National Farmers Federation Says Electricity Best Place To Make Emissions Cuts

Fairfax - Nicole Hasham

The National Farmers Federation has taken a veiled swipe at the Turnbull government's signature energy plan, suggesting proposed emissions cuts in the electricity sector lack ambition and may have unfair consequences for agriculture. 
The comments add weight to criticism that the National Energy Guarantee shifts the burden of climate action to other parts of the economy where emissions reduction is more expensive and difficult.
The new national energy policy would set emission caps and and reliability standards for electricity retailers. The government says this will reduce the risk of blackouts, curb dangerous greenhouse gas emissions and deliver lower electricity prices by encouraging more investment and supply.

The National Farmers Federation has suggested emissions reduction imposed on agriculture could have unfair consequences. Photo: Simon O'Dwyer

It would impose a 26 per cent emissions reduction target on the electricity sector by 2030, based on a 2005 baseline.
In submissions to the Energy Security Board, which devised the policy on behalf of the government, the Farmers Federation acknowledged that the target was in line with Australia’s international obligations.
But current and future conditions meant emission reductions in the electricity sector “will be larger than 26 per cent by 2020 and that further reductions in the electricity sector are likely between 2020 and 2030,” it said.
“The [federation] urges governments to be guided by the many credible and independent studies on what is likely in the electricity sector,” it said.

Reputex modelling has concluded the National Energy Guarantee will allow coal to continue its market dominance and drive up prices. Photo: Carla Gottgens/Bloomberg

“Given the current trajectory of the electricity sector, opportunities for further emission reduction are available, provided they continue to meet the reliability and affordability thresholds that headline the NEG.”
Agriculture emissions largely stem from livestock and manure, and the release of nitrous oxide from pastures and crops through fertiliser use. Reducing such emissions is considered challenging and costly.
The federation’s submission said the government "should appreciate the agriculture sector has taken significant steps in reducing its carbon emissions footprint".
It said a robust emissions target “is about fairness” and the electricity sector represented “the most cost-effective ways to reduce our emissions”.
“Other sectors of the economy, such as farmers and small businesses, are price takers and would not be able to pass on the cost of an imposed emissions reductions scheme,” it said.
The federation stopped short of calling for more stringent emissions cuts for electricity but said 26 per cent “should be the minimum target”.
The Agricultural Industries Energy Taskforce echoed the concerns, saying when emissions targets were set “it is important that appropriate consideration be given to outcomes which do not unfairly shift the burden of reductions onto other sectors”.
The taskforce comprises prominent agriculture bodies including the National Irrigators Council and Cotton Australia.

Labor's spokesman on climate change and energy, Mark Butler, said the NEG would place an unfair burden on other sectors. Photo: Joe Castro

Labor’s climate change and energy spokesman Mark Butler said the 26 per cent target ignored the fact that electricity emissions had fallen since 2005 due to the renewable energy target, while other emissions in other sectors had risen.
“Under the government’s approach, the electricity sector - which has the opportunities for the least cost pollution cuts - does 10 times less than sectors like agriculture and manufacturing, that don’t have many cost effective options to cut pollution,” he said.
“This is not only unfair, it is economically irresponsible and even the electricity sector itself is calling for more ambitious pollution cuts.”
Environment Minister Josh Frydenberg said the 26 per cent target was “a pro-rata contribution out of the electricity sector as part of our overall Paris agreement”.
“We have a strong track record on meeting our international emissions reduction targets,” he said, adding that required emissions reductions to meet the 2030 target fell by 60 per cent over the past two years.
Meantime, analysis by energy market consultants Reputex, to be released on Friday, claims coal will continue to dominate the electricity market under the national energy guarantee and the 26 per cent emissions reduction target will not lower power prices.
The modelling, commissioned by Greenpeace, also found that the 45 per cent target proposed by Labor would imply a constraint on coal-fired emissions and encourage renewable investment, pushing wholesale prices down.

Links

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• NEG vote will be reality check for emissions cuts