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Solar Panel Industry: ignored by the Australian government

Australia takes its sun for granted

During Kevin Rudd's Prime Ministership Australia ignores its abundant sun

Rudd's public servants ignore solar energy for a post-carbon society

"Critics say Treasury remains dominated by free-market devotees who resist the idea of government intervention or playing favourites - as in, giving solar a kick-start in the marketplace."

"The list of companies invited [to the Rudd government's "high-level consultative committee" on shaping Australia's energy policy to 2030 and beyond] is interesting reading: Shell, Rio Tinto, Xstrata Coal, BHP Billiton, Santos, Woodside Petroleum, AGL, Origin Energy, the Energy Supply Association of Australia, and the Australian Petroleum Production & Exploration Association.

The renewables industry didn't get a seat."

What's on this page

This page brings together articles previously published in The Age and written by Royce Millar, Liz Minchin and Mathew Murphy: an investigation into the Australian government's avoidance to use its main asset, the sun, and how it could power much, if not all, of Australia's energy needs.

The investigation shows that Australia is not just avoiding its role in building a post-carbon economy, but more disturbingly, that it keeps itself beholden to the lobbying powers of the polluting industries that use coal as its core energy source, an industry already deeply embedded in the country's energy provision networks.

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Click the links below to jump down to the articles and items on this page with the same title.

Solar not being taken seriously, says enthusiast

The Age
Royce Millar
with Liz Minchin and Mathew Murphy

January 31, 2009

What goes up must come down. In the case of Peter Allan's personal solar system, much sooner than expected.

Mr Allan has removed solar panels from his Brunswick roof, declaring the policies of both the federal and state Labor Government anti-solar.

Mr Allan, who works as an environmental consultant, says both levels of government are undermining the contribution of small-scale solar photovoltaic (PV) panels to reducing greenhouse emissions.

Last year the State Government announced a new subsidy scheme for solar panels under which residents with panels would be paid a premium for the surplus power they feed back into the electricity grid.

The subsidy would only be available to households, not businesses or farms, with small PV systems of less than two kilowatts and households.

In his bid to maximise the power generated from his roof, Allan had spent $24,000 on a 2.4 kilowatt system of 14 panels, rendering him ineligible for the subsidy.

Allan says the two-kilowatt cap means only "toy-sized" systems are recognised making it clear the Government is not serious about the subsidy being effective. He says the cap needs to be lifted to 10 kilowatts and the subsidy made available to all solar producers including farmers and businesses.

So far Allan has removed four panels to bring his system under the Government's proposed cap. If the Government does not lift the cap, Allan says he will smash panels on the steps of Parliament House as a protest.

"We're feeling so frustrated by state and federal half-heartedness on solar. So to symbolise the destruction of the industry we may go and destroy panels that are no longer any use," he said.

Environment groups and the Government's own Department of Sustainability had pushed for a German-style subsidy known as a gross feed-in tariff.

The Government rejected the model, declaring it unfair to lower incomes without solar, and claiming it would add $100 to all household power bills. However, The Age revealed this week confidential advice from senior Government officers that the real cost was just $7.

Mr Allan is also angry about the Rudd Government's proposed Carbon Pollution Reduction Scheme. Last month the Government announced it would replace John Howard's $8000 solar rebate with a scheme that allowed those with solar panels to claim solar credits.

But Mr Allan was stunned to discover his carbon-cutting efforts would be cancelled out by the fact that his credits could be claimed by power retailers under their own carbon reduction obligations. The effect, agree experts, is that household solar panels will make no real contribution in carbon emissions. "How would be anyone be motivated to do this knowing their action would not be reducing the amount of renewable energy generated overall?"

A spokeswoman for Climate Change Minister Penny Wong would not directly respond when asked if the Government would consider amending the carbon reduction policies to account for household action.

"Everyone has to do their bit to reduce carbon pollution -- from big business to households -- no one gets a free ride," she said.

Nothing new under the sun: a nation falls behind

The Age
Royce Millar, with Liz Minchin
January 31, 2009

Royce Millar is an Age investigative reporter. Liz Minchin is an Age writer.

Jim Thomson is hot, and bothered. Each day, the outback electrician spends hours in the red dirt of remote stations and communities where he works to keep the power on in the harshest of conditions. Born and bred in mining mecca Kalgoorlie, the 50-year-old has spent his life under the relentless desert sun. And with his far-flung customers unconnected to Australia's power grid, his work these days often involves installing solar generators.

