One of Labor’s election promises on energy and emissions is to strengthen the existing cap-and-trade system for large CO2 emissions, known as the safety mechanism. Under this, major polluters are required to purchase or issue CO2 credits to compensate for any direct emissions that exceed an agreed baseline. Labor’s plan is to reduce emission baselines for these emitters over time. “The government will then have to withstand the pressure from the industry to keep ambitions low,” Jotzo said, warning that the industry will lobby hard to ease the baselines.
That is exactly what happened under the coalition government after it created this cap-and-trade scheme. Companies were constantly pushing for adjustments to their baselines, which eventually resulted in a increase of 32 percent in the emissions they were allowed to produce.
Another pillar of Labour’s election platform was its national strategy for electric vehicles. In 2020, less than 1.4 per cent of all light vehicles sold in Australia, electric cars were compared to about three quarters of all light vehicles sold that year in Norway. Overall, only 0.12 per cent of all light vehicles in Australia are electric. Manufacturers like Volkswagen have refrained from entering the Australian market because of one lack of incentives for electric cars.
Then go into the election, Labor promised to remove import tariffs and lower taxes on some electric cars and to speed up the roll-out of charging infrastructure. But they have not gone far enough, says Jotzo. “They have not committed themselves to doing what in many countries is the single biggest driving force for the inclusion of electric cars, and that is to introduce emission standards for the entire fleet,” he says. Requiring all automakers to meet emissions targets across their entire range encourages massive investment in electric models to compensate for emissions from petrol and diesel models.
But the biggest fly in Australia’s climate ointment is its fossil fuel reserves – particularly coal and gas – and the question of how the country can safely and smoothly switch away from them both for domestic use and export.
“Because it is a mining resource, the government owns it, it generates royalties to the government, and renewable energy does not,” said Samantha Hepburn, professor and expert in mining and energy law at Deakin University in Melbourne. In contrast, renewable projects will generate very little revenue for the government. “When we talk about energy conversion, I do not think that phrase really captures it – it’s a revolution.”
Some progress with renewable energy was made under the coalition government. A long lasting targets for renewable energy required large energy producers to generate 33 terawatt-hours of renewable energy by 2020, and this was easily met in 2019. But the absence of a new target created a climate of uncertainty in the renewable energy sector, which saw decline in investment in new projects.
Labor’s “Powering Australia” policy now promises to upgrade the grid to enable better integration of renewable energy, to invest in solar banks and community batteries across the country and to implement low-emission technologies.
But the current global gas crisis, triggered by the Russian invasion of Ukraine, has plunged Australia into a world of energy misery, largely of its own production. There are no export controls on its extensive east coast gas reserves, which are now being sold at incredible prices in the international market, with no one set aside for domestic use. Domestic gas prices have therefore skyrocketed and there is not yet enough renewable energy to screw up. Meanwhile, Australia’s aging network of coal-fired power plants has been steadily dismantling over the past decade.