Business

The climate wars are now pulling Labor apart. Yet the price of the Coalition’s new political edge on climate change is an incoherent energy policy that undermines investment in cheaper, cleaner and more reliable power supplies.

As recognised by Queensland Labor premier Annastacia Palaszczuk, to gain office, Labor needs to retain the sort of blue-collar, resource-industry voters that Mr Trump attracted again in large numbers in last weeks presidential election.
Yes, President-elect Biden will recommit the US to the 2030 Paris targets that Australia agreed to under Tony Abbott, and to net zero emissions by 2050. But by refusing during the campaign to back a carbon tax or carbon border tariff, Mr Biden sought no mandate for the radical Green New Deal pushed by far left-wing Democrats.
The Biden administration will likely use executive orders to restore the climate change agencies and regulations gutted by Mr Trump. But the plan to spend $US1.7 trillion to achieve 100 per cent clean energy by 2050, which was to be partly funded by reversing Mr Trumps corporate tax cuts, will be blocked by a Republican-controlled Senate. The Democratic campaign was also rattled in Pennsylvania, with its big oil and gas sector, by Mr Bidens mere mention of an energy transition.
Mr Morrison has moved the Coalition towards the political centre on climate policy by pumping up gas as the necessary lower-emissions transition fuel to support unreliable renewables in keeping the lights on as coal-fired power stations are phased out in line with their natural use-by dates. Labor seemed also to be moving to the centre after its 2019 election defeat by dropping ambitious targets for reducing emissions by 2030.
Now Labors new climate civil war allows Mr Morrison to distance himself from the Coalitions remaining pro-coal agitators and to delay the likely inevitable commitment to a net zero target. In the meantime, however, Mr Morrisons energy technology road map including threats of government investment in fast-start gas plants hides the lack of a settled policy framework to encourage private investment in the next generation of technologies such as hydrogen power.
That died with Malcolm Turnbulls National Energy Guarantee, which aimed to allow the implicit price signals needed to lower emissions and deliver cheaper, reliable and clean power. And the Morrison government continues to send out confusing signals on private investment in gas development, threatening Australias export revenue.
Without a credible national energy policy, state governments are going their own way, further confusing the price signals for private investment. The NSW Coalition governments $32 billion renewable energy plan includes government price guarantees that push the risk from investors to consumers, amid optimistic estimates of the technical capacity of pumped hydro and batteries to maintain reliable power supplies.
Whats really needed is a politically stable policy framework that provides clear signals to private investment, and which includes carbon capture and storage (supported by Mr Biden), permits emissions-free nuclear power (as used in North America and Europe), and allows fossil-fuel-dependent Australia to combat global warming by contributing to lowest-cost abatement around the world.
Mr Morrison has the political edge in the nations climate wars. Now he needs to turn that into a more rational energy policy.