TUESDAY, 22 SEPTEMBER 2020
NORMAN SWAN, HOST: The Federal Government will today outline five technologies expecting to bring down Australia’s carbon emissions, promising to save 250 million tonnes a year by 2040 without harming the economy. Energy and Emissions Reduction Minister Angus Taylor will unveil new details of the Government’s technology investment roadmap with hydrogen, energy storage, low carbon steel and carbon capture and storage among the winners. Targets will be set to bring down the price of these technologies so they can compete against dirtier alternatives. But renewables seem to again be sidelined with the plan putting solar and wind in the same investment category as coal and gas. Mark Butler is Labor’s Shadow Minister for Climate Change and Energy, welcome back to breakfast.
MARK BUTLER: Thanks Norman.
SWAN: The roadmap promises 130,000 jobs by 2030 with government funding to fuel private investment. Now you’ve backed some of these measures before, you went to the last election with a $1 billion hydrogen plan so presumably you support the government’s measures?
BUTLER: We did, we went to the last election with a very ambitious hydrogen plan which the government at the time described as ‘snake oil’ and said hydrogen was decades away and wouldn’t create any jobs.
A technology roadmap like this is useful as far as it goes, but literally there are hundreds of reports lining government bookcases about what is happening with energy technology. There is nothing in this roadmap that hasn’t been very well understood for years. Indeed, some of the technologies identified as priorities like carbon capture and storage and soil carbon, for example, had dedicated funding streams under the last Labor government which was abolished by the incoming Abbott government. Soil carbon funding ran out when Scott Morrison was treasurer.
The point is that, to make an actual difference to Australian households and businesses you don’t need a description of technology that is happening in the private sector and around the world, you need an energy policy. You need investment rules that will actually see this technology built rather than just be written about. Again, that is completely absent from today’s announcement.
SWAN: I thought that was what it was all about, investment rules?
BUTLER: No there are no investment rules. All it says is there is technology and we hope to get to a particular price point for that to be competitive, which frankly will be determined by the market not by any particular government whether it is Labor or Liberal.
Norman, in 1961 JFK pledged to land a man on the moon and return him safely before the end of that decade, so within 10 years. It was the timeframe that created that sense of national mission, that drove the research, drove the investment, and importantly drove the jobs. Imagine if JFK had just pointed to the technology without a plan and without a timetable to use it – because that is what we have today.
SWAN: Haven’t they got a plan that aims for costs and emissions reductions rather than a target, won’t that drive the change?
BUTLER: What you need is the sort of investment framework that sets rules for putting this stuff on the ground, the private sector investing in this stuff on the ground. Not just saying this technology is being deployed around the world and we hope it gets to a particular price point at some point in the future and making a big hullabaloo about research and development funds, the so-called $18 billion that has been in place now for many, many years; most of it set up under the last Labor government. This is an announcement with precious little delivery, which is what we’ve become used to under Scott Morrison.
SWAN: This puts renewables like wind and solar in the same category as gas and coal. That must please some of the Labor Party’s supporters particularly in the unions, the CFMEU etc. They are uncomfortable with some of your positions on renewables?
BUTLER: The really notable thing about all of the series of announcements on energy policy over the last several days is there has been nothing on renewable energy. They’ve been talking about every single technology except renewable energy.
There are other really weird things in this roadmap. Why is nuclear power in, but bioenergy is not? A really critical jobs creator, seen as particularly important in transport and aviation, completely absent from this roadmap. How on earth do you describe energy efficiency as an emerging technology? Something described by the international energy bodies as the first fuel, critically important to bring down prices for households and business, and perhaps the most powerful jobs creator in the energy sector. Why is there still not a plan for electric vehicles? We heard overnight that the sale of hybrid and electric vehicles in the UK overtook diesel vehicles for the first time, but still we lag the rest of the world.
SWAN: The people who developed this plan are not stupid people, they are people who are known for being thinkers. Are you suggesting this is a political document rather than a piece of independent advice?
