Aug 23, 2006

The Energy Debate: Climate Change and Energy Options for Australia

The Energy Debate: Climate Change and Energy Options for Australia

Australian Centre for Science,

Innovation and Society and the Menzies Foundation

University of Melbourne

23 August 2006

Introduction

People used to say: “Everyone talks about the weather, but no one does anything about it”. That’s not true any more.

Humans have become a force of nature. We are changing the climate and affecting the weather.

Earlier this month, the journal Science published two startling pieces of research:

Firstly, that Greenland’s ice sheets are melting three times faster than scientists have previously thought.

Secondly, that Antarctica is failing to lock up increased moisture from climate change, resulting in a more rapid increase in sea levels than scientists have previously thought.

The truth is that governments cannot afford to be frozen in time while the world warms around us.

Almost daily, new scientific reports are shining the light on the shocking reality of climate change.

From the North Pole to the South Pole, and everywhere in between, climate change is unfolding.

We have, as Al Gore has paraphrased Sir Winston Churchill, entered “a period of consequences”.

The critical question is: can we enter a period of real solutions?

This is the great nation building challenge of the 21st Century:

• Avoiding dangerous climate change;

• Preparing our economy for a carbon constrained world;

• Getting our energy mix right;

• Ensuring we are world leaders in seizing the opportunities that this global challenge will bring.

Labor is ready to meet this nation building challenge.

Today, I want to talk a little about the consequences of climate change, but a lot about real solutions.

Consequences of Climate Change

There is much talk from climate change sceptics about alleged costs of responding to climate change. It is clear that the costs of inaction are much, much more.

The consequences of climate change are very real – more severe weather, reduced rainfall, extended droughts with resulting decline in employment and economic growth if left unaddressed.

The Australian Greenhouse Office report Climate Change Risks and Vulnerability suggests climate change is likely to bring:

• An increase in annual national average temperatures of between 0.4 and 2.0 degrees by 2030 and between 1 and 6 degrees by 2070;

• More heatwaves and fewer frosts;

• Possibly more frequent El Nino Southern Oscillation events, resulting in a more pronounced cycle of prolonged drought and heavy rains;

• A further 20% reduction in rainfall in Southwest Australia and up to a 20% reduction in run-off in the Murray Darling Basin by 2030;

• More severe wind speeds in cyclones, associated with storm surges amplified by rising sea levels; and

• An increase in severe weather events – including storms and high bushfire propensity days.

Further proof can be found in the Insurance Council of Australia’s Annual Review 2006:

“During the last 12 months, most States experienced either severe rain and/or windstorms with associated flooding, and extensive property damage.

Apart from Cyclone Larry…hail and heavy rain caused over $100 million in household and commercial damage in Queensland, while a wind storm across South Perth in May, 2005 caused insured losses of $53 million, a record for the state.”

We have, indeed, entered a period of consequences.

Cyclone Larry had a short-term impact on tourism in Far North Queensland, but climate change will deliver a long-term whack to tourism across Australia. Nowhere is this more apparent than the Great Barrier Reef.

Within 25 years, the Great Barrier Reef could be devastated by the regular coral bleaching caused by rising water temperatures.

A 1994 study by the Queensland Tourism Industry Council found the Great Barrier Reef contributed almost half of Queensland’s $11 billion annual income from tourism.

The destruction of the Reef would deliver real economic consequences for Australia. Climate change will deliver real economic consequences for Australia.

Climate change is not just an environmental issue. It is a health issue, a social justice issue, a moral issue. It is the future that we will bequeath our children and grandchildren.

We cannot afford to leave them the consequences of climate change, we must leave them real solutions.

Tragically, the Howard Government has left us unprepared for the dramatic challenges that lie ahead.

There is no national plan to prepare for the impact of climate change and no national plan to cut Australia’s soaring greenhouse pollution.

The Howard Government seems to be interested in neither prevention nor cure.

We desperately need a national climate change adaptation strategy that builds resilience in our tourism industry, our agricultural industry, our water supplies and our energy systems. We need a plan for our future.

We also need to dramatically cut our greenhouse pollution. Labor is committed to cutting Australia’s greenhouse pollution by 60% by 2050, in line with scientists’ estimates of the action that’s required.

That’s a tough ask, but a cricket analogy is useful here.

In one-day cricket, if you’re chasing a big target you need strong batting from the start to avoid having to play wild shots at the end.

If you get to that desperate state where you need ten runs an over to win, you usually lose.

And we simply cannot afford to lose.

