Tuesday, 20 June 2006
Renewable Energy (Electricity) Amendment Bill 2006
The Renewable Energy (Electricity) Amendment Bill 2006 makes some administrative amendments to the Renewable Energy (Electricity) Act 2000. What it does not do is advance the cause of renewable energy in this nation. The government recently established an inquiry into nuclear energy for Australia and is determined to impose nuclear power plants and nuclear waste dumps on Australia. Guillotining this debate on renewable energy highlights the hypocrisy and the bankruptcy of this government when it comes to addressing climate change. When Australians need a responsible, forward-thinking and balanced approach to climate change and renewable energy, all we get is this weak piece of legislation.
Labor supports the bill. There is not much in it that you can oppose, because it does not do much, but we are very disappointed that the bill is merely tinkering with administrative arrangements for renewable energy when greater investment and action is required. This bill shows that, instead of being a responsible steward for our environment and our economy, the Howard government has put climate change in the too-hard basket.
The 2006 budget did not mention climate change, for the 11th year in a row. The budget had no initiatives for clean renewable energy. This bill is consistent with the government’s irresponsible approach of doing very little to avoid dangerous climate change—the greatest environmental challenge facing the world. There is overwhelming scientific evidence that climate change caused by carbon pollution is making Australia hotter, the ocean warmer and our cities and towns drier. The CSIRO says climate change is directly affecting the water supply of every city and town and is threatening the Great Barrier Reef and Kakadu. The science is pretty clear that climate change increases the intensity of cyclones and hurricanes. Climate change means we will have more category 4 and category 5 cyclones. If climate change remains unchecked, it will severely damage Australia’s agricultural and tourism industries while also impacting on many Australians through health effects, weather events and further water restrictions. There is no doubt that recent steep rises in temperature can be put down to human activity.
But the government’s hypocrisy in having the Parliamentary Secretary to the Prime Minister, who is responsible for water, gagging a debate on renewable energy, which has a direct impact on climate change and therefore on water, shows the bankruptcy of the government’s approach. Surely, the recent destruction caused by Cyclone Larry should have been a reminder of the severe weather we must prepare for at home as our planet warms. If for no other reason, Australia’s self-interest dictates we must support clean renewable energy. To do so is prudent and not to do so is irresponsible.
As well as understanding the immediate and long-term threat of climate change, the most important thing to understand about dangerous climate change is that it can be avoided. I repeat: dangerous climate change can be avoided. If governments, communities and businesses work together to get us out of the heat trap which is developing around the world, we can avoid dangerous climate change. Humans have become a force of nature. We are changing the climate, and what happens next really is up to us. Climate change has been caused by humans; but, thankfully, solutions already exist to address it. We can and should act now to address the problem.
That is why the bill before the House represents such a failure of policy by the Howard government. By bringing forward a bill that does nothing to increase the use of renewable energy, the government has failed. Renewable energy is universally acknowledged to be an important part of any climate change strategy. However, instead of supporting clean energy projects and smart, efficient technologies, the Howard government is taking Australia the other way. Instead of a balanced and prudent approach, the Howard government is trapped by old thinking and irresponsible policies.
It is hard to believe but in Australia there is still no national climate change strategy. The report released last month by the Australian Greenhouse Office showed, once again, the Howard government’s failure when it comes to reducing our greenhouse gas emissions. It showed that, if you exclude land use changes made in New South Wales and Queensland by the state Labor governments, greenhouse gas emissions in Australia increased by 25.1 per cent between 1990 and 2004. We hear my opposite number, Senator Ian Campbell, the parliamentary secretary and many members of the government often speaking of the need for a 60 per cent decrease in greenhouse gas emissions by 2050. It is the scientific consensus that that sort of reduction is needed to avoid dangerous climate change; yet the reality of Australia’s performance is absolutely disastrous—a 25.1 per cent increase in emissions between 1990 and 2004. A government that is complacent about climate change places our environment, our economy and our vital infrastructure at risk.
By doing nothing in this bill to increase the use of renewable energy, we just reinforce that. But what is the government doing in order to distract attention from its failure? It is setting up an inquiry to look at imposing a nuclear power industry on Australia. It will not say where the nuclear reactors will go or where the waste from those reactors will go. Of course, you cannot look at the cost of any major piece of infrastructure, such as a nuclear reactor, without looking at where it will go. That is a major part of the cost of imposing on Australia what government advisers say will need to be at least five or six nuclear power plants.
