Whatever happened to the notion of incentive-based lending? Why not allow energy providers, present or potential, to compete for loan funds - perhaps at slightly better-than-market interest rates, and with perhaps a five year no-premiums interregnum? Wouldn’t that leverage the available Government funds much more effectively? Wouldn’t it filter out the innovation tourists, willing to scoop up a pile of Government funds just to give something a go (in all likelihood in a profligate way, given that it will be free money they are using under a subsidy scheme ) and then walk away at some point in the (very likely) event that it failed? Wouldn’t it cause the rent-seekers (think of the less well-located and efficient coal power facilities which have no hope of delivering a solution any time soon) to think very carefully about signing themselves up for funds they would actually have to pay back in some period less than a geological age? Wouldn’t it attract some of the indirect solutions, such as the soil carbon solution commented on above, or avoided deforestation in tropical rainforests, into the mix? They are, after all, at the present time probably the really low hanging fruit (or maybe just after first-round domestic and industrial energy efficiency measures) in terms of producing net emissions reductions most effectively and efficiently, so why leave them out now, of all times?

An emissions trading system, properly administered, will give the competitors to coal the price margin they need to compete - or at least, all the price margin they should need, so start-up capital looks like the only impediment to their doing so, if they are a serious prospect. Availability of funds to invest in something like sequestration of coal emissions should be all the coal power utilities require to get on with this, if they really think they can do it: although frankly, Freeman’s suggestion of a fairly small levy - preferably levied by the industry itself - on the coal miners (who, after all, will be major beneficiaries of a successful sequestration technology, in both the domestic and export markets) will probably look like a better option for the real players in this sequestration initiative, when they think about it, if having to borrow the funds needed is the only alternative, even at fairly attractive rates. If so, that would produce an even better result for the poor old taxpayers who otherwise are going to be financing all this randomized largesse to the vested and sectional interest groups now battering on the Government’s vault doors.

Government has a responsibility, in introducing a serious emission trading scheme - or a carbon tax - to provide some form of adjustment assistance to ensure that the most efficient adaptation to the new price environment happens. This does not translate into shovelling funds down the throats of those who scream loudest; it means making available the amount of funds needed to generate the energy and emission results needed, al least cost to the taxpayer.