Chapter 4
Australia's Greenhouse performance and strategy
(Part a)
The primary objective of all greenhouse policy has to be to deliver
substantial, real and timely reductions in greenhouse gas emissions. This
has to be the primary criterion for judging the performance of [Australia's
greenhouse] programs. [1]
Australia's Abatement Challenge
4.1 Australia's agreed target under the Kyoto Protocol, to reduce greenhouse
gas emissions to 108 per cent of 1990 levels, was granted in recognition
of Australia's particular national circumstances. [2]
Australia's target of 108 per cent is 13 per cent higher than most OECD
countries. Australia successfully argued that, among developed nations,
it faces a distinctive set of challenges which will make effective climate
change abatement difficult and costly. This claim, of `a special case'
in relation to Kyoto emissions targets, has been discussed at length in
chapter 3 of this Report.
4.2 As a percentage of total emissions by Annex 1 countries, only nine
of a total of 34 countries recorded a higher level of CO2 emissions in
1990 than Australia. Excluding the United States (responsible for 36.1
per cent of CO2 emissions by Annex 1 countries), the average Annex 1 country
emissions in 1990 were 1.9 per cent of the total emissions. [3]
At 2.1 per cent Australia is an above average emitter.
4.3 On a global basis, Australia's output of greenhouse gas emissions
in 1990 was 1.4 per cent of total global emissions. [4]
However, Australia is the largest emitter of greenhouse gases per person
in the industrialised world. [5] The National
Greenhouse Strategy (NGS) attributes Australia's national emissions profile
to a number of key factors which distinguish it from other OECD countries.
In summary, these include Australia's:
- above OECD average population growth;
- remoteness from overseas markets;
- widely dispersed natural resources and reliance on long-haul transport;
- lack of economically viable energy alternatives; and
- dominance of world coal markets and fossil fuel reserves which form
the basis of export-oriented and energy-intensive industries such as
steel and aluminium. [6]
4.4 Despite having achieved an emissions target which allows for an increase
in emissions above 1990 levels, Australia's emissions National Greenhouse
Gas Inventory (NGGI) for 1998 indicates that growth in domestic emissions
remains largely unchecked. The NGGI shows that, in 1998, Australia was
16.9 per cent over 1990 levels (excluding emissions from land clearing).
[7] Without a reversal in current trends, Australia
is likely to be well beyond its Kyoto target at the beginning of the first
commitment period in 2008. Australia could also be faced with an equivalent
or greater cut to emissions in the second and subsequent commitment
periods.
4.5 In 1998 Australia's total emissions (excluding land clearing) were
455.9 million tonnes (Mt) CO2, nearly 17 per cent above the 1990 level
of 389.8 million tonnes. An increase of 63.3 Mt CO2 in energy emissions
alone was almost as great as the overall increase of 66.1 Mt CO2. This
increase was reduced in part by falls in the industrial emissions and
land clearing. [8] A summary of the 1990 and
1998 greenhouse gas emissions by sector is provided in the figure opposite.
[9]
4.6 The Australian Greenhouse Office (AGO) estimates that the growth
in Australia's total emissions, including all sources and sinks
(except land clearing), and allowing for the effect of current greenhouse
gas abatement measures, will be 71 Mt CO2 -e (or 18 per cent) between
1990 and 2010, 10 per cent higher than our Kyoto commitment for 2008 to
2012. [10] In the absence of any abatement
measures, emissions could reach 552 Mt CO2 -e by 2010, a 43 per cent increase
over 1990 levels. [11]
Figure 4.1
1990 & 1998 Emissions by sector
Figures not available in Htm Version
The National Greenhouse Gas Inventory
4.7 Under Article 4(1) and Article 12 of the UN Framework Convention
on Climate Change (UNFCCC), Australia has committed to providing an annual
greenhouse gas inventory which records Australia's annual contribution
to global emissions in accordance with internationally accepted guidelines.
The Australian NGGI captures all human induced greenhouse gases emitted
from sources and removed by sinks. It also details the relative contribution
of key industry sectors.
4.8 The NGGI is updated each year and Australia has produced an inventory
for each year from 1990, the most recent inventory being 1998. The 1998
Inventory will allow Australia to establish a baseline from which it will
be able to monitor and review response action and develop projections
of greenhouse gas emissions. [12] As the analysis
underpinning the inventory becomes more robust, it could prove potentially
useful in identifying low-cost abatement options for each sector. [13]
4.9 At an international level, the NGGI contributes to a global picture
of greenhouse gas emissions levels and allows Australia to compare its
performance in achieving its international targets with that of other
countries.
4.10 The NGGI categorises emissions and sinks into six standard sectors
set out by the Intergovernmental Panel on Climate Change (IPCC): Energy,
Industrial Processes, Solvent and Other Product Use, Agriculture, Land
Use Change and Forestry, and Waste. [14] It
also presents emissions on a gas by gas and sector by sector basis.
4.11 The NGGI expresses the emissions of methane (CH4), nitrous oxide
(N2O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs) and sulphur
hexafluoride (SF6) in terms of their `carbon-dioxide equivalent' (CO2-e).
