The recent history of prices for renewable energy certificates which support large-scale renewable power projects, illustrated below, indicates the market took Clive Palmer seriously, but only half seriously, in his Al Gore conference on Wednesday.
Prices spiked the day immediately following his press conference but still sit well below the kind of price they need to be (more than $50) to support the construction of new wind projects required to meet the existing legislated target.
Source: Marco Stella, Traditional Financial Services.
The press release issued by the Palmer United Party (incorrectly dated on their website as July 4 but actually from last week) was pretty unambiguous, stating:
The federal leader of the Palmer United Party and Member for Fairfax Clive Palmer said the party will not support any changes to the Renewable Energy Target (RET) scheme until this matter can be considered by Australians at the next federal election.
But it seems the market’s scepticism of Palmer was right on the money.
Just yesterday on Radio National’s breakfast program PUP’s Tasmanian senator, Jacqui Lambie, was asked to give an example of where she had persuaded Palmer to change his mind. She responded: "The RET scheme, especially in Tasmania, letting him know we’d spoken about the special economic zone that Tasmania needs to be branded under and he agrees there should be an exemption for big business.”
The thing is that if the PUP want Tasmanian power excluded from a RET liability – which would be a legal and administrative nightmare – or perhaps more realistically want aluminium smelting excluded from a liability under the RET, then it requires them to enter into negotiations with the Coalition over the RET legislation. And once you are prepared to negotiate over changes to one element of the scheme, you effectively open up avenues for negotiating over other changes. This creates real risks for the scheme, and particularly the level of the target, to be substantially changed.
Climate Spectator sought clarification from the PUP on precisely what their stance was on changes to the RET – are they open to negotiating changes to the scheme or not? The party's media spokesperson explained that Lambie’s statement reflected her personal view but had not been accepted by her party colleagues. He said that the party’s position was precisely what had been stated in the media release – they would not support any changes to the RET.
This is not the first time we’ve seen contradictory messages out of the PUP. During the Western Australia Senate election re-run, Dio Wang put out a press release stating very clearly that the party would block changes to the RET legislation. Then, when asked about this by the media, Clive Palmer said he wanted the RET to be voluntary. This reflects complete ignorance about how the scheme works and how it is legislated.
In a recent interview with journalist Lenore Taylor, Clive Palmer also seemed to be unaware of the fact that the government had already tabled the legislation to create its Direct Action Emission Reduction Fund (via amendments to the Carbon Farming Initiative legislation).
What is becoming apparent to stakeholders dealing with the PUP is that they have no idea about what a policy commitment means in terms of specific legislative changes. They are making promises to stakeholders without a real appreciation of what those stakeholders understand their promise to mean.
It makes for a very confusing policy landscape, but should be a source of great entertainment over the coming months.