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Gillard’s poll date – clean energy on the line

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There we have it. Australia is about to embark on one of the country’s longest ever election campaigns after Prime Minister Julia Gillard announced the federal election would be held on September 14, with writs written, and the formal campaign, beginning on August 12.

This, of course, will be a crucial election for the clean energy industry in Australia, with major questions over the future of the hard-won policy initiatives of the last few years – the carbon price, and even the Renewable Energy Target. The RET, along with a string of grant-based funding schemes, have been the product of the Labor government, but the carbon price, and the creation of the Climate Change Authority and the Clean Energy Finance Corp have been the product of the minority government agreement with the Greens that followed the 2010 poll.

As we highlighted in our story on Monday, Opposition leader Tony Abbott, in his informal campaign launch, repeated his vow to repeal the carbon price – and will put the motions for that repeal to take effect from day 1 if elected.

He has also said he will scrap the $10 billion Clean Energy Finance Corporation, and said on Monday he would ask the CEFC to desist from allocating funds once the caretaker period begins.

It will be interesting to see if the Coalition pushes for that to occur earlier. The CEFC has a $2 billion budget in its first year, and is keen to announce its first investments from July 1.

An equally important question for the clean energy industry in Australia is the fate of the renewable energy target. The Climate Change Authority – which Abbott has also vowed to dump – recommended that it remain largely unchanged, with a fixed target rather than a floating target urged by some industry and fossil fuel generators. All the conservative-led state governments have pushed for the RET to be modified – a decision that would effectively reduce the number of wind farms and solar farms to be built over the next eight years by half – and protect the value of network and generation assets that they may be trying to sell.

The government has yet to endorse that finding, and the position of the Opposition is still not clear. It will be surprising if some of those utilities that have opposed the RET will engage in contracts to build new utility-scale wind farms until the result of the election is known.

Indeed, the calling of the election and the uncertainty over the Opposition’s position could, in fact, usher in some sort of capital strike on renewables – fears of such a strike have already been expressed privately by some in the renewable industry. Sadly, the utilities can find yet another excuse for delay.

A big question will be the extent to which climate change becomes an issue during the election campaign. It failed to do so in the US election campaign, until the last week when Hurricane Sandy struck the eastern seaboard. In Australia, however, bush fires, heat-waves and this week’s floods has brought the issue to the front pages.

As Gillard told the National Press Club luncheon today: ”Climate change is not a future proposition. We are living through climate change.”

That is a lot more positive response than Abbott’s position on Monday: “Just think of how much hotter it might have been the other day but for the carbon tax!”

Or that of NSW Liberal Premier Barry O’Farrell on Tuesday when asked about the floods: ”If the question is about climate change go and ask me another day. Let’s not turn this near-disaster, this episode that has damaged so many properties and other things, into some politically correct debate about climate change. Give me a break.”

Update: One added thought. Given that we are now facing an effective 8-month election campaign, would the electorate put up with another 12 months if Abbott held true to his promise of calling a double dissolution if his carbon price repeal is stalled in The Senate?

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  • Dermot Duncan

    Indeed Giles: once again, its crunch time for businesses with financial stakes in renewables and carbon. I hope the Coalition give policy clarity on not only the RET but also the CFI prior to the election. Although, it seems clear that the CFI will not survive (either due to a repeal of the CPM or simply because their policy is completely different to the current CFI design) as any revised scheme will be tax payer funded (not polluter pays as per environmental law principles) with a green tendering fund awarded by the Coalition Government to the “least cost” project – however, without any least cost “trading” – contrary to their claims that it has “bipartisan” support.

  • bill parker

    The campaign goes formal on August 12th? I doubt anyone will be able to tell the difference. And from now on until election day we will have to suffer truck load of political tripe from both sides.

    Global warming came on to the agenda this past month but no doubt will fade as we progress through winter, and unless something happens in the northern hemisphere to warrant talking about here, it will be off the agenda.

    • keith williams

      Bill,

      There is a critical role for the Greens here to shine a light on both the Labor and Coalition policies.

      It is really important that voters know what each party plans to do (and both major parties will be trying very hard to obfuscate).

      My hunch is that people know something is up, but they aren’t well informed about either the facts or how to approach mitigation (or even that it is possible to address the problem).

      • bill parker

        Keith,

        That’s why I not only vote Greens I usually help out at the campaign office and do HTVs.

        In WA that Green vote takes importance in our Upper House.