Originally posted by Vibewire
There are a lot of capital letters, dollar signs, confusing terms and unclear expectations being thrown around conversations about climate change at the moment.
According to some, last year with the passing of the carbon price Australia’s economy should have fallen to its knees and we should all be dining by candlelight in response to sky rocketing electricity prices. Despite the metaphorical sky not falling in, the latest controversy is the launch of the Clean Energy Finance Corporation (CEFC) and its role in transitioning Australia to a sustainable, clean energy future.
It’s confusing. We have a carbon price. We have a financing scheme (CEFC). We have a Renewable Energy Target. Above all, we have less than 5 years to reduce our carbon emissions if we want to avoid irreversible climate change, according to the International Energy Agency. So what does it all mean?
Last year the Government passed legislation to price carbon pollution. Given our risk-adverse society driven largely by economic considerations and the need for predictability; a price on carbon makes absolute sense. Irrespective of one’s personal beliefs about climate change; when we’re risk averse, we make decisions based on the opinion of the majority of experts whilst balancing the potential gains or losses of taking action; with the possible cost of inaction. In the case of climate change, the potential damage of inaction if thirty two major scientific academies in the world are right about climate change – is clearly catastrophic. The carbon price is logical reaction to this risk. Charge the biggest polluters a fee per tonne for the carbon dioxide they emit. Make the waste a business cost, and big polluters now have an incentive to increase energy efficiency and reduce consumption.
But, even big polluters cannot reduce their carbon emissions endlessly without viable alternatives. That’s where the CEFC comes in. As part of the carbon pricing package; the CEFC commits $10 billion to the renewable energy sector to make the transition away from carbon intensive energy sources. Historically, Australia has depended heavily on its mining and manufacturing and all our big infrastructure is geared around heavy coal consumption. The only way Australia can join other major economies is to invest money in researching new technologies that utilize renewable energy. The CEFC will direct money into research, and when new technologies emerge, the CEFC will help transition technological prototypes into large scale, commercially viable infrastructure through loans and start up funds. In a race against time, this will be pivotal to Australia competing successfully in the rapidly emerging low-carbon global market place.
But, the CEFC isn’t perfect. As well as funneling money into research, development and implementation of new, renewable technologies; it also directs funding through its “low emissions stream”. The problem with this, is that the “low” isn’t low enough. This scheme, as it currently stands will allow for hybrid schemes that include funding coal, gas and diesel. Current gas technologies could potentially fit within the “low emissions scheme” which would be somewhat self defeating if the CEFC started funding inefficient technologies of today instead of the necessary technologies of the future.
The Renewable Energy Target (RET) exists along side, in addition, to these schemes. The RET was passed in 2009and it’s a scheme that solidifies the Government’s commitment that 20% of Australia’s energy consumption will be powered by renewable energy by 2020. There is potentially a problematic overlap between the CEFC and RET as some initiatives will surely fall within the jurisdiction of both schemes. The problem arises if renewable energy produced by CEFC projects is counted towards our RET because that energy would have been produced anyway, only without subsidy. This means we wont see an increase in the amount of renewable energy produced – which, we desperately need.
Policy is dry and difficult to get through, and fear and confusion is exploited in the political arena to push for vested interests. What is straightforward though, is that there is scientific consensus that climate change exists and things are going to get bad, fast if we don’t do something about it. The carbon price package (including the CEFC) and the RET play an important role in beginning Australia’s transition away from coal. It’s not enough and it’s time to demand that the future of our planet, and the livelihoods, health, wellbeing, homes and existence of many Australians is more important than political point scoring.