There are signs the Government may succumb to pressure from the Opposition, Greens and the renewable energy industry and de-couple its Renewable Energy Target legislation from the CPRS next week.
The bill is the second item scheduled for debate on Monday in the House of Representatives despite the Government previously insisting that it was inseparable from the CPRS bills, which were defeated yesterday in the Senate.
On Wednesday in Question Time the Prime Minister appeared to leave the door open on the issue when he said “if those opposite intend to vote against the Carbon Pollution Reduction Scheme in the Senate … could I suggest to those opposite that they therefore have an obligation to advance what alternative scheme they have by way of compensation regimes under the renewable energy target.”
Crikey understands that after their Lateline debate on Tuesday night, Greg Combet and Greg Hunt, who has repeatedly invited Combet to negotiate with him, spoke on the issue and the two had a further discussion yesterday to the effect that the Opposition would produce an amendment to de-couple the bills, which are linked by a definitional reference in the section of the RET bill that provides for an exemption for emissions-intensive trade-exposed industries.
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The amendment, likely to emerge later today, would involve a straightforward cut-and-paste from the CPRS bills.
If passed in its current form, the Renewable Energy Target would be imposed without a legally workable exemption for big electricity users — an outcome the Greens would welcome, but not the Government or the Coalition.
The exemption will allow electricity retailers to continue to provide the biggest electricity users with cheap coal-based power without incurring penalties for failing to reach the renewable energy target. The biggest beneficiary will be the aluminium industry, which by itself uses 15% of the nation’s electricity. The industry primarily generates its own power, meaning it will have no incentive to switch to renewable energy sources despite the aluminium industry’s reliance on renewables such as hydro-electricity elsewhere in the world.
The amendment would represent another big win for Australia’s worst polluters.
The Government has used the link to seek to pressure the Opposition to pass the CPRS bill, but all parties and the renewables industry quickly criticised it as a political stunt. It now finds itself having to either reverse its rhetoric about the need for the bills to stay together or face a backlash from the renewables industry for holding the sector hostage as part of its political brinkmanship.
Combet’s role also reflects an emerging pattern in which Combet’s senior Minister, Penny Wong, appears inflexible and hardline while Combet quietly tries to negotiate with key stakeholders. It is Combet who has been negotiating with the coal industry on more compensation for the sector in lieu of its inclusion as an EITE.
While this looks a deliberate good cop/bad cop ploy on the part of the Government, Wong’s complete disregard for any form of negotiation has been a hallmark of her handling of emissions trading right from the start. At no stage has Wong offered to seriously negotiate with either the Coalition or the Greens on the CPRS bill, insisting robotically that the Government had “got the balance right”, even as other Ministers like Julia Gillard and Nicola Roxon negotiated high-profile bills through the Senate.
As things stand, Wong is one of the few ministers who have failed to implement key Government election commitments.