Public Policy Papers

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 Since May 2013 the Institute has published 30 Public Policy Papers.

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Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• The Energy Transition entails the decarbonisation of the global economy by mid-century to achieve Net Zero emissions and reduce the pace of global warming. The Energy Transition picked up momentum with the 2021 Glasgow climate change conference but geopolitical events such as the 2022 Russian invasion of Ukraine may test the resolve of policymakers to pursue it.
• Energy trade in the Indo-Pacific region could be affected, for better or worse, as Australia and its energy partners work their way through contemporary geopolitical issues.
• Australia’s main policy goal for the foreseeable future must surely be to maintain its own energy security. For this, it needs to present itself as a safe place to invest and as an even-handed collaborant with its energy partners in the development and export of a diversified range of low-emissions energy forms and energy technologies.

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Author: Stephen Anthony is the Chief Economist at Macroeconomics Advisory

Key Points:

• Science and public opinion is forcing governments around the world to commit to major reductions in emissions over the next several decades. This creates a problem for Australia: we lack a credible national policy for energy and lack a national technology-based energy plan to guide investment in electricity generation and emissions reduction.
• Current policy settings are a mixture of technological choices based on political expediency, defending existing rent seekers, opportunistic market intervention and poor to non-existent economic analysis.
• Current policy settings can be summed up as a complicated way of trying to make solar and wind work and result in fragmented oversight and planning.
• Much more attention needs to be paid to overall grid stability and the destablising impacts of asynchronous generation.
• A blind preferential approach may not deliver for Australia. Indeed it may also lead to huge fail as it embraces massive uncertainty. Either way, we need to thoroughly examining all of our options.
• Without a serious and properly analysed national policy based on technical realities as well as market needs, institutional investors will be reluctant to support the needed infrastructural investment.
• Underpinning national policy must be fundamental economic analysis of all technologies.
• A serious energy and emissions reduction policy should follow basic economic principles and use whatever technologies are best suited to solving the problem.
• It would be possible for government to substantially reduce costs by leveraging the large holdings of funds held in institutions and unlocking a stream of appropriately priced equity and debt funding.
• A single agency needs to be responsible for the broad sweep of progress towards targets and making revisions to market mechanisms and ensuring infrastructure requirements are met.

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Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• The decision of The Hague District Court against the Royal Dutch Shell Group, Milieudefensie et al v Royal Dutch ShelI in May 2021 (‘the Shell decision’) has dramatically increased the risk of investing in greenhouse gas-emitting energy projects and transactions around the world. This requires a legislative solution.
• The Shell decision, coming in the same year as the 26th UN Climate Change Conference of the Parties (COP26), has signalled the start of a legal nightmare for policymakers and investors not just in the Netherlands but around the world.
• A process of decarbonisation is underway globally. It needs to be managed both domestically and internationally. At the same time, investments in carbon-intensive industries that are valuable to society and to the economies of many countries need to be protected. Investors cannot possibly rely on the uncertainty of judicial decision-making to provide them with investment guidance and investment protection. In any case, no government wants to be dictated to by foreign courts.
• A possible way forward for Australia would be to establish a licensing facility to authorise the discharge of greenhouse gas emissions by ‘qualifying investments’. What investments might qualify, and what price and terms the government might require for use of a licensing facility, would need to be carefully weighed up and would take some time. In the meantime, the government, in the global climate negotiations, will need to take care not to expose its energy industries to unmanageable legal liability.
• An Australian licensing facility could channel its revenue into a Future Energy Fund, not unlike a sovereign wealth fund, which could in turn direct its capital to investment in low-emissions energy technologies.

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Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• Until recently in Australia, there had been little public concern about our national defence, our energy security, and the strength of our export earnings from resources such as coal, natural gas and uranium. However, these issues are being impacted by the global crusade to achieve ‘net zero emissions’ by 2050.
• Impacts in Australia include the substitution of weather-dependent renewables for fossil fuels, the electrification of transport, the promotion of hydrogen as an alternative energy carrier, and the possible impairment of our defence and space industry capabilities.
• These impacts pose a systemic challenge that cannot be addressed by a narrow policy response – nor by a range of narrow responses, nor especially by politically contrived solutions.
• To achieve net zero, diversity is more than ever indispensable – a change agent is required and communities need to be involved.

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Author: Geoff Dyke, Construction, Forestry, Maritime, Mining & Energy Union

Key Points

• The CFMMEU Mining & Energy Division of Victoria (the Union) supports Victoria’s transition to low-carbon power generation sources. It urges that energy decisions be made with system reliability, economic viability, and Victorians’ jobs in mind.
• The Union is concerned by the approach of using only non-dispatchable renewable energy sources, supplemented by hydro and battery storage, for Victoria’s energy transition. It believes that this will lead to major blackouts, unaffordable electricity and the future economic shutdown of Victoria’s industry, resulting in massive job losses and a decline in citizen wealth.
• Coal plant workers and their communities demand a ‘Just Transition’ of their industry, a transition where their livelihoods are not unwittingly destroyed by the rush to reduce emissions.
• Nuclear power is a proven choice of a dispatchable and economically viable, zero greenhouse gas emission power generation technology, that is available today. The nuclear prohibition in Victoria should be lifted to allow sufficient time to replace existing generation with nuclear reactors.
• The guarantee of a Just Transition should also provide the essential social licence to satisfy any concerns in local communities about the safe operation of the nuclear industry.
  

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