Martin Ferguson will come in for criticism for his decision to shut down the “contract for closure” negotiations that form part of the government’s carbon pricing package; indeed, he has already done so from the Greens. But if there is a significant gap between what power generator owners were prepared to accept and what the government was prepared to offer, it is the correct decision.
Contract for closure was always one of the most poorly thought-through aspects of the carbon pricing package. The government has already shelled out $1 billion to power stations, primarily in Victoria’s Latrobe Valley, to help them cope with the carbon tax. Paying them to shut up shop — when the economy globally is shifting to cleaner technology — was always galling, and designed to obscure the fact the government’s carbon price wasn’t really going to do the heavy lifting required to start decarbonising one of the world’s most carbon-addicted economies.
A persistent problem with Australia’s inept approach to curbing greenhouse emissions over the last decade — and yes, there has been an approach, one that would be generously described as “half-baked”, revolving around grants programs — has been the absurdly high prices, often several hundred dollars, per tonne of abated carbon dioxide obtained. Contracts for closure risked exactly this sort of outcome without strong and disciplined negotiation on the part of the Commonwealth.
Martin Ferguson is no particular friend of the renewables sector or of the need to decarbonise our economy. He is a relentless advocate of the extractive and fossil fuel industries and nuclear power. But on this issue, his call has been the correct one. There are less expensive ways to reduce our emissions than bribing coal-fired power generators to shut down.
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