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Tonight, Insight is looking at what Australia is doing to meet the challenges of climate change.

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We are one of the world's biggest producers and users of coal, and our economy reaps more than $24 billion a year from it. We are told that clean coal will eventually mean we can use our vast coal reserves and not add greatly to greenhouse gases. At best, clean coal is years away, and what if it doesn't work?

LA TROBE VALLEY COAL:

REPORTER: Lisa Main

Australians are the highest per capita polluters in the world. One of the reasons is we have an abundance of coal. It's the cheapest way to make energy, but it's also the dirtiest. Nowhere is this more evident than in Victoria's Latrobe Valley where brown coal, the dirtiest of all, powers the state.

PETER BACHELOR, VICTORIA ENERGY MINISTER:In Victoria the Latrobe Valley has 500 years of brown coal. That's a huge resource and we don't propose to walk away from it. The challenge is to use the coal in a more environmentally friendly way, so we can transition to a zero emissions future.

Wind farms exist alongside the valley's coal-fired power plants. Farmer Bruce Beatson has watched the development of both industries in the 40 years he's farmed here.

BRUCE BEATSON, VICTORIAN FARMER: When I started farming I had a casual disregard for environment and environmentalists. I used to hand out how to vote cards for the national party and once for the Liberals, and life's experiences change you.

The more Bruce looked at the science, the more he realised climate change was real and complex, so much so he signed up as one of Al Gore's warriors.

BRUCE BEATSON: It's like a patient with cancer who's been told by the doctor, there's a diagnosis and you have a terminal illness, and then spends the next two or three years getting a 22nd and 23rd opinion. Sooner or later we have to bite the bullet. We know there's a problem.

In the hills behind Bruce, both the state and federal governments have committed significant funds to clean coal technology. One power plant that received government funding to clean up its act was Hazelwood. It's Australia's oldest and dirtiest power plant. Green peace campaigner Mark Wakeham says even with this technology Hazelwood will want to pollute.

MARK WAKEHAM, GREENPEACE ENERGY CAMPAIGNER: It has been given money to install an absolutely more efficient turbine at one of its eight turbines, on the greenhouse pollution improvements will be small, it will still emit 17 tons a year, which is 4% of Australia's pollution, so whatever they do, it will remain one of Australia's biggest polluters.

Up the road from Hazelwood, a further $150 million of public money is being invested into the big hope for clean coal, it's called geo sequestration.

PETER BACHELOR: It's a big long complicated name of putting carbon dioxide into naturally occurring reservoirs that already exist and making sure that it stays underground.

Greenpeace disputes the government and HRL's claim that this is clean coal. The problem is that the technology to capture and bury the CO2 is untested and, at best, a decade away. They have taken their complaint to the ACCC for judgment.

MARK WAKEHAM: Using that language is a breach of the Trade Practices Act, calling a coal fired power station a clean power station is like calling cigarettes healthy cigarettes.

PETER BACHELOR: It is an appropriate and accurate term to use to describe these processes. I think this is a political stunt on the part of Greenpeace.

BRUCE BEATSON: I am ever hopeful that we will find clean coal. I know we can make coal cleaner and I know that we have got to do that, but at the moment clean coal is an oxymoron. If we burn coal, we are taking condensed carbon and putting it into the atmosphere as carbon dioxide.

JENNY BROCKIE: Thank you for joining us, especially you, Minister, and the opposition spokesman, Peter Garrett. Bruce, you said you think clean coal is an oxymoron. Explain why you think the term is wrong?

BRUCE BEATSON: One of the things that mankind has been doing for a long time is putting waste to one side. To me, even ultimately carbon sequestration is putting a waste material to one side, in the hope that it will stay there, in the hope it will never come back to be a serious concern for future generations. That's simply how I would put it.

JENNY BROCKIE: We will talk about sequestration later, because I'm sure a lot of people would like to understand it better. Graham Middlemiss, you are a plant operator at a brown coal power station in the Latrobe Valley. How do you see the term clean coal?

GRAEME MIDDLEMISS, COAL MINE WORKER: I think, as has been defined by the speakers, first of all, increasing efficiency, so the emissions are reduced, and capturing the emission, and geosequestration is the description there.

JENNY BROCKIE: Do you think it's a misnomer, the idea of clean coal, do you think it is giving the right or the wrong impression?

GRAEME MIDDLEMISS: I think it's a perfectly adequate description. If the emissions can be cleaned up and stored, it is clean coal.

JENNY BROCKIE: What do members of the public think when they hear talk about clean coal? Do you understand what's meant by the debate?

CARMEN, VICTORIA: No I don't understand anything about it at all. I think we all need to be more educated on this topic.

JENNY BROCKIE: What do you think it means? Are you aware of how much coal we use in the country? Is it an issue for you, something that you are concerned about or don't care about?

CARMEN: I haven't really been that concerned.

JENNY BROCKIE: Liz, what about you, what do you think clean coal means?

LIZ: I don't understand what it meansat all. I would like to understand it, but it's not something I've read it about that often.