It's a job that has made him increasingly aware of the untapped potential of one of the most abundant of his country's natural resources.

"I'm out here in it day after day, and the more I work with solar, the more I see what's possible. We have this magnificent, natural, clean energy belting down on us and we are not using it as we could and should."

Thomson is bothered over what he sees as the failure of politicians to grapple with the biggest threat to his country: climate change.

Like a lot of Australians, he had high hopes for a brighter future for solar and other renewable energy under the Rudd Government. But he is disappointed with Labor's announcements over the past two months: its lower-than-expected greenhouse targets and its refusal to introduce stronger national support for renewable energy.

Thomson is especially upset about Labor's solar credit scheme, which allows energy companies to claim solar power installed by householders as their own carbon reduction. "In fact, I think renewables are going backwards, not forwards. What the Government is doing is supporting the polluters," he says.

To be fair, even critics acknowledge that since Labor came to power just over a year ago, it has already done more on climate change than the Howard government did in a decade. It has signed the Kyoto agreement, vowed to spend lots on solar and other renewables, promised that 20 per cent of all power will come from renewables by 2020, and put a price on greenhouse pollution for the first time in Australia.

Yet, as The Age has revealed over the past week, Australia is still missing out on major investments in solar energy. Its one solar panel manufacturer, BP Solar, is set to close, and concern is mounting among renewables industry experts that Labor's "solar revolution" may be, as University of NSW energy expert Iain McGill puts it, "more talk than walk".

That view is shared by solar powerbrokers from Europe and the United States - that Labor is still not backing the kind of systemic change in the energy market required to make solar take off as it has elsewhere. In Germany, for example, solar energy has exploded, growing more than 30-fold in this decade alone, and Germany now controls half of the world's solar photovoltaic panel industry.

Why does Australia remain a straggler in the solar stakes and what do we stand to lose if we don't catch up? It is not only Australians asking such questions.

German solar manufacturer Solon visited here in December but left disheartened. Solon director Ulrich Prochaska says that, on the one hand, Australia's "very much underdeveloped" solar marketplace is bemusing. But on reflection, he says, it does make sense given our energy history.

"You had the opportunity to produce power absolutely cheaply because your coal is on the surface and you don't have to go down for hundreds of metres; it's absolutely easy and absolutely cheap."

That, in large part, seems to be the answer. It is not that Australia is anti-solar so much as it is pro-coal; cheap, abundant, accessible coal. For all the years of talk about sun, wind, hydro, waves, geo-thermal and all the other alternatives, the fact is that coal accounts for more than 90 per cent of Australia's electricity.

Wind the clock back to 1990 and Australia could probably claim a spot internationally at the forefront of renewable energy, solar research in particular. Then, Australia, Germany and Japan were installing five to 10 megawatts of solar power each year. But Australia fell badly off the pace in the Howard years and by 2007 was adding just 10 megawatts of solar annually compared with Germany's 1300. As coal accounts for almost all our electric power, it is not surprising it wields big political power as well. (In money and job terms, local coal production and exports are worth about $80 billion a year and coal mining and electricity industries together employ about 100,000.)

Despite the mounting evidence of environmental damage caused by our burning coal, the coal industry dominated energy policy through the Howard years - so much so that former Liberal Party activist and one-time government adviser Guy Pearse argued in his 2007 book, High and Dry, that a "greenhouse mafia", made up of fossil industry powerbrokers, shaped and even wrote Howard's energy and environment policies.

What about Rudd's policies? The answer is a little more complex.

Few industry and government insiders doubt that, under Labor, the fossil fuel industry remains a potent lobby. Its strategic role in the economy and its massive wealth give it formidable political muscle. And while the coal industry attracts more public attention in the climate debate, related electricity-hungry industries such as aluminum have also been active in Canberra.

Evidence of the fossil fuel lobby's work is clear in the trajectory of Labor's climate change messages, from its pre-election rhetoric to December's white paper on carbon pollution reduction.

Key changes have included: petrol omitted from the carbon reduction scheme; the modest 5 per cent emissions reduction targets (far below what the science deems necessary); $4 billion in compensation to polluters, against the recommendations of climate change adviser Ross Garnaut; the abandoning of Garnaut's high-priority plan to make buildings energy efficient; and the scrapping of the $8000 solar rebate.

Garnaut himself has described the industry's lobbying as "unprecedented", its message enthusiastically supported by key unions, notably the Australian Workers Union with 130,000 members including in mining, manufacturing and agriculture.

