Melbourne Doorstop 25/02/2019

February 25, 2019


SUBJECT/S: Tony Abbott’s failed policy renewal; Paris commitments; Labor’s RET

MARK BUTLER, SHADOW MINISTER FOR CLIMATE CHANGE AND ENERGY: Thanks for coming out this afternoon. After five years of denying that climate change is real and attacking the renewable energy industry, Australians are now supposed to believe that a Prime Minister who took a lump of coal into the parliament has suddenly had a change of heart on climate change. But all that Scott Morrison has announced today is a decision to double-down on Tony Abbott’s failed carbon blueprint, throwing billions and billions of taxpayers’ dollars at a failed Tony Abbott plan that has seen pollution go up and up and up. And that’s exactly what Malcolm Turnbull warned years ago the consequence of Tony Abbott’s plan when he described it as a recipe for fiscal recklessness on a grand scale. Making Australian taxpayers foot the bill for Australia’s biggest polluters is exactly what you’d expect from a Prime Minister whose only interest is looking after the top end of town.

JOURNALIST: On the fund are they even putting as much money as Tony Abbott put in? It appears that there’s actually less.

BUTLER: Well it’s a little bit less but it’s basically business as usu
al on Tony Abbott plan that has seen carbon pollution go up and up and up in this country. We’re now pretty much the only major advanced economy where carbon pollution is going up, rather than coming down, why would you double down on a plan that has demonstrated to be a failure.

JOURNALIST: Why do you think Scott Morrison is making a media blitz today on this issue?

BUTLER: Well as far as we can tell the Minister with responsibility for climate change policy is completely missing from this. The Prime Minister, the guy who took a lump of coal into the parliament has decided to produce some sort of fig leaf on climate change policy and that fig leaf is a policy that has been demonstrated to be a failure, it’s Tony Abbott’s policy.

JOURNALIST: He also announced a fast-tracked feasibility study into a second Bass link, do you support that?

BUTLER: Well we’ve been supportive of work on a second interconnector to Tasmania now for a number of years and we welcome the commitment today and we will match the commitment for further feasibility study work but we don’t just want to see the Commonwealth supporting further study, we’ll be engaging with stakeholders, as we have over the last few weeks when I was down in Tasmania, about what a Shorten Labor Government could do to see the thing built, not just studied.

JOURNALIST: Can you sort of elaborate on the reasons for Labor not supporting the continuation of the ERF and also what you’ll do to replace it with variation on the safeguard emission or some other baselining credit system?

BUTLER: Well we’ll have much more to say in the coming weeks about the finer details of our climate policy, but the ERF has been something we’ve opposed since it was introduced by Tony Abbott almost a decade ago. Remember at that time Malcolm Turnbull described it as a fig leaf to cover a determination to do nothing and a recipe for fiscal recklessness on a grand scale. And it has done nothing, it has seen carbon pollution go up and up and up. Having said that though, it builds on the carbon farming initiative which Labor introduced in 2011. That is an initiative that we want to see re-invigorated by a Shorten Labor Government so that there is good, private demand for carbon farming offsets in the land sector.

JOURNALIST: Can you guarantee that under Labor retail energy prices will go down?

BUTLER: Well what we know is that Labor has committed to the National Energy Guarantee, which Scott Morrison and Josh Frydenberg told everyone, week after week, month after month, last year, would see power bills come down by $550 per week on average. Now that same modelling, Scott Morrison’s modelling, said that a failure to implement the National Energy Guarantee would see prices go up. We’re already seeing that in the futures market with baseload futures for wholesale power prices in New South Wales and Victoria going up by about 35-40 per cent since the National Energy Guarantee was dumped by Scott Morrison and Josh Frydenberg. So what we’re doing is following a policy path that is supported by every single business group in the country, every state government, Labor and Liberal alike, and which Scott Morrison and Josh Frydenberg assured people would see bills come down.

JOURNALIST: So will you guarantee that bills will be lower?

BUTLER: Well what we guarantee is that a policy that introduces investor certainty back into the system will put downward pressure on, particularly, wholesale power prices. That’s demonstrated by Scott Morrison and Josh Frydenberg’s own modelling that promised a $550 reduction in power prices which they walked away from because they wouldn’t stand up to the hard-right led by Tony Abbott in the parliamentary party room.

JOURNALIST: Do you support the use of carry-over credits in Kyoto to reach the Paris climate targets?

BUTLER: Well we’re continuing to take advice about this issue and the rule book, the so-called rule book, for the way in which that sort of carry-over arrangement would work internationally hasn’t yet been completed. What I have said though is that you can’t rely on accounting tricks to do the work of reducing our carbon pollution in the Australian economy and every bit of accounting trick that you do rely upon simply increases the burden on our children and our grandchildren to do the hard work of reducing our carbon pollution and I don’t think the national parliament in 2019 should be increasing the burden on our children.

JOURNALIST: So why hasn’t Labor yet drawn a line through that policy?

BUTLER: So as I said, we’ll have more to say in the coming weeks about our climate change policy beyond the energy sector, we’re taking a careful, deliberative approach to all of these questions, taking advice, looking at what other countries in a similar position to ours are doing, we know that New Zealand and the United Kingdom and others for example, have declined to use carry-overs, so we’ll make an announcement about this and other aspects of our climate change policies in due course.

JOURNALIST: Do you support the CSRIO report from, I think, July or June 2017, which said in order to achieve the government’s economy-wide Paris target of 28 per cent emissions reduction the electricity sector would have to 52-70 per cent and do you think that sort of proportionality carries over to a more ambitious economy-wide target that Labor might have?

