Wednesday, 3 June 2009
Carbon Pollution Reduction Scheme Bill 2009; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009; Australian Climate Change Regulatory Authority Bill 2009; Carbon Pollution Reduction Scheme (Charges-Customs) Bill 2009; Carbon Pollution Reduction Scheme (Charges-Excise) Bill 2009; Carbon Pollution Reduction Scheme (Charges-General) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009
Last night we had the Leader of the Opposition come into this chamber and desperately try to keep faith with his party room sceptics and faith with the Australian people, who expect government action on climate change. What we saw the opposition leader present to parliament was not an environmental strategy but a coalition political strategy. Whilst the coalition is united in its opposition to this legislation, it is bitterly divided on the question of climate change and the need for any form of legislation.
We saw an opposition leader agreeing that we must act on carbon emissions but not having the courage to either take on the climate sceptics in his own party or make the hard decisions required. That is what the opposition leader did for about the seventh time last night, by putting off making a decision. He put off making a decision until after the Copenhagen conference in December, until after the US passes its own legislation and until after a Productivity Commission inquiry—with terms of reference that could lead to an open-ended inquiry that could drag on indefinitely. This is not a six-month delay, as opposition members would have people believe, but an ongoing delay, because it will continue until there is unity in the Liberal Party room, and there will never be unity in the coalition party room on this issue.
The opposition leader agrees with the targets set and argues that all we need to take to Copenhagen is agreed targets. If we all agree that a scheme should be brought in then let’s get the framework in place regardless of whether it is a five per cent, a 15 per cent or a 25 per cent target, because targets without the mechanism in place to implement them become empty words.
On 17 March I attended the Science meets Parliament function here in Parliament House, where the keynote address was given by Dr Penny Sackett, Australia’s Chief Scientist. Dr Sackett had just returned from a major conference in Copenhagen, attended by some 2,000 climate change scientists from around the world. In her speech, Dr Sackett summed up the Copenhagen conference outcomes on climate change, and I quote part of what she said:
The newest science, based on more, better and a larger spectrum of data, illustrates clearly that the earth is reacting more quickly to greenhouse gases, tracking along the worst case scenario of the IPCC report.
Dr Sackett’s comments highlight both the urgency and the reality surrounding the issue of climate change. Dr Sackett is Australia’s Chief Scientist. If we cannot have faith in the advice of the nation’s Chief Scientist, then who do we look to for scientific advice? Yet we have members opposite who refuse to accept that our climate is changing, who refuse to accept that elevating greenhouse gas emissions are contributing to climate change, and who refuse to accept that for the sake of our children and future generations we have a responsibility to act on greenhouse gas emissions and to act now.
As a member of the House Standing Committee on Climate Change, Water, the Environment and the Arts, which is inquiring into the effects of sea level rise on coastal Australia, I have had the benefit of hearing evidence presented to the committee by a number of Australia’s experts on climate change—scientists from universities, the CSIRO, the Bureau of Meteorology and oceanographers. Every one of those scientific experts had a similar message to that of Dr Penny Sackett, and that message is that the world’s climate is changing, that human activity is contributing to that change, that our climate is warming, that if greenhouse gas emissions continue to rise temperatures will also rise, that if temperatures rise ice in the Arctic and Antarctic will melt, that melting ice combined with expanding warm ocean water will cause catastrophic sea level rise, and that warmer temperatures will also lead to more frequent extreme weather conditions such as heat waves, floods, tropical cyclones, storm conditions and tidal events.
If current climate change trends continue, the human and environmental costs will be substantial. We already have had glimpses of the kind of devastation that we can expect more of, with the recent Victorian bushfires, the Northern Australia floods, the demise of the drought-stricken Murray-Darling system, and the cyclones in the USA. These events are real and when they occur no human intervention will control or prevent them. Yet human intervention in stabilising greenhouse gas emissions around the world is possible and, on the best advice available, would make a difference in stabilising the earth’s climate. The choice about whether we act on climate change or not is very clear. If we get it wrong, and we overreact, the result will be a cleaner, greener environment. If we get it wrong and we fail to act—or act too late—the result will be catastrophic. The choice in my mind is crystal clear.
But there is another strong argument in favour of acting now. Every delay adds considerably to the cost of introducing a scheme, and to the environmental and social costs already being borne by society. The argument being peddled by some industry sectors and used by opposition members to oppose the Carbon Pollution Reduction Scheme legislation is that it will cost jobs. What those people are neglecting to factor in is, firstly, that climate change is already costing jobs. Many more jobs are at risk, and the economic costs of readjustment or repair are already massive. Just look at the costs associated with the Murray-Darling Basin, the Northern Australia floods or the Victorian bushfires. Secondly, there is unlimited opportunity for new job creation as we transition to a greener economy. One has only to look at employment in the solar and wind power industries and other lower emission energy industry sectors to see the jobs growth potential—a potential that is expected to drive around $19 billion in renewable energy investments over the next decade once a 20 per cent renewable energy target is implemented. Thirdly, we read in the papers only today that while some industry leaders are talking publicly about massive job losses, they tell investors the impact of the emissions trading scheme will be minimal. In question time today we heard the Prime Minister highlight that independent business analysts were rejecting the cost to industry being claimed by some.
Let me briefly outline the Rudd government’s proposed Carbon Pollution Reduction Scheme legislation. The scheme will commence on 1 July 2011. A greenhouse gas reduction target of between five and 25 per cent has been adopted, and it is conditional on global agreements being reached in Copenhagen in December. The cost of carbon will be set at $10 a tonne for the first year. Market prices will apply thereafter. An amount of $3.9 billion will be made available to provide transitional assistance to energy-intensive trade-exposed industries. An Australian Carbon Trust, expected to raise $75.8 million, will be established to allow households to directly assist in reducing Australia’s emissions. A $6 billion household assistance package will be provided to assist householders with increases in energy costs. Petrol and agriculture will not be included in the initial scheme. A $2.75 billion package will be allocated to help businesses, community sector organisations, workers, regions and communities to move to a low pollution future.
Our objective should be to stabilise global greenhouse gas emissions, currently at around 380 parts per million, at no more than 450 parts per million by 2050. The natural range for those emissions over the last 800,000 years is between 172 and 300 parts per million. Similar schemes are already operating in 27 European countries, and 28 states and provinces in the USA and Canada are introducing emission trading schemes. Per capita, Australia is the sixth largest polluter in the world. We have a responsibility to the Australian people and to future generations to act. We have the capacity to act. It is regrettable that the global financial crisis has overshadowed the environmental crisis facing the world and compounded the complexity of bringing in this legislation. We hear the cries, ‘Now is not the time to introduce this measure’. In truth, there will never be a good time because whenever this measure is brought in there will be some pain for some sectors of the community. The reality is that at some stage it has to be brought in, and it should have been brought in over a decade ago. Had it been, we would not have been in the predicament we are in today. More importantly, the sad truth is that time is not on our side. This measure needs to be brought in as quickly as possible, and I commend the legislation to the House.
