In an interview with Guardian Australia’s politics live podcast, Butler has also articulated a significantly tougher line on the controversial Adani coalmine than the Labor leader, Bill Shorten – saying it would “not be a positive thing for Australia for the Adani mine to go ahead”.
Butler says he can “understand why the Queensland government might be pressing [the Carmichael coal mine development] but from a national perspective, I just don’t think it stacks up.”
The new podcast interview with Butler traverses the Finkel review and Labor’s likely response, and the party’s attitude to coal – both in supporting research into carbon capture and storage technology, and the Adani coalmine.
Nearly two weeks ago Australia’s chief scientist, Alan Finkel, handed governments a road map for climate and energy policy, with the centrepiece recommendation for a new clean energy target (CET) for the national electricity market.
The CET has been the subject of considerable pushback within Coalition ranks, and on Wednesday, the prime minister opened the way for an alternative to the central Finkel mechanism.
Butler said he was “optimistic” the government had not killed the CET less than two weeks after the publication of the Finkel review, but: “I think some of the signals, particularly over the last 24 hours around government investment or support for new coal fired power stations sends, at the very least, very confusing signals.”
He said the Minerals Council of Australia had been lobbying MPs since the Finkel report’s release to support a power purchase agreement, funded through government, to replace the Hazelwood and the Liddell power stations with two new coal-fired coal generators.
This had subsequently manifested itself in the form of Malcolm Turnbull floating reverse auctions to bring more dispatchable power into the national electricity market, Butler said.
“It remains to be seen whether this is a pretty weird thought-bubble the prime minister has floated to placate the hard right of his party room through this week without having something more permanent done to the CET – or whether they are genuinely serious,” he said.
“If they are genuinely serious, I think this is the most bizarre intervention in the electricity market we have seen for decades.”
He said financial institutions had signalled there was no appetite to build new coal-fired power, and Butler said governments would have to indemnify new builds against the risk of a carbon price, and against regulatory risk, which would leave taxpayers on the hook for massive expense.
The case for new coal-fired power stations was pushed again by the former prime minister Tony Abbott on Wednesday afternoon. Abbott told 2GB he wanted to see more coal plants built.
Butler has reiterated Labor’s position that a clean energy target which allowed coal in the mix was not a clean energy target in anything other than name.
He said Labor would take the view that a CET had to drive new investment in clean energy.
He said even “ultra super critical coal, which sounds like something out of a Marvel comic, but even awesomely ultra super critical coal is still, by any stretch of the imagination, high polluting electricity”.
The Finkel review modelled a CET threshold 0.6 tonnes of CO2 per megawatt hour, which would be too low to see “clean” coal given incentives.
While saying Labor was yet to adopt a formal position on an appropriate threshold for the CET, Butler said a higher baseline of 0.7 or 0.75 is “unambiguously too high to be properly called a clean energy target”.
Addressing the National Press Club in Canberra on Wednesday, Finkel said his CET recommendation was not dead, or on life support, but was “quite legitimately being further evaluated by the government”.
The regular meeting of Coalition MPs this week gave in principle support to all of the other recommendations of the Finkel review, but not the CET, which was referred for further work.
Turnbull on Tuesday cautioned reporters against a conclusion that the government would dump the CET. “I wouldn’t analyse it in that way if I was you,” he said.
In the event the CET survives the current internal deliberations, the government will need Labor in order to legislate the measure.
One Nation confirmed this week it would not support the CET under any circumstances, which cuts off a viable crossbench pathway for the government, unless it can reach a deal with the Greens, which seems unlikely.
Butler was also asked during the interview to explain how Labor was adopting a harder line on new coal-fired power generation, but was supporting the controversial Adani coalmine in Queensland in the event it met regulatory approvals and was not given any taxpayer support.
Butler said he was an opponent of the project. “I have a very clear view that the economics of Adani don’t stack up, and it would not be a positive thing for Australia for the Adani mine to go ahead.
“I think all it would do is take jobs from elsewhere in the coal industry. This is a zero sum game in a declining coal market.”
Several Labor MPs have broken ranks on the Adani issue, saying the project should not proceed.
Shorten has previously argued there is no point having a giant coalmine if you wreck the reef “but, on the other hand, if the deal does stack up, if the science safeguards are there, if the experts are satisfied, then all well and good and there’ll be jobs created”.
Asked to account for the difference in his position to the hedged position articulated regularly by Shorten, Butler said: “I think people take different views about the economics of this.
“I have said I don’t think it stacks up.”
He said while there was an internal spectrum of views about the project on either environmental or economic grounds, all federal Labor MPs had the same negative position on taxpayer support, “which is the matter before us”.