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The Hon Dr Sharman Stone
Parliamentary Secretary to the Minister for the Environment and Heritage
Federal Member for Murray

1st National Conference of the Australian Business Council for Sustainable Energy
Sheraton, Brisbane
Wednesday 9 April 2003

Transcript of Address made to the 1st National Conference of the Australian Business Council for Sustainable Energy

We are here today not simply to discuss advantage through technological innovation. We're actually talking about the future of our children and our children's children in terms of our impact on human induced climate change.

It's interesting that in Australia over the last two hundred plus years we have developed an economy and a society that is absolutely, you could say, profligate in the way we use energy. Australia is amongst the highest per capita emitters of greenhouse gas on the planet. As a continent we emit less than three or four per cent. But in terms of per capita we have an extraordinarily large footprint.

Continuing on from that we need to remind ourselves we're amongst the world's highest generators of household waste. Per capita we have a huge amount of stored water. We are amongst those countries that have some of the highest per capita energy use. So, as a nation we have lived high on the hog. We have produced one of the most enviable societies on earth in terms of our extraordinary sustained democratic freedom.

We have a superb country where we value the rights of individuals and it's a land of opportunity. There are, as we know, numbers of nations who look upon us as a role model for how we've managed to integrate a whole range of cultures and ethnicities in our last two hundred years to put together in a unique society.

But it has come at an extraordinary cost, we now understand and acknowledge, and we must now address not just our own domestic needs in terms of reducing significantly greenhouse gas emissions, and those other consumptions that I've referred to, but we have a significant responsibility globally. And this government does not resile from that responsibility.

As you would be aware, Australia - through previous minister Robert Hill - lead discussions at Kyoto regarding the importance of vegetation, carbon sequestration through vegetation, which we believe is a very significant part of addressing, in our country in particular, our future greenhouse gas emissions. This measure is particularly important because of the extraordinary other benefits in terms of biodiversity protection, salinity mitigation, soil protection and so on.

We were also determined to try and get more nations actively engaged in what was being planned. And we continue to be disappointed that the protocol itself is not comprehensive and, in itself, is not sufficient for what's needed to turn around this human induced climate change, as Flannery and others, including my own Bureau of Meteorology are well able to demonstrate. There is going to be a significant change in the way in Australia experiences climate.

So, they are very significant issues that we face and Australia's been down this track before in terms of alternative and sustainable energy. But we call it old technology and we let it go. For example, when I was young the only way we lifted our water out of the farm dam into the house was via a windmill. And it was my job, as a kid, to go and unleash the gearing of the windmill, and my farm was amongst thousands of other farms in that region whose energy came from a windmill.

In fact, the Victorian Farmers Federation icon is the windmill, and we loved the windmills on the landscape because the northern plains are very flat and our little windmills were our points of focus and reference. There's the windmill on our way home. And we also have used, in the past, water for a whole range of power generation. But we let that technology go and became fossil fuel dependent during the twentieth century.

The twenty-first century is going to be where we bring back a whole range of renewable energy possibilities. And some we haven't even yet come to understand.

So I want to congratulate the BCSE. You came together as two separate industry bodies, you formed a single national peak body for sustainable energy and that's a landmark step for the energy industry in Australia. It is an indicator of the sector's emerging identity and growing maturity.

It's very hard for a government to listen to scattered voices; it's easier for us to engage with an industry that has got it's own act together, so to speak, in terms of understanding from its own membership, where their priorities are and how they want the government to assist.

So, I congratulate you on this amalgamation and I welcome the industry consolidation that it signifies.

Dr David Kemp and I really look forward to doing business with you. Dr Kemp is sorry he can't be here today. It was his intention, as you'd be aware, and he was on the program, but Cabinet responsibilities came between him and being able to participate.

The Howard government has worked in very close partnership with the renewable energy industry for a number of years. And we recognise the important role that renewable and other sustainable energy sources have played and will play in improving sustainability and security of Australia's energy mix.