The concept of global warming potentials (GWPs) has been introduced to
express equivalent units of emissions. [15]
4.12 The GWP is based on the potential for each type of emission to influence
climate change processes. GWP figures are refined as new knowledge emerges
on the relative impact of different types of emissions. GWPs also vary
with the time horizon being considered and, by convention, a 100-year
horizon is used in policy analysis. [16] Carbon
dioxide has a GWP of one. All other emissions have a GWP value set at
a multiple of one. Aggregate emissions are derived by summing the emissions
of various greenhouse gases. The NGGI attributes a value of 21.1 for methane
per unit of carbon dioxide, 310 for nitrous oxide, 6,500 for the PFC perfluoromethane
(CF4), 9,200 for the PFC perfluoroethane (C2F6) and 23,900 for sulphur
hexafluoride (SF6). [17]
4.13 The 1998 NGGI, released in July 2000, provides the most recent report
on Australia's greenhouse gas emissions. The Committee notes the AGO's
explanation that the total emissions reported in the NGGI do not represent
Australia's true performance to date against the Kyoto Protocol, as the
1990 baseline is yet to be determined due to the uncertainties associated
with emissions from the land use change and forestry sector; and the final
guidelines for the compilation of inventories under the Kyoto Protocol
are still under negotiation. [18]
4.14 The 1998 Inventory has incorporated improvements and changes to
methodology and data and now includes: improved emissions estimates for
the manufacturing and construction sector; the CO2 content of distributed
natural gas; improved estimates of animal numbers in the calculations
of CH4 and N2O from livestock; and estimated resident population for all
years. [19]
4.15 In addition to the NGGI, a five-year program to develop a National
Carbon Accounting System (NCAS) was announced by the Prime Minister in
November 1997. This initiative is being led by the AGO and will provide
substantially improved estimates of national emissions for the land use
change and forestry sector. Estimates for land use change and forestry
are still considered highly uncertain. According to Dr Gary Richards,
Manager of the NCAS, estimates used in earlier years of the NGGI carried
a 70 per cent uncertainty. The NCAS aims to reduce this uncertainty to
a `within 10 per cent' range. [20] The AGO
regards the development of the NCAS as critical to addressing the need
for greater transparency of reporting and verification of data. [21]
The Performance of the National Greenhouse Strategy
4.16 The remainder of this chapter presents the Government's response
to global warming. Consideration is given to emission abatement programs
- their objectives, their outcomes and budgetary expenditure. It provides
an overview of the current national greenhouse policy framework, and in
particular:
- examines the role of the Commonwealth, state and territory governments,
local governments and the broader community within that framework;
- examines current progress in the implementation of the NGS, and the
barriers and issues hindering its effectiveness; and
- provides recommendations for future directions.
4.17 In November 1998 the Government released the National Greenhouse
Strategy (NGS) to provide the strategic framework for advancing Australia's
greenhouse response and to be the `primary mechanism through which our
international commitments will be met'. [22]
The NGS also claims that `implementation of the Strategy will forge major
reductions in Australia's projected emissions growth, consistent with
meeting our international competitiveness'. [23]
4.18 Two years after its release, implementation planning is yet to be
finalised, the expected emissions reductions from the implementation of
NGS measures remain unquantified, and the principles to guide its further
development and implementation appear to have been compromised by recent
Government statements aimed at pacifying industry concerns.
4.19 There is a considerable lack of information available regarding
the measures under the NGS, which has made an assessment of its progress
and success extremely difficult. While some information was made available
to the Committee, in a number of areas information simply did not appear
to exist. This was particularly true of measures that were the primary
responsibility of the states and territories. An initial report to Parliament
on the progress of the NGS is to be tabled in 2001, and a major review
is scheduled for 2002.
4.20 The Committee acknowledges that, in many cases, the states and territories
have begun worthwhile greenhouse initiatives. The states and territories
are crucial to Australia's greenhouse abatement efforts, given their responsibility
for policy decisions of great environmental significance across the whole-of-government.
The Committee received submissions from New South Wales, South Australia,
Western Australia and Tasmania, but representatives from Queensland, Tasmania,
Victoria and South Australia declined to give evidence.
4.21 It is a matter of some regret to the Committee that they were not
able to hear the views of all states and territories. While supporting
the Commonwealth's role in setting greenhouse policy, the Committee has
also recommended further efforts to assist, involve and consult with the
states and territories.
Overview of the National Greenhouse Policy Framework
4.22 National action to address climate change began in 1992 with the
National Greenhouse Response Strategy (NGRS). The NGRS represented a commitment
made by the Commonwealth, state and territory governments, and was formally
endorsed by the Council of Australian Governments (COAG). An interim planning
target was agreed that Australian greenhouse gas emissions would be reduced
by 20 per cent by 2005, based on 1988 levels. This target was subsequently
overtaken by the later negotiations associated with the UNFCCC and the
1997 Kyoto Protocol which represents a less onerous target than that agreed
to in 1992.
4.23 Priority measures in the NGRS included:
- preparation of a National Greenhouse Gas Inventory (NGGI);
- micro-economic reform in the electricity and gas sectors to promote
competition between suppliers and the promotion of greenhouse-friendly
energy sources;
- increased energy efficiency within the residential and commercial
sectors through energy labelling and minimum energy performance standards;
and
- more efficient transport systems through travel demand strategies
and improved fuel consumption in the national vehicle fleet.
