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http://www.themercury.com.au/news/o...er-nations-radar/story-fnj4f64i-1227312220727


Emission reduction fund auction flies under nation’s radar

• by: PETER BOYER
• From: Mercury
• April 21, 2015 12:00PM

IN Gallipoli week we can be forgiven if we miss an event of note on Thursday, when the Federal Government releases results of its first emissions reduction fund auction.
The Government, too, seems to have its attention elsewhere. Apart from scant publicity about the closing of applications for ERF funding last week and muted comment from Environment Minister Greg Hunt, there’s been barely a peep from the Government.
This suggests there’s not a lot riding on the event, but in this year of the Paris climate summit nothing could be further from the truth. This first auction (“tendering process” is more accurate) will be an early test of an idea that’s been used in other countries for specific purposes, such as funding development of renewable energy, but never on such a scale or covering such a range of activities.
In a recent statement Hunt refers to “strong interest” from businesses in growing opportunities to cut emissions, but that was as enthusiastic as he got, in contrast to his ebullient publicising of the ERF a year ago.
When they haven’t been critical, economists have stayed silent on the ERF’s prospects for success. The lack of support seems to have the Government nervous.
The scheme drew initially on methodologies developed for a subset of the Gillard government’s carbon pricing scheme, the Carbon Farming Initiative. While ditching the parent scheme, the Abbott government kept its child.
With the rest of the world, the Government must make deep, early emissions cuts if it is to have an impact on climate. Improving the level of carbon stored in soils and trees is commendable, but these measures are slow burners, with little impact on emissions in coming decade.
Because of this the Government has formulated other ERF abatement methods that can have an immediate or near-term impact, like reduced or captured coal mine emissions and more energy-efficient buildings, trucks, aircraft, refrigerators and air conditioning plants.
Coal power generation is the big one. If ERF-approved methods applying to that source turn out to work we’ll see a measurable reduction in the overall figure. But the record reveals the only sure way to get significant cuts at coal power stations is to shut them for good.
The industry seems to be coming to that view. Last week the biggest player in Australian coal-fired power, AGL Energy, began preparing itself and shareholders for different future.
In recent years AGL and Macquarie Energy, the company AGL bought last September, have expanded their portfolio of coal plants in Victoria and NSW. But last Friday AGL’s new chief executive, Andy Vesey, announced an abrupt U-turn.
Vesey declared the company will close its coal-fired plants by 2050, and in the meantime will not buy new plants or increase the capacity of the ones it owns.
What’s interesting about Vesey’s announcement is the reason he gave for the decision — a desire to support the international goal of keeping global warming below 2C.
“To support the Commonwealth government’s commitment to work towards the two-degree goal, companies such as AGL need to take the lead,” he said.
Whatever he says publicly about the AGL decision, privately Tony Abbott won’t welcome it. His plans for coal in Australia’s economic future include selling the stuff abroad and burning it at home, allegedly because it makes cheaper energy.
The Government’s determination to reshape the climate debate on its terms knows no bounds. Last week it found $4 million to help bring the “Copenhagen Consensus Center methodology” of the controversial Danish academic Bjorn Lomborg to the University of Western Australia.
Lomborg’s speciality is politics, not science, but he claims scientists have exaggerated the need to reduce carbon emissions rapidly and says money is better spent on adapting to a changing climate.
Having lost Danish government support in 2012, Lomborg will be pleased to have a new home base. Others won’t be so pleased, having watched in dismay as the Government pursues big cuts to science and higher education spending. Against that backdrop, the Lomborg decision is a disgrace.
It’s yet more evidence that the Abbott Government cares little about lowering carbon emissions, and another blow to the credibility of its Emissions Reduction Fund.
Peter Boyer is a journalist with a special interest in climate and energy.