Reporter: Jonathan Holmes
Date: 25/06/2007
JONATHAN HOLMES: The land of droughts and flooding rains can soon expect more of both - much more. That's what the climate change scientists tell us, and the Federal Government now agrees.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT (speaking at National Press Club, Canberra, 2 May 2007): Climate change is a fact not a theory. It is present tense, not an if, but a now.
JONATHAN HOLMES: But over the past ten years, Australia's consumption of electricity has soared. Most of it comes from power stations that emit two tonnes of carbon dioxide for every tonne of coal they burn.
TRISTAN EDIS, BUSINESS COUNCIL FOR SUSTAINABLE ENERGY: Our electricity greenhouse emissions in Australia have grown 50 per cent since 1990 and ABARE forecasts that they'll grow by another 50 per cent by 2030. So we've got to go beyond what we're doing right now.
JONATHAN HOLMES: Most of the money and attention has gone on new ways of making electricity: clean coal; renewable energy; nuclear power. But they're all expensive. It's much cheaper just to use less, especially in our own homes. Australian households create 20 per cent of the nation's greenhouse gas emissions.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: By 2030 with a reasonably strong and comprehensive energy efficiency program household greenhouse gas emissions could be cut by about 30 per cent.
JONATHAN HOLMES: Tonight on 4 Corners, the fight against global warming on Australia's home front.
(On screen text: "THE HOME FRONT", "REPORTER: JONATHAN HOLMES")
JONATHAN HOLMES: Behind the ribbon development along Queensland's Gold Coast, Currumbin Creek winds through rain-forested hills. Here an old dairy farm will soon give way to a hundred and forty homes
ARCHITECT (speaking at meeting with planner and client): On the eastern side so that it catches the morning sun we'll have the rammed earth panels ...
JONATHAN HOLMES: But don't think you can plonk an off-the-shelf project home down in the Currumbin Eco Village. You and your architect will have to satisfy the body corporate that your house meets its rigorous sustainable building code: it runs to seventy pages.
ARCHITECT (speaking at meeting with planner and client): This is the plan. It's not heavily notated at the moment, but hopefully you'll find it compatible with the ideals of the noble project you're involved in.
CLIENT (speaking at meeting with planner and architect): We're not trying to railroad you here. (Laughter)
CHRIS WALTON, MD, ECOVILLAGE AT CURRUMBIN (to JONATHAN Holmes, showing him around building site): Jonathan, this is an innovative roof that helps energy efficiency in a home but it also helps climatic comfort. It's a polystyrene foam sandwich.
JONATHAN HOLMES (to Chris Walton): Right.
CHRIS WALTON, MD, ECOVILLAGE AT CURRUMBIN: And it has a skin, a metal skin on top and bottom. It's very fast, quick to install and a nice finish.
JONATHAN HOLMES (to Chris Walton): You just whack the whole thing on?
CHRIS WALTON, MD, ECOVILLAGE AT CURRUMBIN: Yep, it just gets up. It can go up within a day.
JONATHAN HOLMES: Eco-Village Managing Director Chris Walton calls this house his living laboratory.
JONATHAN HOLMES (to Chris Walton): So what are we standing on?
CHRIS WALTON, MD, ECOVILLAGE AT CURRUMBIN: Well this is our thermal mass for this lightweight building and it's actually our water storage. So it's concrete tanks, water cell tanks, and we put our finished floor on top of it and through that concrete slab floor we put piping and we've rigged that up to a solar panel that heats the water in winter time, so we get free central heating.
JONATHAN HOLMES: Slowly the Eco Village is taking shape. Some homes are modest. There'll be others whose owners won't see much change from $1 million.
But all must touch the earth lightly. All must be extensively insulated. Rainwater tanks, solar hot water and photo-voltaic panels for generating electricity are all mandatory. The village will be entirely self-sufficient in water and will use about a third of the mains electricity that a housing project of this size would normally need.
JONATHAN HOLMES (to Chris Walton): A lot of people would look at these houses around here and think well, yeah but they're going to be expensive, and they're for greenies. Is it really possible to build sustainable houses at a reasonable price?
CHRIS WALTON, MD, ECOVILLAGE AT CURRUMBIN: Absolutely. The people that are buying into the Eco Village Project here are mainstream people, mums, dads, families, older people. They're people who are interested in community and environment.
JONATHAN HOLMES: Ian and Sascha Kennedy and little Olive are among the first to have actually moved in. They've built a pleasant three bedroom house, but there's no home theatre, no rumpus room and, like every other house in the Eco Village, absolutely no air conditioning.
IAN KENNEDY: The house is designed so that we don't need it. By having doors that you can open on all sides of the house, and the big door here and the louvres there, you can get a cross-ventilation, a cross breeze no matter what direction the wind is blowing. So it helps to cool the house. Ah there is ...
JONATHAN HOLMES: Have you actually, you haven't lived through a summer yet?
IAN KENNEDY: No, no.
SASCHA KENNEDY: We've stood on the block many times in summer and felt the breeze, so we're almost certain it will work, no we're certain it will work.
IAN KENNEDY: There's a good breeze blows up the valley here so it'll be good.
