The Hon Greg Hunt MP
Parliamentary Secretary to the Minister for the Environment and Heritage
The Centre for Independent Studies - Policymakers Lecture Angel Place Conference Centre, Sydney
30 November 2006
We are at a turning point in history. Climate change presents us with a challenge – a dramatic but achievable challenge – to shift from a high emissions to a low emissions economy.
This is a once in a century transition. We are now at that moment in history where we can begin to incorporate externalities – the costs of pollution – into the costs of production.
This will be, at times, a difficult, disruptive transition; but it is necessary.
Unlike the Beazley approach, we must do it in a way that protects the most vulnerable.
This is ‘big history’ in the making, and we will be judged by future generations on how we respond.
- We can neither ignore the problem, nor pretend that we can simply wish it away wit a few solar panels. That is as dishonest as those who say there is no climate change.
We have a moral responsibility to address climate change now:
- because it is a problem of human development, a classic example of “the tragedy of the commons”;
- because we have the capacity to deal with it, more than at any time past or future;
- and because it is essential to our future economic growth and prosperity that we do so.
In this paper I want to present five propositions:
1. First, climate change is both real and soluble.
- The deniers are wrong:
- that is, those who argue there is insufficient evidence.
- The doomsayers are also wrong:
- that is, those who argue that we are coming to an unavoidable and catastrophic end.
2. In order to deal with the issue in any meaningful way, we need a common global agreement which brings in the largest emitters:
- the US, China and increasingly, India.
3. The single most important step to dealing with current global and Australian emissions is clean coal and gas technology to reduce the largest source of emissions – electricity from our power stations and other forms of stationary energy generation.
- This represents a chance to deal directly with up to 40% of our current emissions between now and 2030.
4. In looking at new energy needs, there will be a mix over the century of clean coal, nuclear and renewables – some of which may take up to 50 years to develop a baseload capacity - but on which we must currently work.
- Cost will and should determine the winners among these, so long as they are comparable in terms of emissions, although all are potentially a part of our new energy needs.
5. In order to transition to a low-emissions economy, we need to pursue policy mechanisms which are both effective and viable. There is a right way and a wrong way to do this.
- We must not fall for Labor’s tax on petrol and heat.
- Their apparent approach is to drive down demand on largely inelastic goods. This will cause pain to the most vulnerable but not solve the problem.
- Rather than forcing down demand, we should consider those tools already available to directly clean up the power stations, quickly and effectively, including options such as:
- Clean Air Legislation, setting standards such as we did with lead-free petrol, coupled with a possible system of credits and debits for failing to reach phased in standards;
- and direct investment in cleaning up the power stations.
- These are the mechanisms which we need to consider.
- Our goal must be the most effective means of directly cleaning up the power stations, rather than ineffectively trying to drive up the price of essential services.
1. The Challenges of Climate Change
1.1 Climate change is real: confronting the deniers
Climate change is real. It is important. It is our responsibility.
The link between human activity and increasing levels of carbon dioxide in the atmosphere is clear.
For the past 10,000 years, the global atmospheric carbon dioxide level has been stable between 260 and 280 parts per million.
- The current concentration of carbon dioxide in the atmosphere was identified by the Intergovernmental Panel on Climate Change as being 380 parts per million;
- and more recently by the Stern Review as having risen to 430 parts per million.
The Australian advisory bodies, the CSIRO, the Bureau of Meteorology, the Australian Greenhouse Office and the Australian Antarctic Division all advise that the global release of around 40 billion tonnes of COČ per annum is the overwhelming cause of this change.
This change in CO2; levels is having a direct and measurable impact on our climate.
- The Intergovernmental Panel on Climate Change (2001) estimated a global-average warming of 0.5-1.2șC by 2030, and 1.4-5.8șC by 2100 if climate change is left unabated;
- figures confirmed by the Stern Review.
- The full impact of such temperature increases is unknown, but likely to be significant.
- A 5șC global average temperature change is all that separates us today from the ice age.
