October 26, 2012
Gillard Labor's economic plan is to scrabble and scratch to get out of, and stay out of, deficit in the face of a collapsing revenue base resulting from the after math of the global financial crisis. For many in the Canberra Press Gallery Labor’s credibility rests on it being able to present a half credible explanation of how it will fund the Gonski education reforms and the National Disability Insurance Scheme (NDIS) if revenue falls further. The surplus is their policy issue for the week.
For these political journalists economics has nothing to do with the transition to low carbon economy, even though the objective of the Mandatory Renewable Energy Target (MRET) is to encourage additional investment in renewable energy generation and to reduce emissions of greenhouse gases in the electricity sector.
There had been a concerted push to cutback the scheme, led by Origin Energy, TRUenergy (Energy Australia) and eastern state governments, particularly New South Wales and Queensland.
They were backed by lobbying from heavy industry, the Business Council of Australia), miners (the Minerals Council), the Australian Coal Association and farmers, and even some pricing regulators. Their aim was to stop the declining wholesale prices of electricity for the coal-fired power generators and utilities and to protect the future of their fossil fuel assets.
That has nothing to do with the economy either. What matters is economic growth and prosperity and the shift to green energy indicates the anti-business and anti-growth attitude of the Gillard Government.
The Climate Change Authority (CCA) in its Discussions Paper on the Renewable Energy Target (RET) scheme has rejected this push by the major energy players to reduce the 20 per cent renewable energy target. The paper says:
The Authority’s preliminary view is that the existing LRET target should not be changed, and that the benefits of any change at this time (either an increase or decrease) would be outweighed by the costs of increased regulatory uncertainty.....The Authority considers that the projected resource cost savings to society overall that might be achieved by reducing the target would not be large enough to offset the damage to investor confidence that such a change could entail.
This represents a defeat for the incumbent generators, state-owned electricity networks and other vested interests. The CCA has cut through their threats and the scare-mongering that were used to slow down Australia's transition to a clean energy future.
A clean energy future has nothing to do withe economy either. That's environmental stuff. They fail to see that the fossil fuel industry will only continue in the medium term as a form of back-up to renewable energy.