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Comparing the parties’ climate change and renewables policies

Serious discussion of climate change policy has been noticeably absent this election campaign - while the issue was allotted a portion of the first leaders’ debate, little time was devoted to it. Nonetheless, there are significant differences in the climate change and renewable energy policies of the ALP, Coalition and Greens. The major differences between the parties are outlined below.

Reducing greenhouse gas emissions

There are two key questions for policymakers in this area:

  • By how much and how soon should we reduce our emissions?
  • How should we reduce our emissions?

How much should we reduce emissions?

Both the ALP and Coalition are committed to cutting emissions by at least 5% below 2000 levels by 2020, but will consider increasing that to 15% or 25% depending on the level of action around the world.

The Greens have long considered the 5% figure to be too low.

Both the ALP and the Greens supported the passage of the Clean Energy Bill that enshrines in law a commitment to cut emissions by 80% below 2000 levels by 2050.

The Coalition is proposing to abolish the independent, expert Climate Change Authority, which advises the government on the targets and yearly cap under the emissions trading phase of the carbon price.

How should we reduce emissions?

The ALP and Greens are committed to carbon pricing to cut Australia’s emissions, while the Coalition will “abolish the tax” and introduce a voluntary scheme as part of its Direct Action Plan.

Carbon pricing: Australia has a carbon pricing mechanism that requires the biggest producers of greenhouse gas emissions to pay for their emissions. The theory behind carbon pricing is that by making it more expensive to produce emissions, entities will have an incentive to reduce their emissions. An added incentive comes in the trading phase of the scheme when entities can sell their emissions savings (in the form of excess units).

Rather than introducing tailored regulation for different sectors, carbon pricing leaves it up to the individual polluters to work out the best way to cut their emissions.

The Greens do not support the ALP’s proposal to bring forward the emissions trading phase of the scheme by one year to July 1 2014. When Australia moves to an emissions trading scheme (ETS) it will be linked to the European Union ETS. Because the price of carbon is so low in the EU, the sooner Australia moves to an ETS, the lower our carbon price will be and the weaker the incentive emitters will have to reduce their emissions.

Direct Action: The Coalition’s Direct Action Plan is premised on the idea that “rewarding innovation and initiative”, rather than penalising polluters is a more effective way to reduce emissions.

The plan was first articulated in 2010. The Shadow Minister for Climate Action, Greg Hunt, has provided further details in speeches.

The centrepiece of the Direct Action Plan is a voluntary, competitive scheme that offers a cash reward to entities that undertake projects to reduce their emissions. Under Direct Action, applicants submit project proposals to an Emissions Reduction Fund (ERF) which runs a competitive selection process. Entities are paid when their project has delivered the proposed emissions reductions.

The fund has an annual budget limit and will not favour any particular type of project. Project-specific methodologies will be developed to measure and verify emissions reductions.

The main differences between Direct Action and a carbon price are that under Direct Action:

  • all emissions reductions must occur in Australia
  • there is no cost to produce emissions: entities can continue to produce emissions at business as usual rates at no extra cost and with no penalty if emissions increase above an industry benchmark
  • there is no cap on emissions
  • no revenue is generated for the government.

Renewable energy

Australia has three main policies to support renewable energy in the short term.

Renewable Energy Target

The Renewable Energy Target (RET) is a legally binding target - by 2020 we have to generate 41,000 GWh of electricity from large-scale renewable energy sources such as wind and solar farms.

(When the quota was legislated in 2010, it was expected that the 41,000GWh plus the electricity from federally-supported small-scale renewables would amount to 20% of all electricity consumed in 2020. But we are consuming less electricity than expected. This means that under the 41,000GWh target, more than 20% of the electricity consumed in Australia will be generated by renewables in 2020.)

All parties support keeping the RET.

The ALP agrees with the recommendation of the expert Climate Change Authority that the next review of the RET should be in 2016. The Coalition wants it reviewed again in 2014.

Only the Greens have a policy on expanding the RET, by increasing the target to 90% by 2030.

Clean Energy Finance Corporation

The Clean Energy Finance Corporation (CEFC) is an independent body, established to stimulate investment in clean energy projects. A$2 billion every year for five years is guaranteed by legislation. At least half of the funding must be invested in renewable energy. Funding cannot be spent on technologies for carbon capture and storage or nuclear power.

The ALP wants to retain the CEFC.

The Coalition wants to scrap the CEFC.

The Greens want to triple the CEFC’s funding and have it run for ten years.

Australian Renewable Energy Agency

The Australian Renewable Energy Agency (ARENA) is an independent agency that provides grants and funding for renewable energy. It has $3 billion to 2022 guaranteed by legislation to fund renewable energy projects and related research.

All parties support keeping ARENA.

Electricity grid regulation

Only the Greens have a policy to ensure renewable energy generators have access to and can connect to the grid. Our grid was built to support centralised, coal-fired generation and often does not extend to the places where it would be best to build wind or solar farms.

Currently, planning for where to build new power lines is done on a state-by-state basis. The Greens think that the Australian Energy Market Operator (AEMO) should have a national grid planning role to ensure the grid can optimally accommodate more renewable energy.

Fossil fuel production

Australia is the world’s largest exporter of coal and is a leading exporter of gas. Government policies and regulations affect the growth of the fossil fuel industry.

Regulating new fossil fuel developments

The Coalition wants to reform national environmental protection assessment and approvals processes to reduce the complexity, cost and uncertainty for proponents of major projects, like coal mines and power stations.

The ALP says it will not hand over approval power to the states even through it had been considering doing so 2012.

The Greens want to amend our national environment protection law, the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), to ensure that federal approval processes cannot be devolved to the states. They want a moratorium on the development or expansion of coal mines and coal ports along the Great Barrier Reef.

Coal seam gas

The Labor government expanded the EPBC Act to require that federal decision-makers consider the impact on water resources of coal seam gas and large coal project applications (also known as the “water trigger”).

The Coalition does not support the water trigger.

The Greens support the water trigger and want a moratorium on all new coal-seam gas, shale and other unconventional gas projects.

This policy comparator was originally published by The University’s of Melbourne’s Election Watch.

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