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

by leave—On behalf of the Democrats I move amendments (1) to (4), (6) and (8) on sheet 5180 together:

(1)    Schedule 1, page 2 (after line 4), before item 1, insert:

1A  At the end of subsection 3(2)

Add:

; and (c) to implement cost-effective energy efficiency opportunities, noting that they will achieve cost savings.

(2)    Schedule 1, page 3 (after line 4), before item 1, insert:

1B  Section 4 (after the definition of controlling corporation)

Insert:

cost-effective, in relation to energy efficiency opportunities, meansthe benchmark for financial feasibility will generally be a payback period of up to three years. The discount rate/internal rate of return to be used in making an assessment of financial feasibility should be the current bank bill rate. For long-lived assets (more than 10 years) a full lifecycle analysis should be undertaken. The payback periods should include consideration of savings achieved through reduced energy bills, operational cost savings and enhanced productivity.

(3)    Schedule 1, page 3 (after line 4), before item, 1 insert:

1C  Section 4 (after the definition of Court)

Insert:

energy efficiency opportunities means activities that result in the reduction of energy use or the improvement of energy efficiency.

(4)    Schedule 1, page 3 (after line 4), before item 1, insert:

1D  Section 4 (after the definition of energy use threshold)

Insert:

greenhouse gas emissions includes but is not limited to the following gases: carbon dioxide, methane, nitrous oxide, hydroflurocarbons, perflurocarbons and sulfur hexafluoride.

(6)    Schedule 1, page 4 (after line 23), after item 5, insert:

5A  Paragraph 20(3)(b)

After “use”, insert “and greenhouse related emissions associated with energy use”.

(8)    Schedule 1, page 4 (after line 23), after item 5, insert:

5C After Part 7

Insert:

Part 7A—Implementation of Energy Efficiency Opportunities Assessments

23A  Implementation of the assessment plan

        (1)    The object of this section is to require registered corporations to implement assessment plans required by Part 5.

        (2)    A registered corporation must:

             (a)    implement the cost-effective energy efficiency opportunities identified in the assessment plan submitted under Part 5; and

             (b)    complete the implementation of the energy efficiency opportunities identified in the assessment plan before the expiration of the 5 year period commencing 1 July 2007.

        (3)    The extent of implementation of the energy efficiency opportunities identified in the assessment plan is a matter which inspectors authorised under Part 8 are authorised to monitor and report on.

        (4)    A registered corporation contravenes this section if it fails to comply with subsection (2).

Note:   Clause 3 of Schedule 1 provides for a civil penalty for failing to comply with this section.

These amendments are in two groups. The second group relates to the threshold participation, which I mentioned in my contribution to the second reading debate. The amendments require corporations that are within the energy use threshold to implement identified cost-effective energy efficiency opportunities when cost-effectiveness is defined as those energy efficiency opportunities with less than a four-year payback period. It should be noted, as I said in my second reading contribution, that 60 per cent of these cost-effective energy efficiency opportunities can be implemented at little or no cost at all, that a lot of these cost-effective energy efficiency opportunities will pay for themselves, on average, within 2½ years and that after this time there are accrued energy savings.

The first group of amendments relates to the objective of realising a range of national economic, social and environmental benefits to be gained from improving energy efficiency through the economy. Implementation of cost-effective energy efficiency opportunities results in gains in economic growth, consumer welfare and employment. Energy efficiency is the most cost-effective greenhouse gas abatement activity that there is. It will also ensure improved energy infrastructure utilisation and reduce energy supply costs. Energy efficiency means that you can defer new capital investment until such time as cleaner energy technologies become less expensive.

I urge the committee to support these amendments. As I said, the bill as presented to us is a minor bill but it does give us a chance to capitalise on the opportunities that energy efficiency could provide. At present corporations, despite the audits, are not taking up the measures that they could, even though the payback period is quite short. Our amendments would require them to do that. They will also reduce the threshold for participation, and I will come to that when I move the next group of amendments.

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

The government does not support the amendments moved by the Democrats. We see these amendments as providing an excessive amount of red tape and regulation over the existing systems that are in place. The existing process has the support of industry, and we intend to give firms the opportunity to demonstrate their commitment to the measures.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

That is remarkable, because we are in an age of climate change which is already impacting on the economy, as well as on the stability of global governance and the wellbeing of coming generations. If there is one immediate option that is available to this government to get a transition through to alternative energies, including its own much-mooted but totally unproven option of clean coal, it is energy efficiency. World expertise shows that through simple energy-efficient measures industry, the domestic sector, the retail sector and the primary produce sector, including resource extraction, can cut current use of electricity by 30 per cent to make it available for new users.

If that were really tested it would mean that we have some decades worth of breathing space in terms of not increasing impacts on the atmosphere by building new coal-fired thermal power stations, for example. But we are not going to get there simply by saying, ‘Leave it to the good industries out there—or households, universities or whatever it might be—to adopt energy efficiency and the polluters can keep doing what they do without any regulation.’

Shortly, Senator Milne will be moving Greens amendments to put some legislative action behind this. If we are going to succeed in this world of climate change, we need stick as well as carrot so that the polluters who will not play the game properly can be brought into line and those who are squandering energy find that the days of squander are over. We need to divert wasted energy into new uses; that means that we do not have to build new thermal power stations.

But the government say, ‘No, we will allow the waste to continue, and we will continue to reward the polluters’—the lazy if not malevolent polluters who do not care about the future and will continue the sceptical view of climate change as if it were not a big issue confronting the world. Well, it is a big issue. The government should be leading with an energy efficiency bill which will provide a template to ensure that those who do the right thing get rewarded and those who do the wrong thing get penalised. It is simple goodwill practice.

I suspect we are going to see the government using its numbers again to knock down amendments to this legislation from the Greens and the Democrats which would give it teeth. Let that be on the government’s record. The government should be supporting these amendments as the Greens do. It should be supporting the Greens amendments that will be moved next.

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

The minister says that the government cannot support these amendments as they are about red tape. Can the minister indicate what so far has happened with regard to audits and what the aim of the government is in terms of compliance with audits that find that there is cost-effective energy efficiency that can be developed in corporations? At what point will the government say, ‘We need to have a bit of push and shove here because industry is just not taking up those opportunities which are discovered by their audits’? How successful has the program been so far in terms of those companies adopting measures found to be cost-effective by those audits? At what point will the government say, ‘We need to toughen up here and make this something other than a voluntary scheme’?

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

It appears that the Greens and, to an extent, the Democrats—but particularly the Greens—think that all industry is bad and it is out there basically to pollute, destroy the environment, gobble up resources and just have no heed for anything that might be in the public or the environmental interest. I remind honourable senators that energy is a significant cost for these businesses.

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

Madam Temporary Chairman, I rise on a point of order. That is not what I said in my speech during the second reading debate or in my comments about this bill and our amendments, nor was it anything to do with the question that I put. I ask you to remind the minister that he is suggesting that we are coming from a very different position from the one I outlined. I think this is misleading.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Colbeck.

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

As I was saying, energy is a significant cost for these businesses and it is in their interest to save energy where they can. That was the point I was getting to, Senator Allison. It is the government’s objective to work with industry to demonstrate to them where the energy savings might be found. In fact, as part of that process, there is a public reporting requirement for industries that are using significant levels of energy to report on the savings that they are finding. Any business that can come up with significant cost savings in respect of energy use would be crazy not to implement them.

I will give you four examples. Xstrata Coal in New South Wales identified 32 projects by January of this year. They include energy savings of 13,686 gigajoules, which is a reduction of more than one per cent in energy use; greenhouse gas reductions of at least 3,700 tonnes of CO₂ equivalent per year; and significant cost savings, obviously. Xstrata Copper at its Townsville refinery has found four measures that amount to cost savings of $200,000 a year to the company—a significant saving—and greenhouse gas emission reductions in the order of 3½ thousand tonnes of CO₂ equivalent per year if the programs are fully implemented.

Orica has identified 70 projects that represent energy savings of 140,000 gigajoules per year, which is a six per cent reduction in non-feedstock energy use across the site, and greenhouse gas reductions of 9,520 tonnes of CO₂ equivalent a year. Those savings are worth in the order of $1 million to the company. Midland Brick has identified over 50 energy efficiency opportunities so far. The major focus has been on two of their kilns. There are energy savings of approximately 270,000 gigajoules per year, equivalent to approximately 19,000 tonnes of CO₂ or the energy use of 5,000 households.

There are significant benefits being identified in conjunction with industry. Industry has a significant energy cost. In some of the businesses I have seen, in excess of 35 per cent of the input costs is spent on energy. There are significant savings to be made if industry can maximise their energy efficiency and in so doing generate savings for their businesses.

I do not agree with the assertion being made—I am not saying that it was necessarily just by the Democrats—particularly by Senator Bob Brown, that industry is all bad and greedy. I do not think that is reasonable. Industry has clearly demonstrated that it is prepared to work with the government. There are savings being made, as I have outlined. We ought to encourage industry to continue to work along those lines.

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

To set Senator Colbeck straight, the parties in the Senate that work day in, day out, to promote businesses that are investing in renewable energy and energy efficiency are the Greens and the Democrats. Far from being opposed to those companies, we do our level best to promote what they do and to draw to the attention of Australians the number of businesses going offshore because government policy is driving them out of the country. They are going overseas to maximise their profits and roll out of technologies. So let us not hear the lame political comment that we have just heard from the government senator.

The question here is: why does the government resist making mandatory the requirement to implement the identified energy efficiency savings? It is all very well for Senator Colbeck to stand up and say that these companies have identified opportunities for saving energy. Have they implemented them all? Are we seeing progressive implementation? Businesses are not necessarily going to make decisions to become more energy efficient if they can persuade governments to discount power to them. In Tasmania, as most people would know, the big industrial users of energy—Comalco, for example—have bulk power contracts with what was the monopoly hydro—government-owned at that time—enterprise. We had a situation where, rather than take sensible measures to reduce their energy use, the big industrial users instead used political power to drive down the cost of energy so that they could continue to operate at a profit at the expense of the Tasmanian taxpayer. That is what industry has done in the past and continues to do around the country. They have negotiated—in the case of Tasmania—secret bulk power contracts which both Liberal and Labor governments in Tasmania have refused to make public on the basis of their being commercial-in-confidence, even though there was a monopoly supplier and one large company in the case of Comalco.

Now that these bulk power contracts are coming to an end, there is huge pressure and politics being played around energy. So let us not hear this nonsense that companies which suddenly find there are savings to be made in energy efficiency necessarily make the decision to invest their corporate dollar in that energy efficiency. Often they use investment to expand their businesses into other areas and so on.

We want an explanation from the minister as to why the government baulks at going the next step. Having required companies to identify energy savings, why will the government not then require those companies to implement those savings through a mandatory regulated measure? If you take climate change seriously, if you recognise the savings that are to be made from energy efficiency, why will you not accelerate the process? Is it because the government believes—as does Ziggy Switkowski—that climate change is not the major problem facing Australia and that we have 15 to 20 years to fiddle around while unproven technologies suddenly become proven, or does the government take this seriously? Does the government accept that we have to make significant cuts? If so, why are the government baulking at the notion of making mandatory that which they tout as voluntary?

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

Parliamentary Secretary, I identified in my speech in the second reading debate some of the reasons why businesses do not take up what they would ‘be crazy not to implement’—your words. There is quite a long list. I did not make it up. They were developed by the Ministerial Council on Energy and the National Framework on Energy Efficiency. They documented the known barriers. 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 the total expenditure for many 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. And there are others. This is not just me making something up.

