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Turnbull and the Renewable Energy Target

February 8th, 2015

At the minute of writing (1404 Sunday), it looks as if Malcolm Turnbull will replace Tony Abbott as PM tomorrow. Among his many challenges will be climate change policy, the issue that brought him undone last time around. The word appears to be that he will adhere to the platform from the 2013 election, which rules out a carbon price (tax or ETS) but gives him room to move in various directions.The assumption is that this compromise will buy both Turnbull and the climate deniers in the LNP enough time to work out some kind of solution.

What no one seems to have mentioned is that the Abbott government, in defiance of the 2013 platform, has been doing its best to make drastic cuts in the Renewable Energy Target. To the extent that the processes of government are going on during the current mess, negotations with Labor and the minor parties are still under way. Turnbull will have to decide, more or less immediately, whether to keep pushing for deep cuts.

There’s a further problem. Turnbull can’t simply drop the issue and leave things as they are. Abbott’s obvious intention to destroy the scheme has had a chilling effect on investment, particularly in the wind sector. Under the current rules, fossil fuel generators need to offset their generation with certificates from renewable generators. But it now seems unlikely that there will be enough certificates by 2020, which would result in the triggering of penalty clauses. So, the scheme needs some kind of change.

The Climate Change Authority, of which I’m a member put out a report just before Christmas last year, suggesting that the target date of 2020 be shifted out, and that the duration of the scheme be extended past 2030. That’s one possible solution, though not the only one.

The problem for Turnbull is that any realistic solution will instantly enrage the climate deniers, while continuing on the current path will put him in the position of owning Abbott’s broken promises.

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  1. John Chapman
    February 8th, 2015 at 14:22 | #1

    Perhaps.

    But its high time that the LNP started to acknowledge the real world, rather than worrying about some deniers (over-represented in its ranks), enraged or not.

  2. Megan
    February 8th, 2015 at 14:42 | #2

    I still don’t think it’s going to happen (i.e. Turnbull or anyone else for that matter), but if the LNP changes leaders without changing core policies they’ll be about as despised by the electorate as they are at present.

    GP co-payments, cuts to SBS/ABC, inaction on climate change, uni fees, inhumane refugee policy, foreign wars, police state at home etc.. are all policies the party supports.

    If LNP MPs dislike these policies and/or Abbott they would be much better off splitting from the party en masse. That would have serious impact. Changing the idiot in the big chair for another one will do nothing.

  3. Hermit
    February 8th, 2015 at 15:19 | #3

    It baffles me how the public hated carbon tax but opinion polls say they like the RET. Carbon tax was an explicit price of $25.40 per tCO2 yet under the RET Review ACIL Allen thought the RET incurred an implicit price of $59 per tCO2. See the Review website for links.

    Check my arithmetic. If year 2000 emissions were 562 Mt (maybe that’s been revised) then a decent 20% cut by 2020 would be at least 100 Mt. Ignoring fuel used in spinning reserve a Gwh of clean electricity displaces about 830t of emissions, the rest-of-system average. Now I exclude 20th century hydro since the RET doesn’t apply until 1997. Wind, solar and biomass were about 14,300 Gwh in 2013. Times 830 tonnes is about 12 Mt which is way way short of a decent cut of 100 Mt or so.

    This why the RET is a fluffy duster in financial terms.. it’s just not enough. I submit that stiff carbon pricing has to be re-introduced to get meaningful emissions cuts.

  4. jungney
    February 8th, 2015 at 15:30 | #4

    Yeah. All good. I’ll cite Žižek on how to deal with the crisis, as citizens:

    So the solution is not to be very careful and avoid risky acts—in acting like this, we fully participate in the logic which leads to catastrophe. The solution is to fully become aware of the explosive set of interconnections that makes the entire situation dangerous. Once we do this, we should embark on the long and difficult work of changing the coordinates of the entire situation. Nothing less will do.

    The wort failure of revolutionaries is the failure to recognise the revolutionary conditions of the present.