4.24 In 1995 the Commonwealth Government announced additional greenhouse
measures in a statement called `Greenhouse 21C'. The most significant
of the new measures was the Greenhouse Challenge Program. [24]
The 1997 Prime Minister's Package
4.25 In 1997, immediately prior to the Kyoto conference, the Prime Minister
announced a $180 million, 5 year package of measures Safeguarding the
Future: Australia's response to climate change. The Government argued
that this package of measures represented a `balanced and far sighted
approach' [25] to answer the challenge of climate
change and that the package would deliver a `reduction of a third in our
expected net emissions growth from 1990-2010… from 28 to 18 per cent
in that period'. [26]
4.26 The package was developed on the principles of protecting Australia's
national interests and reflected Australia's national circumstances:
Those interests lie in both protecting Australian jobs and Australian
industry whilst ensuring that Australia plays her part in the world
wide effort needed to reduce greenhouse gas emissions. [27]
The measures have been developed against the background of our national
circumstances and our national interest. They also have been developed
against achievements by Australia to date such as reform of our electricity
and gas markets, halving the amount of waste going to landfill by the
year 2000 compared to 1990 levels and the efforts of particular industries
such as the aluminium industry which will reduce emissions by more than
20 per cent over the same period.
The Government is seeking realistic, cost effective reductions in key
sectors where emissions are high or growing strongly while also fairly
spreading the burden of action across our economy. [28]
4.27 While the package's major focus is on cost effective `no regrets'
action, scope was included to go `beyond no regrets' if required:
We are prepared to ask industry to do more than they may otherwise
be prepared to do, that is, to go beyond a `no regrets', minimal cost
approach where this is sensible in order to achieve effective and meaningful
outcomes. [29]
4.28 The package directed funding at both new or, substantially expanded,
existing programs which included the following elements: [30]
Table 4.1
Australia's response to climate change
| Measure |
Aim/commitment |
Progress to date |
| Establishment of the Australian Greenhouse Office
(AGO) |
Responsible for delivery of Commonwealth greenhouse programs,
and to provide a central point of contact for industry and other stakeholder
groups |
Established as an executive agency within the environment
portfolio to manage a whole-of-government approach to policy |
| Extending the voluntary Greenhouse Challenge Program |
To promote greater uptake by industry; aim to have 500
Challengers by 2005 |
Current status - 366 challenge agreements |
| Accelerating energy market reform |
Further economic, environmental and greenhouse benefits;
and implement efficiency standards for fossil fuel electricity generation
by the year 2000 |
Framework announced. Individual agreements for individual
plant performance targets not expected to be completed for several
years |
| Mandatory targets for increased renewable energy in the
national electricity mix, and assistance for renewable energy technologies |
To increase investment in and take-up of renewable energy |
Renewable electricity legislation introduced into Parliament
in July 2000. |
| New fuel efficiency standards through negotiation with
the automotive industry |
To secure a 15 per cent fuel efficiency improvement target
by 2010 over business as usual - to include mandatory, model specific,
fuel efficiency labelling |
Mandatory fuel efficiency labelling not yet in place |
| Regulations covering strengthened national energy efficiency
building codes and appliance standards |
To accelerate the take-up of energy efficiency measures
with enormous potential for emissions savings |
Poor coordination between and territories and Commonwealth
is slowing this process and standards are still well behind international
best practice |
| Aiming to treble the Australian plantation estate by
2020 |
Remove impediments to the development of commercial plantations
to facilitate the growth in plantation forestry and native revegetation
to act as a sink for greenhouse gas |
Steady progress, but rapid rates of land clearing result
in overall continuing deforestation |
| Supporting the extensive uptake of the worldwide Cities
for Climate Protection campaign by Australian local governments |
Provides for councils to develop local emissions inventories,
forecast energy use and emissions, and develop and implement local
action plans |
CCP in Australia began in 1998. Current progress is slow,
with 45 councils having developed inventories, 8 set reduction targets
and two developed local action plans |
| $6 million for facilitating Australian involvement in
the Kyoto project-based mechanisms such as Clean Development Mechanisms
(CDM) and Joint Implementation (JI) |
To assist Non-Annex 1 countries to develop emissions
reduction projects and develop Australian industry's ability to exploit
Kyoto flexibility mechanisms |
Additional measures have included $154 million in AusAID
funding and $46 million for the Global Environment Facility |
The National Greenhouse Strategy
4.29 The Commonwealth, state and territory governments commenced work
on the NGS in 1996, finalising the Strategy in late 1998. The final Strategy
was based on the outcomes of a review of the NGRS, the Prime Minister's
1997 package, the outcomes of the Kyoto negotiations, and a range of other
`factors that have emerged and evolved since 1992'. [31]
4.30 The NGS has three key goals:
- To limit net greenhouse gas emissions, in particular to meet our international
commitments.
- To foster knowledge and understanding of greenhouse issues.
- To lay the foundations for adaptation to climate change.
4.31 The NGS includes eight modules of targeted measures designed to
achieve the goals of the Strategy, and a framework for its further development
and implementation. Measures contained in the Strategy are to be delivered
through a variety of mechanisms including Ministerial Councils, or independently
by state or Commonwealth governments. Implementation plans take the form
of state and territory greenhouse strategies or nationally coordinated
measure-specific plans.
