The Five Things We Can't Answer About The National Energy Guarantee

Fairfax - Cole Latimer | Peter Hannam

The National Energy Guarantee will face one of its last major tests in August, yet despite nearly a year of development, there are still a number of unanswered questions.

Will the policy work?
The Energy Security Board, which includes the main energy regulators, has spent the past eight months coming up with a scheme it says will reduce power prices, bolster grid stability and meet a "pro-rata" reduction in carbon emissions in line with Australia's Paris climate pledges.

The National Energy Guarantee will be decided on by state energy ministers on August 10. Photo: Nick Moir

The board thinks it has created a scheme that will meet its goals without generating a carbon price that would be political Kryptonite to the Coalition party room. Others think a shadow price will soon emerge.
The refusal of the board to release the modelling that spits out the stated results - such as helping to cut household prices by $550 a year over the decade starting from 2021 - undermines confidence the guarantee will work as projected.
Industry is generally supportive, at least in public, but some chief executives say in private they worry about further concentration of the market and a halt to the renewable energy boom.

Illustration: Matt Golding

Will renewables construction and investment come to a halt under the NEG?
The NEG will begin after the end of the Renewable Energy Target runs out in 2020. The policy, introduced by the Howard government, has driven large-scale investment in wind and solar energy.
The main concern is that there is no obvious incentive for the industry given about 97 per cent of the emissions target - or more - will be achieved on the current goal even before it starts. They note too that the model summary provided by the board excludes the second phases of both Victoria and Queensland's state-based renewable energy targets.
Against those concerns, though, is the understanding that renewable energy prices are only going to continue to fall, making them ever more viable than new coal or gas-fired power. The rise in the number of companies underwriting renewable generation projects is a sign of that trend. In addition, the current timing of when ageing coal-fired power plants will exit may prove optimistic, with the result that wholesale power prices may be higher than forecast, helping renewables.

Illustration: Matt Golding

Hydropower generator Meridian Energy chief executive Ed McManus said, “regardless of the target we will still see renewable investment, coal is not part of Australia's future energy mix".

Can it be scaled?
Despite its name, the National Energy Guarantee isn't national. It only applies to the eastern states (and most of South Australia) as members of the National Electricity Market. Without Western Australia and the Northern Territory, which will be permitted to increase emissions, the power sector's so-called 26 per cent "pro-rata" emissions cut will actually turn out to be less.
While Energy Minister Josh Frydenberg and the states say the scheme they want is scalable, they differ in how the goals should be changed. The Labor-led states want the power to lift the emissions goal - federal Labor wants a 45 per cent cut - to sit with the minister. Mr Frydenberg and the Energy Security Board say any change should have to be approved by the Federal Parliament.

Illustration: Matt Golding

For now, Mr Frydenberg has offered a review by mid-2024 to assess the progress. Labor, the Greens and environmental groups say the goal should be sooner, not least because Australia committed at Paris in 2015 along with all other signatories to consider lifting the climate pledge by 2019.

What will be the impact on non-energy industries?
The low emissions reduction targets for the energy sector – which itself wants more ambitious targets – means other industries will have to have work harder to cut pollution. Almost no other policies are in place to support such cuts, adding to the expectation they will be more costly for the economy.
“Government policy will need to include these other sectors, such as transport and agriculture, because if we don’t we will miss our targets,” Grattan Institute energy director Tony Wood told Fairfax Media.

Illustration: Matt Golding

The government is yet to indicate whether they will implement a target for other industries.
If the agricultural industry moved in sync, it would need to slash emissions by 18.7 million tonnes of carbon dioxide equivalent annually by 2030, according to The Australia Institute. That reduction is not small, and would be about 2.9 million fewer head of beef cattle, 8 million sheep, 300,000 dairy cattle, and 270,000 pigs.

So what will happen?
Nobody can be certain, given the shifting politics. Odds still favour a conditional approval by the Council of Australian Governments' ministers on August 10 - which leaves open revisiting the policy later on, such as after Victoria's state elections in November.
Still, it would take a courageous jurisdiction to oppose the policy given it could be blamed for anything that goes wrong in the electricity sector from here on.

Illustration: Matt Golding

On the other hand, some view an opportunity for mischief. On the Coalition side, restive backbenchers are demanding a "point of difference" with Labor after recent less-than-hoped for byelection results.
For federal Labor, there is a reluctance to grant the Turnbull government a win that could lift its flagging fortunes. As one Labor senator told Fairfax Media, a stalling in approval could also help further strain tensions within the Coalition. Nationals are none too happy that agricultural emission cuts are next.
Whatever happens next week, it is unlikely the so-called climate wars will cease with approval of the scheme. Shifting politics could reopen new fronts at any time, and because the climate threat is unlikely to abate, it won't be too long before the need for more serious emissions action returns.

