Australia's gem of a climate policy may be at risk

The government has quietly initiated a low key, unscheduled review into Australia’s national appliance energy efficiency standards. Why fiddle with a policy delivering consumer savings and easy abatement?

Why mess with success? That’s the question bemused energy industry experts and consumer advocates are asking after the federal government has quietly initiated a low key, unscheduled review into Australia’s national appliance energy efficiency standards.

The Equipment Energy Efficiency (E3) Program is a joint initiative of the Commonwealth, state and territory governments and the New Zealand Government. Improving the energy efficiency of appliances and products has significant economic and environmental benefits for Australia and New Zealand. It reduces greenhouse gas emissions and energy demand in both countries. It also reduces the running costs of appliances and products for households and businesses.

The E3 program includes energy labeling and minimum energy performance standards, or MEPS. It covers obvious consumer products such as fridges, dishwashers, airconditioners, televisions and computers, but also other equipment such as lighting, pool pumps and commercial refrigeration.

It has the potential to set performance standards for products that do not use energy themselves, but influence the energy performance of other products or energy systems – e.g. air conditioning ducts, building insulation or windows. And it also includes demand response projects, where the projected impacts are economic benefits from reductions in electricity system peak demand rather than energy savings.

It’s a largely unsung success in the battle for greater energy efficiency. A review released in March 2014 found that the E3 program is likely to produce net benefits from 2014 to 2030 of $57 billion and would save about 129 million tonnes of CO2-e in this period. The overall benefit-cost ratio of the E3 program is about 4.6, which means that for every $1 of 
expenditure on the program (by government and consumers) $4.60 is saved. The effective cost per tonne of CO2-e avoided is -$118.

It just doesn’t get any better than this for governments keen to reduce cost of living pressures while also maintaining some semblance of a responsible climate change policy. Indeed it should be expanded, for instance to allow direct load control of pool pumps and electric vehicles as well as airconditioners, so that they can be cycled on and off during peak demand periods.

One might think that a government that has set about systematically dismantling Australia’s existing climate and renewable energy policies, and which is yet to pass legislation to introduce its own alternative Emissions Reduction Fund alternative, yet which is still theoretically committed to a 5 per cent cut in the 2000 level of greenhouse emissions by 2020 would need all the help it can get.

The Greenhouse Energy and Minimum Standards (GEMS) Act, which came into effect in late 2012, stipulates that a review of the E3 program must be conducted as soon as possible after the Act has been in operation for five years. Yet the federal government recently contracted Databuild, a UK-based market research company, to conduct a review of the E3 program. Databuild has been conducting workshops and interviews with industry stakeholders, and has an online survey which asks questions with lead-ins such as ‘In your opinion….’ and ‘From your perspective…’ This is in contrast to the quantitative review report for the E3 Committee released only six months ago.

Qualitative surveys can be very valuable, of course, but the rationale for conducting this review at this time is unclear. The only formal explanation offered to date is in the Energy "Anti-" Green Paper, which refers to “opportunities to reduce the red-tape burden on businesses and streamline the implementation of the E3 Program and the GEMS Act.” There are always voices in industry keen to cut regulation, for instance by making compliance voluntary or self-regulated. Some manufacturers and retailers complain about added costs for R&D, manufacture and compliance but then they manage to produce equipment and appliances that perform better and save consumers money. And there is no hard evidence of high costs related to excessive compliance requirements.

In the case of E3, these voices would succeed at the cost of higher lifecycle costs to consumers and higher greenhouse emissions. If you care about the future of energy efficiency in Australia, you could help by completing the survey.

Mark Byrne is energy market advocate at the Total Environment Centre

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