- The Director of Meteorology estimates a rise in sea levels from 50cm to 80cm by end of century.
Australia is vulnerable to the impacts of climate change.
- In Australia, average temperatures have risen by around 0.7șC over the last century and sea level by 12-16cm.
- Many of Australia’s unique ecosystems are vulnerable to climate change, especially coral reefs, alpine regions, wetlands and the Wet Tropics in Queensland.
- Major coral bleaching events occurred on the Great Barrier Reef in 1998 and 2002, and up to 5% of reefs were degraded during each event.
The CSIRO/BoM predict:
- a 10-25% decrease in run-off by 2050 across the Murray-Darling Basin;
- a 10-40% reduction in snow cover by 2020 across Australia;
- the average number of days above 35șC could reach between 64-141 in Broome by 2030 (now 54);
- more cyclone damage and increased flash floods for the Northern Territory and North-eastern Queensland.
There is then overwhelming scientific evidence that significant reductions in greenhouse gas emissions will be needed by the end of this century.
1.1.1 Climate change vs inter-annual variability
However, at this point I would like to add a note of caution:
- yes, climate change is real;
- but we should not attribute all temperature volatility to climate change.
Weather patterns and temperature have always varied from year to year, sometimes dramatically, as the attached slides on variability from the Bureau of Meteorology show in relation to rainfall in the Perth region and cyclonic frequency in Australia.
- It is important to note that while cyclonic frequency is trending downwards over the thirty year period:
- this may be due a number of El-Nińo events over this period, which tend to suppress cyclonic activity;
- the Bureau also notes that despite the downward trend, the severity of cyclonic episodes appears to be increasing.
Two points are clear:
- global temperatures are increasing;
- but climate change is not the cause of every unusually hot day or late snowfall or destructive cyclone;
- indeed, it is almost 100 years since Dorothy Mackellar characterised Australia as “a land of droughts and flooding rains”.
1.2 Climate change is soluble: confronting the doomsayers
Climate change is a major challenge, but not an impossible one. We have faced the so-called “end of the world” before, and survived.
- 150 years ago, London and other cities were faced with the potentially devastating effects of cholera and typhoid flowing from untreated sewage.
- The answer was not to stop citizens consuming water, but to embark on a radical clean-up and transformation of infrastructure.
- Similarly, damage to the ozone layer and acid rain were pronounced irreversible, yet each has largely been addressed through changes to the way in which we organise ourselves.
- The Montreal Protocol on Substances that Deplete the Ozone Layer is one of the most successful environmental protection agreements in the world.
- The Protocol sets out a mandatory timetable for the gradual phase-out of ozone depleting substances internationally.
- As a result, there is now mounting evidence of a decline in ozone depleting substances and an increase in protective ozone in the atmosphere.
- International action on acid rain has been equally successful:
- since the 1979 Convention on Long-range Transboundary Air Pollution came into force, pollution standards have significantly reduced the amount of sulphur dioxide from industrial sources;
- which has meant a recovery of forests in Europe and North America once vulnerable to acid rain.
1.3 But can we afford it? The costs of climate change
The question then is not whether climate change is soluble, but:
- How expensive will it be to address? and
- How will we manage such a change?
The Stern Report calculates the dangers of unabated climate change to be equivalent to at least 5% of GDP each year and up to 20% of GDP or higher.
- In contrast, the cost of reducing emissions to avoid the worst impacts of climate change can be limited to around 1% of global GDP each year.
- Although these estimates have been disputed, they challenge us to review business-as-usual.
In 1942 the Austrian economist Joseph Schumpeter described the concept of creative destruction:
- where radical innovation and industrial transformation are unavoidably destructive to old industries and economic structures.
Climate change is likely to bring about just such creative destruction.
- We will need radical innovation.
- We will need dramatic transformation of our energy industries and our energy use.
- But we do this because we must secure our long-term environmental health and economic stability.
In considering the solutions we need to look both at the international mechanisms and the domestic technology changes we need to make.
