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Tony Jones speaks with Senator Ian Campbell -

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Tony Jones speaks with Environment Minister Senator Ian Campbell, about global warming and power


TONY JONES: Joining us now is the Environment Minister, Ian Campbell. He says that global warming
is a very serious threat to Australia, and that only a handful of sceptics now refuse to accept the
scientific evidence. The target, he says, is to save the climate by reducing greenhouse emissions
by 50 per cent globally this century. So now that the Government has actually picked winners to
fund, in both the solar and coal fired power technologies, what's their actual potential? The
Minister joins us now from Perth.

Ian Campbell, thanks for being here.


TONY JONES: Is this the one occasion when you can proudly say that the Government's initiative is
all about smoke and mirrors?

IAN CAMPBELL, ENVIRONMENT MINISTER: I think that what we've seen here is a policy that's been in
place for a couple of years now. We've gone through a very diligent process of looking at all of
the options; I think something like 30 submissions we received, trying to get a part of this half a
billion dollar fund, and today the Treasurer has announced the first two projects.

I think it demonstrates what the PM has said from the Pacific, is that there is not going to be a
silver bullet solution. You do have to deal with cleaning up fossil fuels, you do have to fast
track making solar a mainstream energy source. You have to do energy efficiency, you have to change
how we use our land, we have to stop deforestation globally. We have to transform our transport
fleet. We have to do all of those things to achieve the target that the globe needs to achieve
during this century if we are in fact to avoid dangerous climate change.

TONY JONES: Let's start with what's been called the 'world's largest solar energy plant'. What sort
of area does it cover?

IAN CAMPBELL, ENVIRONMENT MINISTER: Well, ultimately it's going to cover many hundreds of hectares.
This is the first part of a program. We hope that with the success of the demonstration plant,
we'll be able to roll this out not only up in Mildura, but ultimately in places like China, over
hundreds and hundreds of hectares.

TONY JONES: If it works and you repeated the project around the country, what is the potential? How
much of our power could potentially come from the sun?

IAN CAMPBELL, ENVIRONMENT MINISTER: Well, looking at the problem globally, the Professor Socolo
Study from Princeton University is saying that providing, say, roughly 700 times the solar energy
currently used in the world will produce about one seventh of the challenge.

If you think of the challenge of having to double the world's energy supplies in the next 50 years,
and to stabilise greenhouse gases you have to use about seven different technologies, and one of
them is solar, this particular technology has the I hate to use all these mathematical statistics,
Tony, but they do, sort of, break it down to bite sized chunks. But this technology has the
potential to improve the efficiency of solar by about it improves the effectiveness by about a
sixth. So you use about a sixth of the energy to create the same power. So it's a massive
transformation in terms of efficiency. And when you think the Princeton study says you need to
increase solar penetration by roughly 700 times across the global, then this is a big step forward.
So proving it here in Australia, using Australian technology, Australian know how, and then being
able to export it very quickly, for example through the Asia Pacific Clean Development and Climate
Change mechanism, I think that today is in fact a really, really historic day for Australia.

TONY JONES: I've done a few rough sums here: The Treasurer says the project will power about 45,000
homes. There are about 8 million households in Australia. On those figures, if you built 178 of
these solar powered stations just like the one down there, you could supply power to the whole
country. Does that sound right?

IAN CAMPBELL, ENVIRONMENT MINISTER: Yes, it does, but I think, again, it falls into the trap Tony,
of saying this is the silver bullet. What has exercised my mind for a couple of years is that China
is growing at the rate of a city of Brisbane every month. You can talk about a few homes in
Australia, but when you, say, drive through the Xin Zhen Province, as I did last Thursday night,
and see a city of 12 million people that didn't exist 18 years ago, you realise that you have to
not only do these large scale, breakthrough solar projects.

For example, the project down at Hazelwood, where we're trying to clean up the coal, dry it out,
clean it up and then capture the carbon before it goes into the atmosphere, the importance of that
is that we have so many power stations in the world at the moment, if we develop a new power
station it's almost impossible to replace all of the existing ones. So getting a technology that
can be retrofitted to a station like Hazelwood gives you the sort of global answer you need. You do
need these technologies.

TONY JONES: I'll come to that, and let's think about the global position in a moment. But first of
all, Australians are obviously concerned about what can happen in Australia, since we have a lot of
coal fired power stations here. If you're right and you could build 178 of these solar powered
stations like the one down in Victoria that you're now building, and that could supply energy for
all of Australia, why not just do it?

IAN CAMPBELL, ENVIRONMENT MINISTER: Well, it will come down, again, Tony, to cost and benefit. Even
at a one sixth improvement in efficiency, it is still massively more expensive than what we've got
at the moment. What we have to do is try to get the costs down, and this demonstration project will
be the first step in that.

