The ACT has warned it will be “very difficult” to sign on to the national energy guarantee in early August if Josh Frydenberg fails to give any ground in the remaining weeks before the definitive meeting of the Coag energy council.



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The ACT climate change minister Shane Rattenbury told Guardian Australia he believes conservative internal critics of the policy, such as the former prime minister Tony Abbott, are intent on turning the screws on Frydenberg, the federal energy minister, as the policy enters its make-or-break stage.

Rattenbury points out that another Coalition party room outbreak on the policy this week is likely a tactical ploy by opponents designed to ensure that Frydenberg is locked in to a no-compromise position with the states and territories – which could have the practical effect of scuttling the policy.

“Obviously we’ve seen the push from the government backbench this week which I think is designed to ensure there is no movement,” Rattenbury said in an interview with Guardian Australia. “This puts the federal minister in a particularly difficult position I think.”

On Wednesday evening, Tony Abbott joined fellow conservative Liberal Craig Kelly in signalling he was prepared to cross the floor to vote against the policy if he didn’t get the outcome he wanted.

Rattenbury says over the months of talks between the Turnbull government and the states and territories over the Neg, there has been no willingness at the Commonwealth level to make any concessions, whereas the states and territories are being pressured to sign on despite significant concerns about the emissions reduction target in the scheme.

“In the politics of this, we are being told in the national interest we must negotiate and make compromises, but we’ve seen no willingness from the Commonwealth to demonstrate any compromise,” the ACT minister said.

“Negotiating 101 tells you you don’t put your position on the table and then say you are not moving – but that’s what the Commonwealth has done from the get go”.

The policy will go to a meeting of the energy council of Coag in early August, and any individual state or territory has the power to scuttle the scheme. Implementing the Neg requires consensus across jurisdictions to change the current rules governing the national electricity market.

As revealed by Guardian Australia last week, Frydenberg used a phone hook up with his state and territory counterparts to tell them he would not accept a demand by some conservative colleagues to back-end load emissions reduction in the scheme to the second half of the decade between 2020 and 2030. He said emissions reduction would be linear over the ten years.

But Rattenbury raised concerns during that call about the lack of ambition in the scheme’s emissions reduction target for the electricity sector, which is a 26% reduction on 2005 levels by 2030.

Many market analysts point out that target is too weak to see Australia meet its commitments under the Paris climate agreement, and will have the effect of forcing steeper abatement on other sectors of the economy, where cutting pollution is much more expensive.

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The ACT and the other state Labor governments have been pushing for a more ambitious target. If conservatives make that impossible for Frydenberg to deliver, then some have pushed for an obvious ratchet mechanism to ensure that future governments can scale up the target quickly.

Rattenbury said he was unable to say which way the territory would go in the event that no concessions from Frydenberg were offered. But if there was no movement from the Commonwealth before August, “that is going to make it very difficult for us”.

Erwin Jackson from Environment Victoria argues the latest proposal from the Commonwealth should be rejected because the Turnbull government was now trying to lock-in a 10-year emissions budget for the electricity industry.

Jackson said an earlier draft of a paper setting out the emissions reduction framework for the Neg had flagged that targets could be changed with five years’ notice. But the government’s latest consultation paper, circulated to stakeholders last Friday, proposes that an emissions target trajectory be set for a decade.

He characterised the decision to roll back the five-year option as “a retrograde, shortsighted and backward step that is a recipe for market chaos”.

Tristan Edis from Green Energy Markets points out other flaws in the scheme. He says the current design principles provide no recognition or reward for the abatement from people and businesses that consume electricity generated by their own solar systems – which is a problem, given the growing penetration of solar panels.

He’s also critical of measures that force generators to sell emission abatement to retailers in the year it is produced. Edis says that will “heavily favour the major incumbent electricity companies at the expense of pure-play renewable energy companies”.