ADDRESS TO CRC FOR LOW CARBON LIVING ANNUAL FORUM
MONDAY, 19 NOVEMBER 2018
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I want to say a couple of things about the importance of research in this area before I move to broader climate policy. That is to emphasise, as the Shadow Minister for Climate Change and Energy, my admiration and my regard for the importance of research in this area. It is great to see the CRC in this space has been able to continue its work over recent years, while the research efforts in so many other areas to do with climate policy and energy has been diminishing. One example is effectively the defunding of NCCARF. That has led to a collapse in the amount of published work being able to be funded by the Commonwealth in the critically important area of adaptation. That is certainly a strong focus of Labor’s as we think about the next election and what might follow from the next election in the area of climate policy which, perhaps more than any other, represents the starkest difference between the two major parties.
The challenges of climate change just become clearer and more urgent every year. When I started reading about climate change 25 years ago, generally the impacts of climate change were predicted to start to emerge in the 2030s, maybe even as late as the 2040s. But over the last several years, increasingly we have started to see, feel, and experience the impacts of climate change much earlier than scientists predicted only 20 or so years ago. President Obama said “ours is the first generation to experience the impacts of climate change and the last generation with the capacity to do something about it.”
That, I think, becomes more pressing, obvious and undeniable almost every year that passes here in Australia and beyond.
The most recent reminder of that is the IPCC report, which got a lot of coverage globally, including here in Australia, and emphasises how serious this challenge is for the globe. Even keeping global warming to 1.5 degrees, which would require a monumental effort by the globe, would still, for example, lead to the loss of something between 70-90 per cent of the world’s coral reefs. Keeping global warming to 2 degrees, which we are still nowhere near tracking to, would lead to the loss of well more than 99 per cent of the world’s coral reefs, including, we would have to presume, almost all of the Great Barrier Reef, one of the seven natural wonders of the world for which Australia has the privilege of stewardship.
When you try to narrow the global IPCC report down to our particular interests here in Australia, both immediately and as custodians of Australia to future generations, we are in the somewhat exceptional position of being a very wealthy country that can finance the transition to a clean energy future. But, we are also a very vulnerable country; a country where already the climate, particularly in the heat sense, pushes us right up against the limits of human tolerance. Our agriculture sectors in the South West of Western Australia and in the Murray Darling Basin are already exposed to very significant drying according to the BOM and CSIRO. Drying trends in the rainfall sense, but more importantly drying trends in a very sharp reduction in stream flow that actually sees water reach into rivers. We are on a very vulnerable continent, but also one largely built on urbanisation around coastal communities. What we have seen from the science in the last several years is a very rapid acceleration of sea level rise through an extraordinary acceleration of the melt particularly from the Greenland ice sheet.
But there is a debate here in Australia about whether we really matter. The argument goes that we are a tiny percentage of the world’s greenhouse gas emissions, so it is really going to be inconvenient and difficult for us to do anything. Really, it only matters what the US, China and a couple of other nations do – we should just sit back and hope that they take action. We can then surf the benefits of that. I entirely reject that argument.
Firstly, as part of the principle of common but differentiated responsibilities from the Kyoto Conference, we have a particular obligation as a very wealthy country that became wealthy through the industrialisation that has characterised most of our history. We have a responsibility under that principle to take action. We are also not a minor part of this global problem.
Although Australia doesn’t feature in the top 50 nations by population, we are one of the top 15 in terms of total greenhouse gas emissions. We are, per head of population, the most significant emitter of greenhouse gases in the OECD. We do matter in this global challenge. Interestingly, not only do we feature in the top 15 of aggregate greenhouse emissions, the Red Cross did a study very recently which showed we are in the top 10 nations in the world in terms of the cost of natural disasters. A cost which is starting to increase very substantially as we see not only in our own country but as we see right now in the United States. We do matter. We matter to the global picture and we matter to our own nation.
So how is Australia doing? Well frankly we are not doing very well. The Prime Minister says that we are meeting our Paris targets, a reduction of 26-28 per cent by 2030 on 2005 levels, to use his words in a “canter”. That is just not right. The Department of the Environment’s greenhouse accounts project that, at the moment, we are tracking to a reduction in greenhouse gas emissions between 2005 and 2030 of about 5 per cent. Not 26 or 28 per cent. That really surfs off the improvements that happened in the last decade. Under our last term in government, we reduced emissions by about 11 per cent. But since the removal of the carbon price mechanism and a range of other policies, carbon pollution has been rising since 2014 and is projected to continue to rise between now and 2030.