4.32 Reports on the progress of the NGS are to be prepared every two
years, with a first report by the end of 2000. The reports will discuss
Australia's progress towards its target under the Kyoto Protocol, the
progress of NGS measures, and the effectiveness of these measures to limit
emissions and enhance carbon sinks. Performance indicators are being developed
to assess this progress, although these were not available for scrutiny
by the Committee. [32]
4.33 The NGS will be subject to periodic review, with the first review
scheduled for 2002. Key factors in the reviews will include national emissions
trends, international developments, progress in implementing the NGS,
developments in greenhouse science, advice from stakeholders and the community,
and findings from research about the opportunities, constraints, costs
and benefits of given policy options. [33]
4.34 The NGS is a negotiated document and as such is limited by the outcome
and success of negotiations, primarily between the Commonwealth and the
states and territories, but also between government and industry. It is
noted in the Strategy that a key consideration in its development was
`the need to integrate greenhouse and other policy objectives' [34]
and that:
In addition to the range of new and additional greenhouse measures
outlined in the Strategy, greenhouse policy must also be integrated
with that addressing other community concerns, particularly economic
and trade policies, micro-economic reform agendas, competition policy
reforms and the review of Commonwealth/State environmental roles and
responsibilities. [35]
4.35 To date it would appear that the integration has primarily occurred
in one direction, with existing policy agendas limiting greenhouse responses
rather than greenhouse considerations influencing other relevant policy
frameworks. Greenhouse policy has been subject to a great deal of scrutiny
as to the potential cost to the economy and impacts on competitiveness.
Yet, other policy agendas, such as energy market reform, have not taken
greenhouse sufficiently into account, which has resulted in a significant
increase in emissions from the electricity sector. These issues are discussed
in more detail in chapters 5 and 9 of this Report.
4.36 It is also of some concern to the Committee that the NGS principles
have been compromised by recent state and Commonwealth government statements.
A key principle of the NGS is the `pursuit of greenhouse action, consistent
with equity and cost effectiveness, and with multiple benefits' [36]
with the recognition that `Australia should achieve compliance with the
Kyoto Protocol in the least cost way to the national economy and
with the least effect on competitiveness'. [37]
4.37 However, the Minister for Industry Science and Resources Senator
the Hon Nick Minchin, recently announced that:
The Government is committed to the pursuit of cost effective greenhouse
gas abatement policies and measures in order to minimise the burden
for business and the community so that Australian industry can remain
competitive. [38]
While the Government remains fully committed to honouring Australia's
international greenhouse obligations, it also recognises the imperative
of maintaining the competitiveness of Australian industry. Sacrificing
economic growth and jobs is not in Australia's interests. [39]
4.38 The Committee also notes that the Western Australian Government's
endorsement of the NGS was predicated on the following:
- maintenance of international competitiveness of Australian industry;
- differentiation fully reflecting variations in state circumstances
within Australia so that there is a fair sharing of the compliance burden
nationally;
- changes in assumptions made about the 1990 level of emissions to determine
the basis for changes to states and territories' positions; and
- cost of achievement of greenhouse targets to be recognised in the
implementation of the NGS. [40]
4.39 The Committee understands that a number of other states imposed
similar qualifications on their endorsement. The Committee endorses the
position of the NGS that `Australia should achieve compliance with the
Kyoto Protocol in the least cost way to the national economy and
with the least effect on competitiveness'. [41]
More Recent Greenhouse Measures
Measures for a Better Environment
4.40 The Measures for a Better Environment package announced in
May 1999 as part of the GST tax reforms in Australia taking effect from
1 July 2000, introduced a number of additional greenhouse initiatives:
[42]
Table 4.2
Measures for a Better Environment
| Measure |
Objective |
Progress to date |
| Greenhouse trigger |
Agreement to consult with the states and territories
on the possible application of a Commonwealth greenhouse trigger in
relation to new projects under the Environmental Protection and
Biodiversity Conservation Act 1999 |
Discussion paper developed. Federal Cabinet rejected
putting forward an amendment to the EPBC Act to include a greenhouse
trigger |
| Bringing forward the introduction of new petrol and diesel
vehicle and fuel standards |
Accelerate the achievement of new fuel efficiencies by
the Australian road fleet to counteract the increased incentives for
consumption provided by the new tax system |
Future measures include fuel efficiency labelling, consistency
with international noxious emissions standards by 2006 and an accelerated
phase-out of leaded petrol |
| Providing grants for CNG, LPG and other alternative `clean'
transport fuels |
To maintain the price differential between them and diesel,
when diesel excise was reduced for regional transport |
Diesel and Alternatives fuels grants scheme, administered
by the ATO |
| A subsidy program for conversion of CNG and LPG vehicles
over 3.5 tonnes |
Alternative Fuel Conversion Program |
Commenced in January 2000 with $35 million over four
years |
| 100 per cent diesel excise credit for rail transport |
|
Implemented |
| Grant program to meet half the cost of household photovoltaic
electricity systems (solar panels) |
Commonwealth Photovoltaic Rebate Program - to reduce
cost barriers for householders and community organisations to solar
conversions |
Initial commitment of $31 million in January 2000, and
these funds have quickly been exhausted. The Commonwealth has not
yet committed funds for its further expansion |
| Commercialisation program for renewable energy projects
|
To offset the impact of GST on renewable energy industries |
$30 million for the Renewable Energy Commercialisation
Program (RECP) |
| Energy credit scheme |
|
To commence in 2002 |
| Renewable Remote Power Generation Program (RRPGP) |
A grant scheme for off-grid electricity users to convert
from diesel to renewable energy systems, to assist the uptake of renewable
remote area power systems (RAPS) |
Commenced 1 July 2000 and will be funded at $264 million
over four years from diesel excise revenues |
Greenhouse Gas Abatement Program
4.41 The Greenhouse Gas Abatement Program (GGAP) was announced as part
of the Measures for a Better Environment package (May 1999) and
arose from negotiations with the Australian Democrats on the new tax system
(ANTS) reform package.
