Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Link to this | Hansard source

I seek leave to incorporate my speech in Hansard.

Leave granted.

The speech read as follows—

The Renewable Energy (Electricity) Amendment Bill 2006 makes some administrative amendments to the Renewable Energy (Electricity) Act 2000.

Labor will support the bill, but we are very disappointed the bill is merely tinkering with administrative arrangements for renewable energy when greater investment and action is required.

Instead of being a responsible steward for our environment and our economy, this bill shows the Howard Government has put climate change in the too hard basket.

Unfortunately, when Australia needed a responsible, forward thinking and balanced approach to climate change and renewable energy all we got was this weak piece of legislation.

The 2006 Budget did not mention climate change and had no initiatives for clean renewable energy.

This bill is consistent with the Government’s irresponsible approach of doing very little to avoid dangerous climate change.

Climate change is the greatest environmental challenge facing the world.

There is overwhelming scientific evidence that climate change caused by carbon pollution is making Australia hotter, the ocean warmer and our cities and towns drier.

The CSIRO says climate change is directly affecting every city and town’s water supply and threatening the Great Barrier Reef and Kakadu.

And the science is pretty clear that climate change increases the intensity of cyclones and hurricanes. Climate change means we’ll have more category 4 and 5 cyclones.

If climate change is unchecked it will severely damage Australia’s agricultural and tourism industries, while also affecting many Australians through severe weather events and further water restrictions.

There is no doubt that recent steep rises in temperature are down to human activity.

The recent destruction caused by Cyclones Larry and Monica is a reminder of the severe weather we must prepare for at home as our planet warms.

Increases in temperature are predicted to increase prevalence of mosquito borne diseases such as malaria into northern Australia and diseases such as Dengue Fever as far south as Sydney.

If for no other reason, Australia’s self-interest dictates we must support clean, renewable energy. To do so is prudent, and not to do so is irresponsible.

As well as understanding the immediate and long-term threat of climate change, the most important thing to understand about dangerous climate change is that it can be avoided.

If Governments, communities and businesses work together to get us out of the heat trap which is developing around the world we can avoid dangerous climate change.

Humans have become a force of nature. We are changing the climate and what happens next really is up to us.

Climate change has been caused by humans, but thankfully the solutions already exist to address it.

We can and should act to prevent the problem now.

That is why the bill before the Senate represents a failure of policy by the Howard Government.

By bringing forward a Bill that does nothing to increase the use of renewable energy the Government has failed.

The goal in trying to avoid dangerous climate change is clear. We must avoid dangerous climate change by stopping global temperatures rising by more than 2 degrees.

Renewable energy is universally acknowledged to be an important part of any strategy to avoid dangerous climate change.

However, instead of supporting clean energy projects and supporting smart, efficient technologies, the Howard Government is taking Australia the other way.

Instead of a balanced and prudent approach, the Howard Government is trapped by old-thinking and irresponsible policies.

It’s hard to believe, but in Australia there is still no national climate change strategy and, because of the Howard Government’s complacency, Australia is on track to increase its greenhouse pollution by 23% by 2020.

The Howard Government’s complacency over climate change is placing our environment, population health, economy and vital infrastructure at risk.

By doing nothing to increase use of renewable energy, the Government is once again ignoring the threat climate change represents for Australia.

Last month, Senator Campbell said it wasn’t a problem that Australian renewable energy companies had to move off shore to China in order to commercialise their products rather than produce them here.

The company ‘Roaring 40s’ recently announced it won’t proceed with half a billion dollars worth of projects in Tasmania and South Australia.

The company says this is because of the Budget’s failure to increase the Mandatory Renewable Energy Target.

The Howard Government’s policies are destroying Australia’s clean energy industry and jobs in regional Australia.

Just last month, Roaring 40s announced a $300 million deal to provide three wind farms to China.

They’re welcome in China, but not in John Howard’s Australia.

Instead of blocking clean energy projects like Bald Hill, the Howard Government should seize the economic opportunities of the worldwide push to clean, renewable energy.

Sadly, the Howard Government’s approach to renewable energy is all about politics and not about Australian jobs or the environment.

The Howard Government is being both irresponsible and very inefficient in its approach to renewable energy.

We have the potential for a stronger renewable energy industry, yet the government’s policies send jobs overseas and cripple our renewable energy market.

It is for this reason I am moving on behalf of the Opposition the second reading amendment that is before the chamber.

If we are to meet the challenges posed by climate change, and adapt to a carbon constrained economy, planning is key. We need to act now for the future of Australian society, Australian jobs and Australian business in the emerging global, clean energy economy.

Australia needs a planned approach towards a modern, clean-energy economy.

The Chair of Rio-Tinto Mr Paul Skinner has recently called for the introduction of market mechanisms as part of the global solutions to combating climate change.

