Destination Destruction: Labor’s 50% Renewable Energy Target Means Wholesale Industry Wipe-out

 

Bill Shorten’s 50% RET is guaranteed to send power prices soaring, destroying whole industries and thousands of well-paid jobs. Shorten is a man ready to tax Australians out of existence, and is salivating at the prospect of delivering his blow-the-joint-up, socialist agenda. To get control of the Parliament, Labor will inevitably team up with the loony left, principally the Greens, as well as a handful of GetUp! backed ‘independents’. One consolation is that, whatever happens on 18 May, Labor will not control the Senate, even with help from the Greens.

However, the threat of a 45% carbon dioxide gas emissions reduction target, coupled with the 50% RET (to be met with a massive expansion and extension of subsidies to wind and solar) has industry and business owners worried. As well they should be.

A couple of posts back, we reported on Simon Holmes a Court – the Grand Pooh-Bah among Australia’s RE rent-seekers – and his efforts to insiders acolytes terrorise the family of an energy market economist, Dr Brian Fisher.

Dr Fisher has incensed RE zealots over a report he produced that spelled-out the crushing costs of the Coalition’s climate/energy policy and the even more insane costs of what’s in store should Bill Shorten get to head up his Green/Labor Alliance.

One of the key findings of his report is that:

By 2030, Australian electricity prices are projected to increase around 38 per cent under the Coalition policy and by 94 per cent under Labor’s proposed policy, relative to the reference case electricity price projection.

While lunatics like Holmes a Court are prepared to attack the man and threaten the safety of his family (see our post here), RE rent seekers, Labor and the Greens are having a hard time attacking Dr Fisher’s numbers.

So, given that the report is driving these characters insane, STT felt it opportune to give this Alan Jones interview with John Anderson a run.

John Anderson was leader of the National Party and Deputy PM from 1999 to 2005. Anderson was known for his careful and considered approach to politics and his common sense approach to policy. Here he proves he hasn’t lost his touch.

New report reveals Labor’s climate policy would smash the economy
2GB
Alan Jones & John Andreson
19 March 2019

A new report shows Labor’s plan to drastically cut emissions would slash economic growth and wages.

The Opposition is proposing to reduce emissions by at least 45 per cent if it wins the federal election.

Research by BAEconomics, to be released today, suggests Labor’s plan would see thermal coal production fall by 60 per cent.

Managing Director of BAEconomics Dr Brian Fisher says electricity prices will rise under Labor’s policy.

“In terms of the impact on wholesale electricity prices… under the Coalition scenario $93, versus $128 under the Labor scenario.”

Former Deputy Prime Minister John Anderson tells Alan Jones it would end up “smashing the economy”.

“Carbon abatement is not free, it’s expensive.

“The more you do, the faster you do it, the more expensive it is.

“I am deeply concerned at the way in which many Australians seem to be prepared to virtue signal.”

2GB

 

Transcript

Alan Jones:  I don’t know how many times I have spoken on this program about what I call the global warming hoax and that massive cost that we are bearing as a consequence of this. But at the end of the day, it doesn’t really much matter whether it’s a hoax or not. What matters is where this ideological preoccupation is taking the national economy, via a completely irresponsible energy policy.

High energy costs can cripple business and individuals, and will or are. I mentioned already the number of people in Australia numbers tens of thousands who can’t pay their electricity bill, and tens of thousands who’ve had their electricity cut off. We have the fourth highest electricity prices in the world, yet we’re one of the world’s richest countries in terms of energy resources.

Make no mistake, high energy costs can and will cripple food manufacturing operations such as abattoirs, milk processing, processed food plants, the things that appear right now at this hour on our breakfast table every morning, milk, Weet-Bix, bread, or the dining room table, or the windows, or the air con, the car you get it. They’ve got to be there, a high energy component.

Energy-intensive manufacturing is the lifeblood of many regional cities and towns. It’s critical for their viability. The Australian Competition and Consumer Commission last year identified that there were too few electricity producers producing too little base load energy. That’s stuff that’s there all the time.

I made the point last week that at eight o’clock on any morning, but I said it was Wednesday, Sydney Coal was producing 97% of the electricity that Sydney-siders were using.

We are facing, and this is not alarmist talk, a left-wing attack on both capitalism and coal. The director of the Copenhagen Consensus Centre, Bjorn Lomborg, has argued and no one seems to take note, that solar and wind provide less than 1% of the world’s energy, that require subsidies of 129 billion annually.

Recent research shows that even abiding by the Paris Agreement will cost Australia 52 billion dollars. Around the world, climate change is now a low priority. Energy poverty and electricity cost enjoy greater emphasis. But as we saw with these protests last Friday, there is a rancid demonstration of a profound ignorance of reality.