We had the world's first dedicated Greenhouse office with over a billion dollars worth of investment thus demonstrating our commitment. I don't agree with criticism that all of our policy and technology eggs are in one basket. They're not, they never have been, and I strongly suspect they never will be. This is about diversity of technology, finding out what works best. And given our extraordinary landscape in Australia and our population distribution, there will be remote technology alternatives and there will be metropolitan seaboard technologies at work.

There will be a range of measures and the federal government is not picking winners. We have asked what can we do to make the environment and the market and the technologies more appropriate for the next century. We certainly recognise the parts renewable energy, cogeneration, gas-fired power and energy efficiency have to play.

Australia's approach to human induced climate change is based upon the reality that climate change is occurring. If you read some media, they try and suggest that the government hasn't engaged with the issue of human induced climate change. This just isn't true. Our government understood long ago that we have human induced climate change. The question is how will the climate change? What must we do collectively to try and reduce the impacts on our nation? How can we adapt in the immediate future, given that our entire national and global efforts are not going to reverse these impacts in our lifetime?

How are we going to make the adaptations that will be necessary so that we don't have a human society in Australia where our lifestyle falls apart in terms of access to opportunities? And how can we ensure the biodiversity in our country and our natural resources are best sustained?

So we have four elements underpinning our forward climate change strategy. The first is that we will strive for a more comprehensive global response to climate change than we've currently got at Kyoto.

Secondly, Australia will position itself to maintain a strong and internationally competitive economy with a lower greenhouse signature. If we're not competitive, we simply can't deliver the technology that needs to occur.

Thirdly, domestic policy settings will balance flexibility with sufficient certainty to allow key decisions on investment and technology development and also emphasise cost effectiveness.

And finally, Australia will implement policies and programs that assist adaptation to the consequences of climate change that are already unavoidable. Reducing global greenhouse gas emissions is one of the foremost environmental challenges facing us today. In Australia we have others like salinity, certainly like soil acidity. But global greenhouse gas emissions are an absolute priority for this country. It's a complex policy issue, one that needs to be tackled with equal vigour both domestically and internationally.

The federal government, we believe, needs to take appropriate action to assist industry and our citizenry alike to reduce emissions. We understand the capacity building, the education information role we have. To this end, as I said before, in the world's first dedicated greenhouse office, we've committed nearly one billion dollars to provide incentives for greenhouse gas reduction and to encourage development of a range of low emission technology.

Part of that one billion was a ten million dollar grant we provided to the Australian EcoGeneration Association in 2001. And this has now been novated to the Business Council for Sustainable Energy under the Greenhouse Gas Abatement Program. These funds were for developing a series of co-generation plants that should bring about, we hope, large scale abatement during the Kyoto Protocol commitment period. In addition, we are providing funding to the Business Council to prepare a landmark guide to embedded generation in the national electricity market.

Internationally, Australia's top priority is to have a place a global framework for greenhouse gas reduction that includes all major emitters particularly, the US but also the developing countries.

The weakness of the Kyoto Protocol is that seventy-five per cent of global emissions are not covered by the Protocol. And estimates are that, at its use by date of 2012, Kyoto will have brought about only a modest one per cent reduction in overall emissions.

According to the current science, we need to reduce global emissions by around sixty per cent by the end of this century. Clearly, therefore, a simple and single-minded dependency on Kyoto Protocol is not going to be sufficient for our planet's future, for its protection.

As well, if Australia was to ratify Kyoto now we have a concern that it could create obligations for Australia that are not imposed on many of our regional competitors. We don't want to economically disadvantage Australia at this point. And we actually believe that if some of our so-called dirtier industries were exported - went offshore from our own high emitting economic sectors to countries that have less of a commitment to reducing emissions - then this would not assist at all in terms of the planetary objective.

The Howard government is strongly of the view that future global action needs to reflect different circumstances, the different economic and social needs of all countries. And that was the position Australia took at Kyoto and this continues to be our position.