JENNY BROCKIE: Peter Cook, if we are talking about the technology available right now, not sequestration, which is yet to go the full distance and be proven to work, but the technology available right now, how clean does it make coal?

DR PETER COOK, CHIEF EXECUTIVE FOR CO2CRC: I think I should make the point, it's not something for the distant future, it is something that is happening now in places around the world, not in Australia at the moment. That's the first thing. As for what it is, it's about using coal in smarter ways, so we decrease the emissions, and there are a variety of ways to do this, by burning it in different ways, by processing it in different ways.

JENNY BROCKIE: How much cleaner does it make coal, those other processes?

DR PETER COOK: Essentially, what you can do is potentially store all of the carbon dioxide that would otherwise go into the atmosphere. You can argue about a few per cent here and there, but that is the aspiration.

JENNY BROCKIE: That is the aspiration, but I'm talking about how we can do right now, in terms of cleaning up coal, how much cleaner can he we make it now, given the technology we have right now?

DR PETER COOK: We can do it right now. You can buy systems off the shelf. Can we do it now at the price we want to do it at? No. Can we do it at the scale we want to do it at? No. That's for the future, that is what we 've got to work on, that's why we are doing the research and development to undertake those things.

JENNY BROCKIE: At the moment we're not making it that much cleaner, but you're hoping that we will.

DR PETER COOK: There is a plant in the US, in North Dakota that captures the carbon dioxide, transports it on several hundred kilometres of pipeline and injects it into the ground, so essentially that is zero emission.

JENNY BROCKIE: But we are not doing it here yet?

DR PETER COOK: No, we are not doing it here yet and we need to do it here.

JENNY BROCKIE: Ian McGill, you have been assessing the range of energy technologies that are available, and we are hearing a lot about clean coal lately, what do you think clean coal means?

DR IAIN MACGILL, ENERGY AND ENVIRO. MARKETS, UNSW: Sometimes it seems to mean whatever you can get away with. I think Peter picked up the key point, which is in terms of climate change, clean coal pretty much has to mean coal generation or the use of coal with carbon capture and storage. The term sometimes is used to describe more efficient coal fired power stations and that is sometimes the context in which it is used here in Australia, but even clean coal fired power stations put out more emissions than our other options, so really it has to be about carbon capture and storage.

JENNY BROCKIE: Ian Macfarlane, the government is pouring more than $400 million into the development of clean coal technology. Given the technologies that are working now, as opposed to what we are hoping for in the future, do you think it is an accurate term? Should we be talking about at the moment about slightly cleaner coal or slightly less dirty coal being what we are achieving now?

IAN M ACFARLANE, MINISTER OF INDUSTRY, TOURISM AND RESOURSES: The $400 million that we are currently investing in clean coal technology, is aimed at producing zero emission coal, and that is clean coal. You compare that to the $1.4 billion that we are currently investing in the renewable energy industry, and you see the government is taking a balanced approach to this issue. The ultimate aim has to be to produce zero emission coal. Coal makes up 80% of our electricity generation source, and that percentage is not likely to change in the next 15 to 20 years. If we are going to change our emissions, we have to clean up coal.

JENNY BROCKIE: Peter Garrett, Labor agrees with this. You are throwing a lot of money at clean coal as well.

PETER GARRETT, SHADOW MINISTER FOR CLIMATE CHANGE: We see there's an urgent need to make sure that designs and technology can get on to producing coal that is clean. That is the aspiration, and it will clearly be one of our most important technological challenges. We also see a valuable role for renewables and clean energy generally. When we discuss the issue about the role coal will play, it is really no proportion to the challenge climate change presents to us, and that challenge is so immense, we will need to be able to utilise a range of energy source, and clearly coal will be one of them, but we will have to make sure that the emissions from those energy sources are significantly reduced.

JENNY BROCKIE: Mark Wakeham from Greenpeace, coal is our biggest export and it's provided us with cheap and abundant energy, doesn't it make sense on focussing on trying to clean it up.

MARK WAKEHAM: We have heard of the available technologies at the moment, we can't clean it up very much at all, yet coal is receiving the lion's share of government funding in terms of climate change solutions. We could be investing the money in renewable energy and energy efficiency that we can roll out tomorrow, not something that we may or may not be able to roll out in 10 or 20 years.

IAN M ACFARLANE: That is simply not correct. We are investing $400 million trying to clean up coal and investing $1.4 billion in renewable energy. That is a quantum of 3, when you realise that renewable energy contributes around 8% to 10% of our electricity source and Australia's electricity demand will continue to rise, you have to have a suite of energy resources if you are going to move forward and maintain energy security.

JENNY BROCKIE: Now Mark Diesendorf, why do you disputing these figures?

DR MARK DIESENDORF, SUSTAINABLE ENERGY AUTHOR: The minister’s claim that we are investing $1.4 billion in renewables is laughable. Most of the investment in renewables in Australia doesn't actually come from the government at all, it comes from the contributions to the mandatory renewable energy target that we all pay as a very small surcharge on electricity prices. I suspect the minister is trying to claim credit for that.

JENNY BROCKIE: Are you including that?

