The package of 18 bills will see carbon priced at $23 per tonne from 1 July 2012, rising by 2.5 per cent each year during a three-year fixed price period until 1 July 2015 – when the mechanism will transition to an emissions trading scheme, with a price determined by the market.
The Federal Senate voted 36 to 32 votes in favour of the Clean Energy Future Plan after it was approved by the House of Representatives, in what Prime Minister Julia Gillard called the “most complex policy debate in Australia’s peace-time history”.
Under the legislation package, 500 of Australia’s top carbon dioxide emitters – those emitting more than 25,000 tonnes of carbon dioxide each year – will be required to pay for their pollution. At present, these companies account for approximately 60 per cent of Australia’s pollution.
Industry associations have welcomed the passage of the Clean Energy Future Plan, and the assistance it will provide to reduce carbon emissions from projects and business operations.
“We must use 21st century thinking to overcome some of the problems created during the 20th century,” says Romilly Madew, Chief Executive of the Green Building Council of Australia (GBCA).
“The carbon price will help us do this, by forcing us to develop and implement new and more efficient solutions.”
Ms Madew says that the GBCA is looking forward to a more carbon-conscious economy, to inform better building and community choices.
Funding a cleaner Australia
The establishment of an Australian Renewable Energy Agency (ARENA), a key component of the legislation package, has also passed through the Federal House of Representatives and, at the time of writing, is being debated in the Senate.
If legislated, ARENA will oversee approximately $3.2 billion in Federal Government funding for clean energy technology development from 1 July 2012 onwards. Of this, $1.5 billion is committed to existing projects, and $1.7 billion is uncommitted.
The Clean Energy Finance Corporation (CEFC) was also announced as part of the Clean Energy Future package. Managing funds worth $10 billion, the CEFC is expected to drive innovation through commercial investments in clean energy, through loans, loan guarantees and equity investments from the private sector.
Shaping up the future
The Sustainable Energy Association of Australia (SEA) has also welcomed the passing of the carbon pricing and clean technology funding package.
“Getting the right price on energy by pricing carbon, as well as removing perverse fossil fuel subsidies funded by the Australian taxpayer, will bring about a market response eliciting substantial energy efficiency savings across business activity, increased renewable electricity use facilitated by smart grids and networks supplying electric cars and public transport – and most importantly, transformed cities,” says SEA Chief Executive Professor Ray Wills.
“Measures to reduce emissions – including renovating buildings, capital depreciation of old and less efficient equipment, and incentives to be both more energy efficient and to source emissions-free energy from renewable sources – must be accelerated to ensure that booming Australian industries such as mining, construction and manufacturing do not build a legacy of ‘carbon debt’ for Australia.”
