Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Before debate on the Building Energy Efficiency Disclosure Bill 2010 was interrupted last night, I was observing that an Australian Conservation Foundation submission has recommended:

… governments should adopt a package of priority measures for promoting energy efficiency in the buildings sector that covers the following areas:

• building codes for new buildings;
• passive energy houses and zero energy buildings;
• substantial opportunity for retrofitting existing buildings;
• more energy efficient appliances;
• windows and other glazed areas.

A recent report by UNEP Assessment of Policy Instruments for Reducing Greenhouse Gas Emissions from Buildings 2007 concluded that “Regulatory and control instruments such as building codes were revealed as the most effective and cost-effective” policy instrument open to Government for addressing greenhouse gas emissions from the built environment.

The concept of zero carbon precincts is taking off overseas and, given that Australian developers are amongst the global thought leaders in driving innovation, the government should give serious consideration to providing greater incentives to get in place demonstration programs in each of our capital cities. A bit like tax-free hubs, these precincts could attract a concessional rate of tax and treatment and they would drive successful innovation and competition if they are done right. The Australian Conservation Foundation submission also includes a recommendation for Australia to be aiming for higher energy saving standards above six stars for new homes. It points out:

In the US, Canada and the UK, average building standards are 6.8–7.5 stars for similar climate zones to Australia.

               …            …            …

Not only should Australia fast track towards 7 to 8-star standards for new homes and renovations by the end of 2010, if we want to keep up with international best practice, we also need to address the increasing size of houses and the direct energy use of lighting, heating, air-conditioning and hot water and commit towards zero carbon homes by 2020. The UK has committed to making all new homes zero net carbon by 2016.

A collaboration of organisations including ACF, Alternative Technology Association, Friends of the Earth, Environment Victoria, and Moreland Energy Foundation Limited produced a report last year, Towards climate safe homes The case for zero emissions and water saving homes and neighbourhoods, which calls on the government to commit to climate safe and zero net carbon new homes by 2020.

In terms of retrofitting existing homes, a package of home audits linked to energy and water efficiency improvements could be focused initially on 3.5 million low-income households scaling up over time. Such a program could create 40,000 jobs and generate energy cost savings of $14 billion over seven years, with an investment of about $8.7 billion.

               …            …            …

Existing homes should be upgraded to a minimum of 5 star NABERS rating by 2020.

So these are observations made by the Australian Conservation Foundation and others.

This bill represents another string in the bow of climate change action that the Labor government has been pursuing to ensure that all policy fronts are explored in addressing this critical issue. In the time remaining to me I want to make some observations about the work of the Alliance to Save Energy because their focus is on energy efficiency. As I said earlier in the debate, I think energy efficiency has been something of a Cinderella in terms of discussion about reducing carbon emissions. The Alliance to Save Energy is a collaborative alliance between energy efficiency stakeholders. Their research approach is to work with partners who are already active in this area, seeking to leverage existing research programs and therefore provide additional value. Their research has several key themes. The first relates to energy use, examining physical end-use energy demand including ‘new technologies and appliances’, ‘trends in energy use’, ‘energy efficiency financing techniques’ and ‘ways to motivate smarter end-use behaviour’. They also focus on energy networks, reviewing ‘different energy delivery systems and associated energy savings, including energy transportation and distribution to the point of end-use’. The third is examining energy culture, investigating ‘Australia’s cultural readiness to embrace energy efficiency’ including ‘commonly held perceptions about energy efficiency’, ‘predictable patterns of energy behaviour towards known barriers’ and ‘how energy choices are influenced and made’. I want to draw to the attention of the House an article by their CEO, Mark Lister, titled ‘Unlocking energy efficiency: what Australia can learn from the rest of the world’, which is in the May-June 2010 issue of the journal EcoGeneration. In this Mark Lister points out:

The International Energy Agency … estimates that energy efficiency will account for around 54 per cent—

that is to say more than half—

of global emission abatement to 2030, in a scenario where global carbon dioxide levels stabilise at 450 parts per million.

Mark Lister points out, in relation to California, that their citizens use about 40 per cent less electricity than other Americans. He says:

This success comes from stringent energy codes and standards for buildings and appliances, and ratepayer-funded energy efficiency programs administered by California’s electric and gas utilities. According to the 2009 California Green Innovation Index, California has prospered since energy efficiency regulations were introduced in the 1970s.

Mark Lister says:

In Australia, energy consumption continues to increase. Rather than focusing on ways to reconfigure industry to reduce consumption, billions of dollars are spent to prop up old networks and coal-fired power stations. The cost of this is ultimately passed on to consumers through increased electricity bills.

…            …            …

… state and federal governments can intervene directly through strong policies and regulations to net economic benefit. We can do better with more stringent building codes, targeted information, electricity network regulation, and creating frameworks for parties that currently have no incentive to reduce consumption.

Our governments should consider these options, alongside incentives and other programmes, to encourage the large-scale uptake of energy efficiency.

He goes on to say:

The work of the Prime Minister’s Energy Efficiency Task Group offers a promising acknowledgement of this potential. The Group’s brief is to create a step-change improvement in Australia’s energy efficiency by 2020, and place Australia at the forefront of OECD energy efficiency improvement.

…            …            …

Energy efficiency is a proven, simple and cost-effective way to reduce carbon emissions and can be implemented now using existing technologies. It cuts electricity bills, decreases among networks during peak periods, and reduces the need for costly network infrastructure.

It also:

… buys time for other solutions to be developed and is a fundamental part of any response strategy.

I commend Mark Lister’s article, and I commend the bill to the House.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

In addressing the Building Energy Efficiency Disclosure Bill 2010, let me set the challenge for Australia and the globe in context. This bill is about two things: national economic efficiency and the great and abiding challenge of reducing the globe’s emissions of those gases which contribute to the great issues of greenhouse gas, climate change and the emissions reduction path which we all must face as we look forward over the coming decade, generation and century. We in Australia contribute approximately 1.4 per cent—560 million tonnes—out of a global CO2 figure of approximately 40 billion tonnes per annum. That figure is moving, of course, but it represents a global approximation. What we see there is that acting alone we will be irrelevant but acting in concert and in unison with other countries we can be successful.

The great global deal to address this issue will depend upon China and the United States—which, together, have emissions approaching 50 per cent of global emissions—striking a bilateral agreement which paves the way for a global agreement. Within that context, however, we can and must—and have been—taking immediate steps. In Australia, approximately 50 per cent of our emissions come from the creation of electricity. Whether it is through coal, gas or other forms of fossil fuels which go into making electricity, approximately 50 per cent of Australia’s emissions derive from that source. The consumption of electricity has been increasing over time, and that is understandable. As we achieve the desired elements in our quality of life, we face the simple fact that our office environments, our commercial environments and our domestic environments are all energy hungry.

