Jun 2007 - Australian Institute of Energy

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• $26 million for the establishment of a new think tank, the Australian Centre for Climate Change Adaptation, and $100 million in programme funding for the Centre. The Centre aims to bring together a wide range of economic and scientific expertise on climate change, across all key research agencies, so as to provide information to decision makers to help manage climate change impacts. • $44 million for an Adaptation Flagship to be established in the CSIRO, in collaboration with the Bureau of Meteorology. The Flagship is intended to complement the new Australian Centre for Climate Change Adaptation measure by providing the underlying science required to improve climate projections. Global Initiative on Forests and Climate The Federal Government will provide $197.2 million towards its Global Initiative on Forests and Climate. Launched in March this year, the initiative aims to work with other countries to protect the world’s forests by supporting new forest planting, preventing deforestation, and promoting sustainable forest management. Support for solar energy The Budget will provide an additional $150 million under the federal Photovoltaic Rebate Programme (PVRP) to support: • a doubling of the rebate for solar panels on homes, up to a maximum of $8,000; • a new competitive grants scheme for schools and communities to install solar panels; and • a targeted scheme to support the design and installation of solar systems on commercial, industrial and iconic buildings. The Federal Government expects this funding to more than double the number of solar powered systems installed in Australia over the next five years and to stimulate further growth in the solar industry. Coal mine methane reduction programme The Federal Government will invest $18.5 million over 5 years, partly funded from the existing Greenhouse Gas Abatement programme, to reduce methane emissions from underground mines, found mainly in New South Wales and Queensland. The coal mine methane reduction programme will provide competitive grants to industry to reduce methane emissions from underground coal mines in the Kyoto target period 2008 to 2012. The programme is expected to reduce emissions by up to 0.9 million tonnes per year; 4.5 million tonnes over the 2008 to 2012 period. CCS legislative regime The Budget provides $18.2 million over four years for the Department of Industry, Tourism and Resources and Geoscience Australia to develop and implement laws and regulations for carbon capture and storage (CCS). The new legislative regime will: • provide industry with access and property rights in Commonwealth waters to allow for carbon dioxide to be stored in offshore geological structures; • provide for the release of areas for exploration; and • regulate CCS activities. Tax deductions for carbon sink projects The Budget provides $23.6 million over four years for new tax arrangements applying to the costs of establishing forests for the dedicated purpose of reducing GHG emissions. Carbon sink forest operators will be allowed to depreciate the costs of establishing a qualifying carbon sink forest under the horticultural plant provisions, with effect from 1 July 2007. In addition, the Government will introduce immediate deductibility for costs incurred in establishing a qualifying carbon sink forest during a 5 year period commencing 1 July 2007. The immediate deduction will take precedence over the general horticultural provisions during this period. To be eligible for carbon sink forest tax concessions, businesses will need to participate in the Government’s Greenhouse Challenge Plus programme. Carbon sink forest projects must also demonstrate that they comply with environmental and natural resource management guidelines for their geographic location. Responses from the Opposition and green groups Labor and green groups have criticised the Budget’s climate change measures, claiming they are neither substantial nor new. They criticise the limited support for renewable energy, the lack of long-term targets for emissions reductions, and the absence of any announcement about the introduction of an emissions trading scheme. Opposition environment spokesman Peter Garrett said. “The budget will not stop Australia’s greenhouse pollution from soaring by 27% by 2020, and clearly shows the government lacks the political will to try and prevent dangerous climate change.” Australian Greens climate change spokesperson, Senator Christine Milne, said Treasurer Costello’s 12th budget demonstrated that he is “negligent and reckless” when it comes to climate change. The Australian Conservation Foundation (ACF) acknowledged that the Budget contained some useful funding for environmental initiatives, but argued it does not match the scale of the action required to tackle climate change. ACF’s executive director Don Henry commented that, “Avoiding dangerous climate change is going to take more than modest funding for isolated programs – it requires leadership and far-sighted structural changes.” Prime Minister supports emissions trading In response to criticism over the Budget’s perceived lack of climate change measures, Prime Minister John Howard said he was awaiting a report from the Task Group on Emissions Trading at the end of this month. “Everybody agrees that you have to have some price on carbon to effectively deal with the emissions problem,” he told the Seven Network. “And the best way of delivering a price on carbon is through a market mechanism, namely an emissions trading system. That ... is the centrepiece of any long-term strategy and I’ll be saying quite a bit about this whole issue a few weeks after we’ve received the report.” [“Howard backs emissions trading scheme”, The Age, 9 May 2007] Reprinted from Blake Dawson Waldron’s Greenhouse Update, 17 May 2007. 44 EnErgy nEws Vol 25 no. 2, June 2007