The history of energy efficiency, not just here but in other countries, is that it is not enough to require companies to do audits. We need to push them to that next step. We have put the bar fairly low. We have said in our amendments that if it can be demonstrated that there is a payback period of up to three years then they should go ahead. Three years is nothing. If we were talking about 15 or 20 years payback, then you would say that that is the sort of investment you would think twice about, but three years is a very short time frame. It is our advice that the vast majority of what will be identified in these audits will be in that category.

There are 250 corporations required under the act to do the audits. You have given us the examples of Xstrata and Orica, which identify a huge number of projects that could deliver on savings, but how many of those 250 firms are you aware have commenced putting in place the investment needed for these energy savings? Out of those 250 companies, what is going to be delivered at the end of the day? That is what we want to know. If you cannot demonstrate to the parliament that this act is working, delivering energy efficiency, then it is a pointless exercise. We are trying to shore up the legislation, to make it happen—something that your government does not seem interested in doing.

So is this just a face-saving, make it look like we are doing something exercise? Is this a red tape exercise in making these companies do their audits, but you are not prepared to follow through? We need to know how effective you think this act is going to be and, if it is not going to be effective, if you cannot demonstrate that it is already delivering, then we need these amendments to make sure that happens.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I want to pick up Senator Colbeck’s claim that I am saying that business is bad. Of course, I did not say that at all. As you will have heard, Madam Temporary Chairman, what I did say—and Senator Colbeck smiles at his duplicitous delivery to the chamber—was that bad companies should not be rewarded when good companies are doing the right thing. The amendments of the Greens and the Democrats are saying: let’s make this a level playing field in the market so that where energy efficiency is identified it becomes a requirement to employ it, in the interests of reducing the impact of greenhouse gases on the climate. It is a very big component of getting things right.

Senator Colbeck might want to see Gunns in the same light as every other company. We don’t. Gunns, for example, through its destruction and burning of forests—that season is again upon us in Tasmania—puts enormous amounts of greenhouse gasses unnecessarily—there is no energy gain from this—into the atmosphere of Tasmania. We know that the Stern report said that stopping the burning of old-growth forests could make a bigger saving around the world than ending all the transport systems of the world, and it can be done now. It is the quickest way, beyond energy efficiency, to turn around the enormous threat of climate change. Gunns is a bad company. But for every bad company there are a stack of good companies who are doing the right thing.

Senator Colbeck’s party is advantaged by donations, and large ones at that, from Gunns Ltd. I think we are seeing a government that has been in too long, that is in thrall of and under gains from a corporate sector that is doing the wrong thing and that wants to stay the government’s hand from bringing in proper legislation to level the playing field so that those companies doing the right thing—and there are thousands of them—are rewarded, not penalised. That is what this debate is about.

Senator Colbeck has got it very wrong. He is new. He does not understand the complexities of the arguments here. But making simple political statements, as he has done, and misrepresenting what I have said is not going to shield him from that. He can go as red in the face as he likes sitting over there, but the fact is that we expect a more mature debate and an argument from Senator Colbeck as to why he is failing to endorse amendments like those from the Democrats and Greens. Those amendments simply say that, where savings can be found in this critical period of climate change—even the Prime Minister accepts the realities of it these days—we need to move from simply saying that people can do what they like to saying that the government will ensure that there is a level playing field, that energy audits are required and that when savings can be found in terms of not polluting the atmosphere they shall be implemented. That is what we are debating here. Let’s make it fair for all companies so that the good ones are not penalised and the bad ones are not allowed to continue their polluting trade at the expense of the atmosphere. That is what this debate is about and that is the level of argument that we challenge Senator Colbeck to take up.

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

I think it is quite amusing that Senator Bob Brown should accuse me of making political statements as part of this debate because if there is anyone adept at making political statements as part of a debate it is Senator Brown. He is probably the most political person in this place, although he continually tries to take the moral high ground. But all credit to him—he is one of those adept political operators who are very good at making political statements.

I disagree with Senator Brown in respect of Gunns. Gunns is a good company. It just happens to do something that Senator Brown does not like. So, rather than make the argument, he will demonise the company, which is quite often the approach that the Greens take. Senator Milne has already had a crack at another important company for the north of Tasmania, Comalco, and the way that they operate with respect to their energy use. If a company can make energy savings and then put those energy savings into growth, what is wrong with that? What is wrong with a company making energy savings and putting those energy savings into growth? That again takes pressure off the expansion of energy use. What is the problem with that? Senator Milne makes these arguments but I just cannot see the problem with a company legitimately making energy savings and then putting those energy savings into growth.

To turn to the points that Senator Allison made, in respect of where the process is at this point in time and what evidence we have that these energy savings are being put into place, we are still at the stage of registration of industry. That process closes this month. Obviously some businesses are further advanced than others. There is a five-year assessment process that goes through with this, obviously with reporting, and that provides a level of public scrutiny—and I think that is quite reasonable. We want to work with these businesses. We do not see at this point in time that it is necessary to enforce, by regulation or legislation, compliance. We think that industry will be willing to work with us. The work that has been done at this point in time clearly demonstrates that, and industry is genuinely interested in looking at energy savings, as I have said. Energy is a significant cost to industry and any cost savings that can be made are valuable to industry. Whether those energy savings are put into reduction of costs throughout the business or into growth of the business I do not think makes much difference. It is important that those principles apply, and that is why we are taking the approach that we are.

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

I refer again to the barriers that were identified by the ministerial council and ask the parliamentary secretary: which of those are being overcome at present? What has been done about the lack of information, high transaction costs, access to finance, low order management priorities, split incentives and so on—all of the barriers to energy efficiency which were identified? What is the objective here? How many tonnes of greenhouse gases are going to be avoided by this energy efficient measure? What will the act deliver after five years? If, 2½ years into the process, it looks like it is not going to reach the target, then what is the government going to do about it?

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

The whole point of this legislation, which was passed last year—and obviously the amendments that we are making now—is to assist industry with the inhibitors you were just talking about. That is why we are putting the legislation into place—to work with industry to help them identify the efficiencies and overcome the inhibitors.

In respect of potential targets, I think it is better for industry to be looking at what their energy savings might be than for the government to mandate that they ought to be saving 20 or 30 per cent. Industry knows its business better than government does, and for us to be imposing artificial limits and targets on industry is unrealistic. As I have said several times, industry is interested in saving energy because it saves costs. In the current global environment, there is an incentive for industry to be much more efficient. Efficiencies to be found in any area of business are important. Energy efficiency is one of them.

Some industries are significant users of energy in respect of their overall input costs. I know of a couple in my neck of the woods where energy is 30 to 35 per cent of their input costs. So there are significant incentives for them to save energy. As Senator Milne said, there is pressure on the cost of energy—that is a legitimate point. The points Senator Milne made in respect of some of the bulk energy deals that have been done and the pressure that is applied across the system are legitimate and reasonable and reinforce the point that energy is a significant cost to industry. Industries ought to be—and are, with the assistance of government through this legislation—working to identify those savings and implement them.

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

Labor will not be supporting the Democrat amendments, and not because we do not understand the sentiment behind them or concur with some of the remarks made by Senator Allison in support of them. I want to bring her back to the contents of the legislation. We are having a wider energy debate, which is fine; it is an important debate, in which the parliament ought to be engaged. But I have more modest ambitions today—to stick to the bill. However, on other occasions, I am happy to have a broader debate. Obviously it is up to senators today to do so.

This legislation is a small and fairly tentative step for the government. It is one that Labor has endorsed because it is a positive first step. My sense of the debate today is that the Greens and the Democrats would like the government to go further. I would like the government to go further. Am I going to use this bill as a means to try to achieve that? No. Why? In part because I think it is important we get the bill through and we start to make the scheme work. If we identify problems in the original act, those problems need to be fixed. I accept that. Is the government going to accept broadening the scope of the bill? No. Labor is happy to accept this bill, if you like, as a non-controversial bill because of what it does. The Greens and Democrats amendments tend to reflect the wider debate, which is fine. It is sought, in some part, to make other provisions mandatory, to broaden the nature of the scheme and to require more compulsion to implement energy savings.

We support the current bill. There is mandatory assessment of energy efficiency operations. The bill and the original act hope that the price signal will drive company behaviour but there is some evidence that that has not been enough in the past. That is why we have the act and this amending bill. Despite what should be a cost driver, there is an economic behaviour driver. Industry does not seem to have been, in many cases, as focused on that. There is now a greater focus on energy efficiency, partly because the cost is going up and the cost will go up more. People are much more sensitive to their energy usage and the costs of that.

We support the scheme. We are going to look to have it assessed fairly early. Some of the points about assessment are appropriate. Senator Allison was asking some legitimate questions about how this will work in practice. I suppose my bottom line is that the legislation is a small step. We are going to support it. I know people want to go further. The reality is that this bill is not going to take it further. It is part of the much wider debate. This reflects the government’s reluctance to take bold steps. It is very tentative in approaching these energy and climate change issues. But we say it is a worthwhile initiative. The government is not going to go further at this stage, and I am not sure that with this scheme we would want to go further at this stage. It is about trying to get business to cooperate within the framework. It does identify the main energy users and some important points are made about concessions on the price of energy.

I have some concerns about the attempt to exempt certain industries from carbon trading regimes that may occur in the future. That undermines the potential of the schemes. The real debate here is that the government is unwilling to take on the cost of CO₂ emissions. One of the drivers of energy efficiency is to put a price on carbon. The government is in denial about that challenge. Senator Minchin still remains a sceptic and the government has not quite made up its mind. It seems to be split internally on acceptance of the challenge of CO₂ emissions and climate change. What we should be debating and focusing on much more in the parliament is the whole question of the introduction of a carbon cap scheme which does focus industry on its energy decisions.

Since taking on the portfolio of resources and energy for the Labor Party I have been struck at how far in advance of the government and the parliament business is. It is way in front of us. We are about five years behind. The government is 10 years behind. Business is preparing for a carbon trading scheme. It is focused on these issues. It operates internationally and it is planning for that reality. All that needs to happen in Australian politics is for the government to be dragged, kicking and screaming to the acceptance of the world moving to carbon trading schemes and putting a price on emissions. This is a very small step in focusing on energy efficiency, but the big driver of a change in behaviour will be a price on carbon.

While I accept the desire to have a broader debate—it is a very reasonable thing and it is a good opportunity for people to make some of those broader arguments by way of considering amendments—we will not support the amendments because we do not think they are appropriate in terms of this bill, which is a small step. We are prepared to give it a go. We supported the original act. The slowness of the implementation is concerning. We think that tackling the issues of energy efficiency for these large energy users is important. The mandatory reporting requirement as contained in the bill is an important first step. At this stage we are not going to support moving to the more regulatory and more prescriptive measures that Senator Allison proposes, although I understand the sentiments behind them. We will not support the amendments but we will support the bill.

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

I am very disappointed that Labor cannot support the amendments. I am sure many voters will be disappointed as well. As Senator Chris Evans said, this is just a small step. What I think Australian voters are looking for are giant steps—giant steps because we have a huge task ahead of us. The five-year assessment period will take Australia to the end of its Kyoto commitment period—2012. I remind the government and the ALP that we are on track to reach 127 per cent of our Kyoto target of 108 per cent of 1990 levels. So we have to find a massive saving over the next five years in order to comply. These are the minister’s figures. The parliamentary secretary should not be looking around, scratching his head and thinking, ‘What’s she talking about?’ The minister’s figures show that we will reach 127 per cent of our Kyoto target by 2012.