To put it in context, as we consider the variations to the renewable energy target bill in the Senate today, and most likely in the House over the coming days, the very reason for the bill before us tonight is that we are likely to see an increase in energy generation in Australia from approximately 240,000 gigawatt hours at present to approximately 300,000 gigawatt hours by 2020. Those figures are open to interpretation. The 240,000 gigawatt hours figure will vary depending on whether you are talking about received or transmitted energy, but the general orders of magnitude are significant. Over the course of a decade, we are likely to see in the vicinity of a 25 per cent-plus growth in energy generation in Australia. That would be the single biggest contributor to greenhouse gases in Australia over the coming years.

Where does the energy efficiency challenge fit in with that? I will start with the challenge and then go to the solution. The challenge is simple: to reduce the amount of energy needed to achieve the same or better quality of life outcomes for Australians. How do we bring this about? McKinsey recognised in the cost curve it prepared for the Australian economy as a public service to Australian policymakers and the public that it is possible for Australia to achieve emissions reductions, through energy efficiency steps, of approximately 50 million tonnes per annum over the coming decade and beyond. The Australian Sustainable Built Environment Council has provided a figure of 40 million by 2020. Other groups, such as the Energy Efficiency Council, provided a figure of a similar magnitude, and the Green Building Council, under Romilly Madew’s stewardship, has done incredible work in this space. All of those organisations have identified comparable levels of savings over the coming decade and beyond through genuine energy efficiency measures.

Let us understand where these measures fit on the cost curve for Australian emissions reductions. The latest version of the greenhouse gas abatement cost curve for Australia set up through the work of Monash University and ClimateWorks in conjunction with McKinsey and Company shows that energy efficiency in the commercial environment delivers a net positive return to Australia on the basis of the investment. It is, however, hostage to a series of barriers that inhibit action where it would appear on the face of it to be economically prudent to take such energy efficiency measures. Essentially, it is first the problem of split incentives between landlord and tenant. Secondly, it is the problem that a business will naturally prefer to invest a set amount of money, whether it is $1 million or another figure, in productive activity which will enhance its revenue through sales rather than in defensive activity which will reduce its costs in terms of electricity outlay. There is a well established history in terms of economic behaviour at the firm level where capital is organised to have a bias towards capital which will produce subsequent revenue rather than capital which will reduce subsequent expenditure.

We need to break through that barrier so as to provide incentives to ensure there is genuine energy efficiency in commercial and in domestic spaces. We know that commercial air handling, commercial heating and cooling and commercial lighting including street lighting in our public places can produce significant real and tangible greenhouse emission reductions. In order to effect this we need to do two things. First, we need to have efficiency measures, and this bill goes to that task. We have had some quibbles about the scope and scale, but the direction is clear and agreed upon by both sides of this House. The Building Energy Efficiency Disclosure Bill falls within that category of items which have bipartisan support, subject to agreement on small or minor elements in relation to its implementation. This bill sets up some of the measuring and some of the standards to ensure that we are in a position to make the savings which McKinsey, the Green Building Council, the Energy Efficiency Council, ASBEC and private firms such as Szencorp have identified.

The second big thing is to provide real and tangible financial incentives. That is why the coalition has established a direct action program. The heart of the coalition’s direct action program to achieve the objectives sought through this very bill is an emissions reduction fund. That fund, which totals approximately $10 billion over the period between when it would commence and 2020, which is $2.55 billion over the first four years, is very simple—it will purchase the lowest cost abatement available in Australia so long as it is measurable and verifiable. In that context energy efficiency is likely to be one of the greatest areas of contribution. The work we have done with the Energy Efficiency Council indicates that, with some additional measures but using a lowest cost abatement model, energy efficiency will contribute a minimum of 20 million tonnes per annum by 2020 out of our 140 million tonne challenge and objective. How that works is that if, for example, one were to be seeking to save a million tonnes of CO2 per annum, they would tender it up and say ‘We will, in return for a payment’—whether it is $10, $11, $12 or $13 per tonne—‘produce savings which would comprise a million tonnes of CO2 reduction against what would otherwise have occurred’, and that would be placed in the bidding market and we would purchase the lowest cost abatement.

What that means in practice is that it is the way, if you have a set amount of money to expend, to produce the greatest emissions reductions for the country. In other words, we get the most bang for our buck, we reduce our emissions most effectively, we create an abatement purchasing market rather than a tax or production market. It is very simple. If BlueScope Steel, which has approximately 10 million tonnes of emissions in Australia, were charged under the government’s emissions trading scheme, which has simply been deferred, then it would pay, at $20 a tonne, approximately $200 million for its activity. It might be able to reduce its emissions by a million tonnes, but it would still pay $180 million. Under our scheme, if its benchmark is 10 million tonnes, it can receive benefits and credits if it can make energy efficiency savings of a million tonnes. That is a positive way of providing incentives, rather than a system which represents a production tax and a unilateral approach which will simply transfer Australian production and, significantly, jobs and emissions overseas.

That is the system we have set out. It is a very simple system. We support this bill. We think it is a good bill. It is in line with things which we are proposing, subject to some of those elements which my colleague the member for Dunkley has outlined, but we also clearly and distinctly believe that the single fastest avenue to emissions reduction through energy efficiency is through a genuine emissions reduction fund, an abatement purchasing fund, which will find the lowest cost abatement. Energy efficiency will, on the advice of the Energy Efficiency Council, represent approximately 20 million tonnes, at a minimum, by 2020—we believe we can achieve more—and for organisations such as local councils, who want to tender in transfer projects such as transferring old lights to LED lights for their street lamps, this is an opportunity to save not just hundreds of thousands but millions of tonnes of CO2 equivalent per annum. We would encourage councils and others to look at the single fastest way to reduce emissions in Australia, and that is to provide incentives and then to participate in providing those incentives for reducing emissions. I commend the bill and I thank the House.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

It is always a pleasure to follow a member of the opposition whose comments I largely agree with. It is very pleasing to hear that the member for Flinders has a commitment to lowering greenhouse gases. I have to put on the record very firmly that I think that is one of the greatest challenges that our society faces both nationally and internationally. I believe it is an issue that governments all around the world and of all persuasions have to come to terms with. It is of vital importance if we are going to protect our planet and protect our way of life. One only needs to visit places like the Solomon Islands to actually see the impact that climate change is having on nations like that.

This is vitally important legislation that I am pleased to hear the opposition will be supporting and that I think all members should embrace. The Building Energy Efficiency Disclosure Bill 2010 creates a national scheme which requires disclosure of information about energy efficiency of large-scale commercial office space when that space is offered or advertised for sale, lease or sublease. It will create a legal requirement for owners of these large commercial buildings to obtain energy efficiency information and to disclose it to the prospective purchasers and lessees, as I have already stated. It will also require head tenants who are subletting office space to disclose this information. Funding of $5.3 million over four years was committed by the government in the 2009-10 budget to support the development and implementation of this scheme. This funding will cover the initial phase of the scheme, covering office buildings, and the expansion of the scheme over the coming years to include other types of commercial buildings. Administration of the scheme will be undertaken with the objective of moving to full cost recovery at the cessation of this funding.

