Garrett’s demotion could give clean energy some clear air

Crikey.com.au
Tuesday 2/3/2010 Page: 1
Opinion: Climate Institute CEO John Connor

Friday's shift of responsibility for energy efficiency from the Environment into the Climate Change portfolio, where it will nestle alongside responsibility for the new and improved renewable energy scheme, allows for fresh thinking about the management of Australian climate solutions and low carbon development. There is an opportunity for a silver lining on the political clouds surrounding the home insulation scheme.

The government, opposition and Greens should seize this as an opportunity to shift gears and focus on the competitiveness and productivity risks posed by piecemeal and poorly coordinated efforts to cleaning up our carbon polluting and inefficient economy. It should also be the time to put an end to the increasingly ludicrous myth that Australia is any risk of leading global action on curbing carbon pollution.

The global reality is that, despite the disappointments of Copenhagen, there is significant global public and private investment in clean, low carbon technologies happening, in particular in places like China and Korea. A recent Worldwatch Institute report highlighted that in 2008. A report to the World Economic Forum by New Energy Finance tells a similar story. These investments are being driven not only by concerns about climate change or just by other issues including energy security, transport and public health risks such as urban air quality. They are also being driven by a strong eye on the commercial opportunities of this emerging multi-billion dollar global market.

Australian commentators, caught up in the murky backwaters of recent political bloodletting, have failed to recognise the extent to which Australia is being left behind in the emerging global clean energy economy. Perhaps they are relaxed about the prospect of Australia being reduced to Asia's quarry. A surprising insight into this new race for low carbon competitiveness came at the recent Davos meeting from Republican-repeat, Republican-Senator Lindsay Graham. He said: "Six months ago my biggest worry was that an emissions deal would make American business less competitive compared to China.

Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy." Late last year The Climate Institute Australia commissioned London-based economists to review the carbon competitiveness and recent carbon productivity performance of the G20 nations. Carbon competitiveness is measured on an analysis of a range of factors from industrial efficiency, urban transport networks, education and other indices that test how prepared an economy is to provide future prosperity in a carbon-constrained world. Carbon productivity relates to a measure of the economic output divided by carbon pollution levels-that is, how much value is created per amount of greenhouse gas emissions.

In terms of our carbon competitiveness Australia came 15th, the weakest industrialised nation, and also behind Korea, China and Mexico. This was largely because of pollution from our mines (not including the pollution from exported coal), our coal-based power sector and high car ownership. Our recent performance on carbon productivity is better but other analyses show that is more from restricting land clearing and the demise of our manufacturing sector than improvements in clean energy production or efficiency where we rank poorly.

These findings highlight the huge economic risk for Australia of piecemeal or poorly coordinated carbon competitiveness and productivity policies. Australia will benefit from being Asia's quarry but we will be left behind Asian and other economies increasingly focused on other emerging markets. Taking advantage of these opportunities, and ensuring we address our own energy security, transport and public health challenges, needs greater coordination and leadership.

Friday's portfolio changes and improvements to the becalmed renewable energy scheme are an opportunity to improve the coordination of the whole host of energy, transport and other policies vital to improving our carbon competitiveness and productivity. They can also be vital to our ability to help the rest of the world accelerate the global investment and trade in climate solutions. Perhaps it is time to not just have a minister for climate change but a minister for low carbon development.