The Darwin Declaration After two days of meetings, the eighth APEC Energy Ministers’ Meeting in Darwin concluded on 30 May 2007 with the release of the ‘Darwin Declaration’, recognising the need to deploy cleaner, more efficient and sustainable energy technologies. “This is a landmark achievement for the APEC member economies, said Industry Minister and Chair of the meeting, Ian Macfarlane. “Energy Ministers from across the 21 economies have agreed to a number of ways forward to achieve energy security and sustainable development. A summary of the agreed instructions to APEC member countries follows. ACHIEVING OIL SECURITY APEC oil import dependency is forecast to rise from 36% in 2002 to 52% in 2030. Recent high oil prices have been driven by supply-demand fundamentals, geopolitical risks and concerns about supply interruption and speculative trading. In response we encourage APEC economies to adopt a broad range of measures designed to enhance security of supply and promote fuel efficient transport and the uptake of viable alternative fuels. (a) Facilitating investment and trade in downstream and upstream oil markets To ensure sufficient investment in refining capacity to meet growing demand, including for cleaner fuels, we encourage APEC economies to: • provide a transparent and streamlined regulatory framework for such investment; • facilitate freer trade of oil products; and • create a positive environment for technology development to help refiners to produce cleaner oil products more efficiently. Transparent, credible, equitable, and effective legal and regulatory frameworks, including the ability to enforce contracts, are essential to generate sufficient and sustainable international upstream investment. • We support ongoing dialogue between consumers and producers to facilitate an enabling investment climate in oil and natural gas resources and reserves. • We recognise the importance of facilitating upstream investments. Observing the important role of oil and gas companies in APEC economies: • We encourage the Energy Working Group (EWG) to study the trade and investment practices of these oil and gas companies and to examine how partnerships and cooperation can improve the value chain. (b) Enhancing emergency preparedness Oil supply disruptions can affect all member economies. In response: • we encourage APEC economies to participate in the Real- Time Emergency Information Sharing System (RTEIS) and to develop and communicate emergency mechanisms and contingency plans, including through the APEC Taskforce for Emergency Preparedness and also through enhancing the RTEIS to facilitate the establishment of an APEC Rapid Response Points of Contact Network for the Protection of Critical Energy Infrastructure to help minimise the potential for supply disruptions and to better protect critical energy infrastructure, including for maritime transportation; • we instruct the EWG to strengthen cooperation with other relevant international fora, such as the IEA, for coordinating efforts at the time of energy supply disruption; • we recognise the implications of disruptions and limitations to maritime energy transport and we instruct the EWG to develop linkages with organisations responsible for regional maritime security with a view to identifying and reporting any cross-cutting issues to our next meeting; and • we encourage interested economies to continue to report on implementing best practices for the establishment, financing and management of strategic oil stocks. (c) Improving oil data sharing A lack of transparent and reliable oil market data aggravates price volatility. • We reaffirm our support for the Joint Oil Data Initiative (JODI) as an international initiative that addresses investor uncertainty, contributes towards global harmonisation of energy data, and strengthens producer and consumer dialogue by demonstrating concrete action. • We encourage APEC economies to report timely, accurate and complete data on oil reserves, supply and demand, stocks and production under the JODI. We direct the EWG to continue to provide training through JODI for economies to undertake this task and to contribute towards the JODI World Database. (d) Promoting energy efficient transport and alternative transport fuels Transportation is the leading sector for oil demand growth in the APEC region and high oil prices are driving cost-effective improvements in vehicle fuel efficiency and the development and uptake of alternative transport fuels. • We welcomed the report of the APEC Biofuels Task Force. Among its key findings are that biofuels from several crops are cost-competitive at current oil prices, that biofuels can lower greenhouse gas emissions and that biofuels can displace a sizeable share of oil use over time. • Biofuels production should be advanced in line with sustainable development objectives. We encourage intensified efforts to develop and deploy techniques for the cost-effective use of non-food feedstocks, such as farm and forest residues and grasses, which hold the 45 EnErgy nEws Vol 25 no. 2, June 2007
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Jun 2007 - Australian Institute of Energy

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