Mr Skinner confirmed that “ultimately, the challenge for the global political leadership was how the two components – technology and market mechanism – could be brought together for a long term solution”.

Just as science and technology have given us tools to measure and understand the dangers of climate change, so too can they help us deal with them.

The potential for innovation and business investment is immense.

It is about providing the market based stimulus for the deployment and transfer of clean energy technologies, the transfer of which the International Energy Agency has estimated at $27.5 billion dollars worth of carbon credits.

By not ratifying Kyoto, Australia is giving the world a jump-start in this new dynamic global marketplace.

Australian companies are already being disadvantaged now by our exclusion from carbon markets and from the developing renewable energy technology markets.

The investment is simply going elsewhere. Our technology and our know-how are heading to China instead of creating jobs at home.

More and more we are seeing Australian technology, know-how and Australian jobs go overseas.

More and more, our isolation on this issue has become an international embarrassment.

The Kyoto agreement was hailed by the Prime Minister back in 1997 as a `win for the environment and a win for Australian jobs’. The PM got it right then but he is wrong now.

Labor takes a more sensible, practical approach on this issue.

We acknowledge that the nature of such agreements is that they are a product of compromise and, like almost every international agreement Australia is part of, we do not say it is perfect.

We also need to think beyond 2012, but by not ratifying Kyoto we are excluding ourselves from the negotiating table of future agreements.

Labor believes the Kyoto Protocol is important for the economy, for jobs and for the environment.

The beauty of international instruments such as Kyoto is that they provide a platform for clean energy projects.

The Kyoto Protocol does not tell each country what to do. Instead it provides a stimulus for action against climate change and for clean energy.

Instead of being a responsible steward for our environment and our economy, this bill shows the Howard Government has put climate change in the too hard basket.

The Mandatory Renewable Energy Target was announced in 1997 and implemented in 2001, the Mandatory Renewable Energy Target has helped the deployment of renewable energy projects and technologies.

This has meant the 2010 MRET target of 9,500 GWh of generation is likely to be achieved by the end of 2006.

MRET has stimulated the renewable energy industry, subsidiary manufacturing industries and substantial intellectual property rights that are now being used around the world.

The Government should have taken advantage of this bill to increase and extend the MRET target to 2020. The Government’s own Review Panel, headed by former Government Senator Grant Tambling, recommended that:

MRET targets should increase beyond 2010 at a rate equal to the rate before 2010, and to stabilise at 20,000 GWh in 2020.

To understand why this never happened and why renewable energy is being strangled in Australia, you have to look at the politics of renewable energy and the genesis of the Mandatory Renewable Energy target.

When MRET was first announced it was the Government’s stated intention that it would increase the market share of renewable energy generation as a percentage – to increase market share by 2%.

This is what the Government said:

On the eve of the third Conference of the Parties (COP3) under the framework convention on climate change, the Prime Minister announced that `targets will be set for the inclusion of renewable energy in electricity generation by the year 2010. Electricity retailers and other large electricity buyers will be legally required to source an additional 2% of their electricity from renewable or specified waste-product energy sources by 2010’.

(Senator Ian Campbell, Second Reading Speech, Renewable Energy (Electricity) Bill 2000, Hansard 14 August 2000).

Senator Campbell on MRET (Hansard 14 Aug 2000):

‘And what else does this mean for Australia? It means jobs, particularly in regional areas.’

However in its design MRET became a Gigawatt Hour (GWh) target rather than a percentage of market-share.

That is, by making the target a Giga-Watt-Hour target rather than as a percentage of electricity generated, the target became a dead target.

The result is that market share of renewable energy in 2010 will by approximately 10.5% - exactly the same as it was in 1997.

In other words, MRET hasn’t increased the market share of renewable energy, it has simply enabled it to keep pace with our growing demand for energy.

The question is how we move forward and avoid dangerous climate change.

The answer, or at least part of the answer, is through clean energy solutions such as renewable energy.

Dangerous climate change can be avoided, but to do so we need to take strong, decisive, smart action now.

The Howard Government sees no contradiction in proclaiming that Australia will meet the Kyoto target – while also claiming that ratification would destroy economic growth.

The Howard Government signs the vision statement of the Asia Pacific Partnership, which concludes it “will complement, but not replace, the Kyoto Protocol” - but then Senior Ministers proceed to trash Kyoto.

The Government is playing games and deliberately sending conflicting messages to different audiences.

The Government is two-faced on climate change.

Avoiding dangerous climate change is too important to be hostage to the Government’s spin.

There needs to be action. We can avoid dangerous climate change if we take smart, prudent action.

Determining when to act is often as important as determining how to act. Clearly the time to act is now.

Fossil fuels are a finite resource and the reality is that we are running out of time much faster than we are running out of fossil fuels.

Even George Bush has finally recognised what is happening to our planet and has acknowledged that we need to do something about it.

We know the challenge and most importantly we know enough to act now.

