Voting for a quick cleantech harvest

Australia has moved early on environmental issues in the past – and reaped the rewards. How quickly we rise above vested interests will determine our next bounty.

In can be hard to find points of agreement in an election campaign – even when they clearly exist.

Sometimes it easier to stand back from the political soundbites and look at what the parties say are their goals. In our current debate, industry and economic policy outcomes appear to be very similar. Both parties want to deliver a strong economy with jobs growth, increased productivity, increased efficiency and improved community outcomes.

The cleantech sector provides all of these outcomes so will inevitably have the long term backing of any government. This does not mean it is going to be an easy ride but whatever path is taken will lead to cleantech industry growth. Regardless of politics, the world is accelerating towards innovation and resource efficiency that drives productivity and growth. This is a great example of one of my favourite words: equifinality.

We read (depending on your choice of newspaper) that climate and the environment is no longer an issue; that economic growth will deliver everything required; that the rest of the world is not doing anything of substance on the matter.

We are lucky in Australia in that we moved early on environmental issues and now have a wonderful place to live. We've avoided the smogs of Beijing, and of London and Manchester from an earlier age, we have not killed too many rivers and not destroyed the ecosystems that support many industries and communities. We achieved these benefits by seeing the economic benefits of a healthy environment. We're not doing so well with the current challenges, however. Countries with more pollution are, from necessity, grasping the economic and industrial leadership in cleantech.

Have no doubt that Australia will be buying and adopting cleantech solutions – we just have a choice of whether we would prefer to manufacture or import them.

The vested interests have done a good job so far of protecting their revenue streams and delaying the growth of cleantech. The chief executive of any company is paid to protect shareholder value. The comments from a chief executive of a large company must, however, always be taken with a large serve of salt. Remember the lights were going to go out in Melbourne if there was a price on carbon – how did that ludicrous comment make the front page and why would any sane politician pay any heed?

Origin Energy was once the most outspoken of advocates for renewable energy when it was growing its solar business, was looking at wind farms and had invested into geothermal. Its slick TV advertising even managed to position it as the leading green energy company. As times change so does the source of shareholder value. Origin is now a vocal critic of the same Renewable Energy Target as its retail business stutters, its renewable investments are canned and everything is now riding on being able to sell its gas. Very few companies ever take a position that will not deliver commercial benefit. Origin's position of a few years ago was entirely commercially driven – as it should be and is today.

Vested interests will never see much further than the annual results and certainly do not care about driving long term economic outcomes for the country through building new industries, creating new centres of excellence and changing the business models that enabled their success. That, of course, is the job of politicians.

So what will the election bring for cleantech? Either way, there will be changes to names, numbers and supporting programs – all governments have to do this to show they are 'new'. A Coalition win may see the end of the Cleantech Investment Program and Cleantech Innovation Program which have each delivered great benefits for both mature companies seeking to become more efficient and emerging companies looking to grow. There will be shouts of outrage about change – and/or about lack of change.

Whatever happens it will only be a blip. The fundamental drivers of cleantech have a much longer lifecycle than that of politicians of any colour and the global momentum continues to build. The policy settings may determine how much industry and how many jobs are created in Australia in the short-term. However, these settings can only ever tinker on the edge of the transition to a world that uses its resources more efficiently and is more productive.

Australia has some amazing growing and innovative companies in this sector. As traditional manufacturing continues to decline (I'm sure Holden has its October press releases already written) cleantech companies are the ones that will provide the basis of future industry. They will provide highly productive jobs and shareholder returns while also enabling exiting industries to evolve, survive and thrive. It's hard to see a coherent argument against the sector – even in the wild ride of an election.

So bring on the election as it is great to know that whoever happens to make the victory speech, they will be fully supportive of the growth of cleantech – even if we might have to call it something else next week.

John O’Brien is managing director of Australian CleanTech, a research and broking firm that advises cleantech companies, investors and governments across Australia, China, South Korea and Malaysia.

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