IAN MACFARLANE : Absolutely not. If you add in the mandatory renewable investment, that is $3.4 billion invested in Australia on top of the $1.4 billion . We have invested money in photo voltaics and solar hot water systems and a whole range of solar thermals.

JENNY BROCKIE: The vast majority of the money in the low emission technology fund is going to clean coal isn’t it?

IAN MACFARLANE: That is only part of $3.4 billion allocated by this government to reduce emissions, to make sure we are meeting the challenges of lowering our emissions signature.

JENNY BROCKIE: Peter quickly and then I will have to move on.

PETER GARRETT: I can't let the minister get away with this. At the moment we have an extremely small level of delivered energy under the mandatory renewable energy target, 1% of generated energy. It is an incredibly small figure, and that is under the minister’s government. And we will not over a period of 10 years of the Howard Government see any significant increase in the amount of renewable energy that has been delivered in Australia at all. They are the facts.

IAN MACFARLANE: That's not the facts, because there has been an 80-fold increase in wind electricity generation in Australia as a direct result of that, to say otherwise simply is more of this rhetoric.

JENNY BROCKIE: I would like for you Peter Cook, to describe sequestration for us, because I'm sure everyone is hanging a lot on this idea of sequestration which will clean up coal. You are one of the brains behind developing these clean coal technologies. Take us through how carbon capture storage works. We have a diagram here to help explain. Can you talk us through this?

DR PETER COOK: We start off with a carbon dioxide source that could be a power station, a cement factory, a gas processing plant, in other words, anything that is a point source of carbon dioxide. We then have to capture and separate that carbon dioxide and we do that in a variety of ways, you can use solvents, various liquids to capture that carbon dioxide, you can use minerals to capture the carbon dioxide. Once you capture it, you then get a 97% or more of CO2, you then compress it to a liquid. You are able to move that liquid along a pipeline – in other words, you transport it – to where you are actually going to inject the carbon dioxide. You then inject it into an area where we know and understand the geologyWHERE we have reservoir rocks. These are like sponges, not a hole in the ground, but lots and lots of little holes in the ground, within the grains of the rock. This actually acts as a sponge and the carbon dioxide is then absorbed by the rocks, it stays in the rocks, it's captured in the rocks, it’s sealed in the rocks. It will stay there for thousands of years and longer, in other words for geological time.

JENNY BROCKIE: When will it be available on a large scale?

DR PETER COOK: That is happening now in a number of places around the world.

JENNY BROCKIE: It's not happening here.

DR PETER COOK: We will start it in Australia this year in the Otway basin which is in Victoria, Australia's first demonstration. And what we will be doing there through my organisation, CO2 CRC, we will inject 100,000 tons of carbon dioxide. That is a step in the right direction.

JENNY BROCKIE: That’s one example, but I understand that think it will be 2015 before we see it on a large scale, is that right?

DR PETER COOK: We will have to up the scale of things considerably, everybody recognises that. This is a small step. We will then start to rapidly move by injecting a lot more carbon dioxide, and over the next few years that will happen. We will be talking tens of millions of tons by 2015, that is our target.

JENNY BROCKIE: Iain MacGill do you think that's a realistic time frame?

IAIN MACGILL: We need to separate the issues of carbon capture and storage and clean coal with carbon capture and storage, because the current projects underway are not involving coal, they involve gas processing largely.

JENNY BROCKIE: If we are talking about a time frame for when we might see this notion of clean coal become real, what sort of time frame do you think we're looking at?

IAIN MACGILL: If you take Minister Macfarlane's view of clean coal as zero emission coal, that is pretty unlikely, it's generally expected to be a lower emission technology not a zero emission technology.

JENNY BROCKIE: Saying it's lower emission technology, what time frame?

IAIN MACGILL: We have various demonstration projects under way.

JENNY BROCKIE: I want a date from you Iain, we have been told 2015. Do you agree?

IAIN MACGILL: I think the key point is, what does commercial mean?

JENNY BROCKIE: No, tell me what you think the date might be. Anyone else like to offer a date for me? I'm trying to get a sense of when we might see this happening?

IAIN MACGILL: I could offer you a range of dates, because that's where the opinion is.

JENNY BROCKIE: Give me a range of dates.

IAIN MACGILL: The key question is large scale deployment, when it actually helps reduce emissions, and it varies from the IEA saying around 2020, the IPCC saying perhaps 2020 or 2040 and various other folks with different estimates of when they may be able to make the contribution.

JENNY BROCKIE: Ian Macfarlane is this a gamble, a big gamble, we don't really know what is going to happen when the stuff is in the ground or do we?

IAN MACFARLANE: We do know what is going to happen when it is in the ground, but the issue is what do you do? You have to do a range of things. You have to invest more in renewables and we are doing that, you have to invest more in clean coal technology, you have to consider nuclear energy. If zero emission or low emission coal fails, the only option is for a country to move to a form of nuclear power, because you simply cannot generate enough electricity in Australia from renewable energies like photo voltaics and wind. You then rely on two technologies, you rely on geothermal, which we are investing heavily in as a government and a consideration of nuclear.