JONATHAN HOLMES: On top of the land price, the house has cost $250,000 to build - rainwater tanks, solar hot water system and all.
JONATHAN HOLMES: Obviously you could buy a project home much bigger than this for that money.
IAN KENNEDY: That's right, you could, yeah, but it wouldn't have the sort of features that you can design into this house. And some of the things that make this more expensive are things like the photovoltaic panels and the solar water heating. But things like that are going to become more and more standard anyway.
JONATHAN HOLMES: Perhaps. In Victoria, for example, every new house must be fitted with either a rainwater tank, or a solar hot water system.
That requirement is in addition to a stricter building code. Three years ago, the Victorian Government mandated that all new houses should be built to a five-star standard of thermal efficiency so they use less energy to keep them warm in winter and cool in summer.
For the average new house, it's hardly meant a revolution in building practises.
Reaching the five-star standard is mainly a matter of better insulation, in walls as well as ceilings. And there are fewer large windows.
This 350 square metre house will cost $220,000 but only a negligible amount of that price, says Henley Homes's Peter Hayes, is attributable to the five-star requirements.
PETER HAYES, MD, HENLEY PROPERTIES: It does depend what home you're building. If you're building a traditional home on a concrete slab, brick and tile roof, we think the cost is negligible. I mean these homes cost us about $1000 more, up from two-and-a-half to five-star when we design to make it a five-star home.
JONATHAN HOLMES (to Peter Hayes): But the vast majority of houses built in Australia are ...
PETER HAYES, MD, HENLEY PROPERTIES: Eighty to 90 per cent I'd suggest.
JOHN THWAITES, MINISTER FOR ENVIRONMENT, VICTORIA: Our studies show that the cost of five-star, the additional cost on a new home is very minimal, around $1500. But the returns to households are considerable.
JONATHAN HOLMES: It's far cheaper to make a house thermally efficient when it's being built than to fix it later.
The Australian Building Codes Board has representatives from state and federal governments and industry. In 2005, it considered following Victoria's lead by raising the minimum standard in the Building Code of Australia from three-and-a-half stars to five.
According to Alan Pears, who's a member of its expert steering committee, the Board thought it was doing what the Government wanted.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: The Prime Minister in 1997 in his pre-Kyoto announcement said he would give the building industry 12 months to make progress on voluntary improvement
JOHN HOWARD, PRIME MINISTER (speaking in Parliament, 20 November 1997): If this voluntary approach does not achieve acceptable progress within 12 months, we will work to implement mandatory standards.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: That was the genesis of the whole thing.
JONATHAN HOLMES (to Alan Pears): But that was some eight years earlier.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: Well Governments have not made this a priority area, have they?
JONATHAN HOLMES: But the Building Codes Board ran into ferocious opposition from some powerful lobby groups, notably the Housing Industry Association which represents 45,000 builders and contractors across Australia, most of them small businesses.
The HIA claimed then, and still claims today, that the five-star standard significantly increases the price of the average new home.
GRAHAM WOLFE, HOUSING INDUSTRY ASSOCIATION: It certainly did add in excess of $15,000 to the price of a house as it existed back about four or five years ago, yeah.
JONATHAN HOLMES (to Caroline Pidcock): What was the Board's reaction to that claim?
CAROLINE PIDCOCK, ARCHITECT: Show us the evidence. They couldn't. They had been alleging that for so long and, you know, show us the money, show us the evidence, where is it? It didn't come forward, they couldn't do it.
JONATHAN HOLMES: Sydney architect Caroline Pidcock specialises in renovations and new houses that minimise the need for artificial heating and cooling.
CAROLINE PIDCOCK, ARCHITECT (showing JONATHAN Holmes around a house under renovation): And then we come to this room which is a separate sitting room. We've got high level windows to let sunlight in.
JONATHAN HOLMES: She's the architecture representative on the Building Codes Board and voted for the new five-star code in the teeth of the HIA's opposition.
CAROLINE PIDCOCK, ARCHITECT: The Housing Industry Association I think has not provided good leadership for its members in this area because I think that Australia has got to stop thinking about, oh my god, isn't this hard and isn't this tough. Go and look at what's happening in Germany and Scandinavia. I mean I've got architects working in my office from those places. They can't believe what we're allowed to get away with here.
JONATHAN HOLMES: In fact, a team from RMIT University has looked - not at wintry Scandinavia, but at places like San Francisco Bay in California where the climate is similar to Melbourne's.
Not only here but in Britain and Canada too, they reported to the Federal Government, typical new houses achieved far more than five stars on Australia's thermal efficiency scale.
DR RALPH HORNE, CENTRE FOR DESIGN, RMIT: We found a fairly consistent picture actually. We found that the average was just under seven stars across those 51 houses, so about 6.9 stars.
JONATHAN HOLMES (to Dr Ralph Horne): California had a particularly high rating, didn't it, in this comparison?
DR RALPH HORNE, CENTRE FOR DESIGN, RMIT: In the bay area we were looking at seven-and-a-half-stars plus as an average.
JONATHAN HOLMES: In the past 30 years, in California and Australia, houses have got bigger, electronic appliances mushroomed. Australian household electricity consumption per head of population has more than doubled in that time. California's has grown by just 20 per cent.
