Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise today to support the Energy Efficiency Opportunities Bill 2005 but, as Senator O’Brien has just indicated, the bill does not go nearly far enough.

It is quite clear that around the world, for the last 20 years, the growth in energy demand has been escalating way beyond the rate of capacity to produce energy to meet that demand. So the debate seems to have always centred on, ‘How do we provide more energy? How do we build more power stations?’ Hence, we have had the debate about extending the life of Hazelwood, we have been talking about the nuclear debate and so on. The very poor cousin in all this debate has been demand-side management. I can remember in Tasmania, less than a decade ago, Hydro Tasmania was advertising extensively on television encouraging people to use more power.

It is very hard to imagine any energy utility doing that these days, because they are struggling to be able to produce the power that people need, and the more they produce the more people want to use energy. You only have to look at the number of appliances, particularly in the residential context, to see just how many more appliances people are using. The tragedy is that most people do not realise that energy efficiency is the cheapest and the quickest way of reducing energy use and therefore it also cuts down on greenhouse gas emissions—an imperative that is absolutely urgent for the world to respond to.

With regard to the average consumer’s understanding, most people do not know that when they use their electrical appliance in the course of the day it makes a difference to how much they are charged. If people understood that, they would consider putting on their washing machine at 10 o’clock or 11 o’clock at night and not during peak hour, for example. That is why the announcement in today’s media about the introduction of smart meters to cut power use is a good initiative. I support that and am delighted to see it. It was part of the Greens’ policy platform for the 2004 federal election that smart meters be rolled out across the country so that consumers can have a look and see how much power they are using at what cost and adjust their activities accordingly. Just the simple introduction of those meters will be hugely educational for people right across Australia. They will be able to see how much power they are using and how they can reduce their power bills, take away the stress on the existing energy grid and structure and, at the same time, delay the need for the introduction of new energy facilities.

The problem we currently have is that, with all the talk of the greenhouse gas abatement schemes, we still have state governments saying that they want to commit to a national emissions trading scheme and that they want the federal government to go further—and I applaud them for doing that—but at the same time approving brand new coal-fired power stations when we should absolutely not be approving any new coal-fired power stations in this country. In fact, we should be implementing energy efficiency to a degree that means that we can avoid and delay building new infrastructure until we can get to the new generation technology post coal-fired power stations. This is a critical debate for Australia—that is, that we get involved in a massive national effort on energy efficiency.

On the consumer side of things, again, I do not think that most people realise the extent of the active stand-by consumption of power. I do not think that most people realise, when they buy almost all appliances—whether it is heating, airconditioning, TVs, DVD players et cetera—that they are going on active stand-by consumption of power. People are absorbing all that power when they have their television turned off, and I do not think that they are aware of just how inefficient many of those appliances are in terms of energy use. If the government were serious, it would have a proactive strategy to reduce stand-by power consumption in the next few years. In fact, I think we need to establish a one-watt minimum stand-by standard and prohibit the production and import of products that exceed that limit because, unless we have such a standard, we are going to continue to have appliances being sold in Australia that have a high active stand-by consumption of power. I understand that some appliances can use up to 30 watts while they are on stand-by. This is just a ridiculous waste of power. If people knew how much power they were using when their appliances are effectively turned off with the remote, I think we would have a change in behaviour patterns. I am looking forward to the roll-out of smart meters, and I certainly hope that the Commonwealth is going to match the states or make them available so that they can be taken up across Australia. I think that the increased energy literacy that will result from it will be important.

To return to this particular bill, the problem I see with it is that, once again, it asks business to look at energy efficiency but then does not go any further. All that this bill requires is for big business—and we are talking about the huge energy users here; we are not talking about medium- or small-scale businesses—to conduct an audit of energy efficiency measures that might be taken and then publish the report. One of the first lost opportunities of this bill is that it simply goes for those industries that are using 0.5 petajoules, whereas, in my view, there should be a sliding scale over the next few years to bring that down to industries that use, say, 0.2 petajoules so that we incorporate more and more businesses across Australia into the scheme. As I said, all this bill does is ask business to conduct an audit of energy efficiency measures that might be taken and then publish the report. Then it stops. There is no requirement for those businesses to implement the findings of the report. In other words, we have yet another example of the government pandering to big business and saying, ‘Do your energy efficiency audit, publish it and then consider whether you might do something about it,’ whereas the best way to encourage innovation and competition and not hold back progressive businesses is to require that those audits be implemented, provided there is a reasonable payback period. If an industry gets a report to say it can make X amount of savings over four years, it is a no-brainer for it not to implement that. Because of short-termism and externality issues, companies will choose to go and spend money on other things and not necessarily implement the energy efficiency recommendations and reports. In my view, we need to ensure that this legislation not only requires a report but also requires that the findings of the energy efficiency audit be implemented over a period of time where there is a reasonable payback period to that business.