JENNY BROCKIE: We will get back to some options in the moment, looking at things like solar wind and nuclear power and whether they could meet our energy needs. We're looking at our energy future and how Australia can best reduce its greenhouse gas emissions. Australia relies on coal for around 80% of its energy. What about renewables like solar and wind power, could they provide enough energy to meet our core needs? The government doesn't think so, but some renewable energy developers think they can provide what's called base load energy and they have moved off shore to try to prove it. Here is Lisa Main.

THE DAVID MILLS STORY:

REORTER: Lisa Main

MALCOLM TURNBULL, ENVIRONMENT MINISTER: You cannot run a modern economy on wind farms and solar panels. It's a pity that you can't, but you can't.

Australian solar energy developer, David Mills, disagrees. He's been lured to California and is now backed by the same people who funded Google. David's company Ausra, are key players in Europe and America's energy future

DAVID MILL, CHAIRMAN, AUSRA INC: We have storage actually being installed at a plant in Spain at the moment, which replaced a coal plant of that size. How one can say that this is not possible is difficult to understand. I think he's possibly badly advised. I think it is time for the government to really look at what's happening in this field and in several other fields.

Australia has a rich history of clean energy innovators, but much of the technology has gone overseas.

DAVID MILLS: Also at my university we developed evacuated tubes which are now populating probably the majority of the world's solar collector, bar China. When you look at that, we have done very well in the basic technology. What we haven't done well in and what's often the case in Australia is that the people that should pick up these technologies and run with them aren't there. That's the major failing. We have Olympic standard technologyists, but we don't have Olympic standard developers in business. We can't find it easy to compete with coal, which you dig out of the ground, on a conveyor belt straight into the boiler. That should not be the debate. The debate should be how much you value clean energy, how much you value dirty energy, and what are the relative prices for that. That debate really isn't in Australia yet.

JENNY BROCKIE: Ian Macfarlane, are we valuing dirty energy over clean energy? The government has made it clear we will continue to rely on coal, no matter what. Are we placing a greater value on dirty energy?

IAN MACFARLANE: No we are not and that company is already receiving assistance from the government to develop their concept, but it is still at a conceptual stage. If we look at renewable energy like solar, the challenge is still there to produce energy from that source, 24 hours a day, 7 days a week. So along with developing the technology to actually generate electricity from solar you also have to develop the technology to store the electricity for the night-times and the days when the solar intensity isn't high enough to supply the capacity. You can't just rely on one area of energy, you have to look at the whole spectrum.

JENNY BROCKIE: David Mills clearly thinks that solar will deliver base load power within 12 months he says. He's yet to prove it, as indeed clean coal technology is yet to be proven to be totally clean, but he is backed by the same venture capital money that backed Google. If solar delivers base load power and he achieves what he says he wants to achieve in California and Spain, would that shift the government's priorities away from coal, if the issue of base load power could be addressed, would that change your attitude?

IAN MACFARLANE: We don't have a set of priorities on where the low emission, zero emission energy of Australia's future will come from. We are funding all areas in our research. The reality is that there are still challenges that have to be overcome, but are those challenges insurmountable? No, they are not. Is David right? I hope he is, because Australia is leading the world in areas of solar technology, and they are the words of Sir Nicholas Stern, who acknowledges the work that has been done in Australia.

JENNY BROCKIE: He did have to leave the country, he's not happy about that.

IAN MACFARLANE: He made investment choices, but his project is still being funded. We funded the largest photo voltaic power plant in the world and we are working on those sorts of technologies.

JENNY BROCKIE: I get back to my question though, iIf he does deliver base load power, would you be prepared to walk away from coal to a substantial degree, if it comes on line faster than clean coal does?

IAN MACFARLANE: We will have in place a carbon trading scheme which recognises the value of carbon. It's up to the market to source its electricity from wherever it sees fit. We don't have a set of priorities, Australia’s future lies in energy production,we need to insure that we have energy security and that will come from a suite of energy sources.

JENNY BROCKIE: We do have a set of priorities, we have said that coal is important, we’ve said that coal is essential.

IAN MACFARLANE: If you take priorities based on government funding, then renewable energy, particularly solar energy is three times a higher priority, $1.4 billion against $400 million.

JENNY BROCKIE: Peter Garrett, what about Labor? Would you redirect some of the $500 million you have announced for clean coal to embrace base load alternatives if they were viable and if it was possible to deliver base load power in other ways? Would you move away from coal?

PETER GARRETT: We think there is an important role for clean coal and the initiative that Kevin Rudd announced is a part of that Jenny, but what we would do and the government hasn't done is that we would provide substantial assistance to renewable and clean energy, particularly with the mandatory renewable energy target. The Minister is saying that the government has invested in renewable energy, and your presentation shows that David Mills is in the United States building the plant. The history in the last 10 years has been one of denial of climate change, reducing the investment levels proportionate to things like clean coal and coal for renewables, not embracing a mandatory renewable energy target, which Labor thinks is important, and frankly in terms of the debate, simplifying the debate to clean coal or nuclear. The fact of the matter is we will have to draw on a suite of energy sources. We are committed to a solar nation in Australia, not a nuclear nation, and we think support for renewables and energy efficiency, support for solar, wind and geothermal is critical to help us manage the climate change challenge and to allow the businesses that are offshore to come back and do the job they want to do.

