<a href="http://www.gmagazine.com.au/blogs/leon#">The Business of Green</a>

The Business of Green

Money matters in the green world, by Leon Gettler.

Budget and climate change

2011 Budget

Credit: sxc.hu

- Advertisement -

While the government says it will introduce a carbon price, the Federal Budget shows what little regard Canberra has for the clean tech industry and, by extension, climate change.

With the Budget, renewable energy schemes were either closed, chopped, or pushed back beyond current spending horizons. That tells us Australia finds it hard to see itself as an innovator and developer of new technologies that world markets predict will be big growth industries.

The government has reduced its funding for solar power plants. The $1.5 billion project announced two years ago will have its funding cut by $220 million over the next two years.

As reported here, renewable energy programs being cut include the Carbon Capture and Storage Flagships (-$420 million over the next five years); the Global Carbon Capture and Storage Institute (-$45 million over two years); the National Low Emissions Coal Initiative (-$12.8 million over five years); the Solar Flagships program (-$150 million to natural disaster recovery, and -$220 million over the next two years.)

True, the Government has given $100 million to a Renewable Venture Capital Fund to try and help develop new technologies and new ventures. But the trouble is these funds normally have up to a 10 year investment cycle. That is usually the time that a new technology or business will either fail or move on to the next stage. So there are no guarantees there.

Matthew Wright, the executive director off Beyond Zero Emissions and the 2010 Young Environmentalist of the Year says Labor seems to think a carbon price will fix our addiction to greenhouse gas emissions but it’s not enough. The first we thing we need to do, he says, is to invest in projects to break our reliance on climate-changing fossil fuels.

“A carbon price is not the ideal mechanism for rapidly rolling out renewable energy and other 'cleantech' infrastructure,’’ Wright says. “Regardless of whether Australia gets a price on carbon, there is an important role for public investment in 21st century infrastructure… Australia doesn't have to wait for a carbon price to act. We can afford to take action on climate change and renewable energy. Though some politicians would have us believe that the government and people of Australia are unable to afford real climate action, these voices ignore the fact that we find ourselves in a privileged position. We are a prosperous and economically secure nation, emerging relatively unscathed from the global financial crisis. We have vast reserves of renewable resources and a workforce with the skills to make the most of them. Public investments in cleantech infrastructure will both bring down its cost and kick off extensive infrastructure development - attracting private sector investment and industry development along the way."

All up, the Department of Resources, Energy and Tourism has made cuts of $250 million out to 2015. At the same time, this summer’s flood disasters and extreme weather events have had an impact on the Budget; they have forced the government to spend an extra $6.6 billion in recovery efforts and would cut 0.5 percentage points from economic growth this year. That’s the equivalent of about $65 billion. The deadly season has also led to about $9 billion in production to be written off, mainly in coal and agricultural losses.

Despite that, it’s hard to see this government is taking climate change seriously.