I also think there needs to be a national energy efficiency target. I know that the Productivity Commission has come out and rejected the target. Frankly, I think that is because it is taking the old economic view that anything beyond the production of energy, if you like, is free as an externality. For example, with regard to the use of fossil fuels, it does not take into account the greenhouse gas emission costs to society of producing all that power. It has a view that there is not an economic case to save energy. It should go and talk to all the state governments who are now challenged with having to either put in new supply or somehow achieve energy efficiency. I think the Productivity Commission needs to look at sustainable development, not just development at any cost. Ecologically sustainable development requires that the externalities of the production of energy, as in greenhouse gas emissions for a start, need to be internalised into the cost. I wonder if the Productivity Commission would draw the same conclusions—that it is not economical to save energy—if we had a price on carbon in this country, which is the next thing we should be doing in terms of greenhouse gas emissions.

What I am suggesting is that we need a national energy efficiency target and then a strategy to achieve that target which not only goes across big business, as this bill does, but takes into account transport and residential sectors as well. We need to have a national plan. Interestingly, when the first task force for the National Framework for Energy Efficiency looked at this, they explored the idea of a target but they dropped it, and I would not mind betting that they dropped it because they were under some pressure in terms of government policy. But, if you look at what the Europeans are doing, you will find that in fact national efficiency targets are incorporated in greenhouse gas mitigation plans in most countries. The European Commission, for example, asked member states to save nine per cent of the energy supplied to end users in the nine years following the directive’s entry into force, and some of the states in Europe set themselves even higher targets. They are saying that the European target could save Europe 20 per cent in energy consumption by 2020 and slash its energy bill by €60 billion every year.

There are some pretty amazing figures also being talked about in Australia in terms of what could be achieved if we went for a serious energy efficiency policy with a national energy efficiency target. We know that Australia has a very poor record on energy efficiency. For example, energy efficiency improvements in Australia have occurred much more slowly than in other countries—just a three per cent improvement between 1973-74 and 2000-01. In other words, Australia’s energy efficiency has improved at less than half the rate of other countries. That is appalling when you consider what we could achieve: the National Framework for Energy Efficiency issues paper in 2003 said that an investment of $12.4 billion over four years would yield energy savings valued at $26.9 billion, create 9,000 jobs and reduce greenhouse gas emissions by nine per cent.

So why won’t the government engage energy efficiency and demand-side management just as readily as they seem to be embracing the coal industry’s pleas for ongoing support for the fossil fuel industry? It is an absolute no-brainer for Australia in a world which is saying, ‘We want to reduce greenhouse gases, we want to get away from fossil fuels, we want to move to a low-carbon economy.’ For Australia to be redirecting its major scientific effort at CSIRO away from renewable energy, away from next-generation energy, to one that is almost entirely focused on the coal industry is like saying, in a world that wants to give up smoking, that Australia is going to focus its competitive advantage on healthier cigarettes. It is complete nonsense.

What I am saying is that, whilst I support the government’s initiative in putting forward an Energy Efficiency Opportunities Bill that brings in large energy users and requires them to do an audit, it lacks any accountability because it goes along with the government’s priorities—that is, it is all voluntary. It says to business, ‘We’d like you to do this, but we don’t expect you to have any accountability.’ When you ask the government, ‘Where is the accountability?’ the government’s response is, ‘Oh well, these reports will be made publicly available and there will be public pressure for these companies to act in the right way.’ Well, there has been public pressure on Australia businesses to act on greenhouse gas emissions and energy guzzling for the last 20 years and they have taken no notice whatsoever. Look at that appalling performance by Australia—half the rate of equivalent countries. We now have a situation where, over the last few years, even countries like the Philippines, Peru, Colombia and Brazil have all moved on energy efficiency laws which have some level of compulsory requirement, but Australia is still behind the eight ball.

Let us see this bill, which I am happy to support, as the beginning. But I would like to hear from the minister an explanation of why the government is so against requiring companies to implement the findings of these energy efficiency audits within a time frame that has a reasonable payback period for business. That is why I will be moving a number of amendments when we get to the committee stage. The first amendment would incorporate a national energy efficiency target and recommends setting up a task force to work out how that target would be implemented. Secondly, the target would work on a sliding scale to make sure that it captured not only big business but also businesses that produced 0.2 petajoules. My amendments also require the setting-up of an energy savings fund. The purposes of that fund are:

(a)

to encourage energy savings; …

(b)

to address peak demand for energy; …

(c)

to stimulate investment in innovative energy savings measures; …

(d)

to increase public awareness and acceptance of the importance of energy savings measures; …

(e)

to encourage cost effective energy savings measures that reduce greenhouse gas emissions arising from the use of energy; and

(f)

to provide funding for contributions made by the Commonwealth for the purposes of national energy regulation.

So this fund is not about providing money for the development of renewable energy, although that is important and needs to be part of other government programs. This energy savings fund would provide the finance to allow the government to move forward on some of these energy efficiency measures—because what I think we will see with this bill is a degree of window-dressing and yet more corporate reports at the end of each financial year saying: ‘Aren’t we good? We’ve just done our energy efficiency audit. We’ve identified these possible cost savings, but in the scheme of things we are going to move on this expansion’—or that expansion, or whatever else—‘and not necessarily implement those.’

The government cannot say how it is measuring these energy efficiencies. What is the target? What does the government expect to achieve through this bill from big business—what level of savings over what period of time? That is where I think this bill totally fails, and that is why I will be putting before the Committee of the Whole a series of amendments which would put in place a national energy efficiency target, a mechanism for implementing that target, an energy savings fund and a requirement for business to implement the findings of any of their reports on energy efficiency.