Making the market shine

Much has been made of the solar rebate scrapping yesterday, such as my article with the far more talented mind of Tim Colebatch Much has been made of the solar rebate scrapping yesterday, such as my article with the far more talented mind of Tim Colebatch here.

 This is a very hard one to call. Many green fingers have been wagged at Garrett, but the announcement was made along side Wong and Swan (and in fact Garrett seems like he was a last minute add-in).

A friend of mine from the Environment Department reading of the scheme is that the $8000 was simply to costly for the government to continue. Our article outlined the huge uptake in the rebate, which, even after a means test of $100 000 was implemented in this year’s budget. The conventional wisdom, or joke, among Labor circles is that by implementing the means test it actually drew people’s attention to the rebate.

Our article shows there has also been a substantial council program in which they have been organising groups of house and small business and buying panels at bulk prices, then claiming the rebate, meaning households pay much less for solar.

It is a brilliantly clever scheme for the councils, good for houses and good for the environment (Garrett was yesterday boasting that in 18 months of Labor government solar panels on house have doubled from 30,000 to 60,000), but bad, very bad, for the government’s bottom line.

The problem is, as outlined by my department friend, is that politically it is a bad move to remove any type of rebate. The Government and Garrett took enough of a hit on the means test decision that it didn’t want to raise the ire of the solar industry, green groups and electorate again.

This is the middle road, a market based scheme (for more detail read our article) which taps into an already operating process in which electricity companies pay for Renewable energy certificates (or RECS) upfront from a consumer. RECs are given to a household with solar panels based on how much energy they generate per hour (which varies based on your geographical location).

The scheme creates a monetary value on green energy in the market, sort of like a feed-in-tariff but with a market determined price (the average cost of a REC is $26-46, with RECs in Melbourne being at $42). The price fluctuates on a general supply and demand principal, RECS two years ago bottomed out to $12.

What the government is doing is offering five times the RECS to households (which scales down to two in 2015).

Will a sudden influx of more RECs into the market mean the price crashes? That is the argument of the Greens/Alternative Technology Association and remains to be seen. It depends how highly green energy is valued in the market, and even with a compromised carbon trading scheme, it is likely green energy will rise in value at least in the medium-term.

Will increased RECs in the system create an artificial impression of how much renewable energy is being generate. Maybe, but it will only be short term as the multiplier tracks down by 2015 and the market should correct itself.

If you earn under $100,000 it is very true you will be much worse off buying solar panels, but those over $100,000 will now get some money, and those over $100,000 tend to be worse power consumers. In saying that the rebate means test has only been around since the budget, and before that it was available to all and sundry.

In the long term the extra money will be turned off as the multiplier decreases. The ultimate question, and this is the question of the solar industry, is that once that happens will solar be able to stack up with base power such as coal with the inducement to consumers?

This probably isn’t a bad first step, but there are many more harder ones that have to be taken along the road.

 

Garrett ”considers” greenhouse trigger

A GREENHOUSE trigger, which could stop or amend key infrastructure projects if they emit to much carbon, is being considered by the Federal Environment Minister. 

A trigger would mean Peter Garrett, who announced a review of his powers in late October, would expand his ability to place environmental conditions on projects such as the north-south pipeline and Tasmanian pulp mill.

Mr Garrett said yesterday he would first wait for the results of a review into the Environment Protection and Biodiversity Conservation (EPBC) Act 1999, headed by ANU Chancellor Allan Hawke, and the compliance provisions in the emission trading scheme (ETS) before seeking to gain the trigger power.

“The upcoming carbon pollution reduction scheme white paper (released on Monday) will outline the Government’s framework for action on climate change and the role, scope and operation of a climate change trigger in the EPBC Act would need to be considered in light of the final design of that scheme,” Mr Garrett said. 

An insider in the EPBC this week said they would be very keen to see a greenhouse trigger included in the minister’s powers, but wouldn’t pre-empt submissions to the review due next week.

The panel is due to submit its final recommendation in the second half of next year.

Last week Victoria’s Sustainability Commissioner Dr Ian McPhail called for a “climate change test” to be applied to all cabinet decisions on policy, infrastructure and spending in his “State of the Environment Report.”

An environment law expert at ANU, Andrew Macintosh, said  a greenhouse trigger would also be useful in reigning in carbon emissions from industries given exemptions from the ETS.

“But the problem with any environmental law is it requires political will to carry out its power which is unlikely to happen,” Mr Macintosh said.

“Rather than a greenhouse trigger it is far more important the emissions trading system has strong financial penalties and criminal powers against companies that go over their annual carbon permits.”

