Pat Conroy (Charlton, Australian Labor Party) Share this | Hansard source

When speaking last night on this Energy Efficiency Opportunities (Repeal) Bill 2014 I was remarking on how the repeal of this bill marks the end of one of the most significant acts of environmental policy of the Howard government.

The three credible Howard government policies on the environment in this particular bill aimed at curbing climate change were shifting the economy to a low-carbon future, a commitment to an emissions trading scheme and a renewable energy target—all three things that the Labor government, when we came into power in 2007, sought to build on. So the end of this act marks yet another retreat by this government not only from the Labor government's agenda on decarbonising the economy but even the Howard government's limited efforts in this area.

It is the repeal of a scheme that an independent review commissioned by the government found was saving companies over $800 million a year in energy costs. It did have a small compliance burden; we do not resile from that fact. But that should be contrasted with energy savings of over $800 million a year. I would submit that that is a very small cost for a very significant payoff.

The stated reasoning for repealing this bill is that large electricity customers, that people in Australia, are responsive to rising power prices—that consumers are responsive to price signals and are reducing their electricity consumption accordingly. That is a reasonable statement; electricity is an elastic good. The unfortunate thing is that it demonstrates the hypocrisy of the government because that contradicts flatly what their so-called Minister for the Environment has been stating for the last four years, that one of the reasons they have opposed the carbon price—a fixed price emissions trading scheme transitioning to a flexible price emissions trading scheme—is that 'electricity is a inelastic good', that you cannot increase the price of electricity and expect demand for electricity to fall. This is a concept that is blatant nonsense and yet again was one of the final nails in the coffin of the economic credibility of the government and, in particular, the Minister for the Environment.

This bill is part of a broader agenda of removing any attempts to decarbonise the economy. This bill is part of any attempts to shift Australia's energy structure away from carbon-intensive energy production. The constant attacks on a renewable energy target that we are witnessing now is another part; appointing a self-confessed climate sceptic to review the renewable energy target was a ridiculous and cynical move, a move that jeopardises an industry that employs 24,000 Australians, has $9 billion in sunk investment and another $9 billion of investment in the offing out to 2020. This is a scheme that on independent reports is suppressing energy prices rather than increasing energy prices. So this is another part of their attacks on decarbonising the economy.

Another one is their abolition of the Australian Renewable Energy Agency—ARENA—a body that they voiced support for prior to the election but—surprise, surprise!—have now decided to axe in their latest budget. This is an agency devoted to plugging the commercialisation gap in developing new technologies; it is an agency that those opposite are all too happy to go to unveiling of grants and plaques for but are then happy to kill, destroying $1.3 billion of additional investment in clean energy technology.

It would be remiss of me not to point out that the Parliamentary Secretary for Industry only last month attended the unveiling of a project funded by ARENA that was developing solar thermal technology at the Wallsend Swimming Centre. That is a great project, and the parliamentary secretary was very enthusiastic about it—as he should be. But that was funded by ARENA money that they have now cut from the budget for future projects—a tragic event.

Another attack on any efforts to decarbonise the economy is the stated goal of abolishing the Clean Energy Finance Corporation, a finance corporation that is doing great work. With $600 million worth of investment—half of which is energy efficiency initiatives with companies that are covered by the bill we are debating now—they have managed to leverage that up to $2.4 billion of investment in clean energy technologies. This investment will cut 3.9 million tonnes of carbon dioxide per annum from the environment at an abatement cost of only $2.40—a very low abatement cost—while returning to the taxpayers a return on average of seven per cent, well above the Commonwealth long-term bond rate, which was the stated financing goal.

These are all parts of the last government's efforts to decarbonise the economy, to shift the economy at a relatively low cost into a low-carbon economy where we can compete with the rest of the world, which are all being ripped away by a government intent on returning to the fossil fuel era while the rest of the world moves in a completely different trajectory. For example, overnight, President Obama announced very striking limits on emissions from coal fired power stations. The New York Times stated that it is the single largest climate change initiative of the United States government ever. A 30 per cent cut in fossil fuel emissions from coal fired power stations was his second choice. His preferred choice was an emissions trading scheme but he was unable to get it through Congress because of the climate change sceptics in the Congress, principally in the Tea Party—we see plenty of people who would line up with the Tea Party sitting opposite me today—so he has had to resort to direct regulation. But that will drive a 30 per cent reduction in carbon emissions from the energy generation sector, which is the most significant emitter of carbon dioxide in the US economy.

