As Australia suffers through a drought which Prime Minister Tony Abbott insists is entirely natural, the Liberal/National Coalition government has announced a review of the federal Renewable Energy Target (RET), which “a senior Liberal” told the ABC is “cover” for “let’s kill the RET”.
Australia’s current target is 45 terawatt-hours (TWh) of new renewable energy by 2020, split into the 41 TWh Large-scale Renewable Energy Target (LRET) and 4 TWh Small-scale Renewable Energy Scheme (SRES). That would bring the total amount of renewables to 20% of the demand projected for 2020 at the time the legislation was passed. But since then demand forecasts have been revised downward, implying the RET could potentially deliver enough renewables to provide more than 20% of Australia’s power in 2020.
Global warming is already causing an increase in extreme weather events which are costing lives, and appears to be poised on dangerous tipping points. We urgently need to replace fossil fuels with renewables to have any hope of stabilizing the climate, and renewables can provide 100% of Australia’s energy within ten years. The current RET is far too low and hamstrung by a surplus of permits that will last until 2016; a higher target is needed to incentivize new projects.
In these circumstances, any reasonable person would welcome the possibility of the RET being exceeded. But not fossil-fuelled electricity generators, because the rise of renewable energy threatens their profits (though they pretend they are concerned about electricity prices). They want the RET reduced to a strict 20% of currently projected demand, if not abolished altogether. Reducing the RET would effectively halt the deployment of renewables in (guess when) 2016. If the RET is scrapped, Meridian Energy says it will stop investing in Australian renewable energy.
Under current law, the RET is supposed to be reviewed by the independent Climate Change Authority (CCA), a body Abbott is attempting to abolish. CCA’s previous review recommended the RET be maintained at its present level, fortunately ignoring loud calls from powerful business lobby groups for it to be weakened or abolished, though unfortunately also ignoring the 99% of submissions and 41% of individually written submissions calling for it to be increased or otherwise strengthened because of the urgency of addressing global warming. Polling shows 40% of Australians think the RET is not high enough, 33% believe it’s about right, and only 11% say it’s too high.
Industry Minister Ian Macfarlane and Environment Minister Greg Hunt (better described as the Anti-Environment Minister) announced on Monday the review will instead be conducted by a panel of government-appointed “experts” headed by Dick Warburton, a former Caltex Australia Limited chair, and Business Council of Australia board member. In 2011, Warburton demanded the then-Labor government delay its carbon tax until there was greater international climate action. Like all deniers, Warburton insists he is “not a denier” and he says he will approach the review with “a very open mind”. In reality he does deny the scientifically established reality that humans are causing global warming, and I can’t see how this could fail to influence his approach to the review: if he sees no need to urgently scale up renewable energy, why should he recommend doing so? Hunt defends Warburton’s appointment on the basis that he has also advised the former Labor government, an unimpressive argument considering Labor also denies important implications of climate science.
Another panel member is Brian Fisher, former Australian Bureau of Agricultural & Resource Economics & Sciences (ABARES) head. As documented by Guy Pearse in his 2007 book High and Dry: John Howard, climate change and the selling of Australia’s future, Fisher has a long history of promoting arguments against climate action. Under Fisher’s 18-year watch, ABARES was notorious for being partly polluter-funded and publishing wildly exaggerated and misleadingly presented modelling on supposed costs of the Kyoto Protocol. In 2004 Fisher collaborated on an industry-sponsored denialist book. Since 2006, Fisher has worked for various economics consultants including CRA International, an influential American firm which lobbies for polluting companies, has donated to the Liberal Party, and argues climate policy should focus on energy R&D instead of deploying existing renewable energy technologies (another argument made by ABARES). In 2009, Fisher admitted the assumptions supporting this argument were wrong. An unnamed Australian Industry Greenhouse Network lobbyist told Pearse about Fisher:
On greenhouse, he’s sceptical of the science and even if he isn’t sceptical of the science he says that if the government accepts that something needs to be done radically on greenhouse then basically it opens up public coffers to a whole pile of charlatans from the renewables industry.
A third panel member is Shirley In’t Veld, CEO of Verve Energy, which generates 98% of its energy from fossil fuels. I’nt Veld once told a Senate committee Australia must rely on “clean coal” because “the difficulty with the solar and wind is that it is highly intermittent”, a myth also repeated by Abbott this week. Also on the panel is Matt Zema, CEO of the Australian Energy Market Operator, a body not exactly known for thinking beyond the present energy system. Abbott will also consult his business advisor Maurice Newman, another denier who opposes the RET. Nobody involved in the review has expertise in renewable energy or climate science. While CCA’s board also includes vested interests, Abbott’s RET review panel is far worse.
