Direct Deception – AGL, Energy Australia and Origin: the ‘real villains’

FYI – interesting analysis below. As it points out, it is other factors, not LNP policies that have seen a reduction on CO2 emissions. But they are using it to wedge the renewable energy industry and the Clean Energy Council has conceded. – T.

Peter Hartcher is deeply briefed by Hunt’s office
The Abbott government’s climate change policy is named Direct Action. This has long been regarded in the environmental community as being an Orwellian title for a policy of deliberate Non Action.

This week, however, the government’s policy suddenly looked more plausible. Australia’s greenhouse gas emissions are falling faster than projected. This means that the promise to cut Australia’s emissions to 5 per cent below 2000 levels by 2020 is much more achievable.

Total emissions last financial year were 2 per cent lower than they were in 2000, according to the new estimate from the federal Environment Department. And the rest of the effort required over the next five years is a lot smaller than it seemed just one year ago. Last year the department estimated that Australia would need to cut a cumulative total of 421 million tonnes between 2013 and the target year of 2020. But this week it estimates that the effort outstanding has fallen to 236 million tonnes. That’s a 45 per cent shrinkage.

This has happened not because of any decisive direct action or government brilliance. In fact, the government can’t take credit for any of it. As ANU’s Frank Jotzo put it, it’s a triumph of “luck not design”.

The Environment Department cites five factors in Australia’s diminishing carbon-cutting task. First, forecasts of electricity use have fallen. This is because people are installing more solar panels on their roofs and because Australians are using energy more efficiently. For every $1 of economic output, carbon emissions will be one-third lower in 2020 than they are today, it forecasts.

Second is drought. Third is the shutdown of manufacturing firms. Fourth is less coalmining amid a global price slump. Finally, the department cites two extra years of historical data and better methods of estimation.

Illustration: Rocco Fazzari

All this has happened before the centrepiece of the Direct Action plan has taken effect. This has allowed Environment Minister Greg Hunt to claim that “we will easily meet our commitment to reduce Australia’s emissions by 5 per cent from 2000 levels by 2020”.

True? The experts are divided. Jotzo says it is. “It’s just an observation: we’ve seen emissions flatline, pretty much all that’s required to meet the target now is to continue flatlining,” he told my colleague Lisa Cox.

John Connor of the Climate Institute differs: “Hunt’s chutzpah is amazing. We just don’t think they can buy sufficient abatement with the amount of money they’ve got” in their Direct Action policy.

We’re going to find out very soon. This task – where the government draws on a special-purpose $2.55 billion fund to pay carbon emitters to stop emitting – starts in a few weeks.

Hunt is adamant that the money in the Emissions Reduction Fund is enough to do the job. He’s seen some of the projects and promises that companies are lining up to sell to the government. This is the source of his confidence. The first auction will take place next month. The disclosure of the details should quickly establish the credibility of the scheme.

But here is the thought that should make Labor sweat. What if it does work? What if the government can achieve the carbon target without a carbon tax or an emissions trading scheme? Labor under Bill Shorten has committed to taking a carbon price of some sort to the next election. This suddenly starts to look politically very risky. Both parties have agreed to the 5 per cent cut. The political question will be whether you want to pay more on your electricity and gas bills to achieve it. You can imagine the Coalition campaign line: “We’ve cut carbon while cutting your electricity bill by $500. Why does Labor want to hurt your family just to deliver the same environmental outcome?”

Hunt is also due a little credit. First the government’s critics said they wouldn’t be able to repeal the carbon tax because of Senate opposition. They repealed it. Then they said that repeal would be disastrous because carbon emissions would soar. Emissions have been falling faster than projected.

Then the critics said Hunt wouldn’t be able to get the cash for his emissions reduction fund in a tight federal budget. He got the cash. Then they said he couldn’t get approval for it from the Senate. He got the approval. Some ministers boast, preen, bungle their portfolios and claim to be “fixers”. Others work assiduously, quietly, and achieve. These are the real fixers – the ones who don’t go on TV to declare that they are fixers. This government has a number of them, and Hunt is one.

Hunt can also take some credit for the successful conversion of Tony “climate change is absolute crap” Abbott into a leader committed to the next big global climate commitments.

