Time for direct investment in renewables

August 29, 2014
Direct investment in renewable energy is more effective than a carbon trading scheme.

The Renewable Energy Target could become a victim of its own success. A review into the scheme, released on August 29, has recommended the federal government close new investment into renewable energy because it has produced more energy than originally planned.

But Labor, Greens and Palmer United Party senators have vowed to block any changes to the scheme.

At the same time, a debate has emerged among climate activists about whether we should “change tack” when it comes to campaigning on the issue of climate change.

The Greens’ strategy seems to be to encourage a revival of emissions trading. But carbon trading has proven to have many flaws and will not do what is needed to secure a safe climate.

Apart from being ineffective, even if it did work exactly as intended, carbon trading is also painfully slow. Slow as in it doesn’t have much effect over the course of a three or four or six or even nine year term.

So even if the government implemented a carbon trading scheme that would decarbonise the economy in thirty or forty years, if it gets dismantled after the first three or six years then it won’t have done much good.

By contrast, direct government investment in renewable energy is something that can be done quickly and have immediate effect.


It is important to note that if the government invests in renewable energy, that does not mean there cannot be some form of a carbon trading scheme.

Regulating coal fired power stations, coalmines and unconventional gas out of existence is another action the government could take. Expanding the mandatory renewable energy target is another option.

Nationalising and phasing out coalmines and coal powered stations is another tool at our disposal — if the political will to do these things existed.

There is also the realm of direct action — activism in the streets, climate camps, climate emergency rallies, trade union climate campaigns, town hall meetings, the establishment of renewable energy co-operatives, and forming community blockades to stop coalmining, such as in Bentley in northern NSW where residents stopped a coal seam gas exploration well, and in the Leard State Forest in NSW, where locals are campaigning against a new coalmine.

The grassroots climate movement is crucial to securing permanent action on climate change.

But state and federal policy remains an important area and is something the grassroots climate movements can and should seek to influence in a strategic manner as part of their campaigns.


The question of how to fund such a project rears its head. Such a project could be paired with a double digit rise in both the corporate tax rate and the personal income tax rate on those earning over $180,000 a year.

Taxing the rich and stopping dangerous climate change are intrinsically linked.

Getting renewables built will diminish the power base of those who would seek to overturn and unravel climate policies.

Put simply: if a progressive government builds a hundred billion dollars worth of publicly owned wind farms in six years — which we know will knock out a heap of coal-fired plant due to the merit order effect — what is a right of centre government going to do if it gets elected?

Pull down the wind farms? Not likely. But more to the point, the fact that those wind farms are operating will have significantly diminished the political power and revenue base of the fossil fuel lobby.

Now those who follow climate and renewable politics will know that zero-fuel-cost renewables will inevitably dethrone coal as the dominant source of electricity.

But those who follow the waxing and waning of the polar ice caps would also know that the pace at which renewables are displacing coal — even given its impressive momentum — is nowhere near fast enough to prevent a very high risk of runaway warming, a world six degrees hotter with decimated food production and rising sea levels.

And here in lies the problem with the “market will save us with cheap renewables” approach espoused by Renew Economy and others.

Are “green capitalists” concerned primarily with trench warfare against the fossil fuel mafia to slowly capture market share? Or do they want to decarbonise the global economy quickly enough to stop runaway warming? Because the two are not necessarily the same.

Moreover, would “green capitalists” be content to let the Australian government invest in publicly owned renewables (and thus capture a big slab of precisely the new market they are aiming to control) if it meant that the inevitable demise of the fossil fuel mafia in Australia happened a decade or more earlier than if market forces alone drove the shift


The Greens stand at a crossroads. They could feasibly be the parliamentary representatives of this new emerging group of capitalists.

That is certainly how Greens leader Christine Milne pitches some of her rhetoric, couching renewables policy in terms of competition. It would be naive to think the Greens don’t seek the opinion of Australia’s fledgling renewable capitalists when developing policy.

What if next time the Greens control the balance of power in the Senate, they made it a condition of forming government that there was a major project of public investment in renewables — an “NBN of renewables”?

The longer this government is in power, the closer it takes us to 100% renewables via direct investment in renewables. On one hand the “green capitalists” would miss out on some market share — perhaps even a lot of market share — and the politically dangerous example of what direct government investment in renewables can achieve will be like a genie released from a bottle.

But on the other hand, from the perspective of “green capital” a future government might just privatise the wind and solar parks, and at least one strategically important corner of the “evil empire” of global fossil capital — Australia — will have had a giant hole ripped out of its power base.

How much time do we spend going one step forward and two steps back? Will we have an alternating cycle of gently pro-renewables government followed by a term of fossil mafia dominated government that undoes the previous government’s market mechanisms, all the while green capitalists hold off on investment because of all the uncertainty, and at some point around the year 2035 the balance finally shifts decisively in the favour of just keeping the latest useless emissions trading scheme in place?

Direct public investment is where all our coal-fired plants came from and it is where the Snowy Hydro scheme came from. So let’s just cut to the chase and fund a big renewable public works project starting in 2016.

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