Together, the industry and unions have warned of disastrous impacts of tough carbon pricing: lights going out, industries abandoning the country, massive job losses. Such messages coming from business and labour leaders, reiterated over and over again and by the best lobbyists in the business, is enough to rattle the greenest of pollies, especially amid a global financial crisis.

Australian National University adjunct professor and energy consultant Hugh Sadler says there is no question about who has real clout under Labor: "The green groups have absolutely no influence and the big industries and key unions, and in particular the AWU, completely wipe the floor with them."

The industry association representing the big players in coal, oil and manufacturing, the Australian Industry Greenhouse Network, did not want to comment on speculation about its influence on government. Yet chief executive Michael Hitchens did acknowledge important changes to Labor's policies since its election, which he said had made everyone a little happier, both industry and environmentalists.

Not according to Australian Conservation Foundation president Don Henry. "From our observations, the Government probably spent 100 times more time talking with industry than they did with the community sector. They (industry) seem to be the ones that have mainly been listened to in the formulation of this package."

Inside government, the solar and renewables message is struggling to get through. Environment Minister Peter Garrett is solar's obvious potential champion. But he has been largely sidelined, it seems, playing second or third fiddle to Climate Change Minister Penny Wong, Energy and Resources Minister Martin Ferguson and Treasurer Wayne Swan.

Twelve months ago, Wong was vocal in warning industry to brace for real change as Labor attacked carbon emissions. As time passed, her emphasis has shifted to preparing the public for a more cautious approach.

For solar, it is significant that Wong is understood to be opposed to the German model of long-term subsidies for solar panels - known as a gross feed-in tariff, and credited with that country's solar success - on the grounds it would be too expensive. The Australian Industry Greenhouse Network is also opposed.

Ferguson is an important player, with responsibility for the country's energy future. An old-school Labor and union man, he is renowned for his commitment to protecting jobs, particularly in the heavily unionised mining and energy sectors.

Several solar industry businesses have told The Age they have found Ferguson to be surprisingly interested in solar. Last Monday, he paid a private visit to a solar thermal plant in California run by Ausra, a US-based company chaired by former Sydney University professor David Mills.

But when it comes to the big picture, Ferguson, and the Rudd Government more broadly, still see coal and other fossil fuels as the lifeblood of Australian industry for decades to come. That attitude can be seen in the shaping of Australia's energy policy out to 2030 and beyond.

As part of that process, a number of industry leaders were invited onto a "high-level consultative committee".

The list of companies invited is interesting reading: Shell, Rio Tinto, Xstrata Coal, BHP Billiton, Santos, Woodside Petroleum, AGL, Origin Energy, the Energy Supply Association of Australia, and the Australian Petroleum Production & Exploration Association. The renewables industry didn't get a seat.

Then there is the bureaucracy. Notable is that some of the Howard government's senior energy and climate bureaucrats have remained on under Labor.

Dr Martin Parkinson, who heads the Department of Climate Change, also played a key role in John Howard's climate policy, overseeing a paper on emissions trading that included the kind of industry compensation the Rudd Government has now adopted.

Treasury has been influential upon the shape and detail of the Carbon Pollution Reduction Scheme. Its prime concern, of course, is growth and revenue, so anything that might reduce electricity demand, production and the revenue that flows from it is less likely to be appealing.

Critics say Treasury remains dominated by free-market devotees who resist the idea of government intervention or playing favourites - as in, giving solar a kick-start in the marketplace. This view underlines the Rudd climate change policies: emission reduction and renewable energy targets are set, but after that it's up to the marketplace to sort out how such things are to be achieved. Renewables experts argue that under such conditions the fledgling and currently expensive solar option is not likely to fare well.

The industry lobby, the Australian Industry Greenhouse Network, is in furious agreement with the Treasury approach. It has confirmed to The Age that it has lobbied against what chief executive Michael Hitchens describes as the "picking of winners", such as solar.

"That is entirely unnecessary if you have an emissions trading scheme doing its job. There's no special need to create special markets for solar or wind, or for coal for that matter ... The white paper agrees entirely with that approach."

For all its sabre-rattling on climate change, in practice, Labor's centrepiece policies are not dissimilar to where Howard was heading. "He's (Rudd) not too far away from where John Howard or the Coalition would have ended up," Howard's former chief of staff, Grahame Morris, said on Monday.

So, just as there are climate change sceptics, there is a new school of climate change response sceptics, wary especially of government and industry eagerness to be seen to be doing something on solar.

