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Which Climate Change Policy is Best? We’ve broken them down so you can decide.

27 June 2013

As we edge closer to “E-Day” – the looming September election, a number of debates are heating up the political landscape. The price on carbon continues to be at the forefront – will it stay, or will it go? Amongst the ‘he-said, she-said’ chatter, it can be hard to distinguish what each party is actually proposing.

So, Energy Action clears the clutter and gives it to you straight – here’s what all the fuss is about:

On face value, the Labor Government has remained strong in backing their carbon pricing scheme and the “Clean Energy Future” plan; whilst the Opposition proposes to abolish ‘any price on carbon’. It’s not quite this clean cut.

The Labor Approach
The current Government’s approach to energy efficiency is now well known and publicised. The Government has committed itself to increasing the amount of renewable energy generated to 20% of total generation in 2020. The reaction has been split: some love it, some hate it, and many love to hate it! The Clean Energy legislation includes:

  • A carbon pricing mechanism – a fixed price period until 2015 – with the prices increasing from $23/tCO2 in 2012 to an expected $26.45 tCO2 in 2014. The carbon price will be levied on the top energy users within in Australia, including the electricity generators. Following this fixed period, the carbon pricing mechanism transition to an Emissions Trading Scheme (ETS) on the 1st of July 2015;
  • Household assistance packages, largely in the form of tax cuts and increases in a range of Government payments;
  • Support and incentives to businesses through the Clean Energy Fund where businesses can access financial assistance for energy efficiency related improvements. An example of one program is the Clean Technology Investment Fund.

The Coalition Approach

The loudest message we are hearing from the Opposition is their commitment to abolishing the price on carbon. Whilst technically this is true, they do maintain a climate change policy of their own. Until recently, details on this policy were light on, but there is now some clarity providing a little more to their story also. It’s important to note, they too have maintained their commitment to a 20 per cent Renewable Energy Target by 2020.

The ‘Coalition’s Plan for a Cleaner Environment’ is the competing policy to the Clean Energy Future Plan. The Liberals have outlined four key focus areas for their environmental Plan:

  1. The Clean Air policy incorporates their recently publicised ‘Direct Action Plan’ to reduce Australia’s emissions by 5 per cent by 2020. The intention is to establish an Emissions Reduction Fund to purchase the lowest-cost abatement through a reverse auction. They claim this “will be a true market mechanism for tackling climate change”. In addition, they propose to deliver one million solar roofs, the planting of 20 million urban trees to help green our cities and support for renewable energy projects
  1. The Clean Land policy is based on a ‘15,000-strong Green Army’, intending to help clean up and revegetate urban environments such as creek and river banks. This also incorporates Landcare reform to refocus on community-based environmental work, and the task of simplifying environmental approvals while maintaining standards.
  1. The Clean Water policy incorporates a sustainable plan for the Murray Darling Basin, a Water Security plan and protection of the Great Barrier Reef.
  1. Their Heritage policy is based on both community and heritage icons programs to instil a new sense of pride in Australia’s heritage.

Although the two opposing parties have agreed that the Renewable Energy Target should remain constant there are clearly multiple facets in which the approaches contrast. The Government will continue with their pricing of carbon whilst the Opposition will focus on investing in infrastructure and restructuring the NEM.

Finally, the message to business our view remains the same, avoid the uncertainty surrounding the election and the log jam of energy contracts being processed at the same time. Go to market early and ensure that you take a carbon exclusive contract to guarantee that you won’t be paying for a scheme that may not be existent come September.

Get in touch with Energy Action today and request a carbon exclusive contract.