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Coalition restates wish to axe CEFC, then unveils its largest program

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The Jekyll-and-Hyde nature of the Coalition’s clean energy policies were underlined again on Monday, with the Federal government trumpeting one of the biggest ever programs by the Clean Energy Finance Corporation, just hours after it repeated its wish to close the agency down.

On Monday, Coalition MP Jane Ruston, appearing before a Senate Environment and Communications Legislation Committee hearing, had confirmed that it remained the Coalition’s intention to dismantle the CEFC, if it could get enough votes in the Senate.

Greens Senator Scott Ludlam: Is it still government policy to abolish the CEFC?

Ruston: …Yes.

Ludlam: …Why?

Ruston: …I think the government made it pretty clear when we were elected that we didn’t believe we should be in the job of being a bank. (Ruston apparently forgot that the Coalition has proposed the $5 billion northern Australia infrastructure fund, which is to operate on the same principles as the CEFC, just in a different area).

Hours later, federal environment minister Greg Hunt trumpeted the launch of one of the green bank’s biggest investments yet, claiming credit for a $250 million energy efficiency program targeting community housing in Australian cities.

Hunt – in a media release sent while he was in Dubai, where he is attending the World Government Summit, and is thought to be a finalist in the “world’s best minister” award – said the CEFC-led program would drive the construction of market-leading energy efficient community housing project in 2016.

He said this would contribute to the greening of Australia’s cities and built environment. It will provide as many as 1,000 new energy efficient dwellings Australia wide.

Interestingly, Hunt said his department “had directed the CEFC to focus on cities and the built environment under its new Investment Mandate, which also included financing Screen Shot 2016-02-09 at 12.42.39 PMemerging and innovative renewable energy technologies as well as energy efficiency.”

Under the statute of the CEFC, the government has no power to direct particular investments at all, although it can negotiate its broader mandate.

Of course, it has been the policy of the federal Coalition to abolish the CEFC – along with ARENA, the CCA and the Climate Commission – ever since Tony Abbott was voted into power in 2013.

In December 2013, Hunt himself described the CEFC as “incredibly speculative” in its operation, and argued that it displaced effective policies such as the Renewable Energy Target (which the government was also, at the time, reviewing).

Under the leadership of Malcolm Turnbull, Hunt’s attitude to the CEFC appears to have adjusted itself – last October he described it as one of the “successes and tangible outcomes” his government had overseen, and praised it for acting as a catalyst to unlock private investment in clean technologies and for “achieving the remarkable result” of attracting $1.80 (more like $1.90 by latest estimates) of private finance for every dollar it invests.

But confusingly for the clean energy industry and for CEFC CEO Oliver Yates, the policy goal to dismantle it remains in tact.

Interestingly, Yates was also present at Senate Estimates, and himself answered a number of questions from Ludlam, on the role of the corporation, how it works, as well as on the importance of energy efficiency in cities, and more particularly in community housing.

Yates was particularly well versed on that subject, with the CEFC having today released its new Market Report: Financing Energy Efficient Community Housing, which identifies strong demand for over the next decade, with more than 200,000 approved applicants on waiting lists for social and affordable housing Australia-wide.

“This demand will require significant private sector investment, of as much as $15 billion over 10 years at current growth rates,” a CEFC media statement said on Tuesday.

And in Senate Estimates, Yates expanded on this – although this was before the $250 million program had been officially announced by Hunt.Screen Shot 2016-02-09 at 12.46.10 PM

Yates: What we’ve been noticing is that many houses – and certainly in the community housing sector –… are being built to standards which are actually relatively low.

So we were putting our low-income residents in some very high operating cost houses. So we looked together with …St George housing cooperative to work out how we could encourage them to build new homes and apartments much more highly rated.

In addition… we said well, whilst we’ll set up this ($60 million) program with you to build 200 new houses, we also want to then divert a small amount of the interest revenue that you are paying to us into a community reserve which will be used to upgrade existing houses. And they’ve got 4,300 existing houses, many of which will need significant upgrades if they are going to be efficient.

And later…

“Buildings around this country all need to be built to the highest star rating …To the extent we can encourage that it is critical
We just did a search in the property market at the moment and there are only 16 or 18 (commercial) buildings in Australia that are built to 6 stars. That’s all. We are miles behind the rest of the world.

