Thursday, August 16, 2018

GWPF Newsletter: Aussie Climate Wars Escalate As Rebels Challenge Turnbull

Brazil: Presidential Frontrunner Promises To Quit Paris Climate Deal

In this newsletter:

1) Aussie Climate Wars Escalate As Rebels Challenge Turnbull
The Australian, 15 August 2018 
2) Climate Wars 2.0 Threatening To Engulf Australia’s Green Prime Minister
Dennis Shanahan, The Australian, 15 August 2018 

3) Tony Abbott: NEG Should Go ‘Back To The Drawing Board’
2GB, 15 August 2018
4) Brazil: Presidential Frontrunner Promises To Quit Paris Climate Deal
Climate Home News, 14 August 2018
5) Canada Backtracks An A Carbon Tax
The Wall Street Journal, 13 August 2018 
6) Energy Efficiency, Smart Meters And Climate Policy
Dr John Constable: GWPF Energy Editor, 14 August 2018

Full details:

1) Aussie Climate Wars Escalate As Coalition Rebels Challenge Turnbull
The Australian, 15 August 2018 

Malcolm Turnbull’s authority has been directly challenged by 10 Coalition MPs reserving the right to cross the floor of parliament to vote against the government’s signature energy policy and leave the Prime Minister at the mercy of Bill Shorten to pass the national energy guarantee.

Mr Turnbull held crisis talks late yesterday with five of the rebel MPs who had spoken out against the policy during a Coalition party­room meeting, urging them to support the NEG, which will be introduced as early as this week.

Facing the threat of a parliamentary revolt, Mr Turnbull is understood to be considering further legislation to lock in a price guarantee, separate from the NEG’s emissions target and reliability guarantee, to address concerns that the policy has no firm mechanism to lower prices.

A group of MPs led by Tony Abbott yesterday told a Coalition partyroom meeting that they would reserve their right to cross the floor on the energy policy, which mandates a 26 per cent emissions-reduction target, if the NEG was introduced without major changes.

Senior ministers have privately conceded that a defeat in the House of Representatives inspired by defecting Coalition MPs would have consequences for Mr Turnbull’s leadership and leave the government stranded without a central energy policy that promised lower prices for consumers.

However, the optics of having to rely on Labor support to ensure passage of the bill through either the lower house or the Senate could be just as politically disastrous for the Coalition, several ministers said last night.

Senior government sources have confirmed that the policy is all but dead without Labor’s support, if not in the lower house then at least in the Senate, as the crossbench is unlikely to usher it through.

Mr Abbott told The Australian that the state Labor governments should “kill” the NEG by refusing to implement the state legislation required to enact the bulk of the policy, including the key reliability guarantee. “Any policy that required the agreement of the state Labor governments was always going to have a rough time in the partyroom,” the former prime minister said.

“Having listened to the reservations of my colleagues, the best way forward might be to let the states kill the NEG and just get on with underwriting new dispatchable power along the lines of ACCC recommendation four.” […]

Greens leader Richard Di Natale foreshadowed a ferocious attack on Labor yesterday if Mr Shorten agreed to the 26 per cent target and argued there would be no end to the “climate wars”.

Full story

2) Climate Wars 2.0 Threatening To Engulf Australia’s Green Prime Minister
Dennis Shanahan, The Australian, 15 August 2018 

Malcolm Turnbull’s leadership authority is again under threat from the Coalition’s never-ending energy and climate wars. A backbench revolt over carbon emissions policy has the potential to grow into a leadership crisis for the Prime Minister if he can’t placate the coal-fired energy rebels or strand them by doing a deal with Bill Shorten.

As it was in 2009 when Turnbull was Liberal leader, it is the Labor leader who can decide his fate. Although he won a significant victory in passing the principle of the national energy guarantee through the Coalition partyroom yesterday, Turnbull is facing a rearguard revolt from at least 10 Coalition lower and upper house MPs who could derail the policy if Labor were to oppose it.

Energy Minister Josh Frydenberg has set an almost impossible deadline of October to get all the states to agree, produce and pass the legislation in the House of Representatives and then get the Coalition’s make-or-break plan through a hostile Senate. If the rebels can’t be turned, then Turnbull has to do a deal with the Opposition Leader or bully Labor into submission.

At this stage, the fight within the Coalition is about mandating emissions targets and assisting new coal-fired power stations but should Turnbull fail to get agreement from the states, Labor, the Senate or his own colleagues, or fail to convince the public his plan will lower electricity prices, it will gut his authority and end his leadership.

Turnbull and Frydenberg passed the initial test but within hours the Prime Minister was meeting MPs who had threatened to cross the floor of parliament and oppose the NEG legislation because it mandated the Paris emissions reduction target of 26 per cent and didn’t do enough for coal-fired power. With a majority of just one seat, Turnbull cannot afford one defector — Tony Abbott, Barnaby Joyce or anyone else — if he doesn’t have Labor or some independent support in the house.

