Swimming against the current: Australian climate institutions and the politics of polarisation

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ABSTRACT

While a large body of scholarship has analysed the nature and dysfunction of Australian climate policy over the past generation, there has been little examination of how the Australian state has reorganised itself institutionally to create and execute climate policy. Filling this gap, I explore the evolution of federal climate institutions since the early 1990s, describing how they have fared in the midst of Australia’s highly polarized political debate around climate, as well as how they have facilitated and constrained Canberra’s ability to develop effective climate strategies.

KEYWORDS:

• Australia
• climate change
• institutions
• climate policy
• renewables

Introduction

On most metrics, Australia has, for the past quarter century, been the worst performing industrialised state in the world when it comes to climate policy. In any given year, Australia has among the highest per-capita emissions of any rich country, along with the 16th highest absolute emissions (Carbon Brief 2019). As Figure 1 depicts, high emissions are an endemic feature of the Australian economy, with effectively every major tranche of the country’s emissions profile remaining comparatively high in per capita terms, and projected to increase through 2030. Despite this, however, Australia lacks any sufficient national strategies to arrest its emissions, with its political system still locked in a polarized debate about the existence, causes, and consequences of anthropogenic climate change (Taylor 2014). Not surprisingly, Australia has long been vilified as one of the world’s preeminent climate laggards, and placed last out of 58 countries in the Climate Change Performance Index’s 2019 comparative review of national climate policies (CCPI 2019).

Figure 1. Australian GHG emissions, 1990–2030

Source: Government of Australia (2020).

While a large body of scholarly work has rightly drawn attention to the dysfunctional nature of Australian climate politics over the years (see, e.g. Rosewarne 2003, Christoff 2005, Crowley 2007, Hamilton 2007, Eckersley 2013, Chubb 2014, Taylor 2014, MacNeil 2016), there has been little analysis of how the Australian state has sought to reorganise itself institutionally to create and execute climate policy – nor has there been a focus on the role such institutions have played in either remedying or exacerbating the aforementioned dysfunction. This turns out to be a rather important gap in the literature, both on Australia specifically and national climate policy generally. While there have been various efforts to understand national climate policy development over the years – looking at, for example, the implications of national political variables (Harrison and Sundstrom 2010, Christoff and Eckersley 2011), choice of policy instruments (Lachapelle and Paterson 2013), and the challenges of managing policy in federal states (Rabe 2011, Gordon 2015) – there is a dearth of empirical literature on the rise of an intermediate layer of ‘climate institutions’ within states to oversee climate policy. These institutions are crucial to understand given their potential to mediate political battles around the issue, shape policy outcomes, and accelerate climate action by generating new norms and incentives within the government, economy, and society broadly. Indeed, as Dubash (2020, p. 2) suggests, such institutions, if strong and well designed, have the ability to speed up policy efforts and enable accelerated action – but equally, if they are weak and poorly designed, they could undermine mitigation efforts and leave policy progress vulnerable to rollback.

Filling this gap in the Australian context, I examine the emergence and performance of climate institutions around two broad research questions. First, what political and historical factors have shaped the evolution of Australia’s national climate institutions over the past generation, and what does the resulting landscape of institutions currently look like? And second, to what extent have the resultant institutions succeeded or failed at solving some of the key challenges inherent to climate governance? In this endeavour, I adopt Hall and Taylor’s (1996, p. 938) definition of institutions, as the range of “formal and informal procedures, routines, norms and conventions embedded in the organisational structure of the polity or economy.” Given the rather limited scope of climate policy efforts in Australia, this broad definition allows for a conception of institutions which is capacious enough to capture the full range of entities and efforts (from ephemeral taskforces and informal advisory councils, to more entrenched, formal agencies and bureaucracies) existing across the federal government, regardless of their size and formality, as well as those which may be only tangentially related to formal climate policy itself.

The real value-add of the Australian example in this context lies in its ability to highlight the ways that institutions designed to oversee climate governance develop and perform under conditions of extreme political polarisation and uncertainty. In particular, the analysis underscores two key points about the function of climate institutions under such conditions. On the one hand, Australia highlights the extent to which a hostile political atmosphere around climate policy tends to generate weak and underdeveloped institutions, which thereafter struggle to achieve consistent and durable action. In this context, I highlight how this institutional underdevelopment has hindered Australian climate policy for the better part of three decades, leaving policy efforts sporadic, generally unambitious, and highly vulnerable to political attack and rollback. At the same time, however, Australia has developed a small suite of climate institutions that, despite their fragility, have nevertheless managed to swim against the current of a hostile political environment, creating important new policy spaces and generating crucial (if somewhat isolated) victories in the quest for decarbonization. In this context, while the Australian example is merely one case and not necessarily suggestive of a general trend, it nevertheless underscores how institutions that are born fragile can still become embedded or appropriated to provide helpful policy openings within an otherwise unsympathetic political environment.

