Thursday, 9 March 2023
Safeguard Mechanism (Crediting) Amendment Bill 2022; Second Reading
Zaneta Mascarenhas (Swan, Australian Labor Party) Share this | Hansard source
Action on climate change—it's one of the reasons I stood for federal parliament. That was a strong desire. I wanted to see action on climate change. In the last 12 years I've spent a lot of time in my professional career helping some of the largest companies on the ASX work out what their climate action journey is and how they need to reduce emissions.
I remember when the Abbott government attempted to tear down the Clean Energy Finance Corporation and I remember the destruction of the Climate Commission. It was when the Abbott government didn't send a ministerial delegate to the Warsaw climate summit. Days after that decision the government doubled down on their policy of denial, destruction and delay, committing to only a five per cent reduction in emissions on year 2000 levels by 2020. That decision for a five per cent commitment came from the fact that the conditions were already in place for a five per cent reduction by 2020, thanks to the work of previous Labor governments. It was a commitment to do nothing—and that was only the tip of the iceberg for the denial, destruction and delay by the previous government.
When Prime Minister Abbott said that the Clean Energy Finance Corporation should not invest in established clean energy technologies, it sent massive chills through the clean energy sector. Finally, the previous government had to drag the Nationals kicking and screaming to agree to a net zero pledge. But even after that you had Senator Matt Canavan suggesting there were still wriggle room, and who would blame him for thinking that, when the previous government's policy didn't include a legislated target and allowed for voluntary reductions by major emitters?
All that the business community wanted was some certainty to help them decarbonise. Australians wanted action on climate change, and businesses were already stepping up and working to reduce their emissions. Where was the government? It was cowering in its duty to show leadership and fighting internal battles to try and reach consensus that climate change is real.
Sometimes you have to ask yourself how far the opposition have fallen when you feel nostalgia for Prime Minister Howard's approach to climate change. He recognised the need for action on climate change. He accepted the science and put first steps in place for a framework to manage our emissions. In 2006 we had Prime Minister Howard come out and say the following:
… I think the weight of scientific evidence suggests that there are significant and damaging growths in the levels of greenhouse gas emissions and that unless we lay the foundation over the years immediately ahead of us to deal with the problem, future generations will face significant penalties and will have cause to criticise our failure to do something substantial in response.
What a great previous Prime Minister! Prime Minister Howard may have come out years later and described himself as climate agnostic, but at least he was pragmatic enough to identify where the community sentiment was at the time, and he made the political calculations to stay out of the so-called climate wars.
Instead of attempting to mount a scare campaign, being obstructive and marching headways against community sentiment, I ask the coalition to join us in supporting this bill. One of the first bills passed by the Albanese Labor government was the Climate Change Bill. Australians were sick of delay, and the business community needed clear signals to inspire confidence and invest in our transition to net zero. This bill put an end the climate wars and restored national leadership on climate change by setting legislated and achievable targets. These targets created a clear road map to our pathway to net zero by 2050.
I support the safeguard mechanism bill because it creates a supportive policy framework for industry to meet their legislated climate reductions. It's predictable and known. It gives clear signals to business that they've long asked for and that previous governments have failed to provide. Under this bill, emissions will reduce by about four per cent each year to 2030: it aims to deliver 205 million tonnes of emissions abatement by the end of the decade. That's the equivalent of cutting emissions from Australia's cars by about two-thirds over the same period.
Let's remember the theory of the safeguard mechanism. The previous government created the Emissions Reduction Fund, and the goal was to get companies to bid in a reverse-auction process to reduce greenhouse gas emissions and to pitch projects. So while they were reducing emissions in one part of the economy they wanted to make sure that they safeguarded emissions elsewhere in the economy from increasing. That was the purpose of the bill. However, what ended up happening was that the safeguard mechanism in the previous design didn't actually reduce greenhouse gas emissions. Instead, baselines were calculated and set to be very generous—they didn't actually help to reduce greenhouse gas emissions. Setting half-hearted targets is ineffective, and might as well be the same as not setting a target. I could see, from my extensive experience in the private sector and in dealing with some of Australia's biggest companies, that that wasn't the signal they were looking for. It wasn't meeting community expectations either.
