Supporters of fossil fuels in Australia’s media and political classes have been gleefully echoing Greta Thunberg’s claims that the Glasgow climate summit has been a failure. Yet both European and American politicians have been busily working on other plans to discipline climate change bludgers. These involve measures such as taxing carbon intensive goods imported from countries without equivalent emission control policies, and also choking off finance to high-polluting industries.
The Morrison government’s recently released long-term emissions reduction plan claims that it will protect us from such actions, stating the plan will “ensure Australian exporters are not targeted by trade action, and Australian businesses do not face cost of capital premiums”. While Scott Morrison might be able to fool voters, there is little chance the US and European governments will fail to notice this is a plan to freeload off their hard work.
The government has been busily rearranging and rebadging funding to the Clean Energy Finance Corporation and the Renewable Energy Agency like its announcement on Wednesday. But foreign climate policy observers know this is largely just a shuffling around of old money allocated to these institutions by the Gillard Labor government.
Given what this Liberal-National government has claimed in the past, it would be political suicide for them to acknowledge we should implement a carbon price. Still there is a five-step plan open to Morrison where he could still claim their climate policy was all about technology not taxes, while also restoring Australia’s reputation as a lifter rather than a leaner.
1. Accept the court verdict that the environment minister has a duty of care to prevent harm to children
It might stagger you to hear about a judge’s finding that Australia’s environment minister should seek to protect Australia’s children from harm. This case brought by eight children argued that the environment minister should consider the potential harm new projects, such as coalmines, could have on children by exacerbating climate change before granting an approval under the Environment Protection and Biodiversity Conservation Act.
Instead of arguing the indefensible, the government could amend the act to require all major carbon-emitting facilities install best-available technology for containing carbon emissions within 10 years.
2. Require landlords to meet minimum standards for rental property thermal comfort and energy efficiency to be eligible for tax concessions
The poor level of thermal comfort and energy efficiency of Australia’s rental housing stock is a national disgrace. Renters’ energy bills could be cut in half, while reducing emissions and improving people’s health by requiring landlords to ensure their rental homes meet basic standards of energy efficiency. This could be met through straightforward upgrades like better insulation; efficient heating and cooling via reverse cycle air conditioners; efficient water heaters; and solar power.
Landlords receive large tax concessions which multiple economists have pointed out hinder economic growth while doing little to help renters. Why can’t we at least ask that in return landlords provide housing with reasonable levels of comfort for tenants with affordable energy costs? To completely remove any financial and political sting from such a reform, the Clean Energy Finance Corporation could provide finance at a concessional interest rate for such upgrades.
3. Amend the existing solar support scheme to drive uptake of batteries
Australia leads the world in the uptake of solar systems at the household level. Around a quarter of dwellings nationally have a solar system. However, within the next few years we’ll reach the point where increasing amounts of solar generation will be spilled and wasted during midday hours because it exceeds overall power demand, and its market value will be very low. Yet once the sun goes down over the hours of 4pm until 8pm, more expensive gas-fired generators push the price up dramatically.
To flatten prices in the evening and fully exploit the potential of solar, the government needs to amend the solar support scheme known as the Small Scale Renewable Energy Scheme to encourage the uptake of batteries. The level of government support provided to solar systems has been structured to decline over time and will be completely phased out after 2030. The rebate is now a quarter of what was provided per kilowatt 10 years ago and a third less than what it was five years ago. To drive significant uptake of batteries all the government needs to do is restore the solar rebate back to 2016 levels if the household also installs a battery. Meanwhile the rebate provided to those that install solar only will continue to decline, enhancing the incentive over time to couple batteries with a solar system. Green Energy Markets estimates that such a reform has the potential to drive the installation of as much as 10,000MW of home battery capacity by 2030 – equal in size to five Liddell coal-fired power stations.
4. Follow California’s lead on vehicle emission standards
Morrison’s claim at the last federal election that Labor’s target to increase electric vehicle sales would steal the weekend is looking more and more ridiculous as each day passes. He has since tried to cover up for this embarrassing claim via a Future Fuels Strategy. Unfortunately, within hours of its release the Electric Vehicle Council labelled it a “fizzer” that left Australia as a “dumping ground for the world’s dirtiest vehicles”.
Morrison could make an about face explained away by a change in policy in California.
For many decades California has been allowed to impose its own emission standards on motor vehicles that go beyond those regulated on a national basis in the US. In addition, a further 14 states within the US choose to impose the Californian standard instead of the federal government’s standard. All up these states represent over a third of the US motor vehicle market.
This is a market that by 2035 will only allow the sale of zero emission passenger cars.
By announcing Australia will follow the Californian standard, Morrison can claim he is merely responding to changing circumstances that have made electric vehicles a vastly more practical and affordable option for Australians. At the same time he will ensure Australian consumers aren’t saddled with obsolete oil-fuelled cars which by around 2035 will become increasingly expensive and difficult to service and fuel.
5. Implement a green gas target
Both the Morrison government and the oil and gas industry, among others, are claiming hydrogen will be a miracle cure to our emission problems. While it’s theoretically possible that it could provide weather-independent energy at large scale and affordable cost, a heck of a lot of improvement is required in order fulfil its potential. Feasibility studies and “pilot hubs” won’t deliver this improvement.
If there’s anything we’ve learnt about effective climate policy in the past 20 years it’s that to get the cost of low carbon technologies down we need to deploy them in the field and steadily build up manufacturing scale. So if industry and government are genuinely serious about delivering affordable hydrogen at scale, they should be willing to back it with a legislated target that would steadily grow the amount of hydrogen we use. According to the gas industry, it is possible to blend hydrogen into the existing gas supply infrastructure at levels as high as 10% without significant modification to existing equipment. If this is accurate then this is what suppliers should be required to deliver by 2030.
• Tristan Edis is the director of analysis and advisory at Green Energy Markets