Turnbull is trying to put the pressure on Labor to agree to the NEG so that the Labor states will come on board and he can neutralise the threat of a Coalition revolt in both the house and Senate. But both the Labor states and the federal ALP can draw out the process well beyond the October deadline by demanding details of the policy and insisting on a Senate inquiry to prolong Turnbull’s exposure to internal destabilisation.

Already, Labor has declared “We cannot support a smashing of renewables” — legislating a 26 per cent emissions target only half of Labor’s — or “channelling tax payers’ funds into coal” — a government guarantee for new coal-fired power stations.

While the Opposition Leader is tactically holding back a general declaration, his climate spokes­man, Mark Butler, is setting out clear and immediate objections and accusing Turnbull of “capitulation” to conservatives and an “abject weakness” of leadership. […]

There is still a long way to go for Turnbull to seal his “energy victory” and the longer it goes, the more likely it threatens not just his authority but also his leadership within a Coalition increasingly fearing defeat.

Full post

3) Tony Abbott: NEG Should Go ‘Back To The Drawing Board’
2GB, 15 August 2018

Former prime minister Tony Abbott says the National Energy Guarantee must be taken back to the drawing board after it cleared a Coalition party room meeting yesterday.

Prime Minister Malcolm Turnbull claimed the government’s flagship energy policy received “overwhelming support” from his colleagues, but he now faces a fight to get the policy through parliament.
Some Coalition MPs are reserving their right to cross the floor on the issue, including Mr Abbott.

The Member for Warringah tells Ben Fordham he won’t support the policy as it stands.

“Had I been at the top table, it would have had to go back to the drawing board.

“Certainly in John Howard’s time, a submission from a minister that got the kind of treatment that Minister Frydenberg’s submission got yesterday, it would go back to the drawing board.

“Because the first duty of the leader is to keep the party together, we should be fighting the Labor Party, not fighting ourselves.

“At the moment, thanks to this so-called National Energy Guarantee, the fight is an internal fight.”

When asked whether he’ll be voting for the NEG, Mr Abbott says he “can’t support anything that entrenches the Paris targets”.

Click here to hear the full interview 

see also  
Tony Abbott: Daring To Doubt

4) Brazil: Presidential Frontrunner Promises To Quit Paris Climate Deal
Climate Home News, 14 August 2018 

De facto presidential frontrunner says he would follow Donald Trump out of the international pact, drawing criticism from the UN’s environment chief

Jair Bolsonaro says he would withdraw Brazil from the Paris Agreement if elected president (Photo: Commons)

Presidential candidate Jair Bolsonaro is threatening to take Brazil out of the Paris Agreement if he wins the October election.

In an unpredictable race, the right-wing Bolsonaro is polling secondbehind Luiz InĂ¡cio Lula da Silva, the socialist former president. But “Lula” is in jail for corruption and likely to be disqualified by the courts, leaving a scattered field.

At his campaign launch last month and in subsequent interviews, Bolsonaro said he would join Donald Trump’s US and withdraw from the Paris pact.

That stance drew ire from UN environment chief Erik Solheim. Action on climate change would create “healthier and wealthier” economies, he told Climate Home News.

“A rejection of the Paris Agreement is a rejection of science and fact,” Solheim said. “It’s also a false promise, because politicians who present climate action as a cost to society have got it all wrong.”

Full story

5) Canada Backtracks An A Carbon Tax
The Wall Street Journal, 13 August 2018 

Mary Anastasia O’Grady

Justin Trudeau’s Liberals try to stop a stampede of capital out of the country.


Canadian Prime Minister Justin Trudeau addresses the media in Riga, Latvia, July 10. PHOTO: ILMARS ZNOTINS/AGENCE FRANCE-PRESSE/GETTY IMAGES

Canadian Prime Minister Justin Trudeau’s Liberal government announced last month it will reduce a carbon tax on industry that is set to go into effect next year. The reason for the backtrack has to do with climate change, but not the kind associated with global warming.

Mr. Trudeau is reacting to shifting political winds stirred by Canada’s investment climate, which has turned stone cold. He faces an election in October 2019, and Liberals will have trouble winning unless investors warm to Canada as a destination for capital again. The question is whether the scaling back of the carbon tax is too little, too late.

The initial carbon-tax proposal, which takes effect next year, promised to levy companies on 30% of their emissions at 10 Canadian dollars (US$7.66) a metric ton, rising to C$50 a metric ton in 2022. The revision now sets the taxable emissions at 20%. The Journal’s Paul Vieira reported from Ottawa on Aug. 1 that “government officials are prepared to tinker further with the carbon-pricing regime should domestic industrial sectors bring evidence demonstrating ‘[heightened] competitiveness risks’ due to developments in the global marketplace.”

Canada’s ability to attract capital suffered a setback when oil prices fell hard in 2015. Under Mr. Trudeau, who took office in November of that year, it hasn’t caught up. In an April 13 blog post, Jason Clemens and Niels Veldhuis of the Vancouver-based Fraser Institute noted that Canadian foreign direct investment amounted to C$31.5 billion in 2017, down 56% from C$71.5 billion in 2013. The authors added: “Since peaking in the fourth quarter of 2014, total business investment adjusted for inflation—excluding residential housing—is down almost 17.0 percent. Private-sector investment in factories and other structures is down 23.3 percent. And investment in intellectual property is down 13.3 percent.”

