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Advancing climate action in Queensland: Making the transition to a low carbon future Department of Environment and Heritage Protection Response to discussion paper by Australian Alliance for Energy Productivity (A2EP) September 2016 The Australian Alliance for Energy Productivity (A2EP) is an independent, not-for-profit coalition of business, government and non-government leaders promoting energy efficiency, energy productivity and decentralised energy. A2EP aims to inform, influence and advance the effective use of energy in Australia. A2EP has been working for three years to progress an agenda for doubling Australia’s energy productivity by 2030 (from 2010 base). We have produced a range of materials that explain energy productivity and its relevance in the Australian context. We have detailed the opportunities for energy productivity improvement, the benefits, barriers and solutions. We have built a strong network of leaders in business, government and research who are integral to this work and we have led engagement with a wider group of stakeholders. We collaborate with a diverse range of partners who are expert in energy, economics, information technology, logistics and financing. We have made the case to policy- and decision makers for a step change in energy productivity. In recent times we have been developing ‘roadmaps’ for doubling productivity in end-use sectors of the Australian economy. We have recently commenced work on a roadmap for innovation in energy productivity. Please see the 2xep.org.au website for more information. We offer this summary response to the discussion paper and would be pleased to answer any questions or provide further detail as required. This summary draws on the products of the 2xEP program and has a focus on energy productivity as a critical element of the transition to a low carbon future. Energy productivity refers to the value created from using a unit of energy. Our 2xEP target can be achieved either by doubling the value created from using the existing amount of energy or halving the energy use – or more likely some intermediate position of greater value and lower energy use.

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Page 1: Department of Environment and Heritage Protection Response ... · Advancing climate action in Queensland: Making the transition to a low carbon future Department of Environment and

Advancing climate action in Queensland:

Making the transition to a low carbon future

Department of Environment and Heritage Protection

Response to discussion paper by

Australian Alliance for Energy Productivity (A2EP)

September 2016

The Australian Alliance for Energy Productivity (A2EP) is an independent, not-for-profit

coalition of business, government and non-government leaders promoting energy efficiency,

energy productivity and decentralised energy. A2EP aims to inform, influence and advance the

effective use of energy in Australia.

A2EP has been working for three years to progress an agenda for doubling Australia’s energy

productivity by 2030 (from 2010 base). We have produced a range of materials that explain

energy productivity and its relevance in the Australian context. We have detailed the

opportunities for energy productivity improvement, the benefits, barriers and solutions.

We have built a strong network of leaders in business, government and research who are

integral to this work and we have led engagement with a wider group of stakeholders. We

collaborate with a diverse range of partners who are expert in energy, economics, information

technology, logistics and financing. We have made the case to policy- and decision makers for

a step change in energy productivity. In recent times we have been developing ‘roadmaps’ for

doubling productivity in end-use sectors of the Australian economy. We have recently

commenced work on a roadmap for innovation in energy productivity. Please see the

2xep.org.au website for more information.

We offer this summary response to the discussion paper and would be pleased to answer any

questions or provide further detail as required. This summary draws on the products of the

2xEP program and has a focus on energy productivity as a critical element of the transition to a

low carbon future.

Energy productivity refers to the value created from using a unit of energy. Our 2xEP target

can be achieved either by doubling the value created from using the existing amount of energy

or halving the energy use – or more likely some intermediate position of greater value and

lower energy use.

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The potential: Energy productivity and low cost emissions reduction

Source: ClimateWorks Australia, http://www.climateworksaustralia.org/project/national-projects/low-carbon-growth-plan-australia, 2010

Energy productivity: Energy savings, emissions reductions

Source: ClimateWorks Australia estimates for the Department of Industry, Innovation and

Science, 2015.

