Tilting at Windmills? Blacksliding on Energy & Protectionism in Disguise

The Australian government will
spend up to A$36,000 a year on every steel worker in Australia through carbon
tax industry compensation, prompting claims of protectionism by independent
think tank the Grattan Institute, writes Tom Arup in the Age. While Paddy Manning
in Business Day says “What is galling is watching the clock turn back on state
policies designed to help tackle climate change. Backsliding on support for
renewable energy in Victoria and NSW is a foretaste of life under Tony Abbott.”

Carbon tax compensation a ‘return
to protectionism’

Tom Arup In The Age August 30,
2011

THE government will spend up to
$36,000 a year on every steel worker in Australia through carbon tax industry
compensation, prompting claims of protectionism by independent think tank the
Grattan Institute.

In a report released today, the
institute finds the steel industry will make a windfall per tonne of steel from
carbon tax compensation over the first four years of the scheme.

The institute also finds the
government’s commitment of free permits and a $300 million adjustment fund for
steel under the carbon price will cost it more than $320,000 per worker from
2012 to 2020, or on average $36,000 a year. The finding assumes a carbon price
of $40 a tonne by 2020 – higher than Treasury’s estimate – and that BlueScope
will close the Port Kembla number six furnace. ”The steel package effectively
protects the Australian industry not from a carbon price, but from structural
adjustments in the global steel industry,” the report says.

”This industry assistance cannot
be justified by reference to carbon pricing. It reverts to the protectionist
policies abandoned in the 1980s when Australia realised that boundaries and
tariff barriers reduce Australian productivity and living standards by inhibiting
the shift of resources into sectors that would generate greater value for
Australians.”

The report also reviews
assistance for coal mining and LNG industries, finding it difficult to foresee
large job losses in either industry even with a $40 a tonne carbon price and no
industry compensation.

Contrary to industry claims, the
institute finds only one coal mine – Tasman in NSW – would be under threat of
closure, with the rest buffeted by soaring global coal prices.

Coal miners will get $1.33
billion in compensation under the carbon tax.

A spokesman for Climate Change
Minister Greg Combet said the government made no apologies for ”supporting
Australian jobs and competitiveness as our economy makes the transition to a
clean energy future”.

Source: www.theage.com.au

Paddy Manning in Sydney Morning
Herald Business Day

September 3, 2011

The wheels of clean energy are turning in
ever-diminishing circles as politics hogs its place in the sun, writes Paddy
Manning.

PARTY-POLITICKING on the carbon
tax is to be expected. It would be scandalous if a Coalition state government
came out and backed the multiparty climate change committee’s ”clean energy
future” package.

What is galling is watching the
clock turn back on state policies designed to help tackle climate change.
Backsliding on support for renewable energy in Victoria and NSW is a foretaste
of life under Tony Abbott.

According to the Clean Energy
Council, Premier Ted Baillieu happily kissed goodbye to as much as $3 billion
in wind farm investment this week – a perverse outcome given Victoria’s
excellent wind resource.

What will that do for the state’s
competitiveness in clean energy, let alone for Australia’s response to climate
change? It seems Baillieu and his colleagues couldn’t care less.

On rooftop solar, things aren’t
as bad – at least on Thursday the government retained a 25¢/kWh feed-in-tariff
(down from 60¢/kWh) that will help the PV industry along to grid parity, which
in much of the state should arrive by 2014. A bigger problem than the reduced
tariff is the 75MW capacity cap – which on past experience may be met within
months, meaning the stop-start approach to solar policy will continue.

It’s equally dire in NSW where
Premier Barry O’Farrell has replaced the old Solar Bonus Scheme with (drum
roll) nothing at all, and where the premier casually told radio 2GB that his
government hadn’t approved any new wind farm applications ”and if I had my
way, we wouldn’t”.

In a Thursday speech, NSW Energy
Minister Chris Hartcher went so far as to warn against over-reliance on
renewable energy! With federal climate change minister Greg Combet flagging a
wind-back of renewable schemes when (or if) the carbon price comes in, it feels
like there’s a backlash on in Australia – strengthening even as renewables get
more competitive.

In a revealing interview on
Climate Spectator, Origin Energy chief executive Grant King argued for lowering
our renewable energy target. He complained about a group of people who have a
”very strong ideological view that we should be moving straight to renewable
energy”, who are seeking to ”demonise coal seam gas” and other fossil fuels.

King should go back to the
dictionary, or the history books. Liberalism, socialism … renewable-ism?
Hardly. Supporting renewables has nothing to do with ideology – it’s a
perfectly rational solution to our climate challenge. The cost of renewables is
coming down – ”relentlessly” in the case of solar PV, as King acknowledged in
the same interview – and the cost of everything else is going up.

King has been a consistent
supporter of pricing carbon and has invested heavily in renewables (sometimes
badly, in the case of geothermal). But King has championed starting early and
moving gradually – an eminently sensible position 10 or even five years ago,
which is becoming outdated as we square up to the task of getting global
emissions to peak by the end of this decade.

Part of the problem is that
Australia’s renewable energy industry is, by and large, a subset of the fossil
fuel industry. Origin, AGL and Truenergy have a stranglehold on electricity
markets and they want to decide the pace of our response to climate change.

This week International Energy
Agency researchers predicted solar PV and solar-thermal plants could produce
most of the world’s electricity by 2060 – and half of all energy needs – with
wind, hydropower and biomass plants supplying much of the rest. Renewable
energies are the only zero emission solution that we know will work, at scale -
and once a plant is built we get free fuel forever.

”Loony-tunes (sic)” (as one
columnist complained this week)? Tell that to the IEA.

Source: www.smh.com.au