Renewables beware: Labor may not be able to change emissions target

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Signs that federal Labor could “accommodate” the proposed National Energy Guarantee, on the basis that weak emissions targets could be improved later, should be treated with caution.

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Early signs that federal Labor and one of the renewable energy industry’s key lobby groups could “accommodate” the proposed National Energy Guarantee, on the basis that weak emissions targets could be improved at a later date, need to be treated with caution.

The revised NEG to be considered by state energy ministers at the COAG meeting this Friday includes some significant technical improvements, particularly in the way that the two obligations, emissions and reliability are met.

Indeed, the reliability obligation has been revised to such an extent that it barely exists, and may not require anything beyond business as usual contracting.

But there is still great concern over the emissions target, not in the technical details of how it will operate, but its scope.

The Coalition government is locked in to its 26 per cent reduction target for the electricity sector by 2030, a target that is seen by most as totally inadequate, both because of the scope of the Paris commitment, and because of the sector’s greater ability to achieve low cost reductions.

If the electricity sector only needs to cut emissions by 26 per cent, and can meet some of that with offsets and the rooftop solar of its customers, then it may need to do little, and greater effort will be passed on to other sectors, such as transport and industry.

The Coalition is also seeking to have this weak target “locked in” for 10 years, with a review only allowed in 2025, and any change to have 5-years notice.

If that were to be the case, it would lock in for the whole decade 2020-2030 an emissions target that was effectively weaker than having no policy at all, with the corresponding impact on new investment. There would be little incentive for any.

Many in mainstream media have noted comments by federal Labor, and the likes of the Clean Energy Council, that there could be agreement on the NEG, subject to further work by the Energy Security Board and the Commonwealth ahead of the next COAG meeting in August.

But this is where the rubber will hit the road. Labor is insisting that – while it may in the end agree on the mechanics of the NEG – it will not agree to any deal that effectively “locks in” weak emissions targets for 10 years.

This is a crucial point, and one that needs to be analysed carefully. The Coalition needs to get its weak target, and its “lock in proposals”, set in legislation, which means it has got to get through the Senate.

This won’t be backed by Labor, or the Greens, and it may not even get the support of the Hansonites and other right wing independents who continue to deny the science of climate change and argue against any initiative.

Indeed, some within the Coalition government itself are arguing that the Paris climate commitment be dumped altogether. They are fans of various Sky News commentators who continue to mock the science of climate change.

If the Coalition emissions target does get through this parliament, then new legislation will likely be introduced should Labor win the next election and has the numbers in the Senate to get it through.

It doesn’t look a lot like a climate policy truce at all. It doesn’t look much like bipartisanship, whatever the deal on the mechanism of the NEG.

Indeed Labor, far from flagging the truce emblazoned across the front pages of the Fairfax media, says it refuses to have its hands tied.

It argues that 10 years is too long, and the 5 year review is also too infrequent. (The reliability assessment, for instance, is updated every year).

“Labor won’t support any policy that locks in the government’s weak pollution targets and strangles renewable investment,” Labor climate spokesman Mark Butler said in an emailed statement.

In a later statement he said:

“Labor has expressed misgivings about a number of elements of the government’s latest energy policy, the National Energy Guarantee.

“The Government is now proposing an emissions intensity trading scheme that operates through a clearing house, described as an emissions registry.

“While there are still a range of details to work through, this improves upon the Government’s original proposal as it would allow greater transparency and competition, and underpin a properly functioning market in carbon emissions.

“Labor remains deeply concerned, however, about other elements of the government’s proposal including its intention to use the NEG to lock-in weak pollution reduction targets.

“Not only would this strangle jobs and investment in renewable energy, it would also impose additional costs on other sectors of the economy like manufacturing and agriculture which do not have low cost pollution reduction technologies available to them.”

 

It is also unacceptable that in the absence of strong national renewables policy, the Government is attempting to restrict the ability of state government to continue to pursue ambitious renewable energy programs.

 

Federal Labor will never agree to a policy that seeks to tie the hands of a future Federal Labor government in implementing our clear commitment to 50 per cent renewable energy by 2030. Malcolm Turnbull’s proposal would, according to Bloomberg New Energy Finance, see a cut of up to 95 per cent in renewable energy against current levels and see the loss of thousands of jobs.

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15 Comments
  1. David leitch 6 months ago

    I was disappointed to read the Clean Energy Council’s position as expressed by CEO Kane Thornton as reported in the Financial Review that the CEC will support Frydenberg’s proposal that there be no extra renewable energy for higher state targets. That is 50% renewable energy in QLD might mean say only 10% in NSW to get to a 26% overall target. I can’t believe that the industry’s peak body would support such a soft, lily livered stance. Of course he may have been misreported.

