June 03, 2008
Australian Government to Invest Billions in Clean Energy
By Leigh Ewbank, Breakthrough Generation Fellow
Just one week after it bowed to political pressure and delayed the implementation of a national emissions trading scheme, the Australian Government has announced plans to invest billions of dollars in renewable energy. According to Bloomberg News:
Australia's government will invest A$4.5 billion ($3.4 billion) in the development of infrastructure to generate energy from clean sources such as solar and wind power and to reduce carbon emissions. The government will invest A$2.4 billion in low-emission coal technologies, including funding of A$2 billion for industrial- scale carbon capture and storage projects, according to its annual budget released in Canberra today. The government will invest A$1.6 billion over six years in large-scale solar electricity generation projects, the budget said.
While the Rudd Government's 2009-10 budget is by no means groundbreaking in terms of climate change and energy, it still allocates substantial cash for worthy renewable energy projects. To add much needed renewable energy to the national grid, there is $1.5 billion to build up to four large-scale solar thermal power plants. This is supported by $465 million to establish 'Renewables Australia', a new body to spearhead renewable energy research, development, and deployment in Australia.
Those of us familiar with the Breakthrough Institute will notice familiar themes with these renewable energy initiatives. In addition to the proposal reflecting Breakthrough's longstanding policy prescription for direct government investment in renewable energy, the new agency called Renewables Australia closely resembles the 'renewable energy hubs' that featured in the recent proposal by Breakthrough and Brookings (see 'To Make Clean Energy Cheaper, U.S. Needs Bold Research Push').
There are other significant points to make about the Rudd Government's plans:
- The Australian Government is beginning to throw off years of strict adherence to neoliberal economic policy that barred direct government investment in building clean energy infrastructure. It's too early to tell, but with any luck the misleading notion of governments 'picking winners' will be put to rest.
- As friends and foes weaken Prime Minister Rudd's cap-and-trade policy, Breakthrough-style investment measures are being put into practice and have--so far--escaped political opposition. In this case it's possible that government support for both carbon-capture and storage (CCS) technology and renewable energy was the reason for this--effectively neutralizing opposition. For those of you seeking to settle the 'cap-and-trade' v. 'investment' debate, you'll have to wait for another day.
The magnitude of investment the Australian Government will commit to renewable energy is much smaller than Breakthrough recommends for the US, but this type of investment-centered policy represents a step in the right direction. Let's hope that the Obama Administration and Congress secure US leadership in renewable energy by implementing a scaled-up strategy in 2009.
For more on Breakthrough's take on Australia's climate change policy, check out 'Australia Shelves Cap and Trade'.