Ross Garnaut praises Clive Palmer's decision to block abolition of Renewable Energy Target

Economist and carbon pricing expert Professor Ross Garnaut says the Palmer United Party's position to vote to retain the RET and other key climate change bodies will have "important" and positive effects. "We're in a better position than we were before this news," he told the ABC's 7.30 program on Thursday. "We're in a better position than when we were facing abolition of carbon pricing, major tampering with the Renewable Energy Target, abolition of the Climate Change Authority, abolition of the Clean Energy Finance Corporation.

"It may not be the ideal way of doing things, but Mr Palmer's support for keeping existing arrangements will have important effects." On Wednesday, Mr Palmer revealed his party would vote with the Coalition in the Senate to repeal the carbon pricing scheme if lower power prices were locked in, a condition the Government says it is "happy" to enshrine in law. However PUP will vote to block the Government's bid to abolish the Clean Energy Finance Corporation, the Renewable Energy Target and the Climate Change Authority.

Professor Garnaut says retaining the RET will help Australia significantly reduce its emissions because "it's actually delivering and it will continue to deliver". "The Renewable Energy Target is a very powerful instrument for emissions reduction," he said.

 

Video: Mark Butler discusses PUP's stand on climate change policy. (Lateline)

 

"In the first two years in the current set of policies - carbon pricing, Renewable Energy Target, the whole lot of policies in place - emissions fell by 14 per cent in our electricity sector. "If the current policies are kept in place for the Renewable Energy Target, given what's happening to electricity demand, we'll find that by 2020 emissions in the electricity sector will be down by well over a quarter."

Mr Palmer also revealed his party would push for an emissions trading scheme similar to the one proposed by former Labor prime minister Kevin Rudd, but one that would only come into effect when Australia's main trading partners established similar schemes. The PUP leader met Prime Minister Tony Abbott on Thursday morning to discuss the minor party's policies just before debate resumed in the Lower House on legislation to repeal the carbon tax. The legislation passed on Thursday afternoon and will now be ready to be put before the new Senate as a likely first order of business. The billionaire businessman's party will hold three seats in the Senate, a balance-of-power role that has been bolstered by an agreement with the Victorian Motoring Enthusiast Party senator Ricky Muir.

Clean energy industries back PUP move

Environment groups and emissions trading experts are concerned there could be a possible carbon policy vacuum if the carbon price is abolished and the Government's Direct Action program is rejected by the new Senate. "The Government has said its current position is not to have an emissions trading scheme, but is to have Direct Action. Palmer has said he doesn't support Direct Action," carbon trading expert Martijn Wilder said. "So we'll probably find ourselves in a position, if this goes according to what's been said, that we'll have no cap whatsoever on emissions in Australia." He says Australia does not have time to waste without effective policy in place. "We'd be much better off retaining the emissions trading scheme that we've got, moving to a floating price immediately, and then tying in with schemes that are already operating around the world."

 

Video: Renewable energy sector welcomes PUP move (Lateline)

 

But the clean air industry has welcomed Mr Palmer's promise to block any move to cut the Renewable Energy Target. Managing Director of Ifigen Energy, Miles George, had anticipated a significant cut for the wind farm operator's 20,000 shareholders, most of whom are foreign institutional investors. "They would be very pleased that there is a voice calling for some stability in the legislation that would protect the value of existing investments made in good faith," Mr George said. "[And that] has the potential to provide a signal that will get our industry going again after two years of being frozen pretty much."

Mr Palmer also promised his party would vote against the abolition of the Climate Change Authority and the Clean Energy Finance Corporation.Martijn Wilder, head of Baker & McKenzie's Global Environmental Markets practice, says PUP's policy on the finance corporation is "a good outcome". "The act was set up to make investments. The corporation has been making investments and been making money, and a lot of those investments are received very positively," Mr Wilder said. "For many of the stakeholders looking to the CEFC for finance, it is a very positive measure and it will continue to produce abatement at almost no cost."

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