Background information to LEAN's TREND campaign on climate change

Reinforcing NSW Leadership on Climate Change

The Science

Catastrophic Climate Change looms as one of the biggest threats to Australia's future prosperity and security.

Over 1000 of the world's leading climate scientists, through the United Nations Intergovernmental Panel on Climate Change (IPCC), have concluded that climate change is occurring. The world's average temperature has increased by about 0.6 degrees Celsius in the last 100 years. In 2001, the IPCC warned that unless greenhouse gas emissions are controlled, global average temperatures will increase by up to 6°C by 2100 (IPCC: Houghton et al, 2001).

Among numerous recent predictions, key climate scientists have warned that:

ß The underlying rate of global warming may be much faster than previously thought (due in part to the offsetting effects of "global dimming" caused by industrial pollution).

ß Greenhouse gas pollution is expected to increase the frequency and intensity of tropical storms (like Cyclone Larry in North Queensland). For example, water temperatures in the Gulf of Mexico, rose by three degrees last year in the prelude to Hurricane Katrina in New Orleans (Emanuel, 2005).

ß Warmer sea temperatures could dramatically reduce the oceans' biodiversity. For example, due to ocean warming, the Great Barrier Reef is expected to undergo regular devastating "coral bleaching" events such as those in 2002 within the next two decades (Hughes et al., 2003). The oceans are also becoming more acidic due to carbon dioxide pollution (The Royal Society, 2005).

ß Climate change will mean greater frequency and severity of drought in southern Australia (including NSW), increasing the risk of bushfire, water shortages and agricultural disruption.

ß Melting of the Greenland and Antarctic ice shelves could lead to an unstoppable rise in sea level of several metres with massive damage to coastal towns, cites and natural environments, while creating millions of climate refugees. For example, the Greenland ice-sheet is melting rapidly and seasonal Arctic sea-ice has already halved in size and may disappear by 2050 (Overpeck et al, 2006).

ß Permafrost (frozen earth) in Siberia is starting to thaw, which will speed up global warming (Shakova et al, 2005).

NSW has started to respond but more action is needed

The NSW Government has led the nation, and in some cases the world, in responding to the threat of Climate Change. In doing so, the Government has positioned NSW to develop new technologies and skills for export as the market for clean technologies expands- creating jobs and driving productivity improvements. For example, China is planning to derive 15 percent of its electricity from renewable sources by 2020.

NSW Government deserves much credit for landmark initiatives, such as:

ß Adopting the NSW Greenhouse Plan in November 2005, which included targets of reducing NSW greenhouse gas emissions to the year 2000 level by 2025, and further reducing emissions by 60% by 2050.

ß Introducing the world's first mandatory carbon emissions trading scheme, the NSW Greenhouse Gas Abatement Scheme.

ß Establishing the five-year $40 million p.a. Energy Savings Fund to provide incentives for business and consumers to use energy more wisely.

ß Adopting tough water and energy efficiency targets for new homes, via the BASIX requirements.

ß Initiating the now national Green Power Accreditation Program, to encourage customers to purchase electricity from renewable energy sources.

These initiatives are a good start, but each of them has flaws. Urgent action is required to correct these flaws and to build on this foundation with new initiatives. This is the purpose of this resolution.

Why the Clean Energy (TREND) Resolution?

Per head of population, Australians are among the highest greenhouse gas polluters in the world. In Australia and NSW, electricity from coal-burning power stations is the biggest source of greenhouse gas emissions and growth in emissions. Any serious strategy to reduce greenhouse gas emissions in Australia must reduce and then reverse the growth in greenhouse gas emissions due to electricity consumption.

NSW electricity consumption is expected to grow by 8% (or 6,000 gigawatthours per annum - GWh p.a.) over the next five years. If clean energy options are not adopted over this period, a new coal fired power station is likely to be proposed as the only viable solution, locking NSW into even higher greenhouse gas emission for decades to come. The Clean Energy (TREND) Resolution includes five key measures which together would meet all of the forecast growth in demand, and do so at a lower overall cost, with much lower greenhouse gas emissions.

TREND stands for:

ß Targets: specify targets for each part of the NSW Greenhouse Plan in order to meet the NSW Greenhouse Targets. (To be monitored and reported annually.)

ß Renewable Energy: match the Victorian goal of 10% renewable power by 2010, and a mandatory 10% by 2016.

ß Efficient Energy Use: halve the forecast growth in electricity consumption.

ß Natural Gas: switch to efficient use of gas for end uses and to fill any power generation gaps.

ß Dynamic Pricing & Smart Meters: reduce peak demand growth to avoid wasting $billions on "poles and wires".

