The Clean Industrial Revolution

Last night, the parliamentary secretary for climate change, Greg Combet MP launched the book at parliament house in Canberra.  Many thanks to Greg and his office for this! Here is a copy of his speech that was released last night by his office.

THE HON GREG COMBET AM MP

Parliamentary Secretary for Climate Change

Committee Room 1R1 – Parliament House

CHECK AGAINST DELIVERY

Good evening and thank you for the invitation to speak at the launch of this new book: The Clean Industrial Revolution: Growing Australia’s Prosperity in a Greenhouse Age.

Firstly, I would like to congratulate Ben McNeil for what is a great read – he makes understanding climate change so accessible: both the science of climate change and the solutions for reducing emissions and moving to a low carbon future.

The book has a strong resonance with me as its themes cover many of my portfolio duties. Beyond assisting the Minister with the CPRS and having direct responsibility for treatment of the coal and waste sectors, I also have principal responsibility for adaptation and developing a whole of government approach to green jobs.

On adaptation I was interested in reading the section on ‘Sea Levels, Storms and Premiums’ that highlighted the cost of climate change. I was very interested in it highlighting the $3 billion cost of the 2007 Newcastle storms. As I represent an electorate in this region I can attest to the severity of this storm. The book also highlighted how minor changes in sea level can cause the most drastic of results. Ben discussed Cyclone Nargis and the resulting storm surge which reached 4 kilometres inland, killing 100,000 people. The author argued that if not for a 20cm sea level rise, the storm surge would only have reached 2 kilometres inland, resulting in significantly fewer deaths. The science shows that climate change, left unchecked, will lead to more and severer storm events.

Beyond discussing the cost of climate change, Ben’s book provides different and important ways to look at opportunities to address climate change.  Ben asks us to nominate the person we think did the most to bring climate change to world attention.  A number of names sprang to my mind: Al Gore, Ross Garnaut and Sir Nicholas Stern.  But I don’t think anyone would have nominated King Faisal of Saudi Arabia who died in 1975 – well before scientists even identified the possibility of human induced climate change.

But as Ben points out, King Faisal – a key player in the oil price shock of 1973 – showed  how economies can, and do, adapt and adjust to take account of changed realities.  He forced economies – at least for some time – to decouple economic growth from oil use.  He demonstrated that we could grow and use less energy.  Of course, King Faisal provided no warning of his intention to nearly double the price of oil overnight.  And because of the suddenness of this oil price shock, the short term economic pain of higher energy prices was much higher then was necessary.

By contrast, if King Faisal had managed this transition properly; if he had warned the world community of his intention to double the global price of oil over 30 or 40 years giving people time to adjust to the price increase; if he had capped the price increase to, say, $10 for the first year, if he had worked with the global community to ease the adjustment, I am confident that the same increase in oil prices could have occurred with relatively little disruption to the world economy.

The same energy efficiency gains could have occurred, the same decoupling of energy use and economic growth would have continued.

The Government is determined to manage the transition to a low carbon future properly.  The centre piece of our climate policy is the Carbon Pollution Reduction Scheme (CPRS) – a cap and trade emission trading scheme.

The Government has an integrated approach to reducing carbon pollution: putting a price on carbon through the CPRS, promoting investment in renewable energy through the expanded Renewable Energy Target, driving the uptake of cost-effective energy efficiency measures through a range of programs, and supporting research and development for low-carbon pollution technologies.

In keeping with the Saudi Arabian theme, Ben has a whole chapter on Australia Becoming the New Saudi Arabia highlighting the importance and opportunities afforded by the renewable and low carbon technologies of tomorrow.  Ben is right;  we must implement policies which drive technological improvements  –  including in the energy sector.  The Government is already well advanced on this score.

While we are delaying the CPRS by a year to allow business to adjust to the difficult global environment, we are expanding our Renewable Energy Target to 20 per cent; this is the equivalent of all Australian household electricity consumption coming from renewable sources by 2020.  The RET will drive billions of dollars of renewable energy investment in the period to 2020, accelerating the deployment of a broad range of renewable energy technologies.  And over the longer term, the CPRS combined with the RET should continue the exponential increase of the non hydro renewable sector – by up to 30 times its current size by 2050 according to Treasury modelling.

