Ley seeks to keep Coalition, and her leadership, intact with net zero deal

The opposition is pushing for a nuclear energy deal with the US as leader Sussan Ley works up a net zero policy compromise to keep her leadership alive and the fragile Coalition intact.

Before a critical fortnight in the energy and climate debate, expectations are growing in the Liberal Party that the opposition leader will secure internal support for the pledge to reach net zero by 2050 – viewed as key for the Coalition to prove to voters that it takes climate change seriously.

Climate Change and Energy Minister Chris Bowen is expected to release a long-delayed National Climate Risk Assessment imminently before the government announces its 2035 climate targets.

The Paris Agreement, signed by Australia almost a decade ago by the Abbott government, determined that net zero emissions by 2050 target was key to limiting warming below 2 degrees to avoid extreme weather and economic downturns associated with a changing climate.

However, shadow ministers intend to water down Labor’s climate pledge to make it more of an aspiration than a mandate as Bowen prepares for his 10-year target to be scrutinised by corporations, farmers and households.

Coalition frontbenchers are canvassing stripping the net zero goal from laws passed in Labor’s first term, exempting parts of the agriculture sector and energy-intensive smelters from the targets, pushing the date out from 2050 and keeping gas onshore with more pipelines to move the fuel into states such as Victoria.

Each option creates political and policy risk and would expose the party to attacks from Labor and climate scientists. But party moderates are confident a more flexible approach to net zero, with more focus on energy prices and sovereignty, could win over a clutch of younger right-wingers including James Paterson, Claire Chandler, Simon Kennedy and Matt O’Sullivan, none of whom have yet publicly opposed the target.

“The numbers are there for net zero in the Liberal party room. The question is how we keep the Nats with us,” one senior party figure said.

The opposition has been engulfed in arguments over net zero since it lost the election in May, and the Coalition split was driven in part by the Nationals’ antipathy towards net zero, which has been supported since by some Liberals including frontbencher Andrew Hastie.

The Liberal and National parties are conducting separate net zero reviews, although the Nationals’ likely landing position is more clear given its review is being led by leading fossil fuel advocate senator Matt Canavan.

The Business Council last week released modelling by McKinsey estimating that an ambitious 70 per cent cut to emissions by 2035 could cost the government and private industry $500 billion to achieve. 

The Albanese government is struggling to meet the current 2030 target of a 43 per cent reduction as anti-renewables regional activists impede the rollout of solar, wind and transmission projects.

Senior opposition sources, not authorised to divulge internal policy debates, said Labor’s new targets would put heat back onto the rocky green transition and allow the opposition to bring forward its own energy policy announcement as early as October or November rather than next year.

The Coalition’s energy spokesman Dan Tehan is in the US, where he had a meeting on Tuesday (AEST) with one of the Trump administration’s top energy officials – acting undersecretary for energy Mike Goff – and told this masthead Australia should become one of the dozens of nations to work with the US to develop nuclear energy programs. He refused to be drawn on speculation about the net zero compromise.

“The Albanese government should be building co-operation with the US Department of Energy now with regard to technological breakthroughs occurring in the nuclear area,” he told this masthead. “In government, this is something we would seek to do immediately.”

Tehan is travelling to Idaho to inspect the small modular reactors trumpeted by former opposition leader Dutton before the last election and even smaller “micro-reactors” – a technology Tehan said was being developed by Australian Nuclear Association president Mark Ho.

“Basically, you’d be able to fit it into a shipping container, a micro reactor. It would not be at the household level but it could be used for mine sites and could replace diesel in remote locations,” he said, labelling the products a game changer that could be deployed at scale early next decade.

The Coalition has ditched its heavily criticised election promise to build seven nuclear plants, but it retains a pledge to scrap the nation’s nuclear energy ban and invite private capital to build plants. Tehan said a Coalition government would consider public-private partnerships, similar to those seen on big infrastructure projects to mandate safety.

“There’s various funding models,” he said. “In the UK a lot of the design work in bringing in private capital to utilities involved the government taking a ‘golden share’, which basically means the government has the veto right on where the capital comes … and a board position. You can ensure majority Australian ownership.”

Former prime minister John Howard said on Monday that the world was “making a mistake by going overboard about climate change”, adding that he did not believe net zero “is worth the price we’re paying for it”.

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