Climate policy has been a highly controversial topic in
Australia over the last three election cycles. In July 2016, a
closely contested Federal election saw the conservative party
returned to government with a slim majority in the Lower House of
Parliament and a likely minority of votes in the Upper House.
The current Prime Minister, Malcolm Turnbull, has reiterated his
commitment to the conservative party's Direct Action Plan, the
centerpiece of which is a series of reverse auctions that finance
emission reductions programs. Mr. Turnbull famously lost the party
leadership in 2009 in large measure due to his support for an
emissions trading scheme ("ETS"). For its part, the
labour party opposition supports the introduction of two such
schemes, one applying to the electricity industry and the other
applying to the rest of the economic at large. The minority
parties—which are likely to hold a balance of power in the
Senate—have adopted an array of policy positions ranging from
the reintroduction of carbon pricing and a transition to a net-zero
carbon economy, to an increase of the current renewable energy
target ("RET") to 50 percent by 2030, to the abolition of
the RET altogether and the holding of a Royal Commission into the
alleged "corruption" of climate science.
Given these divisions, the Australian Parliament is unlikely to
pass any significant, climate-related reforms in the near future. A
review of climate policy, scheduled to take place in 2017, may
provide the occasion for further consensus-building in this area.
In the meantime, government financing of renewable energy projects
is likely to survive the political turmoil.
On that note, in July 2016, the Australian government launched an
AUD 1 billion Clean Energy Innovation Fund ("Fund") to
support emerging technologies. The Fund will invest in projects and
businesses using technologies that have progressed beyond the
research and development phase but that are unlikely to attract
private sector capital for a variety of reasons. The Clean Energy
Finance Corporation ("CEFC") will be directed to make AUD
100 million of its legislated funds available to the Fund in
2016–17, with an additional AUD 100 million available in
subsequent years up to the limit of AUD 1 billion.
The Australian government will determine a target rate of return
and risk level for the Fund, which will be jointly managed by the
Australian Renewable Energy Agency and the CEFC. Their
"reinvigorated" mandate is quite significant, the
previous government having favored the abolition of both
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