The Australian Capital Territory says the national energy guarantee will “lock in poor outcomes for the climate, for renewable energy, for states and territories who are pursuing strong climate actions and, ultimately, for electricity consumers” – but will push for improvements at a critical meeting this Friday.
As the federal energy minister, Josh Frydenberg, used interviews on Tuesday to urge state and territory governments to get behind the proposal, arguing it was in the national interest, the ACT’s climate change minister, Shane Rattenbury, continued to highlight deficiencies in the scheme.
While not killing the proposal and confirming the territory government in Canberra will remain at the table, Rattenbury has warned the current policy parameters of the Neg “risk an outcome that would be worse than if states and territories continued to lead the way without a Neg in place”.
“This current generation has an environmental, economic and moral obligation to do our best to tackle the threats posed by climate change, and this policy in its current form does not deliver on those obligations,” Rattenbury said.
The Turnbull government’s Neg would impose a reliability obligation and an emissions reduction requirement on energy retailers and a small number of large electricity users from 2020.
The ACT has nominated five areas of concern about the policy: the “weak target of 26% emissions reduction in the electricity sector”; the potential for the weak national target to undermine the switch to renewable energy currently being driven by the states and territories; the possibility the scheme will allow energy retailers to buy offsets to comply with the emissions reduction target; an artificial lock-in for ageing coal plants; and the impact on renewable investments already in place courtesy of ACT government policies.
Energy ministers will meet on Friday to determine whether to conduct further work on the proposal.
While the consensus behind the scenes is that the Neg is much more likely to progress than not at Friday’s gathering, any single jurisdiction has the power to break the concept because changes to the national electricity market rules require consensus between the federal government and the states.
The Labor-governed states are likely to push for a ratchet mechanism to help ensure the electricity target proposed by the Coalition doesn’t effectively bind any future government, and for state targets to be additional in the national target.
Frydenberg on Tuesday urged his colleagues in the Coag energy council to keep moving the concept forward. “We do need to turn a corner, and Friday is the opportunity for doing that,” he said.
The Turnbull government’s position is expected to be bolstered on Wednesday with the anticipated release of a positive joint statement from energy stakeholders, business and social welfare groups in support of the Neg – although environment groups and the ACTU are understood to have declined to participate.
The Greens federally are urging the Labor states and the federal ALP to hold out against the Turnbull government policy.
“The current design of the Neg is significantly worse than doing nothing,” said the federal Greens climate change and energy spokesman, Adam Bandt. “It will create a massive protection racket for coal and obliterate investment in renewables, as per the request from Tony Abbott and the backbench.”
The shadow climate change minister, Mark Butler, said documentation circulated by the Energy Security Board ahead of Friday’s meeting has improved some elements of the Neg design.
“The government is now proposing an emissions intensity trading scheme that operates through a clearing house, described as an emissions registry,” Butler said.
“While there are still a range of details to work through, this improves upon the government’s original proposal, as it would allow greater transparency and competition, and underpin a properly functioning market in carbon emissions.”
But he said Labor remains “deeply concerned about other elements of the government’s proposal, including its intention to use the Neg to lock in weak pollution reduction targets”.
“It is also unacceptable that in the absence of strong national renewables policy, the government is attempting to restrict the ability of state government to continue to pursue ambitious renewable energy programs,” Butler said.
“Federal Labor will never agree to a policy that seeks to tie the hands of a future federal Labor government in implementing our clear commitment to 50% renewable energy by 2030.”