Extract from The Guardian
PM told Coalition unlikely to adopt carbon trading ‘at any stage’
after terms of reference for Direct Action review leaves option open
Malcolm Turnbull
has been warned to expect backbench hostility if the government
attempts to adopt carbon trading, even if a new scheme is restricted
only to the electricity sector.
The Liberal MP Craig Kelly, who chairs the backbench committee on environment and energy, told Guardian Australia on Monday carbon trading was “contrary to Coalition policy” and argued it was “highly unlikely that the Coalition would adopt carbon trading at any stage”.
The comments were backed up on Monday evening by the South Australian Liberal Senator Cory Bernardi, who told Sky News contemplating carbon pricing would reopen old divisions in Coalition ranks, and was one of the “dumbest” things he’d heard in politics for some time.
Kelly’s comments follow the release on Monday of terms of reference for a review of the government’s Direct Action policy, which leave open the option of reinstating a form of carbon trading in the electricity sector.
Some stakeholders believe the Finkel review into energy security and Australia’s climate commitments may also float the desirability of an emissions intensity scheme for the electricity sector when it presents its preliminary fundings to Friday’s meeting of the prime minister and the premiers.
The Direct Action review will require consideration of policy mechanisms to reduce emissions on a “sector-by-sector basis” – which is code for considering the adoption of a trading scheme in the electricity sector to manage the transition to low-emissions power sources.
In media interviews on Monday morning, the environment and energy minister, Josh Frydenberg, said explicitly the review would canvas the desirability of a trading scheme for the electricity sector.
Frydenberg also appeared to lay the ground not to extend the current federal renewable energy target of 23.5% by 2020, arguing the government was interested in lowest cost abatement.
“When you look at the effectiveness, both in terms of cost as well as reducing emissions, of the various mechanisms that we have, the RET is not at the top of the list,” he said.
Last week, the prime minister telegraphed the review could lead to changes to the federal RET.
Kelly said on Monday it was a good time to review Direct Action and he said Frydenberg’s decision not to rule various policy changes in or out was reasonable.
But he said there was no way Frydenberg would be able to persuade colleagues on the merits of carbon trading. “It wouldn’t have the support of the Coalition party room,” Kelly said.
Kelly also poured cold water on the idea of looking at sectoral responses to reducing emissions, warning that could create “distortions if you tinker with one sector but leave another”.
On extending the federal RET beyond 2020, Kelly said the current scheme was not causing problems for industry “but as soon as you start ramping it up beyond where we have it now it starts to bite in terms of costs and competitiveness”.
He contended Australia could meet its commitments under the Paris international climate agreement without raising the RET by using other mechanisms such as energy efficiency.
The government’s problems won’t be restricted to internal opposition if it ultimately goes down the carbon trading path.
Kelly’s opposition to carbon trading was echoed on Monday by the One Nation senator Malcolm Roberts, who does not accept that climate change is occurring, or that humans are contributing to it.
But business, energy and climate groups argue that Direct Action will not deliver the emissions reductions required to ensure Australia meets its international commitments.
Business and climate groups have also 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.
Both business and environmental groups want policy certainty, given hundreds of millions of dollars of new investment in low emissions technologies are on the line.
The Climate Institute said on Monday the Direct Action review presented an opportunity to get serious about the challenges before Australia.
“This 2017 review and consideration of post 2030 targets will make clear the choices that Australia’s political, business and community leaders make,” said the institute’s chief executive, John Connor.
“We will stick with the chaos and point-scoring of the last decade, or move forward to manage the risks and grab the opportunities of the climate and clean energy challenge.
“The review offers the chance for a real national conversation about how Australia can join other nations working towards net zero emissions by mid-century and modernising and decarbonising their energy systems.
“As part of the review, next year Australia can choose to continue with costly and disruptive policy chaos and political point-scoring that is impacting on investment, electricity prices and energy security. Or we can choose to join the real world of responsible risk management and recognition of the economic opportunities in a world turning to clean energy.”
The Liberal MP Craig Kelly, who chairs the backbench committee on environment and energy, told Guardian Australia on Monday carbon trading was “contrary to Coalition policy” and argued it was “highly unlikely that the Coalition would adopt carbon trading at any stage”.
The comments were backed up on Monday evening by the South Australian Liberal Senator Cory Bernardi, who told Sky News contemplating carbon pricing would reopen old divisions in Coalition ranks, and was one of the “dumbest” things he’d heard in politics for some time.
Kelly’s comments follow the release on Monday of terms of reference for a review of the government’s Direct Action policy, which leave open the option of reinstating a form of carbon trading in the electricity sector.
Some stakeholders believe the Finkel review into energy security and Australia’s climate commitments may also float the desirability of an emissions intensity scheme for the electricity sector when it presents its preliminary fundings to Friday’s meeting of the prime minister and the premiers.
The Direct Action review will require consideration of policy mechanisms to reduce emissions on a “sector-by-sector basis” – which is code for considering the adoption of a trading scheme in the electricity sector to manage the transition to low-emissions power sources.
In media interviews on Monday morning, the environment and energy minister, Josh Frydenberg, said explicitly the review would canvas the desirability of a trading scheme for the electricity sector.
Frydenberg also appeared to lay the ground not to extend the current federal renewable energy target of 23.5% by 2020, arguing the government was interested in lowest cost abatement.
“When you look at the effectiveness, both in terms of cost as well as reducing emissions, of the various mechanisms that we have, the RET is not at the top of the list,” he said.
Last week, the prime minister telegraphed the review could lead to changes to the federal RET.
Kelly said on Monday it was a good time to review Direct Action and he said Frydenberg’s decision not to rule various policy changes in or out was reasonable.
But he said there was no way Frydenberg would be able to persuade colleagues on the merits of carbon trading. “It wouldn’t have the support of the Coalition party room,” Kelly said.
Kelly also poured cold water on the idea of looking at sectoral responses to reducing emissions, warning that could create “distortions if you tinker with one sector but leave another”.
On extending the federal RET beyond 2020, Kelly said the current scheme was not causing problems for industry “but as soon as you start ramping it up beyond where we have it now it starts to bite in terms of costs and competitiveness”.
He contended Australia could meet its commitments under the Paris international climate agreement without raising the RET by using other mechanisms such as energy efficiency.
The government’s problems won’t be restricted to internal opposition if it ultimately goes down the carbon trading path.
Kelly’s opposition to carbon trading was echoed on Monday by the One Nation senator Malcolm Roberts, who does not accept that climate change is occurring, or that humans are contributing to it.
But business, energy and climate groups argue that Direct Action will not deliver the emissions reductions required to ensure Australia meets its international commitments.
Business and climate groups have also 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.
Both business and environmental groups want policy certainty, given hundreds of millions of dollars of new investment in low emissions technologies are on the line.
The Climate Institute said on Monday the Direct Action review presented an opportunity to get serious about the challenges before Australia.
“This 2017 review and consideration of post 2030 targets will make clear the choices that Australia’s political, business and community leaders make,” said the institute’s chief executive, John Connor.
“We will stick with the chaos and point-scoring of the last decade, or move forward to manage the risks and grab the opportunities of the climate and clean energy challenge.
“The review offers the chance for a real national conversation about how Australia can join other nations working towards net zero emissions by mid-century and modernising and decarbonising their energy systems.
“As part of the review, next year Australia can choose to continue with costly and disruptive policy chaos and political point-scoring that is impacting on investment, electricity prices and energy security. Or we can choose to join the real world of responsible risk management and recognition of the economic opportunities in a world turning to clean energy.”
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