Government Role Renewable Energy and Sustainable Development

Government Role

Renewable energy and sustainable development

Why Australian Government should lead the initiative?

Governmental initiatives

Supply side interventions: Rebates and feed-in tariffs

Renewable energy is derived from sources that are naturally replenish-able and supply of energy from these sources is infinite. The main purposes served by using renewable energy are many such as generation of power, transport fuel production, and for heating of houses and other living places. Except the naturally occurring main difference of supply source between renewable and non-renewable energy, there are several industry related differences as well. Usability of renewable energy, level of Greenhouse Gas (GHG) emissions, cost of generating energy, and the phase from renewable energy production is passing through, all these industry related aspects for both renewable and non-renewable energy are different.

Due to the environmental and socioeconomic benefits that renewable sources (RES) provide, renewable energy is considered as most important source of Sustainable Development SD.[footnoteRef:2]The main forms of renewable energy are solar energy, wind energy, hydrocarbon energy, thermal energy, and sea-tidal energy. Since renewable energy industry is still in its early phase of development, it is appropriate to identify key stakeholders of industry's development. This paper will be focused on investigating the role of Australian government in the development of renewable energy industry to enhance sustainable development. Part II of the paper highlights how renewable energy is linked to the sustainable development in Australia followed by a discussion in part III on the importance of Australian government leading this crucial initiative. Part IV and IV will include critique as to how the Australian government can enhance renewable energy use and advantages as well as implications of use of RES. The paper will be concluded in part V with a brief restatement of argument. [2: Del Rio, Pablo, and Mercedes Burguillo. "Assessing the impact of renewable energy deployment on local sustainability: Towards a theoretical framework." (Renewable and sustainable energy reviews, 2008).]

II- Rationale: Renewable energy and sustainable development

Pollutant plays a major role in increasing the GHG emissions in upper atmosphere as well as on our planet. Not only does renewable energy provides environmental benefits, it also does provide socio-economic benefits to people.[footnoteRef:3] "SD has traditionally been de-ned as development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs." [footnoteRef:4]Sustainable development is related to effective management of environment, employability, and social policies. After considerable emphasis on environmental benefits of using renewable energy, governments and corporate institutions are now acknowledging the socioeconomic benefits of RES. [3: Ibid. ] [4: Ibid, P. 1327. ]

Plethora of researches argues that there are three main aspects of sustainable development. These are social, economic, and environmental. United Nation Development Program (UNDP) observed that most vital factor having an impact on all three dimensions of sustainable development is 'energy'.[footnoteRef:5]Poverty reduction and increasing employability (permanent) are the main tasks entrusted to UNDP. Having a vast field experience and research on sustainable development at local, regional, and global level, UNDP has linked sustainable energy provision with socioeconomic factors such as: [5: UNDP. Sustainable Energy. (United Nations Development Programme, 2013). ]

Improving health

Managing population levels

Promoting education

Livelihood development

Access to water

Enhancing agricultural productivity

Only the provision of clean, replenish able, and affordable energy to developing countries and their marginalized population can enable sustainable development to take place. UNDP has also developed Millennium Development Goals (MDGs) in collaboration with governments of developing and underdeveloped countries. Assistance of governments and corporate bodies of developed countries has also been made available to UNDP for this purpose. Research of UNDP suggests that improvement in 'quantity and quality' of energy services is the fundamental element in achieving MDGs.

All the efforts of UNDP are driven by three-pronged strategy under which it provides assistance to governments. This includes:

Policy development for encouraging low-emission energy sources

Removing the barriers to utilization of renewable energy, energy efficiency, and urban transport development on sustainable footing.