I begin by addressing the first research question noted above, exploring the history and factors that have influenced the evolution of Australia’s national climate institutions over the past 30 years. In so doing, I follow a historical-institutionalist approach that explores how politics shape the conditions under which climate institutions emerge (Kuzemko et al. 2016; Lockwood et al. 2017). As noted above, the analysis here underscores the dual nature of climate institutions in Australia – simultaneously too weak and underdeveloped to facilitate a systematic trajectory of decarbonisation, yet in certain limited instances, able to embed themselves in ways that have produced helpful action. Following that, the latter half addresses the second research question laid out above, assessing how Australia’s small suite of climate institutions have fared at solving some of the key challenges inherent to climate policy – namely coordination across economic sectors and governmental bodies, the mediation of prohibitive political forces, and the promotion of transformative economic and social change. This section highlights, in particular, the sizeable gaps and shortcomings that Australian climate policy development has experienced in light of this institutional underdevelopment.

My methodology combines a review of literature on Australian climate policy and institutional change, 15 interviews with policymakers engaged in climate policy development over the past generation at the federal and sub-national levels, and a review of government documents related to climate policy development since the early 1990s. The knowledge accrued from these sources was supplemented by two workshops as part of the Varieties of Climate Governance Research Group throughout 2019 and 2020 (Dubash 2019).

Understanding the evolution of Australian climate institutions

Here, the evolution of Australian climate institutions is divided into four general eras. The first begins with Australia’s adoption of the ‘Toronto Targets’ in 1990, and lasts until the mid-2000s. This is an era in which both Labor and Liberal governments were highly resistant to any real climate action, and institutions were formed defensively, with limited influence and resources.¹ The formation of the National Emissions Trading Taskforce (NETT) by the Council of the Australian Federation in 2004 marks the beginning of a second era, one in which pro-climate forces in both major parties gained greater control over the debate, and laid much of the groundwork for the policy progress that would follow. This in turn leads to a third era from 2007 to 2013 during which Labor governments established the lion’s share of national climate institutions. Finally, the election of Tony Abbott’s Liberal government in 2013 signalled the beginning of the current era, with proactive climate policy once again receding from view, and existing institutions struggling to maintain resources and influence.

Period 1 (1990–2004): anti-climate forces dominate; institutions struggle to gain traction

The period from 1990 to 2004 stands as an era in which climate institutions generally failed to develop in Australia. Despite the changes in Prime Ministers and governing parties during this period, the influence of anti-climate forces within both major parties kept any serious action at bay. In the Labor party, these interests were represented by major unions from high-emitting sectors, while in the Liberal party, business lobbies representing carbon-intensive industries and agriculture exerted immense pressure. The result was that, while all three Prime Ministers during this period made numerous rhetorical commitments to address the problem, climate action consisted of little more than a handful of voluntary programs (Taplin and Yu 2000). The key institutional developments under the Hawke and Keating Labor governments were limited to the creation of a scantily resourced National Greenhouse Advisory Council to advise on policy development, and increases in climate-focused research capacity for the Commonwealth Scientific and Industrial Research Organisation (CSIRO) (Staples 2009).

While the election of John Howard’s Liberal government in 1996 marked a continuation of its Labor predecessors’ general inaction, it nevertheless brought a major stylistic shift. It was during this period that Australia became infamous for its efforts to stifle UNFCCC treaty negotiations, its penchant to openly question IPCC science, and its decision to join the US as the only other rich country to reject Kyoto (Taberner and Zorzetto 2014). Howard’s impact on the formation of federal climate institutions was likewise distinct. With most other environmental policy areas since the 1960s, institutional development had typically occurred through a process of ‘layering’ new mandates and agencies onto relevant departments across the federal government (Mahoney and Thelen 2010). Breaking with this tradition, Howard instead precluded the layering of climate-based considerations across the government by concentrating all policy within a specialised federal agency called the Australian Greenhouse Office (AGO), directly overseen by the Department of Prime Minister and Cabinet (DPMC). In so doing, Howard pitched the AGO as the world’s ‘first national climate agency’, and frequently boasted about its institutional innovativeness.

As the primary national climate institution throughout much of this era, the story of the AGO can be read in two ways. The first is a more pessimistic interpretation about the political constraints that have often been placed upon climate institutions in Australia. Indeed, for Crowley (2007, p. 126), the primary effect of the AGO was to significantly undermine the climate-related influence of all other relevant departments where their functions and influence had been completely lost to the AGO. From the start, this effectively precluded departments like Environment, Energy, Industry, Transportation, Agriculture, Infrastructure, Treasury, etc., from developing the sorts of climate policy capacities that, over the longer term, might have proved crucial to catalysing effective, whole-of-government responses. Moreover, although staffed with a capable, pro-climate leadership, the AGO was subject to significant limitations. Despite being touted as an independent agency, it nevertheless answered to a small council of ministers representing the departments of Agriculture, Industry, and Environment. As Mildenberger (2020, p. 168) notes, this council gave climate opponents the ability to block proposals they deemed unfavourable to their constituents, creating a situation where, rather than facilitating and fast-tracking climate action, the AGO’s institutional structure often enhanced and concentrated the veto powers of anti-climate forces. With these constraints in place, the agency was unable to develop any substantive regulatory policies throughout its existence, and was limited to overseeing a half-dozen small grant programs and voluntary initiatives that failed to make a dent in national emissions. For more critical commentators (e.g. Hamilton 2007), the AGO mostly served as a symbolic decoy to provide cover around the government’s Kyoto position.

