If, as seems more likely than not at this point, Energy Minister Josh Frydenberg manages in the next three months to bring the states and territories on board for the his National Energy Guarantee (NEG) proposal and secure both federal Labor and joint party room support, the headlines will be glowing about his achievement. He’ll be the new golden-haired boy of the government, his leadership credentials burnished, the man who delivered us from a decade of policy paralysis on energy and climate action.
The plaudits will be well-earned, if only for Frydenberg repeatedly enduring the silliness of fossil fuel advocate and rabid coal-seam gas opponent Alan Jones. But they’ll in effect be celebrations of a profound policy failure, Australia’s worst since John Howard lied us into the Iraq War.
For a short while (two years), Australia had a high-quality climate action policy, one that lowered our emissions while having a minimal impact on inflation. That was abandoned in 2014 when the Abbott government repealed the Gillard government’s carbon-pricing scheme. Gillard had also taken some tentative steps to addressing the relentless gaming of the electricity market by participants — especially state-owned distributors — which were, in retrospect, entirely inadequate. We’d have to wait several more years for a government to take real action to stop the gaming.
The carbon pricing scheme, which was by no means perfect, was “replaced” by a kind of joke policy, a back-of-the-envelope idea devised in a hurry by Greg Hunt after Malcolm Turnbull was rolled in 2009, in which the government would hand billions to corporations and farmers to undertake energy efficiency projects they would have done anyway, or plant trees and otherwise conjure “soil magic”.
More sensible figures within the Liberal Party hacked this idiot policy back until it eventually appeared briefly as a $3 billion handout program that wasn’t renewed. That left the Renewable Energy Target, investment by the Clean Energy Finance Corporation — which Abbott was desperate to abolish — and various state renewable energy targets as Australia’s climate policy — even as the Abbott government signed itself up a hard commitment to reduce emissions by 26-28% on 2005 levels.
But Abbott had an informal policy, too, one of relentlessly demonising renewable energy, which drove a 90% fall in renewable energy investment. Malcolm Turnbull’s ascension to the prime ministership changed this dynamic. Indeed, there’s a fair argument that Turnbull’s primary contribution to energy policy as Prime Minister has been his signalling that the war on renewable energy that had been launched by his predecessor was over. Renewable energy investment has surged since he became Prime Minister, such that we’re on track to comfortably beat the Renewable Energy Target for 2020. It’s the one positive in climate-energy policy — to the extent that we actually have any “policy” other than the remnants of former government’s targets, state government one-out commitments and an energy market regulatory framework that’s in recovery phase from the over-optimism of neoliberal policy design.
After being tempted by an emissions intensity scheme, which was strongly backed by business and backed by the opposition, Turnbull backtracked from that under pressure from the right. The subsequent Finkel Review recommended a Clean Energy Target, which Turnbull was initially keen on, but again was forced to abandon under pressure from the right. Then came the National Energy Guarantee, effectively a requirement for retailers to back on-demand (not baseload) power, with a figleaf of emissions reductions thrown in.
Julia Gillard’s carbon-pricing scheme was never perfect, but if that was the closest to best policy we got, an emissions intensity scheme would have been second best policy. A renewable energy target, or a Clean Energy Target a la Finkel, would have been third best. To the extent that a NEG pitched at Australia’s woefully low Paris Accord targets slows the surge in renewables investment, it will be clearly fourth best in policy terms. But the Nationals and some of the Neanderthal faction Liberals like Abbott want to make the NEG worse by tacking on government intervention (because that worked so well with Soil Magic) in the form of billions in funding for state-controlled coal-fired power, because the private sector won’t ever touch coal again.
That would give us fifth-best policy — and be portrayed as a remarkable political achievement. That says a lot both about the government and the media.
Doesn’t the NEG put energy policy in the hands of retailers, who have sometimes been criticised by the ACCC for guessing a household’s consumption rather than actually bothering to read the meters?
The “golden-haired boy” who deliberately told porkies about the reason for SA’s blackout – for maximum political effect – that it was “their reliance on renewables”? When a storm blew down the delivery system that would have been delivering power from no matter what (other) source as well, that would have been blown down in the same way in the same storm, causing the same black-out?
…. From a government so low, what’s one more “reward for misrepresentation”?
“Indeed, there’s a fair argument that Turnbull’s primary contribution to energy policy as Prime Minister has been his signalling that the war on renewable energy that had been launched by his predecessor was over. ”
Which signalling was that, the intense attack on State renewable energy targets, the playing up of renewable energy as unreliable compared to coal, or the pressure applied to private companies to keep coal power plants open? All of which were done by Turnbull personally, not just actions by the likes of Abbott or Abetz from the backbench?
It’s weird how these Keane articles keep making good points, like how most of the media as well as the government will sell the NEG as a triumph because at least it finally “ends” the energy “wars” even though it is 5th rate as an actual policy (but then, few of the media care about policy, only the war), but then tries to find a way to praise Malcolm Turnbull personally in the face of direct evidence to the contrary. I dunno when Keane became a Turnbull apologist but at least try not to make up alternative facts in the process.
The NEG is good in that it can be seen as the Australian Govt taking action on meeting the Paris targets for decarbonisation. It is a backward step in that most of that apparent decarbonisation will result from replacing the currently diminishing coal with increasing gas. Subsequent decarbonisation will be much harder, because it requires replacing gas, including all those nearly brand new installations.
Replacing gas should not be a tomorrow job. Tomorrow’s adults are today’s youngsters, already reading Crikey and questioning our logic.
Oh come on, Bernard. Like Direct Action, NEG is nothing but a fig-leaf. A desperate attempt to *appear* like they are doing something, whilst doing next to nothing, & also providing a nice “Trojan Horse” to funnel money to the CSG & Coal industries. Say what you want about Gillard’s scheme, but it was clearly working at reducing both the Carbon & Energy intensity of our economy-by encouraging people from across the economy to find new ways to cut emissions (which we did see in various enterprises, like cement-makers & abattoirs) . All this current mob have done is waste tax-payers money by handing it out to people who promised to do what they were already engaged in doing.