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Winning power is the easy part of politics. It’s what you do with it that counts.

That’s going to be the challenge for Australia’s new Prime Minister Anthony Albanese, after a striking election victory Saturday that has swept the right-of-center Liberal-National Coalition from power after nine years.

The scale of victory for Albanese’s Labor party looks surprisingly modest. As a share of the governing House of Representatives, it’s likely to have the smallest majority for an incoming government since 1931. The extent of the calamity for the Coalition, however, is unprecedented. Once all the votes are counted, it will struggle to end up with many more than 55 seats in the 150-seat House. That’s on par with the losses for Labor in 1996 and 2013 that locked it out of power for a decade. Relative to the size of the House, the Coalition is likely to have its lowest seat total since it first won power in 1949.

Worse still, it’s a defeat based on a sortie deep inside its electoral heartlands. The outcome is comparable to how the reddening of the US Senate and Electoral College delivered victory to Donald Trump in 2016 and has given the Democrats a shaky grip on power since 2018. Similarly, the British Labour party has found itself locked out of once-solid seats as the Scottish Nationalist party and the Brexit-aligned Conservatives penetrated its so-called “red wall” since the 2010 election.

Outgoing Prime Minister Scott Morrison invited this disaster by pushing the formerly center-right Liberal party in a more solidly conservative direction than even his predecessors attempted. Women in particular revolted, due to the sense he’d turned a blind eye to allegations of rape and sexual assault within Parliament and his own cabinet. About three-quarters of the Coalition’s federal politicians going into Saturday’s poll were men, whereas women made up half of Labor’s legislators.

That shift has been most visible in a swag of half-a-dozen affluent inner suburban seats across the east of Sydney and Melbourne. These areas have been the bedrock of the Liberal party since it was founded during World War II, and will now be held by the so-called teal independents, mostly professional women focused on gender, anti-corruption, and above all climate. (Greens will hold three or four more solidly left-of-center inner-urban electorates.)

It will be hard for the Liberals to find a path back to power without regaining these teal electorates — but over the past decade, voters, angered with the top-down, centralizing tendencies of the major parties, have tended to hold onto their independent and minor party candidates for years at a time, rather than treating them as mere protest votes. Of the seven such candidates elected to the House since 2013, all except populist mining baron Clive Palmer are still in Parliament, having won re-election multiple times.

That all sounds like good news for Labor — but the challenge will be in how it uses its victory. While Albanese is likely to end up with a majority of the Parliament, it will be a narrow one, easily eroded at the next election due in 2025. Interest rates on Australia’s indebted households, especially in “mortgage belt” outer suburban seats where Labor’s majorities against the Liberals tend to be thinner, are set to rise at their fastest pace since the 1980s. That means Albanese would be unwise to govern without an eye on the independents, whose votes he may need sooner rather than later. Passing legislation through the Senate, meanwhile, is almost certain to require Greens votes.

The real victor of this election has been popular will on climate — identified as the most important issue by 29% of voters, but suppressed by both Labor and the Coalition over the past decade as they’ve found found themselves cross-pressured between rural wings focused on mining and urban electorates who prioritize environmental issues. 

Burned by the 2019 election — when its lost ground in the Hunter Valley, the world’s largest coal export basin — Labor’s policy on climate is strikingly unambitious. Renewable power will rise to 82% of the grid by 2030 rather than the 68% projected by the former government, and there will be some modest incentives for electric vehicles. Still, its plan to reduce emissions 30% this decade would leave Australia with a carbon burden of 351 million metric tons — on a per capita basis, more than Russia emits now, and more than twice the tally of France, Italy, Spain and the UK.

On industry — likely to overtake power as the largest emitting sector in Australia during the lifetime of this government — Albanese is planning to avoid the bruising fights that his Labor predecessors Kevin Rudd and Julia Gillard had with major polluters. There are no plans to put a price on carbon, and emissions reductions will largely be delivered through energy efficiency, agricultural offsets, and expected increases in renewables. Fugitive emissions of gas from coal mines and petroleum wells, largely a function of Australia’s fossil fuel exports, are forecast to remain roughly constant throughout the coming decade.

That remains, now as ever, the most important and under-recognized issue. Australia is the biggest fossil fuel exporter after Russia and Saudi Arabia. Measured by the carbon content of its exports, its heavy dependence on coal means its burden modestly exceeds even Saudi Arabia’s. Dealing with that issue remains hazardous for Australian governments, reliant onexport revenue and mineral royalties, as well as jobs in key seats. But as the world decarbonizes, Canberra will ultimately have to tackle the problem, or find itself tackled by it. International climate accounting cares a great deal about whether Australia’s carbon is emitted within its borders, or in export markets. To its fragile farmlands and ecosystems such as the Great Barrier Reef, carbon entering the atmosphere anywhere in the world has the same effect.

One of the greatest, if cynical, victories of the Rudd-Gillard government from 2007 to 2013 was to present an era when coal and LNG exports both increased by about 45% as a time when Australia was making modest progress on its climate priorities, rather than getting rich off the destruction of its own environment. Politically, a repeat of that achievement that locks the Coalition out of power until the 2030s will be a famous victory. The fate of the planet, however, requires Albanese to do better.

More From Bloomberg Opinion:

• How Climate Is Splintering Australia’s Political Parties: David Fickling

The #Metoo Movement Isn’t Over. Not Down Under. Not Anywhere: Ruth Pollard

Australia Has a China Problem and a Chinese Problem: Tim Culpan

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering energy and commodities. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

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