Is Australia Missing CleanTech Revolution?
Australian CleanTech Index performed so poorly over the second half of 2009 when global clean-tech indices were outperforming the general market. With only a few large clean-tech companies and without this depth to the sector, it is difficult for momentum to be built at a policy or investment level. Meanwhile the “Climate Champions” program, designed to improve communication between farmers and the research community to deal with increased climatic variability, is underway in Australia.
Australia missing out on clean-tech revolution
GREENCHIP: Giles Parkinson in The Australian (12 April 2010):
ONE swallow does not make a summer unless, perhaps, you are in the Australian clean-tech sector. For the first time in longer than most will care to remember, the Australian CleanTech Index managed to outperform its mainstream rivals in March, posting a 7.3 per cent gain, compared with a 7 per cent rise for the S&P/ASX200.
But this heroic effort could not disguise the sector’s chronic underperformance against the broad index over the course of this fiscal year (down 9.5 per cent compared with a 25.6 per cent gain) and the year before.
Part of the problem, says John O’Brien, managing director of Australian CleanTech, is that the index is dominated by just a few companies. The lack of depth is a weakness, not just for the index, but for the local industry.
Unless the company is in water, waste or wind, it is probably not generating serious revenue. There are many reasons, including the poor performance of the listed sector, to fear that the clean-tech revolution is passing Australia by.
Arkx, a fund that specialises in international clean-tech stocks, has recorded an 8.03 per cent gain for March, taking its 12-month cumulative gains to 81.3 per cent, with the NEX, an international benchmark, rising 37 per cent over the same period.
The strength in the international clean-tech sector markets simply reflects global trends in clean tech and clean energy, and Arkx has many seriously big companies to invest in.
US-based Pew Charitable Trusts last month predicted that global clean energy investment was expected to jump 25 per cent this year to $US200 billion ($214bn), led by China, Britain, Germany and Spain, and said that last year the amount of installed renewable energy capacity reached 250GW, enough to power 6 per cent of the globe’s households.
Other data highlights the gap between what is happening here and overseas. The Australian Venture Capital Association estimates just $25 million was invested in Australia in clean-tech venture companies last year. Data released this month by Deloitte and the US-based Cleantech Group showed a record $US1.9bn in technology venture investments in North America, Europe, China and India in the March quarter alone, a rise of 29 per cent from the previous quarter and 83 per cent from the same period a year ago.
The most attractive sectors are “smart mobility” (electric cars and grids) and resource efficiency. Also notable was the sharp increase in new investment from utilities and corporations. The established industrial giants are starting to make that transition.
The Australian Cleantech Review, launched last week, highlighted the low level of investment in the Australian clean-tech sector, which is still regarded as a niche or speculative investment opportunity, in comparison to the enormous growth driven by regulatory measures in Europe, a voracious appetite from the US venture capital industry, and massive green stimulus packages in China and Korea.
“Australia appears to be lagging on all of these fronts,” the report says. “The government stimulus is fragmented and small, the regulatory measures are providing some assistance and the venture capital industry is under-funded. This might explain why the Australian CleanTech Index performed so poorly over the second half of 2009 when global clean-tech indices were outperforming the general market. There are only a few large clean-tech companies in Australia and without this depth to the sector, it is difficult for momentum to be built at a policy or investment level.”
Choosing our climate champions
Matthew Cawood in Stock and Land (10 April 2010):
HUMAN-induced climate change or not, climate variability is a reality of Australian agriculture and one of the biggest risk factors for agricultural businesses.
The “Climate Champions” program, which kicked off last week, is designed to improve communication between farmers and the research community about the knowledge needed to deal with increased climatic variability.
Thirty farmers from around Australia have been selected as the program’s “champions”, and will act as the interface between the research and farming communities.
Chair of the Managing Climate Variability program, Ian McClelland, says the strategy reflects the fact that most farmers gain new knowledge and adopt new practices through interaction with their peers.
“The knowledge and lessons learnt from experimenting with various climate adaptation practices is trusted much more when it comes from another farmer,” Mr McClelland said.
“We expect that Climate Champions will help raise awareness and discussion within farming communities about new innovations for managing variable climatic conditions such as frost, extreme heat and low rainfall.”
The program is supported by the Managing Climate Variability program, the Grains Research & Development Corporation, and Meat and Livestock Australia.
Yass Valley superfine woolgrower John Ive, pictured, who has developed his own soil moisture predictive tools for his farm, is one of the program’s champions.
Mr Ive and wife Robyn have won a shelf-full of awards for land management.
Managing climate risk means protecting the health of the natural resource base on which future profitability depends, Mr Ive said, while at the same time ensuring ongoing economic survival.