The Pears Report: Creative policy paths

Alan_Pears

Alan Pears considers the newly minted potential for indirect action in Australia—how creative can we get?—along with important considerations for fuel use in vehicles.

Things sometimes move fast in politics. Since October we have had a new national energy minister and, just as important for energy, a new prime minister. PM Turnbull understands innovation and is familiar with the challenges emerging business models face from powerful incumbent industries. He knows he can’t rely on a resources boom to pay Australia’s bills. He also has rooftop solar on his own home and investment properties.

But both our PM and energy minister are pragmatic politicians who have to manage an anti-clean energy (and climate denial) faction and some politically powerful donors. We’ll have to read between the lines to work out their real agenda(s) on energy and climate.

We need to emphasise some key benefits of clean energy solutions. They are good for job creation across a wide range of skills and regions. They mostly grow the light manufacturing and services sectors, which are more employment-intensive and recirculate capital faster than the traditional energy sectors. They are also a great way of privatising and democratising the energy sector while winning votes, not losing them. Guess who owns and benefits directly from all those efficient appliances and buildings, and distributed energy systems? Voters.

They also provide a useful way to wean the energy sector off ongoing subsidies. Upfront subsidies may be needed until economies of scale are captured and institutional barriers broken down. But clean energy is cheap to run or cuts ongoing costs, costs are declining, and many options are already cost-effective and just need finance and promotion. So the need for ongoing support is minimal.

It is becoming cheaper for a government to subsidise energy-efficient equipment and rooftop solar/storage for a low-income household than to keep subsidising their (increasing) energy bills. And the sense of control and links to their energy-using actions may actually empower them—with the right education, feedback and support. The same approach could apply to struggling businesses.

The Clean Energy Finance Corporation and ARENA are now ‘back in business’ and in the environment portfolio, along with a new minister for cities. And the essential role of public transport in increasingly dense cities is now recognised.

‘Indirect Action’ on climate: a creative policy path
Maybe the present awkward situation on climate policy within the government could be beneficial in the long term. The politicisation and artificial polarisation between carbon pricing and ‘Direct Action’ has been a major block to effective action. Labor shut down useful energy efficiency programs because they were not ‘complementary’ to carbon pricing. There are still quite a few policy makers who think a carbon price will fix everything. At the same time, the government’s ‘Direct Action’ strategy is clearly inadequate and leaves taxpayers funding an increasing burden. As I have said for a long time, we need both a pricing mechanism and real direct action.

Of course, the government must know that they will really need CEFC and ARENA to deliver on their present and future climate targets.

But they have to tread warily to manage the climate deniers and powerful vested interests.

This is where ‘Indirect Action’ enters the picture as a complement to both ‘Direct Action’ and some form of carbon pricing. Indirect Action targets a wide range of policies and measures across the economy that make sense for reasons other than climate response, but also happen to cut emissions, maintain existing carbon sinks or store carbon.

Public transport can easily run on renewable energy and cuts emissions more as occupancy increases. Rail freight could do with some attention, too. And Infrastructure Australia has a long list of cost-effective projects that will create lots of construction jobs. And interest rates are very low, so now is the time to borrow for investment in infrastructure to underpin future social and economic success.

‘Virtualisation’ of goods and services can use the NBN and intelligent technologies to replace physical transport and physical products. This cuts direct emissions and ‘embodied’ emissions associated with mining and production of materials and products. This is a major area for business development and innovation. This also meshes well with the increasing focus on ‘energy productivity’, code for capturing more economic activity from each unit of energy. COAG’s Energy Council has just released a National Energy Productivity Plan that starts to deliver on this.

Housing policy can require buildings to be energy efficient and use first home buyer schemes to incentivise builders to sell low-carbon, smaller dwellings. Urban planning can cut costly and space-consuming dependence on car ownership (fuel is only about a quarter of the cost of car ownership) and time wasted travelling.

Measures that reduce oil use help our balance of payments, as we are increasingly net importers of oil. And they will help us to meet our International Energy Agency obligation to have a strategic store of oil in case of supply disruption.

Gas users on Australia’s east coast face higher gas prices, as prices are driven up towards international prices by the new liquefied natural gas plants in Queensland. Many National Party supporters are concerned about the long-term impacts of coal seam gas development on their land and water. Improving efficiency of gas use and shifting to low-carbon alternatives can help to deal with these issues.

Pressure is increasing on governments to fix our flawed electricity market, so consumers and emerging alternatives have a fair go.
These are just a few examples of Indirect Action that can be pursued without allowing climate deniers to retake control of the climate agenda. And they could win a lot of votes while helping position our economy and society for the future.

Asian traffic!
After a recent visit to Jakarta, where I experienced serious developing city traffic congestion, I thought I would explore the fuel consumption impacts of this congestion using the transport calculator I developed for the EPA Victoria Greenhouse Calculator. I assumed a ‘small’ car (Corolla size), 10 km/h average speed, with stops every 50 metres and a Darwin climate. The results are only approximate, as the model is fairly basic and changes in environmental and traffic conditions and driving techniques can affect the outcomes significantly.

The big message was that air conditioner usage was almost half of total fuel use under these conditions. Fuel consumption for movement was, surprisingly, not very different from typical Australian usage. It seems that the reduction in aerodynamic drag from slower speeds may offset the long periods of idling and inertia effects of frequent stops and starts from low speed.

A well-designed hybrid (e.g. a Prius) used half as much fuel overall and saved two-thirds of fuel used for movement. The large savings reflect the potential to recover and reuse a lot of braking energy from the stop-start driving, and the higher efficiency of the Prius engine.

A focus on optimum car air conditioner efficiency and the thermal performance of the car body could save a lot of fuel! High efficiency air conditioners and refrigerants with evaporative cooling of the condenser—which could be retrofitted—could help a lot. So could a light colour or ‘cool roof’, or insulation of roof, shading (e.g. the old ‘tropical‘ roof used on 4WDs) and effective heat-reflective coatings or shading of windows. Some of these options could increase aerodynamic drag when a car finally escapes the congestion, though, so careful design is needed.

This looks like fertile ground for research into new cars and their air conditioners, and retrofit measures.
Of course, improved urban planning, effective public transport and electric bikes would reduce the time wasted (and productivity lost) trapped in traffic and cut air pollution too.

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a Senior Industry Fellow at RMIT University, advises a number of industry and community organisations and works as a consultant.

This article was first published in ReNew 134.

EOFY ReNew 2017

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