The Rudd government have put into this House a rushed and bundled chaos in the form of an ETS, which does not take into consideration the many options that are available that could be more effective. The government’s immensely complex emissions trading scheme would seriously disadvantage our export and import competing industries and cost us thousands of jobs, kill our investment and yet not produce any meaningful reductions in CO2 abatement. Under the Rudd scheme, Australian export- and import-competing industries will be effectively taxed an extra $12 billion over five years that they simply cannot pass on. And if we move too far ahead of the world, any cuts in Australia’s emissions will not necessarily have a global impact. Take the LNG industry. The proposed scheme would perversely prevent up to 180 million tonnes of CO2, one-third of Australia’s emissions, being avoided each year because of gas projects that will not go ahead. For every tonne of greenhouse gas associated with the production of LNG in Australia, between 4.5 and nine tonnes are avoided in the Asia-Pacific region when this gas is substituted for coal in generating electricity. Natural gas is part of the global solution, not part of the problem, yet the scheme significantly penalises LNG exports. It makes no sense at all.
The Rudd scheme involves generating permit revenue of nearly $13 billion from year 1, a massive increase in taxation. This will see a huge administration set up to churn these billions of dollars back through the economy, with the government picking winners as to who gets compensation and who does not. The government’s scheme will inhibit new resource projects to get off the ground in Australia. Companies will have to be spoonfed by the government’s free quota of permits just to make their investment competitive. This is at a time when we need to be rejuvenating our economy. We are in the midst of the most terrible credit crunch in 80 years, so the capacity of companies to source the finance to buy almost $13 billion worth of permits is highly challenging. I believe that the general public has no concept of the real cost of the Rudd government proposed scheme in this legislation, the Carbon Pollution Reduction Scheme Bill 2009 and related bills. The design of the scheme means that any actions by individual Australians or families to reduce emissions will do nothing to reduce the overall output of greenhouse gases. It will just allow more emissions by industries to go up to the cap.
There is little or no acknowledgement from this government that households and small to medium businesses will face unprecedented rises in energy costs associated with the introduction of this scheme. And the plan fails to include any option for energy-saving initiatives that will assist to reduce the impacts of these price rises. I believe that the effect of any CPRS on small- and medium-sized businesses must be taken into consideration before the government locks into a scheme. Crucial areas such as agriculture and Australia’s huge commercial building sector are not in the scheme and are effectively ignored as sources of abatement. The Rudd scheme involves a tax that indirectly and significantly hits the bottom line of these sectors. Over recent months, company after company has publicly indicated that the cost to jobs of the proposed scheme that the Rudd government has in front of this House today is enormous. The Minerals Council has found over 66,000 jobs will be lost or forgone, and even Ford Australia believes that the ETS will drive jobs overseas.
But let us talk about the regional impacts, because that is primarily my concern at the moment. Research commissioned by the New South Wales government into the regional impacts of the government scheme found that regional centres across Australia could shrink by 20 per cent under this Rudd government scheme. I ask you, Mr Deputy Speaker Scott: who is looking after the people? When does food security get considered? Food security and water security are the biggest issues confronting Australia and the world. Even now we have the ABARE report, titled Effects of the Carbon Pollution Reduction Scheme on the economic value of farm production stating:
Even if the agriculture sector is not a covered sector under the [Rudd] CPRS, agricultural producers will face increased input costs associated with the use of electricity, fuels and freight and may face lower farm-gate prices for their goods from downstream processors. These will have implications for the economic value of farm production.
The report reveals a drop in income for beef producers of 22 per cent; lamb wool incomes will drop by 17 per cent—this is ABARE, this is an Australian government department—grain growers’ income will drop by 14.5 per cent. Every family needs a farmer who is producing food for survival, but who is looking after the farmers’ survival? Not the Rudd government, not this ETS.
And where are the voices of the members of the government who are Labor regional members? Where are their voices talking about looking after their local constituents, who are going to be impacted by the ABARE report that was presented just two days ago? Where are their voices? The member for Leichhardt, Jim Turnour; Dawson, James Bidgood; Capricornia, Kirsten Livermore; Flynn, Chris Trevor; Richmond, Justine Elliot; Page, Janelle Saffin; Hunter, Joel Fitzgibbon; Macquarie, Bob Debus; Bendigo, Steve Gibbons; Wakefield, Nick Champion; Lingiari, Warren Snowdon; Franklin, Julie Collins; Lyons, Dick Adams; Bass, Jodie Campbell; Ballarat, Catherine King; Blair, Shayne Neumann; and Braddon, the surly Sid Sidebottom. Basically, here we have a group of people who are simply voiceless. They are silent on the issues that are affecting their constituents. They do not want to read these reports because they may have to acknowledge that they have not got the courage to stand up in the best interests of the people that they represent.
The critical area of agriculture is not in the scheme and has been effectively ignored as a source of abatement: there is no recognition of the fact that we have to eat. As one learned constituent of mine in the Riverina said:
We should accept that we need to eat and then put our efforts into improving how we produce food in a more carbon beneficial way, thus increasing our ability to sequester carbon through a variety of carbon sensitive measures.
The latest proposed US legislation explicitly excludes agriculture from the cap, but it explicitly includes agriculture in the opportunities to develop offsets to create a revenue stream for farmers. No such action has been taken by the Rudd government. There is a clear indication that the US is heading towards the development of a market based scheme in concert with voluntary, regulatory and incentive based measures. Such possibilities have been totally ignored by the Rudd government. Take the recycling industry. Visy employ thousands of people in regional areas. They have publicly stated that the Rudd government’s proposal will seriously disadvantage their business, because recycling is not recognised under the CPRS that we are discussing here today. Visy’s renewable steam energy is not counted in emissions offsets. Can you believe it?
I firmly believe that Australia is going the wrong way on the design of the emissions trading scheme. The government’s ETS is not the only option to reduce greenhouse gas emissions. To begin with, an effective emissions trading scheme should be designed to protect the competitiveness of Australia’s competing export and import industries. As well, an emissions trading scheme is not an end in itself. It is only part of the solution—one tool in the climate change toolbox. There exist a wide suite of practical and effective approaches that could be employed to reduce levels of CO2 in the atmosphere, but these approaches are being absolutely ignored. They include boosting energy efficiency, especially in the commercial building and housing sectors; soil carbon; biochar; and revegetation of marginal land, including reafforestation. The government is rushing ahead with a scheme that will undoubtedly impact on jobs enormously. Jobs will be lost under this scheme.
The questions are: will the proposed CPRS be effective in substantially reducing global emissions? Who is looking after food security? Not the Rudd government. What will be the short- and medium-term impact of the CPRS on the economy and on jobs? Why are we allowing Australia’s trade exposed industries to be disadvantaged compared to their competitors, unlike in the much cited European emissions trading scheme? What other approaches or scheme designs have been investigated that may be more effective without crippling Australian industry? As Rupert Murdoch has suggested, Australia’s emphasis should be on practical solutions. He said:
The ultimate solution is not to punish the Australian economy by imposing standards that the rest of the world will never meet.
