Malcolm Turnbull and premiers clash over climate, topping a disastrous week for Coalition
Prime Minister Malcolm Turnbull's disastrous week-long spat over a climate-change policy review has culminated in a showdown with state premiers in Canberra, and criticism from the nation's chief business group.
Infrastructure, competition and family violence policies also provoked fights between the Prime Minister and state premiers at Friday's Council of Australian Government meeting.
But it was climate policy that dominated the COAG wash-up, with Mr Turnbull accused of trotting out "infantile slogans" in place of evidence-based policy by South Australian Premier Jay Weatherill.
WA Premier Colin Barnett argued a market-based carbon price mechanism had some role to play in reducing emissions and Victorian Premier Dan Andrews advocated a "proper" examination of climate policy that did not rule out anything - including an emissions intensity scheme - before the federal review was completed.
The COAG meeting capped a bad week for Mr Turnbull and the Coalition, which saw the government abandon plans following a backbench revolt to examine the use of an emissions intensity scheme as part of its 2017 review of climate policy. Environment Minister Josh Frydenberg - who initially said the review would examine the scheme - was thrown under a bus even as he reversed course and said it would not be considered.
The Business Council of Australia, usually a rusted-on supporter of the Coalition, on Friday slammed it for ruling out any prospect of such a scheme being used to reduce carbon emissions while ensuring energy was affordable and the supply secure.
"The categorical ruling out of mechanisms to achieve this transition [to a low emissions economy], or imposing arbitrary moratoriums on lower-emissions fuels such as onshore gas, limits Australia's options," chief executive Jennifer Westacott said.
Ms Westacott said at least two more large coal-fired power stations were expected to close in the next decade and new investment would be needed.
"If Australia's electricity system is to significantly reduce its emissions by 2050 then renewable energy will be a key part of this transition. However, both the pace of transition and resulting market structure will be critical and we must get it right for the sake of all electricity customers," she said.
"Without all the policy options on the table, Australia risks relying on expensive subsidies to renewable energy or blunt regulatory instruments which would increase costs for industry and their customers."
An emissions intensity scheme sets a limit on how much a power station can freely emit for every unit of power generated. Cleaner generators that emit less than the limit earn credits, and sell them to dirtier generators above the baseline.
Presenting an issues paper on the electricity market to COAG, chief scientist Alan Finkel cited evidence from the Australian Electricity Market Commission that it would be cheaper to use an emissions intensity scheme to help reach national climate targets than any other option considered, including doing nothing.
Fairfax Media revealed on Thursday that modelling for the commission found electricity bills for consumers and businesses would be up to $15 billion lower over the decade to 2030 if an emissions intensity scheme was in place than if there was no policy.
The modelling was released on Friday.
Defending his government after the meeting, Mr Turnbull ducked questions about the potential for an emissions intensity scheme to actually reduce prices and vowed their would be no carbon tax or emissions trading scheme under his government.
"Critical to maintaining our international competitiveness is energy prices and energy security. We need to ensure that energy is reliable, we need to ensure that it is affordable. We need, of course, to achieve the emissions target cuts that we have agreed to in the Paris treaty," he said.
"The most striking observation from Dr Finkel this morning was that in the last six years household energy prices have risen by 61 per cent, inflation has been 14 per cent . . . that is a massive increase in the burden on Australian households."
But Mr Weatherill suggested Mr Turnbull had misrepresented what an emissions intensity scheme would do and said it was mischievous to conflate it with a carbon tax or emissions trading scheme.
"It was disappointing to see earlier this week the Prime Minister rule out an emissions intensity scheme", he said, adding that Mr Turnbull had reverted to the "infantile slogans" he had criticised before becoming PM.
"The whole point of [chief scientist Alan] Finkel's recommendation is this puts downward pressure on electricity prices," he said.
Dr Finkel told the COAG meeting the electricity grid was undergoing unprecedented change, and leaders had a once-in-a-generation chance to reform it during the inevitable shift to a cleaner supply.
Speaking after the meeting, Dr Finkel told Fairfax Media there was evidence an emissions intensity scheme was compatible with maintaining a reliable grid.
He said benefits included that it would encourage low emissions technology of any kind, whether baseload low-emissions gas or renewable energy.
While Mr Turnbull maintained Australia could meet its climate targets with existing policies, Dr Finkel said they were not consistent the 2030 goal set in Paris. "I don't think it's an impossible target to be achieved [but] we need to be methodical about how we get there," he said.
He stressed that the security of the electricity grid was not as strong as in the past, and investors had lost confidence and wanted a coordinated national approach to energy and climate policies.
And Dr Finkel said electricity prices were high – up almost 50 per cent in six years - partly due to network expansion, but also due to high gas prices. He called for more to be done to increase gas supply.
The big three Labor states - Victoria, Queensland and South Australia - all refused to sign up to competition and productivity reforms after the meeting, citing a lack of federal cash.
NSW Premier Mike Baird nominated infrastructure spending as his key priority for the meeting, citing the "sobering" drop in GDP growth on Wednesday and argued governments needed to set new infrastructure goals to drive new economic growth.
He argued for billions of dollars to be pumped into infrastructure, but Mr Turnbull responded bluntly: "We are not an ATM."
Premier Andrews expressed his disappointment that a national deal on family violence leave had not been reached.
The meeting's put off the issue until a decision by the Fair Work Commission, which is considering an application to include an entitlement of 10 days' leave in all modern awards.
Queensland Premier Annastacia Palaszczuk said waiting for the decision was a missed opportunity, and suggested COAG meet in regional Australia, where people were hurting in the two-speed economy.
- with AAP
The story Malcolm Turnbull and premiers clash over climate, topping a disastrous week for Coalition first appeared on The Sydney Morning Herald.