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Tuesday, 19 February 2019
Page: 14022


Dr PHELPS (Wentworth) (18:50): Climate change has been variously described as one of the most pressing moral, social, health and economic challenges of our time. The average temperature of the earth's surface has increased by about 0.6 degrees in the last three decades, and global sea levels have risen by around three millimetres per year. Scientific consensus is that this is largely due to an increase in carbon dioxide and other human-emitted greenhouse gases in the atmosphere. We have seen an increase in the number and intensity of natural disasters and the extinction of animal and plant species. Climate change has significant implications for human health; for example, with increased air pollution, insect-borne diseases and impacts on food supplies.

Australia, like nearly 200 other nations, has committed at an international level to address this challenge as part of the Paris agreement's goal of emission reductions to keep the global temperature rise below two degrees Celsius. In October 2018, however, the IPCC report told us that these targets were not ambitious enough and that we needed to take urgent action to limit global warming to 1.5 degrees Celsius, not two degrees Celsius. However, effectively addressing climate change is proving extremely challenging in the current Australian political context. Concerns about spiralling energy prices and reliability of supply have been used by the current government to sideline attempts to adopt climate policies that reduce Australia's carbon footprint. Yet climate change remains one of the top issues in the upcoming federal election, and I believe we need to work together to deliver change.

To be politically and economically viable, any climate change policy in Australia must meet three key criteria: it must take account of social costs—or, as economists call them, negative externalities—associated with the emission of carbon; it must ensure that energy supply is reliable; and it must also ensure that energy is affordable, especially for low-income Australians.

Along with a smart grid and energy efficiency, renewable energy is the lowest-cost sustainable solution for Australia's energy crisis. Renewable energy has the potential to be Australia's largest export industry of the future. In order to contain emissions, we need to shift away from coal. To do this, ideally, we also need to ban any new thermal coalmine developments. A landmark court decision by Chief Judge Preston in the New South Wales Land and Environment Court this month rejected a new coalmine, partly on the grounds of its future impact on climate change.

Fossil fuels are a finite source of dirty energy, and the externalities are extreme and almost entirely uncosted. The majority of fossil fuel projects in Australia are owned by foreign multinationals, yet these fossil fuels belong to the Australian people. Fossil fuel projects benefit from massive taxpayer subsidies in the form of free water, free carbon emissions and massive royalty holidays, particularly for gas. Then there is the diesel fuel rebate, a $2 billion annual subsidy that no Australians, other than farmers, receive. There is no other private industry that is so dependent on using public, finite assets for private, foreign, largely tax-free gain.

This brings us to the fundamental regulatory issue of whether there is a functional gas market. There is no gas market on the east coast of Australia; rather, it is a tightly controlled network, run by a small number of large multinationals for whom profit is the primary motivation. November 2018 saw Australia briefly surpass Qatar to be the world's largest exporter of natural gas. The alleged gas crisis in Australia is not about supply; it is more about offshore sales and supply being prioritised over Australia's consumer needs. In the last eight years, Australia's cost of gas has trebled to US$8 to US$9 a unit, while the United States's has gone down to US$3 a unit. We now have the highest gas prices in the world—even though Australia's east coast production has trebled this decade. If you treble supply and treble the price, you don't satisfy the fundamentals of a functioning market. The government has not intervened to establish a domestic reservation policy—the very policy which keeps Western Australian gas prices far more affordable than gas prices in the eastern states.

Going forward, Australia must invest in renewables. Renewables no longer require major subsidies beyond policy clarity. The single biggest reason renewables are now the clear choice for Australia is that they are now the lowest cost source of new electricity generation. Solar and wind projects are now being built across Australia at just $40 to $50 per megawatt hour, down some 70 per cent in just the last three years. Firming these projects with pumped hydro storage for evening peaks takes the price to $70 per megawatt hour—almost half the price of new coal-fired power generation. Renewables are deflationary. Once built, there is no fuel cost—primarily, just interest on the debt capital. And, like storage costs, renewable energy costs are expected to fall some 10 per cent annually over the coming decade due to economies of scale and massive ongoing technology gains. Renewables are clean and sustainable. Renewables use almost no water. Once built, renewables create no air or particulate pollution or carbon emissions.

