Overall comment
The State Government’s Climate Change Action Statement, released on 6 April 2007, has some positive features but falls well short of being an adequate response to the climate change challenge.
On the positive side, it sets targets for substantial reductions in greenhouse gas emissions, confirms Western Australia’s support for a national emissions trading scheme and commits to some new initiatives such as a strengthening of energy efficiency standards for new residential buildings.
On the negative side:
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The new initiatives that are announced are unlikely to lead to substantial reductions in greenhouse gas emissions;
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The Statement does not quantify the greenhouse gas reductions that are expected from these initiatives;
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The Statement fails to implement most of the recommendations of the Government’s Greenhouse and Energy Taskforce, including the Taskforce’s important recommendation for a mandatory renewable energy target of 15 to 20 per cent by 2020;
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No initiatives are proposed for transport, agriculture, land clearing/revegetation or fugitive emissions; and
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Insufficient funding has been allocated to implement the Statement.
The lack of public consultation is also a concern. Given the importance of climate change and the public interest in this issue it is unfortunate that there was no opportunity for public comment on a draft statement. If there had been such an opportunity, it is likely that the final result would have been a more substantial document.
Greenhouse target
The Statement sets a goal of reducing Western Australia’s greenhouse gas emissions by 60 per cent of 2000 emissions by 2050. This would require that by 2050:
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aggregate emissions are reduced from current levels of 71 million tonnes per annum to 26 million tonnes per annum; and
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annual per capita greenhouse gas emissions drop from the current 34 tonnes per person to 7-10 tonnes per person by 2050.[1]
Three criticisms can be made of the target.
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First, the target is insufficient if Western Australia is to equitably contribute to the global task of constraining global emissions to acceptable levels. If everyone on the planet in 2050 was responsible for annual emissions of 7-10 tonnes, global emissions would not reduce at all – indeed, they would be well above current levels.[2]
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Second, it would be more appropriate to have a target that uses 1990 levels as a benchmark. This is the internationally accepted benchmark year, used for the purposes of the Kyoto Protocol.
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Third, a shorter-term target or targets, in addition to a 2050 target, would promote urgent action to address climate change.
Having said this, it is important that a debate over targets does not delay action to address climate change. There is a great deal of common ground. The Greens and the Government agree that we need to reverse the current growth in greenhouse emissions and make substantial cuts in emissions over coming decades. The 60 per cent reduction target is a welcome acknowledgement of this fact.
It should be noted that the Australian Greens have proposed targets for Australia of reducing emissions 30 per cent below 1990 levels by 2020 and 80 per cent below 1990 levels by 2050. If targets of this nature were set at a national level, then state and territory sub-targets would not be necessary.
Renewable and clean energy targets
The Statement sets a renewable energy target for the South West Interconnected System (SWIS), the electricity network servicing the south west of Western Australia. The target is 15 per cent by 2020 and 20 per cent by 2025.
The Statement also sets a ‘Cleaner Energy Target’ for the SWIS – ‘cleaner energy’ apparently referring to energy with a greenhouse signature as good as, or better than, combined cycle gas generation – of 50 per cent by 2010 and 60 per cent by 2020.[3] The Statement says that the current level of ‘cleaner energy’ on the SWIS is 43 per cent.
There is no serious attempt to explain how the aspirational renewable energy or cleaner energy targets are to be reached. One option that is immediately available to the Government is to support, with minor amendments, the Greens Private Member’s Bill to establish a mandatory renewable energy target for the SWIS. The Electricity Industry (Renewable Energy Targets) Amendment Bill 2005, which is currently before the Lower House of State Parliament, would oblige electricity retailers to purchase a portion of their electricity from renewable sources in line with legislated renewable energy targets. Government support for this Bill would:
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ensure that its renewable energy target is met;
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substantially reduce the greenhouse intensity of the Western Australian electricity sector; and
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help to bring down the price of renewable energy through industry development and economies of scale.
