Australasian Science: Australia's authority on science since 1938

Climate Policy in Limbo

By Ian Lowe

The abolition of the carbon tax has stifled investment in renewable energy.

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The balance of the new Senate has dramatically curbed the Abbott Government’s attempts to wind back Australia’s response to climate change. While the interim fixed price on greenhouse gas emissions – the so-called “carbon tax” – was symbolically important, economic studies show it was much too small to have a measurable impact on new investment. It did affect the operating of existing electricity generating capacity, providing an incentive to minimise the use of coal-fired power stations.

The Senate’s passing of the law to repeal the fixed price has already seen the Queensland operator Stanwell decide to re-start a mothballed coal-fired station at Tarong. To show that these decisions are never simple, the change was also driven by the inflation of gas prices resulting from the expansion of export sales. So Stanwell now has a financial incentive to sell overseas at a large profit the gas it is committed to buy, scaling back gas-fired generation and replacing it with coal. This means the change has already committed the Australian electricity system to reverse some of the gains made in recent years.

The Palmer group in the Senate appears unstable and unpredictable, but at the time of writing those senators were refusing to support other targets of the government’s attack on climate change mitigation measures: the Clean Energy Finance Corporation, the Renewable...

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