We need to confront the problem immediately and head on. The stakes are too high. That is why the bill before us today is so weak. And that was why the Budget was such a disappointment.

This is not about jobs verses the environment as the Howard government would have us believe. That is a false and unproductive debate.

Indeed, strong action is vital for our economic future.

It has been continuously frustrating to watch the Howard government sidetrack and muddy the debate on this issue.

The Howard Government’s approach is very high risk. It puts all our eggs in one basket.

It denies the expansion of technologies already available – solutions that are already tried and tested – such as solar energy or wind energy.

What is needed from Government are drivers of technology change and policies which promote the take up of renewable energy.

The bill before the House is tinkering with administrative arrangements for renewable energy when greater investment and action is required.

Our region holds many exciting investment possibilities yet only with a global mindset can there be the necessary transfer of know how and technical expertise to see a world-wide clean, renewable energy network.

Partnerships in our region have the potential to unlock huge economic and environmental opportunities for our nation.

With the necessary mechanisms and support it is clear that the renewable energy industry can become the focal point for our region.

Indeed, our full participation in the global network is essential to unlocking environmental and economic growth opportunities.

The Howard Government has so far failed to take up this opportunity.

The Government has left us unprepared for the impacts of climate change.

We have the potential for a stronger renewable energy industry, yet the government’s inaction has instead seen our jobs go overseas and our market isolated.

The Howard Government’s refusal to sign the Kyoto protocol rendered the future of our renewable energy industry vulnerable.

The technologies are there. They are proven and available solutions – these are not far distant notions.

We are blessed with natural resources in this vast country of ours.

Fossil fuels, yes. But also a vast wealth of renewable resources.

We have been dealt a good hand, but we need to play our cards well.

Diversification of our energy sources is essential.

We have to ensure that we spread the risk and invest in a range of technologies, as well as looking at energy efficient technologies that reduce our overall demand.

Labor will announce an ambitious renewable energy target closer to the election.

Labor’s MRET target will be a significant increase, but definitely achievable.

I believe we can and must reach further, to ensure the success of our renewable industry, for our economy and jobs at home and for the prosperity and sustainability of this country.

In Germany, the use of renewables has grown from 4-9% in just 6 years.

Conservative Opposition leader Angela Merkel has quickly realised that tens of thousands of jobs would be threatened if this commitment was wound back.

Renewable targets should be viewed in the context of overall emissions reduction targets.

The UK has already set itself a target of a 60% emissions reduction by 2050, as has New South Wales.

These are the kind of aims - this is the kind of vision and leadership that is needed to meet the challenge.

Labor stands for a strong economy, creating wealth and security for all Australians.

And Labor understands that environmental progress is a necessary component of economic prosperity.

We will work with the renewable energy industry to ensure it gets the support that it deserves.

Our very future depends on it.

I move:

At the end of the motion add “but the Senate condemns the Howard Government’s complacency over climate change and calls on the Government to:

(a)

join the established global framework for action against climate change and ratify the Kyoto Protocol;

(b)

establish a national emissions trading scheme so Australians can minimise the cost of adjusting to a carbon constrained economy and enjoy the economic opportunities arising from the global carbon trading market under the Kyoto Protocol;

(c)

ratify the Kyoto Protocol and therefore allow Australian companies to benefit from the Kyoto Protocol’s Clean Development Mechanism and Joint Implementation provisions which encourage and reward renewable energy projects;

(d)

work towards a long-term target of 60 per cent cuts to Australia’s year 2000 levels of greenhouse gas emissions by 2050;

(e)

increase Australia’s investment in proven renewable energy technologies by substantially increasing the Mandatory Renewable Energy Target;

(f)

support greater incentives for the research and development of renewable energy; and

(g)

support measures to improve energy efficiency, such as making an effective five star building code the national standard for new homes, and developing partnerships with energy utilities so that they do not just sell electricity and gas but also help people use less energy and cut their bills”.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

The Democrats support the Renewable Energy (Electricity) Amendment Bill 2006 but we are disappointed that it ignores so much of what has been said to the committee. It ignores recommendations 8 and 9 of the Tambling report—the government’s own report—which were to increase and extend MRET. It ignores all of the submissions to this bill, which pretty much said the same. They said that MRET—the mandated renewable energy target—should be increased and should be extended. The bill also ignores the inquiry into the government’s energy white paper, Lurching forward, looking back, which said much the same, amongst other things.

The fact is that the target for mandated renewable energy has pretty much already been met. There are a number of reasons for that. The first reason is that the conversion of the additional two per cent of renewable energy to 9,500 gigawatt hours by 2010 was based on a gross underestimation of energy use by that time, which means that we have less renewable energy as a percentage of the total being generated in this country now than when MRET was first put forward. That is a miserable state of affairs and also means that, for yet another renewable energy—we have just demolished the biofuels industry—this legislation does not take the opportunity to foster a renewable energy industry for electricity generation. It is a great disappointment.