California's state legislators say that's due to the tough standards they've imposed and keep on imposing.
LOYD E LEVINE, CALIFORNIA STATE ASSEMBLY: We lead the country in energy efficiency. We have insulation requirements in California, but we don't just put them in, we continually update them, so each year or each couple of years our standards are revised so the insulation today is better than it was five years ago. The insulation five years ago is better than it was five years before that. So it keeps improving.
JONATHAN HOLMES: Complaints from the building industry are all too familiar to Assemblyman Lloyd Levine.
LOYD E LEVINE, CALIFORNIA STATE ASSEMBLY: We hear the same thing every time we try and do something. Oh my god, it's going to be the end the industry as we know it. You know people won't be able to afford to buy a house, and all sorts of things.
We always come across opposition every time we try and do something, but we don't throw up our hands and quit, we just keep pushing ahead.
JONATHAN HOLMES: In Australia, the Federal Government's attitude was rather different.
For a start, the RMIT report that showed Australia's building code lagging behind comparable overseas countries has never been publicly released.
DR RALPH HORNE, CENTRE FOR DESIGN, RMIT: I don't know why it wasn't initially published. I'm sure there were a number of reasons behind that, but we simply did the work.
JONATHAN HOLMES: We do know that when, in November 2005, a majority of the Building Codes Board voted for a national five-star requirement; the Federal Government representative voted against it.
A week later, three Federal Ministers: Ian Macfarlane, Minister for Resources and Industry, Ian Campbell, Minister for the Environment and Ian McDonald, Minister for Forestry and Conservation issued a scathing joint press release.
(Excerpt from press release, shown on screen):
(VOICEOVER): "The States have made a complete mess of the energy efficiency programme through these pre-emptive and irresponsible measures ...
... the States have abandoned common sense in a rush for political correctness."
(End of excerpt)
CAROLINE PIDCOCK, ARCHITECT: It was incredibly disappointing to have the ministers treat that independent board with such distain.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: I thought it was pretty unimpressive and I think it just highlighted to me that that some of the building industry associations were very, very influential with the Commonwealth Government which was not really news, was it?
JONATHAN HOLMES (to Malcolm Turnbull): Isn't it the case the Federal Government basically took the side of the timber lobby and the HIA that were lobbying them at the time and came out with this scathing condemnation? I mean looking back on it, that wasn't justified was it?
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: Well, I don't want to do a running commentary on my predecessor but the five-star code is there and the Government supports it.
JONATHAN HOLMES (to Malcolm Turnbull): Do you regret that it was opposed at the time?
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: Well, there's no point. We moved forward. What's important to Australians is what we do now and in the future and we have to aim to make all of our buildings more energy efficient, not less, in the years ahead.
JONATHAN HOLMES: It makes sense to build efficient new homes. But the Housing Industry Association still feels that its members and their clients, the purchasers of new homes, are being asked to shoulder an unfair burden.
GRAHAM WOLFE, HOUSING INDUSTRY ASSOCIATION: There are about 160,000 new homes built each year and addressing five-star or four-star has added costs.
There are eight million households out there, existing households out there and I would ask the question: are those households improving their energy efficiency?
JONATHAN HOLMES: It's a fair question. Home shows these days are chock-full of energy saving appliances, from fluorescent light bulbs to solar hot water.
But most of them are expensive and electricity, for now at least, is cheap.
Persuading us to save energy in the homes we already have is exercising the ingenuity of councils, state governments and energy retailers all over Australia.
(Vision of man fitting draft excluder, woman filling in ventilation grill, insulation being put through trapdoor)
Sustainability Victoria's Energy Task Force trains unemployed volunteers to draught-proof and insulate the homes of low-income householders.
TASK FORCE MEMBER (to Olwyn Bretherton, referring to document): And on here you've got the top tips for saving energy, water and waste ...
JONATHAN HOLMES: Olwyn Bretherton's brother Lawrence's house has already had the Task Force treatment.
LAWRENCE BRETHERTON: Very excited and thrilled. They done a fantastic job. I'm more than satisfied. I'd recommend them to anyone.
JONATHAN HOLMES: New South Wales's Greenhouse Gas Abatement Scheme has produced a swag of small businesses that make their money from the credits they get by swapping old incandescent light bulbs for compact fluorescents.
(Excerpt from press conference at primary school, 20 February 2007):
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT (speaking to primary school children): You've all got light bulbs like this in your house. Have you all seen these?
CHILDREN: Yes.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT (to children): OK, now this is a very old, these light bulbs were invented 125 years ago ...
(End of excerpt)
JONATHAN HOLMES: In a few years, thanks to a simple decision by the Federal government, none of us will be using incandescent bulbs. By law, only energy efficient compact fluorescent bulbs will be on sale.
(Excerpt continued):
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT (to children): Now this one, put your hand on that. See? It's not warm. It's cool.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT (to press): Australia is leading the way. We are the first country in the world to set up a standard like this and I've go no doubt we'll be followed by a great many other countries.
(End of excerpt)
JONATHAN HOLMES: The Government's initiative on light bulbs is a world first and it's met with virtually no opposition.
