In early August, NSW Premier Morris Iemma announced plans to build a new gas-fired baseload power station. He proudly stated that this power station would have lower emissions than the coal-fired alternative.
While Premier Iemma is to be congratulated for finally challenging his treasurer to think beyond coal, his attitude tragically typifies the failure of vision in the mainstream climate debate. Discussions are limited to how to meet soaring electricity demand with lower emissions sources, when the obvious starting point is how to limit our seemingly insatiable demand for energy.
Instead of talking up those slightly less dirty options for new power generation, we need a nation-building, visionary, infrastructure project for energy efficiency: Out with the old, big centralised power stations — in with clean, distributed energy and an empowered community acting to reduce its demand.
If we all got behind the Greens' Energy Efficiency and Access Savings Initiative (EASI) policy that I launched in Sydney last month, we wouldn't need to build an additional power station. Instead of adding greenhouse emissions, albeit less than might otherwise be added, we could already begin reducing emissions. We could start to replace existing polluting power stations with the zero-emissions, renewable energy alternatives like solar thermal, wind and bioenergy.
Most people don't realise, maybe because it's not seen as a sexy topic, that energy efficiency is the fastest and cheapest way to reduce greenhouse emissions. This is true everywhere, but particularly in Australia, where our inefficient use of energy, combined with the fact that our electricity is generated mostly from coal, guarantees our economy is extremely greenhouse intensive at present. The positive upshot of this sad fact is that every gain in efficiency gives us a larger cut in emissions than almost any other OECD country.
Very significant energy efficiency gains can be achieved across every sector of the economy. In the largest industries, the potential is tremendous. The 250 largest companies in Australia use 60% of our energy. These companies are already required to conduct energy audits, but the Senate has repeatedly rejected Greens' attempts to require these companies to implement the results of those audits.
Improvements in lighting, heating and cooling of commercial buildings also provide a great opportunity. Various state governments already require new homes and renovations to meet strict efficiency guidelines.
But there is a gaping hole — our 7.4 million existing homes, most of which are terribly inefficient, without basic insulation, shading, or efficient lighting and water heating. Certainly, there are a few small, ad-hoc subsidy schemes for solar water heating, but nothing comprehensive to upgrade our existing housing stock to a reasonable standard.
Upgrading the energy efficiency of existing homes is a central public policy challenge and people want to do it, but when asked, they say the reason they haven't installed a solar hot water heater or insulation, is because the cost is too high. This is market failure. It is due to several important barriers to action — the large upfront costs of major efficiency upgrades; the lack of information in the community; and the low priority that energy issues have for most householders.
The Greens' EASI policy would plug the public policy gap and leap the barriers to action by making it easy for householders to save money and the environment without investing their own time and money.
EASI would organise a free energy audit for every household. The auditor would advise householders of all efficiency opportunities with a payback period of 10 years or less. Accredited bodies would then organise and pay the upfront costs of implementing cost-effective opportunities.
Householders would then repay the cost on the home's energy bills over a 10-year period. Repayments will be less than the savings on energy bills so that no householders will be "out of pocket".
EASI is also designed to be cost-neutral to the government, excluding administrative costs. The infrastructure investment will be recouped over a decade, shifting today's surpluses to tomorrow.
EASI would also deliver considerable benefits to the economy as a whole, saving over $3.2 billion a year in household energy expenditure, increasing employment and economic activity in the efficiency sector, and deferring investment in new energy generation capacity.
If fully implemented, EASI would reduce greenhouse emissions by close to 30 million tonnes each year, achieving almost 10% of the emissions reductions required by the Greens' target to reduce emissions to 30% below 1990 levels by 2020.
This is a win-win-win for the climate, for the economy and for Australian householders.
[Senator Christine Milne is the Australian Greens' climate change spokesperson.]