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

The Energy Efficiency Opportunities Amendment Bill 2006 was passed in 2005, based on a policy recommendation from the Prime Minister’s 2004 statement on energy entitled Securing Australia’s energy future. The object of the Energy Efficiency Opportunities Act 2006 is to improve the identification and evaluation of energy efficiency opportunities by large energy-using businesses and, as a result, encourage implementation of cost effective energy efficiency opportunities.

The Energy Efficiency Opportunities Amendment Bill 2006 makes minor technical amendments to the act. The history of the federal government’s energy efficiency efforts date back over a decade to 1995 when the previous government introduced the Greenhouse Challenge program, a voluntary greenhouse reduction program for large businesses and corporations. Recently, the Greenhouse Challenge program became the Greenhouse Challenge Plus program, incorporating two other voluntary programs, Energy Efficiency Standards and Greenhouse Friendly.

The government said it wanted to improve energy efficiency through the National Framework for Energy Efficiency, or the NFEE, the specific implementation of which was agreed by Australian state and federal energy ministers in August 2004. The actions for implementation through the NFEE, stage 1, relate to energy efficiency in the built environment, continued support for appliance minimum energy performance, awareness and capacity building with the commercial and industrial sector. Requirements for energy efficiency beyond the incremental awareness and capacity building is referred to in NFEE, stage 2. The Ministerial Council on Energy outlines that, under a NFEE, stage 2, governments will consider possible further measures which could include broad based incentives. These measures would have the potential to deliver significant energy savings in addition to those being delivered through the NFEE, stage 1.

That statement was made by the MCE in December 2004. Two years later, there has been no further development or consideration as to what a broad based incentive for energy efficiency ought to look like. The problem with all of these schemes is that they are voluntary, and they have done very little to improve energy efficiency or reduce emission intensity or energy use.

It is noted that the original intent of the legislation, as outlined in the Energy Efficiency Opportunities Amendment Bill 2006, was to establish a framework for mandatory energy efficiency opportunities, assessments and public reporting of outcomes by large energy-using businesses, including compliance and enforcement arrangements. The scope for energy efficiency is enormous and, frankly, it is a disgrace that governments have taken so long to act. Energy efficiency is the least costly of greenhouse abatement activities. It results in real productivity gains and a reduction in energy consumed and, therefore, a reduction in energy bills and real savings to householders and businesses.

Australia’s historical performance and rate of energy efficiency improvement have been very poor compared with many other countries. Since 1973, Australia’s energy efficiency improvement has been significantly lower than those of major industrialised countries such as Canada and the United States. Economic modelling to estimate the benefits of energy efficiency was undertaken in 2004 by the Ministerial Council on Energy for the National Framework for Energy Efficiency. Economic modelling undertaken by the Allen Consulting Group and McLennan Magasanik Associates showed that if only a one per cent national energy efficiency target were adopted and achieved by implementing those efficiency activities that have less than a four-year payback, if 60 per cent of these less than four-year payback efficiency activities were implemented at no cost or at low cost and if less than four-year payback energy efficiency opportunities were those cost-effective energy efficiency activities, they would pay for themselves within four years. That is a 25 per cent return on investment, which compares with the current bond rate of 6.25 per cent.

The results of the economic modelling of a one per cent efficiency target using only cost-effective energy efficiency activities of less than the four-year payback would be the following net economic and environmental benefits in the 10th year: real investment increases of $586 million, real GDP increase of $1.582 million and a maximum peak demand reduction of 8,322 megawatt hours. That is a reduction in peak demand in the order of 25 per cent of the national electricity market and, as a result, it would make possible the retirement of older power stations and the deferment of capital investment required for new generation.

There would also be a reduction of 19 per cent in the average wholesale market electricity prices by 2014—that is a reduction in electricity bills, not an increase; a net present value of national savings in electricity and gas of $7.7 billion—that is savings not expenditure; greenhouse emission reductions of 28 mega tonnes of CO equivalent—that is a 10 per cent reduction in emissions from the stationary energy sector and a five per cent reduction in Australia’s total greenhouse emissions. We are talking about very substantial opportunities in energy efficiency.

