BCA's climate of investment uncertainty

It’s been 10 years since Peter Costello first took an emissions trading proposal to Cabinet, 12 years since John Howard established the Mandatory Renewable Energy Target and six years since the Howard Government committed to an emissions trading scheme and Kevin Rudd promised to increase the Renewable Energy Target fourfold. Carbon pricing and climate action has a history in Australia.

It’s also 10 years since I established my business, Greenbank Environmental – now Australia’s leading independent environmental trading company.

My business has done well over the past decade and Australia’s renewable energy industry is really starting to make its mark in leading climate action, but I still wonder if Australia is well placed to take advantage of the tremendous economic opportunities that lie ahead as the world moves to a low carbon future.

Greenbank employs 24 people, and focuses on creating and trading renewable energy, energy efficiency and carbon farming certificates as well as helping farmers finance and operate their own projects under the Carbon Farming and Clean Energy Futures package. When we began the business, it was a time of optimism. There was a sense that Australia was finally starting to grapple with the emerging challenge of climate change – it had, after all, been 17 years since the then science minister, Barry Jones, had warned of humanity’s contribution to global warming.

The renewable energy industry has ridden a similar wave of optimism. More than 25,000 Australians now work in the clean energy industry, more than in the car industry. More than four million Australians have solar panels or solar hot water systems on their homes or businesses, and renewable energy is eating away at the out-of-date business models of the fossil fuel industry. 

The success of the renewable energy industry has often occurred despite roadblocks imposed by governments and the fossil fuel industry. It’s an industry full of innovative, hard-working, risk-taking individuals running and managing small- to medium-sized businesses, but if there's one word that has defined the past decade of climate action in Australia it is 'uncertainty'.

Emissions trading proposals have come and gone and governments have established and jacked-up specific feed-in tariffs for solar panels, then decapitated them when they became popular; whilst the Renewable Energy Target has been subjected to perpetual review and constant changes. There are few industries in Australia that require three business models to deal with the three different political scenarios that could eventuate after the election.

Given a decade of uncertainty, it was extraordinary to hear the Business Council of Australia recently call for more uncertainty. The Business Council now wants the Productivity Commission to do an assessment of emissions reduction policies. Having personally co-authored countless submissions to countless government inquiries over the past decade, and having personally been involved in many meetings with ministers, parliamentarians and bureaucrats looking specifically at emissions reductions policies, I know the last thing we need is yet another inquiry.

BCA President Tony Shepherd was more on the money recently when he said “short-term policymaking on the run has had a negative impact on business confidence in Australia”. That’s precisely the experience of the clean energy industry. Business confidence is down, with yet another review of the Renewable Energy Target scheduled for next year (despite a comprehensive review being finalised last December) and deep concerns that a Coalition Government would scrap the carbon price and the Clean Energy Finance Corporation and launch yet another White Oaper process.

It is time the BCA joined renewable energy companies in helping bed down climate policies – like an emissions trading scheme, renewable energy target, carbon farming or the Clean Energy Finance Corporation – and deliver stability to an industry that will help drive Australia’s economic growth in the Asian Century.

Inquiries, reviews and constant policy changes are not the vehicles for economic success, although they are the bread and butter for lobby groups to earn their keep.

Australia will not take advantage of China’s relentless drive to lead the world in clean energy by undertaking another inquiry. The new industries of tomorrow and the entrepreneurs of today will not be motivated by government reviews that rake over old ground and recycle old arguments in determining what we already know.

There is a clear economic consensus that carbon pricing is the most efficient way to reduce carbon pollution, and there is now demonstrable proof that the Renewable Energy Target complements carbon pricing in reducing emissions and building a vibrant clean energy industry.

A decade after Peter Costello took the first submission to Cabinet to put a price on carbon pollution and twelve years after the establishment of the Renewable Energy Target by the Howard Government, it is time to draw a line on our climate action history and make these policies the cornerstone of genuine efforts to cut greenhouse emissions and build a strong, low-carbon economy.  

Fiona O’Hehir is CEO of Greenbank Environmental, Australia’s largest independent trader of renewable energy certificates and other environmental certificates. She has a technical background in electronics and power conversion for the solar industry and has been involved in the renewable energy space for over 15 years.

Fiona has spent six years as an elected industry representative on the board of the Clean Energy Council. She has just completed a two-year board position on Renewables SA and is also the Vice President of the REC Agents Association.