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Lawyers see carbon tax as a 'win' for the renewable energy sector
Amid widespread debate as to whether the Government's recently announced carbon tax is a positive step for the country, Australia's renewable energy sector has emerged as a clear winner.
Amid widespread debate as to whether the Government's recently announced carbon tax is a positive step for the country, Australia's renewable energy sector has emerged as a clear winner.
| Money in the bank: Prime Minister Julia Gillard's proposed carbon tax should benefit the 'green economy', say experts |
If the Government's carbon pricing package is passed through Parliament - the draft legislation is due to be released on 31 July - the renewable energy sector will receive over $13 billion in funding, including $10 billion for the establishment of the Clean Energy Finance Corporation (CEFC), which will invest in renewable energy and energy efficiency projects and technologies, and $3.2 billion for the establishment of the Australian Renewable Energy Agency, for research and development into renewable technologies.
This investment in Australia's renewable energy sector is triple that of the UK, which invested just $4.8 billion in its Green Investment Bank - upon which Australia's proposed CEFC is modelled.
"What's really exciting is the Clean Energy Finance Corporation and the Renewable Energy Authority," said Norton Rose's global head of climate change, Anthony Hobley, who attended the lock-up in Canberra on 10 July as the new scheme was announced.
"I think it will allow Australia to give many of these hubs that are emerging in this region, like Singapore, Beijing and Tokyo, a real run for their money in terms of this whole green economy.
"It will attract a lot of talent and a lot of investment in renewables, clean technology, clean energy and energy efficiency, and allow a lot of capacity building for those projects. It's fantastic."
According to Hobley, the general reaction amongst climate change lawyers to the carbon pricing proposal has been positive.
"I think everyone's pleased. You've got to look at this in the political context," he said.
"The Government has made the smallest possible target they can. They seem to have been pretty clever in diffusing or taking the wind out of the sails of most of the particular areas of criticism. Not all areas, obviously, and they'll still have pretty robust discussion around this in the next few weeks and months, but I think the initial view is that it's a very clever package to address all of these issues."
| "It will allow Australia to give many of these hubs that are emerging in this region - like Singapore, Beijing and Tokyo - a real run for their money in terms of this whole green economy" Anthony Hobley, global head of climate change, Norton Rose
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In her address to the nation, Prime Minister Julia Gillard confirmed the carbon tax will come into play from 1 July next year, forcing approximately 500 "big polluters" to pay $23 for every tonne of carbon they release into the atmosphere. The carbon price per tonne is set to increase from $23 to $24.15 in 2013-14 and $25.40 in 2014-15, with an emissions trading scheme (ETS) to come into force on 1 July 2015.
The ultimate goal of the carbon policy is to cut the nation's carbon emissions by 5 per cent by 2020, cutting 160 million tonnes per year of carbon pollution.
"Putting a price on carbon is a big change for our country," Prime Minister Gillard said on 10 July. "I know we can do it together. Our economy is the envy of the world. We have world-leading renewable technology, a coal industry determined to cut pollution among the world's richest reserves of natural gas."
Following the announcement of the proposed scheme, businesses must ensure they understand the potential impact of the carbon price and the risks of a future ETS, according to Clayton Utz partners Graeme Dennis and Brendan Bateman.
In particular, Dennis and Bateman said the introduction of a carbon price could trigger "change of law" clauses in long-term supply contracts, which could lead to wholesale contract negotiations and disputes over pricing.
"If the new carbon pricing mechanism falls within the definition of 'change of law' in a particular contract, there are a couple of possible scenarios," said Dennis. "One could be a forced renegotiation of the contract and a dispute between the parties over how the increased costs resulting from the change in law should be factored in to the new price."
Briana Everett
