Monday, 16 November 2009
Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 [No. 2]
Consideration in Detail
by leave—I move the amendment circulating in my name:
Schedule 1, item 159, page 36, after subsection (2A) (after line 27) add:
(2B) The regulations must not declare that emissions of greenhouse gas emitted in connection with the production of food are covered by the carbon pollution reduction scheme.
The amendment I am moving today relates to whether or not food commodities from agricultural products should be included in the emissions trading scheme. The reason for bringing this amendment forward is that I am very concerned that if food is included in a global emissions trading scheme—and I know this is the Australian version of a global emissions trading scheme—in fact we will have enormous competitive forces coming into play in terms of land use.
There is an assumption being made around the world that the farm sector will always grow food irrespective of other markets. What the current emissions trading scheme is proposing is that a new market mechanism, that of carbon trading, be brought into play in Australia and around the world. That will add another market mechanism that will compete for land that in many cases is being used for food. We also have another market which embraces renewable energy. If we get into a competitive arrangement that promotes the carbon market in front of the renewable energy and food markets, and in fact we see the food market coming third, we will potentially see an enormous transition of land use from food into more profitable uses. I have used the example of the cotton growers in my electorate and further west. They do not necessarily grow cotton or fibre because they dislike food; they grow it because they are making more money from that form of land-use. The Malaysian palm oil renewable fuel producer does not necessarily not like food, but it is more profitable to grow a renewable energy on his land than to grow food.
If we create a market mechanism, an emissions trading scheme, that starts to penalise food globally, we will potentially see, as I have said, a massive shift in land use. When you see the negatives that start to accrue to food production in the use of land—nitrous oxide for protein in grain, for instance, or carbon in terms of the starch in grain that is being transported around the world—it is not hard to envisage an arrangement where the farm sector actually makes choices away from food towards other land uses. In fact, the current bills before the parliament encourage the planting of trees for carbon purposes, which is an encouragement to shift from food production to another form of land use for carbon purposes. The current arrangements—and if they are carried forward into the Copenhagen arrangements—would in fact create an incentive for those around the globe to use their land for purposes other than food. We saw an example of that with the US biofuel arrangements that were put in place by the previous President, George W. Bush. As a farmer, I do not disagree with that. But if we believe we have refugee issues now, if we start to transfer the use of land away from food, or price food production above the capacity of people to pay in some of the less developed countries, then we will create a circumstance that we could be very severely penalised for at a future date.
The minister in the chair, Minister Combet, whom I spoke to by phone this morning, and the minister in the Senate have in the last couple of days mentioned that they are prepared to exempt agriculture from a future scheme. There is no mention of agriculture in this current scheme. The government says currently that it will reconsider agriculture in 2015. A lot of land use decisions will be made in the intervening time. I was pleased to hear both ministers saying that they are prepared to exempt the agricultural emissions from an emissions trading scheme. 44That is not currently in this bill, and that is why I opposed the bill at the second reading stage. The amendment that I have moved allows for the food component, the thing that keeps people alive across the world, to be removed. (Extension of time granted) It allows the food component of agriculture to be exempted from the bill or, in other words, not to be included in the bill at a future stage. That produces a lot of certainty for the agricultural sector in this country.
If we apply that same logic to a global emissions trading scheme and exempt agriculture, or the production of food from agriculture, from an emissions trading scheme we preserve those lands which are currently being used for food production for a hungry world. We have parallel debates going on. We have a debate that is concerned about greenhouse gases and we have a debate that is concerned about the long-term food security of the globe. There is a collision point between the three market mechanisms, in my view. The mechanisms are: the traditional food economy, which is a poverty economy for developed farmers anyway; the use of land for emerging biofuels or alternative or renewable energy; and now, potentially, a carbon economy, which could become a competitor for the use of land for carbon sequestration through trees or vegetation.
I made the point to the minister this morning that I am opposing this legislation. I opposed it previously when it came before the House. I think what the minister in this House and the minister in the Senate, Minister Wong, are doing by offering the olive branch in relation to agriculture being exempted from future schemes is an enormous opportunity that should not be bypassed by the farm sector. I have issues with this bill, such as the five per cent target, but, as I said to you this morning, Minister Combet, I am prepared to support this legislation if agriculture—or food production, more particularly—is excluded from the remit of the scheme. If my amendment is supported in this chamber, I will be supporting the bill. If it is not, I will not be supporting the bill. But on its return from the Senate, where, hopefully, agricultural food will be excluded, I will support the bill.
I urge those who have been out there in the farm sector suggesting that there are going to be enormous taxation arrangements imposed on that sector to look very closely at this. What we have in that offer from the government is both the Liberal Party and the Labor Party, the two majority parties in the building, agreeing that agriculture should be excluded. That is something that I believe overcomes a lot of the inherent flaws that are in the current legislation. As I said, I will support the legislation if agriculture or food derived from agricultural commodities is exempted from it when we vote now, or in some sort of an arrangement when it comes back from the Senate. Thank you.