In the end….somewhere over the rainbow

From US President Obama and lesser known UK green investment guru Peter Young, there’s some good advice for the taking. But is Australia ready to move beyond being a giant quarry to a hot house of sustainable, low carbon innovation? We let you decide for yourself after reading the Green Chip column (The Australian 1 February 2010), where Giles Parkinson poses some questions and answers.

PRESIDENT Obama said it again in his state of the union address last week. Clean and renewable energy got more mentions than god, healthcare, and the wars in Iraq and Afghanistan as Obama repeated his contention that the nation that led the clean energy economy would lead the global economy in the 21st century.

Right now, the US is worried. It’s not keen on second place, let alone third or fourth, but after a decade of inaction, it fears being overtaken by China in the cleantech sector, if that has not happened already, and maybe Germany and Japan as well. That was one of the reasons Obama was more anxious than his Chinese counterpart about striking a deal in Copenhagen. China, being a command economy, does not have to worry about the niceties of an international treaty or market reforms to shovel investment where it wants it.

The US is stuck in a state of inertia, watching the manufacturing jobs of the future go overseas. “China is not waiting to revamp its economy,” Obama said. Neither are Germany or India. “They’re not standing still. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They’re making serious investments in clean energy because they want those jobs.”

Other countries share Obama’s anxiety, or at least should do so. Particularly Australia, if it has any ambitions beyond being a giant quarry. It certainly troubles many in Australian government and business leaders, even if many struggle to articulate their concerns.

Peter Young, chairman of British-based Aldersgate Group, and strategic director of consultancy Enviros, is visiting Australia and has an interesting perspective on how business and government, along with educators, professionals and scientists, can work together towards a common end.

Aldersgate is a coalition of high-level business and professional groups, government authorities, politicians, green groups and individual corporations. It sounds like the type of organisation Australia desperately needs.

Aldersgate stands on the simple premise that no economic policy that sacrifices environmental quality can succeed in the long term. Young says his main goal is to find “commonality” and once that is done, it proves very effective, “because the government has nowhere to run”.

The coalition was instrumental in the creation of a combined climate change and energy ministry in Britain — which brings all the expertise in climate and the environment, energy and finance under one roof — and the subsequent introduction of the Climate Change Act.

Young says finding ways to unlock finance is pivotal, be it for clean coal, nuclear energy, renewables, smart grids, or electric vehicles. In Britain, it is estimated that the cost of the Low Carbon Transition Plan will be about pound stg. 250 billion ($452bn) by 2020. Globally, the annual cost is estimated at about $US500bn ($565bn) to meet the carbon reduction targets agreed, at least in principle, in Copenhagen.

Young says capital will not be released unless the political risk of such investment is considerably reduced, something Obama recognises and few countries are managing to achieve. Australia, with delays to the emissions trading scheme and problems with the renewable energy target, can bear testimony to that.

In Britain, Aldersgate has recommended that the initial financing gap be filled by government, perhaps in the form of loan guarantees now popular in the US. The benefit of this is that investors can focus on market risk rather than policy risk.

Other ideas in Britain include government-supported “green banks”, the use of green infrastructure bonds, targeted tax breaks, and the encouragement of community ownership of renewable energy installations, a concept now being championed in Australia by Simon Holmes a Court.

Indeed, Young says, this engagement needs to be spread to “green jobs”, a concept that means nothing to most people and probably sounds to many like empty promises and a threat to current employment. Young urges governments to work more closely with universities to ensure that skills in new technologies are developed — electrical engineering for instance — and that training in current professions such as building, plumbing and electrical supply is expanded. It is those areas that may be the source of much of the green job expansion.

He also points to what he sees as the next big growth in renewable technology: marine power. In Britain, it is thought marine power could supply up to 25 per cent of overall energy needs, and it is creating huge incentives to attract marine energy companies to bring their technologies to Britain. Portugal and Chile are following suit.

That should be a clarion call to Australia, which has more marine energy resources than most countries, and some of the smartest marine technologies. It’s just that we’re not doing a heck of a lot to keep them here.

Source: www.theaustralian.com.au