4.42 The AGO reported that:
The GGAP builds on the Prime Minister's $180 million package of greenhouse
measures, which was announced in November 1997 and is currently being
implemented. These funds, together with new allocations for renewable
energy generation, alternative fuels use and household energy reduction
initiatives, amount to nearly $1 billion over five years – the
largest commitment of funding to address the challenge of climate change
in Australia's history. [43]
4.43 The GGAP Program aims to:
- attain long lasting results that translate into sustained reduction
in emissions during the period 2008 to 2012 and/or beyond;
- be cost effective with a least cost impact on economic activity;
- have consistency with ecologically sustainable development; and
- where appropriate, generate employment, the use of new technologies
and innovative processes, support export opportunities, act as a catalyst
for further non-government investment, and provide opportunities in
rural and regional Australia. [44]
4.44 The GGAP commenced on 1 July 2000, with first round submissions
closing in September 2000. $400 million has been allocated to the GGAP
between 2000-01 and 2003-04. [45]
4.45 GGAP is targeting opportunities for large-scale, cost-effective
and sustained abatement across the economy. GGAP will only support projects
that will result in quantifiable and additional abatement
not expected to occur in the absence of GGAP funding. Priority will be
given to projects that will deliver abatement exceeding 250,000 tonnes
of CO2-e per annum.
Areas of Commonwealth Action
4.46 The Commonwealth is responsible for implementing the measures contained
in the 1997 Prime Minister's package, the new greenhouse measures announced
as part of the Measures for a Better Environment package, and has
a lead/coordinating role in a number of nationally focused measures under
the NGS. Key programs/areas of expenditure and activity are listed below,
and discussed in detail in later chapters.
Greenhouse science
4.47 Expenditure on research into climate change issues and greenhouse
gas abatement has been undertaken through the Greenhouse Science Program,
guided by the measures contained in the NGS and international commitments:
- The Government has committed, in the 1999 to 2000 budget, an additional
$14 million over four years for the continuation of the Greenhouse Science
Program. The Program contributes to improving global, national and regional
understanding of climate change, its potential impacts on Australia
and the region and options for adaptation and mitigation through basic
and applied research and communication of findings.
- The Greenhouse Science Advisory Committee, which provides strategic
advice on research directions and priorities, has prepared an interim
Advancing Greenhouse Science Strategy and Business Plan 2000-2005 which
argues for an additional $10 million a year to be devoted to scientific
work. The Government has made no response to this recommendation.
4.48 In August 2000, the Government announced grants totalling $600,000
for 57 Antarctic research projects to contribute to a better understanding
of climate change. [46]
Greenhouse Challenge Program
4.49 An initiative of the Prime Minister's package is `extending the
voluntary Greenhouse Challenge Program to allow a greater uptake
by industry'. [47] The Greenhouse Challenge
Program is a joint initiative between industry and the Commonwealth Government.
Through the mechanism of cooperative agreements, the Program provides
a framework for participants to undertake and report on actions to abate
greenhouse gas emissions. Participation in the Greenhouse Challenge Program
is voluntary. [48] Full details of the Greenhouse
Challenge Program can be found in chapter 8 of this report.
Energy market reform
4.50 Another key initiative of the Prime Minister's package is `accelerating
energy market reform leading to further economic, environmental and greenhouse
benefits, and implementing efficiency standards for fossil fuel electricity
generation by the year 2000'. [49] The production
and use of energy is the largest single source of Australia's greenhouse
gas emissions. Chapter 5 examines the operation of Australian energy markets
and supply in detail.
Renewable energy
4.51 Renewable energy is examined in detail in chapter 5. A Government
initiative in 1997 aimed to establish `targets for increased renewable
energy and assistance for renewable energy technologies'. [50]
To achieve this aim the Commonwealth Government has established a number
of programs to:
- support the development and commercialisation of renewable energy
technologies;
- accelerate the uptake of renewable energy;
- showcase leading edge renewable energy projects; and
- stimulate the development of an internationally competitive Australian
renewable energy industry.
4.52 According to the Department of Industry, Science and Resources,
approximately $387 million is being made available to support the renewable
energy industry over the period 1998 to 2003. [51]
4.53 The suite of programs being funded includes: the Renewable Energy
Action Agenda (REEA); the 2 per cent Renewables Program; the Renewable
Energy Showcase Program (RESP); the Renewable Energy Commercialisation
Program (RECP); the Renewable Energy Equity Fund (REEF); the Renewable
Remote Power Generation Program (RRPGP); the Photovoltaic Rebate Program
(PVRP); and the National Green Power Accreditation Program (NGAP).
