Wednesday, 11 September 2019
Matters of Public Importance
Thank you to the members from the crossbench for bringing forward this MPI. The members, I think, bring forward what is a very important issue and, like you, I've lived through drought in this region. I grew up not far from here and I remember well the early eighties drought and the impact it had on the people around me, on the people I grew up with, on my family, and on many others in regional centres.
These are devastating times for rural Australia, and climate matters. So, too, does access to affordable, reliable power. I visit so many manufacturing facilities and small businesses around Australia—cane growers, foundries, smelters—who all rely on affordable, reliable power for their jobs, for their families' welfare and for their lifestyle. This is enormously important and that's why my job as Minister for Energy and Emissions Reduction is to bring power prices down whilst keeping the lights on and whilst we meet our international obligations. That's why we took to the last election our policy on a fair deal on energy for all Australians.
On the price side, while there is much more to do, I'm pleased to confirm to the House that recent ABS data tells us we're making good progress on electricity prices coming down. The ABS data shows that, in the last two quarters, we've had two reductions and that is very good news. We know that the default market offer reference price and other initiatives like the Retailer Reliability Obligation arrangements, which I'll come back to in a moment, have been important in achieving this outcome.
But, alongside that, we've seen record levels of investment in our electricity sector and it has been in renewable energy. I refer the House to Bloomberg New Energy Finance's work on this, which is very much in line with others. Australia is now leading the world in its investment in small-scale solar, large-scale solar and wind. In fact, our investment per capita was $514 in 2018. The next country in the world was almost half of that, Japan. So if you halved our investments in clean energy, we would still be one of the fastest investing countries in the world. Behind that are United States, Spain, United Kingdom, South Korea, Germany and so on. To give you a sense of how extraordinary this is, if you combined the investments in clean energy in the UK, Germany and France together, in 2018 we invested more per capita than all three of those countries combined, which is an extraordinary achievement. But it is creating an enormous challenge and that enormous challenge is: how do we maintain the reliability and affordability of our electricity grid with that kind of investment happening? That's why the government is committed to the Retailer Reliability Obligation, which requires the electricity retailers years ahead of time to commit to the capacity they need to meet their customers' needs. It's also why we've brought forward the Underwriting New Generation Investments program, with what were originally 66 projects put forward now down to a short list of 12, including a range of different technologies with a particular focus on firming up, on having access to variable power which is dispatchable—there when you flick the switch. I was down in South Australia not long ago, looking at pumped hydro projects at Goat Hill and Baroota up around Whyalla and the Flinders Ranges. These are great projects to be working on. There is more we're looking at. Gas is going to play an enormously important role in this, and I'll come back to that in a moment as well.
All of that is focused on reaching our international obligations, our 26 to 28 per cent target. That is a strong target, as the Prime Minister said earlier in question time. Indeed, what it implies is a more than 50 per cent reduction in our emissions per capita by 2030 on 2005 levels; a 65 per cent reduction in the emissions intensity of the economy. If you want to compare that with other countries: the US's commitment is to 62 per cent, New Zealand's is to 61 per cent, the EU's is to 57 per cent, Canada's is to 57 per cent, South Korea's is to 57 per cent and Japan's is to 41 per cent. Again, we are leading the pack with a strong economy. That is the way it should be: balancing a strong economy with strong emissions targets.
We have a comprehensive set of policies to continue to drive down emissions, but most important in this, as in anything in life, is track record. Let's look at our track record. When we came into government, the data showed that there was a 755 million tonne gap to reach our 2020 Kyoto obligations. We had to find 755 million tonnes of abatement when we got into government. Well, as of December last year, here's where we sit: we will overachieve by 367 million tonnes. Again, we're turning Labor's deficits into surpluses; that's what we do. A 1.1 billion tonne turnaround is what we have done here. We will keep going down that track. Now, as we look forward to 2030, of course we knew as of December last year that we had to find 328 million tonnes of abatement. Well, we laid out in Melbourne earlier this year, before the election, how we are going to do that down to the last tonne. One hundred and two million tonnes from the Climate Solutions Fund. That builds on the very good work of the Emissions Reduction Fund, which has delivered over 190 million tonnes at a cost of $12 per tonne. This program is the envy of the world. Among the Clean Development Mechanism and other mechanisms set up by the UN, this has been the best. It is an extraordinary achievement: low-cost abatement which doesn't destroy Australia's economy and which ensures that our businesses remain strong.
We committed in the Climate Solutions Package to 63 million tonnes of abatement from energy efficiency. Let's be clear: the hardworking households and small businesses of Australia do a great job on energy efficiency, and they're going to keep doing it and we're going to keep helping them to do it. I was in the electorate of Higgins just the other day looking at these extraordinary technologies we're seeing now which are helping small businesses and households to drive energy efficiency. On top of that, we know we'll get 25 million tonnes of abatement from our major generation projects—hydro projects like Snowy 2.0 and Battery of the Nation. On top of that, they can firm up that intermittency which is such a threat to the reliability and affordability of our grid.
Those opposite and some on the crossbench are keen to talk about our LNG exports. They see them as evil because—it is true—our LNG exports result in fugitive emissions, and energy is required for compression of the gas before it is exported. Those emissions from our LNG exports have been growing. There's no doubt about it. Last year they grew, at 4½ million tonnes. They've been a challenge for us in continuing to drive down emissions in Australia. But let me tell you what they're doing. They are reducing global emissions, because we are selling gas to China, South Korea, Japan—
Mr Bandt interjecting—
I see that the Green crossbencher is not happy with this, because he knows it's the truth. They have reduced the equivalent of 28 per cent of our emissions a year in our customer countries. That is an industry we can all be extremely proud of.
By contrast, the Labor Party and the Greens have a plan—different plans, but each as bad as the other, frankly—to destroy the economy in an attempt to halve the emissions in our economy by 2030, without laying out how they're going to do it. Fifty times we heard those opposite attempt to answer the question as to what the details and costings of those policies were, and they failed every time. The Australian people called them out, which is why the member for Hindmarsh has admitted now that it's time for a full-frontal review of their policies, because they got them wrong. Let me give them a tip: they should follow the WA minister's tip. He said, 'We respect the fact that the current government won the election and has a mandate to follow its policies through.' That is from a Labor Minister.