House debates

Wednesday, 3 June 2009

Carbon Pollution Reduction Scheme Bill 2009; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009; Australian Climate Change Regulatory Authority Bill 2009; Carbon Pollution Reduction Scheme (Charges-Customs) Bill 2009; Carbon Pollution Reduction Scheme (Charges-Excise) Bill 2009; Carbon Pollution Reduction Scheme (Charges-General) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009

Second Reading

9:11 pm

Photo of Kirsten LivermoreKirsten Livermore (Capricornia, Australian Labor Party) Share this | Hansard source

When it comes to legislation as significant as the Carbon Pollution Reduction Scheme Bill 2009, the first question is: why? Why are we taking action to address climate change and why are we acting by way of a cap-and-trade emissions trading system? The fundamental answer to those questions is that the government is doing what governments are always asked to do. Sometimes there are areas of policy that are articles of faith for one side of politics or the other, where policy is influenced by the core values that underpin a political party’s existence and reason for seeking office. But this issue does not go to the ALP’s reason for being; it is one that simply has to be confronted as part of putting up our hand to lead the country. When faced with problems, governments seek advice, analyse the problem and weigh up the options for solving the problem. Judgments are ultimately made about the best way to proceed and, in consultation with stakeholders in the broader community, a course of action is determined and implemented. This government’s acceptance of the science of climate change and our commitment to reducing carbon emissions through an emissions trading scheme falls into that category. This is not an ideological crusade for us. It is a reasoned, albeit fraught, response to a challenge that comes with the territory of leading this country in and preparing this country for the 21st century.

I accept the science that tells us the earth is experiencing out of the ordinary warming. The Intergovernmental Panel on Climate Change fourth assessment report noted:

… an improvement in the scientific understanding of the influence of human activity on climate change—


… the warming of the climate system is unequivocal, that there is a greater than 90 per cent chance that the global average net effect of human activities since 1750 has been one of warming.

It is hardly radical or unreasonable for a government to take heed of the IPCC’s findings and for a government to accept its share of responsibility to address the causes of the problem identified in the scientific data. This is not an article of faith for me, or indeed for the Labor Party. The government is not about ignoring credible evidence either, which brings me to the next point about the science.

When we weigh up whether or not to accept the science indicating the existence of climate change, part of that judgement involves understanding and evaluating the consequences of climate change. What is at stake if we get our judgement on the science wrong and that leads to us doing nothing? Mainstream science is telling us that, if climate change of the magnitude suggested by the IPCC is in fact taking place, the consequences that can be predicted are of concern. Plenty of other speakers have run through what this might mean for Australia in terms of more extreme weather events, damage to the Great Barrier Reef, threats to the viability of agriculture in parts of the country and so on. I do not want to dwell on the detail of that, but there is enough even in the most moderate projections to tell me that there are risks in doing nothing.

Accepting the science, the next question is: why an emissions trading scheme to bring about a reduction in carbon emissions? The first point is that an emissions trading scheme is the centrepiece of a much bigger and many-pronged response. The government is making massive investments in energy efficiency and renewable energy that will benefit households, small and medium businesses and industry, and create opportunities for new industries. For example, the investment that Mackay Sugar is making in cogeneration will create a new source of much-needed revenue for cane farmers in my electorate. We are also intensely engaged in international efforts to achieve a global agreement, something that everyone agrees is the best solution and that is at the forefront of the government’s efforts here in securing the passage of this legislation before the crucial negotiations at Copenhagen later this year.

An emissions trading scheme is hardly a radical policy response from the fringes of economic theory. It was the Liberal-National coalition government that set up the task force on emissions trading, which after extensive public consultation recommended that an emissions trading scheme should be implemented in Australia. We know that the Leader of the Opposition, Malcolm Turnbull, argued strongly for such a scheme when he was a cabinet minister in the Howard government. As Minister for the Environment and Water Resources, Malcolm Turnbull referred to the National Greenhouse and Energy Reporting Bill 2007 as the ‘first major step in establishing the Australian emissions trading scheme’. And, on 31 May, just last weekend, the Leader of the Opposition stated that he has no doubt that Australia will have an emissions trading scheme.

In adopting an emissions trading scheme, the government has built on years of expert deliberation, consultation and economic modelling that has concluded that an emissions trading scheme represents the lowest cost way to make the change to a less emissions intensive economy. The government has also been influenced by international developments that have favoured cap-and-trade schemes. The CPRS is designed so it can integrate with international schemes as more and more countries make the move towards reducing their carbon emissions. Of course, a change as big as the one anticipated in these bills—the introduction of a carbon price into our economy—has raised concerns in sections of the community. The government is certainly not blind to the challenges presented in the CPRS for some industries and regions. For that reason, the government has been careful to develop the CPRS step by step—green paper, white paper, draft legislation, regulations. We have gone back to industry and other stakeholders to continue consulting and negotiating and to work through the issues that have emerged at each stage.