The Democrats put in a quite extensive dissenting report to this legislation, which I will not go all the way through, you will be pleased to know, but there are some points that I want to make. It has become clear to us that the government prefers coal to renewable energy; it has made that perfectly obvious in its support of so-called clean coal technology. But, as we all know, that is a highly risky technology and it is unproven in the context of stationary energy generation. It is still very expensive, which is why a lot of money is presently being spent trying to make it less expensive—but it is not expected to be available until the middle of the next decade. By all accounts it is very unlikely that the costs can be brought down sufficiently to make the process viable. It is worth noting here that Australia has the third-lowest electricity prices for industry and the second-lowest for households in the OECD. Again, there are parallels with transport fuel. We have some of the lowest taxes in the world and lowest prices in the world, yet we wonder why there is so little interest in efficiency.

MRET has a number of flaws. I have already mentioned the first, which is that the target is not high enough. It certainly is nothing like two per cent—I am not sure what the figures are right now, but it would be around 0.5 per cent rather than two per cent of the total. The overall share of renewables in Australia’s energy sector certainly has not increased. In that sense it is a miserable failure. But it was an exciting market based mechanism and we certainly were very pleased to see the government move down this path. It is hard to imagine them doing the same thing now, but at the time it was innovative and was something that gave the renewable energy industry a kick-on. Of course, so many of the RECs were taken up by the old hydro projects because of the very generous baseline scheme. No doubt Tasmania benefited enormously and still are benefiting, and that is a good thing. They use their money wisely. I am told they used it to reinvest in wind power. That is really good. However, Australians paid extra—Tasmanians paid extra, too—for renewable energy that they should have expected in any case.

A nationwide carbon trading scheme would have been more desirable. That would far better account for greenhouse gas emissions and provide a level playing field on which truly clean technologies could compete. We have been calling for emissions trading for some years. The Australian Greenhouse Office had developed a scheme for emissions trading, but that has been gathering dust on the shelf of the AGO pretty much since it was developed. This government has done a major backflip on supporting Australia’s efforts to reduce emissions and increase its renewable energy.

The consequences of this failure to increase and extend MRET include a reduction of investment in renewable energy in Australia, a loss of potential export industry, a loss of jobs, and a failure to create more jobs, particularly in regional areas. I know that Tasmania has benefited from having the industry set up down there to make nacelles. We have a plant in Portland that is producing the blades for turbines, which is a massive undertaking and a really good start towards having that industry in Australia. But by all accounts it is not going to go too much further.

That failure means that we are as far away from achieving a reduction in our true energy consumption related greenhouse emissions as we ever were. We have massively increased our emissions from the electricity generation sector. Our saviour is the very generous undertaking we managed to get out of the Kyoto protocol to save our skins through not clearing land. We cannot pretend that there is anything good about our ability to almost meet our 1990 emission levels; it is all a bit of a sham. And, certainly, MRET has not played too much of a part in that.

On the question of the investment in the industry stalling, the Australian Business Council for Sustainable Energy said in their submission that investment had stalled because the target had essentially been met. They said:

We would also highlight that new investment in renewable energy projects has now effectively stalled as sufficient projects now exist to fully deliver the 9500 GWh target.

The renewable energy generators said pretty much the same. Most of the projects needed to meet the cumulative MRET have already been built or committed or are in the advanced planning stages. Auswind said that there were projects in the pipeline but they had not been, and would not be, taken to the next stage. That is because of the next problem with MRET, which is the investment cliff, as it is called. Auswind said:

This investment cliff is clearly evident in the number of projects and associated investments that have now banked up in Australia. These projects, nineteen wind farms with a total capacity of 1369 MW, have received planning approval and yet have not been taken to the next stage.

So it is not just to do with orange-bellied parrots and the possibility of one being at the site of the Bald Hills wind farm once every thousand years, and even then not necessarily being clipped by a turbine. It is the fact that MRET is going nowhere. It is already up to its limit in terms of commitments. It does not help that Minister Campbell is so opposed to wind farms, as he has now demonstrated twice pretty effectively, but it is the government’s policy which militates against further development.

Loss of jobs is a big issue. The great pity is that these jobs could have been developed in regional areas. We hear a lot in this place about the need to support the regions and the country, but not too much has happened. According to one of our submissions:

The Renewable Energy Industry as a whole provides around 15,000 direct and indirect jobs across Australia ... The activity from upgrading existing infrastructure and developing new projects has also contributed to significant levels of investment in regional Australia which has also generated increased levels of employment ...

And so on. Industry growth also led to the establishment of manufacturing facilities to support wind farm installations. The nacelle factory in Tasmania, the blade factory in Victoria and tower manufacturing in Tasmania are all part of the benefits of MRET. But whether they continue, as I said, is another problem.