Cost of emissions reduction

A$/tCO2e

200

100

0

100 150 200 250

Emissions reduction potential

MTCO2e per year -100

-400

Power

Industry

Transport

Buildings

Forestry

Agriculture

Moving to cleaner power

generation is key in the

transition to a low carbon

economy Energy efficiency saves

businesses and households

money

Land based abatement can

also deliver productivity

benefits

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The Queensland context

The discussion paper has a focus on emissions as the policy problem. That focus is proper.

However, in the context of the need for action on emissions is the recent history of energy

productivity and energy markets. Energy productivity improvement is a critical element of the

emissions reduction project. There are great opportunities for energy productivity

improvement in Queensland. Most action undertaken to improve energy productivity also has

the effect of reducing emissions.

Energy productivity in the Queensland economy - By sector

Energy consumption in Queensland - Relative to other jurisdictions

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Electricity prices in Queensland - Select peak tariffs

Electricity prices in Queensland - Select off-peak tariffs

Electricity prices in Queensland - Services charges

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The discussion paper and ‘our say’

1. What should Queensland look like in 5, 10 or 30 years in a low carbon global economy?

In 5, 10 and 30 years, Queensland should look like a reliably attractive place for citizens, investors and businesses, tourists and other visitors. Queensland should be recognised for taking an ambitious but sensible, staged and clear approach to the low carbon transition. Queensland should acknowledge its climactic, geographic and demographic features and seek to optimise the economic efficiency of energy supply. Queensland should lead with its strengths in renewables. 2. What do you think are the benefits and costs of taking action to address climate change in Queensland? Summary of potential benefits

Boosting productivity and competitiveness

Likely to result in improved output and a reduction in energy intensity as well as reduced costs

Improving value for the State and its businesses

High performance organisations are more profitable, attract investment and customers, attract and retain people

Reduced government outlays

Savings can also be achieved through a reduction in capital and operating expenses across operations.

Lower costs of doing business

Reduced company resources required to access support and assistance as a result of streamlined and consistent processes

Red tape reduction Consistent and streamlined processes resulting in reduced regulatory burden

Improved investment certainty

Potential for increased investment as a result of increased certainty about the policy and regulatory environment

Contributing towards emissions reduction

Assisting Queensland meet its emissions reduction goals through improved energy productivity

Reducing the cost of energy Potential to reduce the cost of energy for consumers and expenditure on energy by government

Protecting energy security Reducing reliance on imported liquid fuels as well as coal-based generation and networked electricity infrastructure

Summary of potential costs

Additional government outlays

Additional staff may be required to develop, administer or deliver initiatives

Increased company resources

Increased company resources required to access support and assistance

Increased energy prices Potential to increase energy prices. For example a nationally consistent white certificate scheme might increase retail energy prices in jurisdictions that currently don’t have schemes.

Increased red tape The potential for increased government involvement leading to delays in development and implementation

Government funding/support

Financial costs associated with providing either direct or indirect funding, incentives and support

3. What part should Queensland play in meeting global and national climate change commitments? Queensland should play a part at a minimum commensurate with its contribution to global emissions and the potential to reap significant benefits from measures beyond that level of action.

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4. How should Queensland work with the Commonwealth, state and territory governments and local governments to reduce greenhouse gas emissions? Queensland should work in consultation and collaboration with other jurisdictions in a bid to develop and implement considered and consistent policy and programs towards measureable outcomes. However, Queensland should not shy from leading with projects that benefit the State and its constituents ahead of other jurisdictions. 5. What kind of goals or targets should Queensland set in order to achieve this? Our expertise is in the area of energy productivity. We are of the view that Queensland should target a doubling of energy productivity (2xEP) by 2030. That target should apply to the State economy and to Queensland Government operations. 6. What could the Queensland Government do to further stimulate innovation and commercialisation of low emissions and clean technologies? The Queensland Government could

fund research, development, demonstration and deployment projects

fast track work to collect, publish and analyse data to optimise investments in energy

coordinate policy across energy, water and waste

better manage energy markets in the interests of consumers and constituents

lead the way through procurement practices that demonstrate benefits and raise standards

facilitate development of sustainable value chain precincts

subscribe to and implement national minimum energy and emissions performance schemes

implement rating and disclosure mechanisms for all traded building types

ensure compliance with building and construction codes

work with Queenslanders and consumers and citizens towards better informed decisions 7. Should Queensland sign the ‘Under 2 MOU?’ 8. What are the opportunities for Queensland in transitioning to a clean energy future? Summary of potential benefits

