The Hilmer reforms to competition policy seek to expunge State protectionism and preference for government-owned bodies. At the heart of this reform program is freedom of trade in electricity. This is being undermined by NSW legislation which, under the banner of greenhouse gas reductions, will severely impede interstate trade in electricity.
The previous Commonwealth Government, having reluctantly absorbed the message that a forced reduction in greenhouse gas emissions would irreparably damage the Australian economy, bought off the greens by setting distant targets for reducing carbon dioxide emissions.
More surely than the efforts of Bill Kelty and John Maitland, this would have eliminated the coal industry in Australia early next century and a swag of energy-intensive industries, beginning with aluminium smelting, would have disappeared in its wake.
The Australian Government has courageously refused to join the populist chorus, now led by the US, calling for talks to reduce emissions of greenhouse gases. The US Administration has the luxury of being able to posture on the world stage secure in the knowledge that any agreements it enters into will fail to be implemented.
Unlike Australia, where treaties automatically become the law and usurp parliamentary laws, the US has checks on the Administration. The US system requires congressional endorsement of treaties and the Clinton Administration knows that Congress would never endorse a treaty with the devastating consequences inherent in forcing a reduction in greenhouse gases.
It is ludicrous, as the Federal Government recognises, for Australia to go it alone in reducing domestic emissions of greenhouse gases -- industries would migrate elsewhere with a likely net increase in emissions of greenhouse gases. It is even more ridiculous for one State to act in isolation.
Yet the NSW Government, responding to duress from an alliance of Greens, Democrats and the Opposition, is to do just this. In order to sell electricity in NSW the Electricity Supply Act (1995) requires the licence holder to develop one, three and five-year plans for:
- Energy efficiency and demand management strategies.
- Strategies for purchasing energy from sustainable sources
The Energy Minister is obliged to require licenses to prepare annual reports on:
- Implementing its demand management strategies.
- Carbon dioxide emissions arising from electricity supplied by it as measured by a methodology approved by the Environment Protection Authority.
- The proportions supplied by each of its sources of electricity.
- Strategies to achieve reduced greenhouse emissions "from electricity supplied to customers in NSW" and developed in negotiation with the minister and independently verified.
The plans and their assessment three years after the conditions are imposed are to be reviewed by the minister in consultation with the Minister for the Environment. For good measure, there is a four-member watchdog Licence Compliance Advisory Board comprising two members nominated by the Minister for Energy and one each by the Nature Conservation Council and Australian Consumers Association.
One aim of these measures is to boost energy from politically correct renewable sources that would otherwise prove too costly for the consumer.
Another is coal with its demonised carbon dioxide emissions. The NSW forces -- and especially the Coalition that pressed the legislation on the Carr Government -- have refused to come clean on the fact that the measures introduced will increase the price of electricity. Still less have they owned up to the fact that a smaller coal industry in that State is the corollary of their action.
Many politicians supporting the legislation would have seen a softer target in the abundant supplies of brown coal-generated electricity from Victoria. This is the cheapest source of power and could be expected to win a substantial share of the NSW off-peak demand once trading is permitted under the National Market. Brown coal produces about 30 per cent more carbon dioxide than black coal.
A softer target for the politicians of NSW though Victorian brown coal may be, it is a more insidious target and the NSW measures undermine national competition policy. There are many in NSW would like to turn their back on national competition policy and protect the local industry even where this means higher prices for users. But the use of specious environmental measures to do this introduces State protectionism.
The ACCC, supposedly the protector of fair competition, has given interim approval of the NSW measures. It has done so without consulting widely. Perhaps it, too, is inflicted by green activism. If so, its actions strike at the root of its credibility as the guardian of competition and consumer interest.
ADVERTISEMENT
No comments:
Post a Comment