The debate over the Clean Energy Target overlooks the low target on offer, Reputex says. Credit:AP Federal energy policies remain in flux, with the Turnbull government agreeing to all 50 of the Finkel review's recommendations – bar the CET. Prime Minister Malcolm Turnbull has lately pursued other policies in a bid to deal with Australia's looming energy woes, including this week's pledge of millions of dollars to study the feasibility of increasing storage of the Snowy Hydro scheme. He is also due to meet heads of big energy companies on Wednesday in another bid to browbeat them into curbing price rises. Against this backdrop, the ACF and other environmental groups are urging the government to aim for a more aggressive CET than outlined by Chief Scientist Alan Finkel as the notional goal in his report. Left with a 28 per cent CET, power plants would deliver only a fifth of the national abatement required by 2030, well short of its current pollution share of about 35 per cent, RepuTex said.

The analysis showed that under such a target, annual emissions from the sector would drop 44 million tonnes from current projections to 142 million tonnes by 2030. While power sector growth would be crimped, national emissions would still overshoot the 2030 Paris goal by 119 million tonnes, RepuTex said. A more ambitious CET would not only extract emissions cuts from an industry more capable of delivering them than other sectors such as transport, it would also deliver lower wholesale electricity prices, Mr Harper said. Since wind and solar effectively have no cost of fuel, more solar and wind farms would push out high-cost gas, which often sets wholesale power prices across the National Electricity Market. "Simply introducing more competition makes us less dependent on gas-fired plants and that brings the price down rapidly," Mr Harper said. (See chart below showing how whole prices with a 45 per cent CET would push wholesale prices below $40 per megawatt-hour by 2023, roughly half business as usual levels.)

By applying a 28 per cent CET rate, a straight-line projection would still see the electricity sector producing carbon emissions by 2101. In contrast, applying a 45 per cent CET – more in line with recommendations by the Climate Change Authority of what's needed internationally to keep global warming to under 2 degrees – the sector would hit zero emissions by 2045. The industry will also deliver 41 per cent of the abatement needed to hit the 2030 Paris target along the way. Diving even deeper, a 63 per cent CET would phase out electricity sector emissions by 2035, and supply 60 per cent of the Paris abatement. "Any Clean Energy Target must be ambitious, help Australia meet its international commitments and ensure we are making a swift transition from dirty to clean energy so that we can protect and enjoy a safe and liveable planet," Kelly O'Shanassy, ACF's Chief Executive, said.

"A weak and dirty target is none of these things. Instead it would continue to see dirty fossil fuel plants polluting for another 80 years." Investors' craving for certainty is one reason why the government needed to aim higher – for both the power sector and the economy overall. "The bar is low enough that industry would welcome any target at this point," Mr Harper said. "But a 28 per cent [CET] is clearly not in line with our Paris agreement," he said. "So there would still be some uncertainty with a target that's not compatible with the international agreements, especially when there are no other policies to get there either." Loading

Even with Trump administration's decision in June to pull the US out of Paris, other nations will meet next year to review their pledges. "Australia will certainly be under lots of pressure to scale up their relatively weak target," Mr Harper said. Under RepuTex's scenarios, the CET threshold was set at 0.7 tonnes of CO2-e per MW-hour. While leaving open the prospect that a so-called high-efficiency, low-emissions coal-fired power plant could be built, the high cost of such a plant meant one would "almost certainly" require subsidies to be viable, he said.