The Wind Energy Association said there are also lots of examples of investors going offshore as a result of this government’s inaction. They said:

The investment cliff is also clearly demonstrated by the amount of investment that is proceeding offshore to countries and regions providing market incentives for the renewable energy sector ... Novera Energy withdrew from the Australian Stock Exchange on April 4th 2006, and relocated to the UK.

The UK is a country that at least fosters its renewable energy, particularly wind. The company expressed its disappointment at what it considered to be little incentive for market innovation in Australia’s renewable energy industry and said that the market was a very difficult one for small companies, given competition by larger companies and state owned enterprises for limited renewable energy opportunities. Another example is Investec. The Wind Energy Association said:

The Investec Bank (Australia) Ltd, in its submission to the Victorian Government’s Paper “Driving investment in renewable energy in Victoria – options for a Victorian market-based measure”, states that: “The practical reality is that the Commonwealth MRET scheme delivered significant impetus to the nascent renewable energy in Australia and resulted in the development and construction of many landmark projects since its introduction in 2000. However, with the non-renewal of the MRET scheme and its targets, this momentum has stalled, with many renewable energy projects across Australia unable to be brought to construction and many renewable energy stakeholders leaving Australia for more conducive jurisdictions”.

And there are plenty of them out there. Australia is indeed going backwards. We are lurching forward, but mostly going backwards.

The migration of business offshore is resulting in billions of dollars lost to investment in Australia, including the monetary value of the lost emissions reductions. It is just so disappointing that this government is so uninterested in the sector. Auswind’s sentiments were shared by the Roaring 40s, who said:

Without this change—

that is, increasing and expanding MRET—

the Australian Wind Industry is likely to stall and emerging capabilities in the industry will, in our view, locate off-shore.

That is the sorry story. It is such a shame that this bill does not do anything about it. The minister will talk about how wonderful the sector has been, but we have now reached a stage where there is not going to be too much more by way of wind energy, particularly, and solar. That is because so many other sources have been included that should not have been and because there have been so many miscalculations about what two per cent really means. As I said, it is a lost opportunity.

And now the government is talking about nuclear power. That is where we have lurched to. We are having, as we all know, an inquiry into comparisons between nuclear and coal to see whether it is viable. We know that wind and solar are viable and just need to be given the right incentives and the right market mechanisms to get them going. It is all there. The technology is known. If you are talking about wind, it is not that much more expensive than coal-fired power; it is getting closer all the time. It would beat coal hands down if there were some mechanism in place that required coal to be responsible for the cost of its emissions. But we are never going to go down that path, apparently. A carbon tax would do it. An emissions-trading system would do it. But the government is not interested in those things either. Again, Australia is a backwater on energy. Whether it is transport fuel or electricity generation we do not have a clue, and we do not seem to care about it.

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

I rise tonight to express my great disappointment with the Renewable Energy (Electricity) Amendment Bill 2006. This bill came about in theory to implement the recommendations of the Tambling report into the operation of the Renewable Energy (Electricity) Act 2000 as well as adopting the provisions of the Renewable Energy (Electricity) Amendment Bill 2002 but tragically it fails to incorporate the most important recommendation of the 2003 review of the Renewable Energy (Electricity) Act, namely that MRET be extended from 2010 to 2020, with an increased target of 20,000 gigawatt hours to be achieved by 2020. This recommendation for an extended time frame and increased target received widespread support from the renewables industry, and all of the submissions from industry reflected this, and that was acknowledged in the Senate committee report.

The government’s arguments against extending MRET are completely flawed. The first argument that the government used was that MRET is a more costly measure to reduce greenhouse gas emissions than it needs to be as it focuses exclusively on renewable energy sources rather than least cost greenhouse gas abatement, such as reducing energy consumption through improving energy efficiency. Nobody disputes that we should be moving rapidly to energy efficiency. We would all agree with that, but you can do both. You can have energy efficiency and reduce demand—go for demand side management—and at the same time increase supply of renewable energy. You can have both. It is not one or the other.

They have used the argument that we are not going to go with renewables because energy efficiency is the lower hanging fruit, and it is in terms of greenhouse gas reduction and increased supply as such, but the problem is that the government have not acted on that either. Several times in this chamber in the last month I have moved to have the energy efficiency audits that the government have required to be done implemented. The government have basically rejected that. We have a situation where they reject the argument and the very option to implement what they say is the reason they are not pursuing the MRET.

Secondly, we have a situation where the government argued that the MRET scheme focuses on expanding the renewable energy industry to conserve non-renewable resources, which in reality is not an issue for Australia given our abundant supply of coal and large natural gas resources and may result in unnecessary escalations in the price of energy. That actually goes to the heart of it. That is the explanation. We have got coal and gas so it is not an issue. It is an issue for Australia and I have spoken extensively on that this week. It is an issue for Australia because global warming is real, it is urgent and there is a moral imperative to deal with it quickly because the costs of not dealing with it are going to be mega.

