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The Morrison Government has a strong action plan for Australia’s response to climate change. The plan sets out how we will meet our commitment, made at the 2015 international conference in Paris, to reduce Australia’s emissions by 26-28 per cent below 2005 levels by 2030.
A central element of our plan is the $3.5 billion Climate Solutions Package. We made this commitment as part of the 2018-19 budget. It is Australia’s biggest ever direct investment in emissions reduction.
We have been able to make this significant financial commitment to respond to climate change thanks to the work our Liberal National Government has done to drive economic growth and build a strong budgetary position.
The centrepiece of the Climate Solutions Package is the $2 billion Climate Solutions Fund, which is expected to deliver more than 100 million tonnes of additional greenhouse gas reductions by 2030. This is over and above the $2.55 billion already invested in emissions reduction projects through the Emissions Reduction Fund (established since we came to Government in 2013).
The Climate Solutions Package also includes significant investments in renewable energy to reduce emissions. These investments include:
- Almost $1.4 billion for Snowy 2.0 ensuring clean, reliable and affordable power.
- $56 million for a new electricity interconnector to support Tasmania’s Battery of the Nation project.
- Support for households and businesses to improve energy efficiency and lower their power bills.
Of course, at the same time as boosting investment in renewable energy, we are working to bring lower prices for Australian households and businesses. Another priority for our government, as Australia’s energy grid transitions to greater use of renewable energy, is that Australians continue to enjoy reliable dispatchable power. This is a complex technical challenge, as we move from a grid with a relatively small number of big plants generating baseload power to a much more distributed grid where power sources such as wind and solar come on and off very quickly.
Since our Liberal National Government commenced in 2013, we have invested heavily in measures to reduce emissions and strengthen our environment. These measures include:
- $2.55 billion in the Emissions Reduction Fund.
- More than $1.4 billion in grant funding to 512 renewable energy projects through the Australian Renewable Energy Agency.
- Nearly $7.5 billion funding through the Clean Energy Finance Corporation in projects with a total value of more than $25 billion.
Let me give a bit more detail about the commitment Australia has made to reduce emissions by 26 to 28 per cent on their 2005 levels by 2030. Emissions are now 12% lower than in 2005. (Strictly, what is measured is not the number of tonnes of carbon dioxide emitted, but the number of tonnes of carbon dioxide and all other greenhouse gases emitted, converted into the number of tonnes of carbon dioxide which would have the same global warming effect. This is called ‘CO2 equivalent’ or CO2-e.)
This is an ambitious target, particularly because our economy and population are growing strongly. Other things being equal, if the population grows by a given percentage over ten years, you would expect emissions to grow by the same percentage, in the absence of policy action to reduce emissions. When you put all the numbers together, the effect of what we have promised to do is to cut half the amount of emissions per person which Australia is generating.
To achieve this target we have work to do across the many sectors of our economy. The biggest single sector is electricity, which generates about one third of total emissions. Here, we are making very good progress, as the percentage of electricity generation which comes from renewables (such as wind, solar and hydro) is rising strongly.
The rising percentage of electricity coming from renewables reflects, in turn, the fact that Australia is seeing record levels of investment in renewable energy.
The Clean Energy Regulator estimates that a record 6.3 gigawatts (GW) of new renewable capacity was installed in 2019, 24 per cent above the previous record set in 2018. Electricity generated from renewables is also estimated to have increased to a record 44 terawatt hours (TWh), 20 per cent above the previous year.
The Clean Energy Regulator expects that 2020 will be the biggest year yet for electricity generation from renewables (both in absolute terms and year-on-year growth) with a forecast 26 per cent increase.
Based on Bloomberg New Energy Finance data, Australia invested $7.7 billion or $308 per person in renewable energy in 2019. This places us ahead of countries like the United States ($233 per person), Japan ($179 per person) and the United Kingdom ($109 per person) on a per capita basis and is more than triple the per capita investment of countries like Denmark ($95 per person), France ($90 per person) and Germany ($73 per person).
Another important sector of the economy is transport, and here we have committed to release a National Electric Vehicle Strategy this year.