Australian Renewable Energy Agency

1 September 2014

Today I spoke in the Parliament about the need to keep the Australian Renewable Energy Agency, continue the support of investment in renewable energy and how the government's climate position is globally isolated.  

We are back again in the House debating climate change, after a period of months in which members of the government have, one after another, begun attacking Australia's moves to deal with dangerous climate change. A GLOBE-Grantham survey looked at parliaments around the world and how they were acting on climate change. It covered over 60 nations, accounting for about 90 per cent of global emissions. It found that only two nations were backsliding on tackling climate change: one was Japan, which was shutting down nuclear reactors in the wake of the Fukushima disaster—understandable, you might say; the other was Australia. Australia is now one of only two nations in the world that is backsliding on tackling climate change. It should not be that way because Australia emits more carbon pollution per person than any other country in the developed world and we stand to lose as much as any other country in the developed world. The Great Barrier Reef is a fabulous asset to Australians, not just for those of us who want to visit it but also for the economic benefit that tourism brings.

Australian agriculture could be threatened by unchecked climate change and we have now seen, as a result of record temperatures, the Bureau of Meteorology introducing a new colour to its temperature maps in order to account for the new high temperatures Australia is seeing. This has consequences. We know that natural disasters will become more frequent if climate change is left unchecked. We know it has health consequences. We know that the impacts of extremely hot days on the health of particularly older Australians can be significant. So climate change is an issue we need to do something about.

Thankfully we have not only good advice from scientists saying the climate change is happening and humans are causing it but also good advice from economists on the most efficient and effective way of dealing with it. But that is where the good news ends because this government has appointed climate sceptics to review the renewable energy target in the form of Dick Warburton and to advise the government in the form of its number one business adviser Maurice Newman, who seems to be writing the same opinion piece week after week, saying that climate change is a fraud and a hoax, that it is all a big con put on by those great bastions of global communism, NASA, CSIRO, the Australian Academy of Science and many others.

It would be comical were climate change not such a serious issue for Australia, but we know that, if we do not act now, then the cost for future generations will be higher. A new book put out by one of my Harvard professors, Dale Jorgenson, looks at the cost to the world of unchecked climate change. It estimates, as a result of rising seas and the extinction of plant and animal species, that the cost of climate change amounts to nearly $1.6 trillion annually worldwide. His book, Double Dividend, looks at how pricing carbon pollution can not only reduce the impact on the environment but can also provide fiscal revenue which can be used for a beneficial purpose. That was what Labor did in government. We increased the price of pollution and we decreased the price of work by cutting taxes.

Under this government we are seeing the opposite because this government has repealed the carbon price, the most effective and efficient way of dealing with climate change, it has lost revenue and, therefore, has to increase income taxation, in direct contravention of the pre-election promise. So the double dividend has become a 'double cost'. The government has lost not only the ability to deal with dangerous climate change but also the revenue with which the former Labor government was able to reduce taxes and encourage work.

Now we are seeing this attack on sensible climate change supports extending to the renewable energy target—again, a broken promise. On 29 September 2011, Tony Abbott said:

Look, we originated a renewable energy target. That was one of the policies of the Howard Government and yes we remain committed to a renewable energy target.

He went on to say:

… we have no plans to change the renewable energy target.

The Australian on 20 June 2012 reported:

… the Opposition Leader told the partyroom that people saw generating renewable energy as an important issue and the Coalition had to commit to it.

The Minister for the Environment, as he calls himself, said in a speech on 27 February 2013: 'We will be keeping the renewable energy target. We have made that commitment. We have no plans or proposals to change it. We have no plans or intentions for change and we have offered bipartisan support to that.' And, lest anyone could be in doubt that the coalition's support for the renewable energy target extended to support for its precise target, Senator Birmingham said in a speech to the Clean Energy Week conference on 24 July 2013:

It has been interesting to note the claims being made about what the Coalition will or won’t do. All of it is simply conjecture. The Coalition supports the current system, including the 41,000 giga-watt hours target.

That was—just over a year ago—Senator Birmingham committing the then opposition, now the government, to support the renewable energy target.

But we have seen, instead, the coalition putting in place a RET review, headed by climate sceptic Dick Warburton, which comes to the conclusion that the renewable energy target should be rethought because of the impact it has on existing generators who do not use renewables. That is right: the primary concern of this government is not consumers—because the RET review very clearly shows that electricity prices are lower as a result of the RET putting more supply into the market. It is not, of course, bad for those who work in the renewable energy sector, who have seen the number of jobs triple in that sector to more than 24,000 jobs. It is not bad for Australian households, only 7,000 of whom had solar panels on their roofs when the Rudd government was elected in 2007, and now one million of whom have solar panels on their roofs. And it is not bad for wind power, which has tripled in total generation capacity in Australia.

