Lucky Last – Did you hear the one about “Efficiency Knocks for Australia”?

Prime Minister Julia Gillard has one golden opportunity to restore the Labor government’s credentials on climate change policy and the good news is that it doesn’t even have to show global leadership, all it has to do is follow what’s been happening in most other major economies for years.  Energy efficiency has long been touted as one of the ‘low-hanging fruits’ that could help Australia meet its emissions reduction targets for little cost and keep its economy on a competitive footing with other major industrial countries. Giles Parkinson writes in Business Spectator (2 July 2010):

Prime Minister Julia Gillard has one golden opportunity to restore the Labor government’s credentials on climate change policy and the good news is that it doesn’t even have to show global leadership, all it has to do is follow what’s been happening in most other major economies for years.

Energy efficiency has long been touted as one of the ‘low-hanging fruits’ that could help Australia meet its emissions reduction targets for little cost and keep its economy on a competitive footing with other major industrial countries.

But government and business have been so blasé about energy prices and energy security that the issue of efficiency has been largely ignored. So much so that Australia is now ranked last among the OECD countries and pales in comparison with countries like China.

This has not gone unnoticed. Australia’s lax energy efficiency standards in areas such as construction and automotive, as well as its glaring absence of renewable energy sources – particularly solar – are a constant source of amazement to overseas visitors and observers.

“It is an embarrassment, quite frankly, that a country with as many qualified engineers, scientists and entrepreneurs (has) not just a high carbon footprint but poor energy efficiency,” Stanford University’s Steven Schneider told journalists this week.

Now, however, a long awaited review on energy efficiency standards is being presented to the government this month, and should provide the platform for a raft of new policies.

The Energy Efficiency Council last week released a report pointing out Australia’s energy efficiency improved by just 0.7 per cent a year in the 25 years to 1998, less than half the OECD average.

It advocates three key policy measures: An energy efficiency target that aims for a 20 per cent cut in energy demand below business as usual by 2020, a national energy efficiency scheme supported by higher standards, a sophisticated loan scheme and less red tape, and targeted investment by utilities.

The sum total of these policies could mean billions of dollars in saved energy costs by the corporate sector, reduce the need for investment in new baseload power generation and help limit energy price rises by making much of the $42 billion planned to reinforce existing infrastructure redundant.

And they just might help create a whole new industry. According to the EEC report, the global market has been doubling annually and already stands at $US164 billion a year.

Which is why many major industrial groups – such as those that make up membership of the EEC itself – are right behind it. The EEC, quoting a 2008 report by the ACTU and the ACF, estimates that Australia could create a domestic and export industry with 75,000 jobs in energy efficiency by 2030.

Indeed, the only groups arguing seriously against energy efficiency targets and standards are parts of the energy utility sector, fearful that the business models that have held them in good stead for the past few decades may be under attack. But they are anyway – the conjunction of new technology, energy prices, energy security and emissions targets will create an economic case for change that is simply irresistible.

A recent survey by Johnson Controls underlines the international business interest in energy management. The survey of 2,800 executives across Europe, Asia and North America (but not Australia) indicated that most have increased investment in energy efficiency over the past 12 months. And their motivation makes interesting reading.

Cost savings was the most important factor, with most respondents anticipating a 9 per cent increase in energy prices over the coming year. The second most important consideration was lowering greenhouse emissions (74 per cent) for all regions with the exception of North America, where boosting public image (63 per cent) and taking advantage of government/utility incentives (62 per cent) ranked higher in importance.

Johnson Controls is one of five partners behind the refit of the iconic Empire State Building in New York, which is expected to cut 38 per cent of the building’s energy usage and $4.4 million in costs per year.

That will deliver a return on investment within three years, which is hard to argue against, and Johnson Controls expects the refit market in the US alone to reach $18 billion and 360,000 jobs.

Go to the website to pre-register now for Climate Spectator, edited by Giles Parkinson, launching soon.

Source: www.businessspectator.com.au

Where am I this week? Speaking to the Doctors and Scientists for Sustainability and Social Justice (D3SJ) at Taringa, Brisbane on Wednesday 7 July. See www.d3sj.org for more info. On Friday 9 July I’m back at Angus & Robertson, Post Office Square, Brisbane 11.30 to 2.30 to sign books.  And an advance alert for the next Business Eco Forum on 14 July at Samsara, Milton, Brisbane. Too good to miss!