Oct 26, 2006

Shadow Minister outlines ALP policies to address global warming – Lateline

Shadow Minister outlines ALP policies to address global warming

LATELINE

Thursday 26 October 2006

TONY JONES: But the opposition says the Federal Government isn’t serious about solar power because it prefers nuclear power. Joining me now is the opposition spokesman on the environment, Anthony Albanese. Thanks for being here.

ANTHONY ALBANESE: Good evening.

TONY JONES: You heard what Ian Campbell says. If it’s economically viable to build 178 solar power stations like the one planned for Victoria, Australia could become fully powered by the sun. It’s a visionary idea. Do you support it?

ANTHONY ALBANESE: Ian Campbell is good at making grand statements, in the next breath also he stated that Australia was the world leader potentially in solar energy. In fact, under the Howard Government, 10 years ago, Australia had 10 per cent of the global market. We now have two per cent. Under this government’s program, we’ve seen a collapse, effectively, of the renewable energy industry, because of its failure to have a plan. Now, one-off projects like this project that was announced yesterday, the solar systems project, are worthwhile, but it’s important to recognise that the only reason why it’s viable according to the company itself is because of the Victorian renewable energy target. What that says to you is that you need to put in place a real plan with economic mechanisms not just make grand platitudes and statements as the Environment Minister did last night.

TONY JONES: You heard what Ian Campbell said. If the sums add up, you’d be mad not to do it. Could you actually power the whole country using solar energy with this new technology?

ANTHONY ALBANESE: Well, what you need to do is put in place the market-based mechanisms which will ensure that the best, least cost way of reducing our emissions comes through. That’s why Labor has a plan. Labor’s plan is to ratify the Kyoto protocol, to be part of that global effort, to have a price on carbon through a national emissions trading scheme, to significantly increase the mandatory renewable energy target beyond its pathetic two per cent at the moment. So these one-off projects are worthwhile, but they won’t be sustainable and they won’t be multiplied or commercialised on a big scale that’s necessary unless you have those mechanisms in place.

TONY JONES: Okay. We’ll come to the detail of carbon trading and pricing and all of those things in a moment, but could the technology be there to make base-generated power from solar energy, in other words, could all houses, households in Australia, like the 45,000 they’re hoping to power up with this solar power station, be powered in the future by solar power?

ANTHONY ALBANESE: I think what we need is not just one solution. Certainly, one of the things that it indicates is in the same breath last night, I heard the minister speak about how we can’t actually put in place these bigger mechanisms because the technology isn’t there yet. At the same time of course this project is evidence that the technology is there. There is a solar thermal project opening this month in Spain, powered by innovation. In Australia, it’s unfortunate we’ve lost. We’ve been very good at innovation. What we haven’t been good at is commercialising those opportunities. So certainly solar thermal and base load capacity is an option. You also have the Ladelle power station in the Hunter Valley. There are a number of examples where we have in practice solar projects, along with other renewables. I do think also we need to look at clean coal technology. I don’t think that’s certainly not going to disappear overnight. What we need to do is invest in all these new technologies, but set up the framework so that the least cost method of reducing our emissions comes through.

TONY JONES: I’m trying to get a sense here as to whether it is technically feasible to actually power Australian households solely with one source, the source that’s most abundantly available in Australia, that is, solar power, which is totally clean, has no emissions at all, you don’t have to pump CO2 into the ground, you don’t need coal at all?

ANTHONY ALBANESE: It is totally clean, but is it likely that in the foreseeable future that will be the sole solution? No, it’s not. We’re going to need a suite of technologies, including other forms of renewable energy as well. Wind, tidal energy, geothermal, and also, whilst working to make sure that our coal is actually made clean and that we move towards emissions free technology there as well.

TONY JONES: Do you need a plan, though, and will you need a plan as you go into the next election, will you be able to say to the Australian people, "These are the series of technologies we will put in place. We’re going to build this many plants or cause to be built this many plants through infrastructure spending, through grants and subsidies, and we can actually give you a kind of guarantee for the future as to where power is going to come from."

