How Nationals and lobbyists play the new climate wars

Hunter was heartland territory for Labor until the last election, when the Coalition wedged it on climate change, branding its policy “economy wrecking”. Veteran Hunter Labor MP Joel Fitzgibbon suffered a 14 per cent swing in his primary vote after One Nation stood a local coalminer against him. Fitzgibbon has now retired, leaving Labor to defend the seat with just a three-point margin.

Coal dominates the economy and the mindset in the region. Huge mines splay across the landscape. Together with ageing coal-fired power plants, they employ thousands of workers. In the town of Singleton, 30 minutes’ drive from some of Hunter’s biggest mines, Labor’s vote plummeted in 2019. The Australian Army’s Lone Pine Barracks are down the road, so it was no surprise when Barnaby Joyce, Nationals leader and deputy prime minister, came here to celebrate Anzac Day alongside James Thomson.

“Whilst people want to buy our coal we’ll sell them our coal, there’s no doubt about that. So if Labor gets in, there will be no mines closed under a Labor government and that’s just that.”

At the Singleton Diggers club Joyce talked up the prospect of more blue-collar votes shifting to the Nationals in Hunter and in central Queensland’s coal seats. “There’s been a political journey,” he tells me. “Their first step of the journey is to third-party independents such as One Nation and now is where they make their next step towards the Nationals. They see the Nationals as more sympathetic and understanding to the work they do.”

The week before Joyce arrived in town his close ally, Queensland Nationals senator Matt Canavan, flew in and blitzed the coalmining districts with Thomson. Canavan, a vocal climate change sceptic, was revved up and on message: “Don’t trust Labor with our coal jobs”, “Don’t risk your job with Labor, they are just too close to the Greens.” Canavan’s live cross to Sky News from the local Caledonian pub reinforced his Facebook attack ads, which ran at a relentless pace.

The Nationals’ campaign on Labor over coal jobs stretches from the Hunter to central Queensland, where the climate sceptic lobby, the Institute of Public Affairs (IPA), rams home the message in local ads in News Corp’s Townsville Bulletin, claiming net-zero emissions will stop 125,000 jobs being created in north Queensland. Mining magnate Gina Rinehart, a friend of Joyce’s, has long been one of the IPA’s biggest donors.

In the past fortnight, the Nationals’ campaign has homed in on a critical feature of Labor’s climate policy – the so-called safeguard mechanism. It’s designed to get big enterprises, including coalmining companies, to reduce their emissions. The mechanism was originally brought in by the Coalition government. The idea is that big enterprises can negotiate a baseline to limit and then slowly reduce their emissions. In theory, if the businesses exceed their baseline, they can buy carbon credits to offset their emissions or invest in new technology to reduce them.

The safeguard mechanism is a tool to help Australia meet its UN commitments to cut emissions. But under the Coalition the mechanism has been notoriously flexible in setting baselines for big emitters. The net result is that emissions covered by it are rising rather than falling. Labor’s policy is to tighten up the mechanism.

Joyce and Prime Minister Scott Morrison are now calling this “a sneaky carbon tax” on big emitters. They are ruthlessly using it to once again wedge Labor on climate change in regional Australia. “It’s a sneaky carbon tax which Labor’s putting in place and it’s not just on the coalmining industry, here in Rockhampton, in central Queensland,” Morrison told journalists on the campaign trail. “It’s on fuel supplies. It’s on petroleum. It’s on gas. It’s on the transport sector. It’s right across the board.”

The Coalition knows some of the big coalminers and their lobby, the Minerals Council of Australia, is worried about Labor’s policy. Swiss mining giant Glencore, one of the biggest miners in Hunter, added its voice to the concerns, telling The Saturday Paper, “Without more detail around proposed changes there is a risk that metals processing, oil, gas and coal may be unfairly penalised.”

Under the first wave of Coalition attacks, Labor badly fumbled its initial response. It has tried to ease concerns, saying that while its safeguard mechanism policy did indeed include the coal companies, they would still be given flexibility with their baselines because they faced foreign competition.

In Singleton, Labor’s Hunter candidate, Dan Repacholi, was determinedly pushing this message. “Australian coalmines have only got to meet the same targets and standards of our similar coalmines in Mozambique, over in Brazil, in South America,” he told me. “We’ve just got to have better standards than them and there’ll be no issues here whatsoever.”