I rise to support the Carbon Pollution Reduction Scheme Bill 2009 and related bills, a historic economic and environmental reform for Australia. For the first time in this nation’s history, we will be moving to place a cap on carbon pollution. We are not doing this alone. The United States, Europe, New Zealand and other countries are moving to introduce emissions trading schemes—27 countries in the European Union and 28 states in the United States. We know that the US congress is now looking at legislation and the United States President is committed to an emissions trading scheme. We do not need to act alone; we need to act in concert with the world. But we need to show leadership and we need to demand leadership of the world. I welcome the efforts of the new United States President.
When it was elected the Rudd government delivered on its commitment to ratify the Kyoto protocol. This legislation further demonstrates our commitment to take action on climate change. The CPRS, our emissions trading scheme, is designed to dovetail into emissions trading schemes being developed in other parts of the world. It is the result of detailed policy development. We had the Garnaut report. We have had a green paper and a white paper. We have had draft legislation. Now we have brought this final legislation before the parliament. Throughout this process we have listened and responded to the need to protect jobs while we build the carbon constrained economy of tomorrow. The scheme has been delayed for a year in response to the global recession. It will now be starting in July 2011. There will be a phase-in period including a fixed price on carbon of $10 for the first year and, following this, an auction based scheme. The phase-in period recognises the real need for us to protect jobs as we move to this carbon constrained economy.
We understand that industry needs certainty and time to transition to the new carbon constrained world that we are moving towards. That is why emissions-intensive trade-exposed industries will receive considerable assistance as part of the scheme’s introduction. This has been increased as a result of the global recession over the first five years of the scheme. The Rudd government understands the concerns of business and does not want these industries to be forced to close down and move overseas, effectively moving pollution to another jurisdiction. The government has responded to industry concerns and the need to protect jobs. Industry needs and is demanding certainty. The passing of this legislation will provide that certainty.
You do not need to believe me; listen to what the industry groups have said. In a media release of 4 May, the Business Council of Australia said:
In the interests of business certainty, the BCA calls on the Senate to pass legislation this year to establish a Carbon Pollution Reduction Scheme …
The Australian Industry Group, also in a media release of 4 May 2009, said:
Ai Group supports the passage of the CPRS legislation this year … This is critical to establish the degree of certainty business requires in assessing medium and longer-term investment decisions. It is particularly important in the current context because of the central role that business investment needs to play in recovery from the recession.
Businesses are calling for this to go through to assist our recovery from recession. They need to take long-term investment decisions, some of them up to 30 years, and they are looking to us to bring this legislation before the House, for the opposition to pass it and for it to pass through the Senate.
We also recognise that we need to protect the environment, not only the economy, with this legislation. We have responded to the need to stabilise emissions in the atmosphere at a concentration of 450 parts per million carbon dioxide equivalent or lower as recommended by the Garnaut report. That is why we increased our target to 25 per cent of 2000 levels by 2020 if there is a world agreement in Copenhagen.
There is a significant event coming up at the end of the year, the Copenhagen conference on climate change, and we are committed to do what we can. This legislation is an important part of building momentum towards that conference. Also, we will take to that conference clear targets that will enable us to work with the world to make that commitment of maintaining concentrations of below 450 parts per million, if we gain the support of other countries around the world.
As the member for Leichhardt, I understand how important it is to take action on climate change. Cairns is home to the World Heritage listed Great Barrier Reef and wet tropical rainforests. Scientists agree that both are at risk from climate change. These icons are not only natural wonders but underpin our community’s economy and way of life. Tourism generates more than $2 billion in economic activity in my region and supports more than 30,000 direct and indirect jobs. Tourism is dependent on these environmental icons. Communities in tropical North Queensland are demanding action on climate change. Businesses and the local community where I come from want the government to take action on climate change and they want the opposition to support that. I would suggest that the opposition, with their continuing opposition and delay to our proposals, need to get out and listen to the community more.
The Rudd government is also moving to support the community to take action on climate change. We need business to do that and we also need members of the community to do that. The stimulus package contains important measures to insulate homes. The government will also be moving to roll out its $10,000 loan scheme in the next few months to assist households create more energy efficient homes. The new mandatory renewable energy target of 20 per cent by 2020 will also continue to support the rollout of renewable energy, including solar energy. The government, though, does recognise that you cannot introduce a carbon pollution reduction scheme without cost to the community. We understand that there will be a cost and we are concerned particularly about the cost to low- and middle-income earners from increasing power generation costs and the flow-on costs to their electricity bills. That is why we have developed a detailed package of assistance, including assistance to help low- and middle-income households adjust to a low-pollution future. We will be providing support to pensioners, carers and other members of the community who will see their power bills increase. We understand that. That is why we put in place support for those groups—low- and middle-income earners. The vast majority of them will get support and will feel no financial impact as a result of the introduction of this scheme because of the support measures we are putting in place.
Although mandatory requirements under this scheme will not start until July 2011, there are a number of measures that will need to start before then. Regulations on the rate of assistance to emission-intensive trade exposed industries will be set, following continued consultation with the industry. The Australian Climate Change Regulatory Authority will be established as a result of this legislation. This authority is critical to the functioning of the scheme and will need time to develop relationships with businesses to ensure that everything is in place when the system is scheduled to begin. Scheme caps will be set before July 2010—after Copenhagen but well before the scheme commences. Landholders will be able to earn permits from increased carbon stored in forests from 1 July next year. Auctions of permits will commence in 2010-11 for the 2012-13 financial year. There is a real need for us to get this legislation through the parliament to create certainty for business and ensure that the new regulatory environment on carbon pollution can be developed. We need certainty for business but, as we know and as this legislation does, establishing that regulatory environment and ensuring that those auctions can take place in a timely manner are essential. That is why it is critically important that we continue to progress this legislation through the House this year.
The Australian government is committed to taking action on climate change. The Carbon Pollution Reduction Scheme is at the centre of this commitment. The opposition has brought forward no concrete plans to tackle climate change and, instead, continues to seek to delay action. The Australian people want leadership on this issue. There is total confusion among the opposition on this issue. I come from Queensland. I just heard a member of the National Party making a contribution a little while ago. In Queensland we have the Liberal National Party, the LNP. Members opposite belong to that party. I am quite confused about what they actually stand for in Queensland.
Are you still in favour of an emissions trading scheme?
Mr Turnbull responded:
Yes Barrie, I am … the world is moving very solidly in the direction of an emissions trading scheme, most notably the Americans. So yes, I’ve got no doubt we will have an emissions trading scheme in Australia. That’s my view.
So Malcolm Turnbull is effectively out there saying he supports an emissions trading scheme. You would think the opposition would support this legislation on those words. And then there was Barnaby Joyce, a day later, saying:
I have serious doubts that we’ll ever have an emissions trading scheme …
And I’ve serious doubts that what happens in Copenhagen is going to be of any consequence beyond earnest looks and sweeping motherhood statements and promises that we will do something at some foreseeable time.
