Climate doubting coal baron saves wind and solar

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… but not the carbon price. Clive Palmer’s triple backflip on climate policies creates a political nightmare for Tony Abbott. Now he knows his policies are really untenable.

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So what just happened there? That was the first, second and third reaction of the extraordinary sight of Clive Palmer – he of the outsanding carbon tax bills, dismissive of climate science and renewables, the promoter of a massive coal mine, proprietor of a dinosaur park and the builder of a replica Titanic – standing side by side with Al Gore to deliver Tony Abbott an inconvenient truth: his climate policy is a mess and he doesn’t have the numbers in the Senate.

palmerAnd it’s still the lingering impression.

Palmer, who just two months ago suggested he could buy any opinion from a climate scientist, now says he accepts the science of climate change. Just two months after saying the renewable energy target had to go, he now says it has to stay. And he will protect the Clean Energy Finance Corp and the Climate Authority too, and probably the Australian Renewable Energy Agency when someone tells him what it is.

But what will he say tomorrow? Or next week? Or next month?

The only certainty about yesterday’s extraordinary events is that confusion now reigns, and Abbott’s climate policy is in disarray. It is one thing to have “axed the tax”, but quite another to have nothing to offer in its place. And Palmer has made it clear that he thinks that Abbott’s version of Direct Action is a joke.

Quite where carbon pricing and emissions abatement goes from here is not at all clear. Abbott could, in theory, enact at least parts of Direct Action through executive decree, but it would be unlikely to get to 5 per cent, let alone the 19 per cent recommended by the CCA, which will have full voice on the matter.

Reputex estimates that a carbon price of zero will result in Australia’s emissions rising 12 per cent out to 2020, rather than falling 5 per cent, or meeting the more ambitious targets likely required of an international agreement.

The alternative – Palmer’s conditions for an emissions trading scheme, such as he understands it (essentially one with no price) are vague and contradictory.

As Labor and the Greens have pointed out, we already have an ETS – it’s just that it has a fixed rather than a floating price. That can be easily changed. All Australia’s trading partners cited by Palmer – China, Japan, South Korea, the US and the EU – have an ETS too in some form or another. Even with a general agreement in Paris next year, it will be hard to imagine an international trading scheme for a decade or more.

The key import of what Palmer has done, however, is to leave the key infrastructure of the carbon pricing mechanism in place. That is essential. Once the political intrigues have been dispensed with, and once the Liberal Party follows in Palmer’s lead, isolates the right wing rump currently at the controls, and re-embraces the need to address climate change with the best tool at their disposal – a market based mechanism – then the scheme can be dusted off and re-introduced at short notice.

In the meantime, the renewable energy industry can look forward to some confidence. With the retention of the renewable energy target, the CEFC and hopefully ARENA, there is a chance that WA can become the world leader in large scale solar; Australian miners can embrace renewables and storage as a substitute for gas and diesel; that South Australia can charge beyond 50 per cent towards an unlikely goal of 100 per cent renewable energy; that NSW can match its green energy rhetoric with action; and that Queensland might finally build something green and useful.

So, what just happened here? Palmer did a triple backflip and landed on a surprised and a little deflated Al Gore. Now we need Palmer – and his Senators –  to hold course. But as an investor, would you bet on that?

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13 Comments
  1. Keith 5 years ago

    Next big challenge is to reboot investment to build the renewables the RET requires. It isn’t clear that anyone in the political world is considering this, although perhaps a new clear thinking evidence based Clive can be engaged??? All very strange.

  2. Peter Campbell 5 years ago

    “…right wind rump…” Truth from an errant spell checker! The right really do have a windy rump!
    Meanwhile, let’s hope that Clive really will keep the ETS structure in place, even if the price is fixed at zero for a while. Meanwhile, keeping the RET unchanged is the best result.

  3. Pedro 5 years ago

    Clive Palmer is doing a very nice job of wedging the LNP over climate policy, and I’d give him credit for that. You would have to be a fool to believe he is sincere in any way on climate or clean energy issues. As for Al Gore…good way to give Abbot a climate slap by giving climate credibility to essentially a fossil fuel billionaire Palmer.. definitely got his tongue in cheek on this one.

