House debates

Thursday, 26 November 2015

Matters of Public Importance

Climate Change

3:26 pm

Photo of Greg HuntGreg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Hansard source

The two things come out of this discussion. First, Labor wants to bring back the carbon tax. No matter what else they say, they want higher electricity prices, they want higher gas prices, they want a higher cost of living and they want to make sure that Australian farmers are paying higher prices for fertilisers. Second, they are just a little bit embarrassed and disappointed that we are meeting our targets, that we are beating our targets, and that we are doing it without their carbon tax. Let me say something about our targets and their targets, about policies under us and under the Labor Party and also about some of their sources.

Let me begin with the issue of targets. We do share some common targets, but there is one small difference. In 2012, when they left office, they left a gap of 755 million tonnes between what they predicted would occur and what was needed to meet their targets. There was a gap of 755 million tonnes. Under us that gap has dropped to 421 million tonnes, and then 236 million tonnes and, now, we have reached a point of meeting and beating our targets officially, with yesterday's formal update from the Department of the Environment before the Paris conference. It shows that we have had a reduction in predicted emissions of 264 million tonnes since the last update. The last update was the one they referred to yesterday in question time. When I asked them to table that update, they would not do it—they would not do it because they knew they were using figures that had already been superseded by the latest formal departmental assessment. It was a moment of cringeworthy embarrassment on their behalf.

As a consequence of that, we see a deep sense of shame on their behalf because we are meeting and beating our targets, and now they are arguing there should be higher emissions, from some of the interjections that we hear from our friends on the other side. It has reached the point of absurdity, so much so that yesterday the shadow minister held a press conference decrying not just their own rules, not just the United Nation's rules, but the very thing they demanded. He said it was an outrage that Australia is using carryover from the previous international assessment period. I did some research last night, and I found a little document. This document is called Submission under the Kyoto protocol: Quantified emission limitation or reduction objective (QELRO)—November 2012. In other words, it was the Australian submission to the United Nations in relation to our targets, known in the trade as QELROs.

Australia signed up to new targets: this is the minus five per cent equivalent or the minus 13 per cent from 2005 to 2020. Under Labor, they did that on the basis that confirmation of its provisional QELRO will be conditional on—in other words they said the only way we are accepting these targets will be conditional on:

The rules applying to carryover of units from the first commitment period of the Kyoto Protocol being appropriate for Australia.

They set, not just as an objective but as a condition for signing on, that carryover can be available. The UNFCCC did that for a reason. They did that for every country. They did that in a way that allowed Australia to do that, and they did that because it provides incentives for countries to overachieve. So there is a deep, powerful policy objective behind this. Labor incorporated this in its national accounting rules. Labor counted this carryover, and I am not critical of any of that. In fact, Labor made their participation in the entire set of target frameworks conditional upon setting carryover—it is there in black and white, and I table the conditions.

But yesterday they said it is an accounting trick that the coalition government would use our rules. That argument seems to have disappeared from his protestations today, because it took them three hours to work out that it was not just their rules, not just the UN rules, but it was their demanded conditions that these accounting frameworks be allowed. So we have not changed anything, except we have reduced emissions.

We have reduced emissions not just by the 755 million tonnes but by 783 million tonnes in total since we came into government. What does that represent? That represents 98 million tonnes a year over the eight years of the second period. That represents a reduction of almost 100 million tonnes per year on average on our watch compared with Labor's last prediction. That is an astonishing outcome. It defies every prediction that they and their favoured modellers have made—and, by the way, only a year ago their favoured modellers made a prediction that we would be more than 500 million tonnes short. But they are still stuck in the past. The department has got it right. What is interesting is that they were 500 million tonnes out, for the latest auction they were $500 million out, and then—my favourite—for the first of the emissions reduction fund auctions, their favoured modellers said that the 'absolute maximum' outcome would be nine million tonnes. Well, it was 47 million tonnes—more than 500 per cent greater than their favoured modellers had predicted. I think that they might need to find a new set of favoured modellers going forward.

But then we turn to policies. We don't have just one or two. We have six significant complementary policies to achieve our outcome. Firstly, the Emissions Reduction Fund, which has achieved 92.8 million tonnes of abatement over its first two auctions, at an average price per tonne of $13.12—that is one per cent of Labor's $1,300 per tonne of abatement under the carbon tax. Beyond that, we have a safeguard mechanism that will save 200 million tonnes over the course of the period out to 2030, and we have the renewable energy target, on which we have settled on a bipartisan agreement. Going forwards from here are three further mechanisms. Firstly, we have the National Energy Productivity policy, which is expected to save 150 million tonnes, which the Minister for Resources, Energy and Northern Australia is expected to release within the next two weeks. Secondly, we have already commenced the vehicle emissions reduction process, which will save over 90 million tonnes between now and 2030. Thirdly, we have the ozone gas revisions, which are likely to save an additional 80 million tonnes between now and 2030. It is not just a set of policies, it is a comprehensive framework.