Clearly the opposition are divided. They have no policy on this. I do not know what the Liberal National Party in Queensland stands for. The Leader of the National Party in the Senate, who is from Queensland, is raving on about one thing, while the Leader of the Opposition is saying another. They have no policies. The government needs to get this legislation through the House and the Senate this year. It is clearly in the interests of business and the Australian community. I support this legislation in the House and urge the opposition to provide support as well.
I rise to speak on theCarbon Pollution Reduction Scheme Bill and cognate bills. I will deal with scientific aspects related to this, as well as economic issues and, obviously, Copenhagen. First of all, I think it is very important for all members to realise that, throughout the planet’s history, carbon dioxide concentration has followed temperature changes, not the other way around. Carbon dioxide has never been a driver of temperature in the past. That is like saying that the wheels of the car drive the engine. That is what we are trying to say at the moment. The association between carbon dioxide concentration and temperature is not particularly strong. For instance, in the Palaeozoic era the concentration of carbon dioxide in the atmosphere was nearly 5,000 parts per million. That is about 15 times what it is now, yet the planet was in an ice age.
If you have a look at the historical data, you have got the IPCC effectively trying to say that global temperatures have been stable for a thousand years and all of a sudden mankind has got involved and it has heated up. The problem is that there are significant problems with proxy data which is used to get that last thousand years of data. There is a problem called divergence, which is that after 1960, if you did not have temperature records and all you had was the proxy records, what you would assume is that the temperature had gone down since 1960 instead of having gone up. The lead author on this aspect and the leading authority on proxy data is a guy called Keith Briffa. He has this to say about divergence:
In the absence of a substantiated explanation for the decline, we make the assumption that it is likely to be a response to some kind of recent anthropogenic forcing. On the basis of this assumption, the pre 20th century part of the reconstructions can be considered to be free from similar events and thus accurately represent past temperature variability.
In other words, we have got divergence, the proxies do not relate at all to the temperatures, but we will just make the assumption that it is human beings and therefore, because we have made that assumption, we will just say that the rest of it is correct. What a load of hooey.
Then we have got the rate of temperature change: the rate of temperature change is unprecedented. Well, folks, you only have to go back 12,000 years to the end of the Younger Dryas and the rate of temperature increase was 15 degrees per century. It makes the increase of approximately 0.7 degrees over the last 150 to 160 years seem pretty trivial. It is important also to note that, according to all temperature repositories, global temperatures have come down this century and what we are looking at is merely a short period of time. Model hindcasting is the curve-fitting of previous models to sort of say, ‘Well, this shows that it is human beings that have caused it.’ The problem is that their projections have been lousy. All of the IPCC models, all 23 of them for all scenarios, including where carbon dioxide is held constant at year 2000 levels, indicate that temperatures should have increased this century, certainly not decreased. There is no explanation of it by the IPCC.
In terms of sea ice, essentially there has been no change over the last 30 years in the area of the planet that is covered by sea ice, which is different from what people hear. Indeed, Antarctic temperatures have gone down over the last 30 to 50 years—not up, as people think. The only area of the Antarctic that has gone up in terms of temperature is the Antarctic Peninsula.
Sea level rises are just showing normal rates of increase since the end of the last ice age. There is certainly no acceleration in sea levels at the moment. All there is right at the moment is a bounce-back, if you will, from the Little Ice Age.
On storm intensity, global tropical cyclone integrated intensity is the lowest for 33 years. We keep hearing all these horror stories about how dangerous it is going to be, but there has been no increasing trend for hurricanes in over a century.
In terms of scientific certainty, the IPCC fourth assessment report has got a group of radiative forcing components, nine of them, and they ascribe a level of scientific understanding. Two are high, one is medium, two are medium low and four are low—not exactly settled science. For instance, the Indian Ocean Dipole was discovered in 1999 but only this year they have actually realised that there is a correlation between the Indian Ocean Dipole and droughts in Australia. This was well after the so-called science had been settled. This is a huge issue, yet it was not recognised until this year. In fact, Dr Susan Wijffels, chief scientist of CSIRO Marine and Atmospheric Research, has this to say:
We need to really be keeping track of the system so that our children really do have a proper understanding of what’s going on and they’re not dealing with an inadequate set of information the way we are.
An inadequate set of information. Many scientists, including the IPCC, are sceptical, as are many papers. Indeed, I have got to tell you that I am pretty tired of hearing some of the members opposite talking about deniers and sceptics in derogatory terms when I know damn well from personal discussions with them that they are sceptical.
The Chief Scientist, Penny Sackett, is an exceptionally competent astrophysicist. The interesting thing is that she is making all these religious pronouncements about the effect of climate change—’We’ve only got six years before we reach the tipping point’ and all the rest of it. Yet in discussion she was not even aware that the response of temperature to carbon dioxide concentration is logarithmic. This goes back to 1896 with the original Svante Arrhenius paper, which was called ‘On the influence of carbonic acid in the air upon the temperature of the ground’. This was confirmed by Callendar and others, and the IPCC acknowledges this. The problem is that the constants associated with the logarithmic aspect are all over the place. But a very competent scientist, our Chief Scientist, is making dire pronouncements without actually knowing the details of the science. This is very concerning.
As I have said, models have been hopeless at predicting 10 years into the future, but suddenly they know what is going to happen a hundred years in the future, and in fact the IPCC will even tell you what is going to happen in a thousand years time. Have a look at the report.
There is an issue of prudence—and I will use the example of asteroid strike. Obviously if an asteroid strikes earth the results would be absolutely catastrophic and far worse than any climate change that is envisaged. Does this mean that we should be spending very significant fractions of our economy to defend against asteroid strike? Clearly not. The probability of asteroid strike is very low. However, it would be prudent to putt money aside to have a sky watch so that we can actually track the asteroids. This is a similar issue with climate change and emissions trading. It is a matter of risk assessment, fundamentally a benefit-risk analysis.
We get certainty from the likes of Stern and Garnaut on the economy in a hundred years time. As I have said, the science is certainly not settled. As to the economics, they say they can tell in a hundred years time—but they could not foresee the financial crisis a mere four years ahead.
If you have a look at the details of the emissions trading system designs of Europe and the United States, you will find that they are suited to their individual circumstances. If you had the entire globe adopting, for instance, the European model, it would significantly advantage Europe over other countries. The same thing goes for the US model. We are the only country that is looking at designing a system to damage our own economy in competition with others. We hear all about these dreams of how we can generate almost all of our electricity by using renewables but, if you have a look at it, Denmark uses 30 per cent renewables and it is very expensive. They are integrated into the European market and that is the only way they can deal with 30 per cent.
We also hear all about these great economic times that we are going to have as a result of using renewables and this green industry that is going to create so many jobs and be so beneficial to the economy. If that is true, why bother with an ETS? Industry would do it anyway. The fact that we need to introduce an ETS indicates that there is going to be significant damage and significant costs.