In question time in the House last week, the Minister for Education, Science and Training, who has responsibility for the Lucas Heights nuclear reactor, failed because she did not have any idea about the four incidents that occurred in one week at the Lucas Heights nuclear reactor. The first of those incidents was on Thursday, 8 June—the same day that the chair of the government’s nuclear inquiry, Mr Ziggy Switkowski, stepped aside from the ANSTO board. He intends to return to the board. The inquiry has nuclear proponents as members, with the advocacy of nuclear energy being a prerequisite for appointment to this inquiry. It is quite an extraordinary situation. In the best Yes, Minister fashion an inquiry into nuclear energy is instigated, with all the people on the inquiry being advocates of nuclear energy and some of them having a commercial interest in Australia’s promoting nuclear energy. It is quite an extraordinary situation.
Mr Greg Bourne, the head of WWF, was called while he was overseas—two hours before the composition of the inquiry was announced—and asked to be on the inquiry. That shows two things: firstly, the government were unprepared, given the haphazard way they put together this list; secondly, Greg Bourne refused the invitation to be on this inquiry and described it as a ‘rubbish’ inquiry because it would not be dealing with renewable energy. The key to Australia’s future needs is not about going back to the past, to a discredited form of nuclear energy that creates waste that cannot be dealt with and is uneconomic for Australia; it is about renewables. This bill means we have totally lost the opportunity to move forward with renewable energy and to take advantage of the opportunities to improve not just our environmental performance but our economic position.
Let us look at some practical examples. Last month the Minister for the Environment and Heritage, Senator Ian Campbell, said that it was not a problem that Australian renewable energy companies had to move offshore to China to commercialise their products rather than to produce them here. Two weeks ago I met with the Roaring Forties renewable energy company in Tasmania, which is an offshoot of Hydro Tasmania. After the budget, Roaring Forties announced that it would not proceed with half a billion dollars worth of projects in Tasmania and South Australia because of the government’s failure to increase the mandatory renewable energy target. The Howard government’s policies are destroying Australia’s clean energy industry and jobs in regional Australia. Roaring Forties is the same company that announced a $300 million deal, when Premier Wen Jiabao was here, to provide three wind farms to China. So the situation is such that Australian innovation and renewable energy is welcome in China but it is not welcome in the Prime Minister’s Australia. That is an absolute disgrace.
If you thought the Howard government was not to blame for that, recently the Minister for the Environment and Heritage, Senator Ian Campbell, blocked a wind farm in Victoria because it would threaten one orange-bellied parrot every 667 years. The orange-bellied parrot has not been seen by anybody at the Bald Hills wind farm project, but the minister used his power under the EPBC Act—which is questionable, and I understand will be challenged in the courts because of this—to intervene. Senator Campbell then tried to stymie a Western Australian wind farm, which his own department, after examination, had agreed was a project worthy of support. Instead of blocking clean energy projects, the Howard government should seize the opportunities which are there. Sadly, the Howard government’s approach to renewable energy is all about politics and not about Australian jobs or the environment. The Howard government’s approach to renewable energy is both irresponsible and very inefficient. We have the potential for a stronger renewable energy industry, yet the government’s policies send jobs overseas and cripple our renewable energy market.
The personification of the government’s failure came with the latest Business Review Weekly rich list, which comes out every year. In it you can see where the richest Australians have moved to and from in the previous year. Sometimes they move from No. 10 to No. 8, or from No. 16 to No. 19, but this year there was a spectacular debut. Dr Zhengrong Shi, a dual Chinese-Australian citizen who had never before appeared on that list, debuted at No. 4 on the list of the richest Australians, with a wealth of $3 billion. Dr Zhengrong Shi did his PhD in solar energy at the University of New South Wales. His wealth comes from developing solar energy technology in China. The solar energy technology being used by Dr Shi has made his company, Suntech, very hot property, if you can excuse the pun. It is shameful that Howard government policies have sent great innovative solar energy technology to China—invented in Australia but made in China. What a disgrace. When will the government take action to ensure that Australian ideas in the booming renewable energy market are commercialised in Australia, creating Australian jobs? You have to wonder: why back the toxic, expensive, risky nuclear power industry when Australia has such an abundance of good ideas and other energy sources?
I see Dr Zengrong Shi as the personification of the government’s failure on renewable energy. Let us put it in perspective. This individual dual Chinese-Australian citizen is worth $3 billion in personal wealth. Yet the government would have us believe that the nuclear inquiry is the big issue facing Australia. Uranium exports, which were worth $500 million last year, need to be put into perspective. This one individual is worth $3 billion.
