By Murray Hogarth, Wattwatchers
19 September 2013 — A retrospective was published this week detailing the history and perceived strengths and weaknesses of Australia’s first carbon trading scheme. No, not the one that the new Australian Government led by Liberal Party Prime Minister Tony Abbott is intent on abolishing ASAP. That’s actually the second one.
For the uninitiated or forgetful, the first was called the Greenhouse Gas Abatement Scheme, or GGAS to its fans, and was established by the Carr Labor Government in NSW in 2003. It was billed as a world first.
GGAS was shut down in 2012 by the O’Farrell Coalition NSW Government, having been made redundant by the new national scheme created by the then Gillard Labor Government in Canberra.
A link to the belated GGAS formal obituary arrived in my inbox on Wednesday from IPART, the Independent Pricing and Regulatory Tribunal in NSW, which ran the scheme and oversighted its support for emissions reductions, which extended beyond NSW to cover the National Electricity Market.
The IPART report opens: “When the New South Wales Greenhouse Gas Reduction Scheme (GGAS) commenced on 1 January 2003, it was the first mandatory greenhouse gas emissions trading scheme for the electricity sector in the world. When the scheme closed on 30 June 2012, most participants were well-placed to transition to Australia’s national carbon pricing mechanism, which commenced on 1 July 2012.”
Irony of ironies, we now look set to have no national scheme and no state scheme either. Most of the once proliferating state-based carbon-cutting and renewable energy programs and agencies around the country also have disappeared, and now the scene is set for the same thing to happen at the federal level. Slated for abolition are the carbon pricing scheme itself, the Climate Change Commission, the Climate Change Authority and the Clean Energy Finance Corporation – and there are no guarantees the list will end there.
The Renewable Energy Target, for 41,000 gigawatt hours of renewable energy by 2020, already looks to be threatened with a haircut if not decapitation. The extraordinary surge of home solar installations in the past few years to reach over a million rooftops, combined with declining manufacturing and rising energy efficiency, is causing demand for mainly fossil fuel generated electricity to fall – something Australian energy forecasters never really contemplated until their world started to change post the global financial crisis.
State governments around Australia have been stripping away feed-in tariff and rebate support for home solar, but dramatic falls in solar panel prices and more efficient installation have kept the rooftop revolution ticking along in any case.
Overseas, reactions to solar success have been even more extreme, with Spain earlier this year – and this week the Czech Government – putting new taxes on home panel generation connected to the grid (coupled with the threat of huge fines for not being connected).
Even more alarming, in some ways, are early signs that the climate version of culture wars is undergoing a revival. One of the Coalition’s most senior business advisers, Maurice Newman, this week made headlines by attacking the “myth of climate change” and setting his sights on the CSIRO and the Bureau of Meteorology. If respected public agency scientists and public servants are in the firing line, little is sacred or safe.
Then the Coalition’s Ministry was announced and sworn in without a Science Minister for the first time since the 1930s, the former head of the former Department of Climate Change and Energy Efficiency Blair Comley was among the first public service mandarins to be shunted out, and work on dismantling the carbon scheme began in earnest.
While it’s in the nature of our robust democracy that governments change and policies with them, serious interruption now to Australia’s tentative progress towards a low carbon economy by 2050 is badly timed even taking the long view.
The Coalition and Labor both supported their own versions of emissions trading schemes at the 2007 election, so we’ve gone back in time significantly.
For a while yet everyone is guessing where things will land once the new government settles into a more normal business mode, whatever that is – calm, purposeful, “say what we mean and do what we say” is how the approach is being promoted.
But what can we glean from other Coalition governments that have come to power in recent years – Victoria with a slender hold on power, Queensland with an enormous one and NSW somewhere in between?
The Victorians went anti-green early, but have pulled back recently when it became clear they may struggle to hold power when they go back to the polls next year. Queensland has smashed climate and environment wherever it can, and may soon find itself with the Great Barrier Reef declared World Heritage in Danger.
NSW isn’t bright green, but it’s held the line significantly and hasn’t abandoned the field, especially in regard to energy efficiency.
