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The Hon Peter Garrett AM MP
Minister for the Environment, Heritage and the Arts

Keynote addresses green cities conference

Speech
Convention & exhibition centre, Brisbane
2 March 2009

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I would like to begin by acknowledging the traditional owners of the land on which we meet and pay my respects to their elders, past and present.

It is a pleasure to open this conference and in doing so recognise the work of the Property Council of Australia and the Green Building Council of Australia, who for this third year running have brought the leading thinkers, architects, planners and builders together for what is a timely and essential gathering.

Bushfires and floods

I want to pay tribute in these difficult times to the incredible resilience and spirit of the Australian community, as we pull together to help one another and rebuild.

There has been a terrible human and environmental toll of the Victorian bushfires and the flooding in northern Queensland and naturally our thoughts turnto those families who have suffered grief, whilst we applaud those workers whose service has been unwavering, often at great personal risk, in protecting and helping others.

A changing environment

We are in one of Australias great cities today; Brisbane, a true capital city, a hub of economic activity but also a city that is very much defined by its relationship to the natural environment.

At its best, that relationship can appear effortless and graceful, and we all know places, streets and buildings, which embody that kind of harmony.

It is also the case that we have not always built cities with this relationship to our natural environment in mind, particularly our climate.

I am pleased to see that the themes of this years Green Cities are valuable, affordable and sustainable, because that is a clear recognition that the relationship of our cities to our natural environment and climate can no longer be an afterthought.

One of the worlds most famous architects, Frank Lloyd Wright, once said:

All fine architectural values are human values, else not valuable.

This is a reminder that our built environment is a reflection of our understandings and aspirations form, function and now, I think, a growing awareness that it can contain the solutions to issues that confront us.

And as we set about tackling the challenge of climate change, we confront the critical question of how we should value sustainability; and this means asking how we should value the climate change risks to our livelihood, to our farms, our homes and our urban infrastructure, now and into the future.

Challenges current and future

We inhabit an already hot and weathered continent, prone to climatic extremes, and acutely vulnerable to the changes that will come from the momentum already in the climate system.

For any government serious about climate change, the task of reforming Australias economy for a low-pollution future begins with recognising the real costs of using fossil fuels, and by implication, the very real benefits of renewable energy and energy efficiency.

Our task also requires bringing forward measures that complement the Carbon Pollution Reduction Scheme; addressing market failures that are likely to persist, at least through the early years of the scheme, and helping to build capacity in low-pollution Australian industries.

The Government has identified energy efficiency as the second plank in our approach to tackling dangerous climate change.

Economically, socially and environmentally, the evidence is clear; improving energy efficiency represents Australias quickest and most cost-effective way to reduce greenhouse gas emissions.

If you are serious about climate change then you have to be serious about energy efficiency.

Right now, the world confronts the worst economic crisis in three-quarters of a century, so that means responding decisively to current economic circumstances, as the Government has done through the Nation Building and Jobs Plan.

And, as we face up to the threats to our long-term economic andenvironmental sustainability, that means responding comprehensively to build the low-pollution economies of the future.

At this time, then, effective action on energy efficiency is critical action that benefits households, particularly those who are most vulnerable to cost-of-living pressures; action that supports jobs in low-pollution Australian industries; and action that reduces the cost of cutting our carbon pollution, now and over the long term.

A legacy of inertia

Unfortunately, instead we are dealing with the legacy of inertia from the Liberal and National Parties; a failure to take so many cost-effective actions on energy efficiency the low-hanging fruit investments with economic benefits that far outweigh their up-front cost.

And nowhere is this failure of leadership more stark than in the energy efficiency performance of Australias built environment, the places where we live and work.

We know Australias commercial buildings produce a fair proportion of greenhouse gas emissions; by some measures, the commercial building sectors energy use is responsible for at least 10 per cent of our carbon pollution. Around the world, figures indicate that buildings consume 12 per cent of our water and produce 40 per cent of waste going to landfill.

Similarly, Australian homes produce about one tenth of Australias greenhouse gas emissions, both directly from energy used in homes and also from the electricity generated to power them. These emissions have risen by over a third since 1990 and are continuing to rise.

In the past, our built environment hasnt been optimised for saving energy. For example, the Building Code of Australia only introduced commercial energy efficiency requirements in 2006. Household energy efficiency requirements were only introduced in 2003, and they havent been applied consistently across jurisdictions.

This means the vast majority of Australian households underperform. They cost more to heat and cool, theyre less comfortable and they contribute excessive carbon pollution.

Thats very significant for the way we think about cost-of-living pressures and mortgage stress. Because housing affordability isnt something that stops on the day you move in. Its about making ends meet week in and week out, year in and year out.

For those who are most vulnerable -those on low-incomes -a household that cant afford insulation or a solar hot water heater, freezing in winter and sweltering in summer, with appliances that use far more energy and water than they ought to, these housing deficiencies can become a poverty trap.