But it can't yet solve the problem that's embedded by the hundred in the ceilings of most houses built or renovated since the mid 1990s.
A month ago Deborah Johnston put a new kitchen into her big house just south of Coogee, in Sydney's Eastern suburbs. She thought she was doing the right thing.
RYAN MCCARTHY, AUDITOR, RANDWICK COUNCIL (to Deborah Johnston in her kitchen): Looks like you've got quite a few halogen downlights here ...
JONATHAN HOLMES: Until she volunteered for an energy audit offered by Randwick Council.
DEBORAH JOHNSTON (to Ryan McCarthy): I put the halogen lights in thinking they were actually energy efficient. I didn't do a lot of research.
RYAN MCCARTHY, AUDITOR, RANDWICK COUNCIL (to Deborah Johnston): Yeah. They call them low voltage which often tricks people.
JONATHAN HOLMES: According to energy expert Alan Pears, tens of thousands of Australians make the same mistake as Deborah Johnston. They think low voltage means low energy use and no one's told them otherwise.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: Well, that's a big fallacy. It's not the voltage that counts at all; it's the watts and so one of these halogens is 50 watts and hidden up in your ceiling this kilogram of steel and copper is using another 12 watts or so. So overall your halogen light, your low voltage halogen light is using 60 watts or more of electricity.
JONATHAN HOLMES (to Alan Pears): And of course you tend to have it a lot more of them than you might the old fashioned lights.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: Absolutely. Because the halogen lamp has a very narrow beam you end up with a dozen of them in your room instead of maybe three ordinary light globes.
And we're now seeing a lot of households paying you know, three, four, $500 a year for their lighting bills, when traditionally they were paying $100 or less.
JONATHAN HOLMES: For now, at least, there isn't a simple energy efficient substitute. There are ultra-compact fluorescent downlights but they don't work on dimmers and you'll need an electrician to make the switch.
JONATHAN HOLMES (to Alan Pears): Alan, do you think that governments have been caught on the hop by this halogen craze? I mean should they have stopped it before it really got started?
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: Well, I think that the thing that governments could have done was simply inform people 10 years ago that low voltage didn't mean low energy.
JONATHAN HOLMES: But there are worse greenhouse gas emitters than halogens - like the hot water system Deborah Johnston installed in a hurry when the old one blew up.
DEBORAH JOHNSTON (showing hot water system to Ryan McCarthy): It's about five years old.
RYAN MCCARTHY, AUDITOR, RANDWICK COUNCIL (to Deborah Johnston): Oh yeah.
DEBORAH JOHNSTON (to Ryan McCarthy): It's an electric system.
JONATHAN HOLMES: Electric storage hot water systems can gobble a third of the power a large house uses. They're still remarkably common in New South Wales, even in houses like this one where natural gas is an option.
RYAN MCCARTHY, AUDITOR, RANDWICK COUNCIL (to Deborah Johnston): It's one of those things, it's quite ridiculous you know, we get most of electricity from coal-power up in the Hunter Valley and they discard all this waste heat and it gets piped here in your electricity and you convert it back, only to covert it back to heat. Something like gas or solar obviously makes a lot more sense in terms of reducing greenhouse gas emissions.
(Visions of solar hot water panels being installed on the roof of a house)
JONATHAN HOLMES: Solar hot water is the poor relation of the solar industry. These may look like the photovoltaic panels that generate electricity, but because they just use the sun's rays to heat water, they're substantially cheaper.
A modest one kilowatt array of solar photovoltaic panels will cost the taxpayer and the householder together about $14,000 to save perhaps a tonne and a half of greenhouse gas emissions per year.
Replacing an electric storage heater with a solar hot water system can save twice as much greenhouse gas for less than half the total cost.
JACQUI STURMANN: Two-thousand-seven-hundred.
JONATHAN HOLMES: Right so you got some rebates in there?
JACQUI STURMANN: Yes you can get rebates and I just thought it was a very good deal. I mean I would have put in a large tank which would've cost probably close to the 2,000 mark anyway,
JONATHAN HOLMES: But for people whose electric water heater is still working fine, there's a substantial up-front cost to make the change.
While solar electricity now gets a federal rebate of $8,000, solar hot water attracts only $800.
Some states offer additional rebates. New South Wales, which has 2.5 million homes with electric water heaters, promised a rebate at the last election. So far it hasn't materialised.
The Federal ALP is offering not a rebate, but a low-interest loan, if Kevin Rudd wins the next election.
(Excerpt from ALP loans policy announcement, outside the house of Adrian Langker, 29 April 2007):
WOMAN: Kevin, can I introduce you to Adrian?
ADRIAN LANGKER: Nice to meet you, Kevin.
KEVIN RUDD, FEDERAL OPPOSITION LEADER: Thanks for having us out ...
(End of excerpt)
JONATHAN HOLMES: His gas-boosted, solar hot water system cost Adrian Langker $5,800 dollars up front.
(Excerpt continued):
ADRIAN LANGKER: ... And that's the problem. My friends say we want to get tanks, we want to get solar hot water, everyone says it, it's great, it's logical.