The Australian Greenhouse Office report entitled Tracking to the Kyoto target, which was released in December last year, confirms that Australian government current and committed policies are inadequate to meet Australia’s Kyoto target. Even more concerning is that the AGO report indicates that greenhouse emissions are due to continue to increase strongly to 2020 and that Australia’s emissions will be 127 per cent higher than 1990 levels. The Business Council for Sustainable Energy estimates that for Australia to meet its Kyoto target a further six million tonnes of greenhouse gas emissions abatement is required by 2125. However, as long as the decision to implement the cost-effective energy efficiency opportunities through this legislation remains at the discretion of businesses, even if they have a no- or low-cost payback, these very clear economic productivity and environmental benefits will be lost.

What are the barriers to the uptake of energy efficiency? Commonsense economics suggests that, if energy efficiency has such a strong case for being cost effective, energy efficiency would be implemented through the invisible hand of the market. However, the Ministerial Council on Energy and the National Framework on Energy Efficiency have documented those known barriers. Lack of information, high transaction costs, access to finance, low-order management priorities and split incentives are some of them. Relevant information is not always available at the right time to the right people to enable informed energy efficiency choices to be made. Policies and programs that only provide information do not address or overcome behavioural barriers and inertia. As energy is a small proportion of total expenditure for most consumers, the potential savings are not perceived as justifying the necessary investment in time and effort to consider and implement energy efficiency improvements.

Many organisations do not have easy internal or external access to the necessary expertise or tools to identify or take advantage of the available energy efficiency opportunities. There are limits and priorities on the capital available to any organisation, and energy efficiency has to compete for this capital with other potential investments. Organisations appear to use a higher hurdle rate for energy efficiency investment than they use for other investments. In some situations, the financial incentives are split—the person or organisation that would need to invest in the energy efficiency improvement is separate from those who would gain the benefits from the resulting reduction in energy use. There is also uncertainty about the consistency and adequacy of resources and the continuity of government measures over the long term. Energy efficiency is not broadly integrated into the current curricula of TAFE colleges and universities or in the professional development programs of both professional and trade organisations. There is a lack of evidence of achievements from energy efficient applications and government measures as a result of a lack of consistent measuring and reporting of energy use and efficiency.

So, while NFEE stage 1 goes some way towards addressing these barriers, they are still very real There will always be real barriers when the government relies on voluntary implementation of cost-effective energy efficiency opportunities. The uptake of energy efficiency is a front-line tool in the transition to a carbon constrained future. It is the least-cost abatement activity with positive economic and productivity benefits, yet energy efficiency is also the most underutilised policy with the government, which has not progressed past voluntary measures. Energy efficiency implementation is much too important to leave to the goodwill and voluntary undertakings of corporations, however socially responsible those may be.

Energy efficiency implementation is, we say, much too important to leave to the goodwill and voluntary undertakings of corporations, however socially responsible they may be. Some will progress and others will have it as a low priority. As the act is currently written—that is, identification and reporting but leaving the implementation to the discretion of the corporation—it will result in the same policy failure that was seen in the mid-nineties when corporations were required to undertake audits but not to implement the recommendations even when it resulted in reduced costs and improved profitability.

Mandatory energy efficiency schemes already exist in places such as Italy and the UK. The energy efficient opportunities implementation of the UK schemes is predominantly delivered through energy retailers in order to simplify the administration. In Europe other energy efficiency schemes are developed with a trading component and therefore incorporate incentives for the implementation of energy efficiency activities. In Europe these schemes are referred to as white certificate trading. Currently the Victorian government requires all EPA licence holders with an energy usage greater than 500 gigajoules per annum—that is greater than 100 tonnes of energy related CO equivalent and equates to $15,000 expenditure—to identify, report and implement all cost-effective energy efficiency activities with a payback period of less than four years. The Victorian government has announced an energy efficiency target. While details have yet to be released, I understand that a mandated energy efficiency target with a trading component is being considered in order to create further incentives for the implementation of efficiency activities. The New South Wales Greenhouse Gas Abatement Scheme, while primarily a carbon abatement program, also creates incentives for the implementation of efficiency activities. These are just a few examples of where energy efficiency policies are being introduced and supported with targets and frameworks to deliver real and mandated efficiency outcomes.

If this bill passes in its present form, the result will be a lot of energy audits but little implementation and productivity or economic benefits. The Democrats have circulated amendments that will deliver a broadened level of participation. For instance, the current act applies only to corporations that use 0.5 petajoules of energy per year and it is anticipated that that will only apply to 250 corporations. Making the scheme mandatory and lowering the threshold for participation will reduce Australia’s greenhouse emissions by 10 per cent and result in real productivity gains. Our amendments will require corporations to implement those opportunities with a less than four-year payback—that is, it would be no longer at the discretion of the corporation but become a mandatory requirement. If the company has implemented all cost-effective energy efficiency activities with a less than four-year payback then the company is not required to act further.

