Australasian Science: Australia's authority on science since 1938

Budget defers renewable energy development when it's needed most

By Dylan McConnell

The decision to link the Australia’s carbon price to the European Union emissions trading scheme has wiped A$6 billion from the federal budget.

The full text of this article can be purchased from Informit.

Treasurer Wayne Swan has dealt with that loss of revenue by reducing industry assistance to deal with the carbon price – a reasonable move – but he has also deferred funding for important renewable energy development.

The carbon price estimates for 2015-16 have been revised from A$29/tonne to A$12.10/tonne to reflect the collapse in the European carbon price. Given that the European Emission Allowances are currently trading at €3.30/tonne (A$4.30/tonne), with no recovery in sight, this may still be an optimistic revision.

So key components of the Clean Energy Future package have been revised to reflect the changing prices. These aim to “better match spending with the collection of revenue from the carbon price”.

Industry assistance for adjusting to the carbon price has been reduced by around A$3.9 billion over the forward estimates. This seems a prudent decision given the lower carbon-related costs the industries will face (though arguably, this “industry assistance” was excessive in the first place).

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The full text of this article can be purchased from Informit.