In these circumstances, energy efficiency is not only about reducing greenhouse gas emissions, its also about social equity, equipping people to manage their energy needs whilst reducing carbon pollution at least cost.

Through the Governments National Building and Jobs Plan, we have committed $3.9 billion to the EnergyEfficient Homes package, supporting the low-pollution jobs of the future and rolling out energy efficiency to Australias suburbs on an unprecedented scale.

Energy Efficient Homes will support the installation of ceiling insulation in all non-insulated owner-occupied households some 2.2 million through our cities, towns and suburbs.

The package doubles to $1,000 the rebate for installing insulation in rental properties. This expanded Low Emission Assistance Plan for Renters will cover around 80 percentof the costs of installing insulation for around 700,000 rental homes.

Energy Efficient Homes also boosts the solar hot water rebate from $1,000 to $1,600 and removes the means test put in place by my predecessor as Environment Minister, Malcolm Turnbull, who I believe will be speaking to you later today.

As with the Nation Building and Jobs Plan overall, the Energy Efficient Homes package represents a major boost for households and for the economy.

Ceiling insulation alone has the potential to cut home heating and cooling bills by up to 40 per cent, saving households up to $200 a year on energy bills.

By replacing an electric hot water system with a solar water heater, households can reduce their carbon footprint by between 2 and 4 tonnes per year,potentially saving as much as $300-$700on energy bills.

In total, Energy Efficient Homes is expected to contribute cost-effective greenhouse gas emission reductions of more than 49 megatonnes out to 2020 the equivalent of taking around 1 million cars off the road.

And the benefits of these investments will flow to households, the economy and the environment for years to come in the case of insulation, potentially for the life of the building.

There are also significant and immediate benefits for those who manufacture and install insulation and solar hot water units.

Since the day the package was announced, weve heard from Australian industries ramping up new shifts coming on, factories going to 24/7 production and even new plants under consideration.

As one insulation fitter told ABC Radio on 3 February:

Our own company had to lay off a shift in one of our plants just before Christmas. Well be putting that shift back on.

As Mr Ray Thompson from Bradford Insulation was reported on 5 February:

We will start employing people immediately

This is what the Energy Efficient Homes package is all about supporting jobs and supporting economic activity at this critical time.

Energy efficiency and helping households in the transition to a low pollution future

As I have already indicated, in the transition to a low pollution future, social equity should be and must be a key driver of energy efficiency policy.

I am working with welfare NGOs and non-government housing providers to ensure that disadvantaged households in rental accommodation benefit from insulation through the Low Emission Assistance Plan for Renters program.

The Government has also reached agreement through the Council of Australian Governments for the States to audit the energy efficiency of existing public housing, and to consider implementing a program for cost-effective upgrades.

In the bigger picture, social equity means we help low income families save on their energy bills prior to the introduction of the CPRS, and its also about ensuring we dont leave our children to confront the same problems in 20 or 30 years time.

The Government has indicated that we will be seeking the agreement of States and Territories to increase the energy efficiency requirements for new residential buildings in the Building Code of Australia to six stars by May 2010.

This measure has the potential to drive significant cost-effective energy efficiency gains, ensuring the homes our children live in cost less to heat and cool, are more comfortable and contribute less carbon pollution.

While these performance requirements will be subject to a full regulatory process, we can get an idea of the kind of market transformations that are possible simply by looking overseas.

For example, its often said that if a Californian wanted to install the kind of window glazing that is currently standard in Australia, they would actually pay a premium for a less efficient product.

This is because California has long required new homes be optimised to their climate, and the market has responded and scaled up. Energy efficient glazing is standard. Inefficiency is something you would have to custom-order.

As a Labor Government, we understand the importance of harnessing the market to benefit the community, especially the most disadvantaged.

Thats why our task is to make energy efficiency a default setting; a basic service,

inscribed in the DNA of our suburbs.

There is a precedent for this kind of Commonwealth leadership, when Gough Whitlam argued that sewage should be a national priority.

Gough has recalled how at the time, John Gorton mocked him for talking more like a Shire President than an alternative Prime Minister, but he has also recounted a complement from Neville Wran:

"It was said of Caesar Augustusthat he found Rome brick and left it marble. It will be said of Gough Whitlam that he found the outer suburbs of Sydney, Melbourne and Brisbane unsewered, and left them fully flushed."

We have been no less ambitious with our Nation Building and Jobs Plan. The Energy Efficient Homes package has the potential to assist some three million Australian households, complemented by a National Strategy for Energy Efficiency to provide the Commonwealth leadership so desperately lacking for the last 12 years.

Just as they did then, the conservative parties have scoffed, because they dont see energy efficiency as a basic service and they dont see climate change as a critical long-term challenge.

A comprehensive approach

The Rudd Government is committed to comprehensive action on energy efficiency, providing assistance with up-front costs, ensuring the market has the right information and overcoming split incentives, like those between tenants and landlords.

