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Tag Archives: Renewable Energy Target

Still being lied to

So it seems that Bill Shorten will be taking a proposal for a 50% renewable target by 2030 to Labor’s national conference in Melbourne this weekend. Accordingly, climate change is shaping up to be a major battleground for the next election – probably much to Abbott’s chagrin. On this argument, the Coalition starts from behind. Tony Abbott would prefer the discussion to be neutralised and as a result the government is stepping up the rhetoric to attack Labor’s history and position on the climate change front. As a result, the laughably-named Minister for the Environment, Greg Hunt, has been working the airwaves furiously to poison the national consciousness.

Shorten’s laudable goal, as those who have been watching the development of renewable energy and its increasing prevalence in the energy mix of countries and even Australian States will know, is technically not difficult. Labor describes the proposal as “ambitious”, but the main challenge with achieving this is political. The primary difficulty is that the Australian people are skeptical about the ability of renewable energy to be a practical, economical choice for energy generation, and consecutive conservative governments have sought to play up on that uncertainty at the behest of their backers and overlords, the existing fossil fuel oligarchies. The Australian people have been lied to from the outset.

They’re still being lied to now. Greg Hunt has been given saturation coverage on news media outlets, parroting the Government’s official response to the reports of this labor policy proposal. The detail of Hunt’s interviews and discussions has varied slightly from broadcast to broadcast, but the salient points remain the same. Unfortunately but predictably, the Government’s official stance – and thus Hunt’s answers – is a farrago of lies and mistruths that often pass without challenge. The ABC is not immune to this mistreatment: in several ABC news interviews Hunt has made the same baldfaced statements without being challenged. The ABC can’t be blamed for this. In an already fraught environment with the national broadcaster under continual threat, challenge and attack by our government, it is vital for the ABC to retain an appearance of impartiality for its news arm. Rather, the problem is with our laws and systems that contain absolutely no penalty for a Government Minister to lie to a reporter, and to lie to the Australian people, so long as they can get away with it. A Minister can lie with impunity – as long as their lie goes unchallenged.

This is a problem, as we head into an election year in 2016. Standard practice in news reporting is to describe the news item of the day, interview appropriate persons involved with the policy or proposal or scandal, and drill into the detail to as shallow or deep an extent as time allows. Then, in the interest of “balance”, journalism will often seek a response from the other side. In politics, this brings us to a situation where the Coalition, with the benefit of incumbency, can coast with few policy announcements, leaving Labor few opportunities to respond. Labor’s situation is more challenging. Winning back government from opposition is difficult and requires a constant stream of policy announcements. When the last word in a news report comes from a Coalition minister in response, far too often the sound bite the audience will remember is the government’s position. If that position is in error, the voters have been misled.

A news reporter is not in a position to challenge a statement made. That comes down to us – the concerned public. It is incumbent on us to be informed, and to inform others who might otherwise be taken in by the lies.

Because the Coalition adheres to the concept that repeating a lie often enough will convince people to take it as truth, their talking points in response to Labor’s proposed policy are consistent and we will hear them trotted out regularly over the coming weeks. Each one of them is demonstrably untrue and the best response progressives can make is to have ready clear, concise explanations as to why each Coalition argument is based on a falsehood. With that in mind, what follows is a precis of the Coalition’s talking points on Labor’s proposed renewable energy target and ETS.

The centrepiece of the policy will be a new carbon tax.

“Carbon tax – they’ll call it an emissions trading scheme, but it’s the same thing, with the same effect, the same hit on electricity prices…” In a recent interview, asked several times for clarification, Hunt fell back on the government’s agreed attack line: that an ETS is just a carbon tax by another name. This was not true the first time around and it is certainly not true now. The reason why is very simple.

Under a carbon tax, every emitter pays for their emissions. Every tonne of carbon carries a cost. The incentive is obvious for the business to reduce its carbon emissions and pay less tax. All taxes raised go to the government, for use in whatever way it deems appropriate. The government may choose to return some of the taxes to companies in the form of incentives and subsidies, but to do so is to devalue the impact of the tax. Over time, unless you force changes to the tax rates through parliament, the price of carbon remains the same.

In contrast, under an ETS, businesses are permitted to release carbon emissions up to a cap, without any cost to them. If a business holds sufficient carbon permits, it can emit as much carbon as it likes with no financial cost at all. If it emits less carbon than it holds permits for, it can trade the excess permits on the market, allowing other businesses more latitude to emit carbon. This brings you to the question of how the business gets the permits in the first place.

Under the Gillard government’s ETS, initial permits were allocated for free to relevant industries to shield them from the immediate impact. Other organisations were forced to purchase initial permits. Over time, under an ETS, the number of permits available is regulated to decrease, providing incentive to companies to reduce their carbon emissions over time: as time goes on, carbon permits become more expensive, increasing the benefit to the company if it can trade its excess permits on the market, and increasing the cost of permits if it does not.

Due to compromises with the Greens required to get the legislation through a hostile senate, the price of permits was set for an initial three year period and the permits were not eligible to be traded, thus making the scheme’s initital appearance close enough to a “tax” to make it unworth arguing the semantics of “tax” and “ETS”. This led, in short order, to Labor being lambasted as a high-taxing regime (ironic, coming from the party which would soon implement a much more oppressive tax regime) and Julia Gillard as a liar.

Labor has learned its lesson on this front. It is fair to assume its new ETS will not commence with a set price and untradeable permits. For the government to claim that Labor’s new ETS will be “exactly the same” as a carbon tax is misrepresentation of the highest order. The ETS will be a different thing, with a very different effect, working in a very different way.

Greg Hunt knows this very well. This is the same Greg Hunt who won an award for co-authoring a thesis about implementing an ETS in Australia. Until recently some on the left held a grudging respect for Mr Hunt, being forced to toe the party line against his own documented beliefs, and pity, for being one of the few realists in a cabinet laced with flat-earthers. His recent performances have shown that he is a thorough convert to the Coalition’s paradigm that somehow a market-based scheme is far inferior to direct governmental intervention. As a result, his respect has died, leaving him only with pity.

Regardless of his personal beliefs, however, Greg Hunt knows very well that an ETS is not remotely similar to a carbon tax, and to claim that it is is to deliberately mislead Australian voters.

A higher renewable energy target will increase electricity prices

The talking point that a renewable energy puts upwards pressure on power prices seems an article of faith for the Coalition. This also is demonstrably untrue. ETS or carbon tax aside, all experience in Australia to date disproves the idea that renewable energy competition can push the price of electricity up. All models and analysis, including the government’s own modelling, show clearly that renewable energy puts competition and downwards pressure on energy prices. The only group that this hurts is the big energy generators and distributors, who coincidentally are big benefactors of the Coalition.

An ETS did have the expected outcome of pushing up power prices from carbon-heavy power generators. Gillard’s government allowed for this and overcompensated consumers for the expected price increases.

The one thing likely to place significant upwards pressure on energy prices is the effect of Queensland’s previous, liberal government opening its gas markets to export. The result is that gas, one of the major energy sources for much  of Australia’s eastern seaboard, will now be traded at the significantly higher international price rather than the domestic one.