That is why we need to enter a period of real solutions.

A Period of Real Solutions

What can Australia do to avoid dangerous climate change? Three things for a start:

1. Dramatically cut Australia’s greenhouse pollution;

2. Ratify the Kyoto Protocol and join the world in a global agreement to cut greenhouse emissions; and

3. Develop a world beating clean energy industry.

Avoiding dangerous climate change is one of Federal Labor’s policy priorities and Kim Beazley is absolutely committed to a long-term plan of action.

That plan of action was outlined in Labor’s comprehensive Climate Change Blueprint, released in March 2006.

Labor is committed to:

• Ratifying the Kyoto Protocol;

• Establishing a national greenhouse emissions trading scheme;

• Substantially increasing the Mandatory Renewable Energy Target; and

• Establishing a climate change trigger under the Environment Protection and Biodiversity Conservation Act.

Getting Australia’s energy mix right is absolutely central to dramatically cutting our soaring greenhouse pollution.

We need a diverse energy mix, a portfolio of flexible energy strategies that include clean coal technology, solar and wind power and research into hydrogen, wave power and geothermal technology. We also need a strong national commitment to energy efficiency.

Our Climate Change Blueprint makes it clear the only environmentally sustainable energy policy for Australia is one which makes the tough decisions to invest in two great transformations:

• transforming the coal industry into a cleaner coal industry; and

• transforming our specialist solar industry into a world beating solar industry as big as coal is today.

I want to particularly focus on the latter transformation today.

Before going into further detail, I want to make it clear that Labor believes market based incentives through emissions trading are an essential component if Australia is to advance in a carbon constrained world.

The notion that there is a choice between new technology and targets with economic mechanisms is false. Everyone supports new technology.

We need the pull of the market, as well as the push of new technology to ensure it is deployed.

Those who argue in abstract for new technology in the absence of economic incentives exhibit a triumph of hope over experience.

Building A World Beating Solar Energy Industry

I strongly believe we can build a world beating solar industry.

In fact, if Australia is to actively engage in a period of solutions, we must establish a world beating solar industry.

The global picture is clear – the sun is shining on solar energy.

Solar photovoltaics have grown by 40% globally over the past five years.

Mark Twidell of BP Solar has stated that sales of solar cells within Asia could grow by 50% within the next decade.

BP expects global solar manufacturing revenue to double by 2008 from almost $500 million in 2005.

According to the International Herald Tribune, Asia is poised to overtake Germany as the solar industry’s main source of growth.

We could, and should, be a part of that massive growth, but the reality in Australia is very different.

Compared to a global growth rate of 40%, solar PV has only grown by 16% in Australia over the past five years.

In June 2007, the sun will set on the popular Photovoltaic Rebate Program (PVRP), which is responsible for more than a quarter of the 25 000 solar panels on rooftops across Australia.

PVRP provides Australians with a direct rebate of up to $4000 for a solar system. The truth is it has always been too popular for its own good, with long waiting lists for people wanting to participate in the scheme.

Instead of a world-beating solar energy industry, we have a beaten solar energy industry.

We could have been the Silicon Valley of solar, but when we needed national leadership we didn’t get it.

Australia once led the world in solar water heater technology but we faltered and failed to commercialise our technologies.

Now we lag behind manufacturers in both China and Europe and account for only a tiny proportion of world production and installations.

Over the last decade, our best technology and our brightest ideas have gone overseas.

Take the solar hot water systems developed at the University of Sydney.

The Chinese saw its commercial potential and grabbed it. It’s now a huge part of China’s solar market. Invented in Australia, made in China. That’s a disgrace.

You see it again with the story of Dr Zhengrong Shi, a dual Chinese-Australian citizen.

Dr Zhengrong Shi debuted at number 4 on this year’s Business Review Weekly, with a wealth estimated at $3 billion.

Zhengrong Shi completed his PhD in solar energy at the University of New South Wales, but his wealth comes from developing solar energy technology in China.

His company, Suntech, is hot property in China but solar power continues to get the cold shoulder in Canberra.

If the last ten years have been a lost opportunity for Australia, what does the next ten years hold?

I think the solar technologies that are currently being developed around the world, and particularly in Australia, have the capacity to drive a period of solutions.

Solar thermal technology being developed by CSIRO and solar sliver technology being developed at the Australian National University are both showing significant potential for addressing base load capacity.

