Climate Change

The Hon. J.M. GAZZOLA (15:07): I'm just waiting for the camera! G'day, mum. My question is to the Minister for Climate Change. Will the minister update the chamber on the most recent developments in South Australia, Australia and the world with respect to climate change?

The Hon. K.J. Maher: Your other side is the better side.

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (15:08): Thank you, I wasn't aware that I had a particular side that was better than the other, but I will take advice from my leader, as I always do. This is a very timely question, particularly in light of the recent developments at the federal level regarding climate change and energy policy, and I thank the honourable member for being on the spot again in terms of his question.

I have spoken previously in this chamber about the calls from the community and business for bipartisanship when it comes to climate change. I referenced that earlier in terms of the RET debate and in response to a question from the Hon. Michelle Lensink. Sadly, it is still the case, unfortunately, that the Liberal Party, at the federal level at least, is incapable of accepting the science of climate change, at least wholly across the government. While other conservative governments around the world are taking action and accepting the need to limit global warming to 2º or less, the same cannot be said of the Liberals at the national level.

A damning example of this happened last week. Following the release of the Finkel review, the federal Liberals spent the whole week debating climate change science rather than seriously looking at the challenges facing our country in terms of energy policy. If we are to meet the Paris Agreement requirements that we signed up to as a government and as a nation of decarbonising our energy sector, which frankly is worth about a third of our emissions profile, and if we had a bipartisan approach to energy policy, it would be the easiest way of actually acting on emissions reductions across the country, because there is already considered agreement across industry, NGOs, the community, many politicians and most state jurisdictions, including the Liberal government in New South Wales, on energy being the easiest way forward to act quickly.

We are still struggling with federal Liberals like Tony Abbott, the former Liberal leader, who said that climate change was crap, who led his troops into battle once again in the party room, discrediting and debating the merits of climate science all over again. The science is very clear. To achieve the ambitious targets set out in the Paris Agreement of limiting global warming to 2º or less means decarbonising the economy and it means more clean renewable energy. It is clear from across the country that there is a set of ageing energy infrastructure which has to be replaced. Much of this currently is coal-fired energy production.

I am advised that two-thirds of existing coal generators are more than 30 years old and that by 2025 (less than 10 years away) only four gigawatts will be less than 30 years old. The challenge is: what do we replace these ageing production units with? The answer has to be, I would think, the cheapest, most efficient, least cost alternatives. The answer these days, obviously, is renewables. That's the solution that the markets are telling us to adopt and yet, at a federal level, the party so-called of business, of the free market, is unwilling, in this case, to adopt that advice.

Last week, Bloomberg New Energy Finance released their 2017 New Energy Outlook and it's worth looking at the summary of their findings. A Bloomberg's analysis showed that the levelised cost of new electricity from solar photovoltaic generation falls by 66 per cent by 2040 and for wind this falls by 47 per cent. Bloomberg New Energy also estimates that the battery storage market will become a $20 billion a year global market by 2040.

But, as we have seen with so many issues of the federal Liberal Party, they are no longer the lions of the market. They are the keepers, the last bastion of protectionism for old, failing industries, because they want to build coal-fired power stations using the Clean Energy Finance Corporation. That's their answer. They want to intervene in the market, using taxpayers' money to build dirty, expensive coal-fired power stations. That's their commitment to the market. This is despite energy companies in Australia, energy companies that run the energy system, saying they won't build coal-fired power stations.

Mr Andy Vessey is the chief executive of one of Australia's largest energy companies, AGL. He has had over 30 years of experience in the industry. His company has the dubious honour of being one of Australia's biggest polluters. He is someone who probably knows a thing or two about energy and he knows a thing or two about coal. This is what he said yesterday, 21 June, I am advised:

The fundamental is this. Technology is driving us in a direction. What's the new baseload for us? It's going to be large-scale renewables, it's going to be firmed up by probably open cycle gas until storage comes down, that's what it will be. We don't see anything baseload other than renewables, but yet you will hear people tell you, no coal—it can compete. Look at the numbers, I can give you the numbers, I've looked at the numbers, I've come to a decision and the decisions I've come to are going to direct billions of dollars of investment ultimately, so I think I've looked at it pretty hard.

Andy Vessey has doubled down on his assessment in an opinion piece in today's Australian, writing:

Given the technology is changing, investors are increasingly sure that the cheapest source of electricity is likely to come from renewables supported by firming or storage and it is highly unlikely to come from baseload coal or gas—technologies which haven't changed a great deal in decades.

Not only won't energy companies build coal-fired power stations, insurers won't insure them and Australian banks won't finance them. The coal-loving approach of the Liberal Party is not worthy, I say, of a party in government, certainly not one seeking election to office. As I have summarised previously, it is worth repeating a quote from Michael Bloomberg:

Government can no more save the coal industry than it could have saved the telegraph industry or the horse and buggy industry a century ago. Pretending otherwise only hurts those in coal communities—trapping them in a dying industry instead of helping them acquire new skills and gain access to new career opportunities.

It is no wonder that the approach of the Liberals is shunned by the Australian Industry Group, the Business Council of Australia, the Australian Aluminium Council, the Australian Energy Council, the Cement Industry Foundation, Chemistry Australia, and the National Farmers' Federation, amongst many others, who have called for action on energy and climate change. It is particularly worth looking at what the National Farmers' Federation contribution has been in recent times, and I don't often quote them. In an op-ed published in the Australian Financial Review on 6 June, Miss Fiona Simson, a farmer from the Liverpool Plains in New South Wales and the NFF's national president, wrote:

Farmers are also focused on the future. They are the frontline of the impacts of climate change—and most accept that as a climate nation we must contribute our fair share to reduce our greenhouse gas emissions. The farmers I talk to know that a transition away from cheap, coal-based power generation is inevitable as assets age and new technologies become more affordable.

Likewise, as the peak representative body for Australian farmers, the National Farmers' Federation sees integrating renewables into the electricity supply as critical to meeting Australia's emission targets. We know the transition to clean energy generation is not free, but the threat of climate change makes the sacrifice worthwhile.

Minimising the transition cost is possible only if we have stable and coherent policy settings that send the right signals. Investors in large-scale generation want certainty to spend big money to underpin generation capacity.

That is the National Farmers' Federation. It is long past time to get on with the job. After nearly a decade of inaction caused by sceptics in the Liberal Party who have continually challenged the science, we need the federal government and the Prime Minister to actually act and to actually lead. We know what is needed. The time for debate is long gone.

It is time for Australia to transition to a low-carbon economy. I call on the Liberal Party in this state to help us try to convince the federal party to embrace the changes that are being espoused in the Finkel report. It is not nirvana. It is not the most optimal solution, but it is one that both parties can agree to. Let's get on board.