Minority Report from Labor Senators
The Bill is a huge missed opportunity to
ensure our children have a clean, healthy energy future
When our children
look back, they will judge the Howard Government very harshly for not taking
stronger action to support clean energy and avoid dangerous climate change.
True to form, the
Howard Government's Renewable Energy
Amendment Bill 2006 does very little to help avoid dangerous climate
change.
The Bill is another
missed opportunity for clean energy, and another example of the Howard
Government fiddling while Australia burns.
While this Committee has been considering
this Bill, the Howard Government has once again shown it does not support
renewable energy.
Over the last month the Minister for the
Environment, Senator Ian Campbell, has blocked a wind farm in Victoria because
one parrot every 667 years was threatened, and then the Minister tried to
stymie a Western Australian wind farm which his own Department had given the
green light to.
Instead of blocking clean energy projects and presenting Bills such as
this one which do very little to help avoid dangerous climate change, the
Howard Government should seize the economic opportunities of the worldwide push
to clean, renewable energy.
Sadly, the Howard Government's approach to
wind farms specifically and renewable energy more generally is all about
politics and not about the environment.
The Howard Government is taking Australia
down the wrong path.
By not taking stronger action in this Bill to
support clean energy and avoid dangerous climate change, the Howard Government
has shown that its own political interests are a higher priority than providing
a clean, healthy environment for our children.
Labor Senator's main concern is that the Bill
is a missed opportunity for renewable energy, but we are also concerned with
one specific and unintended consequence of the Bill, namely that the
anti-gaming provisions in Clause 30D of the Bill are quite likely to have some
unintended consequences for the sugar industry.
Section 30D creates
considerable risk and uncertainty for some renewable industry sectors. It is particularly the case for the sugar
industry, where a number of sugar mills operate in a local area. It is important that the definition of gaming
be clarified in the legislation and not to be left to the Regulator by doing so
has the potential to put at risk future investment in renewable cogeneration in
the sugar industry.
Cane transfers between sugar mills (which are
also renewable generators) are a normal operating practice. The practice is likely to increase over the
coming years as the industry restructures to optimise operations and reduce
costs to compete internationally. Under
the proposed changes this has the potential to be defined as gaming.
It is disappointing that the Committee has
not accepted the clear and cogent arguments made in submissions by industry on
this matter.
Recommendation
1
To address the unintended consequences of the
anti-gaming provisions, Clause 30D should be amended to ensure the definition
of a gaming arrangement focuses on arrangements where the predominant outcome
it to create more renewable energy certificates without an increase in total
electricity generated.
The Bill is a huge missed opportunity for
clean energy
Announced in 1997
and implemented in 2001, the Mandatory Renewable Energy Target has been
responsible for the deployment of renewable energy projects and
technologies.
This has meant the
2010 MRET target of 9500 GWh of generation is likely to be achieved by the end
of 2006.
The Government
should have taken advantage of the Renewable
Energy Amendment Bill 2006 to increase and extend the MRET target to 2020.
When MRET was first
announced the Government's stated intention was to increase the market share of
renewable energy generation as a percentage – to increase market share by 2%. This
is what the Government said:
On the eve of the third Conference of the Parties (COP3) under the
framework convention on climate change, the Prime Minister announced that
`targets will be set for the inclusion of renewable energy in electricity
generation by the year 2010. Electricity
retailers and other large electricity buyers will be legally required to source
an additional 2% of their electricity from renewable or specified waste-product
energy sources by 2010'.
(Senator
Ian Campbell, Second Reading Speech, Renewable Energy (Electricity) Bill 2000,
Hansard 14 August 2000).
Senator Campbell on MRET (Hansard 14 Aug
2000):
And
what else does this mean for Australia? It means jobs, particularly in regional
areas.
However in its
design MRET became a Gigawatt Hour (GWh) target rather than a percentage of
market share. That is, by making the
target in GWh rather than as a percentage of electricity generated, the target
became a dead target.
The result is that
market share of renewable energy in 2010 will by approximately 10.5% - exactly
the same as it was in 1997.
In other words, MRET
hasn't increased the market share of renewable energy, it has simply enabled it
to keep pace with our growing demand for energy.
Implications of the Government's current 'dead'
MRET target
The renewable energy industry is currently
facing a significant down turn in project activity and investment. Without an increase in MRET, Australia is at
risk of 'stranding' industry capability, technology, skills and intellectual
property. This will come at a time when
the world increases global constraints on greenhouse emissions.
In other words, while MRET helped build industry capacity in the face
of greenhouse constraints, its ability to respond in the future will be
diminished.
By making the MRET
target a dead target in GWh rather than as a percentage of electricity
generated, the Howard Government will be allowing the potentially huge greenhouse
friendly renewable energy industry fall over.
The importance of industry stimulus measures
such as the Mandatory Renewable Energy Target (MRET)
All around the world
governments are putting in place polices to facilitate the growth of the
renewable energy industry.