The regulation impact statement, or RIS, indicates that the scheme will cost $18.7 million over 10 years. The 10-year cost includes both costs to building owners in obtaining the energy efficiency information that is to be disclosed and the cost to government in administering the scheme—so it covers the total cost. The benefit of the scheme will far outweigh this cost if as little as 3.9 per cent of the sale and lease transactions result in disclosure of information being used to purchase or lease office space that is more efficient by one star. The total energy cost saving will be equal to the cost of the scheme.

One of the real challenges that government faces is to encourage owners of commercial buildings and those involved in commercial activities to see the benefit of lowering their greenhouse gas emissions and investing in these new technologies. As has already been stated, there is always a greater incentive for a business to increase its profits rather than reduce its costs. Investing in greenhouse friendly technology will lead to a reduction in costs, but that is not quite as immediate as the investor or owner of the commercial building seeing that profit in their hands.

The National Strategy on Energy Efficiency was signed up to by the Council of Australian Governments in July 2009. That strategy was aimed at improving the efficiency of new buildings and major renovations by increasing the energy efficiency requirements in the 2010 update of the Building Code of Australia; providing information to the housing market by requiring Australian homes to provide energy, water and greenhouse performance information to buyers and renters, starting with energy efficiency in 2011—I know that is a little further down the track; and requiring owners of commercial office buildings and government buildings to provide energy efficiency information to interested buyers and tenants, starting in the second half of 2010. The legislation before the House brings that to fruition. It is of vital importance.

The national buildings framework will set increasingly strong minimum performance standards over time for new buildings and major renovations, with standards to be reviewed and increased regularly every three years. Eventually it will cover all classes of residential and commercial buildings. As I have already mentioned, this legislation applies to commercial buildings over 2,000 square metres. It will also apply to new and existing buildings; cover the building envelope including roof, walls, doors and windows as well as the energy efficiency of key building services; aim to bring together assessment and rating tools for existing and new buildings; include common measurement and reporting to help in setting up building standards and assessing building performance; allow for the use of rating tools developed by the market, provided they are accurate, transparent and user friendly; encourage innovation in meeting defined performance standards; continue to communicate energy efficiency improvements using star ratings; and facilitate effective monitoring and compliance.

The star rating system is vitally important and should be given credence in this House. This legislation looks at a minimum star rating of one. The NABERS energy rating goes up to four stars and sets out a number of ways that this can be achieved. It highlights opportunities to improve energy efficiency and looks at all initiatives that building owners can take to bring this about, including central chiller plants to identify efficiency improvements to control chilled water and improved in-house expertise and reporting, as well as monitoring heating, ventilation and air-conditioning systems, timer controls, optimum start controls, carbon monoxide sensors, reduced hours of servicing, after-hours switching, zone controls and weather compensation controls—and the list goes on.

It also includes external shading, internal shading, energy performance modelling, glazing and things such as roof colour, building insulation, testing, boiler size, technology and controls. There are many innovative ways to lower the energy consumption of buildings and improve their energy efficiency. It is only by making the initial investments and by providing incentives to building owners that these changes will come about. It is one of the easiest ways to bring about those changes.

The Department of Climate Change and Energy Efficiency in Canberra has a proposal for purpose-design office accommodation with high environmental standards. It is my understanding that the fit-out plan will incorporate a number of energy efficient and environmentally sustainable features, including operable windows. I find the simple fact that you cannot open a window in a building most perplexing. Within my own electorate office, I do not have a window that I can open. Being able to open a window to allow, in addition to the natural light, fresh air to come through removes the necessity to have an air conditioner running full-time, day and, in some cases, night. We have, though, had an energy audit within my office, so there is now a timer on our air conditioner. If we wish to have it operate outside hours then we need to do that manually. But, because of the design of the office, we have to have an air conditioner running and we have to have artificial lighting.

When you come across something as innovative as the proposal that has been put up by the Department of Climate Change and Energy Efficiency, you realise that those simple little changes can really make a difference. With this legislation, owners of commercial buildings will need to present energy efficiency information to people seeking to lease, sublease or buy their buildings. It is vitally important that we embrace mechanisms that are going to improve energy efficiency and reduce the impact of greenhouse gases and such on our environment.

Another recently announced government initiative is to make Newcastle Australia’s first smart grid city. I think that is great news for Newcastle and the Hunter. I see the member for Paterson is in the chamber. It will have an impact on his area. It will have an impact on the Shortland electorate, which is in the Lake Macquarie area. It really puts us in the Hunter at the cutting edge, because Australia’s first commercial-scale smart grid, which will help Australians save energy, connect renewable energy to the grid and tackle climate change, is being set up in the Hunter. It will commence in mid-2010, and the $100 million Smart Grid, Smart City demonstration project in Newcastle is expected to lead to Australia-wide advances in energy efficiency. It will place Australia at the cutting edge internationally and it is something that should be embraced. I am quite convinced that this trial will be very successful. I congratulate all who have been associated with it and I thank the Minister for Climate Change, Energy Efficiency and Water, Senator Penny Wong. We in the Hunter are pleased that the main demonstration sites will be in Newcastle, Lake Macquarie and the Upper Hunter, with parts of the trial in the Sydney CBD.

Smart grids, as I am sure most members know, will give Australian households and businesses tools to reduce energy use and energy bills in the future—something that all Australians would like to do. It helps them reduce their cost of living and, in addition to that, it makes them feel good about making a positive commitment to our environment. Smart grids give households the ability to manage their own energy use and information about their energy use. Consumers can also use smart grids with energy efficient smart appliances—matching them up. If the smart grid application is adopted throughout Australia, it could deliver a reduction of 3.5 megatonnes of carbon emissions annually. That is very significant.

I am very pleased that EnergyAustralia were successful in gaining the Smart Grid, Smart City project because I know that they have had a long-term commitment to being at the cutting edge of innovations on reducing greenhouse gases. It was EnergyAustralia that introduced Pure Energy to New South Wales. At the time, former Treasurer Egan was in state parliament. He came to Newcastle to announce that EnergyAustralia customers who signed up to the Pure Energy product could buy a proportion of their electricity from renewable sources. That proportion has now increased: people can buy up to 100 per cent of their energy from renewable sources. Many people have signed up to that product.