University of NSW academic and solar specialist Muriel Watt says she knew the Government was about to go soft on its climate and energy policies last month when she saw Rudd had flown to a new solar farm in outback Queensland the day before the release of the carbon pollution-cutting white paper. The Prime Minister used the visit to announce he was bringing forward a half-billion-dollar spend on new, clean power plants as part of his "solar revolution".

For Watt, Rudd's Windorah trip was an all-too-familiar signal that Labor's white paper would offer little for renewables. "The (grant money) was only announced because the carbon reduction scheme was going to be so appalling they wanted to say something about renewables beforehand."

Watt welcomes more research funding but says it is being poured into a bottleneck. Without structural change in the marketplace, all the funding and pilot programs achieve is to keep solar alive at the margins of the economy.

David Mills, the Australian founder of Californian-based solar thermal manufacturer Ausra, agrees. "The Government is still playing the handout game and not the systematic change game.

"If you want clean energy installed on a systematic basis, on large-scale projects throughout the country, it doesn't matter whether you're talking about coal sequestration, nuclear or solar, all of those technologies are going to require some kind of systematic price support. They're just not going to get in otherwise.

"My view is that you should put in a structural change - like a feed-in law (for all renewables) - and let the market decide what's the cheapest way to provide the clean energy," Mills says.

Other structural change tried in the US and elsewhere has included loan guarantees to major new power generators - making it easier for new coal, nuclear or renewables facilities to get cheaper interest rates from banks. Rudd announced a similar scheme for the construction industry only last weekend but, so far, there are no signs of such a scheme for new clean energy plants.

Almost all of the many renewables experts spoken to for this story agree that what is required is intervention in the marketplace to give still-expensive solar electricity a price that makes it competitive. Where this has happened, the industry has flowered. As the industry has grown, the price of solar power has started to plummet, and with it the subsidies initially necessary to allow it to mature.

This is so much so that energy experts expect solar in some countries to match the price of other electricity, without subsidies, within the next few years. At that point solar is likely to blossom in ways previously unimagined. For all the talk of solar revolutions, Australia will not be reaping the benefits.

Rudd himself seems reluctant to intervene in the energy market in the way that countries such as Germany and Spain have to boost solar power. In that sense he reflects the still-dominant Canberra ethos that the market is sacrosanct.

There is no doubt that Germany's embrace of solar is in part driven by necessity - its lack of energy sources. It has coal but it is buried deep, it is expensive to mine and supplies are dwindling fast. It has banned nuclear power and does not want to rely on other countries, such as Russia and Albania, for gas.

But there is another factor at work in Europe, seemingly absent here: a belief that elected governments have the right to make big, transformative decisions in what is perceived to be the good of the public, economy and environment.

Martin Ferguson has highlighted his Government's $100 million Australian Solar Institute, the $500 million Renewable Energy Fund and the $150 million Energy Innovation Fund as clear commitments to renewables and solar on top of the carbon reduction and renewable target schemes.

Peter Garrett told The Age that he believes Labor is "on the way to laying the foundation for solar to play the significant role that I've always thought it could".

But Clean Industry Council chief executive Matthew Warren says it is precisely a foundation that is missing. He says that while the German system made power more expensive, it gave investors a strong sense of certainty that the country was behind solar. "If you had a scheme in Australia that was bankable, you could say: 'I know the industry will be there in 10 years' time.' That's the kind of platform these (solar) guys need."

This week The Age revealed that a string of European solar companies had considered investing in Australian solar but had opted to go elsewhere because of a lack of government commitment and support. They warned that our attachment to coal is not only an environmental problem, it threatens to be an economic one as well - as Australia is left clinging to fossil energy and a fossilised economic model.

Germany's booming solar industry now employs 57,000. One company alone, solar cells manufacturer Q-Cells, established in 2001 with 19 employees, now has 1900 workers. It is the largest manufacturer of solar cells in the world. Australia's solar industry employs 3500.

Perhaps even more worrying than cloudy Germany showing us up in the solar stakes is the growing interest in truly sunny places such as the US and Middle East. In the US, hopes are high that new President Barack Obama will follow through on his inauguration pledge to "harness the sun and the winds and the soil to fuel our cars and run our factories" and, at a more practical level, to use $US150 billion of his economic stimulus package to promote clean energy.

Despite the drop in oil prices, a few oil-rich nations led by the United Arab Emirates are pouring billions into solar projects, investing a stake of their current oil wealth to tap their harsh desert sun for the future. Last week the UAE's capital, Abu Dhabi, hosted 15,000 renewable energy experts from around the world at a World Future Energy Summit.

