The renewable energy industry is trying to broker a deal to end the standoff between the Abbott government and Labor over the renewable energy target by suggesting the parties “split the difference”.
On Monday the government told the industry its latest offer – that the target would be reduced from a requirement that 41,000 gigawatt hours of energy be sourced from renewables by 2020, to 32,000GWh – was a “take it or leave it” proposition.
At the time the industry peak body, the Clean Energy Council (CEC), said it would “leave it”, prompting the industry minister, Ian Macfarlane, to suggest he might walk out of their meeting. He also told the industry representatives he was not even sure cabinet would back a 32,000 GWh target. The industry appeared to support the ALP’s bottom line of a 2020 target in the “mid-30,000s”.
But on Wednesday the CEC wrote to Tony Abbott suggesting he “split the difference” between the two major party’s positions and reach a bipartisan consensus with Labor on a target of 33,500 gigawatt hours.
“While the sector is not prepared to accept the government’s previous proposal to cut the 2020 … target to 32,000 gigawatt hours due to the impact it would have on the sector, we are prepared to accept a reduction of the target to 33,500 GWh,” the council’s chief executive, Kane Thornton, wrote.
“We accept that some level of compromise is necessary in any political negotiation, and this figure represents the midpoint between the original position of government (often described as a ‘real 20%’) and the opposition.”
Thornton said the compromise position would “unlock over $10bn in new investment, protect the 21,000 jobs in the sector and create more than 6,000 new jobs around the country”.
But it is also a 30% reduction on the existing legislated target – which was calculated to generate $14.5bn in investment. The government argues the original target cannot be met, but that claim is based largely on an 80% drop in renewable energy investment due to policy uncertainty and the government’s review.
A spokeswoman for Macfarlane said the government position “has not changed”.
The compromise plan also demands the government drop plans – which it has so far been unable to implement – to abolish the Australian Renewable Energy Agency (Arena) and Clean Energy Finance Corporation (CEFC).
It leaves in place the things the major parties had already agreed to: that the small-scale target for rooftop solar stays in place and that energy-intensive industries be exempted.
The government had originally signalled it wanted very deep cuts to the target. It commissioned the businessman and self-professed climate sceptic Dick Warburton to undertake a review, which recommended the target be slashed to about 16,000 GWh.
After fierce resistance from industry and concerted criticism of that review, the cabinet asked environment minister Greg Hunt and Macfarlane to try to reach an agreement with Labor about the future of the program that would allow continued investment without fear of policy change.
Labor and the renewables industry had insisted a target had to be in the mid-to-high 30,000 GWh. When the government refused to budge from about 26,000 GWh last year, Labor walked out of the talks.