Improving energy delivery through cost effective financing methods

If first tier of UNDP's strategy to assist sustainable development is analyzed, it becomes clear that development of low-emission energy sources is the key priority of this corporate body. Only renewable energy sources provide us to reduce GHG emissions as emissions from RES are non-existent or negligible. Sustainable development also requires that whatever source of energy is used remains uninterrupted and without threat of disruption, either due to natural or manmade threats. Since the source is naturally available for RE, RES provide best alternative for developing communities on sustainable terms. Health and environmental benefits of RES are also greater as compared to non-renewable energy.[footnoteRef:6] [6: Hill, Jason, Erik Nelson, David Tilman, Stephen Polasky, and Douglas Tiffany. "Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels." (Proceedings of the National Academy of Sciences, 2006).]

III- Why Australian Government should lead the initiative?

Having identified the relationship of sustainable development and renewable energy sources, the paper now discusses that what is the rationale behind government intervention in promoting renewable energy in Australia and what role the government should play to such an effect of promoting RE usage? As discussed earlier, one of the main objectives of UNDP in sustainable development is to remove the barriers to energy access. The main barriers that prevent significant use of renewable energy by domestic and commercial consumers are the lack of information and awareness in development, use, and marketing of renewable energy sources. Besides informational barriers, there are several market-related and economic barriers to the development of renewable energy industry.

More than a decade ago, Loiter, et al.[footnoteRef:7] argued that since renewable energy production is in early stages, the cost of producing electricity through renewable sources is less cost efficient. Wind energy was termed as being most commercially viable renewable energy source. The authors contended that weak demand-side policies negatively impact the development of renewable energy production. Weak diffusion of renewable energy coupled with lack of investment in technological innovation results in halting the process of development of renewable energy industry. Since huge sums of public funds are used in development of industry, it is imperative for the governments to increase the demand of renewable energy through policy actions. Only a strong demand can induce the development of industry.[footnoteRef:8] [7: Loiter, Jeffrey M., and Vicki Norberg-Bohm. "Technology policy and renewable energy: public roles in the development of new energy technologies." (Energy Policy, 1999).] [8: Ibid. ]

Externalities, both positive and negative, have been identified whenever energy is produced and consumed. Electricity is the most widespread form of energy required.

The governments are main source of developing renewable energy sources as these sources help better environmental management through reduction in emissions and generation of employment and economic activity. To achieve greater benefits of environmentally sustainable energy production, through atmospheric ?uidized bed combustion, solarphotovoltaic panels, wind andgas turbines, the governments have to play their role based on demand-pull and supply-push policies.[footnoteRef:9]Since the cost of developing technology and production is more during the pre-commercialization and lead adoption phase of a new technology, significant amount of public funding is required to sustain initial development of an industry such as renewable energy. Since Research and development (R&D) and initial commercialization phase for new technologies is capital intense riskier for most private organizations respectively, firms try to avoid launching new technologies due to initial negative cash flows. Energy is part of public utility being privately provided; therefore governments are obliged to invest in R&D of this basic science industry. The example of U.S. is evident where a consensus has been reached regarding public funding for the R&D phase of renewable energy industry. Thus, on the footing of developed countries such as the U.S., China, and other OECD countries, Australian government should formulate demand-pull and supply push strategies for renewable energy in three initial phases of various technological forms of renewable energy production. The main investments in R&D should be made during pre-commercialization, ?rst commercial use, and lead adoption.[footnoteRef:10] [9: Norberg-Bohm, Vicki. "Creating incentives for environmentally enhancing technological change: lessons from 30 years of U.S. energy technology policy." (Technological Forecasting and Social Change, 2000), 125. ] [10: Ibid. ]

Two main initiatives of the Australian government have been 'Renewable Energy Target scheme' and 'The Carbon Pollution Reduction Scheme'.[footnoteRef:11]The general direction of the governmental effort remains in consistency with recommendations of researchers and corporate bodies that support broad-based policy and strategy actions for reducing GHG emissions and promoting clean energy use. The government is currently using both demand-pull and supply push tactics to increase the size of renewable energy market. [11: ABS. Are Households Using Renewable Energy? (Australian Bureau of Statistics, 2013). ]