We would also reduce the threshold for participation to include commercial and industrial organisations with greater than 1,000 tonnes of energy related CO equivalent emissions or energy consumption of greater than 5,000 gigajoules, whichever is the lesser. Lowering the participation threshold would bring in 5,000 companies to implement those efficiency activities. Those 5,000 biggest energy users would all be companies that would have more than 200 employees. So we are not talking here about small organisations. Clearly, there is a range of economic, national, social and environmental benefits to be gained from improving energy efficiency throughout the economy. It will result in gains in economic growth, consumer welfare and employment. It is in fact the most cost-effective greenhouse abatement activity there is. It will also ensure improved energy infrastructure utilisation and reduce energy supply costs. Another advantage of energy efficiency is that it can defer new capital investments until such time as cleaner generation technologies become less expensive and are geared up in terms of our own industry here in creating them.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to 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.

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

I rise to contribute to the debate on the Energy Efficiency Opportunities Amendment Bill 2006. In fact, it should be called the ‘Energy Efficiency Lost Opportunities Bill’. What we see here is a technical amendment. We will be supporting that technical amendment, but the lost opportunity is to actually deal with energy efficiency. I will get to the amendments that the Australian Greens will be moving in relation to this bill when we get to the committee stage.

I am always appalled when I hear any debates on climate change in which the side of the equation that gets the most emphasis is producing greater supplies of energy. The other side of the debate—reducing demand through energy efficiency—is nowhere to be seen. Only last night, on an ABC program, we again had the former head of the Prime Minister’s task force on nuclear energy talking up the opportunities as he sees them for nuclear energy to increase supply and the coal industry talking up the need to continue to use coal. But we also had Alan Pears and Mark Diesendorf talking about renewable energy, energy efficiency and the capacity to reduce demand through energy efficiency measures.

The importance of energy efficiency is that it is the easiest and the fastest way to reduce energy use and therefore to reduce greenhouse gases. It is not something that requires any kind of rocket science; it just requires commitment from government to change the regulations to make sure that it happens. We have a situation in which the government has recently announced its intention to phase out light bulbs and bring in the more energy efficient light bulbs—and I applaud that; I think that is a good idea. But what it seeks to do is to distract the community into taking personal responsibility for their energy use whilst taking their eye off the fact that the government is not doing anything in terms of policy initiatives to deal with the main energy users.

Let us face it: it is not the domestic sector that is the main energy user when it comes to electricity. In fact, in the minister’s own document he said that 250 corporations that use more than half a petajoule of energy per year cover around 40 per cent of Australia’s total energy use. So we are talking about 250 corporations. What this bill did originally—and the amendment does not change it—was simply to say to those large energy users: ‘You are required to do an audit of energy efficiency opportunities and you have to report on that audit. And that is it; you are not required to implement the findings of that audit.’

When the legislation originally came in, I asked the then minister, Senator Ian Campbell: ‘Why is the government so resistant to requiring these companies to implement their audits and to start off with a low, very easy bar and then take it out to more difficult ones? Why is the government only concentrating on those companies that use more than half a petajoule of energy per year? Why don’t we phase in gradually and include companies that use lesser amounts over a period of time so that we capture more and more energy users and require them to implement the findings of their audits and get the bar higher and higher over time?’ He could not answer the question, and I will be very interested to hear Senator Colbeck’s response as to why the government still will not require these companies to implement the findings of their audits.

Why have we still got the focus on voluntary measures? Between the time that this bill was introduced and now, we have had the IPCC report globally, which has told us that things are grim in terms of climate change. We have reports virtually daily from scientists telling us that the IPCC report was way too conservative in its findings, that the impacts of climate change are accelerating and that the predictions scientists were making for 10, 15 or 20 years from now are actually occurring as we speak. We are seeing species extinction. We are seeing ice melt at a rate never expected. We have predictions coming out in April on the IPCC’s report on the impacts of climate change which are telling us that the polar bear is going to be extinct in the wild because the amount of ice we are losing in the Arctic is such that they will lose their habitat. That is just one example of what is going on as we speak.