It is really good to see that EnergyAustralia is involved in the Smart Grid, Smart City project. The EnergyAustralia consortium includes the CSIRO, IBM Australia, AGL, GE Energy, TransGrid, Newcastle City Council and the New South Wales government. We need to congratulate all those who have been involved in winning the Smart Grid, Smart City bid. The people of the Hunter welcome it. They are only too pleased to be able to make their little commitment to adopting a more energy efficient lifestyle. It is programs such as Smart Grid, Smart City that enable them to do so. The bill before us today is a very important step towards improving our energy efficiency nationwide. I commend it to the House.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

I rise today to address the Building Energy Efficiency Disclosure Bill 2010. This bill takes further action to install mandatory commercial building energy efficiency reporting—action which was started by the former, Howard government. The coalition took the lead on this matter, and I am pleased to see that the Rudd Labor government has followed. As detailed in the coalition’s direct action plan, it is important that all Australians take action to protect the environment for our kids, their kids and so on. This action needs to be practical so that people can make a real difference in their everyday lives. It is simply not acceptable to punish people with great big new taxes or huge increases in energy bills.

Last year, EnergyAustralia increased the price of electricity to consumers by 20 per cent. IPART in New South Wales has agreed that the cost of energy can rise by 64 per cent over the next three years. It is beyond me how many people are going to afford their energy bills. If we want to change the way people treat our environment then we need to educate them. Most importantly, we need to give them the tools to make a measurable difference. That is what energy efficiency measurement and reporting is all about—giving businesses the tools to find out what they are doing right and what they could improve.

Specifically, this bill will set up a new scheme to publicise the energy efficiency of large office buildings in Australia. Large office buildings are defined as commercial spaces of more than 2,000 square metres. Under the legislation, large office buildings will be given a star rating for their level of energy efficiency, and this will be recorded in a building energy efficiency certificate. The certificate will need to be disclosed when buildings are put up for sale, lease or sublease. The certificate has three parts: firstly, the building will be given a star rating; secondly, lighting efficiency will be detailed; and, lastly, guidance will be given to new occupiers on how the energy efficiency could be improved. Star ratings will be determined by professional and accredited assessors. In terms of access, certificates will need to be placed in an online registry so that they are readily available to potential buyers and lessees. The star rating of each building will also need to be included in any future sale or lease advertisements, and there are heavy penalties for those who do not comply.

The benefits of such a scheme are wide reaching. For example, buyers and lessees of commercial properties will be able to consider the energy efficiency of buildings before they purchase and, therefore, will have a better idea of how high their greenhouse gas emissions will be. Knowing how efficient a space is will also give buyers a better idea of how high or low their power bills might be. Conversely, the scheme will also affect those selling properties. By having a mandatory star rating attached to an office, sellers of properties will be given an incentive to improve efficiency. With companies looking to be kinder to the environment, this could be a very important selling point.

As I have already touched on, one of the most important elements of this legislation is that it gives people practical tools to lower their carbon footprint. Importantly, it does not punish those who are already at world’s best practice—unlike Labor’s Carbon Pollution Reduction Scheme, which would have placed a huge tax burden on businesses in the Paterson electorate, even those who are already at best practice and working hard to lower their impact on the environment. For example, when I drive around the Paterson electorate, I see more and more homes and businesses with solar panels on their roofs. I have also personally visited businesses across the Hunter Valley which are working hard to lower carbon emissions, such as Corky’s Carbon and Combustion Lab in Ashtonfield. The employees there are developing technologies to directly lower CO2 emissions and better utilise waste in industries such as mining. They are in the perfect position to help others lower their impact on the environment.

Another positive example of a business in the Paterson electorate that is working hard to protect the local environment is Salamander Bay Shopping Centre. Its proactive approach to reducing its carbon footprint sets a positive example which I sincerely hope others will follow. I would like to mention a few details about that tonight. Salamander Bay Shopping Centre employed consultants to audit its existing systems and, as a result, the centre has now implemented a number of energy saving programs and facilities. These include waterless urinals, external light sensors, water restrictors to all taps, water-saving toilet systems, building maintenance systems for energy management and waste recycling. There are also a number of projects in the pipeline for introduction in the next 12 months. They include converting the shopping centre’s hot water systems to solar and making tenants aware of sustainability.

Tenants are important to shopping centres. One such tenant, the owners of the Donut King franchise in Salamander Bay, Adam and Jodie Olsen, have a very special interest in reducing their carbon footprint. They want to be a business that is sustainable and they want to be a business that lowers its footprint. They also wants to teach their young children, Sydney and Reagan, that looking after the environment, reducing their footprint and energy efficiency are important not just for today but for the long term. They are determined to educate their children about the environment.

This is a such a great example to others, because it shows how relatively small changes can make very big differences. Imagine if we could all convince our children to turn the lights off when they leave the bedroom, to switch their computers off when they have finished with the internet, to flick the television off at the wall when their favourite program is over or to turn off the heater lights in bathrooms when they are not needed. These small action when multiplied by millions of people would make a momentous difference to Australia’s carbon emissions.

What never ceases to amaze me as I drive through the capital cities of Australia in particular, with all the talk about energy saving and reducing our footprint, is the number of multistorey buildings with full lights blazing through the evening—24 hours a day, seven days a week and 365 days a year. That is not using energy efficiently or effectively. There is no-one in those buildings. There is no benefit ti lighting it up other than to improve the tourism vista of looking at a city all lit up. I am sure that we could retain a vista without that number of buildings, high buildings in particular, being all lit up at night. That is why practical changes such as those in this bill will make a difference.

This will also be an important bill as the Hunter Valley grows and expands. At the end of June 2007 there were 9,801 businesses in the Paterson electorate. While the great majority of these businesses are small, privately owned operations, we also have a number of sites which would be covered by the legislation, particularly in heavy industry. For these businesses, energy efficiency principles will become a normal part of setting up, moving or expanding operations. Therefore, a building’s impact on the environment will become a more mainstream part of the property market.

This is important if Australia is to develop as a leader in energy efficiency. It is also important in combating the current trend of growth in energy use. In fact, in the 15 years to 2006 there has been an 87 per cent growth in energy use in the commercial building sector. This coincides with an increase in working hours and advances in technology which have become essential for businesses right across the country. We as a society are also becoming increasingly reliant on air conditioning. That is why, in 2007, the coalition committed $20 million in support for the CBD energy proposal to build a 30-megawatt solar farm at Grahamstown. This would have included a state-of-the-art energy manufacturing factory to produce thin-film photovoltaic panels. It could have provided enough green electricity to power more than 30,000 homes.

Unfortunately, after taking over government, Rudd Labor did not follow through on the previous, coalition government’s pledge. Because of this government’s refusal to invest, 100 local jobs and hundreds of millions of dollars in energy manufacturing exports did not go ahead in our region. Under a coalition government, this solar farm would be operating now, providing real and measurable benefits to our carbon footprint and local jobs. Instead, under this government, this project is non-existent.

For any scheme to work well, experts should be consulted. It is those in the industry who know industry best. That is why the coalition has fought hard for amendments to the Rudd Labor government’s original Building Energy Efficiency Disclosure Bill—as a result of concerns from industry groups. Together with further assurances from the government, we are confident the bill can now be implemented. Changes to be made include deferral of the lighting tool, which is still under development, and the exclusion of short-term leases. In addition, more up-to-date emissions factors are to be included by assessors when determining the star rating of an office space. This will help ensure accurate and thorough energy assessments.