Read another way, however, the AGO provides an example of how institutions – even weakly designed and poorly resourced ones – can unexpectedly provide new spaces and lead to unpredicted outcomes. Indeed, lacking capacity to promote any substantive regulatory initiatives, leadership within the AGO soon turned its attention to research, developing a series of discussion papers around emissions trading that outlined the broad parameters of such a system for the Australian context. While Howard reaffirmed in August 2000 that he had no plans to pursue the idea, the AGO nevertheless brought the concept on to the radar of policymakers, generated initial intellectual momentum for it, and developed the skeletal framework from which the Rudd/Gillard Labor governments would soon develop their carbon pricing programs (Mildenberger 2020, p. 169). Likewise, the agency was able to capitalise on a favourable opportunity to significantly expand its funding and policy capacity. In 1999, Howard’s government passed a tax reform bill that required support from Democrats in the Senate. In exchange for their support, the Democrats demanded, among other things, additional funding for climate action. In response, Howard provided an extra 400 USD million for the AGO, but failed to directly stipulate how the agency should use the money. AGO bureaucrats thus used their own discretion to establish the Greenhouse Gas Abatement Program (GGAP), which paid businesses to cut their emissions through a competitive tender process. While the program failed to achieve its abatement goals, GGAP nevertheless signalled to the Australian business community that new climate policies would remain on the agenda, even within an otherwise anti-climate government (Mildenberger 2020).

Indeed, while this era could justifiably be characterised as something of a ‘lost decade’ for climate policy, a more optimistic reading of the AGO throughout this period underscores how an institution that was generally marginalised and under-resourced nevertheless developed substantial bureaucratic capacity on climate, including among central economic ministries like Treasury. The result was the bureaucracy increasingly becoming an independent, driving force for climate reforms by the early 2000s, working under the radar to lay some of the crucial groundwork for the national emissions trading system (ETS) implemented a handful of years later.

Period 2 (2004–2007): pro-carbon trading forces rise to the fore

By the mid-2000s, the political landscape around Australian climate policy had shifted significantly. As emissions trading emerged as the likely mode of national climate regulation, pro-climate forces within both major parties began to control the debate for the first time. Indeed, while heavy-emitting constituents continued to resist regulation, the prospect of a national ETS animated a powerful cross-party, cross-sector coalition of environmentalists, banks, financiers, gas companies, and businesses/unions from low-emitting sectors – all of whom saw some type of benefit in emissions trading (Paterson 2012, p. 86). The result was an enormously chaotic decade of advances and retreats that yielded the small landscape of climate institutions that Australia has today.

The major catalysing events for this second era occurred at the subnational level, as Labor governments within the states sought to capitalise on growing public calls for climate action. What followed was a series of efforts by the states to both exploit Howard’s inaction on the issue, and force the federal government’s hand. In 2003, New South Wales’ Labor government introduced the world’s first mandatory ETS for carbon emissions. The country’s six states and two territories, all ruled by Labor governments, then went a step further in 2004 when they formed the National Emissions Trading Taskforce (NETT) to establish the parameters of a national ETS – one that could be run with or without the assistance of the federal government. During this period, pro-climate voices within the federal Liberal party were also beginning to rally around the idea of an ETS. They soon found a sympathetic ear amongst Treasury officials who were growing increasingly concerned about climate risks to the Australian economy, and had begun to openly discuss the possibility of a national carbon market (Müller and Slominski 2017). Around the same time, the Australian business community intuited that some form of climate action was growing inevitable in the coming years, and began to express support for an ETS as the least punitive form of regulation (Chubb 2014, p. 29).

By 2006, the issue-attention cycle for climate had dialled up significantly in light of a devastating multiyear drought across Eastern Australia. As media attention and public discussion around the issue reached unprecedented levels, pro-climate forces inside both parties were suddenly afforded significant leverage. Led by then-Environment Minister Malcolm Turnbull, pro-climate Liberals joined Treasury officials in persuading Howard to reconsider his opposition to carbon pricing (Chubb 2014, p. 31). Acknowledging the growing public pressure and support within large sections of the business community, Howard agreed to create the Prime Ministerial Task Group on Emissions Trading (PMTGET). In so doing, however, he restricted the PMTGET’s terms of reference to simply advising on the design of a global ETS in which Australia could profitably participate, without sacrificing its comparative advantage on fossil fuel production. Yet much like the AGO in the previous period, the taskforce soon reinterpreted its own mandate to include the design of a stand-alone Australian trading scheme, thereby unilaterally overstepping Howard’s instructions, and facilitating a much bigger policy discussion within the government (Mildenberger 2020, p. 172). Indeed, submitted in May 2007, the PMTGET’s final report directly contradicted Howard’s instructions by recommending the creation of a domestic ETS (one featuring broad sectoral coverage) in advance of a workable global one, noting that any delay would create significant policy uncertainty and lost investment (Ibid). Acknowledging that some type of policy would be a necessity going into the 2007 federal election – and that an ETS was likely the least punitive approach – Howard accepted the taskforce’s recommendation, and joined his Labor opposition in running on the creation of a domestic trading system.

