HOUSE OF REPRESENTATIVES, 16 FEBRUARY 2021
The Clean Energy Finance Corporation is a great Labor achievement. Established by the Gillard government, it seeks to mobilise capital investments in renewable energy, energy efficiency and low-emissions technologies where low-emissions technologies are defined by an independent board and guidelines.
In its first year it made nearly a billion dollars of investments and, to date, has deployed $6 billion of Clean Energy Finance Corporation funds and leveraged $27 billion in private investment. It's helped finance around 18,000 small-scale projects and every year is responsible for about one million tonnes of carbon abatement. Since it began, it has returned to the Australian taxpayer some $718 million. It's an extraordinary record. It's an organisation which has improved energy technologies in Australia, which has boosted investment and created jobs in Australia, which has contributed to carbon abatement and which has returned money to the budget.
Who could be against that? The answer is the Liberal and National parties.
In November 2013, Tony Abbott introduced legislation to abolish the carbon pricing mechanism, the Climate Change Authority and the Clean Energy Finance Corporation. In 2014, the Liberals made two attempts to abolish the Clean Energy Finance Corporation. Both attempts were blocked by the Senate. Then, after they couldn't kill it, they decided they'd try and kneecap it. Tony Abbott tried to limit the Clean Energy Finance Corporation's remit to support renewable energy, by issuing a draft directive to prevent it from investing in wind and rooftop solar—because why would you invest in wind and rooftop solar if you're about climate change? The coalition then changed the Clean Energy Finance Corporation’s investment mandate, increasing its benchmark, which limited the degree to which the Clean Energy Finance Corporation could support new technology development. The coalition has sought to amend the Clean Energy Finance Corporation's legislation to enable the corporation to invest in carbon capture and storage technologies, changes which lapsed in the Senate.
So the Clean Energy Finance Corporation has been a great success—and it has been greatly opposed by those opposite, who tried to kill it and, when they couldn't kill it, did their best to try and limit its mandate. Why is that? Because fundamentally there are some on the coalition back bench who either don't believe in climate change or don't believe Australia should do anything about it.
Australia is now in the extraordinary situation of potentially facing European carbon tariffs. In the discussions that Australia has had with Europe, it's quite clear that, if we do nothing about climate change, we could face what RepuTex has referred to in a research note as a 'carbon border adjustment mechanism' as early as 2023. That would require Australian exporters to pay a cost equivalent to the carbon price in the European carbon market, which is currently trading at around A$60 per tonne of CO2. That EU price could rise, and Australian exporters could be subject to it. That is a direct potential impact of this government's failure to act on dangerous climate change. They could well be exposing Australian exporters to carbon tariffs.
Yet it's very clear that, if we did act on climate change, it would benefit our economy. A Deloitte report suggests that failing to adopt net zero emissions by 2050 could cost 880,000 jobs and slash some $3.4 trillion from GDP by 2070. Acting on net zero, according to the Deloitte report, would create 250,000 new jobs and deliver an additional $680 billion in GDP by 2070. Deloitte warns that the Morrison government's approach of not adopting net zero emissions could cost the mining, manufacturing, services, trade and tourism sectors. There would be an impact right across Australia—particularly on the Queensland economy, which relies heavily on tourism.
So you'd think that moving Australia to net zero emissions by 2050 would be the smart approach, and that's of course why Australia’s largest bank, our largest miner, and our largest airline have signed up to it. It's why more than 60 per cent of our trade is now with countries that have adopted a target of net zero by 2050. The Biden administration has locked in that target, with an earlier target for the US electricity sector. And China has said that they are aiming for net zero by 2060. Every state and territory in Australia has signed on to a target of net zero emissions by 2050. It is only the federal government that's a hold-out.
You can get a sense as to why they're holding out when you listen to the cavorting from the tinfoil hat brigade that sit on the coalition back benches. The Prime Minister hasn't committed to net zero, but when he began kicking tyres or musing or market testing, as the ad man in charge so enjoys doing, there were outraged cries from the National Party. There was a call that agriculture should be omitted. I'll quote a terrific piece by Katharine Murphy in The Guardian:
This begs obvious questions. Agriculture should be exempted from … what exactly? Exempted from the technology roadmap the Nationals welcomed? Exempted from a nominal, highly caveated, possible mid-century target that Morrison hasn't committed to adopting, and hasn't even begun to talk about legislating?
She says people are talking about crossing the floor against net zero and as she notes, that would be the first time in which people were crossing the floor against a 'prime ministerial feeling'.