Energy Australia, Origin Energy and AGL, Australia's three largest electricity generators, understand the need to move to renewables. Each has ruled out any involvement in any new coal power plant. Moreover, NAB, CBA, Westpac and ANZ have not invested in new coal projects since 2015. Macquarie Group is one of the largest investors in renewables globally.

The idea of baseload electricity is last century's solution to today's problem. Yes, renewable energy is variable. But Australian cities have 24/7 water supply, even though it's not always raining. What we need is firming electricity supply to balance out when low-cost renewables are not available. Firming and peaking power will come from: pumped hydro storage; batteries, both utility scale and distributed; greater interstate grid connectivity; and demand-response management. In November last year, the New South Wales government launched an excellent program to pay 40,000 New South Wales households $1,000 over three years for the use of their home battery systems—a virtual 200-megawatt power plant delivering ultra-peak power supply.

Investing in renewable energy infrastructure is creating substantial investment and jobs for regional Australia. The New South Wales government announced in November 2018 that it had $28 billion of low-carbon project proposals under evaluation right now, ranging from pumped hydro storage to wind and solar infrastructure. Investing in industries of the future will build our engineering and scientific capacity, leverage our financial capacity, including our $2.6 trillion superannuation pool of assets, and build export industries of the future. Mike Cannon-Brookes has recently launched the campaign Fair Dinkum Power, calling for Australia to target 200 per cent renewable energy. This is a vision worth discussing.

After iron ore, Australia's top exports are all fossil fuel commodities—gas for electricity, coking coal for steel and thermal coal for electricity. We cannot simply switch off these industries, but we need to plan our transition to a clean energy future. We need to transform our economy and prepare transition plans for our most affected communities, such as those in the Hunter and Latrobe Valley. We need to build industries of the future. We should consider building a renewable energy hub in outback Australia and then exporting clean, 100 per cent sustainable and renewable energy, from either hydrogen or ammonia, via a subsea cable connected to Indonesia. Several of the largest energy investors and corporates in the world are exploring such a concept in the Pilbara—for example, the $20 billion nine gigawatt Asian Renewable Energy Hub.

It gives me great pleasure to present on behalf of the citizens of Wentworth a petition to firstly impose an indefinite moratorium on all new coal mines, including Adani's; immediately cease all federal government subsidies for fossil fuel companies; impose a nationwide ban on fracking; and legislate a renewable energy target of 100 per cent renewable energy by 2030.

The petitions read as follows—

This petition of the citizens of Wentworth comes at a critical juncture in human history. Climate change poses a threat to the continued existence of human beings and myriad other species. The world's leading climate scientists have sent governments a clear warning - rapidly transition away from fossil fuels or risk global warming exceeding 1.5 degrees and the consequent, devastating effects. Approving the construction of new coal mines and subsidising fossil fuel extraction is incompatible with this essential transition.

We therefore ask the House to: 1. Impose an indefinite moratorium on all new coal mines, including Adani's proposed Carmichael mine 2. Immediately cease all Federal Government subsidies to companies mining fossil fuels 3. Impose a nation-wide ban on hydraulic fracturing (tracking) 4. Legislate a renewable energy target of 100% renewable energy by 2030

from 1441 citizens (Petition No. PN0400)

This petition of the citizens of Wentworth comes at a critical juncture in human history. Climate change poses a threat to the continued existence of human beings and myriad other species. The world's leading climate scientists have sent governments a clear warning - rapidly transition away from fossil fuels or risk global warming exceeding 1.5 degrees and the consequent, devastating effects. Approving the construction of new coal mines and subsidising fossil fuel extraction is incompatible with this essential transition.

We therefore ask the House to: 1. Impose an indefinite moratorium on all new coal mines, including Adani's proposed Carmichael mine 2. Immediately cease all Federal Government subsidies to companies mining fossil fuels 3. Impose a nation-wide ban on hydraulic fracturing (fracking) 4. Legislate a renewable energy target of 100% renewable energy by 2030

from 652 citizens (Petition No. EN0840)

Petitions received.

Dr PHELPS: Australia needs an evidence based climate policy led by our national government. We can and must all assume responsibility for supporting and embracing change for our children, for our land and for our planet. Taxpayers' money should be invested in creating the long-term sustainable transition to renewable technologies. ARENA and the Clean Energy Finance Corporation are world-leading examples of how our government can cost-effectively lead this transition. Investing government money in privately owned coal-fired power stations or protecting those assets against future changes in policy will only create bigger problems for Australia down— (Time expired)