The carbon tax “didn’t work”

Perhaps the most egregious lie of all is the continued insistence by the Government and Greg Hunt as their mouthpiece that the carbon tax was ineffective. It has been claimed that during the carbon price, emissions continued to increase. This is true. What is wilfully ignored in that discussion is that, under the influence of the carbon price, emissions rose less than they would have otherwise done. In fact, the carbon price was restricted to a relatively small part of Australia’s economy. In sectors where the carbon price applied, carbon emissions decreased markedly. (And, unsurprisingly, upon the repeal of the carbon price, carbon emissions in these sectors immediately increased again). Hunt has argued that Australia’s carbon emissions were already falling prior to the introduction of the carbon price and that the ETS had little effect. This also is untrue. In short, the government’s overblown claims about the carbon tax are almost universally deliberately misleading or even entirely untrue. The carbon price, even at a high price per tonne and acting like a tax, had little effect on the overall economy, destroyed no country towns, and was being remarkably successful at reducing Australia’s emissions.

A new ETS could do the same again.

Labor is inconsistent

Greg Hunt foamed that the parliament had “…just voted for stability in the renewable energy sector…”, referring to the recent passing through the parliament of a reduced renewable energy target for Australia. This criticism popped its head up but has now subsided; perhaps the Coalition has decided that talking about “the politics” is a little too fraught to be a certain winner. In any case, the fact that Labor reluctantly supported the government’s cut of the renewable energy target to 33,000 GW does not mean that Labor is inconsistent. Labor was able to forge a compromise position for the sake of settling the argument in the short term and giving certainty to the existing renewable energy market, but it was clear that this figure was not Labor’s preference.

Frankly, it seems amazing that Labor was able to secure any kind of a compromise from this government, after more than a year of the government steadfastly refusing to budge from its original position. As this government has shown, any policy agreed to under one government is not sacrosanct to the next.

The truth shall set you free

Armed with the facts, it becomes easier to counter the government’s wilful misinformation. Not easy, of course: there are none so blind as those who will not see, and for many in the Australian public the prevailing narrative being told by the government is emotionally compelling. But there are some who may be persuaded by actual facts and evidence. It is for these people that we must be prepared to call it out when we see the government deliberately distorting history and building straw men on Labor’s commitments. We must be able to point out that they have been lied to, and they are still being lied to.

 

Good luck in Paris

good luck

 

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.

“This election is all about trust.”

In December 2012, in an interview on Sunrise, Tony Abbott said “It is never a good thing for a government to break fundamental promises and this government has broken its two covenants with the Australian people: no carbon tax and a budget surplus. They’ve broken both of them. You just can’t trust this mob.”

Fair enough. They were silly promises in the first place and Labor did a pitiful job of explaining the need to maintain deficits in the short term, and that our carbon pricing mechanism was actually an ETS with a temporary fixed price period.  They needed to talk about the necessity of creating jobs and the economic consequences of inaction on climate change.

Instead, this was the wedge that Abbott used so successfully to bring Gillard down.

In August 2013, Tony Abbott said “I want to be known as a prime minister who keeps commitments.”

In his victory speech, Abbott reassured us

“In a week or so the governor-general will swear in a new government. A government that says what it means, and means what it says. A government of no surprises and no excuses.”

So let’s have a look at a few examples of Tony et al saying what they mean.

At his campaign launch Tony said

“Within 100 days….The NBN will have a new business plan to ensure that every household gains five times current broadband speeds – within three years and without digging up almost every street in Australia – for $60 billion less than Labor.”

More than a year has passed and the Coalition’s NBN truly is in no-man’s land with Telstra holding Turnbull, the NBN effort and the entire Abbott Government over a barrel.  Turnbull is still happy to keep fighting the election with endless reports supporting the Coalition’s increasingly untenable NBN policy.

NBN Co’s Strategic Review makes it very clear that the company could deliver an all-fibre FTTP network to Australians for just $15 billion more and only three years later than the Coalition’s Multi-Technology Mix project. This infrastructure would be vastly superior to the Coalition’s version and would not need to be upgraded. The review also showed, rather than costing the government anything, the investment will bring a return.  Turnbull is being deliberately misleading in describing this as an expense when it is actually a capital investment.  We are still waiting to hear the result of the Michael Vertigan-led cost-benefit analysis.

While this may be an example of a Minister determined to get his own way who is now on a learning curve on how difficult business negotiations can be in such a large scale project, that can’t be said of other commitments which have been abandoned, though Tony will tell you that you misheard him.

In December last year, Tony told Andrew Bolt

We are going to keep the promise that we actually made, not the promise that some people thought that we made or the promise that some people might have liked us to make. We’re going to keep the promise that we actually made.”

He was referring to his backflip on school funding. So let’s look at the promises that were made.

“In order to ensure funding certainty, we will honour the deals that the government has so far made and we will match the offers that the government has so far made in terms of funding.” –Tony Abbott, interviewed by Sabra Lane, ABC Radio’s AM, 5 August 2013

“I can promise that no school would be worse off under the Coalition.” –Joint doorstop interview with Russell Matheson, Camden, NSW, 15 July 2013

“As far as school funding is concerned, Kevin Rudd and I are on a unity ticket. There is no difference between Kevin Rudd and myself when it comes to school funding.” –Joint press conference with Christopher Pyne and Alan Tudge, St Andrew’s Christian College, 2 August 2013

And it’s not just on school funding where Abbott is trying to tell us we misheard him.

In May last year in South Australia, the defence minister David Johnston gave this doorstop media conference on the future submarine project.

“DAVID JOHNSTON – The Coalition today is committed to building 12 new submarines here in Adelaide, we will get that task done, and it is a really important task, not just for the Navy but for the nation. And we are going to see the project through, and put it very close after force protection, as our number priority if we win the next Federal Election. Over to you Steve.

MARSHALL – Can I just say I am very grateful for Senator Johnston coming to South Australia and confirming the Coalition’s policy, to build 12 submarines here in South Australia. It’s fantastic news for South Australia, it’s fantastic news for the people who work in the defence sector in South Australia, there has been a big cloud having over their heads for an extended period of time, the Government announced this in 2009 and as Senator Johnston said has done very little since then, we still have no clarity about the time frame, the cost for the project from the Government whatsoever, but what we have got today is a real focus from the Opposition, this a major priority for us as the Federal level and we are just so delighted here in South Australia that Senator Johnston has been able to come along and confirm that for us today.”

Sophie Mirabella was appointed to run the show.

“Once she has straightened things up, implemented a few changes and bullied or cowed the workforce, her operation will be made to float (or sink, when necessary) on their own merits, without any assistance from taxpayers. And to make a profit doing so.”

Then on October 23, Peter Hendy, member for Eden-Monaro, rose to say in Parliament

“The coalition promised at the last election that the new submarine project will be centred on Adelaide. Any more specific commitment than that would have been grossly irresponsible in defence strategy terms. We need to ensure that the best capability is purchased, not simply have an industry policy propping up one region of Australia. I think that whatever decision is made there will be plenty of contracts and jobs for South Australia. This can be done without jeopardising the overriding priority of good defence policy.

I note that the Leader of the Opposition did the exact opposite in his recent speech on the topic. His speech, promising amongst other things that, under Labor, the submarines would be built in Adelaide without first doing the proper due diligence harked back to the protectionist, xenophobic unionism that we all thought had been relegated to the past—obviously, not.”

And then we have the Renewable Energy Target.

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. And we’re very clear that that’s not what we want to be.”

From a doorstop interview on 29 September 2011:

“QUESTION: Is the Coalition committed to a renewable energy target?

TONY ABBOTT: Look, we originated a renewable energy target. That was one of the policies of the Howard Government and yes we remain committed to a renewable energy target. I certainly accept that the renewable energy target is one of the factors of the current power system which is causing prices to go up but we have no plans to change the renewable energy target.”