The Treasurer might think that wind farms are a blight on the landscape, but, frankly, I think that the Treasurer ought to be more concerned about the health effects of unchecked climate change. We are now seeing, in the United States and in China, a renewed focus on dangerous climate change because of the concern about clean air. President Obama launched his initiative on climate change at a children's asthma centre, reflecting the impact that dirty air can have on human health. China is now setting up emissions trading pilots covering hundreds of millions of Chinese and it is looking at a national scheme to 2018. As we know, President Obama's first choice in dealing with climate change was putting a price on carbon pollution. Unable to get that, he has moved to a second-best approach, part of which encourages states to put a price on carbon pollution. California has just done that—and its economy is significantly larger than Australia's. And the US and China, as we know, are engaged in negotiations about the pledges that they will put on the table ahead of the Paris talks in 2015.

Australia's climate denialism was brought into sharp focus when the Prime Minister visited Canada and stood next to Stephen Harper and declared that he would be part of something you might think of as a 'coalition of the unwilling'—climate change sceptics united; a coalition of conservatives across the globe—standing for the new flat-earth movement, that climate change is not happening. But barely were the words out of his mouth when we had David Cameron in the UK running as fast as he could to say that the UK supported an emissions trading scheme. Conservatives in New Zealand under John Key also supported an emissions trading scheme. And why wouldn't they? It is not a left-right issue; it is a matter of pragmatism. Putting a price on carbon pollution is the most effective and efficient way of achieving outcomes.

The bill before the House looks at the Australian Renewable Energy Agency, and we on this side of the House are proud to support renewable energy. In the ACT, there have been 27 projects worth $59 million that have been backed by ARENA. Twenty-four million dollars of that funding came from ARENA; the remainder came from the private sector.

Encouraging investment in renewables must be part of a long-run Australian future in which we decouple carbon pollution from economic growth. Australian businesses have the ingenuity and the ambition to be able to continue to grow in a clean, green environment, and the notion that the way in which we produced electricity in the 1960s is absolutely right for the 2060s is taking an ostrich approach to public policy.

Australia needs to back renewables because renewables are not only putting downward pressure on power prices but also allowing us to reduce Australia's carbon footprint. We know that if we do not reduce Australia's carbon footprint the impact could be considerable. The risk is that if Australia does nothing then, by the time we have to engage in dealing with climate change, the impact on the Australian economy will be larger, not smaller, than if we begin today by taking modest steps.

The government's unwillingness to put the health of Australian children before its own political needs concerns me deeply. Australia needs to be part of the global movement to tackle climate change. When we look at the economic research that is being done on this, it is very clear that a cap and trade approach is the right way to go. A cap and trade approach when applied in the case of acid rain under George HW Bush in the United States produced all of the abatement that had been projected but at a third of the cost. Why did it manage to do that? Because, when you back the ingenuity of the market, you are often surprised to see the ways in which the market is able to reduce carbon emissions. One of my favourite examples of this occurred simply as a result of labelling. Tesco, the British supermarket company, decided that it would label the carbon emissions on its products, and a potato chip manufacturer was shocked to discover that its carbon pollution was higher than it had expected. It looked into it a little further and it turned out that what had been happening was that it had been buying potatoes from growers at wet weight—the growers had been keeping them in green houses using extra electricity to get more water into them, which then had to be boiled out during the cooking process. They switched their buying process to buy dry weight and their carbon footprint fell, whilst also saving money. There are many illustrations of this kind in which it is possible to achieve significant reductions in carbon emissions and to do so in an equitable way.

What is striking about this government is that they are backing the big end of town at every turn. We know that climate change threatens the most vulnerable. Lower income Australians are less likely to live in houses with air conditioning; they are less likely to hold the insurance that people fall back on when natural disasters strike. Lower income Australians are suffering as a result of the payment cuts being put in place by this government, driven by the budget hole that they have created as a result of scrapping the carbon price. When we look overseas, we can see many low-income people around the world for whom climate change is an existential threat—people living in subsistence conditions in low lying Pacific atolls and people in countries like Bangladesh, which is likely to be severely impacted by unchecked climate change. We have the ingenuity and the mechanisms to deal with dangerous climate change, but we have a government which is unwilling to listen to the experts and is instead appointing sceptics and backing the big end of town over the most vulnerable.


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8/1 Torrens Street, Braddon ACT 2612 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au