Energy focus risks ignoring emission cuts

The Carbon Market Institute has proposed an offset scheme that would allow Australia to keep coal-fired power while cutting its emissions.

A climate policy think tank warns the intense focus on how Australia's electricity is generated risks ignoring the nation's commitments to cut emissions.

And the Carbon Market Institute is proposing a compromise it believes reunites energy and climate policy.

When the energy debate heated up Energy Minister Josh Frydenberg coined the term "trilemma" to signify the need for power that was reliable, affordable and reduced emissions.

In recent weeks, politicians have repeated a mantra that only includes the first two.

"Leaving the politics aside and the media messaging aside, there is no way that the government of the day is going to escape scrutiny over our emissions profile," CMI head Peter Castellas tells AAP.

"It's ok to say yes we want coal-fired generation, we want ongoing security and reliability ... however, by dropping the third element of that - emissions reduction - down the pecking order, that's going to get scrutiny from a lot of parties including internationally."

Australia committed to cut its emissions by 26-28 per cent as part of the Paris agreement and it will take a lot of diplomacy to explain why it might miss that target of that turns out to be the case.

Mr Castellas is proposing the government require coal-fired power stations under the clean energy target to buy carbon offsets from projects eligible for its existing Emissions Reduction Fund.

That would allow coal power to stay in the energy market while still cutting overall emissions, and have the added advantage of creating private sector demand for the ERF so the government won't have to pour more money into it when the remaining funds run out in the next year or so.

The idea was gaining some traction across all parties as politicians scramble to find an energy policy parliament will accept.

Nationals MPs have been especially outspoken about what they see as the necessity of keeping coal in the system and Mr Castellas says they've been receptive to his plan because most of the ERF projects used to offset emissions would be in rural and regional locations.

Competition and consumer watchdog head Rod Sims on Wednesday warned there was no "silver bullet" for energy problems, saying the three problems would require three different solutions.

Source AAP

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