There is an urgency to act. We have to act. We should be acting in those areas where the savings are cost effective. We know that businesses are going to benefit from this. They just need a bit of pushing and shoving to get there. That is what this is about. We cannot wait for five years to assess the situation. This is a small step and we cannot wait five years to take it. We are looking at a massive increase in our greenhouse emissions. Despite our very generous deal at Kyoto, despite the huge credit that we receive for not cutting down trees, we are still going to exceed our target by 2012.

This may not be a controversial bill, Senator Evans, but this issue is hugely controversial. The Australian people are looking for action. I do not want this to turn into a debate. Senator Evans, you said you did not want this to turn into a broader debate. We could speak for the next three weeks just on carbon trading. I will resist doing that. But we do need to bring you back to some realities here. The reason for the amendments is not just some whim of the Democrats or some flight of fancy. We are doing this because the task is so great. The government seems not to recognise that. It is wallowing around in this sea of indecision: ‘Let’s be nice to industry and let them do it in their own good time.’ There is not time. If you have read any of the reports that have come out of the United Nations in the last few weeks and months you will know that there is no time to waste. We need to take action now. If you read the Stern report you will soon understand that the folly of not taking action immediately will cost the economy down the track. It is in Australia’s interests, it is in industry’s interests, it is in the parliament’s interests—and I would have thought it was in the Liberal Party’s and the Labor Party’s interests as well—to act and to act now. Here is your chance.

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

I rise to also express my disappointment that the Labor Party will not support the amendments and, presumably, the Australian Greens amendments, which we will deal with shortly, which try to achieve the same thing—that is, to put some teeth into this legislation. I thought it was the role of a legislature, when making laws, to make the best laws that it can for the country. To say that we do not want to broaden the debate now and we do not want to increase any part of the framework at this time is an excuse for inaction. Only yesterday the shadow minister for the environment, Peter Garrett, was reported in the Sydney Morning Herald as saying how wonderful the European Union was for having set a 20 per cent reduction in greenhouse gases below 1990 levels by 2020. I agree. Labor has a policy of 60 per cent reduction on 1990 levels by 2050.

How are Labor going to get there if at every turn they back off from any mandatory requirement for industries to do anything? Whilst you can talk all you like about the residential sector, the fact of the matter is that we have 250 corporations using more than half a petajoule of energy per year and they cover round 40 per cent of Australia’s total energy use. That is from the government’s own explanatory memorandum.

This is an opportunity to act and act now. If you accept what Sir Nicholas Stern has had to say and what the world’s scientists have had to say in the IPCC report, we have fewer than 10 years left as of last year. So we have until 2016 to significantly reduce greenhouse gases and to try to maintain global temperatures below an average two-degree rise. How are we going to do this by 2016 if we allow five years of fiddling around before we say whether this has worked? I hear the minister say that that is crazy and that of course they would do it. Perhaps the government can explain to me why it is that, according to the International Energy Agency, Australia’s energy efficiency has improved at less than half the rate of other countries? Are our industries just not bright enough? Are other countries better? What is going on here? The difference is that other countries have regulated. They have regulated because they do not want to penalise progressive companies. Progressive companies are disadvantaged by the implementation costs of energy efficiency measures relative to companies not prepared to act under voluntary schemes. That is a fact.

If you read yesterday’s paper you would have seen that AGL has gone offshore and joined the Chicago trading exchange. Industry is well ahead of the government and the opposition. In fact, the irony is that, while the Treasurer and the government argue that they are the best managers of the economy, Australia’s most progressive businesses are all saying, ‘We are fed up. We are sick of the uncertainty. We know a carbon price is coming. By not acting you are disadvantaging us and we are having to go offshore.’ So off goes AGL—not some small start-up company by any means—to the Chicago exchange. The minister needs to explain why, if the government are managing this so well, these companies are rushing offshore. It is because they can see the opportunities in the carbon market.

More particularly, I would like an answer to the fact that the 2004 energy white paper stated that energy efficiency could deliver 40 per cent of energy savings to the year 2010. We are already in 2007. It noted that energy efficiency improvements in Australia have occurred more slowly than in other nations, with just a three per cent improvement from 1973-74 to 2000-01. Why is it that Australian industry has failed on energy efficiency? Why is it that the European Union had to have a directive on energy efficiency that has led to building a competitive advantage in the whole environmental and energy management area? Why did the European Union do it if it was crazy for companies not to act without it? The fact is that it has not happened for all the reasons that Senator Allison has just indicated. The government have not acted and now we are in a global crisis.

It is quite apparent to me that the government does not believe we are in a global climate crisis and that we have only until 2016 maximum to make significant greenhouse gas reductions. It is obvious to me that that is the case. It is obvious to me that we have climate sceptics and the government advocates—such as Ziggy Switkowski, who was in the paper today saying that climate change is not the greatest threat facing Australia, without going on and saying what supposedly is—at the same time as we have state governments moving to cut off wetlands and so on because of a water crisis that quite clearly is linked to climate change. Yes, there are climate sceptics. There are nuclear advocates in the coal industry saying: ‘Our technology won’t be ready for 15 or 20 years, so climate change is not that urgent. It can wait for our technology to come on-stream.’ It cannot wait, we cannot wait and, what is more, the Australian economy is suffering because progressive businesses are heading offshore.

We have hollowed out the manufacturing sector and we are losing the innovators, who are going offshore because of government policy. The minister has still not explained to anyone in this house why it is that the government think that voluntary regulation is going to work and why there is no target. One of the amendments I am going to move in a moment is for a national target. The minister has said he has no idea at all what level of energy this might save in five years. At the end of five years they will add up what they did save and then tell us. There is no target. There is no performance limit or benchmark at all. There is just a country ramble when we are faced with a huge global crisis.

I would like an answer from Senator Colbeck as to why it is that Australia’s energy efficiency has improved at less than half the rate of other countries if voluntary schemes work so well. In terms of Labor’s objection, I want to know from the Labor Party whether they endorse the target that the opposition’s shadow minister for the environment, Peter Garrett, suggested was a good thing in the paper yesterday—the European Union’s target of 20 per cent below 1990 levels by 2020. If so, how are they going to get there if they, too, refuse to make mandatory the energy efficiency savings identified in the audits that relate to 40 per cent of Australia’s total energy use? It suggests to me that they are prepared to talk up climate change in every forum except the parliament, where it counts.

Question put:

That the amendments (Senator Allison’s) be agreed to.

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

I move amendment (1) on sheet 5179:

(1)    Schedule 1, page 3 (after line 4), before item 1, insert:

1A  Section 3

Repeal the section, substitute:

3  Objects

        (1)    The objects of this Act are:

             (a)    to facilitate the establishment of a national energy efficiency target; and

             (b)    to promote the identification and implementation of measures to reduce energy consumption through energy efficiency.

        (2)    In order to achieve its objects, this Act requires:

             (a)    the Minister to establish a taskforce of experts to report on the implementation of a national energy efficiency target; and

             (b)    corporations to undertake an assessment of their energy efficiency opportunities to a minimum standard in order to improve the way in which those opportunities are identified and evaluated; and

             (c)    corporations to publicly report on the outcomes of that assessment in order to demonstrate to the community that those businesses are effectively managing their energy; and

             (d)    corporations to implement identified energy efficiency measures contained in their energy assessment; and

             (e)    establishment of an Energy Savings Fund.

This is an eminently sensible amendment because it addresses the lost opportunity in this energy efficiency ‘lost opportunities’ amendment bill. It recognises the lost opportunity to require corporations to implement the findings in their audits. It goes further by requiring the minister to set up a task force to develop a national energy efficiency target. The problem is that the government refuses to set climate change and greenhouse gas reduction targets and time frames. It is working with an open-ended process even though the real world is working with very clear processes and time lines in response to daily reports about the adverse impact of climate change. By refusing to set national energy efficiency and greenhouse gas reduction targets that are realistic within the time frames, the government is condemning future generations to appalling lifestyles and climate consequences. Government members will live long enough to see that reality.

The parliamentary secretary did not respond to the question I asked him during the last debate on this legislation and I would like an answer. Why has Australia’s energy efficiency improved at less than half the rate of that of other countries? Is it because we do not know how to do it, because our corporations are not smart enough or because governments have failed to regulate to require corporations to do it? Please, let me have an answer. Why is Australia failing so badly? Why has our energy efficiency improved at less than half the rate achieved in other countries if voluntary schemes work? It is a simple question and I will keep asking it until I get an answer from the government. It is an unacceptable situation given the global crisis that we must deal with.

First, we need a national energy efficiency target. We must then identify and implement measures to reduce energy consumption and establish an energy savings fund. That would then generate the investment we need to be able to roll out the energy efficiency technologies that will effectively deal with the crisis we have at the moment and enable us to achieve the identified 30 per cent energy efficiency savings. As I indicated in my speech in the second reading debate, those savings will buy us the time to leapfrog the old technologies and enable us to meet increased demand through energy efficiency, reduction of use and increased supply using new renewable energy technologies.

I cannot for the life of me see why the government will not take this opportunity. It is not enough for the Minister for the Environment and Water Resources to talk about banning light globes when he and this government are refusing to require action from the 250 corporations that use 40 per cent of Australia’s energy. The minister insulted the community when he said that those corporations must simply register by March of this year. That will be followed by a five-year process to see how they go after they have registered and have done their audits. At the end of that process, we will assess whether they have actually done anything. If they have not done anything, presumably the government may then regulate. We do not have that time; we do not have five years. Sir Nicholas Stern said that we have less than 10 years to deal with this issue.

The Labor opposition’s support for this legislation is an abrogation of its responsibility. It is time that this duplicitousness stopped. Members cannot tell Australians that they support greenhouse gas reductions and not take the necessary measures to achieve that. I put the same challenge to Labor. A minute ago I heard Senator Evans say that the opposition is not prepared to require companies to implement the findings of the audits. How will we achieve a 60 per cent reduction by 2050 without requiring that? It is not enough to write op-ed pieces for newspapers. What will Labor do to achieve the target? We are approaching crunch time. European Union directives require its members to achieve targets, but nothing is required in Australia. That is completely unacceptable.

The government supports the clean coal fund and the Labor opposition wants to spend $1.5 billion on unproven clean coal technology. We want to set up an energy savings fund to support energy efficiency measures in Australia. No doubt that will be voted down today, just like the Democrat amendment was voted down. This amendment is designed to change the objects of the legislation to give it some teeth, to require compliance and to provide some vision to take this beyond an unlimited vacuum. It says that we need an energy efficiency target in Australia. It will come, but probably not until 2010, when the world is facing an even greater and more urgent crisis. The problem with not acting now is that it will make it a lot harder and a lot worse for future generations when they are forced to act.

So I now put to the parliamentary secretary: why is Australia’s energy efficiency improving at half the rate of other countries if the government’s voluntary arrangements work so well? Perhaps he can answer that. Secondly, what is wrong with establishing a national energy efficiency target? I am not saying what the target should be; I am setting up an intention to have a target and a process to get one. Why wouldn’t we have a national energy efficiency target if we are serious about tackling climate change? Thirdly, why wouldn’t we require these companies to implement the savings that they have identified? Finally, how are we going to reduce greenhouse gas emissions in Australia if the 250 companies that use 40 per cent of our energy are not mandated to do anything?

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

I indicate that the Democrats will support this amendment. No target has actually been suggested in this amendment. I think we probably could put a target in fairly quickly. Two or three per cent is doable by 2010 by all accounts, and we could probably say five per cent by 2012 or so. However, we do support the idea of establishing that target. But the point that the government needs to hear is that this all needs to happen quickly. We certainly support the establishment of a task force of experts to do it, but you would want to make sure that they started their work on Monday week or so in order to get this going.