- In each case there is a wrong way and a right way.
2.1 The Challenge
We can tackle climate change, but internationally, how big is the challenge before us?
Global demand for power is increasing.
- Primary energy demand is projected to rise by 53% by 2030 (IEA).
- Over 70% of this increase comes from developing countries, led by China and India.
- Demand for fossil fuels is also expected to rise.
- By 2030, fossil fuels will still provide 81% of global energy needs.
- This will mean increased COČ emissions on a business-as-usual basis, of 55% over current levels.
- More than 75% of this increase is projected to come from developing countries;
- with China alone to account for almost 40% of the rise of global emissions.
- Emissions from developing countries are projected to overtake emissions from OECD countries by about 2010.
2.2 The Wrong Way: Kyoto Protocol
The first attempts to address climate change internationally are not proving particularly successful – despite being well intentioned.
The Kyoto Protocol does not – cannot – have any real impact on reducing greenhouse gas emissions:
- developing countries, including some of the world’s biggest emitters such as China and India, have no greenhouse abatement obligations;
- as a result, greenhouse emissions are still expected to rise by 40% over 1990 levels by 2012;
- the figure could be even higher, because most developed countries are falling well short of their emission targets, for example:
|Kyoto Target (%)
Yet Australia, which hasn’t ratified, is one of the few countries on track to achieve its target of 108%.
- In essence, the morality is with Australia as a deliverer, rather than as a promiser who does not deliver.
Another key concern with the Kyoto framework is leakage, or what I call the Bhopal Effect, of industries such as aluminium and cement moving away from Kyoto-bound countries to ones with weaker emissions controls.
There is great potential for companies to move large scale manufacturing from Europe offshore to the Middle East or North Africa. In some cases this process may actually increase global emissions in net terms – rather than reduce them.
An international agreement which excludes major COČ emitters, whether in the developing or the developed world, will simply not work.
2.3 International Response – The Right Way
Given a poor start, how might the international regime evolve post Kyoto, that is, post 2012?
- The Prime Minister has indicated the need for a ‘New Kyoto.’
- Any new approach must include big developing countries, and the US.
Australia is not the only country to recognise the weakness of the Kyoto Protocol. Negotiations are underway to create a stronger, more inclusive protocol, and Australia is a part of this process.
An opportunity now exists to create a genuinely inclusive “New Kyoto” and Australia can and should be one of the drivers of this process.
- The key to engaging developing countries is what I call “Rewards Plus;”
- - developing countries will not sign on to punitive targets;
- - but they will respond to rewards:
rewards for signing on to targets – for example, in the form of funds to assist in technology transfer;
and rewards for achieving targets.
- US participation will also be critical.
Australia can take a leading role, in the region and internationally, to push forward a truly global climate change regime, and in particular to engage the US.
- Our relationship with them is an opportunity to engage the US, as we have done through the Asia-Pacific Partnership.
The Asia-Pacific Partnership on Clean Development and Climate, or AP6, was formed this year by Australia, China, India, Japan, South Korea and the United States.
- This group represents around half the world’s economy, population and energy use.
- And produces around 65% of the world’s coal, 48% of the world’s steel, 37% of the world’s aluminium, and 61% of the world’s cement.
Working with private sector partners, AP6 aims to deliver greenhouse emission management, national pollution reduction and energy security through a series of projects that also support economic development.
The Australian Government is providing $100 million over five years to AP6 projects that will advance cleaner fossil fuel and renewable energy technology.
The AP6 is an example of the kind of practical action we can take globally to reduce greenhouse gas emissions.
- Significantly, ABARE estimates a total saving of potentially 90 billion tonnes of COČ by 2050, or up to three times the savings under Kyoto if it were extended over that period.
3. Domestic: current energy
Domestically, tackling climate change will be no less challenging.
Australia’s annual emissions are 560 million tonnes of COČ-equivalent gases.
- This makes up just 1.4% of global emissions, currently at 40 billion tonnes of COČ-e annually, and growing.
