For nearly a decade the Coalition has been attempting to dismantle the country’s green energy infrastructure – first trying to defund it, then hollowing it out, then using it to fund fossil fuel projects. Through all this, careful drafting has made it almost impossible for the government to fully implement its plans. By Mike Seccombe.
Tracking the Coalition’s attacks on green energy infrastructure
They thought of it as the Abbott-Proof Fence, a suite of legislation so tightly and unusually structured that it might withstand the depredations of a climate change denying opposition leader should he ever come to government.
A multiparty committee comprising Labor, the Greens and two independent MPs, Rob Oakeshott and Tony Windsor, worked for more than a year to create the Clean Energy Future package: 18 separate pieces of legislation aimed at addressing the threat of climate change, the greatest problem confronting humanity. It passed the parliament in November 2011.
Two years later, Abbott came to office intent on doing as much as he could to destroy what they had crafted. The centrepiece of the package, a world-leading scheme that put a price on carbon pollution, was scrapped.
But the Abbott-Proof Fence did protect some important things, essentially because Abbott could not dismantle them without a vote of the parliament. Notably it protected the twin agencies designed to implement climate action, the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC). The original plan was that the former would provide grants for research and development in renewables and the latter would become a “green bank” to help commercialise these projects, taking equity in them and leveraging private capital.
Over a decade, they have continued doing their work finding and funding renewable climate solutions. They have faced attempts at abolition, at cuts to their funding, as well as meddling in their management and mandates.
Only this week, ARENA survived another attempt to subvert its function. The Morrison government wanted to force it to provide hundreds of millions of dollars in new subsidies for the fossil fuel industry.
But on Monday, that attempt expired in the senate. The death certificate appeared on that day’s notice paper. It read: “Chair of the Standing Committee for the Scrutiny of Delegated Legislation (Senator Fierravanti-Wells): To move – That the Australian Renewable Energy Agency (Implementing the Technology Investment Roadmap) Regulations 2021, made under the Australian Renewable Energy Agency Act 2011, be disallowed.”
Angus Taylor, the minister for Industry, Energy and Emissions Reduction, had tried to modify the legislation using regulation that allows laws to be tweaked without going to a vote in the parliament. The government could have fought to revive the regulations but apparently realised it did not have the numbers.
Some have suggested that in disallowing Taylor’s regulations Concetta Fierravanti-Wells was acting out of spite, having spectacularly fallen out with her party this week. In reality, she had no choice but to kill the government’s plans for ARENA. The Abbott-Proof Fence demanded it.
As one of the fence’s architects, former Greens leader Christine Milne, explains: they not only set up ARENA and the CEFC as independent statutory authorities, limiting the capacity of the relevant minister to direct them; they also legislated funding.
“Now, that is very unusual, but we did it because we didn’t want a repeat of what had happened [with previous policy] … which is that when governments felt like it they just went in and raided the money and spent it on something else.”
They also clearly stipulated what sorts of activities could – and could not – be funded. “Carbon capture and storage was specifically excluded,” Milne says, “as was biomass, burning forests.”
But in a media release on August 4 last year, Taylor boasted that the government had budgeted an extra $1.6 billion so that “under an expanded remit, ARENA is now able to support a broader range of technologies to advance the priorities of the Government’s Technology Investment Roadmap”.
Those technologies included carbon capture and storage (CCS) and the production of hydrogen from gas using CCS. It was part of the government’s plan for a “gas-fired recovery”, under which subsidies are being used to massively expand the production and use of methane.
In a nutshell, the legislation under which Taylor operates specifically forbids ARENA from funding CCS – but still the minister was proposing the agency should spend a huge sum of money funding CCS. This was the contradiction that came before Fierravanti-Wells and her committee.
“My committee is a technical committee,” she tells The Saturday Paper. “It scrutinises delegated legislation. It’s a bipartisan committee. This was a unanimous recommendation of the committee to the senate to disallow these regulations.
“We have never had a contested vote on our committee. And we have never had a recommendation that we have made to the senate for disallowance rejected. So we’ve got a good track record. When we recommend disallowance to the senate, there is a very good reason for it.
“What the minister should have done is instead of trying to change ARENA’s activities by regulation, he should have gone to parliament and asked parliament to change the act.”
She declines to speculate why Taylor did not take that route, but the obvious conclusion is that if he had tried to change the legislation the numbers would have been against him.
In reality, even if the committee had not acted, Taylor’s scheme would likely have been knocked off in the courts, says Hollie Kerwin, senior specialist lawyer with Environmental Justice Australia, a national public interest legal centre.
A legal opinion provided to her organisation by Fiona McLeod, SC, former head of the Law Council of Australia, advised the regulations were open to challenge on multiple fronts.
“That advice and our analysis really made it clear that the regs were very likely to be unlawful,” says Kerwin.
On the basis of that advice, the Smart Energy Council, the peak body for businesses engaged in solar, storage and other renewables, had been prepared to mount a legal challenge to Taylor’s plan.
Not only were the new regulations, introduced on July 23, in contradiction of the ARENA legislation, says Kerwin, but they were “very, very similar” to regulations that had already been disallowed by the senate only a month previously, on June 22.
“And what the law says about that is that you can’t bring the same set of regulations or a set of regulations that are the same in substance within six months. And the underlying reason for that is pretty obvious: it’s very disrespectful of the parliamentary process.”
So, she says, this week’s disallowance was “a very important moment” for ARENA, parliamentary process, and the climate.
The attempt to do an end run around the parliament to subvert the mandate of ARENA is indicative of the current government’s approach to undermining key climate agencies over its time in office, says Richie Merzian, director of the climate and energy program at The Australia Institute.