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

I have just a couple of points in response to Senator Milne’s questions in particular and to some of the things that Senator Milne said during her presentation. Senator Milne is right: our rate of reduction of energy use is lower than, say, that of the EU. A number of factors are involved in that process, one of those being that, because Australia has a significant advantage in energy costs, it attracts a higher proportion of high energy use companies. One of the things that the government are seeking to do through this process, through the legislation that was passed last year, and which we are looking to make some minor technical amendments to today is to work with those industries so that they and the government can understand where efficiencies might lie and be gained. That is the whole purpose and point of this legislation.

So there are a number of factors involved, particularly our low energy costs, which are a significant advantage to industry in our country. Senator Milne earlier talked about the impact on manufacturing. I can assure her that, if there is a significant increase in the cost of energy that is disproportionate to other countries around the world, there will be a very negative impact on industry and employment in this country. That is one of the reasons that the government has said consistently that it will not disadvantage Australian industry in its energy policy, and that is why it insists that, if we are to be part of a carbon trading system, it be a global carbon trading system.

And that is why we have engaged with the world’s largest greenhouse emitters to build a process that puts us in a situation where we do not negatively impact on our industry. We are working very closely with industry to see those things are moved forward. So I think that our approach is a responsible one in respect of industry in this country and in respect of employment. We see it as very important that we work with industry. The Greens cannot have it both ways. They cannot say that industry are ahead of us and then say that industry are not interested in participating in this process. We know that they are. I have already given some examples of how they are looking at this process, working with us, identifying savings and putting them into place.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The first thing that needs to be said is that one has to have some sympathy for Senator Colbeck in this situation. It is a complex area, and it is not one that he has been used to debating. Indeed, it is an area that the government has turned its face against for a decade now. One of the things that have put Australia in a very disadvantaged position is the Howard government’s scepticism about climate change and therefore its failure to follow through with world’s best practice in this area.

The first thing to be said about Senator Colbeck saying, ‘We don’t want industry to be disadvantaged,’ is that that is the government again lining up, saying it wants to be there with the world’s worst practice. You will find countries such as maybe Russia, India perhaps and the United States under the Bush administration—and this will rapidly change if the Democrats keep control of the legislature in the United States and there is a Democrat president next year. But why should Australia be lined up with the world’s worst practice? And that is endorsed by the Labor Party in refusing to take up these very sensible amendments.

Then Senator Colbeck says as an excuse that Australia attracts a higher proportion of high energy use companies. If that is the case, that simply means that Australia has a bigger opportunity to employ energy efficiency to cut its greenhouse gas emissions, because the bigger the corporations, the more energy they are using, the bigger in general the opportunity for cutting back through efficiency.

We now have the enormous burden on our shoulders to reduce greenhouse gas emissions. But the problem here is that this government is under the thrall of the coal industry; the aluminium industry, the huge consumer of coal-fired power; and the heavy metallurgical industries, which consume so much of the power. Those companies do not want to have their responsibility to the world and to coming generations imposed on them, because they are looking at the profit line and it is cheaper for them to do nothing. It is cheaper for them to continue to hyperpollute the atmosphere at no cost. And that is what the government and the Labor Party opposition are endorsing here today.

We do not have, as Europe has, a carbon tax. That is world’s best practice. We do not have, as Europe has, a carbon trading scheme. That is world’s best practice. And we do not have, as Europe has, mandated energy efficiency targets. That is world’s best practice. The shadow spokesperson for the environment, Peter Garrett, said in a column in the Australian yesterday that at last Britain is bringing in the world’s first climate change bill. Where has he been? That is what Europe has been effectively implementing over the last couple of decades. Indeed, Senator Milne brought a climate change bill into the Senate for the Greens last year, which will be debated later this week. We will find that, on today’s performance, the Labor Party will oppose it—and the government will oppose it.

What we have here is the two big parties in this parliament, nobbled by the high energy use companies that Senator Colbeck referred to, refusing to take up the responsibility that is incumbent upon them to change this country from world’s worst practice to world’s best practice and to do the right thing by all Australians, their kids and their grandkids. The Stern report, let me remind the chamber, said that a one per cent cut in gross domestic product to fund doing the right thing now will save our grandkids a 20 per cent cut in their gross domestic product because of the impact of climate change. We are charged with the responsibility to act now and to act urgently—all the more urgently because of the failure of the Howard government over the last 10 years to act responsibly and in accordance with world’s best practice.

What we are getting here today from both the government and, surprisingly, the alternative government—the Labor Party—is world’s worst practice. This is driven by the coal industry and others who say: ‘Let’s not legislate. Leave it to us—who have failed to do the right thing for decades—to do the right thing some time in the future. But let’s not get us ahead of world’s worst practice.’ The Democrat amendments, and now Senator Milne’s amendment for the Australian Greens, head us towards being world leaders.

Let me remind the chamber that with energy efficiency targets come enormous job-creating opportunities. This is not neutral in terms of jobs. When you move to cut wasted energy in industry and in the retail, the agricultural and the domestic sectors, you create jobs. If people are going to have inventories of their power use implemented, that requires tradespeople to fix up the waste. It requires consultants to advise people. I advise every business in Australia to get an inventory done to cut their energy wastage. Even the Prime Minister is now talking about carbon taxes and a potential carbon trading scheme. When that happens the price of power is going to go up. What then happens is that those people who are energy efficient and are using less power have much smaller power bills. The extraordinary thing about this process is that it ends up cutting the power bills of people who employ energy efficiency measures and it creates jobs. The European experience is that you also create technology that is then exportable to other countries and you gain a windfall in export income. That is the business side of this.

We can be, as the government and opposition are now, lazy about this and say: ‘Leave it to industry; we will draw their attention to it but we will leave it to them to implement it.’ But the world is changing rapidly and there will be mandated targets a little way down the line. It is coming. It is unavoidable. Wait till we see what targets the second round of Kyoto talks, due in three to five years, set for the world. Just the week before last the countries of the European Union went back to their own domestic parliaments and, while the government and Labor Party here are blocking this legislation, all legislated for this. They want a 20 per cent cut in greenhouse gas emissions and a 20 per cent delivery of renewable energy by 2020. They are going to legislate for it. Prime Minister Blair in Britain and his environment secretary, Mr Miliband, consequently announced that they are going for a 30 per cent target. Here we have a government and an opposition led by Mr Rudd who want no targets at all in the short term.

Why are targets not being set? Because they are in the thrall of heavy industry, against the interests of the average Australian—the average Australian family, the average Australian small business and indeed the big businesses themselves. When you have that sort of blinkered thinking, you wonder just how much the Australian economy is going to be disadvantaged by this lazy failure to implement world’s best practice now. That is what this amendment is about; it is saying, ‘Let’s move up to the European level of practice.’

Angela Merkel, the conservative Chancellor of Germany, spoke about the disaster stalking humanity. She understands that somebody has got to take the lead. When she, Prime Minister Blair of the UK and others were asked if Europe was going to be put at a business disadvantage, they went straight to the clear ethical requirement on the world to change course and talked about somebody having to take the lead. How different that attitude of conservative and Labour premiers in Europe is to that of the coalition and the Labor Party here in Australia, which says: ‘We measure ourselves by world’s worst practice. We are not going to step up to the plate, be ethical and take the lead here.’ I am afraid there is a penalty clause—that is, the business end of this operation. Since 2003 Germany has created 60,000 jobs just in the area of renewable energy. How many have been created in the area of energy efficiency, which is the area before the chamber at the moment? I cannot give you figures but let me tell you: it is thousands of jobs. Because that is what happens when you move wise, world-leading legislation.

So on all counts the government and the opposition have got this wrong; the Greens and the Democrats have got it right. These amendments should be passed, and the pity of this is that in a year or two from now we will be back in here passing these very same amendments as legislation simply because the world is going to force the Australian government to. The Australian people want these changes—80 per cent of the polls show that, for example, the Australian people want the Kyoto protocol ratified—but this government says no. But these changes will come, because the public is wiser than the leadership of either the coalition or the Labor Party.

There should be time for rethinking here. I am amazed that the Labor Party lines up with the Howard government on this. I am amazed that the Labor Party cannot see that world’s best practice is what we should be leading. We are not saying, ‘Go out into some unknown territory;’ we are simply saying, ‘Line up with those countries in Europe and with California and the other states in the US which have decided to break away from the Bush mantra of pushing oil and coal.’ Let us put our children and their interests ahead of those of Exxon and the other big corporations which do not want any legislated result.

We have got the big corporations winning in Australia on ‘Let’s not have legislated targets’, but the Greens have taken a more responsible attitude to this, as have the Democrats. That is why these amendments are here and that is why they should be supported. They should have the support of the opposition. The last 10 years of failure might lead us to the conclusion that the government could not raise itself to do the right thing by Australia even in 2007.

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

I want to comment on the remarks Senator Colbeck made a little earlier when he said that high energy users are attracted to Australia. They are indeed. It is not just because Australia has not ratified Kyoto. It is not just because we have got cheap power, mostly coal-fired power. It is also because the Australian government has not shown much interest in those big energy users—how they use energy and why they use as much as they do—or put any sort of pressure on them to reduce usage. This bill is another example of that. In fact, we do not have energy and energy efficiency data collected in this country so the parliamentary secretary cannot answer a whole range of questions about those 250 biggest energy users. We do not have minimum key performance indicators of energy intensity. We do not calculate those on an annual basis. Our energy data collection is a disgrace. We just do not know which energy users are using power and how. That is the fact of the matter.

A point about carbon trading needs to be made, and this is something that Senator Evans raised before: it will not necessarily produce energy efficiency. It is likely—we do not know because we have not got it yet; we have got a task force, nothing more—that it is going to be applied at the smokestack as it were, and that is not where energy is used. So you need other mechanisms to mandate energy efficiency.

Also, energy efficiency would make power cheaper. The government does not seem to understand that. As I said in my second reading debate speech, a study has been done—I am not making this up—which shows that a one per cent energy efficiency target would reduce our wholesale electricity price by 19 per cent. You would not only be doing industry a favour by finding savings for them through the audit requirement; you would be advantaging consumers across the board because that wholesale price would go down. I explained why. It is about peak loads; it is about the need to find new energy generation that would be avoided with even a one per cent target, a very tiny per cent. We know that one per cent can be achieved at little or no cost.

There is much the government can do. It does not necessarily take away the cheapness of our energy, although plenty are talking about a price signal. Again, no doubt our high energy users are attracted to Australia because we do not have that price signal and we do not look like having one, frankly, any time soon. The reasons that those energy users are attracted to Australia need to be examined. It is not something to be proud of; it is an indication of the lack of government action and the lack of the right signals to make energy efficiency happen.

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

I will add to those remarks. I am interested to hear the government’s explanation as to why Australia’s energy efficiency has improved at less than half the rate of other countries—that being that we have a large number of companies that are big energy users and we attract others. It interests me because the European Union includes countries like Hungary, the Czech Republic, Slovakia, Bulgaria, Romania, Cyprus, Estonia, Poland and Slovenia. These eastern European countries that have joined the European Union are way behind the eight ball compared with Australia in the level of energy efficiency of their companies and where they are coming from. Yet all the countries in the European Union are required to abide by the European Union directive on energy efficiency. So I do not accept for a moment the excuse that Australia attracts companies that use a lot of energy and therefore we go soft on them. The European Union does not go soft on the eastern European countries; it requires the whole of the European Union to meet the energy efficiency targets and to follow the directives that give effect to those targets.