Boosting productivity and competitiveness

Likely to result in improved output and a reduction in energy intensity as well as reduced costs

Improving value for the State and its businesses

High performance organisations are more profitable, attract investment and customers, attract and retain people

Reduced government outlays

Savings can also be achieved through a reduction in capital and operating expenses across operations.

Lower costs of doing business

Reduced company resources required to access support and assistance as a result of streamlined and consistent processes

Red tape reduction Consistent and streamlined processes resulting in reduced regulatory burden

Improved investment certainty

Potential for increased investment as a result of increased certainty about the policy and regulatory environment

Contributing towards emissions reduction

Assisting Queensland meet its emissions reduction goals through improved energy productivity

Reducing the cost of energy Potential to reduce the cost of energy for consumers and expenditure on energy by government

Protecting energy security Reducing reliance on imported liquid fuels as well as coal-based generation and networked electricity infrastructure

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9. What are the major barriers in adopting clean energy technologies in Queensland? In the built environment

Barrier Overview

Prevailing investment paradigms The investment-decision making framework used by 90% of Australian firms appears to ignore cash flows beyond 5-years which penalises long term transformational projects. This short term orientation is placing Australia’s future growth and prosperity at risk (Delloite, 2014; Lane & Rosewall, 2015).

Split incentives Developers and builders have different costs and interests to building occupiers, and building owners have different incentives to tenants

Unsupportive regulatory environment Key concerns include.

o poor enforcement of standards

o regulation of energy and water networks

o retail pricing structures for energy

Lack of information and knowledge Building owners and managers frequently hold on to old paradigms/habits/behaviours which are not conducive to optimising energy productivity

There is a genuine lack of information and knowledge across all sub-sectors in the built environment. For example:

o a lack of performance and stock data limits regulatory efforts and has an impact on performance benchmarking.

o in the residential sector, there is a general lack of understanding and awareness of benefits vis costs

Lack of skills Skills gaps in the building sector have been noted as one of the key barriers to lifting energy productivity (The Department of Resources Energy and Tourism, 2010).

In agriculture

Barrier Overview

Energy industry and government leadership

Lack of a systems approach to policy development leading to a win-loss strategic approach rather than a win-win strategic approach. For example, missed opportunities for energy productivity collaborations across production, transport, processing.

Savings made within electricity efficiency in agriculture are

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consumed by inefficiencies in the electricity market. This disconnect can drive down the adoption of technologies within agriculture.

Lack of incentives for midscale distributed renewable energy and off grid and hybrid electricity supply solutions.

Ability to address the major barriers

The most significant energy productivity risks are out of farmers’ control. For example, network charges; climate; commodity prices.

Access to finance The longer pay back periods often associated with investment in energy innovation hamper access to finance.

Farm capital replacement cycles are typically very long.

Market uncertainty leads to hesitancy to invest.

Imperfect information Insufficient information accessible to farming businesses about how to improve energy productivity (eg on-farm data and comparisons across alternative production systems and energy solutions).

Businesses lack information to identify and quantify non-energy savings benefits from energy productivity projects.

Hidden costs Poor information used for making energy-related investments, sometimes as a result of consultants/vendors over-selling the benefits and underselling the full implementation costs, leading to loss of confidence in the measure.

Due to the nature of innovation and the speed of change there is a lack of 3rd party review of the potential of new technologies. This is compounded within agriculture due to the tyranny of distance.

Access to capital Insufficient capital for investment – generally due to competition from what are considered more ‘core’ production efficiency such as though fertiliser or labour efficiencies – sometimes as a result of poor appreciation of the benefits of many energy investments in rate determining processes to improve output.