  5. Donald Oats
    February 8th, 2015 at 15:55 | #5

    If I were Malcolm Turnbull, I wouldn’t contest the leadership if the spill occurs; better to let Tony stew in his own juice for a while longer, let the LNP get almost hysterical with fear, and when a second challenge is made possible, go for it then. If the LNP are in total fear of losing their seats, they are less likely to object to a new PM making a very quick and decisive set of changes to the toxic Tony policies, if they think it will save them from electoral oblivion.

    The difficulties Malcolm had last time were due in part to an ultra-conservative, ultra-freemarket, rump of the LNP, senator Nick Minchin, Andrew Robb, being two of these fellows; they cooked up a plan to snooker him on the eve of agreeing to the CPRS/ETS agreement with the ALP. Although Minchin is gone, there are plenty more like him. This mob would do him in once more, no matter how well liked he was by the electorate at large. So, if he wants the main prize, he may need to chance it and wait a few more months.

  6. Doug
    February 8th, 2015 at 16:49 | #6

    Latest work from Bernard Keane is the numbers are close but not not yet close enough for the spill to succeed. The problem is that if the spill succeeds narrowly and Turnbull wins narrowly he will have a bunch of disgruntled dissidents, some of whom have brought on the spill particularly on climate change issues. The backbenchers are revolting and some are likely to keep revolting whatever the outcome

  7. February 8th, 2015 at 16:51 | #7

    According to the CSIRO annual survey of attitudes towards climate change 2014 , people are gradually becoming more accepting that cc is caused by humans and that measures to address it are positive, rather than too expensive or useless. Renewable energy remains popular. So perhaps the time is right for Turnbull to start moving the Coalition back towards sanity.

  8. BilB
    February 8th, 2015 at 17:03 | #8

    It is all go in Australia. Jay Weatherill has announced a royal commission into nuclear energy for South Australia. I’ve been saying lately “let the nuclear industry demonstrate that it can make a go of it for shipping”.

    http://www.gizmag.com/shipping-pollution/11526/

    This is the hidden climate change smoking gun cost to global markets. It all seems rosy until you till you can see where people normally don’t look.

  9. February 8th, 2015 at 17:16 | #9

    Is it too much to hope for anything better than an extention to the RET? How about keep the RET as it is and let companies use the penalty rates to build additional renewable capacity instead? I realise that’s not going to make the domestic coal industry happy, but they don’t make me happy, so we’re even.

  10. February 8th, 2015 at 17:27 | #10

    Okay, here’s something Turnbull could do that might appease some of his fellow conspirators while still doing something positive. He could scrap all the utility scale solar projects that are not already under construction but strongly promote rooftop solar. Even just putting solar PV on every Commonwealth building where it would clearly save money would be a big help. More real support for rooftop solar should be popular with voters and would neutralise any bad press from cancelling utility scale projects while still reducing our emissions and moving us away from international pariah status.

  11. Ken_L
    February 8th, 2015 at 17:39 | #11

    Abbott is gone. It’s only a question of whether it happens tomorrow or in a few months.

    By accident or design – I cynically suspect the former – Shorten’s small target strategy has left the way open for Turnbull to make new policies without being seen to be adopting Labor ideas. On previous form I wouldn’t expect him to worry too much about upsetting the troglodytes. He didn’t go into politics to be a consensus-seeker, but to be the CEO and impose his personal stamp on the government. He’s the Libs’ Paul Keating.

  12. bjb
    February 8th, 2015 at 18:18 | #12

    My take on this is that Turnbull’s ego will get the better of him and he’ll challenge. This may be his only chance to get his name in the history books as Prime Minister.

    Unless the LNP radically change tack, it’s hard to see how anyone would believe whatever they might propose at the next election, so the odds of a second term are not good IMO. In that case, the Libs in opposition may go for generational change – maybe Corman will find himself a lower house seat, or one of the young guns like Josh F. might be given a go, and Turnbull’s time will never come.

