Green Is Not Good: How Abbott Sabotaged The Clean Energy Sector


In 2012, Michael Ignatieff lamented that “the liberal task – deliberation, compromise, respecting rights and due process – often seems uninspiring.” The uncharitable might observe that Ignatieff, who led the Canadian Liberals to their worst ever defeat, knows a thing or two about failing to inspire. But he was surely correct in pointing out that the everyday business of liberalism is often cautious, conciliatory and prudent.

Judged by these standards, the Liberal government of Tony Abbott is spectacularly illiberal. Instead of cautious and deliberative, the government has been reckless and overconfident. Rather than respect rights, the Abbott government has enthusiastically restricted them. And in place of compromise, this government has offered a long series of ultimata, most of which have ended in abject failure.

Those who have dealt politically with our 28th prime minister – Tony Windsor springs to mind – have warned us to expect a leader for whom conflict and confrontation come easily. But even seasoned observers of this government can occasionally be shocked at the wrecking ball antics and ideological fervour of the Abbott administration.

It springs up in all sorts of places, often where you least expect it. Some decisions seem like strange ideological ticks, that make no sense unless viewed as a kind of arcane point-scoring exercise in the eternal culture war to which Abbott seems so committed.

That might be the best way to view the bizarre decision, announced last week, to give $4 million of taxpayers money to Bjorn Lomborg, international man of skepticism, to create an Australian chapter of his Copenhagen Consensus Centre at the University of Western Australia. The decision, greeted with enthusiastic approval by the right-wing partisans at the Institute for Public Affairs, stunned academics and climate scientists across the country. It comes from the same government that abolished the Climate Commission as almost its first order of business on taking office.

Lomborg “has no real credibility, he’s got no credentials in either the economic area or the climate area,” Professor Tim Flannery told New Matilda yesterday. But of course credibility is not the reason Lomborg has been rewarded. As a loyal foot soldier of the international climate denial movement, Lomborg is a well-remunerated merchant of doubt, and that’s exactly why Christopher Pyne is backing him.

The Abbott government’s ideological crusade is never more fervent than when the battleground is climate and energy. Don’t take my word for it: listen to the Prime Minister himself. “Coal is good for humanity,” he said last year.

And in the Manichean world of Tony Abbott, if coal is good for humanity, renewable energy, the greatest threat to coal, may well be bad for humanity.

This would be the easiest way to explain the Abbott government’s treatment of Australia’s once-booming renewable energy industry. 18 months after the election of a government supposedly “open for business”, the renewables industry in this country is in ruins.

Investment has fallen off a cliff – down a stunning 90 per cent since early 2013. More than 2000 jobs have disappeared. Almost no new large-scale renewable energy is being built in Australia, so hostile has the environment become. Banco Santander, the world's third-largest clean energy lender, packed up and left in March.

The reason? The government has sabotaged the industry. According to international energy consultants Bloomberg New Energy Finance, “the Australian large-scale clean energy industry has become practically uninvestable due to ongoing uncertainty caused by the government's review of the Renewable Energy Target.”

As we’ve chronicled here at New Matilda, the Renewable Energy Target was once the tripartisan policy of the Coalition, Labor and the Greens. The law, which was passed under the Howard government, mandates that there must be 41,000 gigawatt hours of renewable electricity fed into the grid by 2020.

Before the 2013 election, the Coalition promised many times to keep the RET. “We have no plans to change the renewable energy target,” Tony Abbott said in September 2011. “We will be keeping the renewable energy target,” Environment Minister Greg Hunt said in February 2013. “The Coalition supports the current system, including the 41,000 gigawatt hours target,” Liberal Senator Simon Birmingham said in July 2013.

The promise was broken in early 2014, when the government announced that former Caltex boss, noted climate change denier Dick Warbuton, would head up a review. Surprise, surprise: the review recommended abolishing the RET altogether. Energy Minister Ian Macfarlane then used the report as political cover to attempt to slash the RET, to 26,000 hours.

But the RET is a law which requires amendment, and Macfarlane has been unable to get any cross-bench support for his changes. He instead said he would “negotiate” with Labor over a revised target. After first refusing any kind of compromise, Labor eventually came all the way down to 33,500 hours. Macfarlane is holding out for 32,000. In the meantime, renewables investment tanked, and has never recovered.

You get the impression the Coalition is quite happy that negotiations have stalled. No deal on the RET means the renewables industry stays in limbo, killing investment and destroying the medium-term prospects of the sector. Meanwhile, carbon permit-free coal makes windfall profits. And Macfarlane doesn’t even have to do anything. He can just fiddle while the renewables sector burns.

If this wasn’t the Abbott government, and we weren’t talking about renewable energy, it would be difficult to believe. Imagine a government that set out, quite openly, to destroy an entire sector of business activity, for purely ideological reasons – breaking an iron-clad election promise in the process.

But that’s precisely what’s happened in renewable energy, which depends upon the RET to leverage new investment into the Australian grid. It might be the biggest scandal in economic policy in recent history – and almost no-one seems to care.

In recent days, the Coalition has been banging on about Melbourne’s doomed East-West Link, and the supposedly dire consequences for international investment that cancelling that road project will bring. And yet here is an example of sovereign risk that dwarfs anything in urban infrastructure.

But that’s the Abbott government for you, where ideology trumps reason every time. After all, the liberal task of deliberation and compromise is so uninspiring. It’s much more fun to destroy an entire industry, while you toss some money at Bjorn Lomborg, and watch the lefties get outraged.

Ben Eltham is New Matilda's National Affairs Correspondent.