Minority Report Australian Greens
The Renewable Energy
(Electricity) Amendment Bill fails to incorporate the most important
recommendation of the 2003 review of the Renewable
Energy (Electricity) Act 2000, namely, that the MRET be extended from 2010
to 2020 with an increased target of 20 000 GWh to be achieved by 2020.
This recommendation for an extended timeframe and increased target has
received very widespread support from the renewables industry since 2003. Each
of the industry’s submissions reflected this, as acknowledged in the Committee's
report.
The Government's arguments against extending the MRET, as presented in
the Committee's report, are flawed.
The Committee's report makes it clear that the Government's decision
not to extend the MRET is based on the recommendations of the 2002 Energy
Market Review Towards a Truly National
and Efficient Energy Market (aka the Parer report), which argued that:
1. The MRET is a
more costly measure to reduce greenhouse gas emissions than it needs to be as
it focuses exclusively on renewable energy sources rather than least cost
greenhouse gas abatement, such as reducing energy consumption through improving
energy efficiency. [para 2.9]
This argument fails to recognise that the purpose of MRET is to support
the development of a domestic renewable energy industry so that greenhouse gas
emissions can be reduced over the long term, something that will not happen in
the absence of viable renewable energy sources. One third of Australia’s
greenhouse gas emissions come from fossil fuels used in electricity generation.
How can these emissions be reduced without a cost effective viable renewable
energy sector? MRET has demonstrated that it is an effective tool to encourage
investment in that sector. Nothing prevents the government from also
implementing energy efficiency at the same time. In fact it is essential that
it does so.
2. The MRET
scheme focuses on expanding the renewable energy industry to conserve
non-renewable sources, which in reality is 'not an issue' for Australia given
our abundant supply of coal and large natural gas resources, and may result in
unnecessary cost escalations in the price of energy. [para 2.1]
The complete failure to acknowledge that the issue is not the extent of
Australian fossil fuel, coal and gas reserves, but rather the imperative to
reduce their use because of dangerous climate change, is a reflection on the
narrow economic parameters of the Parer report. While the supply of coal is
abundant, it is widely accepted that that future of the coal industry will
depend on the price that will be placed on carbon and the capacity of the
industry to develop 'clean-coal' technology, something which to date has proved
impractical, unachievable and not cost-effective. With regards to gas,
Australian gas reserves may last several decades at current usage rates,
however, gas extraction may increase substantially as oil prices increase and
as coal becomes a less favoured fuel for electricity generation. Overall, the
case for developing a domestic renewable energy industry for both greenhouse
gas mitigation and energy supply security reasons is overwhelming.
3. The Energy
Market Review supported the introduction of a national economy wide emissions
trading system to abate the same level of emissions as intended through a
number of separate schemes currently in operation. Following announcement of
agreement to implement the new emission trading system, these existing schemes,
including the MRET, would cease to operate. The report commented that any form
of a compensatory subsidy to support the renewable energy market following
cessation of the scheme should be provided outside of the energy market, thus
avoiding distortion of the energy market to support the growth of a particular
section of the industry. [para 2.11]
It is agreed that the MRET and similar schemes should be replaced by an
emissions trading system (with compensating subsidies), but the government has
made it clear that they will not be implementing such a scheme – hence the
ongoing need for the MRET.
The streamlining of elements of the energy industry and the promotion
of market transparency are minor changes to the energy market. This Bill fails
by omission. It fails to address the elephant in the room, the need to increase
the target and extend the timeframe of the MRET scheme. Most of the submissions
to the Committee supported this proposition.
The Bill should be passed with amendment to provide for the extension
of MRET from 2010 to 2020 with a target of 20 000 GWh by 2020.
Senator Christine Milne
Australian Greens
Senator Rachel Siewert
Australian
Greens
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