The Political Economy of Renewable Energy Generation

in AustraliaJemma V. Williams

Fenner School of Environment & SocietyAustralian National University

Jeremy B. WilliamsAsia-Pacific Centre for Sustainable Enterprise

Griffith University

1. Climate change adaption

<20C

November 2011

2. The Clean Energy Future package

Aims to transform Australia’s energy production, distribution and usage systems

The carbon pricing scheme

Improving energy efficiency

Creating opportunities in the land sector to cut pollution

Promoting innovation and investment in renewable

energy

The Australian Capital Territory Region (ACR)

Is a quasi-official sub-region of the state of NSW, with Canberra in the ACT as a regional capital city

Political Discord

Legacy Grid

Institutional Dissonance

Public Antipathy

Regulatory hurdles

Economic Hurdles

Technical Hurdles

Policy control by incumbents

Barriers to the adoption of

renewable energy

Political Discord

Legacy Grid

Institutional Dissonance

Public Antipathy

Regulatory hurdles

Economic Hurdles

Technical Hurdles

Barriers not unique to renewable energy policy

Barriers addressed by the CEF renewable energy initiatives

Barriers unique to renewable energy policy

Policy control by incumbents

Political Discord

Legacy Grid

Institutional Dissonance

Public Antipathy

Economic Hurdles

Technical Hurdles

Barriers not unique to renewable energy policy

Barriers addressed by the CEF renewable energy initiatives

Barriers unique to renewable energy policy

Policy and regulatory control by the incumbent

Media Misinformation

Regulatory hurdles

Policy control by incumbents

Political Discord

Legacy Grid

Institutional Dissonance

Public Antipathy

Barriers not unique to renewable energy policy

Barriers unique to renewable energy policy

Media Misinformation

Policy and regulatory control by incumbents

“So the Clean Energy Package … it’s a small first step [but] nowhere near enough to be an adequate response to what the science demands.

… But at least it has initiated the process and has some small but significant impact.”

Clive Hamilton

Climate Change Authority

3. The implications of business as usual

Meeting the Cancun Agreement commitment

International commitment to limit global warming to 2°C above pre-industrial levels

Meinshausen et al calculated that to reduce the chance of exceeding 2°C warming to 20%, the global carbon budget for 2000-2050 is 886Gt CO2

Deducting emissions from the first decade of this century, leaves a budget of 565Gt CO2 for the 40 years to 2050

Dr. Malte Meinshausen

July 2011

The carbon budget for the 40 years to 2050 is 565Gt CO2

All of the proven reserves owned by private and public companies and governments are equivalent to 2,795Gt CO2

Only 20% of the total reserves can be burned unabated, leaving up to

80% of assets technically unburnable

http://www.carbontracker.org/wp-content/uploads/downloads/2012/08/Unburnable-Carbon-Full1.pdf

At the present rate of consumption, the 2000-2050 carbon budget will be exceeded around 2024

Nick Robins, Head of the Climate Change Centre at HSBC Bank, London, on the impact in Europe of a deflating carbon bubble:

Could nearly halve the value of coal assets on the London exchange, and knock three-fifths from the value of oil and gas companies.

“At the moment this risk is not being priced at all”

“The average pension fund invests about 55 per cent of its portfolio in high-carbon intensive industries and only 2 per cent in their low carbon counterparts.

How are they going to manage the risk of catastrophic climate change going forward? The best way is to put a higher percentage of their funds in low carbon-intensive industries.”

John Hewson

Asset Owners Disclosure Project (AODP)

4. Creating a resilient energy portfolio

@TheGreenMBA@jemmavwilliams

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