Now we have Ian McFarlane attempting to convince us that the Coalition is keeping their promise to stick to the 20% RET but, due to falling demand, the actual amount will be reduced by 40%.  This, he says, is not a reduction and he played the “baffle them with numbers game” on Insiders this morning.

Unfortunately for him, the government website explaining the RET legislation is very specific on this matter.

“The RET policy is often expressed in terms of a percentage target, specifically to ‘ensure that at least 20 per cent of electricity is generated from renewable sources by 2020’. However this is translated into a fixed GWh target in the legislation in order to provide a clear goal for industry and certainty for market participants. The target has been expressed in GWh since the original Mandatory Renewable Energy Target scheme commenced in 2001.

The Government agrees that the existing 41,000 GWh Large-scale Renewable Energy Target and annual targets should be retained. A change to the target (either an increase or a decrease) would create instability in the renewable energy industry, impact on the risk premiums required by lenders and investors, and decrease the likelihood of any target being met.

The Government also notes that modelling conducted for the Review found that reducing the target would not result in a material reduction to average household electricity bills and would not justify the damage to investor confidence that would be caused by such a change.”

And then we have the car industry.

On July 28 2013 Tony Abbott said

“What I want to do is make it easier for this industry to flourish. I want to make it easier for people to get on with their lives and to enjoy driving great motor cars, particularly great Australian made motor cars.”

On 21 August 2013, he assured us that “We have a good record when it comes to working with the car manufacturers to help them, not just to survive, but to flourish, and we will act in that same spirit in the future.”

In his campaign speech he said “the motor industry will be saved from Mr Rudd’s $1.8 billion tax on company cars.”

Instead, not only did he give up almost $2 billion in revenue from stopping tax rorting, he wasted no time in putting the nail in the coffin for car manufacturing in Australia.

And the lies didn’t stop after the election. During the by-election for Kevin Rudd’s old seat the Medicare co-payment was a hot topic.

REPORTER: “Can you guarantee there won’t be a Medicare co-payment?”

TONY ABBOTT: “Nothing is being considered, nothing has been proposed, nothing is planned.”

-Joint doorstop interview with Bill Glasson, Brisbane, 1 February 2014

REPORTER: “Would you consider a co-payment, a means testing to help relieve the pressure on the health budget?”

TONY ABBOTT: “Obviously the budget, generally, is under pressure and it’s very important that we do what we can to fix the budget, as quickly as we can, but we’ve got to do it in ways which are consistent with our pre-election commitments. Don’t forget, I said we were going to be a no surprises, no excuses government.”

-Doorstop interview, Sydney, 20 February 2014

REPORTER: “In light of the latest scare campaign however, can’t you just knock it on the head, pull the rug out from under Labor’s scare campaign and guarantee no co-payments?”

TONY ABBOTT: “Well I think I have knocked the scare campaign on the head and again this is all the Labor Party has got.”

-Doorstop interview, Sydney, 20 February 2014

We also had continual promises about no new taxes.

“The only party which is going to increase taxes after the election is the Labor Party.” -Joint press conference with Greg Hunt and Bill Glasson, Brisbane, 9 August 2013

Instead we have the high income earners levy, the Paid Parental Leave levy, fuel excise indexation, and the medicare co-payment. We have also seen funding to the States slashed by $80 billion in an obvious attempt to starve them into being the ones to ask for a hike in GST.

And who could ever forget…

“No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS.” -on SBS TV on election eve, 6 September 2013

This list is by no means exhaustive but I am already well past the attention span of most readers. I will close with some wise words of advice from our current Prime Minister….

“Look, if I tell the kind of massive fibs that this government has told, I would deserve the most condign electoral punishment.”

-Tony Abbott, Interviewed by the Grill Team, Radio Triple M, Sydney, 25 February 2011

Tell me what I want to hear

As it becomes increasingly apparent that households will not be $550 a year better off without the carbon tax we hear the rhetoric change.  Andrew Laming said

“It will be $550 lower than it otherwise would be, but if other elements have made prices go up then you won’t see a $550 fall on any bill.  But you’ll be $550 better off than you otherwise would have been, and that’s a very important caveat.”

So if I understand him correctly, because prices are going up at a slower rate that is a cut.  How come the same does not apply to funding for health, education, and pensions?

Despite cutting $80 billion from State funding for health and education, Abbott assures us that this is not a cut because funding goes up each year, albeit by less than promised.  Likewise, Tony repeats over and over that pensions will go up twice a year.  The fact that they will be going up by less (CPI rather than AMWE), thus expanding the relative gap in standard of living, is not to be considered a cut.

Having abandoned carbon pricing, and facing criticism of, and opposition to, its Direct Action Plan, the government, at the behest of its masters, has now set its sights on the Renewable Energy Target.

Jennifer Westacott, Chief Executive of the Business Council of Australia, recently wrote

“We might be able to farewell the carbon tax, but it is just one of a long line of green energy policies which federal and state governments have layered on top of one another that are driving up the cost of electricity.

It is the cumulative impact of these policies that is pushing up the cost of electricity and making our businesses less competitive.

Repeal of the carbon tax therefore must be the beginning of removing shortsighted schemes and programs, and the start of a process to design an integrated approach to climate change and energy policy that supports rather than weighs down our economic competitiveness and jobs.”

Tony Shepherd, the man chosen to lead the “audit” of government expenditure, was also chair of the Business Council of Australia, which threw its weight behind the government’s move to repeal the carbon price.  As a previous chairman of Transfield Services, he has long-established ties to the Liberal Party and ex-NSW Premier Barry O’Farrell, and was an outspoken critic of the Gillard government.  He criticised the carbon tax legislation and warned of the dangers of Australia leading the world on climate change, stating “tails do not wag dogs”.

Shepherd wants nuclear power to be in the energy policy mix, not “excluded on ideological grounds”, which, as Crikey points out, seems to forget that for Australia nuclear power is excluded on simple maths — it’s hideously expensive, compared even with renewables.

In January 2012, Maurice Newman, head of Tony Abbott’s Business Advisory Council, wrote in the Spectator

“Even before they threatened my property, I was opposed to wind farms. They fail on all counts. They are grossly inefficient, extremely expensive, socially inequitable, a danger to human health, environmentally harmful, divisive for communities, a blot on the landscape, and don’t even achieve the purpose for which they were designed, namely the reliable generation of electricity and the reduction of CO2 emissions.”

In an interview on Lateline, Newman said

“I just look at the evidence. There is no evidence. If people can show there is a correlation between increasing CO2 and global temperature, well then of course that’s something which we would pay attention to. But when you look at the last 17.5 years where we’ve had a multitude of climate models, and this was the basis on which this whole so-called science rests, it’s on models, computer models. And those models have been shown to be 98 per cent inaccurate.  CO2 is not a pollutant.”

Newman is calling for the RET to be scrapped  saying

“Whether the Coalition will change their policy on the RET is up to them … I believe it should be removed because the basis upon which we accepted in good faith that we needed it is no longer there.  When we look at the experience of Germany, they have not been successful in reducing emissions; when we look at the science it no longer supports the global warming theory and when we look at the health and economic effects of windfarms and the obscene wealth transfer from poor to rich we have to ask: why are we persisting with them? I think it is a crime against the people.”

David Murray, a former CEO of the Commonwealth bank of Australia, former head of the $90 billion Future Fund, and the man chosen by  Tony Abbott to lead the review of the $5 trillion Australian financial services industry, has also dismissed the threat of climate change, and suggested climate scientists had no integrity.

In an interview on ABC TV’s Lateline Program, Murray said the climate problem is “severely overstated.”