Recently, I talked about the work of the independent research of Doctor Brian Fisher, who has worked for governments of both persuasions, and his final report which is forecasting that Labor’s policies in particular, this is federally, they’re a mile in front at the polls, will result in the closure of nine of Australia’s 17 existing coal-fired power stations. He found that Labor’s energy policies would double electricity prices, cost workers $9,000 a year in reduced wages, and wipe 472 billion dollars from Australia’s economy by 2030. 472 thousand million dollars.

I’ve said many times, the economic suicide note is being written.

John Anderson is a former Deputy Prime Minister of this country to John Howard, a former National Party leader. On the last occasion I spoke to John, I said, and I should say it again, he and I have had some agreements in the past. But I also strive to give credit where it’s due, and John Anderson is emerging as a very significant national figure in this battle of ideas. He’s Chairman of the Page Research Centre, dedicated to rural and regional policy. He’s worked with Doctor Brian Fisher in the past, and regards him as a world leader in the modelling work he does, and would defend him against anyone critical of his work.

We’re not here to talk about climate change deniers or climate change supporters. What John Anderson is saying is that climate policy and significant emission reductions programmes are economically transformative, and we have to approach this issue, his words, “With the utmost responsibility, or the consequences could be dreadful.”

Today, the modelling report by Doctor Brian Fisher on the economic consequences of Australia meeting its 2030 greenhouse gas emission abatement targets, the Doctor Fisher report, will be released. He’s the managing director of BAEconomics Proprietary Limited. He’s been involved in climate policy research since 1992, and has participated as a lead or convening lead author in three IPCC climate assessments.

I’m not talking to him today. I’m talking to John Anderson, who is the Chairman of the Page Research Centre, named after another former great Australian National Party or Country Party leader, Sir Earl Page.

John Anderson’s on the line. John, good morning.

John Anderson: Good to be with you.

Alan Jones: Thank you for your time. I think the point you’re trying to make is this is pretty serious stuff, from an economic perspective.

John Anderson: Well it is. See, you had massive turmoil in Australian politics. You could almost say its broken. You’ve had revolving door prime ministerships and so forth, and much of it’s been related to energy policy. And I would I turn shoot that back to the fact that we’ve had this terrible lack of transparency about climate policy. Politicians and leaders have not been prepared to say the simple truth: Carbon abatement is not free. It’s expensive. The more you do, the faster you do it, the more expensive it is-

Alan Jones: Stop-

John Anderson: So the question-

Alan Jones:  Stop. Stop. Please say that again.

John Anderson: Carbon abatement is expensive. It has a price tag. The more you do, the more quickly you do it, the more you get in front of technology in the race for renewables, the more expensive it will be.

Alan Jones:  And that expense is spelled out in Doctor Fisher’s report, where he talks about the economic impact on GDP, on jobs, on wages, and of course on electricity prices, and the effect on different sectors of the economy.

John Anderson: Well that’s right. Now there’s a couple of points to make here. We are in great danger, Alan, of doing three things, in my view.

The first is smashing the economy and jobs, in a very serious way.

The second is dividing ourselves. I am deeply concerned about the way in which many Australians, not a lot, but too many, let’s put it that way, seem to be prepared to virtue signal and say, “We are going to be the world leaders on this. We’re going to get right out in front. It doesn’t matter what it does to the economy. We’ll fix emissions with another Australian’s job.” That’s very divisive. That’s Brexit-style stuff. That’s not showing enough respect for the people who are expected to make all the adjustments.

And the third thing is, here’s the ultimate irony, we are going to end up creating a worse problem globally. It doesn’t matter, in one sense, so much what Australia emits. We’re only 1.15% of global emissions. But if we’re not careful with some of our heavy industries and so forth, at this rate, we’re going to push them offshore. And a tonne of aluminium produced in a place like China produces twice the carbon it does here.

So we really could end up with a sort of trifecta of own goals, which would be very damaging.

Alan Jones: I can believe what you’re saying, bu ti just can’t understand how we’ve got here. I’m almost speechless. I mean, you’re a former Deputy Prime Minister, you’ve had political clout, you’re making these observations. Are people going to say that you’re a rat bag?

John Anderson: Well my greater concern is that they might try … well they are trying to say Brian Fisher shouldn’t be listened to. There is no better modeller in Australia. The Hawke government trusted him. The Keating government trusted him. We trusted him. He was, of course, part of the machinery of my department. In those days, everybody listened to him, including the ABC, when he spoke on agricultural matters Eighteen years the head of ABARE. There’s no better modeller in Australia, and this work’s been peer reviewed internationally.

Now to come back to your point about the debate, this is a much more transformative economic issue, especially if you go with Labor’s policy, than the GST ever was. In those days, the GST was absolutely centrepiece in the election debate of 1999 and every aspect of it was teased out, argued out, refined, people knew what they were getting.