What about Australia? That does not answer the question at all. Senator Colbeck has said that we cannot have it both ways—that we say industry is ahead of the government and then we say industry will not implement these measures. It is not inconsistent at all. I am saying that industry is way ahead of the government in recognising that a price signal is needed for carbon, and it is crying out for one. I am saying that it is the government that is actually holding up investment—because there is no certainty in the investment climate because it does not know what the regulations are going to be.

But the issue with companies then not doing the right thing is that the progressive companies are disadvantaged because of the implementation costs of energy efficiency relative to companies that are not prepared to act under voluntary schemes. Of course there are going to be some companies that do not want to act, but that does not negate the view that companies generally, good and bad, are way ahead of the government in requiring investment certainty in regard to a carbon signal and price, emissions trading and energy efficiency. But the good companies are the ones that are disadvantaged by the government’s refusal to act.

Why am I not surprised? You only have to look at the delegations that Australia takes to the climate change conferences. That will tell you which companies in Australia have clout with this government and why we have this proposal for voluntary schemes and not mandated implementation. Look at who went to Montreal. Look at who went to Nairobi. You find the aluminium industry fair, square and central to what goes on in the negotiations. Do they support mandatory targets? No. They use the whole time on the government delegation to try to undermine global efforts to get mandated targets, particularly for the post-2012 period. Not one of those companies supports mandated targets on energy efficiency or stringent targets post-2012. They are the companies the government is listening to. They are the companies the government is responding to by saying, ‘Okay, we’ll require you simply to report on what you could do. We will not require you to implement those things that you identify you could do.’ I am not seeing progressive companies on the government delegations to the conferences on climate change. The companies are there to support the government’s view. It and the United States want to undermine, water down, blow up and destroy any effort by the rest of the world to get a stringent post-2012 regime on climate change.

Regardless of the efforts of those companies and the efforts of the Australian government, we are going to have a post-2012 emissions reduction treaty for the world. What Australia does will be relatively irrelevant. What the US does will be significant, and the US is already moving very fast. It is quite clear that, regardless of who wins the next presidential election in the US, the US will move rapidly and is already moving. Look at the Chicago Climate Exchange. Look at the north-eastern states of the US and their trading scheme. Look at what Arnold Schwarzenegger is doing in California: requiring 20 per cent renewable energy to be purchased by the utilities. That is why, thanks to this government, Solar Heat and Power has left Australia—bye-bye!—and has gone to California. Those utilities are desperate to sign contracts with anybody who can produce renewable energy to meet their 20 per cent target supplying renewables. They could sign up immediately in California, whereas they have 300 megawatts out at Moree waiting to be implemented and they cannot do it because the government will not put a price on carbon. It is because of the cheap price of coal-fired energy that they cannot establish their concentrated solar thermal at Moree.

So let us not have this talk about crippling Australian industry. In fact, to put some figures on it, the economic modelling for the Ministerial Council on Energy in 2003—four years ago—showed that a 50 per cent penetration of a low-energy efficiency scenario over a 12-year period would deliver the following substantial economic benefits. It found that real GDP would be $1.8 billion higher, employment would increase by about 9,000, stationary final energy consumption would be reduced by nine per cent and greenhouse gas emissions from stationary energy would be reduced by nine per cent. Why would you not want that to happen—improvements to GDP, improvements to employment, a reduction in stationary final energy consumption and a reduction in greenhouse gases? That was in 2003. Why would you not do it? That is the question that the government must answer.

It is clear to me that the pressure that the government comes under from the self-titled ‘greenhouse mafia’—that is, the coal industry, the oil industry and the large energy consumers—means that that is where the effort is put in. That was revealed by Four Corners last year and it is revealed daily by the efforts of the spin doctors and the sceptics. That is why the government will not do it. But I would like to hear that from Senator Colbeck. When your economic modelling for the Ministerial Council on Energy in 2003 identified that if you went with even a 50 per cent penetration of a low-energy efficiency scenario over a 12-year period you would get a $1.8 billion increase in real GDP, employment figures increasing, stationary final energy reduced and greenhouse gases reduced, why will you not do it?

Question put:

That the amendment (Senator Milne’s) be agreed to.

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

I move Australian Greens amendment (2) on sheet 5179:

(2)    Schedule 1, page 3 (after line 4), before item 1, insert:

1B  Section 4 (after the definition of monitoring warrant)

Insert:

payback period means the period of time it takes to recoup the cost of the initial capital outlay of an energy saving project.

This amendment relates to the definition of the payback period—meaning the period of time it takes to recoup the cost of the initial capital outlay of an energy saving project. It is an important insertion in the bill in relation to matters pertaining to implementation of the mechanism to require companies to implement their identified energy efficiency savings. This amendment defines the payback period. It is a straightforward amendment.

I note that Senator Colbeck, representing the government, still has not given us an explanation as to why the government opposes a national energy efficiency target. I hope in the course of the debate that we are going to get an explanation for that. He is, after all, Parliamentary Secretary to the Minister for Finance and Administration. One would expect that there is a view on why the government does not want a national energy efficiency target, and I would like to hear what it is. The amendment I have moved is a straightforward definitional amendment.

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

The definition proposed by the Greens in this amendment is, effectively, unnecessary because it duplicates the definition that is already in the regulations that apply to the bill—regulation 1.3—and have the same effect. The government does not support the amendment.

Question negatived.

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

I move Australian Democrats amendment (5) on sheet 5180:

(5)    Schedule 1, page 3 (after line 21), after item 2, insert:

2A  Subsection 10(1)

Omit “used by the entities that are members of the group is more than 0.5 petajoules”, substitute “related greenhouse gas emissions is greater than one thousand (1,000) tonnes of CO₂ equivalent or five thousand (5,000) gigajoules, which ever is the lesser”.

This amendment changes the threshold above which companies would need to be involved in this measure. It would omit members of the group at 0.5 petajoules and substitute those that have related greenhouse gas emissions greater than 1,000 tonnes of CO₂ equivalent or 5,000 gigajoules, whichever is the lesser.

The effect of that would be to bring around 5,000 high energy using companies into the scheme. We have had a look at what those companies might be and have found that they are companies that have around 200 employees. So we are talking here about still quite large companies in this country—certainly large enough to have an audit done and for energy efficiency measures to be put in place. We say that 250 companies, which is the current reach of the act, is just too few and that, by reducing the threshold, there would be far more involvement and you would still be dealing with the biggest companies and those companies that could afford, both in an administrative sense and in an investment sense, to do this.

Question negatived.

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

I seek leave to move Australian Greens amendments (3) and (4) on sheet 5179 together.

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

I want to make the point that the Democrats cannot support Australian Greens amendment (4), and I wonder if it would be best to move amendments (3) and (4) separately.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

My understanding is that you can put the questions separately. So the amendments can be moved together but the questions can be put separately.

Leave granted.

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

I move Australian Greens amendments (3) and (4) on sheet 5179 together:

(3) Schedule 1, page 3 (after line 4), before item 1, insert:

1C  At the end of the heading to Part 3

Add “energy use threshold”.

(4)    Schedule 1, page 3 (after line 21), after item 2, insert:

2A  Subsection 10(1)

Repeal the subsection, substitute:

        (1)    The regulations must prescribe the energy use threshold.

     (1A)    The regulations must set a sliding scale for the energy use threshold of not more than 0.5 petajoules for a controlling corporation’s group for each financial year commencing in the 2007-08 financial year reducing annually to not more than 0.2 petajoules for a controlling corporation’s group by the financial year 2011-12.

      (1B)    A controlling corporation’s group meets the energy use threshold for a financial year if in that year the total energy used by the controlling corporation’s group is more than the energy use threshold nominated for the relevant financial year as prescribed by subsection (1A).

The government is proposing that the Energy Efficiency Opportunities Amendment Bill apply only to those companies that use more than half a petajoule of energy per year. As we said, that is 250 companies covering around 40 per cent of Australia’s total energy use.

The Greens believe that it is critical not only that we capture the companies that use more than half a petajoule but also that, over time, we expand the coverage of the Energy Efficiency Opportunities Amendment Bill to cover companies that use less than half a petajoule so that, over time, you would capture all the companies that use over 0.2 petajoules. We would go from half a petajoule down to 0.2 petajoules so increasingly, over time, we would capture more and more of the companies that are high energy users.

We are proposing that each financial year, commencing in 2007-08, it reduce annually to not more than 0.2 petajoules for a corporation by the financial year 2011-12. It is a progressive increase in the number of companies that are captured by this legislation, so that you progressively get energy efficiency measures moving through the system. We think it is important. I do not think it is enough to deal with just 250 companies. I think we have to increase that over time. We are suggesting a phase-in so that the energy use threshold is changed over time and we capture more and more of the nation’s large energy users.

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

The Australian Democrats support amendment (3). We do support amendment (4) to some extent but think that the target of 0.5 petajoules for 2007-08 could be pushed to our amendment. It is contrary to our amendment which says that we should go to the lower threshold straightaway and involve more than 250 companies. It is a small point, and it is obvious that the amendment is not going to get up so I doubt that it matters.

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

The government does not support the two amendments. The scheme has been carefully targeted at the 250 biggest energy users, which comprise 60 per cent of business energy use—a fairly large proportion of energy use—and provides what the government sees as a sensible regulatory balance. What is being proposed would potentially increase the regulatory burden on industry by some 20 times but for much less gain in respect of energy efficiency. There is real capacity for lessons learnt by the 250 major energy users to be passed on by the public reporting process to other industries.

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

I thank Senator Colbeck for his contribution, and I ask him if he would table the analysis that has been done in regard to the increased regulatory load on those companies and also the assessment of the energy efficiency gains if this were to be implemented. The inference of what he is saying is that the energy efficiency gains would not be worth the regulatory effort, so I would like to see the analysis that the government has done that supports Senator Colbeck’s contention. I would ask Senator Colbeck to also tell me why the government opposes a national energy efficiency target.

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

It is a fairly simple equation. We are getting access to 60 per cent of business energy usage by working with these 250 companies. You are getting much less return—perhaps only an additional 30 per cent—by taking it from 250 to 5,000 companies. It is a fairly simple equation that you are imposing a much more significant regulatory burden on industry for a much smaller gain.

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

I would like to know from Senator Colbeck why a 30 per cent gain in energy efficiency is not worth achieving. That is the inference: that it is a very insignificant gain. Thirty per cent is a very substantial gain, and I would like to have an explanation. I did ask that the government table the documentation and analysis that has been done to demonstrate the point.

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

I would like to clarify, Senator Milne, that I am talking about coverage of energy use. I think the government have made a reasonable calculation in respect of that documentation. I do not have a table at this point in time to place before the chamber, but the government believe that we have made a sensible and balanced decision in relation to the proportion of industry that is being brought in under this process, and bearing in mind that this legislation was passed in this form last year. Effectively we are making some minor technical amendments which the Greens and the Democrats are trying to broaden through a different agenda, as was indicated in the debate earlier.

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

It is clear that there is no analysis and that it is a back-of-the-envelope analysis. The government admitted earlier that it does not have a target and it does not have any idea what the energy savings are going to be from this legislation. It does not have a target and it does not have a performance benchmark. It simply knows that there are 250 companies that cover around 40 per cent of Australia’s total energy use and that, by bringing this in, somehow we might reduce that energy use. There is no target and there is no modelling. We do not know what is being aimed at in the five years that we have got until the review. And now the government has told me that expanding the threshold to progressively include more and more companies that have energy usage of less than half a petajoule but more than 0.2 of a petajoule is going to impose a regulatory burden and insufficient energy savings. But it cannot identify what those savings are. It has got no idea. That is the fact of the matter. There is no documentation to support the government’s view. It is an ideological one which simply says, ‘We don’t think the regulatory burden is worth the effort. We’ve got no idea what amount of energy we could save or what amount of energy we will save,’ and the government is blocking this amendment.

