Dr Mark Diesendorf from the University of NSW’s (UNSW) Institute of Environmental Studies says that funds set up to support both industries suffer from serious imbalance towards the much more lucrative coal sector.
According to him the government is neglecting its election promises make the nation’s energy use more sustainable by not setting aside money for renewable energy.
"Even worse is the government’s inexplicable refusal to allocate anything in 2008-09 from the much-vaunted Renewable Energy Fund ($500 million over six years)," Dr Diesendorf said in a statement.
"Yet the Clean Coal Fund ($500 million over eight years) will pay out $35 million in 2008-09. "This suggests a bias against renewable energy compared with coal," he said.
The government’s decision to match $1 for every $2 contributed by industry to both funds could lead to serious problems for Australia’s renewable sector.
"It’s straightforward for the coal industry to raise $1 billion by placing a small levy on each tonne of coal and so claim the full $500 million from the government," he said.
"But it could be an impossible task for the fledgling renewable energy industries to raise $1 billion.
"If so, the Renewable Energy Fund is a feel-good illusion that may never be fully spent. Voters may well conclude that the Rudd government has violated an implicit promise to them."
Treasurer Wayne Swan has already been attacked over a budget decision to deny the $8000 solar panel rebate to households earning over $100,000.
Dr Diesendorf said it appeared the big polluters have gained the same level of influence over the Rudd Government as it had over the Howard Government.
"Yet efficient energy use, solar power and second-generation biofuels all need urgent research funding to enable Australia to respond to the combined threats of global warming and peak oil with a broad mix of technologies," he said.