Energetics executive director Jonathan Jutsen told the Green Capital conference it is time business looked at energy efficiency throughout their supply chains instead of just looking at the end user side. “We shouldn’t get bogged down in the science, the ETS or the scenarios. The key is to consider the numbers,” he said.
“Rises in electricity prices… will add up to $40 billion by 2014, while the cost of the Renewable Energy Target (RET) will add up to four times the value of an ETS. Add to that escalating gas prices and peak oil and we really have a massive issue of energy efficiency on our hands to deal with within the next 40 years.”
He said Australia’s 2020 carbon reduction commitments of at least 5% below 2000 levels, and up to 25% below if there is an international agreement, “will be a significant challenge for companies in Australia, not just miners and electricity generators”.
“With targets of either 5% or 25% the absolute carbon abatement challenge facing Australia is between 140 or 250 million tonnes of CO2 per year.”
The numbers are daunting. The total reduction is equivalent to improvements in energy intensity of 40-60% after accounting for GDP growth of 2.5% per year. This means that each dollar of GDP must be generated with 40-60% less carbon emissions, yet Australia has not even begun to curb its carbon intensity growth.
Beyond 2020, the government target for 2050 is 60-80% below 2000 levels, which equates to a 90% reduction in carbon intensity when GDP growth is factored in.
“The later we start to deal with energy efficiency, the harder it will be,” said Jutsen.