There are three phases to this approach. First it tried to kill them off, then it tried to starve them out, then it tried to “bastardise” their function. A quick survey of the past nine years underlines how this pattern works.
As well as killing off the carbon price scheme, the Abbott government moved quickly to abolish the Climate Commission, an expert body established to collate climate science and inform the public. It cut funding for climate research by the CSIRO, too.
Abbott tried to abolish ARENA and the CEFC but was prevented by the parliament from doing this.
Ivor Frischknecht, the agency’s inaugural chief executive, who served for six years, believes that having failed to abolish it the Abbott government would then have moved to defund it if not for the “highly unusual” guarantee of funding built into the legislation to protect it.
ARENA’s initial funding allocation was $3 billion and, Frischknecht says, “it is likely, I think, that if it hadn’t been for that future-proofing, Abbott would have deleted it right away”.
As evidence of the government’s hostile intent, he points to another $200 million administered by ARENA but not protected by the legislation. That was cut.
Some years later, with the support of Labor, the government did succeed in legislatively lopping $500 million from ARENA.
The history of the government’s various assaults on the agency and its funding is long and complicated, but the essence of it, says Merzian, is that the government eventually stopped trying to actively injure or kill it and decided to let it die of starvation instead.
“ARENA had 10 years of funding,” Merzian says. “It was going to run out of funds in June 2022 – that is, three months from now. The budget papers of 2020 literally showed funding for 2020 and 2021. And then in 2022 – zero.
“What that meant is that it had to slow down its grant funding. And internally, a lot of good staff, seeing what was in the future, left.”
As noted above, the government did subsequently provide new funding. They did this for two reasons, Merzian believes. The first is that they hoped to use the agency as a vehicle for subsidising fossil fuels. The second is that the continued existence of ARENA serves a public relations purpose, both domestically and internationally.
“It is one of the few positives they can point to in international forums, as evidence they are taking some action on climate,” says Merzian.
The same is true of the $10 billion CEFC, which the government has also tried to nobble in various ways in the past, including by demanding unreasonably high rates of return on its investments in renewables. Now it seeks to use the CEFC as a means of subsidising fossil fuel investments.
This was also identified by Fierravanti-Wells and her committee as a matter of concern. The issue remains unresolved and will be a matter for the next parliament.
The bottom line, according to Merzian and a number of other critics, is that the current federal government continues to slow-walk on real climate action while funnelling money into fossil fuel subsidies portrayed as emissions reduction schemes.
We saw more of this in Tuesday’s budget. It is not just the renewable sector pointing to it, either: the peak body for the oil and gas industry, the Australian Petroleum Production and Exploration Association, celebrated the budget with a media release headed “Federal Budget confirms gas central to the economy and emissions reduction”.
The release welcomed in particular “$300 million additional funding to support low emissions LNG, hydrogen production and associated carbon capture and storage infrastructure”.
Budget analysis by The Australia Institute suggests the gas industry got much more than that – between $3 and $4 billion in total.
In contrast, the 2022-23 budget papers showed funding for the government’s various clean energy agencies falling sharply over the next four years, from $2 billion to $1.9 billion, to $1.5 billion, to $1.3 billion. In all, that represents a 35 per cent cut.
As for the extra spending on CCS, it is at best a technology of unproven worth. As Environmental Justice Australia notes: “CCS prolongs fossil fuel dependency, as it works in conjunction with projects with high emissions profiles, actively precluding any efforts to transition away from fossil fuels.”
Economist Nicki Hutley, a councillor with the Climate Council, is even more blunt. She describes CCS as a “mythical unicorn … which has proven neither technically nor financially feasible”.
She questions how “in good conscience” the government can continue to subsidise fossil fuel development that will only increase the likelihood of climate-related disasters – fires, floods, droughts – in the future.
“Look at the massive amount the government will spend on various programs intended to aid the recovery from the recent floods,” she says. “All together, those [recovery measures] are close to $8 billion.”
Polling suggests a strong chance that there will be a change of government in May. But, says Christine Milne, that does not guarantee a greatly more ambitious climate policy.
She says that a decade ago, when the Abbott-Proof Fence was built, it happened because Labor was a minority government that needed the support of the crossbench. There was strong opposition from some in Labor.
“The way that the multiparty Climate Committee worked was that [prime minister Julia] Gillard would have to take it back to cabinet,” she says.
“Throughout the whole negotiation of ARENA, the CEFC, the carbon price, there were constant leaks in the newspapers as to what was going on in the negotiations, and always to the detriment of the negotiations.”
Milne says there was “a huge fight” in the government, especially with then Resources and Energy minister Martin Ferguson.
“Martin Ferguson absolutely loathed the whole thing. He couldn’t stand the idea that ARENA was going to be an independent statutory authority,” she says. “And of course, when he left politics he went to straight into the fossil fuel lobby.”
Milne’s point is that there were – and still are – people within Labor who are as hostile to serious action on climate change as the current government.
The current leader of the Greens, Adam Bandt, makes the same point to The Saturday Paper. He says that without the intricate structures built into legislation, ARENA and the CEFC would not have survived.
“We knew we had to build them to withstand the constant attacks to destroy and undermine them if the Libs got into power,” he says. “Our plan worked and these successful institutions have survived a decade of attempted Liberal sabotage.”
Milne and Bandt are of course speaking as partisans. But that doesn’t make what they say untrue.
This article was first published in the print edition of The Saturday Paper on April 2, 2022 as "Building the Abbott-Proof Fence".
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