Labor has sought to outflank the Coalition government by committing to a zero net carbon pollution target by 2050, proposing two separate “low-cost” emission trading schemes, and reinforcing its interim commitments to cut carbon emissions by 45 per cent by 2030, and reaching 50 per cent renewable energy by the same date.
The proposal – officially launched by Bill Shorten and climate spokesman Mark Butler at the Gatton solar farm in Queensland on Wednesday morning – was hailed by most environmental groups, although nearly all noted that in a week of the Paris climate deal signing, more temperature records, and worsening impacts on the Great Barrier Reef, the party could have gone a lot further, and a lot quicker.
The Greens did just that, with Senator Richard di Natale reinforcing his party’s commitment to cut emissions by 80 per cent and reach 90 per cent renewables by 2030 – a target that is not far short of studies produced by Beyond Zero Emissions and the Institute for Sustainable Futures in recent weeks.
But the Labor strategy is intent on differentiating itself from the Coalition, and to bait a trap for prime minister Malcolm Turnbull, who has been forced to inherit and defend the policies of his predecessor, Tony Abbott, that he often ridiculed as “reckless” and a fig leaf for action.
And Turnbull duly obliged, accusing Labor of producing a “jobs-destroying” policy – even though, on the estimates of the Climate Change Authority and others, it is exactly what Australia has signed up for in the Paris agreement.
Turnbull, in two separate press conferences on Wednesday, was channeling the words of Abbott:
“(The Labor policy) is well above what we committed to at Paris and will put a very big burden on Australians,” Turnbull said. “This is yet another economic handbrake that Labor is putting on our economy, another restraint on jobs to add to all the other job-destroying measures they’re proposing,” he said at another.
Indeed, environment minister Greg Hunt and deputy prime minister Barnaby Joyce both trotted out old claims that Labor’s renewable energy policy would nearly double electricity prices, claims that have been rejected by the CCA – the author of the report they were supposedly citing – and by The Climate Institute. Labor says its policies can limit the impact on GDP to just 0.12 per cent. Hunt spoke of a huge “electricity tax.”
The Coalition currently has a target of cutting emissions by 26-28 per cent below 2000 levels by 2030, a target widely judged to be incompatible with the Paris climate pact.
It has no renewable energy target beyond 2020, and has been fiddling with the CEFC mandate and proposes to cut all remaining funding from ARENA. It appears hamstrung by Turnbull’s commitment to the Far Right of the Coalition to not change the Abbott policies. Turnbull appears unable to change its policy before an agreed review in 2017.
Labor, on the other hand, proposes a 45 per cent cut in emissions by 2030, in line with the recommendation of the CCA. Turnbull argued on Wednesday that this would put Australia at the front of the pack, but analysts suggested it would do no such thing.
The policy effectively allows dirty power stations (brown and black coal) to buy credits from clean power stations (wind and solar). It is expected to have a minimum impact on electricity prices. It would start from 2018, and be ratcheted up through a series of baseline and caps adjustments.
Even the Electricity Supply Council welcomed the move, although it pointed out it was short on detail – and the detail of Labor’s energy policies (and the huge compensation packages it proposed in previous governments) have been its Achilles Heel in the past.
The second part of the ETS is a scheme that would cover facilities emitting more than 25,000 tonnes of carbon pollution annually. It would run from 2018 to 2020, impose caps on pollution consistent with Australia’s 2020 target of a 5 per cent cut in emissions, and would involve no price.
Instead, it could provide offsets for any breaches in pollution that could be sourced at negligible price from overseas carbon markets. The design and cost of a wider scheme to help meet the 2030 target between 2020 and 2030 would be designed by 2019.
Labor is also proposing a scheme to close down brown coal generators, possibly by adopting a scheme proposed by ANU climate economists that would see the cost of closure shared by other brown coal generators.
While regarded as far from perfect, it is seen as the most effective option to break the deadlock on brown coal generation. Separate analysis from Reputex suggest the cost to the energy consumer of closing down brown coal generators would be minimal.
Labor has also committed to a 50 per cent renewable energy target, but has not yet said how it will achieve that. As RenewEconomy reported earlier this month, it will not be through an extension of the current target, but with other mechanisms, quite possibly a series of reverse auction successfully adopted by the ACT government, and widely used overseas.
The Labor policy included other initiatives studied separately. It proposes additional funds of $206 million for solar tower and storage, and promises to protect ARENA and widen the ambit of the Clean Energy Finance Corporation.
It also proposes nearly $100 million in funding to promote community energy, seen as a key ingredient to a decentralised energy system. It proposes a Community Action Plan and a series of regional hubs. And it proposes initiatives to deal with extensive land clearing.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.