Political Risks to the Clean Energy Industry

Friday, February 20th, 2015
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The clean energy industry has been living in uncertain times for the past decade, and never more so than over the past five years.

Today’s political problems are not easy to solve, but I believe they are simple.

Many Federal and State political elites of the recent past seem to have failed the basic values of social and business life: honesty and trust. I’d also add that blanket negativity or vindictiveness by a political party whether in opposition or as a sitting government, might win the battle but not the war. Swing voters are more intelligent and switched on than they were 10 or 20 years ago; they are now proactively reclaiming the democratic centre quickly if they believe they have been lied to.

Australian voters seem to be demanding answers and not just ideology. They seem to want to be given the honest state of affairs, provided with honest, well-reasoned and fair options for dealing with such affairs. They don’t want hyperbole, slogans or continued blaming of the other side! There is a clear disconnect between politics and reality.

The clean energy industry has been at the pointy end of many political and ideological attacks. Unfortunately most of it has been from the conservative side of politics. However, there is hope moving into 2015. Notwithstanding the continued uncertainty over changes to the Renewable Energy Target, a clear broken election promise, the Emissions Reduction Fund (ERF) should provide participants with an opportunity to access tax payer funds to reduce greenhouse gas emissions, improve their productivity, save money and provide employment opportunities.

One major concern some have with the ERF is the Treasury’s present consultation suggesting certain licencing exemptions for aggregators under the ERF. This means that in many circumstances they will not require an Australian Financial Services Licence when advising, dealing or pricing an Australian Carbon Credit Unit (ACCU), which is a financial product. We just don’t see the need to relax these licensing and consumer protection measures, and we fear it will open up the market to unscrupulous operators undermining the integrity of the market and the ERF.

What we do know is that the clean energy industry needs certainty and bipartisan support. We cannot keep going from a one form of emissions trading under the Carbon Pricing Mechanism to another form of emissions trading under the ERF.

Depending on the make-up of the current or future government, whoever leads Australia, needs to support the clean energy industry. Such a leader really needs to have a clear and honest discussion with the Australian population based on our shared national interest, not vested interests.

A change in leadership of the Liberal National Party Coalition may not achieve the bipartisanship the clean energy industry needs given some of the beliefs held by some of the right wing conservative LNP members. Further, if the Labor party wins the next election, then they also need to seek bipartisanship and that may mean retaining the ERF emission trading scheme but implementing key design changes to ensure it is financially feasible and tackles the sectors where key emissions reductions can be achieved.

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