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Tag Archives: energy white paper

Good luck in Paris

 

On 19 June 2013, Greg Hunt said on Sky News:

“We agree on the national targets to reduce our emissions by five per cent by 2020. We also agree on the renewable energy target. And one of the things we don’t want to do is to become a party where there is this wild sovereign risk where you are, where businesses take steps to their detriment on the basis of a pledge and a policy of Government.”

In July 2013 at the Clean Energy Week conference Labor’s Yvette D’Ath explicitly challenged the Coalition’s representative at the conference, Simon Birmingham, to stop talking about a 20 per cent target and make it clear whether it would keep the target at 41,000GWh.

Birmingham responded without fluffing around, stating that the Coalition supported the RET as currently legislated with its fixed 41,000GWh target.

While Hunt now does a Pyne by saying when they committed to a 20% Renewable Energy Target before the election what they really meant was…..followed by some fancy backpedalling… his own Department website still states

“The large-scale targets ramp up until 2020 when the target will be 41,000 gigawatt-hours of renewable electricity generation.”

When pressed about the 41,000 target in an interview on Rupert Murdoch’s Sky News on August 28 2014 Hunt said

“Look, with respect, our promise – is that our policy was for a 20 per cent, for a 20 per cent Renewable Energy Target, but that there would be a review which had to come, by law, under the ALP’s own law, it was due to come this year.”

He seems to ignore the fact that the “law” states quite clearly that it is the Climate Change Authority that must conduct the review, not a hand-picked panel of climate sceptics and fossil fuel lobbyists.

The Warburton Report also clearly states

The expanded RET scheme, which commenced in January 2010, is designed to ensure at least 20 per cent of Australia’s electricity comes from renewable sources by 2020. To achieve this, the legislation contains annual targets for large-scale renewable generation, expressed in gigawatt hours (GWh) that rise each year to 41,000 GWh in 2020.

Whilst coming up with the predictable recommendation that “In the presence of lower cost alternatives, the costs imposed by the RET are not justifiable,” they could not hide the facts.

“Analyses suggest that, overall, the RET is exerting some downward pressure on wholesale electricity prices. This is not surprising given that the RET is increasing the supply of electricity when electricity demand has been falling.

The direct costs of the RET currently increase retail electricity bills for households by around four per cent, but modelling suggests that the net impact of the RET over time is relatively small.

The Panel found that the RET has broadly met its objectives. It has encouraged significant additional renewable electricity generation, with output from large-scale renewable generators having almost doubled as a result of the scheme. Installations of small-scale systems have exceeded expectations, with output from these systems already exceeding levels anticipated for 2020. To date, the RET has delivered a modest level of carbon dioxide equivalent (CO2-e) emissions reductions. Commonwealth, state and territory environmental regulation provides a framework for ensuring that the RET promotes the use of ecologically sustainable renewable energy sources.

Over the past five years demand for electricity has been significantly lower than forecast and electricity demand in 2020 is now expected to be much lower than when the current RET was adopted. At the same time the cost of renewable technologies has fallen, particularly for rooftop solar photovoltaic (PV) systems. These factors mean that the RET could achieve a 26 per cent share of electricity from renewable sources by 2020.”

Perhaps the real reason for the panel’s recommendations is revealed by the statement that the renewable energy target results in “a transfer of wealth among participants in the electricity market” and we can’t have that now can we. If anyone’s going to get wealthy here it must be the coal miners, not those wind farm people who are making us all sick.

And so much for the One Million Solar Roofs. When asked about this, the Minister’s office said “the Government will take due care and consideration in the design and implementation of any further large initiatives to support solar energy”. Coalition speak for another broken election promise.

The Energy White Paper simultaneously delivers the message that we must privatise to increase competition and keep prices down whilst decrying the competition provided by the renewable energy sector because the increased supply has driven down prices.

The Direct Action Plan has become pointless with toothless safeguard mechanisms to punish polluters who increase emissions.

“Direct Action has no point if it does not have an effective safeguards mechanism and what the government has released seems like a try-on,” Nick Xenophon said. “It goes against what they promised me in the discussions before the vote. I was assured this safeguards mechanism would have real teeth. There is no point in the government spending $2.55bn if there is no requirement to cap or reduce emissions from industry.”

It is becoming increasingly impossible to believe this government has any intention of accepting the burden of addressing emissions reduction. Good luck in Paris is all I can say.

 

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Breaking Debt Or Abbott On Ice

People have a funny way of looking at numbers. I remember during the GFC, people were expressing concern that China’s growth rate had dropped to a mere 8%. I commented at the time that it was still a pretty good growth rate and, unless it kept dropping, then it was probably more sustainable at 8% than its pre-GFC growth rates. It’s still growing at 8%, I remember telling someone, trying to convince them that this wasn’t going to lead to a contraction in the Chinese economy. At least now until it fell several more percentage points.