It is interesting to note that in the Budget Papers, the Office of Energy says that one of its major initiatives for 2007-08 will be to “commence implementation of a renewable energy target for 2020, including developing legislation to establish the scheme”.[4] This suggests that a mandatory target was understood by the Office of Energy to be proceeding at the time the Budget Papers were put together, but that a last-minute political decision removed that measure from the Statement. The result is that we still have a target, but no longer have a plan to achieve it.
Emissions trading
The Statement supports the establishment of a national emissions trading scheme, to be established by the States and Territories by 2010 if the Commonwealth Government fails to take the lead in establishing such a scheme. This is a welcome commitment, especially given the State Government’s previously expressed position on emissions trading.[5] However, the real test of the State Government’s commitment to addressing climate change will be the position it takes on the design of an emissions trading scheme and in particular on what ‘cap’ is to be applied on greenhouse gas emissions. The indicative caps put forward by the States and Territories for the electricity sector in the discussion document Possible Design for a National Greenhouse Gas Emissions Trading Scheme are clearly inadequate. By 2030, they would lead to little or no reduction in emissions compared to 2000 emission levels.[6]
Other initiatives relating to the stationary energy sector
Stationary energy, which includes electricity production and combustion of fuel for industrial processes, is Western Australia’s largest, and fastest growing, source of greenhouse gas emissions. In 2005 it was responsible for 55 per cent of the State’s emissions and between 1990 and 2005 emissions from this sector more than doubled.[7]
On 30 May 2005, then Environment Minister Judy Edwards announced that a Greenhouse and Energy Taskforce had been established to provide advice to the Government on practical and economically feasible ways to manage greenhouse gas emissions from the stationary energy sector. After 15 months of deliberation, the Taskforce delivered its report. While the Taskforce report was a conservative one, it did make a number of important recommendations.
Some recommendations of the Taskforce have been adopted, including:
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endorsement of the need for a national emissions trading scheme;
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establishing a low emissions technology development fund;
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establishing a mandatory energy efficiency program for medium to large energy users;
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purchasing a greater proportion of Green Power for the Government’s electricity use; and
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extending the Solar Schools program.
Unfortunately, the Statement failed to respond to many of the recommendations in the Taskforce’s report. Some of the more important recommendations that have not been addressed are to:
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set a mandatory renewable energy target for the SWIS of 15 to 20 per cent by 2020;
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call for expressions of interest to establish a pilot geothermal (hot dry rock) energy project in Western Australia;
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require all high CO2 content natural gas fields to use capture and storage technology for fugitive emissions;
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require significant new electricity generators to minimise emissions in line with contemporary emissions intensity benchmarks;[8]
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make a clear statement that, as a general principle, all new stationary energy developments will be liable for the full cost of future greenhouse gas emission compliance;
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require all major new fossil fuel plants to plan for future carbon capture retrofit as carbon capture and storage technology becomes available;
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mandate use of smart metering;
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allow network service providers to recover foregone revenue from demand side investments; and
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establish a program to progressively install cogeneration in government-owned hospitals and other appropriate institutions wherever possible.
In addition, a number of the measures that were announced in response to the Taskforce’s recommendations either did not go far enough or were lacking in details. For example:
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The ‘5 star plus’ home energy rating system does not take into account the size of houses. In Victoria, a recent study found that new dwellings built under ‘5 star’ rules used 6 per cent more energy than average dwellings because their larger size.[9] To be effective, a green building code must take the size of houses into account. This could be done, for example, by setting a maximum ‘greenhouse budget’ for a dwelling so that the larger the dwelling is, the more efficient it has to be in its energy use.[10]
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The ‘5 star plus’ system requires the use of efficient heating systems (solar, 5 star gas or heat pump), but only applies to the small percentage of new homes that are constructed each year. A more effective and equitable approach would be to require every household replacing a heating system, whether in a new or existing building, to use one of the mandated models. This requirement should apply to commercial, as well as residential, buildings.
