Page 3228 - Week 11 - Tuesday, 13 November 2007
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At the rate I am proposing today, we would not hit this point until 2013, by which time, I hope, we will instead be using an improved national scheme. We could have a separate debate about how a national scheme should be set up. There are certainly a few key issues about how the permits would be allocated and priced that we, the ACT, should ensure we have a say in.
As well as low benchmarks, under the scheme we are discussing today, if electricity producers make emissions savings, they are allowed to roll them over as credits for the next year. So, instead of real reductions in emissions, they are allowed to pollute more the next year to make up for the savings. If this scheme is to continue, it should at least have the benchmarks reduced so that it is meaningful, have caps added to give it some teeth, and the option of rolling over any “savings” should be withdrawn.
This scheme should go hand in hand with increasing targets for mandatory renewable energy use. As a priority, we need better energy efficiency programs. As we all know it is cheaper, easier and more effective to use less energy in the first place. There are still many opportunities here for ActewAGL and other electricity providers to be entrepreneurial and offer ACT residents more sustainable options than are currently available.
Members may be interested to hear about the work of the Centre for Energy and Environmental Markets at the University of New South Wales. The centre has done extensive research into various energy efficiency schemes and detailed analysis of the NSW-ACT scheme over a number of compliance periods. In combination with the problems I mentioned earlier, they found that, despite abatement benchmarks being met, actual emissions have risen. Additionality from this scheme—that is whether change would have occurred anyway without the scheme—could be quite low, especially given the federal government’s weak, up until now, mandatory renewable energy target.
The abatement certificate database lacks reporting transparency, including uncertainty about the method used to create the certificates, how baselines were calculated, and how compliance was achieved. There is evidence of market concentration in just a few types of projects. Waste, coal mine gas, landfill gas and natural gas-fired plants make up the majority of certificates. This scheme has not help progress new types of more sustainable alternative energy sources. The scheme’s performance against the effectiveness criteria, which has to be measured in terms of reducing emissions, efficiency—equivalent to cost in the economic world—and equity is insufficient for the likely abatement task out to 2020. It is economically inefficient due to the low target, high auditing costs and regulatory overheads.
Placing a price on greenhouse emissions is an important function of any emissions trading scheme and is necessary for the capacity building within industry and government required for the transition to a less carbon-intensive economy. Unfortunately, the GGAS instead places a price on abatement certificates, which represent the absence of imputed emissions with respect to a projected baseline.
It is even possible, Mr Speaker, that the GGAS could delay meaningful action, not only due to the perception that emissions are being reduced—a false perception—but
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