Interview with Patricia Karvelas, ABC Radio National

PATRICIA KARVELAS: Climate action has become a key plank of global diplomatic agreements, and the Albanese Government has used its commitments around climate change to improve ties with the Pacific, EU and the US. Today Australia will sign a memorandum of understanding with California as the government works to bolster the Australian industry to compete with Joe Biden’s big renewable spend known as the Inflation Reduction Act.

Chris Bowen is the Minister for Energy and Climate Change and he joins me now. Chris Bowen, welcome back to the program.

CHRIS BOWEN: Great to be back, PK. Good morning.

PATRICIA KARVELAS: What will the memorandum actually do? Will it give Australian businesses access to funding from the US Inflation Reduction Act?

CHRIS BOWEN: No, it won’t do that. What it will do is take cooperation between California – which is, of course, the world’s fifth largest economy and a leader in renewable energy – and Australia to a new place. It arises out of a meeting I had with Governor Newsom last year and we’ve been working on it with them since then.

And it’s, as you said, one of a piece of negotiations and agreements that our government has been undertaking with like-minded governments around the world. California and Australia actually share a lot in common. You know, they have about half of their energy, in state energy generation, being renewables. Their solar is about 27 per cent. You know, their EV policy is very advanced. So, there’s a lot we can work on together, and certainly Governor Newsom made clear to me that he was keen to collaborate on things like EV charging and joint learning. So, it’s just another one of the many agreements that we’re forging around the world.

PATRICIA KARVELAS: How much money is on the line here? I mean, will projects come from existing pools of funding or is there new money too?

CHRIS BOWEN: Well, we have an existing budget within my department for international engagement, and it’s out of that. And, you know, that’s as it should be. And, of course, it comes on top of, PK, as you know, the agreement between the President and the Prime Minister earlier this year, which, again, the President and the Prime Minister will discuss on his upcoming visit to the United States, which makes climate cooperation the third pillar of this important alliance, and subject to Congressional approval, got us access to the preferential treatment under the Defence Production Act, which is a big deal – a big deal – when it comes to renewables. You might think defence production renewables aren’t that related – actually, they are. Increasingly around the world both governments see this as a national security opportunity and challenge as well as an environmental and economic imperative.

PATRICIA KARVELAS: The Chief Scientist Dr Cathy Foley was on Q&A this week and she says it’s good to have a plan and targets when it comes to the broader emissions reduction but we’re not doing enough to reduce emissions. Here she is:

[Excerpt]

CATHY FOLEY: At the moment, the requirement is we need to be reducing by about 16 mega tonnes of carbon a year. We’re doing 2, so we need to increase by eight times.

[End excerpt]

PATRICIA KARVELAS: Why are we so far behind, Minister?

CHRIS BOWEN: Well, because we started in 2022, Patricia. You know, we had a government – we had 10 years of a government denying the problem, delaying. And we’re starting in 2022, which is not a great time to catch up on a ’27 target, but it’s the best time available to us. Cathy, of course, is a member of the Climate Change Authority, which is – I’ve already asked to start the process of giving us advice on the 2035 target.

But I make this point: you know, 2030 is now just seven years away, and that’s 76 months. It’s not long. We are going at a very rapid pace. In fact, Patricia, it’s pretty fashionable for the column inches of a couple of newspapers in Australia at the moment to say our targets are too ambitious, that we won’t get to 82 per cent renewables and, therefore, won’t get to 43 per cent reductions. I don’t agree with that. It is ambitious but it’s also achievable. But we have a good deal of work to do, and we’re getting on with that work. I mean, whether it’s the Rewiring the Nation transmission funds or whether it’s the capacity investment mechanism which is well underway, an option in New South Wales to bring on new renewable energy, whether it’s all the other work we’re doing, that work is proceeding at a very rapid pace. But, yes, we are – we do have an enormous amount of catching up to do, absolutely.

PATRICIA KARVELAS: Yeah, okay. So instead of saying, okay, there was inaction in the past, which I think lots of people would accept, that we were not fulfilling the ambitions that needed to be fulfilled, don’t you need to ratchet up your ambitions, Minister?

CHRIS BOWEN: Well, we need to ratchet up the action, and that’s exactly what we’re doing and then make the plans for the next step. I announced a couple of weeks ago that we would – we have begun the process of our 2035 targets and that we are now developing sector plans as well, you know, electricity and energy, agriculture, transport, industrial emissions, building, built environment, resources. All those sector plans which will be very important. The investment community tells me they’re looking for that guidance sector by sector on where the government sees the decarbonisation coming from.

