Bloomberg New Energy Finance announced trends in renewable energy investments around the world. China emerged as the leading investor in renewable energy project, which is hardly a news anymore. The big news is actually the massive fall in renewable energy investments in Australia.
Such was the slump in clean energy investment in Australia that the country slipped from the world’s 11th largest investor in renewable energy projects to 31st in 2014. During the first three quarters of 2014, Australia invested just $238 million in setting up large-scale renewable energy projects.
Several countries, including Algeria, Myanmar, Thailand and Uruguay, have made more investments in renewable energy projects than Australia has this year. The overall investment has also increased after two years of declining trend. During the first three quarters this year, about $175 billion have been invested in renewable energy projects, 16% more than the investment made during the corresponding period last year.
China invested a record $12.2 billion in the third quarter itself, up 52% compared to the investment in the second quarter this year. Other countries with noticeable increase in investments are Japan, Canada, France and India.
The significant slump in Australia’s investment is due to the lack of a market-linked carbon emissions reduction policy. The carbon tax regime implemented by the Labour Party government was cut short by a year with a plan to replace it with an emissions trading scheme that would eventually be linked with the European Union’s emissions trading scheme. The emissions trading scheme was never launched, as the Labour government was ousted by the Liberal Party.
The Liberal Party has a largely non-functional emissions reduction policy that lacks transparency. To add to that, it is considering either weakening the Renewable Energy Target, or doing away with it entirely. The country’s poor standing in renewable energy investment is, thus, not at all surprising.
But the Liberal government is running out of justifications and reasons to avoid implementing a sound emissions reduction policy. Australia has among the highest per capita emissions in the world. It is has adopted a target to reduce emissions by only 5% by 2020 from 2000 levels. China, South Korea, and several other developing countries are set to implement emissions trading schemes on a national scale. These policies and schemes will lead to significant increase in renewable energy infrastructure. Australia will feel increasing pressure to act on low-carbon initiatives.