ALMOST half of Victoria's 20 per cent emissions reduction target could be met through a federal government program paying to shut heavy-emitting power plants, think tank ClimateWorks says.
In a submission to the Baillieu government's review of Victoria's climate change laws, ClimateWorks says replacing one large and one small brown-coal power generator in the Latrobe Valley with gas electricity could slash the state's emission by 9.6 per cent.
It comes as the federal government has now invited all five generators who expressed early interest in being paid to shut down to enter into direct negotiations.
The plants up for closure are Hazelwood, Yallourn and Morwell in the Latrobe Valley, Playford in South Australia and Collinsville in Queensland. The pay-to-close program aims to shut about 2000 megawatts of highly emitting generation capacity by 2020, generally seen as enough to shut one large plant such as Hazelwood or Yallourn and one small such as Morwell, Playford or Collinsville.
Submissions to the review of the Victorian Climate Change Act - passed in 2010 by the former Brumby government - were made public this week.
The act, which legislates the 20 per cent target and other measures, required a review to be held when the federal carbon price scheme was brought in.
Announcing the review in October, state Climate Change Minister Ryan Smith said ''it is imperative that we avoid duplication and minimise the waste of Victorian resources, while making the most of any opportunities that may be identified in the review''.
The ClimateWorks submission bases its findings on the emissions savings from closing Hazelwood and Morwell and replacing their capacity with combined cycle gas generation.
If the two plants are replaced by 50 per cent gas and 50 per cent renewables, the cut to the state's emissions rises to 11 per cent, ClimateWorks says.
''Given the substantial additional potential to reduce emissions that exists across the state much of which provides financial or productivity benefits to Victorian businesses and households, maintaining a 20 per cent emissions reduction target is therefore both realistic and achievable,'' the ClimateWorks submission says.
Other submissions to the review by prominent businesses with significant Victorian interests - Alcoa, Loy Yang Power and ExxonMobil - questioned the need for state-based emissions targets in the wake of a comprehensive federal carbon program.
Alcoa's general manager for climate strategy, Tim McAuliffe, wrote ''inefficiencies and significantly increased costs can arise from state initiatives when a national carbon pricing mechanism has been established''.
ExxonMobil's submission argues with the passage of the federal carbon price ''the need for states to take independent action no longer exists''.
The Australian Industry Group's submission says it is opposed to sub-national targets which impose greater emissions reductions than Australia's national 5 per cent cut.
It says any state target pursued should be for emissions from sectors not covered by the federal scheme.
Other submissions by green groups and some city council's supported retaining the state climate laws.
The City of Melbourne said the 20 per cent target was a strong commitment to emissions reductions that would help the council meet its own targets.