Cleantech Leadership Threatened by Ignorance

Australia has the opportunity to be a global leader in cleantech. A strong and robust Carbon Pollution Reduction Scheme (CPRS) will facilitate the investment and innovation required to enable many companies to commercialise their clean technologies. However, the Federal Government appears to be heading towards a decision to appease the emissions intensive industries, a disastrous short term approach that would sabotage this leadership opportunity. It is essential that all those who want to see Australia build a long term future understand this issue and make their feelings known.

Every indication from the Government is that it will honour its election commitment to introduce the CPRS in 2010. However, as the potential impacts of the scheme become more fully understood, pressure has been building to ensure a soft start. This softness might be obtained by the setting of very modest targets and the provision of many free permits. An alternative approach would be to fix or cap the price of permits in the market for a number of years to remove volatility. Fixed price permits would merely act as a tax. Emissions would not be seen as carrying any intrinsic value and few tradeable assets could be created by those reducing emissions. Thus the introduction of fixed priced permits or capped prices is a particularly obnoxious and dangerous threat to Australia’s aim to be a leader in the carbon constrained world ahead.

At last month’s Carbon Market Expo, held on the Gold Coast, speaker after speaker implored the Federal Government not to adopt a fixed price or capped permit scheme even if it is pressured into the adoption of a soft start approach. The reasoning behind these arguments put forward by Australian and international investors, traders, cleantech companies and environmental NGOs was that a fixed price would stifle investment. Without investment technologies will not be commercialised and Australia will languish as the rest of the world invents and profits from the technologies of the future. It is true that this may provide a benefit to some of the old emissions intensive industries, but it is no way to build strong foundations for Australia’s future.

Much of the danger lies in the understanding, or lack thereof, by the general public. Lobbying and community engagement by the emissions intensive industries has been well funded and effective. Stories of the future benefits that would be betrayed by a soft policy decision have not gained wide coverage. It appears that the public has been persuaded that a fixed price is the low risk option. What has not been communicated is that a decision to adopt a fixed or capped price is a decision to be a follower rather than a leader in global carbon markets. It is a decision not to build the foundations of a smart country.

I am reminded of two widely discussed public issues, the outcomes of which would no doubt have been different if the issues had been subject to informed and rational debate. The national referendum on whether Australia should become a republic was cleverly manipulated to achieve the outcome desired by the then Prime Minister. Tactics of fear and confusion were used to great effect, together with an emphasis on divisions between republicans. Voters were denied the opportunity simply to say ‘yes’ or ‘no’ to the concept of a republic. If such a straight forward question had been posed, most commentators seem convinced that a ‘yes’ vote would have resulted.

The defeated town referendum on the indirect potable recycled water scheme in Toowoomba again shows how the introduction of fear and confusion into a debate can work extremely well for those opposing change.
In both of these, the outcome was not what the voters would have chosen if they had been fully informed and not been led to fear change. The old adage of ‘better the devil you know’ is often applied without reason. Common sense too often faces defeat by the ignorance engendered by a poorly communicated debate.

Australians now stand at a turning point. We can choose to fear change and let the Government be persuaded to make Australia a technology taker by adopting fixed or capped carbon price. Alternatively, we could choose to build the foundations of cleantech leadership through investment and innovation.

The absence of an official referendum should not cloud the great power of the community, of the readers of this column. The Australian Federal Government is influenced by community opinion. It is incumbent on all of us to explain our position clearly and loudly.

This article was originally published in Environmental Management News on 6 November 2008.