I noticed with great interest a press release by the Property Council of Australia today titled ‘Compromise on Energy Efficiency Disclosure Bill welcomed’. It reads:

“The Property Council welcomes the changes to the Bill and believes that it will provide a clear direction for building owners,” ...

Further, it says:

“We welcome the agreement to extend the transition period and changes to the proposed punishing penalty regime.”

“We also welcome the Government’s commitment to review the legislation, before it is expanded, to ensure that it is operating efficiently and effectively.”

“The Government has committed to the Opposition and the Property Council that building owners won’t be penalised due to bureaucratic delays.”

“It has also promised to delay the use of the lighting tool and consult further before it is finalised.”

…            …            …

The Property Council acknowledges that mandatory disclosure is an important energy efficiency measure supported by both the Government and Coalition.

Making sure that you engage and consult with industry is critically important. Again, this bill, with the amendments being put to it today, is another reflection of how little consultation this government did—the fact that it has to amend its own bill and is going through the process now. The one thing I say to this government is: learn from your mistakes of the past, consult and consult widely, and listen to those in industry that are the experts. This government has shown that it is not prepared to listen to the mining industry and it will suffer the ramifications of that. But in relation to this I am glad it has finally been dragged to the table to listen to the property industry on what is manageable, workable and effective.

With the Hunter Valley region so reliant on energy-intensive business and its support industries, it is vital we give people practical tools they can use to make wise choices and lower their emissions. That is the intention of this bill, which will make selecting energy efficient properties that much easier. Just as consumers can now go to the shops and select a washing machine, television, clothes dryer or refrigerator with clearly visible energy star ratings, so too will renters and buyers be able to select energy-efficient office spaces. I welcome any such practical program to protect our environment for years to come.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

The purpose of the Building Energy Efficiency Disclosure Bill 2010 is to create a national scheme requiring disclosure of information about the energy efficiency of large-scale commercial office spaces when offered or advertised for sale, lease or sublease. The scheme provides that corporations must not offer to sell, lease or sublease premises without a building energy efficiency certificate. Corporations must not advertise premises without a valid and current energy efficiency rating. This is all very nice, but I look at the Queensland government and I ask myself: how in heaven’s name could they have gone from spending $8,000 million—which we spent in 1990 when our government fell—to spending $42,000 million? Here is your answer—the BEEC. I thought it was not a bad idea that we give a guarantee on buildings in Queensland, and we were assured that the government guarantee would mean that if there was a shonky building the money would be put aside and the guarantee scheme would be accessed. I thought the government guarantee scheme on all new buildings in Queensland was a good idea.

Arguably, 25 per cent of the cost of a house in Queensland goes in government charges. It is quite extraordinary that once again we are putting a charge on everything: for example, $6,000 for the assessment of office space in Cunnamulla or in my own area in Julia Creek. This is quite ridiculous. In some of these places the office space itself would not be worth $6,000. But, even if it was in the city, don’t you realise that every one of these things costs somebody money? At the end of the day there is only so much money to go around. So, if the Queensland government—to use them as an example because the figures are available to me here—are spending an extra $30,000 million a year, where is it going? It ain’t going on health. Everyone in this place would agree that state governments are not meeting their health requirements. It ain’t going on roads. There is no-one in Australia who would claim that the state governments are spending it on roads. So where the hell is the money going?

The last government increased their spending by over 100 per cent and then had the hide to call themselves a conservative government. A conservative government is where someone like Bjelke-Petersen tells you have two per cent maximum growth in your budget and that is it—‘Don’t whinge, don’t complain and don’t explain because that is it.’ You had a two per cent increase in your budget and you made do with that. You thought intelligently and you got things done in a different way.

Up to date I have been pretty fascinated by the federal government. They really ask for trouble. In many ways I have found them much more approachable than the last government, and I hope that the representative of the opposition here takes that remark into account. That this government has been much more approachable than the last government has been my experience. Having said that, there has been more hot air in this place over the last three years about carbon emissions, renewables and trading and all of these things than I have ever heard on any other subject in my time in this place or in the state house in Queensland. I have never seen such a concentration on one single issue.

Let us ask ourselves the question: has there been any reduction in carbon emissions in Australia in those three years? No, there has not been the slightest reduction. The government leave themselves open. If I can help the government out and give them a little bit of advice after 36 years as a member of parliament, if you keep talking about it and you do nothing about it then don’t be surprised when the Green vote goes through the roof. If you are saying it is a serious problem, then the answer is the Greens, not you. It was not remotely surprising that I heard some of the biggest ratbags in my public life when I was advocating for the removal of what we call buffel grass, which is an introduced species in North Queensland. I said: ‘That is a great idea. You will probably wipe out about three million kangaroos because there was no grass at all before this grass came along. So, if you believe in wiping out three million kangaroos, it is a good idea. Go right ahead. I don’t know how you’re going to do it. You’re going to send dozers in everywhere, are you?’ This ratbag element is getting a terrific head of steam up. According to the last poll, the ALP will lose two seats, and arguably four, to the Greens. So stop talking about renewables and do something about it. You say you are doing something tonight. No, you are not; you are imposing $6,000.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I am not saying anything, please. I am not saying anything.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, you have been an example of intelligence, wit and also good government and good policy advice to the government, so I most certainly would exclude you from the description that I am putting down here. I must return to the issue before the House. Once again, you are making a lot of noise—not you, Mr Deputy Speaker, but the government—and are not giving a result. Is this going to reduce carbon? No, it is not. Please look at the polls out there. Listen to what people are saying in your electorate. Surely, you must know that the message is coming through loud and clear, but you are not getting it. You are sitting here again tonight imposing $6,000 upon every poor beggar that has an office in Australia for no purpose whatsoever.

Do you think they are all going to race out after they have expended this $6,000 and go around and put solar hot-water systems on their roofs? No, they are not. When I was minister for mines and energy in Queensland I did not have to be Albert Einstein to work out that I could save myself one huge coal fired power station if I simply put solar hot-water systems on all the roofs of all the government houses in Queensland. It was a really simple thing to do, and it worked out cheaper. The householder would save in electricity more than the annual cost for the solar hot-water system. I was at a sleep-out the other night with Dwayne, who has his own company, and he said, ‘We put to the state government that a mass purchase would mean that we could bring the cost of the solar hot-water systems down.’ That proposition will reduce the amount of carbon. Forty per cent of domestic consumption is the heating of water. If you put in a solar hot-water system you will not reduce it by the whole 40 per cent but you will most certainly reduce it by more than 20 per cent. As the minister in Queensland I would have saved a $1,000 million power station. The interest and redemption on capital servicing was $100 million a year and we were probably up for another $60 million or $70 million to run it, so I was going to save the electricity consumers of Queensland $200 million a year simply by writing on a piece of paper in a cabinet submission that we put solar hot-water systems on all houses and call for expressions of interest.