Once again, the PMTGET provides an example of an institution that may have been created to be more symbolic than substantive, but which nevertheless found a fortuitous lane for itself, and reinterpreted its own mandate to deliver recommendations that went well beyond the government’s original intentions. In so doing, the PMTGET created a space to design an ETS capable of generating buy-in from broad swaths of Australian industry and society. This pattern throughout these first two eras (in which small, scantily resourced institutions end up developing greater autonomy, making stronger recommendations than the government initially intended, and accelerating the trajectory of national policy) speaks to an interpretation of institutions as non-static, and as capable of shaping the space for decision-making, often with unexpected consequences as interests learn to harness and use them to their advantage.

Period 3 (2007–2013): the high-water mark of institutional development

Following his 2007 election victory, Labor PM Kevin Rudd initiated plans for a national ETS, formally titled the Carbon Pollution Reduction Scheme (CPRS). As with the preceding proposals, the CPRS exposed deep divides in both parties over carbon pricing. In the Labor party, while environmentalists and unions from low-emitting sectors criticised the CPRS for a perceived lack of ambition, the Australian Workers Union, which represents workers in several high-emitting sectors, took the unusual step of attacking a sitting Labor government over the perceived threat to their workers (Burgmann and Baer 2012, p. 291). Likewise, in the Liberal party, Opposition Leader Malcom Turnbull’s support for an ETS revealed the extent of anti-climate sentiment in his party. While several prominent members of the caucus stood firm in their support for carbon pricing, others remained deeply opposed, as did members of the National Party (see Table 1 for a breakdown of the political shifts during this period).

Table 1. Timeline of Australian climate institutions, 1990–2020

Political moments	Period	Institutional events
Dec ‘91: Paul Keating takes over as Labor PM March ‘96: Coalition wins election; Howard becomes PM June ‘02: Howard govt refuses to ratify Kyoto	1990–2004	Oct ‘90: Govt and COAG adopt ‘Toronto targets’ of 20% reduction by 2005 (with ‘no regrets’ strategy) Feb ’94: National Greenhouse Advisory Council est’d April ‘98: Australian Greenhouse Office is established May ‘99: Govt creates GHG Abatement Programme Jan ‘03: NSW’s ETS is implemented
Dec ‘06: Kevin Rudd becomes Labor leader, makes climate action a central feature of Labor’s priorities Oct ‘07: Howard promises to create national ETS	2004–2007	Jan ‘04: State/territory govts create the National Emissions Trading Taskforce (NETT) May ‘07: Prime Ministerial Task Group on Emissions Trading releases ‘Shergold Report’: recommends ETS
Nov ‘07: Labor forms govt; Rudd takes over as PM, Howard steps down as Liberal leader Dec ‘07: Australia ratifies Kyoto Sept ‘08: Malcolm Turnbull becomes Liberal leader Dec ‘09: Abbott replaces Turnbull as Liberal leader, voids CPRS deal. June ‘10: Julia Gillard becomes PM after Labor leadership challenge Aug/Sept ‘10: Election results in hung parliament. Gillard signs agreements with Greens/independents to form govt June ‘13: Rudd becomes PM in Labor leadership challenge	2007–2013	Sept ‘08: Final Garnaut report released, proposes ETS. Aug ‘09: CPRS Bill is rejected in the Senate (42 to 30) Sept ‘09: Renewable energy target increased to 20% Dec ‘09: CPRS rejected again by Senate March ‘10: AGO formally disbanded, with remaining functions absorbed by Dept of Climate Change Sept ‘10 Prime Minister’s Committee on Climate Change (PMCCC) is established Feb ‘11: Climate Commission is created to provide expert information to the public Nov ‘11: Clean Energy Act and ETS passed by Parliament April ‘12: Clean Energy Regulator is established June ‘12: Clean Energy Future Package creates Clean Energy Finance Corporation, Climate Change Authority, and Australian Renewable Energy Agency July ‘12: Price on carbon comes into effect
Sept ‘13: Coalition wins election; Abbott becomes PM Sept ‘15: Turnbull becomes PM in leadership challenge Aug ‘18: Morrison becomes PM in leadership challenge	2013–2019	Sept ‘13: Climate Commission abolished. June ‘14: Govt introduces Direct Action Plan (Carbon Farming Initiative & Emissions Reduction Fund) July ‘14: Carbon price repealed. CEFC and CCA are kept as part of a Senate deal to scrap carbon price March ‘17: Secretaries Group on Climate Risk formed

Following the CPRS’s defeat in the Senate in August 2009, Rudd struck a deal with Turnbull to bring the program more in line with industry preferences, including the provision of additional free permits, greater industry assistance, and the exclusion of the agricultural sector. Yet the compromise only further inflamed tensions within each party. While the deal pacified high-emitting unions within Labor, it aggravated environmentalists who saw the CPRS as increasingly useless (Chubb 2014, p. 39). In the Liberal party, the deal satisfied the pro-climate wing, but angered high-emitting constituents – particularly in the extractive sector. The result was a leadership challenge in which Turnbull was replaced by Tony Abbott, who strongly opposed the CPRS. Lacking Liberal support, the CPRS was defeated in the Senate for a second time in December 2009. Rather than strike a deal with the Greens (whom Rudd believed would undermine support from high-emitting industries), the CPRS was shelved in April 2010.

