Wednesday, 13 July 2011

‘Securing a clean energy future’ in Australia

imagePrime Minister Julia Gillard has announced the Australian Government’s plan for tackling climate change, which goes under the title of ‘Securing a clean energy future’. Under the plan the country is expected to cut 159 million tonnes of CO2 emissions a year by 2020 – ‘the equivalent of taking over 45 million cars off the road’ (although there are only about 13 million cars in Australia). The Government is committing to cut pollution to 80% per cent below 2000 levels by 2050.

The plan includes a carbon tax. The initial price has been fixed at AUS$23 (US$24.4, £15.4) per ton on July 1, 2012, with a rise of 2.5% a year in real terms until July 1, 2015. After that it will move to an emissions trading scheme as the number of permits issued by the Government each year will be capped and the price set by the market.

Industry will get a helping hand with a Jobs and Competitiveness Program that will provide AUS$9.2bn assistance for companies that produce a lot of carbon pollution but who can’t easily pass on the costs. There will also be a AUS$1.2bn Clean Technology Program to help directly improve energy efficiency in manufacturing industries.

While the carbon tax itself is expected to encourage investment in renewal energy, another AUS$13bn will be invested in clean energy projects. This will come via a AUS$10bn new commercially-oriented Clean Energy Finance Corporation (CEFC) to drive innovation, and AUS$3.2bn invested in an Australian Renewable Energy Agency (ARENA) to coordinate existing grant funding programs for research and development. The plan is that large scale renewable electricity generation will be 18 times its current size by 2050, comprising around 40% of electricity generation by that time.

The Government will also create an independent body, the Climate Change Authority, which will track Australia’s pollution levels and provide independent advice to the Government on the performance of the carbon price and other initiatives.

But it remains to be seen whether the legislation gets through. The coalition government has a one-seat majority in the lower house, the opposition is strongly against the measures and previous attempts at legislation have failed.


Well the proposed legislation has caused some consternation in Australia, with protests that it will somehow destroy the Australian way of life (as if climate change isn’t doing that already). But this does seem to be a comprehensive plan and addresses concerns. The expectation is that “The prices of most household purchases will barely be affected by the carbon price - for almost everything other than electricity and gas, the estimated price impact is likely to be less than 1%. Taking electricity and gas into account, the overall impact on the Consumer Price Index (CPI) is expected to be around 0.7% in 2012-13”. That’s something that’s going to be difficult to control, but households will be helped with tax cuts, higher family payments and increases in pensions and benefits to help meet the costs passed through by some businesses.

It’s a real attempt to address the impact of climate change on Australia. Compare and contrast with the US, where Tea Party Republicans have been pushing hard to repeal the 2007 law which simply phases out inefficient incandescent bulbs, even though it is expected to reduce household energy costs by 7%. Fortunately the Republicans failed to achieve the two-thirds vote they needed to stop the law (introduced by a Republican president - George Bush!).

Getting back to the green IT aspect, there will be a need to count and trade carbon if and when the Australian tax comes into effect. The only way to do that effectively is through various software solutions available on market. There will be a limited number of companies directly impacted by the legislation – mostly high carbon emitters – but it’s bound to encourage other organisations to follow suit. The renewable energy push will also be a stimulus for those technology companies involved in the management and distribution of power from new renewable energy sources, itself a growing market that a number of major IT companies are pushing into.

© The Green IT Review

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