3.1 Australia’s Emissions
It is important to understand how Australia’s emissions are made up.
- Stationary energy comprising our power stations as well as our aluminium, cement and steel operations, makes up 50% of emissions or 280 of 560mt of COČ-equivalent gases.
- Our emissions from energy generation according to the Australian Greenhouse Office in 2004 comprise:
- 50% stationary energy (ie, electricity generation);
- 13% transport;
- 5% fugitive emissions (leakage).
- Non-energy sources of emissions:
- 16% agriculture;
- 6% land use change and forestry;
- 6% waste.
Energy consumption is expected to rise by 2.1% a year until 2030, and to reach double the current levels by 2050.
- This will require significant additional baseload and peak generating capacity. Projections suggest the need for 100 GW of capacity by 2050, compared to the current capacity of 45 GW (Switkowski).
3.2 Cleaning Up the Power Stations
There is no solution to climate change in Australia or the world without cleaning up our coal-fired power stations.
- Carbon capture and storage offers possibly Australia’s single largest opportunity to reduce emissions while underpinning our competitive advantage in fossil fuels.
- The Director of the Co-operative Research Centre for COČ, Dr Peter Cook, has advised me that there is the potential for 200 out of 560 million tonnes of COČ within Australia, or 40% of our total emissions, to be sequestered within 15 years, if not earlier, if the right incentives and signals are in place.
- In particular, there is the capacity to clean up 50 of the La Trobe Valley’s 60 million tonnes of COČ.
- Australia’s geology is ideal for large-scale carbon sequestration.
- The COČ Research Centre has found that our large storage capacity can take projected domestic COČ emissions for the next 1000 years.
- Globally, the IPCC has found that the storage capacity is sufficient to take all the likely COČ emissions for the next 100 years.
- Two major Australian companies have advised me this week that they are ready to commence major carbon capture projects within a few years, not decades as some of those opposed to clean coal allege.
- Indeed, the use of COČ re-injection is currently occurring in Norway, Algeria and at Weyburn in Canada.
So through clean coal technology and carbon capture and storage, it is possible to decrease emissions from stationary energy generation by 200 of 280mt, or 40% of overall emissions.
- But what are the costs of clean coal?
The Switkowski report outlines three variations on the price of carbon capture and storage.
- All trending upwards from a price starting at $50 per MWH, compared with a conventional coal price of about $38 per MWH.
- Other sources have indicated a likely cost of about $45 per MWH.
Another way of looking at it is to break up the cost into capital enhancement of existing power stations and any subsequent operational costs after deducting amortised capital.
- In essence, over a 20 year period, capital costs will account for 75% of the costs of clean coal and operating costs 25%, or 1.25% per annum of the Net Present Value.
On this basis, a number of industry sources, including the Energy Supply Association of Australia, have indicated a total conversion price for our coal and gas power stations between $10-$30 billion against business-as-usual costs.
- However, if it is possible to combine super critical coal technology with post-combustion capture, the ESAA’s estimate for fleet transformation drops to $5 billion, as does the estimate from AGL and Frontier Economics.
- I would take the more conservative range and assume a cost of somewhere in the vicinity of $20 billion, which is less than Switkowski but more than the ESAA.
- But there is clearly more modelling to be done.
So there you have it, a once in a century capital cost of $10-$30 billion spread over 20 years.
- After that, the operating costs alone are likely to be 10% greater than current electricity as new efficiencies are factored in.
However, if the capital costs are included in the costs to consumers, then the costs of power by 2030 are likely to be between 15 to 40% higher than at present in real terms.
4. Domestic: future energy
Beyond our current power we have to consider how we allow for the transition from a 45 GW economy to a 100 GW economy by 2030.
There is a role for renewables in Australia’s future energy mix, to help ease our dependence on coal. But it will take perhaps two decades or longer before the costs and technology make this viable on a wide scale as a baseload support.
- Power generated by solar photovoltaics – solar panels – offers real potential to cut greenhouse gas emissions by limiting demand for coal-fired electricity;
- particularly during periods of peak electricity demand.
