterOhegemonic!narratives!and!indeed! change.! Although!the!conceptual!framework!used!in!this!thesis!provides! fertile!ground!from!which!to!understand!the!politics!of!SETs,!the!results! themselves!must!be!approached!with!some!care.!What!this!thesis!has! provided!is!a!historical!and!situative!context!of!SETs!in!Australia!over!the! last!25!years.!A!similar!study!in!a!different!geographical!region,!with!its! own!unique!politics,!would!likely!yield!different!outcomes.!Nevertheless,! these!studies!should!be!linked!to!help!identify!common!threads,!which! would!ultimately!improve!our!understanding!of!SET!governance.!For! Australia,!this!would!mean!undertaking!comparative!analysis!of!‘likeO minded’!regions,!such!as!federated!or!energy!exporting!states.!This!could! help!to!reveal!the!kinds!of!institutional!arrangements!that!might!be!more! conducive!to!the!promotion!of!a!SET.!! One!of!the!major!challenges!facing!sustainability!transitions,! according!to!Meadowcroft!(2005,!p.!492),!is!that!‘environmental! innovation!has!been!divorced!from!more!general!policies!for!economic! and!social!development’.!This!appears!the!case!in!Australia.!Even!when!a!

! ! 263! Chapter!9:!Conclusion! new!climate!and!energy!policy!pathway!was!promised!from!2007!onward! (which!led!to!a!price!on!carbon),!neoliberal!discourses!coOopted!those! measures!to!the!extent!that!the!government’s!overall!approach!avoided! questions!on!social!realities!and!the!framing!of!environmental!problems.! As!such,!any!discussions!on!socioOcultural!change!and!industrial!ecological! restructuring!were!peripheral!at!best.! Neither!the!Labor!Party!nor!the!Coalition,!which!together!account! for!close!to!80!percent!of!the!vote,!offers!a!strong,!reflexive,!ecologically! modern!vision!for!Australia.!As!such,!any!policy!‘shifts’!have!been! contingent!and!unstable.!If!Australia!is!to!overcome!its!SET!impasse,!it! must!seriously!consider!the!efficacy!of!deliberative!policymaking!designs,! such!as!the!transition!management!model,!that!emphasise!cooperation! and!integration.!This!of!course!is!easier!said!than!done!in!Australia’s! traditionally!adversarial!political!culture.!While!there!is!no!shortage!of! ‘organic!intellectuals’!in!Australia!who!can!provide!alternative!energy! future!narratives,!the!challenge!is,!and!has!always!been,!integrating!these! into!the!policymaking!process!beyond!the!informal!level!of!community! and!stakeholder!consultations.!After!all,!these!consultations!are!often! more!about!political!compromise!rather!than!a!genuine!attempt!to!open! up!policy!communities.!Despite!the!Greens'!success!in!incorporating! alternative!energy!narratives!into!government!policy!during!the!period! 2010!to!2013,!such!approaches!depend!on!contingent!political!dynamics! and!alliances.!These!were!not!formalised!institutional!arrangements!that! allow!for!deliberation!between!competing!discourses;!rather!they!are! subject!to!accident!and!change.!For!a!SET!to!succeed!(or!even!to!simply! progress),!climate!and!energy!policy!goals,!and!more!broadly,!economic! and!ecological!interests!must!be!integrated!so!as!to!promote!coOevolution.! Only!then!is!Australia!likely!to!establish!a!SET!vision!capable!of! withstanding!shortOterm!electoral!cycles.!!

! ! 264! !