Yet we still have a government that says, ‘We are only interested in voluntary arrangements.’ From the explanatory memorandum we know that the companies that used over half a petajoule in 2005-06 have until March, the end of this month, to register in relation to this energy efficiency opportunities legislation. By late November last year six companies—Alcoa World Alumina Australia, Hanson Australia, New Hope Mining, Queensland Alumina, Rio Tinto and Leighton Holdings—had registered for the energy opportunities program, and more are expected to register shortly. They are looking at their energy efficiency. They are required to register, but these companies can well afford to implement the findings of their audits.

The importance of doing it is that, if we implement energy efficiency initiatives now, it will buy us the time that we need to be able to roll out the renewable energy technologies so that we do not have people talking about building new coal fired power stations. We have just had the United Nations Foundation saying no new coal fired power stations should be built unless they can be retrofitted for carbon capture and storage. We also know that carbon capture and storage is at least 15 to 20 years away—if it ever occurs; it is unproven technology. We have had admissions in the last couple of months that the government’s big promise with clean coal is not working out as they expected. In fact, their aqua ammonia process is a complete failure. It is not scientifically viable as it releases large clouds of ammonia. So we are back to square one. We are back to the only process they have, which is a monoethanolamine process. It is going to double the price of coal fired power and it reduces the efficiency of power stations by 30 per cent, therefore increasing the pressure on the demand and supply side.

We need to buy some time, to not build polluting new infrastructure and to allow the renewables sector to roll out, by reducing energy demand. Why is that such a difficult concept for the government to grasp? Why is it that every time we are told about climate change and the government’s response we are told that demand for energy is soaring and therefore we need to build new supply constantly? Why can’t we reduce demand at the same time as we are working on rolling out the renewable energy supply?

In Europe they introduced an energy efficiency target by way of a directive from the European Commission. It has been hugely effective. They have brought in programs that deal with things like stand-by power. Most people are not even aware that 11 per cent of their energy usage is in the flickering lights that they might see if they walk around their house at night in the dark. They do not need those appliances to be on. It is carelessness, a lack of awareness and the fact that it is so difficult to reprogram a lot of these technologies. People would quite like to turn them off but in many cases they get frustrated because they have to reprogram them to get them back on again, and that makes it a no-win exercise.

We need governments to move in and require appliances to meet new standards so that the consumer can easily do what they want to do, and that is reduce their energy consumption and reduce their power bills at the same time. People want to do the right thing and they want to save money as well. But they are not being facilitated in doing so because the mandatory energy performance standards are too low. Why is it that you can still buy in Australia such inefficient appliances? Why is it that you can buy such inefficient electric hot water cylinders? We should not be doing that. They are not doing that in Europe because they recognise the cost savings that they can achieve by bringing in government regulation that requires new standards.

The Greens announced a few weeks ago a plan to roll out solar hot water across Australia. We pointed out that the government is forgoing $1 billion a year by providing people with a fringe benefits tax concession which is an incentive for them to drive their cars more and waste fuel in an effort to get to a higher level of concession. That is a nonsense when Australia is running out of oil and our bill for imported oil is growing larger. If you were to abolish that fringe benefits tax concession for using more and more fuel, you could use that billion dollars to roll out solar hot water across the country and you could back it up with higher mandatory energy performance standards so that you could not buy inefficient hot water technology.

At the same time, we need to strengthen the Building Code of Australia so that it is uniform across the country and is a higher standard than it is now. It was ludicrous, when I was in the Tasmanian parliament only a few years ago and introduced legislation to make it mandatory for insulation in new houses in Tasmania—which you would think was a logical thing to do—that the Master Builders Association came out and condemned it, saying that all that would do would be to increase the price of new houses. They refused to concede that not doing so adds inefficient housing to the building stock and leaves people with higher and higher power bills over time as they try and heat inefficient houses in the Tasmanian winter. Now, of course, people cannot understand how it was possible that people building relatively new houses in Tasmania were allowed to get away with not insulating them. It is ridiculous when we have an energy and global-warming crisis.

We need incentives to roll out energy efficiency technology, increased mandatory energy performance standards and mandatory and uniform increased standards in the Building Code of Australia for new houses, for retrofitting older houses and for extensions to existing housing stock. Where state governments are providing government housing they should be required to build that state owned housing stock to the highest levels of energy efficiency, because it would cost the consumers in those houses far less to live. They are the people who need those sorts of benefits, and we all need them as a community in terms of climate change. But we are not seeing that level of consistency. Here we have a completely forgone opportunity.

