This morning the Treasurer trumpeted economically viable, technological solutions to the climate change problem off the back of the government’s announcement of $75 million towards a major solar power station in northern Victoria.

According to the government, to be eligible for support under their Low Emissions Technology Demonstration Fund, “technologies will have to demonstrate a potential to be commercially available by 2020 to 2030 and able to reduce the energy sector’s greenhouse gas signature by at least 2% per annum from 2030.”

Doesn’t exactly have a sense of urgency to it, but at least it means the government is putting climate change firmly on the agenda — or does it?

Not necessarily, says Corin Millais, Chief Executive of The Climate Institute. “There’s no new money and no new policy… it’s a reannouncement. We’re all waiting for a new policy announcement from the government — this is not it, ” Millais told Crikey. “The $125 million announced today is a pittance compared to the scale of the climate change problem. The 2002 drought alone cost Australia $6.6 billion so we need a more immediate intervention.”   

And according to Millais, while the Government promises the equivalent of a “cup of water on a bushfire”, there’s an international boom in clean energy – in 2005 the market was worth $74 billion. So why, according to the Climate Institute, has the government effectively killed off what was a good government policy — the Mandatory Renewable Energy Target scheme (MRET)?

In 2005, there was a 229% growth in commissioned clean energy projects compared with 2004, which means the 2010 MRET target for renewables has been met – and now there’s no incentive for continued growth and investment. Under current policy, the “renewables industry is firing not hiring, going offshore and abandoning future investments” and the “proportion of energy that Australia generates from renewables is in decline, in contrast to global trends.”

“The loss of income from the government’s decision to end the renewable energies scheme is billions,” says Millais, “…a $230 million wind farm in Tasmania has been cancelled… and wind farm manufacturer, Vestas is closing its Tasmanian factory citing regulatory uncertainty.”

The government is big on crunching numbers when it comes to climate change, but the books don’t seem to be balancing on this issue. Shadow Minister for Public Accountability Kelvin Thompson has done a bit of his own accounting. By his calculations, the government has underspent on climate change in the years from 1998-2006 by $362,475,000.

So are the Treasurer’s economic credentials in question when it comes to climate change? “The cheapest method to approach the greenhouse problem would be to have a carbon price, the most expensive way is to subsidise a lot of technologies — this isn’t the market friendly way,” says Millais.

“One would expect the government to be more market friendly than they actually are; they’ve taken a very subsidised non-commercial approach to the issue,” says Millais. “Clear regulation that sets a price on carbon and rewards all companies, that’s a pretty mainstream economic and business view that’s quite prevalent.”

Except within the halls of government. A U-turn on climate change? Maybe not.

Peter Fray

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