JENNY BROCKIE: Brad Page, you represent the energy supply industry. Describe base load for us. We hear base load all the time, politicians say we can't get base load from other sources. How do you think we can best provide reliable energy and reduce greenhouse gas emissions and do it quickly – that's the other issue?

BRAD PAGE, CEO ENERGY SUPPLY ASSOC. AUSTRALIA: There are a lot of challenges there. Base load electricity generation in technical speak generally refers to a plant that can deliver electricity across a year about 85% of the time. That means that most of these plants operate 24 hours a day, 7 days a week in very stable states and then go off line for a certain amount of the year for maintenance, so it's meeting the basic demand for electricity all of the time.

JENNY BROCKIE: Even when we don't need it?

BRAD PAGE: Not quite true, it's there all of the time. We actually use consistently power 24 hours a day 7 days a week. These units can move up and down and increase and decrease their output, but they are very low cost, reliable and consistent producers of electricity. Other suites of generators, called intermediate and peaking plants can start very quickly, much higher cost, and can do what is called load following, so if we ramp up our requirement for electricity, say on cold evenings where lots of heaters come on and so on, the extra plant comes on to meet the demand and is switched off again to come back to the underlying basic level of requirement.

JENNY BROCKIE: What do you think will be best to provide what we need and reducing our emissions at the same time?

BRAD PAGE: We have done some studies on this and view is that you should always be going about these things with a very clear objective of about what level of emissions you are trying to achieve and at the least cost outcome for the community so that you minimise costs.

JENNY BROCKIE: You should have targets?

BRAD PAGE: You undoubtedly have to have targets.

JENNY BROCKIE: What do you think is the best way of delivering it?

BRAD PAGE: Our modeling, say, for a deep cut 30% reduction at 2030 says –

JENNY BROCKIE: I’m sorry, I am talking about the types of re –

BRAD PAGE: The types of reductions?

JENNY BROCKIE: The types of energy we use, coal, nuclear, what's the best way to deliver the base load power.

BRAD PAGE: In terms of base load, coal is undoubtedly the lowest cost you have at the moment but the highest emissions. The next lowest technology available today is gas cycle turbines, which have an emission level of a half to a third of that of coal fired plants. Hydro, if you have enough water, is extremely efficient.

JENNY BROCKIE: Not in a drought it’s not.

BRAD PAGE: Not at the moment. After that, you are tending to look at on the horizon technology.

JENNY BROCKIE: Hot rocks?

BRAD PAGE: Geothermal technology, absolutely. Biomass is another very promising and in fact already available and increasingly in use technology as well.

JENNY BROCKIE: What about nuclearWHERE does that fit in?

BRAD PAGE: Nuclear undoubtedly fits in as well.

JENNY BROCKIE: But it's not a short-term option.

BRAD PAGE: In our view it's not. There's a lot of infrastructure to enable a nuclear industry here, and we think the earliest you would see any nuclear reactors if we got on with it, would be 2020.

JENNY BROCKIE: Greg Bourne, you have been listening to all of this. You have worked for a big company and now you have moved into the environmental sector. What do you think listening to this, have we got our priorities right, are we addressing climate change the best way, what can we do to bring those emissions down?

GREG BOURNE, CEO, WWF AUSTRALIA: The key thing is to focus on reducing emissions and targeting them. We need to work on energy efficiency. It's about 20% of the solution and delivers money back into the pockets of the firms and the nation.

JENNY BROCKIE: Use less, whatever it is?

GREG BOURNE: Use less, use it smartly and plan it very well. That's about 20% of the solution. That pushes off the need for another coal fired power station, clean or dirty, maybe another 10 years, but which time some of the technology may have come through. Who knows? The next thing is moving into gas in a big way. It will become more expensive in the future and the emissions trading scheme will increase the cost, but gas can be brought in very very quickly. The final point about base load, in fact in the industrial scene it is people who want to use concentrated power, like an aluminium smelter, for example, in which case they can very often build a plant right inside the fence, a gas fired station, and reduce emissions quite quickly. You and I don't need base load power as is sold to us at all, we don't need it in that sense.

JENNY BROCKIE: Ric, you represent sustainable energy businesses. What do you think of the whole base load argument and the way that it is being used politically, that we can't move away from coal because of the base load issue?

RIC BRAZZALE, AUST. BUS. COUNCIL SUSTAINABLE ENERGY: The concept of base load is really an old-fashioned term. The issue is really to be able to provide electricity when customers need it, and that's typically not in the middle of the night when we're all asleep. We also run a modern power system that can accommodate all types of different technologies. So we see, for example, in South Australia 17% of their power will come from wind this year. There's no reason why 20% of Australia's electricity shouldn't come from wind, and we could do that relatively easily, and it's not one single technology to deliver 100% of the solution, we have a mix, and in fact we indeed do have a mix in Australia.

