Coalition makes it harder to change low-ball emissions target

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Coalition seeks to make it harder for any future government to change low-ball emissions targets, and removes option for changes with 5-years notice.

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The federal Coalition government has sought to make it harder for any future government to change the current low-ball emissions targets, seeking to lock in a policy that seeks to stop new renewable energy investment in its tracks.

Climate policy expert Erwin Jackson, from Environment Victoria, says an option to change the government’s current target with five years notice has been removed from the proposed National Energy Guarantee.

Instead, it seeks to lock in is target until 2030, and would allow no changes to be made until 2025, although these would not take effect until 2031-35.

The revelation comes as the Coalition government seeks to calm concerns from the right wing of its party, led by former prime minister Tony Abbott, who argue that the NEG – and its proposed 26 per cent cut in emissions – goes too far, and should be “back-loaded”.

But analysts say this attempt to stop any action in coming years is moot, because the target for the electricity sector is so weak that much of it will be met by 2020 anyway, because of all the wind and solar being built under the renewable energy target that Abbott tried to destroy.

And it begs the question, if the NEG has been designed as the only thing acceptable to the likes of Abbott, Craig Kelly, and Barnaby Joyce and co, and they don’t like it, then why bother?

The only policy incentive for new investment in wind and solar will come through the state-based targets in Victoria and Queensland.

Worse, analysts say that the outline of the mechanism prepared by the Energy Security Board appears designed to penalise those retailers who “over-achieve” on their emissions. i.e. if they build too many wind and solar plants.

On top of this, the ESB proposes to include any efforts by individual households to reduce emissions through their own rooftop solar in the overall calculations.

That means that retailers can use the rooftop solar of household customers to reduce their own emissions intensity, and unless the household goes off-grid, their efforts won’t add to the legislated target.

The situation underlines the quiet, and not-so-quiet, fury among states and analysts over the design and intent of the NEG, and the Coalition efforts to do all it can to remove any incentive for new clean energy investment.

Analyst David Leitch on Tuesday wrote an eviscerating assessment, declaring it to be a “fraud” of a policy, a complex beast rushed together in a matter of weeks for a vote by state and territory ministers in August.

While the ESB is designing the mechanism of the proposed emissions and reliability guarantees, the federal government remains in charge of policy, which includes targets, access to offsets, and exemptions for trade exposed industries.

In previous iterations, the Coalition government said it would seek to lock in its target for 10 years, until 2030, but advised that any changes would require 5 years notice.

Jackson notes that in the government’s latest 20-page report to COAG energy ministers, reference to the 5 years notice is removed, and it suggests that any change could only occur in 2025. (See page 7 of that report)

“This is basically a retrograde step that further undermines investor confidence in the sector,” Jackson tells RenewEconomy.

“Business needs to know the rules of the game in terms of how the target can be changed, so they can factor that in to their decision making.”

Jackson says locking in low-ball targets for electricity means that the country’s cheapest abatement options will be ignored. So instead, the burden of meeting the overall Paris targets will fall on other sectors, such as transport, manufacturing and farming

Jackson says this will be self-defeating for the Coalition, because it could cause big prices rises in those sectors, which don’t have access to the cheap abatement available in electricity, thanks to the falling cost of wind and solar and battery storage.
Environment Victoria, and the likes of Origin Energy and the Grattan Institute, among others, had pushed for the changes to emissions policy to be made with three years notice.
This would avoid, they say, a “train crash” of epic proportions. If a Labor government, for instance, wanted to lift its target to its stated 45 per cent reductions, but could only do so with five year targets, then it would require unprecedented amount of abatement in a short period.
“If the ALP is elected federally in 2019 and had to give five years notice to change the target, then emissions reductions in the second half of the decade would need to decline sharply to achieve their emissions reductions goal of 45 per cent by 2030.
“This rate of emissions reductions would be around 15 percent a year. This would be historically unusual, disruptive to the economy and could threaten the ability of the government to achieve its Paris commitments.”
But under the new rules, it would make it near impossible for Labor to change the target to match its own commitment to a 45 per cent cut in emissions.
There is a chance that a Labor government could seek to change the legislation once elected, but it would require a majority in the Senate to do so. That has only occurred twice since 1949.
Jackson rates this issue as potentially more important than the proposed penalties for overachievement, although the lack of transparency in the hidden registry is also a major concern.
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8 Comments
  1. George Darroch 1 year ago

    The Liberal and National Party are the worst kind of people, determined to inflict generations of suffering on Australia and the world. If you vote for them – from city council all the way up to the Senate – this is what you get.

    • MaxG 1 year ago

      Depends how you look at it…. I am sure there are many good people like everyone else; it is their belief system and being in power which makes these people so untenable.

  2. DogzOwn 1 year ago

    With rocket scientists in COALition, looks like we’re turning into mindless Trumpalia

  3. RobertO 1 year ago

    Hi All, I have alway hated the NEG. I can not see any benefits that make it something I would vote for, or support in any format. I suspect that the ACCC would not accept this if they were asked about it. There are so many loopholes that exist in this system that we will see abused if allowed to pass. Labour has to bite the bullet and tell the COALition to shove it where the sun don’t shine.

  4. D. John Hunwick 1 year ago

    Surely this agreement is just that – a piece of paper on which there is an agreement. It must be changeable AT ANY TIME. If this is not the case and the COALition gets its way then its time for all of us to march on Canberra and change the Government!

  5. Ren Stimpy 1 year ago

    The two monkeys in the picture also think nil of the NEG, but for a different reason. Who knows, maybe they might grow a spine and cross the floor?

  6. MaxG 1 year ago

    I said it many times and early: this COALition is a wrecking ball, when most said they can’t do much damage. And here we go… cementing their position.

  7. Nick Kemp 1 year ago

    “And it begs the question, if the NEG has been designed as the only thing acceptable to the likes of Abbott, Craig Kelly, and Barnaby Joyce and co, and they don’t like it, then why bother?”

    I wish they wouldn’t – time to step away from a conversation they either clearly don’t understand or are unable to take an unbiased (i.e. donations free) opinion on.

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