The federal government’s plans to establish a Clean Energy Finance Corporation (CEFC) should be scrapped. As a commercially oriented company, it competes with private investors. As a company with a public mandate, it nevertheless aims to serve a public policy goal. These dual purposes are hard to reconcile. However, its place under an emissions trading framework is even more problematic. As a carbon emissions trading scheme sets a ceiling on overall emissions, the CEFC will not achieve any additional emissions cuts but only result in lower prices for emissions certificates. $10bn of public funding will thus yield a zero emissions effect.

Dr Oliver Marc Hartwich is a Research Fellow with the Economics program at The Centre for Independent Studies. He has published widely on issues such as demographic change, local government, industrial policy, and transport. He is a weekly columnist with the Business Spectator and a frequent commentator for a wide range of Australian and international media.