- Today solar PV power is installed on around 25,000 homes across Australia.
- Solar PV power has grown in Australia at an average of 16% over the last five years;
- but global growth over the same period has averaged 40%.
- Australia should work to remain a world leader in solar energy technology.
- Both in solar PV and solar concentration, such as the recently funded Mildura project which is potentially the largest solar power station in the world.
- The problem of course is that on a cloudy day solar effectiveness can drop by 80% while collapsing overnight.
- The problem then is not only cost – which is significant – but simply the capacity to provide reliable base load energy. It is the same challenge which applies to wind energy.
- Australia currently has 531 wind turbines producing a total of 788MW.
- A further 143 turbines are under construction, which will produce an additional 358MW.
- Wind has a role, but it only operates between 30 and 40% of the time.
- In that context, to replace our current coal fired output we would need to ring Australia’s coastline with wind turbines – about 30,000km of Australia’s approximate 36,000km coastline, 2.5km deep.
- Wind power technology continues to develop, but we need to be realistic about the capacity of wind energy to meet our energy needs in the medium term.
Geothermal (hot dry rock) energy:
- Hot dry rock technology requires water or another heat transfer medium to be pumped into fractured rock deep underground. Heat emanating from inside the earth turns the water into steam, which in turn is used to generate electricity.
- Geothermal power is an enormous opportunity for Australia.
- Just one geothermal site in the Cooper Basin has a thermal resource estimated to be equivalent to 50 billion barrels of oil;
- dwarfing Australia’s current total oil reserves of 2.9 billion barrels.
- Hot dry rock energy has the potential to provide base load power as an alternative to coal and gas;
- and could produce significant quantities of electricity unrestrained by environmental conditions that inhibit renewable energy technologies at the surface.
- But hot dry rock technology has not yet been commercially proven, and many obstacles remain:
- expensive drilling costs;
- heavy infrastructure requirements;
- estimated high costs for electricity generated;
- a start up cost estimated by DEH of around $90-130 per megawatt hour (compared with about $38 for coal);
- although the ESAA estimates the price will drop to $40 per MWH by 2030.
Renewables have real potential to contribute to a low emissions power supply in Australia;
- but they are unlikely to generate a viable alternative baseload power supply in the short to medium term, with the exception of hydro, which has however been ruled out by the very people who demand renewable energy.
4.2 Nuclear energy
In contrast, nuclear energy is a proven technology for generating baseload electricity, that is already making a major contribution to reducing COČ emissions around the world.
Nuclear energy accounts for about 16% of the world’s electricity generation (World Nuclear Association):
- 20% share of electricity generation in the United Kingdom;
- 19% in the United States;
- 79% share in France.
- 16 countries depend on nuclear power for at least a quarter of their electricity generation, including:
- South Korea;
- There are now some 440 commercial nuclear power reactors operating in 31 countries.
In Australia, we should be seriously examining the use of nuclear energy either as an alternative or as a complement to existing base power load;
- the Switkowski report does just that.
Australia is ranked fourth lowest for the cost of electricity generation in the OECD, based on its extensive gas and black and brown coal resources.
- But Australia also has 38% of the world’s low-cost reserves of uranium.
The Switkowski report found that nuclear power would cost between 20 and 50% more than coal or gas-fired power.
The earliest that nuclear electricity could be delivered to the grid would be 10-15 years.
- We could see the deployment of nuclear power starting in 2020 with 25 reactors producing over a third of the nation’s electricity by 2050.
Life cycle greenhouse gas emissions from nuclear power are more than ten times lower than emissions from fossil fuels.
- Australia’s total emissions (excluding land use change and forestry) are projected to be 846 MT COČ-e in 2050.
- If nuclear power was brought on line relatively quickly, growing to a total capacity of 25 GW by 2050, this could reduce emissions by almost 150 MT COČ-e – or 18% of the total.