In June 2010, Rudd was replaced as Labor leader and PM by Julia Gillard in a leadership challenge. Upon taking over, Gillard effectively put climate policy on the back burner, and ruled out a carbon tax. Yet, relying on Greens support to prop up her government following a hung parliament in the 2010 election, Gillard’s term as PM would actually come to constitute the high-water mark of climate institutions in Australia. As part of their conditions, the Greens demanded a cross-party taskforce to establish a national ETS. The resulting Multi-Party Committee on Climate Change (MPCCC) included members of Labor, the Greens, and two independent MPs, with the Liberals and Nationals refusing to participate. While Labor wanted to reintroduce the existing CPRS, the Greens (who had voted it down less than a year earlier) demanded a substantially stronger program. Unable to bridge the gap on a narrow ETS policy, the MPCCC proposed a broader climate policy which bundled a short-term fixed carbon price (to be rolled into a floating price ETS after 3 years) with significant new supports for clean energy.² The combined Clean Energy Act and Clean Energy Futures Package (CEFP) thus legislated a national carbon price along with the creation of the Clean Energy Finance Corporation (CEFC) to help fund the deployment of renewables, as well as the Australian Renewable Energy Agency (ARENA) to support renewable energy innovation (these institutions are discussed further in the next section). Added to this, Gillard established the Climate Change Authority (CCA) to provide authoritative scientific advice to the government and Parliament on climate-related matters, and the Climate Commission (CC) to provide similar information to the Australian public. The Clean Energy Regulator (CER) was likewise established during this period to oversee the Renewable Energy Target.

Period 4 (2013–2020): climate policy languishes; institutions struggle against the current

Tony Abbott’s 2013 election victory cemented a stark shift in the trajectory of Australian climate policy – one that had been underway since late 2009 when Abbott initially won the leadership of the Liberal party and signalled a fracturing of the tenuous bipartisan consensus on climate action. Abbott’s leadership victory gave a powerful voice back to anti-climate constituents within the party that had been marginalised since the mid-2000s. And in short order, his ‘blood oath’ to repeal Labor’s carbon price upon forming government began to undermine the previous sense of policy inevitability that had coalesced the business community around carbon pricing over the preceding decade.

Making good on his promise, Abbott set to work dismantling the country’s climate policy infrastructure. While he succeeded in disbanding the Climate Commission and the carbon price, cross-bench parties in the Senate saved the Climate Change Authority, ARENA, and the CEFC – all of which were viewed as less integral to Abbott’s mandate on climate, and the latter two simply doling out largesse to one of the country’s fastest-growing industries. The government thereafter introduced its expenditure-focused Direct Action Plan, featuring an Emissions Reduction Fund in which reverse-auctions distribute funding for projects capable of reducing emissions. Though pro-climate forces within the Liberal party and business community remained uncomfortable with Abbott’s approach, they increasingly lacked the political space to voice their concerns. While Malcolm Turnbull’s ascendency to the Prime Ministership in 2015 marked a break with Abbott’s hard-line rhetoric, Turnbull won the leadership by promising not to significantly alter Abbott’s climate policy settings. A similar effort to appease the party room has informed the climate policy of Scott Morrison, who became PM in 2018 following yet another leadership challenge.

Yet despite the disruption and policy uncertainty introduced at the federal level in 2013, subnational governments across the country soon stepped in to fill the policy vacuum, after having dialled back their own climate strategies during the Rudd/Gillard years to work within the national framework. While state and territory efforts have been modest in most categories (mostly small, benefit-bestowing programs, with minimal policies around agriculture, mining, transportation, or industrial processes), their efforts around renewables have been responsible for most of Australia’s policy-induced emissions reductions, with major programs for buying power from renewable projects being established in nearly every jurisdiction (Climate Council 2019).

This success owes, in large part, to the small ecosystem of federal institutions that came out of the Clean Energy Futures Package, all of which appreciably enhanced the investment conditions and incentives around renewables. The federal Renewable Energy Target provided the main early impetus to the country’s electricity transformation, with the Rudd government increasing the requirement to produce 41 tW hours of electricity per year by 2020. While the Abbott government appointed a committee to review the target with an eye to abolishing it, the modelling showed that removing it would lead to higher electricity prices for consumers. As a result, Abbott merely reduced the target from 41 down to 33 tW hours, which still proved strong enough to increase investment to unprecedented levels across the country (Climate Council 2019). ARENA further supported this increase by using its 3.2 USD billion allocation through 2020 to spur the commercialisation of novel renewable technologies, including grid scale solar photovoltaic generation, battery storage, and pumped hydro storage. But the CEFC (a government-owned ‘green bank’) provided the crucial anchor, using its 10 USD billion allocation through 2022 to provide generous loan terms to projects that would otherwise be considered too risky for private banks, thus reducing the policy uncertainty around clean energy projects introduced by the carbon price repeal (Garnaut 2019, p. 79). Since its inception, state and territory governments have partnered with the CEFC on numerous projects to promote small and large-scale renewable projects within their jurisdictions. As of 2018, the CEFC had invested 4.3 USD billion in more than 5500 projects across the country, contributing to a total Australia-wide project value of 19 USD billion, and generating more than 1.80 USD in private sector funding for every dollar invested (Climate Council 2019).