With our amendments to this, the Greens are proposing, first of all, to set up a mechanism for the government to establish a national energy efficiency target. Then, from that, we need a strategy that is designed to achieve the target not only for big business but also for the transport and residential sectors. We would roll it out over a period of time, as the European Union has done. I congratulate the European Union for the leadership they showed on climate change just recently when they announced a 20 per cent reduction in greenhouse gas emissions below 1990 levels by 2020.

I remind the government that Jacques Chirac has said that the European Union is not going to tolerate countries around the world getting a free ride and that the European Union is considering bringing in a tariff on imports into Europe from countries that have not ratified the Kyoto protocol, that have not taken these matters into account. So, whether we like it or not, Australian exports going into Europe are very likely to be taxed in the foreseeable future with a carbon tax because of the failure of the Australian government to introduce appropriate policies.

Our amendments set up a mechanism for a national energy efficiency target. Secondly, it is a mechanism to require companies that are captured by this bill, those 250 that are effectively using 40 per cent of Australia’s total energy, to implement the findings of their energy efficiency audit over a period of time with an increasingly high bar. Another amendment is to capture those medium-sized companies so that they also get involved in this energy efficiency program over time.

Our amendment will require those companies to report to their shareholders what the energy efficiency audit says about what they could achieve over a 10-year time frame, for example. Whilst the government requires them to report on what the audit is doing, frequently they do not tell their shareholders because, contrary to the government’s view that they will automatically understand the cost savings and so just go ahead and do it, many of these corporations have other priorities that do not include energy efficiency and spend money on those and do not implement the energy efficiency audit.

So we need to achieve serious cuts—and it is my view that we need in excess of an 80 per cent reduction in Australia’s greenhouse gases below 1990 levels by 2050—if we are to have any hope of stabilising greenhouse gases in the atmosphere and containing a global temperature rise below two degrees, and that should be our aim as this parliament. It should be our aim if we are interested in the wellbeing of future generations and particularly our capacity to sustain ourselves in Australia in what is effectively a desert landscape in many parts of the country. We are already living beyond our ecological limits. Climate change is making that absolutely apparent in terms of extreme drought, extreme flood and bushfires. We are already experiencing the impacts of climate change. It is not good enough for the environment minister, Mr Turnbull, to stand up and say he is going to change over light globes and then not take the obvious step. Just one of these companies implementing their audit is the equivalent of 10,000 households. We are talking about serious energy efficiency savings if the government was actually serious, but I do not think it is.

I was disappointed to hear Labor’s spokesperson, Senator Evans, saying that Labor will support the framework as it currently is. Last time, Labor voted against these amendments that I am going to move again which require companies to implement their audit. I would hope this time that we get that support because since then the world has had a much clearer understanding of the size of task. Frankly, if we cannot act on the lowest hanging fruit, which is energy efficiency, then we have got no hope of getting where we need to be by 2020 and 2050.

There is an opportunity now for a tripartite response to the challenge, and I honestly believe that if the government moved in this way the Australian community would be enormously grateful, because 250 companies can make a big difference. This is not about a government subsidy; this is about a change to government regulation and abandonment of the notion of voluntary commitments and going with regulating for change. I would remind the government that Sir Nicholas Stern has said that climate change and the impacts of climate change are the biggest market failure of all time. The free market has failed in our efforts to address climate change.

Let us bring in the regulation now, and I urge both the government and the opposition to support the Greens’ amendment for these companies, these 250 large energy users, to implement the findings of the energy efficiency audit and therefore delay the time in which decisions have to be made about new infrastructure at the same time as rolling out more renewable energy. It is a win-win for the country, and I would be very interested if there is any logical argument against it, because none are apparent to me.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

in reply—Thank you to the senators who have contributed to the debate on the Energy Efficiency Opportunities Amendment Bill 2006. I hope that we can see agreement on this bill, which makes amendments to the Energy Efficiency Opportunities Act 2006 to correct a small number of technical problems. These amendments will properly align the act with the original policy intent and improve its administration. They are consistent with the explanatory memorandum to the Energy Efficiency Opportunities Act 2006 and the obligations as set out in the Energy Efficiency Opportunities Regulations 2006 and the Energy Efficiency Opportunities industry guidelines. The amendments will enable the Energy Efficiency Opportunities program to be delivered as originally intended, ensuring that industry is not disadvantaged, and will assist in its administration. I commend the bill to the Senate.

Debate (on motion by Senator Colbeck) adjourned.