Investment in renewable energy down 70 per cent: Climate Council report

Updated

New investment into renewable energy projects has dropped by 70 per cent, a report by the Climate Council says.

In the last five years most countries around the world had accelerated action on climate change, with China and the United States two of the global leaders on the issue, the report, Lagging Behind: Australia and the Global Response to Climate Change, said.

But while Australia was a crucial player in global climate action, it had "moved from a leader to laggard", the report said.

In addition, the Climate Council said the Federal Government needed to make its position on renewable energy clear, before Australia lost even more investment in new energy projects.

Earlier this year a government commissioned review of Australia's Renewable Energy Target (RET) recommended it be scaled back or wound up.

The review also suggested closing the scheme to new companies involved in larger renewable energy projects.

The Climate Council's Professor Tim Flannery said because of the uncertainty in Australia, investors were going to countries such as China and the United States.

"We are lagging behind the rest of the world [and] this year particularly has seen a big drop.

"We've had a loss of 70 per cent of new investment in renewable energy in this country, and when you compare that with the US and China, which are powering ahead - China particularly at record levels - it's a pretty sorry state of affairs," he said.

"The big international companies are just looking across-the-board and saying 'there's a favourable environment here in Texas or there in Europe or China, we'll put our money there'.

"Ever since the Howard era we've understood what it was, which was 41,000 megawatts to be installed by 2020, but the Abbott Government has now brought that into question and we are uncertain as to what the target will be and that's a big part of the uncertainty that's holding back investment."

Renewable energy projects on hold

Professor Flannery said the breakdown of bipartisan support had cost Australia a significant number of projects.

"We've had five electoral cycles where we've had bipartisan support for a policy which has served us very well. The breakdown this year has started to cost us. Unfortunately that damage, you can't undo that.

"There's a whole pipeline of projects. There's a lot of permitted wind projects in Australia. There's lots of solar stuff in the pipeline as well. They're not saying 'we're not doing it' but maybe 'we're not doing it right now, we're going to leave those permits in place, we're going to invest overseas'.

"There was a plan for a solar farm at Moree. That fell over a bit before this year, though. There was just a recent announcement about King Island as well, a wind farm on King Island, which has now been delayed.

We've started the process of reducing [emissions] but with the abolition of the carbon tax we've seen a very large increase in carbon pollution. If it continues for a year, it will wipe out the gains of the last four or five years. Professor Tim Flannery

"So I think that if you look across the board there's a whole series of regional communities where these projects have been permitted and are waiting, but will not be built under current circumstances."

The former Labor government's RET of 20 per cent came with an output number attached to it - 41,000 gigawatt hours.

As electricity demand has fallen that 41,000 gigawatt hours has become nearly 30 per cent of output.

The Abbott Government announced it wanted to see the RET reduced from 41,000 gigawatt hours to about 26,000 gigawatt hours.

The RET was initially set up by the Howard government to encourage investment in electricity produced from sources such as solar and wind, but the Rudd government expanded the RET scheme to mandate 20 per cent of all electricity would come from renewable sources by 2020.

The Climate Change report said emissions in Australia had been falling since the start of 2012, but the achievements in the electricity sector had effectively been cancelled out since the repeal of the carbon tax in July.

"We've had a reduction [in emissions]. In fact, last year we were about 0.8 per cent down, which was our first decrease in many years - at a time when the economy was growing," Professor Flannery said.

"To put that in context, the US is about 12 per cent down now on where it was during its peak.

"So we've started the process of reducing but with the abolition of the carbon tax we've seen a very large increase in carbon pollution. If it continues for a year, it will wipe out the gains of the last four or five years."

Environment Minister Greg Hunt has said the Government's Emissions Reduction Fund - part of its Direct Action climate change policy - will allow Australia to keep burning coal.

He said improved technology will ensure power stations are cleaner.

"The work that the CSIRO is doing is looking at a 30 to potentially 50 per cent reduction in the footprint of coal fired power stations," he said.

"The world needs to ensure there's electricity for those that are trying to work their way out of poverty, that's been the great goal and dream of humanity for centuries."

"Our approach has been to let the market come forward with proposals for reducing emissions. My belief is that it's possible to clean up power stations."



Flannery hopes for 'common sense' on target

The Opposition's environment spokesman Mark Butler accused the Government of walking away from the previous bipartisan agreement.

He said he was negotiating with the Government in good faith to try and seek an acceptable bipartisan agreement that would return certainty, and therefore investment, to the renewable energy sector.

The Climate Council said 39 countries had now put a price on carbon, four more than last year, with another 26 considering it.

"What we're seeing around the world is really strong action on climate change," Professor Flannery said.

"The Government has said, as far as I know, has left it open as to whether it could go to 15 per cent for the target, or even higher depending on what's happening around the world.

"I hope there's enough common sense that both parties can negotiate a sensible outcome that will stand Australia in good stead in the long term."

Topics: climate-change, environment, business-economics-and-finance, australia

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