The Coalition's climate change plan is about $4 billion short of the funding required to meet its greenhouse emissions pledge. Photo: Paul Jones
About $4 billion in private funding would be sucked from Australia's solar power and renewable energy industries over the next three years if the Coalition wins government, confidential data obtained from banks and financial analysts shows.
The Coalition's climate change plan is also about $4 billion short of the funding required to meet its pledge for a 5 per cent cut in greenhouse emissions by 2020, and is instead on track for a 9 per cent increase by then, according to analysis commissioned by the independent think tank The Climate Institute.
Although the Coalition rejects that analysis, major investors are planning for the impact if Opposition Leader Tony Abbott wins power and axes the carbon price and dismantles the clean energy finance system. They expect about $4.1 billion in private funding would be directed away from large-scale renewable power - starving the sector of capital - due to regulatory uncertainty and a lack of solid returns.
''Under this scenario, the winners are probably going to be the gas guys and the wind guys - you will see a charge towards getting lots and lots of wind farms up at lowest cost because you have still got to meet the [renewable energy target],'' a source within the sector said. ''It's going to change the shape of the industry.''
Mr Abbott said at the weekend that spending under his ''direct action'' climate change plan would remained capped at $3.2 billion, even if it meant missing the Coalition's pledge to cut greenhouse gas emissions by 5 per cent by 2020.
Climate change spokesman Greg Hunt reaffirmed the Coalition's support for the mandatory renewable energy target, which commits Australia to 20 per cent clean power by 2020.
Mr Hunt said $3.2 billion would be enough to meet the 5 per cent target because cutting carbon emissions was getting cheaper.
''First, because of a collapse in overseas demand for our manufacturing goods, our emissions task is lower,'' he said. ''Second, the available quantity of abatement is higher. We did not include revegetation in our initial assessments and there is significant opportunity there. Third, the likely cost is now lower than we expected given international events.''
The renewables sector, which now employs more people than the car industry, is nervously awaiting the election result.
Clean Energy Council chief executive David Green said: ''Australia's significant clean energy potential is being held back by seemingly endless rounds of review … our main need is for policy stability to drive investment.''
A major survey of businesses has found uncertainty about the future of the carbon price has had a negative impact on over half the responding firms. The survey by consultants AECOM found 65 per cent of businesses supported an emissions trading scheme, 29 per cent backed a carbon tax and just 7 per cent supported the Coalition's direct action.