Australia news live: Chalmers says China ambassador’s speech ‘concerning’ as Dutton warns of threat

The electricity and gas supply squeeze that occurred in May and June in eastern Australia thankfully hasn’t been repeated, even with the current flurry of cold and wet conditions across much of the south.

Federal, state and territory energy ministers will meet to discuss what caused the suspension of the national electricity market for nine days in June on Thursday and Friday in Canberra. The meeting will be the first such meeting in years which will kick off with dinner followed by more formal discussions on Friday.

We looked at what’s expected, particularly the addition of ‘emissions‘ finally to the national electricity objective. Heading down that road may lay the basis for a carbon price, at least implicitly.

Environmental concerns had been part of the original design for the market during the Hawke-Keating years but they got scrapped under the Howard government, Bruce Mountain, the head of the Victoria Energy Policy Centre, says.

The proposal for updating the NEO has lately been led by the ACT’s Shane Rattenbury and his Queensland counterpart Mick de Brenni. However, it’s also worth noting Lily D’Ambrosio, Victoria’s energy minister, proposed similar changes back in 2016 to both the electricity and gas objectives, but didn’t get sufficient support from counterparts at the time.

D’Ambrosio, though, tells us her state wasn’t deterred, and proceeded to become the first state to legislate a net-zero emissions target by 2050.

Explicitly including emissions in the national energy bbjectives will provide strategic guidance to new investments to help to achieve net zero at least-cost.

Flagging another issue that will likely be debated at the ministers’ meeting, D’Ambrosio also stressed the need to secure more gas for domestic use rather than export.

It is unacceptable that Australia produces so much gas, yet we have a gas crisis because exporters are making super profits.

We’ll be seeking agreement for [the Australian Energy Market Operator] to have the power to make sure national gas storage facilities have sufficient domestic reserves, and greater market monitoring by the Australian Energy Regulator to stamp out dodgy behaviour that costs households and businesses.

Woodside results are expected to land soon, and may foster more debate about those “super profits”.

Paul Karp

PM and foreign minister have avoided China’s ‘political bait’, Kevin Rudd says

Kevin Rudd also praised the way Anthony Albanese and the foreign minister, Penny Wong, are dealing with the China relationship.

He told Radio National the government has “got the balance right by rejecting China’s list of demands, ignoring it and getting on with the quiet business of de-escalating the relationship”.

Rudd said the pair had avoided the “political bait” of China’s 14 demands, rejecting them on principle. He reiterated the demands “never will be” met by a democratic Australian government and called for “our Chinese friends to move on”.

Asked about Peter Dutton’s comments about appeasement, Rudd accused the Liberal leader of being the “architect of Australia’s megaphone diplomacy to Beijing” that hadn’t solved anything, but rather was aimed at “domestic political posturing”. Rudd also charged the Coalition of failing to stop the lease of the Port or Darwin and to construct submarines.

Paul Karp

‘We’re on a 27-year slide into difficult strategic circumstances,’ Kevin Rudd says of China

Australia’s former prime minister Kevin Rudd has commented on the Chinese ambassador’s warning that Beijing will use “all necessary means” to achieve the reunification of Taiwan.

Rudd said this was the “standard position” from China in the last 25 years but what had changed was Xi Jinping had set a timeframe that reunification should occur by the centenary of the people’s republic of China, 2049. This means “we’re on a 27-year slide into difficult strategic circumstances” for China, Taiwan, the US and its allies, Rudd told Radio National.

The former PM said he was “deeply concerned” about possible use of armed forces in the late 2020s or early 2030s, “when China believes it has a bigger balance of power advantage against the US and Taiwan in that time” and “greater financial and economic resilience against Russia style sanctions”.

Asked about suggestions of re-education camps, Rudd said:

Regarding what China would then do if it was to bring Taiwan forcefully under Chinese sovereignty through military invasion, I think it is inevitable it would use … within Taiwan the same suppression tactics used in the mainland in 1949 and more recently in Hong Kong. That’s why all policy actions by the US and its allies should be directed towards maintaining the status quo over Taiwan, and that means increasing long-term deterrence.

Rudd said the best way to deter China was for the US to supply Taiwan with more weapons to help it achieve a “porcupine defence” and to attempt to “close the military gap” with China in east Asia and the west Pacific.

Asked if the US speaker Nancy Pelosi’s visit was a mistake, Rudd said she had the right to visit Taiwan. But was it wise to do so?

He said:

From a Taiwanese perspective, is its own security better or worse after the visit? The analytical consensus here [in the US] is on balance it’s worse because China has been able to war game effectively for the first time what an invasion would look like and change the parameters for possible military action.

The visit also didn’t help the US stabilise its bilateral relationship. Rudd concluded:

Did she have the right? Yes. Was it wise? No.

Australian treasurer Jim Chalmers has told ABC Radio National this morning that the Chinese ambassador’s language in his address to the National Press Conference last night was “concerning”.

He was followed by opposition leader Peter Dutton who said “we’ve got to be very frank about the threat that is there” and warned against a repeat of what occurred when people doubted Russia’s President Vladimir Putin would invade Ukraine.

More on this story shortly …

Calls for Albanese government to back international carbon offsets

Adam Morton

The Climate Change Authority has recommended that the Albanese government open the door to greater use of international carbon offsets to meet national and business climate change goals.

The authority – an advisory body that faced deep cuts under the Coalition and is about to be newly empowered under Labor – today released a review of the use of international offsets, which some businesses and organisations buy voluntarily to meet self-imposed emissions targets.