  13. Peter Chapman
    February 8th, 2015 at 20:19 | #13

    Some brief observations. 1. Changing leaders mid term is one of the strengths of our democracy, such as it is, not a weakness. 2. The current crisis in the federal Liberal Party may not be the same as the leadership changes of the Rudd/Gillard variety, as Tony Abbott is at pains to remind us, but whatever the numbers in the party room, the poll numbers are remarkably similar to those that precipitated change in the ALP. And they won’t change for the better if Abbott remains in charge. 3. Meanwhile, has anyone noticed, the Queensland LNP appears to be carrying out a coup by default, claiming that the caretaker government will remain in charge until the Ferny Grove situation is sorted. The Borg is back! Having complained, when he was deposed by his own party in favour of Campbell Newman, that the action was a contradiction of the Westminster system and a danger, the Borg now blithely seeks to reassure us that he is the one to guide our leaky little ship of state through “uncharted territory”.

  14. m0nty
    February 8th, 2015 at 21:27 | #14

    Turnbull doesn’t have the numbers. 30-odd out of 102 doesn’t cut it. It will take Abbott falling on his sword to do it, e.g. by allowing a secret ballot on the spill and preventing the 40-odd in Cabinet from being bound by Cabinet solidarity. I can’t see him doing that. He’s too stubborn.

    This one’s going to drag on for a while.

  15. 2 Tanners
    February 8th, 2015 at 21:30 | #15

    JQ, I think you give the denialist camp too much credit for quasi-religious fervour and not enough for realpolitik. If MT takes over, and I’m not convinced he will get up, and if he once again pursues some kind of climate change mitigation policy, my belief is that the bulk of the party will be watching the poll numbers more than anything. Sure, some of the dinosaurs may maintain the rage and certainly many hate Turnbull. If the numbers don’t improve much, there’ll be rumblings later. for now, though, I’d be thinking that the thought uppermost in most minds for Monday is not “What kind of carbon target will there be?” but “Who will best help me keep my seat?” Fear of Abbott continuing the way he is will be balanced against fear of him going down like Rudd and Gillard – noisy and damaging.

    I agree with Ken_L about MT’s opportunties in the face of Shorten’s tactics. There won’t be Abbott to blame and he may have to actually step up and announce policies.

  16. Collin Street
    February 8th, 2015 at 22:19 | #16

    JQ, I think you give the denialist camp too much credit for quasi-religious fervour and not enough for realpolitik.

    Pyne’s still in cabinet. We have some evidence, you know.

  17. BilB
    February 8th, 2015 at 22:51 | #17

    That is my expectation, Monty, that Abbott, having brought the spill forward, why should he not make it a show of hands, if only for consistency.

    The fact is that the liberal party is doomed. If Turnbull takes the lead, then the right wing faction will set out to demolish him. If he doesn’t then Abbott will continue to drag the party into oblivion.

  18. ElPoppin
    February 8th, 2015 at 23:05 | #18

    I think that it is clear that MT believes science but due to Murdochistan, his party does not and certainly the federal National party does not. This will remain a big wedge for the conservatives and a smaller wedge for the ALP (the now retired Martin Ferguson was a denier but he was not alone). Then there are the miners who will throw dollars at campaigning against any risk mitigation let alone trying to resolve the problem. Can MT resolve this wedge? Unlikely, as climate change management (and uncharacteristically I am pessimistic about this) will play out like the tobacco mitigation. At best I can see MT being like FW de Clerk was with the ending of apartheid – taking his side screaming and kicking back to believing in science and economics.
    Finally, for the record, I loath MT. He may be soft and cuddly to those whose lives revolves around the arts and gay issues but at his core he is the worst of capitalism. Anyone who worked for Goldman Sachs and Kerry Packer deserves to rot in an imaginary hell.

  19. Uncle Milton
    February 9th, 2015 at 07:57 | #19

    The problem for Turnbull is that any realistic solution will instantly enrage the climate deniers,

    Turnbull’s very existence already enrages the climate deniers; see Corey Bernardi’s commentary this morning.

    If Turnbull gets up (unlikely today, highly likely in a few month’s time with the LNP behind 40-60), he’ll do whatever he wants and that might include purposely further enraging them; the better to differentiate his product from Abbott’s.