In manufacturing

Barrier Overview

Business leadership Lack of CEO/top management commitment to addressing energy productivity.

Other business priorities have led to energy efficiency/productivity opportunities being side lined.

Perceived risks Short payback required for energy improvement project reflecting excessive perceived risk from energy productivity projects.

Business and market uncertainty lead to hesitancy to invest.

Imperfect information Insufficient information accessible to the business about energy productivity

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opportunities in similar businesses to assess business like returns and risks.

Businesses lack information to identify and quantify non-energy savings benefits from energy productivity projects.

Hidden costs Poor information was used for making energy investments, sometimes as a result of consultants/vendors over-selling the benefits and underselling the full implementation costs, leading to loss of confidence in the measure.

Access to capital Insufficient capital for investment – generally due to competition from what are considered more ‘core’ production enhancing investment – sometimes as a result of lack of appreciation of the benefits of many energy investments in rate determining processes to improve output.

Split incentives Energy efficiency/productivity opportunities are foregone and the cost and benefits are misaligned due to a split between the investor and the party gaining the operating savings from the investment. This occurs in situations such as where manufacturing premises are leased.

In mining

Benefits of energy projects pursued in isolation are perceived as lacking materiality

Mining companies have significantly reduced capital spend in the wake of the mining

downturn (PwC, 2016). This has resulted in intense competition for internal capital, with core

operational projects being prioritised over other projects, such as energy productivity

initiatives.

Falling commodity prices and declining margins highlight the importance of managing energy

costs, particularly for marginal mines. However, potential investments in energy projects are

often considered in isolation, ignoring the flow on benefits for the site as a whole.

Consequently the benefits that accrue from an individual energy project may not be

considered material enough to warrant management attention.

This incremental approach to assessing potential investments in energy projects is in contrast

to a strategic systems approach, which takes into account the flow through benefits of energy

projects across an entire mine site. Ideally each project should constitute an element of a

systematically implemented energy master plan involving a number of integrated energy

projects across a site.

Short payback threshold for investments

In response to the current low commodity price environment many mining companies have

ramped up production, reduced capital spend and minimised operating costs where possible in

order to maintain a level of profitability. This short-term orientation places pressure on return

on investment (ROI) cycles. Consequently energy productivity strategies that require longer

ROI periods may not meet investment thresholds.

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The Net Present Value (NPV) method is commonly used to assess potential energy projects.

NPV analyses discount the future energy cost savings that result from up-front energy

productivity investments. It may be helpful to include alternative methods, such as real

options analysis, in energy project evaluation processes, or reduce the extent to which future

savings are discounted in the NPV calculation. Taking a longer-term ‘value at risk’ perspective

of energy costs would also be useful.

Management practices and internal barriers

Innovation will become increasingly important to the mining industry’s efforts to improve

productivity, including energy productivity, and adapt to changing market conditions.

However, the industry tends to display a cautious approach to investment in innovation, as

revealed in the 2014 Mining Innovation State of Play Survey (VCI, 2014). Of the large mining

company survey participants, 75 percent described themselves as conservative or fast

followers in their approach to technology-based innovation. The corresponding figure for small

mining companies was even higher, at 81 percent. Only 25 and 19 percent of large and small

mining companies respectively described themselves as having a leading approach to adopting

technology-based innovation.

Capital investment in the mining industry is often in long lived assets, possibly explaining the

risk averse approach to innovation investment common in the industry. In addition, a lack of

systems knowledge in the face of increasing systems complexity provides little incentive to be

an early adopter, with the gap between project owners and engineers on one side and

technology developers on the other hindering innovative technology transfer (Napier-Munn,

2014).

The prolonged investment phase may have impacted the way mining businesses operate,

creating a focus on maximising throughput. Consequently, practices in some organisations may

not be focused on maximising efficiency. It should be noted that significant improvements in

energy productivity may be made by implementing energy management best practice.