- A more gradual implementation of nuclear power, bringing a total capacity of 12 GW by 2050 would reduce emissions by over 70 MT COČ-e – or around 8% of the total.
It would be irresponsible to ignore nuclear energy as an important potential contributor to Australia’s future energy needs.
- But Australia’s greenhouse challenge requires a full spectrum of initiatives and its goals cannot be met by nuclear power alone.
The question for Mr Beazley is this – if nuclear energy is so dangerous, what does he think our exports are actually used for?
I do think that in handling this issue we can see the difference between the two parties – a desire to solve the problem, as opposed to a desire to present a glib answer, which will ultimately fail to address our power needs.
- I also believe that any decision would need to be on a basis of geological stability, economic viability and local acceptance.
A possible energy future for Australia over the coming century may therefore look like this:
4.3 Other Sources of Emissions
Energy generation is only half of Australia’s carbon emissions picture.
- Cuts will also need to be made to the other 50% of Australia’s non-electricity emissions.
Cuts to auto emissions:
- In 2004, Australian motor vehicles emitted 76 million tonnes of COČ-e into the atmosphere;
- 13% of our total emissions.
- Potential for hybrid vehicles to cut emissions:
- only last week, at the Commonwealth’s initiative, the States and Territories agreed to pursue common purchasing positions to drive hybrid uptake and manufacture in Australia.
- In particular, hydrogen technology is a transformative technology which will develop over the coming decades both for motor vehicles and potentially for electricity.
- Energy efficiency is currently the most cost-effective approach to reducing greenhouse emissions:
- delivers abatement at a net economic benefit to the community;
- can reduce the eventual need for new energy investments; and
- defers the shorter-term need for new energy supply infrastructure to a time when low emission technologies are available at lower cost.
- For example, 39% of Australian houses, or around 2.5 million houses are uninsulated.
- But household heating and cooling accounts for 39% of the energy used in the home – 14% of Australia’s greenhouse gas emissions.
- By simply insulating homes more widely, Australians can both cut their energy bills and reduce greenhouse gas emissions.
- Carbon sinks or reforestation remove greenhouse gases from the atmosphere and can make an important contribution to Australia’s total net emissions.
- New plantations established since 1990 sequestered around 18 million tonnes of carbon dioxide in 2004.
- This is expected to increase to about 21 million tonnes annually in the Kyoto target period.
- Cumulatively, these plantations have sequestered nearly 100 million tonnes of COČ-e between 1990 and 2004.
- In Australia, methane emissions from solid waste disposal were around 15 million tonnes of COČ-e or 2.7% of net national emissions in 2004.
- Methane captured from landfill has some potential as an alternative source of electricity generation.
- Up to 75% of landfills servicing major urban areas and capital cities use gas capture technologies.
- Between 1990 and 2003 the proportion of methane generated in Australian landfill that was captured for fuel or electricity generation grew from zero to around 24%.
- But the contribution of landfill-generated electricity to Australia’s overall electricity supply remains small:
- all up, we have the potential to decrease emissions from landfill by 20 million tonnes.
As we work towards solutions to the challenges of climate change, we do not lack for options on low emissions energy sources; we do not lack for technological innovation or creativity; we do not lack for political will.
- The question then is how do we now convert this into bold, far-reaching policy solutions?
5. Policy mechanisms
Policy options for dealing with climate change largely fall into three categories:
All options recognise that there is no cost-free option for emissions reductions:
- but there are radically more effective solutions.
5.2 The Wrong Way to Address Climate Change: Tax on an Inelastic Good
I would like to first talk about the wrong way to address climate change. This is the current Beazley approach.
Targeting demand through a domestic carbon tax on petrol and domestic heating will not solve the problem of greenhouse emissions.
Petrol and heating are not generally elastic goods. Over the last decade, petrol has almost tripled in price, but demand has remained largely constant. It is long-term inelastic.
- If you increase the price by 30 or 50%, this will have only a modest effect on demand for energy.
