Climate policy has been a highly controversial topic in Australia over the last three election cycles. In July 2016, a closely contested Federal election saw the conservative party returned to government with a slim majority in the Lower House of Parliament and a likely minority of votes in the Upper House.
 
The current Prime Minister, Malcolm Turnbull, has reiterated his commitment to the conservative party's Direct Action Plan, the centerpiece of which is a series of reverse auctions that finance emission reductions programs. Mr. Turnbull famously lost the party leadership in 2009 in large measure due to his support for an emissions trading scheme ("ETS"). For its part, the labour party opposition supports the introduction of two such schemes, one applying to the electricity industry and the other applying to the rest of the economic at large. The minority parties—which are likely to hold a balance of power in the Senate—have adopted an array of policy positions ranging from the reintroduction of carbon pricing and a transition to a net-zero carbon economy, to an increase of the current renewable energy target ("RET") to 50 percent by 2030, to the abolition of the RET altogether and the holding of a Royal Commission into the alleged "corruption" of climate science.
 
Given these divisions, the Australian Parliament is unlikely to pass any significant, climate-related reforms in the near future. A review of climate policy, scheduled to take place in 2017, may provide the occasion for further consensus-building in this area. In the meantime, government financing of renewable energy projects is likely to survive the political turmoil.
 
On that note, in July 2016, the Australian government launched an AUD 1 billion Clean Energy Innovation Fund ("Fund") to support emerging technologies. The Fund will invest in projects and businesses using technologies that have progressed beyond the research and development phase but that are unlikely to attract private sector capital for a variety of reasons. The Clean Energy Finance Corporation ("CEFC") will be directed to make AUD 100 million of its legislated funds available to the Fund in 2016–17, with an additional AUD 100 million available in subsequent years up to the limit of AUD 1 billion.
 
The Australian government will determine a target rate of return and risk level for the Fund, which will be jointly managed by the Australian Renewable Energy Agency and the CEFC. Their "reinvigorated" mandate is quite significant, the previous government having favored the abolition of both entities. 

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