ANTHONY ALBANESE: I think you’re getting it the wrong way round. What Labor has a plan for is to establish the mechanism so that that comes through. If you establish a national emissions trading scheme which has a price on carbon, what you’ll see emerge is the least cost way of reducing our emissions. You’ll see an expansion of renewable energy. At the moment we have massive constraints. I mean, Australia is the only country on the planet where renewable energy projects are actually closing. We saw the minister block the Bald Hills wind farm in Victoria. We saw just in August, the renewable manufacturing plant in northern Tasmania close. We saw the Roaring 40s company, because of the failure to increase the renewable energy target in the last budget, not proceed with $550 million worth of projects in Tasmania and South Australia. And we saw the Environment Minister last week, up in China, opening a project, but it was a project totally funded through the clean development mechanism of the Kyoto protocol. That was a project 51 per cent owned by China, and therefore was eligible for those carbon credits through those economic incentives. Unless we actually have economic incentives, you won’t get the deployment of that new technology and to suggest otherwise is just a triumph of hope over experience.

TONY JONES: The flip side of economic incentives is economic disincentives. In other words, you do have to penalise those who pump CO2 into the atmosphere in some way. Is that not true?

ANTHONY ALBANESE: Well, you do have to price carbon. That’s right. But an effective national emissions trading scheme will do that, and let’s have the market work it out. You have an extraordinary position, really, whereby the government is saying "We’ll pick winners." It’s all about politics, not about good policy. So you have funds established, such as the half a billion dollar fund, the low emission technology fund. That was established in June 2004. What do we see? Absolutely nothing for more than two years and then announcements and we’ll see more announcements in the lead up to the election, because the thing that characterises this government isn’t a look to the future, isn’t a plan; it’s all about politics and one-off announcements. Now, you can’t have a command economy solution to climate change. What you need to do is harness the power of the market to achieve the objective that you need. That reduction in emissions.

TONY JONES: The market is calling for, is asking for and individuals within the market at least are asking for a pricing signal. They want to know if they’re making investments into the future, how much it’s going to cost them to pump CO2 into the atmosphere. Can you give them and will Labor be able to give them a direct answer to that question?

ANTHONY ALBANESE: Absolutely. We will establish a national emissions target, a national emissions trading scheme. We will have a long term target. We’ve said we have an objective of a 60 per cent reduction in emissions by the year 2050. Now, that’s the figure that the scientists tell us is necessary if we’re going to avoid dangerous climate change.

TONY JONES: Okay. So what is then the penalty or the tax that’s imposed on those who put CO2 into the atmosphere?

ANTHONY ALBANESE: The way that an emissions trading scheme works is that you have permits to emit, carbon allocated, and then you’re able to trade those permits so that you get the least cost emissions coming through. Yes, it is the case that therefore, you have an economic incentive for a move to a carbon constrained economy and by definition also there you have some disincentives but what you don’t have is this idea that somehow bureaucrats in Canberra can decide this is the solution or the way forward for project A, B and C. We need – if you’re going to actually move the economy forward, what you need is a whole of government approach, and you need to embrace what is the world’s biggest emerging market. I find it extraordinary that members of the government can acknowledge that the carbon trading market will be the biggest market in the world, but we don’t want to be a part of it.

TONY JONES: What you’re saying effectively is that the current price that people are paying for electricity is too low because they’re actually not pricing in the CO2 that goes into the atmosphere. So what’s your estimate under this system for how much electricity prices for an average household would go up?

ANTHONY ALBANESE: Look, what’s clear is that emissions trading will be the least cost way of providing these solutions. Next week, we’re going to see a report from …

TONY JONES: But you did talk about disincentives, so electricity prices will have to go up, won’t they?

ANTHONY ALBANESE: Well, what we’re going to see, and it is that this is the least cost way of reducing emissions. Now, the Stern Report is going to be released next week in the UK and that will be for the first time a very comprehensive analysis of the cost of inaction, and that’s what we need to work out here. If we’re going to move forward the economy, it is far better and what business is saying, the business round table on climate change and other leading businesses are saying "We need certainty in order to provide that investment so that we can move forward."

TONY JONES: Anthony Albanese, we’re out of time. We’ll have to go into this in more detail in the future. Thanks very much for talking to us.

ANTHONY ALBANESE: Good to talk to you, Tony.