Canberra Times
Wednesday 5/3/2008 Page: 11
A strong, well-designed law needs to be enacted in the ACT now, James Prest writes.
Climate change poses a serious test for all governments. In the ACT, we face the same test. It is one which Professor Ross Garnaut, the Stern Review and the Intergovernmental Panel on Climate Change have each warned its is now far more serious than was previously believed.
But is the ACT taking the issue of climate change that match more seriously than before? In the first action plan of the ACT Climate Change Strategy, Weathering the Change (2007), a commitment was trade to a number of actions, few of them genuinely far-reaching. The exception was a visionary promise to legislate to "introduce feed-in tariffs" to assist citizens and companies who install grid connected renewable energy equipment such as solar panels. Such feed-in laws require electricity grid operators to pay independent generators of renewable electricity a premium price over a guaranteed time period for any electricity they feed into the grid.
These laws are not new and untested. In fact, they are the prevalent model for renewable energy laws worldwide. They have been enacted in more than 41 jurisdictions. They have driven a massive increase in investment in renewables in countries such as Germany and Spain. Germany's feed-in law, introduced in 1990 has led to a massive boom in investment. There was an increase in its solar capacity from 64 million kWh in 2000 to two billion kWh in 2006.
Feed-in legislation is necessary for the ACT to produce its own green power, reducing the reliance on coalfired electricity from NSW and Victoria. Perhaps more importantly, it would provide a stimulus for local investment and innovation in renewable technologies. As Sir Nicholas Stern noted,"innovation in the power generation sector is the key to decarbonising the global economy."
However, the ACT Government is in danger of wavering on the feed-in law. Chief Minister Jon Stanhope agrees that he made the commitment, but he is now stating that his Government is not sure which model to adopt. He said last week "there are some difficulties inherent in this entire proposal that need to be ironed out before we charge into it." As if to distance himself from the proposal, he is not introducing the law himself, but has relied upon the hard work of MLA Mick Gentleman to bring forward and promote a private member's Bill.
The Government is to be congratulated for its commitment to the idea of a feed-in law, but we mast ensure that a strong, well-designed feed-in law is enacted, one which takes account of international best practice. By wavering on the model, the ACT Government is in danger of failing to exhibit leadership on global warming. It seems some interests are scared that solar feed-in legislation might work too well. Without a feed-in law, the ACT is likely to miss out on its share of rewards from growth industries such as solar photovoltaics - where global grid connected capacity grew by 52 per cent just between 2006 and
2007.
A purely market-driven approach will ignore technologies that could ultimately deliver huge cost savings in the long tern. By not funding alternatives, we will "lock in" high carbon electricity generating capital stock for decades. Some have emphasised the social equity implications of a feed-in law. While important, this has been blown out of proportion. In Germany, government figures show that the feed-in law accounted for only 3.6 per cent of the average electricity bill in 2006, despite nine billion Euros ($A14.7 billion) of investment in renewable energy in that year. The average cost per household per month in 2006 was just over $A3.25.
In the ACT, the share would be far less. A recent discussion paper by the Chief Minister's Department overstated the average system size, artificially restricted the billing pool to residential customers only, and overestimated the extent of response to the measure. The flip side of the social equity issue is the principle of intergenerational equity. This has received little attention so far. We must ensure our actions do not limit the options of future generations. In short, that we don't steal the future from our children. This principle is central to international laws such as the Convention on Climate Change.
Gentleman in particular deserves congratulations for introducing a feed-in law. He deserves the full support of all the Assembly. The model of feed-in law needs to be a strong one. It should provide sufficient guarantee of return to investors over a 10- to 20-year period, high enough tariffs to provide an attractive incentive, and should apply across a broader range of technologies and contexts than just residential solar photovoltaics installations.
With the economic and environmental threats posed by climate change, there is a real need to begin taking bold steps. Harvard Business School economist Michael Porter has observed that companies and our leaders "must start to recognise the environment as a competitive opportunity- not as an annoying cost or a postponable threat."
Jantes Prest is a lecturer and researcher at the ANU's Centre for Climate Law and Policy.
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