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Labor’s climate policy could remove the need for renewable energy targets

The Grattan Institute’s Tony Wood writes in The Conversation (21.2.17) that Labor has been criticised for vacillating about its 50% renewable energy ambition. But, according to the author, Labor’s proposed emissions intensity scheme could boost green energy without any hard target at all.’The federal Labor Party has sought to simplify its climate change policy. Any suggestion of expanding the Renewable Energy Target has been dropped. But there is debate over whether the new policy is actually any more straightforward as a result.

‘One thing Labor did confirm is its support for an emissions intensity scheme (EIS) as its central climate change policy for the electricity sector. This adds clarity to the position the party took to the 2016 election and could conceivably remove the need for a prescribed renewable energy target anyway.

‘An EIS effectively gives electricity generators a limit on how much carbon dioxide they can emit for each unit of electricity they produce. Power stations that exceed the baseline have to buy permits for the extra CO₂ they emit. Power stations with emissions intensities below the baseline create permits that they can sell.

‘An EIS increases the cost of producing electricity from emissions-intensive sources such as coal generation, while reducing the relative cost of less polluting energy sources such as renewables. The theory is that this cost differential will help to drive a switch from high-emission to low-emission sources of electricity.’

Energy security: a litmus test for the PM and his deputy

Tim Colebatch writes in Inside Story (17.2.17) that Malcolm Turnbull is staking his government’s reputation on policies that are widely opposed and hard to defend.

‘For years the federal government published an annual stocktake of major electricity projects in the pipeline: some firmly committed, some undergoing feasibility studies, some simply proposals. But in 2016, the stocktake was suspended. There was too little investment to report.

‘The only information we have now is from the Australian Energy Market Operator, which publishes a simple graph and table of future projects on its website. It shows committed investment amounting to just 634 megawatts of new electricity generation – 583 MW of wind and 51 MW of solar – within the national electricity grid. Proposals exist for gas-fired stations, but none are definite. And there’s not a single plan for another coal-fired station.’

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