In a move that has surprised renewable energy advocates, Senator for Victoria John Madigan–who is better known for his strong opposition to wind energy–has backed the Clean Energy Finance Corporation.
The Clean Energy Finance Corporation was a key plank of the Clean Energy Future legislation negotiated by the Gillard government, the Australian Greens and independent members. The body was set up to stimulate private sector investment in Australia’s nascent renewable energy sector.
Last week, it was revealed that the Abbott government’s decision to scrap the CEFC would cost taxpayers. CEFC chair Jillian Broadbent says the fund delivers a $200 million return to taxpayers each year or $2.40 worth of profit for each tonne of carbon abatement.
Pollie Watch articles hold politicians to account when their arguments against renewable energy aren’t supported by the evidence. They also give politicians a pat-on-the-back when they stand up for renewable energy in Australia. In that spirit, Yes 2 Renewables are happy to post Senator Madigan’s excellent defense of the Clean Energy Finance Corporation below.
Senator John Madigan (Hansard):
Whilst I and the Democratic Labour Party have been critical of the carbon tax, we acknowledge that it is part of a much larger legislative package that includes some useful and important initiatives. I do not support the abolition of the Clean Energy Finance Corporation and I urge the government to amend its legislation and to retain the Clean Energy Finance Corporation.
I want the Australian population to be very clear: the Clean Energy Finance Corporation is not providing grants to fund projects. It is not giving away taxpayers’ money. It is a pro-industry development bank that is helping drive private and public investment in lower emission and cleaner energy technologies. It prefers Australian manufacturers. It is helping our farmers and our manufacturers to reduce their costs and to use energy-efficient equipment. It requires borrowers to be responsible, to deliver on their project commitments and to repay their borrowings. It leverages private capital to invest in areas they might otherwise ignore, like energy generation using methane emissions from farms and industrial processes.
The Clean Energy Finance Corporation is dragging Australian financial institutions into investing in the 21st century. It is helping fulfil the role that used to be filled by the likes of the Commonwealth Development Bank, the rural and regional development banks and other public lending institutions that engaged in nation building. The Clean Energy Finance Corporation epitomises direct action on lower emissions to support the development of new technologies and to help commercialise cleaner technologies. Its eligibility criteria recognise the necessity to support transition technologies, Australian innovation and Australian manufacturing content. Energy and manufacturing are industries that demand a practical approach to complex but inherently practical problems.
I suggest that abolishing the Clean Energy Finance Corporation is ideologically driven. You do not solve practical problems by ideology. You solve these problems with practical solutions. The Clean Energy Finance Corporation is a vehicle that encourages and supports practical solutions. It takes the approach of building a diversified portfolio, encouraging cleaner energy generation using a range of technologies, encouraging efficiency and savings and encouraging private and public sectors to upgrade their technology using low-emission, efficient equipment. Examples include the Baw Baw Shire Council upgrading their street lighting, Castlemaine School of Mines reducing the energy use in their buildings, the CQ Melbourne building upgrading their heating system using trigeneration technology and many others.
Compare this to the idiocy of governments encouraging some $65 billion of private and public investment in gas export developments that have overcommitted Australia in export market activities. The export demand for our gas is so huge that our manufacturers are being left without gas and are unable to enter into gas contracts with suppliers. Gas prices are expected to quadruple and household gas prices will rise. The flow-on effects will erode our manufacturing base and, in some cases, destroy local manufacturers. How do we feel about the possibility of seeing our glass manufacturers close down, our paper mills stop production, our chemical manufacturers shut up shop? How do we feel about the possibility of destroying our artesian water supplies with more and more coal seam gas development to meet our gas needs, because we are exporting too much and we allowed private companies to invest too much money in gas extraction and processing in this country?
The Clean Energy Finance Corporation is the very opposite of this madness. It is contributing to sane, sustainable, measured investment in the short, medium and long term. It supports and encourages good local industry development on a responsible basis. I want an energy transition that promotes Australian jobs, Australian technology and innovation and Australian manufacturing and helps protect the environment to boot—economic, social and environmental outcomes we can all be proud of.
Practical solutions that achieve such high performance standards take a long time to develop and commercialise—20 years or more. They also need ongoing government assistance along the way. It is extremely difficult to embark upon and keep alive the development and commercialisation process across the decades necessary to bring such technologies to market. The Clean Energy Finance Corporation is absolutely essential in helping the development and commercialisation of these absolutely essential technologies.
I look at some of the cleanest, greenest countries on the planet, such as Germany, which are eminently practical in their approaches to reducing emissions. German coalition governments take practical approaches to practical problems. They provide direct funding and capital grants to develop and commercialise low-emission technologies. They assist companies and households to buy low-emission technologies. They are driving down emissions by using a combination of direct action, including capital subsidy programs and regulation, as well as taxing pollution.
Even if we do not like the carbon tax—and I have never been a big fan—I do not believe in throwing the baby out with the bathwater. I urge the government to retain the Clean Energy Finance Corporation. Several times, when I have asked questions in this place or of people in the other place, I have been told about ‘sovereign risk’. What is the sovereign risk if the Clean Energy Finance Corporation is abolished and uncertainty is brought to the market you profess to protect?
Visit RenewEconomy for more coverage of the Senate’s response to the Abbott government’s attempt to kill off the Clean Energy Finance Corporation.