Energy stalemate deepens as governments dig in over climate action
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Energy stalemate deepens as governments dig in over climate action

Hopes of a swift end to Australia’s climate policy paralysis have been dashed after the Turnbull government refused to capitulate to the states’ appeal for compromise on the landmark energy plan, including their demand that accelerated emissions reductions be made easier.

Environment and Energy Minister Josh Frydenberg has accused the states of "posturing" and says the government has sought to address their concerns.

Political tensions are high in the days ahead of a highly anticipated meeting of energy ministers in Sydney on Friday where the fate of the National Energy Guarantee will be decided.

The Commonwealth and states appear unlikely to strike a deal on energy policy this week.

The Commonwealth and states appear unlikely to strike a deal on energy policy this week.Credit:Phil Noble

Labor governments in Queensland and Victoria and the ACT’s Labor-Greens government held cabinet meetings on Monday to finalise their positions.

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The three governments hold serious doubts over the policy - chief among them that the 26 per cent emission cuts to be imposed on the electricity sector are weak, too difficult to change and will undermine their own more ambitious renewable energy targets.

Federal Labor has proposed an electricity sector target of 45 per cent, in line with its national carbon abatement goal.

Labor states are also reluctant to agree to a policy framework on Friday for fear right wing federal Coalition backbenchers may seek to amend it later.

Following the cabinet meeting Queensland Premier Annastacia Palaszczuk said the state needed “very clear certainty from Malcolm Turnbull’s party room”.

“Get all your eggs in one basket first, then we are prepared to look at the legislation and look at the national framework, to give certainty to families and certainty to investors,” she said.

Ms Palaszczuk said her office had also been kept in the dark over the agenda to be discussed on Friday, saying “how can you commit to something when you’re given a blank piece of paper?”

Queensland has also said it cannot support a policy that would drive up power prices or jeopardise its target of 50 per cent renewable energy by 2030.

Labor states fear the energy plan would undermine their renewable energy targets

Labor states fear the energy plan would undermine their renewable energy targets

Mr Frydenberg is unlikely to secure Coalition party room support to apply stronger targets. At the very least, federal Labor and its state counterparts want the energy plan to allow a future government to easily lift the targets.

Ms Palaszczuk said this should occur through regulation, rather than legislation that would need the support of both houses of Parliament.

Following the ACT cabinet meeting, Climate Change Minister Shane Rattenbury said his government would “seek significant improvements” to the energy plan at Friday’s meeting.

The ACT would only support “a national energy policy that will genuinely help the national energy market transition to a more modern, sustainable, affordable, and reliable system,” he said.

“The current NEG proposal does not do that, and in fact may have a negative impact in the areas it claims it will improve.”

The ACT also believes the emissions target is inadequate and should be reviewed within a shorter timeframe than the 2024 review currently proposed.

Victoria baulked at a decision on whether it will sign on to the Turnbull government's national energy guarantee at a meeting of the Andrews government cabinet on Monday.

Ministers in Victoria's Labor government were expected to reach a final position on the guarantee but instead stuck to the line they have held for the past week and urged Prime Minister Malcolm Turnbull to show that he has the support of his own backbench.

Energy Minister Lily D'Ambrosio said Victoria was still assessing the impact of the National Energy Guarantee on energy jobs, supply and prices.

Ms D'Ambrosio said the Andrews government was working with other states for greater certainty and would "have more to say on our position shortly".

"We again call upon the Prime Minister to demonstrate he can deliver the NEG through his own party room before asking others to sign up to it,” Ms D'Ambrosio said.

Victoria has legislated renewable energy targets of 25 per cent by 2020 and 40 per cent by 2025, and the government has said it fears the lower target in the guarantee could dampen investment in renewable energy.

Mr Frydenerg on Monday said the government’s position was firm and the target would only be

lifted through legislation.

“You can’t just flick a switch to turn a target from 26 per cent to 45 per cent with all the subsequent consequences that that would mean for the energy companies,” he told ABC Radio.

Environment and Energy Minister Josh Frydenberg accused Labor states of "politicking".

Environment and Energy Minister Josh Frydenberg accused Labor states of "politicking".Credit:Alex Ellinghausen / Fairfax Media

Mr Frydenberg said the government had agreed to bring forward a review of the targets. It had also offered a phone hook-up with the states after the party room meeting on Tuesday and the legislation would be released for stakeholder comment before returning to the states for final sign-off.

Mr Frydenberg accused Queensland and Victoria of “politicking and posturing”.

He insisted the majority of the party room backed the policy aside from the “usual voices” of dissent.

Labor climate change and energy spokesman Mark Butler said there was “fundamental concern about [Prime Minister] Malcolm Turnbull’s apparent intention to tie the hands of future governments from expanding opportunities for renewable energy investment and jobs and bringing down power prices”.

With Adam Carey and Alison Brown

Nicole Hasham is environment and energy correspondent for The Age, The Sydney Morning Herald, Brisbane Times and WAtoday.

Peter Hannam is Environment Editor at The Sydney Morning Herald. He covers broad environmental issues ranging from climate change to renewable energy for Fairfax Media.