News & media

It's time to adapt to a green, clean economy (Canberra Times)

Of late, Australians have witnessed a relentless drive from industry groups, and some state governments, to water down crucial environmental measures.

This attack was delivered under the guise of a desire to ''slow down'' in the face of ''uncertainty'' and roll back the ''green tape''. Our ever- responsible captains of industry were merely trying to protect our economy from ''reckless'' adaptation to a clean economy.

Wheeling out these same tired arguments, groups such as the Minerals Council campaigned to prolong the easy ride they've come to expect.
The litany of complaints goes on and on; their forecasts of doom and gloom depressingly predictable. But their complaints are beginning to ring hollow.

This week, we saw one of Australia's most credible economic voices make a compelling and economically sound case for Australia to get a move on, via the $10 billion investment vehicle known as the Clean Energy Finance Corporation. As a Reserve Bank of Australia board member, Jillian Broadbent is the last person one could accuse of being part of a Green/Labor ''big solar'' conspiracy fighting for a one-world government.

She is a hard-nosed, firmly independent banker who speaks for no one but herself.

Her review made a powerful case that the corporation will play a critical role in ensuring that Australia has the best and cheapest mix of energy as we enter a carbon-constrained world and that ''the development of these skills will benefit our economy, employment and competitive position''. Broadbent believes it will help Australia resist the inevitable energy shocks as the globe cuts pollution while burning through what's left of the easily available fossil fuels. Last year, global investment in clean energy projects outstripped investment in fossil fuels, while Deutsche Bank reported that there were already 2.3 to 3 million clean-energy jobs worldwide, with the potential for 30 million by 2030.

But where is Australia? Presently, we seem to be in a state of 20th-century denial.

Contrary to global trends, some so-called business leaders are running an aggressive campaign against any Australian effort to secure a prominent role in this emerging clean energy economy. ''Lower the carbon price!'' they cry.

''Lower the renewable energy target!'' ''Abandon the Clean Energy Finance Corporation!'' As they continue to ask for more, nestled in the afterglow of the mining boom to which they owe their success, their international competitors are looking to the future. Last year alone, $260 billion was invested in clean energy.

In the US, there are more people employed in the solar energy industry than in the steel industry.

More staggeringly, the global clean energy and environmental sector is now valued at about $4.7 trillion – three times Australia's annual gross domestic product. Industry groups that claim that the corporation is not an important piece of the Australian economy, or that it is unnecessary because there is a price on carbon pollution or renewable energy target, are now making claims directly counter to one of the board members of the RBA. In Broadbent's words, she sees a ''diversity of generation as insurance to Australia securing the lowest cost energy in a carbon constrained world''.

A price on carbon pollution alone won't cut it.

Without investment in clean energy, Australia will miss the boat in the rapidly expanding, multi- billion dollar clean energy industry. And without clean energy, we can't remain competitive in a 21st century economy.

But there remains one major reservation. As it has been proposed, the corporation will not deliver any renewable energy beyond our current 20per cent target.

This needs to change. The corporation and its potential $100 billion boom must result in more clean energy than was already set under the renewable energy target if we're going to create a lasting investment boom.

In conjunction with putting a price on pollution, and building on the 20 per cent renewable energy target, the corporation is a critical policy that will deliver Australians clean energy cheaper, sooner. No doubt this report will prompt big polluters to resume their campaign against action on climate change.

No doubt they will try to belittle its authors.

But if this report can't do it, will anything bring their rent-seeking to an end? Honestly, who do we trust: an independent RBA board member, or those who would strip-mine the WACA if they could? The reality is we can't afford not to do this. It's time to get this Clean Energy Finance Corporation into law and unleash the clean-energy boom that this country is sick of waiting for.

Simon O'Connor is an economic adviser with the Australian Conservation Foundation.

This article was originally published in The Canberra Times