Fed Govt denies playing favourites

Posted April 30, 2007 14:50:00

The Federal Government has denied a Greenpeace report accusing them of spending billions on the coal industry rather than on renewable energy.

Source: The World Today | Duration:

Topics: alternative-energy, uranium-mining, australia


ELEANOR HALL: Greenpeace has accused the Federal Government of spending billions of dollars on the coal industry while paying only lip service to renewable energy.

A study commissioned by the Environment Group has found that in an average year, the Government subsidises coal, oil and gas companies to the tune of around $9-billion. But renewable industries like solar and wind received just a tiny percentage of that figure.

The Federal Government though has rejected the report and denied it's playing favourites, as Environment Reporter Sarah Clarke explains.

SARAH CLARKE: The report was done by the Institute for Sustainable Futures at the University of Technology in Sydney. And after closely scrutinising government handouts in 2006, it found that coal, oil and gas companies were the big winners.

Chris Riedy is the research author.

CHRIS RIEDY: Well, I guess the first one is that there's this massive disparity between the public support for fossil fuels and the support for renewable energy, so there's at least $9-billion going into fossil fuels annually, and only about $330-million to renewable energy.

SARAH CLARKE: Renewable energy sources like solar and wind receive just four per cent of all government handouts. Chris Riedy says instead the subsidies and favourable tax treatment are being handed to the energy and transport sectors, which are responsible for almost 70 per cent of Australia's greenhouse emissions.

CHRIS RIEDY: Some of it is supporting electricity generation, which currently comes almost entirely from fossil fuels. Some of it is supporting petrol consumption in cars. Some of it is supporting petroleum explorations.

There's, despite some increases in recent years, there's just very little support going into renewable energy.

SARAH CLARKE: Greenpeace commissioned the report.

Catherine Fitzpatrick says the money spent on subsidising greenhouse polluters would be better off helping cleaner power sources. She also questioned the Federal and State Governments' commitment to cutting greenhouse gases, and doing something to combat climate change.

CATHERINE FITZPATRICK: It's a message that's being replicated around the world, but now we have an Australian report that clearly shows that we have the Government on the one hand saying they'd like renewable energy to move ahead, and on the other hand, the fossil fuels sector are getting direct taxpayer subsidies, so they're making it very difficult for renewable energy to compete on a level playing field.

SARAH CLARKE: Ric Brazzale from the Business Council for Sustainable Energy says the study is in fact conservative, and without a stronger government commitment to cleaner energy sources, the renewable sector simply can't compete.

RIC BRAZZALE: We think one of the areas where clean energy technologies are disadvantaged is that the existing coal-fired generators don't have to pay the quite extensive costs transporting their power to market.

They don't have to pay for the cost of transmission whereas new renewable energy generators, as an example, wind farms, they do have to pay significant costs of, transmission costs to connect to the system. And that's basically unfair and disadvantages new renewable power generators.

SARAH CLARKE: But the Resources Minister Ian Macfarlane has rubbished the report. He says the Federal Government supports a mix of energy sources, including coal, gas, nuclear, solar and wind power, and he rejects claims the Commonwealth is playing favourites with its subsidies.

IAN MACFARLANE: Quite often we see from these green groups, particularly Greenpeace, an exaggeration of the real situation. The real situation in terms of government support is that wind energy, for instance, has increased 80-fold under the policies of our government, particularly as a result of our introduction of MRET program (mandatory renewable energy target).

If you look at direct funding into renewables, we're spending somewhere between $300-400 million currently on renewable fuels. And when you consider the percentage of energy produced in Australia's energy mix from renewables, they are doing particularly well out of Federal Government funding.

ELEANOR HALL: And that's Resources Minister Ian Macfarlane ending that report by Sarah Clarke.