It is for that reason that I will be moving a second reading amendment to the bill. If we are going to meet the challenges posed by climate change and adapt to a carbon constrained economy, planning is the key. We need to act now for the future of Australian society, Australian jobs and business. We need to move towards a modern, clean-energy economy.
The chairman of Rio Tinto, Mr Paul Skinner, has recently called for the introduction of market mechanisms as part of the global solutions to combat climate change. Mr Skinner confirmed that:
... ultimately, the challenge for the global political leadership was how the two components—technology and market mechanism—could be brought together for a long term solution.
Just as science and technology have given us tools to measure and understand the dangers of climate change, so too can they help us deal with them. The potential for innovation and business investment is immense. It is about providing the market based stimulus for the deployment and transfer of clean-energy technologies, the transfer of which the International Energy Agency has estimated at $27.5 billion worth of carbon credits. By not ratifying Kyoto Australia is giving the world a jump-start in this new, dynamic global marketplace.
Australian companies are already being disadvantaged by our exclusion from carbon markets and from the developing renewable energy technology markets. The investment is simply going elsewhere. Our technology and our know-how are heading to China instead of creating jobs at home. More and more we are seeing this occur. More and more our isolation on this issue has become an international embarrassment which makes it harder for us to achieve other environmental objectives. We have seen that recently at the International Whaling Commission.
The Kyoto agreement was hailed by the Prime Minister back in 1997 as ‘a win for the environment and a win for Australian jobs’. The Prime Minister got it right then but he is wrong now. Labor takes a more sensible, practical approach on this issue. We acknowledge that the nature of such agreements is that they are a product of compromise and, like almost every international agreement we are part of, we do not say that it is perfect. We need to think beyond 2012, but by not ratifying Kyoto we are excluding ourselves from the negotiating table of future agreements and undermining our credibility.
It is very hard for Australia to argue that countries such as China and India should take on board targets. Clearly there is a need for the developing world to also look at reductions, just as annex 1 countries to the Kyoto protocol have targets for their greenhouse gas emissions. But there is a reason why annex 1 countries—the most industrialised countries that have created the problem of greenhouse gas emissions and climate change—took the lead. Commonsense tells you that it was important that they move forward in the first instance.
Our credibility is very limited. Australia got the second-most generous target in the world—108 per cent. Only Iceland, at 110 per cent, has a more generous target. Even after the concessions we got on land use being accounted for in reaching our target, Australia said no. I had the privilege of attending the Montreal climate change conference last year. Australia’s credibility, along with that of the United States, was very limited because of that. The alternative that some would put—that of the climate pact—was rejected for funding by the United States Congress. This week it managed to get a total funding contribution from the US government of $4 million, which might pay for a few airfares for people to go to meetings. It is just farcical compared with the main game—the international agreement that is the Kyoto protocol.
The Mandatory Renewable Energy Target was announced in 1997 in the wake of Kyoto. It was implemented in 2001. It has helped the deployment of renewable energy projects and technologies. This has meant that the 2010 MRET target of 9,500 gigawatts of generation has basically been achieved now. MRET stimulated the renewable energy industry, subsidiary manufacturing industries and substantial intellectual property rights that are now being used around the world. The government should have taken advantage of this bill to increase and extend the MRET target. The government’s own review panel, headed by former government senator Grant Tambling, recommended that MRET targets should increase beyond 2010 at a rate equal to the rate before 2010 and stabilise at 20,000 gigawatts in 2020.
To understand why this never happened, and why renewable energy is being strangled in Australia, you have to look at the politics of renewable energy and the genesis of the MRET. When MRET was first announced it was the government’s stated intention that it would increase the market share of renewable energy generation as a percentage by two per cent. This is what the government said:
Electricity retailers and other large electricity buyers will be legally required to source an additional 2% of their electricity from renewable or specified waste-product energy sources by 2010.
That was Senator Ian Campbell in Hansard on 14 August 2000. However, in its design MRET became a gigawatt hour target rather than a percentage of market share. That is, by making the target a gigawatt hour target rather than as a percentage of electricity generated, the target became a dead target. The result is that market share of renewable energy in 2010 will be approximately 10.5 per cent—exactly the same as it was in 1997. In other words, MRET has not increased the market share of renewable energy; it has simply enabled it to keep pace with our growing demand for energy.