Automotive industry fuel efficiency
4.54 An initiative of the Government is the introduction of `new fuel
efficiency standards through negotiation with the automotive industry
to secure a 15 per cent fuel efficiency improvement target by 2010 over
business as usual - to include mandatory, model specific, fuel efficiency
labelling'. [52] A number of specific measures
are outlined in chapter 6.
Building codes and appliance standards
4.55 The Commonwealth Government has committed to regulations covering
strengthened national energy efficiency building codes and standards for
housing and commercial buildings, appliances and equipment. [53]
A more detailed discussion of energy efficiency and greenhouse gas abatement
can be found in chapter 5 of this report.
4.56 Energy consumed by equipment and appliances is a major source of
greenhouse gas emissions. According to the AGO, these emissions are responsible
for more than a quarter of net greenhouse gas emissions in Australia (excluding
land use change and forestry). [54]
4.57 The Commonwealth Government has introduced a National Appliance
and Equipment Energy Efficiency Program. Through this Program, the Commonwealth,
state and territory governments throughout Australia, and the New Zealand
Government, are working cooperatively to develop and introduce measures
that improve the energy efficiency of appliances and equipment used by
households and business by extending and enhancing the effectiveness
of existing labelling and minimum energy performance standards (MEPS).
International projects supported by the Australian Government, including
the Clean Development Mechanism (CDM) and Joint Implementation (JI)
4.58 The Commonwealth Government's final initiative in the Prime Minister's
1997 statement is the provision of `$6 million for facilitating Australian
involvement in the Kyoto project-based mechanisms such as the Clean Development
Mechanism and Joint Implementation'. [55] This
funding is largely focused on facilitating commercial involvement in projects
in developing countries and meeting the additional costs incurred by business
in undertaking such a project. [56]
4.59 The main discussion of the Clean Development Mechanism (CDM) and
Joint Implementation (JI) mechanisms of the Kyoto Protocol is provided
in chapter 3.
The Performance of Commonwealth Measures Under the National Greenhouse
Strategy
4.60 In evidence, Ms Lynette Thorstensen, of the Australian Consumers'
Association, captured the inevitable gap between policies, programs and
action. She argued that the voluntary NGS programs were not delivering
adequate results, and that the credibility of some programs, such as the
Greenhouse Challenge and the 2 per cent renewables energy target, was
questionable:
… we are urging a wide range of incentives for energy efficient
products on both the supply and the demand sides. We would like to see
more rebate schemes, we would like to see a vastly improved approach
to minimum energy performance standards and we would like to see new
building energy efficiency standards. We notice that there is a lack
of credible national minimum standards in Australia … I suppose,
if we have a general criticism of the National Greenhouse Strategy it
is that the number of voluntary programs within the National Greenhouse
Strategy just do not seem to be delivering the kinds of greenhouse gas
savings we would like to see. Certainly we are highly critical of the
Greenhouse Challenge Program and, in a general sense, we would like
to see - particularly with respect to the two per cent renewable energy
target, which we think is so small as to be almost meaningless - mandated
credible national targets. [57]
4.61 The Electricity Supply Association of Australia (ESAA) also expressed
reservations about the success of the NGS and criticism of the low level
of spending on research into development of new greenhouse-benign capacity:
The National Greenhouse Strategy response measures are generally pragmatic
and sensible. However, lack of effective implementation, particularly
on issues related to the end-use efficiency, should be of concern.
… there needs to be a process for effective NGS implementation,
particularly focusing on end-use efficiency where the most effective
gains can be made. [58]
Direct and indirect incentives offered to improve existing fossil fuel
supply efficiency and new fossil fuel and renewable energy projects
are inadequate, piecemeal and distortionary. A more coordinated national
response is needed to ensure that greenhouse gas reduction benefits
are maximised and costs minimised. [59]
ESAA believes Australia should increase its support for industry-related
greenhouse gas abatement research and development activities. Energy-related
research spending is conspicuously low. Government is not contributing
to even modest spending on the International Energy Agency's program
on energy efficiency, wind technology, photovoltaic power systems, solar
photovoltaic and chemical energy systems, and greenhouse energy research
and development. [60]
4.62 Stanwell Corporation commented on greenhouse gas management in Australia
and argued for reform of the regulatory framework when it stated that
the following factors were crucial to the success of renewable energy
projects. There must be:
- appropriate price signals to reflect the full cost of fossil fuelled
energy;
- an end to the distorted investment signals in favour of generation
using fossil fuels; and
- an end to the inappropriate network pricing framework. [61]
4.63 Great Southern Energy noted that initiatives taking industry beyond
`no regrets' were necessary and that there is a need for legal enforcement
if industry is to go beyond `no regrets' measures. The organisation indicated
that mandatory requirements are likely to be accepted because of the certainty
they provide to companies with long term time horizons as a basis for
their operations and decision making:
Great Southern Energy has considerable experience participating in
Government greenhouse programs and developing emissions reduction measures.
This experience provides a useful insight to the design of future programs.