We need to see what happens in Copenhagen to ensure that we are not relatively disadvantaged for the sake of no improvement in global carbon dioxide emissions. This is something that the government does not seem to have considered. It is interesting that sceptics, led by an Australian, Bill Kininmonth, are included in the Copenhagen meeting. It is now part of the formalised process, and this is a good sign.
Finally, on the precautionary principle: given the low certainty of the science but the certainty of losing jobs with an ETS, we must make sure that what we do causes the least damage possible. We should go for the low-hanging fruit, from which we can gain benefits for virtually no cost. We certainly must not go it alone if competitors do nothing and so end up not achieving anything in net global terms apart from shipping Australian jobs overseas.
I suppose I can only say that I am very proud to be standing today in this parliament to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills. For me, this is why we are here. As members of parliament, our aim is always to improve the quality of life of both the people we represent and all Australians, but this gives us an opportunity to sustain that quality of life well into the future, and that makes me particularly proud.
We do have to balance needs and that is also our job. We do that in every piece of legislation, and this legislation does just that. I applaud the work of the Minister for Climate Change and Water, Senator Wong, and the assistance of the Parliamentary Secretary for Climate Change, Greg Combet, in being able to come up when challenged not just by climate change but also by a global financial crisis with legislation that responds to both those needs, balances them in a positive way, recognises and respects all the positions that come to this debate and finds the way forward. They are reformists, and they have done this particularly well.
Climate change is perhaps not just the greatest challenge we face but the highest priority of this government, and it is one that I support entirely. It is imperative that Australia plays a major part in this international challenge. I have just heard the member for Tangney try to use science, which is laudable, to explain his position. I, on the other hand, explain my position from the experiences of life. I use my experience of having visited China and seeing that country trying to do a very noble thing—create wealth for its people. I have seen that, in doing so, it has relied heavily on fossil fuels, and the emissions are terribly frightening. I also use my experiences of the wonderful opportunity I had to visit America and go to FutureGen to see the work that is being done in the coal industry to find clean coal solutions to a problem that is acknowledged, to meet with the US Department of Energy, to go to the UN and talk to the climate change unit there and to see a solar plant in Nevada. I have had the opportunity to see the wonderful efforts of mankind in other countries to know that there is an imperative, it is recognised and it is being responded to. I can only say how exciting it is when necessity comes together with innovation. That is what creates this marvellous world. That is what sets us apart as human beings. So I feel very fortunate to be part of this debate.
Economic modelling projections undertaken by Treasury last year tell us that the consequences of inaction far outweigh those of acting now. Although they were ignored, I applaud the representatives of business who came to the Howard government many years ago with a proposal detailing it for them. Similarly, the Stern report concluded that action must be taken, and I do not dispute that. Cycles can be in aeons or ages, but our life is short. We see those cycles and those changes and they impact on us. I come from Newcastle. We have seen the impact of storm events, those one-in-200 year events that are unfortunately becoming too frequent in this country. We see the repetition in Northern Queensland and northern New South Wales of those one-off events. They have human impact and cause human damage. We do not need science. Science has its place and has played its part, but I think all of us, on the basis of the reality we share as human beings, can make some very wise decisions on this. The CPRS white paper of December 2008 reads:
Australia faces a choice. We can either wait and leave our children and grandchildren to face the full impacts of climate change, or we can take responsible action now …
The immediate passage of these cognate bills through both the House and the Senate is imperative. The opposition’s argument that we need to wait until after the United Nations Climate Change Conference in Copenhagen is certainly one of following the leader, and it is an argument that I do not support. I think it is really about sustaining a leadership of their own, a leadership that is under threat and struggling to assert itself in the opposition parties. It is important, though, that we do not fiddle while the planet burns; it is important that we act now.
It is also important that, as a country, we lead. That is not a problem; it is something we have done historically and something we should be very proud of. We know that international decisions will be made; we know that international action will be taken. We should be prepared for that. We are doing the right thing by preparing industry and business for those decisions and making sure the way ahead is planned, discussed and collaborated upon, and that the decisions are the best ones to take us forward. It is a true expression of acting in good faith, and that is a position I encourage the opposition to come to.
In economic terms, business and industry do need certainty that this bill will pass so that investment and growth in jobs can continue. It is also important to drive the investment in renewable energy sources to sustain the energy use that we like in our lives—that we demand in our lives. We cannot have it both ways. We have to make those changes. Certainly business and industry—coal—in my electorate impact very much on employment, on the economy and on our way of life. Coal is part of our industrial heritage and history. We exported 92 million tonnes of coal last year. That is something we are proud of; it is not something we shy away from in any way. The Rudd Labor government is acutely aware of the vital importance of the coal industry, and so am I. My grandfather was a coalminer at the Rothbury riots. You do not have to scratch the skin of Novocastrians too deeply to find a mining history. Knowing how well the coal industry have collaborated in my area, I do not have any doubt that the $750 million compensation package that we are offering the coal industry can be leveraged in the smartest and best ways to sustain the industry and make the shifts we need to make. Delaying the CPRS for a year and having a soft start with a fixed permit price of $10 will certainly assist the coal industry, as will the $750 million in transitional assistance.
Newcastle, of course, is home to Tomago Aluminium, OneSteel, the concrete industry et cetera. I have been very pleased to assist dialogue between the minister and those companies and I think it has been a very healthy and positive way forward for us. I have great faith in people like Geoff Plummer, the CEO of OneSteel, and Andre Martel, a Canadian, who runs Tomago Aluminium. These are people of vision who will know how to cope with what they sometimes interpret as a crisis. They also know that relationships with government are terribly important, and the contribution they have made shows in this legislation. I will continue to work with our local industry so that this transition phase is positive and takes us forward.
Newcastle does not have a problem with being part of the future. We actually make an amazing contribution to the fight against climate change. Members will know of the activist group Rising Tide. They presented themselves at the Prime Minister’s Press Club luncheon and the Treasurer’s post-budget luncheon and they unfurled a banner here. They are also from my electorate. When it comes to climate change, in my electorate the whole gamut of arguments is represented. We are never shy about coming forward, no matter what our position. But we are uniquely positioned to contribute to the fight against climate change, as we have become a centre for smart energy and responsible emission targets. We have taken advantage of our expertise in energy generation, in smart manufacturing and in the research capacity embedded in the CSIRO Energy Transformed Flagship and the University of Newcastle’s clean energy centre. We have moved very quickly to be part of the solution, not just part of the problem. In January the Minister for Resources and Energy, Mr Ferguson, launched the headquarters of the Australian Solar Institute at CSIRO in Mayfield. There will be $5 million for a new solar thermal tower and array, which I know is about energy generation, not just about solar experiments. Similarly, I am very proud that the Clean Energy Innovation Centre was officially opened in my electorate in April this year. I look forward to working very positively with that organisation.
