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Thursday, 24 June 2010
Page: 4235

Senator MILNE (9:33 AM) —I rise to speak on the government’s Building Energy Efficiency Disclosure Bill 2010. Energy efficiency is not only one of the fastest ways to reduce our greenhouse gas emissions but, when thoughtfully implemented, it also saves us more money than is expended to achieve the savings. With the implementation of sensible energy efficiency policies Australia can actually achieve far greater greenhouse gas emission reductions than the government had proposed in the CPRS and at far lower cost. Indeed, the government’s failure to understand the huge economic benefits of embracing energy efficiency is central to the failure of ambition in the CPRS.

In order to play our fair part in avoiding catastrophic climate change Australia needs to commit to cut emission to at least 40 per cent below 1990 levels by 2020, and on our way to building a zero emissions economy we need to implement significant change. The built environment is one way of actually doing that. The Greens have already introduced to this chamber measures for residential energy efficiency, which, I might add, have not been implemented by the government.

Where we have industrial scale energy efficiency, we have also said that the energy efficiency opportunities identified by utility scale facilities ought to be implemented in a mandatory way. Those companies that use more than five petajoules of energy should be forced, in a mandatory environment, to implement the energy efficiency opportunities they identify with a payback period and that can be designated over a period of years. The government has not done that. It is still voluntary and as a result many of those energy-intensive trade-exposed companies, which expect to get benefits and exemption from the CPRS, from the renewable energy targets, have not implemented the energy efficiency opportunities that they have identified as being part of the regime. I want to put on the record here that, in terms of that utility scale, the government can hardly expect to give them more exemptions when they will not implement the energy efficiency opportunities that are before them.

But we are talking today about the non-residential building sector, and again the government has missed a big opportunity here. All we are talking about is offices. We are not talking about all the buildings that should be coming under a non-residential scheme. We should be looking at energy efficiency upgrades not only in offices but in hotels, in shopping centres, in hospitals and in schools. So I think the government has really made a big mistake opting to deal with energy efficiency, even at this very superficial level, just for office buildings.

I inform the Senate that there are eight new shopping centres outside the city of Jakarta in Indonesia. Those shopping centres use more energy than Jakarta airport. They are mega shopping centres. That gives you some idea of just how much energy those massive buildings use when you build those large-scale shopping centres.

In this government bill, as I indicated, we are dealing just with office buildings. While you might be talking about energy efficiency upgrades in the office sector around Australia, what about the massive shopping centres? What about hospitals? What about schools and hotels? What about all of those incredibly energy-consuming buildings? We should be looking at a scheme which covers all non-residential sector buildings, not just office buildings.

We know that the main barriers to taking up energy efficiency measures include: firstly, that energy costs are typically a small proportion of the total expenditure for most people in these sectors, so the potential savings are perceived as small compared to the time and effort needed to research and implement energy efficiency improvements; secondly, that frequently the person who pays the energy bill is not the person responsible for the selection and purchase of energy-using equipment; thirdly, that the benefits and payback of these investments are gradual, accruing over the medium to long term as savings on energy bills; fourthly, that information is not always available at the right time to consumers, tradespeople, managers and policymakers to enable informed energy efficiency choices to be made; and, finally, that many consumers lack the capital to buy new energy-efficient equipment or make the required changes to their businesses. Energy efficiency has to compete with other priorities for capital investment, and it has been really clear in the commercial sector that the people who are building the buildings and leasing them out are not the same people who are dealing with the day-to-day expenditure in those buildings in terms of energy and amenity.

Because these barriers are unaddressed, there is tremendous untapped potential in Australia for energy efficiency. The greenhouse intensity of our economy means that every gain in efficiency gives us a larger cut in emissions than in almost any other OECD country. According to the Climate Institute, Australia has the third-highest energy intensity of all OECD countries, with only Canada and the US being worse performers. During the period from 1990 to 2004, Australia’s energy efficiency improved at a rate three times slower than the OECD average. Energy use in Australia’s non-residential buildings alone was responsible for 17.7 per cent of our total energy-related emissions in 2005. I will say that again, because it is a really critical statistic: energy use in Australia’s non-residential buildings alone was responsible for 17.7 per cent of our total energy-related emissions in 2005. So, if we dealt with the emissions in our commercial buildings, we could not only bring down our emissions substantially but improve life for people who work in those buildings.

The Senate committee have visited several buildings that have been upgraded for energy efficiency. What that usually means is that you get better natural light, which is a better environment to work in than artificial light. You get plants in the building. You get all sorts of improved amenity in managing everything from the airflows in the building to the sunlight—everything about it—and you get better productivity, which is something on which Lend Lease gave evidence to the committee inquiry that we had on the Greens bill. They pointed out that there was much greater productivity in those buildings and many fewer sick days taken by staff. So, as I say to people often, by dealing with climate change and peak oil, you actually make yourselves healthier and happier at the same time because the improvements that you make actually lead to better personal outcomes as well as better outcomes for the planet.

Unfortunately, when the Australian government brought out the CPRS and identified in its statements to the UNFCCC what energy efficiency across all sectors could result in, it identified savings of only three megatonnes per annum from energy efficiency by 2020. Contrast this to what McKinsey and Co. have said. They think around 50 megatonnes is achievable. If you consider that the savings identified by just 165 companies—this is in the top end and the utilities end—in the first round of that energy efficiency opportunities report amount to 4.7 megatonnes, it is clear that the government just has not understood, or has chosen not to really calculate, the big opportunity that is there in energy efficiency for greenhouse gas reduction.

