When it was announced, The Climate Institute welcomed the 2017 climate policy review and consideration of post-2030 targets, which had been first promised by then-Prime Minister Abbott.
However, ruling out options before this review even begins (as the Coalition has done this week) is irresponsible.
1. Energy security
It will heighten, not decrease, risks to energy security and electricity prices, because it adds further uncertainty to a sector which has already been described by the Australian Energy Council as “almost unbankable” and “visibly deteriorating”.
2. Regulatory intervention
If a market mechanism is off the table, the remaining options are one or more of the following:
· regulatory intervention to ensure steady replacement of aging power plants;
· massively increased taxpayer expenditure to top up the near-empty Emissions Reduction Fund or other subsidies; or
· policies set collectively by state governments.
Or we maintain the policy chaos of the last decade with bits and pieces of the above.
Doing nothing is not a solution. Our energy system is already brittle. The transition to cleaner energy is happening globally.
It cannot be stopped, but it could be managed in ways that address energy security, affordability and decarbonisation. However, without policy adjustments, the recent recurring shocks to the electricity market (the collapse of renewable energy investment, the sudden exits of Northern and Hazelwood power stations, the inability for energy regulators to foresee major changes) will become the new normal.
3. Action by comparable countries
Australia is one of the world’s top 15 greenhouse gas emitting nations, on a par with the UK, Germany and Canada. Despite their political differences, these countries all share a recognition of the need to modernise and completely decarbonise their energy systems – and the opportunities this presents. Each has announced plans to systematically replace existing coal power by around 2030. It is important to recognise that they see this as a means of protecting energy security and improving the efficiency of investment.
Reactionary idealogues who call off any responsible risk management in a world where renewable energy investments outstrip fossil fuel electricity investments are directing their fear-mongering in precisely the wrong direction. Their recalcitrance only increases risks to energy security, prices and community stability.
John Connor is CEO of The Climate Institute. This is adopted from a TCI statement on Wednesday.