While we may not have ratified the Kyoto Protocol, we are participating globally, as well as domestically. Our government in doing all we can to reduce emissions, and to assist you, the industry, to do all you can. From a global point of view it is better that some production is in Australia right now, with our environmental standards, than somewhere else.

I'll give you an example. The recent twenty-five billion dollar LNG contract with China is case in point. The contract will add around one million tonnes of CO2 energy to Australia's emissions. But by replacing coal-fired power in China, it will reduce China's emissions by around seven million tonnes a year. This is a substantial net gain for global emissions.

There's no doubt that, as our technology improves, Australia's greenhouse gas emissions intensity will reduce. Our present measures, we believe, will see a reduction by 2010 of some thirty-nine per cent of 1990 levels. And remember, this is during a period of unprecedented economic growth.

Some Australian business leaders, of course, are concerned that their companies might suffer discriminatory treatment in overseas markets if Australia is not a party to the Kyoto Protocol. But let me assure you, Australia will meet the target it agreed at Kyoto, we will continue to do our part in the global task and to work with other countries to develop an effective and robust global regime that tries to involve all major greenhouse gas emitters. We believe we will be able to do the task both nationally and domestically.

Australia's actions go well beyond the limited horizon that Kyoto offers, as many in this room know. We are in the process of developing a long-term climate change forward strategy to lower Australia's greenhouse signature, consulting widely with State and Territory governments and with the industry and community.

This strategy will not only cover the next decade, it will be a key component of Australia's longer-term energy strategy. This strategy will emerge from the Prime Minister's ministerial committee on energy and we are conscious that many of the investment decisions needed for our energy futures must be long term. A long-term framework is essential for the sort of investment security that that is essential if we're going to secure the sorts of investment necessary.

The Climate Action Partnership between the USA and Australia was launched early last year and much work has been done since then to develop a program of strong bilateral cooperation. We are strongly committed to this partnership with nineteen projects being implemented under the inaugural work program. Key among these is a specific technology covering renewable energy with immediate emphasis on remote power.

The success of the US-Australian partnership has led to discussions with other countries. Export development is likely to flow from these partnerships and so I encourage industry to engage in this process, obtain more details of these nineteen projects if you're not familiar with them. And we have representatives of the Australian Greenhouse Office here. Please make sure you're positioned to take advantage of these benefits.

We've been pleased with the way industry has engaged with the government's business climate change dialogue. This has provided real opportunities for industry to contribute directly into the process. And I'm very pleased to acknowledge your own Business Council for Sustainable Energy activity in relation to that dialogue.

Ultimately, the size and shape of the role of renewable and sustainable energy will depend on a number of things. It will depend on industry's ability to provide reliable and cost efficient energy and it will depend on how well the industry is positioned to contribute to Australia's ability to adapt to the impacts of climate change. The good news for us is while we are fossil fuel rich, we are also rich in wind and sun resources; we have enormous renewable energy potential.

In Antarctica we have been the first to install two huge wind turbines that harness the world's strongest winds. And they're going like a dream at the moment.

Whilst we don't have the same sort of winds on the continent, we do have an extraordinarily large continent with a lot of remote areas and we are positioned to be world leaders in using natural elements of wind, sun, maybe tidal, and we must make sure we capture these natural advantages.

We are reviewing progress and developing future directions in climate change and energy policies. And councils like these are so critical to assist us to do that. And there are differences amongst the different sectors of the industry and we certainly are not just listening to the big end of town.

Obviously we've made an enormous commitment to the development of renewable energy in Australia. Some of you are recipients of grants and the support that we have made available. Commonwealth greenhouse policy has been complemented by measures such as the Renewable Energy Commercialisation Program, the Renewable Remote Power Generation Program and the Mandatory Renewable Energy Target. Together they have been the key driver of a veritable explosion of activity in the domestic renewable energy sector.

Over the last five years, we've allocated three hundred million dollars to programs that have encouraged deployment of existing renewable technology, commercialisation and innovation, also industry capacity building. And the results speak for themselves.