PETER GARRETT, SHADOW MINISTER FOR CLIMATE CHANGE, ENVIRONMENT AND HERITAGE, ARTS: Everybody wants to do it
ADRIAN LANGKER: Yeah, but they can't afford it,
KEVIN RUDD, FEDERAL OPPOSITION LEADER: The policy we put out today is trying to make this possible by effectively a low interest loan, zero real interest loan up to $10,000.
And it's for solar panelling, it's for roof insulation, it's for treatment of grey water, it's for rainwater tanks, all those sorts of things.
ADRIAN LANGKER: Yeah that's great.
(End of excerpt)
JONATHAN HOLMES: The Federal Government is scornful about the Opposition's energy efficiency loans.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: We do not regard Labor's proposal to add to household indebtedness as one that would be attractive to very many people at all. In fact it's a very bad policy. It's administratively, it's administratively complex; it's expensive. It is not one that will appeal.
JONATHAN HOLMES: Malcolm Turnbull is a lot less forthcoming about what policy, if any, the Government might come up with to help meet high up-front costs.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: Look I can't comment any further than that other than to say that all of the issues you've raised are ones that are that, we're very alert to. We've talked about solar hot water; we've talked about insulation.
They're very, they're key issues; they're key parts of household energy efficiency, the household energy efficiency mix and they're all part of the mix that we're considering very actively.
(Excerpt from house auction, Canberra):
AUCTIONEER: Ladies and gentlemen, good afternoon and welcome all on this glorious, autumn afternoon ...
(End of excerpt)
JONATHAN HOLMES: The average Australian house will change hands several times in its lifetime.
(Excerpt continued):
AUCTIONEER: I'd like to welcome you all to the auction today.
(End of excerpt)
JONATHAN HOLMES: Just before, or just after it's sold is the moment when owners are most likely to make the changes that might dramatically increase a house's energy efficiency.
(Excerpt continued):
AUCTIONEER: Three-hundred thousand dollars I'm bid. Do I have 350?
(End of excerpt)
JONATHAN HOLMES: In an attempt to spur them on, the ACT insists that the contract on every house sold must include an energy efficiency audit and an energy star rating.
(Excerpt continued):
AUCTIONEER: The bid's with number one,
BIDDER: Three eighty.
AUCTIONEER: Three-hundred and eighty, back with number 12.
(End of excerpt)
JONATHAN HOLMES: But according to Canberra real estate agent Peter Blackshaw, the effect has been negligible. Other issues concern buyers far more.
(Excerpt continued):
AUCTIONEER: Excellent position here, we've got elevation, we've got the sun in the front, there's potential to enlarge the house.
(End of excerpt)
PETER BLACKSHAW, PETER BLACKSHAW REAL ESTATE, CANBERRA: People haven't been concerned about the energy assessments to date.
Interestingly, the houses that make the the biggest prices are generally the houses that are least energy efficient, and that's more because of their period and their proximity to the city. Older houses are generally more valuable in Canberra.
(Excerpt continued):
AUCTIONEER: Back with No. 1, at $460,000. Once! For the second call! ...
(End of excerpt)
JONATHAN HOLMES: What's needed, say the policy buffs, is a real financial incentive to make changes, tied to that crucial moment when a house changes hands.
(Excerpt continued):
AUCTIONEER: For the third and final call! Are you all silent? Are you all done? Congratulations sir and madam, well purchased.
(applause)
(End of excerpt)
JONATHAN HOLMES: A small rebate on the much-resented stamp duty might offer the mechanism.
BRUCE TAPER, DIRECTOR, KINESIS: Certainly none of us like paying it when we make that transaction. There goes another 20, $30,000 on the cost of the home.
JONATHAN HOLMES: Bruce Taper used to be a senior official in the New South Wales planning department. He's now a partner in a new energy consultancy.
BRUCE TAPER, DIRECTOR, KINESIS: The trick'll be making it easy to do.
(Excerpt from couple signing contract):
AGENT: Are you paying the full 10 per cent deposit?
WOMAN: We've got the deposit bond, yes.
(End of excerpt)
JONATHAN HOLMES: As the ACT does now, says Taper, every state government should insist on an energy audit before a house can be sold. But there should be a real incentive for the purchaser to take it seriously, either before they've bought the house or for a limited period afterwards.
BRUCE TAPER, DIRECTOR, KINESIS: If it's an efficient house they know that they get a stamp duty rebate, ie they get a portion off their stamp duty. If it's not, they know they've got two years to renovate or retrofit that house and make a claim to get that same percentage of stamp duty back.
So you've set the market in train to know that if I choose to do that there is some support and it's bundled up with the transaction in purchasing a home.
PETER BLACKSHAW, PETER BLACKSHAW REAL ESTATE, CANBERRA: It sounds to me like a good idea. Essentially the Government's offering you back a fair proportion of the cost of making your house more efficient and that's a good thing.
LUKE SKILLICORN: If we had the opportunity to get a rebate back if we bought this house to increase energy efficiency, most definitely because we'd be looking to do that anyway ...
MARINA MUTTUKUMARU Just for our own purposes, to save ...
LUKE SKILLICORN: That'd be an added bonus.
