Election could leave Australia with AUS$4 billion clean energy funding gap

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If the Coalition defeats the current Labor government in Australia’s general election on 7 September, it could create an AUS$4 billion (US$3.7 billion) gap in funding for the renewable energy sector and other carbon cutting measures, research claims.

The centre-right Coalition, which currently leads opinion polls, would repeal the AUS$10 billion (US$9.2 billion) Clean Energy Finance Corporation, a state-backed financing vehicle, but supports the AUS$3 billion (US$2.7 billion) research focussed Australian Renewable Energy Agency, according to a report by the Climate Institute think-tank.

The Australian Climate Commission, independent advisors to the government, estimates that 2.6 million people currently benefit from around one million solar installs.

But personnel changes in Canberra could reduce funding and policy incentives making growth rate unsustainable.

The Coalition has also pledged to review the country’s Renewable Energy Target (RET) to generate 41,000GWh of electricity from clean sources by 2020.

The report, based on data modelling by the consultancy SKM-MMA and Monash University's Centre for Policy Studies, states that the RET would have to be reinforced, not relaxed if the country was to cut emissions by 5% without a carbon tax policy also helping to cut emissions.

Removing the carbon tax will itself reduce the incentive for big emitters to invest in renewable energy. The forecast for clean energy’s share of the mix in 2020 cut from 24% to 22% with the removal of the carbon tax, according to the Climate Institute.

Liberal leader Tony Abbott, has said that should he be elected as the country’s next prime minister he would unpick a number of existing climate policies including the existing carbon tax for big emitters. He intends to replace it with a so-called 'Direct Action' climate policy. This will have an annual spending cap of AUS$3.2 billion (US$2.9 billion).

The plan would sever much of the support for renewable energy, with the Climate Institute’s analysis estimating the funding will fall AUS$4 billion (US$3.7 billion) short of what is needed for the nation to hit its 2020 5% emission reduction target.

The Coalition does have a target for an additional one million rooftop solar installs (PV and thermal). At the current growth rate Australia would beat that target ahead of schedule with no additional policy support.

State governments are already struggling to cope with the rise of PV. Western Australia recently had to perform an about turn on a retroactive tariff cut after facing a vociferous backlash. Tasmania will cut its feed-in tariff at the end of this month.

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