Canberra Times
05/06/2007 Page: 11
A building in Bruce that has cut its C02 emissions by 75 per cent shows what can be done if there's the will.
LET ME get this right. Our Prime Minister now applauds the idea of a long-term goal to help its cut greenhouse gas emissions. He just doesn't like any of the goals he has heard of. They are all apparently too big. Labor wants a 60 per cent cut by 2050. Sir Nicholas Stern wants 0 to 90 per cent. Labor's Peter Garrett once wanted 20 per cent, but by 2020. It's the 20 per cent cut that worries John Howard the most. Apparently it would bring on a recession because 2020 is too soon. I'm not so sure.
There's a building in Bruce that has cut its CO2 emissions by 75 per cent. It took about a year to fit out. The headquarters of Australian Ethical Investment in the Fern Hill Technology Park looks pretty much the same as its neighbouring corporate headquarters. The strata rules don't allow it to look different. But when I visited at the end of summer it sounded different. The block next door had the air-conditioner churning. Australian Ethical's airconditioner was off and silent, yet inside everything was cool.
The trick was insulation 7.5cm thick, on the outside of the bricks rather than the inside, and an automated system for sucking out heat at night. The building waits until a Canberra summer night is at its coldest and then opens louvres and turns on a fan that sticks out all of the hot air, replaces it with cold air, and shuts the louvres again.
My tour guide, a director of the firm, Howard Pender, told me that the most surprising thing about the fit-out was that all of the emission saving technology was established. If it were possible for Australian ethical to cuts its emissions by 75 per cent, it should be possible for every office block in Canberra to do the same.
Australian Ethical spent $2.3 million on the building and another $1.7 million on the fit out. It has slashed its energy and water costs, its staff are happier because the building is pleasant to work in (nearly all of the light was natural the day I was there) and it has hugely increased the building's value. Now what was that about a cut in greenhouse gas emissions bringing on a recession?
Queensland is planning to cut emissions faster than Garrett ever proposed. When I last looked it still had its AAA credit rating. The Queensland proposal highlights one of what to me are the two weaknesses in the otherwise excellent report on emissions trading adopted by the Prime Minister on Sunday.
The state plans to reach its target using not only emissions trading (beloved of economists) but also by less fashionable regulation. All new commercial buildings in Queensland will be required to reach a four star energy efficiency rating by 2010, from March all new houses approved have been required to install greenhouse friendly hot wall systems and after 2O1O, when an existing electric hot water system dies, it will have to be replaced by a gas or greenhouse friendly alternative. And so on.
What alarms me about the report endorsed by the Prime Minister is that it suggests that Australia's existing Mandatory Renewable Energy Target abolished upon the introduction of emissions trading. Apparently by mandating that a certain proportion of' electricity sourced from renewable sources if is attempting to "pick winners''.
There is no doubt that the Mandatory Renewable Energy Target Scheme was successful until the Government wound back its scope. The Industry Minister Ian Macfarlane, is reported to have told a meeting of fossil fuel executives in 2001 that it had worked too well. But economists aren't as much impressed by success as they are by Process. Rules requiring that a certain proportion of a retailers' energy be renewable are apparently a costly means of achieving greenhouse gas reductions. Even worse, the cost of the rules was "hidden in the electricity market, where consumers are forced to cross-subsidise renewable energy generators".
The economists from the Treasury who presumably put this sort of language in the report didn't seem too worried that they were hiding costs when they set up the GST. The whole idea of our goods and services tax was that it would be invisible. It is even illegal for retailers to display pre-GST prices on their counters. The GST was introduced this way because it would work. The Mandatory Renewable Energy Targets Scheme has worked as well.
The chief point I took away from Sir Nicholas Stern's address to the National Press Club in March was that the British economist and author of the Stern report on climate change wasn't too hung up on using only economically pure means to fix things up. As he talked of what would happen if the world got a lot hotter I imagined a human being clinging on to the edge of a cliff by her fingers. Even if she were an economist she would not want to rely on only economically pure tools to scamper back up - she would want to use every tool at her disposal. (And she probably wouldn't want to wait until 2012 as the Prime Minister proposed on Sunday.)
To me there is one other regrettable weakness in the landmark report presented to the Prime Minister on Thursday. The report is upfront about acknowledging who will be hurt most by the system it is proposing. The biggest victims will not be Australia's power companies; they will be able to pass on their increased costs. In the words of the report: "Regardless of how permits are allocated, much of the cost from imposing a constraint on emissions will ultimately be borne by Australian households.''
Australia's least-well off households will bear the biggest brunt. Unable to afford the sort of energy-saving measures that I saw in the office building at Bruce, their electricity bills may double. Yet the Prime Minister's taskforce advises that "the household sector should not be shielded from the price changes arising from a decision to impose a carbon constraint on the economy- this would act counter to price based incentives to change consumer behaviour".
The only compensation it suggests is that the Government ''may wish to consider helping households to constrain costs through better management of their consumption of carbon-intensive products''. An education campaign is no substitute for cash. Australia's least well off didn't cause climate change. They should not be the most heavily punished by our totally understandable attempt to ward it off.
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