16
Jul
2017

Why No Clean Energy Target?

Why was Environment Minister Frydenberg  unable to tell his equivalent ministers from the States what Clean Energy Target (CET) the Commonwealth government proposes? According to his comments made just before his meeting with State ministers on 14 July:

“There will be discussion about the clean energy target, but … we received the report just five weeks ago,” Mr Frydenberg said. “We need to get this right. Dr Finkel made it very clear that the clean energy target, if it would be implemented would be from 2020, so there is no rush. What is important is to get the policy right” (see Frydenberg on CET).

This comment is a matter of concern.

First, the Commonwealth already has a target for reducing CO2 emissions by 26-28% by 2030 and for usage of 23% in renewable by 2020. Finkel proposes reduced emissions of 50% by 2050 and increased renewable usage of 42% by 2030. The implication of this remark by Frydenberg is that higher targets will be adopted by the Turnbull government no later than 2020 by which time the Commonwealth will have reached a decision on Finkel – or, more likely, Labor and its already similarly high proposed targets will be in office.

Second, it leaves a further period of uncertainty on electricity  prices for (in particular) businesses but also for households. Frydenberg’s pre-meeting comments also included that “the best way to drive down electricity prices is to get reform to the market, and that is what the meeting today will focus on, and I am confident that we can make substantial progress on the Finkel recommendations”. But there will NOT be any effective market under a system which is subject to extensive government regulations and which are likely to have a significant upward effect on prices (NOT downward) compared with coal usage unless government subsidies are increased. Judging by the recommendations by Finkel (which on my count are 55), the regulatory apparatus will be large (see Finkel Blueprint Recommendations) and imply that many future decisions by operators will have to be approved by one or more of the busy regulators.

Frydeneberg’s very short press release after the meeting with State Ministers (see Press Release on COAG Energy Council Meeting) claims agreement on “a significant set of reforms which will deliver a more affordable and reliable electricity system as we transition to a lower emissions future.” He claims that under the new arrangements  consumers will have “greater real time control over their energy consumption” – but in a higly regulated “system”?

Of course, most people know the real reason why the Turnbull government isn’t yet able to  announce a CET, viz that there is a significant section of the Parliamentary Coalition party which is sceptical of global warming and doesn’t accept the targets (see Craig Kelly on Renewables). Tony Abbott has proposed a renewable target no higher than the existing level of about 15% and some other MPS would support such an approach. There is also a significant number of journalists and others with expert analytical capacity who believe there is no need for government intervention to reduce CO2 emissions.

My previous Commentary drew particular attention to Andrew Bolt’s view and his reference to Finkel’s statement that there would be virtually no effect on global temperature even if Australia stopped emissions altogether. Yesterday Terry McCrann wrote in Weekend Australian “The single most stunning, most depressing inanity is energy: the conflict between the commitment to cutting emissions — bluntly, closing coal-fired power stations — and growing population relentlessly. So that the already onerous (and utterly pointless) 26-28 aggregate cuts in emissions by 2030 is actually a commitment to cut emissions by over 40 per cent in per capita terms — and in just a dozen years”.

Amongst the many Australian climate experts who are sceptics to one extent or another are Bill Kininmonth, Garth Paltridge, Tom Quirk and Michael Asten. Add warmist Mathew England who, while not a sceptic, acknowledged in a recent peer reviewed paper co-authored with two renowned warmists that the failure of temperatures to increase to any significant extent in the past nearly 20 years is a “problem” facing believers in global warming. There is also a significant group of former meteorologists which claims that the published temperature measurements are inaccurate and that there has been little or no actual increase over the past 100 years or so. Yesterday we also had a “wake-up” advertisement in News Ltd papers by a Climate Study group suggesting that another Ice Age is more likely than a Burning Temperature one and calling for the continued usage of coal. The coming week will see the publication by the IPA of a book outlining “the facts” on climate change, with sceptical analyses by a number of experts.

All these –and more – indicate that the Turnbull government is helping sign its own death warrant if it makes emissions reductions  a major policy. That is not the only reason for its poor polling. But with other Labor-like policies adopted by Turnbull it  serves to move otherwise supportive voters not to Labor but to the two groups who are now flourishing.

But what is Turnbull’s reaction after returning from his overseas visit and from telling the Cabinet of PM May in the UK about how to govern?

Yesterday he addressed the Liberal National Party state convention in Brisbane and “hit out at the state Labor government’s “reckless” plans to ensure Queensland’s energy supply was carbon neutral by 2050” (see Turnbull Tells Qld Convention of Coal’s Importance). He also  mounted a defence of coal-powered electricity, saying “Those people who say coal and other fossil fuels have no future are delusional and they fly in the face of all of the economic forecasts,” he told the crowd of party faithful.His sentiments were greeted with applause by the crowd, who a day earlier had passed a resolution urging a future state LNP government to promote and support the coal industry.The convention is also considering a resolution to call on the Turnbull government to withdraw from the Paris Climate Accord, which is likely to be debated today. Mr Turnbull devoted a significant portion of his 20-minute address to energy policy, warning of the impact of renewables on power prices and the security of the electricity grid.

Just how Turnbull government’s energy policy is going to ensure a role for coal in an environment where  provision would be made for  reducing emissions to a much lower rate is a mystery yet to be explained by  Turnbull. There are many options but the major question is whether he can provide a sufficient assurance to the many sceptics that coal would have a major role. Present indications are that this is unlikely.

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