Once again, this most recent era highlights a pattern in which relatively small and modestly resourced institutions manage to generate disproportionate progress in the midst of a hostile political environment. Indeed, the efforts of ARENA and CEFC, combined with the incentives generated by the Renewable Energy Target and the renewable-power purchase schemes of subnational governments, catalysed a significant transformation of the Australian electricity system in the midst of these reactionary Liberal governments, such that, by 2019, Australia had the largest proportion of households with rooftop solar in the world, with 8 gigawatts of photovoltaic panel capacity installed on over two million homes and businesses (Garnaut 2019, p. 78–80) (see Figure 2).

Figure 2. Australian renewable energy growth (GWh), 2008–2018

Source: Garnaut (2019).

In short, the story of Australian climate institutions over the years is an undeniably bleak one. Relative to many of its peer countries, climate advocates in Australia have been forced to contend with a toxic public debate around the issue that has significantly limited the development and effectiveness of these types of agencies. Despite this, however, we nevertheless see a pattern in which the institutions that did manage to take root have often made unexpected progress. Indeed, despite the hostile political atmosphere, each era saw the rise of various agencies (in some cases, ones that were quite weak and under-resourced) that managed to open the door for more substantive action down the road. This, again, speaks to an interpretation of institutions as non-static, and capable of creating important new policy spaces as various interests learn to harness and work with them.

Path dependency and institutional formation

Before closing this section, it is crucial to highlight that, when thinking about institutional development (and especially when drawing conclusions about what sorts of climate institutions a state ought to develop), the roles of structure and historical path dependence loom large. Indeed, while agency and intentionality clearly play a pivotal role, institutional development and function is deeply informed by a range of pre-existing domestic interests, global influences, and existing governance traditions specific to the Australian state. In the evolution described above, we see several key structures circumscribing the parameters of institutional development.

For starters, the overall underdeveloped nature of Australian climate institutions cannot be understood in isolation from the country’s status as a resource-dependent economy with a national accumulation strategy based on ‘ripping and shipping’ raw materials to the rest of the world (Rosewarne 2003, Robertson 2008). Chief among these resources has been fossil fuels and a range of other high-emitting primary industries, the aggregate of which comprised around 70% of export wealth in 2019 (OEC 2020). This over-reliance on these sectors served to ramp-up their political influence, and, given their relatively high levels of unionisation, allowed them maintain what Mildenberger (2020) refers to as a ‘double representation’ within business and labour alike. This, in turn, has strongly informed the climate policy preferences of both the Liberal and Labor parties over the past generation, and significantly circumscribed the overall ambition of Australian climate policy.

When climate action eventually did appear inevitable by the mid-2000s, the fetishisation of an ETS as the central regulatory response for the better part of two decades was likewise the product of several pre-existing factors. For example, under the Australian constitution, states have regulatory jurisdiction over most GHG emitting activities, leaving the federal government without a broad capacity to regulate specific sectors. This not only made the use of carbon pricing under Canberra’s taxation powers an attractive option but also placed certain limits on the rise of regulatory institutions across the federal government. International influences likewise loomed large in the near-exclusive focus on an ETS. As a country with comparatively high abatement costs, Australian industry and policymakers saw an obvious advantage in international trading, and were strongly influenced by the growing global network of actors promoting ET throughout the 2000s – indeed, spending time consulting with relevant public officials, private sector groups, and civil society associations in Brussels, London, and other European capitals all throughout that period (Müller and Slominski 2017). In the background of all of this has been the general framing role that neoliberalism has played in Australian politics since the 1980s. This led to an overarching narrative which enhanced the legitimacy of market-led solutions like an ETS over conventional regulation, and created space for neoliberals within the Liberal party to embrace climate action (MacNeil 2016). Indeed, put succinctly, the Australian state did not begin with a blank slate when building its climate institutions. Rather, actors across the state were guided and constrained by several existing factors, even as they pursued intentionality in their design (Dubash 2020).

Governing climate without strong institutional underpinnings

Here I address the second key research question, looking at how Australia’s existing climate institutions have fared at solving some of the key governance challenges inherent to climate change. In so doing, this section looks at three particular challenges identified in the literature on climate policy – namely the task of coordinating governance strategies across economic sectors and governmental bodies, the mediation of prohibitive political forces, and the promotion of transformative economic and societal change – and asks how Australia’s institutions have worked for or against solving them. While the previous sections underscored the notable ways in which small institutions have positively influenced climate policy since the 1990s, this section underscores the other side of that equation, highlighting the ways in which a generally weak and underdeveloped landscape of climate institutions has handicapped national policy efforts over the past generation. As we will see below, the key point here is that, to a large extent, the sorts of policies that have managed to endure since 2013 can be understood as a reflection of the poor institutional landscape around them. That is to say, lacking any entities capable of nurturing climate policy and insulating it as the national political context turned against it, it is likely no surprise the country has idled for the better part of a decade with a small range of relatively unambitious and unthreatening policies that require very little institutional buttressing to support them.

