16
Jul
2018

Frydenberg Gets Help with NEG O’Seas

Did Turnbull Get Frydenberg to Canvass Overseas the NEG Policy of Reducing Carbon Emissions?

Today’s AFR reports it had an exclusive interview with the executive director of the International Energy Agency, Faith Birol, about the Turnbull/Frydenberg NEG policy (I have highlighted the major points made). This appears to follow Frydenberg’s private meeting with Birol purporting to explain NEG and a speech to diplomats and energy policy makers at IEA’s Paris HQ. He also claims to have briefed “key” Trump officials and chairs of US energy committees in Washington.

The attempt to obtain a tick (or at least a “no problems” response) from overseas is an attempt to persuade the States to also give NEG approval when they meet next month. But it is also, of course, an attempt to get approval from both the National Party and the party room, where Abbott and some others oppose NEG and support the withdrawal from the Paris  accord. As I pointed out in my previous Commentary, some journalist experts have also opposed NEG and some have supported withdrawal from Paris. It seems likely that Turnbull has used Frydenberg to “explain” the policy overseas and report back that it is favourably received.

One question which arises is the credibility of Birol. As indicated here, he became head of IEA in 2015 and his predecessor (a former Dutch Minister) had built a reputation of providing accurate estimates of energy supplies in a relatively neutral policy context. Former Turkish economist Birol has, however, a reputation of supporting action to reduce carbon emissions and substituting renewable. In fact, the AFR’s report below quotes Birol as referring to “a report by the IEA to be released this week showing investment in renewable energy was slowing”. “Political uncertainty is the number one enemy of renewable energy investment and this approach in the National Energy Guarantee brings predictability and certainty,” he said.

In short, an interview by Frydenberg with Birol was bound to result in him approving NEG and its basic objective of establishing an electricity policy which supports the Turnbull government’s carbon emissions reduction policy.

Interestingly, Resources Minister Canavan of the National Party is quoted as saying that, while he supports the usage of coal, he and his party colleagues don’t believe in mandating action for it’s use. He also warns that policy should not  “put all our dice, all of our eggs in the basket of potential improvements in batteries or renewables,” he said. “That might happen but that approach would effectively, like going to the casino and saying ‘Let’s put it all on black and see how we go.’”

This, of course, is what the Turnbull government is proposing.

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