Nick Xenophon (SA, Independent) Share this | Hansard source

I move amendment (8) on sheet 5912 standing in my name:

(8)    Page 204 (after line 4), after Part 7, insert:

Part 7B—National energy efficiency scheme

Division 1—Introduction

164J Aim, objects and intentions

        (1)    The aim of this Part is to promote and recognise efficiency in the production and supply of energy for use in the residential and commercial sectors of the economy by creating a market for energy efficiency savings.

        (2)    The objects of the scheme embodied in this Part are:

             (a)    to create incentives for households and business to choose actions that reduce their carbon emissions; and

             (b)    to deliver energy efficiency that would not have otherwise occurred; and

             (c)    to ensure that linkages between energy efficiency measures and carbon pollution reduction scheme measures are properly monitored, analysed and accounted for in establishing and achieving the objects of the Act and Australia’s long-term greenhouse gas emission reduction targets.

        (3)    The scheme is intended:

             (a)    to complement the CPRS, since it is designed to address activities in regard to which the price signal created by the CPRS may not create a strong enough signal; and

             (b)    to operate separately to the CPRS, so that any emissions reductions that are delivered are additional to those realised through the CPRS; and

             (c)    to build on similar schemes in State and Territory jurisdictions, with a view to developing a consolidated national approach that harmonises approaches to energy efficiency.

164K Simplified outline

                 The following is a simplified outline of this Part:

• The regulations must formulate a scheme, to be known as the national energy efficiency scheme, to create a market for energy efficiency savings across residential and commercial sectors of the economy.
• The Minister must, by 1 July 2011, undertake a consultation process on the design of the scheme, including consideration of the applicability at a national level of existing state and territory schemes and consultation with key stakeholders.
• The Minister must take all reasonable steps to ensure that regulations which reflect the outcomes of the consultation process are made by 1 July 2012.
• The Authority is given additional functions in relation to the formulation and operation of the scheme.
• Although the principal link between the scheme and the CPRS is in market influences on the carbon price, the Authority may, in any year, determine an energy efficiency adjustment amount, which is an amount by which the Authority determines the national scheme cap number must be reduced to account for energy efficiency savings.
• If the Authority determines an amount as the energy efficiency adjustment amount for a year, the national scheme cap number for that year is taken to be reduced by that amount.

164L Interpretation

                 In this Part:

CPRS means the carbon pollution reduction scheme, other than the scheme embodied in this Part.

participant in the scheme means a person who:

             (a)    creates or deals with white certificates or equivalent property rights under the scheme; or

             (b)    is a liable scheme entity.

scheme means the national energy efficiency scheme formulated in accordance with section 164M.

Division 2—Formulation of the national energy efficiency scheme

164M National energy efficiency scheme

        (1)    The regulations must formulate a scheme (to be known as the national energy efficiency scheme) to create a market for energy efficiency savings in the production and supply of energy for use in the residential and commercial sectors of the economy.

        (2)    Without otherwise limiting the design of the scheme, the scheme must encompass:

             (a)    either:

                   (i)    the creation of tradable certificates representing energy efficiency savings (white certificates); or

                  (ii)    another process for creating and trading verifiable property rights over particular energy efficiency savings (equivalent property rights); and

             (b)    the imposition of energy efficiency targets on liable scheme entities, which entities can meet by creating or trading white certificates or equivalent property rights; and

             (c)    the imposition of penalties for liable scheme entities which do not meet energy efficiency targets;

             (d)    procedures for the implementation and oversight of the scheme by the Authority.

164N Consultation on the formulation of the scheme

        (1)    The Minister must, by 1 July 2011, undertake a consultative policy development process, with the aims of:

             (a)    formulating a national energy efficiency scheme;

             (b)    determining a method of setting energy efficiency targets under the scheme;

             (c)    developing the administrative requirements to implement the scheme.

