An independent carbon bank, similar to the Reserve Bank, should be set up to oversee a carbon price and investment in clean technology, the peak renewable energy lobby says.
The Clean Energy Council will today release a discussion paper proposing the carbon bank, which it says could be allowed to borrow money to invest in renewable energy projects against the future revenue of Labor’s proposed carbon tax and emissions trading scheme.
Like the Reserve Bank, a carbon bank would have the advantage of distancing efforts to tackle climate change from daily political pressures, the council says.
”Like interest rates, managing short-term political pressures may not always be consistent with the long-term goal of the lowest cost transition to a decarbonised economy,” the paper says.
”Independent institutions may be better placed to make these difficult decisions that inevitably will arise in the future.”
The chief executive of the Clean Energy Council, Matthew Warren, told the Herald the job would be so big that several independent bodies could be needed, instead of one central agency.
The council’s paper suggests an independent carbon bank could:
Set and change emissions reduction targets.
Administer an emissions trading scheme.
Allocate revenue from a carbon price and set industry compensation.
Help fund clean technology projects which would not normally attract private investment.
Mr Warren said the independent carbon bank could also consolidate and better direct more than $6 billion on offer for renewable energy, energy efficiency and carbon capture and storage projects through government programs, funds and grants.
The Gillard government’s chief climate change adviser, Professor Ross Garnaut, proposed an independent body to oversee an emissions trading scheme in both his landmark 2008 report and this year’s updated report.
The Clean Energy Council says its proposal is similar to those of bodies overseas, including Britain’s Committee on Climate Change, which advises the government on how to best achieve its emissions reduction targets. In 2012-13 Britain will also set up a green investment bank which has been given £3 billion ($4.6 billion) to help fund own-carbon infrastructure. However, the bank will not be allowed to borrow money until 2015-16, which has angered environmental groups.
In the discussion paper, prepared with the help of the Boston Consulting Group, the Clean
Energy Council says creating a bank that responds quickly to problems in carbon markets and clean energy investment ”will provide stability and clarity for business, along with fairness and efficiency in the allocation of revenues collected (from a carbon price)”.
