I really do have to give thanks to this current Government. They seem intent on providing me with a neverending stream of topics to write my slightly rant-filled blog posts on.
So what are we looking at this week? Well I was going to write a piece on the instability in the Chinese stock markets and the indirect implications these have on the Chinese government, but then good old Tone just had to go and throw something in my lap. That new topic is the recent ban the government has put on the Clean Energy Finance Corporation (CEFC) investing in both wind farms and household solar. This ban is such a slap in the face for the idea of balanced policy that I couldn’t help but cover the topic.
But first, some background.
The CEFC is a government owned organisation established by the Australian Government in 2012 (under the previous Labor government). The corporation was established with the goal of assisting the development of the Renewable Energy industry in Australia. It was to accomplish this by providing loans to assist in the development of renewable energy infrastructure and renewable energy generation.
Since 2012, the CEFC has invested around 250 million dollars into the Australian renewable energy sector. The original aim of the program was for this to eventually scale up to nearly 10 billion dollars subsequent to the federal government providing the company with 2 billion each year for a period of five years.
Now The Coalition is no friend of the CEFC, voting against its establishment in 2012 and demanding, in 2013, that the CEFC stop issuing further loans as they intended to dissolve the organisation upon winning government. The Coalition at the time argued that the dissolution of the CEFC was part of it’s dismantling of the previous government’s carbon tax program. This framing of the CEFC along with the carbon tax was, no doubt, designed to paint the CEFC in the same light as that of the carbon tax.
Now some in the renewables crowd claimed that The Coalition was actually using the carbon tax as a red herring. A way to distract the Australian public from the facts and paint the entire renewable energy development program as a burden on the Australian taxpayer. Why would the Coalition do this? The claim was that the coalition was ideologically opposed to renewables as a very concept. Now at the time these notions were dismissed as conspiracy theories; the coalition was meant to be the party of economic rationalism, surely they were just trying to trim the excess of the Rudd/Gillard Labor government.
The problem was that it had nothing to do with the carbon tax. Apart from being established at around the same time, the CEFC’s mechanism of action was completely different and it cost the Australian public nothing. It operated as a minority investment partner in major renewable energy projects. It worked alongside financiers such as Commonwealth Bank, ANZ, ING, and took on nearly no long-term risk. In spite of this though, the coalition argued that the CEFC was bad for the taxpayer in the same way the carbon tax was.
The numbers, however, painted a vastly different picture.
In late 2013, while trying to defend the CEFC’s continuation, CEFC chair, Jillian Broadbent revealed that the CEFC had actually been turning a profit… and a pretty tidy one at that. Analysis showed that dissolution of the CEFC would actually cost the Australian Government 200 million dollars a year in lost revenue.
Interestingly, the dissolution of the CEFC was actually defeated in parliament when the government attempted to move the legislation through the senate. This is partly the reason why the coalition’s initial intent to dissolve the corporation didn’t gain much attention in the media.
That would have been that… had The Coalition not decided to ratchet their opposition to the CEFC all the way up to 11. Instead of allowing it to continue operating (and returning a 7% profit) as the democratic process had deemed it should, The Coalition decided to go full vendetta.
The method through which they did this is a little complicated, and very deceptive. See the CEFC has a profit figure which it has committed to achieving; this was one of the primary reasons for the CEFC’s dissolution being defeated in parliament. The idea was that as long as the corporation was making the taxpayer a profit… and, you know… developing an ever more essential sector of the Australian economy designed at averting climate change; the government had very little leverage with which to persuade the senate to dissolve it. What the government does have though, is the ability to decide exactly what the CEFC can and cannot invest in… and it has this ability no matter what the senate says.
So, in its infinite wisdom/deception, the government has made its final move, banning the CEFC from investing in both wind farm and residential solar energy generation. These two forms of renewable energy are, yep, you guessed it, also the most profitable.
Effectively what the government has done is said that the CEFC must continue returning a 7% profit on their investments, which is completely reasonable. But what they have also done is said that this must be done without investing in either of the two most profitable forms of renewable energy generation. Now while this may look like a deliberate effort to sabotage the major source of government funding for Australia’s renewable energy sector; the government has assured the Australian people that it is actually part of a far more constructive plan.
See the government wants the CEFC to focus more on “new and emerging technologies” rather than those that have already been established. The CEFC will become sort of an R&D bank for the renewable sector (while still being expected to return a 7% profit figure, something most analysts say is impossible).
Now, this almost has that last little shred of believability about it. You could almost believe that the government wasn’t just trying to kill the CEFC as part of a wider campaign against the very idea of renewable energy and climate change. It would be almost plausible to think that this was just part of a change of direction and the CEFC was going to be more targeted at developing new and innovative renewable energy technologies… if it wasn’t for the Australian Renewable Energy Agency (AREA).
See the AREA (established in 2012 alongside the CEFC) already exists, and it’s sole purpose is to foster the development of new and innovative renewable energy technologies.
And so, I’m calling bullshit.
This is not part of a refocusing of efforts. This is not designed to ensure a more targeted approach to government spending on renewables. This is a calculated move in the government’s ongoing campaign against the very idea of climate change and renewable energy. This is the latest salvo in the Abbot government’s war on sustainability alongside the cut to rooftop solar rebates in 2013, the axing of the carbon tax in 2014, and the lowering of Australias renewable energy target only a few months ago.
This is part of an ongoing vendetta waged by the Coalition against renewable energy; there is no other explanation for it. It is not rational, it is not sustainable, and it is not good for the nation.
It is purely ideological and it has to be stopped!
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