I am going to do back-flip with a triple pike here. Do-nothing Malcolm has circumvented Tony Abbott on carbon:
The Coalition party room has endorsed the government’s new energy plan, despite objections from Tony Abbott and others that the policy still has a component aimed at reducing emissions….Energy retailers will be required to meet standards mandating both a certain percentage of reliable, dispatchable power, and power that reduces emissions.
The government claims the policy will save $115 a year, more than the savings under a CET which aimed to reduce household bill prices by about $90 a year.
Retailers who breach the reliability or emissions guidelines could face penalties such as fines or even a loss of licence.
Reliability requirements will favour coal and gas, at least in the short term until the reliability of renewables improves, while the latter will favour renewable energy.
It will be up to each energy retailer to decide what mix of power they source to meet both mandated criteria.
Mr Turnbull used a Facebook video to declare the policy” a significant breakthrough” which would lower prices and which should “end the climate wars of the past”.
…There will be no change to the Renewable Energy Target which peaks at 23 per cent in 2020 and runs until 2030.
But the policy will be designed to ensure Australia meets its economy-wide commitment made in Paris – when Mr Abbott was prime minister – to reduce emissions by 26 per cent to 28 per cent on 2005 levels by 2030…Inside the party room, Mr Abbott said there should be no emissions reduction criteria at all. He no longer believes Australia should adhere to the Paris targets.
He was reportedly backed by Queensland LNP MPs George Christensen and Matt Canavan who said emissions reductions would add costs to power.
However some dissidents, such as NSW Liberal MP Craig Kelly, were happy with the new policy.
It is a breakthrough on a number of fronts. The plan has two parts:
- a reliability guarantee to ensure sufficient dispatchable power and
- an effective emissions intensity cap.
It is likely that it won’t do anything to promote coal so long as the emissions reduction criteria are stiff enough. It will instead promote low carbon storage and/or gas. Given batteries are already more competitive than gas, it may actually accelerate their take-up, which will lower power prices somewhat over time as gas is pushed to the margins.
Because it will all be done without any certificates or other trading instruments, the costs of the scheme will be hidden from consumers (and everybody else).
The problem is this is very complex policy. The rules that govern the National Energy Market are controlled by the states, in particular, SA. The COAG Energy Council could agree to implement the new rules without any federal legislation. But that means it’s now down to state Labor to agree or not.
If that fails, it’s the Federal Parliament that will decide and Labor plus the Greens and cross-bench do not appear to like the policy, whether for political or real reasons.
Moreover, the public is never going to understand any of this so the policy could be derailed easily by any of them.
So, Do-nothing Malcolm has not ended the climate wars but he has handed Labor the chance to do so. There will be nothing to stop it reducing the emissions intensity limits in the NEG when it takes power if it deems it necessary to accelerate decarbonisation.
