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Australian electricity industry bodies call for carbon policy certainty

Australia's electricity industry has asked the country's state and federal governments to adopt consistent policies that will help provide predictability of energy prices and security of supply to help meet Australia's commitments to carbon abatement targets.12 Dec 2016

There is an urgent need for "nationally integrated, predictable policy and regulation", Australian Energy Council and Energy Networks Australia said in a joint statement.

The energy bodies called for "national, market-based measures for achieving carbon abatement, preferably an emissions intensity scheme for the electricity sector or an economy-wide price on carbon", to help companies to move towards renewable energy sources.

Without such a change, customers face higher prices and an increasingly unstable electricity supply, they said.

Technology-specific and jurisdictional measures like state-based renewable energy targets are "a second-best measure", the statement said.

Australian governments must "urgently commit to implement nationally consistent, enduring and market-based policy frameworks to achieve current and future carbon abatement targets. This will provide the long-term certainty and predictability which supports needed investment," it said.

Australian prime minister Malcolm Turnbull last week ruled out introducing carbon pricing only days after his environment minister announced that the government would be exploring all options, including an emissions intensity scheme, as part of the government's planned 2017 review of climate policy, Reuters reported.

Australia-based energy expert Anthony Arrow of Pinsent Masons, the law firm behind Out-Law.com, said: "The combination of completely inconsistent policy frameworks across the various states and the federal government's recent backflip on policy direction is a dangerous cocktail for our electricity industry."

"The renewable industry in particular suffered significant stagnation under the former Abbot-led government after abolition of the carbon tax and material delays to climate policy," said Arrow. "Investor confidence has only recently been reignited with the federal government's signing of the Paris agreement and commitment to 33,000 GWh of electricity coming from renewable sources by 2020, but this latest retraction is surely a step in the wrong direction."

"It really is time for our federal government to allow an independent climate change expert to make recommendations on policy options without political persuasion or influence. Without looking at all of the options, it is difficult to see how we are able to make a completely informed decision in the best interest of the economy and the environment. Cutting off the options for a future tax on carbon or emissions intensity scheme is both unhelpful and short-sighted in the context of the Paris agreement and achieving our 2020 targets and beyond," Arrow said.