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Policy Responses to Climate Change and Energy Security Post-Cancun

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Policy Responses to Climate Change and Energy Security …

Policy Responses to Climate Change and Energy Security
Post-Cancun: Implications for the Asia-Pacific
Region’s Energy Security
Australian Perspective


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  • 1. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Policy Responses to Climate Change and Energy Security Post-Cancun: Implications for the Asia-Pacific Region’s Energy Security Australian PerspectivePolicy Responses to Climate Change and Energy Eva OberenderSecurity Post-Cancun Regional DirectorSingapore 18 March 2011 REEEP South East Asia & Pacific
  • 2. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Overview  Australia as a major emitter j  Australia as a resource-intensive economy with small energy security issues  Australia as a “Disneyland” of renewables  Australia chooses fixed carbon price to reduce emissions  Australia’s future position in the international negotiations ti ti
  • 3. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 The “world champion” - Australia’s per capita emissions remain the highest in the world Source: World Bank 2010 Development report
  • 4. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Australia is a net exporter of energy sources and is heavily reliant on coal for electricity generation itself  Black coal 53.2%  Australia uses easily accessible  Brown coal 22.5% surface coal for electricity  Gas 15.6% generation  Australian electricity prices are yp almost the lowest in the world - just over half of those in most European countries Source: Clean Energy Australia 2010
  • 5. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Australia’s low electricity prices impedes on attracting investment in renewables Source: PowerGen, 2010
  • 6. Policy Responses to Climate Change and Energy Security Post-Cancun 6Singapore, 18 March 201110
  • 7. Policy Responses to Climate Change and Energy Security Post-Cancun 7Singapore, 18 March 201110
  • 8. Policy Responses to Climate Change and Energy Security Post-Cancun 8Singapore, 18 March 201110
  • 9. Policy Responses to Climate Change and Energy Security Post-Cancun 9Singapore, 18 March 201110
  • 10. Policy Responses to Climate Change and Energy Security Post-Cancun 10Singapore, 18 March 201110 www.cleanenergycouncil.o
  • 11. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 The majority of investment flows into wind power development Source:Source: Clean Energy Australia 2010 Bloomberg New Energy Finance 2010
  • 12. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Household clean energy technologies are the success story of Australia’s 2010 clean energy sector Source: Clean Energy Australia 2010
  • 13. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Large-scale clean energy projects grew modestly due to political and policy uncertainty  The success of household renewable energy such as solar power and solar hot water in 2009 led to an oversupply of renewable energy certificates (RECs) in the market, which led to a drop in their price.  For large-scale projects this REC price is critical. Combined with the large scale financial crisis, the situation made it extremely difficult for developers to secure financing.  The Federal Government’s therefore redesigned the scheme to split the scheme into large and small technologies effective from 1 January 2011. It should go a significant way towards returning some stability and g g y g y supporting renewable energy investment in Australia.
  • 14. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Australia relies on existing hydro power for its clean electricity generation but wind power is gaining on significance i ifi Source: Clean Energy Australia 2010
  • 15. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Energy security is not a major concern, but climate change is: New Garnaut review is clear about the link between recent extreme weather events and global warming h d l b l i “If we are seeing an If intensification of extreme weather events now … you ain t aint seen nothing yet.
  • 16. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 New Garnaut review is clear about the link between recent extreme weather events and global warming.  Unprecedented warm sea surface temperatures in 2010 contributed to the record rainfall and high humidity across Eastern Australia in winter and spring.  Nearly 250,000 homes—together with essential infrastructure—could suffer inundation and storm damage as sea level rose and more ferocious storms ensued; estimated to cost up to $63 billion dollars within the century. The coast around Sydney is particularly vulnerable.  While heavy rainfall in 2010 ended a decade-long dry spell in much of southern and south-eastern Australia, the southwest suffered its driest year on record, including record low inflows to Perth’s water storages. record Perth s storages
  • 17. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 New Garnaut review is clear about the link between recent extreme weather events and global warming  At the same time, there is an increasing risk of flooding as rainfall becomes concentrated into more intense torrential downpours.  The frequency of tropical cyclones is decreasing but their wind speeds are increasing, making for storms potentially more costly in lives and property. property  The intensity, frequency and extent of droughts is projected to rise in coming decades if there is insufficient action to arrest the rise in pollution.
  • 18. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Businesses call for certainty  BHP Billiton, the world s largest Billiton world’s mining company, urges the government to “take more decisive decisi e action on climate change in the wake of Labor dropping its emissions trading scheme ...  "We do believe that [international agreement] will eventually come and, and when it does Australia will does, need to have acted ahead of it to maintain its competitiveness."