  4. Chris Fraser 5 years ago

    It’s great news … and understandably it makes no sense. A climate warrior and self interested coal magnate standing shoulder to shoulder, agreeing on things ? How long will my confusion last ?

  5. Graeme Henchel 5 years ago

    It is hard to be sure if Clive is sincere but it is easy to see how he could be. He may have got to the position of power and influence that he has for all the wrong reasons but there is a chance that he is taking his role seriously and considering his place in history. If you are worth a billion dollars then what is left to achieve apart from a legacy. Clive has a choice between being remembered as a self interested buffoon or a serious contributor to solving serious national and global problems. As those of us who follow renew economy know if one takes the time to be informed on the issues and one is not beholden to sectional interests or ideology (as Abbott is ) then keeping the CCA, the RET, the CEFC and hopefully ARENA are no brainers ( which is why the acerebral Abbott wants them gone) In the end the climate crisis must be solved by moving from carbon based energy to clean renewable energy so the RET, CEFC and ARENA are crucial. More important than a carbon tax or ETS. Readers of renewable economy should know by now that the cost functions alone of renewable vs fossil fuels will eventually force a change to renewables on purely economic grounds. The other thing about Clive is that he is both a populist and an opportunist. he knows the tide is turning back to climate action and now with the advice that he is getting and accepting he can see the opportunities.

  6. Colin Nicholson 5 years ago

    I thought you knew how this system works. Introduce just the carbon tax bill without any of the extras…. get all the mainstream press onboard and then over 6 months get rid of the CEFC RET etc by small bills introduced on the drip feed – mainstream press will ignore it because it is complex. The climate criminals have won and the renewable industry including Gore has been shown to be naive country bumkins

    • Chris Fraser 5 years ago

      i had the same concerns, and I thought the real Clive had been stripped of his XXL suit, gagged and stuffed in a cupboard before the announcement. But i suspect that Gore can’t be played. We can inform ourselves better here …

      http://www.smh.com.au/federal-politics/political-news/the-four-who-brought-together-clive-palmer-and-al-gore-20140626-3awgy.html

      • Colin Nicholson 5 years ago

        There is no background data on how the finances will add up and “budget emergency” can always be trotted out as an excuse to chnge ones mind. The government has cancelled a tax, but fails to say that the hole in revenues will be filled by other tax collections one way or the other.- ie no nett savings in tax for joe blow The mainstream press does not ask the simple question as to where the money to fill the gap left by abolition of the carbon tax will actually come from. Direct action was not fully funded in the budget, so the savings aren’t there. Al Gore is on the hook to hold palmer to his word (as of todays date) and therein lies the problem.

        • Chris Fraser 5 years ago

          The 2014 federal Budget is clearly at issue. It is a strange irony that this government would want to dud themselves out of the proceeds of a price on carbon … anyway, they have made their bed …

  7. Alen 5 years ago

    Well it’s the best climate news since the election that I can think of (in Australia), but what I appreciate most about this development is that climate is finally making big news and grabbing main stream media coverage. Keeping the RET alive will hopefully also finally disprove the theory that you can’t have climate action and a prosperous economy at the same time. I understand it’s only addressing the energy sector, but 30% of our national GHG emission come from electricity, and well 20% RE might be the aim now but RE has clearly demonstrated it’s popularity and a higher target might be in the cards in the near future. -especially if the large-scale sector takes of and shows to be as popular as the small-scale component.

  8. coomadoug 5 years ago

    Giles

    i think if Clive was a Steve Jobbs, he might just keep leaning still further into what is a genuine opportunity and end up being a lot richer swapping horses. He might just do something special in the emerging renewable economy. Either that or disappear and die and unhealthy death having pretentious meals with fossil fuel barons on hos plane flights to Switzerland

  9. CM 5 years ago

    Giles, so there is still doubt about ARENA’s future? Though the Senate will have to pass any changes to ARENA’s legislation so we may know more then.

    • Giles 5 years ago

      Yes, there is still doubt. But there is a Senate inquiry, so it will happily go about its business for a few months more. It will be interesting to see what happens to board when their term expires in a fortnight. Numbers in Senate not at all clear

Comments are closed.

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