- The Energy Supply Association of Australia only yesterday provided information that the elasticity of domestic energy consumption is -0.2 or put simply, if you increase pensioner heating prices or electricity generally by 100%, demand is likely to decrease by only 20%.
- So the only practical effect of a carbon tax is to impose a petrol and heating tax on pensioners and others who are least able to deal with a huge increase in their most basic costs.
Only last night Brotherhood of St Laurence executive director Tony Nicholson said poor families had little capacity to adapt to energy price increases, and they were likely to suffer if the full environmental costs of greenhouse gas emissions were included in the price of energy.
- Moreover, we will not achieve the purpose of cutting emissions in any meaningful way.
Ultimately, the Labor approach is careless – it does exactly what Menzies warned us about – and forgets the forgotten people.
5.3 The Right Way to Address Climate Change: Legislate and Trade
By comparison, the right way to reduce emissions I believe is to directly invest in cleaning up energy generation.
If we invest directly in clean air technology for the energy sector it is possible, over time, to cut our emissions by up to 200 million of the 280 million tonnes of COČ or equivalent gases that the sector produces.
How do we do this? I would like to outline four possible suggestions, all of which of course are contestable, but which serve as suggestions:
First, Clean Air Legislation coupled with a system of tradeable credits and debits could establish a phased set of emissions standards for power generation.
- Legislation has traditionally been the way that Australia and other countries have dealt with environmental challenges.
- In Australia, we have legislated to control the release of ozone depleting substances – including CFCs – into the atmosphere through the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989:
- This legislation has had a direct impact on the use of CFCs and other ozone depleting substances in Australia.
- Similarly, the Fuel Quality Standards Act 2000 regulates the quality of fuel in Australia,
- to reduce the level of pollutants and emissions from fuel that pose environmental or health hazards, including lead and sulphur dioxide.
- Clean Air Legislation could be coupled with a gradually phased-in system of tradeable credits and debits for surpassing or failing to reach standards and could provide an effective basis for subsequent markets.
Second, either a Clean Air Fund or tax credits – which are being considered in the United States – could assist in the capital costs of transition of existing power stations to low or zero emissions technology.
- It contrasts with the Labor proposal which is a regressive tax and the wrong way.
- It is based on the premise that once in a century, Government may have to share in such a transition of the national generating fleet.
- Once we have set standards on a sliding scale over the coming years for a clean up of the power stations, it may be possible to build a system of credits and debits around the meeting of such targets as the basis for a trading system.
- But the Labor way of a tax to force the transition is doomed to failure and to hurting the poorest and most vulnerable – precisely as Tony Nicholson has named.
Third, a Clean Auto Emissions Package could comprise:
- Clean Auto Emissions Legislation setting future auto emissions standards at least comparable to if not better than current world’s best; and
- cooperation between Federal, State and Local governments to purchase Australian-made Low Emissions Vehicles.
- The foundations for this were outlined in last week’s historic agreement at the Environmental Protection and Heritage Council to examine low-emissions vehicle procurement practices for Federal, State and Local governments.
- Fourth, we could and are likely to encourage the growth of solar homes through an extension of the Photovoltaic Rebate Program.
- These are ideas for debate and I offer them as such.
There is no single answer to climate change. We will need to clean up our coal-fired power stations, potentially develop nuclear power, search for baseload renewable energies, develop greater energy efficiency, and push for a common global agreement.
We must do all of this, and we cannot delay.
Confronting the challenges of climate change will be difficult. We will make mistakes – the Europeans certainly have.
- But at no time in history have we been in a better position to meet this challenge.
I recognise that if we leave this to the next generation, we will have failed: failed to accept responsibility for a problem that is ours to solve and failed the generations that come after us.
- But I reject the symbolic, in favour of real actions which will reduce emissions by millions of tonnes.
Climate change is not insurmountable. We have faced “the end of the world” before, and survived.
- We possess the resources, the technology and the will to tackle climate change now, domestically and internationally.
But it is our responsibility, we must deal with it in our generation. It is our task. We must take action now – but it must be the right action.