Considerations included in the review’s terms of reference include “impacts on electricity prices, energy markets, the renewable energy sector, the manufacturing sector and Australian households”, “the Commonwealth Government’s commitment to reduce business costs and cost of living pressures and cut red and green tape”, “whether the objective of the RET scheme… is still appropriate”, and “implications of projected electricity demand for the 41,000 [gigawatt-hour (GWh)] target”. There is no mention of any consideration of increasing the target.
Abbott told radio personality Alan Jones on Monday that “renewable energy makes a lot of sense” but “if it goes too far it becomes very, very costly”. Macfarlane said: “The role of [sic] panel will be to clearly enunciate what renewable scheme is contributing how many dollars to each individual and each industry’s bill.” Hunt said: “We are a government that is unashamedly doing our best to take pressure off manufacturing and households through anything that can lower electricity prices.” And Liberal MP Craig Laundy tweeted: “Wonder how popular RET will be when people learn how much it’s costing them?”
The focus on electricity prices ignores the fact that we urgently need to transition to 100% renewable energy to halt CO2 emissions. Moreover, the RET has reduced wholesale electricity prices, and CCA concluded its cost is a minuscule $15 per year, not much for a contribution toward saving the world. The major factor in rising retail electricity prices is over-investment in poles and wires. The prices of renewable energy technologies are decreasing rapidly. And killing renewable energy investment would help tie electricity prices to rising gas prices.
The Australian Chamber of Commerce and Industry’s Burchell Wilson, in an interview with Sarah Ferguson on ABC TV’s 7:30, said Fisher didn’t have “any predetermined views on the matter”, but “what he will tell you is the Renewable Energy Target is high-cost, it’s inefficient as a means of abating carbon, and if that’s your primary objective with respect to the RET, then we should scrap it altogether.” Wilson claimed the RET is not cost-effective, quoting a Productivity Commission report debunked by the Productivity Commission itself (anyway, the complaint is rather like saying anti-smoking policies should be less costly for tobacco companies). Wilson said renewable energy policy should be voluntary – but how is it acceptable to allow energy companies to continue relying on the fossil fuels that are destroying our future? Wilson described the RET as “corporate welfare on a massive scale”, claiming it imposes a cost of $1.5 billion, a number based on incorrect assumptions originating from the denialist Institute of Public Affairs. Meanwhile, one wonders why Wilson is silent about the $10 billion annual subsidies for fossil fuels. Ferguson must be patriotic, because she didn’t challenge any of Wilson’s claims.
On Q&A, Employment Minister Eric Abetz tied himself in knots trying to spin the review as consistent with Greg Hunt’s election commitment to continue the RET. Abetz said the review was going to happen anyway, ignoring that the Government has taken it away from the CCA and given it to a hand-picked panel of anti-renewable ideologues. He also described the target they supported as “20%”, when in reality it was “at least 20%” and the Liberals explicitly endorsed the existing form of the RET.
It looks like history is going to repeat itself: the last time the Liberals were in government, they sabotaged their own Renewable Energy Target by refusing to extend it. Leaked minutes from a 2004 meeting between Prime Minister Howard, Industry Minister Ian Macfarlane, and fossil fuel CEOs, intended to be kept secret for fear of an outcry from the renewable energy sector, reveal Macfarlane was concerned the RET “worked too well”. The Government was looking for a credible alternative policy to replace it, to protect the fossil fuel industry. The meeting agreed on an energy R&D fund which was then dutifully announced.
Scarily, in the intervening decade politics has shifted so far to the right that Macfarlane is now considered a moderate among Abbott’s Cabinet. Whereas Macfarlane and Hunt may merely want to sabotage the RET, “a senior government figure” told The Australian every other minister wants to scrap it entirely. When the review concludes in mid-2014 (around the time the Government expects to repeal the carbon price), it will report directly to the Prime Minister’s office.
Renewable energy lobby groups, armed with facts disproving their opponents’ claims, are saying “Bring it on.” But as Renew Economy editor Giles Parkinson warns: “If the clean energy industry thinks that facts will win this argument, it is kidding itself.”