Australia missing out on huge cuts in emissions through energy efficiency failure

Australia could cut greenhouse gas emissions halfway to its Paris agreement target, and save $7.7bn a year in bills, by adopting existing global standards on energy efficiency.

From new hot water heaters to better standards for appliances, a new report has found Australia is missing an opportunity to “easily” meet its emissions targets and fight the looming climate crisis.

The report, from the Energy Efficiency Council (EEC), found that adopting the measures used in Germany would save the average Australian household $790 a year on power bills.

It would also create 70,000 extra fulltime equivalent jobs – from advanced engineering to plumbing – as houses are fitted with new boilers, draught-sealing and new lights, and factories invest in efficient equipment.

A YouGov survey commissioned by the EEC found that “investing in energy efficiency” is one of the most politically popular actions the government can take on the climate crisis – with more than 85% support among both Labor and Coalition voters.

However, Australia is not on track to meet its target of a 40% increase in efficiency by 2030, according to the EEC’s head of policy, Rob Murray-Leach.

Since 2015, Australia has only improved an average of 0.7% a year, according to the EEC’s figures – well below the 2.3% rate needed.

Murray-Leach said the levers of change were controlled by the states and territories – meaning Australia could still “crack on” even if the federal government was inactive.

The report said Australians should start thinking of energy efficiency as a form of energy generation – adding capacity to the grid and reducing power bills.

“Energy efficiency is just another form of supply,” Murray-Leach said. “When I look at Germany, their bills are 30% lower”.

According to the report, Australia has “barely begun to tap the potential of energy efficiency”, and was the worst developed country for efficiency, out of the top 25 energy-consuming countries.

In comparison, China set a target of 20% improvement in only five years between 2006 and 2010, and exceeded it. And California in the 1970s generated the equivalent of two new nuclear power plants of energy, just by improving the efficiency of fridges.

“It wasn’t until I went overseas that I realised how far behind we were,” Murray-Leach said. “We have fundamentally dropped the ball on what is seen as the standard way of how you do business. It’s like every other country in the world did accounting, and we just didn’t bother.”

The report found that adopting best practice from around the world would “easily deliver half of the abatement required to meet Australia’s target to reduce emissions by 26-28% by 2030”.

And that push would create 120,000 fulltime equivalent jobs, up from the current 50,000.

“A lot of energy efficiency jobs are not labelled energy efficiency jobs,” Murray-Leach said. “It’s a builder who 20% of his time is making sure the doors and the roof are keeping the heat in … It’s a lot of different jobs making things work better.

“If you are upgrading the efficiency of a factory, you are getting highly skilled chemical and mechanical engineers to go in. If you are talking about draught-proofing a home, you are talking about a skilled tradesman. And if you are increasing the replacement rate of hot water, then those are plumbing jobs.”

The report also recommended Australia improve minimum standards for appliances, and implement an energy rating scheme for houses.

Australia currently has minimum standards set for 21 kinds of appliances – much less than our biggest trading partners, the US (with 51), the EU (41) and China (also 41).

Simply matching those standards would boost trade as well as energy conservation, the report said.

In the US, California also updates its building codes every three years to keep new buildings energy efficient.

If Australia copied the same building codes as the US or Japan, an office building in Brisbane would be 20% more energy efficient, the report found.

It also recommended that houses be given energy efficiency ratings in the same way appliances are, so new buyers and new renters can see how much money they would lose by choosing an energy inefficient home – a scheme the UK has had since 2007.

“The research has shown you could easily double energy productivity – so a 100% improvement by 2040, instead of a 40% increase by 2040,” Murray-Leach said.

Californian energy commissioner Andrew Mcallister told Guardian Australia “there is a lot of low-hanging fruit in Australia, that in California we have already harvested”.

“Energy efficiency advocacy is not really a radical thing,” he said. “It is rational, it is good policy. It is not a partisan thing at all. It’s just good management.”

Murray-Leach said much of this could be achieved without the federal government.

“The levers for energy management really sit in the hands of states and territories,” he said.

States have the power to institute energy-efficiency schemes (which currently exist in New South Wales, Victoria, South Australia and the ACT), can establish new building standards for homes and fund businesses to improve their own efficiency, as has recently happened in NSW.

“Queensland can put in an energy efficiency scheme, it can introduce one tomorrow,” Murray-Leach said. “Businesses would prefer to have a national approach to these polices. But the states can coordinate with each other without the federal government. And the cost of inaction would be far worse than being uncoordinated.”

The report also recommends that manufacturing businesses be given incentives and grants to improve efficiency, and that the government introduce stronger fuel-efficiency standards for vehicles.

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