Australia’s parliament voted to set up the Clean Energy Finance Corporation (CEFC) on June 26. The law was backed by Labor and Greens MPs. Mainstream environment groups have welcomed the initiative, saying the CEFC will make $10 billion available to fund clean energy.
With the dire warnings from climate scientists about the need to cut carbon emissions quickly, such a big investment in clean energy sounds like a good thing. But there is a catch: most of the money won’t be spent on clean energy at all.
The $10 billion CEFC will be split into two parts. At least 50% will go to fund “renewable energy”. The rest will fund so-called low emissions technologies, which include gas-fired energy projects such as trigeneration plants.
But some of money marked for “renewable energy” will also go to fossil fuels. The CEFC will define the term “renewable energy” to include “hybrid” gas power technologies.
By law, the CEFC will not add any more renewable energy to Australia’s energy mix above the government’s existing 20% by 2020 target. That is, Australia’s renewable energy will be at the same level with or without $10 billion.
Because the CEFC is required to fund cheaper energy technologies, it is very unlikely to support more expensive projects like big solar plants, which are essential to cut Australia’s emissions fast.
These are very serious problems, but some big environment groups have chosen to deal with them by pretending they don’t exist.
Strangely, the WWF welcomed the CEFC due to the “$10 billion invested in renewable energy deployment”. Similarly, Australian Conservation Foundation President Ian Lowe said “the CEFC will be at the vanguard of this [renewable energy] revolution”.
But others have criticised the CEFC for falling so far behind what is needed.
In an April 19 Crikey article, the ANU Centre for Climate Law and Policy’s Andrew McIntosh and the Australia Institute’s Richard Denniss said: “There is a significant risk that the CEFC will duplicate what other programs are already going, or corrupt their operation.”
In May, climate research group Beyond Zero Emissions said: “BZE opposes the CEFC in its current form because it will do nothing to actually support the installation of additional renewable energy beyond the current 20% by 2020 target. Instead, the policy appears designed to distract the media and the public, and to obscure the very real difference between government-defined 'clean energy' and truly clean renewables.”