Energy and climate policy in this country continues to divide many in the electorate and has been at the forefront of political debate for several decades now.
Recently, I argued that current policy is leading us down a path of ‘duplication’ as opposed to a path of genuine energy ‘substitution’. I was implying that policy is top heavy in the pursuit of emissions reduction, compared to economic and reliability considerations.
Yet many would disagree with that assessment, saying that continued fossil fuel use should be stopped forthwith, with emissions reduction the priority.
Energy policy is just one area where it feels as if political debate has dialled up in Australia in the last decade or so, with immigration being another. But just how polarised are we politically?
Formulating climate and energy policy is really an optimisation problem with competing objectives. Governments must balance emissions reduction, affordability, energy reliability, and economic stability. It is about assigning weights to these goals to hopefully optimise the policy outcome. I say “hopefully”, because sometimes policies are also shaped by political incentives and ideological preferences.
The electorate would in the main agree that these are worthwhile goals when it comes to energy. But where opinion differs and debate occurs is around the weight that each should carry when setting policy.
Energy policy is an example of where there can be broad agreement on a set of core policy objectives in a democratic society. The idea that policy should be the outcome of trade-offs between competing objectives is a central concept in most democracies, resolved either through debate or at elections.
Where things can become unstuck is when the electorate disagrees not just about the weights, but about the objectives themselves. Climate and energy policy debates for example, can feel more polarised when people treat their preferred objective not as a trade-off but as a moral imperative. This can lead to less willingness to compromise, and stronger rhetoric.
At that point in the policy cycle, there is little or no attempt to balance objectives, with one or more placed above others. And trade-offs are deemed unacceptable, with certain technologies definitively ruled in or out. From there, political tension rises, along with economic and operational divergence. This is arguably where climate and energy policy debates sit today.
But how can this sequence be resolved? Eventually reality becomes the arbiter. Economics, and indeed physics in the case of energy policy, will ultimately force a reframing of intent, and a reconsideration of previously excluded approaches. If however, the mindset of government is to double down on specific goals and targets, and to try and eliminate compromise through rhetoric, then a democratic system has one final correction mechanism: the ballot box.
This is the beauty of democracies, and it reminds me of a quote by academic and author Yuval Noah Harari who said on elections, “People feel bound by democratic elections only when they share a basic bond with most other voters”. “They are a method to settle disagreements among people who already agree on the basics”.
By agreeing on the basics, Harari refers to things like: a shared history, the rule of law, the authority of institutions, and the notion of shared community values nationally. Having a shared framework allows people to accept election outcomes when they lose, because they still share a sense of belonging in the national community.
That feeling of belonging can be challenged however, if trust in institutions declines, polarisation in certain policy areas entrenches, or social cohesion fragments. If groups feel they are not a part of one national community, commitment to electoral outcomes can weaken.
Political debate has certainly become more intense over time in Australia, and it seems the sense of belonging in the community has perhaps become a bit of a stretch for some groups. In particular, we have seen tension rising because of cost-of-living pressures, housing affordability, rapid population growth, and cultural conflict. These issues can strain tolerance for policy trade-offs and lead to division in communities.
Which is why as a nation, we must be forever vigilant. Democracies aren’t a given, and policymakers need to be mindful not to alienate communities and instead be more aligned with mainstream ideas and attitudes, and civic identity, otherwise majoritarian democratic rule can feel authoritarian. Particularly when sweeping policies are implemented when large portions of the electorate disagree with them.
But tensions aside, the basic consensus remains intact, and the electoral experience overall is still positive[1]. Many Australians may disagree with policy paths taken currently, but they still accept the system that determines policy.
[1] Australian National University (ANU) research shows that while support for democracy remains high among most Australians, satisfaction declined in the 15 years to 2023. Its findings showed that 77.4% of Australians were satisfied or very satisfied with democracy compared to 81% in 2008, with the ‘very satisfied’ category dropping from 23.4% to 14.2%. And recent ANU research found a generational divide, with only 44% of Australians aged 18-24 believing democracy is the preferred model, compared to 90% of those aged over 75.
A 2025 Lowy Institute poll also found broad support, with 74% of Australians considering democracy to be the best form of government despite low satisfaction with some outcomes. And that free and fair elections, the rule of law, and a ‘fair go’ were strongly valued.
Tony Dillon is a freelance writer and former actuary. This article is general information and does not consider the circumstances of any investor.