Government's RET compromise guarantees uncertainty for renewables

As the Abbott government prepares Australia’s post-2020 emissions targets for this year’s Paris conference, the chairman of the Prime Minister’s business advisory council has make an extraordinary intervention in the climate debate.

Maurice Newman, writing in the Australian, maintains it’s all a United Nations conspiracy – a power grab of massive proportions.

“This is not about facts or logic. It’s about a new world order under the control of the UN. It is opposed to capitalism and freedom and has made environmental catastrophism a household topic to achieve its objective.”

Newman claims that 95% of the climate models that we’re told prove the link between human emissions and global warming “have been found … to be in error”.

In his article he targets Christiana Figueres, the executive secretary of the UN’s Framework on Climate Change, who has been visiting Australia. Newman writes that “there is a real chance Figueres and those who share her centralised power ambitions will succeed.

“As the UN’s December climate change conference in Paris approaches, Australia will be pressed to sign even more futile job-destroying climate change treaties.”

Newman of course has every right to hold whatever views he likes. But it’s to be hoped that Abbott (who says he accepts the human cause in climate change but in the past described himself as a weathervane on the climate issue) does not listen to his chief business adviser on anything to do with global warming. Newman’s conspiracy theory makes your common or garden climate sceptics look mainstream.

The government will be under pressure this year on the climate issue. It needs to produce credible post-2020 targets, and to flag what policies would be needed for Australia to meet them. As Malcolm Turnbull used to point out, Direct Action would become a big financial drag in the long term.

Environment Minister Greg Hunt this week met with Figueres. He said on Friday their talks had been “very constructive”.

Hunt distanced himself from Newman’s stand without bluntly calling it out as ill-based nonsense.

“Individuals are entitled to their views,” he said. When pressed on whether he agreed with the view Hunt replied, “look, it’s not been something that I’ve expressed; it’s not something that I would express.”

Hunt was questioned about Newman at a news conference with Industry Minister Ian Macfarlane called to announce an agreement “in principle” for a revised renewable energy target (RET).

After mutual stand offs, government and Labor have finally settled on 33,000 gigawatt hours (GWh) by 2020, down from the legislated 41,000.

But the government has thrown in conditions - the inclusion of wood waste in the target, and the continuation of reviews every two years. Labor is opposing both.

The government says it will introduce one piece of legislation and the Senate can sort out the disputed matters. It expects the crossbench will support it on wood waste.

The pressure to revisit the target came from the fact that lower-than-anticipated demand for electricity meant renewable energy was being subsidised into an over supplied energy market. Also, some in the Coalition are simply not keen on renewables and were anxious to scuttle the target if possible.

The review set up under Dick Warburton produced options that were extreme, going too far even for the government, which was confronted by the political reality that renewables had considerable support in the community and the economic fact that enterprises and jobs were at stake.

More than a year of uncertainty during that review and after has already torpedoed investment in a sector that should be full of potential for businesses and workers.

The government was urged by a number of its own backbenchers with renewable energy enterprises in their electorates to get the issue sorted. Earlier this week business groups issued a joint statement calling for a deal at 33,000 GWh. The government had been stuck on 32,000, saying that was its last offer.

The industry was anxious the Coalition did a deal with Labor rather than the crossbench for a new RET because bipartisanship is needed to restore some confidence.

But the two-yearly review of the target would ensure that doubt remained in investors' minds. The Clean Energy Council, representing a substantial part of the sector, said on Friday night that the issue was not worth resolving if the reviews continued every two years.

Labor promises that if it wins the 2016 election, it would revise the target up. But if the Coalition wins, would the target be cut again?

The government hopes the in-principle deal holds so it can see another barnacle scraped of the hull of the Abbott ship.

This has been a saga that, like so many other issues under this government, has been grossly mismanaged.

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