Handouts to polluters but peanuts for renewable energy

Bob Briton

The Federal Government last week announced a $2.2 billion plan 
going by the laughable name "Securing Australia's Energy Future". 
The scheme does nothing of the sort. While public relations firms 
will do their best to dress the package up as "pro-environment" -
- and thereby neutralise some of the benefit Labor may have got 
from the recruitment of the increasingly flexible Peter Garrett -
- it seeks to reassure Australia's biggest polluters and 
threatens to kill off much of the country's renewable energy 
sector.

Speaking at the National Press Club in Canberra, the Prime 
Minister set out its main thrust and its main camouflage:

"The essential argument of this paper is that whatever may be the 
merits of renewables, the reality is older fuels — of which we 
have large supplies — are going to contribute the bulk of our 
energy needs, and what we have to do is make them cleaner."

An overhaul of the fuel excise and diesel rebate system will cost 
an estimated $1.5 billion of foregone revenue by 2012. It will 
slash fuel costs for the mining, transport, farming, forestry and 
the fishing industries by removing all excise on all off-road 
business uses (power generation, grain drying etc.). The diesel 
fuel rebate will be extended to include large trucks of all fuel 
types — not just diesels, as is the case at present.

The Government's last "reform" of fuel excise in 2001 reduced the 
levy by 1.5 cents per litre and scrapped CPI-related indexation. 
The cost so far of this incentive for the use of fossil fuels has 
been put at $4.6 billion. The latest changes — the most 
expensive items in the package — could not possibly have any 
positive environmental impact. The move is also a transparent 
piece of pork barrelling aimed at marginal rural electorates in 
the upcoming Federal Elections

Australian Conservation Foundation executive director Don Henry 
summed up the reaction of those concerned for the environment: 
"In a world where we're trying to tackle climate change, I don't 
think it's smart to cut the price of fuel."

Howard also promised a new "Resource Exploration Strategy" to 
facilitate land access and encourage exploration for oil and gas 
reserves.

The other big winner in the Federal Government's plan is that 
other big source of climate changing greenhouse gases — the coal 
industry. The PM has thrown his weight behind the "cleaner coal" 
lobby and the bulk of a pool of $500 million for the development 
of "greenhouse technologies" is expected to go to 
geosequestration research.

Geosequestration is a controversial and unproven technology that 
involves pumping the gases produced from the burning of coal deep 
underground where, presumably, they can do no harm. Overseas 
research has so far only demonstrated that the idea has a long 
way to go.

The Government is reported to be heavily influenced in favour of 
geosequestration by the Commonwealth's Chief Scientist, Dr Robin 
Batterham. This Howard appointee was previously the Chief 
Technologist at Rio Tinto Limited which — surprise, surprise — 
has major coal interests among its other mining operations 
worldwide. Rio Tinto is set to announce a profit increase of 50 
per cent this year with coal playing a very big part in its 
"success".

Support for renewable energy technologies is way down the list of 
funding priorities. In fact the $134 million being provided to 
make renewables more cost efficient includes an amount of $50 
million already set aside under the Industry Department's 
"Commercial Ready" program. A paltry $75 million is earmarked for 
trial "solar city" developments in Sydney and Adelaide where 
smart electricity metres will be used.

However, the biggest setback to the hopes of the community for 
renewable energy sources comes from a decision not to extend the 
Mandated Renewable Energy Target (MRET) scheme. The target for 
energy to come from renewable sources and sold by electricity 
retailers is currently set at one per cent. It was expected that 
this would be increased to five per cent in the near future but 
Howard's plan would effectively "cap" the target at a very 
unambitious two per cent by 2020.

In its typical fashion, the Government claims that a MRET of five 
per cent would cost the economy $11 billion and 15,000 jobs. 
However, a report by Allens Consulting Group for the NSW 
Sustainable Energy Development Authority says that a 3.5 per cent 
target would actually create a net 530 jobs in NSW and 1,630 
across Australia. An MRET of five per cent would have a benign 
effect on the economy, especially when the benefits to the $16 
billion environment sector are considered.

The first casualties of this sector will be the companies that 
have invested in renewable energy on the understanding that the 
demand for their services would be increasing. Karl Mallon of the 
Australian Wind Energy Association expects $5 billion worth of 
proposed investments to go elsewhere. Danish firm Vesta was 
considering setting up a plant in Tasmania, employing 250 people 
to manufacture blades for wind farm turbines prior to the 
announcement of the Federal Government's plan.

Of course, the plan confirms Howard's intention to continue the 
boycott of the Kyoto Protocols. The country's big energy users 
will only be obliged to audit their own energy use and take part 
in a "Greenhouse Challenge Program". There will be no carbon use 
charges of the sort that our trading partners are introducing. A 
self-regulating honour system is the cornerstone of the 
government's "vision" for the environment.

This is consistent with the "free market" approach of the 
Australia-US Free Trade Agreement which promotes "voluntary, 
market-based mechanisms to protect the environment". In effect it 
means total abdication by the government of its responsibilities 
for environmental protection and a free hand for the private 
profiteers whose interests lie in the production of greenhouse 
gases.

The Australian Coal Association, the Australian Aluminium Council 
and the Minerals Council all love the Howard plan. Hugh Morgan of 
the Australian Business Council said that it "strikes an 
appropriate balance." They would all agree with the editorial of 
The Australian Financial Review last week that "technology-
neutral, market based solutions are nearly always better than 
governments trying to pick winners."

No examples are produced to support this expression of faith in 
the bosses' ideology. In fact, no reasons are offered as to why 
capitalist markets — attuned to returning maximum profits — 
should suddenly expand their focus to include the environment. 
"Securing Australia's Energy Future" is the Government's latest 
gift to big business, especially the big polluters. It is another 
major reason why Howard's time is up.