Green/Left Australian government likely to turn down people's electricity consumption by 3 percent a year

That's about 10% during their term of government if they win the upcoming election. At the very least, power is going to cost Australians a lot more. The crazy talk is already pushing prices up

In what is likely to be a vigorous debate, this afternoon cabinet will also consider a proposal to cut energy consumption by up to 3 per cent a year.

The target is strongly supported by some ministers searching for ways to rebuild Labor's green credentials - battered by the deferral of the emissions trading scheme - before the election expected to be called for late next month.

But others argue that such a target could cause politically dangerous rises in electricity prices and another scare campaign by the Coalition.

Ms Gillard is under pressure from some ministers to promise that Labor will legislate an emissions trading scheme in a second term, to placate voters angry that Labor deferred the program.

Sources say Ms Gillard is intent on building industry and community consensus for a workable scheme before a final decision, in part to ensure the new policy does not founder in the Senate as the original scheme did.

Asked yesterday if she sought to differentiate herself from the Opposition Leader, Tony Abbott, on the starting point issue of accepting climate science, Ms Gillard said: "I believe climate change is caused by human activity.

"I also understand that doing the things that we will need to do to change our economy, to change the way we live to deal with climate change, are complicated. They will require dialogue with the community. They will require the community's deep and lasting consensus about these changes."

Sources said other energy-efficiency measures proposed in a recent expert report are more likely to win cabinet support.

These include setting nationwide efficiency standards and possibly a scheme to allow farmers to claim credit for saving emissions through forestry and land management in ways that comply with the international rules under the Kyoto protocol.

Policies to meet the new national energy initiative would include requirements that electricity retailers reduce energy usage by their customers by a fixed percentage each year.

Cabinet will also consider pollution standards for new electricity generators and requirements for existing generators to calculate how they can reduce their greenhouse emissions.

Energy industry and other businesses are seeking definition from the government, complaining that not knowing whether or when they will face a carbon price is creating an untenable level of investment uncertainty.

The energy industry says that within a few years the uncertainty will lead to short-term investment decisions that will push up the cost of power anyway - the same hip-pocket concern that has driven political opposition to an emissions trading scheme.


Posted by John J. Ray (M.A.; Ph.D.).

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