Sunday, 24 May 2009 08:10
This year's budget and the submission to parliament of the CPRS didn't really have any surprises.
The Green Party rightly criticised it as not being green enough, and even the Chinese got into the criticism.
ABC says that it funnels $4.5b to clean energy, but closer inspection reveals that the bulk ($2.4b) will be wasted on so-called "Clean Coal".
At least the solar power rebates haven't been axed just yet, as recommended by the Wilkins report, but that creates the strange anomaly with the industry rushing to get as many rebates pre-approved as possible because no-one knows just how long the scheme will last.
Unfortunately petrol is being kept out of the scheme till 2014, which means that we won't see the necessary reductions in consumption, nor the pricing pressure towards public transport, and of course any change in 2014 will be at the whim of the next government.
The bills for the CPRS have been introduced to the house which at least will give some certainty - uncertainty being the biggest barrier to investment (except for a shortage of money ! ), the worst part is that the fixed price of $10/tonne for the first year means that almost nothing will happen as industry will find it cheaper to pay the penalty than to reduce costs - something closer to $60/tonne is going to be needed according to at least one Australian power retailer.
Of course, as expected the big polluters will get most (up to 95%) of their permits for free (an extra $1bn bringing it to $12.5bn), creating little incentive for structural change to the economy.
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