One of the key conclusions from this experience is that companies will
not implement measures that go beyond a `no regrets' approach, without
legally binding requirements in place. In addition to enable sound commercial
decision to be made companies require a framework that provides certainty,
flexibility and time frames of at least ten years. Without such a framework
major emission reduction measures are unlikely to be approved. [62]
4.64 In its submission, the Tasmanian Government pointed to the need
for the AGO to place greater emphasis on informing stakeholders about
its programs and claimed that a significant proportion of the Tasmanian
community was unaware of the various loan support schemes available to
assist greenhouse gas emissions reduction initiatives. [63]
4.65 In the Committee's view, the Commonwealth Government must send a
clear message to business as to how it intends to address the issue of
significant emissions reductions and provide a structural framework or
industry plan which spells out its medium and long term objectives. It
is clear that there are a range of perceived problems associated with
the NGS: the methods for implementing the programs, especially the efficacy
of voluntary programs; the need to encourage or enforce action beyond
`no regrets' outcomes; the importance of educational support; and the
need for equitable distribution of burdens. These issues are discussed
in greater detail in the remainder of this report.
4.66 During the inquiry the Committee sought to gather specific information
about the progress of specific initiatives under the NGS. In many cases
it was difficult to do so, and a full accounting may be delayed until
the completion of the major review of the NGS, currently planned for 2002.
In the Committee's view, there are strong grounds for this review to be
brought forward, and it emphasises that the review be comprehensive and
transparent.
4.67 The Committee notes that the NGS contains a Measure (3.1) for Commonwealth,
state and territorial governments to reduce emissions from their operations,
including mandatory targets for government agencies, inventories of government
emissions, independent verification, and minimum energy performance standards.
[64] The Committee was unable to establish
what progress has been made on this Measure.
4.68 In all these areas it became clear that a stronger commitment to
a whole-of-government approach is required. The Committee notes that one
of the declared principles underpinning the NGS is the `integration' of
greenhouse `with other government commitments', specifically to ensure
that government policymaking be `consistent with the principles of ecologically
sustainable development' and `to promote the need for greenhouse goals
and policies to be recognised in the development of other government policies'.
[65]
4.69 However, while the NGS contains a Measure (3.2) to incorporate
greenhouse issues into planning and decision making, the measure is limited
in scope and worded vaguely. It is hard to see exactly what either the
Commonwealth or the states and territories have committed to in this area,
and there is no clear timetable applied to the measure. [66]
The NGS contains no clear commitment to fully integrate greenhouse with
other policy areas. A variety of evidence to the Committee shows that
Commonwealth and state policies in regards to taxation, transport, energy
and resources remain poorly integrated (and often simply not integrated)
with greenhouse policy, even though they often have crucial effects on
emissions outcomes.
Recommendation 11
The Committee recommends that the first report on the progress of
the National Greenhouse Strategy, which is to be tabled in Parliament
in early 2001, should:
- include an assessment of the progress, implementation and effectiveness
of each measure;
- include an estimate of emissions reductions for each measure;
- clearly identify where information is lacking and progress remains
unsatisfactory, and
- assess performance against prior pledges, including performance
against expected emissions reductions.
Recommendation 12
The Committee recommends that the major review of the National Greenhouse
Strategy currently planned to be conducted during 2002 be brought forward
to 2001 to immediately follow the release of the first report.
Recommendation 13
The Committee recommends that the Commonwealth Government incorporate
the reduction of greenhouse emissions as a central objective across the
whole-of-government and in all policy formulation. All relevant areas
of Government, including transport and treasury, should be required to
include greenhouse abatement in policy development and report on progress
in their annual reports.
Recommendation 14
The Committee recommends that all agencies of the Commonwealth Government
be required to develop quantified emissions reduction targets for all
emissions from their operations.
Recommendation 15
The Committee recommends that performance against emissions targets
should be monitored, independently and transparently assessed, and reported
in annual reports.
Recommendation 16
The Committee recommends that government develop greenhouse accounting
tools for the private sector and provide tangible recognition and encouragement
to those organisations which apply in-house mechanisms such as emissions
trading or de-facto carbon taxes.
Australian Democrats Recommendation 3
The Australian Democrats recommend that the Commonwealth Government
apply a tax on all energy used within its departments at the rate of $10/tonne
of CO2. These funds should be allocated to investments in emissions reduction
for Government operations. Agencies could be allowed to determine how
they spend those funds, or unallocated funds be allocated to the Australian
Greenhouse Office to invest in the most cost- and greenhouse-effective
manner. The Australian Democrats recommend that state and local governments
be encouraged to match this measure.
Footnotes
[1] Greenpeace Australia, Proof Committee
Hansard, Canberra, 23 June 2000, p 752.
[2] United Nations General Assembly, Executive
Summary of the National Communication of Australia, 26 October 1995,
A/AC.237/NC/4, p 3. See also Department of Foreign Affairs and Trade,
Australia and Climate Change Negotiations, An Issues Paper, September
1997, pp 4-6, at dfat.gov.au/environment/climate/accn/overview.html (02/02/00);
Australian Greenhouse Office, Submission 169, p 1682; and The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 100.
[3] `Report of the Conference of the Parties
on its Third Session', The Kyoto Protocol to the Convention on Climate
Change, p 33.
[4] According to the Australian Greenhouse Office,
this percentage will fall as emissions from developing countries grow
in association with economic growth (AGO, Submission 169, p 1682).
[5] Using official totals for 1995, supplied
to the UN by the 35 Annex B (industrialised) Parties to the Kyoto Protocol,
the Australia Institute calculated that Australia had the highest emissions
per capita at 26.7 tonnes: `this is twice the level for all other wealthy
countries (13.4 tonnes) and 25 per cent higher than emissions per person
in the US (21.2 tonnes). While the US has higher emissions per capita
from energy (20.6 tonnes compared to Australia's 17.6 tonnes), Australia
has much higher levels of emissions from agriculture and land-use change'
(The Australia Institute, Submission 79, p 2).
