Thursday, 28 August 2014
Australian Renewable Energy Agency (Repeal) Bill 2014; Second Reading
I am opposed to this bill and opposed to its passage through the parliament. The purpose of the Australian Renewable Energy Agency (Repeal) Bill is to repeal the Australian Renewable Energy Agency Act and the great work of this organisation—again, a classic example of the difference between this Abbott government and the Labor Party when it comes to protecting our environment; encouraging investment in renewable energy in our economy and, ultimately; ensuring that we hand on a cleaner, safer environment to our children.
The Australian Renewable Energy Agency was established in 2012 by the previous Labor government. The ARENA is an independent agency designed to improve the competitiveness of renewable energy technologies in Australia and to increase the supply of renewable energy to Australia's electricity markets. This bill to repeal that organisation and the philosophy behind it is well and truly rooted in the 1970s. It demonstrates the attitude of this government when it comes to encouraging the uptake of renewable energy in our economy. ARENA works to reduce the cost of renewable energy technology development and increase its use in Australia.
Through ARENA, financial assistance, largely through grants, has been provided to nearly 200 renewable energy developments, including the construction of renewable energy projects, the research and development of various technologies and the development and deployment of renewable energy, along with activities to capture and share knowledge gained through all of these projects to advance the sector towards commerciality. Seventy per cent of ARENA funding has gone to projects in rural and regional Australia, and those projects have created jobs for the future in these areas and encouraged investment in renewable energy in important localities and sectors of our economy. The Abbott government's axing of this very important body and its work puts many of those projects in jeopardy. On 1 July this year ARENA celebrated its second anniversary. In existence for two short years, ARENA has succeeded in shifting Australia's energy landscape. In his second reading speech introducing this draconian bill, the Minister for the Environment acknowledged the considerable success of ARENA, but, rather than seek to continue the program that this bill repeals, the government has decided instead to thrust its head in the sand and hope for the best.
Australians know and understand that climate change is real. They understand that climate change is occurring. They understand the vulnerability of Australia when it comes to climate change and our incidence of and our propensity to be affected by extreme weather events. They know that climate change is occurring, and, importantly, they know that as a nation we need to take action to combat climate change. If we are going to meet the IPCC recommendations, if we are going to meet the international obligations for which we have signed up as an economy to reduce emissions in Australia, then we need to be taking coherent and effective action to transition our economy into a clean energy future, to provide incentives for the development and the research of clean energy technologies, to provide the incentives for businesses to provide seed funding and to invest in renewable technology projects, and of course to provide the wherewithal and the expertise to manufacture those clean technologies into the future. That is what will drive future economic growth.
Many other economies in the world now see this. In our region many economies see this, including one of our closest neighbours, New Zealand, and, increasingly, our most important trading partner, China. China now has emissions trading schemes working in five—soon six—provinces. And during this five-year plan period of the Chinese government, we will have at the end of it a nationally operating emissions trading scheme. And we would have been looking, I might add, to link that trading scheme to neighbours and trading partners within our region, including Australia. But what has Australia done? We have gone in the opposite direction. We have taken a backward step when it comes to combating climate change, and this bill is a further example of that.
A recent Newspoll published in The Australian on 20 August this year showed that a staggering 98 per cent of Australians support renewable energy in our nation. A few days before that Newspoll was published, research was released that showed that energy companies stood to gain $10 billion in profits if the government winds back the renewable energy target—$10 billion for those dirty, polluting industries, predominantly coal fired power, if the government winds back the renewable energy target. And this research sheds an illuminating light on why the Prime Minister is so determined to either freeze or scrap the renewable energy target.
Australia was taking action on climate change. We had developed a price on carbon. That had been recommended by no fewer than 37 parliamentary inquiries in Australia. And when it came to the issue of how we tackle climate change in this country, since 1992 there have been no less than 37 parliamentary inquiries—and every single one of them recommended that a market-based mechanism was the cleanest and most effective way to reduce emissions within our economy, to provide a market-based approach, to allow businesses, households and individuals to make their own decisions about how they change their behaviour and reduce emissions within our economy. But despite this, despite all of these parliamentary inquiries, the coalition has failed to heed this message. Instead, it has chosen to take an axe to some of our most important institutions charged with the task of leading the nation into a clean energy future. The Australian Conservation Foundation's campaigner Tony Mohr said in the Sydney Morning Herald:
[These cuts] will starve research and development of clean energy in Australia, moving us to the back of the global race for clean tech.
