One of the old warriors of Australia’s climate policy wars is returning to Australia to head up the Carbon Markets Institute, just as most of Australia’s big corporates finally agree that carbon pricing is actually a really good idea.

John Connor is the former head, for more than a decade, of The Climate Institute, and has since the TCI’s closure in 2017 (due to a lack of funds) been the head of the Fiji government’s rotating presidency of the UNFCCC climate negotiations. (Fiji was host of COP23, although it was held in Germany for logistical reasons).

Connor’s appointment comes just a few weeks before the federal election, which will set Australia either on a course that dramatically increases the country’s emissions reduction target, or continue with a government that is still fudging the issue.

In many way the politics has barely changed since 2009, when Labor put a bunch of different policy proposals on the table, The Greens advocated for tougher and more biting targets, and those within the Coalition prepared to talk about a solution were shut down by the hard right and majority of climate deniers in the Liberal and National parties.

Those same forces pulled down the carbon pricing mechanism put in place by the Gillard government, and replaced it with little, apart from a much criticised emissions reduction fund. National emissions have jumped ever since.

But while the politics has changed little, technology and the markets have. The cost of solar and wind has plunged dramatically, battery storage costs have also fallen, there is renewed interest in pumped hydro and demand management, and the culture has changed too: Engineers and institutions are no longer afraid of a rapid clean energy transition.

And so, too, Connor says, has awareness among regulators, central banks and business people. He notes the recent interventions and warnings by the Reserve Bank, the APRA, and ASIC.

“There is a greater sense of the physical risks of climate change and a greater sense of the climate crisis,” Connor tells Reneweconomy in a phone interview from Suva, where Connor is preparing for a major international conference before taking up the post at SMI.

“The prudential environment is now more geared to a sense of responsibility and risk management, and all those things are causing businesses to reflect – some looking to their books (to help fashion policies they prefer), while some are looking to their own personal liability and company liability.”

Connor also says notes there is a greater understanding, particularly on the international stage, of the opportunity cost between capping average global warming at an average 1.5°C and 2.0°C.

“There is a clear understanding that there is no such thing as a “low carbon” future, the task is to get to net zero carbon and below,” Connor says.

“It is very clear that the climate crisis will blow out … and that you can’t muddle along with half measures. ‘Low carbon’ has a lot of wriggle room, zero carbon doesn’t.

Carbon markets have also grown, matured and expanded. Australia has a de-facto carbon price through the creation of ACCUs, and the so-called Safeguard Mechanism, a policy put in place by the Coalition.

The debate is now focused on how far that mechanism can be tightened and expanded. The Coalition has taken its default position of creating a scare campaign, particularly around the linkages to international markets, but business is largely behind it.

Indeed, Connor sees huge potential in Australia becoming an exporter of carbon credits in the longer term, even if it will need to be an importer in the short term.

“The coils are tightening. we are going to need strong carbon markets and develop the triplet of integrity, liquidity and linkages.

“There is a sense of frustration and an acknowledgment that something has to happen. 92% of business recognise that what we got is not adequate. We know we need to integrate climate and energy police even if what that looks like is always up for debate.”

Connor will attend the CMI Emissions Reduction Summit n Melbourne next week, although he won’t take up his position formally until May 27, just over a week after the federal poll. “It’s a bit of a roll of the dice … I guess the difference (from the election result) will be whether it is interesting or very interesting.”