RETs are the only policy tool left to shift Australia’s electricity sector away from fossil fuels, RepuTex modelling shows
Under current policies, state RETs will become essential to Australia’s carbon reduction efforts, a report has found.
Photograph: Steven David Miller/Getty Images/Nature Picture Library
State-based renewable energy targets are becoming essential drivers
of Australia’s carbon reduction framework and, based on current policy
settings, will be vital for Australia to meet its 2030 emissions
targets, according to a report by the energy consultancy RepuTex.
The finding comes amid attacks on state-based renewable energy
targets by the prime minister, Malcolm Turnbull, and his ministers, who have called for them to be scrapped.
According to modelling by RepuTex, since the federal government has
excluded the electricity sector from the so-called “safeguard mechanism”
and ruled out any sort of carbon trading, state and federal RETs are
the only policy tool left to shift the sector away from fossil fuels.
The government has released projections
showing that under current policies emissions would continue to rise to
2020 and 2030, leaving no chance for Australia to meet its 2030
targets.
Renewable energy
targets in the Australian Capital Territory, Queensland, South
Australia and Victoria would have an effect equivalent to that of
raising the federal RET to 35% by 2030, from its current target of 23%
by 2020, the RepuTex report found.
Combined state and federal RETs would amount to fulfilling 20% of Australia’s 2030 abatement task, it said.
“In the absence of a federal policy framework, state actions are
likely to drive large-scale emissions reductions,” said RepuTex’s
executive director, Hugh Grossman. “We would therefore see the states as
the dominant driver of the national energy and climate debate.”
Grossman said the reliance on renewable energy targets to achieve the
transformation was far from ideal, since it didn’t provide certainty to
the market and wouldn’t put downward pressure on prices. “We consider
not implementing an emissions intensity scheme a policy failure,” he
said.
Next week Turnbull is expected to outline new vehicle emissions standards which, using a best-case-scenario, Reputex estimated could account for 7% of the government’s abatement task by 2030.
Assuming the government doubles its nearly empty emissions
reduction fund, and accounting for expected reductions from synthetic
greenhouse gases, RepuTex found the government would have left more than
40% of its abatement task unaddressed.
“With an EIS off the table, and no extension of the RET, the
government has a limited number of policy levers to meet its 2030
target,” Grossman said.
As a result, a tightening of the last remaining lever, the “safeguard
mechanism”, would be needed, the report said. The safeguard mechanism
sets emissions caps – or “baselines” – for polluting industries, with
the exception of the power sector.
RepuTex found that to fill the abatement gap, the government would need to reduce the baselines by between 1% and 3% each year.
Grossman described meeting those tightened baselines as a “modest
task for industry”. “This reinforces the zero-sum nature of Australian
climate policy – the exclusion of one policy lever is fine – but losses
will need to be balanced elsewhere in the economy,” he said.
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