        (2)    The consultation process must, at a minimum, include:

             (a)    consultation with each of the States and Territories;

             (b)    consideration of the applicability at a national level of:

                   (i)    the Greenhouse Gas Reduction Scheme, operating in New South Wales and the ACT; and

                  (ii)    the Victorian Energy Efficiency Target Scheme; and

                 (iii)    the South Australian Residential Energy Efficiency Scheme; and

                 (iv)    the New South Wales Energy Efficiency Scheme; and

                  (v)    any equivalent scheme operating or planned to operate in any other State or Territory jurisdiction during 2010;

             (c)    consultation with key stakeholders.

164O Implementation

                 The Minister must take all reasonable steps to ensure that regulations which reflect the outcomes of the consultation process are made by 1 July 2012.

164P Functions of the Authority—formulation of the scheme

                 The Authority has the following functions in relation to the formulation of the scheme:

             (a)    assisting the Minister in the consultation process;

             (b)    reviewing the operation of the scheme, and reporting to the Minister and the Parliament on the operation of the scheme at least every 2 years;

             (c)    making recommendations to the Minister on matters of policy relating to the operation of the scheme;

             (d)    any other function prescribed by the regulations for the purposes of this paragraph.

164Q Elements of the scheme

        (1)    Without limiting the design of the scheme, the regulations may prescribe:

             (a)    which entities may create and deal with white certificates or equivalent property rights;

             (b)    procedures for the accreditation of such entities;

             (c)    the eligible activities through which white certificates or equivalent property rights may be created;

             (d)    the manner in which white certificates or equivalent property rights may be traded and otherwise dealt with;

             (e)    which entities are liable under the scheme (liable scheme entities);

              (f)    methods of estimating or calculating:

                   (i)    energy efficiency savings made under the scheme; and

                  (ii)    the effect of the scheme on the price of carbon;

              (f)    procedures for the transfer of property rights in energy efficiency savings between the scheme and State or Territory schemes dealing with energy efficiency;

             (g)    reporting and compliance protocols.

        (2)    Without limiting the generality of paragraph (1)(e), the definition of liable scheme entities may include (but is not limited to) entities which produce or supply electricity, gas and oil for use in the residential and commercial sectors of the economy.

164R Ancillary or incidental provisions

                 The scheme may contain ancillary or incidental provisions.

Division 3—Operation of the national energy efficiency scheme

164S Functions of the Authority—operation of the scheme

        (1)    The Authority has the following functions in relation to the operation of the scheme:

             (a)    to certify entities for the purposes of the scheme;

             (b)    to determine, in writing, energy efficiency savings targets to be met under the scheme;

             (c)    to verify energy efficiency savings and ensure that the benefit of property rights in relation to particular savings are not accounted for elsewhere;

             (d)    to monitor, analyse and report on energy efficiency savings;

             (e)    any other function prescribed by the regulations for the purposes of this paragraph.

        (2)    A determination under paragraph (1)(b) is not a legislative instrument.

164T Links between energy efficiency and the CPRS

        (1)    The principal link between the scheme and the CPRS is intended to be reflected in market influences on the carbon price.

        (2)    However, the Authority may, in any year, determine, in writing, an energy efficiency adjustment amount for that year.

        (3)    A determination under subsection (2) is not a legislative instrument.

        (4)    The energy efficiency adjustment amount for any year is an amount by which the Authority determines the national scheme cap number for the following year must be reduced to account for energy efficiency savings made under the scheme.

        (5)    The regulations may prescribe any of the following:

             (a)    factors the Authority may take into account in making such a determination;

             (b)    factors the Authority must take into account in making such a determination;

             (c)    a method of calculating the energy efficiency adjustment amount for a year.

        (6)    The Authority may determine that there is no energy efficiency adjustment amount for a particular year.

164U Adjustment of national scheme cap number

                 Despite any other provision of the carbon pollution reduction scheme, if the Authority determines an amount as the energy efficiency adjustment amount for a year, the national scheme cap number for the following year is taken to be reduced by that amount.