Another important initiative to come from Newcastle is Together Today. We are the only city in Australia that measures its emissions every day. Together Today tell me that we can exceed the government’s targets at least 12 months ahead of time. We are the world’s first user of a greenhouse gas speedometer. It is displayed in a square in our city for everyone to see every day. For us, responding to climate change is a collective challenge, a real part of our everyday lives in Newcastle. We create the energy and we want to create it in a cleaner and more efficient way; we produce the goods from that energy, which flow out of this country, and we want to do that in a more efficient way; and we enjoy a quality of life that we want to protect. This week, on 7 June, is the second anniversary of the day the coal ship Pasha Bulker washed up on our shores. We have seen extreme weather events and we know that what we do today in the House is an important response to those experiences and that it will lead to even greater success.
In concluding I quote the Garnaut climate change review, which said:
of climate change—
can be substantially reduced by strong, effective and early action by all major economies. Australia will need to play its full proportionate part in global action. As one of the developed countries, its full part will be relatively large, and involve major early changes to established economic structure.
… There is a path to Australia being a low-emissions economy by the middle of the 21st century, consistently with continuing strong growth in material living standards … By the end of the 21st century, and beyond, more so with each passing decade material living standards would be higher with than without mitigation of climate change.
I support the legislation.
I am pleased to be on the record this evening in relation to the Carbon Pollution Reduction Scheme Bill 2009 and cognate bills. The coalition of course recognises the need to take steps towards reducing greenhouse emissions, but an effective and responsible approach is needed. The government has run up a bill of $315 billion, or one-third of a trillion dollars, in 18 months, and that is going to take generations to pay back. It has a plan that is likely to cost jobs, drive up inflation, inhibit business growth and investment and hit household budgets.
A global response is necessary, not the response of an overzealous Prime Minister. Cutting Australia’s emissions alone will not solve global warming. The big emitters such as China, the United States and India need to get on board. That is what Copenhagen is about. The global community will look at targets, actions and building an effective global market. But Prime Minister Rudd cannot wait until December because his vanity has got the better of him. An editorial in the Financial Review on 28 May this year hit the nail on the head. It says that the government:
… can afford to delay the passage of the legislation to get the detail right. It emphatically should not be holding the future of the economy hostage to the timetable of one of Prime Minister Rudd’s beloved international conferences.
Rushing the scheme to suit the Prime Minister’s political timetable would damage the Australian economy, cut jobs and result in businesses being exported to places where carbon emissions are free. So what is the result? The biggest polluters just keep polluting and there is little if any reduction in emissions, and developing countries will not have to comply because they are developing countries.
With Australia accounting for only 1.4 per cent of the world’s CO2 emissions and being one of only five countries to meet its Kyoto targets, it does not make sense to rush the CPRS without knowing the outcome of the Copenhagen summit and without the detail of President Obama’s plan. Canada has made the wise decision to defer its plans until the United States announces its measures. Canada’s action should serve as an example to Mr Rudd. It makes sense to wait for the world’s largest emitter to detail its plans. The US will have a much more powerful seat at the table in Copenhagen to influence the rest of the world, particularly the big-emitting and developing countries. A report in the Age newspaper on 24 November last year titled ‘Developing nations urged to slash carbon emissions’ spelt out that point. It said:
Executive Director of the International Energy Agency Nobuo Tanaka said “Developing countries will generate 97% of the growth in greenhouse emissions between now and 2030. After 2020 Brazil, Russia, India and China must participate. Without some of them it’s simply impossible to achieve the goals of limiting global warming by 2 degrees.”
Mr Tanaka confirmed that even if all the OECD economies reduced their emissions to zero it would not be enough.
I have said time and time again that the best thing you can do for a worker is give them a job. Under this flawed scheme an estimated 70,000 jobs will go. Many companies have already foreshadowed job cuts, including Rio Tinto, Xstrata, Bluescope, OneSteel, Ford and Envirogen. In Western Australia before the last election Mr Rudd promised that his emissions trading scheme would not disadvantage Australia’s export and import competing industries—yet another broken promise, costing export and import industries $12 billion in new taxes over five years and having a major impact on West Australian operations.
Woodside’s CEO, Don Voelte, said last year that the CPRS would threaten up to $100 billion in new projects and APPEA warned that the scheme could lead to a fall in growth in the LNG sector of up to 37 per cent. For every one tonne of emissions from LNG production in Australia, the reduction in coal production would save four tonnes in Japan, for example, and up to 9.5 tonnes in China. The West Australian CCI has warned that the state’s international competitiveness should not be undermined.
In my electorate of Canning, Alcoa employs 900 people at Wagerup and more than 1,000 people at the Pinjarra refineries. These refineries see millions of dollars poured into the local economy. I recently had the pleasure of presenting certificates to those employees who have worked at the Wagerup refinery for more than 25 years. Alcoa’s current carbon footprint is less than half that of its Asian competitors. So we do it far better and far more efficiently. If the CPRS becomes unaffordable for the emissions-intensive industries it may become cheaper to take operations offshore. That would cost Australian jobs and the Australian economy and do nothing to reduce global emissions. People in Canning cannot afford to lose the job opportunities that Alcoa offers. The company has already forecast job cuts at its Geelong and Portland facilities.
Alcoa needs to be sure that all emissions-intensive trade-exposed components receive at least 90 per cent credit assistance and that this remains until competitors adopt a comparable carbon price. Earlier this year Alcoa informed me that the cost of buying permits for refining is $25 million and the cost to Alcoa for all its operations with the introduction of the CPRS could be up to $95 million. That is a cost that Alcoa has to bear in full, making them less competitive with international companies that do not have to abide by an ETS. The cost cannot be passed on because the price is set by the London Metal Exchange.
Each year Alcoa exports $5 billion in products and 80 per cent of that stays in Australia. This is where there is a stark difference in the proposed American scheme. The draft US legislation includes provisions for 100 per cent protection of US export and import competing industries in any future emissions trading scheme until 2025, and protection will only be reduced when 70 per cent of the global industry have to abide by an ETS scheme. Doesn’t Australian industry deserve the same protection? If the Americans give their exporting industries that sort of protection, why aren’t we giving it to ours? Do we really want to export jobs and pollution because they do it less efficiently overseas? I can assure you I will be making sure the workers at Alcoa know what is before them if this scheme comes in and affects their jobs and their livelihoods.
Alcoa has already takes indirect action to address climate change. Globally its emissions are down 36 per cent on 1990 levels and the two refineries in Canning have cut emissions by 12 per cent per tonne over the same period. It has invested in energy efficient cogeneration, CO2 sequestration and carbon capture technology. There are two cogeneration plants at the Pinjarra refinery alone. This technology offers energy efficiency of 75 per cent, compared to only 30 per cent for conventional methods, and saves more than one million tonnes of CO2 emissions per year at Pinjarra, compared to coal-fired power. That is equivalent to taking 140,000 cars off the road.
Like Alcoa, BHP’s Worsley Alumina facility near Boddington has extensive revegetation programs to offset emissions. The mine’s capacity, rising from one million tonnes in 1984 to four million tonnes today, makes it BHP’s biggest carbon emitter in Australia. So the additional cost to them will be burdensome. Boddington Gold Mine, also to be in my electorate, is a $3 billion investment, which will make it the largest gold producer in Australia. It will support around 1,000 local jobs. When I visited the mine just a couple of months ago, BGM estimated that, depending on the price of carbon permits, the CPRS would cost anywhere between $15 million and $40 million a year, equating to up to $40 per ounce of gold, which certainly does a lot to their bottom line.
