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Wednesday, 18 June 2014
Page: 3210


Senator LUDLAM (Western Australia) (11:04): I am very pleased to be speaking on the Clean Energy Finance Corporation (Abolition) Bill 2013 [No. 2] again. We are standing here today at a tipping point in the politics of global warming. It is long overdue and in fact it may well be arriving far too late, but at least it is here.

The global climate science community is watching the fingerprints of another El Nino cycle forming across the Pacific, and Australia just recorded its warmest year since instrumental records began. What happens if we swing back into another El Nino is really anybody's guess. Global warming is no longer a matter of theoretical conjecture for the future; it is a matter of life and death today. And the signs are everywhere.

I want to just pick three different examples of the various ways in which this issue touches everyone. The Center for Climate and Security is a non-profit policy institute in the United States and it has on its distinguished board mainly retired military and national security professionals from the United States. They do excellent work on the impacts of global warming on US security policy. I will just read into the record one representative quote. CCS Advisory Board member Rear Admiral David W Titley, retired from the United States Navy, points out:

Compared to many other threats the Department of Defense faces, we know a lot about both the timing and the magnitude of climate change. As today’s testimonies make clear—the time for action is now.

The United States military might view global warming through the prism of the security challenge and of how they need to change US military posture—and we might have a very interesting conversation about the degree to which Australian military doctrine lags probably a decade behind some of the thinking going on in the United States—but, nonetheless, this body is not, you would have thought, a likely candidate for being part of the global socialist conspiracy that some in this country seem to believe that global warming is.

From the worlds of commerce and finance, a correspondent with Senator Milne this week who works in currency markets in the city of London wrote:

Where a conservative government would seek to repeal an institution that is, from my research, successful in acting as a commercial entity and turning a profit means it can only be a pure anti-climate change act.

We might pause to consider those words for a moment. Again, it is not exactly someone coming from the margins.

The third example is from local government. I, Senator Rachel Siewert from WA and a number of other WA MPs from across the political spectrum breakfasted yesterday with mayors, CEOs, councillors and staff from the Western Australian local government sector and I had the good fortune to sit and spend a bit of time with Mayor Tracey Roberts from the city of Wanneroo. I had not really put two and two together that one of the fastest growing areas of local government expenditure is adapting to coastal erosion as infrastructure, coastal housing, parks, roads and power conduits are eaten away by coastal erosion.

These are three indicators from across the world and across very different areas of our community that show just how deeply entrenched and ongoing this problem is. What is bearing down on us is utterly forbidding. I refer to the most recent State of Our Cities report before the government abolished the Major Cities Unit that was doing such useful work on documenting Australian cities. We are one of the most urbanised societies in the world and must make real attempts to mitigate and adapt to climate change, amongst other things. The last State of Our Cities report before the Abbott government bowled that entity over said that heat deaths would double by 2050 in all Australian cities and quadruple in Perth and Brisbane. That is people within our lifetime dying as a result of the increased heat strokes and heat impacts from heatwaves in Australian cities. That is something we could do something about, but of course this government seems determined to blindfold itself from the challenges bearing down on us. We appear to be now looking not at a metre sea level rise by the end of this century but potentially three metres of unavoidable sea level rise if the West Antarctic ice sheet continues to collapse. That does not happen necessarily within our lifetimes but it is a relentless accelerating problem that we are leaving for our kids and grandkids to content with. I do not imagine they would thank this present generation for walking them into that future with our eyes open even though we knew that is what we were committing them to. I believe now the evidence is sufficiently strong that we can say with confidence that we live in the age of dangerous climate change, and the choice that we face is whether to press over the edge and commit ourselves to catastrophic climate change.

Renewable energy obviously is one important part of the answer. During the brief, rapidly shrinking window of agency that we have to prevent the very worst impacts where things are basically irreversible and nothing we do really matters and it is simply a question of bracing for impact, renewable energy is obviously a very big part of the answer. Particularly in a fossil and carbon intensive economy like Australia's, it helps in decoupling economic development from growth in fossil fuel combustion. Renewable energy as a relatively new part of the energy sector needs assistance. It needs assistance in research and development, in industry development and in education and training, and we should not treat that as though it is some kind of aberration from the economic development of industrialised economies.

