Time for a grown-up carbon strategy

Monday, 21 February, 2011


Total Environment Centre has called on government to embrace energy efficiency along with a carbon price, in response to an analysis of federal government climate change programs, which was published in The Sydney Morning Herald on 16 February.

“Recently we have seen calls by business and the energy industry to drop efficiency programs if a carbon price comes in,” said Jeff Angel, Executive Director of Total Environment Centre.

“If this were to occur, consumers would be robbed of financial savings and climate change programs would be all the poorer.”

Angel noted that the Herald’s report only told half the story, pointing out that energy efficiency makes money rather than costs: “Energy efficiency costs ‘less than one dollar a tonne’, and that’s before you even factor in the benefits of avoided climate change.”

The high net savings of energy efficiency was identified by ClimateWorks Australia in its Low Carbon Growth Plan:

*Other industries include cement, chemicals, petroleum and gas, food, beverage and tobacco, and pulp, paper and print.

These savings were incorporated in the Report of the Prime Minister’s Task Force on Energy Efficiency. The Task Force confirmed the cost-effectiveness of energy efficiency, and identified that the myriad of programs spread out over multiple state and federal government departments were insufficient and needed an overall strategy to be truly effective.

“The Prime Minister’s Task Force on Energy Efficiency has offered sound solutions, such as establishing a National Energy Savings Initiative,” said Angel. “This initiative was shown by the task force to save $12 billion on infrastructure and lower power prices, saving households $87 to $180 a year in 2020.

“TEC urges the federal government to implement the recommendations of the Report of the Prime Minister’s Task Force on Energy Efficiency. The programs recommended complement a carbon price and work towards the goal of tackling climate change at least cost to the economy, the environment and society.”

There are indications, however, that these complementary programs may be phased out once a ‘mature’ carbon price has been established.

“TEC advises federal and state governments not to phase out effective complementary programs, because a carbon price by itself will not be enough to ensure the economically efficient reduction of greenhouse gas emissions.

“The belief that all that is needed to tackle climate change is a carbon price is lazy policy which betrays an incomplete understanding of economics. Complementary mechanisms such as a Mandatory Renewable Energy Target and a National Energy Savings Initiative are necessary to address market failures, which a carbon price cannot solve, and undo some of the damage caused by any compensation payments to big polluters.

“All these programs must be used in unison to ensure that the mitigation of greenhouse gas emissions is economically, environmentally and socially efficient,” said Angel.

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