A Chinese windfall for green firms
Last week, Australian Environment Minister Ian Campbell led a group of 60 businesspeople - involved in the renewable energy industry - to China. The trip, according to Senator Campbell, was 'a resounding success', with deals cut and agreements signed.
He and his Chinese counterparts announced that, under a three-year-old partnership between the two countries on climate change, around A$5 million (HK$29 million) will be spent on projects to reduce greenhouse-gas emissions.
Some will focus on reducing the production of methane gas from one of China's most notorious polluters, its coal-mining industry.
But what Senator Campbell didn't focus on was the reason why some Australian renewable energy companies are heading to China. It is because opportunities in this field are relatively thin on the ground in Australia. That is partly because the Australian government refuses, unlike China, to sign the Kyoto Protocol governing greenhouse-gas emissions.
Instead, Australia, along with China, belongs to what is regarded by its members as a practical alternative to Kyoto - the Asia Pacific Partnership on Clean Development and Climate. While Kyoto sets mandatory targets for greenhouse-gas reductions, The partnership focuses on renewable-energy initiatives led by the private sector.
Further, while China wants to see 10 per cent of its energy needs met from renewable sources by 2010 and 15 per cent by 2020, Australia has set a much more modest target of 2 per cent by 2010. It is Canberra's refusal to increase this target that has made life difficult for some companies. Take the Australia-based renewable energy company Roaring 40s, for example. Senator Campbell travelled to Shuangliao , Jilin province , during his trip last week to officially open a wind farm owned and operated by Roaring 40s and its joint-venture partner, Datang Jilin Power Generation.
The project, which cost A$300 million to build, was funded by the clean-development mechanism of the Kyoto Protocol. Roaring 40s has looked to China because the Australian government gives industry little incentive to buy wind power.
In May, Roaring 40s announced that it was abandoning its plans to build a A$300 million wind farm in Tasmania, and to build and operate another in South Australia. The company is 50-per-cent owned by CLP Power. The other half is owned by the Tasmanian government's energy company, Hydro Tasmania.
The Shuangliao wind farm is not just a one-off project. Hydro Tasmania chairman David Crean has said that while progress on the renewable energy front was slow in Australia, 'China has a much longer-term, renewable-development objective'.
Senator Campbell said the opportunities in China for renewable-energy businesses were 'phenomenal'. But he forgot to add that it was his own government's policies that have been partly responsible for driving Australian investment to China.
Greg Barns is a political commentator in Australia and a former Australian government adviser
