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Turnbull government tests out “carbon price” on electricity. It bombs, then gets retracted.

It started on Monday on ABC AM when energy minister Josh Frydenberg was asked about the review about climate policies.

If you listen to the full AM program from 9 – 10:30mins he absolutely rules out an economy wide approach, but when asked about an electricity sector “emissions intensity scheme” he does say “wait and see”. Was it a bizarre slip of the tongue, or was he fishing to find out the strength of the opposition to bringing in a carbon price on electricity?

9 mins: He is asked about an energy “emission intensity scheme”.

Josh rejects any “economy wide approach”.  “”What this review has indicated is we will look at a sector-by-sector approach. The electricity sector is the one which produces the most emissions — around a third of Australia’s emissions come from that sector.”


Frydenberg: We know that a large number of bodies have recommended an emissions intensity scheme a baseline and credit scheme.

Any chance of that happening?

 10 minutes  Frydenberg   “Wait and see… we want to hear from the experts on the lowest cost of abatement… thats what we owe the Australian households and businesses.”

 FairFax and the ABC promptly amplified that to “Carbon price for power generators back on the table “.

To which Liberal members and skeptics unleashed their scorn. This is the exact issue that got Turnbull chucked out as leader of the opposition in 2009, and the backlash is stronger now:

Tony Abbott’s former chief of staff Peta Credlin claimed she had never seen such a reaction from backbenchers on an issue like she had yesterday.

“My phone has not stopped all day. People are really angry that they sense the party will re-litigate those issues which they had considered closed and dealt with,” she told Sky News last night.

MP’s were having none of it:

Fairfax Media spoke to 10 Coalition MPs on Monday about the prospect of an emissions intensity scheme for the electricity sector and all of them were scathing at the prospect of what is, in effect, a carbon price being re-introduced in Australia, regardless of the relative cost.

Liberal Senator Cory Bernardi, said it was “one of the dumbest things I’ve ever heard. … To get back on the right economic track, we need the cheapest electricity in the world.”

West Australian MP Andrew Hastie said his overriding concern was the cost of living for families and asked: “Why would we unilaterally, economically disarm [by adopting a price on carbon]?”

So the Turnbull government had to come out and say “No way”.

The Turnbull government will maintain its blanket ban on the introduction of an emissions trading scheme and has ruled out an increase to the renewable energy target ahead of its long-awaited review of its climate change policy next year.

Environment and Energy Minister Josh Frydenberg will today announce the government’s terms of reference for its review, which will look at how Australia can meet and expand on its target to reduce emissions by 26 per cent to 28 per cent on 2005 levels by 2030.

We could believe this might be a slip and a Love Media beat up, but then Barnaby Joyce appears to confirm the Coalition was thinking of putting a carbon price on electricity, saying “He said there was potential for a scheme where power generators could pay for emissions above a particular level.” Which is all a bit bizarre, since there already is a scheme that does this kind of cap N trade.  It’s called the Safeguard Mechanism, and applies to our biggest 150 corporate emitters, though at a very low level (which could always be ramped up).

Which is, of course, just another kind of tax, though it only applies to people who use electricity.
Homes with candles and Coolgardie safes will be exempt.

h/t Pat. Andrew Bolt.

UPDATE: Chris Kenny calls it Kryptonite for Turnbull

In US politics they talk about “third rail” issues, based on the extra rail that supplies electricity to New York subway trains; touch it and you are zapped.

Carbon pricing is Malcolm Turnbull’s third rail and this week he voluntarily grasped it, again.

Seven years ago last Thursday Turnbull lost the leadership of the Liberal Party because he wanted to put a price on carbon and Tony Abbott organised a revolt.

In the biggest shock since the election we returned to this ­divisive debate for a crazy 24 hours.

This was unfathomable for Turnbull — resistance within the Coalition was so strong it brought a similar fallout into the realms of possibility (although with a one-seat majority Turnbull has in-built insurance against insurgency). But he did — knowingly — reignite the Coalition’s most inflammatory debate.

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