Abbott confirms his tea party connections
We’ve been casting Tony Abbott in the role of Tea Party conservative for months now, fretting that he might somehow take offence. Not at all. The Opposition leader proudly told the Canberra press gallery in his stump speech on Thursday that he had hosted not one, not two, but 33 local morning teas with voters over the past year or so. And, by golly, he conceded, climate change is real and man may even be making a contribution towards it, which is why he is proposing something sensibly practical that the CWA would be proud of – organize a series working bee to pick up litter, build boardwalks, and plant trees. There will probably even be a BBQ.
Abbott did, of course, promise to repeal the carbon tax, saying his previous support for the measure was in the context of other countries doing the same. He insisted no other country is going “anywhere near” carbon taxes or trading schemes – apparently never having never heard of carbon taxes and ETS’s and pilot programs implemented and planned throughout the 27 states of Europe, Scandinavia, New Zealand, South Korea, China, California, a bunch of other American states and Canadian provinces, South Africa and Mexico. Not to mention Kazakhstan. And where did we find such subversive information? Well, Google would have done the trick, but most of it is contained in his own Direct Action policy. Here it is on page 9.
Carbon hits junk bond status
Still, these are not happy days for emission trading schemes, and politics being what it is, Labor will be watching developments in Europe a little nervously, having linked its own scheme with that of the EU. Right now, the ETS in Europe is an absolute mess as the price plunges to record lows in response to a massive surplus of credits, and the refusal of some European nations (particularly Poland) to fix the problem.
Hans ten Berge, secretary-general of Eurelectric, the continent’s electricity industry association, warned that the market was nearing “junk bond” status, and the EU risked creating a “lost decade” which would make it “impossible to achieve the 2050 decarbonisation targets.” Just as a reminder, the EU has pledged a reduction of CO2 emissions to 85-90 per cent of 1990 levels by 2050 – the minimum necessary to avoid global warming above 2 degrees Celsius.
His organization says a failure to redress the carbon price would force “astonishingly fast roll-outs of low-carbon technologies” in subsequent years, which would not only be expensive, but possibly not even technically feasible. Jeffries carbon analyst Matthew Gray described the ETS in Europe at the moment as a “casino” and predicted that while it continues to be dominated by politicians, many utilities and industrials would simply “give up”. Which gives some context for Ross Garnaut’s call for Australia and China to lead the way in making deeper emissions cuts. He also said low carbon prices were threatening efforts to limit the impact of global warming.
At least green energy is on target
This week “veteran green activist” Mark Lynas was talking to the BBC about his recent conversion to nuclear energy and now GM foods. Such people often sound terribly convincing, until you hear something that is absolute bollocks. In Lynas’ case, it was the claim that Germany is replacing all its nuclear facilities with coal and other fossil fuels, and cited the case of a recently opened brown coal generator. It’s one of the great furphies spread by the pro-nuclear camp. Planning for this particular coal plant began years before Germany announced its nuclear phase out, and was designed not as a base-load generator, but as a sort of peaking plant that could fill the gaps between renewables. The owner of that plant, utility giant RWE, said it would be the last coal plant they would build.
And as Johannes Teyssen, the CEO of Germany’s largest energy generator, E.ON, confirmed this week, his company is not building any new coal or gas fired generators either, in fact it is closing them down – it expects to close 11,000MW of them by 2015. It’s true that Teyssen had a bit of a whinge about the “unmanaged growth” of renewables in Europe. So what’s he going to do about it? He said he would ensure that the company’s transformation to one focusing on distributed and renewable generation would be “even faster and more decisive” than before. Sounds like the policy is working.
Australia’s slow race to green energy
As the rest of the world surges ahead in renewables investments – with the announcement of new wind farms, onshore and offshore, and large scale solar plants becoming more than a daily event across Europe, Asia, Africa and the Americas (both north and south), the industry appears to have once again ground to a halt in Australia. Numerous project developers are once again complaining of their inability to even negotiate a power purchase agreement with a utility, let alone sign one.
The utilities seem to be in no hurry. They have loads of excess certificates, and even though the Climate Change Authority has rejected their pleas to dilute the renewable energy target, the Labor government appears in no hurry to rubber stamp that recommendation. A spokesman for Greg Combet told RenewEconomy this week that a decision would be made “in the first half of the year.” So the uncertainty continues. Then, the utilities might just wait until the result of the election and hope for an opportunity to get into the ear of Ian Macfarlane, a sort of Martin Ferguson think-alike who may not be encumbered by anything as pesky as a climate change minister in a Coalition government.
One piece of good news is that the Clean Energy Finance Corporation may not be as hamstrung by the election campaign as Abbott might have hoped. Abbott had promised to write to the Finance Department urging that any investments by the $10 billion institution be suspended until the result of the election campaign. But at least one reading of the relevant Act suggests that the while the relevant minister can give the CEFC an investment mandate, it has to be consistent with the objects of the Act, so they can’t tell them not to invest. So the CEFC can continue until Abbott, or someone, pulls the plug.
Digging up old fossils
The world’s richest woman, Australia’s very own Gina Rinehart expanded her interests beyond media, iron ore and coal this week, and made what is said to be her first investment in oil and gas, the Victorian minnow Lakes Oil. Ironically, this came on the very day that global investment bank HSBC issued a report saying that the value of oil and gas majors such as BP, Shell and Statoil may be reduced be between 40 and 60 per cent if ever the world got serious about climate change, decided to leave carbon reserves in the ground, and demand for oil drops sharply. Rinehart need not worry, however, because her appointee to the board of Lakes Oil, the geologist Ian Plimer, says climate change is definitely not happening.