Comprehensive action means addressing the commercial sector as well as the residential sector

.

Prior to coming to Government, we identified the significant opportunities for energy efficiency gains in the commercial building sector. In fact, we drew on work from the Australian Sustainable Built Environment Council, a unique partnership that I am pleased to see remains strong.

Wecommitted to establish the Green Building Fund, the first time a Commonwealth Government has taken action of this kind targeting commercial buildings.

We also committed to drive efficiency gains through commercial building standards and ratings, and to require disclosure of energy use for appropriate types of commercial building stock.

The Rudd Government is delivering on these commitments.

The Green Building Fund is open for business, and the response has been very positive.

In fact, we have received enough applications from the first round of the Green Building Fund to fully allocate available funding. The program is currently in an assessment phase, and this includes assessing some larger projects that may be exemplars.

The Australian Government is working with the State and Territory Governments to develop a National Mandatory Disclosure Scheme for commercial building energy efficiency.

This scheme will first be introduced in large commercial office buildings, providing purchasers and lessees with the ability to choose a building based on its actual energy efficiency and operating costs.

We are keen to work with industry to develop this scheme and have undertaken significant consultation, releasing a draft Regulation Impact Statement and Regulation Document for public comment in late 2008 and undertaking public workshops in every capital city during January and February, which involved more than 400 people from industry, government and the community.

Currently, the average energy rating under the National Australian Built Environment Rating System (NABERS), formerly ABGR, for commercial buildings in Australia is 2.5 stars, on a 5 star system. Australian Government departments are now required when leasing to seek buildings with a NABERS energy rating of 4.5.

A National Mandatory Disclosure Scheme will increase the demands for energy efficient commercial buildings and raise the average NABERS energy rating.

We know that the investment in developing a sustainable building whether new or old is rewarded not only with savings but with increased productivity, morale and health of the workforce.

Recent studies of Green Buildings in Melbourne indicate that people respond positively to innovation in energy and water smart buildings.

500 Collins Street, a 30 year old building in Melbourne that was given a major green refurbishment, recently surveyed its tenants. Remarkably, one company found a 44% reduction in sick leave and the surveyed businesses reported increased productivity. Of course there were also major savings in electricity, gas and water all of which contributed to the businesses profits.

As I noted last September in a speech to the World Sustainable Building Conference, current energy efficiency requirements for commercial buildings have a cost-benefit ratio of close to five-to-one that is, a payback of five times the investment for minimum energy efficiency requirements.

Again, as I said at the time, the Building Code reads more like a business case for how much more can and must be done to create sustainable buildings.

With this in mind, it is pleasing that the Council of Australian Governments is now giving direct consideration to increasing energy efficiency requirements for all classes of commercial buildings in the Building Code of Australia from 2010, as well as ensuring greater consistency in the application of building standards across all jurisdictions.

I encourage States and Territories to support reform in this area that is both cost-effective and well overdue.

This is a time to act decisively to capture the low-hanging fruit, and its also a time to apply policy rigour and comprehensiveness.

That is why we are advancing a National Energy Efficiency Strategy through COAG, to ensure a clear and co-ordinated work-plan is put in place over the long-term.

This is a task that will draw on the talents, insights and experience of those of you in this room.

You are the designers, builders and advocates of energy efficient buildings; you have created monuments to sustainability in our built environment, and it is our collective task to ensure sustainability becomes the status-quo rather than the exception.

We want your ideas and we need your engagement. Some ideas have already found their way into Government policy, while others will be given full consideration, for example commercial building accelerated depreciation, which is being considered through the Henry Review of Australias tax system.

We will take your ideas and your participation seriously because the opportunity for a sustainable built environment for Green Cities is essential.

Conclusion

The heatwave that hit most of South-Eastern Australia recently has been a reminder that living in a hot, dryand weathered continent, we are highly vulnerable to extremes in weather, and we are, among developed nations, particularly exposed to impacts of global warming.

It is long overdue that we started building and retrofitting our homes and workplaces for this climate and these extremes, especially with climate change force-feeding the system.

As we transition to a low-pollution economy, the real benefits of energy efficiency will be magnified, and the costs of inefficiency will become starker.

We are ready to help Australian households maximise these benefits and relieve cost-of-living pressures.

We are getting on with the task of supporting the jobs of the future in low-pollution Australian industries.

And we are committed to take action on climate change thats both good for the economy and good for the environment.

This is the kind of vision which delivers for Australians; one which fronts up to the big challenges we do face, one which equips people more fully with the means of responding.

'Green Cities are places that breathe easily and sit easily on the landscape, where excellence in design and construction, inventive use of technologies and creative planning all work as one to produce buildings that are great places to live and work in, and also lessen the carbon load on an overburdened planet.

By bringing energy efficiency to every street, suburb and CBD, we will build green employment and green industries -and green cities -and deliver the opportunities for everyone to play their part which theage of climate change so urgently demands.

Thank you.

Commonwealth of Australia