There are several options that have been tried around the world to deal with the non-residential sector. One of them is disclosure of energy efficiency, which is what the government is doing here today by bringing in a bill to disclose the energy efficiency performance of an office building at the time of sale or lease. The Greens believe that that is not good enough, but we will just park that for a moment and say that disclosure is one thing to do, and the beginnings of that are happening here today. You can have green tax incentives, such as accelerated depreciation and the like, or you can have some form of white certificate trading. Those things have all been tried and promoted in the past, and they have had limited success both locally in Australia and internationally.

The Greens believe that there should be mandatory disclosure of building energy performance and greenhouse gas emissions at both the time of sale and lease and on an ongoing basis. One of the amendments that I will be moving will require that to happen. We believe that we need to go much further than disclosure at the time of sale or lease to ongoing disclosure, and that the information that you get enables you to move to a much more stringent regime. One of the problems with white certificate trading is that it is a voluntary scheme, and we are well beyond voluntary schemes. We need to get into mandatory schemes to achieve the kind of greenhouse gas emission reductions that need to occur.

The Greens brought in legislation earlier this year; we worked with Lend Lease, with Lincolne Scott and Advanced Environmental to bring in what was quite revolutionary legislation in the field of non-residential buildings. Lend Lease, of course, and Lincolne Scott have worked all over the world in the sector. They worked with us and came up with something which I think was groundbreaking internationally. I have to say that I was delighted to see that Rand Corporation in the US—not a corporation that would normally say anything positive about the Greens—came out and said that the legislation that the Greens introduced into the Australian parliament was the best energy efficiency legislation for non-residential buildings in the Asia-Pacific region. Yet we brought it here for a Senate inquiry and it was given only cursory attention by both the government and the coalition. I was really disappointed because this is something we have worked very hard on with people in the sector to introduce what was effectively a trading scheme in the area of non-residential buildings. It required these buildings to collect data on an ongoing basis. You would then set a benchmark for those buildings for energy efficiency performance and then you would say that those buildings that perform above the benchmark have credits to sell and those below the benchmark have to buy them. It was a mandatory scheme to actually force buildings to be upgraded over time.

There is also the issue of procurement. The government made some promises in relation to procurement, saying that the Commonwealth would use its purchasing power with lease arrangements for commercial buildings to make sure that they were upgraded. Everybody welcomed that because the Commonwealth is a large purchaser in this field, but now we discover that the Commonwealth has exempted itself on many occasions from actually complying with its own standards in relation to this. Even the Department of Climate Change moved into a building that did not meet the standards in the first place. That did not give me much hope that anyone was actually very serious about this, although I believe that over time that has actually been improved. I will be interested to hear from the government how many of the buildings it leases actually meet the standards that it set for itself. I move the second reading amendment standing in my name:

At the end of the motion, add: “but the Senate, while supporting the proposal that the building energy efficiency disclosure scheme initially only apply to buildings and building areas over 2 000 square metres, calls on the Government to commit to extend the scheme in 2011 to all buildings and building areas equal to or greater than 1 000 square metres, subject to a detailed regulatory impact assessment”.

I would like the Senate to consider this amendment because disclosure at the point of lease or sale, whilst it is important and it is a first step, is not enough. You cannot move to anything else unless you get a lot more data than that. We are not going to be able to collect that data unless we get ongoing performance, and I cannot see how the Commonwealth is going to get that data. I will be very interested to hear how it is going to be collected on an ongoing basis in order to be able to move to a scheme such as the one that we are suggesting, which actually provides for something beyond the voluntary: a mandatory scheme which will require the upgrading of buildings.

We will move a number of amendments in the course of the debate. I also have concerns about the NABERS rating. Part of that is that currently NABERS only applies to a very small number of buildings—a couple of hundred, I suppose, across the country. Whilst you are only in a system requiring mandatory disclosure at the point of lease or sale, you can probably manage the system. But if you go to something that is mandatory for everything beyond office buildings, to all non-residential buildings, and you implement that across the country, then I cannot see how this scheme is actually manageable. I will be interested to hear from the government what they have to say in response to that particular proposal from the Greens.

I want to make it very clear that energy efficiency has the potential to move to substantial cuts in greenhouse gas emissions way beyond the five per cent. The unfortunate thing is that we always have a lack of ambition from the government. Every aspect of its climate work shows a complete lack of ambition. We have the private sector identifying massive potential to reduce greenhouse gas emissions and to improve the lives of people who are in these commercial non-residential buildings, yet at the same time the government comes out with a scheme which simply requires disclosure of energy efficiency at the time of lease or sale. Frankly, that is not good enough; it is way beyond starting in this way and being so slow about it. Everywhere else in the world has moved on this. You have got global experience in a whole range of fields; this is just such a small step.

Why would we not try something more ambitious? It seems to me that for every single effort that is made on greenhouse gas emissions, whether it be for renewable energy, we always have the most conservative target and a lot of sectors complain about that. When it comes to energy efficiency, it is voluntary and the whole business about energy efficiency opportunities not requiring corporates to implement those energy efficiency opportunities and then giving them exemptions from the renewable energy target because they use a lot of energy seems to me to be ridiculous. Those two things should be tied. When it comes to non-residential buildings we should be a lot more ambitious in our target and in the scope of what we are doing. I hope that the Senate will support the second reading amendment of the Greens so that we can extend the scheme in 2011 to all buildings and building areas equal to or greater than 1,000 square metres subject to a detailed regulatory impact assessment.