LEAN response to CFMEU on renewable energy targets

The CFMEU has expressed its opposition to LEAN's call for 50% of our electricity to be sourced from renewable energy by 2030. Following is LEAN's response.

Read the original CFMEU letter here. Following is LEAN's response:

We write to you in response to a recent letter (April 24) from Tony Maher of the CFMEU in which he stated the CFMEU’s support for science based emission reduction targets and its opposition to a 50% Renewable Energy Target by 2030.

LEAN’s campaign calls for the Australian Labor Party to adopt the independent Climate Change Authority’s emission reduction targets and a 50% renewable energy target by 2030. Over 90 sub-branches of the Australian Labor Party around the country have endorsed this position. More do so each week. These two proposals are consistent with Labor’s current National Policy Platform. Any weakening of this position leaves Labor exposed on many fronts.

Emission Reduction Targets

We welcome the CFMEU’s support for emission reduction targets based in science and international action. LEAN is campaigning for adoption of the Climate Change Authority’s recommended emission reduction targets. The Climate Change Authority was created by the last Federal Labor Government to give independent advice on climate policy including setting targets by consideration of the science, the international context and economic implications.

In late April 2015 the Climate Change Authority published recommendations for Australia’s emissions reduction targets of 30% by 2025 (on 2000 levels) and 40-60% by 2030. LEAN’s campaign simplifies this to a call for the mid-point of these recommendations, that is 50% pollution reduction by 2030.

These targets are not unrealistic. The US has committed to 26-28% reduction by 2025 (on 2005 levels), Europe to 50% by 2030 (on 1990 levels) and China has committed to peaking emissions by 2030. 

To prevent catastrophic changes in our way of life, we must keep global warming within 2 degrees. According to the Intergovernmental Panel on Climate Change (IPCC) and the World Bank, business as usual will commit us to at least 4 degrees of warming by 2100.[i] This will unleash massive social and economic dislocation. There is no path for Labor on this issue, apart from taking leadership.

We are pleased the CFMEU agree with us on this point.

50% Renewables by 2030

While an ETS is essential, it alone will not allow Australia to prosper in a 21st century low-carbon global economy. We must also transition the energy sector.

CFMEU Claim: RETS are poorly targeted and ineffective relative to their supposed goal of reducing emissions

The CFMEU seems to have misread our campaign for increased renewables and it is important to clarify our campaign aims. LEAN is calling for 50% of our electricity to come from renewable energy by 2030, not necessarily a 50% Renewable Energy Target (RET). 50% may be achieved with the RET or with a mix of other policy tools.  Furthermore, the CFMEU is inaccurate in suggesting our focus is only on electricity.

LEAN’s call for 50% renewable energy in the electricity sector is the headline in a policy that calls for broader energy transition including increases in energy efficiency and fuel switching across the economy to lower intensity fuels. Our proposals for energy policy are grounded in the modelling for decarbonising the Australian economy done by Monash University’s ClimateWorks.[ii] ClimateWorks, chaired by former Victorian Labor Minister, John Thwaites provides robust scientific and economic analysis and argues that increasing renewable energy to 50% of electricity by 2030 is an essential part of a broader approach to committing Australia to playing its part in keeping warming within two degrees.

CFMEU Claim: Higher prices for electricity will impact manufacturing and households

LEAN supports all the strategies developed in the Clean Energy Future Package to support low income Australians.

According to the Queensland Competition Authority the RET was responsible for 2% of the average consumer’s electricity bill in 2014-15, while network poles and wires accounted for 44% of an average bill.[iii] Furthermore evidence is that over the last years, as the share of renewables has increased in the electricity sector, electricity prices are falling. The recent AER determination in NSW is an example of this.[iv] All analysis, including that commissioned by the Abbott Government’s Warburton Review shows that over time renewable energy will reduce, not increase, electricity prices.

Keeping energy prices under control is an important issue for manufacturing. That is why LEAN supports the AWU’s campaign for a National Gas Reservation policy as part of a transition strategy. But equally important to the future of this sector is creating new manufacturing opportunities. By undermining the existing RET, Tony Abbott has overseen the loss of 2300 jobs in the renewable sector since 2012.[v] Keppel Prince, a manufacturer of wind turbines in Portland, Victoria put off 100 workers in October 2014.[vi]

We must look to the future. Hasn’t it traditionally been the role of Labor to stand against conservatism and vested interested in economic policy? Cross subsidies exist across our electricity sector and a modest impost to create new jobs and industries is surely something the CFMEU supports.

Establishing credible renewable energy targets will inevitably drive more jobs in construction. The Party also needs to seriously consider maximizing the manufacturing opportunities associated with this industry.

CFMEU Claim: Existing ALP national policy for an ETS is vastly preferable

We agree, an Emission Trading Scheme (ETS) is the most cost effective mechanism to reduce emissions, it enables us to support affected industries so they can restructure and we can design a mechanism to minimise the impact on the most vulnerable. LEAN fully supports the re-establishment of an ETS

However, an ETS without a renewable energy target is poor policy and poor politics.

Renewable energy has overwhelming popular support. Crosby Textor report that 82% of Australians support the RET.[vii]

Perhaps more importantly, a market instrument like an ETS will not create a renewable energy sector. All new technologies, especially ones that have a higher capital to operation cost ratio, require rules or standards to encourage their adoption. All social democratic parties know that the market has a range of constraints. It is the historic role of social democratic parties to support new and emerging industries, with the economic, social and environmental benefits they bring.

The uncomfortable truth

LEAN supports strong interventionist industry restructuring that genuinely protects communities affected by moving to a clean energy future and steers the course of industry creation. In doing so, Labor must act in the interests of all Australians and not put the self interest of any sector of the community above the national interest.

The benefits of a popular renewable energy target to Australians, our economy, our environment will outweigh the costs to some existing sectors and provide the necessary growth and revenues to implement suitable labor market programs and transitional pathways for workers, including CFMEU members.

Labor must be a party of the 21st century, ready to deal with hard but important transitions that will deliver good union jobs, innovation and investment. To stick with the past will leave us exposed to political opponents on the left and right as well as commit us to betraying both the workers and children of the future.

[vii] Crosby Textor polling conducted for Pacific Hydro, August 2014

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