Coordination

As an issue that involves numerous policy domains and economic sectors, climate governance is, to a large extent, a coordination problem. Thus, to achieve a coherent system of governance that avoids fragmentation and incoherence, states need mechanisms that can account for the cross-cutting nature of the problem, and systematically integrate policy goals, instruments, and frameworks across the government as a whole (Candel and Biesbroek 2016, Tosun and Lang 2017). When developed properly, such institutions can help manage conflicting priorities and maximise synergies across policy subsystems to enable more productive climate action (vanAsselt and Persson 2015). Yet, in the Australian case, when we look at the limited array of existing institutions depicted in Figure 3, coordination is not a function that shows up in any systematic way. Indeed, the sole institution with a coordination-focused mandate until recently was the Secretaries Group on Climate Risk, which brought together senior bureaucrats from departments across the government to coordinate strategies to deal with climate risks to the economy and infrastructure. Formed in March 2017, the group soon fell into dormancy a little over a year later under the Morrison government.³ Here we begin to see a first example of what could be interpreted as a dialectical relationship between weak institutions and weak climate policies. Indeed, lacking any entities capable of actively promoting and coordinating a range of policies across a broad spectrum of governmental bodies and economic sectors (e.g. transportation, agriculture, industry, buildings, mining, waste, etc.), it is perhaps unsurprising that such policies have never materialised over the past 30 years. At the time of writing, Australian climate policy, such as it is, has settled into a near-exclusive focus on electricity (with other sectors being only peripherally treated by the government’s Emissions Reduction Fund), creating a national climate policy that is easily capable of existing without the buttressing of coordination-focused institutions.

Figure 3. Australia’s federal climate institutions, 2020

Mediation of political battles

Institutions are further required to mediate the influence of politics and special interests on the development and implementation of policy, either by restricting their access to the policy process, or systematically neutralising the grievances of those losing out from climate policy. Under ideal circumstances, this means that institutions can carve out the requisite political space to impose regulations on polluters, and begin to shape politics in ways that avoid policy rollbacks, and create positive feedback loops and political coalitions that can, in turn, lead to even stronger action (Meckling and Nahm 2018; Lockwood et al. 2017). On this challenge, Australia’s limited set of climate institutions have not been particularly active, lacking any agencies capable of playing this type of role. Here again we see climate policies becoming a reflection of these weak institutional underpinnings. Lacking any bodies capable of actively insulating national climate policy from the country’s extremely toxic debate over climate change, the limited range of policies that have managed to endure past 2013 have been required to walk a very fine political line. In the words of one government official, they must be just strong enough to satisfy the general public and pro-climate elements within the Liberal party, yet weak enough to avoid alienating its anti-climate constituents.⁴ Indeed, lacking the institutional capacity to safely impose costs on polluters or otherwise inflict any type of pain on Australian society, climate policy has evolved since 2013 as a set of strategies designed to simply dole out government largesse for various projects across the country (see Table 2), and the remaining institutions effectively exist to oversee this spending.

Table 2. Major climate policies of the Morrison Government as of 2020

Policy/program	Description
Emissions Reduction Fund (CER)	Reverse-auctions to fund initiatives that reduce GHG emissions.
20 Million Trees Program (Dept of Agriculture & Enviro)	Funds the planting 20 million trees.
Clean Energy Innovation Fund (ARENA)	Funds clean technologies from demonstration phase to deployment.
National Landcare Program (Dept of Agriculture & Enviro)	Funds GHG mitigation projects and practices in the agriculture sector.
Energy Efficiency Program (Dept of Industry, Science & Resources)	Develops energy efficiency standards in refrigeration and lighting.
Blue Carbon Program (Dept of Agriculture & Enviro)	Funds projects that protect carbon stored in coastal ecosystems.
Carbon Farming Futures Program (Dept of Agriculture & Enviro)	Funds research and on-farm trials of activities that reduce emission.
CCS R&D Fund (ARENA)	Funds CCS projects; encourages industry investment in the technology.
Low Emissions Coal Initiative (Dept of Industry, Science & Resources)	Funds deployment of technologies to cut GHG emissions from coal.
ERF Safeguard Mechanism (CER)	Ensures reductions purchased via ERF aren’t offset by other increases.
Renewable Energy Target (CER)	Mandates additional generation of electricity from renewables.

Source: Government of Australia (2020).