  • 19. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Nuclear energy won’t emerge in Australia for at least another two decades  Prime Minister Julia Gillard made it clear earlier this week that that the country had no need for itit.  Even without the safety concerns, t e e s o energy utility there is no e e gy ut l ty in Australia ust al a possessing the attributes allowing contemplation of such a scale of investment. investment  The opposition’s policy on nuclear is not to have a policy unless Labor does p y – a unique position of bipartisanship
  • 20. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 The largest short-term abatement will be delivered by the gas industry and then by renewables  Spending on new gas-fired power generation in Australia may almost double A$14.7 billion ($14.5 d bl to A$14 7 billi ($14 5 billion) in the next six years if the nation imposes a price on carbon emissions.  Even in the absence of a carbon price, price as much as A$7.8 billion may A$7 8 be invested in gas-fired plants during that period. Source: Bloomberg New Energy Finance 2010
  • 21. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Worldwide investment into clean energy has reached record high levels  Worldwide investment in clean energy increased by 30 per cent last year to a record $US243 billi tl t t d billion, d i driven b l g by large investment in China, offshore wind and rooftop solar in Europe, as well as increased spending on research and development generally.  Barack Obama offered a new goal: America would get 80 per cent of its energy from clean sources (including clean clean coal, gas and nuclear) by 2035.
  • 22. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Australia’s BAU emissions buck the tendency of developed countries as a result of the resource-intensive economy  This will not be easily understood by other countries, and is likely to bring Australian mitigation policy under close scrutiny.  It is unlikely that Australia will meet international expectations of proportionate effort without getting credit for substantial international purchases of legitimate international entitlements entitlements.  More fundamentally, any failure of proportionate mitigation effort will invite critical and in some circumstances damaging international g g responses.
  • 23. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Financing a key issue for the global climate change community  It is expected that sources of finance will be a key focus for negotiation in 2011.  Not all sources of finance require a decision from the UN.  Domestic action to identify how countries can mobilise new funding beyond what it being delivered through the aid budget will be needed.  Two options available to Australia are the use of revenue from a domestic pollution price and the re direction of fossil fuel subsidies re-direction subsidies.  Broader options include funding from international aviation and shipping.
  • 24. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Fixed carbon price a preferred option  An initial fixed price would make it easier for parties to agree on an emissions target and trajectory, especially at a time when there are few international markets to link to and domestic industry is p y pleading for g predictable CO2 prices.  The future potential to link to other regional carbon markets and hence theoretically k h i ll keeping a lid on the price of carbon would b among the i h i f b ld be h main reasons for why Australia would pick trading over a tax.  Such a link would allow Australian emitters to pick up carbon credits through reducing emissions in other countries at a lower cost than domestically.
  • 25. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Garnaut calls for a start-up carbon tax of up to $30/t  Initial compensation for trade-exposed industries is almost as generous as the former governments emissions trading scheme.  The model has the big advantage of being already worked out and accepted by large sections of the business community.  The most trade exposed industries would be required to buy only 10 per cent of their permits, after receiving 90 per cent for free, with a second tier of trade-exposed industries required to buy p p q y permits for 40 p cent per of their emissions.  The government should shift to a full emissions trading scheme, where the price is set by the market, in 2015.
  • 26. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Garnaut calls for a start-up carbon tax of up to $30/t  From that date industry assistance should be offered on the less generous basis - with compensation paid only for the gap between the world prices expected with a global carbon price, and without global carbon pricing. d ih l b l b i d ih l b l b i i  The proposal is for the price of between $20 and $30 a tonne from next year and to be increased by 4 per cent a year for the first three years years, before the move to a full market.  Low income households that would benefit less from the tax cuts could be offered extra energy efficiency assistance and hard-hit regions such as coalmining areas could be offered upfront structural adjustment assistance. assistance
  • 27. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Businesses call for certainty  BHP Billiton, the world s largest Billiton world’s mining company, urges the government to “take more decisive decisi e action on climate change in the wake of Labor dropping its emissions trading scheme ...  "We do believe that [international agreement] will eventually come and, and when it does Australia will does, need to have acted ahead of it to maintain its competitiveness."
