Move to scrap big-ticket items priceless

THE message sent by Julia Gillard's decision to scrap token carbon schemes and cut into the government's big-ticket solar and carbon capture and storage flagship programs is much more significant than the amount that will be saved.

There is welcome confirmation this government recognises that real progress in cutting carbon emissions will come only from getting the framework right to put a price on carbon.

The proposed cleaner car rebate, green car innovation fund, green start loans and solar homes programs were never more than window dressing or, in the case of the car schemes, shonky industry protectionism.

Similarly, the LPG vehicle scheme was a panicked response in the dying days of the Howard government to ease the political pressure of rising oil and petrol prices.

The flagship solar and carbon capture and storage cuts are different. Neither scheme has been scrapped. The government will instead reduce its funding for the flagship programs by a total of $500 million across the forward estimates period, with $350m of this to be returned at an as yet unspecified date.

Both schemes are designed to keep Australia at the forefront of technological developments in large-scale solar and carbon capture and storage.

In solar particularly - where a decision is imminent on funding for both a commercial-scale solar thermal and solar photovoltaic plant - it could be argued that advances are taking place and costs are falling so quickly that no government program could keep pace.

Advances are also being made in the area of carbon capture and storage, but a lot remains to be done.

Both industries claim to need government support to prosper and, for environmental and economic reasons, it is wise that Australia stay in the race.