The recent appointment of a new CEO for the Clean Energy Council, David Green, brings into focus the limited time left until the next federal election. During this period the clean energy and greenhouse abatement industry sectors need to secure a reasonably stable regulatory environment in which to invest and grow, irrespective of the election result.
These businesses cannot take anything for granted despite calming reassurances from government and shadow ministers. Household cost-of-living pressures, even those that are imagined rather than real, are dominating the political landscape. These make governments keen to find any lever, no matter how inconsequential, to reduce prices.
The Gillard Government and Opposition also face major challenges in trying to achieve their promises to bring the budget into surplus. And various industry associations have been emboldened by their success over the carbon price and the mining tax and are now aiming to bring down a range of other government policies that support the clean energy sector.
Obviously the carbon price is in the firing line, but I would suggest that the Renewable Energy Target is also under attack. Direct Action, if designed and funded properly, is likely to be a lot better than nothing, but there are so many unanswered questions about how it will work. There is the potential for a mandated nation-wide energy savings target and economic modelling suggests it will benefit the economy. But a number of industry associations are aligned against it. And as we’ve reported previously, feed-in tariffs for solar PV have been steadily whittled away.
To address this, the clean energy industry must convince those that live in the mortgage belt of Australia that a clean energy future is an affordable and prudent investment, not a cost of living impost.
The reality however, is that support amongst the community for government policy to support clean energy is soft. The polls indicate that the vast majority of Australians prefer their energy needs to be met from renewable sources and greater energy efficiency. But they become noticeably less enthusiastic when it is suggested that this might come at the expense of higher electricity prices.
The enthusiasm for action on climate change and buoyant economic mood of 2007 that gave people the confidence to be more generous to others is now long gone. While unemployment is low by historical standards, the Global Financial Crisis and the debt hangover from the prior property boom have left people nervous for their own personal financial circumstances. This is evidenced through the rising rate of savings.
Today, the clean energy sector has very strong support amongst inner urban suburbs in Australia’s capital cities, where people tend to be focussed heavily on a concern for the welfare of others. This can be useful in influencing Labor politicians to do something who are threatened by the Greens. But it has zero influence over Liberal-National politicians who have no chance of winning these seats anyway. Probably the next place where support is reasonably strong for the clean energy sector is the wealthy suburbs slightly further out from the CBD. But this isn’t much good either, because even though these people may be keen to see policies to address climate change, they won’t change their vote away from the Liberal Party.
What this leaves is the mortgage belt in outer suburban capital cities and a number of major regional cities. These people are an extremely tough sell on anything that doesn’t benefit them directly. The mortgage belt is characterised by people who are reasonably well-off but feel financially stretched and vulnerable. This is related to a large mortgage (relative to their income) and the responsibility and financial pressure that comes with raising children. It probably also reflects some social pressures associated with trying to keep up with the Jones’.
It is these people where populist appeals to relieve the “cost of living pressures” ring most loudly. Any kind of government policy that involves taking money from them (even when they’ll receive mitigating compensation) to pay for something to benefit the community as a whole needs to be very well supported. Their inclination on such things is to say, ‘I’ve worked hard for this money, how can I trust that you won’t just waste it?’
If the clean energy sector is to have any hope of securing a stable regulatory environment conducive to investment and growth they really need to start selling themselves much harder to this Kath and Kim segment of the population. Their time is running out.