1. Targets for greenhouse gas emission reduction measures

The NSW Government has adopted the following Targets:

"1. Reduce NSW GH emissions to 2000 levels by 2025, and 2. Reduce NSW GH emissions by 60% by 2050" (See NSW Greenhouse Plan )
The NSW Greenhouse Plan contains dozens of measures, but does not specify how much each measure will reduce emissions. While Governments are often reluctant to set specific targets to which they may be held accountable, specific targets and regular reporting are essential to monitor progress towards the long term targets and to adjust the Greenhouse Plan where necessary. (Note: The NSW ALP endorsed this measure at its June 2006 State Conference.)

2. Renewable energy to boost clean energy investment and employment in NSW

In 2001, the Federal Government established the Mandatory Renewable Energy Target (MRET) which required an additional 9,500 GWh p.a. of renewable energy by 2010. Due to a number of loopholes and flaws, the MRET has not fulfilled its objectives. This modest target has now effectively been met four years early, and Australia's renewable energy development industry in danger of going bust. The Federal Government has refused to expand MRET.

Because of this lack of Federal Government leadership, Victoria has passed a law to create its own renewable energy target: 10% of electricity consumption by 2016. This will stimulate an extra 3,274 GWh p.a. of renewable energy generation in Victoria by 2016 (i.e about 5,200 GWh compared to about 1,900 GWh in 2006).

For NSW to adopt a similar 10 % renewable energy target would also represent roughly an extra 3,200 GWh p.a. (about 8,800 GWh in 2016 compared to about 5,600 GWh in 2006). Relative to NSW's larger population and economy, this would be an easier target than Victoria's. Like Victoria, NSW should also seek to achieve the 10% renewable target earlier by promoting voluntary purchases of Green Power, which is additional to the legislated target.

3. Efficient energy use to halve growth in energy consumption to 2010

Saving energy is cheaper than wasting it. Halving forecast growth means cutting consumption growth by 3,000 GWh p.a.

This can be achieved by increasing the NSW Government's Energy Savings Fund (ESF) to complement other measures such as BASIX. The current ESF ($200m over 5 years) already aims to deliver 30% of this (900 GWh p.a. by 2010/11) , while reducing consumer energy bills by $370 million and reducing emissions by 800,000 tonnes of carbon dioxide (CO2) per year.
In March 2006, Round 1 of the ESF offered $19 million to 28 projects, aiming to save 1.4 million tonnes of CO2 emissions over 10 years (roughly 150 GWh, or $150 million, of energy savings p.a.). Round 2 closes on 1 Nov 2006.

4. Natural Gas to fill any power gap

Using natural gas has much lower greenhouse gas emissions than coal fired electricity. There is potential to make much greater use of natural gas instead of electricity- for example, in residential water heating and industrial and commercial "Cogeneration" (generating both heat and electricity simultaneously).

If additional power generation is still required after all these five Clean Energy TREND measures, natural gas can be used, with up to 50% lower greenhouse gas emissions than coal-burning power stations. Gas fired power stations have been announced for Tallawarra near Wollongong and Tomago on the Central Coast. Other gas-fired power stations have been proposed for Wagga, Nowra, Marulan, Bega and Cobar.

5. Dynamic Pricing and smart meters to reduce peak demand

The NSW publicly-owned power network companies are spending well over $1 billion per annum on network infrastructure. This unprecedented cost is being driven by rising peak demand for power - peak demand which may only occur for a few hours each year. Electricity prices are rising significantly to pay for this investment.

There are large opportunities to reduce the need for this network expenditure and reduce consumer energy bills through the use of dynamic pricing (that is, higher prices at times of peak demand and lower prices at other times) and smart meters to give consumers more control over how and when they use electricity.

For example, a current trial by Country Energy in Queanbeyan of dynamic pricing and smart meters has led to consumers voluntarily reducing peak demand by over 15% and reducing their overall energy consumption by over 5%.

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References:

Emanuel, K. A., 2005: Increasing destructiveness of tropical cyclones over the past 30 years. Nature.

Houghton, J.T. et al. (2001) Climate Change 2001: The Scientific Basis. Cambridge University Press, Cambridge.436, 686-688.

Hughes, T.P., et al (2003) Climate Change, Human Impacts, and the Resilience of Coral Reefs; Science 301: 929-933

Overpeck J.T., (2006) Paleoclimatic Evidence for Future Ice-Sheet Instability and Rapid Sea-Level Rise, Science 24 March 2006:
Vol. 311. no. 5768, pp. 1747 - 1750

The Royal Society (2005) Ocean acidification due to increasing atmospheric carbon dioxide. The Royal Society Report 12/05, London, UK.

Shakhova, N., I. Semiletov, and G. Panteleev, The distribution of methane on the Siberian Arctic shelves: Implications for the marine methane cycle, Geophysical Research Letters, 32 (9), 2005.