Hewson's View: No conclusion to energy crisis

This week saw a significant Energy Conference organized by the AFR with all the usual suspects in attendance: key politicians, regulators, electricity and gas generators, distributors, retailers, and others.  

Lay them all, end to end, and we still wouldn’t reach any specific conclusions – indeed, still just a mish-mash of conflicting views.

There were fundamental differences of opinion on the causes of and blame for rising power prices, on the capacity of the system to affordably meet our future needs, on whether or not there is a gas shortage, and so on.

The only message was that the issue of energy policy has been left to drift for so long by governments of both persuasions, both state and federal, that there are now no easy, short-term, solutions – electricity and gas prices will continue to rise, and the risk of black-outs remains very real.

Energy and Environment Minister Josh Frydenberg seemed to back off from adopting a Clean Energy Target on the grounds that the cost of renewables is falling dramatically.

However, the Chief Scientist Dr Alan Finkel, whose recent report recommended it, thought the target was still essential to provide certainty for the necessary transition to achieve our 2030 Paris commitments on emissions reductions.

Opposition Leader Bill Shorten offered bi-partisan support for a target, but he still looks like he is attempting to wedge Turnbull on the issue, hoping to capitalize on divisions within the government on such a target.

NO TARGET: Federal Energy minister Josh Frydenberg speaks at the National Energy Summit on October 9. Photo: Ben Rushton/Fairfax Media.

NO TARGET: Federal Energy minister Josh Frydenberg speaks at the National Energy Summit on October 9. Photo: Ben Rushton/Fairfax Media.

Ex-PM Tony Abbott compounded the government’s difficulties with a speech in London to a noted climate deniers group, basically ditching climate science – indeed, arguing that global warming may be beneficial, or certainly better than the policy responses.

While this may cut with some of his conservative colleagues, Abbott’s credibility on climate is now actually non-existent, as he has now held the full spectrum of assessments from it being “significant” to “crap”, over the last several years, and his ex -chief of staff Peta Credlin has recently conceded that his opposition to Gillard’s attempt to put a price on carbon was just short-term opportunism.

The impact of rapidly rising electricity and gas prices, as a key element of the cost of living or doing business, threatens to be a dominant issue at the next election. It is crying out for government leadership.

The climate challenge is not a matter of religion or ideology, but of science. The only way most of us even know the problem exists is that climate and other scientists have done what is not in their nature to do, namely “agree”. It is the very essence of science, and the advancement of the frontiers of knowledge, to “disagree” – to contest each other’s hypotheses and research conclusions. But at last count, some 97 percent of climate scientists have agreed on the magnitude and urgency of the climate challenge, globally supported by a host of other scientists, governments, businesses, and key representatives of civil society.

The climate challenge is, without exaggeration, the most important global, policy challenge of the first half of this century, in economic, social, political, and moral terms. To fail to recognize the magnitude and urgency of the challenge, and to fail to act decisively, is simply inter-generational theft, leaving a horrendous legacy to future generations.

Against this background, to have to continue to endure all the political point scoring, and blame shifting, on climate and energy policy in this country, leaving us live with rising power prices, and little real progress on the climate challenge, will have defining political consequences for governments.

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