As Australia phases out renewable energy, UK phases out coal
UK to phase out coal as Australia phases out renewable energy, Business Spectator TRISTAN EDIS 16 FEB,
The leaders of the UK’s three main political parties – Tories, Labour and the Liberal Democrats – have chosen to put efforts to address climate change above politics.
Prime Minister David Cameron from the Tories, Labour leader Ed Miliband and the Deputy PM and leader of the Liberal Democrats Nick Clegg have put out a joint statement – which echoes comments by US President Barack Obama – declaring that climate change is one of the most serious threats facing the world. According to the statement they argue climate change is not only a threat to the environment but, also, “national and global security, to poverty eradication and economic prosperity”.
The agreement is a major step forward because, while it might be vague on policy detail, it sets out some long-term principles that are critical to support investor confidence in low carbon energy infrastructure involving billion-dollar price tags and with lifetimes of several decades. It makes a stark contrast with Australia where investors (other than mums and dads buying solar systems) have abandoned power generation as a result of Tony Abbott tearing up the political consensus that had been achieved on pricing carbon and the Renewable Energy Target.
The agreement sets out that, irrespective of who wins the UK election in May, all three parties agree to:
- Phase out the use of coal in power generation (unless emissions are captured and stored) while accelerating the development of an energy efficient, low carbon economy;
- Continue the practice as set out under the UK’s Climate Change Act of having an independent institution (the Climate Change Committee) plan out carbon pollution budget constraints between now and 2050 with the aim of achieving an 80% reduction in emissions by 2050 compared to 1990 levels.
- Seek a legally binding international agreement to limit temperature rise below 2 degrees………..
Just recently the chief executive of the Australian division of major global bank BNP Paribas commented on Australia’s rewind of climate policies: “It makes some international investors more reserved about coming to Australia under those circumstances.”
As an illustration, when the Abbott Government announced that its review of the Renewable Energy Target would put everything on the table, including complete abolition of the scheme 15 years short of its end date, it left investors stunned. The head of the review, Dick Warburton, then made the extraordinary statement to media outlets that he would actively consider the possibility of not just abolishing the scheme, but also leaving investors in existing plant worth billions of dollars without compensation. For the investors involved this represented a loss of 50% of their revenue, a result far worse than anything proposed under the original mining tax put forward in the Henry Review……..
the safest thing for investors to do is sit on their hands or look elsewhere, to places like the UK.
Follow @TristanEdis https://www.businessspectator.com.au/article/2015/2/16/policy-politics/uk-phase-out-coal-australia-phases-out-renewable-energy
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