Scale Back Paris Commitment, Australian Reformers Urge
Two of Australia’s most respected economic reformers have urged the government to scale back its commitment to the Paris emissions-reduction agreement and revive a market-based mechanism to curb greenhouse gases, suggesting the renewable energy target is damaging the country’s competitiveness.
Lamenting at least a decade of reform paralysis, Keating government adviser Fred Hilmer and Gary Banks, the inaugural Productivity Commission chairman, said they had all but given up on rational reform in the energy market. They were now left to hope that blackouts in Sydney and Melbourne this summer inject sense into what they saw as an increasingly dishonest policy debate.
Professor Banks sympathised with Australians who were “bemused” about rising power bills amid claims of a low-cost, renewable-energy future
“The notion that there’s a trade-off, that we can’t have it all, that there’s no free lunch, that’s not been made clear to the public,” Professor Banks said. “In fact when you look at it, we’ve ruled out all the least-cost ways of transitioning to a low-emission economy … we’ve ruled out nuclear and essentially ruled out gas too.
“I had a feeling under the last Labor government that there were tentative moves in the nuclear direction but then we had Fukushima, and that was it.”
Australia is the only G20 country with a legislative prohibition on nuclear energy.
Professor Hilmer, whose report for the Keating government unleashed a wave of pro-competition reforms in the 1990s, including helping to form the national electricity market, said blackouts this summer “would be great” to refocus the energy debate.
He and Professor Banks are both frustrated with state bans on gas exploration. “I can’t believe the problems (with fracking) are all that real; otherwise the US would be committing suicide,” Professor Hilmer said.
He suggested claims about the capacity of new batteries to store renewable energy had been exaggerated. “We need a blackout in South Australia when the new battery is going,” he said. “You can look at the sun shining and say renewable energy is cheap but it doesn’t solve storage. These huge batteries — half an hour’s power for Adelaide, or not even.” […]
In June the Turnbull government reaffirmed Australia’s commitment along with more than 100 countries to reduce emissions by at least 26 per cent by 2030 from 2005 levels.
Brendan Lyon, head of Infrastructure Partnerships Australia, which hosted the discussion with The Australian this week, said: “Paris is the hair shirt and we’ve popped on a straitjacket too.”
The comments will increase pressure on the Turnbull government, which has appeared divided on energy policy since the wake of blackouts in South Australia last year, to reject chief scientist Alan Finkel’s recommendation in June to introduce a clean energy target that would mandate a rising share of low-emissions energy provision after 2020.