Things are heating up: Small-business policy is aplenty as politicians try to tackle climate change

climate change

Scott Morrison looks at a piece of coal during Question Time at Parliament House on Thursday, February 9, 2017. Source: AAP Image/Lukas Coch.

Climate change, much like small business, has been a political football for years in Australia.

But a combination of soaring energy bills and dire warnings about the future of our planet has left many in the electorate, including business owners, demanding urgent policy solutions.

Both major parties are moving into the election with climate change and energy policies that profess to tackle the big issues while giving a nod to small-business welfare.

Under an international agreement signed in Paris back in 2016, Australia has committed to reducing 2005 emissions levels by 26-28% before the end of 2030.

Prime Minister Scott Morrison has said Australia will achieve this target “at a canter”, although experts have warned we’re not on track to make good.

Labor has committed to 50% renewable power generation by 2030 and “net zero pollution” by 2050.

Many questions remain unanswered, however, so let’s break down what’s on offer.

“Fair dinkum power”

After Morrison took the top job last year, newly minted Energy Minister Angus Taylor was given the job of getting power prices down.

It’s a pretty pressing concern for small business, with the most recent research on the topic finding annual average bills passed $3,700 last year, while 85% of firms say they don’t believe they can absorb further increases.

Seizing on ACCC recommendations, the coalition believes it can reduce small-business power bills by $1,000 or more each year by creating a new default market price that could save SMEs up to 24% on their bills.

But while bill relief is on the agenda, addressing carbon emissions is another story, and while the coalition has committed to underwriting new energy supply, it has not ruled out supporting the creation of a new coal-fired power station in Australia.

The coalition is focused on what it calls “fair dinkum power”, which Taylor told a room of energy market veterans earlier this year was a guarantee against wind and solar power being ineffective when the sun is down and the wind isn’t blowing.

The Climate Solutions Fund (previously the Emissions Reduction Fund) is the pillar of the coalition’s climate policy, committing $2 billion to the program, which focuses on improving energy efficiency and other measures, while other policies aim to provide support for small businesses.

Other policy commitments include:

  • A $1.38 billion equity investment in the Snowy 2.0 Hydro scheme;
  • Up to $50 million in grants for businesses to undertake energy efficiency projects;
  • $11.6 million to fund grants and a business advice program to help firms save energy;
  • Underwriting new power generation with a $13.5 million investment; and
  • Accelerating the Marinus Link project with a $56 million investment to support a second interconnector between Tasmania and Victoria, which will support the Battery of the Nation scheme.

The coalition has also said it is committed to developing a National Electric Vehicle Strategy to manage a transition to emerging technologies, although no specific commitments or funding announcements have been made.

Labor’s action plan

Labor has attacked the coalition for what it claims is “six years of chaos, uncertainty and rising pollution”, and has promised to address policy instability by creating concrete emission reductions targets over the next decade.

Labor wants to achieve this by pursuing a bipartisan national energy guarantee which would create obligations for energy companies to ensure reliability and emissions reductions.

The opposition also wants to double taxpayer investment in the Clean Energy Finance Corporation (CEFC) — which hands out taxpayer-funded loans to organisations and businesses to pursue green initiatives — by providing an additional $10 billion in capital over five years from 2019-20.

The coalition, in contrast, has made no commitment to providing ongoing funding for CEFC.

Other policy commitments include:

  • Targeting installation of one million household battery systems by 2025, supported by $2,000 rebates for 100,000 households which have annual incomes of less than $180,000 per year;
  • Spend over $30 million for grants which aim to help manufacturing companies reduce their energy use as part of an Energy Productivity Agenda, which will help businesses increase their energy productivity more broadly;
  • Spending $5 billion to upgrade energy transmission and distribution, designed to modernise Australia’s energy network;
  • Establish community power hubs to support development of renewable energy programs in local communities, including solar gardens and community wind farms; and
  • Expand the mandate of the Australian Renewable Energy Agency (ARENA) so it can support energy-efficient projects that don’t necessarily include a renewable component.

Labor has also developed a national electric vehicle policy, targeting 50% of new car sales by 2030.

The opposition says it will expand its Australian Investment Guarantee to allow businesses to immediately deduct 20% off any new electric vehicle they purchase valued at more than $20,000.

Additionally, the policy would see $200 million spent on creating charging infrastructure, split between taxpayers and industry.

The most controversial aspect of the electric vehicle target is the proposed introduction of a vehicle emission standard.

Labor has said it would deliver a standard of 105g CO2/km for light vehicles, the same target the coalition considered but then dumped several years ago, amid pressure from business lobbyists.

Anna Mortimore, a lecturer at Griffith University who has researched vehicle standards, has welcomed the target.

“We’re so far behind. We’re the only OECD country that has no regulations,” she tells SmartCompany

Electric vehicle sales are still relatively low in Australia, accounting for less than 1% of the total market, compared to almost 5% in New Zealand and over 15% in Norway.

Labor has said it won’t apply a “blanket mandatory standard” to new vehicle sales, which will allow retailers to offset high-emission car sales with low- or zero-emission sales.

“The global transition to EVs [electric vehicles] is well underway, but Australia lags behind other countries in EV take-up due to the government’s failure to put in place credible climate change and EV policies,” Labor said of its policy earlier this year.

Getting help

There is also a myriad of existing incentive programs small businesses can access to make their businesses more sustainable and get their power bills down.

Small businesses are eligible for the small-scale renewable energy scheme, which was set up under the federal renewable energy target to provide businesses with an incentive to go green.

Small-scale solar panels, wind and hydro systems can generate small-scale technology certificates, which can then be sold to help recoup the cost of investment and operation.

The number of certificates that can be generated by a particular system varies, depending on location, installation date and electricity generated, but the Clean Energy Regulator has a handy calculator to help businesses see if they’re eligible.

Alternatively, businesses looking for larger loans to adopt low-carbon, carbon-free or energy-efficient solutions can also apply for funding with the Clean Energy Finance Corporation.

The CEFC is responsible for investing $10 billion in clean energy projects on behalf of the Australian government and to date has invested in businesses large and small.

In one case, a Mail Plus delivery franchisee was awarded a loan for a $32,900 fuel-efficient vehicle for their business through CEFC supported Metro Green Vehicle finance.

There are also a variety of state-based incentives for small businesses looking to double down on sustainability.

Down south, Sustainability Victoria offers a range of grants for businesses, from recycling projects to e-waste busting grants valued at up to $100,000.

In NSW, the government is offering businesses heavily subsidised energy-efficient lighting upgrades, which can be particularly useful for retailers.

In South Australia, businesses can access the Retailer Energy Efficiency Scheme (REES), which enables retailers by offering free or discounted energy-efficiency programs through power companies.

Most of the large energy retailers participate, but each offers their own suite of programs, including the installation of energy-efficient lighting and ceiling insulation.

This article is part of our spotlight on climate change. You can view the full series here.

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