  20. Newtownian
    February 9th, 2015 at 09:07 | #20

    Hope you didnt put money on it. (Actually I thought the likelihood was 70% of Tony going too. It seemed to good a gift to the opposing forces to keep this lightning rod in there but there you have it. Maybe they will now manage him like like Jeremy Bentham – stuff him in a glass case and wheel him out for the occasional meeting to support their contention he is still alive).

    Next installment. Will Mike Baird roll out Tony and Joe for the NSW state elections as he promised??

    Truly this period must rank as one of the worst in Australian gutter politics.

    But the interesting question you raise here is important. How long the climate change deniers can keep flogging this dead horse i.e. Tony. If it was just a question of good business they could pursue a direct action policy and that might actually prove not too bad. I dont think the power companies care that much provided they keep their profits going.

    The trouble for the Liberals though is they are beholden to the miners and they know we are as hooked now on fossil fuels export for revenue so they are on a hiding to nothing either way and with fossil fuels they can at least kick the can down the road locally for the time being.

  21. Newtownian
    February 9th, 2015 at 09:10 | #21

    @Megan
    Seconded all the way down.

  22. Jim
    February 9th, 2015 at 09:48 | #22

    Well the results if the non-spill are in.

    It makes a nice change to see the LNP kick a collective own goal instead of just the Captain. What were they thinking?

    Look out for the smile on Bill Shorten’s face this morning. The Coalition have just handed the Federal ALP the same election strategy that the LNP in Queensland handed to the Queensland ALP. No need to have any detailed plan, just state you are not (insert name of unlikeed LNP leader here).

    I was hoping the next election might be a competition of ideas. That seems highly unlikely now.

  23. Ken_L
    February 9th, 2015 at 10:40 | #23

    The likes of Abetz, Brandeis and Pyne will be out for revenge on the plotters now – they won’t be able to help themselves. Turnbull virtually declared a willingness to challenge, so he’ll have to do it sooner or later if he wants to continue in politics. Carrying on pretending nothing has changed isn’t an option. He doesn’t strike me as someone who would be willing to wear the “too gutless to have a go” ridicule that made Costello such a figure of fun in the end.

  24. Uncle Milton
    February 9th, 2015 at 10:50 | #24

    @Ken_L

    He doesn’t strike me as someone who would be willing to wear the “too gutless to have a go” ridicule that made Costello such a figure of fun in the end.

    Indeed.

    As George Gershwin wrote

    But I’m bidin’ my time,
    ‘Cause that’s the kind of guy I’m,
    While other folks grow dizzy,
    I keep busy,
    Bidin’ my time.
    Next year, next year,
    Somethin’s bound to happen,

  25. Dave Lisle
    February 9th, 2015 at 12:26 | #25

    Headline in Saturday’s Saturday Paper says it nicely: “Mal content to wait his turn”.

  26. February 9th, 2015 at 12:55 | #26

    “it looks as if Malcolm Turnbull will replace Tony Abbott as PM tomorrow”

    Not a very good call, although everybody including myself underestimated Abbott.

    It looks like Abbott has increased his support in the party room. Last time he only got 42 votes to Turnbulls 41 or about 51% of the vote. This time around he achieved 61% of the vote; 61 to 39.

    Turnbull would need to prove himself in a major role like treasurer before the party would trust him again after selling out to the left; there are too many better options than him to fill Abbotts spot.

  27. Jim
    February 9th, 2015 at 15:33 | #27

    Phoenix

    There is a weird “rule/convention” within the Coalition that the front bench (40-odd members if the parliamentary secretaries are included) all oppose the spill motion, but then they can vote however that like if there is an actual contest. So it is really only the back bench that have any freedom to vote as they choose in the spill motion. Most of them voted for a spill.

    The convention is a bit like a bunch of lemmings marching together to ward off the foxes when there is a cliff just in front of them. Sooner or later it is gong to get very messy. @phoenix

  28. J-D
    February 9th, 2015 at 18:17 | #28

    @Jim

    There are forty-two members of the current Coalition frontbench, but seven of those are Nationals, so there are only thirty-five with a vote in the Liberal party room.