In terms of broadening the agenda, when this legislation was first brought in we moved these amendments and the minister of the day, Senator Ian Campbell, could not answer our questions—just as Senator Colbeck cannot answer them today. We know that the minister personally tried to get the implementation of these audits and did not succeed. We are facing an ideological view about voluntary behaviour as opposed to regulatory mechanisms. There are no figures on the table to justify it, and history is going to judge the government very severely for failing to act at this time because it is so obvious that this is necessary. This is also rendering Australian business uncompetitive with overseas business. As the measures become more and more stringent in other countries, the levels of efficiency in those countries will get higher and Australian businesses will go out the back door—just as your refusal to have a mandatory vehicle fuel efficiency standard has driven the Australian car manufacturers to the brink whereby they are not competitive with China or the EU. The best they can do is use a government subsidy to re-tool and sell V8s into a US market where it is completely failing.

If you want to make Australian industry less efficient and less competitive with overseas, you are going the right way about it by sticking with the advice of certain members of the big business community—high energy users who do not want to be required to do anything and want to have the ease of a voluntary situation continue. It is simply not going to occur. The rest of the world is going to force us, whether Australia likes it or not. Tragically, when it does, our industries are going to be less efficient. I just wanted to get on the record that there is no documentation to justify the government’s position in relation to failing to extend the threshold. The government cannot indicate at all what levels of savings may be achieved by expanding the number of businesses and energy users. We have got no idea from the government. It just adopts a position of opposing it because it does not want to extend the number of businesses or the amount of energy covered that this threshold change would bring about.

Sandy Macdonald (NSW, National Party) Share this | Link to this | Hansard source

We are taking these amendments separately. The question is that Australian Greens amendment (3) be agreed to.

Question negatived.

The Temporary Chairman:

The question is that Australian Greens amendment (4) be agreed to.

Question negatived.

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

by leave—I move amendments (5) and (6) together:

(5)    Schedule 1, page 4 (after line 23), after item 5, insert:

5A  After Part 6

Insert:

Part 6A—Implementation of identified energy efficiency measures

20B  Requirement to implement identified energy efficiency measures

        (1)    A registered corporation required to lodge an assessment plan in accordance with Part 5 must identify as part of the plan a program of energy saving capital improvements (the energy audit) which have a payback period specified in subsection (5).

        (2)    A portion of the saving identified in the energy audit required by subsection (1) must be made within three years from the commencement of the Energy Efficiency Opportunities Amendment Act 2007.

        (3)    The regulations must include provision for a registered corporation to delay the implementation of an energy audit prepared under subsection (1) if the registered corporation provides satisfactory evidence of an intention to implement the energy audit.

        (4)    A registered corporation must provide an annual summary of the implementation of the energy audit of the previous year and a summary of the proposed implementation of the energy audit for the following year to be included in the register maintained by the Secretary in accordance with section 12.

        (5)    The regulations must set a sliding scale to progressively lower the duration of the energy payback period from not more than two years in the financial years 2006-07 and 2007-08 to not more than four years by the financial years 2010-11 and 2011-12.

(6)    Schedule 1, page 4 (after line 23), after item 5, insert:

5B  After section 22A

Insert:

22AA  Public reporting of identified energy efficiency opportunities

                 If an energy efficiency opportunity identified during an energy efficiency opportunity assessment is assessed by the corporation as having a payback period of less than 10 years, the company must:

             (a)    report the details of the opportunity and the payback period in a report of the type required by section 21; and

             (b)    include the details of the opportunity and the payback period in its next annual report.

One amendment relates to the implementation and reporting of energy efficiency opportunities. It is clear from the divisions earlier that the government has no intention of requiring companies to implement the identified savings from their energy efficiency audits, which is what this amendment would give effect to.

The other component will require registered corporations to include an annual summary of the implementation of the energy audit of the previous year and a summary of the proposed implementation of the energy audit for the following year in the register maintained by the secretary in accordance with section 12. The reason for this is, as Senator Colbeck said earlier, that the government has no way of knowing what companies have done and what they intend to do in any 12-month period and we will come to the end of five years of the review before we actually know the situation. You will not be able to see how this legislation has performed after a couple of years.

This amendment includes a mechanism that requires companies not only to implement their audits but also to provide an annual summary of the implementation of the audit for the previous year and a summary of the proposed implementation of the audits for the following year and to include them in the register maintained by the secretary. This amendment sets a sliding scale to progressively lower the duration of the energy payback period to not more than two years in the financial year 2006-07. You cannot set a lower bar than getting companies a payback within not more than two years, taking that out in 2007-08 to not more than four years by 2010-11 and 2011-12.

In respect of a payback period, this is saying that you must implement the findings of your audit provided in the first instance you get a payback period that recoups the cost of the initial capital outlay as a result of the energy savings project in that two years, gradually increasing the degree of difficulty for companies but not to more than four years. It is not very difficult for companies to see that they actually get a financial benefit within that payback period. It is eminently sensible that that occurs. It is quite apparent from the debate earlier that the government will not support it, but I am interested to know why the government would not want to support such a sensible amendment.

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

One of the reasons we do not support the amendments is that there is already a requirement for companies to complete their first site assessments by the end of the coming financial year, with public reporting to start next year. So company boards, their shareholders and the public will have the opportunity both to scrutinise and to judge companies on their performance. We see that as being an effective way to ensure that the public, companies and those involved are aware of the opportunities, and also some of the smaller companies may be able to take up the improvements that are brought into place. As I think we have all agreed, there will be an increase in the cost of energy as time goes on, which will provide a further incentive for industries generally to become more energy efficient and therefore cost effective. We see that there are already adequate measures in the bill to cover this issue.

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

It is quite clear that the government has a much greater faith in corporations and the transparency of their reporting than has been the experience in Australia with the corporate sector. One only has to look at the ethical investment and social responsibility sectors to see that there are a number of companies that are not interested in that level of reporting. The Global Reporting Initiative and any number of initiatives have tried to force companies to be more transparent, and that is not occurring. That is why I have moved these two amendments.

We say that if an energy efficiency opportunity identified during an energy efficiency assessment is assessed by the corporations as having a payback period of less than 10 years then the company must report the details of the opportunity and the payback period in a report, as detailed in section 21. It must also include the details of the opportunity and the payback period in its next annual report, thereby informing its shareholders that there are energy savings opportunities. That gives shareholders an opportunity to judge the performance of the board against what the company is actually doing. What I am seeking here is greater transparency, greater requirements to report, greater capacity for government to assess how this scheme is going, to generally improve corporate governance and to give Australia a much better idea of the opportunities and the speed with which we could make the changes we need to make, given that we have to make deep cuts in greenhouse gas emissions by reducing energy use in a very short time frame.

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

Amendment (6) requires assessment for energy efficiency opportunity activities of a payback of less than 10 years. I make the point that, in fact, a payback of four years would pick up the vast majority of energy efficiency opportunities, with the average being 2½ years. It is a very short time frame, so we do not need to go out 10 years in order to capture the vast majority.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

A question has arisen a number of times in various forms this morning, but I have not heard a response to it from the government. What in its view or in the estimation of the Australian Greenhouse Office—which the government established a decade ago and which looked at this extensively—is the potential for energy efficiency savings in Australia in the purview of this amendment, which is 10 years, and, in Senator Allison’s view, three years or five years? Can the government inform the chamber of the assessment to date of the energy efficiency potential in Australia as a whole and from the various sectors?

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

It has been acknowledged several times during the debate that the government has not set a target. The government has been criticised by the Greens and, I think, the Democrats for not having set a target. Its objective is to maximise the efficiencies, and that is the whole point of this legislation—which is what I have said a couple of times. The government sees the benefits of this legislation in working cooperatively and effectively with industry to maximise the energy efficiencies, and in that context—which has been indicated and acknowledged during the debate—it has not set targets.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I was not asking for a target; I was asking for the effective potential that the government knows about and has identified for saving power to be used in new industry, without us having to build new polluting thermal power stations or other options. After more than 10 years in office, can the parliamentary secretary tell us what the potential for energy efficiency in Australia is?

The Rocky Mountain Institute, which has been a world leader in this field at least since the 1980s, looks at countries like Australia as having a potential saving of 30 to 40 per cent. That seems astonishing, but people who have investigated what a real effort to save energy without reducing output or the goods available to us might produce know that you save a lot of money when you do that. There are savings not only in energy consumption by current consumers and, therefore, in the price passed on to people buying goods that might come from the manufacturing sector, for example, but also for the shareholders involved. Senator Milne has just told the committee about the advantage of this Greens amendment in making sure that shareholders have access to the information about savings to be made to that bottom line—which many people are so often interested in—by an energy efficiency coming out of an energy efficiency audit. I was asking: after 11 years of studying this, could the minister tell the committee what the government’s assessment of the energy efficiency potential for this nation is?

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

Senator Bob Brown mentions the figure of 30 per cent, which he finds quite incredible. The government’s figures indicate that the potential savings could be between 10 and 30 per cent.

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

It begs the question: if the savings are between 10 and 30 per cent, why aren’t we mandating a target to achieve those savings?

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

If the parliamentary secretary is not going to answer that question, he may be able to answer this one: if the savings are between 10 and 30 per cent, what does the government think it will achieve from this legislation? What part of that 10 to 30 per cent will be the outcome from this legislation?

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

As I said before, we do not have a target; we have not set a target. That is an indicator of the potential savings that we see may be achieved through this process.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

No target is one thing; but savings of 10 to 30 per cent is another. Ten per cent is obviously the bottom line—the easy target. Is the parliamentary secretary able to tell the committee whether this legislation will achieve the bottom line savings of 10 per cent through energy efficiency?

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

This could turn out to be a circular argument, Senator Bob Brown. They are the potential savings that the government see as part of this process. We are not setting targets. I have consistently indicated that. He has criticised us for doing that, but that is the government’s position. We do not intend to set targets, but our information indicates that between 10 and 30 per cent are the parameters of the potential savings from the original legislation that was passed last year and which we are making some minor technical amendments to as part of the debate today.

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

Again, it is the ‘energy efficiency lost opportunities’ legislation we are dealing with today. I wanted to comment on Senator Allison’s remarks regarding energy efficiency opportunities. Whilst the Greens amendment, in terms of implementing energy efficiency measures, did set out payback periods—as I said, very easy ones of not more than two years initially, going out to four years in 2010 and 2011—that is not to say that energy efficiency measures cannot be achieved with a longer payback period. That is the point. The easy ones can be dealt with in a short time but the more difficult ones may require a longer payback period. In fact there were a number of opportunities identified with longer payback periods of up to 10 years, which is why I have moved this particular amendment.

The fact of the matter is that boards do not tell their shareholders that those opportunities exist, and as we currently stand there is no requirement for them to even go outside the boardroom. That is why it is important that companies be required to identify the opportunities with a longer payback period—say less than 10 years—and to include those details in the annual report. Otherwise, how are shareholders going to have any idea that those opportunities exist?