    Personally I would have expected a much stronger stance from the CEC but it seems you have to go to the Smart Energy Council to get a body that will stand up for the renewables industry.

    • Mark 6 months ago

      Hi David, the CEC’s position is that the NEG must not prohibit the states from continuing to take their own additional action, and these policies should be recognised under the scheme.

      We support further development of the NEG’s policy architecture, but this is different from supporting the policy in its current form. The government’s current emission reduction target is too low to
      continue to drive substantial investment in new clean energy and this needs to be addressed. It is crucial that the NEG policy architecture allows future governments to increase the emissions reduction target in a timely fashion.

      Our full submission to the NEG consultation paper is available here:
      http://www.cleanenergycouncil.org.au/dam/cec/policy-and-advocacy/submissions/2018/national-energy-guarantee-consultation-paper.pdf

      • David leitch 6 months ago

        Mark

        Thank you very much for those clarifying comments. I definitely should have read the CEC submission first. Didn’t realise it had been published.

        regards
        David

  2. Peter Campbell 6 months ago

    I hope Labor sticks to its guns. An inability to ramp up the emission reductions later and undermining the ‘additionality’ of state and territory programs are deal-breakers as far as I am concerned. Not having those in would probably be deal-breakers for the JAAACKs.

  3. Joe 6 months ago

    Labor would have to have the numbers in The Senate to be able to legislate any ramping up of reduction targets after they win the next election. Not sure that the numbers will fall their way. Maybe best to knock The NEG down in the first instance.

  4. David Havyatt 6 months ago

    Hey yeah lets all repeat what the Greens did in 2009 and have nothing at all – is that better?

    • Giles 6 months ago

      In this case, nothing might be better.

      • Jo 6 months ago

        as it was in 2009

    • Chris Fraser 6 months ago

      2009 was an argument over the CPRS’ perceived ambition. This year, in spite of having developed technologies available, the NEG appears simply to be a choice of locking in energy-inefficient emissions, or allowing a market mechanism to be rid of coal much sooner than the NEG requires. Trust the Coalition to think of such bureaucratic nightmares.

    • Ren Stimpy 6 months ago

      The Greens were not responsible for the failure of the CPRS and neither was Rudd. Labor and the Greens didn’t have the numbers in the senate to formulate a ‘Greens friendly’ climate policy. Rudd was forced to deal with the Coalition in the formulation of the CPRS. Abbott then burrowed his way into the Coalition’s prefrontal cortex, ending all bipartisanship on climate and energy policy. After the Abbott infestation began there were still two Coalition senators who crossed the floor to continue their support for the CPRS, but they would not have done so if Rudd had dealt with the Greens instead of the Coalition in the formulation of it.

  5. Jon 6 months ago

    Locking in an emissions target of any level for 10 years while the whole world is making an effort to combat climate change is ludicrous.

    Even if the dimwits got it through it’s not going to drive investment in high polluting technology which is the only reason you could ever want to.

  6. Peter 6 months ago

    SA has the highest wholesale prices. Is there anything in the NEG that would encourage RE investments in other states over SA given it’s higher rate of return per MWh (i.e. the current situation)? For example, if all states had to achieve at least 26% reductions in emissions there would be an incentive to spread the new build in all states, then additionality could kick in above that. However if NSW takes the emission credits from SA builds why would an investor build anything in NSW until its wholesale price spikes post the Liddell closure?

  7. Ken Dyer 6 months ago

    An election is looming and the COALition has to move away from dumbass tricks like riding your bike past old defunct power stations and claiming Australia needs a new one.
    Labor just has to say, “There are 23 coal fired power stations still operating in Australia. All those older than 30 years are to be closed by 2020. The rest are to be closed by 2030, and in the meantime, will be subject to a carbon tax.”
    Why does Australia have to accede to a weak ass target promulgated by the LNP COALition to appease the right wing loonies?

    • Ren Stimpy 6 months ago

      Labor just has to say, “The NEG will be worse than business-as-usual, so it will only add a pointless layer of bureaucracy. It doesn’t deserve bipartisanship.”

  8. neroden 6 months ago

    A future Labor government is not bound by the criminal actions of a criminal LNP government. They can simply revoke all the NEG enacting legislation *and* repudiate it, declaring it to have been corrupt and against Her Majesty’s policy — that’s pretty radical, but they can. Parliamentary Supremacy…

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