TONY JONES: So can you just explain that? Do you mean the actual power coming from this station is
going to be much more expensive than other power?

IAN CAMPBELL, ENVIRONMENT MINISTER: The cost of producing it, Tony. That's the difference.
Ultimately the market will decide the price for power. The costs of producing it is what's
important. We ultimately would like to see solar power being available at the same price as
existing power generated by, for example, brown coal. Now, that may well happen. It won't happen
unless you take the first brave step towards pumping in hundreds of millions of dollars to this
sort of breakthrough solar facility, the biggest of its type in the world.

TONY JONES: Indeed. You are putting 75 million into it. If you put $75 million into $178 (million),
you'd come up with a figure of $13.35 billion, which is actually not a bad investment over a period
of time if it could indeed supply power, with a grid like that, to the whole country; in other
words supply base power. Could it happen?

IAN CAMPBELL, ENVIRONMENT MINISTER: This, Tony, is really the Government's approach. That's why
we've put up at least half a billion (dollars), under this low emissions technology demonstration
fund, but also $100 million under the Asia Pacific partnership, and we'll be announcing some
projects on that in the near future. You used the words "picking winners"; we are actually
investing across the whole range of renewable. We put money, for example, into geodynamics that are
drilling in Iniminca, right in the dead heart of Australia, to try to generate power from hot rocks
under the earth. That project, they say, could supply the whole of Australia.

If the Hazelwood project works, you could have every single brown coal fired power station in
Australia producing energy with zero, or very low emissions. So I think, rather than wanting to put
all of you eggs in one basket, it is sensible for the Government to invest taxpayers' money in a
range of technologies that are very importantly you can't ignore the world. This is truly a global
solution. I mean, trying to get an effective global agreement post Kyoto is incredibly important,
but in the meantime finding technology transfer mechanisms so that you can get these technologies
developed in a place like Australia, and very quickly moved into places like China, is really the
front edge of the problem and the challenge.

TONY JONES: I understand. But can you just explain to us why solar generated electricity is
actually going to be more expensive, once the plant is up and running, than coal fired electricity,
since it comes from the sun?

IAN CAMPBELL, ENVIRONMENT MINISTER: These are issues that we will know more about once this plant
is up and running, once we know that it's built, that all of the engineering challenges this is
what a demonstration project is all about. We will know all of those costs, we will know what it
costs per unit of electricity, then we'll know what it will look like as it's expanded.

The great thing about this project is that I believe, from the briefings I've had in fact I spent
all of last week with Dave Holland up in China that this is has the potential to be really brought
up to scale very rapidly. So this first step is an incredibly important one. We'll know the answer
to your question once we've built it, Tony, and we'll know the costs and the benefits.

TONY JONES: If it's cheaper than coal fired power stations, why not just decommission all the coal
fired power stations in the country, gradually replacing them with large scale, solar powered
stations like this, 178 of them?

IAN CAMPBELL, ENVIRONMENT MINISTER: There is no reason why you wouldn't, Tony. You'd be mad not to.
If the sums add up, that's what could happen.

TONY JONES: So is that a kind of dream for the future? A, sort of, massive investment in solar
power that could actually make Australia perhaps the greenest country in the world?

IAN CAMPBELL, ENVIRONMENT MINISTER: My strong conviction has been, for a couple of years now, that
Australia should be and will be the leader in solar technologies in the world. That is already
happening, although people on the Left of politics keep putting down our achievements. You can't
beat going to Xen Zhen Province and seeing the largest solar photovoltaic installation in Asia,
built using and solar cells made at Homebush by BP Solar, and installed by an Australian company in

I believe that if we're not the top solar country now, we're on track to be that. But I don't want
to mislead people by thinking that solar is the only answer; nuclear is certainly not the only
answer, nor is solar. It is going to require this portfolio approach and you can't put all your
eggs in one basket because you have some ideological attachment to one technology. The problem is
so serious that you must have a portfolio approach and you must ensure that your natural and
national comparative advantages are pursued with vigour, and that's what this Government is doing
with its multi-billion dollar funds.

TONY JONES: Let's look at the other project now that you've been talking about. The idea is clearly
to separate the carbon dioxide out and pump it underground; in other words, geosequestration.
Putting away the CO2 so it doesn't go into the atmosphere. If that works, would you consider making
it mandatory for all coal fired power stations in Australia?

IAN CAMPBELL, ENVIRONMENT MINISTER: Once again, Tony, we've got to get the technology right.

TONY JONES: Let's say you do get it right, though. I mean, the obvious implication here is that if
you do get it right, there would be no point, in the future, in having coal fired power stations
pumping CO2 into the atmosphere.

