Energy Green Paper boosts energy productivity but risks policy instability Media Release

Sep 23, 2014 - 3:13pm

The Climate Institute welcomes the focus on energy productivity in the Energy Green Paper released today, but warns about the failure to consider long-term emission reduction risks ongoing policy instability in the energy sector.

“The high point of the Energy Green paper is its recognition of the importance and economic benefits of a coherent and ambitious approach to generating more economic output for less energy, or energy productivity,” said Erwin Jackson, Deputy CEO of The Climate Institute.

“We welcome the Energy Green Paper’s consideration of a national focus on energy productivity to underpin measures like higher standards for energy efficient appliances, and vehicle efficiency standards. These measures can reduce pollution while saving consumers and business money.

“On the downside, the Energy Green Paper notes the transformation underway in global energy markets as countries make increasing efforts to reduce their emissions, but steps back from positioning Australia to deal with international shifts to clean energy and carbon constraints. Similarly, the paper recognises the distorting effect of subsidies on energy markets, but fails to address the largest energy subsidy of all - the multibillion dollar subsidy provided to polluting companies by letting them pollute for free.”

By ignoring the costs of carbon pollution, the paper sets up government policy for failure.

Analysis released today by The Climate Institute estimates this carbon subsidy to polluting Australian energy at $14-39 billion a year, and growing. Carbon-intensive electricity alone receives an annual subsidy of $7-20 billion. If the Renewable Energy Target is weakened, the annual carbon subsidy will increase by up to several billion dollars a year.

“By ignoring the costs of carbon pollution, the paper sets up government policy for failure. Turning a blind eye to the massive carbon subsidy only perpetuates our distorted markets and unstable regulatory environment. This punishes investors, consumers and ultimately all Australians.”

“Ultimately, a bipartisan approach to decarbonising Australia’s energy sector needs to be central to discussions around energy policy. A good place to start would be a return to bipartisan support for a strong Renewable Energy Target, along with investigation of a regulation to ensure the closure of surplus high-carbon coal generation capacity. ”

“Both major parties accept the international goal of working to avoid 2°C warming but neither has yet accepted that this requires a longer term decarbonisaton goal. Australia’s energy policy debate has been in a stalemate with a short-term fixation to 2020, when all parties should be looking much further ahead,” said Jackson.

For more information   
Kristina Stefanova | Communications Director, The Climate Institute | 02 8239 629

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