THE fate of billions of dollars of planned investment frozen by carbon policy uncertainty remains clouded despite the government's latest moves to curb emissions.
While business groups cautiously welcomed Julia Gillard's carbon policies on Friday, big investors in the energy sector said the changes would do little to shift funding towards cleaner fuels.
Under Labor's proposal, all new coal-fired power stations would face new emissions standards and have to be ''carbon capture and storage ready''. The government claims this will send investors a powerful signal to invest in cleaner energy, including gas and renewable power.
But energy sector sources said the policy did nothing to answer the key question hanging over their investment decisions - what, if any, carbon price to factor in.
The Liberal Party is promising to reduce emissions through improved energy efficiency and better land-management practices, but has ruled out a carbon price either by way of a trading scheme or a carbon tax.
A report this week from the Energy Supply Association of Australia said policy uncertainty had already caused power companies to slash $10 billion off their spending plans for the next five years.
The Investor Group on Climate Change, representing fund managers holding more than $600 billion, said Friday's changes would only ''marginally'' affect investment decisions until there was a clearer policy.
"In terms of driving significant investment into low-carbon technologies, or allowing investors to price emissions risks into their portfolios, clearly we are still in a period of waiting," said chief executive Nathan Fabian.
The big listed utilities, Origin and AGL, echoed their previous calls for greater clarity through an emissions trading scheme. More broadly based business groups welcomed the chance for further discussion, but stressed the need for greater certainty in carbon policy.
Business Council of Australia chief executive Katie Lahey said that while elements of Labor's policy were ''useful'', the party needed to show leadership and provide lasting solutions.
"The ALP's commitment to building community consensus is constructive," she said. "However, in this complex policy area, long-term solutions that balance Australia's economic and environment considerations will only come through strong political leadership."
Energy Supply Association of Australia chief executive Brad Page said the measures, including $1 billion over 10 years to connect remote renewable energy projects, were ''sensible policy''.
But he said that without both major parties being aligned on climate policy, uncertainty would continue.
However, ANU climate change economist Professor Warwick McKibbin said the government had adopted an ''asylum-seeker approach to climate policy''.
He said climate uncertainty would be felt ''right across the economy''.
Email a friend