[6] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 100.
[7] Australian Greenhouse Office, National
Greenhouse Gas Inventory, Fact Sheet 1, July 2000, p 1.
[8] Australian Greenhouse Office, National
Greenhouse Gas Inventory 1998, July 2000.
[9] Australian Greenhouse Office, National
Greenhouse Gas Inventory, Fact Sheet 1, July 2000, p 1.
[10] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 99.
[11] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 99.
[12] Australian Greenhouse Office, Submission
169, p 1701.
[13] Pacific Power, Submission 98, p 805.
[14] The Australian methodology for estimating
greenhouse gas emissions and sinks are consistent with the Revised
1996 IPCC Guidelines for National Greenhouse Gas Inventories, Intergovernmental
Panel on Climate Change, 1997.
[15] Australian Greenhouse Office, National
Greenhouse Gas Inventory 1998, July 2000, p ix.
[16] Australian Greenhouse Office, National
Greenhouse Gas Inventories, IPPC, 1997.
[17] Australian Greenhouse Office, National
Greenhouse Gas Inventory 1998, July 2000, p ix.
[18] Australian Greenhouse Office, National
Greenhouse Gas Inventory 1998, 2000, p xii. See chapters 3 and 8 of
this report for a further discussion of the Kyoto Protocol framework for
accounting emissions and carbon sinks.
[19] Australian Greenhouse Office, National
Greenhouse Gas Inventory 1998, Fact Sheet 7, July 2000.
[20] Dr Gary Richards, Proof Committee Hansard,
Canberra, 6 September 2000, p 926.
[21] Australian Greenhouse Office, National
Greenhouse Gas Inventory 1998.
[22] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, piii.
[23] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, piii.
[24] The Australian Institute, Submission 79d,
p 2299.
[25] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, p 2.
[26] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, p 3.
[27] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, p 1.
[28] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, p 4.
[29] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, p 4.
[30] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997.
[31] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 1.
[32] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, pp viii-ix.
[33] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p viii.
[34] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 2.
[35] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 2.
[36] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 3.
[37] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 3.
[38] Media release: Senator, the Hon Nick Minchin,
Minister for Industry Science and Resources, 23 August 2000.
[39] Media release: Senator, the Hon Nick Minchin,
Minister for Industry Science and Resources, 23 August 2000.
[40] Western Australian Government, tabled
documents.
[41] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 3.
[42] Changes to the Goods and Services Tax,
Measures for a Better Environment, Media Release 31 May 1999, Prime
Minister of Australia, pm.gov.au/media/pressrel/1999/changes3105.htm (02/08/00).
[43] greenhouse.gov.au/ggap/internet/guidelines.htm
(03/09/00).
[44] Australian Greenhouse Office, Submission
169, p 1683.
[45] Gwen Andrews, Climate Change: The current
status of Australia's response, Outlook 2000, Proceedings of the National
Outlook Conference, Natural Resources, Volume 1, 29 February - 2 March
2000, ABARE, Canberra, 2000, p 69.
[46] Senator, the Hon Robert Hill, Opening
Address to the Insurance Council of Australia's Canberra Conference, 10
August 2000, Department of the Environment and Heritage Media Release
and Speeches, environment.gov.au/minister/env/2000/sp0aug00.html (13/08/00),
p 1.
[47] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, http://www.greenhouse.gov.au/ago/safeguarding.html
(17/07/00).
[48] Australian Greenhouse Office, Submission
169, p 1683.
[49] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, http://www.greenhouse.gov.au/ago/safeguarding.html
(17/07/00).
[50] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, http://www.greenhouse.gov.au/ago/safeguarding.html
(17/07/00).
[51] Department of Industry, Science and Resources,
Action Agendas, isr.gov.au/agendas/Sectors/energy.html (19/07/00), p 2.
[52] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, http://www.greenhouse.gov.au/ago/safeguarding.html
(17/07/00).
[53] greenhouse.gov.au/ago/safeguarding.html
(17/07/00), p 6.
[54] greenhouse.gov.au/energyefficiency/appliances/index.html
(07/08/00).
[55] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, http://www.greenhouse.gov.au/
ago/safeguarding.html (17/07/00).
[56] Statement by the Prime Minister of Australia,
the Hon John Howard, Safeguarding the Future: Australia's response
to climate change, 20 November 1997, http://www.greenhouse.gov.au/
ago/safeguarding.html (17/07/00).
[57] Official Committee Hansard, Sydney,
22 March 2000, p 368.
[58] Electricity Supply Association of Australia
Limited, Submission 83, p 635.
[59] Electricity Supply Association of Australia
Limited, Submission 83, p 635.
[60] Electricity Supply Association of Australia
Limited, Submission 83, p 636.
[61] Stanwell Corporation Limited, Submission
91, pp 694-97.
[62] Great Southern Energy, Submission 150,
p 1550.
[63] Tasmanian Government, Submission 185,
p 1983.
[64] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 32.
[65] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 3.
[66] Australian Greenhouse Office, The National
Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse
Response, 1998, p 32.
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