Energy efficiency ignored again

Alan Pears

Energy efficiency measures have huge potential for delivering climate change abatement, and yet they are often overlooked in the debate on climate policy. Alan Pears explains.

Many people watched the recent ABC documentary and panel show on the climate change debate. It was interesting to hear that both Clive Palmer and Nick Minchin were prepared to support renewable energy—if it were cost-effective. However, apart from a couple of passing mentions in the panel session, a sustainable energy option that already meets their criteria for cost-effectiveness and climate change abatement was ignored.

Most international experts, including the International Energy Agency, expect energy efficiency to deliver a third to half of all energy-related abatement over the next 20 years. Yet, if it’s mentioned in Australian climate policy discussion, it’s almost always an afterthought.

It’s not that policy people and commentators don’t think energy efficiency is a good thing, but it’s not ‘top of mind’—mostly they have to be prompted. And they tend to see it as a fairly small contributor to solutions. One British study recently estimated that 88% of all energy used globally is wasted before it delivers a useful service: so the potential for efficiency improvement is enormous.

There seems to be some kind of deep cultural driver for Australians to focus on supply-based solutions. I really don’t know how we can overcome this, because it is so pervasive.

At least there is some money (thanks to the cross benches, especially the Greens) in the Clean Energy Futures package for energy efficiency—although much less than for low-emission energy sources. But we will have to withstand yet another attempt by econocrats to cut energy efficiency programs because they fail the ‘complementary to carbon pricing’ test. That won’t be easy, and it will divert our efforts from delivering results to defending the validity of energy efficiency—yet again.

My recent submissions
I’ve been busy recently producing a few submissions to government inquiries (see links at the end of this article).

My submission to the Draft Energy White Paper is in two parts: part 1 is my annotations on the whole document, while part 2 is a 20-page submission summarising my key points. My main recommendation is that they start again with a new and more inclusive process that reflects a ‘whole of government’ perspective and engages households and services sectors as well as big industry.

In my submission to the Victorian Competition and Efficiency Commission inquiry into feed-in tariffs (FiTs), I pointed out that the whole debate is focused on the wrong issue: it’s not about how much PV saves the energy industry. If we step back, distributed generators should have the right to sell power to neighbours at whatever price they can negotiate: that’s how markets are meant to work. So the retail price is the right benchmark for pricing FiTs. Further, there is a legitimate argument for additional subsidies of distributed generation as an emerging technology that competes with powerful entrenched interests. I proposed that a FiT that provides the same price for exports as for consumption has many advantages.

I also made a submission on the proposed National Energy Saving Initiative. I argued that we need two kinds of certificates, as we have for renewable energy. This will allow flexibility to ensure the scheme really works to deliver outcomes and reward reductions in peak demand and other benefits beyond energy savings.

Passing the buck
The Australian Government’s failure to set up a proper accounting system so that businesses, local and state governments and households can qualify their energy efficiency and renewable energy action as ‘additional’ to the carbon target is now visibly backfiring.
The new Victorian and Queensland Governments have slashed programs on energy efficiency and renewable energy because, under the carbon pricing scheme, reducing emissions would simply leave more room under the carbon cap for other states to increase their emissions.

Under the carbon target, reducing emissions is now the federal government’s responsibility. See for detail on the problem and the solutions. How can such a perverse situation be allowed to occur?

Feedback from a reader
In my column in ReNew 110, I included some thoughts about public transport funding. One reader has responded to my comments. I’m pleased, as I was hoping to provoke some discussion. [Ed note: the reader’s letter appears on p17 of ReNew 120.]

The fact that I proposed two diametrically opposite ideas on rail crossings (one to reduce road delays and the other to allow more delays due to rail crossings) shows that I was floating ideas rather than taking a position.

But to clarify my suggestion that congestion due to rail crossings could be allowed to increase as a way of limiting traffic growth, there are some fundamentals here.

Overwhelming evidence shows that if you increase road capacity, it simply fills up to a new, higher level of traffic without solving the congestion problem. Further, if your policy objective is to reduce car usage, you need to increase capacity of alternatives while also reducing road capacity. Otherwise cars come from elsewhere to fill up the freed-up (effectively lower cost in terms of travel time) space. Economists propose road pricing as a way of limiting road use, but this has equity issues.

I was trying to point out that rail crossings can act as a policy tool to limit car usage and increase pressure on road users to shift to other options. It is imperfect, but all the options have their problems. And the money saved from avoiding construction of grade separation could be spent on extending public transport (PT) and buying more rolling stock.

With regard to the reader’s comment on my proposed PT property levy, his comment is focused on a group of workers who happen to live near good PT but work in PT-poor locations. This is a legitimate concern, but the situation is complicated. First, as congestion (or road pricing) increases, those with the cheapest or most practical options tend to change behaviour first, so this should leave more room for those who really need to use cars. Indeed, giving people who live near PT free or discounted PT travel to offset the levy cost provides an incentive to change behaviour and free up road space. The levy also creates a new incentive for PT agencies to improve and extend PT because they are rewarded with more funds. As our reader points out, we need to find more money to improve and extend PT, and this is one possibility.

The situation for tradies is challenging, but there are some options. First, as a rider on early trains into Melbourne, I’m seeing increasing numbers of tradies on PT, complete with wheelie bags of tools. Obviously this only works where there is PT, or where the tradie can travel part of the way by PT and leave their vehicle somewhere secure where PT finishes, so the trip can be completed by ute.
Second, for tradies working on new housing, there is potential to shift a lot of building construction from on-site work to housing manufactured off site. This would significantly increase productivity by reducing travel time and avoiding rain delays and damage. Countries such as Germany are able to produce high-quality, diverse housing using this approach.

For tradies involved in appliance maintenance, smart appliances and mobile phone cameras increasingly allow remote diagnosis and accurate identification of models, so they can spend less time travelling, and may even be able to carry a lot fewer spare parts.

My key point was that we need some creative ideas because present approaches to transport are not working very well. I hope the debate continues and more ideas flow!

Alan Pears has worked in the energy efficiency field for over 20 years as an engineer and educator. He is Adjunct Professor at RMIT University and is co-director of environmental consultancy Sustainable Solutions.

Alan’s recent submissions
Draft Energy White Paper:
Victorian Competition and Efficiency Commission Inquiry into Feed-in Tariffs:
National Energy Saving Initiative:

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