Transformative change

Finally, climate is further distinctive as a policy domain for the fact that, given the scale and scope of the crisis, its general, long-term telos has to be the facilitation of a broad socio-technical transformation of society, as captured by emerging paradigms like the ‘green new deal’, ‘strong ecological modernisation’, or ‘ecological civilisation’. In this quest, a growing body of literature underscores the essential role that institutions must play in developing the ‘blue-sky’ technologies, cultural paradigms, and broad shifts in everyday lifestyles that will underpin the net-zero economy and society envisioned by these concepts (Harrison and Mikler 2014, MacNeil 2017, Lachapelle et al. 2017). Yet, while Australia has managed to sustain some respectable renewable energy institutions, it nevertheless fundamentally lacks any mechanisms capable of generating or maintaining broadly ambitious, whole-of-government/society reforms. Once again, reflecting this weak institutional landscape, the policies depicted in Table 2 have evolved as a series of small, piecemeal funding arrangements that will easily allow industries like coal, gas, mining, ruminant livestock, and other high-emitting sectors to remain at the heart of the Australian economy over the medium term, and pose no threat to the carbon-intensive, day-to-day lifestyles of average Australians.

In summary, Figure 3 paints a picture of a generally weak and under-developed institutional landscape that fails to systematically address some of the key governance challenges inherent to climate policy. In general, most of the remaining institutions continue to subsist on limited resources and capacity (relative to the scale of the challenge), particularly as it pertains to things like budget, personnel, regulatory authority, and the level of priority assigned to them within the government. This, in turn, has a sizeable impact on their capacity to set agendas, coordinate actors and strategies, and oversee the actual implementation of their respective mandates. Compounding this is the endemic political instability that Australian climate institutions have had to endure over the years, which has largely prevented them from emerging as strong, durable, and authoritative players capable of bending the policy debate to their will. As Figure 3 depicts, most of the institutions that have evolved over the years have had very short lives, unable to survive changing governments and frequent bureaucratic reconfigurations. Reflective of this immature institutional landscape, the country’s climate policy has evolved in a direction that appears to have largely sidestepped any strategies that would require the sorts of institutional buttressing described above. As depicted in Table 2, current federal policy basically consists of a series of small, ad hoc, benefit-bestowing initiatives that make use of operational funding already allocated to the department in its annual budget, and create no losers along the way. Most of these ‘no regrets’ initiatives are simply created within the department, with decisions made by secretaries, ministers and the Prime Minister and Cabinet.⁵

Conclusion

As outlined above, there appear to be two general lenses on the story of Australian climate institutions. On the one hand, a more pessimistic reading would underscore that, given the toxic political context and the stunted nature of institutional development, many of the crucial governance functions one might hope to see from these agencies are left unfulfilled, with most lacking the resources, regulatory capacity, and durability required to systematically decarbonise Australian society. In this absence, the Australian state has struggled to address the sorts of unique governance challenges posed by climate, with policy breakthroughs tending to be erratic and unsustainable. Yet, at the same time, Australia has nevertheless developed a small subset of institutions that, despite their fragility and lacklustre resources, have managed to generate important new policy spaces that have led to action, however limited and/or short-lived. Viewed through this more optimistic lens, the Australian case also tells a story about how institutions can sometimes swim against the current of a hostile political context, creating new spaces for action as various interests within the state learn to harness their capacities.

While this is merely one case study in this nascent field and is not necessarily generalisable, it nevertheless seems to hint at the types of institutions and policies that are best equipped to survive under conditions of deep political polarisation around climate. Indeed, it is likely no coincidence that the main entities to survive after Labor’s loss in 2013 (particularly ARENA and CEFC) are strictly benefit-bestowing institutions that distribute government money broadly across the country, and focus their efforts on a rapidly expanding employment sector. The structure of the CEFC is likewise instructive, existing as a government-owned ‘bank’ that provides favourable loans (as opposed to simply handing out grants) and operates at a profit for the government. Moreover, both the CEFC and ARENA had long-term funding arrangements extending out over a decade legislated as part of their founding. This allowed Liberal governments the option to simply turn a blind eye to their funding, rather than actively renew it each year and invite a hostile reaction from their constituents. With its funding in jeopardy after 2020, the Morrison government bowed to pressure to extend CEFC’s funding in the wake of the country’s catastrophic bush fire season of 2019–2020, which killed 34 people, burned 186,000 km² of forest, and cost over AUD$100 billion in damages (Read and Denniss 2020).

Whether or not a carbon-intensive jurisdiction like Australia can decarbonise itself through the exclusive use of low-visibility, benefit bestowing institutions that only accrue funding guarantees under occasional Labor governments or following national climate tragedies is another question entirely. But under the current circumstances, it may well be the central question facing Australian climate policy going forward. Indeed, with the Liberal party having governed the country for 50 of the last 70 years (including 19 of the last 25 years), barring a major philosophical shift within the Liberal and National parties, climate institutions and policies are going to have to find a way to swim faster upstream against these parties’ ideological dogmas.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The Liberal party has historically governed as part of a coalition with the National party. For simplicity, the term ‘Liberal government’ is used as a shorthand to refer to the Liberal–National Coalition.

2. For a full, blow-by-blow account of how these negotiations played out, see Chubb (2014).

3. Interview with P. Delonghi, Director at Department of Agriculture, Water and Environment, 17 October 2019.

4. Interview with government official at Department of Industry, Science, Energy & Resources, 18 October 2019.

5. Interview with M. Beauman, Senior Policy Officer at Department of Treasury, 2 December 2019.