Contrary to what the opposition would have people believe, this has not been a rabid ideological crusade on the part of the government, devoid of reference back to the real-world consequences of this legislation. There are some things we will not back away from. Yes, we have an election commitment to reduce carbon emissions—an election commitment that we took to the Australian people in 2007 and which they supported. Yes, we are committed to doing that by means of an emissions trading scheme. But within that broad framework the government has taken a pragmatic and cooperative approach to working with industry to achieve those policy aims. Evidence of that is the government’s decision announced early last month to delay the start of the scheme, to fix the price of carbon at $10 for the first year and to increase the assistance given to emissions-intensive trade-exposed industries. The government is sensitive to the circumstances of industry. We want to work with them to meet this challenge, recognising that we absolutely must get the balance right between environmental imperatives and economic reality.

I have seen this approach in action as I have helped businesses in my electorate to negotiate their way through the process from our stated policy in opposition to the green paper to legislation and regulation. Among other businesses, my electorate is home to QMAG, a company with a magnesite mine and a processing plant on the outskirts of Rockhampton. The management of QMAG have been very proactive in making their case to me and the government about the company’s situation and what the company needs to make the transition to operating under an emissions trading scheme. As soon as we announced the policy we would take to the 2007 election, I was invited to the plant so that I could understand the processes it uses, the products it makes and especially the nature of its emissions.

QMAG’s concern, which I shared, was that it is a comparatively small player in the resource sector and could not rely on a peak body or a team of lobbyists to guide it through this process. But, as I said, the management were very proactive and fought hard to make sure that their voice was heard. They met my colleagues when they were shadow ministers, and that process of engagement has continued since the election and throughout the development of the emissions trading scheme. QMAG has been recognised as having emissions-intensive trade-exposed status and consequently is expected to be eligible for free permits for over 90 per cent of its emissions once the CPRS commences.

The initial activity definition for those parts of QMAG’s operations that will be covered by the free permits was not satisfactory to QMAG’s management, so once again I worked with them to make sure that they were fully engaged with the consultation process. They have succeeded in achieving a wider activity definition that more accurately reflects their operation. There is still an issue outstanding with the activity definition that QMAG intend to pursue through the independent panel headed by Dick Warburton, and they have my support in making that case. I do not pretend to speak for QMAG and I have no doubt that there remain aspects of the CPRS that they would prefer to live without, but, from my experience of helping the company through the policy process, at no stage were they fobbed off with rhetoric or unyielding ideologically based spin. Instead, there has been a genuine attempt to understand the business and to work out the best possible fit between the government’s objectives and the interest of QMAG. They have had access to the Minister for Climate Change and Water and the parliamentary secretary as well as advisers and departmental staff to listen to their concerns and to work through QMAG’s suggestions for change.

This process has been repeated for other businesses and industries in my electorate, and it has been my top priority throughout this process to keep meeting with affected industries and to advocate their position and their concerns to ministers and to the Prime Minister. Of course, there are still matters to be resolved, so I am still all over Parliament House making the case, and I can tell the House that doors are open, meetings are happening and issues are being worked through. Chief among these are those affecting the coal industry. It goes without saying that the government recognises the vital importance of the coal industry as our biggest exporter, a major employer and a driver of economic growth. We give real and meaningful support to the coal industry through the investments we are making in clean coal technology, including $100 million to accelerate the deployment of carbon capture and storage projects globally through the Australian led Global Carbon Capture and Storage Institute and, most recently, the announcement of $2.4 billion to get commercial scale carbon capture and storage projects operating in Australia. On that front, it is important to acknowledge the efforts that the industry itself initiated through COAL21 to raise substantial funds to invest in the technology that will secure the future for the industry.

In addition to those programs there is also assistance to the industry under the CPRS—three-quarters of a billion dollars in transitional assistance. The immediate challenge is for the government and the industry to allocate that money to the mines with the highest fugitive emissions and therefore the highest carbon permit liabilities. The complexities of this process are well known due to the discrepancy in emissions intensity from mine to mine. For example, in its announcement in May of the proposed project at Alpha in Central Queensland, a coalmine worth $7.5 billion that will generate 6,000 jobs, the President of Waratah Coal said, ‘I don’t think that the CPRS is going to have enough of an impact to present insurmountable problems.’

For his part, the National President of the CFMEU, Tony Maher, has said the industry’s own figures show that the Queensland mining industry will grow 120 per cent between now and 2030. On behalf of his members employed in the industry he has called for the scare campaign to stop and the work on compensating gassy mines to start. I want the compensation targeted to those mines with the highest methane emissions. The parliamentary secretary Greg Combet had the chance just a few weeks ago when he was in Rockhampton to speak directly to the operators of coalmines in Central Queensland, so he understands exactly how important it is to get this right.

I will close my remarks there, because in some senses the public posturing on these issues is not getting the job done. It is time to get down to the serious business of working through, mine by mine, what is needed and what allocation should be made to compensate them for the costs of the CPRS. The delayed start to the scheme is recognition that all industries are suffering from the global economic downturn, and it will give mining companies in particular time to regain their profitability as demand and coal prices recover. In the meantime, the uncertainty surrounding the fate of this legislation is not helping any business to make the decisions it needs to make or to attract the investment it needs to attract. Further delay and confusion on the part of the opposition serves no-one. They should join the government in passing this legislation and turn our national focus to securing an effective international agreement.


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