WHAT WE DO KNOW

Illustration: Matt Golding

• There will a reduction target of 26 per cent of 2005-level emissions by 2030 for the National Electricity Market that serves eastern Australia.
• The energy industry broadly backs the policy but thinks the emissions goal is too low.
• It is projected to cut household power bills $150 a year, over 10 years.
• COAG energy ministers will meet in Sydney on August 10 to sign-off - or not.
• Federal Coalition party room meets on August 14 to debate what it approves after the COAG result.
• States and the ACT will then develop and pass legislation - as will the Turnbull government - to approve the changes.
• Final changes to bring the policy into effect will need to pass through the South Australia parliament, which the Turnbull government hopes will happen by November at the latest.

Links

• States Combine To Pressure Turnbull On Climate Target
• Don't forget the 'big picture' says man who could kill energy plan
• 'Nut case stuff': Barnaby Joyce threatens to oppose government's energy policy
• Final Detailed Design of the National Energy Guarantee
• Federal Labor, Experts Call For Full Release Of Energy Plan Modelling
• Government's Energy Plan Would Guarantee A 'Nightmare' Of Complexity
• Electricity Plan Would All But Hit Emissions Goal Before It Starts
• Tender Will Allow Coalition To Dig Its Way Out Of Coal Hole
• Renewables Will Replace Ageing Coal Plants At Lowest Cost, AEMO Says
• Prolong The Life Of Coal-Fired Power Stations In The National Electricity Market, Says Australian Energy Market Operator
• Greenpeace And Getup Launch Campaign To Kill National Energy Guarantee
• National Energy Guarantee 'Clumsy, Inefficient', Says VEPC's Mountain
• Phony Peace? Challenges To Energy Plan Sent Back To Modelling Board
• 'Not A Big Drama' For Electricity Industry To Slash Emissions, Says Scheme Architect
• Victoria Demands New Detailed Analysis On NEG After COAG Meeting
• NEG: A Bipartisan Agreement To Disagree?

Paris Agreement Failure To Cost Australia $126 Billion A Year

SBS - Nick Baker

A new report maps the economic gains and losses of the Paris Agreement.



What's the cost for Australia if the Paris climate change agreement falls apart? Around $126 billion a year, according to a new report.
A team of Australian scientists from local universities and the CSIRO has mapped out the economic impact of countries complying with the Paris Agreement and found that gains far outweigh losses.
The report showed that if the Paris Agreement came undone and warming was not limited to two degrees, the world would lose $23 trillion dollars a year over the long term.
Report co-author Tom Kompas from the University of Melbourne said this is the equivalent to the world experiencing four to six 2008-style global financial crises every year.
Prof Kompas told SBS News the costs primarily come from "loss of agricultural productivity, loss of human productivity and land loss" brought about by climate change.
The report found South Asia, Southeast Asia and Africa were the hardest hit by temperature increases, underscoring the point that poorer countries are the ones most impacted by climate change.
"The losses in GDP are shocking [in these areas]," Prof Kompas said.

The report said climate change will see a major "loss of agricultural productivity". AAP

He said for Australia, costs come from "sea level changes and especially the loss of agricultural productivity" caused by climate change.
Looking at the numbers even further, Prof Kompas said warming not being limited to two degrees would cost each Australian household $14,000 a year in the long term.
While the Australian government has not placed exact costs on the impact of climate change, the Department of Environment and Energy has acknowlegded that "Australia faces significant ... economic impacts from climate change across a number of sectors".
While other studies have been released on the economic impacts of climate change, this report claims to be the first large dimensional model that breaks down costs to individual countries.
And Prof Kompas said the team was surprised with the numbers.
"Economists around the world have largely underestimated the damage from climate change … Previous works have not come even close to the $23 trillion in global damages," he said.
The Paris accord was agreed to by more than 190 nations as a path toward curbing harmful emissions in 2015.
Last year, President Donald Trump announced the US would pull out of the landmark deal.
Mr Trump used an economic argument against the deal, saying it placed "draconian financial and economic burdens the agreement imposes on our country".
And former prime minister Tony Abbott, who signed the agreement, has said Australia should back away from its target.
"If we had known then what we know now about America's withdrawal, about the economic damage that renewable energy, in particular, would do to our power system and to our industries, we would never have signed up," he told Sky News.

Links

• The Effects of Climate Change on GDP by Country and the Global Economic Gains from Complying with the Paris Climate Accord (pdf)
• Australia Could Lose $159 Billion A Year If We Miss Our Climate Agreement Target By 2 Degrees
• Is climate change to blame for Europe’s record heatwaves?
• What is the Paris climate agreement?