Our bill meets the expectations of people in the heart of Swan. When I was knocking on doors and listening to residents, they were looking for a plan to act on climate change. Time and time again, people said that they wanted action on climate change. In Forrestfield, High Wycombe, Belmont and elsewhere people were telling me that they were so distraught at seeing floods in one part of Australia whilst seeing fires in other parts at the same time. The thing that we know about climate change is that the intensity of events will increase. We can't say that a single event is necessarily related to climate change, but the thing that we do know is that where there's more energy in the system the intensity and severity will increase.
Our country can't afford to ignore the impacts of climate change. The earth's average temperature has risen by about 1.2 per cent, and the scientific consensus is that this has been human induced. The consensus is also that climate change results in our weather systems being affected. The patterns of wind and rain are changing, and extreme weather events are increasing in frequency and intensity. So we know that emissions are affecting our climate. We also know that 30 per cent of Australia's emissions come from 215 different facilities. It makes sense that the government meets community expectations and actually helps these big emitters to reduce their greenhouse gas emissions.
Our pathway to net zero requires a foundation built on a regulatory framework that incentivises these top 215 emitters with abatement measures—also known as greenhouse gas reductions. And it needs to disincentivise emissions that exceed baselines. This builds on the National Greenhouse Emissions Reporting Act, which sets out a mechanism to ensure that covered emissions of greenhouse gases from the operations of a large designated facility—essentially, a facility with more than 100,000 tonnes of carbon dioxide equivalent—don't exceed the baseline applicable. By creating a baseline that decreases predictably by four-ish per cent each year, this bill empowers the stick that exists in the National Greenhouse Emissions Reporting Act, while also disincentivising emissions. It also provides the carrot by rewarding and encouraging when emissions abatement measures are undertaken by the 215 emitters.
The opposition has spent some time in my home state of WA, trying to demonise these effects. I remember when the West Australian had an article about me: the headline was something like 'Labor star candidate linked to carbon tax'. That wasn't factual, but the overwhelming community sentiment was: 'Oh, this is a person who's an engineer and who has worked in climate change action. She knows what she's talking about—yes, we're going to vote for her.' That was because they wanted to see predictable climate change action. From my time in working in this professional area, I would say that companies understand their climate footprints and they understand their social responsibility. They need a legislative framework to decarbonise.
The truth is that there are many companies across Australia that are very supportive of this. Toll said: 'We believe that building upon the safeguard mechanism will promote policy certainty and stability, while delivering on the government's climate targets in a way that minimises costs and shares the effort across the economy.' Doesn't that sound fair? Rio Tinto said that they support the use of a reformed safeguard mechanism as part of a suite of policy measures to incentivise genuine industrial abatement. The Australian Chamber of Commerce and Industry said:
The business community has been very clear in its support for reforms to the Safeguard Mechanism. This is the best way to secure the planning, investment and innovation that will underpin the decarbonisation of our economy without sacrificing reliability or affordability.
Approximately 80 per cent of safeguard facilities are covered by corporate net-zero commitments and represent about 86 per cent of the scheme. How can those opposite continue to peddle the myth that this will harm the economy when industry is clearly rallying around this policy? There are so many great examples, and the member for Curtin has also been involved in doing some great climate-change-reduction work over the years.
One of my favourite examples of greenhouse gas reductions in WA is from Wesfarmers and CSBP. They have a nitric acid plant. Nitrous oxide is a greenhouse gas that has a higher warming potential than methane and carbon dioxide. They actually put a catalyser in their nitric acid plant, basically to abate the nitrous oxide emissions. It significantly reduced the emissions. They did this because they thought that it was the right thing to do, but they also knew that there was going to be a price on greenhouse gas emissions and that they needed to reduce their greenhouse gas emissions.
The thing that this bill will do is incentivise great industry examples like that. This scheme has the credit, which is the carrot bit, and the baseline, which is the stick bit, and will be a wonderful asset for companies going forward. It provides predictable policy, and it provides vision. The thing that I'd love the opposition to do is join us in bipartisan support. Let's do this together, let's give the business community what they want and let's give the Australian community what they want.