Repacholi is an affable former coalminer and Olympic sports shooter, supported by the mining union, the CFMEU. He’s running a grassroots campaign to fight off the threat from One Nation and the Nationals, but when it comes to defending coal jobs he is on the same page as his opponents.

“Whilst people want to buy our coal we’ll sell them our coal, there’s no doubt about that,” he stresses repeatedly. “So if Labor gets in, there will be no mines closed under a Labor government and that’s just that.”

But the gap between the campaign rhetoric in Hunter and the scientific reality of climate change is becoming harder to bridge. The latest report from the Intergovernmental Panel on Climate Change revealed the world now has little chance of holding global warming to 1.5 degrees Celsius. Even limiting warming to about 2 degrees Celsius  – above the Paris Agreement target – will need global greenhouse emissions to peak before 2025 and be reduced by a quarter by 2030.

Phasing out coal-fired electricity globally will be critical to making this happen and that will mean big change in Hunter. Most coal exports from the area are for electricity generation. While the UN has not given a “10-year deadline” to shut down coalmining in the Hunter Valley, as the Nationals’ candidate claims, the UN secretary-general, António Guterres, has called for global coal use in electricity generation to fall 80 per cent below 2010 levels by 2030 – just eight years away.

The coal industry is already being rocked by the global energy transition brought on by climate change. The big Hunter coalmines, like the local coal-fired power stations, are on borrowed time. The mining companies know it, even though some are still aggressively pressing ahead with major mine expansions while they can.

Right now, Glencore is waiting for the tick of approval to greatly expand its Glendell mine in the large open-cut complex at Mount Owen, just 20 kilometres north-west of Singleton. Glencore wants to extract another 135 million tonnes of coal over 20 years until 2044, arguing it has to replace coal from depleted mines that are closing.

Both the NSW Independent Planning Commission and the federal Environment minister, Sussan Ley, are expected to sign off on the expansion, despite opposition from environmentalists, Indigenous groups and former chief scientist for Australia Professor Penny Sackett.

Sackett says projects such as Glendell make it harder to keep the global temperatures below 2 degrees Celsius. “New and extended coal developments are increasing the speed with which we are approaching not just dangerous but catastrophic climate change,” Sackett says.

Glencore insists that, because it is closing other mines, the emissions from the new project will not be significant. It argues that if it doesn’t sell the coal, someone else will. Yet on the other side of the world the company is facing increasing pressure from its own shareholders over its coal business. Last year Glencore asked its shareholders to approve a new climate plan for the company to reach net-zero emissions by 2050. Two weeks ago, at its annual general meeting, Glencore suffered a surprising rebuke when almost a quarter of its shareholders voted against approving its progress report on the plan. One key reason was concerns from investor activists that the company needed to cut coal production much faster over the next decade to meet its net-zero commitments.

The impact of shareholder pressure on big greenhouse emitters is already being felt in Hunter. In February, workers at Eraring, Australia’s largest coal-fired power station, were told it would shut down in 2025, seven years earlier than expected. Some 400 workers will be made redundant. Announcing the decision, Origin Energy chief executive Frank Calabria said bluntly, “The reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower-cost generation, including solar, wind and batteries.”

Another ageing Hunter coal plant, Liddell, is slated to shut down next year. Its owner, AGL, is Australia’s biggest carbon emitter. Just this week, the company was thrown into turmoil when billionaire clean energy investor Mike Cannon-Brookes bought 11 per cent of the company and became its largest shareholder. Cannon-Brookes is aiming to derail AGL’s current plans to spin off its big coal plants into a separate company, saying he wants to find faster ways to reduce AGL’s emissions from the fossil fuel plants.

If Cannon-Brookes succeeds, it will mean even more upheaval for Hunter. AGL also owns the region’s big Bayswater power station and it too could face an early shutdown. The plant supplies electricity to the Tomago aluminium smelter, a major employer both in Hunter and the neighbouring seat of Paterson.

The speed of energy transition in the Hunter is not lost on the NSW Coalition government. Along with private energy companies, it has been working on big plans to make the region a workable renewable energy zone, allowing companies such as Tomago to survive the shift to clean energy. Even Morrison and his Energy minister, Angus Taylor, are keen to talk up their support for a clean energy hydrogen hub in the Hunter region to create new jobs, when it suits them.

But on the campaign trail in the Hunter, reigniting the climate wars is still the go-to strategy for the Nationals. The loud message of fear cuts through when your job is on the line. Labor will only be hoping that message won’t be as potent this time around.