Asked what it would take to change his mind about the climate science, particularly in light of the recent IPCC 5th assessment report, Murray replied: “When I see some evidence of integrity amongst the scientists themselves,” – an interesting comment considering what has come out about shonky practices at the Commonwealth Bank that he led.

He said if he were in a leadership role, he would “set up some scientific approach to get a community consensus here about what is the truth on this matter.” Rather than listening to every major scientific institution around the world, and the overwhelming scientific consensus, he wants “community consensus”?

Murray’s appointment to head the first full scale review of the financial system in 17 years is problematic given his stance on climate change. The financial services industry is probably the most exposed to risk created by a changing climate, changing policy, and the likelihood of stranded assets as the world accelerates towards a low carbon economy.

A growing number of actuaries, advisors and investor groups are raising concerns that banks and funds managers are “flying blind” on climate risk because they are effectively ignoring the issue.

They argue that systemic reviews, be they in finance or resources of manufacturing, need rigorous attention to how the world is changing. Denying climate change is the wrong way to start.

In 2011, Dick Warburton became the executive chairman of the newly-formed lobby group Manufacturing Australia, whose members included big players like Amcor, BlueScope Steel and Boral and small-to-medium business.  Their aim was to urge for a delay to carbon tax legislation.

When Warburton, a self-professed sceptic, was interviewed on the ABC, the following exchange took place:

TICKY FULLERTON: You said earlier today that why should we be doing this when the rest of world is actually pulling out of carbon taxes and the ETS? I’m just wondering what countries you’re thinking about there?

DICK WARBURTON: Canada has announced that they’re not going to go ahead with any carbon tax, so has Korea, so has Japan. They’ve made those announcements they’re not going ahead. And no country has gone ahead with a carbon tax or an ETS since Copenhagen.

TICKY FULLERTON: Can I take you up on that?  Because my understanding is that they are – Japan is still going to be putting a carbon tax in place; in Canada the carbon taxes are being put in – going to be scheduled in through different states. And indeed, in Korea, they used their stimulus money into new green initiatives. And so these are very strong moves. They may be shifted back a bit, but everybody’s moving in that direction, aren’t they?

DICK WARBURTON: No, they might be doing moves like Korea – you’re talking about is the moves of mitigation or moves of change. That’s good. I’m very much in favour of that. But they announced that they would not be introducing an ETS (inaudible). Canada announced it straight after the election. They announced that. Japan, I can’t recall when they made the statement, but Canada and Korea definitely have.

Mr Warburton may like to change his sources of information.

South Korea’s only securities exchange, the Korea Exchange, is reported to have won a contract to operate world’s second largest Emissions Trading Scheme (ETS) from the start of 2015.

Two Japanese regions have operational mandatory ETSs in place: Tokyo and Saitama. Similar schemes, although likely voluntary, are being or have been considered for the Osaka-Kansai Prefecture and the Chiba Prefecture.

In March 2010, the Japanese government introduced the “Basic Act on Global Warming Countermeasures.”  An initial feature of the Act was a nation-wide emissions trading system (ETS) that would have begun in April 2013.

While this nation-wide ETS was removed from the Act in December 2010, other cap-and-trade measures, such as the Japanese Voluntary ETS (which began in 2005 and became part of the Experimental ETS in 2008), the Tokyo ETS, and the Experimental ETS (the trial period was for 2008-2012, and the government continues to encourage firms to participate), have been active in the country.

According to Japan’s former National Strategy Minister, Koichiro Gemba, the primary reason that the Japanese ETS was deferred was because fellow nations (particularly the United States and Australia) struggled to develop their own robust climate policies.

With the Government’s recent coal-fired electricity regulations, Canada became the first major coal user to ban the construction of traditional coal-fired electricity generation units.

”Our approach will foster a permanent transition towards lower or non-emitting types of generation such as high-efficiency natural gas and renewable energy.”

The Province of Alberta passed its Specified Gas Emitters Regulation in 2007 establishing an emissions intensity trading scheme.

To achieve its emissions reduction goal, the Quebec government has enacted regulations for an ETS. As with the Californian scheme, it began in 2013.

Warburton said on repeated occasions that climate science was not settled. “On the cause there’s huge debate about whether carbon dioxide is the main cause.”

Last year, Tony Abbott said “We have to accept that in the changed circumstances of today, the renewable energy target is causing pretty significant price pressure in the system and we ought to be an affordable energy superpower … cheap energy ought to be one of our comparative advantages,”

Earlier, the Climate Change Authority’s review of Labor’s renewable energy scheme had concluded that the current targets should be kept. Although it had the statutory obligation to undertake the next review, the government moved quickly to appoint its own inquiry and what better man to appoint to head the RET review panel than Dick Warburton?   The other members of the panel are Matt Zema, the CEO of the Australian Energy Market Operator, Shirley In’t Veld, the former head of WA government owned generation company Verve Energy, and Brian Fisher, the former long-term head of ABARE who gained notoriety for his positions on climate policies and is a noted free-market hardliner.

Environmentalists’ fears that this inquiry was set up to reach a predetermined conclusion were strengthened by the government’s rapid moves to cut funding in this area. The budget recommended the abolition of the $3.1 billion Australian Renewable Energy Agency, or ARENA, an institution formed to help bring new technologies into production and deployment, and to fund Australia’s world-leading solar research. While it retained funding to meet its existing contracts, it had almost no funds to enter into any new agreements.

But what can we expect when we have the Prime Minister who said in a radio interview he understood why people were anxious about windfarms that were “sprouting like mushrooms all over the fields of our country”.

“If you drive down the Federal Highway from Goulburn to Canberra and you look at Lake George, yes there’s an absolute forest of these things on the other side of the lake near Bungendore,” he said.

It must be on the daily song sheet as we heard the Treasurer make similar comments.

“If I can be a little indulgent please, I drive to Canberra to go to Parliament, I drive myself and I must say I find those wind turbines around Lake George to be utterly offensive.  I think they’re just a blight on the landscape.”

The government is under pressure from the coal lobby, incumbent utilities, network operators and state governments to either dump, or sharply reduce the renewable energy target.

As Ross Garnaut said

“Whether or not Abbott really does believe in anthropogenic climate change, it is extraordinary that the four business leaders the government has appointed to senior advisory roles – Dick Warburton on the inquiry into renewable energy, David Murray on the financial system inquiry, Maurice Newman to chair the PM’s Business Advisory Council, and Tony Shepherd to head the Commission of Audit – all share a strong view that the science on climate change is wrong.”

ian macfarlaneSeeing Senator Cory Bernardi heading the Senate Committee into Direct Action – ”I do not think human activity causes climate change and I haven’t seen anything that changes my view. I remain very sceptical about the alarmists’ claims.” – and Senator Ian Macdonald wearing a high vis “Australians for Coal” vest in the Senate at the behest of the Minerals Council, just underlines what we are dealing with – a bunch of hand-picked flat earthers who get their climate advice from Christopher Monckton and Andrew Bolt.

 

How about 54% of our electricity from renewables? We could have done it in 2012.

After reading that 27% of energy is generated from renewables in Germany, Gregor Ptok asked himself the obvious question: why isn’t this happening in Australia? “Initially I didn’t do anything much with it, but remembered about the Renewable Energy Target (RET) review . . . but was in two minds about whether I should go to the effort of putting a submission in. On the Friday morning when the submission was due, I was reading The Lorax to my son – as stated in my submission (see below), it was the first time I had come across the story. At that point I decided to ‘speak up’ and contribute to the debate. It’s his future that we’re stuffing up and I at least want to be able to say that I tried what I could to mitigate the impacts”.