Division 4—Reporting and record-keeping requirements

164V Reporting and record-keeping requirements

        (1)    The scheme may make provision for and in relation to requiring a person who is a participant in the scheme to give one or more written reports to the Authority.

        (2)    The scheme may make provision for and in relation to requiring a person who is a participant in the scheme to:

             (a)    make records of information specified in the scheme; and

             (b)    retain such a record, or a copy, for 5 years after the record was made.

164W Compliance with reporting and record-keeping requirements

Reporting requirements

        (1)    If a person is subject to a requirement under the scheme to give a report to the Authority, the person must comply with that requirement.

Record-keeping requirements

        (2)    If a person is subject to a requirement under the scheme to:

             (a)    make a record of information; or

             (b)    retain such a record or a copy;

the person must comply with that requirement.

Ancillary contraventions

        (3)    A person must not:

             (a)    aid, abet, counsel or procure a contravention of subsection (1) or (2); or

             (b)    induce, whether by threats or promises or otherwise, a contravention of subsection (1) or (2); or

             (c)    be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of subsection (1) or (2); or

             (d)    conspire with others to effect a contravention of subsection (1) or (2).

Civil penalty provisions

        (4)    Subsections (1), (2) and (3) are civil penalty provisions.

Note:   Part 21 provides for pecuniary penalties for breaches of civil penalty provisions.

This amendment introduces a framework for the minister to create a national white certificate scheme. In environmental policy white certificates are documents certifying that a certain reduction in energy consumption has been attained. In most cases white certificates are tradable and combine with an obligation to achieve a certain target of energy savings. They operate in a similar way to the renewable energy target. I acknowledge the work that the Greens, in particular Senator Milne, have done in relation to the whole issue of white certificate schemes. I know this issue was the subject of a private senator’s bill introduced by Senator Milne. These schemes are common in Australia and they are common in Europe.

Australia already has a number of white certificate schemes successfully in operation. The expertise that is being developed through the implementation of these schemes, along with the expertise in relation to energy efficiency measures around the nation, is a vital resource and that is why these amendments do not seek to dictate what a white certificate scheme must look like; rather, in proposed section 164N, they establish a comprehensive consultation process to guide the minister in establishing the scheme. This amendment introduces a new part 7B to the bill, which aims to promote and recognise efficiency in the production and supply of energy for use in residential and commercial sectors and, as detailed in proposed section 164J, it also aims to ensure that the linkages between energy efficiency measures and the emissions trading scheme are properly analysed and accounted for so that any savings from efficiencies are delivered in addition to those realised through the ETS. The principle here is clear: just as the renewable energy target ensures that Australia raises its domestic abatement by setting a minimum standard, so can the introduction of commercial and domestic efficiency measures take these savings even further through positive incentives. So it is a carrot-and-stick approach: polluters feel the impost of greater costs while people doing the right thing are rewarded.

Broadly, this amendment picks up established energy efficiency initiatives that have quantifiable outcomes and, as detailed in proposed section 164M, it is through the trade of either white certificates or equivalent property rights that a market for energy efficiency saving will be created to reward residential and commercial investment in these measures. It means that, when someone signs up for one of these initiatives, they can do so with confidence—confidence that it will cut their costs while not cutting into the emissions savings being made elsewhere. It would also address the current problem with the renewable energy target where, perversely, energy efficiency measures such as solar water heaters are now supplanting investments in renewable energy such as wind farms.

Proposed sections 164O and 164W address issues of implementation and the functions of the Australian Climate Change Regulatory Authority in relation to the scheme as well as record-keeping requirements, and these provisions mirror those of similar sections in other parts of the bill. I commend this amendment to my colleagues and again I acknowledge the work that the Australian Greens have done on this. We need a white certificate scheme in one form or the other.