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Monday, 9 December 2002
Page: 9948


Mr MARTYN EVANS (10:07 PM) —I rise in support of this Renewable Energy (Electricity) Amendment Bill 2002. This bill enjoys a large measure of bipartisan support, but this is the House of Representatives of the parliament of a democratic country and I think there are grounds to accommodate a wide variety of views on these kinds of issues. Indeed, within the support for a measure like this, the parliament can accommodate views that allow one to canvass the depth of the measure. While supporting it, that allows an analysis of the measure, encompassing not only support for the measure but also a broader understanding of the way in which the measure will impact on the Australian public and, perhaps, a broader understanding of the many and deep policy issues which are involved in energy analysis as well.

That brings us to the terminology of the bill itself and the policy issues which underlie the principal act with which we are dealing—the Renewable Energy (Electricity) Act itself, which this bill amends. Renewable energy itself is something which most members of the public and indeed almost all members of the parliament would, if pressed, immediately support. It is something which, when you examine the title itself, you could hardly not support. That is the instinctive reaction of all concerned and it is one that I normally have.

It is the instinctive reaction that we have these days particularly in the context of the global crisis in relation to climate change and greenhouse gases. People automatically link these two issues because in the public mind we have often come to associate them. Those who expound the virtues of renewable energy have played on the relationship between these two issues in marketing their products—because let us not lose sight of the fact that this is also a commercial issue. Those who sell renewable energy products such as windmills and solar energy products also have a commercial interest in the sale of those products. There is nothing wrong or unreasonable about that. Our whole society is based on the principle of market sales of products, and I am not in any way critical of that. It is entirely appropriate that they should have that commercial interest, and that forms the basis of the renewable energy market with which we are dealing here today. But we should not lose sight of that commercial interest, because it is central to this whole thing. Indeed, if we turn our minds back, what we have here is another tariff debate in a way, because this is a bill which subsidises a significant industry, and it subsidises it to a substantial extent.

If we read the report of the Australian Greenhouse Office and the underlying documents that support the renewable energy legislation—both the principal act and this amending bill—we realise that the estimates of cost for this measure are quite substantial. Over the next 10 years, the principal act and this legislation will ensure that the cost of this renewable energy target, which is some two per cent, is of the order of 1.5 per cent to perhaps as much as three per cent of the electricity cost to Australian business and consumers. Estimates vary of course but that makes the total cost of this a very substantial cost indeed. It will be of the order of $1 billion or $2 billion. In fact, if one were to quote from the implementation study from the Australian Greenhouse Office, the working group places the cost at $1.8 billion to $3 billion in the period 2001 to 2010.

In the light of that, we have to ask ourselves what the purpose of this legislation is. Is it to create a renewable energy industry for its own sake? In other words, is the parliament subsidising this form of energy for the purpose of creating an industry? We did that in the fifties and sixties with Holden and Mitsubishi to create a motor vehicle industry in South Australia—in my own electorate as well as in other electorates of South Australia—and perhaps in other places throughout Australia. That had its success and then, ultimately, it had to be phased down. If that is the purpose of the legislation, it is one thing. Are we looking to create a windmill industry in this country, for its own sake, or are we looking to create a renewable energy industry in order to address the greenhouse gas problem and in order to reduce CO2 emissions? If that is our target, we should say so. We should not title this the `renewable energy' bill. We should title it the CO2 Gas Reduction Act or the CO2 Gas Reduction Amendment Bill, so that we actually understand the purpose of the legislation. If we did that, we could better define our target.

If we are going to spend $1.8 billion to $3 billion—and let us say that that is $2 billion on the low side—over 10 years, every cent of that money is going to come from Australian taxpayers. While it is very reasonable that Australian taxpayers and taxpayers throughout the world should spend money to address serious issues like greenhouse gases and global warming—and I am sure all members of the House would agree that those are very reasonable targets for the Australian community to address—on the other hand, consumers and taxpayers would insist that we spend that money in the most effective way. I am sure that they would agree that it is reasonable and effective to spend that money to address an important global crisis like that created by global warming and CO2 emissions, but would they also agree that it is a desirable thing to spend the money to establish an industry in renewable energy? That may be a different question.