The largest energy users are big corporations—they have many institutional shareholders—and there are ethical investment funds looking for opportunities, and so on. Why wouldn’t you require companies to identify those opportunities and let the shareholders know that decisions have been made not to invest in those long-term energy efficiency opportunities? It may be that shareholders endorse that view; it may be that they do not. But they cannot make a decision about that and they cannot look at the strategies of a corporation unless those energy efficiency opportunities, over a long period of time, are identified. I put in this amendment an opportunity for public reporting because it allows some transparency and some real involvement of shareholders in the operations of companies.

The greenhouse gas effort—I come back to this at all times—that the world has to make within 10 years is huge. It is dramatic. In my view we have to get more than 80 per cent reductions on 1990 levels by 2050 and at least 20 per cent, if not 30 per cent, by 2020. How are we going to get there if we do not give the community the opportunities to exercise the power as shareholders when it comes to making judgements about the corporations in which they have shareholdings? That is why I am keen to see this additional requirement for reporting there to allow that collaborative effort between the community, business and government to work towards achieving significant greenhouse gas reductions. I would like to know from the parliamentary secretary why he would oppose having this requirement for corporations to put this information in their annual reports.

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

As I have already indicated, under the act companies are required to complete their first assessments by the end of the coming financial year and publicly report them next year for energy efficiencies that can have a payback period of up to four years. So there is already a public reporting process that companies have to comply with. Given that that already exists as part of this legislation we see the Greens amendment as superfluous.

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

I do not know whether we are reading from the same sheet. You are talking about the requirements to report in terms of the government’s register or whatever; I am talking about the requirement of corporations to put it in their annual reports and to look at 10 years, not four years. So it is not the same at all. By all means say that you do not support it but please do not insult us by pretending you do not understand it.

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

Senator Milne, you should listen to what I have said. I have said that there is a requirement for public reporting. They are public or they are not public. There is public reporting. As Senator Allison has indicated, most of the projects can get a payback period of three or four years. You are talking about a payback period of 10 years; it is likely to be a very inefficient project. We see that there is public reporting; we have indicated that several times. That is why we do not support the amendment.

Question negatived.

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

I move the Australian Greens amendment (7) on sheet 5179:

(7)    Schedule 1, page 4 (after line 23), after item 5, insert:

5C  At the end of Part 8

Add:

Division 7—Energy Efficiency Target Taskforce

38A  Establishment of Energy Efficiency Target Taskforce

                 The Minister must, before the expiration of 3 months after the commencement of this Act, establish an Energy Efficiency Target Taskforce (the Taskforce) to inquire into and report on the establishment of a national energy efficiency target.

38B  Membership of Taskforce

        (1)    The Taskforce is to consist of 4 members, appointed by the Minister.

        (2)    The Minister must appoint members to the Taskforce with the following expertise:

             (a)    one member representing industry;

             (b)    one member representing conservation interests;

             (c)    one member representing the Commonwealth;

             (d)    one member with expertise and qualifications in energy conservation.

        (3)    The member appointed under paragraph (2)(c) must convene and chair the Taskforce.

38C  Report of the Taskforce

        (1)    The Taskforce is to report to the Minister within 18 months of the commencement of the Energy Efficiency Opportunities Amendment Act 2007.

        (2)    The Minister must cause a copy of the report of the Taskforce to be tabled in each House of Parliament within 5 sitting days of receiving it.

This amendment establishes an energy efficiency target taskforce to inquire into and report on the establishment of a national energy efficient target. It cites the membership of the taskforce and then it says that it is to report to the minister within 18 months of the commencement of this particular amendment act and that a copy of that report is to be tabled in each house of parliament.

As I indicated before, this is not setting what the energy efficiency target is. It establishes a mechanism so that Australia can have the option of an energy efficiency target. It is not saying what level the target is, but it is giving us a mechanism to move towards having a target. I still have not had an explanation from the government as to why you oppose establishing a national energy efficiency target. Any country that is serious about dealing with climate change has an energy efficiency target. You say that we are simply working with business to assist business to reduce their energy use, but to what end? Is it to assist them to be more profitable? That is fine, and if you mandated it, it would make them more profitable more quickly. But to what end? The reason other countries have national energy efficiency targets is that they are serious about reducing their greenhouse gas emissions, that they have ratified the Kyoto protocol and that they intend to meet the targets of greenhouse gas reductions. Therefore they are heavily into reducing demand and at the same time building renewable energy so that they can come within their targets.

Even if we are serious about even 108 per cent of 1990 levels, at the moment we are not on track to achieve it. Without the windfall of the land use, land use change and forestry provisions, Australia is on track for 127 per cent of 1990 levels. We are nowhere near what we need to do. If you are saying you will not have a national energy efficiency target, you are saying you have no commitment to a long-term reduction in greenhouse gases, unless you believe that clean coal and nuclear are somehow going to be operational in the time frame and somehow reduce greenhouse gases. The government has absolutely no capacity to do this because the technologies in the case of nuclear are too expensive, too dangerous and not going to happen in the time frame, and in the case of clean coal are unproven. It is fantasyland. Putting government money into that is not in the best interests of Australia and we will oppose it.

Let me come back to this—this is a mechanism for having a national energy efficiency target. I would hope that the Labor opposition is going to support this as well, because if we do not have a mechanism then we are never going to have a target and without a target we are not going to meet even the greenhouse gas reduction commitments we have, let alone our moral responsibility to the rest of the planet to get our emissions down. Let’s have a more serious answer than simply, ‘We’re working with companies to let some of them become more energy efficient.’ Without a target, without performance benchmarks, it is just a gesture to corporate Australia with no outcome.

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

The Greens amendment, quite frankly, is nothing more than a recipe for bureaucracy and red tape, and obviously the government does not support that. We have indicated several times during the debate today that we do not support targets. The Greens continue to refer to other countries that have them. But when setting a target you need to have a mechanism in place to actually meet that target. Interestingly, many European countries are talking to Australia about this program as a mechanism to meet their targets. In fact, a recent Productivity Commission report on energy efficiency recommended against setting a target. We reiterate our perspective on that but do not support this amendment.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The Productivity Commission report on that is one thing; the world’s best practice by countries comparable to us is another. They are way ahead of the Productivity Commission, this government and this opposition in setting targets. The minister earlier said that energy efficiency could produce 10 to 30 per cent savings of the current use of energy by Australia’s largely coal-burning power stations, which are creating an enormous pollution hazard for the future of this country with massive costs involved. I ask the parliamentary secretary: is it true that, if we were to achieve a 30 per cent target, we would have no need to look at the nuclear option at all?

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

While the parliamentary secretary is considering that, I would like to respond to his view about the Productivity Commission. It is certainly true that they came out against a national energy efficiency target. Frankly, it makes them a laughing stock around the world, because their rationale for that is the old economic view that anything beyond the production of energy is free and an externality. They take the use of fossil fuels as separate from greenhouse gas emissions and the cost to society of producing the power. They say there is not an economic case to save energy. They are a joke. It is a joke that they are arguing along those lines. They should talk to state governments who are now challenged with having to put in new supply or somehow achieve energy efficiency. They need to take on board the principles of sustainable development and that ecologically sustainable development requires that the externalities of the production of energy, such as greenhouse gas emissions, are internalised in the cost.

We will have a price on carbon. It will internalise the cost of carbon dioxide. Perhaps then the Productivity Commission will recognise that there is an economic case for saving energy. But the way they think is that you do not cost carbon dioxide emissions into energy. I cannot believe that the Productivity Commission still behaves in this way, but then again I could not believe that ABARE continued to give the advice it gave to government until I saw that the former head of ABARE Brian Fisher had gone across to Charles River Associates, the biggest climate change sceptics on the planet. He is now giving them the benefit of his advice. What a pity he did not admit at the time that he was advising ABARE and advising government that he was involved in such climate change scepticism.

The Productivity Commission report on the national energy target will be seen as a national embarrassment as Australia gets a bit more perspective on internalising the costs of carbon dioxide emissions and the costs of climate change. The Productivity Commission should determine the cost to the Australian economy of the drought and then tell us about whether or not there is benefit to be gained from energy efficiency.

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

Giving some consideration to Senator Brown’s question, a 10 per cent to 30 per cent decrease in the amount of industry use of energy—given that that is only 40 per cent of the national use—does not rule out any form of energy generation coming online. The government’s position on future energy use is quite clear. We do not rule out any of the energy options. The Greens obviously have a different perspective to the government on that. That is their business. Given that the overall energy needs of Australia are expected to potentially double by 2030, ruling out any energy option is irresponsible. That is the government’s firm view. Considering a potential reduction in energy use by industry of between 10 per cent and 30 per cent, given that industry accounts for only 40 per cent of overall energy use, does not leave room to rule out any energy generation options.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

What an incredible failure of vision is involved in those statements. Firstly, if you did take industry as being 40 per cent and a 30 per cent cut was achievable, there is 12 per cent cut out of the Australian current consumption and available for new use. But the parliamentary secretary is saying that the government is banking on there being no cut in domestic consumption, no cut in the retail sector and no cut in the agricultural sector. The government is happy to allow business as usual, and that is fatuous. It is so last century. It is incredible that it is coming out of a government seven years into this century. If industry can achieve a 30 per cent cut, there is a strong argument that the other sectors can achieve bigger cuts than that. That is where we should be aiming.

Energy efficiency is the best way to provide power for new users because when you switch off a light the power that was used there is available to switch on a light for some productive purpose in some new installation—it is as simple as that. But the parliamentary secretary says that regardless of that we will be building new power stations. That is illogical. To be putting vast investment into that—including into Mr Howard’s favoured option of nuclear power—is incredible when energy efficiency, which creates no greenhouse gas emissions and is so much cheaper and so much more job productive, can do that job.

What Senator Milne and I are uncovering here is a government that simply does not know what it is doing. It simply does not have priorities; it does not have a plan. Eleven years after coming into office, it is still treating climate change in a cavalier manner and showing that there is a better nous in the average primary school student about climate change than there is in the current cabinet and leadership of this country. It is reckless to say that we will go ahead with nuclear power even if energy efficiency is there as a viable option without the hazard, without the cost and without the division that that Howard option would bring to the Australian community.

Meanwhile the opposition supports the government in opposing these amendments which would mean that we would be equipped rapidly, with the first report coming down in 18 months, with the knowledge about the contribution that energy efficiency can give this country—knowledge that this government should have had 11 years ago. We could then move on to implementing the gains from that, which are going to save us from having to establish more thermal stations in a decade when clean coal—the other thing that the Prime Minister; the opposition leader, Mr Rudd; and Mr Garrett talk about—is not available. The Stern report said that we must act within a decade to save our kids from extraordinary impacts from climate change, which Angela Merkel, the Chancellor of Germany, can see is a potential disaster for humankind.

But here we have studied ignorance. We have the government saying, ‘We will not allow the Greens amendment through because that would allow us to discover how much energy efficiency this country has the potential to achieve,’ knowing that would mean that we do not need to establish either polluting coal-fired power stations or dangerous nuclear power stations, to which the Prime Minister is attracted. This is studied ignorance from a government which has its mind back somewhere in the last century. It is the government’s responsibility to establish what the targets are here. Here we are talking about energy efficiency—which is cheap, is good for business, improves profits, creates jobs and, as you get the technology for it, creates export opportunities—and the government is saying: ‘We don’t want to measure that. We’ll leave it to the Europeans to grab the world advantage in that. We want to be back with the polluters, Saudi Arabia and Russia included, because the coal industry has control over our policy basis.’