JONATHAN HOLMES: But after the purchase and the renovations, comes the stuff to fill the house: the fridges, and dishwashers, and clothes dryers, the wide-screen TV's, and computers, and play stations, and air conditioners - and all of them suck up power.
Most white goods on sale have to carry energy-efficiency labels. And there's a mandatory Minimum Energy Performance Standard, or MEPS, which keeps out the least efficient appliances altogether.
According to Alan Pears, who's been advising Australian governments since the 1980's, those programs have been dramatically effective - especially for the biggest energy user in the house, the family fridge.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT (referring to fridge for sale): There is a trend towards larger size but even taking that into account we're saving 60 to 70 per cent and in fact, if you look at a large fridge like this that's using 872, in the mid, early mid 80s a fridge like this would have been using 2000 kilowatt hours so you've still made a significant reduction even though you've gone to a bigger fridge.
JONATHAN HOLMES: But there are new power-guzzlers on the market now. Even when they're on stand-by, electronic appliances can now suck up around 10 per cent of a household's power. When they're switched on of course, they use even more.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT (referring to televisions for sale): These large screen TVs can now use more power for a family than a large family fridge, but we know nothing about how much they're using to run. The customer has no information.
JONATHAN HOLMES (to Alan Pears): So why is there no star labelling for them, or why ...?
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: Well, it's about lack of Government commitment to labelling. We're still labelling the products that used lots of energy in the 80s and 90s. We have not expanded the labelling programme into the things that use lots of energy in the 2000s.
JONATHAN HOLMES: The Government says that on the contrary, its MEPS program is a world leader and it's moving now to mandate that appliances should use just one watt when on standby.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: Well, what's different about Australia is that we're the first. We have set a 2012 target for a one watt stand-by standard. We've committed to that. I'm not aware of any other country that's made that commitment.
Now again, the International Energy Agency can say the world, countries of the world are not moving fast enough but the country that is moving the fastest is our own, is Australia.
JONATHAN HOLMES: But even for appliances that have them, can the energy star labels be trusted?
For the most part, say the experts, they can. But there are problems with one of Australia's new favourites, the wall-mounted, split-system air conditioner. When we all turn them on, they drive electricity demand through the roof .
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT (referring to air conditioners for sale): These air conditioners being used on a hot day are driving the construction of new power stations, new power lines. These are the reasons why electricity bills in NSW are going to go up 25 per cent in the next three years and if we chose efficient ones and we insulated and built our houses right, all of that problem would be solved.
JONATHAN HOLMES: One problem is that the labelling system hasn't kept up with technology. Some air conditioners are even more efficient, for both cooling and heating, than their labels suggest.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT (referring to air conditioners for sale): The best air conditioners on the market are now rating eight to 10 stars on a six-star label. So you can't actually see how much better they are. But the best air conditioners are nearly twice as efficient as some of these air conditioners on the wall here.
JONATHAN HOLMES: On the other hand, some are much less efficient than their labels claim. On the whole, says Alan Pears, the leading brands can be trusted since one of the biggest, LG, was successfully taken to court last year.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: It's cost them $3 million recently for misleading the community about energy labels. I think the other well known companies now realise what could happen to them and the damage that can be done to your reputation if you aren't playing it straight.
JONATHAN HOLMES: But thousands of cheap air conditioners are imported each year, mostly from China, and sold under little-known brand names, through discount stores or directly on the web. And you don't always get what you think you're buying.
Four Cornersbought a 2.5 kilowatt capacity Optical air conditioner from this discount store in downtown Melbourne.
(Image of Nightingale Electrics store-front)
We took it to a Melbourne company whose business is testing the efficiency of appliances. VIPAC performs many such tests every year for manufacturers, importers, and regulators.
VIPAC LABORATORY WORKER (referring to testing apparatus): We also have ultrasonic humidifiers and we control them here as well, and we have an ouput here ...
JONATHAN HOLMES: The data from similar tests, often carried out by the manufacturers' in-house lab, has to be supplied to an Australian state regulator before any appliance can be registered for sale.
But the VIPAC test showed its performance to be dramatically different from that claimed on the Optical's label and on the official Australian Government website.
The Optical label says its cooling efficiency merits four-and-a-half stars.
According to the VIPAC report to Four Corners, it rates no more than two stars.
(Images of test results. On screen text enlarged: "Energy consumption (kWh/h +20.1 per cent)", "Energy Efficiency Ratio (EER) -22.8 per cent", "Applicable 2006 MEPS Level NO)"
It used 20 per cent more power than it claimed, and was 22 per cent less energy efficient. In fact, it fell far short of the 2006 Minimum Energy Performance Standard.
It's a result that's all too familiar to VIPAC's engineers.
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: This air conditioner is typical of a large number imported from the Northern Asian countries. Most of them show a deterioration from the label of approximately 20 per cent.
JONATHAN HOLMES (to Michael Smith): So it's not just a one-off result that you're seeing?
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: No, no, no, no. This is very typical. This is more the likely result than the unlikely of the bottom end of the market. This is not the top end, name brand market.
JONATHAN HOLMES (to Michael Smith): And what would that translate to in terms of numbers of machines?