Energy is a system that is pervasive across all functions of an organisation. Some mining

companies have ‘silo structures’, with weak accountability for energy efficiency across

functions, leading to sub-optimisation of energy productivity opportunities. Those responsible

for making decisions about energy productivity at a corporate level may be unaware that a few

simple changes to existing processes can have a significant impact on energy productivity, and

those at the operations level capable of implementing these changes may be unaware of the

impact on the overall value chain.

Split incentives for energy efficient site development and operations

Unless energy is a key consideration in contracts with mine designers, developers and

operators, the long-term energy profile of mines can be adversely impacted and energy cost

become a driver of operating expense. A guide produced by the Department of Industry,

Innovation and Science (Smith & Stasinopoulos, 2014) illustrates this point by means of an

example in which a mine owns and operates the mills, but contracts out the extraction and

transport of ore bodies from mine-to-mill on a $/tonne basis. This KPI in itself does not

consider the energy cost associated with crushing and grinding rocks into smaller particle sizes.

Spending more on smart blasting to break up ore bodies into smaller particle sizes could save

much more energy (and cost) in the crushing and grinding phase of mineral processing.

Availability of relevant information

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‘Silo’ structures, as discussed above, limit the cross-pollination of ideas, shared insights and

understanding of ‘the whole picture’. Silos may result from different reporting structures and

processes evolving for different business units within a single organisation. Implementation of

integrated, site-wide systems can provide opportunities for cross-disciplinary reporting and

therefore collaboration which can assist in removing silos.

At an energy-specific level, tracking of energy consumption using metering and sub-metering

equipment is required to understand and improve energy productivity performance. Unless

companies use more detailed energy tracking systems on an enterprise-wide basis, the true

energy cost of different aspects of operations will be difficult to determine. Sub-metering of

energy consumption on site is not a common practice and the lack of detailed energy

consumption data is an impediment to building robust business cases to justify investment in

energy productivity projects.

As noted throughout this document, the market downturn and consequent cuts in staffing

levels have created human resource shortages and a narrow focus on core operational issues

in many mining companies. This situation limits the ability of mining companies to investigate,

evaluate, implement and monitor energy productivity initiatives. However, on the other side of

the coin, implementation of energy productivity initiatives can reduce operating costs,

increase operating margins and increase the resilience of companies during periods of market

downturn.

10. What programs would you like to see put in place to encourage greater uptake of energy efficiency and clean energy? The Queensland Government could

fund research, development, demonstration and deployment projects

fast track work to collect, publish and analyse data to optimise investments in energy

coordinate policy across energy, water and waste

better manage energy markets in the interests of consumers and constituents

lead the way through procurement practices that demonstrate benefits and raise standards

facilitate development of sustainable value chain precincts

subscribe to and implement national minimum energy and emissions performance schemes

implement rating and disclosure mechanisms for all traded building types

ensure compliance with building and construction codes

work with Queenslanders and consumers and citizens towards better informed decisions 11. What steps should Queensland take to improve energy efficiency in the built environment sector? fund research, development, demonstration and deployment projects

fast track work to collect, publish and analyse data to optimise investments in energy

coordinate policy across energy, water and waste

better manage energy markets in the interests of consumers and constituents

lead the way through procurement practices that demonstrate benefits and raise standards

facilitate development of sustainable value chain precincts

subscribe to and implement national minimum energy and emissions performance schemes

implement rating and disclosure mechanisms for all traded building types

ensure compliance with building and construction codes

work with Queenslanders and consumers and citizens towards better informed decisions

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12. What are the main challenges to achieving successful, sustainable communities in Queensland? What types of innovations might address these challenges? 13. What would an efficient, affordable, low emission transport system look like in 10 or 20 years? People are exploring new ways to meet their needs and desires through non-traditional

market mechanisms. The internet and social media have bred new models to directly match needs with services, transforming areas as diverse as asset ownership (via the sharing economy), energy supply (as a service), employment (task-level contracting), and productivity (co-working spaces and business collaborations).