    However, given a genuinely secret ballot there is no way of confirming that all thirty-five of them actually did vote against the spill motion.

  29. Ikonoclast
    February 9th, 2015 at 19:07 | #29

    I know the leadership result at this time but will not comment on that. The leaderships of the parties are immaterial. The substance of their policies is what counts. The policies of the duopoly parties remain inhumane, environmentally dangerous and economically idiotic.

    “A plague on both your houses!” – Shakespeare.

  30. Donald Oats
    February 9th, 2015 at 19:08 | #30

    @phoenix
    Actually, PM Tony Abbott avoiding a spill motion does not necessarily demonstrate that everyone under-estimated Abbott; on the contrary, it may be that everyone under-estimated one or both of Julie Bishop and Malcolm Turnbull. See my previous comment:

    Donald Oats :
    If I were Malcolm Turnbull, I wouldn’t contest the leadership if the spill occurs; better to let Tony stew in his own juice for a while longer, let the LNP get almost hysterical with fear, and when a second challenge is made possible, go for it then. If the LNP are in total fear of losing their seats, they are less likely to object to a new PM making a very quick and decisive set of changes to the toxic Tony policies, if they think it will save them from electoral oblivion.
    The difficulties Malcolm had last time were due in part to an ultra-conservative, ultra-freemarket, rump of the LNP, senator Nick Minchin, Andrew Robb, being two of these fellows; they cooked up a plan to snooker him on the eve of agreeing to the CPRS/ETS agreement with the ALP. Although Minchin is gone, there are plenty more like him. This mob would do him in once more, no matter how well liked he was by the electorate at large. So, if he wants the main prize, he may need to chance it and wait a few more months.

    Perhaps the would-be pretenders for the throne have estimated Tony Abbott just fine, and left him there for a bit longer.

  31. James Wimberley
    February 10th, 2015 at 02:00 | #31

    I chased up Abbott’s baffling reference to a scandal involving “pink batts”. This turns up to be a monumentally screwed-up scheme for .. home insulation. Not sniffer planes or attack helicopters or corn ethanol, something complicated where there’s some excuse for failure, but home insulation. You’d expect Luxembourg to be able to manage that.

    One Polish (IIRC) wit described late socialism as a scheme for turning the supply of toilet paper into a problem. Is late Australian crony capitalism a scheme for turning fibreglass roof insulation into a problem?

  32. Salient Green
    February 10th, 2015 at 11:36 | #32

    @Ken_L
    Pyne, Abetz and Brandis, you’ve named the three I find most contemptible and revenge against Turnbull would be giving them too much credit.
    More likely craven terror of losing their jobs should MT arise. Of course they may just be rat cunning enough not to martyr him.

  33. BilB
    February 10th, 2015 at 17:14 | #33

    James Wimberley, are your training to become a Political Neo- Con?

    The pink batts programme was only ever a scandal in Tony Abbott’s twisted mind. The opposition attack on the government initiative was hysterical in the extreme and used every possible distortion of fact and fiction in the attempt to create credibility.

    The programme was a GFC stimulus with Global Warming Action extentions that insulated the rooves 1 million Australian homes in a very short period of time. During the course of the implimentation there were several accidents and a small number of house fires that were not necessarily a consequence of the insulation. By relative proportion the incidents were below that normally experienced in this industry, but because the federal government had created the initiative it had somehow to be an absolutely perfect application to the belligerent political opposition.

    John Quiggin did a number of enlightening articles on the matter at the time, threads that you would do well to read.

  34. February 14th, 2015 at 15:49 | #34

    James Wimberley, just to reinforce what Bilb wrote, the home insulation scheme (pink batts) was a huge success and a demonstration of how improvng efficiency can cut carbon emissions and contributed directly to a reduction in wholesale electricity prices. Tragically however, some cowboy installers ignored safety procedures and deaths resulted. I believe as many died as did building the ethane pipe to Melbourne. However, I am positive that as a result of these tragic events, the Abbott government will move to improve safety regulations and monitoring for Australian businesses, just as soon as a sufficient proportion of Australia’s bovine population have jumped over the moon.

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