The non-policy on energy

So overall the picture is one of actual policy actions that are inconsistent with rhetoric, combined with a continued re-arrangement of taxpayer-funded schemes. The unspoken true policy appears to be to work behind the scenes to undermine any attempt at internationally agreed GHG emission reductions, in order to protect our fossil fuel export income. That is a logical policy if not a very moral one.

What the other parties offer

Presumably at some stage before the federal election, the ALP will present an updated policy statement on energy and greenhouse issues. In the meantime the most relevant document is the platform adopted at the January 2004 ALP National Conference. In addressing “A sustainable Environment”, the platform contains many positions that seek to address the greenhouse issue and the development of the renewable energy sector. The need for cuts of 60 to 80 per cent in GHG emissions is recognised, although no timescale for doing this is given. Most importantly there is a firm commitment to ratify the Kyoto protocol, with emissions trading suggested as the mechanism of choice to achieve targets.

There is also a commitment to a Mandatory Renewable Energy Target of 5 per cent. Whilst these positions combined represent a much more forward looking view of sustainable energy than the Coalition offers, the chapters concerned with economic development indicate there remains a level of schizophrenia in the overall position. Chapter 12 deals with “Developing Australian Industry” and contains a commitment to employment growth in the mining sector. The section addressing the “The Future for Minerals Resources and Energy”, is explicitly and implicitly devoted to the continued growth of the fossil fuel industry. It seeks “sound” development of coal resources and exports and commits to intensification of oil and gas exploration. There is also a commitment to a national effort on energy with the stated aim to bring down energy prices to industry and consumers.

What is completely missing is any reconciliation between the environmental goals, how to manage a transformation of the energy industry, and long-term replacement of the export income from fossil fuels. The continued emphasis on keeping energy prices low also misses the point that it is provision of “energy services” at the lowest true cost that should be the goal.

The minor parties have the luxury of not having to worry about the actual detail of forming a government and keeping the economy functioning. It is politically easier for them to adopt clear principles and this they have done quite well. Both the Australian Democrats and the Greens, have articulated clear policy positions on moving away from fossil fuels and supporting renewable energy technologies. It is the Greens that have spelt this out with the most specific detail in their “specific goals” for climate change and energy, advocating a 50,000GWh/yr MRET by 2020 and a reduction of GHG emissions to 80 per cent below 1990 levels by 2050.

An interesting issue that has come to prominence with the release of the energy statement is the idea of capturing CO2 emissions at the point of creation and then pumping them underground or into the Ocean. This has been embraced with enthusiasm by the fossil fuel lobby and the government. It appears that it may also be quite appealing in some quarters of the ALP.

At a first analysis, the policy position and diversion of money in this direction is quite distressing to supporters of renewable energy. However just a few years ago, the basic fossil fuel lobby line was to suggest that there was no proven link between GHG emissions and climate change. We have now seen a major shift. Essentially the whole industry and all sides of politics are now accepting that the GHG/climate change issue is a real and serious threat that must be dealt with. The fossil fuel industry have come up with their own preferred solution, which, (surprise, surprise), will require a great deal of research and development investment and take many years before it can be commercially applied. In the meantime it is being used to justify business as usual and divert resources away from the renewable sector.

From a commonsense point of view, it is reasonable to imagine that some percentage of emissions could indeed be captured and effectively sequestered in locations such as old gas wells. It is interesting to note that in contrast to the government/fossil fuel lobby position that large percentages can be sequestered at low cost, the experts funded by industry to work on the issue actually suggest that only 25 per cent of total annual emissions could realistically be sequestered and that the costs do not appear cheaper than renewable.

This situation makes it increasingly hard for the fossil fuel lobby to argue we should not immediately allow market forces to choose between technology options via mechanisms like emissions trading.

The good news is that energy issues are now well and truly on the political radar screen. What we need from the major parties is clearly articulated long term plans which spell out a timeline for a transition to an energy scenario with zero emissions and avoiding any side tracks to involvement in the nuclear fuel cycle. We need to restructure our energy markets so that they incorporate all currently “external” environmental and other costs and facilitate the provision of energy services rather than energy units. Plus we need a major strategic plan for replacing the role of conventional energy exports in our economy. The following specific suggestions ought to be part of such a plan:

• Immediate adoption of a legally binding target for GHG emissions that reduces to zero in 50 years;
• Introduction of an emissions trading scheme that recognizes the offsets associated with efficient deliver of energy services;
• Strengthening of the MRET measure to increase to 20 per cent by 2020;
• A 20-year plan to build a new industry that replaces coal exports with renewable energy derived fuels such as gasified biomass and renewable hydrogen derivatives.