E&OE….
Topics: Renewable Energy Target, emissions projections
DAVID SPEERS:
Today the Minister for the Environment, Greg Hunt, has been meeting with representatives of the renewable energy sector. He joins me now. Minister, thanks for your time.
GREG HUNT:
Good afternoon, David.
DAVID SPEERS:
You’ve been meeting with the sector, Cabinet’s been meeting as well today – what is your position as of this afternoon in relation to the target?
GREG HUNT:
Well we are looking to double the amount of renewable energy that’s been installed under the target in the period to 2020. So, in just over fifteen years we’ve had a significant amount put in but we’re looking to double that in the next five to achieve what would be an approximately 23% Renewable Energy Target. So that is…
DAVID SPEERS:
So what does that mean for the actual number of what the target should be?
GREG HUNT:
Look, you can understand that I won’t speculate on the fine detail of the negotiations, but I think what Australians need to understand is we’re looking at a figure of 23% and why that? That’s because what we need to be able to do is ensure that the trade-exposed sector which Labor itself has conceded is under terrible threat from the target in its broken form is given the space and an exemption.
To ensure that we don’t drive families to a position where they face a $90 per tonne carbon tax equivalent, which is the penalty if all of that renewable energy which was mandated in law isn’t built and nobody believes it’s going to be. So we want 23% which is a significant increase, a doubling of what’s already there. But it will prevent us hitting a penalty of $93 a tonne for carbon tax equivalent.
DAVID SPEERS:
What does 23% equate to in terms of gigawatt hours?
GREG HUNT:
Look, we’re obviously negotiating over the 30,000 mark but beyond that I never go into the fine detail of negotiations, as much out of respect…
DAVID SPEERS:
Well you have previously though, just to be fair, I don’t want to – make sure I’m not misinterpreting but you were clear about the 32,000 gigawatt hours. Is that now more flexible?
GREG HUNT:
Look, I myself have not referred to specific figures and I’ll continue that practice because I think that that’s the most respectful way to deal with industry and the most respectful way to deal with both the Opposition and the crossbench. And we would prefer, as we’ve always said, to achieve a bipartisan agreement. It has been disappointing that after 12 months the ALP has not put a single figure on the table…
DAVID SPEERS:
Well they’ve said…
GREG HUNT:
…but the crossbench has been constructive. They used the same figure with no change in formulation, no specificity, in over twelve months.
DAVID SPEERS:
Labor said a mid to high 30,000’s. So 35,000, which seemed to me to be mid-30,000’s. What’s wrong with 35,000 gigawatt hours?
GREG HUNT:
It’s most importantly, remember where we all agreed on a 20% target. We’re now heading, we’re now offering a 23% target which is well above what was ever promised or intended. The challenge that the country is facing is that the total electricity consumption hasn’t just fallen short of where it was expected to go, but has dropped in real terms.
DAVID SPEERS:
And that can keep changing which is why the percentage figure – sorry to get technical here – but the percentage figure can be a more uncertain one that the actual gigawatt hours.
GREG HUNT:
Well we are willing to settle on a specific number, but that’s part of the discussion…
DAVID SPEERS:
So what’s wrong with the 35,000 gigawatt hours?
GREG HUNT:
Well the problem with going to a figure which simply can’t be built out, which can’t be achieved with actual construction over the next five years is that you end up hitting what’s called a penalty, if you don’t build it all there’s a penalty and that penalty takes the form of a carbon tax equivalent four times higher, at $93 a tonne…
DAVID SPEERS:
And you believe that’s the case with 35,000 – that it cannot be achieved without…
GREG HUNT:
Yes I do, I really do. And indeed the Climate Change Authority said that they thought the figure of 33,000 was the absolute maximum that could possibly be built by the industry by 2020.
DAVID SPEERS:
Alright. So anything above that would cost energy users money?
GREG HUNT:
In particular there are two effects. One is a cost for houses and so for pensioners and for low income families, they get hit with significantly higher electricity charges and they’re the people least able to afford it. Secondly, Australian manufacturing and especially metal producers, cement, other forms of manufacturing have very high costs which would suddenly skyrocket and they are, frankly, terrified of a figure which is too high, unrealistic, which would then lead to a $93 carbon tax equivalent and…
DAVID SPEERS:
Just on that penalty…
GREG HUNT:
…and put many of them out of business.