Admittedly from a small base, just a few megawatts four years ago, we now have over a hundred megawatts of wind power installed and running in Australia, and we expect two thousand megawatts in the future. This has been an enormous success.

Solar power has also made rapid progress. And I love to watch the solar cars race from Sydney via Canberra down to Melbourne. It is great to see the high schools out there building their solar panelled cars.

By the end of February this year, four thousand households and community buildings across Australia will be generating solar electricity. Over a thousand of these are grid connected.

The Photovoltaic Rebate Program has been a strong catalyst for industry. We've found it so popular, funds were committed way ahead of schedule and I can ensure you that the program can continue while we still need some stimulus in the marketplace. This program is a great example of the Government working with industry.

In March this year, Industry Minister Ian Macfarlane and Dr Kemp announced another one million in backing for nine major renewable energy projects under round seven of the government's Renewable Energy Industry Development Program. These range from pig waste to electricity and wind turbines.

In my own area, we've got some salinity impacts. We have solar energy now, thermal energy being used to help evaporate salt in ponds to de-water and de-salinate areas and to produce a very commercially valuable product.

This is just one example of some extraordinary work going on in our country. Under the renewable remote power generation programs isolated households and remote communities have installed one thousand eight hundred and eighty kilowatts of photovoltaic power and you're going to hear from one of these remote communities later on in the day.

We have four hundred and fifteen kilowatts of wind turbines, twenty-three kilowatts of micro-hydro and associated equipment. This will reduce greenhouse emissions by about seven thousand tonnes per year. We've also got seven point five million dollars for major projects leading to the installation of four point two megawatts of wind turbines at Esperance and Rottnest Island in WA, and two hundred and eighty kilowatts of photovoltaic generation at Bulman and Kings Canyon in the Northern Territory for example. It doesn't sound to me like we're just bogged down with coal fired power generators.

I'm very pleased today to announce three new projects under the Renewable Remote Power Generation Program and these will be released to the media today. The first of these new projects is in the Northern Territory. The Commonwealth will provide some three and a half million dollars to Solar Systems NT to install thirty concentrating dish photovoltaic generators for three indigenous communities.

If any of you have been out to remote Australia you almost expect to hear the diesel motor thumping away from a couple of kilometres out. There are enormous costs associated with getting diesel out to these places, there are health issues and there are waste issues. It is an extremely non-cost effective way to go so our remote communities are ideally set up for photovoltaic generation of energy and that's what we're doing. We expect to reduce diesel fuel consumption in these communities by four hundred thousand litres per year.

We think these activities will save over a thousand tonnes of greenhouse gases annually.

The second new project is in Tasmania where nearly two million dollars will go to Hydro Tasmania to install one point seven megawatts of wind turbine on King Island. When these are operational, thirty per cent of the power used by the island's eighteen hundred residents will come from a renewable source displacing over a thousand million litres of diesel fuel per year. The annual greenhouse gas savings will be about two thousand eight hundred tonnes.

And finally, in Western Australia, we're going to allocate five point five million over four years to assist establishing a renewable energy industry development centre jointly hosted by Murdoch and Curtin universities.

Today, it's also my great privilege to launch the Renewable Energy Commercialisation in Australia Handbook and there are only a hundred of these in captivity at the moment. They're literally arriving from the printers and you will find them at the Australian Greenhouse Office stand. They are a great idea because they are giving us examples of the alternative energy projects that are up and running.

This publication will be an excellent source of information for our community but also for the industry to see just what we are doing. I'm very pleased to show this to you and say we need more examples of just how good some of our innovation is and how brilliantly a lot of our industry is doing.

In cooperation with industry, the government has launched a renewable energy action agenda to provide a strategic policy framework for the development of sustainable and competitive renewable energy industries in Australia.

The agenda aims to grow annual industry sales to four billion dollars by 2010 and the Business Council for Sustainable Energy - your business council - along with industry. Our government believes industry will have primary responsibility for helping shape that agenda and implement it.

