I have a high regard for Australia and the Australians. Being a motorsport fan I can’t help but feel that any country that runs a V8 Supercar racing series must have a lot going for it.
Just recently, there’s been a change of government. I won’t bore you with details but essentially a slightly left of centre government has been replaced by one that’s somewhat right of centre. This new government has – as it promised – already put in place a series of measures that could have an impact on Australia’s energy sector.
What seems to be driving these changes is that the new Australian government simply doesn’t believe in climate change or rather, it believes that the climate is no longer changing or is changing so slowly that its impact is going to be much less severe than previously thought.
As it stands, Australia’s overall policy consists of a carbon trading scheme, a renewable energy target of 20% and public financing for clean energy projects.
The carbon price which the trading scheme was meant to adopt and which the Australians refer to as a “carbon tax” – was planned to be increased gradually until 2015 which was the start-up date for trading in carbon credits which is when “the Market” would take over the setting of the price.
This process has now been stopped dead in its tracks and the entire carbon trading scheme is to be scrapped.
The new Australian government also intends to conduct a “serious review” of its renewable energy targets but also says it intends introducing a plan to reduce greenhouse gas emissions to 5% below 1990 levels, which seemingly relies heavily on the agricultural sector implementing actions such as more tree planting and storing carbon in soil.
In addition though and very importantly, it has agreed to finance the reduction in emissions from power stations and create incentives for adopting renewable energy. Hopefully, this means the Australian algae-based carbon capture trials will be continued.
The reaction to these changes would appear to be generally quite positive although inevitably it isn’t universal. Interestingly though, the chief economist of the Australian Chamber of Commerce and Industry, Greg Evans, has come out very strongly in favour of the changes.
Of the Carbon Tax he says: “There are no plausible economic or environmental reasons to maintain this unilateral cost penalty on Australian industry. Treasury’s own modelling demonstrates unambiguously that the carbon tax is detrimental to productivity, will cost jobs, damage the international competitiveness of industry and curtail investment.”
That’s pretty clear then.
He adds: “The independent Parliamentary Budget Office, in costing the abolition of the carbon tax for the Coalition, also concluded it would deliver a growth dividend in excess of $1billion over the forward estimates period,” and goes on to say: “It is now time to abandon the carbon tax, support energy efficiency and technology responses and the plans for much more modest government programmes designed to mitigate emissions.”
I like this chap because I pretty much agree with everything he’s said. Irrespective of the latest Australian government’s stance on climate change I have always been of the opinion that carbon trading is utterly pointless, achieves absolutely nothing and is based entirely on free market ideology rather than common sense.
In fact, I believe it sucks money out of the economy which should be going towards developing new alternative energy technologies.
I also object strongly to the idea of paying City spivs a commission on carbon trades especially when the amount of risk equity capital going into clean technology development in the UK is so pathetically low.
I also believe that, like a lot of Square Mile-based activities, carbon trading is open to abuse and corruption.
In fact, as I was writing this column I picked up on a news item to the effect that the City of London Police had arrested six men after fraud squad detectives raided an office in the City which was suspected of being a so-called “boiler room” selling carbon credits.
Apparently, they had already made around a million pounds from cold calling people across the UK.
Now this was unlicensed fraud but surely the UK Government is simply practising licensed fraud.
The money being paid in carbon taxes by UK citizens hasn’t resulted in a boost to the UK clean energy sector. In most of the benefit has gone to overseas manufacturers and technology developers via Renewable Obligation Certificates (ROCs) given to the windfarm operators or in a subsidy to foreign-owned electric car builders and – if they ever reach a conclusion – in what will by any other name be a subsidy to either a French, Chinese or other foreign nuclear reactor builder.
Frankly, I’d like to scrap our entire carbon tax regime. If – for all the usual reasons – we’re not going to benefit industrially then I don’t see why we should go on paying through the nose simply to achieve government policy targets.
Personally, I’d also like to shut down the Carbon Trust and the Energy Technology Institute, neither of which seem to have achieved very much in terms of growing and broadening the clean technology industry.
Greg Evans is right though. The way forward in developing a response to climate change is only through developing new technology and making sure our use of all types of energy is much more efficient.
Of course, the Australians actually realise this already.
After all it’s an Australian company that is providing one of the two types of tidal turbine to be used in a large-scale trial in the Pentland Firth. The other one is French.
What was all that guff about the UK leading the way in wave and tidal technologies?