Finally, the coalition acknowledges the importance of taking a unified commitment to Copenhagen—an unconditional five per cent reduction on 2000 levels by 2020 and conditionally up to 25 per cent. But we do propose an earlier start to emissions abatement and the potential to build on the 2020 targets via voluntary action. Based on the Chicago Climate Exchange, our plan means Australians can take steps towards reducing emissions from 1 January 2010 with the knowledge that they will be credited for their work when the CPRS comes into full effect. It is an incentive that will encourage voluntary action. Considering the government has delayed the effective start date of this scheme until 2012, the adoption of these changes would give Australia a head start on meeting targets and would give Australia time to get its CPRS right—saving jobs and billions of dollars in investment I reiterate: why would Australia put itself in the position of exporting jobs to developing countries which do not have to comply and exporting pollution to those countries which have industries that are far less efficient and are higher polluters than those in Australia? It just does not make sense.
I rise today to speak on the Carbon Pollution Reduction Scheme Bill 2009 and cognate bills. This bill is important for not only the future of our environment but also the future of our economy. The legislation before us today is yet another example of the stark division within this parliament. On the one hand, you have those on this side of the House who are acting in the national interest, looking at the long term and committed to Australian jobs. On the other side of the House, you have an opposition which is deeply divided, with the Leader of the Opposition desperately looking to score cheap political points.
On behalf of the people of Kingston, many of whom live in seaside suburbs and many of whom are acutely concerned about water shortages, I can say that they want action on climate change. The Australian people clearly sent this message for action on climate change at the last election. The previous government, led by John Howard, refused to act. In contrast, the Labor Party set out a clear election policy to act on climate change; to ratify the Kyoto protocol and to design an effective scheme to mitigate Australia’s greenhouse gas emissions. This was a policy that was embraced by the Australian people and this course of action was also, we later found out, then privately supported by the current Leader of the Opposition.
Since being elected, the Rudd government has been consulting with groups from all sectors around the country, has developed an emissions trading scheme through a green and white paper process and now presents it to this parliament. It presents today an emissions trading scheme that gets the balance right—a scheme that reduces carbon pollution and supports economic growth. The legislation before the House today not only sets a target range but also sets out clearly how we might achieve this reduction through a cap-and-trade system. Rather than acting in the national interest, the Leader of the Opposition has now quickly changed the position that he held while the Minister for the Environment and Water Resources in the previous government. This, one can only conclude, is to shore up his standing within his own party, where we have seen the Leader of the Opposition present no coherent policy. We know that this is because the National and Liberal parties are deeply divided when it comes to climate change. They are divided between those who are and those who are not climate change sceptics. If we do not act, if we continue with the coalition’s policy of ‘do nothing’, then we are condemning ourselves and our children to average temperature rises of just over five degrees Celsius by 2100. Five degrees is a lot considering that just a one degree rise threatens the Murray-Darling river system and all the Australians who rely on it as a life source.
It has often been said that Australia is one of the countries that has the most to lose from the impact of climate change. The Garnaut review illustrated the severe impact on agricultural production, in particular in the Murray-Darling Basin. Not only is agriculture and food production under threat from climate change but also our water supplies. As I come from South Australia, often considered to be the driest state in the driest country in the world, I believe this threat needs to be taken seriously. Climate change is also predicted to threaten the Great Barrier Reef, the Kakadu wetlands and the Australian rainforest—some of our most important environmental sites but also, we cannot forget, some of the most sought after tourist destinations in the world.
We have heard the coalition say that we should defer—not rush in. First we heard, ‘Wait for America,’ from one member of the coalition. Then we heard, ‘Wait for an international agreement.’ The other proposition was to wait until after a Productivity Commission report. However, the coalition is ignoring that there have already been a number of reviews and inquiries, including a white and green paper process and the Garnaut review. The only conclusion that I can come up with about this delay is that it is a tactic to ensure that there is not a split within the joint party room. By insisting on delaying any scheme or mechanism, the coalition ignores one very important point—that with delay of the legislation comes uncertainty. Business groups have been demanding certainty and by passing this legislation we will provide certainty to business. This has been clearly called for by peak bodies and business groups across Australia. The Business Council of Australia put out a press release on 4 May which said:
In the interests of business certainty, the BCA calls on the Senate to pass legislation this year to establish a Carbon Pollution Reduction Scheme.
The Australian Industry Group also put out a press release on the same day, saying:
Ai Group supports the passage of the CPRS legislation this year … This is critical to establish the degree of certainty business requires in assessing medium and longer-term investment decisions.
However, it is not only business groups that oppose the delay of the legislation. Residents in my electorate regularly contact me with their desire to see action on climate change. Many of their sentiments are summed up by David Gill of Morphett Vale, who wrote to me and has also spoken to me at street corner meetings in Willunga. He says: ‘The science has leapt way ahead of the policy. There is actually no other issue that anywhere near matches the importance of the climate change response. Please do what you can to ensure that my grandchildren have a decent future.’ In addition to this, more than 40 per cent of respondents of my electorate-wide survey identified action on climate change as a top priority.
Some residents have contacted me wanting even more action than the government has proposed. They want deeper cuts and they want them sooner. But on this side of the House we believe that we have got the balance right. This government has committed to a Carbon Pollution Reduction Scheme in the most responsible way that recognises the impact of the global financial crisis on business and also recognises that transitioning to a lower carbon economy will position our economy well for the future.
I have spoken about the impact of climate change on the economy and the environment. But climate change will also impact on our nation’s health. The Garnaut review projected significant health impacts from climate change here in Australia. Increase in dengue fever is just one example, where the incidence of disease is likely to increase and will lead to the loss of up to an extra 36,000 work days by 2100.
The legislation that is before us today puts in a carbon reduction target range of five per cent to 15 per cent of 2000 levels, with a potential of 25 per cent reduction if an international agreement occurs on a target of 450 parts per million.
We have heard a lot about jobs from the opposition, but what we have not heard from them is the potential increase in green jobs. The CPRS, in conjunction with the government’s renewable energy target, will provide the opportunity for cutting-edge green jobs such as in solar energy, wind farms and clean coal. As the Treasury modelling has shown, these measures will see the renewable energy sector grow by thirtyfold and in so doing produce thousands of jobs for the long term. An example of one of these companies in my electorate is the Hydragate Sun Farms project. This is a group of young entrepreneurs who have diversified their business from providing high-tech electric gates to installing solar farms, not only providing another economic opportunity but also increasing renewable energy and reducing our carbon emissions. This company is now looking to employ new staff and expand their company. It is one of those good news stories which we cannot ignore and has the potential to really impact positively on job growth for the future.