The Renewable Energy Technology road map has followed on from the action agenda with active collaboration from groups including your council. This road map outlines a long-term research and development plan that helps define the industry's future. If you're not familiar with these elements then it's important that become familiar so you do not miss a single opportunity of engaging with the government and your fellows in industry, to maximise the opportunities.

In May, this year, we'll have an international conference in Broome about hydrogen economy. There's never been a more dynamic focus by our government on the renewable sector than is now occurring and the opportunity has never been better for industries to have their opinions taken into account.

In relation to MRET, now a cornerstone of the government's strategy for growing the Australian renewable energy industry, we are currently reviewing the program. It was a world's first in creating a national renewable energy market that's backed by legislation and it gives us an innovative market based system of tradable certificates.

We believe the MRET measure has performed strongly since it came into force in April 2001. It's generated a high level of renewable energy project planning and development activity especially in the wind sector. There are a hundred and seventy power stations running on renewable energy being accredited across Australia covering a wide range of technologies.

The interim targets for the first two years have been met comfortably and inroads are being made into the third year target. But, as you know, MRET legislation prescribes that we must have an independent review and that will take place now in 2003 as prescribed by the legislation.

Last month, we announced the membership of the review panel and in fact they met last night in one of their first get-togethers here to coincide with your conference. The chairman's Grant Tambling. The government welcomes the very valuable contribution of renewable energy industry stakeholders in terms of the MRET review. We also welcome your contribution.

We want your ongoing engagement and we want to particularly ask you in submitting your views to make sure that your analysis and data is included. We think MRET is a cutting edge program for supporting renewable energy. Other countries are now replicating the program, because it's seen as an effective mechanism to deliver industry development. It's building industry capabilities and capacity and will deliver, and it's already delivering now, low cost emissions.

For this reason and for reasons of industry certainty that's why it was designed for at least a twenty year program and we've not changed our long-term commitment to that. However, of course, like all good things, it's important to have a bit of a check up and see how it's going, to see if we need to tweak it, adapt it, and make it as good as absolutely possible.

The Howard government is hugely impressed by the way the industry's taken up the challenge of delivering the projects. And we're also very pleased to look at the investment and jobs that have been created through MRET.

Where to from here? The Prime Minister has said that Australia's energy policy must continue to support economic growth and development while, at the same time, contributing to reduced air pollution and greenhouse gases and developing new technologies. Wherever possible it must be integrated with other activities to create other benefits for our country, like our protection of our biodiversity.

I'm particularly anxious about the vegetation issues associated potentially with greenhouse emissions and sequestration. And there are multiple benefits when we go down the line in terms of industry efficiency, in terms of waste management and so on.

The delivery of competitively priced and secure energy sources is an issue for all Australians. The government therefore has made it one of its highest priorities. The Business Council for Sustainable Energy has a pivotal role to play in this.

And that's why I'm very proud to announce today that we have granted two hundred and fifty thousand dollars to your Business Council for Sustainable Energy to help your strengthen your activities, to progress your activities, to help focus and consolidate your industry's development. Specifically, we will see this money spent on the council employing an industry development manager for two and a half years.

So, I congratulate the council and know that with two hundred and fifty thousand dollars you'll be even more able to represent your industry in a significant way. The Commonwealth government stands firmly beside this industry and all those engaged in this greenhouse gas challenge. We look forward to hearing your ideas, to work with you to find the best way forward.

Quite clearly our children and our children's children's future depends on how we address the legacy of the past and how we adapt and at the same time mitigate the impacts that are now occurring in some parts of Australia. Human induce climate change is making the drought more intense. This will have, without a doubt have an impact on the future of our agribusiness.

So, I thank you for the opportunity to speak this morning. And let me say that the Commonwealth government is very grateful to the industry for responding in the way it has and we will work beside you for as long as it takes. Thank you very much.

Commonwealth of Australia