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A wide range of policy options, including a range of market-based mechanisms are available to governments to support the development of renewable energy. These options include provision of investment incentives such as grant programmes, tax measures such as investment and production tax credits, government procurement policies, and guaranteed price systems such as feed-in tariffs. More common mechanisms include various market-based schemes built around obligations to purchase renewable energy, including portfolio standard or quota systems, and a binding renewable energy target. All of these options are present in some form or other in various government responses to climate change and in efforts to promote the development of renewable energy across Australia. By far the most important of these mechanisms has been the Mandatory Renewable Energy Target (MRET) scheme established under the Renewable Energy (Electricity) Act 2000 (Cth). This scheme was originally established to spur investment in renewable energy generation in Australia. This chapter argues that this core policy objective has been undermined by a constant stream of government-sponsored inquiries, reviews and legislative amendments that have created uncertainty and undermined investor confidence in the renewable energy industry. This chapter argues that the Australian experience demonstrates a fundamental lesson that the best way to destroy, or at a minimum undermine, the effectiveness of a market-based mechanism is to create a continual climate of uncertainty through inquiries and reviews and numerous amendments to the scheme.
Evgeny Guglyuvatyy and Natalie P. Stoianoff
Australia had actively participated in the 1992 Earth Summit in Rio de Janeiro, endorsing the Summit goals that were formed by the desire for sustainable development. Australia also joined the United Nations Framework Convention on Climate Change and much later signed the Kyoto Protocol, enthusiastically supporting greenhouse gas reduction. A range of measures aimed at reducing Australia’s greenhouse gas emissions have been on the agenda at the federal and state level for the last two decades. Until recently, successive Australian governments have been committed to the introduction of a carbon tax or an emissions trading scheme designed to mitigate climate change. This chapter examines the historical progress of Australian climate change policy including the implementation of the present Australian government’s Direct Action Plan. The chapter in particularobserves several interesting and significant aspects of Australian climate law, highlighting governmental approaches and processes leading to the introduction of those laws.The historical perspective is necessary to identify most common features of the climate law implementation procedures and to identify what political factors influence these processes in Australia. Examination of the Australian climate change regime indicates how different actors influence policy proposals to achieve their own goals, rather than to cooperate in a process of generating the best overall legal option. This chapter concludes that the development of climate law in Australia required some innovative and responsive law initiatives. However, the practical implementation of various climate change laws had been constantly impacted by various economic and political factors.
The EU Emissions Trading Scheme (EU ETS), launched in 2005,has not achieved its goals. It has not been attractive to other geographic areas and global emissions have increased. Leaving aside the recession, Europe did not consume less but produced less, importing goods from emerging countries with high carbon intensity. In addition, CO2 permits reached a price level that has been insufficient to encourage research and investment. The ETS has become a kind of (low) negotiable energy tax burden on EU business competitiveness in a global market. The World Trade Organization (WTO) (and international policy opportunities) does not allow the imposition of an unjustified carbon border tax. For trading within the European market, the proposal in this chapter is to consider CO2 as a raw material used in the production of goods, regardless of where they are produced and enhance it in the quantity ‘contained’ in a single product as a result of the energy mix. The CO2 cost would be administered as a charge converging in value-added tax (VAT). This approach allows an enhancement of CO2, to be free from market fluctuations and from recession, if the CO2 cost is set at an appropriate level to encourage research and low-carbon investments in EU and non-EU territories. Because of the greater efficiency of the European energy mix it would also create competitiveness in the energy costs of production. This approach –adopted unilaterally by Europe – complies with WTO rules, as long as it allows industries outside the EU to demonstrate their production energy mix. If European standards are respected, industries would be exempted from the additional charge on emissions within the VAT. In the extremely complicated context of energy and industry – the United States moving towards energy independence thanks to shale gas; China and India increasing their market shares; Organization of the Petroleum Exporting Countries (OPEC) countries adopting ‘strong’ international policies on the cost of crude oil – Europe needs to take advantage of the low carbon intensity of its industrial system, especially now that the abandonment of free CO2 permits will inevitably increase production costs. This could be a way to create conditions for lower global emissions and increase environmental benefits faster than any global agreement.The aim is not to lower EU environmental objectives but to urge the rest of the world to follow Europe.