Interview with Greg Jennett, ABC Afternoon Briefing

GREG JENNETT, HOST: And this week, Australia will get the latest official update on its track towards its carbon reduction commitments pledged at the United Nations and locked into domestic law in a sneak peek over the weekend we already know the projected reductions are 42 per cent, one point short of the 43 per cent that's been promised, but a huge part of the assumed progress comes through policies that haven't even begun yet and aren't due for quite a while yet.

To talk about that, Assistant Climate and Energy Minister Jenny McAllister joined us here soon after Question Time.

Jenny McAllister, welcome back to the program. So, Chris Bowen is going to report officially to the Parliament this week that we're on track to 42 per cent emissions reductions by 2030. A big part of this is the expanded Capacity Investment Scheme, variously described as massive and a game changer. What contribution is this new expanded scheme going to make to get to 42 per cent?

SENATOR JENNY MCALLISTER, ASSISTANT MINISTER FOR CLIMATE CHANGE & ENERGY: This is an important part of our policy settings. Generally, though, we have come to government with a determination to increase our ambition in relation to climate change. That meant revising upwards the targets that we set for ourselves for 2030 and then putting in place the policies to deliver them. We of course put in the Safeguard Mechanism, a scheme which deals with the very largest of the emitters. But the Capacity Investment Scheme is significant in the role it will play in bringing on new dispatchable renewables so that we can move towards a much greater penetration of renewables in our energy system as coal-fired power plants retire.

JENNETT: Sure, but where would you have been on the 2030 trajectory without this new announcement? And it is very new, it was only made at the end of last week.

MCALLISTER: There's no doubt it's significant. We've been monitoring closely investments in the National Electricity Market and we know that there are a range of global challenges that's made, put pressure on investors in the Australian market. We are determined to make sure that as older coal-fired power stations retire, new generation is in place to replace it. That's essential for the reliability of the Australian electricity market. It also put downward pressure on prices. These are important features of our policy settings, and I should say this is all work that could have been done many years ago. I think something in the order of 26 coal-fired power stations announced either a closure date or brought forward a closure date under the last government. They had no plan to deal with that. We are taking the steps necessary to ensure reliability in the system.

JENNETT: The difference between the Safeguard Mechanism and two not fully fleshed out ideas, Capacity Investment Scheme and Fuel Efficiency Standard, the difference between them is one is classed as operational, that's the Safeguard Mechanism, the other two are not yet. Why do you get to count unproven and so far really undelivered policy measures in the counting towards 2030?

MCALLISTER: We're asked to describe the policies that are in place and of course the Capacity Investment Scheme has been announced and put in place, and so we are examining the opportunities, describing the impact that that will have on our emissions over the relevant period.

JENNETT: A lot has to go right though, doesn't it? With both of these unproven policy prescriptions, Vehicle Efficiency Standard and Capacity Investment Scheme? There's no margin for error here, is there? If taken on your numbers, you're at 42 per cent only.

MCALLISTER: You know, we always say these are ambitious but achievable goals. They were intended to be a target that we'd have to work hard at. There are always people who say that they're not enough. And there are other people, of course, who say that it's too much. We set out to put in place targets and policies that would achieve them, because we know how important meeting these climate goals is for Australia's contribution to global efforts to address climate change, also important for our industrial development and our economy.

JENNETT: There's a tension here, isn't there, between large-scale solar and wind, large-scale renewables and rooftop solar? To what extent is rooftop solar that we all, as householders, may or may not have on our roofs undermining the revenue certainty for those who would invest hundreds of millions of dollars, if not billions of dollars, into large-scale renewables in this country?

MCALLISTER: Australians have been great early adopters in terms of rooftop solar and over recent years, rooftop solar has made a very important contribution to the overall energy generation capacity in the system. As we evolve towards a system more dependent on renewables, we are going to depend on rooftop solar and also on these large-scale renewables like wind and solar farms.

JENNETT: But one is crashing the price for the other, isn't it? On a sunny day at least.

MCALLISTER: The truth is that solar, whether it's on the roof or in a large-scale solar farm, generates significant quantities in the middle of the day when the sun is shining. That's why these dispatchable mechanisms are really important, and it's why the government places such a focus on dispatchable technologies like batteries and other forms of storage.

JENNETT: Which will be a part of this expanded investment scheme. I know total cost won't be announced for reasons that Chris Bowen has canvassed publicly, but will it be broadly accounted for in MYEFO initially before this year is out? Even if we can't see the figure because it's hidden behind contingency reserve, will it be accounted for?

MCALLISTER: Yeah, of course. These matters are being dealt with in the budget, but they are not for publication for the reason Minister Bowen has explained. We're in a negotiation, we're in a contracting environment. We don't want to tip our hand and we want to preserve and protect best value for money for the taxpayer.

JENNETT: All right, let's see where that one takes us. Now, some time after Parliament rises, I assume this week, you are going abroad, Jenny McAllister, representing along with Chris Bowen, Australia at the COP talks in Dubai. To what end? What's your role in this?

MCALLISTER: That's right. So, our goal nationally, of course, is to make sure that we keep pressure on in terms of ambition at these big global meetings. Climate change is a global problem. It can only be solved through cooperation with the other nations of the world. And it's in Australia's interests to make sure that we get good, ambitious results at this meeting. I personally will be taking responsibility, along with the Chilean Minister, for negotiations around adaptation. We've been asked to do that by the COP Presidency. And I think the significance of that is this, that for a long time, Australia was not a constructive participant. Under the previous government, our role was really very unhelpful in these international discussions. This year and last year, Australia has been asked to play a role in supporting the negotiations at these global meetings. That's really important, and significant and we're very pleased to make a contribution.

JENNETT: Is any country likely to be asked to increase its commitments in this round of talks? I think we can rule Australia out, can't we? You're at 43 per cent and not budging, is that fair to say?

MCALLISTER: So, the way the Paris Agreement is organised is that all the countries of the world will need to provide an update to their 2035 targets by 2025. And so that's the timetable that the parties are on. At this COP, though, we'll be doing what's called a global stocktake and so we'll be presenting and agreeing a description of how the world is going and providing the signals about what's to be expected in the future. From Australia's perspective we want to see a really strong outcome in that global stocktake that clearly sets out the need for action and responds to the imperatives of tackling a warming world.

JENNETT: Yeah, well, there are concerns at large that a lot are dragging their feet so, far, but we'll see how that is dealt with in Dubai. Jenny McAllister, really appreciate you giving us some of your time again.

MCALLISTER: It’s a pleasure.