Tony Abbott’s signal on Monday that he would avoid, at all costs, a deeper emission reduction target, and his outburst against renewables, would come as a shock to those who care about the science, the environment, sound investment or even good business practice. But it shouldn’t come as a surprise.
Abbott has spent the first two months of his government doing what he said he would – which was to dismantle any market signal or institution in any way related to the carbon price, and a couple of key advisory bodies along the way. So out goes the Climate Change Authority, the Climate Commission, the carbon price, and the Clean Energy Finance Corp
Now Abbott is acting on what was implicit in his policies. Which is that Direct Action is a construct of a party that simply doesn’t accept the science. Direct Action is barely capable of meeting a 5% target and certainly not a 25% target, and was never designed to do so. Little wonder that Abbott is still calling for proof of any equivalent international action, when it is there for all to see.
The party says it supports the 20% renewable energy target, and has even on occasion said it supports the 41,000GWh fixed target. But the crucial point – expressed almost immediately after the last review was completed 10 months ago – was that it wanted this target reviewed again. It is this policy decision that has brought the large-scale industry – quite knowingly and intentionally so – to a grinding halt.
The timing of Abbott’s comments on emissions reduction targets, coming as they do at the start of parliament, and at the conclusion of the first day of the UN climate change negotiations in Warsaw, are quite deliberate. They are designed, as we suggested on Monday, to extend the climate wrecking ball beyond the national border to the international stage. They are policies that defy the science and are designed simply to protect the interests of a certain few.
As we reported last year, the international coal industry has a trillion reasons to see climate action defeated. It would cause coal consumption to slump more than half, prices to fall, and would result in $1 trillion lost revenue a year. That’s a fair heap of vested interest.
The latest International Energy Agency World Energy Outlook, released overnight, confirms this. It says that coal prices could fall with climate action – to a point that will make the massive coal mines in Queensland’s Galiliee Basin unprofitable. If the world acts on climate, there will not be enough room to accommodate that amount of coal in the market.
Abbott’s suggestion that wind and solar are intermittent are also born of breathtaking ignorance. Like his comments on climate and bushfires, it reflects the fact that he and/or his advisors, not to mention his inner coterie, are informing themselves from the worst of climate denial and anti-renewable blogs.
It doesn’t stop there. Environment Minister Greg Hunt presents himself as someone who knows and understands the issues. On that basis, he should probably do the right thing and resign immediately, but ambition gets in the way.
But there’s a growing realistation that Hunt doesn’t know what he’s talking about either. A few months ago, addressing a conference, Hunt, was asked by the local head of sustainability for a Japanese car giant why Australia did not have a more ambitious climate program, like Germany – the questioner’s country of birth.
“Oh, really,” said Hunt. “And how is that going in Germany.” The tone of his response was that he presumed the answer was “badly”. He probably read that in The Australian, the AFR, or Forbes. But the real answer is actually “quite well”, despite all the political posturing in the lead-up to that country’s recent polls.
How well?
Well, it seems that the two biggest parties in Europe’s industrial and manufacturing powerhouse, Angela Merkel’s centre right CDU, and the centre left Social Democrats, have inked an agreement that will see Germany likely increase its renewable energy targets for 2020 and 2030.
There is now talk of the target being lifted to 40 per cent by 2020 (it was previously 35 per cent), and to 60 per cent by 2030 (it was previously at 50 per cent). The Energiewende, as the transition away from nuclear and fossil fuels and towards renewables is known, is accelerating, not slowing.
Rainer Baake, a former permanent secretary to Germany’s Minister of the Environment and now head of a think tank called Agora Energiewende, said you shouldn’t believe what’s reported in the newspapers.
“If there was such controversy over this, you would assume there at least one political party that expressed opposition to the Energiewende would have made it into parliament,” in the recent election, he told RenewEconomy in an interview in Berlin on Monday.
But not a single party did. That says something about public acceptance, more than in any newspaper articles. The two mainstream parties are worrying about whether the target for 2020 should be 35 per cent or 40 per cent, and for 2030 one party is suggesting over 60 per cent and the other one is just under 60 per cent.
“This is the kind of controversy we have,” Baake says.”And when one party is talking about a (renewables) target of more than 60 per cent, and the other is talking a target just under 60 per cent, it is not much of a controversy.”
If Abbott and Hunt and their coterie scratched below the surface, they would see that the real noise about the Energiewende is being made by big industry – who having benefited from a fall in electricity prices over the last five years (they are billed on wholesale prices and these are down 50 per cent thanks to the growth of wind and solar), are now fearful they will lose that advantage.
In effect, it is the same complaints, and the same pursuit of vested interests, that is raised in Australia. The only difference being that in Germany, those narrow, short-term interests don’t guide long-term government policy.
In Australia, they most certainly do. The one key difference between the two countries is the level of ownership of renewable energy. In Germany, it is more than 50 per cent by individuals and farmers. Major generation companies have invested very little.
“This is very important when trying to interpret why Germans are backing the Energiewende,” Baake said. “They are not consumers any more, they are also producers.”
But this is also the latent power base that exists in Australia, with more than one in ten households investing in solar, and at least that money thinking of doing so. Only when that power base is exploited, might the politics change.
