My previous Commentary have argued that, as a Coalition leader facing an election, Scott Morrison needs to get cracking on enunciating policies asap in the New Year. But although active since early January, he seems to have focussed on matters which are mostly “organisational” and would have limited appeal to the electorate in general. Indeed, his poor handling of some of these matters might even have attracted negative comment or a sort of “well what was that all about”.
The Australian reports that the “final” version of NEG has now been sent to the states from where they will soon be leaked (see NEG “Finalised”). This version is to be considered at COAG next month and it appears that it does not include the mechanism for setting the emission reduction target, which are (amazingly) to be set each year under federal legislation. The responsibility for meeting the so-called “reliability obligation” is unclear as to what variation in supply, and from what fuel source, would be “unreliable”. No mention is made in this report of what is expected to happen to electricity prices.
Recipients of my Commentary (who include Environment Minister Frydenberg and PM Turnbull) know that recent Newspolls show only 24% support for reducing carbon emissions by 26% (cf 2005) by 2030 and 48% favour pulling out of the Paris accord (14% Uncommitted). They are also aware that the CEO of the Australian Energy Market Operator has advocated continuing to use existing coal-fired generators for the next 20 years because electricity prices will be lower than using other fuel sources. And that Turnbull has acknowledged this view as correct.
In previous Commentary I have drawn attention to the apparent strengthening in The Australian’s critique of the Turnbull government’s NEG. Two days ago the paper published a Newspoll showing that only 24% opt for the Turnbull policy of obtaining a 26-28 % reduction in carbon emissions by 2030 rather than keeping energy prices down and that 48% now favour Australia pulling out of Paris. Yesterday it gave publicity to the report by the Australian Energy Market Operator (AEMO) and the CEO’s call ”for Australia’s fleet of coal-fired power plants to be operated for as long as possible to prevent a future price shock in the transition to renewables, claiming the ageing plants will still deliver the cheapest electricity for the next 20 years” (see CEO AEMO). It also referred to Turnbull’s welcoming of the report and his telling to radio 3AW listeners that “there’s no question that getting more megawatt hours out of an existing coal-fired power station is cheaper than the megawatt hours that’d come out of a new one. No question about that at all”.
The editorial in today’s Australian contains an important follow-up to yesterday’s Newspoll showing that only 24% opt for the Turnbull policy of obtaining a 26-28 % reduction in carbon emissions by 2030 rather than keeping energy prices down and that 48% now favour Australia pulling out of Paris, which is up 3 percentage points (see OZ Favours Coal Instead of NEG). It also draws attention to the report by the Australian Energy Market Operator (AEMO) and its call ”for Australia’s fleet of coal-fired power plants to be operated for as long as possible to prevent a future price shock in the transition to renewables, claiming the ageing plants will still deliver the cheapest electricity for the next 20 years”.
Today’s Australian runs a Letters section titled “Newspoll is not all bad news for the Prime Minister”. Indeed! Even though it includes eight leadership quality measures showing a quite sharp deterioration in Turnbull’s assessment (see yesterday’s Commentary on web), no Liberal Party MP comes forward to challenge Turnbull (partly because he or she realises the enormous task required to undo his decisions). This suggests we face with another year or so of Turnbullism.
The week-end’s Media assessment of Turnbull’s New Energy Guarantee (NEG) is generally favourable, but withTerry McCrann predicting an extremely unfavourable outcome for the Coalition viz “Malcolm Turnbull and Josh Frydenberg have made a deliberate decision to lose the next election and to lose it badly. The rest of the joint party room voted to endorse the decision, an indeterminate number of Liberal and National members voting for an early retirement. This is the irresistible and even more the irredeemable political consequence of the Turnbull-Frydenberg decision to opt for a policy of (only trying) “to keep the lights on” over a policy of significantly and quickly cutting both electricity and gas prices. Far less, the third, but first-best, option — the option, begging to be embraced by a half-rational government that had the most minimalist understanding of political dynamics — of aggressively aiming to deliver both more and more reliable power and cheaper and sustainably cheaper power”.
Various developments emerging since yesterday’s Commentary suggest that the quick decision to establish a new National Energy Guarantee (NEG) may largely reflect concerns by Turnbull about his continued poor polling and that “something needs to be done” to repair that.
The further fall (down to a 46/54 TPP) in the Coalition’s Newspoll last Monday might have been expected to produce a swathe of comments as to either the possible replacement of Turnbull or possible major changes in Coalition policies. Surprisingly, few did so.
I referred yesterday to the publication in the AFR of my letter headlined “Emission Target should be Reviewed”. This raised the possibility that Australia might follow the three largest emitters (China, India and the US) by dropping our target of a 26-28% reduction in emissions by 2030. Today I also had the following letter (abbreviated by Ed) published in The Australian