The causes of this capital strike seem to be taxes and regulation, as more than one business leader has noted. Suncor Energy CEO Steve Williams said in February that his company is “having to look at Canada quite hard. The cumulative impact of regulation and higher taxation than other jurisdictions is making Canada a more difficult jurisdiction to allocate capital in.”

For prospective investors, the business climate in Canada is naturally compared with that of the U.S. Recent U.S. tax cuts, including accelerated depreciation, and President Trump’s deregulation push, are increasing the pressure on Canada to step up. In an April interview with the Canadian Press, Royal Bank of Canada president and CEO Dave McKay described the competitiveness problem behind what he called “significant” capital flight and called on the government to address it. “If we don’t keep the capital here, we can’t keep the people here—and these changes are important to bring human capital and financial capital together in one place,” he said.

The new carbon tax is only one of the green policies hurting Canada’s competitiveness. Ontario has long been the nation’s manufacturing hub. But in 2005 the province began phasing out the use of coal for electricity generation, and in 2009 it passed the Green Energy Act, designed to force industry and consumers into renewable energy. The net effect has been skyrocketing electricity prices in the province and declining manufacturing output.

A May 8 paper by Fraser analysts Elmira Aliakbari and Ashley Stedman titled “The Cost of Pipeline Constraints in Canada” blames“environmental and regulatory impediments as well as political opposition” for delays in the expansion of the nation’s pipeline infrastructure. This has depressed prices for Canadian heavy crude, creating a drag on growth, the authors show. Energy company Kinder Morgan recently sold its assets in the Trans Mountain pipeline to the Canadian government because of continuing opposition to its completion by British Columbia and others.

Elsewhere in Canada there has been aggressive pushback against the federal carbon tax. Ontario, under new political management since June, and Saskatchewan have gone to court to challenge the federal government’s authority to impose the tax. Prince Edward Island, New Brunswick and Manitoba have their own proposals to price carbon and are all on record against a federal take.

In Alberta, where the economy depends heavily on pumping oil, the United Conservative Party’s Jason Kenney is the favorite to win next year’s election for provincial premier. He has promised to oppose the Trudeau tax. He says he will keep a provincial carbon tax but limit it to “major emitters.”

Full post

6) Energy Efficiency, Smart Meters And Climate Policy
Dr John Constable: GWPF Energy Editor, 14 August 2018

The Chief Executive of the UK’s electricity and gas regulator, Ofgem, has published a prominent article in The Daily Telegraph reassuring the public about the Smart Meter programme, and stressing its potential benefits. Unfortunately, Ofgem is no longer the independent consumer champion that it once was, and the statement cannot be taken at face value.

It is a commonplace of conventional thinking in climate policy that improvements in the conversion efficiencies of processes and devices ranging from industrial techniques to engines to domestic boilers to washing machines will deliver reductions in total energy consumption. The following chart from the International Energy Agency, taken from Dr Birol’s Melchett lecture last year (discussed on this blog here), is perhaps the locus classicus for this view:

Figure 1: Global CO2 emissions reductions in the central and 2C scenario by technology. Source: International Energy Agency (2017).

The light blue wedge representing “energy efficiency”, a misnomer since the IEA actually means energy conservation (i.e. a reduction in the consumption of energy), accounts for about 40% of emissions reductions in 2040.  But as discussed elsewhere on this blog (“Energy Efficiency: Lessons from the Green Deal and Energy Company Obligation”) practical, real-world experience of energy efficiency policies is very discouraging. Such policies don’t work as well as forecast, either because they are not adopted or because the claimed efficiencies don’t materialise (Shortfall), or because the hoped for conservation of energy is offset or more than offset by an increased use of that process or device or by the use of of the saved energy for another purpose (Rebound and Backfire). Indeed, there is a steady stream of information reporting negative practical experience relating to supposedly efficient devices, with The Times alone publishing two in the last few weeks (“Mis-sold boilers cost homeowners hundreds of millions in extra bills”“Ignore the energy ratings on TVs and washing machines”).

Nevertheless, without any sound theoretical or empirical justification, the International Energy Agency and many other organisations persist in their use of assumed “conservation” to deliver the projected emissions savings. In spite of that apparent confidence, it is notorious amongst analysts that the IEA’s 40% figure is unreasoned, and is simply the residual after all the other options for emissions reductions have been applied to the plausible maximum. Faced with the limits to even optimistic assessment of potential for renewables, and the knock-on devastation of prospects for nuclear and gas (which might in an otherwise undistorted market actually deliver affordadable substantial emissions savings), the IEA simply opted to square the circle by arbitrarily suppressing world demand for energy in its model, camouflaging this casual dirigisme with the cynically deployed term “efficiency”. One wonders how Mr Birol, the Executive Director of the IEA, has the nerve to stand in front of this slide.

Full post

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at

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