JENNY BROCKIE: How relatively -'s all very well to talk about relative easily, but our economy relies heavily on coal and represents a lot of money to the Australian economy.

RIC BRAZZALE: That's coal exports, but at the moment we need to build more than 1,100 mega Watts of new generation plant every year to meet our growing power needs. Where will that come from, and in a way that will lead to a reduction in emissions? That's why we need to move strongly into renewable energy and into natural gas.

JENNY BROCKIE: Ian Macfarlane, I'm interested that you have done a turnaround on nuclear energy, because a few years ago you said nuclear wasn't part the mix, it wasn't appropriate for Australia to consider nuclear energy. Now you have changed and you have been a climate change skeptic as well and I wander what process has gone on for youWHERE you have turned on that?

IAN MACFARLANE: The reality is that the advances we need to make in low emission technology means that you have to consider nuclear. As people are saying here, the long-term introduction of low emission coal is certainly an aspirational target, but perhaps that won't be happening for another 10 or 15 years and the technology still has to be proven. If you are looking at zero emission base load power, and we all use power, 24 hours a day 7 days a week, in our refrigerators, heating systems and air-conditioning systems, then you will have to look at how you sustain the supply of energy in a low emission future. On that basis, nuclear has to be in the mix.

JENNY BROCKIE: When we hear that wind could provide 20%, the impression a lot of people get is that the government is focussing a lot on coal and nuclear as the great hopes here, clean coal and nuclear.

IAN MACFARLANE: I have explained repeatedly, we have a focus on the whole range of energy sources, we are funding geothemal, wind, photovoltaic, photothermal and looking at bio mass and yes we are funding coal, but if we look at where Australia's energy consumption and needs come from, it is not practical to supply large quantities of wind energy into a market like Sydney. Where will you site the turbines? South Australia is ideal for wind but at the same time it relies on interconnectors to back it’s system up on the days when the wind doesn't blow and the turbines don't turn.

JENNY BROCKIE: Mark is that a reasonable argument, what do you do in Sydney?

MARK DIESENDORF: It’s totally wrong. When I was a principal research scientist at CSIRO we actually modeled the integration of wind power into electricity grids and we found that large scale wind power which was spread out geographicly was actually quite reliable, not quite as reliable as coal, but we can make it equally reliable to coal by adding a little bit of peak load plant, like gas turbines, like big jumbo jet engines, which are not operated continually, only when they are needed. Even wind power can substitute for some coal fired power stations.

JENNY BROCKIE: Peter Garrett, plenty of countries use nuclear energy efficiently and effectively. There are limits to most of the technologies we have been talking about so far, there are problems with development or hold-ups and we are looking at a longer process. We do know that nuclear works, and we know that it doesn't emit greenhouse gases.

PETER GARRETT: Yes, we don't know that it works to do exactly what a modern community needs in terms of the production of energy, that is to do it in a timely fashion, do it effectively and not produce a lot of emissions, but, most importantly, not produce another set of problems that follow on. The biggest problem the nuclear industry has is that it still hasn't resolved the intractable problem of radio active waste and waste storage. In Australia, it is an expensive source of energy, it produces radio active waste and ultimately opens us up to the possibility of being a waste disposal site for other countries in the world who are still struggling with their waste problems. As a number of speakers said, we have existing energy sources. I was interested to hear talk about gas, which has been under valued by the government. Gas, bio energy is what might be described as base load energy providers. If we had substantial investment in this country, our great solar resource, in geothermal and energy efficiency, a Greg Bourne said and to let natural gas play a role in the transition and let our Australian scientists get on with the job of doing it, we can produce the energy that we need and reduce emissions without taking the expensive and waste producing option of nuclear.

JENNY BROCKIE: George, you were part of the government's nuclear taskforce. The issue of waste is obviously an important one.

PROFESSOR GEORGE DRACOULIS, NUCLEAR TASKFORCE: It is important, but I think we need to get a sense of the scale of the problems. We need to have a sense of the scale of power required. You need a gigawatt electrical to service 1 million people, not a mega watt, a gigawatt. The waste issue is one the world is facing, but the volume of waste is very small. You produce 1 ton of radio active waste for 1 gigawatt every year, you produce 500 tons of waste for 20 reactors, so these are very small volumes. Could I make a comment on the cost?

JENNY BROCKIE: Yes, quickly.

PROFESSOR GEORGE DRACOULIS: We compared technologies in Australia, and the cost is sensitive to the interest rates one pays. In a moderate risk situation, about 10% interest rates, and coal is about the same – nuclear is about the same price as wind, and the same price as gas. In emissions, gas is not a low emissions technology. Nuclear, over a life cycle, is slightly worse, 60 kilograms per mega watt hour than wind and not as good as hydro, but better than photovoltaic, 10 times better than gas and 100 times better than coal.

JENNY BROCKIE: Let's look now at what our power bills might look like in the future. Brad Page, we are told to expect big rises in our energy bills as a result of a switch to cleaner energy. How high will they go and what will it depend on?