Meanwhile, in the West Australian outback, Jim Thomson is left pondering what could be in his own desert.

Nationwide Renewable Energy Feed-In Tariffs

Greens Senators website
Spokesperson Christine Milne
Monday 10th November 2008, 11:23am

Australia needs nationally consistent price guarantees for renewable energy (feed-in tariffs), as the most effective & efficient way to build a people-powered, zero emissions energy network & help drive a 'green economic recovery'.

This fundamentally important issue has resulted in all levels of Greens across Australia coming together to call for a federal plan for renewable energy.

One of the best things governments can do is to guarantee a fair price for all renewable energy generated by anyone, giving householders, farmers and businesses the certainty they and their banks need to invest in solar panels, wind turbines or any other renewable energy technology.

Following Germany's lead, many countries and states around the world have introduced feed-in tariffs and seen their renewable energy supply boom, creating jobs and investment and reducing greenhouse emissions. Recent studies from the International Energy Agency and Ernst & Young have shown that feed-in tariffs are more effective and cheaper than quota systems such as Australia's Mandatory Renewable Energy Target. The UK is already taking this recent advice.

Several Australian States and Territories have proposed or active feed-in tariffs, but all are different and most are deeply flawed. The biggest problems are in limiting payments to solar power, to small scale generation, and to 'net' generation, instead of all power generated.

The Greens are calling for uniform gross-metered feed-in tariffs, supplementing the MRET, to ensure that people get fair pay for all renewable energy generated from any source of any size.

The call for a national feed-in tarriff has been backed by all levels of Greens across Australia, represented by Christine Milne (Federal), Greg Barber MLC (VIC), John Kaye MLC (NSW), Ronan Lee MP (QLD), Paul Llewellyn MLC (WA), Nick McKim MP (TAS), Mark Parnell MLC (SA) and Shane Rattenbury MLA (ACT), all of whom have worked for effective feed-in policies.

Get paid for solar power on your roof

Sydney Morning Herald
Marian Wilkinson Environment Editor
November 24, 2008

Householders who put solar panels on their roofs and generate power that feeds back into the electricity grid will be paid a fee, but how much will not be decided until January.

The move to introduce the "feed-in tariff" will be announced today by the NSW Minister for Environment and Climate Change, Carmel Tebbutt, at a solar power conference in Sydney.

It marks an end to the State Government's opposition to solar subsidies. The Energy Minister, Ian Macdonald, is backing it despite strong objections from one of the state's main energy retailers, Energy Australia. NSW is the last state to introduce the solar subsidy or feed-in tariff.

"We know the community want to act on climate change and this is one way the NSW Government can support people who want cleaner, greener energy," Ms Tebbutt told the Herald. "A feed-in tariff makes solar panels more affordable because people are paid for the clean electricity they produce."

But the minister and a state taskforce on the tariff, which will report in January, will face intense lobbying from the solar industry, which does not want NSW to follow the example of Victoria, South Australia and Queensland. Those states have announced only a minimal solar feed-in tariff that leaves most solar households with little or no fee after they pay their own electricity bills.

"We're pleased that NSW is looking at a feed-in tariff," said Muriel Watt, who chairs the main solar panel industry group. But Dr Watt said NSW should introduce a "gross" feed-in tariff where power companies pay households for all the electricity they generate, including their own, at a premium rate. The household would then be billed at the normal rate for their own power use. This would be an incentive to people who invest in solar panels to feed into the electricity grid.

Dr Watt said states such as Victoria paying "net" feed-in tariffs provided little incentive for households to install solar panels.

"With normal electricity use on a normal [solar panel] system you're not going to earn anything, so it won't be driving any change much," she said.

The debate over the feed-in tariff has been fraught in Australia. Only two state governments, Western Australia and the ACT, are committed to the more generous "gross" feed-in tariff. A recent Senate inquiry heard evidence from the industry, here and overseas, that a "gross" tariff paid to businesses as well as households had proved successful in massively expanding solar power in Germany and Spain.

"We'll await the advice from the taskforce," Ms Tebbutt said. "It's got to be a fair and reasonable tariff for people who do return electricity to the grid and it shouldn't place a disproportionate burden on all electricity consumers".

The head of the International Energy Agency, Nobuo Tanaka, arrived in Australia yesterday to address the Clean Energy Council on the need for an "energy revolution" to prevent global greenhouse gas emissions triggering a rise in the world's temperature of 6 degrees by the end of the century.