We cannot even begin to imagine in this house tonight what the costs of global warming are going to be within 20 years, especially if there are greenhouse or climate accidents of the scale that scientists say are possible. If we have the break-up of the west Antarctic ice shelf, if we lose the Greenland ice shelf, then we are going to experience a five- to seven-metre sea level rise. A five- to seven-metre sea level rise would wipe out 44 million people around Shanghai, in Bangladesh, Manhattan, around Australia—imagine that, with our capital cities based largely on the coast. We are talking about huge costs for not dealing with greenhouse gases, not going with mitigation right now.

So to say that renewable energy is not an issue because we have an abundant supply of coal and natural gas is totally, utterly, absolutely irresponsible, and fails to internalise the costs of coal and greenhouse gas energy sources. What we should be doing is putting a price on carbon so that you internalise the externality, as it currently is, of greenhouse gas emissions. If you put a price on carbon then you would not need the mandatory renewable energy target. You would have an emissions-trading system, you would have options for various forms of carbon taxation, and the renewable energy sector would fly.

But as I indicated today in the fuel tax debate, there is no comprehensive plan to deal with greenhouse gas abatement. We are not asking what the extent of the task is. Let me tell you what the extent of the task is. In terms of stationary energy, we have had a 43 per cent increase in emissions between 1990 and 2004. How are we going to deal with that? How are we going to drop the emissions in energy, particularly in the electricity sector? The government does not have a plan for doing that.

The last argument, the main argument the government use, is that the energy market supports the introduction of a national economy wide emissions-trading scheme to abate the same level of emissions as intended through a number of separate schemes currently in operation. So they are saying: ‘Yes, we should have an emissions-trading scheme, and if we did that, we wouldn’t need MRET. Therefore, we’re going to get rid of MRET, but we don’t have the emissions-trading scheme.’ So the logic behind rejecting MRET is just not there. It demonstrates that the government are not serious about greenhouse gas abatement.

The Minister for the Environment and Heritage, Senator Ian Campbell, said earlier this year that he believed Australia’s competitive advantage in a carbon constrained world is our coal reserves. I never understood the logic of that then, and I still do not understand the logic of that. Nevertheless, that was the minister for the environment telling the world that in a carbon constrained world, Australia’s competitive advantage is in its coal reserves, and when everybody else is moving on to renewable energy, we are focusing on carbon capture and storage, which is unproven technology. We are being left behind.

India has a 20 per cent renewable energy target. China has a 15 per cent target. The UK has 10 per cent and Australia has two per cent, which has retreated to 0.5 per cent because of the expanded economy and because of the extent of the increase in our energy demand. So we are actually going backwards at a fast rate. Apart from the clear imperative to deal with greenhouse gases and to reduce our reliance on coal and fossil fuels, there are the issues of strengthening and developing some resilience in the Australian economy, boosting the manufacturing and R&D sectors and boosting the number of jobs, particularly in rural and regional areas. That is what investment in renewable energy does. But what we are seeing is the government actually stopping that investment and driving these companies offshore. I simply cannot understand how the government can sit back and be so relaxed about so many companies going offshore.

Senator Allison has referred tonight to some of them. Roaring 40s, the Tasmanian example, has gone to China, where it has recently announced a new joint venture of wind farms on China’s east coast. It will have an operating capacity of 48.75 megawatts and is part of a target of 150 megawatts for joint development for China. This makes Roaring 40s a major player in renewable energy there. Roaring 40s has said very clearly that it is being driven out of investment in Australia because of the government’s refusal either to put a price on carbon and go with an emissions-trading scheme or to extend MRET. We are not seeing anything. The whole world is recognising the need to put a price on carbon, and I simply cannot understand why Australia refuses to do so, except that it is so married to the notion of coal and uranium as future energy sources—when neither can deal with greenhouse in the time frame we are talking about.

Ten or 15 years will not see us being able to use uranium, even if you supported that as a fuel source, because we are not going to have any capacity on stream to reduce greenhouse gas emissions, and if we have not done that in 15 years it will be too late. That is what I need to convey to the Senate: the urgency of the need for dramatic reduction in greenhouse gases. While we encourage individual action and we ask people to do what they can in their personal lives, what we need is systemic change, and only governments can bring about systemic change, through a regulatory environment and a series of incentives. That is what MRET did. When it was introduced, the Prime Minister said:

Targets will be set for the inclusion of renewable energy in electricity generation by the year 2010. Electricity retailers and other large electricity buyers will be legally required to source an additional 2 per cent of their electricity from renewable or specified waste-product energy sources by 2010 (including through direct investment in alternative renewable energy sources such as solar water heaters). This will accelerate the uptake of renewable energy in grid-based power applications and provide an ongoing base for commercially competitive renewable energy. The program will also contribute to the development of internationally competitive industries which could participate effectively in the burgeoning Asian energy market.

