Retreat on Paris emissions target may not save Malcolm Turnbull

Malcolm Turnbull has dumped the government’s plans to legislate the Paris emissions-­reduction target, in a dramatic ­capitulation to rebel MPs.

Malcolm and Lucy Turnbull attending a Nationals Party Reception at the Hyatt Hotel in Canberra. Picture: Kym Smith.

Malcolm Turnbull has dumped the government’s plans to legislate the 26 per cent Paris emissions-­reduction target, in a dramatic ­capitulation to rebel MPs and ministers threatening to cross the floor and vote it down.

Senior government sources confirmed that Mr Turnbull’s praetorian guard had come to the conclusion on Thursday night that threats to his leadership were real and that a bold move was needed to head off the growing likelihood of a revolt.

This followed a group of ­marginal-seat MPs from Victoria, Queensland and NSW approaching Home Affairs Minister and leading conservative Peter Dutton over the course of the past week to express their concerns that the government was heading towards a disastrous defeat.

The Weekend Australian has confirmed with several of those MPs that Mr Dutton would have their support should Mr Turnbull’s leadership become terminal.

Under the backdown, the 2015 climate change commitment would be retained but mandated through a ministerial order and only after advice from the competition regulator that it would not ­increase power prices.

The plan to carve out the target from the federal legislation follows a rearguard action from a group of 10 rebel Coalition MPs who have withheld their support for the ­national energy guarantee and threatened to cross the floor in a direct challenge to Mr Turnbull’s authority as leader.

Despite the last-minute policy shift, some conservative MPs were saying last night the policy recalibration would not be enough to win over all of the Coalition holdouts or restore confidence in Mr Turnbull’s leadership, following the poor showing at the Longman by-election last month and the Prime ­Minister’s 38 consecutive Newspoll defeats.

Former deputy prime minister Barnaby Joyce last night suggested Mr Turnbull should reconsider his ability to lead the Coalition to ­victory before the next federal ­election but denied knowledge of any move.

“I’ve always said openly that if a person gets to a point where they think they can’t win an election then they should consult with their colleagues about what happens next,” Mr Joyce told ABC radio.

Asked when Mr Turnbull should reconsider his position, the former Nationals leader said: ­“Before the election.”

The changes to the energy shake-up were swiftly condemned by Tony Abbott, who told The Weekend Australian he was concerned about whether the new plan would allow a future Shorten government to ramp up emissions-reduction targets more easily.

“It does look like policy on the run and, given that both the Prime Minister and the Minister for ­Energy emerged on Monday to declare overwhelming support for their policy, it seems a little strange that the policy has now been turned on its head,” the former prime minister said.

“I have grave concerns about anything which would enable a ­future Labor government to ramp up what are already very onerous emissions-reduction targets, particularly if it is still intended that there be massive fines for any breach of emissions-reduction ­requirements.”

Victorian Liberal MP Kevin Andrews — one of the leading rebels on emissions-reduction targets — declared Mr Turnbull’s plan for regulation “was just as bad as legislation”.

“We have signed Paris and will meet the target. We need neither legislation nor regulation,” Mr ­Andrews said.

The Weekend Australian has also confirmed the Prime Minister will pursue an aggressive campaign to force down energy bills that will include arming the Australian Competition & Consumer Commission with divestiture powers to strip the big three energy ­companies of generation assets if their early closure leads to higher prices.

It is understood that Mr Turnbull will legislate to give the ­government the broad powers to act against the big three power companies, or “gentailers”, in a campaign that has the hallmarks of the government’s crackdown on the banks.

Mr Turnbull and Scott Morrison will use the weekend to finalise the package of measures to present to Coalition MPs as early as Monday.

Late yesterday, Mr Turnbull decided that the 26 per cent Paris target would not survive a vote in the parliament, with at least six Coalition MPs confirming they would cross the floor.

A decision was made to ensure the 2015 climate change commitment would instead be mandated through ministerial regulation or executive order and only following advice from the ACCC that would need to be tabled in the parliament.

If a minister wanted to change the target they would have to ­inform the energy regulator and the ACCC so they could provide a ­report detailing the impact on ­prices. That report would need to be ­released publicly before a decision was made.

This means the model being adopted by Mr Turnbull would force a Labor government to seek the same assurance from the ACCC that its 45 per cent ­target would not raise power ­prices.

It is understood that the decision to remove the Paris target from legislation was made on Thursday night in a late-night meeting between Mr Turnbull, Scott Morrison and Energy Minister Josh Frydenberg.

It will mean the only legislation required by the government to ­fulfil the commonwealth component of the NEG would be minor and include carbon credits and offsets.

The Weekend Australian can also reveal that the legislation that was being proposed — but being kept secret from Coalition MPs — would have legislated an emissions-intensity target over time.

Mr Abbott said the decision not to share the legislation was “shambolic” and “no way to run a government” as well as a “serious breach of due process”.

Additional reporting: Dennis Shanahan, Ben Packham