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Monday, 1 September 2014
Page: 9204


Ms MacTIERNAN (Perth) (17:54): I rise to join in the condemnation of the attempts by the government to repeal the legislation surrounding ARENA. We have some confidence that this legislation will fail to get support in the Senate. But, of course, that is only half the task. Obviously, even if this very important research entity within Australia, the Australian Renewable Energy Agency, remains, it is important that it continues to get funds.

I do not believe that the move to abolish ARENA is really principally about the government being climate change sceptics. I think it is grounded in a far more fundamental problem, and that is one where the leadership of the current government is actually just not interested in any vision of the future; its primary interest is to unravel anything that was put in by the previous Labor government. It has no agenda beyond that of student politicians. Indeed, the Prime Minister and many of his henchmen really approach politics as student politicians. This is all about sticking the rough end of the pineapple up the opposition; not about having any vision of what we need to do to take this country forward.

It is almost unbelievable that we do not have any understanding of the importance of government funded research and development in this area—how critical it is for us to have research and development of these sunrise industries so that we have an economic future. We have been told that we have to demolish the car industry, we are going to withdraw support from the car industry and we are going to see tens of thousands if not hundreds of thousands of jobs lost—but, not only jobs lost; our advanced manufacturing capability reduced. We are going to see submarines and battleships going to be constructed offshore—again, losing that advanced manufacturing capacity. Here we have yet another industry that we are turning our backs on. Forget climate change. The most socially conservative person could understand the importance of ensuring that we have some skin in the game of renewable energy. Let me quote Mark Diesendorf, associate professor from the university of New South Wales, who says:

There is no rational reason for a political person to oppose the growth of renewable energy in Australia. These are new industries being implemented by small and medium-sized businesses, creating jobs and supporting technological innovation.

Let us understand a little bit about how we get new industries, how we get to the stage of the development of the internet; the development of the algorithm that underpins the search engines; the development of touchscreen technology; the development of wi-fi; the development of radar. Each and every one of these—things that are underpinning the 21st century technologies—each and every one of those innovations had at their heart government investment. It is really important, for innovation to thrive, that we have government investment. In those cases by and large the investment came out of the investment in defence technologies. But there were very creative collaborations between institutions, between the private sector and the public sector. If we do not do that we really will not see these technologies develop in this country.

They will develop. Do not let any of us think that we are not going to see great leaps forward in renewable energy over the next 10 years. The question is: do we want Australia to be part of that? Do we want to be in the game of development or do we want to sit back there and become just become technology takers? We are not going to have a role if we do not get in there and invest. Look at the fundamental functions of ARENA. They fund research in collaboration with research institutions and the private sector. They go for demonstration projects, they go for pure research and then for the early stage commercialisation of renewable energy projects. All of this is really important if you actually understand how technology develops, how we go from an idea to a commercially realistic project. Let me quote a paper put out by the International Energy Agency in 2011 in which they talk about how critical it is that we have investment at this particular stage. It states:

Significant challenges, mostly linked to a lack of joined‐up policies to reduce investor risk and the resulting funding gap, hamper the smooth … transition from demonstration to deployment for viable—

technologies—

The absence of adequate financing means that the point at which innovative energy technologies might be deployed in the market and prove themselves on a large scale may be delayed or at worst fail, a phenomenon commonly termed the commercialisation 'valley of death'.

Indeed, this was the very place where ARENA was targeting their work: they were ensuring not just the pure research and the demonstration project but the early stage of commercialisation—avoiding that valley of death. That is what ARENA was doing and that was enabling an enormous number of Australian companies to engage and develop technology and a wide source of renewables.

This development is not going to stop because we stop ARENA. The world is not going to stop doing this. Renewable energy will not stop being developed. Let me quote Steven Cohen, a professor at Columbia University in the School of International and Public Affairs. He said:

The need for low-cost and reliable energy is going to grow … Engineers and businesspeople all over the world see the demand and are working to figure out a way to generate supply. In the global economy, the old line fossil fuel companies will not be able to prevent the diffusion of new technology once it is developed. Ask Kodak what happened to companies that do not change their strategies to reflect the emerging technologies.

That is what we are doing in Australia—we are acting as if we are Kodak. We are in there backing it 100 per cent. We are saying that the technology we are going to go with, the technology we are going to persist with, is the fossil fuel technology and that that is our business model, and that we are not going to be part of this new emerging industry that is happening around the world.

Just in the last couple of weeks, we have seen companies like Suntech, the Chinese solar energy firm, announce that they are going to close their local research arm and close-down the research projects that they had in Western Australia. Suntech have been investing more than $3 million a year in Australian research and development. Because of the decision of this government to close down ARENA, the decision of this government to put under question the renewable energy target and its decision to demolish carbon pricing, Suntech are moving their effort out of Australia, and no doubt will be working, as they are, in China and in India to develop these emerging markets. Let us remember this: we are not going to stop this development. ARENA is not going to be there. That is not going to stop the research being undertaken, but it is going to stop us having a meaningful role in it.

Seven of China's largest subeconomies already have emissions trading schemes and now China have announced that it is going to rollout its national market for carbon permit trading in 2016. They will be a major hub. South Korea is going to be launching its scheme in 2015. Indonesia, Thailand and Vietnam are drawing theirs up. You can see what is happening. We have a mob of Luddites here in this place—people who do not actually understand the technologies and industries of the 21st century and the role that government research and assistance in the early commercialisation of these projects play in ensuring the development of some home-grown technology. We are going to be left behind in this game.

The wonderful work that we have seen happening in Australia and in Western Australia will pretty much come to a grinding halt. One WA company that we were talking to recently told me that they are aware of several projects that were in discussions with ARENA—really good projects. Several were large scale—10 megawatt to 30 megawatt solar projects on the south-west interconnected grid. Another project was a plantation fuel biomass project on the south-west interconnected grid and several large-scale solar projects on the north-west interconnected grid. The combined value of these projects would be over $500 million and the vast majority would have been funded from private sector investment. Again, to ensure that we get over that hump, that we move beyond and do not fall down into the valley of death, it is important that we have government assistance at that critical time to allow that research to take place and for that early commercialisation to be derisked, to some extent, for the private sector.

I want to finish by quoting the Australian Academy of Science from 2010. It says:

Australia’s renewable energy future poses important national choices. We can adopt the reactive path of minimisation of known economic costs, leading to the slow uptake of renewables mapped above. Or we can be proactive in stimulating research and installation of renewables, a path that will lead to a more rapid uptake. The second option has the potential to put Australia at the leading edge of renewable energy technology, an objective of particular importance to the Australian Academy of Science. It may also have the potential for sustainable job creation and stimulation of export business opportunities. Government policies are crucial in determining both the rapidity of evolution and the future potential net economic value of our energy future …

So forget this being an argument about climate change. It does not have to be an argument about climate change. This is an argument about where Australia is going in the 21st century, to participate in the new sunrise industries. This is quite clearly an industry in which there is enormous investment going on around the world. We have just pulled the rug from under the Australian industry. Shame on you, Mr Abbott, and your government.