Australia's Stand on Renewable Energy: Role of Government and Economic Analysis

This study highlights Australia's stand on renewable energy, role of government, and economic analysis. It also provides recommendations to policymakers for improving renewable energy.

Running head: ECONOMICS FOR BUSINESS
ECONOMICS FOR BUSINESS
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Role of Australian government on taking stand in renewable energy.............................................2
Economic analysis on the present issue...........................................................................................3
Recommendations to policymakers on the actions to be taken for improving renewable energy...5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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Introduction
The present assignment highlights on the Australia’s stand on renewable energy. Over the
last few decades, production of renewable energy has grown rapidly in the Australian economy.
Renewable energy in Australia basically deals with huge efforts for expanding as well as
quantifying application of the renewable energy in generating electricity as fuel in energy as well
as transport. This renewable energy is created through the electricity generation using few
renewable sources involving- geothermal, landfill gas, hydro, wind and so on. The renewable
energy sector has huge contribution to the economic growth of Australia. This study also
discuses about the role played by the Australian government in enhancing renewable energy in
this country.
Role of Australian government on taking stand in renewable energy
The renewable energy of this country has been continuously declining for the last few years. In
fact, the government of this country takes interest in adopting new policies of renewable energy
with the aim of reducing carbon emission from this nation. The Australian policymakers also
strategizes to enhance renewable energy by implementing two main policy instruments, which
includes- Renewable Energy Target (RET) scheme and State based Feed in Tariff (FiT) scheme
(Azad et al. 2014). In addition to this, the Australian government takes stand on increasing
investment in the renewable energy infrastructure and development in the systems of renewable
energy. They also targets to integrate more schemes along with these two for augmenting
electricity from all the renewable sources. Even though the renewable energy in this nation has
been enhancing at high rate, the Australian a government has been facing several challenges
relating to increase in cost. They also makes huge investment in emerging technologies of

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renewable energy for innovating more renewable sources and declining carbon emissions.
Furthermore, they are also uses the intergovernmental forums to tackle overlapping between
various renewable energy policies. Thus, all these measures taken by the Australian government
helps to improve the growth of energy in present years.
Economic analysis on the present issue
Rising cost effectiveness and technological advancement of the renewable energy has
offered new opportunities to this Australian economy for transforming their different energy
systems (Council 2016). Also, increasing deployment of this renewable energy also opened up
several employment opportunities and improved human welfare. Moreover, large investment in
the renewable energy also led to rise in Gross domestic Product (GDP) of Australia by around
1.7%. GDP is considered as one type of basic indicator that is used for measuring the
performance of the nation (Arena 2016). Furthermore, it has been evident from some recent facts
that increase in growth of the renewable energy sector also created numerous jobs in this nation
over the past few years. However, increase in rate of employment also leads to sustainable
growth in GDP and human welfare in Australia (Evans and Honkapohja 2012). Recent facts
highlights that use of these renewable energy sources also enhanced rapidly owing to
technological advancement, decrease in relative prices and huge support of the policies adopted
by the Australian government to meet the emission target. Due to decline in prices, demand for
this renewable energy also increased over the last few years in this country (Sloman, Norris and
Garrett 2013). Furthermore, Australia having large quantity of renewable energy sources also
increased the its supply. This in turn helped in meeting the growing demand of this renewable
energy. This is explained in the figure given below:

Quantity
Prices
D
D
D
D1
S
S
S
S1
P
Q Q1
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Diagram 1: Rise in demand and supply of renewable energy in Australia
Source: (Author’s creation)
This diagram highlights that P is the equilibrium price in which the initial demand curve
intersects with the initial supply curve. increase in demand of renewable energy shifts the
demand curve to the rightward direction, indicated by DD1 (Taussig 2013). Similarly, increase in
supply of renewable energy also shifts the supply curve towards rightward direction, indicated by
SS1.Thus, the price might remain constant and the quantity will rise.

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Recommendations to policymakers on the actions to be taken for improving renewable
energy
 The policymakers should make investment in technologies for increasing production of
the renewable energy sources and thus making these affordable as well as highly
competitive in the marketplace
 The policymakers should also change their policies regarding renewable energy for
meeting with the varying demand
 The key holders must also take into account variation in the availability of these
renewable energy sources while making policies
 These policymakers must also assure that decision regarding tax incentives for these
sources of renewable energy are well designed, so that it can deal with inefficiencies in
the market.
Conclusion
From the above study, it can be concluded that Australia has taken good stand on the
renewable energy. As a result, it led to improvement in employment, human welfare, trade and
economic growth of this nation. in addition to this, huge progress in technologies along with
changes in energy policies also led to increase in efficiency in the renewable energy.
Furthermore, few economists predicts that rise in growth of this renewable energy industry will
provide huge opportunities as well as create new market for exports and increase the
employment rate of this country. Overall, this stand on the renewable energy will further
improve the performance of this sector and increase economic growth.

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References
Arena, R., 2016. The economics of Alfred Marshall: revisiting Marshall's legacy. Springer.
Azad, A.K., Khan, M.M.K., Ahasan, T. and Ahmed, S.F., 2014. Energy scenario: production,
consumption and prospect of renewable energy in Australia. Journal of Power and Energy
Engineering, 2(04), p.19.
Council, A.E., 2016. Renewable Energy in Australia. How do we really compare.
Evans, G.W. and Honkapohja, S., 2012. Learning and expectations in macroeconomics.
Princeton University Press.
Mankiw, N.G., 2014. Principles of macroeconomics. Cengage Learning.
Sloman, J., Norris, K. and Garrett, D., 2013. Principles of economics. Pearson Higher Education
AU.
Taussig, F.W., 2013. Principles of economics (Vol. 2). Cosimo, Inc..