The coal industry was built entirely by taxpayer endeavour. In my home state the Swan River colony effectively took one of its great growth spurts on the construction of the East Perth power station, of course at taxpayer expense. How else was that economy going to develop? Similarly the gas industry decades later benefited—in the public interest, you can argue, if you are setting aside climate change issues—from billions, not millions, of dollars of taxpayers' investment in the development of the Burrup and the Dampier to Bunbury natural gas pipeline. Again it was done for the purposes of state economic development with taxpayers' expense. Now the very same players and the same industries have benefited from such largess, you could argue in the public interest, are determined to slam the door on the renewable energy sector, condemning subsidies and assistance quite clearly to prevent a fast-moving competitor from eating up their market share.

Of course renewable energy needs industry development assistance while it gets on its feet. That is how the Chinese government built the largest PV fabrication plants in the world. That is how the German government, with the use of a feed-in tariff legislated and negotiated by the German Greens, built a photovoltaics industry out of nothing. You put the supports in the place and when the industry matures you take that supports away, and that is precisely what we are seeing occur in Europe now that the industry is mature. Australia is benefiting from that industrial development, much of it led by Australian research and ingenuity at the University of New South Wales and elsewhere. Those people then distributed that through solar PV companies in China, Europe and North America, leading to some of the greatest innovations in the world, and Australians then gets the benefit of that in the form of very low cost photovoltaics.

Regarding the form of industry assistance that has come about, let us pay some bipartisan credit here. It was John Howard's government that introduced the Renewable Energy Target. It was only two per cent at the time but it did get the industry on its feet. It was the Rudd government, with the legislative support of the Australian Greens, that expanded that target out to 20 per cent. That is effectively bootstrapping an industry into existence. The Renewable Energy Target is one of the most important industry supports to mature and diversify the renewable energy sector and it is extraordinary that the Australian government has chosen to install Mr Dick Warburton, who is under something of a cloud as a result of his involvement—

Senator Johnston: Cut it out.

Senator LUDLAM: Well, release the documents so that we can all see.

Senator Johnston: What about the other members of the panel?

Senator LUDLAM: Not a single person on the panel that has been tasked with reviewing the Renewable Energy Target has the faintest amount of experience in the renewable energy sector. In fact, the government has installed a climate change denier to lead that review.

The other elements of the policy obviously include the Clean Energy Finance Corporation, the bill to abolish which we are debating today, which makes a positive return for every tonne of carbon that it abates. It creates jobs and it returns a positive benefit of $2.40 a tonne to taxpayer. The surplus it has generated is then folded back into the Australian Renewable Energy Agency, ARENA, which does the research and development, the commercialisation, the early work, some of the risk capital in bringing the next generation of renewable energy technology to market. This is precisely what this government, led by someone who thinks climate change is absolute crap, is proposing to bowl over.

It is going to cost the taxpayers money. And you are screaming all over the landscape about a budget emergency, yet you are proposing to knock the Clean Energy Finance Corporation over. In case you have not noticed, it generates a positive return for the taxpayer while creating Australian jobs and bringing forward the next generation of renewable energy plants for deployment in Australia. It is absolutely unbelievable. No wonder none of you can make eye contact in here this morning. I note also a significant lack of coalition—Liberal or National—speakers on this bill. That is because you know it is indefensible.

In the pipeline, up for grabs by the Clean Energy Finance Corporation, is $10.7 billion in total project value, two-thirds of it private sector capital. There is $3.7 billion of investment by the CEFC in the pipeline. What that looks like in my home state of WA is $460 million invested by the CEFC, which has a positive return to the taxpayer, leveraging just over $1 billion in private sector finance. What on earth is wrong with that? I am a little sick of being accused of being the socialist by these so-called capitalists on the other side of the chamber. They somehow think that bringing about a market mechanism that takes $6 billion or $7 billion a year from the heaviest polluters, the heaviest and most carbon-intensive quarters of industry, and transfers it into clean energy at a positive return to the taxpayer is part of some gargantuan left-wing conspiracy.

Senator Johnston interjecting

Senator LUDLAM: Speak up if you like, Senator Johnston. Why don't you put yourself on the speakers list and defend this obscene policy you are bringing forward. I do not think you will. I would also like to add my commendation of the CEFC Chair, Jillian Broadbent, and the CEO, Oliver Yates, for standing up to the absurd bullying that has been levelled at them over the last 12 months. It started when this government was in opposition and said, 'At some point we're going to bowl you over, so we want you to stop investing.' Thank goodness Ms Broadbent and Mr Yates had the common sense to say, 'Our legislation says we invest $2 billion a year, and that's exactly what we're going to do.'

