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Electricity politics

By David Leyonhjelm - posted Monday, 9 October 2017

Democracy has an ugly virtue. It makes the problems of government our fault.

Electricity prices are ridiculously high and there is a real prospect of blackouts each summer and winter for the foreseeable future. Politicians are to blame, but so too are voters. Voters want low electricity prices as well as lower greenhouse gas emissions. The lie that they can have both has been sold by politicians, but voters have lapped it up.

I want lower electricity prices and I don't really care about Australia's greenhouse gas emissions, given what other countries are doing.


For my goal of lower electricity prices to be achieved, we need to drop Australia's commitment to cutting greenhouse gas emissions by 26 to 28 per cent over the 25 years to 2030.

But for this to occur, voters also need to be convinced of its wisdom. Otherwise, a party sticking with the emissions reduction commitment will win government and we will be stuck with both the commitment and high electricity prices.

So here's my pitch, direct to voters, asking them to agree to drop the commitment to cut Australia's emissions by 26 to 28 per cent.

We are not succeeding in reducing global greenhouse gas emissions. Emissions are rising rapidly, with countries that make up more than half of global emissions increasing their output each year at a bewildering pace.

If the climatologists are correct, we're screwed, and we need to get ready. We need to take every opportunity to make our economy more efficient, so that with stronger production, incomes and wealth we can leave the next generation with assets rather than debts, and maximise our capacity to help people around the world.

A key efficiency we must grasp is the generation of electricity at the lowest cost. This involves removing constraints on coal and gas fired electricity generation and accepting that Australian greenhouse emissions will rise. Only with least‑cost electricity will Australian businesses thrive, invest in new assets, and create jobs. And only with least-cost electricity and strong employment will households have the wherewithal to start saving for the next generation and consider extending a helping hand to people in need overseas.


Governments around Australia can also prepare for a new climate future by paying off their debts, to ensure that future generations are not faced with a double burden of a new climate and heavy public debt. Government spending and lending programs seeking to contribute to the 26 to 28 per cent emissions reduction commitment are a luxury we can no longer afford.

Despite this pitch, I don't expect the Coalition will drop its emissions reduction commitment anytime soon, or abandon the associated renewable energy target. In my opinion, this will cost the Coalition the next election. There will be blackouts this summer and next, electricity prices will remain painfully high, and no new coal fired power stations will be built, so no promise of relief.

Voters would punish whatever party was in power under these conditions, and the Coalition will lose votes to parties opposed to the renewable energy target, such as my Liberal Democrats, and also to Labor.

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About the Author

David Leyonhjelm is a former Senator for the Liberal Democrats.

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