And so we have Tony “I find economics boring” Abbott asserting that the Liberals have halved the debt. Actually, they’ve halved the projected debt for 2055. The actual debt has increased by billions of dollars. But halving the projected debt counts as halving the debt because debt is half what it would be if Labor had stayed in power for the next forty years and made no attempts to rein in debt, so that makes our debt half what it would be, not half what it was. Still that’s halving the debt, isn’t it?

This is almost as good as when Abbott, Hockey et al tried to argue that the Paid Parental Leave Scheme was completely paid for because they were going to add one percent to the company tax of the biggest companies after reducing company tax by one percent. I remember suggesting at the time that they could cut company tax by three percent then add a three percent to the top companies and pay for a few other things. A Liberal supporter told me I was an idiot because simply taking something away then adding it back didn’t raise any money at all…

Which was sort of what I was suggesting, but irony is lost on Liberals.

One thing that’s not lost on Liberals though, is a sense of urgency. We’ve have various emergencies since Abbott came to power, and I’m not just talking about the Budget emergency which is under control now that we’re only heading for half as much debt in 2055 (even though it’d be a much, much greater percentage of the GDP than when Labor spent all the money to shield us from the GFC, which was silly when it didn’t hit us hard as the rest of the world!).

And the latest emergency isn’t the rise of groups which are mimicking the rhetoric and behaviour of the early Nazis – which Abbott has been strangely silent about – but rather it’s the ice epidemic. As our PM said in his announcement:

“As a citizen and as a parent I am appalled at what is happening on our streets and in our homes,

“Ice is far more addictive than any other illicit drug. It does far more damage than any other illicit drug.

“The propensity for violence, the propensity to subsequent, very serious mental illness, the propensity to disfigurement which ice produces means that this is a drug epidemic way beyond anything that we have seen before now.”

Excellent. He also told us that he was going to ensure that every state and territory took “the menace of ice” seriously, which makes me wonder which states or territories had been making jokes about it.

So, thanks to Mr Abbott, we now have a task force developing a national action strategy to tackle this growing problem. And it’ll deliver an interim report to him by the middle of the year.

Now I don’t want to pre-empt the report but I suspect that it’ll recommend that we put more time and money into cracking the criminal gangs, more support for the ice addicts trying to kick the habit and more education about the dangers of ice. On the last point, perhaps they could join it to the domestic violence campaign, we could have an advertising blitz that warns us that both crystal meth and domestic violence are bad for us, which might save on the advertising budget until just before the election, where government ads can point out how awesome the current goverment is… In a totally non-partisan way.

And they’ll need it when some of the finer detail of their Energy White Paper hits the mainstream. For example:

“The Australian Government does not support reserving gas for domestic use. Reservation would result in less profitable production, attracting less investment, thereby reducing supply and raising costs.”

So we’ll be competing with all those countries who want to access our gas, but somehow that’ll increase supply rather than demand leading to lower costs. Strangely, this a point of view no economist I’ve read seems to share… Actually, I suspect it’s a point of view that nobody actually holds.. including the person who wrote the Energy White Paper!

And they’ll probably need to explain their Asset Recycling Initiative, which describes how they intend to “recycle assets” in the energy sector into private hands, so that the state governments can afford to “invest” in infrastructure. I reckon they’ll need a really, really big campaign to explain that this is not simply privatisation.

And they’ll probably need to explain how, in spite of their constant arguments about the free market and how companies like Holden, Toyota or SPC should stand on their own two feet, they’ll be spending almost a billion dollars on the following:

“INDUSTRY GROWTH CENTRES

$188.5 million Industry Growth Centres, which will lift competitiveness and productivity by focusing on areas of competitive strength, including the oil, gas and energy resources sector and the mining equipment, technology and services sector.

INDUSTRY SKiLLS FUND

$476 million Industry Skills Fund, which will enable Australia to have the highly skilled workforce needed to adapt to new business growth opportunities, rapid technological change and market-driven structural adjustment.

ENTREPRENEURS’ iNFRASTRUCTURE PROGRAMME

$484.2 million Entrepreneurs’ Infrastructure Programme, which will provide Australian companies with structural and strategic support to capitalise on growth opportunities.”

And then they may need to explain that the reason why there’s hardly any mention of climate change in the Energy White Paper is that their Direct Action Strategy has fixed the problem and we don’t need to worry about that any more.

Because, well, with the Ice Epidemic we have more than enough to worry about!

 

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