How Did We Get Into This Energy Mess, And How Do We Get Out Of It?

Fairfax - Tony Walker

Let's start with the smelly, dead chicken the Turnbull government is seeking to hang around the Shorten opposition's neck.
In a variation of the children's party game, pass the parcel, or, should we say, pass the chicken, Malcolm Turnbull and his Energy Minister, Josh Frydenberg, are seeking to impose on their political opponents responsibility for an energy mess, including crippling power bills.
The public could care less about the source of power as long as the lights remain on. Photo: Liam Driver
This is self-serving politics.
Culpability for two decades of policy paralysis going back to the Howard government's failure to ratify the Kyoto Protocol – setting the tone for an aimless debate on climate and energy – rests with the political class of all stripes, including the hapless Greens.
In their failure back in 2009 to support reasonable proposals for an emissions trading scheme known as the Carbon Pollution Reduction Scheme (CPRS), the Greens scarred the Rudd prime ministership, contributed to Turnbull's demise as opposition leader and helped prolong a lost decade in energy policy.
Our purpose is not to argue the merits, or otherwise, of the case for sustaining AGL's Liddell power station in the Hunter Valley beyond a five-year shelf life, but to ask a simple question.
How did we get into this mess, and how do we get out of it?
In answering this question, history is important.
As far back as the 1990's the Coalition debated in its internal processes the merits of an emissions trading scheme as a means of setting a price on carbon, thereby constructing a rational energy policy for the 21st century. Several proposals were discussed in cabinet, one in 2000 and the other in 2003.
Neither made it past the opposition of cabinet climate sceptics, including then prime minister John Howard himself.
However, by 2007 with defeat in prospect, Howard capitulated.
On July 17, 2007 he said: "Implementing an emissions trading scheme and setting a long-term goal for reducing emissions will be the most momentous decision Australia will take in the next decade."
More than a decade later, Howard's forecast remains stillborn, ensnared by rancid politics in which Kevin Rudd squibbed an opportunity for a double dissolution election on the Senate's rejection of his CPRS.
To her great cost, Julia Gillard introduced a carbon tax after having pledged not do so. Then Tony Abbott replaced it with a Direct Action plan to compensate emitters who reduced their carbon footprint, or got out of the emitting business altogether.
In one of politics' ironies, the problematical Direct Action plan – described by Turnbull in 2009 as "bullshit" – is subject to an internal review by the government with a result due by the end of the year.
Perhaps nothing has confused Turnbull's credentials more as an environmentally-responsible small 'l' liberal centrist than his positions on energy and climate policy under a Coalition agreement struck with the Nationals after he deposed Abbott.
Basically, Turnbull fell into line with his predecessor's policies on climate change, carbon taxes and emissions reduction targets.
Implicit in all of this was support for the coal industry.
On occasions, Turnbull has sought to edge away from these commitments such as when his energy minister talked about an emissions intensity target.
Under fire from his right flank over this heresy, Turnbull quickly disavowed any such idea.
In this latest period, we are witnessing an intense bout of blame-shifting in light of the most politically sensitive of cost of living issues – power prices.
The Turnbull government is also seeking to shield itself from the fury that would surely follow a summer of power outages due to insufficient baseload power.
In the debate about baseload power provided by coal-fired power stations versus renewables, the public could care less about the source of power, as long as the lights remain on.
What all this points to is a failure by successive Federal governments, Labor and conservative, to develop a national energy policy that provides a reasonable balance between conventional coal and gas-fired sources and renewables within a framework that satisfies Australia's international emissions-reduction obligations.
Speaking of gas, one of the more surprising aspects of the current debate is the lack of focus on gas as a cleaner energy alternative to coal. According to chief scientist Alan Finkel's National Electricity Market report, gas accounts for just 10 per cent of the country's power generation.
That could be increased significantly using existing modified infrastructure at a much lower emissions cost than coal: gas emits around 400kg/MWh compared with 1272kg/MWh for the highest emitting coal-fired plants.
One might have thought the country's secure energy future lies in a mix of gas and renewables, with Australia's ageing coal-fired plants being phased out over time, leaving aside the government vacillation on a Clean Energy Target recommended by Finkel.
Turnbull might serve the national interest more effectively by putting aside politics for a moment and listening to expert advice – from Finkel and the power generation industry itself – about the best energy mix.
Bullying corporate representatives in the manner of an early NSW governor named Bligh may serve a political purpose, but it hardly solves the problem.


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