House debates

Wednesday, 10 October 2012


Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012, Clean Energy (Charges — Excise) Amendment Bill 2012, Clean Energy (Charges — Customs) Amendment Bill 2012, Excise Tariff Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Clean Energy (Unit Issue Charge — Auctions) Amendment Bill 2012; Second Reading

6:51 pm

Photo of Mike KellyMike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Hansard source

I add my public congratulations to you on your election, Mr Deputy Speaker. I know no more decent man, and you are deeply schooled in this role.

I begin my comments on this legislation by reading the following passage:

The Government will introduce an emissions trading scheme, no later than 2012, as the primary mechanism for achieving the long term emissions reduction goal. A well-designed emissions trading scheme will help to reduce emissions at least economic cost. As a mechanism to establish and appropriately manage a forward price for greenhouse gas emissions, trading will reduce uncertainty, improve the investment environment, and strengthen the incentives for low emissions technology development and deployment. It will also encourage new economic opportunities in low emissions technologies, energy efficiency and through carbon offsets such as forest plantations.

The document that I am reading from is Howard government policy from 2007. That policy, seeking to operate on the recommendations of the Shergold study, was an initiative going forward in what was that current international environment, not conditional upon the sealing of the Copenhagen arrangements or any other emissions trading scheme being established in any other part of the world. It was government policy and it was to be implemented. It had a target date of 2012, the current year, with our scheme now in operation. The logic of the scheme was well understood by the Howard government, and of course that logic was indisputable. The logic was based on expert advice not only from Professor Shergold but also from many other sources, such as the OECD and the Productivity Commission; we have recently had Mr Garnaut's detailed studies, and of course the living example of many of these schemes around the world, which I will come back to.

Specifically, this package of legislation is aimed at preparing us to move into that international space and to align and engage with those international trading schemes which the Leader of the Opposition seems to deny exist—once again an indication of his struggle with reality in this respect. Certainly it will enable us to engage immediately with the European Union's emissions trading system by removing the price floor that was to operate in the first three years of the flexible price period, establishing the flexible registry arrangements to ensure linking arrangements can be entered into; it introduces provisions regulating carbon unit auctions. The current arrangements applying to the equivalent carbon price settings for synthetic greenhouse gases and some liquid fuels will be altered to ensure they remain equivalent to the effective carbon price faced by liable entities. And it allows the minister also to determine methods to measure potential greenhouse gas emissions embodied in the amount of designated fuel and to adjust liabilities between financial years, providing additional flexibility in the regulations for how liability is imposed on potential greenhouse gas emissions and extending the eligibility test for JVPs, joint venture participants, to participate in the opt-in scheme.

I mentioned that it enables us to move forward in this evolutionary process of the growing international regime relating to carbon trading. There was a lot of scepticism about the Copenhagen and Durban processes but COP17 in Durban was a major breakthrough. It has taken the world forward to the position where all the major emitters, most of the world's countries—almost all of them—will be pushing forward to establish by 2020 an international global regulation regime. In the meantime, having that peg in the sand in front of us, countries all around the world are now furiously moving towards establishing reductions in their emissions, positioning themselves to be able to participate in trading regimes so that their transition in 2020 will be smooth. That is exactly why we need to move forward now, because doing this now puts us ahead of the game in many respects but also keeps us at pace with other nations who are moving forward in this area.

We know that, apart from those 90 countries, we have seen movement towards emissions trading schemes beginning in South Korea, much influenced by what we have done in Australia. We have seen moves beginning in California and the four major provinces of Canada. We have seen initiatives in Japan. The process is well and truly underway in China. Of course, the European-wide scheme has been in operation for some time. So most of our major trading partners, most of the key dynamic elements of the world economy, are already moving down this road and it will now be possible for us to position ourselves in engagement with them.

Establishing an international trading regime will also enable many of our businesses operating in the limits which we establish to offset some of their costs. As the member for Flinders acknowledged, carbon knows no international boundaries. So any carbon emissions abated anywhere in the world bring us further forward in our global effort to prevent further deterioration of the climate change circumstance. We know that 94 per cent of OECD members have legislated or are developing an emissions trading scheme at the national or subnational level, 88 per cent of all advanced economies have legislated or are developing an ETS at the national or subnational level and over 70 per cent of the richest economies in the world have legislated an ETS at the national or subnational level.

This is not just a scheme that is going to benefit many of the industries that are associated with renewable energy and the like; of course, many opportunities are available from this Australian landscape to take advantage of an international trading regime. The Carbon Farming Initiative will very much advance that cause. Already, this is happening. There was an article in the Australian on 12 October 2011 which reported on the circumstances of two Tasmanian farmers. One was Mr Roderic O'Connor, who, participating in the international trading regime at that time and having achieved the verification of carbon credits, was prospectively earning $400,000 from the vegetation on his property that was not to be logged or harvested. In addition was the example of Peter Downie from Bothwell in Tasmania, who became the first farmer in Australia to bank hard cash for selling his registered carbon credits. He was paid more than $200,000 when he sold his first 15,000 carbon credits. Of the 70,000 units he had had assessed, they were registered and verified to a German property developer and a Japanese wool processor. So already we can see the shape of the international regime developing and our own farmers—these two farmers in Tasmania as an example—taking advantage of that.