These new models are converging in the transport sector where ride sharing and ride hire booking companies (Uber, Lyft) have disrupted traditional services like taxis and public transport. Ultimately, many expect ‘private’ transport to evolve into mobility as a service. Some cities are already experimenting with a single annual mobility subscription fee that covers ride sharing, public transport, bicycle hire and taxi services.

As autonomous vehicles become common place, the rationale for car ownership will be undermined even further. A small number of large fleet operators keeping vehicles highly utilised in autonomous taxi services could meet the majority of private and public urban transport requirements. While the timing of this is highly uncertain, the many benefits of people not being required to drive themselves (road safety, productivity, recreation time, cost reductions) suggest that the business case will be strong.

Combined, these developments may erode patronage and viability of public transport systems as the ‘mobility cloud’ becomes reality, at least in urban areas. Such a concept would see an extensive fleet of ubiquitous, driverless, connected vehicles picking up passengers on-demand—either as a shared ride service or private hire. Waiting times would be short, costs would fall, and congestion would be reduced. And instead of cars spending the majority of their life parked, they would be better utilised, with the overall size of the fleet falling.

In the longer term, changes in the design and integration of cities will also reduce the need for people to travel. Integrated urban design results in co-location of employment opportunities, residences and services with public transport and walkable urban form. Initiatives such as the NSW Green Grid is a good example of a spatial development strategy that has as a central tenet of encouraging shifts to less energy intensive modes of transport, particularly active transport (walking and cycling) and public transport (Government Architect’s Office n.d.). Coupled with concepts such as smart hubs, it could also reduce the scale of the transport task by reducing the need for travel or the distances travelled, particularly distances travelled in private vehicles. A national Smart Cities Plan has seen opportunities emerge linked to the government innovation agenda.

Convergence of energy, information, buildings and transportation is creating opportunities to incorporate transportation as part of a ubiquitous energy network.

14. What are the major barriers in shifting to lower carbon transport options in Queensland? Prevailing transport investment paradigms: Transport infrastructure is among the most

complex areas of investment decision-making. It requires a very long-term strategic

investment decision-making framework due to the lifespan of transport infrastructure, and

also the deterministic impact transport systems have on urban form, spatial development and,

ultimately, economic activity in Australian cities. Yet despite development principles that

include systems, social, economic, environmental and governance criteria (IA 2013), traditional

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transport infrastructure policy has not explicitly considered energy productivity. One result is

that past planning and infrastructure investment policies directed funding to road

infrastructure—essentially the ‘point of greatest pain’. However, this simply reinforces the

dominance of road transport against all other modes. So the decision-making paradigm that

has shaped Australia’s current infrastructure1 appears to be in sharp contrast with the

required strategic approach to investment in an integrated transport system that reflects

energy productivity principles.

Prevailing energy policy paradigms: Transport is now the biggest user of energy and growing,

and it has important linkages to major issues including congestion, greenhouse emissions, air

pollution, and other productivity factors outlined earlier. Yet despite its significance, transport

if rarely included in policies and programs that claim to be “energy” focussed. Instead, most of

these focus on electricity, or electricity and gas. This is particularly so at state government

level. There are in fact very few policies that directly focus on reductions in transport energy

use, transport emissions, or reducing transport costs.

Planning regulations and responsible agencies: The current split in responsibilities for

transport systems between federal, state and local governments adds complexity to integrated

planning and decision-making on large infrastructure projects and urban development more

generally. This results in siloed decision-making processes that do not allow for government

agencies with different responsibilities and at different levels to come together to discuss

planning as a whole (Simpson, 2014). This view is also supported by the Rail Tram and Bus

Union’s (RTBU) Public Transport Blueprint for Sydney which notes the issue of responsibilities

for transport planning being spread across too many government departments and authorities

with insufficient coordination, and imbalances of power between public transport and roads

portfolios (Atherton, Riedy, & White, 2006). Furthermore, Regulation Impact Statements and

cost benefit analysis tend to maintain the status quo and can further entrench fundamental

flaws in city structures (Simpson, 2014). The transport task is therefore not adequately

considered as a whole in conjunction with strategic urban and regional planning.

