Lessons from the golden state

At a solar energy industry conference in California last October I saw Governor Arnold Schwarzenegger give what can only be described as a pep rally to 6000 solar entrepreneurs. He told them ‘there are no downsides [to the solar industry], only upsides, and this is what makes me happy’. It was a fascinating contrast to the efforts of our PM, who is fond of questioning whether solar even works.

More importantly, the economy there is going solar. Some 4000 companies in California have committed to use it for power – Google’s announcement of a 1.6 MW roof installation is the biggest yet. The Governator described this as a ‘movement’ which is ‘good for our earth, good for fighting global warming, good for our future generations’.

So what? This could all be dismissed as pre-election hype, but behind the hot air is a suite of concrete legislative measures; aiming to cut the real hot air by shifting one of the largest economies on earth to clean energy.

It may seem strange, but we Australians could learn a lot from the United States about how to support clean energy as the key solution to climate change. The most important lessons are:

  • You can’t rely on voluntary measures to make any real impact;
  • Market mechanisms can be useful, but are not always the best approach;
  • Direct regulation, levies and incentive programs are more powerful ways to harness and encourage community and individual action;
  • The yardstick for companies and institutions should be reductions in carbon dioxide emissions, benchmarked carefully over time, not commitments to taskforces and ‘dialogue’; and
  • There is a role for governments to ‘back winners’ in the clean energy generation industries. In fact, it is the only morally and politically sensible approach to the crisis we face due to climate change.

California ‘s top line was a Bill that says CO2 emissions must come back down to 1990 levels by 2020. That’s the first step towards the vital ‘deep cuts’ of 80 per cent by 2050 to which Schwarzenegger has committed the state. Other goals stem from this aim: for example, they will produce 3,000 MW of new solar power by 2017. And it’s the mechanisms they’ll use to attain these that matter.

Besides the bill on emissions levels, California legislators sent five other environmental bills to the governor to sign last year. One requires that electricity production create no more pollution than that associated with one of the most advanced generating technologies. This will effectively ban new coal-fired power in the state.

A second boosts Schwarzenegger’s ‘million solar roofs’ plan with a massive $3 billion in subsidies. A third helps fuel cells. A fourth would impose a $30 fee for each container at the ports of Long Beach and Los Angeles — possibly the largest aggregate source of global warming pollution west of the Mississippi — to help pay for pollution control. And finally, the Legislature is likely to pass a bill requiring that by 2020, at least 50 per cent of new passenger cars and light-duty trucks be clean, alternative-fuel vehicles, such as hydrogen, plug-in hybrids and flex-fuel vehicles.

The University of California estimates that the Governor’s greenhouse goals could add $60 billion to the state’s economy and create over 20,000 new jobs. As a result of these initiatives — regulations, levies and incentives, not emissions trading or voluntary schemes — California attracted $484 million in venture capital in 2005 alone, 40 per cent of which went to startups in renewable energy generation and energy efficiency sectors.

Now, compare that to Australia – where we have had a few paltry project announcements accompanied by the constantly repeated lie, from the PM down, that clean energy technology won’t meet our needs and is hardly worth a look.

The most galling of these is Howard’s oft quoted statement that ‘renewables don’t do baseload’. He is either incredibly ignorant or deliberately lying. Remembering Tampa, WMD and AWB, and after 5 years spent lobbying his government, I have concluded that it must be the latter. The Prime Minister knows that renewables work but is spreading misinformation to extend the life of the fossil fuels that they threaten.

Thanks to Bill Leak

As but one of hundreds of examples of baseload renewables, from wind in Denmark to minihydro in China, I think of the solar thermal power plants in the Mojave desert in California. These spectacular fields full of generating arrays — shiny parabolic troughs using the sun’s rays to create steam to drive turbines — have been pumping more than 200 MW of electricity to LA day in day out for over 20 years. The lack of moving parts means low maintenance costs too!

Howard should also look to California for input into his emissions trading ‘taskforce’. Despite immense pressure from businesses and outspoken support from some environmental groups, the Californian Legislature has allowed carbon cap-and-trade but refused to mandate it. It may be the first government to seriously attack greenhouse emissions without requiring this market-based approach to the problem. In effect they are saying ‘you can have your carbon trading if that helps you, but we are going to set the goals and regulate to ensure they are met’.

