Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

The Energy Efficiency Opportunities Amendment Bill 2006 seeks to make a number of minor technical amendments to the Energy Efficiency Opportunities Act 2006. Labor will be supporting the passage of this amendment bill, which will address deficiencies in the parent legislation which came into effect in July last year. The energy efficiency opportunities framework is worthwhile and we support these amendments. We are, however, deeply concerned by the Howard government’s approach to energy policy more broadly; in particular, its failure to accept the realities of climate change and the need for action on carbon emissions, a topic I will return to.

The purpose of the Energy Efficiency Opportunities Act was to provide a structure for mandatory assessment of energy efficiency opportunities and the public reporting of outcomes by businesses which use large volumes of energy. It is noted in the explanatory memorandum to the original bill that usage by business accounts for around 80 per cent of primary energy use. Within that, according to the ABS, 250 or so of the largest users account for 60 per cent of business energy use. The act’s requirement to conduct efficiency assessments and report on outcomes applies to the largest energy users—those using in excess of 0.5 petajoules per year, which is around 250 businesses, according to the ABS. The act leaves to the business in question decisions on investments identified by their normal business processes.

Labor have supported the establishment of the energy efficiency regime in this form with the coverage that I have indicated and with the take-up of efficiencies left to the businesses involved. We have consistently said that we want to see the scheme up and running in this form before we consider any further changes. I think these amendments will help to ensure that the scheme is given a fair chance, but we will be monitoring its effectiveness over the coming period. The bill, as I say, seeks to remedy a number of deficiencies in the act. It will ensure an unambiguous definition of the trigger year in which energy use creates a requirement to register under the act. It will allow participants to submit their assessment plans within 18 months of the end of the trigger year. It will clarify that assessment plans must cover the five-year period commencing the day after the end of the trigger year and that subsequent plans are required to start the day after the end of the previous plan. It will allow the delegation of the secretary’s powers under the act to certain officials.

Labor support those amendments. We support the intent of the act as a means to encourage business to identify and utilise efficiencies which otherwise might not be taken up. Despite the economic advantage, there is evidence that some firms just do not take those opportunities.

Australia is blessed with enormous energy reserves, but that abundance is perhaps not the best incentive to ensure that we are harnessing energy use and utilising all cost-effective energy efficiency opportunities. Our rate of energy efficiency and the improvement in that rate over the last three decades do not compare well with other industrialised nations. There is a clear challenge for us to remedy that. That applies as much to the way we use energy across our economy and society as it does to the largest business energy users. There are opportunities to increase efficiency in transport and in our homes as well as in our businesses.

While the measures in the act are worth while, they do nothing to address the broader challenge of the need for increased energy efficiency. We need to take a fresh look at energy use to meet the challenge of climate change in the context of our abundant energy supplies. This act will, we hope, encourage a greater rigour in the use of energy, allowing business to gain greater benefit from Australia’s comparative advantage in the area.

Rising energy costs, the economic expansion of China, India and other economies, and the challenge of global warming all demand that we get the most out of our energy sources. Efficient energy use is a key contributor to our long-term energy security. As a nation we face complex energy challenges, and it is increasingly clear that the Howard government is not capable of meeting those challenges. It has proved unable to work with the states and territories to improve public transport, particularly in the major cities—an area of importance if we are to increase our energy efficiency and emissions reductions. The Howard government’s decade in power has been marked by its failure to support the renewable energy and alternative fuel industries. But where it has failed most abjectly is in its response to climate change. On this front the Howard government has given us a decade of denial and inaction. This is despite the IPCC reports and other reports that culminated in the 2006 Stern report.

We have seen the unedifying sight of the Prime Minister backtracking and backflipping. First he is a sceptic, then he is not; then he is again and then he is not. We have an industry minister who said just six months ago, ‘I am a sceptic of the connection between emissions and climate change’. He apparently has had a conversion, although I do not think Senator Minchin has quite been able to swallow the new government line. The government is simply incapable of taking us forward on this issue. Its scepticism—its denial—is just too deeply ingrained.

Four years ago the COAG Energy Market Review recommended a national emissions trading system. Bill Scales’s report for the Energy Reform Implementation Group, released last year, said that the ERIG had been struck by the significant concerns raised by market participants about market uncertainty in relation to possible future greenhouse gas abatement initiatives. There is a pressing need for investment decisions to ensure adequate baseload and peakload power is supplied for Australia, but these decisions cannot be made currently because of uncertainty over our national response on carbon emissions. Business tells me this every time I meet with its representatives. And Mr Scales continues to say that market participants have indicated to ERIG that greenhouse risk constitutes one of the most important barriers in the energy industry, particularly to new baseload coal investments. ERIG notes that most market participants desire a coordinated and sustainable policy approach to greenhouse. I note also that the Energy Supply Association of Australia has now come out in support of a national carbon emissions system, leaving the Howard government completely isolated on this issue. We have CEOs of major electricity generators and downstream gas providers calling for a national carbon emissions trading scheme and long-term targets for greenhouse reductions.

It echoes Labor’s policy and its target of reducing greenhouse gas emissions by 60 per cent by 2050. As the Energy Supply Association notes, the electricity generation sector is facing investment decisions that might total $100 billion over the next 25 years to ensure Australia’s future electricity supply. The government, in refusing to agree to a national emissions trading scheme, is holding up investment and jeopardising our future electricity supplies. Labor and the business sector are in agreement that we need to dramatically cut our greenhouse gas emissions and that the best way of achieving those cuts is through a trading scheme that sets a price signal on emissions. This will ensure that business has the certainty it needs to make the necessary investment decisions to ensure adequate future power supplies. The government, through its denial and inaction, has left Australia unprepared for the huge economic and environmental challenges we now face.

In conclusion, Labor supports the amendment bill to iron out anomalies in the Energy Efficiency Opportunities Act. It is a small but important measure; we supported the original act, and we support this amendment bill. It is a useful way to encourage business to take up advantages of valuable efficiencies. It is a useful step and, while it does not go as far as many would like, we think it is an important addition to measures to encourage energy efficiency. We will be supporting the bill.