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Sep 18 2012

Why the RET review matters

Last week, I made a submission to the Climate Change Authority review of Australia’s federal Renewable Energy Target (RET). In August, the Climate Change Authority released an Issues Paper on the review, inviting public submissions (which closed on 14 September, but you can still have your say in a poll by the Australian Youth Climate Coalition). A discussion paper with draft recommendations will be released in October, followed by final recommendations by 31 December. The Government must respond within six months.

The RET review is the first in a series of independent reviews of climate policies, intended to allow them to be strengthened, secured by the Greens in last year’s Multi-Party Climate Change Committee negotiations in return for agreeing to initially inadequate and potentially ineffective policies. However, a number of businesses and business lobby groups invested in fossil fuels are using the review as an excuse to demand the RET be weakened.

An internal document obtained by the Australian Financial Review in April showed the Australian Industry Greenhouse Network is lobbying for the RET to be to scrapped or weakened. Meanwhile, TRUenergy has joined Origin Energy in its more public campaign to weaken the RET. These two “gentailers” (companies who both generate and retail electricity) argue the RET should be adjusted downward so that it accounts for no more than 20% of 2020 demand. Such a move would cause renewable energy deployment in Australia to stop completely in 2016, with only gas-fired electricity generation built post-2016:


Projected new and retired electricity generation capacity under the reduced Renewable Energy Target advocated by TRUenergy. Green and purple bars are renewable energy sources; dark blue and red are gas-fired; light blue are retirements. (Image source: Renew Economy.)

TRUenergy’s claim that the RET will cost a massive amount of money is based on modeling by ACIL Tasman, a consultancy with a bad track record and connections to the fossil fuel industry.

The RET review will be a key test of the Greens’ climate strategy. The Greens argued the independent reviews would provide regular opportunities to improve climate policies in future. The RET review is the first test of whether it will play out that way, or if the reviews will instead be regular opportunities for polluting industries to sabotage climate policies. The role of the Climate Change Authority is crucial, as in 2014 it will be tasked with recommending five years of emissions targets. The Authority is as yet an unknown quantity (though I am concerned that two board members have conflicts of interests). Will the Authority prove to be a strong advocate for climate action, or will it fall prey to the siren songs of vested interests?

The RET review will also be an input into a Council of Australian Governments (COAG) review of federal and state climate policies in February 2013. The COAG review came out of the Business Advisory Forum in April and is about taking the razor to all non-carbon-price climate policies in the name of “least-cost abatement”, an ongoing campaign by business lobby groups and the Productivity Commission. It is vital that the Climate Change Authority clearly explain to COAG what is wrong with the business lobby’s arguments.

In my submission I counter their claims, and argue for the RET to be strengthened:

  • Avoiding dangerous climate change requires urgent and radical change to the global and Australian economy.
    • Unilateral action by Australia can make a difference.
  • All aspects of the policy should be designed to accelerate deployment of renewable energy.
    • The RET is intended to increase the amount of renewable energy, not limit it.
    • The Authority should look critically at advice from those invested in fossil fuels.
    • Environmental effectiveness must be prioritized over economic efficiency.
  • The RET must not be weakened.
    • The RET complements other climate policies.
    • The RET is efficient. The Productivity Commission’s analysis is wrong.
    • Falling demand is not a reason to lower the RET.
    • Renewable energy decreases wholesale electricity prices.
    • The RET will protect Australia’s future competiveness.
    • Renewable energy subsidies are appropriate.
  • The Large-scale Renewable Energy Target (LRET) should be strengthened.
    • The 2020 target should be increased by as much as possible, and continue to rise thereafter toward 100% renewable energy as soon as possible.
    • The LRET must not limit renewable energy.
    • All fossil fuel technologies should be ineligible.
  • The Small-scale Renewable Energy Scheme (SRES) should remain separate from the LRET, to ensure the RET supports both large-scale and small-scale technologies.
  • The Authority could consider recommending bands for emerging renewable energy technologies, which need government support to reduce their costs.
  • Emissions reductions achieved by the RET should be additional to Australia’s emissions targets.
  • This submission explains what is wrong with fallacious arguments by certain organizations, which the Authority should debunk when reporting to COAG.
    • The same principles should be applied to any other climate policies reviewed.
  • Future reviews should focus on strengthening climate policies to accelerate the transition to a zero-carbon economy, not weakening them to delay it.

You can read the full submission here.

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