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: Possibly 100,000. Possibly 100,000.
JONATHAN HOLMES (to Michael Smith): Every year?
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: Every year.
JONATHAN HOLMES: Optical air conditioners are imported by a small Melbourne-based wholesaler, but manufactured by a giant Chinese company, the Chunlan Corporation, reputed to be the fifth biggest air conditioner manufacturer in the world.
Chunlan puts whatever brand name its customers want on the air conditioners it exports to Australia. It looks after testing and registers the results with the Australian regulator.
Nightingale Electric's proprietor George Anderson had told me earlier that he had himself imported thousands of air conditioners directly from Chunlan in the past four years.
So I went back to speak to him. He declined to appear on camera, but he did know I was recording his voice.
JONATHAN HOLMES (to George Anderson): George. Hi. Remember me from Four Corners, from the ABC? We had a chat before? Look I want to warn you, I've got a microphone on me, I'm recording this conversation,
okay?
GEORGE ANDERSON, NIGHTINGALE ELECTRICS (voice only): Did you have a microphone on you when ...
JONATHAN HOLMES (to George Anderson): No, no. We have to tell you if we're doing that and I'm telling you now.
GEORGE ANDERSON, NIGHTINGALE ELECTRICS (voice only): Okay.
JONATHAN HOLMES: I told Mr Anderson about the result of the VIPAC test on the Optical 2500 watt machine.
JONATHAN HOLMES (to George Anderson): You did tell me earlier that you've imported over 30,000 of these machines.
GEORGE ANDERSON, NIGHTINGALE ELECTRICS (voice only): Exactly, over the last four years, no 25s, not that particular model, I've never imported that model.
JONATHAN HOLMES (to George Anderson): Right. So when you said that you were talking about Chunlan machines in general?
GEORGE ANDERSON, NIGHTINGALE ELECTRICS (voice only): Yes.
JONATHAN HOLMES (to George Anderson): So what are the machines you mostly sell?
GEORGE ANDERSON, NIGHTINGALE ELECTRICS (voice only): Model KFR 70, KFR 35 and KFR 60.
JONATHAN HOLMES (to George Anderson): Right.
JONATHAN HOLMES: So an ABC staff member unknown to Nightingale bought a second air conditioner from them on our behalf.
It was a Chunlan model KFR 35 and we had that tested too at VIPAC. The results would turn out to be even worse than the 2500 watt machine.
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: It was labelled as a four-and-a-half-star machine. It was actually a one-and-a-half-star machine, it used about 25 per cent more electricity than it was labelled and the smaller one was slightly better than that.
JONATHAN HOLMES (to Michael Smith): And neither of them actually met the minimum energy performance standard?
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: No neither of them complied with the current regulations.
JONATHAN HOLMES: Industry sources have confirmed to Four Corners that up to 25 per cent of the air conditioner market consists of cheap, imported units with little known brand names.
From the consumer's point of view, they're a good buy. They cost hundreds of dollars less than the big name brands and even if they're as inefficient as the models we tested, they'll typically cost only a few dollars more per year to run. It's the cost to Australia that matters.
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: If they were all this level of inefficiency then we're talking about a small power station and roughly the equivalent in CO2s of about 8500 cars on the road.
JONATHAN HOLMES (to Michael Smith): And that's the difference between how they're actually performing and how they say they're performing?
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: That's just the difference that's not the absolutes, so that's the additional amount you need.
JONATHAN HOLMES: The Australian Greenhouse Office in the Federal Department of the Environment coordinates the regulation of the MEPS system, under powers delegated by state and federal governments.
VIPAC claims it's told them about the problem, with no apparent result.
MICHAEL SMITH, VIPAC ENGINEERS AND SCIENTISTS LTD: We demonstrated to them that on a sample of some 60 units tested during 2003/2004, about 46 of them were about 20 per cent below the capacity that they were rated at.
JONATHAN HOLMES: But the Greenhouse Office reacted with remarkable speed when we gave them a summary of VIPAC's test on the Optical two-and-a-half kilowatt model.
Here at the School of Mechanical Engineering in the University of New South Wales, the AGO had an identical Optical air conditioner tested three weeks ago.
That test has been completed. The Australian Greenhouse Office won't tell us the results but I understand that they're similar to VIPAC's.
No doubt Optical and Chunlan will be hearing from the regulators soon. But this laboratory is the only one in Australia that's officially accredited to do check tests on air conditioners.
And besides, funds for testing are limited, so for the most part the regulators are forced to rely on the results of the manufacturers' in-house tests. And that, say the critics, is asking for trouble.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: Well Jonathan, the - all I can say to you is that the system that we have at the moment is working in that we, when we identify units that are not compliant they are dealt with. If there is an assertion that a particular model is not meeting the standards ...
JONATHAN HOLMES (to Malcolm Turnbull): But who's going to make that assertion? I mean Four Corners isn't going to do it very often. Who else is doing it?
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: No, no well, we live in a very competitive free market environment and what happens is competitors, bluntly, dob each other in.
JONATHAN HOLMES (to Malcolm Turnbull): In this case if our tests are replicated by the tests that I gather the AGO is doing, the particular Chinese manufacturer that's exporting these machines can expect to be hearing from the AGO.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: Of course, absolutely, that's exactly how the system works.
