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Join the dots: Industry must push for higher NEG targets

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The heavy lifting to cut Australia’s emissions to ensure our Paris commitments for 2030 will not come from the biggest emitting sector, electricity, under the federal government’s proposed National Energy Guarantee (NEG) pro-rata share approach.

Rather, sectors like Transport, Stationary Energy, and Fugitives will each have to cut emissions by 30 per cent and more over the next decade for the nation to get close to meeting just the already committed downpayment on its Paris obligations.

Agriculture and Industry will also need to achieve 20 per cent reductions.

These are among the key findings of the Climate Council’s latest Working Paper, “Australia’s Rising Greenhouse Gas Emissions ” which finds that Australia’s greenhouse gas emissions increased for the third consecutive year in 2017, approaching all-time highs.

Under current policies, Australia will fail to meet its 2030 Paris commitments and will completely exhaust its global carbon budget share well before 2030.

While electricity sector is the only major polluting sector likely to meet the woefully inadequate 2030 pro-rata 26 per cent target set for it by the Federal Government, that has almost nothing to do with the NEG.

Indeed, the electricity sector only needs to reduce cumulative emissions by 8 per cent from 2018 to 2030 in order to achieve its pro rata reduction share.

It’s the rush of new renewable projects being built by 2020 to meet the Renewable Energy Target, state and territory reverse auction initiatives, and corporate renewable PPAs that will deliver the 2030 reductions, essentially by 2020.

The NEG ensures that other key sectors of the economy will shoulder much greater burdens to reduce emissions where it will be much more challenging and expensive.

The prospect for these sectors cutting emissions this much in a decade is remote on current policy settings, or initiatives currently up for discussion with the Federal Government.”

Join the dots. Australia will not meet its 2030 Paris emissions reduction commitment, woeful though that is, unless big step change national policies across all of these sectors are implemented before 2020,

How can it be in the national interest to saddle the rest of the economy, industry and consumers with high abatement costs when electricity can and is currently doing more to reduce emissions?

It makes no engineering or economic sense.

It also makes no sense for State, Territory and corporate renewable electricity purchases to be subsumed by the NEG emissions target. This fails to relieve pressure on other sectors of the economy.

State, Territory and corporate reverse auction schemes are a proven effective way to add capacity at lowest cost, and transparently when the public is paying for it.

The NEG emissions scheme is completely opaque to the consumers who will pay for it, unproven, and untested anywhere.

Member companies of industry associations like the BCA, APPEA, MCA, AIG, EUAA, NFF, motoring organisations and the like should be asking the question – “Why are we pushing for such a lowball NEG electricity emissions target when it will boomerang back at us to do much more across our own businesses?”

Join the dots.

Andrew Stock is a councillor for the Climate Council.  

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  • Joe

    The Coalition are purposely not joining the dots. The Abbott, the Kelly and the rest of the MOANash Forum posse are continually giving Two Tongues Turnbull grief over energy policy and Turnbull caves in by not adopting serious actions on energy and climate. Just have to wonder who in fact is running the Coalition’s energy and climate policy.

    • MaxG

      Neither… it’s the corporate interests…

  • D. John Hunwick

    Can anyone tell me why the states should go along with the NEM – why not be independent and extend what they can do whenever possible?

    • Rod

      The blue States will go along with the blue Feds.
      QLD and Victoria will probably be bribed via Federal funding or the Snowy 1.0 buyout.
      Rattenbury in the ACT will be bludgeoned by the MSM until he folds.

    • Farmer Dave

      Indeed, and if the States do go along with the NEG as currently designed, then they are deciding to either (a) not meet our Paris obligations, and thus damage their economies via additional climate disruption, or (b) damage their economies by expecting the non-generating sectors to do the heavy lifting of emissions reduction. If State ministers plan to support the NEG they need to be told by as many of us as possible that they will damage their State economies by doing so.

  • RobertO

    Hi All Electricity is by far the easiest to do followed by Transport and then Agriculture. We have both the capacity and the ability to do Electricity followed by Transport all before 2030 with any issued to our economy. We can build lots of the materials required for either of these projects if we want too! Our leadership is so woeful.

    Let hope that a change of Gov will help us

  • Nick D

    Well a quick and easy solution to the agricultural emissions would be to cut back on eating meat. Especially red meat. The good thing about cutting back on the consumption of meat is that there doesn’t have to be a policy put in place by any government. It basically the same principle of individuals putting on solar panels to cut their use of fossil fuels. If that is the case than any one with those panels should also realise the benefits of eating less meat too.

  • manicdee

    The NEG is a net negative. There is no point lobbying for a less dead version of it. The only option is to scrap the NEG altogether. The Liberal Party are demonstrating their absolute hypocrisy claiming that they are the party for free markets and small government, yet they can’t help sticking their fingers into everyone’s business.

    Australia will be better of without the NEG. The NEG is to energy policy as the Turnbull NBN is to broadband internet.