As the Australian Federal government approaches the launch date for its carbon price, conservative state governments in Australia are rolling back their climate change mitigation programs. While parts of this policy recalibration makes sense under a national cap-and-trade scheme, other changes are a missed opportunity to take advantage of the opportunities of a low carbon economy.
The Sunshine State turns out the lights on carbon mitigation
Only a few days after a very significant election victory in Queensland, Premier Campbell Newman announced that he would cut Queensland’s climate change programs because the Federal Government’s carbon price had rendered the programs redundant.
The programs to be axed include support for energy efficiency, innovation and infrastructure spending. For example, the government will axe the Future Growth Fund, which was set up with proceeds from the sale of state assets in 2006 and has been funding transport and water infrastructure, clean-coal technology and climate change projects. The Smart Energy Saving program which provided support to improve energy efficiency in business will also be cut, along with six other programs.
The Government has also signalled that it will be withdrawing its $75 million from the SolarDawn project, which is a joint project with the Federal Government to develop a 250 megawatt solar thermal plant in Southern Queensland. The project is now at risk, with the Federal Government saying they will have to reconsider their position in light of Queensland’s change of heart.
Meanwhile, in Victoria (the second largest state in Australia) the conservative government has announced that it will abandon its predecessors’ 20% carbon reduction target by 2020 along with removing new emission standard for coal fired power stations that capped emissions at .8 tonnes of CO2 for every megawatt hour of electricity produced. This standard would have effectively banned any new conventional coal stations. The Victorian Government had already implemented planning restrictions which effectively ban wind farms by giving any resident within 2km a veto over proposed windfarms and there is talk that Victoria will remove its State-based energy efficiency program.
Dealing with a new carbon price
The decision to walk away from these programs was justified by arguing that the Federal government’s new carbon price was a sufficient incentive to drive carbon reductions in Australia. There is some truth to this – there is little point to having a carbon target that surpasses the National target as reductions will simply be used in other states.
However, many of the programs that are to be scrapped went far beyond simply setting targets. Instead, they delivered important complementary measures that can help states take advantage of the opportunities of a low carbon economy. Innovation investment is essential to bringing new technologies to market. Given the high costs and broader benefits of renewable energy there is a strong case for Government to work in conjunction with business. Queensland’s past support for geothermal was a good example of this, helping position Queenland as a leader in this new technology. If states are to thrive in the new clean energy economy then support for innovation will be essential.
There also remain very good reasons for State governments to help businesses and households reduce energy through efficiency programs. As California has demonstrated, efficiency can help avoid costly investments in power plants and can help low income earners confront rising energy bills. A carbon price does not replace these sorts of policies. Instead, increased energy prices as a result of a carbon price make it even more important that government work proactively to reduce the barriers to energy efficiencies in homes and businesses.
Political winds shift
The conservative governments’ policy shifts on climate change reflect the changing winds of climate politics in Australia. Conservative governments once supported action on climate change, but now there is now political advantage in rolling programs back. This, combined with the Federal Opposition’s ‘bloodoath’ to roll back the carbon price, show how divisive climate change has become. Climate change is again a deeply ‘left-right’ issue in Australia – thrust into the centre of the political fray.
Building comprehensive action
Carbon prices are an essential part of tackling climate change, but they are not a panacea. Policies at all levels of government are required, and indeed some policies can only be delivered well by State governments. Building a comprehensive approach to tackling climate change that involves all levels of government is essential if Australia is to realise its carbon reduction and make a significant contribution to developing new technologies.