May 13, 2011

Budget breakdown: the holding pattern on clean-tech investment

In the first of a series of post-budget reports, Fiona Armstrong and Laura Eadie from the Centre for Policy Development explore options to encourage innovation and roll out less mature renewable energy technologies.

When it comes to innovation policy, the Gillard government relies heavily on hot air to hide its lightweight commitment to Australia’s long-term future. In February, the prime minister painted a vision for a “high-tech, high-skill, clean-energy economy that is self-sustaining beyond our reliance on mineral exports”. Yet the 2011-12 federal budget is light on detail about achieving this.

Given the rapid pace of clean-technology development in Europe and Asia and the pressure of the high dollar on manufacturers, developing a coherent set of policies to stimulate low-emissions technology is an essential risk management tool for any government hoping to last beyond the next election, let alone beyond the current mining boom.

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5 thoughts on “Budget breakdown: the holding pattern on clean-tech investment

  1. Dan Cass

    Good article.

    PM Gillard is in a difficult position. Energy Minister Ferguson seems to hate renewable energy. This makes it almost impossible to have a credible climate and energy policy.

    Witness a comment by Ferguson and note that is was made to the cleantech sector – imagine what he says behind our back, when he’s talking to his mates at Big Coal?!

    “I am very firmly of the view that a price on carbon is going to create
    a huge growth opportunity for gas. It is the really only form of
    alternative clean energy in Australia at the moment…”


    Like some other Labor / union figures, he has become a tragic figure – more boss than the bosses, less Labour than Labor.

  2. nicolino

    With Ferguson at the wheel and this ghastly apology for a government in power Australia will still be mining coal when the rest of the world has moved on. Well, at least we have football to make Julia comfortable.

  3. Frank Campbell

    “Australia risks remaining stuck in a holding pattern — while other countries ride the wave of clean-tech investment into the global green economy.”

    Religious fantasy. There is no “wave of clean-tech investment into the global green economy.” But there is a tsunami of heavily subsidised, politically-driven flood of capital into energy dead-ends like wind and domestic solar.

    Basic R and D into renewables is farcical, as the authors say:

    “Yet at a tiny $108.7 million over 14 years, the commitments in the federal budget for venture capital for development and commercialisation of renewable technologies are laughably low.”

    $8 million a year until 2025. 2025! Holy shit- isn’t that well past Armageddon according to Kevin Anderson, Prince Charles and other climate hysterics? And $8 million is just lolly money, innit?

    Indeed. So no one is really taking Imminent Armageddon seriously, are they? So let’s postpone it.

    Meanwhile, the authors know what to do:

    “We urgently need serious policies to scale up alternative base-load renewable energy technologies, such as wave, geothermal and concentrating solar thermal.”

    Come again? “Scale up”? What about “proving up” first? Britain has just abandoned its $100 billion Severn tidal barrage- not proven, insanely expensive and wouild massacre the Severn wetlands. Geothermal? Works in Iceland and NZ for obvious reasons. Yet to get to first base. “Concentrating solar thermal”? Has potential but hasn’t won over this distance.

    This piece gets us nowhere. It’s political, economic and technological naivete.

    First, you have to kill off magical, wasteful “solutions” like wind- which get all the capital now. Second, you have to kill off the climate hysteria which generates these crippling, futile gestures. Third, real money- not loose change- has to be invested in proving new renewable technologies. Even headbanging AGW deniers can sign up to that.

    A new political coalition is essential- or the hard Right will assume power in the near future. And that’s bad news for everything, not just the Savonarolas of the climate cult.

  4. shake up

    “Geothermal? Works in Iceland and NZ for obvious reasons. Yet to get to first base”

    Frank, much of what you say makes sense, but what is the logic in your dismissal of geothermal? That because it is not already producing on a large scale it is not proven. It is proven to work and big mainstream energy companies are farming in to existing projects with significant amounts of their cash but I think everyone agrees the investment climate for renewables in Australia over the last few years has been terrible (GFC, delayed carbon price, etc.)

    Geothermal has MASSIVE potential in Australia, as in, it could easily replace coal for baseload power in 15- 20 years with major investment, including in grid connection. Fiona and Laura are right to argue for government investment to scale up wave and geothermal. I would like to see a big chunk of the carbon tax revenue go to this, but sadly the government hasn’t the ticker for that. Killing off the diesel rebate and putting the money into the most promising renewables like wave and geothermal is an absolute no-brainer. Even without connecting to the national grid, there are thousands of mines that are off-grid and are paying a fortune for their diesel power (albeit heavily subsidised by the government).

    The government needs to stand up to the vested interests, push the carbon tax through and look to support cutting edge renewables, with a view to exporting the technology and expertise as the rest of the world transitions to cleaner energy.

    I am so sick of the vested interests (from the polluters, to the corrupt scientists making a motza out of ‘sceptic’ books and talks, to the Murdoch press, to Abbott’s self-interest) holding so much sway over the public on this. If we don’t act now we will only be dropping even bigger problems on our kids. The ‘market,’ left alone, will NOT solve this. Hazelwood and the like could still be running in 30 years if the government doesn’t intervene on this.

  5. Frank Campbell

    Shake Up

    I’m not dismissing any technology at all (except wind- a premodern proven failure).

    Geothermal is the most elegant technology, theoretically speaking. It appears to have minimal negative environmental effects (vs for example the idiotic $100 billion Severn tidal barrage, now abandoned by the UK govt).

    And the diesel rebate has been a monster rort for decades…(undermines the sickening agribusiness mantra “the most efficient farmers in the world..unsubsidised”)

    But the carbon tax will not knock coal off- unless it is very steep in which case gas is the next choice. Gas is FF though, and the climate cult can’t bear that- even though it would lead to a sharp drop in CO2 emissions.

    politically, a high carbon tax is a dead duck. Even $20 is parachuting the Naked Jesuit into the Lodge…

    So would a huge carbon tax drive renewables? It would certainly drive fuel efficiency, but that won’t make a huge difference to emissions…it might cause a rapid expansion of domestic solar and wind- both absolute disasters (piddling amounts of power at great cost- a cost dumped on the poor and the remnant industrial economy, and a fat subsidy for middle-class rentiers)

    This is why direct R and D of renewables is the only solution. Big bucks. Now. Long overdue. Typical capitalist behaviour- why bother if we’re making a shitload of money using FF? No need to invoke climate Armageddon- peak oil etc is reason enough to get on with it.

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