Warped Policy Priorities

Currently renewable energy seems to be the new trend in Labor’s and Green’s policy issues, which in typical fashion means tax hikes, increased spending, and a conscious blindness to anything that contravenes their do-gooder attitude.


Under increasing pressure from the international community, Australia is expected to step-up and be the world’s leader in renewable energy. But at what cost?

As we’ve seen through the SA experiment, renewable energy isn’t a reliable source of alternative energy, with strong winds making wind mills inoperable. And the renewable energy industry is being propped up via government funding, while at the same time increasing domestic unemployment.

This green energy utopia is a costly dream and one that seems to be not worth the economic investment, at least not at these ambitious and aggressive targets.

There are many contradictions in a decarbonising economy. The poor, we are told, suffer the most from climate change, thus have the most to gain from mitigation. This is false, as in practice we see the price in electricity climbing and large-scale employers, such as BHP, closing due to instability in supply.

Since Al Gore made climate change cool, there has been a return to industry intervention driven by moral panic. Currently more than 41 per cent of South Australia’s energy comes from wind and solar, ultimately pushing electricity prices up, as well as increasing reliability risks.

Through the South Australian government closing mines and power plants, through subsidies and government intervention, this has reduced South Australia’s capacity for baseload power.

Currently there is no feasible way to of producing baseload power in Australia, a continent that lacks the mountains and rain required for hydro-electricity and the political determination to go nuclear, without fossil fuels.

Government interventions within the energy market to subsidise wind and solar have often caused more problems than they solved, mainly because the technology isn’t advanced enough. The South Australian government, in an effort to combat the power shortages, rather than reintegrating cheaper and more reliant fuel sources are urging consumers to ration consumption due to the self-inflicted shortage.

Following South Australia’s path of rationing is Victoria and Queensland as their Labor Governments bid to be green, not heeding the warnings of the need for energy security.

The capital cost of the extra renewable capacity would be at least $14bn in Victoria and $27bn in Queensland. These investments will equal approximately $2300 more in electricity bills per Victorian and $5600 per Queenslander.

Should these lofty goals of reducing carbon emissions come at a great personal cost to the average Victorian and Queenslander?

Why should these states follow the same path when the costs seem to far outweigh the benefits, at least in the immediate future?

With rising electricity prices, increased government spending and subsidies into ineffective industries and increasing unemployment rates, it seems that a skewed sense of morality is driving our markets instead of reliability and productivity.

With a strategy built on consumer rationing, is the system doomed to fail?


Erika Salmon is a Research Associate at the Australian Taxpayers' Alliance

[This article first appeared in Online Opinion]

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