We did not talk about it; we just went out and did it. We designed a house that, by standing in the sun, became a static air-conditioner. It had a big, high, steep roof, so it sucked the air up from the verandas, and mister jets put a very thin film of water down on both verandahs so the air that would be sucked in over it would be cool, with the constant circulation of air through the house. These were not Albert Einstein solutions. I personally had a look recently at the Dulux product through Jeffrey Knuth company in Townsville. We decided that our roof had a number of rust spots on it but we could prolong the life of the roof by some 50 years. We knew a number of people who had put this coating on. I found out that we did not need air conditioning during midsummer in Queensland once we had this reflective coating on the roof. I am not saying they are all as good as this particular model, because they are not. Of course, the corollary of that was that I had to use a blanket if I wanted to watch television during winter. All the more credit—we did not need a heater in North Queensland, though we probably did need a blanket. I am just saying how enormously effective a reflective roof is. But here we are adding $6,000 to the cost of every single office in Australia instead of going to a solution which would reflect the heat out of the home and provide us with comfortable living, with no cost to the environment or the atmosphere in any way, shape or form—and, quite frankly, at no cost to the person in the house or the office either because the heat is being reflected.

Having said all of those things and returning to the issue of the coating on the roof, there is a little sting in the tail here, because as Northern Australians we are just a little sick of being treated as second-class citizens. I am told that the golden boomerang operates under the golden rule. The golden boomerang is Brisbane, Sydney, Melbourne and Adelaide. Mr Deputy Speaker Sidebottom, being from Tasmania you would know that the golden boomerang gets it all, and Tasmania, North Queensland and to some degree Western Australia get absolutely nothing. We have a winner-takes-all system in Australia; we do not have the checks and balances that were put into the system in the United States. We do not have a multiparty system, which every country on earth, with the exception of Australia, now has. You can say that America has not, but they do not vote along party lines because they have a primary system even for their congressmen, and that means that a politician is answerable to his electorate, not to his party. To go back to the golden boomerang and the golden rule, I asked the person who referred to it what the golden rule is. It was explained to me that it is: he who has the gold rules. This person was saying it in connection with Woolworths and Coles. He said, ‘It’ll end up being decided along the lines of the golden rule—he who has the gold rules.’ Mr Deputy Speaker, you would sympathise with me interpreting the golden rule a different way. We would put a bit of a twist on it and say: he who rules gets the gold. That would be the golden rule as Tasmania and North Queensland would see it.

We are a little bit sick of this in Northern Australia, and very serious things will happen if we continue to be treated the way we are treated. Coming from Tasmania you would sympathise with us on this, Mr Deputy Speaker. The primitive two-party system we have in Australia, with no system of primaries as they have in the United States, is just crippling this country in every respect. In this case, you get a tax deduction for putting heaters in your homes down in southern Australia, but you get no tax deduction for putting air conditioning in your homes in Northern Australia. The decision to put batts in was good if you have got a problem of cold. It is no good at all if you have got a problem of heat—the last thing in the world you want to do is to trap the heat in, which is the effect of an insulation batt. It is fantastic in the southern states, but it is enormously counterproductive in the northern states. So instead of giving the northern part of Australian the reflective roofing, which should have happened at every point north of Byron Bay—for the five million of us who live north of Byron Bay—we got wiped like a dirty rag, but the batts went in down south. They went in, to everyone’s shock, of course—and that is an unfortunate pun, because a very nice young man died in my electorate as a result of that scheme and the way it was misoperating.

The government is going to apply a charge of $6,000 to every office in Australia. I have 142 towns in the Kennedy electorate. I suppose 20 of them are fairly sizeable, but in the other towns an office simply would not cost $6,000. This shows the abominable nature of yet another stupid proposal. I am sure the honourable member for Wentworth, who up until recently was the Leader of the Opposition, would agree with me. I saw him on television recently most certainly asserting that there has been a lot of noise about but there has actually been no reduction in carbon emissions. We sat here for three years being preached to about carbon emissions by both sides of the House—it was not just the government’s side of the House.

I was a minister in Queensland and I simply did what I did because I could see that it was going to save electricity consumers in Queensland $200 million a year if they went to solar hot-water systems on their roofs. Has anyone done that most simple solution? No, nobody has done it and nobody intends to do it. The simplest solution is to put some reflective coating on roofs in Northern Australia. Is anyone doing it? No, and no-one intends to do it.

With all due respect to both sides of the House, if you have a carbon trading scheme, you put a value on a unit of carbon emission. The minute you do that, all of the merchant banking companies and all the stockholders in Australia say: ‘Whoopee. We’ll get another $10,000 million in securities we can trade every year.’ The slithering suits from Sydney will once again have their pockets lined. In fairness to the honourable member for Wentworth—people are nodding in his direction—I think he made some very significant contributions. If he had been listened to on his solutions for the high cost of housing in Australia, we would have a hell of a lot cheaper housing in Australia than we have today. But I am certainly criticising his proposal and the government’s proposal for a trading scheme.

What the hell do you want a trading scheme for when the answers are staring you in the face out there? Simply switch to ethanol. Instead of having to fight wars to secure our pipeline of oil and our diminishing supply of oil in Australia, we can simply produce our own fuel. I hardly think the United States is a stupid country—I might say a lot of other things about it, but I would not say it was stupid. I hardly think that Brazil, with an annual growth rate of 19 per cent, is being stupid. When people in Brazil fill their motor cars, they do it for 74c a litre—that is what it cost when I was over there. I do not want to make out that I am an international traveller; I have been out of Australia for only 10 days. In South Boa I filled up my car for A74c a litre and when I went to Minnesota in the United States it cost me 84c a litre. When I came back to Sydney it was 148c a litre. Why in hell’s name are we paying that amount of money for oil when we can produce ethanol? Clearly America is doing it for 84c and Brazil is doing it for 74c at the bowser. Of course, that would reduce our carbon emissions dramatically.

Ethanol is the very first solution of Al Gore, who is not my patron saint, I can assure you; he is one of my devils. Anyone who reads An Inconvenient Truthand I doubt anyone in this House has—will see that his very first solution is ethanol. Has anyone on the government or opposition benches in this place talked about ethanol? No. They have not even remotely considered it. But of course those stupid countries like Brazil, with an annual GDP growth of 19 per cent, thought about it and America, who are no slouches, thought about it. (Time expired)

Malcolm Turnbull (Wentworth, Liberal Party) Share this | Link to this | Hansard source

It is widely accepted that there are considerable opportunities for greenhouse gas abatement through energy efficiency. The IPCC has estimated that by 2030 about 30 per cent of global greenhouse gas emissions from energy use in buildings could be avoided at zero or minimal cost. Locally the Australian Sustainable Built Environment Council has estimated 27 to 31 per cent of emissions from buildings could be abated at zero economic cost. Reductions of this order are not trivial. In the context of Australia’s total carbon emission profile of around 600 million tonnes, they turn out to be close to 10 per cent of our total emissions. McKinsey has estimated that the Australian building sector could by 2020 achieve abatement of close to 50 million tonnes, while the Centre for International Economics has estimated an abatement of about 45 million tonnes of CO2 could be achieved at a low cost or negative net cost—in other words, at a gain.