Edited Submission to the review of the renewable energy target

I just read Dr. Seuss’ The Lorax for the first time when reading it to my son. But more about that later. First, I would like to share some thoughts about long-term impacts of government decisions.

The long-term impacts of some decisions made now will be significant. I’m not thinking about 10 years’ time when the budget may be balanced, but 2080 – when I will no longer be here, but my children and their children will. Is the best we can leave them: “a balanced budget” and $12.4bn worth of Joint Strike Fighters? If even one less aircraft was ordered, that would free up $214m for other uses. What effect will one less aircraft have if Australia gets attacked by China? Very little, I would argue.

What will people need in 2080? We can’t be sure how technology changes, but they will still need water, food and shelter. What are we doing to ensure these necessities will be provided in the futures?

My hope against hope is that governments surround themselves with wise advisers. Mature, experienced people who have learned to critically evaluate different viewpoints, balance the short-term and long-term impacts of their recommendations, do thorough risk-assessment and who have compassion for all. People, who strive to leave a legacy that reaches beyond the “bottom line”; one that builds a sustainable, thriving community. A community that is able to pull together to navigate the black swan events that may occur – not just in response to external threats (which would necessitate Joint Strike Fighters), but to the very fundamental threats that The Lorax refers to – resource depletion. If you think of a glass of water, at some stage it is half empty (or half full, whichever way you prefer), but ultimately it will be empty if you keep drinking. The same principle applies to oil, which is the very lifeblood of our current economy. It applies to a lot of other things as well as Richard Heinberg’s Peak Everything so aptly demonstrates.

Taleb wrote about black swan events. My apologies for referencing Wikipedia, but I don’t have enough time at the moment to read the full book.[1] A black swan event is an event that comes as a surprise, has a major effect, and is often inappropriately rationalised after the fact with the benefit of hindsight. Examples given include the internet, personal computer, World War 1, the dissolution of the Soviet Union or the September 2001 attacks:

The phrase “black swan” derives from a Latin expression; its oldest known occurrence is the poet Juvenal’s characterization of something being “rara avis in terris nigroque simillima cygno” (“a rare bird in the lands and very much like a black swan”). In English, when the phrase was coined, the black swan was presumed not to exist. The importance of the metaphor lies in its analogy to the fragility of any system of thought. A set of conclusions is potentially undone once any of its fundamental postulates is disproved. In this case, the observation of a single black swan would be the undoing of the logic of any system of thought, as well as any reasoning that followed from that underlying logic.

Juvenal’s phrase was a common expression in 16th century London as a statement of impossibility. The London expression derives from the Old World presumption that all swans must be white because all historical records of swans reported that they had white feathers. In that context, a black swan was impossible or at least nonexistent. After Dutch explorer Willem de Vlamingh discovered black swans in Western Australia in 1697, the term metamorphosed to connote that a perceived impossibility might later be disproven.

……

The main idea in Taleb’s book is not to attempt to predict black swan events, but to build robustness against negative ones that occur and be able to exploit positive ones. Taleb contends that banks and trading firms are very vulnerable to hazardous black swan events and are exposed to unpredictable losses. On the subject of business in particular, Taleb is highly critical of the widespread use of the normal distribution model as the basis for calculating risk. For example, a paper produced by academics from Oxford University and based on data from 1,471 IT projects showed that although the average cost overrun was only 27%, one in six of the projects had a cost overrun of 200% and a schedule overrun of almost 70%.

In the second edition of The Black Swan, Taleb provides “Ten Principles for a Black-Swan-Robust Society”.

Taleb states that a black swan event depends on the observer. For example, what may be a black swan surprise for a turkey is not a black swan surprise to its butcher; hence the objective should be to “avoid being the turkey” by identifying areas of vulnerability in order to “turn the Black Swans white”.

A common strategy to mitigate risks is not to put “all the eggs in one basket”. By reducing the RET, one strategy that seems to be working to encourage greater use of renewables (and thus more eggs in terms of energy generation) will be negated.

There is a country which in the last quarter generated 27% of its energy from renewable sources[2]: Germany. It generated 40.2bn KWh from renewable sources[3], which equates to 40,200 GWh. A country with less sunshine and landmass than Australia (though admittedly a higher population), in the last quarter generated the equivalent of Australia’s expected annual RET in 2020. If there was a will to invest less in a few strike fighters, Australia could be on the way there now.

I hope your recommendations will create the foundation for mitigating risks in energy generation not just for this generation, but for my son’s generation as well. And due to the time-lag usually involved in energy programs, leaving a balanced budget – in my view – does not count as risk mitigation. I take out a mortgage to build a house and spend a long time paying it off. Investment in renewable energy infrastructure is one investment I believe we should be willing to pay off for a longer timeframe as well. Or we could re-allocate some funding from the defence budget.

A different world is possible. Borrowing language from Dr. Seuss’ The Lorax again: Are we Once-lers or someone who cares a whole awful lot?

If Australia were to have Germany’s renewables energy generation capacity, in 2012 we could have sourced 53.65% of our energy from renewables.[4] Whilst there are arguments around baseloads, etc. this is just one image to show what that would look like:

Graph2

Click on the image to enlarge

 

[1] Information in this paragraph and the following quotes: http://en.wikipedia.org/wiki/Black_swan_theory

[2] Energiewende: Deutsche verbrauchen so viel Ökostrom wie noch nie, Spiegel Online, http://www.spiegel.de/wirtschaft/soziales/erneuerbare-energien-oekostrom-anteil-steigt-auf-27-prozent-a-968439.html

[3] ibid

[4] Australian total energy production 2011-2012: 253,851 GWh. Source: 2013 Australian Energy Update, Australian Government Bureau of Resources and Energy Economics, p.11

The truth about the ‘carbon tax’

Image by abc.net.au

Image by abc.net.au

Firstly, let’s remember that from June 2007 to December 2012, before the introduction of carbon pricing, average electricity prices rose by 70 per cent, so the big hike we all endured had nothing to do with action on climate change. A 2012 report by the Productivity Commission found network services, or poles and wires, to be the single most costly component of electricity supply accounting for around 45 per cent of total electricity prices from 2007-2012.

Next, let’s get the terminology straight. We have a fixed price emissions trading scheme which was slated to move to a floating price in 2015 under Gillard, moved forward to 2014 under Rudd. This means that our current system has two months to run, after which time we were going to align with the EU market which is estimated to move to about $9 per tonne this year, a significant reduction from our current carbon price.

Abbott said “the average power bill will be $200 a year lower and the average gas bill will be $70 a year lower.” He went on to say the average family would be $550 a year better off with the rest of the saving supposed to come from a general reduction in prices of goods and services passed on by other businesses, many of whom claim they had not increased prices because of carbon pricing and would therefore be unable to reduce prices.

The Queensland Competition Authority’s report estimates that, if the carbon tax is repealed, the average electricity user can expect their bill to increase by 5.4 per cent, or about $76.  This is less than if the carbon price remained, but prices will increase not decrease nevertheless.

Gas prices in the eastern market – Queensland, NSW, Victoria, South Australia, ACT and Tasmania – are projected to rise sharply in the coming years as exports and demand for domestic consumption increase.

Energy Australia said it is important for the government and community “to be aware there is no guarantee that final energy prices will move proportionately with the average carbon price reduction in wholesale energy market”.

AGL Energy says that it usually needs a lead time of months to make price changes, and that “non-carbon” factors will drive prices after July 1 this year.