By comparison, what do we have from the ALP? Let us ask ourselves: has anybody seen their policy document? After all this time, it does not exist. There was a leaked document, obviously designed to kill their own policy, which was given to The Daily Telegraphyou will all remember a $600 billion cost for their favoured policy. But what we see now is that their renewable energy target is on some days a target and on other days an aspiration. We do not have a set of international targets, although I am told that they will pick the minus 26 to minus 28 per cent but bring it forward to 2025—you heard it here first. Let's see how they are going achieve it. The most fascinating thing is that we do not have a scintilla of a mechanism from them after all of the discussions about the Emissions Reduction Fund, about the safeguard mechanism and about the renewable energy target.

We have six significant elements on our side. We have overachievement in our targets, we have overachievement in our Emissions Reduction Fund, but on their side of the house: no targets, no policy, no hope, and just an approach of higher prices for mums and dads across Australia—their approach to climate change is a disgrace. (Time expired)


Tibor Majlath
Posted on 1 Dec 2015 10:26 am (Report this comment)


There was a leaked document, obviously designed to kill their own policy, which was given to The Daily Telegraphyou will all remember a $600 billion cost for their favoured policy.


There is nothing 'independent' about that estimation. Greg Hunt's office did the calculation and released it to Simon Benson (Newscorp). The figure is a sum of the projected difference of GDP's between two hypothetical models inflated over 15 years with an assumed constant inflation rate of 2.5% per annum. It is the usual cherry picking from one of three models.

Tibor Majlath
Posted on 1 Jan 2016 9:08 am (Report this comment)


But then we turn to policies. We don't have just one or two. We have six significant complementary policies to achieve our outcome. Firstly, the Emissions Reduction Fund, which has achieved 92.8 million tonnes of abatement over its first two auctions, at an average price per tonne of $13.12that is one per cent of Labor's $1,300 per tonne of abatement under the carbon tax.


$13.12/tonne which as a cost to government is NOT an economy wide measure! Most of these ERF projects apply to sequestration methods, and landfill and alternative waste treatment methods. It does not include heavy industry nor the energy sector - the heavy emitters. So this figure of $13.12/tonne is not only unreliable but meaningless unless those free to pollute are brought into the fold.

Hunt is getting ahead of himself, the 92.8 million tonne of abatement has not been achieved yet. The ERF auctions are projections several years into the future. The ERF is voluntary. The contracts are for a specified period of up to 10 years. The Clean Energy Regulator will publish the amount of abatement achieved by contractors each year. Some will be audited to ensure compliance. Only some?

How many hundreds of public servants and consultants with the necessary expertise and knowledge are required to properly assess all the submitted projects from such diverse areas? Is that cost included in the $13.12/tonne? We don't know.

The $1300/tonne does sound excessive even though it is nothing but a fiddle with yearly emission differences under the carbon tax over a very short time period before the tax had time to bite. As such it is a poor measure of the effectiveness of the carbon tax. Since these values can only ever be estimates, it would be more appropriate to estimate the yearly emission without a carbon tax and compare that with the emission under the tax.

But the $1300/tonne claim is even more confusing because heavy polluters received top-shelf compensation for free permits under Labor. A licence to pollute. For example, Alcoa received 94.5% free permits. This meant it was responsible for only 5.5% of its carbon liabilities. How did this situation affect the figures - tax and emissions, if at all? We are none the wiser.

To add to the confusion, Simon Birmingham, in the Senate on 3 December 2015, mentions the Coalition's abatement price of $13.12/tonne in the same breath with Labor's alleged carbon price of $209/tonne!

How does one confuse a 2015 abatement cost with a hypothetical, over-inflated, carbon price in the year 2030? Seems you can use any unrelated figure from any future time period to make a case. What are we to believe?

It is hard enough to understand complex issues even when politicians are not spouting such naive and conflicting information. The quality of the current debate over climate change, emissions and the carbon tax is not an auspicious sign that we will have a 'mature debate' on raising the GST on electricity, gas and other essential services in the hope of "keeping the cost of living down" under the guise of 'tax reform'.