Unlocking those opportunities is not easy. According to the Green Building Council, 97 per cent of existing buildings are too old to have been built with energy efficiency measures. That means retrofits to the existing building stock are just as important, if not more important, as building new structures to high standards of energy and water efficiency. A key element in achieving this goal is information, and that is the object of the Building Energy Efficiency Disclosure Bill 2010 that is before the House. It will require energy efficiency information to be provided to prospective purchasers and lessees of commercial office space of 2,000 square metres or more. This will be done in the form of a building energy efficiency certificate, which will include an energy efficiency star rating together with information about lighting energy efficiency as well as guidance as to how the building’s overall energy efficiency might be improved.

Another element in the quest for better energy efficiency in the built environment is appropriate incentives, which is why in 2009 I announced that the coalition would introduce accelerated depreciation rates for capital spending on green buildings. This would be a doubling of the depreciation rates normally applicable to investment in buildings or improvements which meet specified energy efficiency standards. Such accelerated depreciation does reduce tax revenues in the short term, although this is offset, at least in part, by higher collections in the future as the net income from the improved buildings increases. The Centre for International Economics has estimated that green depreciation of this kind would lead to a deferral of revenue of approximately $560 million over the first four years of the scheme.

So much of the energy requirement in our built environment is literally built in. Too much of our building stock was created on the assumption that every requirement of heating, cooling, lighting or electricity could be provided with abundant and very cheap power. That assumption is being challenged now with rising energy costs and will be increasingly challenged in the future. ClimateWorks Australia’s Low carbon growth plan for Australia recently identified emission reduction opportunities of 28 million tonnes of CO2 equivalent by 2020, a 28 per cent reduction on business-as-usual emissions. The commercial sector accounts for 77 per cent of this potential, most of which comes through improved efficiency via better technology, including more efficient lighting systems and other electrical appliances and equipment as well as reducing energy loss from refrigeration and ovens. The study argues that one of the biggest obstacles to achieving these efficiencies is gaps in information. It says:

In many cases, homeowners and businesses—in particular those with low energy bills as a proportion of outgoings—may not closely follow how much energy they use, and the savings which could be achieved through improved energy efficiency. Moreover, the equipment needed to estimate and verify energy savings is not readily available and comes with a cost, making it difficult to build traction on energy efficiency measures. Even when energy efficiency measures are pursued, savings are often undermined by a lack of understanding of the proper use of new equipment, or inadequate investment in the skills of auditors and contractors.

The disclosure regime set up by this bill seeks to address this information gap. There are numerous opportunities for energy efficiency at low or negative net cost and especially so with new buildings, of course. Buildings that have appropriate awnings to keep sun away from windows will need less cooling as will buildings with breezeways.

One of the ironies is that some of our oldest buildings are the most energy efficient. An old Queenslander, built up on stilts with big verandahs, is a much more sustainable, energy efficient dwelling than the modern equivalent built on a concrete slab, more often than not with no eaves—in short, no protection from a baking sun and no means to take advantage of a cooling breeze, and consequently only bearable during the height of the summer’s heat by reason of air conditioning.

Another area where we have gone backwards is in the use of water. Imagine if every new building was required simply to do this: plumb the blackwater and the greywater separately, collect the greywater in a tank and recycle it through the toilet cisterns. This greywater could be supplemented with rainwater if it was felt that it was not appropriate to use rainwater for drinking or washing purposes. The cost of this at the outset is very modest—some metres of additional poly pipe—but to retrofit it when the plumbing is encased in concrete floors is prohibitive. There is an important insight to bear in mind here. Water has a very high weight and volume—1,000 litres is a cubic metre and weighs a tonne—relative to value. So moving it around is more often than not the bulk of the cost of water. Hence, being able to use and re-use water onsite not only saves water but saves energy.

Now, I trust it is plain from what I have said that I am an enthusiastic supporter of energy and, indeed, water efficiency. However, gross emission abatement figures cited, including those that I have just cited, often fail to take into account what is known as the Jevons paradox. This paradox was described in 1865 by the British economist William Stanley Jevons in his work The Coal Question: Can Britain Survive? He wrote:

… it is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth … Every improvement of the engine when effected will only accelerate anew consumption of coal.

In 1865 he pointed to the experience of the Scottish iron industry, where the consumption of coal per tonne of iron had dropped by one-third but the consumption of coal, because of the enormous increase in the production of iron, had increased 10 times over.

This paradox has bedevilled the debate about energy efficiency ever since. It was considered in some depth in 2005 by the House of Lords Select Committee on Science and Technology which took evidence from Dr Brookes who, together with another economist, Daniel Khazzoom, had simultaneously published papers elaborating on the Jevons paradox in 1979. The report of the select committee said:

Dr Brookes’ argument is that for any resource, including energy, “to offer greater utility per unit is for it to enjoy a reduction in its implicit price”. Cheaper energy has two effects: the substitution of energy for other factors of production, which are now relatively more expensive, and the release of income which can then be reinvested in new production capacity, and so on. As a result, Dr Brookes argues, developed countries, have since the Industrial Revolution, seen “rising energy productivity outstripped by rising total factor productivity, hence rising energy consumption alongside rising energy productivity”.

The report went on to observe:

… there appears to be no example of a developed society that has succeeded in combining sustained reductions in energy consumption with economic growth.

We can observe the phenomenon of the Jevons paradox in our own homes. A modern refrigerator and a modern television are far more energy efficient. But our modern refrigerator is likely to be larger than the old one and our modern television is likely to be a flat-screen television whose output is vastly greater than that of the old television. And of course there are a range of other electrical appliances that simply did not exist before.

Many studies have demonstrated that increases in the energy efficiency of heating and cooling, for example, by the installation of insulation, have resulted in householders seeking greater comfort and hence using more energy. In The Bottomless Well, Peter Huber and Mark Mills explained how this paradox comes about:

Efficiency may curtail demand in the short term, for the specific task at hand. But its long-term impact is just the opposite. When steam- powered plants, jet turbines, car engines, light bulbs, electric motors, air conditioners and computers were much less efficient than today, they also consumed much less energy. The more efficient they grew, the more of them we built, and the more we used them —and the more energy they consumed overall.