With the caveat that we’re all polishing the crystal ball at the moment, here are my tips:
High level of certainty
- The Coalition will repeal the carbon pricing scheme, one way or another, in spite of political and legal obstacles, but it may take nearly a year to achieve it (ie, waiting for the new Senate line-up after July 1, 2014, rather than risking a double dissolution election)
- It also will push to fast-track new and already planned coal and coal seam gas projects, including clearing away so-called “red” and “green” tape
Moderate level of certainty
- The Renewable Energy Target will come under pressure as early as next year, when a review is scheduled, with pressure to at least clip the target (to be justified to voters as a further measure to bring down consumer energy prices)
- International trends and key ally diplomatic pressures will prove more influential by 2015 than currently is the case, and will steer the Coalition towards a more robust and comprehensive climate policy – and back towards a form of carbon market for the post-2020 second Kyoto deal (assuming there is one, and that Coalition holds power for an extended period)
Low level of certainty
- Within two years energy efficiency will be elevated as a popular policy focus for the Coalition that is differentiated from carbon pricing and aligns with reducing power bills/cost of living pressures
- In spite of its climate skeptics and loud reactionary voices, the Coalition cabinet room will be significantly influenced by ministers who “get” the climate action imperative – Greg Hunt (Environment), Malcolm Turnbull (Communications) and Ian Macfarlane (Industry) – and move towards adopting a more substantial post-2020 set of targets and policies
That said, my greatest concern now is that a culture of anti-climate science thinking and ideological opposition to reshaping the economy towards clean and green so permeates the conservative side of politics that it kills off creativity and innovation for solutions.
On that score, we need business and community to step up and fill the void that has been left by politicians, and that’s not just the new Government.
Murray Hogarth chaired Green Capital’s Power Game Forum last week (as The Fifth Estate was being published), which featured an expert panel focused on the new era for carbon, energy and the environment under the incoming Coalition Government. He is senior adviser to Green Capital, the business sustainability program of the Total Environment Centre, a director of smart energy technology company Wattwatchers, and principal of consultancy The 3rd Degree.
In the final days before the national election on 7 September, the Green Capital program ran its own mini-poll of its sustainability-aware constituency.
How concerned were they about a change of government and its implications for carbon, energy and the environment?
In opinion-polling terms, the 86 respondents are a small sample, but nonetheless the direction the results have taken is strong and clear. Highlights of the survey outcomes include:
- On the proposition that the incoming Coalition has an electoral mandate to repeal the Clean Energy Future Act and in particular carbon pricing, nearly four out of 10 respondents (39.53 per cent) strongly disagreed and a further 15.12 per cent somewhat disagreed. But a total of about four out of 10 agreed – strongly agreed (17.44 per cent) or somewhat agreed (23.26 per cent)
- On the proposition that the ALP, now the Opposition, should accept the election outcome and support repeal of the carbon pricing scheme in the parliament, the result was far more decisive: over nine out 10 did not agree, with most strongly disagreeing (80.23 per cent) and the balance somewhat disagreeing (10.47 per cent), and less than one in 10 agreed – strongly agreed (4.65 per cent) or somewhat agreed (2.33 per cent)
- Concern that uncertainty around the future of the Renewable Energy Target (20 per cent by 2020) would discourage investment in clean energy alternatives was very high, with over nine out of 10 being either very concerned (74.42 per cent) or somewhat concerned (19.77 per cent)
- Over nine out of 10 also were concerned that the new Coalition Government does not have a long-term target for greenhouse gas emission reductions past five per cent of the 2000 baseline by 2020 – with most respondents either very concerned (82.5 per cent) or somewhat concerned (11.63 per cent)
- Similar high levels of concern were expressed about the potential for downgrading of environmental protection laws in Australia, with the very concerned (74.42 per cent) dominating the somewhat concerned (16.28 per cent) and not concerned (5.81 per cent)
- Finally, on the question of whether the new government would seize on energy efficiency as a bipartisan sweet spot for action, the largest groups of respondents were pessimistic (38.37 per cent), with those were slightly optimistic (33.72 per cent) next, then very optimistic (4.65 per cent) and neutral was a substantial subset (23.26 per cent)