Energy suppliers, business groups and consumers have joined in an unlikely coalition to warn that a failure to provide climate policy certainty would cost all Australians and lead to higher costs.
Eighteen organisations as diverse as the Business Council of Australia, the Australian Conservation Foundation, the Australian Aluminium Council, Energy Networks Australia and St Vincent de Paul called on the Turnbull government to ensure energy markets remained reliable and affordable during decarbonisation.
“All sides of politics and all levels of government share responsibility for the current state of our energy systems – and for taking action with the energy industry and its customers to improve it,” the statement said. “A collective failure to act would come at a cost to all Australians.”
One week after the energy minister, Josh Frydenberg, ruled out an emissions intensity scheme due to pressure from the backbench, the joint statement calls on the Turnbull government to assess all policy options during its 2017 climate policy review.
“The status quo of policy uncertainty, lack of coordination and unreformed markets is increasing costs, undermining investment and worsening reliability risks,” the joint statement said.
“This impacts all Australians, including vulnerable low-income households, workers, regional communities and trade-exposed industries.”
Consensus is building outside the government for a no-holds barred review of climate policy to move the country on from Tony Abbott’s climate policy of Direct Action.
“Energy has been a source of advantage for our industries and prosperity for our household,” the statement says.
“It should become so again even as Australian governments, businesses and communities deliver our national contribution to the global net zero emissions goal of the Paris climate agreement.
“Much depends on the success of two closely connected policy processes. The 2017 climate change review should assess all policy options and provide advice to government.”
The joint statement comes on the eve of an energy ministers meeting in Melbourne on Wednesday – the final meeting for the year.
While the Frydenberg last week said an emissions intensity scheme for the electricity sector was under consideration, he subsequently backtracked after pushback from Tony Abbott, defence industry minister Christopher Pyne, backbench environment committee chair Craig Kelly and Cory Bernardi.
The prime minister backed in his energy minister, suggesting the Coalition would not increase a carbon tax or emissions trading scheme – support for which led him to lose the Liberal leadership in 2009 to Tony Abbott.
But later in the week, a report by Australia’s chief scientist, Alan Finkelsaid that investment in the electricity sector had stalled because of “policy instability and uncertainty”.
Finkel warned that current federal climate policy would not allow Australia to meet its emissions reduction targets under the Paris agreement.
The chief scientist will update the energy ministers’ meeting on Wednesday.
“An update from Australia’s chief scientist Dr Alan Finkel will provide ministers with an insight into some of the challenges and possible solutions he has gained on his recent work on the issues of energy security,” Frydenberg said.
“Ministers will also discuss the outcomes of two reviews designed to streamline the approval process for new interconnectors and to ensure consumers aren’t paying more than necessary for their network costs as a result of the limited merits review process.”
The signatories to the statement said Finkel’s preliminary report correctly noted that many of the technological, economic and consumer trends transforming our energy systems were irreversible.
“Policy and market designs need to evolve if investors are to deliver the energy services Australians require at a price they can afford,” the statement says.
“A raft of reforms are needed to encourage and support flexibility throughout the system.”
But Frydenberg said Australians expected access to reliable and affordable electricity.
“We are working through Coag to ensure the lights stay on and that power prices remain low,” he said. “This task, however, is being made more difficult by states putting in place unrealistic renewable energy targets which will inevitably put energy security at risk and drive up power prices.”
The federal Coalition has been critical of South Australia’s renewable energy targets after the statewide blackouts.
Last week, the South Australian premier Jay Weatherill said the states could go it alone on a carbon trading scheme if the federal government failed to show leadership.
The signatories to the statement are: the Australian Aluminium Council, the Australian Conservation Foundation, the Australian Council of Social Services, the Australian Council of Trade Unions, the Australian Energy Council, The Australian Industry Group, the Australian Steel Institute, the Business Council of Australia, the Cement Industry Federation, the Clean Energy Council, Energy Consumers Australia, the Energy Efficiency Council, Energy Networks Australia, Energy Users Association of Australia, the Investor Group on Climate Change, the St Vincent de Paul Society National Council, The Climate Institute and the World Wildlife Fund Australia.
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