TiP

Suppose you are running a business and you want to go in a bold new direction that provides very interesting opportunities but also carries quite large risks. How do you go about it?

You decide what you would like to achieve. You draw up a plan to reach this goal. You test the elements of the plan and you establish a timeline for pursuing it. You cost it rigorously to ensure that you can afford what you want to do.

Above all, you are honest with yourself about the risks. In truth, this is the point at which more than a few business people lose the plot. Just read the newspapers.

Importantly, you are honest with your shareholders, if you have such.

You are free to run over a cliff on your lonesome.

If you have fellow travellers, they are entitled to know exactly what is going on. The law has a few things to say about this point for businesses.

Against this background, consider what the federal government is up to with its decarbonisation plan.

We have a goal – to cut emissions by five per cent below 2000 levels by 2020 – but very little understanding in the public arena of what this means.
Above all, we don’t have a roadmap, even though the government has been pursuing its goal for more than three years.

The central problem is that a crucial part of the roadmap, the energy white paper promised by Kevin Rudd on assuming office, has not been produced.

After initial delays – it is a huge task – the expectation was that the paper would appear in 2010, but Rudd’s personal political train wreck helped to derail this.

The government is now saying the white paper won’t be available until late next year.

Federal Resources and Energy Minister Martin said in a speech on 1 April that the process needed to be restarted after last year’s election.

“I remain committed to finalising (it) by the end of 2012,” he said.

The big, big difficulty with this timing is that the federal government is determined to push through the carbon price legislation late this year so that it can take effect in July 2012.

This is putting the cart so far in front of the horse that they are not even in the same town.

Decarbonising energy supply and use is not the only means of cutting greenhouse gas emissions.

Indeed, the energy industry is adamant that it must not be.

But stationary energy emissions – as opposed to those from vehicle tailpipes – are central to the decarbonisation plan.

The 2020 target currently stands at 160 million tonnes of annual abatement.

This is higher than it was when Rudd announced the goal because continuing growth in domestic fossil-fuelled energy production keeps making the target bigger.

It is likely, I think, to be about 200 million tonnes in reality by the decade’s end – which is equivalent to the total emissions from power generation today.

To put this in context, note that the renewable energy target scheme, on the government’s calculations, will deliver 30 million tonnes a year of abatement in 2020, assuming the RET can be made to work properly.

At present, partly because of silly decisions to use it also to subsidise solar photovoltaics, the RET market is in a mess and about $4 billion worth of wind farm development is parked in corporate “pending” files.

Another $15 billion worth of wind planning is stalled behind this.

It is wholly illogical to commit to a carbon price regime without the energy white paper, but speeding up production of the latter is easier said than done.

So why not bring the deadline for its delivery forward, perhaps to mid-2012, and delay a decision about the carbon tax until the full picture is available?

Of course, this may be more than Julia Gillard’s political life is worth.

However, without a new energy policy approach as the horse, Julia Gillard’s carbon cart actually is going nowhere, no matter how she and Combet paint it, no matter how many ribbons they tie to it and no matter how loudly they cry “Gee up!”

And coming up with a heavily-laden cart now, then producing a horse to pull it in a year’s time is no way to travel.

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