We are also talking about supercharging the development of a green industry and green jobs in this country. My own region is a prime example of that. We are experiencing that dynamic change happening right now. The New South Wales Department of Premier and Cabinet itself rejected that there would be 2,300 new jobs generated in my region alone from this scheme and from the carbon pricing package. We are seeing immediately, right now, over a billion dollars in renewable energy projects in Eden-Monaro.

We already have the Capital Wind Farm, just out here at Bungendore, with 60 turbines. A $700 million project is about to get underway in Boco Rock, in the high country here, which will also potentially generate up to 22 ship movements and 1,600 truck movements through the Port of Eden, generating stevedoring jobs and support industries that will enable that transport and logistics operation to occur. This will have a major economic impact in my region. It will not only be confined to those major wind power operations. The Capital Wind Farm, near Bungendore, is developing a 50-megawatt solar farm and we will be engaging with our tertiary institutions here in the ACT to develop better storage techniques for solar generated energy.

This hive of activity is also driving research in my region. Just nearby the Capital Wind Farm is the Woodlawn Bioreactor, which is taking advantage of a major ex-copper mine and taking putrescible waste from Sydney through the train and truck system, filling that hole and generating electricity through the harvesting of methane through the bioreactor facility.

We are also seeing the development of the Carnegie Wave Energy Corporation's potential facility off the Port of Eden, which has reliable average wave movements that will make the project highly profitable and could power up to 55,000 homes. Already, Carnegie Wave Energy Corporation is doing a job for us with HMAS Stirling, generating power for that major naval base. This is a very exciting technology, which is tethered to the bottom of the ocean, so it is completely invisible. Not only will it generate electricity but potentially these facilities can generate desalinated water, based on their pumping actions. Carnegie Wave Energy Corporation will be sinking its first test buoy next year.

We are also seeing Algae Tec in Shoalhaven, just across the border from my electorate, moving forward with this magnificent algae technology generating biodiesel fuel. They have already entered into a contract with Lufthansa and will be entering into production with them. The refinery is in operation. It also offers us the potential to significantly abate emissions from our coal fired power stations because this technology actually harvests the carbon component of waste generated from coal fired power stations. You could abate up to 80 per cent of the emissions of a coal fired power station by utilising this algae technology. Our power-generating companies should already be reaching out to position themselves well, to keep themselves going for a much longer period and to defray costs. The technology is there for them to take advantage of.

Beyond these projects we also have industries being generated locally in many exciting directions—for example, the solar store company in Cooma, which is exploring the storage of solar energy in its graphite block system and which is now moving forward into deployment. Dyesol, in my hometown of Queanbeyan, is developing world-leading technology in solar photovoltaic systems using film technology, with very flexible industrial application. That is now moving forward.

In addition, we have a very exciting company down in Pambula, Pambula Engineering. A headline in the Merimbula News said 'Carbon tax produces new interest in business'. This company is taking advantage of the carbon-pricing regime because of the issues associated with putrescible waste going into landfill and has created an organic waste dehydrator technology, invented by Jose Ruiz-Avila, from Cobargo in my electorate. This technology has been implemented by Pambula Engineering. It is creating jobs and is now exporting this technology to Mexico and Iceland and is developing it for major projects within Australia. This exciting new industry is just one example of many that are starting to spring up around my region. We were certainly indicated as one of the top four in the country by the Access Economics study because of every available renewable energy source being available to us and being close to the grid. Certainly, what we are now seeing is growing proportions of renewable energy developing at a much more accelerated rate. In South Australia, where so much devastation had been predicted by the Leader of the Opposition, we recently saw renewable energy peak at 60 per cent of the state's power resources. How could you take any advice or comment from the Leader of the Opposition on this subject? The guy cannot even read an electricity bill, as we saw well demonstrated today.

He has been waging a fraudulent campaign against the interests of this country. He is a one-man sovereign risk, because business wants certainty in relation to an international and domestic trading regime. He is the one who is generating the uncertainty that is affecting investment. In spite of that, we have seen those who have faith in the industry moving forward because they are seeing immediate results being demonstrated. But an attempt to try to dismantle the clean energy future package, as this man proposes to do, not only would set us back but would cripple the growing green energy industry that is developing and these spawning industries in my electorate. He would be setting us back behind the international pack that is developing internationally, as I have explained. Those are the real facts, the real statistics.

We have been trying to recover from the 12 Rip Van Winkle years, when the former government failed to invest in innovation, infrastructure and skills. All of that period was wasted during the years of the mining boom, when our country slid backwards, when we saw 10 interest rate rises in a row because of the poor-quality spend of that government.

The current government has managed to completely turn that situation around with a regime that will not only generate this investment and new industries but support that with huge investment in the new skills that will be required, creating prosperous jobs and a great future for our kids.


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