This, in addition to the axing of the Clean Energy Finance Corporation, paints a vivid picture of this coalition's indifference to the global challenge of climate change.
Labor believe in taking real action on climate change. Importantly, we also believe in ensuring that our economy should transition to a clean energy future. If we misjudge our policy approach to tackling climate change, then we will all pay. But, alarmingly, those that will pay the most and those that will suffer the most, if we do not get the policy right on tackling climate change, will, unfortunately, be our children. They will bear the unbridled economic and social brunt of a mistake on climate change policy. But that is exactly what we are doing with climate change in this country at the moment. This bill is a classic example of that mistake that we are making. We are moving away from promoting research and development and the commercialisation of renewable energy projects. And that will be paid for by our children. That is why this bill must be opposed.
Australia is a nation of extreme weather events—of droughts and flooding rains, as it has been famously put. Failure to tackle climate warning and warming will see a greater incidence of extreme weather events that we will all pay for. Now, that is not my view. That is not the view of people who are uninformed in this area. That is the view of scientists. That is the view of climate change experts. What are we to do—ignore that advice? The great irony is that this is exactly what is occurring in this bill.
The coalition has developed a policy of direct action. It is a system of subsidies for companies paid for by us, through our taxes, to hope that companies will install cleaner technology that will, hopefully, reduce their emissions. So this is the great irony of this government's policy on clean energy: here we have the Liberal Party, the bastion of free-market economics—of the value of markets determining efficient outcomes within our economy—arguing for Soviet-style direct subsidies to combat climate change. And here you have the Labor Party arguing that we should have a market-based mechanism to allow companies and individuals and households to make their own decisions within the market about how they will reduce their emissions and change their behaviour.
All economists in our economy who are worth their salt will understand and know that that is the most efficient and effective way to change behaviour. The price allocates capital in market-based economies. And that is what was occurring under the Labor government, particularly in respect of the development and the commercialisation of renewable energy projects. In closing ARENA, we will see the promotion of renewables be reduced. We will see subsidies being offered to polluting companies in the hope that they will install new technology to reduce their emissions.
The other great irony is that the government claims there is a budget emergency. They claim that there is a need to take drastic action to clean up the budget and to get into a better financial position. But what we are seeing with their climate change policy is the complete opposite, because they are removing about $11 billion of revenue each year that is raised through the carbon price. It is raised by that market-based levy on big polluting companies—so that $11 billion in revenue has gone. And what do they put in its place? They put in its place $1.56 billion worth of expenditure each year, so, in net figures, the budget ends up about $12½ billion worse off. Our environment ends up being more dirty as we are not reducing emissions within our economy, and, importantly, the financial and economic incentive to invest and to make the transition to a clean energy future is also removed within our economy. It is a backward step in any objective analysis of this policy.
This policy of direct action will be paid for by all of us through our taxes, but we will not get the investment in clean energy technology and we will not get the market-based incentive to make a transition to a clean energy future. Although we pay the costs of the scheme through our taxes, only those who receive the subsidy will benefit. That is the great downfall of this, and that is being recognised—traditionally, I might say, by the Liberal Party in promoting market-based approaches but also by economists in respect of this. This is an unfair and inefficient system. More importantly, it will not work. It will ensure that our children have to clean up our policy failure at a greater cost.
Of course, we all know the Prime Minister's feelings on climate change. They were made clear a long time ago. 'Absolute crap'—they were the words that the Prime Minister used to describe the science around the greatest challenge of our generation. The direct action policy is proof of that attitude. The Abbott government is now determined to hurt Australians with this unfair budget, and also to hurt future generations of Australians by saddling them with the cost of taking action on climate change—by passing on to the next generation of Australians that cost, which will increase into the future if we do not take action now, of taking action to tackle climate change.
The Abbott government's Renewable Energy Target Review has only ever been about politics. It does not do anything to promote a clean energy future in our economy. Not only is this review the wrong way to go but it has also sparked a war within their cabinet and put billions of dollars worth of investment in clean energy technology and jobs at risk. Under Labor's renewable energy policies, wind power generation has tripled. The number of jobs in the renewable energy sector has tripled. The number of households with rooftop solar panels has increased from 7,400 to almost 1.2 million. Labor's renewable energy policies have been a success story but they are now under attack from this government. The abolition of the Australian Renewable Energy Agency is a classic example of that. That is why this policy must be opposed and this bill must be opposed.