A joint submission by power and gas companies cast doubt on Tony Abbott’s promised price cuts of 9 per cent for electricity and 7 per cent for gas from the abolition of the carbon tax warning “it is difficult to specify exactly how much electricity prices will fall once the carbon price is repealed”.

The submission argues the carbon price impacts vary by region, by supplier, by retailer and in many cases by individual contract. The carbon tax applies to the cost of electricity generation where fossil fuels are burned, which represents about 30 per cent of the electricity price. Network charges for transmission represent a “significant portion” of retail prices and these could rise on July 1, except in Victoria, and this will have an impact on electricity prices that may reduce any cuts associated with carbon tax repeal. In Western Australia and the Northern Territory the electricity price is determined directly by the government, so regulatory changes will take time to implement.

So when Abbott, Hockey and Corman tell us we will be $550 a year better off they are talking crap, plain and simple. They use a price that won’t apply after July 1 and ignore industry advice that prices will not go down. Even if we didn’t move to a floating price until 2015, any supposed savings would only be for one year.

Instead of collecting about $13 billion in revenue from polluters over the next four years we will be paying over $3 billion of taxpayers’ money to polluters. As Mr Abbott has chosen to keep the compensation package, this means over $16 billion difference to government coffers, or about $450 per household per year. Add to that the fact that every single expert has said Direct Action will not achieve our targets without a far greater expense if at all, and we will patently be much worse off financially and environmentally.

Frank Jotzo, Director of the Centre for Climate Economics and Policy at the ANU Crawford School of Public Policy, believes we should keep the fixed price on carbon.

“If it wasn’t for the poisonous politics of the “carbon tax”, the best option would be to stick with the gradually increasing fixed price, and keep it for longer. The effect on cost of living from the $23 carbon price has been minor, and most households are better off financially because of income tax cuts and welfare increases.

Impacts on industrial competitiveness have been negligible. Keeping the fixed price would cause no further impacts. The carbon price immediately reduced emissions from the power system, because it made some of the dirtiest electricity plants too expensive to operate. Lowering the price could undo many of the gains, bringing old clunkers online once again.”

The fact that companies are still announcing closures, even with the promised repeal of the carbon tax, shows how small a factor it plays.

Global investment in renewable energy dropped 11% in 2013, according to EY’s latest quarterly Renewable energy country attractiveness index (RECAI), with policy uncertainty in particular reducing investor appetite across many markets.

China closed the gap on the US at the top of the index, installing a record-breaking 12GW of solar capacity in 2013 and ramping up its consolidation effort to accelerate market recovery.

Germany remains in third place, but lost ground following the announcement of subsidy cuts and watered-down renewables targets by the new coalition government. Rapid solar market growth and a burgeoning offshore sector helped Japan to replace the UK in fourth place.

Ambitious targets and a series of large-scale project announcements have seen India jump to seventh place. Competitive bidding trendsetters Brazil and South Africa have also risen in the index thanks to a plethora of new projects awarded in 2013 auctions.

Australia has dropped from sixth to eighth spot in the rankings, off the back of the expected repeal of the carbon tax and review of the Renewable Energy Target (RET) creating an uncertain investment environment, particularly in regard to large scale renewable energy, EY said.

Australia’s largest renewable energy company, Hydro Tasmania, has posted a record $238 million operating profit. The state-owned power generator says it made $70 million from the carbon tax, exporting record amount of clean power to mainland Australia. The company was able to pay a $116 million dividend to the State Government. This will be jeopardised if carbon pricing is removed.

Nathan Fabian, head of the Investor Group on Climate Change, told the Senate Committee looking into Direct Action:

“My members are looking at the United Kingdom, Ireland, the United States, France and some South American countries as having more stable investment environments for low-carbon opportunities. Direct action is not an investment grade policy.”

Tim Buckley, from the US-based Institute for Energy Economics and Financial Analysis, told the same hearing that Australia was missing out on hundreds of billions of dollars being invested every year in renewables, in energy efficiency and in development of these new technologies, and the hundreds of thousands of jobs being created in China, Germany and in America.

When the economists agree with the scientists it is surely time to start thinking well this is the way to go, or should we decide what’s best on the basis of talk-back radio hosts and polls printed in the Telegraph.

So to sum up, removing the carbon price will not lower your bills, nor will it save businesses. Direct Action will not lower emissions. Uncertainty about the renewable energy target is costing us investment in a growing industry of the future and the jobs that go with it. And we are now seen internationally as lightweights, easy prey to corporate greed and unwilling to share the global burden of action on climate change.

Oh and just a heads up on a potential new rort – You may now become a “Service Provider” with the government’s Green Army romp. You can submit a tender for as many projects as you like and you will be paid $192,500 per project, $22,500 for administration, and provided with a workforce that you pay between $10.14 and $16.45 per hour with no superannuation. How many employers will decide it’s far cheaper to be a “Service Provider”?

Sir Abbott, duplicity is thy name

 

queen

Do you come here often?

Every day the duplicity of this government becomes more apparent. In order to assist their political puppet masters, the Coalition is prepared to condemn future generations to the enormous task and cost of coping with catastrophic climate change.

Joe Hockey, in another crass display of duplicitous behaviour, tells us that Labor left us with a debt of $667 billion. What he fails to mention is that this is projected debt for 2024. By that time, if we continue on this path of destruction, I would suggest our debt will be far higher as we cope with natural disasters of increasing intensity and the health and social costs from rising temperatures and pollution of our air and water.

Our tourism trade will suffer as the reef dies, the old growth forests are logged, marine creatures are slaughtered, and animals become extinct as their habitat is handed over to miners and developers. Our farmers will struggle with drought as the Murray-Darling dries up. Summer will be a time to fear as bushfires rage around the southern states and cyclones and floods devastate the North.  Our exporters and airlines (if we have any) will face sanctions from countries that have emission reduction strategies in place.

The WHO’s Director-General, Dr Margaret Chan, joined the ever-growing chorus from influential leaders when she said:

Climate change will affect, in profoundly adverse ways, some of the most fundamental determinants of health… we need champions throughout the world who will work to put protecting human health at the centre of the climate change agenda.”

The group Doctors for the environment Australia focuses on the environmental causes of human illness and the means to address them. At their recent conference an impressive display of speakers urged doctors to become vocal and active in campaigning for urgent action on climate change.

Greg Hunt was heckled as he, in all seriousness, said that Australia would use its presidency of the G20 as a “catalyst” to help the “G4” – the US, China, the European Union and India – complete the groundwork for a new deal to lower emissions. He spoke about the value of trees in carbon reduction amidst taunts about logging the World Heritage forests in Tasmania. Do as we say, not as we do?

In October last year, Hydro Tasmania announced a record $238 million profit, $70 million of which came directly from the carbon tax. When asked if Tasmania would receive compensation for scrapping the tax, Greg Hunt said “We are not proposing compensation to businesses as a result of the carbon tax repeal.” But they are more than happy to give billions to polluters to update their factories.

Tasmanian opposition energy spokesman Mathew Groom said Hydro Tasmania’s record dividends had come at the cost of high power prices in Tasmania, and scrapping the carbon tax would lower power prices, but Lara Giddings said power prices were set to drop 5 per cent on January 1, independent of the carbon tax. So much for caring about Tasmania.

The Senate Committee investigating the Coalition’s Direct Action Plan have released their findings. To paraphrase…Direct Action is crap, won’t work, will cost a fortune, will require a huge bureaucracy to administer, is lacking in detail about implementation, is inadequate for now let alone the future, and is just downright madness. Recommendation – stick with our current system but up the ante.