“It’s the same in infrastructure, Senator. we’re going to be spending $200bn on infrastructure in the next four years and the ratings there don’t exist. There’s a lot of work to do.

And here are Yates and Ludlam on the subject of rentals, which Ludlam notes are mostly “crap” when it comes to energy efficiency:

Yates: “The landlord doesn’t have an incentive to care about the insulation, because he doesn’t have to pay the bill (Ludlum adds: “And the tenant can’t do anything about it.”) Correct, so there’s a real dichotomy there that we decided to step in to try and fix.

Ludlam: Well this is my favourite moment of estimates so far today… Tell us how you get this from what you describe on your website as a demo project, how do you get it to scale?

Yates: Senator, what we like to do is we like to do one demo project and then with that success we launch a program like we have the $250 million program for large-scale solar…

We will be probably likely to launch a project which is more available to housing coops right around the country who want to also build better and upgrade their houses so they too can get the benefit of government funding at a rate above the government’s cost of funds, and improve the livelihood of their own members, reduce their own energy costs and decrease our carbon emissions in one hit.

“We think that it’s an important step forward. This hopefully would be the first area…but it should apply to old age homes, it should apply to improving our hospitals… We’ve got to improve all of our buildings, and if we can do it with government finance in a way that generates a positive return for taxpayers, we’ve got to get on with it.”

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  • Phil Gorman

    Corpocracy + bumbling incompetence + hypocrisy = very bad governance.

  • Ian

    Hunt going for the Worlds Best Minister Award…WTF!
    Sadly the government appears to be generally opposed to sustainability.
    A good start would be if the govt ministers could start speaking in the positive language of energy efficiency.
    Then if they could get it together on building standards compliance………

    • JeffJL

      Sorry about you exploding head Ian. Hunt took out the Worlds Best Minister Award.

      Sometime soon I am going to read this is an Onion piece (please).

      • Ian

        Hi Jefff JL- Here are some facts
        Greg has presided over and promoted the following-

        Destruction of the globally accepted as most effective carbon reduction policy

        Been responsible in REVERSING the downward trajectory of carbon emissions- now carbon emissions are rapidly increasing for the first time in more than 9 years-

        Approved the worlds largest coal mine- the Carmichael Adani coal mine- which if it ever goes ahead will use up around 20% of the carbon budget- incredibly irresponsible and dangerous.
        – Incredibly this happened around the same time as the Paris Climate agreement was made. Was Greg down a coal mine when the Paris COP 21 was on? .

        Been a mouthpiece for The Great Big Wrecking Ball of the economy and the environment – the globally infamous T Abbott

        Abolition of a billion dollar biodiversity fund

        Wants to destroy the Clean Energy Finance Corporation- a body which has been extremely successful in anyone’s language – in stimulating business in emissions reduction

        Wants to destroy Australian Renewable Energy Agency

        Presided over the near total destruction of the wind energy industry in Australia- setting the renewable energy industry perhaps 5-to 10 years

        presided over the demolition of the previously bipartisan Renewable Energy Target

        This list could go on for many more points …..amounting to the conclusion that Greg Hunt is clearly a total failure in being an effective champion of the environment

        • JeffJL

          Nice summary Ian. I am glad you stopped as my data allowance would have been all used up had you listed all the ‘great’ things TWBM Hunt had achieved.

          I am still waiting for The Onion to admit they made this story up.

  • AlanDownunder

    Old and trite, but brick veneer is inside out. The masonry should be on the inside as a heat sink / temperature stabiliser and the sheeting should be on the outside insulating it from temperature extremes. It should be illegal to build walls inside out.

  • juxx0r

    Just to clarify, a 6 star building is thermally only slightly better than a shed with roofing insulation.

  • hydrophilia

    Well, he IS correct that investments in energy efficiency are often a very high payback opportunity for society… kind of like subsidizing higher education. I applaud any positive actions the coalition takes.

    I don’t even mind if they talk about shutting down some of the sensible programs as long as it just remains talk, perhaps to maintain political support. But let’s watch to see what they actually do…

  • As Oliver Yates stated, “We are miles behind the rest of the world.” It is so true and not just in energy efficiency it is in many aspects. Why do we find it so hard to implement what is proven good practice in other parts of the World?

  • Alan

    If they want to get landlords and investors more incentive to fix up properties, residential building mandatory disclosure should come into effect as soon as possible.