Appendices(

! ! Appendix(1(( ! Timeline,of,key,climate,and,energy,policy,events,relating,to,Australia’s, sustainability,energy,transition! ! 1988! ! June! Toronto!Conference!on!the!Changing!Atmosphere! 1989! ! July! SECV!first!greenhouse!paper:!The,SEC,and,the,Greenhouse, Effect! 1990! ! May! Keating!asks!the!Industry!Commission!to!examine!the!scope! ! for!improving!the!efficiency!of!the!energy!generation!and! ! distribution!industry! June! Australian!Minerals!and!Energy!Council!report:!Energy,and, ! the,Greenhouse,Effect! Oct! Federal!government!announces!a!20!emissions!reduction! ! target!by!2005!(Interim!Planning!Target)! 1991! , May! Industry!Commission!report:!Energy,Generation,and, July! Distribution! ! Special!Premiers’!Conference!agrees!to!establish!a!National! Nov! Grid!Management!Council!! ! Industry!Commission!report:!Costs,and,Benefits,of,Reducing, Dec! Greenhouse,Gas!! Keating!elected!Prime!Minister! 1992! ! June! SECV!second!greenhouse!paper:!The,SECV,and,the,Greenhouse, ! Effect, June! Rio!Earth!Summit! Oct! Kennett!Liberal!government!elected!in!Victoria! Nov!! 51!per!cent!of!Loy!Yang!B!sold!to!Edison!Mission!Energy! Dec! National!Greenhouse!Response!Strategy! 1993! ! Aug! Hilmer!Report:!National,Competition,Policy! Oct! SECV!corporatised!and!split!into!generation,!distribution!and! ! transmission!

! 265! Appendix!

1994! ! Oct! Victorian!wholesale!electricity!market!commences! 1995! ! Jan!! Victorian!electricity!generation!horizontally!separated!and! ! privatised!over!the!next!four!years!! March! Greenhouse!Challenge!Program!initiated! 1996! ! March! Howard!Coalition!government!elected! May! Yallourn!Energy!sold! Aug! Hazelwood!Energy!sold! 1997! ! March! NEMCO!established! April! Loy!Yang!A!sold!! April!! Remaining!Loy!Yang!B!sold! Nov! Howard!government!Safeguarding,the,Future!statement! Dec! Kyoto!Protocol!(COP3)! 1998! ! April! AGO!established! Dec! NEM!operational! 1999! ! MarODec! AGO!releases!four!separate!papers!on!the!design!of!an! ! emissions!trading!scheme!! Oct! Bracks!Labor!government!elected!in!Victoria! 2000! ! Jan! Victorian!blackouts! 2001! ! April! MRET!begins! June! COAG!establishes!the!MCE! 2002! ! June!! Victorian!Greenhouse!Strategy! Dec! Parer!Review!released! 2004! ! Jan!! National!Emissions!Trading!Taskforce!established!(led!by! ! Victoria!and!New!South!Wales)! June! Energy!White!Paper!released! Dec! Victorian!Greenhouse!Challenge!for!Energy! 2005! ! July! Australian!Energy!Regulator!established! July! Australian!Energy!Market!Commission!established! Sept! Hazelwood!mining!licence!extended! !

! ! 266! Appendix!

2006! ! April! Australian!Business!Roundtable!on!Climate!Change!report! May!! Al!Gore!film!An,Inconvenient,Truth!! Aug! National!Emissions!Trading!Taskforce!Report!! Oct! Stern!Review! Dec! Prime!Minister’s!Taskgroup!on!Emissions!Trading! established! 2007! ! Jan! Victorian!Renewable!Energy!Target!scheme!commences!! March! IPCC!AR4!released! May!! Shergold!Report!released! July! John!Brumby!becomes!Premier!of!Victoria! Aug!! DPI!Near!Zero!Emissions!From!Latrobe!Valley!Coal!report! Nov! released!Victorian!Energy!Efficiency!Target!scheme!proposed! Dec! Rudd!Labor!government!elected! Dec! Department!of!Climate!Change!and!Energy!Efficiency! Dec! established! Kyoto!ratified! 2008! ! July! CPRS!Green!Paper! Sept! Garnaut!Review! Oct! Treasury!releases!Low!Pollution!Future!! Dec! CPRS!White!Paper! 2009! ! May!! Clean!Coal!Victoria!established!! July! Australian!Energy!Market!Operator!established! July! Victorian!Climate!Change!Green!Paper! Aug! CPRS!rejected!by!Senate! Sept! New!RET!introduced! Dec! Abbott!defeats!Turnbull!and!become!leader!of!the!Coalition! Dec! CPRS!rejected!a!second!time! Dec! Copenhagen!Conference!(COP15)! 2010! ! April! Positioning!Latrobe!City!for!a!Low!Carbon!Emission!Future! April!! report!CPRS!delayed! Sept! Gillard!Minority!government!elected! Sept! MultiOParty!Climate!Change!Commission!established! Sept! Victorian!Climate!Change!Act! Oct! Gillard!establishes!Roundtables!on!Climate!Change! Dec! Victorian!Climate!Change!White!paper! Dec! Baillieu!Liberal!government!elected!in!Victoria! ! !