IV- Governmental initiatives

The governmental initiatives in promoting renewable energy use have been increasing during the past few years. Despite excessive reliance on electricity produced from fossil fuels (92% of Australia's electricity demand is met through electricity generated from fossil fuels).[footnoteRef:12]Despite heavy emphasis on development of this industry and acknowledgement of the benefits offered by renewable energy production, the growth in production through renewable energy sources in only 49% percent since last 30 years, from 1976-77 to 2006-07. Currently the government has aided the private sector in generating clean energy through source such as "hydro, biomass, biogas, wind energy, and solar energy." [footnoteRef:13]Some of the main initiatives that Australian government has adopted to address the issues of growing energy demand and GHG emissions coupled with the aims of sustainable development are: [12: Ibid. ] [13: BREE. Energy in Australia, (Bureau of Resources, & Energy Economics, 2012)]

Large scale solar energy plants

Geothermal generation technologies

Ocean energy technologies

Carbon capture and storage (CCS)

Various state and territory governments have adopted aggressive plans to encourage demand and supply of renewable energy supply. Close analyses of statistics indicate that specific advancement in context of solar energy has been accomplished. As compared to 2001 to 2009 period, 86000 solar panels were being installed in Australia having a capacity of 123 megawatts. In 2010 alone, there was reported to be an addition of 305 megawatts generated through 158000 new solar panels.[footnoteRef:14]The government in Australia during the last few years has systematically introduced the adoption of an energy demand and supply based on gas and renewable energy sources.[footnoteRef:15] [14: Ibid, P. 49. ] [15: Graham, Paul W., and David J. Williams. "Optimal technological choices in meeting Australian energy policy goals." (Energy Economics, 2003).]

V- Supply side interventions: Rebates and feed-in tariffs

Recent statistics reported by the Australian Bureau of Statistics indicate that despite huge emphasis of households to consumer clean energy, the government's main emphasis should on the commercial businesses and industry that consumes around 74% (2,947PJ) of the total energy consumed in Australia. Therefore an intervention to make supply of clean energy abundant for the industrial units is more important than to limit the efforts households. Further, more amount of GHG emissions are also produced by the industrial sector. The government can make use of several studies conducted to show that wind energy conversion systems (WECS) are more cost and performance efficient as compared to energy production through photovoltaic cells (solar energy). The study conducted by Dalton, et al. For a 100 beds hotel having large scale demand for energy made efficient use of wind power. The study also recommended that rather than installing and funding various small scale solar power plants (0.1-100 megawatts), the government in Queensland, Australia should install large WECS (over 1000 kW). Cost and maintenance of large scale renewable energy production systems is more effective economically.[footnoteRef:16] [16: Dalton, G.J., D.A. Lockington, and T.E. Baldock. "Feasibility analysis of stand-alone renewable energy supply options for a large hotel." (Renewable energy, 2008).]

Rather than thermal energy supply to large scale industrial units, that increases dependence on fossil fuels and GHG emissions, government should invest in developing RES and implement it. Both technical feasibility and economic viability of renewable energy use by large scale industrial units is existent.[footnoteRef:17]European Union (EU)and its member states (MS) have used both feed-in tariffs and trade of renewable energy certificates to encourage renewable energy use.[footnoteRef:18]Energy is also obtained through the anaerobic digestion plants whereby Germany is the country that has vastly subsidized its farming industry for producing anaerobic digestion plants for energy production purpose. Such subsidies and support network can also be adopted by the government in Australia to help produce more renewable energy.[footnoteRef:19] [17: Ibid. ] [18: Del Rio, Pablo, and Miguel Gual. "The promotion of green electricity in Europe: present and future." European Environment 14, no. 4 (2004): 219-234.] [19: Wilkinson, Kevin G. "A comparison of the drivers influencing adoption of on-farm anaerobic digestion in Germany and Australia." (Biomass and Bioenergy, 2011).]