Deaths Rose 650 Above Average During UK Heatwave – With Older People Most At Risk

The Guardian - Damian Carrington | Sarah Marsh

Exclusive: data shows spike in deaths coinciding with high temperatures, with frail, older people with kidney or heart problems most vulnerable

Blackpool sun-seekers: the heatwave has coincided with a 650-strong spike in fatalities. Photograph: Christopher Furlong/Getty Images

Nearly 700 more deaths than average were recorded during the 15-day peak of the heatwave in June and July in England and Wales, according to official statistics.
Experts said that an increase in deaths is fully expected during heatwaves, but they cautioned that the provisional data requires further analysis to determine if the higher mortality is statistically significant for the summer months.
“The heatwave will have been associated with a number of excess deaths,” said Dr Adrian Boyle of the Royal College of Emergency Medicine. “The people most at risk in a heatwave are the frail elderly with heart or kidney problems.”
The UK is “woefully unprepared” for deadly heatwaves, a cross-party committee of MPs concluded in a report published on 27 July. The MPs said the government had ignored warnings from its official climate change adviser, and that without action heat-related deaths will triple to 7,000 a year by the 2040s.
The height of the heatwave was from 25 June to 9 July, according to the Met Office, a run of 15 consecutive days with temperatures above 28C. The deaths registered during the weeks covering this period were 663 higher than the average for the same weeks over the previous five years, a Guardian analysis of data from the Office of National Statistics shows.
ONS analysis for previous years indicate hundreds of additional deaths were associated with brief periods of heatwave conditions in July 2016 and June 2017. The full toll of the 2018 heatwave could reach 1,000, according to one prediction.
“Although the 2018 data is only preliminary, there seems to have been a concerning increase in the number of deaths,” said Dr Isobel Braithwaite, of the public health charity, Medact. “This fits in with current scientific evidence, which clearly shows that long periods of very warm weather can harm people’s health, particularly at extremes of age and in people with other pre-existing health problems.”
“While working in A&E this summer, I saw patients presenting with heatstroke and other conditions that were probably exacerbated by the hot weather, and this obviously places an additional strain on our already struggling health services,” she said.
Saffron Cordery, deputy chief executive of NHS Providers, said: “Some trusts have reported record numbers of people coming in to A&E, with increased emergency admissions, often for respiratory problems and conditions made worse by dehydration. We have heard concerns about large numbers of people from care homes requiring treatment.”
Dr Nick Scriven, the president of the Society for Acute Medicine, which represents hospital doctors specialising in emergency care , said: “The pressure was real and felt at the frontline. I would not be surprised at all if an effect on mortality is shown. The figure of about 700 would seem very plausible.”
He said dehydration can lead to many issues, from dizziness and falls, to an increased risk of infections, heart attacks and strokes. High temperatures can increase air pollution, and some urban areas including London saw alerts issued for ozone pollution. “That can really affect those with respiratory conditions,” Scriven said.
The heat also puts NHS staff themselves under pressure, he said. “NHS staff are working in often intolerable conditions. Compounding the heat is the fact that this is prime holiday season and there is little slack in the system regarding staff numbers.”
Braithwaite said the 2018 heatwave showed that hospitals and care homes must be made ready to cope with high temperatures. “We now know that the frequency and intensity of heatwaves is set to increase significantly over the coming decades because of climate change, so we have to heed this warning call in order to protect the public’s health,” she said. “We also need to treat the underlying cause of the problem by rapidly cutting emissions.”
“The extreme heat has highlighted the shortcomings of ageing buildings, which are not designed or equipped to deal with these conditions,” said Cordery. “Staff and patients are paying the price now for past decisions to delay investment in the NHS estate.”
The ONS data records when deaths are registered, not when they occurred, but 77% of deaths are recorded within five days. Even higher levels of excess deaths are seen in the colder months, but the year-to-year variation is lower in the summer months.
“We cannot say whether any of these [663] deaths are due to the heatwave or from other causes,” said an ONS spokeswoman. “Causes of deaths data for 2018 will be published next summer and they may provide a better understanding.”

Links

• Heatwave made more than twice as likely by climate change, scientists find
• Summer heatwave may explain surge in deaths in England and Wales
• Heatwave sees record high temperatures around world this week
• Climate change already bringing disease, air pollution and heatwaves                 
• Climate change made Lucifer heatwave far more likely, scientists find
• Floods and erosion are ruining Britain’s most significant sites
• Major flooding in UK now likely every year, warns lead climate adviser
• Last winter's floods 'most extreme on record in UK', says study
• Global warming to blame for hundreds of heatwave deaths, scientists say
• Climate change: the poor will suffer most