Corporates and government incentivise the use of private vehicles: Between 2008-09 and

2011-12, over $4.5 billion more was spent on roads than was raised in almost all road taxes

and charges (IA 2014). At the same time, leased company vehicles are a standard feature of

many corporate salary packages, with Fringe Benefits Tax (FBT) rules effectively subsidising

private use of new vehicles, while simultaneously incentivising commercial company vehicles

over more efficient passenger cars. The cost of FBT associated with company cars in 2007–08

was estimated at more than $1 billion. The Australian Conservation Foundation (ACF) argued

that the FBT regime is a subsidy to road transport users due to application of the statutory

method to value car benefits (ACF 2011).

Lack of information to support decision making: The Energy Efficiency Opportunity (EEO)

report Fuel for Thought on transport efficiency opportunities, identified a lack of adequate

data in the transport sector, particularly data on the real-world benefits of new technologies.

While this is less significant in light vehicles than in heavy vehicles, it does apply to bus and rail

investment. (DRET 2012). Equally, one of the reasons for the slow uptake in EVs is the view

that ‘green’ consumers do not deem it to be a lower emissions transport option while coal

continues to dominate grid-supplied electricity (Duff, 2015). While this may be true for some

classes of vehicles in Victoria, which has the most emissions-intensive electricity in Australia

(Lal, 2015), it is not the case for most average vehicles in other states (CCA 2014). EV emissions

intensity is also likely to reduce further as the share of renewables in the grid continues to

increase, or of charged from rooftop solar panels. Different considerations in the business case

calculation for EVs and hybrid vehicles (e.g. lower maintenance costs, different depreciation)

1 With notable recent shifts in some States as previously discussed

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might also make it overly complex for private buyers, who do not base their purchasing

decision on a whole-of-life cost calculation.

Reluctance to regulate industry: New vehicles are required to be labelled to indicate fuel

economy. However, there are no regulated minimum standards for vehicle fuel efficiency such

as the minimum energy performance standards (MEPS) that many other products are subject

to; and with which over three quarters of vehicles in the rest of the world must comply.

Numerous vehicles emissions standards and supporting measures have been proposed and

considered in Australia over a number of years. However, past governments of all persuasion

have refused to impose fuel efficiency or CO2 standards, fearing the decline of local vehicle

manufacturing in Australia as a result.

Split incentives: Nearly 50% of all new car purchases are for fleets. The purchasing choices of

fleet buyers therefore affect the second-hand car market. However, corporate fleets are

diverse, ranging from executive corporate car schemes to specially equipped utility style

vehicles. Thus, fleet buyers have different requirements, motivations and constraints to

private buyers. ClimateWorks estimates the payback period on more fuel efficient vehicles to

be three years, which is well within the five-year average period of car ownership for private

car owners (ClimateWorks, 2014b). However, this may not be the case for fleet buyers for

whom stock turnover is more frequent.

Unpriced externalities: This barrier includes costs or benefits that affect a party who did not

choose to incur the cost or benefit. Three relevant examples include the free emission of

exhaust pollution into the air, the lack of any price for climate change–causing greenhouse gas

emissions, and the avoidable costs of lost productivity arising from traffic congestion. Failing to

charge for these externalities reduces the incentive to choose products or practices that could

reduce these costs to society. Of particular relevance is the lack of a price on carbon, which

would increase the cost of less efficient vehicles and support other measures to drive change

in consumer choices.