  • 28. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Domestic action on abatement and carbon pricing is paramount for Australia to regain international standing in the fight of climate change h fi h f li h  For Australia, it is crucial that a domestic limit and pricing system is put in l i place, with th capacity t achieve at l t th f ll t g t range ith the it to hi t least the full target g pledged under the Copenhagen Accord (5-25% off 2000 levels by 2020).  This will send a clear signal that Australia is serious about contributing to the global effort on climate change.  With the extent of global action becoming clearer, the Cancun Agreement reinforces the need for Australian pollution and climate change policy to be flexible enough to go beyond the 5 per cent 2020 reduction targets.  I 2011, th A t li In 2011 the Australian P li Parliament will need t negotiate a fl ibl t ill d to ti t flexible package with not only a pollution price, but also limits and other policies that can enable more ambitious pollution reduction.
  • 29. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110
  • 30. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110thank you
  • 31. Policy Responses to Climate Change and Energy Security Post-Cancun Singapore, 18 March 2011 10 REEEPquestions? Eva Oberender Regional Director, REEEP Southeast Asia & Pacific T: +61 410 277 393 eva.oberender@reeep.org www.reeep.org www.reegle.info Supported by
  • 32. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Renewable Energy and Energy Efficiency Partnership  an international partnership established at the 2002 World Summit on S Sustainable D i bl Development i J h l in Johannesburg b  working primarily in developing countries and in countries in transition
  • 33. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 REEEP’s focus facilitating the development of market conditions for the accelerated uptake of renewable energy and energy efficient technologies through:  structuring policy and regulatory initiatives for clean energy, and  facilitating financing for clean energy projects REEEP adds unique value of bringing the private sector to the table
  • 34. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110REEEP partners- businesses- G8 countries- developing countries ti- NGOs Currently more than 320 partners: • 45 Governments • International organisations,  NGOs and companies
  • 35. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Regional Secretariats delivering value
  • 36. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 REEEP’s goals:  increase the sustainability of demand and supply side of energy systems f  reduce market barriers and financial obstacles for renewables and energy efficiency systems  establish on-the-ground project activities that are targeting policy improvements and innovative finance g gp y p mechanisms  improve energy access for the poor through reliable and clean energy services  replicate success across the developed and developing world
  • 37. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Establishment of the Pacific Islands Sustainable Energy • Project outputs: Association & Certification  An active industry association Scheme for f sustainable energy i d i bl industry companies active in the PICs  Establishment of a certification scheme for auditors, installers and designers which will consequently increase the quality of RE installations • Project partners: – Global Sustainable Energy Solutions Pty Ltd (Australia) and Pacific Islands Greenhouse Gas Abatement through Renewable Energy Project (PIGGAREP)
  • 38. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Pacific Renewable Energy and Microfinance (PREM) Project • Innovative & sustainable microfinance loan products for renewables & energy efficiency y Project Outputs • Baseline survey of microfinance • Development of training materials and training on basic awareness on RE and EE. • AAssessment of environmental risks and f i l i k d needs • Continuous mentoring of institutions involved. i l d
  • 39. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Tourism Sector Energy Efficiency & Renewable Energy Program • Creating a model to adopt a stakeholder approach to a low carbon tourism sector low-carbon in Fiji • Promoting a range of energy efficiency and small-scale renewable energy d ll l bl technologies available to the hotel & resort sector in Fiji • R i i awareness of related carbon Raising f l d b financing opportunities • Project outputs: – Reduce GHG emissions through demand-side abatement initiatives in Fiji’s hotel and resort sector. – Enhance Fiji’s ecoTourism credential.
  • 40. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 RE & EE regulatory frameworks in Kingdom of Tonga • Strengthening regulatory framework in Tonga Project Outputs • Implementation of the revised RE Act through endorsed RE regulations • Development and adoption of energy p p gy efficiency policy
  • 41. Policy Responses to Climate Change and Energy Security Post-CancunSingapore, 18 March 201110 Pacific Island Countries (PIC ) E P ifi I l d C t i (PICs) Energy Effi i Efficiency, A diti and Auditing d Appliance Labelling • Project aim: To progress the implementation of PIC national energy action plans including Energy Efficiency and Energy Conservation strategies to ultimately enhance energy security in the Pacific. • Project outputs:  Output 1 – Appliance labeling & standards (Samoa, Tonga & Vanuatu)  Output 2 – Energy Auditing (RMI, Palau & Vanuatu) O Output 3 – EE & EC A Awareness  Output 4 – Project evaluation & Assessment • Project partner: SPC
  • 42. Policy Responses to Climate Change and Energy Security Post-Cancun Singapore, 18 March 2011 10REEEP tools www.reegle.info www.retscreen.net