DAVID SPEERS:
Just on the penalty, I was mentioning that if you don’t get the deal done by the end of the month that kicks in, is that?
GREG HUNT:
Now there are two different things here. That penalty is something that would accrue over the next two to three years once the surplus of renewable energy certificates runs out. There are other costs to industry which are going to develop in coming weeks and we would like to strike this agreement before the end of the month but there are days where it feels as if we’re the only ones pushing for the agreement.
Although I think there has been much more constructive work from the Clean Energy Council. I was very happy with how things finished today. I think we are very close, but I would say to the ALP because I know some really want a deal and others perhaps not less – now’s the time to work with the Clean Energy Council and to come to us. At the end of the day we can double the amount of renewable energy…
DAVID SPEERS:
Hang on, hang on. You’re saying that…
GREG HUNT:
…hit 23% and get a good outcome.
DAVID SPEERS:
Yeah ok but you’re saying that Labor needs to come to you. Have you got a meeting scheduled this week?
GREG HUNT:
Look, we’re always happy to meet, there’s an open invitation. My door’s always open, Ian Macfarlane’s door is open and we met, I think, a week ago and they unilaterally said that they were walking away until Christmas, unless something else changed. We’ve been meeting, they went on strike. Oddly enough, they went on strike but then the aluminium unions effectively forced them back because the workers were saying we’re desperate for you to be part of this and after a year…
DAVID SPEERS:
Labor have said…
GREG HUNT:
…haven’t changed their formula at all.
DAVID SPEERS:
Labor have said that it’s essentially your fault the talks stopped, because you were putting a take-it-or-leave-it approach with the 32,000.
GREG HUNT:
Well of course we’ve come up very, very significantly. The ALP by contrast has not moved once. They’ve yet, in a year, to put an actual figure on the table. They’ve yet, in a year, to move at all. And if you said to the Australian public there was 20% on the table at the election, now there’s 23%, I think most people would say that’s pretty fair and that’s pretty reasonable.
DAVID SPEERS:
Now this is – the Renewable Energy Target helps bring down our emissions. You’ve released figures today showing that we are actually on track to achieve the target of 5% below 2000 levels by 2020. What have been the main factors in achieving that?
GREG HUNT:
Well it’s actually the same cause, underlying all of this, is a reduction in electricity consumption. Both projected increases, which have never eventuated, and actual decreases which were never anticipated. I remember in Opposition, we said our real emissions were far lower that the figures used to justify the carbon tax by the ALP and they mocked us. Strangely, from Opposition, with scarce resources we got it right, whilst the ALP, the Government of the day, got it massively wrong.
DAVID SPEERS:
They say the carbon tax achieved more than they had expected.
GREG HUNT:
Well I can tell you the exact figures. In the six years prior to the carbon tax, there was a 55 million tonne reduction. In the two years of the carbon tax, there was a 12 million tonne reduction. So the rate of reduction and emissions during the period of the carbon tax was far slower, dramatically slower, than in the years before the carbon tax…
DAVID SPEERS:
Because of the Global Financial Crisis?
GREG HUNT:
Well actually, it’s largely been a change in electricity consumption. Some of the big changes pre-dated the Global Financial Crisis. There has been a change in the structure of the Australian economy. We saw it, we could see it, we forewarned about it, we said that it was a positive element in some respects, negative in others because manufacturing, affected by high electricity costs, has been driven overseas.
DAVID SPEERS:
If we’re doing so well on this front, when are you going to announce the post-2020 target and are you going to be more ambitious about it?
GREG HUNT:
Look we will announce a post-2020 target in the mid-year period. That’s when we always said we would do it and that’s in line with many other countries in the world. It’s important, I think, for viewers to understand there are three Kyoto periods. The first was 2008 to 12. We beat our target significantly. We were one of the few countries to do that.
The second, the period from 2012 to 2020, we’re also going to meet or beat our target and then we’ll become one of the very few countries to have done it twice in a row. And post-2020, we do want a good global deal, we will put a very constructive contribution on the table and I think that the world can avoid the Copenhagen failure at the end of the year, at the Paris Conference, which is about bringing together the nations to set a course for the coming decade.
DAVID SPEERS:
Environment Minister Greg Hunt, thank you.
GREG HUNT:
Thanks very much David.
(ENDS)