Clean energy and low-carbon investors are abandoning Australia as the Federal government, and its conservative colleagues at state level, turn their interests and policies away from renewables and long-term carbon abatement incentives. Nathan Fabian, the head of the Investor Group on Climate Change, told the Senate committee that “Direct action is not an investment grade policy,” noting that investors viewed it more like a short-term grants scheme. Banks, he said, were likely to take a similar view, echoing the frustrations of many players in the clean energy industry who have been unable to obtain finance because of policy uncertainty.

Fabian also said the proposed review of the RET “appears to be another very clear signal that Australia will not be a market for low-carbon investing for the next few years. My members are looking at the United Kingdom, Ireland, the United States, France and some South American countries as having more stable investment environments for low-carbon opportunities ” So much for being open for business.

Tim Buckley, a former Citigroup chief analyst in Australia, clean energy funds manager, and now with the US-based Institute for Energy Economics and Financial Analysis, told the same hearing that the Australian clean energy industry is regressing because of the lack of clarity on policy.

“We are worse than stalling; we are actually investing in assets that I think will become stranded as a result,” Buckley said. “Internationally, companies and economies are building industry capacity to transition for the long term. We should be building capacity as well and we are not doing so.”

He said Australia was currently missing out on hundreds of billions of dollars that were being invested every year in renewables, in energy efficiency and in development of these new technologies, and the hundreds of thousands of jobs being created in China, in Germany and in America. So much for jobs, jobs, jobs.

Numerous other parties have dismissed the proposed emissions reduction fund as “unfinancable” – mostly because it offers a maximum 5-year investment horizon. That reflects the view of most people – and possibly even the government – that Direct Action is not a long-term policy position, just part of a short-term political manoeuvre that has helped deliver power to the conservative parties.

Economists are convinced that carbon pricing will yield the greatest environmental bang-for-buck at the lowest economic cost. Justin Wolfers, an Australian professor at the University of Michigan, says:

“Abbott’s plan doesn’t effectively harness market forces; it relies instead on the government handing out cheques. One problem is that we’ll end up subsidising a lot of abatement that would have occurred anyway. Another is that the plan imposes extra costs because it uses scarce tax dollars . . . All told, Direct Action involves more economic disruption for less of an environmental payoff.”

Quoting from the Federal Parliament website:

“The Senate is a house of review and a powerful check on the government of the day. The proportional representation system of voting used to elect senators makes it easier for independents and the candidates of the smaller parties to be elected. In recent decades this has meant that the government party usually does not have a majority of votes in the Senate and the non–government senators are able to use their combined voting power to reject or amend government legislation. The Senate’s large and active committee system also enables senators to inquire into policy issues in depth and to scrutinise the way laws and policies are administered by ministers and public servants.”

I would ask all Senators to remember their role. You have heard the expert advice. You have received submissions from stakeholders and concerned parties. You have whole departments to help you understand what you are being told. On the basis of what you have learned, you have recommended that we do not proceed with the Emissions Reduction Fund, that we have an Emissions Trading Scheme, and that we increase out targets.

The lie about the carbon tax hurting business and families just has to stop. Families were well compensated for the small increase in power bills due to the carbon price. Trade exposed businesses were also compensated. Renewable energy and sustainable practice received funding, and research and development was leading to whole new industries.  And if you were really all that concerned you could make power GST free.

Mr Abbott, your absolute intransigence on this matter, your insistence on “we said we’ll do it so we will”, regardless of all expert advice to the contrary, makes you unfit to lead our country. You show no intitiative, you are unable to react to changing circumstances, you are unwilling to take advice, and you are prepared to sacrifice all for the short term gain of the wealthy. And as for you Greg Hunt and Malcolm Turnbull, you are despicable – you know the truth but are unwilling to speak it.

People of Western Australia, I urge you to consider how important it is to have a genuine house of review in the Senate. Our fate lies in your hands.

An act of betrayal

Image by themotorreport.com.au

Image by themotorreport.com.au

Before the introduction of carbon pricing Tony Abbott claimed that the price of petrol would go up by 6.5c per litre.  It actually went down by 3.3 per cent in the first year.

He claimed that the cost of living would skyrocket.  Inflation for 2012-13 was 2.3 per cent which is at the lower end of the RBA’s target range.  It was estimated that about 0.7 per cent of that rise was due to carbon pricing.  To put that into perspective, the GST and related changes caused an increase to the CPI of almost 2.5%! Record low interest rates have also led to substantial savings on mortgage payments.

He claimed that power bills would increase by $300 a year.  This was a reasonable estimate.  To compensate for that the tax free threshold was increased from $6000 to $18,200 which meant that the majority of people earning less than $80,000 saved at least $300 on taxation.  Pensioners and self-funded retirees, as well as family payment recipients and other allowance recipients had their payments increased.

The level of compensation saw the vast majority of people fully compensated for the price increases, and millions of households, particularly pensioners and low income households, actually ended up better off. Plus, if you can reduce your dependence on carbon-intensive products you could end up even better off still.

Tony also continues to claim that the carbon tax is responsible for the closure of businesses.  Not one of the many manufacturing or mining ventures that have closed have mentioned the carbon tax as a reason.  With the imminent repeal of the carbon tax in July, rather than a decrease, we are seeing a rapid increase in industry closure all of whom seem to agree that the greatest pressure has come from the high Aussie dollar.

The carbon price only applied to about 500 businesses and there were six different streams of assistance that industry could apply for, with special consideration given to those who were “trade-exposed” by having to compete with companies that did not have carbon pricing.  Tony was embarrassed on more than one photo shoot to be told about grants and industry assistance that have been given to the very businesses he was saying had suffered.

In fact, before carbon pricing, Qantas had to pay an initial carbon tax penalty of 15% on its carbon emissions for any flights it made into or out of Europe. This penalty would increase over time, and is payed directly into the coffers of the European Union. The reason for its imposition was specifically because Australian did not have a carbon price in place.

Over the next few years, the European Union will expand its penalty regime to impose general sanctions on countries that do not meet its standards on carbon reduction mechanisms.

There are further economic reasons behind acting to implement a price on carbon, aside from the risk of foreign sanctions. The fact is that renewable energy technology will be the next huge growth industry. The Chinese have been quick to recognise this and have the highest level of investment in this sector, accounting for almost 25% of worldwide investment in renewables in 2010 for a total of $50 billion USD. If we do not incentivise investment in the sector, we will simply be left behind.

Fossil fuel subsidies cost almost $200 per taxpayer per  year while mining companies continue to enjoy record profits.  As they move from construction to production phase, profits will increase but jobs will be lost in this less labour-intensive phase.  It is unjustifiable madness to repeal the mining tax just when it could make us some revenue.  The cost of repealing that tax on superprofits is the loss of the schoolkids bonus, delay of superannuation guarantee increase, scrapping of the low income co-contribution to superannuation, and scrapping of the instant asset write-off for small business amongst other things.  In other words, the workers will take a cut so the profits of mining companies can skyrocket.

I know energy bills are high but let’s be clear about when that happened and why.  In the 7 years prior to the introduction of carbon pricing, the average bill for a customer in regional NSW had risen by 154 per cent to $2520.  This was due to the ‘gold-plating’ of Australia’s power grid.  Power companies had been basing spending decisions on their own forecasts of future consumption of electricity, but power demand has been decreasing.