The answer is an electricity levy, but what is the question? We have our answer, but what is the question? The answer is $2 billion, but we still have not quite defined the question. Is the question addressing greenhouse gases or is the question establishing a renewable energy industry? Right now, the question is that we are establishing a windmill industry and perhaps a solar power industry and perhaps a biomass industry? Right now it seems to be windmills and biomass because nothing else is viable—and certainly on the whole it is a biomass industry. So right now we are spending $2 million over the next 10 years to burn some biomass and perhaps to build some windmills. I am not certain that that is the best investment for $2 billion of Australian taxpayers' and consumers' money over the next 10 years.

I think the global greenhouse problem is the most serious issue that we face in the environmental area—apart from salinity, which, in Australia's case, may be more serious. Those two issues rank very highly. If this bill is about addressing the global warming question and CO2 emissions, surely we should define that and not renewable energy as the most central issue in this debate. If it turns out, on sensible inquiry and with scientific research and economic modelling, that the renewable energy industry is the most effective way to meet that target, then certainly present that inquiry, that research and that modelling to the parliament. I am sure that, with the degree of unanimity which you have seen this evening and which you saw when the bill was last before the House, you will get the same vote and the same answer. The parliament will endorse the taxation of the people over the next 10 years to obtain the funding necessary to support the industry, because it certainly will not survive on its own without that kind of subsidy. Without that subsidy, I suspect none of these projects will succeed. That certainly tells you something about the industry itself, because, without the subsidy, those projects will not go ahead and they will not succeed.

Unless we continue in the present vein, the industry will gradually fade out because coal and gas can compete much more cost effectively. That tells us something else about the nature of Australia's energy cost structures. We have a great deal of coal and gas. If the issue was CO2 rather than the creation of a renewable energy industry, perhaps that large taxation base could be spent on a clean coal industry and on removing the CO2 from the coal stack as it is generated. With a small portion of that funding, the CRC for Clean Power from Lignite, which is currently working very hard to evolve new technologies to remove the CO2 from power stations as it is generated, could evolve much better technologies than it currently is able to with its limited funding and could assist our very substantial coal export industry, which currently accounts for a substantial part of our export earnings, Australia being the world's largest coal exporter. Many thousands of jobs in Australia depend on that export industry. They would be able to go a long way towards delivering on their target of a zero emission coal plant—a very effective answer to the very serious problem of global warming and a very effective answer which seeks to address the serious problem of Australian economic catastrophe if coal ceases to be a serious energy source at some time in the future. Current ABARE projections still have coal and gas as very serious contributors to Australia's electricity generation capacity, even in 20 years time, and renewables still at a very low level in 20 years time. That is something which we all have to address if this bill and the parent act are to be the effective measure that the proponents are seeking.

My colleagues and, indeed, colleagues on the other side of the parliament support the legislation which we have before us. Nonetheless, I think there are serious issues which we still have to consider to satisfy ourselves—and the taxpayers and voters who put us here—if we are to seriously address the legislation and the objectives which we have set ourselves in this legislation and in the parent legislation. How do we actually meet the targets in the act? How do we actually meet the objectives which we have told the public we have set for ourselves? How do we actually address the understanding which we have here? This is a $1½ billion to $3 billion taxation act, and it is an act with objectives which we need to meet if we are to be honest with ourselves, with the environment and with the community. Yet it is one about which, at this present time, we have not been entirely honest with ourselves or with the electorate. I think we need to do that in a very serious way and in a scientific and environmentally accountable way if we are going to meet that standard.

The United States, since the mid-1970s, have spent in the order of $A22 billion in subsidising the delivery of renewable energy. They have spent that kind of money over that period and have achieved minimal penetration of renewable energy into the US market. They have also spent $A30 billion in researching renewable energies. Yet what is the state of that technology in the United States? The technology is freely transferable to Australia. It is on the open market in the United States. There is nothing secret about that. Unlike US military research, this research is freely available on the open market. After $A30 billion, where are we with renewable energy in the US market? You can buy that technology tomorrow in the United States and import it to Australia, and the result of approximately 25 years work and $A30 billion of R&D is still your average windmill. We still have the finest technology of the 15th century from Holland. It has been dramatically improved, but it is still your average windmill. With that, I rest my case. While supporting the bill, I think we have some serious questions to address.

Debate (on motion by Fran Bailey) adjourned.