All that is true and all that has happened, and you are abolishing it. I simply do not understand why you are not taking this opportunity to build resilience and a bit more sophistication into the Australian economy, instead of simplifying it more and more by the day, in going back to a ‘digging it up, cutting it down, quarry, farm and nice place to visit’ economy.

Of the companies that are being driven overseas, we have heard about Roaring 40s and Novera Energy. There is also Seapower Pacific. It is a Western Australian company that has left Australia and gone to the UK. The product is a renewable wave energy converter. It is the first wave power converter that sits on the seabed, where it is invisible, safe from storms and ocean forces, and self contained. It is yet another example of an Australian technology going overseas. Pacific Hydro is currently looking at the potential of geothermal energy from the Great Artesian Basin. It says that there is sufficient geothermal energy there right now to produce 25 per cent of the eastern states’ baseload for the next 100 years. Why are we even talking about nuclear when we have got a renewable energy company that has already done the survey work, has identified the capacity and can roll it out right now?

At ANU we have got sliver cell technology for photovoltaics, which will reduce the cost of photovoltaics by 75 per cent. That technology is likely to go to Germany, Japan or possibly China. It is not going to be rolled out in Australia. Why not? There is also solar thermal. With an area of 35 square kilometres in Australia we can produce all of the baseload power that Australia needs. That is 35 square kilometres to roll out the huge solar collectors to go with this technology. We have got the capacity with renewables to meet our baseload requirements. That would support our R&D sector and it would support a more sophisticated economy. All of that could be achieved by going with a comprehensive plan to look at energy provision and supply for Australia and a way of incorporating that through a series of government regulatory frameworks—whether it is a price on carbon through tax, a price on carbon cap-and-trade or through the lesser mechanism of MRET. But at least the potential is there.

But I am not seeing anything from the government that suggests that it has any understanding of either the urgency or the size of the task of reducing the greenhouse gas challenge. How are we going to stop these greenhouse gases spiralling out of control? As I indicated earlier today, in the transport sector there was an increase in emissions of 23.4 per cent between 1990 and 2004, and in energy we have had a 43 per cent increase. I do not know how we are going to deal with it. The government has not got an idea of how to deal with it.

I moved in this house this week for a full and comprehensive inquiry into renewable energy and meeting Australia’s energy needs into the future, and it was voted down. The government does not have a plan and it does not want the Senate to find a plan, because the government is intent on backing coal and uranium against the renewable sector. What it is doing is backing quarries against brains. That is the Liberal strategy. Quarries can exist as long as you have a market to sell what you dig up—assuming that what you have to dig up can last forever, and we know that is wrong. The world cannot afford to mine coal at the rate that it is and it cannot afford to use it, and the world cannot afford uranium. Even if it could, it is only a short-term source of supply, maybe 40 years worth at best; if you use the high-grade ore, probably nine years at best. So it is a transitory strategy to deal with a long-term problem, when renewables can address that problem.

In the committee stage, I am going to move for the government and the Senate to implement the recommendation that the Tambling report came forward with, and that is 20,000 gigawatt hours by 2020. It is not enough. We would like to go way further than that. As I indicated, the Greens would like to see a price on carbon. We would like to see a comprehensive emissions trading system. We would like to look at a range of measures in relation to transport fuels, such as changing the whole basis of transport fuel tax to a tax on carbon instead of a tax on energy content. But that is not going to happen. At the very least, the Senate should vote on accepting the main recommendation of the government’s own review, the Tambling report. That is what I will be moving for. I am also going to support the Democrats’ amendment with regard to this, which goes much further, and I would be happy to go further still. But supporting the Greens’ amendment would be an indication that this chamber support the mandatory renewable energy target, that we support renewable energy and that we want to see the jobs, the investment and the excitement that can come from investment in that field.

As a final word, I would just like to mention Dr Shi, the Australian scientist who has now made a billion. He is our first solar billionaire, and he has made that money by investment in China. That investment should have been able to occur in Australia as well as in China. It is great to see China, India and the rest of the world investing in renewable energy, but that should be happening here as well to meet the ever-increasing greenhouse gas challenge that we have.

Nigel Scullion (NT, Country Liberal Party) Share this | Link to this | Hansard source

I seek leave to incorporate Senator Boswell’s speech.

Leave granted.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

This bill amends the Renewable Energy (Electricity) Act 2000 to implement the Government’s response to a review into the operation of the Act, and reaffirms the Government’s commitment to the mandatory renewable energy target – the MRET scheme.

The MRET, which requires that minimum amounts of additional renewable energy be sourced by wholesale electricity purchasers, is a sizeable greenhouse abatement measure. Australia was the first country in the world to introduce such a nationally mandated renewable energy target backed by legislation.