BRAD PAGE: It depends on a range of things Jenny, fundamentally it depends on two things, first of all, what are the targets we are trying to achieve and what technologies and fuels do we have available to do it? We have looked at what the lease cost generation might be in 2030 for 30% reduction in energy emissions from electricity generation over what they were in 2000. If you have every likely technology available to you to choose from, including nuclear, carbon capture and storage, geothermal, the whole range of things, you see that the cost to produce the electricity rises by about 45% over what it otherwise would have been. If you strip away some of the available technologies, if you don't have nuclear or carbon cop tour and storage, you can quickly go to a place where the cost to produce the electricity rises by 95% over what it would have been. What does that mean at home on your power bills, it's pretty rough and you can never really replicate what will happen in a competitive market – but it's about half the increase. The increase is somewhere between 20 to 25% on what the power bill would have been otherwise, through to 40 to 50%?

JENNY BROCKIE: If we do nothing?

BRAD PAGE: The power bill is relatively stable.

JENNY BROCKIE: But the environment is a mess?

BRAD PAGE: That's the point.

JENNY BROCKIE: Andrew Lamond, you have installed solar panels on your roof in Sydney, how much did it cost and how much is your energy bill now compared to your neighbours?

ANDREW LAMOND: In the solar panel, it was about $11,000 after the government rebate. The bill was $4.50 for the last quarter. The gas bill on top of that for the gas was $3.28. They are great numbers, but one of the things I did before putting a single solar cell on the roof what to make the house more efficient and I halved the energy consumption before that.

JENNY BROCKIE: You had to have a big outlay to do this?

ANDREW LAMOND: The total outlay for panels and all the efficient measures was about $20,000.

JENNY BROCKIE: How long before you break even, or will you ever break even?

ANDREW LAMOND: Probably 10 or 15 years, but that's based on the current flat rate of power. With power potentially going up to meet the environmental challenges, it might happen more quickly.

JENNY BROCKIE: Both the government and the opposition are offering rebates for solar panels. How many people here would take up those options or are interested?

WOMAN: I wouldn't mind getting a loan. I'm a student at the moment, but one day when I have my own house, I wouldn't mind getting a loan to save the environment.

JENNY BROCKIE: Would other people take up the option?

BRUCE BEATSON: We have just ordered solar panels for our house that will cost $16,000 with the government's rebate, it would be a bit over $24,000. That will effectively almost take us off the grid.

JENNY BROCKIE: That is only an option still for people with a reasonable amount of money, isn't it?

BRUCE BEATSON: If you are building a house and making a major investment for the long term, I would regard that as a very rational and sensible investment, taking into account what we are talking about is going to be the future cost of energy.

JENNY BROCKIE: Carmen, would you do any of these things, would you consider doing them or are they just too expensive?

CARMEN: At the moment we live in an apartment, so that would be out of the question. I guess in the future, if we had a house, that would be something to think about.

JENNY BROCKIE: Ian Macfarlane, I'm interested in the process here, because these are big questions and they are very important, not just to Australia's future but to the world's future. I wonder how you do decide priorities with policy. What process do you go through in determining where the money will go and what you will back and what you will give government support to?

IAN MACFARLANE: We are backing at the moment is low emission technology. Across the suite of low emission technology, money is being made available, it's being made available in lumps to renewable energy, $1.4 billion, it's being made available to low emission technology, $500 million, which includes renewable energy, the solar systems, photovoltaic power station was funded out of that. You basically will make available photovoltaic rebates for private use, hot water system rebates, you do it across a whole suite, you don't try to pick winners. There are no silver bullet solutions in lowering emissions.

JENNY BROCKIE: Haven't you picked a winner with clean coal, I mean we have heard so much emphasis on it and I know that low emissions technology fund , the vast majority of that money is going to clean coal technology.

IAN MACFARLANE: Around $300 million is going to coal and some is going to gas. The reality is that coal is a major energy source. If you look at any prediction around the world, that will remain so for the next 50 years or so. It would be irresponsible not to fund research into coal.

JENNY BROCKIE: Guy Pearse, you are a current Liberal Party member and were a consultant speech writer for former Environment Minister Robert Hill in the 1990s. You have written a book about the governments relationship with industry on this issue and you have been very critical, describing it as being carbon captured what do you mean when you say that?

GUY PEARSE, AUTHOR ‘HIGH AND DRY’: Well I think there's a very different type of carbon capture going on than the one that we hear about from the government so regularly. What started to trouble me after almost 20 years in the party was that the emission trajectory was so worrying, Australia is on track to increase by more than 70%by mid century and we've have had more than a decade in office already. And so I spent a lot of time investigating the politics behind this, and what I found, which was very disappointing to me as a Liberal, was that at virtually every turn we've had the terms of our policy dictated by a very small proportion of the economy, essentially our largest polluters, so the largest producers of fossil fuel and the largest consumers.

JENNY BROCKIE: What's your evidence for that though, business always influences governmentWHERE is your evidence?

