The Turnbull government's credibility on climate change, regarded as close to zero by some environmental groups, faces searching scrutiny in coming days and weeks. On Monday, Josh Frydenberg announced the Coalition's Direct Action policy would be reviewed by his Department of the Environment and Energy, and that a national emissions intensity trading scheme might be included in a revamped emissions policy.
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And on Friday, a report into energy security and Australia's international climate commitments will be presented at the Council of Australian Governments meeting in Canberra. A stormy reception looks very likely given federal Coalition criticism of ambitious state renewable energy targets for raising electricity prices and imperilling energy reliability.
Reaction within the Coalition to the idea of an electricity industry-specific carbon trading scheme has been largely negative too, with Defence Industry Christopher Pyne saying the Coalition has no intention of "returning to a carbon tax" and Liberal Senator Cory Bernardi describing it "one of the dumbest things I have ever heard".
In fact, a system where high-carbon emitting power generators (such as those reliant on coal) have to buy "credits" from lower-emitting or gas-fired generators is the idea of the CSIRO and Energy Networks Australia, which have spent two years analysing the future of the nation's electricity grid. Their report concludes that an emissions trading scheme – together with incentives to drive the uptake of domestic solar power and battery storage – would be the least expensive way for Australia to reach its international carbon reduction targets.
By continuing "business-as-usual policies", the report's authors claim governments and policy makers would condemn householders to increases of over $400 in average annual electricity bills by 2050. Their faith in market-driven solutions as the most efficient way to lower emissions (and to drive down the cost of wholesale power) may be unimpeachable, but the obstructionist legacy of Tony Abbott's "axe the tax" rhetoric is considerable, as Senator Bernardi confirmed this week. The failure of South Australia's renewable-heavy electricity grid to withstand a storm-related outage in October appears to have hardened Coalition attitudes towards the uptake of wind and solar-powered generators too.
Market-driven solutions are crucial to enabling Australia to meet its emissions targets – and to providing the policy certainty generators are pleading for so that they invest long term in cleaner base-load power. And while the likes of Senator Bernardi might decry the overall economic costs of carbon trading, it's hard to see what other mechanism may be cheaper and more effective at reining in emissions to the timetable that the his government has committed itself.
Malcolm Turnbull's willingness to sell policies opposed by the more ideological elements of his party has been absent since he succeeded Tony Abbott in September 2015. If he can't do so soon – and Mr Frydenberg now claims the government is "committed to a non-ideological approach to emissions reductions" – then the prime minister faces a large credibility gap of his own making.