Studied ignorance can never be accepted. But turning down this amendment is studied ignorance by the government. It is a deplorable attitude. This is going to have to be made up by future governments a few years or many years down the line at far greater expense to this country. If you do not have the information base, you are not able to plan and you are not able to establish options. The climate change spectre hangs over us. The reality of climate change—the droughts, the worst bushfires, the worst cyclones, the increased coastal erosion coming from sea level rises and the feeling of concern about it in the community, which is a negative—is being ignored by this government, which should be putting itself at last onto a basis of best practice in gaining information.

Senator Milne’s amendment says, ‘Let’s get that information’—we all know it is readily gettable—‘and put some expertise into having a report back to parliament and consequent reports.’ The government says no. It is incredible that this government can turn its back on its past failures and also wants to compound them into the future with this minimalist attitude to its high responsibility for tackling climate change to the advantage of business, families and the environment in Australia. It cannot do that. This particular moment is just an indicator of how far short of the mark this government is. This amendment should not be here; it should be in this legislation. It should have been legislated 10 years ago. Instead of that, we have the parliamentary secretary effectively saying: ‘I don’t want to know. We will leave it to business to work it out as it goes along, on a business-by-business basis, but I don’t want to know what can be achieved in Australia to deal with climate change.’

I know his direction has come from the prime ministerial office, but he has a responsibility to be able to adequately answer the challenge that comes out of amendments like this. There is no adequate answer from the government. What makes this all the more worrying is that the opposition agrees—there is studied ignorance from the government and studied ignorance from the Labor Party. If there is some reason why we should not know what the potential for energy efficiency is in this country, let us hear it. I have not heard it today and we are not going to hear it if the minister continues to fail to rise to the challenge of taking up a positive amendment like this. We are going to get a negative response from both the government and the opposition.

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

I note the parliamentary secretary said that there is no point in having an energy efficiency target unless you have the mechanisms to achieve it. I think that was the most satisfactory answer I have had from the government all day as to why it will not move for an energy efficiency target: it is not prepared to put in place the mechanisms to implement it. It does not want to have a benchmark standard against which performance can be measured. It is the position of the Howard government that, unless you have the mechanisms to implement and achieve the target, there is no point in having the target. It will be interesting to see if it is also the position of the opposition. This is a straightforward amendment which is a mechanism to provide a national energy efficiency target for Australia. I urge the support of the chamber on this amendment.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I have one other vitally important question to put to the parliamentary secretary. He mentioned that on current projections Australia’s energy consumption—largely through burning coal, or maybe, if it was rushed by the Prime Minister, we could have a nuclear power station or two online by 2030—will double by 2030. Has the government considered demand management for the sake of the future of the planet and the people who will be on this planet in the future? What is the government’s attitude to demand management? If it does consider that sensible option, how is it going to undertake it?

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

That is what this legislation is all about. That is why we passed the bill last year: to look at reduction in energy use, to bring on energy efficiencies and to reduce the potential growth. I might add that Senator Bob Brown’s previous recitation ignores quite a few facts. It is long on rhetoric and cliches but pretty short on fact. The figures that I gave of a potential doubling of the energy demand by 2030—and, I might add, a trebling by 2050—do, in fact, incorporate potential energy savings and demand growth below economic growth, reflecting growth in less energy-demanding industries. The government’s figures do give consideration to energy efficiencies as part of our projections on growth. On a slightly different topic, I reflect that we were criticised roundly prior to the 1996 election for not setting an unemployment target. Enormous pressure was applied to the Prime Minister to set an unemployment target. Our objective was to strive to do the best we could and we have achieved the lowest unemployment rate in over 30 years; it is currently 4.6 per cent. I think that we apply the same principles to this particular process with good cause.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The parliamentary secretary says that, taking into account energy efficiency, we will have doubled our energy consumption by 2030 and tripled it by 2050. These are frightening figures. Can the parliamentary secretary tell the committee what the greenhouse gas emission outcome scenarios for 2030 and 2050 coming from those figures will be for Australia compared to the 1990 level, which is the benchmark for the Kyoto protocol?

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

That will depend entirely on the mix of energy options that the country has before it over that period of time, which is one of the reasons why the Prime Minister—quite rightly—does not rule out any energy generation option. There is obviously going to be a growth in the demand for energy. The indicators demonstrate that quite clearly. No responsible government would take any clean energy generation options off the table. So the answer to Senator Bob Brown’s question is that it really depends on the energy mix. The government’s view is that clean coal, renewables and nuclear all have a part to play not only in meeting that demand but also in reducing CO₂ emissions.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Let me put the question again, because it was not answered. The parliamentary secretary says that there will be a doubling of energy consumption in Australia by 2030, taking into account energy efficiency, and then a tripling by 2050. He tries to squib answering the question about what that will mean in terms of greenhouse gas emissions by saying that it will depend on the mix. Let me ask the parliamentary secretary: using the best mix possible—he has already disclaimed energy efficiency as being in that mix, because he has taken that into account—what are the projections for greenhouse gas production in 2030, when we have doubled energy consumption, and in 2050, when we have tripled it? On the best figures—which the government will have come up with; obviously, it would be irresponsible not to—what is the best scenario that Australia is looking at in terms of greenhouse gas emissions by those two dates?

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

I have already given my answer. I do not intend to expand on it any further. I think I have given quite a reasonable answer to the question. Senator Bob Brown is obviously not interested in that answer. But I have provided my answer to the chamber.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

What the parliamentary secretary is saying is that he does not have an answer. He can give figures about energy consumption—that is, a 100 per cent increase by 2030 and a 200 per cent increase by 2050—but even on a best-case scenario he cannot give figures about greenhouse gas production. We must assume that those figures will be of the same order, because he has said that those figures for energy consumption take into account energy efficiency so we can eliminate that from the mix. That is extraordinarily threatening to the future of this planet. That breaches the Intergovernmental Panel on Climate Change report. It breaches the call by thousands of scientists and hundreds of Nobel Prize winners, which predated the Howard government coming into office back in 1996, that we tackle climate change. It breaches any standard of sensible practice in dealing with the reality of climate change and the impact it is going to have on this nation of ours, Australia.

It just shows how captured by old power bases this government is. It knows what the energy requirements of the corporations are but it does not know about the greenhouse gas emissions. I think it does, actually. It has had the Greenhouse Office working on things like this for the last decade. The government knows what the phenomenal increase in greenhouse gas emissions is from the scenario being presented by Senator Colbeck here this morning, but it is too ashamed to give those figures to this committee—because they are too frightening and delinquent to contemplate for a government that will not go in for demand management and will not set energy efficiency targets. In turning down this amendment of Senator Milne’s, the government does not want to know what the energy efficiency capabilities in this country are.

This is studied ignorance and it is irresponsible. Not much more can be said about it. This is failing this nation. It is failing the people in Australia—the families, the businesses, the small towns and the cities. We are all going to have to live with the failure to act now. We have 10 years of it behind us, and here we have a government in full knowledge, if ever it had it, still failing to deliver on very simple tasks like equipping itself with the knowledge required to be able to make the best decisions 18 months down the track. Here we have the Howard government saying: ‘We don’t want to know. We will cut down an amendment from the Greens that would enable us to have the knowledge base to work on energy efficiency—the best alternative after demand management—in a carbon neutral fashion, tackling the huge problem of climate change.’ The government will have to live with that. But the Greens will continue to put forward positive amendments like this, even if the government and the opposition take a negative attitude towards them.

Question put:

That the amendment (Senator Milne’s) be agreed to.

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

I move Australian Greens amendment (8) on sheet 5179:

(8)    Schedule 1, page 4 (after line 23), after item 5, insert:

5C  After Part 8

Insert:

Part 8A—Energy Savings Fund

38D  Establishment of Energy Savings Fund

The Energy Savings Fund is established by this section.

38E  Purposes of Energy Savings Fund

        (1)    The purposes of the Energy Savings Fund (the Fund) are to provide funding:

             (a)    to encourage energy savings; and

             (b)    to address peak demand for energy; and

             (c)    to stimulate investment in innovative energy savings measures; and

             (d)    to increase public awareness and acceptance of the importance of energy savings measures; and

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

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

        (2)    It is not a purpose of the Fund to provide funding for investment in low emission power generation, or any other kind of power generation, where the primary purpose of the generation is to generate energy for sale into the power grid.

38F  Payments into Energy Savings Fund

There is payable into the Fund:

             (a)    all money received from contributions required to be made to the Fund under section 38H; and

             (b)    all money appropriated by Parliament for the purposes of the Fund; and

             (c)    the proceeds of the investment of money in the Fund.

38G  Payments out of Energy Savings Fund

        (1)    There is payable from the Energy Savings Fund any money:

             (a)    approved by the Minister to fund all or any part of the cost of any energy savings measure that the Minister is satisfied promotes a purpose referred to in subsection 38E(1); and

             (b)    approved by the Minister to fund all or any part of the contributions that the Commonwealth is required to make for the purposes of national energy regulation; and

             (c)    required to meet administrative expenses related to the Fund; and

             (d)    required to meet administrative expenses of the Minister in connection with the Minister’s functions under this Act.

        (2)    In exercising the Minister’s functions under paragraph (1)(a) (but without limiting the generality of that paragraph), the Minister may:

             (a)    approve selection criteria from time to time to be applied to determine the kinds of energy savings measures that will be eligible for funding from the Fund; and

             (b)    require a person or body seeking funding for an energy savings measure to do either or both of the following as a precondition to applying for or obtaining funding:

                   (i)    to submit an energy savings action plan that includes details about the measure;

                  (ii)    to provide any other information requested by the Minister about the measure; and

             (c)    obtain and have regard to any advice, recommendations or other information provided to the Minister by a committee appointed by the Minister, or by any other person or body that the Minister considers relevant.

38H  Minister may require registered corporations to make contributions

        (1)    The Minister may by regulation require registered corporations to make an annual contribution for a specified financial year to the Fund.

        (2)    A regulation made for the purposes of subsection (1):

             (a)    must specify the annual contributions payable by each registered corporation to which it applies (being an amount that does not exceed the maximum amount, if any, prescribed by the regulations); and

             (b)    may specify that an annual contribution may be paid by instalments during the financial year to which the regulation applies; and

             (c)    must specify the time or, in the case of an annual contribution that is payable by instalments, the times at which any contribution required under the regulation is to be made; and

             (d)    may be made before or within the first 3 months of the financial year to which it relates.

Since the government opposes implementing the energy efficiency audits that this legislation requires and having a national energy efficiency target, let us hope that the government and the opposition can support the establishment of an energy savings fund. We have had the low-emissions technology fund set up by the government. It caused great excitement to start with because people thought it was actually going to invest in new renewable energy technology. Instead of that, of the $500 million that has been allocated, more than $300 million has gone to the coal industry, one of the most profitable industries in the country, and less than $80 million has gone into renewable energy projects. So not only has it been a huge disappointment in terms of the renewable energy sector but, equally, when you are talking about new energy, it is not talking about the technologies that will help to save energy.

I am proposing to complement what the government has already got with its low-emissions technology fund. I am saying: let’s set up an energy savings fund. The purposes of the fund would be to provide funding to encourage energy savings, address peak demand for energy, stimulate investment in innovative energy savings measures, increase public awareness and acceptance of the importance of energy savings, encourage cost-effective energy saving measures that reduce greenhouse gas emissions arising from the use of energy, and provide funding for contributions made by the Commonwealth for the purposes of national energy regulation.

The purpose of the fund is not to provide funding for low-emissions power generation for renewables. That is a separate thing altogether. This is specifically a fund to facilitate investment in energy savings. If the government and the opposition want to put billions into clean coal, then they must have some justification for why they would oppose putting substantial sums of money into energy savings.

Progress reported.