Mr Macintosh said if strong financial penalties are not included in the carbon trading market major companies could consider fines “as a cost of doing business,” rather than keeping to permits. 

“As anybody familiar with environment law know there is some really strong legislation out there, but if there isn’t the financial pressure behind it tends to be flouted,” he said. 

Labor insiders yesterday confirmed news reports that details of the ETS have already been signed off on by caucus, including the 2020 target range and an “extensive” range of concessions to be given to high polluting trade exposed industries.

It is expected the Federal Government will announce a 2020 target reduction range of 5-15% of 2000 levels, depending on the outcome on an international agreement. 

The final decision will be signed off by the ”core three’ Climate Change Minister Penny Wong, Prime Minister Kevin Rudd and Treasurer Wayne Swan. 

NOTE: The original version of this story appeared here, albeit in its tiny format. For more information about the history of a greenhouse trigger I recommend Andrew Macintosh’s chapter in Climate Law in Australia (ed. Tim Bonyhady and Peter Christoff, Federation Press 2007) titled ”A greenhouse trigger: Where did it go and what of its future?”

 

WWF claims endangered species funding shortfall

Damage done by feral cats to Brush-Tail Rabbit-Rat PHOTO: M. EVANS

The now endangered brush-tail rabbit-rat (conilurus-penicillatus) PHOTO: MARTIN ARMSTONG

THE WORLD Wide Fund for Nature (WWF) is warning Australian revival programs for endangered species are seriously underfunded and a backlog of hundreds of plants and animals are still waiting to be reviewed for endangered status.

WWF Manager of  Threatened Species Katherine Miller, said she was disappointed with the growing number of species stalled on the review list and urged Environment Minister Peter Garrett to better fund the Threatened Species Scientific Committee which process the reviews.

Ms Miller added the bigger problem is a lack of species specific funding in the $2.5 billion Caring For Our Country plan announced by Minister Garrett last month.

The Caring For Our Country plan provides an over-arching policy for funding conservation management projects in Australia from costal care to land management.

“There has been some money for the Tassie Devil, which is great, but there is a serious lack of money available for other specific programs for treatened species,” Ms Miller said.

“We welcome the Caring For Our Country plan, but it contains very little money for species specific programs within it.”

“That means unless a threatened species falls under a wider land project, like addressing fires in the Kimberleys, then it is unlikely to get money for a numbers revival program.”

At the start of the year Minister Garrett called for submissions to a priority assessment list of species, those in the most dire situations, who are currently stalled waiting review for endangered listing.

The priority assessment list was released at the start of October which included 27 species, along with a number of other ecological communities and processes.

The Minister’s office last week indicated 26 of these application had already been processed and the final would be completed by October next year. 

The large backlog of species, which is believed to be over 200, developed under the former-Howard Government because of a sharp increase in  applications a result of an increased awareness of the application process, increase in wildlife groups representing specific species and increased environmental pressures on ecosystems.

In addition Minister Garrett announced last week the brush-tailed rabbit rat, a small native rodent found mainly in northern Queensland, Northern Territory and WA, has been elevated to the endangered species list after review by the Threatened Species Panel.

The numbers of the rabbit-rat, which has a distinctive long tail and is found mainly sheltering in trees and hollow logs, has been critically threatened by feral animals such as cats and destruction of habitats through grazing and fire.

Minister Garrett said the Federal Government was partially tackling the rabbit rat’s decline by approving four new plans to address the threat of invasive pests, especially feral cats which he said costs Australia $1 billion a year (this blog will post more on invasive pests in the coming weeks).

Ms Miller welcomed the Government’s new focus on feral animals, in particular feral cats which she said are are much larger problem than other invasive species.

A full or partial revival program for the rabbit-rat will now be drawn up by the Environment Department as a matter of process, but funding and approval is a matter of ministerial discretion.

It is understood the rabbit-rat recovery program, if approved, will be funded from a mix of grants under the Caring For our Country and State Government budgets for endangered species.

It is also understood a number of other species that didn’t make it onto the priority list are currently being reviewed for endangered listing in the current round of meetings of the Threatened Species Scientific Committee which is expected to report early in the new year.

However, a spokesman for Minister Garrett would not reveal the exact numbers currently awaiting endangered species review and the Department’s website has removed a full listing of animals, plants and ecosystems on the waiting list.

At a Senate hearing on December 10 representatives of the Department of Environment, Heritage and the Arts told the committee the Department had moved away from recovery plans towards broader management issues as outlined in the Caring For Our Country policy.