Australian emissions reduction scheme attacked

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A new report from the Australian government has challenged the effectiveness of measures used in New South Wales (NSW) to reduce greenhouse gas emissions through regulating its electricity retailers. The report, prepared by the License Compliance Advisory Board (LCAB), shows the increase in emissions from the state's 21 electricity retailers is much higher than government targets permit. The NSW regulations were supposed to counter any negative environmental effects of the deregulated national electricity market through license conditions that set benchmarks for reducing emissions.

In the first benchmark for the 1997/98 financial year, emissions per head of population were supposed to stabilise at the 1996/97 level and then decrease 5% below the 1989/90 levels by the year 2001. The LCAB reports that retailers have exceeded established targets by 3.3 million tonnes. The main reason is because of reduced output from the Snowy Hydro Scheme and more imports of polluting brown-coal electricity from Victoria. From the Australian Consumers' Association (ACA), Anna Salleh says the report confirms the association's prediction.

"NSW environmental regulations for electricity companies are in danger of being seen as nothing but window dressing," she warns. According to Salleh, although NSW has taken a lead among Australian states in the area of greenhouse reduction, the LCAB report shows that electricity consumption grew nearly four times more than the population. As a result, the state's licensing scheme is "clearly ineffective," she says, pointing to the lack of penalties for companies not meeting their targets.

ACA believes retailers need more flexibility in how they meet the targets, suggesting mechanisms to credit retailers for buying electricity from specific low emission generators. Emissions trading between retailers and generators, to provide an incentive for retailers to buy cleaner electricity, was also suggested. Salleh warns, however, that such schemes must be focused on energy efficiency and renewables and not on carbon sinks.

The NSW government is defensive. Speaking on behalf of NSW energy minister Bob Debus, Sarah Turner says the conclusions of the LCAB report are "disappointing." But she stresses that NSW is alone in both publicly disclosing the environmental performance of the state's electricity industry and requiring retailers to develop detailed strategies to reduce emissions as part of their license conditions. Turner adds that it is "premature" to talk about penalties for non-compliance as retailers have only recently finalised their greenhouse strategies. "But penalties has never been ruled out and it will be looked at if required."

Action plan

At almost the same time as the LCAB was releasing its report, Bob Debus was releasing NSW's official Greenhouse Action Plan, saying the government is "not content to rest on our laurels" . The plan contains several initiatives including a government Energy Management Policy that sets targets for reducing energy consumption within government agencies; a two year, A$2 million Sustainable Energy Research and Development Fund to assist long term development of renewables and energy efficiency projects; and a requirement that government agencies increase their purchases of green energy to 6% of needs.

Debus also announced a three year, A$5 million program to promote green power initiatives. The Renewables Investment Program will build on the A$70 million in new renewable projects initiated since the start of the Sustainable Energy Development Authority's green power accreditation scheme in April 1996. A national green power scheme, accredited by SEDA, was launched in May 1997.

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