The ‘left coast’ as it is sometimes known, may be leading the way in clean energy, but there are signs that the rest of the US may soon follow suit.

Perhaps most important are the signals coming from the newly elected Democrat Congress. On January 19, the CLEAN (Creating Long-Term Energy Alternatives for the Nation) Act was passed by the House of Representatives. This bill, when made into law, will repeal nearly $14 billion in tax breaks for oil and natural gas companies and put that money toward renewable energy and energy efficiency programs. The CLEAN Act was passed by a vote of 264-163 and should do as well in Senate. It is interesting to note that it opposes gas as just another climate changing fossil fuel, while in Australia even some environment groups promote it as a lesser evil.

While both the Democrats in Congress and Republicans in California are using proven methods for achieving industry development such as targets, efficiency standards, tax credits and grants schemes, in Australia both sides of the house babble on about emissions trading. This of course only applies to renewables; the coal industry gets all the help and handouts governments can offer without raising public ire. For example, it receives billions in tax breaks – akin to those just reversed in the USA. One of the most egregiously perverse subsidies is the 50 per cent rebate on every dollar spent on diesel fuel for the coal mine trucks devastating the Hunter Valley.

Meanwhile, Australia’s laughably small 2 per cent renewables target has already been met. The climate change spending announced so far is disproportionately committed to ‘cleaning coal’ (carbon capture and geosquestration); the dream that we can find enough suitable holes underground to bury our greenhouse problems forever. And while you can’t take the coal out of the Coalition, I am constantly amazed to find that the ALP is just as beholden to this agenda from the big end of town. After all, Rio Tinto et al are hardly the best friends of ‘the working people of Australia’.

The Australian public knows that we have to quit coal over time. 90 per cent of Australians support a move away from coal to clean energy. And yet both major parties are fighting a rearguard action in defence of this industry. It strikes me that in an election year a smart politician would be looking at those numbers and thinking about championing a program of change. This could include a major ‘green-collar jobs creation’ initiative. Solar and wind power now employ more people in Germany than coal and nuclear power combined, and it is my hope that the new jobs that will come with the energy revolution will be global warming’s silver lining. It should also be linked to a ‘just transitions’ strategy for those workers and communities currently dependent on coal.

We could tithe the coal companies’ superprofits to seed clean industries, retrain workers to get into those new renewable enterprises, create community support programs, and otherwise ease Australia into the post-coal era. If just the diesel rebate were reversed this year, so that companies like BHP couldn’t access it to subsidise their tonka trucks tearing up the coal country, we’d raise over $100 million per mine.

But alas, the truth is that Australian politicians don’t yet feel the heat the way Californians do. While at a protest outside Howard’s offices last year, I bumped into Wayne Swan. He wasn’t joining our demonstration but shares the same electoral office building as the PM. Seeing Greenpeace’s antics representing government in bed with the coal industry — featuring a lovely young coal lobbyist snuggled up to John Winston in a double bed that we had dragged up to the door — he got quite huffy and told me we were out of touch with the Australian people.

It struck me then that these politicians, of different parties but the same CBD address, are the ones that are out of touch. The Australian public wants and needs leadership on climate protection. It wants real solutions, not nuclear power, geosequestration and carbon trading. In this time of bushfires and historic drought, we need people who will provide answers commensurate with the threat.

In truth, we will need to move to 100 per cent renewable energy before too long, to achieve zero emissions and prevent a runaway greenhouse effect. To achieve that, we need to move to a war footing, in which the government puts industry and the community on notice for major changes in what we produce and consume, just as we did when faced with the fear of invasion in World War II.

Of course, California and the Governator are still quite a way from that goal. But they have recognised that the time for bluffing is long gone, and that the only way we will achieve real change is by setting strong goals and regulating to achieve them. Both of Australia’s major parties, and indeed some of our environment advocates still working for ‘incremental change’, could learn a lot by looking across the Pacific to the Golden State.

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