Australian federalism’s impact on energy efficiency policy

Abstract

The Australian constitution makes no mention of energy or environmental matters. Hence the States have assumed responsibility for developing and implementing energy policy. Yet the need for efficient, large-scale markets, together with Australia’s international obligations, demands that a national approach be adopted. Australia’s eight main jurisdictions have acted creatively and cooperatively to deal with these constitutional difficulties. The National Appliance and Equipment Energy Efficiency Program is a successful labelling and standards program that will result in greenhouse savings of 81Mt of CO2 equivalent between 2000 and 2015 at a net economic benefit to the economy. Yet the complex federal structure is clearly hampering the program’s ability to achieve maximum impact, delaying implementation and resulting in confusion for industry. The net result is that greenhouse gas abatement opportunities are forgone and opportunities for greater economy-wide efficiency lost. A more efficient federal system or the introduction of Commonwealth energy efficiency legislation would allow these economy-wide efficiencies to be captured.