The rest of the world is taking action. Over one billion people now live in countries or regions governed by a carbon price. By the end of 2016 that will be three billion people. Unfortunately, the Australian government is intent on going in another direction of condemning us to being a rustbelt economy while the rest of the world embraces these clean energy opportunities. It is all built on a falsehood that the carbon price is not working, that an emissions trading scheme is not providing appropriate incentives to decarbonise the economy in conjunction with things like the Energy Efficiency Opportunities Act. The facts are already starting to show this is patently false. For example, since the carbon price began in July 2012, emissions in the electricity sector are down over 7.6 per cent or the equivalent of 14.8 million tonnes of carbon dioxide. This is the equivalent of taking three million to four million cars off the road.

A frequent response by those opposite is, 'Well, emissions in the economy as a whole are broadly flat. They have only fallen slightly by 0.1 per cent.' That is true but all the growth has been in sectors not covered by the carbon price. So their simplistic mischievous response is actually undermining their argument and supporting the argument of those people who support of market based mechanism to combat climate change complemented by policies such as energy efficiency opportunities.

It contrasts directly with their patently ridiculous Direct Action Scheme, a scheme of command and control, a scheme that they could not find a single reputable economist to support. A recent survey of 35 economists found 33 of the 35 economists opposed the scheme. The only two economists that they could find that supported the scheme were one who supported it because he did not accept that science of climate change so he thought direct action would do least harm in combating climate change and one who supported his own unique scheme and saw direct action as a way of getting there. They could not find a single reputable economist to support their dog of a scheme.

They are still walking away from their scheme despite paying lip service to it. For example, the Minister for the Environment stated only one week before the budget that the forward estimates commitment to the Emissions Reduction Fund—the centrepiece of direct action—would be $2.55 billion. Yet when the budget was released two weeks ago, we only saw $1.1 billion allocated in the budget to be spent over the forward estimates. Yet again, not only is direct action a fig leaf but it is a fig leaf that they do not match with any significant amount of dollars.

The Energy Efficiency Opportunities Act was a good act. It was an act implemented by the Howard government. It was an act supported by Labor. It was act that was delivering over $800 million a year in energy costs. It was an act complementing other strong policies to decarbonise our economy: the Renewable Energy Target, the Emissions Trading Scheme, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency. All of these are being undermined by a government intent on being economic and environmental vandals.

Unfortunately, it will be the Australian population that will pay the price, not just people of voting age now. I have a daughter who is one-year-old and I want her to grow up in an economy that is decarbonised, not because it means that we have got a chance of saving the Great Barrier Reef—a reef that delivers $9 billion in tourism revenue each year—or saving agriculture in the Murray-Darling Basin—a basin that is at risk of losing 97 per cent of its production if climate change is left unchecked—but because I want her to grow up in an economy where we can take advantage of the opportunities of living in a low-carbon economy, of developing the technologies that in the future can spark a new industrial revolution and that can be strong manufacturing sectors for our Australian sector—and we need them after the death of the automotive industry under the current government's negligence.

It is very important that we continue attacking a high-carbon carbon economy by supporting energy efficiency, by supporting a market mechanism to combat climate change and by placing a hard cap on pollution. Unfortunately, this repeal bill is a step backwards not only from the Labor government's agenda but from the Howard government's limited agenda on climate change. It represents another step in the Liberal government, the coalition, becoming the Tea Party of Australia where they reject the science and they reject the reputable economists all to appease people like Alan Jones and other cranks who have a very poor impact on Australian society and public policy discourse. So the Labor Party will reluctantly wave this bill through but we would like to place on record our deep opposition to the repeal because yet again it demonstrates the hypocrisy and economic illiteracy of the coalition government.

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