End renewable schemes now: big emitters

AUSTRALIA'S biggest carbon emitters have called for the immediate withdrawal of certain renewable energy programs.

AUSTRALIA'S biggest carbon emitters have called for the immediate withdrawal of commonwealth and state renewable energy programs that the Productivity Commission has found cost billions of dollars for little result.

States that refused to wind back generous rooftop solar and other programs should be denied Grants Commission funds or GST payments, the Australian Industry Greenhouse Network said.

The AIGN, which represents industries responsible for more than 90 per cent of Australia's carbon emissions in mining, manufacturing and energy production, has lobbied the federal government's multi-party climate change committee for reform.

"It may be that punitive action needs to be taken through a reduced distribution of Grants Commission funds or GST revenues to states that fail to make the required reforms to existing programs or continue to adopt new ones," the AIGN says in a letter to the multi-party committee.

AIGN chief executive Michael Hitchens said this week's Productivity Commission report strengthened the case for reform.

The report found schemes such as state-based feed-in tariffs for rooftop solar cost between five and 10 times as much as a market-based scheme to cut the same amount of CO2 emissions.

All parties, including the Greens and independent MP Tony Windsor, have criticised the ad hoc approach to "complementary measures".

The issue of reform is understood to be on the table for discussion within the multi-party committee, but state reform can be achieved only through the COAG process.

The AIGN yesterday called for the so-called complementary measures to be phased out immediately to concentrate on a market-based scheme.

Mr Hitchens said the Productivity Commission report confirmed that if an economy-wide pricing approach was taken in Australia most of the 237 other policies needed to be abolished.

A spokesman for Climate Change Minister Greg Combet yesterday said the federal government's Renewable Energy Target scheme had already been scaled back to a significant degree.

"Once we introduce a carbon price, the Renewable Energy Target will not need to do the heavy lifting in transforming our energy sector," he said. "That's because the carbon price will provide additional strong incentives for investment in renewable energy.

"Final details of a carbon pricing mechanism are yet to be determined and remain the focus of negotiations in the multi-party climate change committee."

Mr Hitchens said a key challenge for the implementation of a single economy-wide carbon price was the concurrent removal of most of the other measures adopted by all governments.

"In the electricity sector, on the most optimistic estimates, the Productivity Commission shows that, globally, all these policies are saving just 210 million tonnes of CO2-e for a total cost, as measured by subsidy equivalent, of over $18,000 million a year," he said.

A Greens spokesman said the party was keen for complementary measures, but it had always been critical of the ad hoc approach. The Greens have said the state-based feed-in tariffs have been very poorly designed and they wanted to see a carbon price.