As descendants of Liberal MPs, we wish the Coalition had a rational climate policy

This piece was originally published in the AFR. Click here to read. 

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Labor’s approach has been erratically interventionist, slow and piecemeal. The Coalition could capitalise on that by offering a credible pro-market alternative.

Allegra Spender and Kate Chaney

Nov 11, 2025 – 11.50am

   

There’s a deep irony in the Liberal Party’s current disarray on climate and energy policy. If it remembered what it once stood for, such as rational economics, market-based solutions, scientific evidence and long-term thinking, its path forward would be far clearer.

What would Liberal climate and energy policy look like if it were truly pro-market, pro science and forward looking?

It would start with recognising the science. It is firmly in Australia’s interest that warming doesn’t exceed 1.5 to 2 degrees. We are particularly susceptible to climate impacts, with our droughts and flooding rains, fragile ecosystems and coastal infrastructure.

Former defence chief admiral Chris Barrie and others have said “climate change now represents the greatest threat to the future and security of Australians”. A responsible alternative government would recognise the existential threat of climate change to our Pacific neighbours, the risk to food security, and the potential for mass migration in our region.

It would recognise that we need the world to act in concert as we can’t hold back climate change singlehandedly. It would support the net zero accord, although imperfect, as the best global framework for co-ordinated action that we have. It would recognise that if Australia abandoned net zero it would damage our credibility and reduce our influence on the world stage.\

Domestically, a rational Liberal Party would apply the lessons of Economics 101 and price the negative externalities. Carbon emissions impose real costs on society, health, infrastructure, agriculture, and ecosystems. A rational Liberal economic approach would bring those costs into the market through a technology-neutral, economy-wide carbon price, allowing businesses and households to respond efficiently and drive emissions down at the lowest cost and intervening only where there is market failure.

Such an approach would acknowledge that our ageing energy infrastructure needs urgent investment regardless of climate concerns. Whether we rebuild for coal, gas, nuclear or renewables, the price tag is many hundreds of billions of dollars, so the opportunity to renew our grid and build a resilient, low-cost energy system is one we should seize, not squander.

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A responsible Liberal Party would relentlessly drive regulatory reform to eliminate duplication and unjustified red or green tape. It would speed up decision-making and make it predictable and focus government intervention to drive innovation where there are market failures. It would listen to the chorus of business voices that urge it to stay the course on net zero.

But instead of being guided by these principles that have historically underpinned the Liberal Party, we’ve seen more than a decade of political point-scoring.

The Coalition’s wild swings on energy policy have injected damaging uncertainty into the market, delaying investment and increasing costs. Capital is a coward – political uncertainty drives it away.

Australia needs a serious, stable energy transition pathway. That means being honest with the public. Yes, the transition is hard. Yes, energy prices are high. And the causes, such as global fossil fuel prices, ageing infrastructure, and a slow renewable rollout are complex to fix. We cannot simply blame the transition itself.

Better way forward

Condemning net zero is a political distraction. Banking on that distraction to attract votes is populist opportunism.

Helping households electrify can reduce bills, stabilise the grid, and give families more control over their energy use.

Supporting regional communities to share in the benefits of renewable investment is essential, rather than inciting fear about change.

Stopping native forest logging is one of the lowest costs, and most effective ways to reduce emissions, if only both major parties would resist vested interests.

Beyond investment in Australian critical minerals required by the renewable energy transition, there is significant upside to a clear decarbonisation pathway.

Australia has the potential to lead in low-emissions iron production, leveraging our iron ore and renewable energy advantages and solving a problem for our trading partners. But that requires clear policy, regulatory reform, and targeted capital – not vague promises or bailouts.

This week, the Liberals are meeting to discuss their energy policy. Instead of holding the government to account on delivering the transition at the lowest cost, they are simply abandoning the field.

Emboldened by Barnaby Joyce and Matt Canavan, Liberal conservatives have declared war on the words “net zero” while the opposition spokesman for energy, Dan Tehan, is advocating a “wishing and hoping” strategy, where technology without leadership solves all our problems.

The Nationals have set the agenda again. The Coalition is not Schrodinger’s cat – it cannot support and not support net zero at the same time. Unless the Liberals find the courage to split from the Nationals, reconnect with their fundamental principles and recommit to net zero, their climate credentials will just be spin.

The government’s approach has been erratically interventionist, slow and piecemeal. The Coalition could capitalise on that by offering a credible, pro-market alternative.

As descendants of proud Liberal MPs, we wish they would. But right now, it seems increasingly unlikely.