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The Taskforce recommended an Energy Savings Fund, based on the New South Wales model of a small surcharge on energy consumption, to identify and invest in energy savings, home energy retrofitting, awareness raising, incentives, rebates and energy auditing for small and medium enterprises. The Government has committed to a much more limited program restricted to household audits and funded with a small allocation from consolidated revenue. The funding allocated to the Western Australian program is $1.5m over 2 years, compared to $200m over 5 years under the New South Wales program.
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It is unclear how much of the Low Emissions Energy Development Fund will be directed towards ‘clean coal’ research. It would be unfortunate if, like the Commonwealth Government’s Low Emissions Technology Demonstration Fund, it were directed mainly to ‘clean coal’ projects.[11] There is a strong case for the development of ‘clean coal’ technology to be funded by the coal industry, given that this industry is large and well established. The renewable energy industry, which has less resources and has to compete with low-cost coal-fired generators, is more deserving of support.
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It is unclear what ‘payback period’ will be adopted for the mandatory energy efficiency program. It appears that the Taskforce favoured a scheme under which any energy efficiency investment that would pay for itself within six years should be mandatory, but the Government has not indicated whether it endorses this approach.[12]
Initiatives in other sectors
While stationary energy is responsible for more than half of Western Australia’s greenhouse gas emissions, other sectors such as agriculture and transport are also significant emitters. Apart from one good initiative to require landfill sites to capture and use or destroy methane gas emissions, no specific initiatives were announced for these sectors of the economy. A ‘broad brush’ general commitment was given to ‘develop emission reduction strategies with key sectors of the Western Australian economy, including transport, housing, minerals, agriculture, manufacturing and service enterprises.’
Budget allocation
While government policy on climate change cannot be measured simply by expenditure, budget allocations for greenhouse initiatives provide one measure of how serious a government is about tackling climate change. New funding allocated by the State Government to addressing greenhouse issues in the 2007/8 Budget is outlined in the following table. Additional funding for climate change initiatives in 2007/08 is $8 million. This represents just 1.1 per cent of total new funding on an issue that the Premier describes in the Statement as the greatest threat to Western Australia’s environment and economy. This additional expenditure of $8 million compares, for example, to $258 million in new funding for roads in 2007/08.[13] The level of funding allocated to climate change initiatives indicates that the State Government has not given this issue a high priority relative to other issues.
WA Budget 2007/08 – New Funding for Climate Change Initiatives
|
Initiative |
2007-8 |
2008-9 |
2009-10 |
2010-11 |
|---|---|---|---|---|
|
1. Household Sustainability Audit and Education Program |
750 |
750 |
- |
- |
|
2. Low Emission Energy Development Fund |
200 |
8,650 |
8,650 |
9,500 |
|
3. National Emissions Trading Team |
300 |
300 |
320 |
320 |
|
4. Public Awareness and Education Campaign (Act Now for Tomorrow) |
650 |
600 |
100 |
100 |
|
5. Reducing Impacts of Climate Change on Western Australia |
1,975 |
1,925 |
2,175 |
1,725 |
|
6. Government Purchase of Green Power |
1,300 |
2,600 |
5,200 |
5,200 |
|
7. Renewable Energy Target |
1,522 |
1,272 |
802 |
802 |
|
8. Mandatory Energy Efficiency Program |
400 |
2,400 |
2,400 |
1,900 |
|
9. Additional funding for Office of Climate Change |
200 |
200 |
200 |
200 |
|
10. Additional funding to Solar Schools Program |
750 |
1,150 |
1,150 |
50 |
|
TOTAL |
8,047 |
19,847 |
20,997 |
19,797 |
Notes:
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The Government has stated that it has committed $101.2 million over 5 years to initiatives included in the Climate Change Action Statement.[16] This includes funding for 2011-12, which is not addressed in the Budget Papers because they only contain budgeted expenditure up to 2010-11.
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It appears that funding for the Waterwise Rebate Scheme and the ‘Beat the Peak’ campaign are included in the $101.2 million, the objective of these programs is not to address climate change. They have been excluded from the above list.
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It is difficult to estimate total spending on greenhouse initiatives because there is no line item for these initiatives in the budget papers for the Minister for Climate Change.
