Gavin Dufty St Vincent de Paul Society, Victoria Why Climate Change Matters
Why Climate Change matters • This presentation covers: • An overview of the broad climate change response framework (adaptation / mitigation) • An overview of the policy strategies and responsibilities (government / individual) • An overview of some of the current programs and opportunities for job creation • A discussion about what the future may hold in terms of opportunities for job creation
Why Climate Change matters – the framework •
Impacts of climate change and measures implemented to address climate change will impact on every sector of the Australian economy and every household. It will be ongoing and bring fundamental change.
Climate change responses and associated programs can be classified into two broad themes:
1. Mitigation strategies ‐ programs designed to mitigate the impacts climate change such as, the Carbon Pollution Reduction Scheme and Renewable Energy Targets Scheme and developmental technologies such as Carbon Capture and Storage. These strategies are designed to reduce the amount of Carbon Dioxide that is released into the atmosphere. 2. Adaptation strategies ‐ programs designed to help communities and individuals deal with the impacts of climate change. For example, the building of water desalination plants and other projects .
Why Climate Change matters – who's required to change •
The mitigation and adaptation responses to climate change can be conceptualised into two broad areas of responsibility:
1. Government backed and funded programs. This include national programs and schemes available for all, state based schemes available to some, and local schemes to address local issues or exploit local opportunities. 2. Households / consumers. The introduction of new technologies and other strategies that shift the responsibility for decision making away from institutions and onto households. It will influence how household spend their money and change household expectations on goods and services they desire. •
The government will help us a BIT but the rest its up to US and the MARKET to develop solutions that meet the needs an demands of household, industry and commerce.
Laying the foundations - The CPRS What a CPRS will do: •The CPRS will put a price on carbon throughout the economy. •It a ‘cap and trade’ mechanism to limit carbon pollution. •Setting a limit means that the right to generate carbon pollution becomes scarce— and scarcity entails a price. •The CPRS will increase the price for everything that uses carbon based energy (electricity, gas, transport fuels etc). •Cost impacts will vary between states (high in Victoria due to brown coal and less in Tasmania due to hydro).
Laying the foundations - The CPRS CPRS impacts: • Community impacts. Some communities, such as coal mining communities (Latrobe Valley in Victoria) will change significantly as coal is phased out and replaced by non or low carbon producing power technologies. • Distributional impacts. The CPRS will have significant distributional impacts for businesses (job markets), households and communities across Australia. • The Government says: “The introduction of a carbon price will change the relative prices of goods and services, making emissions‐intensive goods more expensive relative to those that are less emissions intensive. This provides a powerful incentive for consumers and businesses to adjust their behaviour, resulting in a reduction of emissions.”
Laying the foundations - The CPRS CPRS revenue, programs and compensation: •The CPRS will raise revenue through the selling of permits. •This revenue will be used to fund programs and provide compensation to households to ameliorate the financial impacts. •Households and business will seek to re‐order budgets to offset these price increases. •These price increases and compensation measures create an environment for new capital investment and hence job creation opportunities.
Government Funding Commitments Federal Government funding to assist this change includes $3.7 billion across 62 programs over four years (2008–09 to 2011–12), including $840 million in 2008–09. Programs by impact category and size of expenditure: •Technology development and demonstration (34%) – Government assistance to develop and demonstrate low emission technologies – which includes renewable energy and carbon dioxide capture and storage. •Industry development and assistance (31%) – Government assistance to either (a) overcome barriers to growth in specific industries that are thought to be important to Australia’s eventual transformation to a low carbon economy or (b) help sectors adjust to a carbon constrained world.
Government Funding Commitments •Energy efficiency (15%) – Government regulation, information and assistance to encourage the uptake of cost effective, proven energy efficiency opportunities for business and households, to reduce their end-use energy consumption. •International (10%) – contributing to international action to support a global solution to climate change. •Climate change adaptation and science (6%) – understanding why and how the climate is changing and the likely impact of climate change on Australia and developing informed strategies and decision making in response. •Abatement (4%) – emissions measurement and reporting, the policy and regulatory framework for climate change mitigation and programs to reduce greenhouse gas emissions.