The Clean Energy Finance Corporation has done extraordinarily important work. At the last election, Labor sought to build on its successful model, taking a $5 billion energy security and modernisation fund to the people in the 2019 election which was aimed at complimenting the continued growth of renewable energy by investing in transmission, storage, firming and reliability assets such as synchronous condensers. I commend to the House the Leader of the Opposition's budget reply speech in which he talked about the importance of investing in modernising the grid in order to support the growth of renewables.
The coalition, however, is seeking to create a faux debate over gas. It is quite clear that gas is not a clean energy. There are carbon equivalent emissions associated with gas and it therefore doesn't meet the Clean Energy Finance Corporation's 'low-emission power generation' definition of being an emissions intensity which is less than half the emissions intensity of the relevant energy system. Gas also is a well-established electricity generation technology that doesn't face financial or technological barriers to investment that need to be addressed by public financial support. There aren't big decisions being made around the investment in major gas projects and there aren't long gas lines in Australia which are facing approval processes. And for those who are touting gas as being the great solution to Australia's woes, it is worth noting that the gas price has approximately halved over recent years, yet many of the benefits that were forecast to flow from a lower gas price don't appear to have materialised. So this idea that Australia's salvation lies in gas is belied by the evidence that we see from the recent significant fall in the Australian gas price. It's a bit like people saying it would transform transport if the petrol price at the pump were to go from $1.20 down to 60c. Then a year later the price is at 60c and people are still talking about the great benefits of doing it. We've had that experience of a lower gas price and it doesn't appear to have had the transformative impact that the gas boosters would have you believe.
The bill also includes a provision which allows the minister to directly determine an investment is eligible for support from the Clean Energy Finance Corporation through a non-disallowable regulation. Former Clean Energy Finance Corporation CEO Oliver Yates has warned that that power fundamentally undermines the integrity and independence of the Clean Energy Finance Corporation. A letter from former CEFC and ARENA board members says:
We do not support changes to the CEFC's legislation that undermine its independence, low emissions remit, commitment to profitability, or its avoidance of fossil fuels as part of a clear commitment to assist in the reduction of Australia's climate emissions.
You particularly wouldn't trust the current minister with additional latitude. This is, after all, the minister who was embroiled in the ‘grasslands’ scandal where he failed to declare a private interest in a company being investigated by his own department and admitted on radio that he was advocating for his own interests, not the public interest.
The minister was also behind the 'Clovergate' scandal in which he used doctored figures in official ministerial correspondence to attack the Sydney lord mayor, Clover Moore, and then failed to ever admit that he had done the doctoring. He's the man behind the 'watergate' scandal in which the company, Eastern Australia Agriculture, of which the minister used to be a director and which was a Liberal Party donor, was allowed to undertake a water transaction valued at $80 million, which appears to have been a significant overvaluation.
Under the coalition, we have had renewable energy investment smashed. New figures from the Clean Energy Council show that just three new projects reached financial closure in the last quarter—the lowest quarterly investment in dollar terms since the index started in 2017. Investments were down more than 50 per cent below the quarterly average for 2019. We should be seeing investment and jobs in renewable energy soaring at the moment. But, as a result of the chaos and the many energy policies that have been pursued under the coalition, we don't have those jobs and we don't have that investment. There are fewer jobs in clean energy today as a result of the coalition's hopeless mismanagement of the climate and energy portfolios.
Australian emissions are too high. The government has no plans to reach their inadequate emissions reduction targets. They are relying on low targets and dodgy tricks in order to even have a hope of getting to those targets. Yet they're soon going to have to face up to the world. They are soon going to be in a position in which they will have to account for Australia's appalling record on climate policy.
It doesn't have to be this way. If you look to Britain or New Zealand, you can see conservatives that have accepted that they need to do something about climate change. They've accepted the science, they've accepted the good economics and they've gotten on and done it. Those countries will not be facing carbon tariffs from their trading partners. But, as a result of the coalition's bungling of this policy and as a result of the fact that they are in the thrall of people like the member for Hughes—who, when he's not peddling misinformation on vaccines is peddling misinformation on climate change—there are still those in the coalition backbench who think that the Bureau of Meteorology is engaged in some sort of conspiracy or cover-up over climate change. There are still those on the coalition backbench who would like to see taxpayer dollars funding new coal-fired power stations that the market won't touch. These people on the other side want to say that they are the party of the market, but, when it comes to coal investments, they want public dollars to go where the market isn't willing to invest: in new coal-fired power stations.
I commend the previous speaker from the coalition for saying that he didn't think that taxpayer dollars should go behind new coal-fired power stations. I look forward to such statements from every coalition member on the other side.
Authorised by Paul Erickson, ALP, Canberra.
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