Conclusion
On the whole, the Climate Change Action Statement is an inadequate document. While it contains some good targets, it does not do enough to put in place measures that will achieve those targets, either through regulatory initiatives or expenditure on new programs.
Having said this, it is hoped that the Government will acknowledge that the Statement is far from the last word on Western Australia’s climate change policy. The Greens look forward to seeing more practical, properly funded climate change initiatives and working with the Government to pass strong legislative initiatives to respond to the challenge of climate change. The Greens look forward to action bring taken by the Government in a range of areas, including the following:
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Advocacy for a strong national greenhouse gas emissions trading scheme that will achieve substantial cuts in emissions over coming decades;
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Legislative backing for mandatory renewable energy targets;
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Legislative backing for a strong energy efficiency program applying to medium and large energy users;
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Implementation of the outstanding recommendations of the Government’s Greenhouse and Energy Taskforce;
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Strengthening and extension of ‘green building’ requirements; and
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Effective policy initiatives in sectors not addressed in the Statement, including transport, minerals and agriculture.
27 June 2007
* We gratefully acknowledge the assistance of our research officer, Michael Bennett, in the preparation of this article.
[1] The 7-10 tonnes per person figure has calculated by dividing the aggregate emissions for 2050 by the range of ABS population projections for Western Australia (ABS 3222.0). The 34 tonnes per person figure is derived from the Government’s estimate of 71mtpa for 2007 divided by the latest ABS estimate of WA population (ABS1367.5, March 2007).
[2] With a global population of 9 billion in 2050, 10 tonnes of emissions per person would result in 90CO2-e, well in excess of 2004 global emissions of 49CO2-e.
[3] Electricity generation from combined cycled gas has a greenhouse intensity of about 0.4 tonnes of CO2 per megawatt hour, compared to 0.5 t/MWh for thermal gas and 0.9 t/MWh for electricity generation from black coal: see Greenhouse and Energy Taskforce: A Cleaner Energy Future: Strategies to Reduce Greenhouse Gas Emissions from the Western Australian Stationary Energy Sector (December 2006), p 41.
[4] Budget Papers, Part 2, Volume 3, p 991.
[5] See Premier’s Media Release, 16 August 2006.
[6] National Emissions Trading Taskforce, Possible Design for a National Greenhouse Gas Emissions Trading Scheme (August 2006), p47.
[7] Australian Greenhouse Office, State and Territory Greenhouse Gas Emissions 2005 (2007), pp15-16.
[8] From the discussion preceding this recommendation, it appears that this is intended to rule out the selection of conventional coal-fired power plants in the interim period before a national emissions trading scheme is implemented: Greenhouse and Energy Taskforce: A Cleaner Energy Future: Strategies to Reduce Greenhouse Gas Emissions from the Western Australian Stationary Energy Sector (December 2006), pp46-7.
[9] George Wilkenfeld and Associates, Options to Reduce Greenhouse Emissions from New Homes in Victoria Through the Building Approval Process (April 2007), p5.
[10] Ibid, p9.
[11] This is $500 million program of which to date 67% has been allocated to 6 projects related to carbon capture and storage and 15% has been allocated to a single solar energy project.
[12] Greenhouse and Energy Taskforce: A Cleaner Energy Future: Strategies to Reduce Greenhouse Gas Emissions from the Western Australian Stationary Energy Sector (December 2006), p38.
[13] WA Government, 2007-08 Budget: Decisions for Our Future, p15. Total road spending in 2007-08 is $1.2 billion.
[14] $500,000pa was recorded in the last budget for ‘coordination of climate change policy’. (Pt 2, Vol 2, p846). The $700,000pa allocated to the Office for Climate Change represents a $200,000pa increase on this amount.
[15] $250,000 pa was allocated in the 2005-06 budget to the solar schools program (Pt 2, Vol 2, p746). The funding itemised above is the increase on this amount.
[16] Budget 2007-08 Fact Sheet – Leadership on Climate Change.