Specific programs & Job opportunities •Home Insulation Program The Government’s target is that insulation will be installed in 2.9M homes in 2.5 years (from July 2009 when the program was fully launched). This program pays ceiling insulation installers $1,600 per home for owners and landlords respectively for each home where insulation has been installed. •Job opportunities: (value adding opportunities – new customer lists for future products and services?) •Solar Credit Scheme ‐subsidise the renewable energy industry through rebates for generating electricity through PV panels. •Job opportunities: ( installation – aggregation of energy produced – value adding?) •Solar Hot water rebate ‐ a rebate of $1,600 to install a solar hot water system or $1,000 to install a heat pump hot water system. This is to help eligible home‐owners, landlords or tenants to replace their electric storage hot water systems with solar or heat pump hot water systems. •Job opportunities:(installation – value adding opportunities )
Specific programs & Job opportunities •The Green Loans Program this program assists households to install solar, water saving, and energy efficient products. The Green Loans Program provides: Home Sustainability Assessments; and access to interest free Green Loans of up to $10,000 each to make the changes recommended in the assessment. •Job opportunities: (loan brokerage opportunities ‐ assessment opportunities – bundling with other programs?) •Phase out of inefficient incandescent lighting The Australian Government will gradually phase out all inefficient incandescent light bulbs. The first stage of the phase‐ out plan was the introduction of an import restriction on inefficient incandescent general lighting service (GLS) light bulbs used for general lighting purposes from 1 February 2009. •Job opportunities: (lighting replacement programs, fixtures and fittings other technologies?)
Specific programs & Job opportunities • Phase out of greenhouse intensive hot water systems ‐ During 2010, electric hot water systems will no longer be able to be installed in: any new detached, terraced and town houses; and any existing detached, terraced and town houses that have access to piped gas, except where an exemption applies. During 2012, electric hot water systems will no longer be able to be installed in: any existing detached, terraced and town houses; and any new flats and apartments with access to piped gas, except where an exemption applies. • Job opportunities: alternative technologies, value adding opportunities energy management, green disposal, recycling.
Specific programs & Job opportunities •Low Emissions Technology and Abatement The Low Emissions Technology and Abatement (LETA) initiative is a $26.9 million measure to reduce greenhouse gas emissions over the longer term by supporting the identification and implementation of cost effective abatement opportunities and the uptake of small scale low emission technologies in business, industry and local communities. •Job opportunities:(funds to identify opportunities via peak body)
Other initiatives: shifting the responsibility to the individual In addition to the CPRS there are other developments which aim to shift the responsibility onto households through the use of price signals (such as the proposed changes to energy and water pricing). •Introduction of electricity smart meters – these meters will be rolled out to all households in Victoria (to be completed by 2013) and where the benefits outweigh the costs in all other states across Australia. • Smart meters allow the cost of energy to be calculated and billed according to the time that you use it, I.e. off‐peak and peak charging. This potentially see 48 charging periods per day! With some pricing trials factoring energy costs on extreme heat days at 700% above current levels. Effectively those at home at peak times pay more and those who consume at off‐peak times pay less.
Other initiatives: shifting the responsibility to the individual • The meters will also allow for in home displays and numerous other functions. • This means that the cost of the CPRS will be more efficiently and precisely passed through to consumers BUT it will also increase price volatility and redistribute energy costs within communities – it will make household energy use much more complicated and increase many households’ electricity bills. •These initiatives place a new responsibility on the demand side (the consumer) to understand their consumption pattern, the energy intensity of their appliances and the impacts this has on their bills. • Job opportunities: This may create a whole new world of household and industry energy management products and information services. This could include
Why Climate Change matters – What households and business might need? •Energy managers / management services – For Businesses ‐ we get an financial auditor in each year maybe business will pay for an energy manager to review cost regularly – as energy cost will escalate annually with the CRPS •Brokers – For business and households (specialists that get the best appliance / car / etc deal with the least emissions) •Auditors – for the household (where are your emission costs and how could you reduce them) this could be targeted at time of rental lease or purchase of home •Aggregators – aggregate energy products OR Demand shedding that is ‐sell green energy to energy companies OR pay for people to switch off this reduce costs for others (see USA payment for business to shut off) •Appliance management services for business and households – given price increases and volatility and the associated complexity of bills and associated I see a new type of energy retailer emerging one that automates discretionary energy use to the lower cost times
Why Climate Change matters • There are many more strategies, programs and impacts than I have discussed in this presentation they include opportunities in sectors such as: •Transport (individual, mass, fleet management ) •Agriculture (what to farm and how to farm) •Location ‐ different issues for different states (there are 7 distinct weather zone across Australia! With different fuel sources available) •Geospatial ‐ Urban vs. regional vs. rural •If these or other issues associated with this topic interest you there will be a wide ranging discussion at the panel session Being enterprising about climate change – hope to see you there