Australia launches $500M climate fund

Sydney, Australia (GLOBE-Net) – Australia has established an AU $500 million (CAD $427M) fund to encourage companies and state governments to invest in technologies for ‘clean fossil fuels’ and renewable energy. The fund is part of a $2 billion national climate change strategy which is largely focused on technology development, particularly related to the efficient use of coal.

Acceleration of the development of technologies to reduce greenhouse gas emissions from fossil fuels is a major part of the government’s policy on climate change. The fund will go towards technologies that ensure that “use of our abundant fossil fuel reserves will in the future occur in a cleaner, greener fashion, thus reducing the process of climate change,” said Australian Prime Minister John Howard.

The first wave of projects, to be announced shortly, will receive CAD $273 million, leveraging almost $1.7 billion of other investments.

Australia is one of the world’s largest producers and exporters of coal, and relies on fossil fuels for much of its economic output and energy. Coal accounts for around 12 percent of its total export revenue, according to the International Energy Agency, and coal-fired generation makes up 85 percent of the country’s electricity consumption; coal is also used in a number of industrial sectors, including steel production.

Australia, Canada, and the United States are the world’s largest producers of greenhouse gas emissions on a per capita basis. Australia’s national greenhouse gas emissions have risen 22.7 percent since 1990; Canada’s have increased by 26.6 percent during the same period.

Australia and the United States, both of which have not ratified the Kyoto Protocol, have initiated a ‘supplementary’ approach to dealing with climate change via the Asia-Pacific Partnership on Clean Development and Climate, formed with Japan, China, India, and South Korea.

The pact focuses on voluntary, industry-led task forces on the development and deployment of clean energy solutions, particularly ‘clean fossil fuels’. One example of this technology is coal gasification combined with carbon dioxide capture and sequestration, which could enable the production of energy from coal with zero greenhouse gas emissions.

Australia’s national government has been reluctant to impose greenhouse gas emissions caps or employ carbon trading, citing the economic costs of such a system. However, state governments are currently undergoing consultations on a proposed emissions trading plan which would seek to reduce emissions over the long term.

The national government has released a draft paper addressing the formation of a framework for greenhouse and energy reporting by industry.

Initiatives already undertaken by the Australian government include cooperation with China on projects to reduce emissions in the coal industry. The two countries recently announced 11 joint projects, four of which will aim to capture methane escaping from coal mines and turn it into electricity. Australia has also pursued expansion of its solar power industry through partnerships with the United States and China.

Australia is located close to two of the world’s largest coal consumers - coal provides more than two-thirds of China’s energy and half of India’s. Both countries are central to future efforts to slow global climate change: China is already the world’s second largest emitter of climate-altering carbon dioxide, while India ranks fourth.

The International Energy Agency and other organizations predict that world energy consumption will rise by as much as 70 percent by 2030, with most of the new generation coming from fossil fuels. Coal will remain a cheap power source for many developing countries that are seeking to fuel their growing economies, and the implications for global climate change will be massive.

Australia is well positioned to develop and deploy clean-coal technologies, and that may be the area in which they can have the largest impact on reducing global greenhouse gas emissions. Critics charge that Australia has a huge potential for solar energy and other renewables, and that it must also diversify its energy supply. Clearly, as Prime Minister Howard noted while announcing the new clean energy fund, “there is no single solution” for climate change, and all countries should seek a variety of options to mitigate greenhouse gas emissions.

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