Ken Henry #4

A gas export tax would help solve Australia’s energy crisis, says Dr Ken Henry

The dire state of Australia’s domestic electricity market and our lack of investment in renewable energy is a mess of our own making, said former Treasury Secretary Ken Henry.

Australia has also lost its chance to use its vast domestic gas reserves as a temporary fuel to shift our electricity system from heavy reliance on coal to renewables, he says.

“It’s been squandered by politics — part ideological, part I think driven by personal ambition — and it’s put us in a very bad position,” he told ABC this week.

“It’s too late to have the kind of reliance on gas-fired energy as a transition fuel that we imagined last century.”

dr. Henry, who was Australia’s finance minister from 2001 to 2011, argued in 2004 that Australia should introduce a national emissions trading system.

In his 2010 Tax Review, he warned that energy markets could become unstable if investors were not provided with sufficient certainty to make long-term renewable energy investment plans.

Now, looking back, he says that no one involved in energy policy making in the late 1990s and early 2000s could say they didn’t see Australia’s current energy crisis coming.

But a windfall on gas exports could help clear things up, he said.

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Would a gas export tax solve Australia’s energy crisis?Rachel Pupazonia

Australian policymakers have screwed up

dr. Henry spoke to the ABC after one of the most tumultuous weeks in the Australian energy policy experience.

Last week, the electricity system on Australia’s east coast was thrown into chaos power shortages led to a spike in demand as people increased their energy use during a severe cold spell.

Some fossil fuel producers had withdrawn a huge amount of capacity from the national electricity market, exacerbating the predicted electricity shortage and leading to unprecedented regulatory intervention.

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