In fact, an unpublished report by the Cooperative Research Centre for Coal in Sustainable Development, obtained by The Canberra Times, suggests solar thermal technology “is poised to play a significant role in baseload generation for Australia” and will be cost competitive with coal within seven years.

The question for John Howard is this – will you build a world beating solar industry or will you allow our solar industry to be beaten by its overseas competitors?

Already, Spain has begun construction of the first large-scale commercial solar thermal plant in Europe. The power plant is designed to generate electricity continuously to the grid when in operation.

We are already falling behind.

Labor will turn this around. We will build a world beating solar industry.

In addition to the major policy initiatives announced in our Climate Change Blueprint, we have announced a number of important practical measures that will provide a real boost to the solar industry.

We will ensure all of Australia’s 10 000 schools are solar schools.

With the right policies in place Australia should aim to deliver on our potential to have at least 1.5 million solar powered homes by 2015 and 2.25 million homes by 2020.

In addition, Kim Beazley’s Innovation Blueprint outlined a series of initiative to: • kick start the next generation of private sector innovation;

• Reform research and development investment arrangements; • Develop the capacity and diversity of our universities; and

• Rebuild Australia’s great research institutions, including the CSIRO. These initiatives will provide a real boost for the development and commercialisation of solar technology.

A Solar Industry or a Nuclear Fantasy

All energy is derived from the sun, which gives off more energy in one second than people have used since the beginning of time.

Will John Howard harness this energy by building a world beating solar industry or will he blinded by his nuclear fantasy?

The answer is that true to character John Howard has an ideological obsession with nuclear power.

He supports uranium enrichment, despite a global push for a moratorium, and he supports nuclear power plants, even though there are no answers to the critical questions of cost, safety, nuclear waste and nuclear proliferation.

Nuclear power will not be a part of the energy mix under a Beazley Labor Government.

We stand for renewables, not reactors.

Nuclear power will not deliver a period of solutions. It will just create more problems for our children and grandchildren.

The economics of nuclear power simply do not stack up.

Of all the energy options, nuclear is the most capital intensive to establish, decommissioning is extremely expensive and the financial burden continues long after the plant is closed.

Britain has estimated it will cost $170 billion to clean up its 20 nuclear sites.

The safety of nuclear power remains a significant problem.

On 6 July 2006, the Industry Minister, Ian Macfarlane, visited the ageing Torness nuclear reactor in Scotland.

The same day, the Guardian newspaper reported the reactor has cracks in the graphite bricks in its core. According to confidential documents obtained by The Guardian:

“the company does not know the extent of the damage to the reactor cores, cannot monitor their deterioration and does not fully understand why cracking has occurred”.

If Ian Macfarlane had gone further north in Scotland, he could have visited the Dounreay nuclear plant, which has recently incurred a £2 million penalty after a radioactive spillage during decommissioning work.

Nuclear Not the Answer to Climate Change

Nuclear energy is not a solution to climate change.

Think of this – if we doubled the global use of nuclear energy we would use all known reserves of high grade uranium in 25 years.

In the process, we would achieve global emissions reductions of only 5% compared with the 60% reduction that is needed to avoid dangerous climate change.

Even if the Howard Government decided to build nuclear reactors today, it’s unlikely they would be operational for another two decades. That’s hardly urgent action.

Nuclear power is not saving us from climate change, it’s in trouble because of climate change.

According to the Christian Science Monitor, Europe’s extended heat wave in July this year aggravated drought conditions, lowering water levels in the lakes and rivers that many nuclear plants depend on to cool their reactors.

As a result, utility companies in France, Spain, and Germany were forced to take some plants offline and reduce operations at others. Across Western Europe, nuclear reactors also had to secure exemptions from regulations in order to discharge overheated water into the environment.

Sweden shut four of its 10 nuclear reactors after a short-circuit cut power at one plant on July 26, raising fears of a dangerous design flaw.

One week later, Czech utility officials shut down one of the country’s six nuclear reactors because of what they described as a serious mechanical problem that led to the leak of radioactive water.

Why on earth would we want to get ourselves involved in this mess when we have a ready made power source hovering peacefully in the sky every day?

Nuclear power brings its own consequences, and it is certainly not a solution to climate change.

Conclusion

Dangerous climate change is the ultimate intergenerational issue.

We have entered a period in which the consequences of human activity have changed the climate. This has profound implications for our children and grandchildren.

But dangerous climate change can still be avoided. For the sake of our children and grandchildren, we must deliver real solutions.

That must be at the core of our national agenda to help Australia contribute to meeting the global challenge of climate change.