The future for
United Kingdom wind power was brightened with the July 2003 approval of up to
6000MW of offshore wind by 2010. In
Spain, Denmark and Germany alone the expansion of the renewable energy sector
has created about a quarter of a million new jobs in the last few years.
John Howard's
refusal to ratify the Kyoto Protocol has meant Australian companies such as
Macquarie Bank are investing in massive renewable energy projects in Europe and
Britain.
Wind continues to be
the world's fastest growing energy source.
Yet at home we must do better.
According to
Business Review Weekly, Australia is missing out on $3 billion worth of
investment due to the inertia of the Howard Government.
If we are to grow
our renewable energy industry effectively and reduce greenhouse gas emissions,
we need a regulatory frame work that allows the market to operate with
certainly. We need effective incentives
to drive investment.
Mandatory Renewable
Energy Targets (MRET) are part of this solution. MRET seeks to diversify our electricity mix
and contribute towards greenhouse gas abatement in the long term. MRET is needed to ensure there is incentive
and viability for the renewable energy industry.
The theory behind
MRET is right and it works. The
incentive is an effective subsidy provided by the market. But the Howard Government has set the target
too low, and the Bill is a missed opportunity to increase the MRET.
As the current
Mandatory Renewable Energy Target is expected to be reached within by the end
of 2006, we are essentially capping our capabilities.
Avoiding further
dangerous climate means long term vision, ambitious targets and multiple
solutions. Small targets mean small
returns.
Quickly achieved
outcomes may look good for government, but short-sightedness is killing our
potential and with it our environment.
Our renewable energy market needs long term vision if we are to see the
rewards, to boasts in jobs and investment.
We need far reaching goals.
Why the Bill should have increased the MRET
Climate change is
the greatest environmental challenge facing the global community. However, in Australia there is still no
national climate change strategy and, because of the Howard Government's
complacency, Australia is on track to increase
its greenhouse pollution by 23% by 2020.
The Howard
Government's complacency over climate change is placing our environment,
economy and vital infrastructure at risk.
There is
overwhelming scientific evidence that climate change caused by carbon pollution
is making Australia hotter, the ocean warmer and more acidic, and that this
directly threatens every city and town's water supply and the Great Barrier
Reef and Kakadu.
The science says that climate change increases the intensity of cyclones
and hurricanes. Climate change means we'll
have more category 4 and 5 cyclones. If climate change is unchecked it will
severely damage Australia's agricultural and tourism industries, while also
affecting many Australians with more severe weather events and further water
restrictions.
2005 was the hottest
year on record and the five hottest years have been in the last seven. The Bureau of Meteorology says this is
because carbon pollution is changing our climate.
Climate change poses a challenge
for Australia and the world, and Australians must rise to that challenge. All of us — industry, governments,
communities and individuals — must do our fair share.
With this challenge comes
opportunity: to enhance our health
through cleaner air, and an opportunity to strengthen our competitiveness by
transforming our economy to make it more efficient and more sustainable.
Doing so means drawing on the
ingenuity and innovation of all Australians.
Our region holds
many exciting investment possibilities yet only with a global mindset can there
be the necessary transfer of know how and technical expertise to see a
world-wide wind energy network.
Partnerships in our
region have the potential to unlock huge economic and environmental
opportunities for our nation. With the
necessary mechanisms and support it is clear that the renewable energy can
become the focal point for our region.
Indeed, our full participation in the global network is essential to
unlocking environmental and economic growth opportunities.
The Howard
Government has so far failed to take up this opportunity. The Bill is another example of the Howard
Government's slothful approach to supporting renewable energy and avoiding
dangerous climate change.
We have the
potential for a stronger renewable energy industry, yet the government's
inaction has instead seen our jobs go overseas and our market isolated. The Government is deliberately frustrating
the expansion of clean energy technologies which are already available –
solutions that are already tried and tested – such as solar and wind energy.
The Bill is merely
tinkering with the issues when stronger action is needed.
What is needed from
Government are drivers of technology change and policies which promote the take
up of renewable energy.
The Howard
government's selective and isolationist attitude continues to inhibit further
development of the renewable energy sector and subsequently our ability to
avoid dangerous climate change.
Greater support for
renewable energy and a national emissions trading scheme are necessary
components of any serious policy to address Climate Change.
Leadership and
vision is already being provided by state and territory governments around this
country. Design
propositions for an emissions trading market have been agreed to as the basis
for further development and investigation.
If we deliver the
right price signals, and provide the right incentives within a well developed
and supported regulatory framework, Labor believes Australia can play its role
in helping the world avoid dangerous climate change.
Recommendation
2
That the Bill be amended to:
- Provide
strong incentives for industry to move to clean energy,
- Deliver
a genuine and substantial increase in the percentage of Australia's energy
generated from renewable sources and, in doing so, set the MRET at more than
5%, and
- Highlight
the important role clean, renewable energy will play in cutting Australia's
greenhouse gas emissions.
Senator Kate Lundy
Australian Labor Party
Senator Dana Wortley
Australian Labor Party
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