By Tracy Sorensen
There is evidence that many clean and efficient energy investments would reduce energy costs now, but are not being implemented, says Greenpeace. This is because the energy "playing field" is steeply angled against clean and efficient energy. Structural, policy and price reforms are necessary to allow Australia to meet its emissions reduction target.
While such reforms might eventually cause job losses in some areas, investment in clean and efficient technology would actually generate jobs in others. According to atmosphere and energy campaigner Keith Tarlow, energy reforms are not only environmentally necessary, but could bring economic benefits in the long term.
If clean and efficient technologies were developed now, he told Â鶹´«Ã½ Weekly, Australia would be "sitting pretty" for sale of environmental technologies that would be in heavy demand around the world in the future.
Greenpeace defines clean energy as that produced "from sources with low environmental impacts": alternatives to fossil, nuclear and large hydro sources. Examples include solar heating and wind electric generators.
Energy efficiency is defined as providing energy services while reducing the amount and cost of energy used. Examples include the use of insulation in buildings and heat recovery processes in industry.
Institutional barriers
An example of an institutional barrier to energy efficiency is the organisation of electricity supply.
"In most western countries, there are institutions set up to produce, distribute and sell kilowatt hours of electricity", said Tarlow. "Not only are they monopolies, they are basically restricted to selling electricity.
"They can't really go out and say to a customer, 'We think that the most cost-effective way of you getting your hot water or your industrial steam is a solar preheater and a gas booster. You'll get lower bills, and we'll get more profit because we'll get a good return on marketing you this equipment'. They can't do it. That's an institutional barrier to rational energies."
According to Tarlow, such barriers encourage overinvestment in traditional energy supplies relative to clean and efficient energy. Solar energy, for example, is being squeezed out of the Australian market.
In general, the solution to such barriers is to "compare energy efficiency, clean energy and traditional energy investments on an equal basis in every respect".
Specifically on the question of electricity production and sale, a National Utility for Clean and Efficient Energy to compete with the existing utilities.
"This would take the form of a joint venture between the Commonwealth, some of the existing electricity and gas distribution authorities and some energy efficiency, energy management and clean energy businesses.
"This initiative could be combined with a Clean and Efficient Energy Levy to increase the capital base available to the new utility."
Prices
Fossil fuels are underpriced, says Greenpeace, because their price does not reflect the environmental and social costs of producing and using them.
Tarlow pointed out that through history, more and more "externalised" costs of industrial production had been "internalised". Workers' health and safety, for example, are now included in the costs of production through insurance premiums, whereas they once were a private burden on workers.
Environmental costs should be seen in the same light, said Tarlow. The environmental cost of smoke billowing from a factory or electricity plant has been "externalised" by making it someone else's problem. "Or, in the more complex case of greenhouse gases, the costs are borne by future generations." These costs should be reflected in prices, says Tarlow.
Tarlow said that while the recent, much-publicised London Economics study focussed on the costs of acting against carbon dioxide emissions, it was necessary to focus instead on the eventual costs of not acting.
Greenpeace advocates a "revenue neutral" environmental tax on energy (offset by reduced taxes on labour) and the removal of all subsidies to fossil and nuclear fuels (such as favourable tax arrangements for oil exploration and the funding of nuclear research).
Other Greenpeace proposals include encouragement of research and development into non-fossil, non-nuclear energy alternatives; building regulations ensuring energy efficiency; and federal government expenditure on subsidies to firms and households introducing advanced energy efficiency schemes.
Coal
Tarlow insists such reforms would not wreak the economic havoc envisaged by London Economics and the Industry Commission. Concentrating in the short to medium term on energy efficiency would leave much of the existing technology still in use over the next 20 years or so, while reforms were phased in.
But a view to phasing out coal was essential. "With carbon dioxide, there is very little you can do", said Tarlow. "There are really no technologies for removing carbon dioxide. It doesn't matter how cleanly you burn it, whether you gasify it or fluidise it or use all these fancy technologies, basically if you burn a tonne of coal, you arbon dioxide. There's just no way you can burn coal without getting carbon dioxide.
"So in the long run you've got to stop using the stuff. But how quickly that happens depends on what sort of policies you implement."
Tarlow said that by concentrating on energy efficiency, current power stations could "more or less run their economic life". By then (about 20 years hence), "we'll have so much efficiency in place that we can start replacing them on an incremental basis with renewable sources of energy".
An analysis focussing purely on using less-polluting fuels (such as natural gas) rather than striving to achieve the greatest energy efficiency was misdirected, said Tarlow. That would lead to spending "a lot of money getting more power stations which are a bit better but not that much better than coal-fired ones, still emitting lots of carbon dioxide". Instead, capital should be invested in "getting efficiency in the short term and renewable energy in the long term".
Jobs
In the long term, there would be job losses, "but we're talking about after the lifetime of the power stations". The restructuring involved would be "no different to any other form of economic restructuring that we've seen". The shift from agriculture to manufacturing, and from manufacturing to service industries, were examples of the scale involved. A "safety net" would have to be in place for those disadvantaged.
Greenpeace argues that clean and efficient energy production is "more labour intensive yet cost effective" than energy from oil, gas, coal and coal- or gas-fired electricity.
It points to a 1990 study for the Victorian Solar Energy Council which showed that a shift to clean and efficient energy to achieve the proposed 20% reduction in greenhouse emissions by 2005 would increase jobs by up to 7900 by 1995 and 17,300 by 2005 in Victoria alone, depending on the level of equipment imports.
London Economics, the Industry Commission and federal environment minister Ros Kelly have all pointed to the very small contribution Australia makes to total greenhouse emissions (although per capita, the emissions rate is one of the highest in the world). They argue that without simultaneous international action, the Australian economy would be pointlessly disadvantaged by unilateral actions.
But Tarlow argues that by taking unilateral actions — facilitating a shift away from fossil fuels — the Australian economy "might be better off".
"You'd get in first with the newer technologies, the efficient technologies. Australia has an edge in solar, thermal and solar photovoltaic technologies. If we fostered the market here by moving ahead of the world towards lower emissions, we'd be sitting pretty to capture some of that market.
"If we wait, we'll certainly lose that edge to Japan, the US, western Europe and the rising Asian economies. Australian ideas go s not enough market here. If you allow the market to develop here, you might have some chance of cornering international markets later."