A wide range of policy options, including a range of market-based mechanisms are available to governments to support the development of renewable energy. These options include provision of investment incentives such as grant programmes, tax measures such as investment and production tax credits, government procurement policies, and guaranteed price systems such as feed-in tariffs. More common mechanisms include various market-based schemes built around obligations to purchase renewable energy, including portfolio standard or quota systems, and a binding renewable energy target. All of these options are present in some form or other in various government responses to climate change and in efforts to promote the development of renewable energy across Australia. By far the most important of these mechanisms has been the Mandatory Renewable Energy Target (MRET) scheme established under the Renewable Energy (Electricity) Act 2000 (Cth). This scheme was originally established to spur investment in renewable energy generation in Australia. This chapter argues that this core policy objective has been undermined by a constant stream of government-sponsored inquiries, reviews and legislative amendments that have created uncertainty and undermined investor confidence in the renewable energy industry. This chapter argues that the Australian experience demonstrates a fundamental lesson that the best way to destroy, or at a minimum undermine, the effectiveness of a market-based mechanism is to create a continual climate of uncertainty through inquiries and reviews and numerous amendments to the scheme.
The first pollution laws introduced in the 1960s–70s were based on traditional command-and-controlregulation. More flexible and innovative instruments were introduced with reformed pollution laws in the1990s. The centrepiece of NSW’s pollution laws is the Protection of the Environment Operations Act1997 (NSW) (‘POEO Act’). The POEO Act and associated regulations provide the NSW EnvironmentProtection Authority (‘EPA’) with a number of economic tools to address pollution. This includesinstruments such as load-based licensing fees, risk-based licensing fees, tradable emission schemes,green-offset schemes, and monetary benefit orders. Those instruments have been utilized to variableextents. Some instruments such as monetary benefit orders, which require that a defendant pay back anyprofit they have derived from an offence, have not been used at all. Fines, which are offset by any profitsretained by the defendant, provide little, if any, deterrence to potential polluters. Other instruments such as tradable emission schemes have been employed in limited circumstances, namely for specific pollutantsand defined geographical areas. Economic regulatory tools have been received with mixed success and criticism. This chapter considers the extent to which economic instruments have been utilized in NSWpollution law as a regulatory tool that can aid environmental protection. Particular focus is placed on theuse of load-based and risk-based licensing fees, tradable emission schemes and monetary benefit orders. The chapter concludes that while economic instruments have the potential to contribute in an effective wayto the EPA’s regulation of pollution, some instruments seem to have been all but forgotten and othershave a number of potential weaknesses in their design. These factors may be negatively impacting on theEPA’s ability to effectively protect the environment.