It has led to some $3 billion in renewable energy investment, and is expected to increase renewable energy generation by more than 50 per cent compared to pre-MRET levels.

And I understand that more than 230 power stations have been accredited since 2001 small and large producers using a wide range of fuel types.

This bill will continue to support and encourage the renewable energy sector, and deliver significant benefits.

In particular, I am pleased that among other things, this bill will now serve to clarify the gaming arrangements (ie the generation of renewable energy certificates without an equivalent increase in the amount of electricity from renewable energy sources.)

This clarification addresses the legitimate concerns of CSR and other renewable energy stakeholders who were concerned that the gaming provisions in the bill could unintentionally penalise or discourage, for example, sugar mills and refineries from optimising or expanding their core operations or improving their electricity generation efficiency and capacity.

This was obviously not the intention of the Government and so I pursued this matter on behalf of concerned stakeholders including CSR to clarify this aspect of the bill and remove the uncertainty.

The government has consulted closely with stakeholders to clarify their concerns and develop a solution that meets legitimate stakeholder concerns, while preserving the effectiveness of the gaming provisions in discouraging a potential practice which could damage the integrity of the scheme.

The outcome is an amendment that will allow regulations to be made which will specify certain matters that the Renewable Energy Regulator must take into account when making his or her decision on gaming.

This government amendment has the support of CSR – and I’m sure others – and will provide some assurances to these stakeholders in relation to this issue of gaming.

The next step will be ongoing discussions between these groups and the government to ensure that the concerns about unintended consequences are dealt with appropriately.

I have worked closely on this issue with CSR - Australia’s largest sugar company (and one of Australia’s oldest companies) which is expanding its capacity to commercially generate renewable electricity.

They are heavy investors in Queensland, and Australia, and I’m pleased these changes will help minimise the risks to their expansion in the renewable energy industry.

I support this bill because it will enable ongoing encouragement of the additional generation of electricity from renewable energy sources and a reduction of greenhouse gas emissions.

Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Link to this | Hansard source

To sum up, I will be as brief as I possibly can. I will indicate that concerns have been raised by sections of the renewable energy industry that the gaming provision in the bill may unintentionally penalise or discourage, for example, sugar mills and refineries from optimising or expanding their core operations or improving their electricity generation and efficiency. This is not the government’s intent, as indicated in the explanatory memorandum. To clarify this situation, the Renewable Energy (Electricity) Amendment Bill 2006 will allow regulations to be made which will specify certain matters that the regulator must take into account when making his or her decision.

Amendments have been moved by the Australian Greens and the Australian Democrats to increase MRETs. However, increasing the MRET would impose significant economic costs through higher electricity prices in Australia. Targets of five per cent and above could increase the cumulative economic costs of MRET by $10 billion. It is suggested from time to time that that would only be the cost of a cup of coffee per month—or, to be more politically correct, possibly a cup of soy latte per month. That is all very well for those who live in a household, but when you multiply that impact on energy consuming industries—and in my home state of Tasmania and yours as well, Acting Deputy President Barnett, we could think of some, such as Comalco at Georgetown in the seat of Bass, Port Latta in the seat of Braddon, Cement Australia in the seat of Lyons or Xenofex in the seat of Denison—the cumulative cost of the increased power supply to those companies would clearly see masses of jobs being shed and we as a government do not want to preside over such an occurrence, having now gotten the unemployment rate down to below five per cent.

It will not surprise anyone that we oppose the Labor Party amendment. We do not believe that the Kyoto protocol is the appropriate way to go. We believe it is now quite established that it is quite a discredited framework and not effective, because it does not include some of the more important countries. It will simply export jobs out of countries like Australia to China and India, and they would then be undertaking the pollution for no net benefit to the global environment.

In relation to other measures to improve energy efficiency, they would be a good idea but for the mentioning of an effective five-star building code. I am not sure what is meant by that, but I know that a five-star building code is going to come into force in the ACT on 1 July. That is something which has been repudiated—thank goodness—by the state Labor governments of Tasmania and even the Deputy President’s state of Queensland because the code does not take into account the whole carbon dimension of its recommendations.

Unfortunately, this code seems to recommend against wooden floors. Of course, the alternative is a concrete floor, and when you take into account the energy consumption in making the cement and the concrete, it is in fact environmentally more damaging to have a concrete floor than a wooden floor. Nevertheless, that is what this building code requires. If I can use Senator Milne’s terminology about whether we want quarries or brains, this building code that is being suggested will in fact ensure the ongoing quarrying of limestone, gravel and other things for the making of concrete, as opposed to what our brains tell us—that a renewable source, namely timber, is environmentally better. Whereas concrete and those products are congealed electricity, trees and wood products are in fact congealed solar power. I thank honourable senators for their contributions and recommend the bill.

Question negatived.

Original question agreed to.

Bill read a second time.