Garnaut calls for major investment in low-emission technology innovation
The Government’s advisor on climate change, Professor Ross Garnaut, has called in his final report for the allocation over a period of several years of up to $2.5 billion of the annual revenues that would be generated by the recommended $26 per tonne carbon price to research, development, demonstration and commercialization of new low-emissions technologies.
Professor Garnaut said that the central policy instrument to encourage the use of established low-emissions technologies and to discover and to apply new technologies is carbon pricing.
However, he noted that the carbon price alone will not lead to adequate investment in research, development and commercialisation of new technologies, because the private investor can capture only part of the benefits.
“Fiscal incentives can bridge the gap between benefits to the whole of society and benefits to the individual investor in innovation. Part of the carbon pricing revenues—on the plateau of expenditure between about five and ten or twelve years from the commencement of carbon pricing, about $2.5 billion per year of the Australian revenue—can be used productively for this purpose.”
Professor Garnaut allocated a chapter of his three-part report to Australia’s performance as an 'innovation nation’ in the field of low-emissions technologies, highlighting the achievements in a number of areas including solar technologies, where the University of New South Wales School of Photovoltaic and Renewable Energy Engineering has generated world-leading experts and technologies that have been behind the formation of the world’s largest solar photovoltaic companies.
Professor Garnaut concluded that support for innovation should extend from basic research and development to the demonstration and commercialisation of new technologies.
“The basic research will be conducted mainly but not only through public institutions. It requires decisions on allocations of expenditure according to assessments of Australia’s comparative advantage in research capabilities, and national interest in successful outcomes. At the commercialisation end of innovation, allocations are best guided by private priorities backed by private commitments of funds, in the form of matching grants or other benefits from government.”
Professor Garnaut’s final report, The Garnaut Review 2011: Australia in the Global Response to Climate Change, is available here