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Inquiry Into Sustainable Cities 2025

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Inquiry Into Sustainable Cities 2025 Australian Business Council for Sustainable Energy Inquiry into Sustainable Cities 2025 Submission to the House of Representatives Standing Committee on Environment and Heritage November 2003 Australian Business Council for Sustainable Energy Suite 304, 3rd Floor 60 Leicester St Carlton Victoria 3053 Tel. +61 3 9349 3077 Fax. +61 3 9349 3049 Email: [email protected] www.bcse.org.au Page 1 Introduction The Australian Business Council for Sustainable Energy (BCSE) welcomes the opportunity to make a submission to the House of Representatives’ Standing Committee on Environment and Heritage Inquiry into Sustainable Cities 2025. The BCSE has endeavoured to provide an effective, considered submission that benefits from ongoing BCSE engagement with the Australian sustainable energy industry in addition to leading research and analysis in this field. As such, this submission focuses on the sustainable energy industry, which is defined below. The sustainable energy industry is critical in the context of developing sustainable cities in greenhouse terms by 2025. Sustainability in this submission refers to the stabilisation and eventual reduction of greenhouse gas emissions in order to avoid detrimental change in climate. Great potential exists in Australia to meet sustainability in the energy sector. Provided with the correct policy framework, the sustainable energy industry is poised to meet customers’ energy needs in a manner that reduces greenhouse emissions while simultaneously increasing economic activity, jobs and investment. The BCSE asserts that from 2006 all new commercial buildings and all Government office buildings should have zero net greenhouse emissions. Household greenhouse emissions from energy use should be limited to one tonne per person (nearly a one-third reduction). Industry should be required to report on energy use and meet economic energy efficient and sustainable generation measures. These goals are currently achievable and already in practice by some leading organisations. The correct policy framework to achieve these goals relies on an effective mix of policies, which are detailed in this submission. Fundamentally, however, the policy framework rests on three premises. Firstly, minimum energy performance standards must be mandated in order to achieve acceptable levels of sustainability. Secondly, market based measures that provide investment signals for renewables and greenhouse abatement must be implemented in order to efficiently allocate resources. Finally, industry support measures need to be introduced that address impediments and support continued innovation and cost reductions. Sustainable cities in 2025 should be characterised by the efficient use of energy and would have renewable energy systems incorporated as part of the urban infrastructure. About the BCSE The Australian Business Council for Sustainable Energy (BCSE) is the peak industry association representing the sustainable energy industry. The BCSE was formed in September 2002 through the merger of the Australian EcoGeneration Association (AEA) and the Sustainable Energy Industry Association (SEIA). The BCSE represents the broader sustainable energy industry covering renewables, waste-to-energy and gas-fired generation as well as energy efficiency. The BCSE has more than 250 organisations as members ranging from installers and designers of renewable energy systems to large project developers and equipment manufacturers and including both energy retailers and energy service providers. See Attachment 1 for details about the sustainable energy industry in Australia. Page 2 Summary of policy recommendations The BCSE recommends the following policy initiatives and measures to support the development of sustainable cities by 2025: 1. Ratify the Kyoto Protocol and participate in the development of an effective international emissions trading scheme. 2. In the transition to emissions trading, implement a mandated greenhouse emission intensity requirement on electricity retailers so that the greenhouse emission intensity of electricity sold progressively reduces. 3. Expand the Mandated Renewable Energy Target (MRET) to a real 10 per cent by 2020 in an extended scheme and support the development of a renewable energy industry that can deliver longer-term cost effective emission reductions. 4. Implement a nationally mandated zero building energy emissions standard for all new commercial buildings and all government buildings from 2006. 5. Initially require that existing residential buildings be rated for their energy performance prior to resale. For rental properties, the building’s energy performance to be disclosed in new leases. Progressively introduce a limit on household emissions from energy use of one tonne per person. 6. Require industry to report on energy use and greenhouse emissions and progressively move to best practice energy performance with Government to provide industry support through best practice programs. 7. Develop electricity market arrangements that deliver a level playing field for sustainable energy through a move to more cost reflective pricing. Address electricity industry impediments to the implementation of sustainable energy options. This includes standard connection and lowest cost metering options for sustainable generation. 8. Provide financial and regulatory support for the development of an energy services industry including the establishment of cogeneration and energy efficiency targets and the establishment of an energy services action agenda. This should also include the implementation of a public benefit fund that enables distributed energy options to effectively compete with conventional energy supply options. 9. Provide an appropriate method for deeming Renewable Energy Certificates (RECs) for solar photovoltaic (PV) systems within MRET. 10. Implement a mandated minimum five star ABGR energy and greenhouse performance standard for all buildings, including renovations, by 2010. Ratings to reward renewable generation such as PV systems and solar water heating. 11. Expand funding support for research, development, demonstration and commercialisation of greenhouse abatement technologies. Page 3 2. Ensure equitable access to and efficient use of energy, including renewable energy sources. The sustainability imperative Increasing levels of greenhouse gas emissions from human activity is an important global issue, as recognised by the Australian Government’s acceptance of the United Nations Framework Convention on Climate Change (UNFCCC). The Minister for the environment, Dr David Kemp, has expressed the requirement for a global reduction in greenhouse emissions of between 50 and 60 per cent by the end of this century1. To meet this requirement, it is crucial that the development of Australia’s cities results in a declining greenhouse emission intensity. Thus the contemporary ‘green agenda’ challenge for cities is to avoid adverse global environmental impacts from greenhouse gas emissions. This challenge must be an important concern for the Committee, who are in a key position to contribute to the development of appropriate policy response. The contribution would also provide a just response to heightened community concern over climate change. Australia has historically enjoyed a competitive energy cost advantage which has been underpinned by access to abundant reserves of coal. Coal, which has high greenhouse emission intensity, currently provides a fuel for over 80 per cent of our electricity generation and electricity consumption is projected to grow by over 2 per cent per year2. The largest source of greenhouse gas emissions in Australia is energy supply. The 2001 National Greenhouse Gas Inventory, released in September 2003, cites that stationary energy sector emissions in 2001 totaled 260 Mt, 48 per cent of net national emissions. Electricity generation emissions alone, which account for 35 per cent of total emissions, have increased by 52.3 Mt (40.5 per cent) from 1990 to 2001. This highlights the requirement that the emission intensity of electricity supply must be reduced significantly. Australia has access to world-class sustainable resources that can continue to support its relative energy cost advantage in a carbon-constrained world. The building sector (including commercial, residential, government and educational buildings) and the industrial sector each have potential for increased energy performance by means of improved energy efficiency and low-emission intensive generation. In particular, residential and commercial buildings account for significant energy consumption and their numbers are rapidly growing each year. According to the United States Department of Energy’s Centre for Sustainable Development, buildings consume 40 per cent of the world’s total energy. 2.1 How might we implement a shift from the existing large-scale energy generation and distribution infrastructure towards an alternative model? A positive shift in the configuration of energy supply is a critical step in the reduction of greenhouse gas emissions. This will require a transfer from the current scenario of centralised generation and high-emissions to an alternative model that incorporates low emission distributed generation and high energy performance (energy efficiency). Actions required for the implementation of this model and to achieve the targets set out the 1 In an address to the House of Representatives on 20 August 2002 2 National Electricity Market Management Company (NEMMCO), 2003, ‘Statement of Opportunities’
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