! ! 267! Appendix!

2011! ! Feb! Climate!Commission!established! May! Garnaut!Updates! July! Securing!a!Clean!Energy!Future!report! Nov! Clean!Energy!Act!O!Carbon!Tax!passed! Dec! Latrobe!Valley!Transition!Committee!established! 2012! ! June! Clean!Energy!Finance!Corporation!established! July! Climate!Change!Authority!established! July! Carbon!Tax!comes!into!force! Sept!! Contracts!for!Closure!scheme!abandoned!! Oct! Energy!White!paper!released! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

! ! 268! Appendix!

Appendix(2( ! Participant,Information,Statement,and,Consent,Form!

!

! ! 269! Appendix!

! ! ! ! ! !

! ! 270! Appendix!

Appendix(3( ! Interview,schedule, ! Coded!interview! Date!of!interview! Background! #1! 06/02/13! Energy!White!Paper! Reference!Group! #2! 27/08/12! ExOAGO! #3! 18/07/12! Gippsland!Trades!and! Labour!Council! #4! 16/08/12! ExOgreenhouse!policy! bureaucrat! #5! 23/08/12! ExOOrigin!Energy! #6! 03/08/12! CFMEU! #7! 16/07/12! Regional!Development! Australia! #8! 23/08/12! Energy!policy!advisor! #9! 31/10/12! ExOenergy!policy! bureaucrat! #10! 10/10/12! Department!of!Regional! Australia,!Local! Government,!Arts!and! Sport! #11! 09/08/12! Climate!change!advisor! #12! 19/03/13! Department!of!Climate! Change!and!Energy! Efficiency! #13! 11/07/12! ClimateWorks!Australia! #14! 13/08/12! Melbourne!Energy! Institute! #15! 10/08/12! Latrobe!City!Council! #16! 20/07/12! Department!of!Primary! Industries!Victoria! #17! 08/08/12! ExOpolitician!(energy! policy)! #18! 18/09/12! Climate!Change! Authority! #19! 24/08/12! Regional!Development! Victoria! #20! 31/08/12! Environment!Victoria! #21! 07/09/12! ExOclimate!change! advisor! #22! 18/09/12! ExOpolitician!(climate!

! ! 271! Appendix!

change!policy)! #23! 09/08/12! Climate!change!advisor! #24! 10/07/12! Gippsland!Climate! Change!Network! #25! 31/07/12! Academic! (environmental! engineering)! #26! 18/07/12! Latrobe!City!Council! #27! 20/07/12! Utility!advocate! #28! 02/10/12! Energy!efficiency! advisor! #29! 04/10/12! Climate!change! ! roundtable!participant! (Gillard!roundtables)! #30! 18/07/12! Gippsland!Trades!and! Labour!Council! #31! 16/07/12! Latrobe!City!Council! #32! 25/10/12! ExOSECV! #33! 27/08/12! TRU!Energy! #34! 07/08/12! Department!of! Resources,!Energy!and! Tourism! #35! 10/07/12! BZE! #36! 26/07/12! Politician!(Gippsland! region)! #37! 06/09/12! Department!of! Resources,!Energy!and! Tourism! #38! 03/08/12! Clean!Energy!Council! #39! 03/04/13! Politician!(climate! change!policy)! #40! 10/10/12! Department!of!Climate! Change!and!Energy! Efficiency! (

! ! 272! !

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