This is the main game now in the effort to protect the planet from irreversible harm. A frustrated John Connor says: “We are still stuck in the backwater of what might be achieved by 2020 when the debate has moved on. It’s dangerous short-sightedness for a high-emissions country.” The EU has already announced its Paris target for post-2020. It is to achieve carbon emissions 40 per cent below 1990 levels by 2030. The US is expected to announce its target on Monday. Australia has said it will announce its target midyear.

The issues paper that the government is to publish on Saturday starts to move the focus onto this bigger picture. It commits Australia to being a constructive part of the Paris carbon conference due in December. “A strong and effective global agreement, that addresses carbon leakage and delivers environmental benefit, is in Australia’s national interest,” says the document, titled Setting Australia’s Post-2020 Target for Greenhouse Gas Emissions.

There is no attempt here to elide the reality and the harmfulness of climate change: “The latest climate information from the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Bureau of Meteorology indicates that Australia has warmed by 0.9°C since 1910, with most of the warming since 1950.

“There has been a rise in sea levels of about 20 centimetres over the past century, increased ocean acidification and a shift in rainfall patterns. Australia’s climate will continue to have high variability. Nevertheless, average temperatures are projected to continue to increase and extreme rain events are projected to become more intense. Average rainfall in southern Australia is projected to decrease.”

There are still strong climate change sceptics in the government, and they are fighting hard, but silently, in its inner counsels. This is clear from the protracted argument over the Renewable Energy Target.

This is something of a proxy for the argument over climate change itself. The sceptics have managed to limit the scope of the concession to renewable energy. A final compromise is expected to emerge from the government in the months ahead.

And this tension within the government will continue as the Paris negotiations proceed. But the Paris issues paper, jointly the work of Hunt, Foreign Affairs Minister Julie Bishop and the Abbott office, makes clear several points. First, the overarching question, the theology of climate change, is settled within this government. Climate change is real, and it will harm Australia if left unaddressed. Second, the government will set a post-2020 target to further limit greenhouse gases. Third, Australia will participate in the Paris commitments to help bring about a global accord.

In this, Hunt and the rational policymakers in the government have succeeded. The political argument in Australia is not going to be about climate change, a reality or a hoax. The argument will be about how to tackle it. In the current framework, in crude political debate, this will mean the argument is about electricity prices.

And Malcolm Turnbull’s position, in the event of a leadership change in the Coalition? He has said publicly that there is no point in revisiting carbon taxes – that has come and gone. He has said he supports the current policy, to be adjusted according to the direction of the global negotiations in Paris.

The issues paper indicates some guidelines on how far this government would be prepared to move. The new target, says the paper, “will be consistent with continued strong economic growth, jobs growth and development in Australia”. And it will be crafted “so that our target represents Australia’s fair share and does not put Australia at a competitive disadvantage to our key trading partners and the major economies”. Promisingly, the paper says the government is open to new policy measures to tackle climate change, though you can safely assume that this open-mindedness will not extend to carbon taxes.

Troublingly, perhaps, the paper makes no mention of the international pledge to limit global warming to 2 degrees Celsius. The warming to date has been 1 degree. Another 0.5 degrees is considered inevitable as a result of the time lag effect of emissions already being pumped into the atmosphere. This was mentioned in the government’s Intergenerational Report. It’s an important commitment to state in its climate policy, too. This is, after all, the whole point. To limit warming.

The hard outcomes of the Abbott government’s climate policies, up to 2020 and then beyond, are still in doubt. But the trend is vastly better than the early indications of “absolute crap” Abbott.

Abbott even seems to be taking some personal pride in some of the government’s environmental achievements. The Prime Minister told Parliament’s question time this week of the government’s Great Barrier Reef plan which has now, with Queensland’s co-operation, banned the dumping of any dredge spoil onto the reef. And he seems to have taken a personal interest in the government’s Antarctica plan, in which China has agreed not to explore the frozen, fragile continent for resources. Much remains in the balance, but credit where it’s due.
Peter Hartcher
Sydney Morning Herald political and international editor

Peter Hartcher is the political editor.


AGL, Energy Australia and Origin: the ‘real villains’ on the RET. John Hewson 26Mar15

Industry minister Ian Macfarlane would not have believed his luck when the clean energy council (CEC) buckled to a 20% reduction in the renewable energy target (RET), diminishing the target from 41,000 gigawatt hours of energy to 33,500GWh.

Please comment down below