The intricacies of climate change policy have not been front of mind for the Australian government this last half year, but the issue is now back on the agenda. Yesterday a review chaired by energy industry executive Grant King into new low-cost sources of emissions reduction was released. The government has accepted many of its recommendations.
Federal energy minister Angus Taylor says the changes create new ways to reduce emissions across the industrial, manufacturing, transport and agriculture sectors.
The package spells a broadening of existing mechanisms and may open the door to some better outcomes. But the existing climate policy patchwork remains deeply inadequate, and in practice the changes may do little more than channel government funding to industry.
The role of carbon capture and storage and storage
In line with the review’s recommendation, the government’s emissions reduction fund will be extended to projects using carbon capture and storage (CCS) technology.
CCS involves capturing carbon dioxide from sources such as power stations, gas plants or cement plants and pumping it underground. It tends to be technically difficult and costly per unit of tonne of emissions saved, and usually does not capture all of the emissions.
The Emissions Reduction Fund (ERF) has been the government’s primary climate policy mechanism. It gives subsidies to projects that are deemed to reduce carbon emissions – to date, mainly in agriculture and forestry. The policy is vastly less effective and efficient than the carbon pricing mechanism it replaced in 2014.
The obvious criticism is that extending government support to CCS locks in some fossil fuel use, when Australia has great opportunities to put our energy system on a zero-emissions footing using cheap renewable energy.