The Climate Spectator has a look at some of the policy options available to the Australian government in the absence of willingness to push for a carbon trading scheme or carbon tax - Options aplenty.
Even if the Gillard Government decides today that committing to a carbon price is all too hard at this delicate juncture, it has been presented with a range of policy options that could be employed to help propel Australia towards a low carbon economy and start catching up with the rest of the world.
These are policies that are well established in other industrial economies – government loan guarantees, feed-in tariffs, tax incentives, flow-through schemes for investors, the creation of emissions polluting standards, the creation of a “green bank” and a host of energy efficiency measures.
The common thread in most of these recommendations – apart from a price signal – is the removal of risk, the principal blockage that has stalled investment in low carbon and emission reduction technology in this country.
Murray Ward argues in an excellent piece, that governments must find measures to reduce risk and close the “green gap”. The good news for Gillard is that many of these policy measures are tried and tested.
Loan guarantees, which have been placed high on the agenda, have become a favoured tool for the Obama Administration, which is desperate not to let China get the upper hand in the low emission technology race.
Obama has announced nearly $10 billion in loan guarantees in just the last six weeks, centred mostly on the creation of large-scale solar thermal plants and manufacturing facilities.
Others have suggested the introduction of feed-in tariffs to help large-scale projects. This has been used successfully in countries such as Italy, Germany and Spain, where large renewable energy industries have emerged and can be reduced once scale is achieved. Many Asian countries are looking to follow in their footsteps.
Other options include extending the flagships concept to other emerging industries, such as wave and geothermal. And there are a host of regulatory measures available to the government, including energy efficiency for buildings, fuel efficiency for cars, and emission pollution standards for generators.
One piece of armoury up its sleeve, if the government does want to appear serious about emission reductions, is the use of the Environment Protection and Biodiversity Conservation Act.
This has not been mentioned much, since it was discussed behind closed doors at Copenhagen but, as seen with America's Environment Protection Authority, the mere threat of using similar measures has been wonderfully successful in concentrating the minds of those who would argue against any price incentives. And it's doubtful Australian business would like it any more than their US counterparts.
Another idea that has been presented to Canberra is that of the “Green Investment Bank.” It is currently being considered by the UK government, which is looking for added mechanisms to help unlock the estimated $1 trillion in capital needed to help the UK meet its emissions reduction and renewable energy targets.