Coalition turns to fossil fuel lobby to lead “secret” review of climate policy

The Morrison government has quietly formed an ‘expert panel’ to review the government’s climate policies, tasked with finding additional emissions reductions from the government’s underperforming emissions reduction policies, in a process that will be conducted behind closed doors.

It’s a move that harks back to Abbott era approach to climate policy, with the panel stacked with representatives of Australia’s fossil fuel industry set to oversee a review of the Morrison government’s emissions reduction policies.

The panel has not been officially announced publicly, and only came to light when copies of a discussion paper were obtained by Footprint.

It also appears the panel will only consult with an unknown, pre-selected, group of industry representatives and interest groups, with the panel writing to a hand-selected group of industry members to seek responses to a consultation paper.

A spokesperson for the Department of Environment and Energy has told RenewEconomy that the panel has sought input from the industry, manufacturing, energy, mining, agriculture and transport sectors, as well as environmental groups ;and carbon market organisations.

The ‘expert panel’ will be tasked with finding new opportunities for emissions reductions under the Morrison government’s $2 billion Climate Solutions Fund, as well as how it can use the remaining funds available to the Clean Energy Finance Corporation and the Australian Renewable Energy Agency to achieve emissions reductions.

The panel will consist of two government representatives and two representatives from industry, with the panel to be chaired by soon to be replaced Business Council of Australia president, and former Origin Energy managing director, Grant King.

King has had long ties with the fossil fuel industry, having held numerous positions with oil and gas companies, and during his time at the helm of Origin Energy, King was one of the strongest critics of the Renewable Energy Target.

King will be joined by the Chair of the Clean Energy Regulator, David Parker, with the other government representative being the head of the Emissions Reduction Assurance Committee, Andrew Macintosh.

The panel will be rounded out by Susie Smith, the chief executive of the Australian Industry Greenhouse Network (AIGN), which has been the long-time front for the Australian fossil fuel lobby. Members of the AIGN are a collection of Australia’s largest fossil fuel users and producers, and have self-styled themselves as the ‘greenhouse mafia’.

Smith has previously held positions with oil and gas producer Santos and the Australian Petroleum Production and Exploration Association.

The appointment of King and Smith to the review places two of Australia’s primary antagonists in the ongoing debate over Australian climate policy at the helm of a review of those very policies.

The Department of Environment and Energy has said that the review would serve as a “due diligence” process as the Government implements the Climate Solutions Fund at the centre of the review.

The Climate Solutions Fund, a re-branded Emissions Reduction Fund, to which the Morrison Government committed an extra $2 billion in funding. The fund is to purchase emissions reductions from land holders, energy efficiency projects and industrial emitters through contracts awarded via auction.

The Emissions Reduction Fund has faced ongoing criticism regarding the quality of the emissions reductions purchased under the scheme, with critics suggesting abatement purchased from avoided land clearing may be overblown.

A consultation paper prepared for the review have also flagged that the government will consider expanding the Emissions Reduction Fund to reward industrial emitters whose emissions fall below caps set under the Safeguard Mechanism.

Under the flagged proposal, industrial emitters may be credited with offset permits if emissions fall below “business-as-usual” conditions, with the offsets sellable to the government or private purchases.

The Safeguard Mechanism was established under the Abbott government to stem the growth in industrial emissions, but the strength of the scheme has progressively been eroded under the Coalition, and has done little to prevent increases in Australia’s emissions.

This was recently made clear during the questioning of environment department officials at Senate Estimates hearings. Energy minister Angus Taylor has repeatedly claimed that the Morrison government as a plan for “every tonne” of emissions abatement required to meet the 2030 target.

But department’s officials were forced to concede that the did not know what “technology improvements” the government will rely on to meet its 2030 Paris Agreement targets, and they could not guarantee Australia would be allowed to carry over the overachievement of its 2020 Kyoto target.

The creation of a panel tasked with finding additional abatement suggests a concession from the Morrison Government that the current suite of climate policies will not be sufficient to achieve its emissions targets.

This was a point leapt on by opposition climate spokesperson Mark Butler who said it showed the “fig-leaf Abbott era approach to climate change is a gross failure.”

“This confirms what every expert observer, concerned citizen and the international community has known for years; the Liberals claims about delivering their inadequate Paris targets “in a canter” is nothing short of a lie,” Butler said.

“Tinkering around the edges of the Liberals Abbott era policies, as this panel is tasked to do, will not deliver the clean energy economy Australia needs to embrace to deliver real action on climate change and to support the clean energy industries and jobs of the future.”

The Emissions Reduction Fund has dramatically under performed at recent auctions, with the last emissions reduction auction flopping, securing just 59,000 tonnes of emissions reductions under contracts worth just $850,000.

This is a long way short of the 103 million tonnes the government expects to purchase under the Climate Solutions Fund, and is likely to be another contributing factor to the need for the review.

The government blamed the proximity of the auction’s timing with the federal election for the poor result, but market analysts have hold RenewEconomy that the supply of cheap abatement has dried up and the Government will need to offer higher prices to secure emissions reductions going forward.

The discussion paper released by the review also concedes that there has been low participation by industries beyond the land sector under the Emissions Reduction Fund and would look for how participation by other sectors of the economy may be boosted.

“Despite the existence of 12 methods across the energy efficiency, industrial and transport sectors, current contracted abatement across these methods is only around four per cent of the total contracted abatement,” the consultation paper says.

The need to offer higher carbon prices to attract additional abatement raises the prospect the government will fall further behind on its plans to meet the 2030 emissions reduction target, as it would exhaust the Climate Solutions Fund and fall short of the 103 million tonne target for the fund.

It is understood that members of industry have been given as little as a month to respond to the consultation paper.