Australia braces for renewed climate wars in risk for Turnbull

[SYDNEY] A fresh skirmish over Australia's climate policy has broken out with lawmakers in Prime Minister Malcolm Turnbull's government raising concerns that a proposed clean energy target would limit the role of coal in the nation's energy mix.

At least 22 ruling coalition members spoke out against the proposal by Chief Scientist Alan Finkel at a special meeting in Canberra late Tuesday, the Australian Financial Review reported. Climate policy has dogged successive leaders in the nation, one of the world's highest per-capita polluters whose second largest export is coal.

The "government is having to deal with a very difficult issue which has frankly vexed governments for over a decade," Treasurer Scott Morrison told reporters Wednesday when asked about unrest within the coalition.

He said it was naive and unrealistic to expect the government's response to the Finkel review to "all be presented nicely tied up in a bow" given the complexity of the issue.

The renewed tensions over climate policy come after Mr Turnbull's Liberal-National coalition failed to gain a bounce in the polls from last month's annual budget, which hit the major banks with higher levies and promised increased funding for infrastructure and schools. His government trails Labor, 47 per cent to 53 per cent, on a two-party-preferred measure, according to a Newspoll published May 29.

Mr Turnbull is under pressure to curb emissions by electricity generators without driving up power costs, hastening the closure of coal-fired stations or exacerbating energy shortages along the east coast.

In his review released last week, Mr Finkel recommended a clean energy target be adopted after 2020, under which a percentage of power would be generated from low emissions sources, encouraging gas, renewables and potentially carbon capture and storage.

The place of coal within that mix remains unclear, however. Mr Finkel's report included modeling that defined a low emissions source as producing a maximum 600 kilograms, or 0.6 tons, of pollution per megawatt hour of energy. So-called clean coal, or High Energy Low Emissions power stations, have a 0.7 ton baseline.

Generators would receive certificates for the power they produce depending on how much their emissions intensity is below a set threshold. Electricity retailers would have to show a predetermined share of their power came from low emissions generators.

Australia has pledged to cut greenhouse gas emissions by at least 26 per cent on 2005 levels by 2030. The path to reaching that goal is strewn with political landmines.

Mr Turnbull almost torpedoed his political career in 2009 when he backed the rival Labor government's emissions trading plan, and was dumped as opposition leader.

His replacement, Tony Abbott, ditched the nation's first-ever carbon pricing mechanism on winning office in 2013. Now a backbench lawmaker, Mr Abbott is among the most vocal critics of a clean energy target.

BLOOMBERG