Link to the AustralianThe Australian — April 19, 2012
RENEWABLE energy is powered more by the winds of the zeitgeist and the flow of taxpayers’ money than it is by westerlies or sunshine.
Political fashion — in the form of a carbon tax — is about to deliver another $10 billion to the renewables sector.
The Clean Energy Finance Corporation will seek out projects that might otherwise not be funded because their risk or projected low returns dissuade private investors, and invest them with public funds. The outcome, almost certainly, will make some recipients rich, increase the costs of electricity and create additional losses for taxpayers. Governments that intervene as financiers to pick winners, with political goals counter-weighing commercial imperatives, invariably pick some losers. Julia Gillard and her ministers should remember the 1980s disasters of Victoria’s Tricontinental, Perth’s WA Inc and South Australia’s State Bank when state governments directed their banks and finance corporations to leverage commercial outcomes for political gain. The result was financial collapse and political capitulation.