In Western Australia there are direct benefits to companies like Carnegie Wave Energy. This is exactly the kind of innovative technology we are talking about. It is based in my home town of North Fremantle. It is a plant that operates 24/7 on wave energy. It can generate clean electricity from the limitless power of the oceans, or it can be switched across to desalinate water. Their first commercial client is the Australian Navy—something I would have thought Senator Johnston would be a bit interested in. That is precisely the kind of industry and investment we should be encouraging here in Australia. Instead we are getting precisely the opposite: you are trying to cut those people off at the knees.

This is the tipping point that I referred to, and this is why I think what is about to happen in the Senate today is so powerful. The tipping point in climate politics is that you have lost the argument. We saw that in Western Australia, where Liberal and National senators could barely show their face in public. They are still feebly murmuring the same tired talking points about abolishing the carbon tax. Senator Back, I notice your furrowed brow. You are the one honourable exception—ironically enough, not somebody who was up for re-election. Senator Back did front an energy panel at the Perth Town Hall. But at virtually every other public meeting I attended the Liberals were completely invisible—because what you are up to is indefensible. Your vote fell by another five per cent. The Australian Greens, campaigning almost solely on a clean energy platform of saving the CEFC, recorded our highest ever vote. So now let's talk about just how confident you are that 'Whyalla is about to be wiped off the map' and 'climate change is absolute crap'!

I think what we have seen is a very powerful sea change in the Australian community. Maybe people believed what they were told about the so-called toxic carbon tax over the last couple of years and it has worn increasingly hollow as people realise that your Prime Minister was simply making it up. In Western Australia, because the state government, similar to its federal colleagues, has basically abandoned the policy space and is simply locked in behind the coal and gas industry, the Australian Greens engaged an independent consultant, Sustainable Energy Now, to conduct a study on what 100 per cent renewable energy for the south-west grid would look like. We called it Energy 2029. Since we released it at the end of last year, we have had to revise the figures because the operating costs of large-scale renewable energy have come down so rapidly. What it shows is that the cost of 'business as usual' is more expensive than the cost of transitioning to renewable energy.

It might sound a little unusual that that would be the case; but, when you think about it, by the end of that transition to renewable energy, you have eliminated your fuel bill for all time. It is capital intensive upfront, it is vastly more labour-intensive than old fossil fuel fired power stations; but, once that transition is completed, you have eliminated the coal and gas bill, you have eliminated your fuel bill for all time, and there are only operating and maintenance expenses from there on. In one year, the average cost of electricity generation for onshore wind power fell by 18 per cent. The cost of tracking solar PV fell by 20 to 30 per cent depending on the energy market. The cost of concentrating solar power—that is, solar thermal, the next generation of better than base load large scale solar plants—fell by anywhere between eight and 27 per cent depending on the technology type and the energy market. Renewables overall saw levelised cost of electricity reductions of about 20 per cent.

And that, I think, is the key to this debate. People like me are scratching their heads wondering why a party of so-called economic rationalists would bowl over an entity like the CEFC, which is making a positive return and contributing more than its fair share to the cost of driving greenhouse gas emissions down. It is not because renewable energy cannot do the job, it is not because the clean energy sector is not effective enough. It is because it is succeeding a little too well—and it has deeply rattled your financial backers in the Liberal and National parties, who receive so much money every year. You scoff, Senator Johnston. Why don't you read into Hansard what the coal and gas industry spend propping up the Liberal and National parties every year—and then the position and the picture becomes much more clear. The renewable energy industry is doing a little bit too well, and it is in the process of stranding the assets of your coal and gas backers. That is what is actually going on here. You are doing everything you can, using your position of political incumbency, to nobble a competitor. It is no more simple or complex than that.

Imagine, just for a moment, that you are standing in the wheelhouse of the Titanic. A dirty grey iceberg has come looming out of the fog and the ship's navigators and engineers are screaming at those on the bridge to turn the wheel before impact. Imagine how it would feel to elect a captain who would confidently declare the iceberg to be absolute crap, sack the navigators, smear the reputations of the engineers and order that the ship immediately increase speed. In the fog of statistical uncertainty and the unpredictability of the weather at the best of times, we do not know how far ahead the iceberg is. Some in the climate science community think we might have hit it already. We do not have the luxury of knowing; we just have to turn the ship, if it is still possible, or, at the very least, open our eyes and brace for impact.

This is the political tipping point that I am referring to. Prime Minister Abbott, if you really believe that this is absolute crap and that the Clean Energy Act is going to wipe Whyalla off the map, how is that working out? If you really believe that renewable energy cannot deliver, then here is the double dissolution election trigger you have been waiting for. The world is starting to move—in fact, parts of the world are well ahead of Australia. We are lagging and the hour is late. So, if it is an election you want, then bring it on.