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Carbon price is no silver bullet: Industry policies vital to drive innovation

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Christine Milne

Australian Senate Australian Greens Deputy Leader

Contact: Tim Hollo on 0437 587 562

media release

Tuesday 1 February 2011

Carbon price is no silver bullet: Industry policies vital to drive innovation

Prime Minister Julia Gillard today told the Committee for the Economic Development of Australia that 'a carbon price will drive another sweeping technological revolution like Information Technology did in the 1980s and 90s'.

Responding to the Prime Minister, Australian Greens Deputy Leader, Senator Christine Milne, said:

“The Greens more than anyone know that a carbon price is essential, which is why we made it a condition of government that a multi-party committee be established to design one. But we also understand that, on its own, a carbon price is not enough.

“The Prime Minister has been warned repeatedly by economic and industry experts from Professor Garnaut to the Clean Energy Council's Matthew Warren that a carbon price on its own is not going to be enough to drive real change and job-creating innovation.

“Successful climate policies around the world always involve a well-designed combination of putting a price on pollution and encouraging clean alternatives with supportive policies.

“The more mature technological alternatives we have, the easier it will be for all of us as we face an increasing price on pollution.

“The Prime Minister needs to recognise that a technological revolution will not happen with policies that tinker around the edges. We will only see the huge benefits of the transformation to zero emissions if we embrace change and put in place the ambitious policies to make it happen.”

Professor Garnaut has repeatedly pointed out that only a very high carbon price will drive innovation in the absence of other measures.

“If the price is established at the right level, there is no need for other policy measures to tip the balance of private decisions on supply and use of fossil-fuels towards low-emissions technologies, But for as long as the price, now and expected in future, is insufficiently high to ensure that Australia lives within the national emissions budget, a case can be made for other measures, such as a mandatory renewable energy target, during the transition to an environmentally and economically rational emissions price.”*

*Professor Ross Garnaut, Will Climate Change Bring an End to the Platinum Age, available on request.