Forget knights and dames — if the Abbott government genuinely wants to be less ideological and reconnect with the political centre on a policy of substance, it should start by reaffirming its commitment to the Renewable Energy Target.
The “20% by 2020” RET has been held hostage to the kind of unfounded, extremist hate politics that is being rejected by Australians everywhere, as recent state elections and opinion polls suggest.
A clear signal to the energy industry that the target will be retained would immediately unleash a $15 billion investment boom at no cost to taxpayers (unlike the PM’s beloved toll road projects).
Clean Energy Council modelling suggests the task of meeting the RET would create 18,400 jobs from now to 2020.
The PM put jobs at the forefront of his pitch for government stability and, as Crikey wrote on Friday, with the mining and automotive industries shedding tens of thousands of jobs — and the future of shipbuilding up in the air — there is a crying need to identify industries that can deliver real jobs growth, right now. It would be plain stupid for the government to carry on a narrow, denialist vendetta against renewable energy, particularly wind farms, rather than focus on boosting the economy.
It has a mandate, for a start. When in opposition the Coalition promised it would maintain bipartisan support for the RET, subject to an independent review to ensure it was not pushing up power prices.
The review, headed by climate sceptic Dick Warburton, went off script when it commissioned modelling that confirmed — inconveniently — the RET was in fact reducing electricity prices. Warburton’s final report recommended nevertheless the RET be wound back or closed to new entrants but that position was quickly rejected by the cabinet, with unconfirmed reports soon appearing that the RET would be scrapped altogether.
That required numbers in the Senate that the government didn’t have, after Clive Palmer promised Al Gore he would save the RET. The government and Labor have had on-again, off-again talks to reach bipartisan consensus, and on Friday newswires were reporting the talks had suddenly resumed again.
The energy industry says the RET is not working, but for mine that’s because the energy industry is refusing to comply with it.
As Crikey wrote here, that’s because the business model of the big three overwhelmingly coal- and gas-fired, vertically integrated incumbents – Origin Energy, AGL, and Energy Australia – is under threat from renewables, and they stand to make a windfall gain of $13 billion or more from the higher prices and diminished competition they would reap over the next decade if the RET were repealed.
All it takes for the RET to work is to tell the energy industry the target’s not changing. Pointing to the price of renewable energy certificates and saying they are too low to support new investment is a circular argument. Prices are low because they reflect the crippling uncertainty that has bedevilled the RET for years.
Yes, overall electricity demand has fallen and there is a surplus of generating capacity. But we still need to install new zero-emissions capacity because, remember, we’re trying to stop dangerous climate change. New renewables capacity would create an opportunity to make very cheap and very substantial cuts to Australia’s greenhouse gas emissions by closing the dirtiest brown coal-fired power stations in Victoria’s Latrobe Valley, which are enjoying a perverse comeback after the removal of the carbon tax.
With gas prices rising as LNG exports begin from the east coast, more generators will likely switch back to coal, meaning the electricity grid is about to get browner, not greener, in terms of emissions intensity.
It’s crazy. It’s not a question of subsidising renewable energy: the truth is that no new build can compete with ancient, fully depreciated power stations belching out stupendous amounts of carbon dioxide. Únless you’re an out-and-out climate denier — or believe, like Environment Minister Greg Hunt that unproven, uncommercial, clean coal technologies that can be bolted on and solve the problem are just around the corner — it is high time that those power stations (in themselves highly dangerous, as the people of Morwell will tell you) are closed for good. No compensation — they’ve already had that — just an orderly progressive closure, with a fair transition plan for workers.
Maintaining the 20% RET ticks every policy box. Unleashing investment. Boosting jobs. Saving consumers money. Reducing greenhouse gas emissions — and restoring some badly needed credibility for Australia when it comes to crucial international climate talks in Paris this year. Restoring trust by honouring a pre-election commitment. Winning votes even, because polls consistently show Australians love renewable energy.
All good stuff for any government with its head screwed on. Instead we’ve had a non-stop, determined attempt by Tony Abbott and the sceptic cabal that keeps him in power, cynically backed by the three big energy players, to fatally undermine investment in renewables, which has duly stopped dead. Not to mention another laughable Senate inquiry into wind farm syndrome.
ACCI boss Kate Carnell told ABC24 this morning that business wants the government to get on with the job, but “not with the old job”. The PM’s old job was remorselessly skewering his enemies and governing for the Institute of Public Affairs and his hardline mates. The PM’s new job should be governing in the national interest, on behalf of all Australians.
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