GUY PEARSE: There's plenty of evidence. I went on Four Corners last year talking about my PhD research, in which I had, lobbyists from the Australian Industry Greenhouse Network, which represents that carbon lobby if you like, bragging to me they had written cabinet submissions and ministerial briefings on greenhouse policy in the last 10 years, butto be honest, that was the tip of the iceberg. When I looked around a lot further at all of the lengths, to the sources that John Howard takes most seriously on climate change, I found that the same industries had their views, their money and their people embedded in all of those sources.

JENNY BROCKIE: Ian Macfarlane, a response from you?

IAN MACFARLANE: I have heard Guy's comments before and they are full of inaccuracies. For instance, he quotes me in a conversation with Peter Costello, when in fact I was on leave from Parliament at the time having treatment for cancer. Guy wasn't involved in advising the Minister directly, he's welcome to his views, but the facts speak for themselves. The heaviest proportion of funding from our government is towards the renewable energy sector.

JENNY BROCKIE: Do those people write submissions to government?

IAN MACFARLANE: They don't write my cabinet submissions I can assure you of that. We have to look at where Australia is in terms of setting emissions targets and the Kyoto target. We are one of only 3 or 4 countries that will meet the Kyoto targets. We are a country that is leading the world in a whole range of technologies all of which is about lowering greenhouse gas emissions, we have a higher than average renewable use than the European countries. Those are the facts.

JENNY BROCKIE: Peter Garrett a quick response from you.

PETER GARRETT: The government has had 11 years to do something about climate change and they have done very little. The Minister is giving us rhetoric here and the reality is Australia is not looking to meet its energy needs by renewable energy, because its own policy is not to have a renewable energy target. Whether it's the CSIRO, talking about the climate change on our economy, our environment, our coasts, when experts are saying we should look at emissions trading schemes, so the market can work, on all those issue, including the claim the Minister makes about investing in renewable, they haven't done it and the issues Guy raises are worrying, but more worrying than all of this is the affect the government hasn't stood up and said, we will resolutely address climate change because it is the most important moral and political and environmental issue we face.

JENNY BROCKIE: Guy is Labor any different from the government in this regard?

GUY PEARSE: Well I think they are at present. I want to see a lot more detail from Labor, but at the moment we have some of the essential elements of an effective greenhouse policy from them, they've said they are going to ratify Kyoto, they have said they will increase the emret, they said they are going to have a thorough investigation of the economics of climate change.

JENNY BROCKIE: What about the influences you are talking about, do you think they are at work with Labor too?

GUY PEARSE: I don't think they are immune to those, but at this point I wouldn't be able to say they are as enslaved as we have seen my party become.

JENNY BROCKIE: Enslaved?

GUY PEARSE: Yes.

JENNY BROCKIE: Fiona, you have been dying to say something about all this, listening to all the politicians talking about what they are doing, , what do you think needs to be done from a business perspective.

FIONA WAIN, ENVIRONMENT BUSINESS AUSTRALIA: Several things. The cost of electricity has to be weighed up against the cost of collateral damage, pollution and waste. Secondly, we talk about changing to renewable energies. This is a transitional phase that will happen over the next 5, 10,15 to 20 years, seeing coal reduce its market share and renewables increase their market share. Solar thermal, we have a storage technology that can sit alongside solar thermal now, developed at ANU, hot rock geothermal, wave energy that can provide desalinated sea water, and in terms of the CO2 capture, we are looking at interesting technologies coming along at an early stage, but force feeding algae with the carbon dioxide can be turned into biofuels or a natural fertiliser that can be returned as soil carbon additives, and the soil is crying out for this stuff, the atmosphere certainly isn't.

JENNY BROCKIE: Ian Macfarlane, a quick comment. You haven't set emission targets yet. Without them, how can we move to a cleaner future?

IAN MACFARLANE: The alternative is to ratify Kyoto and basically send Australian jobs offshore. The fact of the matter is that this government is funding $3.4 billion of low emission technology and we will reduce carbon emissions by 2010 by 87million tons per year, those are the facts, and we will set a carbon targets, but not until we know the impact it will have on Australia.

JENNY BROCKIE: Mark quick.

MARK WAKEHAM: I just don’t know how we are going to meet our Kyoto target, but ratifying Kyoto would send us broke it seems to be a real contradiction .

JENNY BROCKIE: Peter Garrett a quick comment from you, you have set a target of reducing emissions to 60% by 2050, I think. That is a long way off 2050.

PETER GARRETT: It is, but Labor has confidence that setting a target like that is the right thing to do, that science says it's the right thing to do and that business and the community will have certainty on get us on to the pathway to reducing emissions. We would ratify Kyoto, it is an important step to take and Australian business has missed out because we haven’t. And we would work profoundly to encourage the use of renewable and cleaner energy in the country because it is clear that's what we will have to do to meet climate change.

JENNY BROCKIE: Ian Macfarlane very quickly, what do you think will happen if clean coal does not work?

IAN MACFARLANE: We need to look at other energy sources, that is why you need a suite of emission energy resources, that's why you have to consider nuclear.

JENNY BROCKIE: Thank you all very much for your time everybody.

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