02/12/2016

Direct Action Review Could Bring Changes To Renewable Targets, Says PM

The Guardian - Katharine Murphy

Malcolm Turnbull says ‘mechanisms’ to meet 2030 Paris emission reduction targets may need to be examined
The prime minister, Malcolm Turnbull, has acknowledged a Direct Action climate policy review could lead to change. Photograph: Lukas Coch/AAP
Malcolm Turnbull has acknowledged the looming review of the Direct Action climate policy in 2017 “may result in some changes” to the federal renewable energy target.
The prime minister’s hedged observation on Thursday morning comes ahead of the release of the preliminary findings of the Finkel energy security review determining whether the national electricity market can deliver reliable base load power while meeting Australia’s climate change commitments.
Some participants in the Finkel process think it is possible the review could float the desirability of an emission intensity trading scheme for the electricity sector – a form of carbon trading currently being championed by the South Australian government through the energy ministers council.
Even if Finkel doesn’t go down that path, pressure from business, energy and climate groups will build on the Turnbull government once the new political year opens, because there is widespread criticism that the Coalition’s climate policy won’t deliver the emissions reductions required to ensure Australia meets its international commitments.
Business and climate groups have been dismayed by a rerun of Australia’s toxic climate politics triggered when the prime minister linked a statewide blackout in South Australia in September explicitly to the state’s use of renewable energy – which led to brawling between Canberra and the states on renewable energy targets.
In a joint statement issued in October, major business organisations and energy users warned that, in the absence of bipartisanship, “uncertainty will cause essential energy investments to be deferred or distorted, to the ultimate cost of us all”.
Many groups will use the review of Direct Action to call for greater policy certainty, either through a carbon trading mechanism, or longer legislative timelines on the federal renewable energy target – eventualities that would trigger renewed internal brawling within the Coalition about climate policy.
The government’s recent decision to ratify the Paris climate agreement triggered a small internal breakout, with the chairman of the government’s backbench committee on the environment and energy, the Liberal MP Craig Kelly, declaring on Facebook after Donald Trump won the presidential election in the United States the Paris agreement was now “cactus”.
George Christensen, the outspoken Liberal National party backbencher from Queensland, later backed Kelly’s view.
Anticipating internal turbulence, both Turnbull and the minister for environment and energy, Josh Frydenberg, have been careful to play down the potential for the Direct Action review to lead to major changes in the existing policy.
In his remarks on Thursday morning, Turnbull acknowledged the review could lead to change, but he also attempted to fence-sit on the issue.
“The climate policy will be reviewed and the renewable energy target is agreed, it is legislated, we have got no plans to change it,” the prime minister said. “But the 2017 review, which has been part of our policy for a very long time, is to examine the mechanisms that we have to meet the 2030 Paris targets, which, as you know, is a reduction of our emissions by 26 to 28%.”
But while playing down the prospect of big changes in the Direct Action review, Frydenberg has been making the case since he assumed the energy and environment portfolio for gas as the transitional fuel to help Australia continue to deliver reliable base load power while lowering carbon emissions.
An emissions intensity scheme for the electricity sector is a favourable regulatory regime for gas, because gas would be considered preferable to coal in the short term to deliver base load power.
Frydenberg used a speech this week to argue gas provided “a pathway to a lower emissions generation future with up to 50% fewer emissions than coal, depending on the generation technology”.
“Recent events in South Australia in particular have brought home the role of gas in providing capacity to balance the intermittent nature of solar and wind. Gas can be dispatched in a short timeframe, something renewables cannot do in an affordable way at this stage.”
Frydenberg has consistently criticised current moratoria on coal seam gas exploration.
“We need to improve market efficiency and competitiveness while attracting further investment in exploration and development,” the minister said this week. “We need to make it easier for new producers to enter the market and for buyers to more efficiently move that gas around our pipeline networks.”

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