IAN CAMPBELL, ENVIRONMENT MINISTER: It's, interestingly, Tony, one of the technologies that Al Gore
and Eileen Clauson, Bill Clinton's former Chief Climate Change Negotiator Eileen said it to me, Mr
Gore hasn't, but Eileen said it to me that if we don't get this technology, if we don't get carbon
capture and storage right, then we won't solve the problem. That's how strongly she feels about it.
We have to get it right. Are you saying would we legislate to make sure every power station in
Australia does that? I would say that's unlikely. What we have to do is bring it on. I don't think
you want to legislate to make any particular technology the requirement.

TONY JONES: But why would any --


TONY JONES: But why would any company producing cheap, dirty power and pumping CO2 into the
atmosphere, actually put huge investments into changing that, unless they were forced to do it by
the Government?

IAN CAMPBELL, ENVIRONMENT MINISTER: Well, I think the answer to that, Tony, is that no one, for
example, is forced to use General Electric's latest gas turbine technology, yet that is likely to
become the commoditised standard around the world. My strong view is that firstly we have to
develop the technology. No one has done carbon capture in a post combustion environment at this
stage. I'm really hoping that Australia is able to achieve it first at Hazelwood; that will prove
up the technology. We'll then have to expand it to full scale deployment, then questions about
whether the Government legislates to make that the standard required in Australia, or whether
countries get together, through the Asia Pacific partnership, and agree that that becomes the

You can't wreck the economy if you want to solve this problem, Tony. The world has got to have a
strong economy if it's going to find and continue to fund the multi-trillion dollar investments
that are going to be required to address the issue. So you can't have this, sort of, ideological
approach which says "pass a law in Canberra and hope that you can make the problem go away". If you
kill either the Australian economy or the global economy by taking those measures, you kill the
opportunity to make the investments required for these multi-trillion dollar technological
deployments. If you don't have a strong economy --

TONY JONES: The argument you're now hearing from a lot of people in business is that they know that
sooner or later governments are going to have to move to call CO2 being pumped into the atmosphere
like this pollution and penalise companies that are pumping pollution into the atmosphere. They
know that already. In order to make their investments into the future they're looking for a pricing
signal from the Government; right now they're not getting one.

IAN CAMPBELL, ENVIRONMENT MINISTER: It is a chicken and the egg. I think I heard one of the ABC
news bulletins talking about the chicken and the egg. It is indeed a chicken and the egg, but you
do absolutely need the technologies first. You need to know what the costs are. There is two ways
of doing it. There is the Labor way of saying, "Let's put a new tax on energy. Let's tax carbon,
let's use a tax." The alternative is to use what we're doing, which are incentives. It is to the
benefit of the globe for governments to invest taxpayers' money to create incentives to bring down
that capital cost up front. The ideal thing is, in terms of creating the incentives to reduce
carbon going into the atmosphere, is to spread the costs as broadly as possible across the
community, ideally spread them as broadly across the globe as you can, using an effective
international agreement, and also to spread it as long as you can into the future. That's the sort
of work that Warwick McKibbon is doing. Warwick McKibbon, for example, is very anti-tax; so am I.

We don't want to smother the economy in the short term, because that will kill the potential for
governments and companies to invest in the multi-trillion dollar technology rollouts you need. So
have to be very, very cautious about the steps. I believe that the front end research, development,
deployment, demonstration path that the Australian Government is on at the moment will bear great
fruit, will be an important step towards Australia's own contribution to this global challenge, and
also will make a great contribution globally.

TONY JONES: A final quick question though, because you must already be getting signals from the
nuclear policy task force that are looking at the costs of nuclear power and comparing it to coal
power right at the moment. What they're already finding is that it's going to be uneconomical to
have nuclear power in Australia unless there is some penalty on the coal fired power stations for
polluting the atmosphere. Isn't that the case?

IAN CAMPBELL, ENVIRONMENT MINISTER: Well you keep talking about penalties, Tony, and I don't think
any Australian when you realise that Australia is 1.46 per cent, less than 1.5 per cent of global
emissions, creating policy measures in Australia that put up the price of energy, put up the price
of fuel for motorists, put up the price of energy for businesses, small businesses, households;
that is the Labor way of doing things. The other way is to create incentives. Whenever you want to
create an energy source that is more expensive to create infrastructure wise than what we're doing
at the moment, you will need some sort of subsidy. You will need some sort of subsidy. That's what
we've announced today; a massive subsidy for solar. That's why we have been subsidising solar
throughout Australia for nearly a decade now. That's why we are massively putting money up the
front end. You can go for penalties and taxes or you can go for taxpayer funded incentives. We have
chosen, at this stage in the development of policy, to go for this incentive side of things.

TONY JONES: Ian Campbell, we'll have to leave you there. We thank you very much for coming in to
explain all that, and hope to see you soon.