Allegra Spender (Wentworth, Independent) Share this | Hansard source

I rise to speak on the Annual Climate Change Statement 2025 tabled by the Minister for Climate Change and Energy. I welcome this fourth annual report. I commend the department for comprehensive work and the government for its commitment to targets and reporting. The statement is an important stocktake of progress. This year it shows emissions 29 per cent lower than 2005, following the largest annual drop outside the pandemic. It shows renewables are working, with electricity emissions falling 3.3 per cent. It shows the safeguard mechanism beginning to deliver reductions after a first year of reform, and it reminds us there is still much work that needs to be done, if we are to meet our 2035 targets.

There are a number of issues I would like to speak about. Firstly, on the least-cost pathway, Treasury estimates that a least-cost pathway to net zero would make Australia $1 trillion richer by 2050, compared with a disorderly transition. Real wages could be four per cent higher if we were to get the transition right, so how we decarbonise matters. But, when I look across the state of the policies, I'm not convinced we are on the least-cost path.

There are 430 climate related policies in government, as identified by the Climate Change Authority. The Productivity Commission, however, identified that we should have greater transparency and reporting on the cost effectiveness of emissions reductions against this. This transparency is much overdue. Neither the Parliamentary Library or the Parliamentary Budget Office can advise me or my office on the cost per tonne of abatement of the government's policy suite. This is important. We need this information, particularly if we're not going to have an economy-wide climate target.

The one estimate the Parliamentary Library could locate was for the electric vehicles novated fringe benefit lease tax exemption, the so-called EV discount. It is estimated to cost over $900 per tonne of abatement, yet Treasury's least-cost pathway assumes that the highest marginal abatement cost to 2030 will be $67 per tonne. It suggests government policy has wandered away from the least-cost pathway. I understand that there are reasons why you would adopt a non-least-cost pathway initially: to encourage a technology into a degree of maturity. But we also must be willing to pull back when that is no longer needed and redirect funds to the least-cost pathway.

If we are going to make this transition at its lowest cost, we must be disciplined about where and when we procure emissions reductions, and the pathway—not the politics—matters. An economy-wide carbon price or an expanded safeguard mechanism would provide the market structure to deliver this least-cost transition. It would replace the government's captain's calls with a predictable, pro-business framework. At the very least, the government should transparently cost its actual climate policies, not just model a theoretical trajectory. I strongly support the transition to net zero and the urgency of getting there, but it must be done with the least cost and in a way that shares the benefit. At present we do not know the cost of emissions reductions the government is purchasing through subsidies, and it does concern me that many Australians cannot access these incentives.

The second piece I'd like to talk about is shared benefits. The two cornerstone programs—the Small-scale Renewable Energy Scheme and the Cheaper Home Battery Program—are largely available only to homeowners, especially those with green title. This is the same cohort already benefiting from additional tax settings. Similarly, the EV discount provides the greatest benefit to high-income earners purchasing expensive vehicles through employer-provided novated leases. Renters, apartment dwellers and many Australians under cost-of-living pressure struggle to see how the transition is working for them. The Solar Sharer scheme was pitched as a mechanism to share the benefits, but it relies on smart metres not due to be rolled out until 2030. Many have also questioned whether households, particularly those who can't readily shift their usage, could end up paying more overall.

There is another issue that the statement largely avoids: Australia's exports. It mentioned coal exports just once, in the context of South Korea's COP commitments affecting Australia's export opportunities. My community sees this inconsistency. They see ministers pulling in different directions, spending money on decarbonisation while expanding fossil fuel supply. Someone said this week that the investors regard the Future Gas Strategy as the government's most significant climate policy. Domestic emissions are now 29 per cent below 2005 levels. That progress matters, but domestic emissions pale in comparison to those we export in the form of fossil fuels. Australia's contribution to global emissions—more than triple our domestic emissions—continues to rise. We will not be shielded from the consequences of those emissions. They will be felt here, in more frequent and catastrophic floods, fires and droughts, in increasing insurance premiums, in more days spent indoors escaping the heat and in the decimation of the Great Barrier Reef and Ningaloo Reef.

At COP30, Australia joined the Belem Declaration on the Transition Away from Fossil Fuels. That was important, but, despite the minister leading preparations for the next COP in Turkiye, we are far away from leading the transition. If there is a plan to phase out coal, I have not seen it. Recent decisions to expand or extend projects suggest one does not exist. Just this week, the NSW government approved an extension for a thermal coalmine, allowing another 36 million tonnes of coal to be extracted, roughly equivalent to one-fifth of Australia's annual domestic emissions when burnt. This is an affront to Australians making concerted efforts to reduce their own carbon footprint. The government has also introduced mandatory climate disclosures, requiring businesses to report emissions across their entire value chain, yet when it comes to the minister's own scope 3 emissions, which the government is asking businesses to report on—the emissions from the fossil fuels we export—apparently they cannot be reliably reported.

Australians understand that the transition to net zero is necessary. What they want to know is that it is being done sensibly, fairly and at the least cost, and at the moment this story is incomplete. We celebrate progress on domestic emissions while expanding the export of fuels that drive global emissions. We promise a least-cost transition while failing to measure the cost of the policies delivering it. If we are serious about climate action, as I know the minister is, then our policies must match our ambition. That includes being transparent about the cost of our policies, disciplined about pursuing the least-cost pathway and honest about the full climate impact of our decisions, including the emissions embedded in what we export.

Australians are already doing their bit, installing solar, electrifying homes, buying more efficient vehicles and adjusting their lives in meaningful ways. They deserve a climate policy framework that is coherent, economically disciplined and consistent with our international obligations, because the pathway matters. As we look to bridge the gap between the projections and the 2035 target, these new policies do need to be cost effective. The safeguard mechanism review will need to consider how to best cover a greater portion of emissions without strangling businesses with red tape, and barriers to investment need to be addressed to accelerate the renewables rollout and lower power bills. The transition to net zero is one of the largest economic transformations Australia will undertake this century. If we do it well, it will make us more prosperous, more competitive and more resilient.

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