3 billion reasons to be hopeful
23 March 2011
We're getting into the meaty end of Professor Ross Garnaut's papers and presentations on carbon pricing. Today he released the seventh of eight papers, after which he will report to Prime Minister Gillard with recommendations about how to structure a carbon price policy.
Today’s presentation was all about low-carbon technology innovation: basically, how we should use a carbon price mechanism to fund low-carbon technology development in Australia. While the details were always going to be a bit vague, after half an hour the audience got the number we were waiting to hear. Professor Garnaut recommended that $2-3 billion per year (or about one fifth) of the carbon price revenue be used to foster innovation in low-carbon technology. That would apply to the research and development phase, right the way along to deploying large-scale projects and helping drive down their costs.
OK, so we and Professor Garnaut have different views on what low-carbon technology means. While we agree on the importance of renewables, Professor Garnaut is still keen on false solutions such as “clean coal” and nuclear power, which is amazing as his speech was given in the context of the still ongoing Fukushima nuclear reactor crisis.
But it really comes down to this: we know the economics of renewable energy mean that they offer the greatest chance of providing clean, safe, reliable and affordable energy. And $3 billion per year, if used strategically and thoughtfully, is a very powerful amount of money. Even the lower end of that range – $2 billion – would be able to mobilise a huge amount of private finance and together would not be far off the investment required to fund an Energy [R]evolution.
I asked Professor Garnaut what sorts of gains he thought that kind of money could deliver. While he wasn’t up for making any precise predictions, he said we would be very surprised in a positive way at the improvements that will be achieved economically and technically.
It will be interesting to see how Professor Garnaut’s recommendation goes down with this Government. But the message of the last fortnight is clear: we can put a price on carbon pollution and use that money to achieve a variety of goals, including funding the myriad of climate solutions that will help drive down our overall carbon pollution.