Scheme's cost estimated at $1.8bn a year

LABOR faces growing business pressure to scale back its renewable energy target when it is reviewed this year, with BHP chief

executive Marius Kloppers urging the Gillard government to "take a cold, hard look" at how it will interact with the carbon

tax.

Mr Kloppers, who runs the nation's biggest company, said governments had introduced a mishmash of energy efficiency schemes,

then renewable energy targets, and now a carbon tax was due to start, but "what we haven't done is to dismantle".

"If you pick a carbon tax, then theoretically the market should work _ because that's why you picked a carbon tax and not a

regulation regime," Mr Kloppers said.

"As the renewable energy target comes up for re-examination during the next 12 months, taking a cold, hard look at how that

intersects with the carbon price, I think, is going to be in everybody's best interest.

"But there is no doubt that these things are interacting in a dyssynergistic way at the moment."
Rec Coverage 28 Day pass

The government promised in 2009 that the energy target would ensure that 20 per cent of Australia's electricity supply would

come from renewable sources by 2020.

Modelling in 2010 suggested that splitting the target would mean it was exceeded, but the latest Treasury modelling estimates

20 per cent of the electricity mix will be from renewables.

Origin Energy boss Grant King said the energy target review, which was to be done by the newly formed Climate Change

Authority, needed to be wide-reaching.

"I think most Australians signed on for the 20 per cent by 2020," Mr King told The Australian.

"I think we need to make sure that's what we're actually getting and paying for."

Business Council of Australia president Tony Shepherd said the renewable energy target should be scrapped, as it was costing

about $1.8 billion a year.

The comments came after the chief executives attended the business advisory forum to the Council of Australian Governments,

which pledged to end duplication in the carbon and energy schemes. First ministers agreed to act on business calls for COAG

to commit today to a competition reform and productivity enhancing agenda led by a commitment to cut unwieldy green tape.

Canberra and the states have agreed to work together to cut duplication and the costs to business.

But the commonwealth would remain responsible for World Heritage and high-risk projects.

Shell Australia chief executive Ann Pickard said it was important to reduce the burden of regulation.

"With the strong Australian dollar we've got to find a way to keep our manufacturing business competitive, and sometimes

people forget that an LNG plant is a manufacturing business," she said.

Rio Tinto boss David Peever backed the move on green tape.

"The current system of regulatory approval processes creates uncertainty and delays, which are costing Australia," Mr Peever

said.

"Windows of opportunity for investment open and close, so that's why it is very important that we are able to streamline the

processes for getting projects up and running and delivering better environmental outcomes." Dow Chemical managing director

Craig Arnold said the BCA's views were accepted but hard data was needed to support reform.

"There was a lot of qualitative commentary. Was it beneficial? Absolutely. Can you get it from good to great? Absolutely. And

the way you do that is with quantitative work," Mr Arnold said.

He said measurable targets and deadlines would be needed to ensure the reforms were achieved.

"Failure to act on reform would relegate Australia to default status as a primary producer rather than an innovative

economy," he said.

"It means you default to being a beach, a farm and a quarry, versus being a serious player in the G20, which we have the

opportunity to be."