"I think everyone thinks a 6-degree rise is not sustainable," Mr Tanaka told the Herald. "The issue is how we can achieve emissions reductions somehow without causing economic growth to slow down."

Mr Tanaka said to keep the temperature from rising above 2 degrees, which scientists say would avoid dangerous climate change, renewable energy, including hydro power, would have to rise to 40 per cent of all energy used by 2030. "It's possible, but very costly, very difficult and challenging."

Energy without an end

The Age
Muriel Watt and Iain MacGill
February 2, 2009

Dr Muriel Watt is project manager with IT Power Australia and Iain MacGill is a senior lecturer in energy systems at the University of NSW.

The environment and the economy would benefit if the Government showed leadership on solar power.

As south-eastern Australia sweltered last week with consecutive days of 40-plus temperatures, electricity was rationed and rail lines buckled. In such a climate, it seems incredible that this country trails so far behind others in its attitude to power supplies.

We have huge solar energy potential, our coal-dominated electricity industry is among the most greenhouse intensive in the world, yet we are half-hearted about adopting the former and spend a great deal of effort bolstering up the latter.

In an increasing number of other countries, solar technologies provide power for homes, offices, farms and factories.

The rest of the world is embracing the very solar inventions stemming from Australian research to enable them to secure 21st-century industries and jobs, while Australia clings to its fossil-fuel past.

Australia was one of the early leaders in solar heating and electricity. This leadership was built upon outstanding research and development within CSIRO and the universities, along with early markets provided by government-led organisations such as Telecom Australia.

As a result we were, for a time, one of the world's leading manufacturers of solar hot water systems and photovoltaic (PV) solar panels. Now, however, and despite continuing with world-leading research in some areas, Australia is a very minor player on the world scene.

The global PV industry has been growing at 30-50 per cent a year in the past decade. Billions of dollars are being invested in solar technologies internationally with hundreds of manufacturing facilities being established in countries as diverse as Norway, Germany, Spain, Japan, the US, China, Taiwan, Korea, Malaysia and Singapore. These plants are employing hundreds of thousands of people, and helping deliver a more sustainable energy future.

In contrast, a series of Australian governments has squandered the promising early solar energy industry that developed here.

Many of our technology breakthroughs now look as though they will be commercialised and deployed seemingly everywhere but here. Australia's only solar cell manufacturing facility - run by BP in Sydney - will close in April.

How did this happen and what can be done? In short, the key problem has been a lack of government leadership. And the solution, unsurprisingly, hinges on government leadership.

First the good news. Australian governments have provided significant support for solar research and development and we have some world leading solar technologies including, for example, high efficiency solar cells, concentrator PV systems and stand-alone remote area power systems.

We also continue to be global leaders in solar education, training and standards development.

The problem is that we haven't supported this with coherent and consistent industry development and market deployment policies that bring technologies out of the lab through to commercial success.

Innovation and change always involves risk and often needs government support, particularly in the energy sector, which is dominated by entrenched, politically connected, vested fossil-fuel interests.

Stop-start market policies pandering to short-term political positioning and yearly budget cycles don't build sustainable industries. This is the key difference between Australia and those countries with expanding solar industries, such as Germany, Spain and Japan.

Governments here have seemed far more focused on trying to retain and expand Australia's fossil-fuel energy industries than on supporting the sustainable energy industries of the future.

The Federal Government's embrace of carbon capture and storage to clean up fossil fuels is vital for our own, and the world's, energy future. However, even if technical progress in this area is highly successful, it can only ever be one part of the solution.

The International Energy Agency, for example, foresees a greater role for solar than carbon capture and storage over the coming decades in protecting the climate.

Governments have been too ready to continue supporting well-established and politically powerful industries, such as those built around fossil fuels. Or electrical appliance retailers for that matter.

It's far too easy for government in the current global financial crisis to look for ways to put money back in the hands of these interests and try to shield them from the inevitable changes that a carbon-constrained world will bring.

When government ministers tell the Australian people to use their "economic stimulus" handouts to buy imported, energy-hungry plasma TVs, rather than, say, locally made solar water heaters, you know they are not serious about making changes. This is not leadership. What takes real Government leadership is to support promising sustainable industries of the future that aren't already entrenched or politically well-connected; to build sustainable green jobs for the future, rather than desperately trying to preserve existing jobs, regardless of how unsustainable they might be; and to develop a clear transition strategy from the existing to the new.

This is a true test of leadership and the only way to build a sustainable Australian economy and society for a carbon-constrained future.