We are now pretty much the only major advanced economy where greenhouse gases are rising rather than coming down. We are not meetings the targets that I already regard as inadequate. We are certainly not meeting our Paris targets in a “canter”. Our poor performance is really reflected across the economy. Other than a big burst of renewable energy investment to discharge the Renewable Energy Target, every single sector of the economy at the moment sees pollution rising because of a lack of policy. We’ve seen pollution rise in the land sector because of the removal of land clearing laws that were put in place in the early part of the 2000s, particularly in Queensland but also New South Wales. We are seeing emissions rise in transport, because we are the only OECD economy that does not have pollution standards for our light vehicle fleet. We are seeing pollution rise in the industrial sector, not just because we have built these very big LNG plants, but because there is now no legal control to contain, let alone reduce, emissions because of the removal of the emissions trading elements of the carbon price mechanism. We have an economy wide challenge in getting pollution to start to come down.
It just reminds you that the government matters. Policy in this area really matters. I said that in 2030 our pollution at the moment is projected to be about 5 per cent below 2005 levels. Compare that to the United Kingdom which is currently projected to meet a reduction of 61 per cent over the same time period. Their fifth carbon budget, set up under the 2008 Climate Change Act and supported by both major parties, reflects a bipartisan process that is seeing carbon pollution come down at pretty much a faster rate than you can find in any other economy in the world. They still make about three times as much steel in the United Kingdom as we do. They still have about 800,000 workers employed in the automotive industry at a time where we have shut ours down. They still have a strong industrial base but have been able to reduce carbon pollution to levels that are below anything seen in the UK since before the 1940s. It’s an extraordinary demonstration of the impact of political maturity and bipartisanship in this area that is so hotly contested in Australia.
The debate in Australia really is unique. You see it in bits of the United States, you saw it a few years ago in Canada. But if you read Fairfax this morning there is a poll from Ipsos which asks Australians as if there is this stark choice, do you want lower power prices or do you want lower emissions? Ignoring the possibility that you could have both – an utterly false choice because we’ve known for years now that building new renewables puts downward pressure on power prices. At a time where we simply have to renew our ageing electricity infrastructure, much of which was built in the 1960s and 1970s, replacing it with renewable energy is going to be the cheapest way to guarantee energy through the future. The idea that there is this false choice and you have to pick, I think reflects the poor, immature nature of the debate here in Australia.
The other thing we have to focus on is to harness much more opportunity from better energy efficiency, better energy productivity. The IEA point out that energy efficiency really is the best way to get down emissions. It has been the most effective way globally since 2000 to get down emissions. Australia has long been one of the most energy inefficient economies in the OECD, because we could afford to be. Before people worried about carbon pollution we had such cheap energy it simply didn’t make sense to invest in a new boiler or a new refrigerator. You would just cop a hit on your power bill because that was the cheaper thing to do. At a time when the unit price of electricity is now relatively high by OECD standards, and we do care about carbon pollution, businesses are being hit through power bill rises snf, through gas bill rises, and are unable to invest in those better energy efficiency measures.
The National Energy Productivity Plan that the Government put in place a few years ago has inadequate targets. A 40 per cent improvement by 2030 off 2015 levels would see us slip further behind, not only other OECD nations but other competitor nations like China that are making really significant strides in improving their energy efficiency and energy productivity. But even though those targets in themselves are inadequate, we are still not reaching them. The last annual improvement in energy efficiency was about 0.4 per cent, slipping way behind our competitor nations and meaning that businesses and households are not reducing their emissions and are paying more on their power bills then they should be. We want to see a much more concerted effort, economy wide, to deal with this issue that is becoming a major drag on our broader economic productivity. It is probably the best opportunity to find ways to reduce power bills and carbon emissions in the built environment, in the industrial sector, and in the household sector.
We’ve been working with a range of stakeholders, like ASBEC, the Green Buildings Council, the Energy Efficiency Council and a range of others about ways in which we try and bring energy efficiency and productivity back to the centre of this debate - a debate that has been overwhelmingly focused on the supply side and needs to shift a bit more to the demand side. As you may have read, we will probably have more to say about this in coming days.
Can I close by saying the CRC model, in this area and beyond, is a great model, especially in climate policy where sectors need to be working together. If we are going to clean up our transport sector and harness the opportunities that come from automation, there are huge implications, for example, in urban design and in the way in which we build our built environment. The CRC model is precisely designed to deal with those cross-sectoral challenges; bringing in the understanding and insights of state governments, federal government, universities, other educational institutions, and the private sector with industry partners. This is a great success and I am enormously glad it has been able to endure through some pretty difficult times in climate policy where others, quite frankly, haven’t been able to. I wish you all the very best for today. Thank you very much.