Escalating use of renewable energy and energy efficiency are contributing to reducing wholesale power prices across Australia.  Mr Abbott seems convinced that the Renewable Energy Target and the carbon trading scheme were almost entirely to blame for the doubling of power prices since 2007, even though the Australian Energy Market Commission and every state government utility regulator has provided information that shows this is not accurate.  Distribution network charges, supported by transmission networks, are by far the biggest cause of price rises, even though peak demand growth has tailed off well below the projections used to justify this huge expenditure.

There has been a deliberate campaign of misinformation about carbon pricing and the renewable energy target and the assault looks set to continue with the appointment of self-confessed climate change deniers, opponents to renewable energy, and fossil fuel industry lobbyists, as government advisers.

Pinning our economy to an industry that the rest of the world is moving away from is economic short-sightedness to say the least.  Expanding coal mining as the price plummets and China and the US sign agreement to move towards clean energy and sustainable practice is bad planning.  The short term boom has made our dollar so high that we are seeing the death of manufacturing nationwide.

If Tony Abbott really wanted to lower your energy bill he could do it very easily by making power bills GST free.  If he really cared about action on climate change he would keep carbon pricing and invest in renewable energy.  If he truly cared about falling revenue in this country he would tax the superprofits that the mining companies make.  If he really cared about jobs he would be investing in the industries of the future and the education and skills training of our youth and retraining of the many people whose jobs have been sacrified to fossil fuel greed.

Mr Hunt, two months ago you said:

“Our Direct Action plan encompasses support for solar power through our One Million Roofs, Solar Towns and Solar Schools programmes”.

These initiatives are in addition to support for renewable energy through the Renewable Energy Target and the Australian Renewable Energy Agency, which is funding projects and research across the spectrum of renewable energy sources, including bioenergy, hydropower, geothermal, ocean energy and wind.

The Government will provide $500 million for the One Million Solar Roofs programme and a further $50 million each for the Solar Towns and Solar Schools programmes.

The Solar Roofs programme will provide $500 rebates for installing one million rooftop solar energy systems over the next ten years.

This rebate will be in addition to the support already provided through the RET. Eligible systems will include small-scale photovoltaic systems, solar water heaters and heat pumps.”

Do you stand by what you said and your support for the RET?  I am paying you to fulfil the role of Environment Minister which is a job with a huge responsibility attached.  If you make the wrong decisions the consequences could be far worse than any war that mankind has seen and the longer you delay, the more likely that the damage will be irreversible.

Tony Abbott described carbon pricing as “an act of betrayal”.  What do you call paying vested interests to convince us to maximise their profits by throwing ourselves, our children and our planet off a cliff?

Renewable Energy Makes Tony sick.

pollution

Since the introduction of the carbon price in July 2012, emissions from the National Electricity Market serving eastern Australia have fallen about 8.9 per cent, in part due to less demand from a shrinking manufacturing sector.  By 2020, under current projections, wind, hydro and other renewable sources will supply more than 20 per cent , perhaps as high as 27 per cent, of our electricity needs.

So we appear to be on track.  But, in what appears to be an increasingly common loathing for anything to do with tracks or Labor or anything green (unless it’s a paper abolishing regulations), Tony looks set to derail us again.

He has announced he will head an energy policy task force that will be “looking at new options to reduce the costs of energy.”  He has also renamed the Australian Cleantech Competition – it will now be known as the Australian Technologies Competition.

“We have to accept that in the changed circumstances of today, the renewable energy target is causing pretty significant price pressure in the system and we ought to be an affordable energy superpower … cheap energy ought to be one of our comparative advantages … what we will be looking at is what we need to do to get power prices down significantly,” the prime minister said.

The Australian Energy Market Commission says the renewable energy target (RET) comprises less than 1 percent of the average household electricity bill.  The Queensland Competition Authority notes in its latest finding that the large-scale renewable target (the apparent subject of the new government’s attacks) will cost Queensland households $26 a year, or about 1.3% of their bills — about half the rise in retail bills caused by soaring gas prices.

Climate Institute chief executive Erwin Jackson said

“For a cost of 80 cents a week for the average household, the RET has attracted billions of dollars in investment and cut millions of tons of emissions. That’s a pretty good investment.”

Kane Thornton, deputy chief executive of the Clean Energy Council agrees saying

“Any substantial change to the Renewable Energy Target would obviously have a big impact on the future of the solar industry.  The goal makes up a very small proportion of power bills while creating thousands of jobs and billions of dollars in investment, much of which flows into regional areas.”

The solar PV industry employed about 13,600 as of late 2013.  Research by industry group SolarBusinessServices suggested that would dive immediately by 2000 if the government were to end support for the industry by scrapping the RET, with the total number of jobs lost or foregone swelling to 6750 by 2018.  A reduction on the goal that resulted in the halving of the price of small-scale renewable energy certificates would lead to about 600 solar jobs going.

With no policy change, 8000 jobs will be generated between 2014-18, assuming a floating carbon price – something the Abbott government has vowed to scrap – and electricity and PV prices would continue to fall, the report said.

Solar panels generated more than 25 per cent of South Australia’s electricity on January 4, 19 and 25 and supplied significant amounts during the state’s recent heatwaves, according to a new service supported by the Australian Renewable Energy Agency that tracks PV’s contribution to power supply.

In yet another waste of time and money, the Abbott Government has also announced yet another pointless inquiry into the health impacts of windfarms even though the overwhelming scientific consensus is that wind turbines have no health effects on the surrounding populations.  Could it be because Tony’s adviser on all things, Maurice Newman, doesn’t want them near his property?

“Even before they threatened my property, I was opposed to wind farms.”

The Abbott government have also cut $435 million funding to the Australian Renewable Energy Agency (ARENA) and deferred $370 million funding announced by Labor in the 2013 budget to the agency, until the next decade.

Australian Conservation Foundation campaigner Tony Mohr said:

“The axing of $435 million from ARENA will starve research and development of clean energy in Australia, moving us to the back of the global race for clean tech.”

Australian Solar Council chief John Grimes called on the Parliament to block any attempt to gut the agency.

“The work that ARENA does is an excellent example of direct action,” he said. “This independent agency, with its annual funding prescribed in legislation, back practical programs. This is about real action in the real world.”

In another incomprehensible move, the government has decided to scrap the Clean Energy Finance Corporation which was set to invest $10 billion in low-carbon technologies, while achieving up to half the government’s emissions reduction target, and return a profit to the budget.

“The strong positive response from the market has enabled the CEFC to successfully build a total loan portfolio of $536 million funding projects with a value of over $2.2 billion.

Our portfolio represents a diverse mix across the economy, with projects comprising 56 per cent of renewables, 30 per cent in energy efficiency and 14 per cent in low emissions technologies. We have financed projects involving wind, solar, and bioenergy across Australia (both on grid and off grid), as well as energy efficiency and low emissions technology projects in manufacturing, buildings and local government.

The CEFC portfolio of contracted investments is presently expected to earn an average return of approximately 7 per cent, around 4 per cent above our benchmark return of the Government five-year bond rate.

Co-financing is integral to our strategy. Through matched private sector funds of $2.90 for each $1 of CEFC investment, the CEFC has been able to catalyse over $1.55 billion in non-CEFC private capital investment in projects and programs to deploy renewables and to improve energy efficiency.

The response that we have received from the market has remained extremely encouraging and we currently have 179 project proponents in our pipeline for projects to the estimated value of $14.9 billion.”

The march towards renewable energy is inevitable yet we are being held back by Tony’s ties to the fossil fuel industry which is determined to place every impediment in the way to prolong their profit-making at the expense of our jobs, our health and our home.

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