And we’ll update our net zero 2050 plan, which is currently the plan of Australia, unfortunately lodged by the previous government and is a fantasy document. It bears no resemblance to reality. So, I’ve said that we will change that and update that. All that work is happening at the same time as implementing the things we said we would do, whether it is lifting our renewable share of the energy grid to 82 per cent, whether it’s getting industrial emissions down through the safeguard reforms, which is equivalent to taking the emissions of two-thirds of Australia’s cars off the road in seven years. I mean, this is an ambitious agenda. We’re getting on with it and we are beginning the process, as you correctly point out, of the next steps, like 2035 and the sector plans. All this work is well, well underway.

PATRICIA KARVELAS: Tomorrow is the national Labor conference, and some members are concerned Australia isn’t doing enough to compete with America’s Inflation Reduction Act worth more than $500 billion. You’ve cited the $2 billion hydrogen Head Start program, but that’s nowhere near what the US is investing. Will we see more commitments?

CHRIS BOWEN: Well, firstly on the ALP National Conference, yes, we have the conference getting underway. We are the only political party in Australia with an open, transparent and real conference. The Liberals have a bit of a jamboree; the Greens have theirs in secret. We have ours. We cherish and celebrate the fact that we have good debates about the future of our country.

On the Inflation Reduction Act, yes, we made it very clear in the budget that our $2 billion green hydrogen Head Start program – which is no small amount of money, Patricia, with respect. I mean, $2 billion is not a drop in the ocean.

PATRICIA KARVELAS: Yeah, but the question is about the comparison to the US.

CHRIS BOWEN: Yes, if I could just finish my point, thanks, Patricia. That’s no small amount of money. But we did say at the time that was a down payment, if you like, an early down payment, a deposit, on our broader Inflation Reduction Act response, which is a big deal. It needs to be carefully thought through. We said we’d have more to say later in the year. We will. You know, we are on that time frame. People understand that. People respect that. The green hydrogen Head Start program went very well. It was very well received. It is well advanced now in its design and its progress. And, of course, with the broader Inflation Reduction Act, which is – you know, does need a careful response, we continue to work that through.

PATRICIA KARVELAS: Just one more question before I let you go, Minister, yesterday you announced you’ll be looking at green tariffs. You’ve announced two rounds of consultation over these tariffs. So how long till they’ll be introduced?

CHRIS BOWEN: Well, firstly, Patricia, now that we have a decent climate change policy and carbon reduction policy in Australia we can look at this seriously. Couldn’t do it up until now under the previous government’s arrangements. There was nothing to protect against. Now that we have an industrial emissions reduction policy through the safeguard reforms everybody sensible would agree it makes no sense to see carbon leakage.

Now, what I have said, though, it’s very complicated. This took the EU about six years to put together. I don’t want it to take that long. But it will take serious consultation. I’ve said that that consultation will occur in two rounds in terms of design and principles. And that will report to government next year. I’ve had a lot of conversations with steel and cement and aluminium industries about this, for example. It’s very, very important. We want to see emissions come down. We want to see those strategic industries grow. We need more steel and aluminium and cement for this massive transformation, renewable energy transformation, and we want to see that continuing to be made in Australia.

PATRICIA KARVELAS: Okay.

CHRIS BOWEN: This is an important part of it.

PATRICIA KARVELAS: So next year, you know, you clarify it. When’s the earliest we will see the actual tariffs being implemented?

CHRIS BOWEN: Well, that will in part depend on the consultations.

PATRICIA KARVELAS: But realistically can you give me a time frame? You must have some idea about when you’d like to see them?

CHRIS BOWEN: Well, when they’re ready. When they’re ready, Patricia.

PATRICIA KARVELAS: That’s not an answer – when they’re ready. You know when you might like them to be ready; you’re the minister.

CHRIS BOWEN: It is. That’s why I’ve begun the consultation process. Everybody accepts this is a complicated piece of policy. Everybody accepts it’s not going to happen this year. Sensible people accept that it’s going – should happen, that we should have a policy in this space. By sensible people I mean everybody except the Liberal and National parties who have still got their heads stuck in the sand. But it is a big and complicated process which we’ve begun. And that consultation process will be very real with industries. It’s just part of the great, you know, very significant signature reforms we have underway on renewable energy and climate policy and carbon reduction.

PATRICIA KARVELAS: Thanks for your time this morning, Minister.

CHRIS BOWEN: Always a pleasure, Patricia.