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In a last minute bid to halt an internal revolt and save his leadership, Prime Minister Malcolm Turnbull has announced he will abandon plans to legislate the Paris climate change targets through the National Energy Guarantee.

Turnbull's updated National Energy Guarantee - which has long proved to be a political football for Home Affairs Minister Peter Dutton and former Prime Minister Tony Abbott - will no longer require a 26% decrease to greenhouse gas emissions through legislation or regulation.

Removing this target means Australia will fail to deliver on its Paris agreement commitment.  

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Turnbull claimed the change was required because the emissions target legislation would not pass in Parliament, despite the government having a majority of one in the House of Representatives.

"In politics you have to focus on what you can deliver," Turnbull said. "The National Energy Guarantee can operate to create investment certainty without an emissions intensity standard. At this stage, we cannot secure sufficient support to pass it through the House of Representatives.”

In an attempt to shift focus away from emissions reductions and toward power prices, Turnbull has announced new measures that will reduce electricity bills by hundreds of dollars a year and "shift the balance of the electricity market back in favour of families and businesses."

Under the new measures, the guarantee will adopt the Australian Competition and Consumer Commission’s plan to initiate a default market offer, give more money to the ACCC and the Australian Energy Regulator to track pricing within the electricity market, and increase financial penalties for Australia’s largest energy suppliers - Origin, Energy Australia and AGL.

“Power bills are one of the biggest cost of living pressures facing Australian families and, indeed, businesses," Turnbull said. "Cheaper power has always been our number one priority when it comes to energy policy. Each and every one of these measures is designed with just one purpose in mind - making sure you get the best deal on electricity."

The new measures and discourse surrounding Liberal leadership have received a varied response from parliamentarians.

Ex-deputy Prime Minister Barnaby Joyce told Sky News he didn't think a prime ministerial shift was a good idea.

"What Malcolm Turbull’s shown is his capacity to listen, his capacity to understand the concerns that are out there in the electorate, and isn't that what a democracy is about?” he stated. "I'm not here to comment on Peter Dutton. I know Peter Dutton is doing a very good job, Malcolm Turnbull is doing a very good job. I don't think changing prime ministers looks good. I thought the Kevin Rudd-Julia Gillard thing, people didn't like it. When the Malcolm Turnbull-Tony Abbott thing happened, I don't think they liked that. I don't think they'd like that if that happened again."

Opposition leader Bill Shorten announced he was willing to discuss the government's new policy measures in further detail.

"We would like to talk about energy prices, as long as it includes more renewable energy, lower prices and less pollution,” he stated. "I say to Malcolm, you have my number, we are down the hall. I'm not saying we will automatically agree, but I'm willing to put aside party politics to lower energy prices, to lower emissions, and to have more renewable energy in the system."

Business and industry groups have demanded the Turnbull government “stay the course” on the National Energy Guarantee, stating that whilst the guarantee was far from perfect, its implementation would far surpass a return to years of energy policy dysfunction.

Energy program director from the Grattan Institute Tony Wood stated that despite an almost predictable coalition leadership revolt as a result of the National Energy Guarantee, an ensuing guarantee dissolution would nevertheless be a disaster.

"The National Energy Guarantee is a proxy for the self-destructive intent of the Coalition government. If it destroys another leader that may be sadly predictable in a toxic political environment," he told The Australian Financial Review. "If the guarantee itself is destroyed in the process that would be an outcome to be regretted by anyone concerned for effective policy."

Wood further called for both state and federal leaders to concur on the guarantee immediately.

"The Turnbull-led Opposition almost delivered a sound climate policy with the Rudd Labor government. Their failure led to the ensuing mess that is obvious to all," he stated. "Today, the Shorten-led Opposition and the majority of the Coalition government have the opportunity to deliver a platform for both lower emissions and lower prices. Political opportunism on one side and fatalistic manoeuvring on the other could kill the opportunity. We should exhort our leaders to the opposite."

Business Council of Australia Chief executive Jennifer Westacott stated it would be businesses and households which would suffer as a result of political leaders' inability to agree on energy and climate change policy.

"We need to end this decade of dysfunction and get on and do something," Westacott said. "We need a workable national energy policy that provides certainty around how emissions will be treated in the future. Only policy stability and certainty will provide the confidence we need to make important investment decisions in the electricity market."

The Paris agreement, which saw 96 countries pledge their support to reduce greenhouse gas emissions by 26% by 2030, was first formalised on December 5, 2015. The agreement ultimately gave countries around the world the directive to make the shift toward a “low-emissions, climate-resilient path”.

According to The Australian Conservation Foundation's CEO Kelly O’Shanassy, a move away from the Paris agreement and toward legislating a watered-down energy guarantee is not only a recipe for future uncertainty, but also a blatant disregard for an agreement that was a major victory for the environment.

“The guarantee is nobody’s preferred policy,” she stated in a press release. “Climate damage is accelerating. Our communities are facing more extreme droughts, heat, and floods. We need real climate leadership from our elected representatives. We must take the politics out of climate change and allow future governments to make emissions targets more ambitious without another major legislative fight.”

So, where to from here?

The Coalition will debate the details of the new National Energy Guarantee scheme on Aug. 21 during a joint party room meeting. A decision surrounding Liberal Party leadership will occur during their own party room meeting, however, there is no meeting scheduled for Aug. 21 nor has there been a request for one. There has been discussion from Turnbull supporters that a Liberal Party “empty-chair” challenge is a possibility.

Ultimately, if Australia is to instigate low emissions and support the reduction of climate change, it must work toward the Paris agreement targets, not away from them.


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