This direct rebound effect, as it is termed—that is, using the same device to achieve greater output than before—has been estimated to be, in many situations, as much as 50 per cent, and the indirect effect can be much greater. Indirect rebound effects can simply involve the savings from energy efficiency being invested in other activities which require the use of energy. An example would be that a person buys a more energy efficient vehicle so they get more miles per gallon—one assumes the price of fuel has not changed—and they take that opportunity to drive more miles and hence use the same amount of fuel, albeit more efficiently. That is a direct rebound. An indirect rebound would be if the fuel savings were then invested in a holiday, to take an aeroplane to a foreign destination and thereby consume fuel or to buy some other good or service in which there is embodied energy. The other form of indirect rebound comes from an economy-wide increase in productivity, which increases economic activity and hence the overall need of the economy for energy. In other words, it increases the demand for goods and services, all of which have an embodied energy component.

In a recent paper in the journal Energy Policy, Steve Sorrell refers to the increase in fuel savings arising from the Bessemer process for steelmaking in the 19th century, which dramatically reduced the cost of steel. My recollection is that it was from around ₤40 a tonne, in the money of the day, to ₤6 a tonne. Not only did this result in much more steelmaking requiring much more coal because it made steel cheaper and more available—notwithstanding the efficiency obtained by the new process—but the new steel was used in building railroads and other infrastructure, all of which had, caused or initiated their own energy demands. In some cases this rebound can be so substantial as to result in what is called a backfire—literally, a situation where the energy efficiency actually results in more energy being required.

It follows that energy efficiency, while very desirable, is not a solution to greenhouse gas emissions or their abatement in and of itself. Because energy efficiency means that for a given amount of energy there will be more output, the energy becomes less expensive in output value terms. In other words, the energy, whether it is a tonne of coal, a kilowatt hour of electricity or a litre of petrol, may have the same price—its price might be changed—but the output, product, service or result that the energy acquires has become cheaper because you can acquire more of it with the same amount of energy. If the price of the energy remains the same then, so long as demand is elastic, there will be more energy consumed.

Another observation worth making in this context is that the object of climate policy is not to reduce the use of energy per se but rather to reduce the emissions intensity of the energy we use—or, to put it another way, to decrease the amount of energy we use generated from burning coal, for example, and increase the amount of energy we use generated from zero- or low-emission sources. When we talk about putting a price on carbon, what we are seeking to do is to make carbon intensive energy more expensive relative to less carbon intensive energy.

As most of our energy in Australia is generated from burning coal and as low-emission generation is—at least in the present state of technology—more expensive, it follows that any policy to cut greenhouse gas emissions, unless it is funded directly from the taxpayer’s purse, will increase the cost of energy. This will offset the impact of the Jevons paradox and result in any rebound in energy usage stimulated by the increase in efficiency being at least moderated to some extent by the price increase.

The Jevons paradox is a reminder that there is no substitute for ensuring that the focus of policy be keenly directed to the objective of the policy. If that objective is, as it should be, the reduction in greenhouse gas emissions then we will need, whether by an emissions trading scheme, a carbon tax or by regulation, to put a price on those emissions and change the price of carbon intensive energy relative to less carbon intensive energy and thereby, over time, transition our economy to a low-emission economy.

Some flaws in this legislation were identified by the coalition and through the Senate committee process. I am pleased that the government has responded constructively to those concerns and, as a consequence, with those amendments agreed to, the bill has the support of the opposition. I commend the bill to the House.

Greg Combet (Charlton, Australian Labor Party, Minister Assisting the Minister for Climate Change) Share this | Link to this | Hansard source

I thank the member for Wentworth for that thoughtful contribution, and I also thank all of the other members who have contributed to the debate on the Building Energy Efficiency Disclosure Bill 2010. The bill represents one of the most cost-effective opportunities to reduce the wasteful use of energy within the commercial building sector and to prepare the economy for a low-carbon future. The bill will give effect to a new national scheme which, for the first time, will require the disclosure of energy efficiency information when large offices are sold, leased and subleased.

I note the bipartisan support for this important bill, as indicated by the member for Wentworth in the previous address, and I especially thank the honourable member for Dunkley for his cooperation in relevant discussions. The government recognises the issues raised by the opposition and is committed to implementing a workable and effective scheme in consultation with industry. The scheme will transform the commercial property market by making energy efficiency considerations a normal part of commercial property transactions. Importantly, it will address market barriers to energy efficiency and capitalise on the increasing value that the market is attributing to energy efficient buildings.

The Building Energy Efficiency Disclosure Bill 2010 represents over three years of solid policy work, during which all prescribed processes for the development of best-practice regulations were meticulously followed. In July 2009 the Council of Australian Governments agreed to the scheme being phased in, commencing with office buildings in 2010. In November 2009, the Ministerial Council on Energy agreed to the scheme’s parameters, which have formed the basis of this bill before the House. Through the release of consultation documents, working groups, information seminars and media articles, both industry and government stakeholders have been extensively consulted throughout the development of the scheme. Sensible adjustments to the scheme have been carried out as a result of these processes. In fact, over 700 people attended the information seminars conducted late last year in conjunction with the Property Council of Australia. More extensive seminars, within 15 major cities, are planned to occur once the scheme commences.

The scheme has the advantage of being based upon the National Australian Built Environment Rating System, known as NABERS, which is by far the most widely recognised and accepted energy efficiency rating system by industry. Over 40 per cent of office space within the major business districts—which represents over 10 million square metres—has been rated under NABERS. NABERS is backed up by a rigorous training and accreditation program and a recently established national stakeholder advisory committee will ensure that key stakeholders have a role in the ongoing refinement and development of NABERS.

As mentioned by the Member for Dunkley in his second reading debate contribution, prior to the commencement of the commercial building disclosure scheme, NABERS will report the actual greenhouse emissions of buildings. NABERS will use up-to-date emissions factors that are consistent with the National Greenhouse and Energy Reporting Scheme. Where appropriate, further refinements to NABERS will be carried out on a systematic basis, in consultation with industry. On-site testing of the tenancy lighting element of the scheme will be finalised in consultation with industry to ensure that it provides cost-effective information on base lighting within office tenancies.

The Building Energy Efficiency Disclosure Bill will build on these solid foundations to establish a relatively simple and effective scheme. It provides appropriate powers to assessors and auditors to ensure that they can perform their critical tasks. It includes appropriate penalty provisions to deter noncompliance. It includes exemption provisions to ensure the scheme is not unfairly or inappropriately applied. The bill also includes generous transitional provisions to provide industry with a smooth build-up to full compliance with the scheme. The bill will be supported by appropriate subordinate instruments that will outline the administrative requirements of the scheme, including the kinds of offices that are captured by the scheme, the technical standards for assessing buildings, assessor training and accreditation and exemption processes.

Overall, the Building Energy Efficiency Disclosure Bill will give effect to a scheme that has been well developed through the input of a large number of energy efficiency and property experts; that stacks up economically, providing a relatively low-cost measure that complements other energy efficiency measures; and that will transform the approach to energy efficiency by the commercial property sector. I commend this bill to the House.

Question agreed to.

Bill read a second time.