We are in a situation now where in effect, there’s no transparency, no one’s asking enough hard questions. Well they’re just starting now, thankfully, because of this work. And you’ve really got a situation where the Australian people are not going to be informed. They therefore can’t give informed consent to what they want to do, and you will therefore have, let me say this very firmly, just a continuing chaos, because what Labor’s committing to do cannot be achieved out of renewable energy. You have to go deep into other sections of the economy, into agriculture, into transport, into plastics manufacture, into smelting, every aspect of the economy will be affected and

You know, if you’re going to make those changes and you’re going to be a leader, in an age when trust has been smashed, you have to have the courage to go to somebody who works, say in a meat processing factory or a smelter or in the dairy industry, and say, “I’m sorry old bloke, but decarbonizing the Australian economy is more important than your job.”

And then explain why and be ready for the comeback, “Well so my job just goes to some other country where it’ll probably produce more greenhouse.”

Alan Jones:  Oh dear. Brian Fisher … This is staggering. I agree with every single syllable you’ve uttered, and we’ve been arguing it over and over again.

Doctor Brian Fisher spells this out though, does he not, John Anderson? Where he looks at industry sectors and he say about Labor, 45% they want … up to 50% renewable energy. There are some of them say 100%.

So he says, if you just take the Labor policy that they’re taking to the election, and if you look at the polls and they’re supposed to be in the door, agriculture down almost 3%, livestock down almost 3, fishing down almost 9, thermal coal down 44%. These are industries. Mining, generally down 13%. Oil refining down 17%. Chemicals, rubber, plastics, down 16%. Construction down 6%. Land transport, 10%. Air transport, 7%. Services down 4%.

I mean these are thousands and thousands of jobs, and he quantifies that, does he not? He talks about under Labor, there’ll be 336,000 jobs lost.

John Anderson: Well the point to take out of that, more than anything else, is this, which timely recognised, you cannot get the sort of numbers Labor’s talking about, even if you switched off every coal-fired power plant and switched to renewables. You have to go deep into other sections of the Australian economy.

Alan Jones:  That’s it.

John Anderson: There’s two things that the Labor Party needs to immediately come clean on. Well, probably three, because they really, really mean 45% and 50% renewable energy.

Secondly, will they allow for the Kyoto credits that we earned, because we over-performed on Kyoto?

And thirdly, they keep saying to trade-exposed sectors, “Oh, we’ll exempt you.”

Well there’s two really important points to make about this so called claim of, “We’ll exempt trade-exposed industries,” Alan.

The first is, you can’t. So agriculture would say at the moment, “No, we haven’t been a direct target.”

But a very, I thought, thoughtful dairy farmer on the ABC the other night just said, “You know, the biggest problem for we as milk producers is not actually quite so much the price at the supermarket. It’s the costs.” Electricity costs have doubled-

Alan Jones: That’s correct. That’s correct.

John Anderson: So you see, you can’t insulate one section from what’s happening in the other-

Alan Jones: No you can’t. See Doctor Fisher says, these are his words, these are not John Anderson’s words or Alan Jones’ words. Doctor Fisher says, “Any significant reduction, any, in emissions requires sizeable economic transformation. And that will result in cost, regardless of the policy approach. The higher the abatement task and less policy flexibility that we allow to meet our targets, the higher the economic adjustment costs will be. The bigger impacts will fall on households and regions dependent on Australia’s traditional export industries, but other sections like manufacturing, transport, and construction will be affected.”

John, who cares, in Canberra?

John Anderson: Well you know, look, I think … Let me tell you something that might surprise you and your listeners. I actually think the biggest single issue of all in this is in fact trust. Those who advocate these policies must go and explain their intended consequences, because if we continue this breaking of trust between … it’s the key. The key to leadership is surely character, and a key to character is trust. We need a return of trust and character if our democracy is to work properly.

So I’d say the greatest need of all is to get real about people being transparent about not only what their policies will do, but their intended consequences. They must have an intention behind this consequence, you know, behind they’re seeking to do.

Now the other thing that needs to be said here is, and it’s not yet in Brian’s work, but there’s one thing that I know was always incredibly sensitive when we were in government and when I was on the razor gang and people were worried about where we were going to try and find savings. And we wouldn’t talk about what we were doing because the minute someone broke ranks we would never have been able to keep the thing on the rails.

Under the policy, the first thing that would have to go for farmers, in my view, it would have to because you’ve got to go deep into transport, would be the diesel fuel rebate. So that’s another question that needs to be asked of Labor-

Alan Jones: Well now listen, I’ve got a network commitment and I’ve got to go. I will let people know where they can check you on the website, which is outstanding. And we have to talk again.

John Anderson: Okay. Well-

Alan Jones: Very grateful.

John Anderson: … questions are asked.

Alan Jones: Absolutely. We will talk again.

Alan Jones: John Anderson

2GB