There are many implications of the government’s current dead MRET target. The renewable energy industry is currently facing a significant downturn in project activity and investment. Without an increase, Australia stands at risk of stranding industry capability, technology, skills and intellectual property. We are missing out on great opportunities because of our failure to be involved in the international world. Because of our failure on Kyoto, we are unable to participate in the clean development mechanism, which would allow Australian companies to invest in our region and to gain an advantage that otherwise is not available to them. Because of its failure, Australia cannot receive investment under the joint implementation measures of the Kyoto protocol, which could see great opportunities for investment here in renewable energy and other greenhouse friendly economic activity from those countries that are struggling to meet the targets that have been established. By not ratifying Kyoto, Australia is not able to attract this investment. The fact is that the international emissions trading market is booming as countries like Britain, Germany, Spain and Japan all look for cost-effective ways of meeting their obligations.
The Howard government sees no contradiction in proclaiming that Australia will meet the Kyoto target whilst also claiming that ratification would destroy economic growth. The Howard government signs the vision statement of the Asia-Pacific climate pact, which concludes it ‘will complement, but not replace, the Kyoto Protocol’, but then senior ministers proceed to trash Kyoto. The fact is that the government is two-faced on climate change. There needs to be action. Determining when to act is often as important as determining how to act. There is an opportunity cost of time. As the business roundtable on climate change pointed out, the longer the delay in action, the more expensive it will be—which is why this bill fails so dismally. The government says that its technology will somehow be applied by itself without any economic incentives. That is simply a triumph of hope over experience.
This bill could and should have done far more for renewable energy. All around the world governments are putting in place polices to facilitate its growth. The future for UK wind power was brightened with the July 2003 approval of up to 600 megawatts of offshore wind power by 2010. In Spain, Denmark and Germany alone the expansion of the renewable energy sector has created about a quarter of a million new jobs in the last few years. John Howard’s refusal to ratify Kyoto has meant that Australian companies such as Macquarie Bank are investing in massive renewable energy projects in Europe and Britain. According to Business Review Weekly, Australia is missing out on $3 billion worth of investment due to the inertia of the Howard government. We need effective incentives to drive investment. Growing targets for clean, renewable energy are part of this solution.
The government has also failed with the drafting of the bill. Throughout the investigation of the Senate Environment, Communications, Information Technology and the Arts Legislation Committee Labor senators raised concerns over the antigaming provisions in clause 30D of this bill. We are concerned that those provisions would have some unintended consequences for the sugar industry. This is an issue that Labor and some sections of industry have been pressuring the government over for some months. It is disappointing that government senators on the committee did not accept the clear and cogent arguments made by Labor and industry on this matter.
Today, given that the government has gagged this bill, I suspect that the amendments that have been flagged as being needed by the government are not coming. Perhaps they have been knocked over by the Prime Minister’s office. But I suspect that the government will be back here when we get to consideration in detail moving amendments to its own bill because it has it wrong. So you get it wrong in the detail of the bill. You then leave it on the shelf for a couple of months. Then last night you decide, ‘Oh, we’ve got to bring on this bill.’ When it is brought before the House the first thing that happens is the parliamentary secretary for water, who feigns concern about climate change, moves a gag to stop debate on renewable energy before this House, yet the government still has not even got the legislation right in its detail. That is why I move:
That all words after “That” be omitted with a view to substituting the following words: “whilst not denying the bill a second reading, the House condemns the Howard Government’s complacency over climate change and calls upon the Government to:
- join the established global framework for action against climate change and ratify the Kyoto Protocol;
- establish a national emissions trading scheme so Australians can minimise the cost of adjusting to a carbon constrained economy and enjoy the economic opportunities arising from the global carbon trading market under the Kyoto Protocol;
- ratify the Kyoto Protocol and therefore allow Australian companies to benefit from the Kyoto Protocol’s Clean Development Mechanism and Joint Implementation provisions which encourage and reward renewable energy projects;
- work towards a long-term target of 60% cuts to Australia’s year 2000 levels of greenhouse gas emissions by 2050;
- increase Australia’s investment in proven renewable energy technologies by substantially increasing the Mandatory Renewable Energy Target;
- support greater incentives for the research and development of renewable energy; and
- support measures to improve energy efficiency, such as making an effective 5 star building code the national standard for new homes, and developing partnerships with energy utilities so that they don’t just sell electricity and gas but also help people use less energy and cut their bills”.