Is Abbott crazy enough to axe the RET?

Reports the Coalition is hell-bent on total abolition of the RET wreak of political expectation-massaging. But then again, Abbott could be plotting a Machiavellian shock.

The Australian Financial Review's Phil Coorey reported Tuesday that the Abbott Government has settled on a plan that would see the Renewable Energy Target effectively closed, with the target for large-scale projects frozen at 16,000GWh, and presumably the rebate for smaller solar systems (known as the Small-scale Renewable Energy Scheme, or SRES) completely abolished.

This would mean the end of the wind power sector in Australia for at least a decade and probably more (until wholesale electricity prices rise to reflect the cost of new entrant gas power stations). For the solar sector sales would plummet dramatically although a much smaller market would remain, based on households and businesses offsetting high retail electricity prices.

But there is still considerable scepticism about whether this is the final decision of the government.

Only last Thursday, Environment Minister Greg Hunt came out accusing the Solar Council’s chief executive John Grimes of lying in accusing the government of plans to slash support for solar. Hunt also said the government was committed to maintaining the RET. If Coorey is right, then Hunt looks like a complete fool who has been left stranded by his colleagues. He’d have no other choice to maintain his dignity, other than to resign his ministerial position in protest.

One industry insider noted that the people privy to such a decision would probably be limited to Prime Minister Tony Abbott, Hunt, Industry Minister Ian Macfarlane and, perhaps, a small number of advisers. Identifying the leaker of the story would not be hard. So it was hard to believe the leak occurred without Abbott’s approval.

This, of course, prompts the question why you’d want to disclose such a decision to the public in advance of an official government announcement.

It might be to test the waters as to the political wisdom of such a change and whether you really want to pursue it.

Or it could be to soften-up the renewables industry to more willingly negotiate over a cut. In the end, the Abbott government can’t get any cut-through the Senate at present and certainly not closure of the scheme. If the renewable energy industry can be persuaded that a cut to the target is better than taking a risk on a re-elected Abbott government with a mandate to close the scheme, they might be co-opted to encourage Labor or Palmer United to pass government-proposed amendments.

Consistent with such an idea is that Liberal Party's federal director, Brian Loughnane, is advising the Cabinet that to ensure re-election they need to now make decisions that "stick to the middle", "slow things down" and involve, "no more ideology". Scrapping the RET in defiance of your own election commitment and in the face of Senate opposition would appear completely contrary to this advice, as detailed in Monday's column, Alan Moran dumped by IPA – a lesson for Abbott?

Yet, one can’t dismiss the idea that there is no hidden agenda. As explained Monday, Abbott’s ascension to the leadership was driven by a group absolutely driven in its passionate rejection of controls on greenhouse gas emissions. They see the movement to address climate change as part of a wider long running battle against socialism.

Of course, this is completely ridiculous once you consider that former Liberal leader John Hewson is a one of the strongest proponents of retaining the RET, but this misses the point. This isn’t logical, it’s emotional. After all, why would a politician with next to no expertise in science choose to take the word of a handful of retired geologists over the conclusions of the meteorological bureaus and academies of science around the world?  

But there’s also some cold-hearted political calculus that could be involved, too. Abbott isn’t ever going to win over those engaged and passionate about renewable energy. Whether he severely cuts the target to cap the renewable energy’s market share at 20 per cent, or completely abolishes the thing, he’ll have the industry at his throat.

The Clean Energy Council’s chief executive, Kane Thornton, sent out a letter to his members recently which stated in relation to their lobbying of the government on the RET that:

“There isn't any point screaming unless the people who count are listening. But, there is no point being nice if you simply get ignored. So it's time to stop playing nice. That's why I met with the Prime Minister last Wednesday to tell him that we had had enough.”

Abbott may well have decided to follow the guidance of Niccolo Machiavelli, who had this political advice for Italian feudal princes:

Upon this, one has to remark that men ought either to be well treated or crushed, because they can avenge themselves of lighter injuries, of more serious ones they cannot; therefore the injury that is to be done to a man ought to be of such a kind that one does not stand in fear of revenge.

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