But such measures are on their own unlikely to be enough.  Given the size and scale of energy related R&D that is necessary, there is an important role for government in facilitating and catalysing R&D.  In this year’s Budget, the Government committed $4.5 billion to Clean Energy Initiatives to support R& D and development projects of low emission energy technologies.  This includes the Solar Flagships program which will aim to create an additional 1,000 MW of solar generation capacity.  This ambitious target is three times the size of the largest solar energy project currently operating anywhere in the world.

The Budget also established Renewables Australia to promote the development, commercialisation and deployment of renewable technologies, and provided further funding for the Cooperative Research Centre for Greenhouse Gas Technologies.

But the Government is not putting all its eggs in the renewables basket.  Coal currently provides around 40 per cent of global and 80 per cent of Australia’s electricity generation. Many countries, particularly major developing countries such as China and India, use coal as a substantial and growing portion of their energy supply. The world needs to find an answer on low emissions technology for coal, which is why Australia is putting so much effort, internationally and domestically, into programs to develop these technologies.

The Government will invest $2.4 billion in low emissions coal technologies including new funding for industrial-scale carbon capture and storage projects under the Carbon Capture and Storage Flagships program. The development and demonstration of industrial-scale CCS power stations will accelerate the commercialisation of these critical technologies, and underpin a transition to a low-carbon pollution economy.

Looking beyond stationary energy, Ben’s book also highlights the importance of the transport sector – including the importance of hybrid and other low emission cars.  It is not about government mandating action; but the CPRS changing the incentive structure for households and business.  But again, to complement the CPRS where there are major non-price barriers, last year the Government allocated $1.3 billion for the Green Car Innovation Fund to provide assistance, on a co-investment basis to develop and manufacture low-emission, fuel-efficient cars and components in Australia over the next ten years.

Ben ends his book talking about the job creation potential of the move to a low carbon economy.  In Australia, the public discussion of the employment dimensions of climate policy is overwhelmingly focused on short run risks and negative impacts, particularly the risk of job losses in the early phase of the transition to a low pollution economy.  Yes, there are downside risks.  All structural change involves adjustment; and the move to a low carbon future is one of the most profound and significant changes we are being required to make since the industrial revolution.

But, there is also significant upside job creation potential.  This point is made by study after study:  new low pollution jobs will be created in new industries and established industries alike; they will be in semi-skilled, skilled and professional occupations and will be spread throughout Australia.  And these studies suggest that these low pollution jobs have relatively high local content, tend to be more labour intensive then traditional high carbon jobs and are difficult to outsource.

Overall, the Federal Government has allocated over $14 billion of funding to programs that will increase the demand for green jobs. Over $3 billion has been allocated to programs that will help develop and increase demand in renewable energy. In addition, Government has allocated over $6 billion in existing funding to drive energy efficiency.

The Rudd Government is also helping business to develop low carbon transport and energy products through funding of $3.7 billion. All these measures will help grow low pollution jobs.

Some people regard Green Jobs as illusory, but they are real. As Van Jones, President Obama’s Green Jobs Adviser recently said:

“Sometimes people think we’re talking about some exotic occupation from Mars that nobody’s ever heard of.  That we’re talking about George Jetson or Buck Rogers when we’re thinking about green jobs.  We’re not talking about solar ray-guns; we’re talking about caulking guns as one of the major tools we’re going to need to be smarter with energy. Those are jobs our existing work force, with a little training, can start doing right away.

And I would add, this is just the beginning of the journey; progressively the activities that add value in the Australian economy will be those that provide similar goods and services to what we produce today but the production processes will be “greened” so that they produce less pollution.  And the people working in those activities will be doing green jobs.

As I was reading Ben’s book I was struck by the fact that it doesn’t focus on the science of climate change.  The question of whether climate change is real has been answered. The overwhelming view now is that the risks posed by climate change require a substantive response; and that to delay action would involve unacceptable risks.

With this starting point, Ben’s book shows how we can address these challenges; it shows that we have the ability, the ingenuity and the drive to address these challenges.

The back cover quotes Professor Peter Doherty as saying “Humanity’s greatest challenge is to minimise the consequences of climate change.  With challenge comes opportunity.  This book is about opportunity.”  I would like to echo these sentiments and again congratulate Ben on a great and worthwhile contribution in his book.