Fraser fears Abbott at mercy of fossil fuel lobby on renewables

The certainty that the renewable energy industry craves from government policy making may be short-lived – even if Climate Change Minister Greg Combet rubber stamps the Climate Change Authority’s recommendations for a steady course on the renewable energy target.

The CCA chairman, Bernie Fraser, told RenewEconomy in an interview last night that he feared a Coalition government would be swayed by the intense lobbying of the fossil fuel industry – despite the apparent bipartisan support for renewables

“I think that that lobbying that is being made to us, and the views being expressed by the fossil fuel generators and some other groups will be pretty powerfully directed towards the Coalition,” Fraser said. “I feel sure, well I expect, that the Opposition Coalition parties will be swayed by the lobbying to reduce the figure to an updated 20 per cent figure.”

The RET is supposed to be bipartisan policy – but while the Opposition has said it supports the “20 per cent” target, it has been careful not to commit to the legislated fixed target of 41,000GWh, or to disown the “real target” that takes into account reduced demand.

This was the most contentious point of the RET review completed yesterday. Fossil fuel interests want the renewables target reduced to an effective 26,000GWh, or removed altogether, and they have received the strong support of conservative state governments, many of them who own coal and gas fired generators who business models are being undermined by the penetration of renewables. These state governments could be expected to bring added pressure on an Abbott government. A Federal election is due to be held before the end of 2013, and the Coalition leads in the polls.

RenewEconomy has raised this prospect on several occasions, noting that if Abbott was unable to repeal the carbon price, as he has pledged to do, he could switch his focus to the RET and renewables, which would be the path of least resistance. This, of course, would be devastating to the large scale wind and solar sectors, who can finally see some daylight after years of policy meddling. It would put tens of billions of dollars of investment at stake, and thousands of jobs. But the Opposition has form, ignoring the Tambling review’s recommendations to extend the then MRET when it was in government nearly a decade ago. As Fraser noted, it all comes down to numbers in the parliament.

In a candid interview, Fraser also expressed frustration about the nature of the political debate, and also the Coalition’s promise to dissolve the CCA, which is charged with providing independent advice on climate change, emissions reduction and renewable energy. It also threatens to dismantle the climate change department, as newly elected Coalition state governments have done in recent months.

Fraser said he was worried that much needed knowledge could be lost if the authority were to be closed “on an overnight whim”. This, he said, would be a tragedy.

“Climate change issues are not going to go away,” he said. “They will become more complex and I would have thought that if a government were sensible it would realise that policy making is becoming more complex than ever, and really needs access to best policy advice.

“To risk disbanding and tossing that out the window would be a great loss, I think, to sensible policy making. It would mean ministers would have to rely on ministerial advisors who do not have the knowledge and are not in the business of providing independent advice.

“That is what I cannot understand, how a forward looking and rational Opposition can not see the folly of disbanding such a resource – not just in climate change but in other areas as well.”

Clearly Fraser, a highly respected former governor of the Reserve Bank of Australia, was keen on expressing his frustrations about Opposition policy and appears destined for a bust-up should the Coalition win power. In a separate interview with the AFR, Fraser said the Coalition’s vow to repeal the carbon tax “flies in the face of science”. That earned a rebuke from  Opposition climate change spokesman Greg Hunt, who said Fraser should reconsider his position. He also earned a rebuke from Treasurer Wayne Swan over his remarks to journalists that an obsession with producing a budget surplus was “fiscal stupidity.”

In his interview with RenewEconomy, Fraser said he was only tempted to take the chair of the CCA because of his respect for Greg Combet, the minister who made the request. He conceded, however, that he was asked by Combet if he “thought the science was crap”, a pointed barb by Combet to a line made by Abbott.

As for the RET decision itself, Fraser defended the decision to make changes to rules that could affect commercial scale solar PV, predicted by some to be an under-developed market in Australia – at least compared to overseas – and which may be hamstrung by a decision to move rooftop systems of 10kW or more into the large scale target rather than the small scale target.

Solar industry insiders have suggested this could curb the growth of the sector. But Fraser said it would likely grow anyway, particularly when some “smart financier” finds a way to make the economic case irresistible to commercial businesses, schools, and owners of park lots. He said there was every likelihood that the sector would boom anyway, and the decision to move the category from the uncapped small scale target to the capped large scale target was simply a means of minimising costs.

“It’s all about balance,” Fraser said of the role of the CCA. “The (roles are) different (from the RBA), but similar in trying to achieve in a pragmatic way an acceptable balance that delivers desirable objectives at a reasonable cost.”

Please click here for the full interview with Bernie Fraser.