Carbon Tax: Between a Snog and a Hard Place

Unless you’ve taken up residence under a rock somewhere in one of our sun-bleached deserts, you’ll be aware that the House of Representatives successfully passed the government’s controversial carbon legislation earlier this week. The minority Gillard government punted the bills through the Lower House with the support of the Independents to the delight of renewable energy fans and the disgust of the Opposition Leader Alan Jones Tony Abbott.

The legislation puts a price on carbon, looks to encourage investment in the renewable sector and reduce the level of carbon emissions. While the legislation still needs to be passed by the Senate, the enthusiastic support of the balance-of-power Greens (who are still settling their bums into their plush seats at the “House of Review”), should make this a sure thing.

The passing of the Clean Energy Future package (a.k.a the “Great Big New Tax” depending on which side you’re on) should unlock much needed financial assistance for the renewable energy industry, including the battered and bruised solar power sector.

AuSES Chief Executive John Grimes said the passing of the bills was a step forward for the nation.

“AuSES supports actions which foster the generation of renewable energy. Today’s result will help Australia transition to a sustainable, low carbon economy,” he told reporters.

However there was one important aspect of the legislation which managed to fly under the radar of the mainstream media (probably because the combined drama of the Gillard/Rudd snog and the Abbott “promise in blood” was to hard to ignore).

This was the establishment of the Australian Renewable Energy Agency (ARENA). The agency, to be established within the Department of Resources, Energy and Tourism is being set up to centralise decisions on renewable energy and will have the power to allocate funding from the tax towards initiatives such as solar energy projects.

An extract from the department’s press release:

“ARENA will manage $3.2 billion in renewable energy investment to promote the research and development (R&D), demonstration, commercialisation and deployment of renewable energy projects to improve the sector’s competitiveness.”

“Around $1.7 billion in uncommitted funding from the range of consolidated programs will be available for the ARENA Board to invest in new renewable energy projects – such as large scale solar, geothermal, ocean, and including projects that potentially involve renewable energy-related transmission infrastructure investments – between now and 2020. This funding will be allocated in accordance with a funding strategy developed by the ARENA Board.”

Reading between the bureaucratic syntax, it appears ARENA will have enormous clout when it comes to divvying out the dosh from the carbon tax when this comes into effect next year (Senate boil-over notwithstanding). Libertarians and shock jock radio fans are already accusing the government of centrist Trotskyesque tendencies, however: is focusing renewable energy funding policy on one agency a good thing for the solar sector? Indeed which form of renewable energy will ARENA favour? Finally, as an agency within Martin “drill, baby, drill” Ferguson’s Department of Resources and Energy, what hope does this mean for the future of funding for the renewable sector?

Stay tuned.

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