BUTLER: No I’m saying the technology roadmap is useful as far as it goes. We are going to work through it and I do have questions about things like why nuclear power is in and why bioenergy is not and why energy efficiency is pushed so far down the list for example. But this is a useful document and it is good to see the government picking up some technologies that it has shunned in the past, for example renewable hydrogen.
But, at the end of the day, if we are going to make a difference to households and businesses you can’t just have a description of technology. Uou need investment rules that will see that technology built on the ground. We need that urgently as our old coal and gas generators retire from the system. We need that to bring down power prices. We need that to create jobs. The criticism I’ve made about the series of announcements over the past week is it is hard to point to a single job that will be created as a result of the announcements in the timeframe that we need, and that is now. We are in the deepest recession in almost a century and there is precious little, if any, job creation from these announcements that are not off in the never-never.
SWAN: So what would you do to create jobs?
BUTLER: We would put in place an energy policy that would unleash the investment in renewable energy that is ready to go. Ten weeks ago, Anthony Albanese made an offer to Scott Morrison for us to sit down and agree investment rules. That is what the energy industry and energy bodies have been crying out for years. There are renewable energy projects that already have planning approval that, if allowed to go ahead, with investment rules that deliver investor certainty, would create 50,000 jobs, not off in the never-never but in the next couple of years. Instead, because there is no energy policy after the end of the Renewable Energy Target, UTS models that we will lose 11,000 jobs in the renewable energy industry because of the drop in investor confidence.
SWAN: Do you think there is market failure here. One could argue that interfering in the market, trying to create a market for gas is assuming market failure. Royal Dutch Shell is moving away from gas to invest in renewables. If you left the market to itself wouldn’t it go in the direction you are looking for in terms of reducing emissions?
BUTLER: Even in the middle of the worst recession we’ve experienced in almost 100 years there is still very substantial investment appetite in the energy industry across the world. Countries across the world are focusing on renewable energy at the heart of their economic recovery strategy, something that this government refuses to do. What investors need is to understand what the rules around their investment will be. Particularly because these are very long-term investments, they are going to last for 20-30 years and if governments are going to chop and change the treatment of those investments they simply won’t put down the hundreds and hundreds of millions or even billions of dollars that are needed. That is what the industry has been talking about. The lack of the sort of bipartisan agreed energy policy, even if we continue to disagree about the level of ambition within that, at least what we need to do is agree the rules and then you will see investment particularly in renewable energy because the costs keep coming down, start to be unleashed, creating jobs, bringing down power prices.
SWAN: You still don’t have a target for emissions reductions for the 2030s, an interim target. And you’ve told us that that will be clear by the next election. Is there really such a substantial difference between the government and Labor?
BUTLER: Again the critical thing out of this is there is no middle of the century target, which almost every single serious economy around the world has, every state government Liberal and Labor alike.
SWAN: But if you’ve got road surely you need to know where you are going in the middle of the road, halfway there, which is around about 2030?
BUTLER: You need to know the ultimate destination. That is why I have criticised this government, business groups have criticised this government for not having an ultimate destination set – net zero emissions by 2050. It’s what all the scientists and economists say is critical. Of course you can’t just get up in 2049 and check how you are going on getting to that ultimate destination, you need medium-term targets, which is why I’ve said our position on medium-term targets will be very clear well before the election for people to look at, analyse, and make a decision about.
SWAN: Just finally quickly, do you see gas as a transitional fuel or do you view it like coal something we should be trying to move beyond?
BUTLER: Gas is still a very important fuel for our economy and society. We use gas for heating and cooking, a number of manufacturing companies use it as a feedstock and it is an important peaking fuel, or transitional fuel, in the electricity sector. I see that myself, I’ve got gas generators in my electorate that are playing an important role in supporting the very high renewable energy industry here in South Australia. But the Energy Market Operator makes the point that on any scenario, the role of gas in the electricity sector is expected to decline over the course of the coming decade as it increasingly gets priced out of the market by newer technologies like batteries, by some old technologies like pumped hydro and by the fact that gas prices in Australia, like Matt Canavan makes the point this morning, are very high.
SWAN: Mark Butler thanks for joining us.
BUTLER: Thanks Norman.