BUTLER: Well what we’re all working to at the moment is a decision by the COAG, by the premiers and the prime minister, with governments of both political persuasions that accepted the advice of the chief scientist in 2017, which was for all sectors of the economy, to do their mathematical share of lifting on the economy-wide abatement task. That’s the standing decision of COAG, it’s the position that’s underpinned all of the modelling about the energy sector and the non-energy sector and that’s what we’re working on.

JOURNALIST: Do you think that’s realistic though, looking at the way that all the non-power sectors lifting emissions or struggling to keep them flat like agriculture?

BUTLER: Well other sectors of the economy often do raise that whether the advice from the chief scientist should’ve been accepted by COAG, it was accepted by COAG and I think if other sectors of the economy want to continue to make that argument into the future they’ll have to make that argument, at the moment as an alternative government we’re dealing with the modelling and the decision of the COAG that reflects the advice of chief scientist.

JOURNALIST: You’ve sighted Germany as a world leader in renewable energy but they’ve got the highest retail electricity prices in Europe. Is that what Australia can expect?

BUTLER: Well I’m not quite sure what you’re referring to when you say I’ve sighted Germany as the leader in renewable energy, I don’t quite remember doing that. There’s no question though that Germany now has a very high percentage of renewable energy in their system and across the world we are seeing country after country rely more heavily on investment in renewable energy than ever before. From 2015 onwards we’ve seen investment in renewable energy outpace the combined investment in coal, gas, nuclear and hydro power as well. So the whole of the world has recognised that renewable energy is the cheapest and the cleanest form of new electricity build, every company in Australia says that, the CSRIO and all other independent stakeholders and think groups also say that. It’s quite clear the future of new building of electricity generation is going to be renewable energy.

JOURNALIST: How will Labor get to 50 per cent renewables by 2030 then and what would it cost?

BUTLER: Well the first thing we’ve said is that we think the Coalition, after the next election, whatever the result of the next election, should recognise they’ve made a colossal mistake several months ago in walking away from the National Energy Guarantee. So our preference would be, and the preference, as far as we understand it, of every single business group would be to return to the National Energy Guarantee. We’re very confident that can be calibrated to get us to a position of 50 per cent renewables by 2030. Now if that doesn’t happen, if the Coalition continues to dig-in against the advice of every business group in the country and oppose a bi-partisan market mechanism then we will put in place contracting arrangements to ensure we get to that same position by 2030. What we also know is that we have no option about rebuilding our electricity system. 75 per cent of our generators are already operating beyond their design life and we see after every summer now unreliable generators dropping out of the system with no notice. We have to find a way to rebuild that and every bit of advice from the business sector and independent groups like the CSRIO is says the cheapest way to rebuild our electricity system is with renewables.

JOURNALIST: So you’re coming under sustained attack from the government arguing that your renewables target and emissions reduction targets are economy wrecking. I take it this is a subject of today, but can you just outline why they’re not.

BUTLER: Well first of all on emissions reduction targets, the modelling that was conducted for Tony Abbott back in 2015 when he was still the Prime Minister and was building his case for his Paris targets, the modelling by Warwick McKibbin showed that the impact on real GDP growth, so economic growth through the 2020s of our target versus Tony Abbott’s inadequate target would be negligible, would be the difference between 23 per cent in real GDP growth and 23.2 per cent or something. McKibbin also showed that the only difference in that GDP growth reflected the fact that energy bills would be cheaper under Labor’s more ambitious target. Energy bills would be cheaper. So there’s no significant economic difference between our targets. The only difference is that our target is the only target consistent with scientific advice about what is necessary to keep global warming below 2 degrees. As for our 50 per cent renewable energy target, RepuTex, a very reputable analytical firm, based here in Melbourne, found that over the course of most of the 2020s, from about 2023 from recollection, wholesale power prices would be lower under our ambitious target because building more renewables into the system puts downward pressure on wholesale power prices, flowing through to retail prices for households and businesses.

JOURNALIST: You talk about coal-fired generators ageing, would the 50 per cent target contribute to maybe bringing forward the shut-down of some of those or is it more a case of putting more energy into the system?

BUTLER: Well ultimately it’s going to be a decision for companies as to when some of these coal-fired power stations shut. It doesn’t appear that a great deal of money is being spent by them on maintenance and upgrades so that’s a matter for them really. What we do welcome is a recommendation from the chief scientist that there be minimum notice periods of three years so the system isn’t ambushed, if you like, by a decision like the closure of Hazelwood by ENGIE at the La Trobe Valley here in Victoria with only several months notice. So this has to happen in an orderly way but there is no option about renewing our electricity system.  They’re already showing signs of age, particularly periods of summer, very extreme heat when those coal generators become highly stressed, too often are dropping out of the system without any notice.

JOURNALIST: Do you support the default market offer in the way that it was unveiled on the weekend?

BUTLER: Well we were the first party to announce that we supported and accepted the advice from the consumer watchdog, the ACCC, back in August last year and Malcolm Turnbull followed our announcement very quickly, for more than six months this has been a bi-partisan position but what we do also understand, and stress, is that 90 per cent or more of households will not be impacted by the announcement Angus Taylor made over the weekend. 90 per cent or more of households would continue to see their bills go up and up and up because of this government’s decision to walk away from the National Energy Guarantee, so yes we do support this announcement as far as it goes, we were the first to support it more than six months ago but it is no substitute for a system-wide energy policy that will see all households get some price relief, not just less than ten per cent.