Ted O'Brien (Fairfax, Liberal Party) Share this | Hansard source

I am delighted to speak today on the report of the Standing Committee on the Environment and Energy relating to the National Greenhouse and Energy Reporting Amendment (Transparency in Carbon Emissions Accounting) Bill 2020. I thank the deputy chair for tabling the report on my behalf.

The committee concluded not to support the passing of a bill that was put forward as a private member's bill by the member for Clark. In looking at the evidence, it was very clear that the two parts of the proposed bill should be rejected. The first part of the proposed bill suggested that the minister should report on Australia's Greenhouse Gas Inventory quarterly in the parliament. What we saw in the evidence was that the minister already presents information on quarterly and annual bases to the parliament and the public, and thus the committee decided to reject that part of the bill.

The second part of the bill referred to scope 3 emissions. It suggested that scope 3 emissions be included in Australia's emissions reporting obligations. For those who may not be familiar with them, scope 1, scope 2 and scope 3 greenhouse emissions are the typical categories considered. Scope 1 and scope 2 emissions refer to the emissions that an organisation, in some shape or form, controls. Scope 1 typically refers to direct activity that a company might undertake and the emissions it gives rise to through its own operations. Scope 2 can refer to more indirect emissions, such as the purchase of electricity. Scope 1 and scope 2 emissions can be controlled by the company; they can be controlled by an organisation.

Scope 3 emissions, the very emissions that the proposed bill seeks that Australia report on, are not controlled by the organisations who would be required to report on it. Thus the committee concluded that it should not support the passing of that part of the bill on three grounds. First, it is too costly. Second, it's too complex. Third, it is inconsistent with our international reporting obligations.

You can imagine the cost and complexity if a company were to try to track and calculate all of the emissions upstream and downstream of its own activities. They would have to look at the end-to-end value chain in which it plays internationally, to try to calculate what emissions might be generated. Not only would that be resource intensive and highly complex but it would also represent double counting in the system. As the deputy chair, Josh Wilson, outlined, the international system, as it is applied today, does not support scope 3 emissions being included in calculations. It would represent double counting. What's more, it would be inconsistent with the Paris Agreement and other obligations to which Australia has already signed.

I too wish to thank the other members of the committee, the secretariat, those who submitted and those who were witnesses. However, I do wish to put on the parliament's horizon that I reject deputy chair Josh Wilson's suggestion in his speech that, as some Australian companies currently seek to calculate scope 3 emissions, it would not be costly. There is no agreed methodology in Australia for how they're calculated. I believe that is a false conclusion.

What's more, there's the fact that the International Energy Agency recognises that coal to gas represents a transition approach. Where we export our gas from Australia, it can reduce emissions by 50 per cent, on average, where end users had previously been using coal. This sort of conclusion by this committee does not take away that fact, and nor should it. In conclusion, I do not commend the bill to the House, but I am very happy to commend the report of the Standing Committee on the Environment and Energy.

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