Negative public perceptions: Negative public perceptions about collateral impacts of improved

passenger transport systems (both private and public), particularly those that rely on

significant changes to the urban environment, can hamper and prevent improvements in

energy productivity. These supposed impacts might include higher traffic flows, higher

development density, changes in use and amenity and reduced property values. These are

reasonable concerns and efforts must be made to understand and mitigate them or/and

facilitate support for change in the community interest. Any case for change must engage with

decision-makers including local governments and with relevant stakeholders. 15. What strategies would you like to see put in place to encourage greater uptake of low emission transport options? Introduce better information for consumers and decision-makers

Establish an independent organisation to support and advocate for low emission vehicles

Provide incentives to purchase low emission vehicles

Enable flexibility and choice to support shift away from low occupancy private cars

Accelerate adoption of renewable energy in transport

Support wider use of carpooling and car sharing

Coordinate the development of infrastructure for autonomous vehicles

Introduce fuel efficiency standards for light vehicles

Provide incentives for high occupancy vehicles

Set a State target for low emission vehicles uptake

Introduce cost-reflective road pricing.

Support industry associations in providing information to constituents

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16. What strategies would be effective in encouraging greater patronage on public transport and fewer private vehicles on the road? Introduce better information for consumers and decision-makers

Enable flexibility and choice to support shift away from low occupancy private cars

Support wider use of carpooling and car sharing

Provide incentives for high occupancy vehicles

Introduce cost-reflective road pricing. 17. What could the Queensland Government do to support greater uptake of electric vehicles? Introduce better information for consumers and decision-makers

Establish an independent organisation to support and advocate for low emission vehicles

Provide incentives to purchase low emission vehicles

Accelerate adoption of renewable energy in transport

Introduce fuel efficiency standards for light vehicles

Set a State target for low emission vehicles uptake 18. How could the Queensland Government maximise the carbon reduction potential of electric vehicles? Introduce better information for consumers and decision-makers

Establish an independent organisation to support and advocate for low emission vehicles

Provide incentives to purchase low emission vehicles

Enable flexibility and choice to support shift away from low occupancy private cars

Accelerate adoption of renewable energy in transport

Support wider use of carpooling and car sharing

Coordinate the development of infrastructure for electric vehicles

Set a State target for electric vehicles uptake 19. What do you think the key waste priorities are in Queensland? 20. What are the key issues the Queensland Government should address with respect to land use and land use planning? 21. How can we provide some stability in the livelihood of our farmers, and support the potential for transition to new industries such as carbon farming? Conduct a thorough review of ‘farm to plate’ energy productivity opportunities along the

entire supply chain;

Build on-farm capacity to deliver energy productivity improvements with an emphasis on farm-use and supply chain diesel;

Develop sustainable value chain precincts incorporating renewable energy, advanced manufacturing and logistics;

Develop an energy and water productivity program that aligns water policy with energy policy and enables adoption of water efficient irrigation technology;

Deliver practical and relevant agriculture-specific energy productivity information including benchmarking data across production systems and energy solutions;

Deploy on-farm digital technology to optimise energy use and generate data needed to inform energy efficiency improvement;

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Accelerate investment in energy productivity technologies, including through an effective, nationally consistent energy efficiency certificate trading scheme

Reduce risk of early adoption of new technologies and practices for improving energy productivity through enhanced research, development and demonstration;

Extend energy performance standards for on-farm equipment and require vendors to provide access to data streams generated by the equipment they sell;

Develop efficient and effective energy markets that serve the interests of consumers, price fairly, facilitate innovation and reward investment;

Build on the existing role of agriculture industry associations in delivering integrated energy innovation information, demonstration and extension services.

22. What role do you think the Commonwealth, State and Territory Governments should play in securing terrestrial and marine blue carbon storage areas? 23. What strategies should Queensland pursue to support industry to reduce emissions generated in the process of mining and production?

Australian Alliance for Energy Productivity (A2EP) phone: 0419 256 339 email: [email protected] web: a2ep.org.au, 2xep.org.au Level 11, UTS Building 10, 235 Jones Street, Ultimo NSW 2007