They will rue the day that they allowed a non-compliant product to come into Australia. It will prove to be a very expensive error on their part.
JONATHAN HOLMES: It's hard to avoid the conclusion that on policing the MEPS system, as in so many other areas of greenhouse policy, the Federal Government reacts - to industry, or media, or public pressure - rather than setting a pro-active policy.
(Excerpt from Parliament, 8 May 2007):
PETER COSTELLO, TREASURER: One of the serious, long terms threats is global warming ...
(End of excerpt)
JONATHAN HOLMES: To its critics, the Government's new-found enthusiasm for solar panels is a case in point.
(Excerpt continued):
PETER COSTELLO, TREASURER: The current rebates will be doubled, so that households will receive up to $8,000 for installing an average system, which costs around $14,000 - a rebate of over 50 per cent.
(Cries of "hear, hear" from the House)
(End of excerpt)
JONATHAN HOLMES: Before the budget, a mere 4000 homes across Australia had installed solar electric systems on their roofs, connected to the national grid.
No doubt that figure will increase sharply with the new rebate. But that's because the taxpayer's footing more of the bill. It's still a very costly form of renewable energy.
DR GEORGE WILKENFELD, ENERGY POLICY CONSULTANT: Well that's about the most expensive way you could possibly come up with to save greenhouse gas emissions. The worst energy efficiency program you can come up with, the least cost effective, will still be a cheaper way to abate than the best renewable energy program.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: It is an expensive way to buy greenhouse gas abatement, there's no question about that. The reason for the solar subsidy is to drive technology, because what we're all looking for is that time when photovoltaics are really competitive with grid connected energy because they are an enormous opportunity.
JONATHAN HOLMES: To the hard-pressed manufacturers and installers of solar panels, the new rebate is certainly welcome. Compared to the global leaders - Germany, Japan, California - Australia has given little support so far to solar power.
In California, solar is hot and Vote Solar, one of the lobby groups that made it so, is putting on a show. The state government is pumping billions into a program to put solar power on the roofs of a million homes.
(Excerpt from Vote Solar show):
MAN: Because when you take solar, it can be the mainstream, it can be the thing that we put on every single rooftop, it can be thing that we every single big-box store installs as a matter of course.
(End of excerpt)
JONATHAN HOLMES: But California combines its enthusiasm for solar power with tough laws and tough targets on energy efficiency, including its stringent building codes. It's that coherent strategy, some argue, that Australia so obviously lacks.
TRISTAN EDIS, BUSINESS COUNCIL FOR SUSTAINABLE ENERGY: In Europe they've got a 20 per cent reduction by 2020 in term of their energy efficiency target. California have exactly the same target. In fact even Texas has one of these targets.
We've got to have a target. We've fundamentally got to have a target for improvement in energy efficiency. Without that we can't hold governments accountable. They don't know where they're going, they don't have a direction. It's the same with any kind of strategy that anyone does. If you do not have a target you don't know where you're going.
JONATHAN HOLMES: But the Government doesn't believe in mandatory targets. Instead, it's urging us to take voluntary action.
MALCOLM TURNBULL, FEDERAL MINISTER FOR ENVIRONMENT: ... I mean do you want to do you want to go out and say to people: nobody can have a computer turned on at home; nobody can have a large screen television set? Is that, now is that a policy that you would recommend? I certainly wouldn't.
People want to use more energy. What we want to encourage is for people to use more energy efficiently, and so giving people ideas, alerting them so they become more aware is a vital part of the campaign for a more efficient use of energy.
JONATHAN HOLMES: The Government will shortly spend millions on a website and a direct mail campaign to raise that awareness.
But there are dozens of similar websites out there already - from state governments, energy retailers, and green NGOs. The information's available if we want it, but our bills just aren't high enough to make us care.
TRISTAN EDIS, BUSINESS COUNCIL FOR SUSTAINABLE ENERGY: People spend more on grog and cigarettes than they do on electricity and gas. Trying to spend huge amounts of money on advertising campaigns involving people like Don Burke is not going to drive the sort of change that we need. People just don't want to worry about it, they only care about it when it's not there.
JONATHAN HOLMES: One mechanism it seems is on the way - the much heralded Emissions Trading Scheme. But so far, neither major party has set a near term target for greenhouse gas emissions, let alone for reducing our household electricity use, and emissions trading on its own is unlikely to change our habits.
ALAN PEARS, ENERGY EFFICIENCY CONSULTANT: The key issue here is that emissions trading really targets the big emitters. Then the energy generators will be effectively passing on, you know, whatever their overall cost of compliance is. But it will be a relatively small percentage change in people's energy bills.
JONATHAN HOLMES: No-one pretends it will be easy to change the state of mind of a nation that's enjoyed cheap energy for a century. There's no shortage of rules and rebates. What's lacking is a coherent national strategy, and a challenging long-term goal.
Perhaps in the next few months we'll see one emerge. Meanwhile, if we can't change our habits, at least we can change our light bulbs. By the time the next election comes, they'll be half way to paying for themselves.
(End of transcript)