Greenhouse Policy

esaa continues to support the development and implementation of an efficient, well-designed and equitable emissions trading scheme as the primary mechanism to reduce greenhouse gas emissions.

esaa first advocated in February 2007 for an emissions trading scheme and long-term emission reduction target as part of a national, enduring greenhouse gas emissions policy applying across the economy .

To ensure timely new energy supply investment an agreed bipartisan policy that provides efficient incentives and enables energy supply companies to remain commercially viable is essential.

Complementary measures should be used only where market failures have been identified, and should be coordinated nationally.

Carbon Pollution Reduction Scheme

In relation to the Federal Government’s proposed Carbon Pollution Reduction Scheme, esaa has consistently advocated for four key issues to be addressed in the CPRS legislation to make it workable for the stationary energy industry.

The CPRS needs to adequately address the stranding of coal-fired generation assets; commit to ten years of firm scheme caps followed by a ten-year rolling gateway; manage the working capital requirements for liable entities from the operation of the CPRS including taxation and auctioning; and ensure retail price regulation is removed.

On 27 April 2010, the Federal Government announced a delay in the commencement of the CPRS until the end of 2012, citing an inability to gain passage of the legislation through the Senate and the lack of a comprehensive global agreement on emissions reduction.

In response, esaa called for the two major political parties to constructively engage industry and finalise bipartisan agreement on a stable and sustainable greenhouse policy that will enable a smooth transition to a low carbon future and to provide the industry with the policy certainty it needs to undertake investment.

Renewable Energy Target

esaa supports measures to reduce greenhouse gas emissions that are least cost and applied through policy settings and measures that are national, long-term and complementary to competitive market arrangements. This includes support for a national, economy-wide emissions trading scheme as the primary emissions reduction policy.

Complementary measures to an ETS should only be deployed only where it is demonstrated that they are likely to reduce the overall cost to the economy by overcoming a market failure.

However, as the RET has been legislated as part of a package that has bipartisan support, the principles of ensuring investor certainty and minimising the administrative burden for energy industry liable entities should be paramount in the design of the Renewable Energy Target.

While esaa supports the establishment of the Large-Scale Renewable Energy Target following the government’s announcement splitting small-scale generating units from the RET, significant uncertainty remains regarding the implementation of the Small-Scale Energy Scheme.