garnaut review, page-2

There is some really in depth reading there. The authors were thorough and competent.
It is also an excellent example of how a document ought to be written in order to influence government instrumentalities. At the same time of course one has to hang out some weaknesses on the line to emphasize the need for government funding. The 'facing the Valley of Death' principle is one such admission. I also like the way GDY makes it clear of the possible ways the Government can assist:

"b. Methods of assistance
Broadly, there are four possible ways of providing public financial support for the development and commercialisation of low emissions technology:
· Payments through the tax system (tax deductions or tax credits)
· Direct subsidies in the form of grants or loans
· Government equity investments
· Loan/financing guarantees

The first three methods involve a direct, immediate call on the public purse, while the fourth involves a contingent call on public funds (which would normally be counted as a liability for public expenditure control purposes). The cost of tax concessions tends to be open ended (as it is driven by the size of complying business spending) while the other forms can be limited by administrative or legislative fiat. The bulk of Australian Government support for business expenditure on research and development (BERD) in recent years has been directed through the tax system (via the 125/175% R&D tax deductions), with the broad policy objective of increasing BERD on the basis of broad spillover benefits for the economy as a whole. The nature of the policy objective avoids the “picking winners” problem but at the risk of loss of additionality (i.e. there can be no assurance that the company would not have undertaken the R&D in the absence of the tax concession).
Both State and Federal Governments have also provided significant direct subsidies (usually on a sectoral basis). Loan guarantees and equity stakes have only tended to be used in very limited circumstances.

In principle, any of these methods can be configured to have the same impact from an investor risk/return point of view. Given the nature of the policy problem under consideration – the acceleration of development/commercialisation of low emissions technologies - support through the tax system would still need to be evaluated against selection criteria of the type suggested above. In large measure, therefore, the choice of mechanism is a second order issue which should be driven by considerations of transparency and ease of administration. In general, Geodynamics favours a straightforward grant scheme with competitive qualification against the criteria suggested above. This would be simple to administer and would provide a clear incentive for private investors to control capital expenditure and manage technical risk. Government/societal carbon portfolio risk (arising from over concentration on one technological option) could be managed by ensuring a requisite degree of diversity constrained by the proposed selection criteria, including support for strategic transmission investments that facilitate development of competing low carbon energy supply solutions. An alternative, modelled on export finance guarantee arrangements, would be the establishment of a specific purpose low emissions loan guarantee company wholly owned by government. This would provide for detailed decisions on the allocation of support to be taken within a more commercial culture at arm’s length from government. An illustrative outline of how such an arrangement might be configured and managed is at Annex 3. "

The suggestion for transmission infractructure support appears on p.13. I hope the authors of the "trec" website quoted by Bohlsen put in their submission to match GDY.

There are some 100s of submissions yet to be placed on the Garnaut website in the next few weeks. They are snowed under.

Juke