It found the carbon market in Australia was “fragmented, inefficient and complicated” and called for a national strategy to help fix it. It said it would be in Australia’s interest for the government to play a leading role in developing a “robust, liquid, high-integrity, trusted and effective global carbon market”.

Carbon offsets, also known as carbon credits, are bought by governments and businesses as an alternative to making emissions cuts. Each carbon credit is said to represent one tonne of carbon dioxide that has either been stopped from going into the atmosphere or sucked out of it.

The authority’s recommendations are likely to be controversial due to concerns about the integrity of some international credits and plans by some companies to rely on access to cheap offsets to meet emissions reduction targets, rather than cut their own pollution.

The authority said the international carbon market was still evolving in the wake of the 2015 Paris climate agreement. It suggested a national carbon market strategy would help clarify the separate roles played by Australian carbon credits and much cheaper international offsets.

But the authority’s chief executive, Brad Archer, said using offsets should not be seen as a substitute for a “plan to decarbonise”:

We need to be reducing emissions wherever we can, as quickly as we can, where that makes sense to do it, but there’s always going to be a need for offsets.

The climate change minister, Chris Bowen, said the government would formally respond to its recommendations in due course but its immediate focus was on the “integrity and growth of the domestic carbon market”.

Critics including the Australian National University’s Prof Andrew Macintosh – a former chair of the government’s emissions reduction assurance committee who used to be responsible for the integrity of the system – have released academic papers arguing that most credits do not actually represent real or new emissions cuts. The clean energy regulator, which is responsible for the system, has rejected this.

Labor has commissioned a review of the Australian system headed by the former chief scientist, Prof Ian Chubb. It is due to report back by the end of the year.

Damian Carrington

Australian scientists say the world’s largest ice sheet can still be saved if the Paris climate change agreement succeeds.

The East Antarctic sheet is due south of Tasmania and holds the vast majority of Earth’s glacier ice. Sea levels would rise by 52 metres if it all melted. It was thought to be stable, but is now showing signs of vulnerability, the scientists said.

The EAIS is far larger than the West Antarctic ice sheet (WAIS), which hosts the so-called “doomsday” Thwaites glacier, which has lost significant stability. Total loss of the WAIS would cause 5 metres of sea level rise.

Sea level is rising faster today than for at least 3,000 years, as mountain glaciers and the Greenland ice cap melt, and ocean waters expand as they heat. Even a few metres of sea level rise will redraw the map of the world, with profound consequences for millions of people in coastal cities from New York City to Shanghai.

The Greenland ice sheet, which could deliver 7 metres of sea level rise, is on the brink of a tipping point after which accelerated melting would become inevitable, scientists warned in 2021. While the full impact of melting ice is felt over centuries, researchers warned that the level of carbon emissions over the next few decades will lock in future sea level rise.

For more on this story read the full report by the Guardian’s environment editor Damian Carrington.

Peter Hannam

Inflation forecasts

Australia’s RBA and Treasury (and so the Albanese government) are forecasting inflation to peak at just under 8% by the end of 2022, with commercial banks (but not investors) tipping the RBA’s cash rate to peak around the same time.

The US provided some indication overnight that higher official interest rates are taking the steam out of price rise, with inflation in July coming in at 8.5%, down from 9.1% in June. Prices were unchanged on a monthly basis.

The impact on financial markets has been notable, with Wall Street up 1.6% to 2.9%, depending on your index.

The prospect of fewer interest rate rises to come – based on the latest inflation numbers, at least – also sent the US dollar tumbling. That sent the Australian dollar bolting over the 70 US cent mark, rising about 1.6 cents to 70.8 US cents.

One month doesn’t make a trend, of course, with much hinging on what happens to oil and food prices. Vladimir Putin and wild weather are tough to predict.

Still, there may be some short-term reassessment of inflation prospects in Australia, too. Before the release of US data, investors were still predicting a steady march higher of the RBA’s cash rate. That may ease back a bit.

A side note: the ABS yesterday set a timetable for when it will finally start releasing monthly consumer price index data – rather than just quarterly ones.

From October, the stats bureau will start providing monthly numbers that will “be an important tool for policy makers, academics and businesses”, said David Gruen, the Australian statistician (who knew there was such a title?). (Media types might also find them useful.)

A caveat, though:

One important point of distinction with the monthly Indicator is that, while it will include prices for all the items in the CPI basket, not all these prices will be updated each month.

So it won’t be quite apples and apples, for now at least.

What’s not clear is when the equivalent wage price index will have a monthly readout (so we can see how much our real wages are falling). The next iteration of that will land on 17 August, when the June quarter WPI lands.

New South Wales residents have been warned by the Bureau of Meteorology to expect fresh rains with flood warnings current.

And welcome to Thursday’s Guardian Australia live blog.

Chinese ambassador to Australian Xiao Qian addressed the National Press Club yesterday with a surprisingly candid speech. Over the course of 90-minute address Xiao drew a line in the sand on Taiwan while indicating that a thawing in relations between China and Australia on trade relations may be possible – and the terms under which China would re-engage.

The speech will be expected to add to heightened tensions as Xiao made clear that China was intent on reunification between Taiwan and the mainland, saying it would use “all necessary means”. When asked what “all necessary means” meant, Xiao responded by saying: “Use your imagination.”

I’m Royce Kurmelovs, taking the blog through the day. With so much going on out there, it’s easy to miss stuff, so if you spot something happening in Australia and think it should be in the blog, you can find me on Twitter at @RoyceRk2 where my DMs are open.

With that, let’s get started …