In addition, the Carbon Pollution Reduction Scheme also provides for reforestation credits, which will generate economic opportunities across Australia. It also utilises a cap-and-trade system, which will allow flexibility for firms and individuals. Despite what the coalition might have us believe, Australia will not be the first country to introduce an ETS. Twenty-seven of the EU countries have done so, New Zealand has done so and in the United States President Obama has prepared a budget that includes provisions for a cap-and-trade scheme. Also keep in mind that many American states have already introduced their own emissions trading schemes.
The cap-and-trade scheme works by reducing emissions across the economy. Under the CPRS an economy-wide emission cut will be set by the Australian Climate Change Regulatory Authority, which will auction emission units. Firms must provide units equal to their emissions to the authority each financial year.
While the opposition remains divided on whether or not to believe in climate change this government is acting in the long-term interest of the nation by addressing climate change. The Carbon Pollution Reduction Scheme is the foundation of a low-carbon economy. It gets us to where we want to go with our targets and I commend the bills to the House.
I rise to speak to the Carbon Pollution Reduction Scheme Bill 2009 and related bills and make the point at the start that I will be opposing it—but not because I am a climate sceptic. In fact I believe that the climatic conditions that man has caused are having an impact on the globe. Essentially, I oppose this legislation because of the five per cent that the government is aiming at here. I am fully aware that they suggest that if there are global resolutions they will escalate that to a higher level of 25 per cent, but I believe that to set up a market structure which will quite significantly change the economy in Australia with the only known target a five per cent reduction in emissions is nonsense and should not be done.
In fact, the five per cent emissions target could be achieved without going near a market mechanism at all. If the government is serious about these issues—and I think it is—it has to have a serious look at what the actual agenda is. It seems to me that both sides of the parliament at the moment are actually trying to find some time in this debate. Both sides, even though only one side will admit it, are trying to defer the real debate until a later date—that being the Copenhagen meetings that will take place and the American Congress decision on its targets.
I think there is quite a convenient arrangement going on here. We have seen a reduction in speaking times and other things have been happening between the two sides. The agenda is to shift it. From the government’s perspective it could be seen to have been forced by the coalition and possibly the Greens, who I am told will not support it. They may change their mind; they may negotiate but I do not think they will support it at five per cent. So the government will have the capacity to say, ‘Well, we tried and it was shifted past Copenhagen because of the parliament.’ That will suit the government’s agenda long term and I think the government probably should be a little more honest about where it is actually aiming, at this time.
But to bring into this parliament a target of five per cent and set up a market mechanism to achieve that is absolute nonsense when it can be achieved in many other ways. We have heard a number of suggestions from others in the parliament—biochar soil sequestration, vegetation, renewable energy sources, shifting behavioural patterns in terms of our homes and shifting some of the means of producing food to be more energy conscious. Those sorts of things are happening out there anyway. But they do not fall within a market mechanism. I think the government has made a mistake. Essentially it has developed a model of what it sees as the problem. There is a problem; I agree there is a problem. I am not a sceptic; in fact, I have a private member’s bill before the parliament—it has been here for many months—which calls for a 30 per cent reduction by 2020 and an 80 per cent reduction by 2050. It is called the Climate Protection Bill not the climate change bill and there are a number of other issues involved in the bill that work on the possibility that the globe will not solve the problem. What do we do if in fact the problem is not solved? In my view, we have to try to get the best out of the arrangement we are left with—and that in a sense is climate protection.
I will give the House an example of that. We are told by the climate scientists that run-off in the Murray-Darling system—of which the New England electorate is a significant part; the New England electorate has all the storages bar one in the Darling system so it is very significant in terms of the regulated streams flowing west—could reduce by up to 30 per cent due to climate change. When you try to get a climate scientist to actually tell you that, they will talk about trends, about its being hotter and drier and that there will be more evaporation, but up to 30 per cent is one of the numbers they will give you. I have heard people in the National Party say this is all rubbish, it is this and that and we should not go near it. If in fact the climate scientists are right and there is a 30 per cent reduction in run-off in that system, the impact on agriculture will be far greater than provided for by the possibilities of extra prices in terms of methane, nitrous oxide and carbon equivalents—far greater.
I cannot believe that people are not looking at the opportunities in these messages that are abounding on climate change. Only recently during Science Meets Parliament a scientist from Western Australia visited my office. Methane is going to be a problem. The farming community—I am a farmer—is apparently up in arms about how methane is going to wipe animal production off the map. One scientist in Western Australia has developed a legume—I am not a plant scientist—with tannins in the leaf. Being a legume, it partly cures your nitrous oxide problem and when animals eat this plant the methane levels in the gut are much lower. There are enormous opportunities in relation to a lot of these things.
There are soil science issues—and the government is spending some money on some of the soil science issues. The basics of agriculture have been left behind by all governments. The research has moved into other areas. The research has to come back because it left behind the various solutions to some of these problems. The minister has developed this model—and she is doing this on the advice of economists and others—that says, ‘This is the problem and the only way that you will fix it is by a market mechanism.’ I think that is the wrong approach. The market mechanism will be there at some time but we can shrink the extent of the problem before going to the market mechanism, and we have not done that at all. In fact, what we are saying in terms of soil science and the potential to sequester carbon in our soils is: ‘No, it wasn’t at Kyoto; no, it’s difficult to measure. We had better not put it in a market because it might not be there when we want to get it back out again; if there is a very dry period of time it could release at certain depths in the soil.’ All those things may or may not be quite true but why put soil science in a market? We should be using it to potentially solve some of these problems.
Another problem to be solved—whether climate change occurs or not—is the everlasting issue of drought in this country. ‘Climate change’ is the term of the month at the moment; ‘salinity’ was the term six years ago and it has disappeared from the dictionary. ‘Climate change’ is the term of the moment and we have to take advantage of that and put in place some of the technological practices in agriculture particularly that can be part of the solution not only for carbon emission equivalents but also for drought.
The government is in an interesting position at the moment, because it is going to be announcing new drought policy. I recommend that we do not look at this in the simplistic terms of, ‘If it will not fit in a market, you do not go near it.’ We really do need to go near some of these other things, to do more research and to encourage innovators et cetera irrespective of whether they fit within a cap-and-trade market mechanism. I think there are enormous opportunities. I am pleased that the Parliamentary Secretary for Regional Development and Northern Australia is here, because this is an easy issue around which to create fear. We see our good friend the next candidate for the New England electorate, Barnaby Joyce, wandering about every day of the week creating fear on this issue. I repeat my question: if there is a 30 per cent reduction in the Murray-Darling system, what sort of fear will that create? It will destroy agriculture in that system. Some will say: ‘It will never happen. They’re only scientists. Don’t believe them. Just ignore it. We won’t be here when it does happen.’ That is a fairly short-sighted view.
As a member of parliament—and this may not be the popular view in my electorate—I would rather take some advice from the climate scientists and attempt to do something about it. If we find in 50 years time that it was overkill, we can say, ‘At least it didn’t get worse.’ But if we do nothing and there is a 30 per cent reduction in the Murray-Darling system, we will have done an extraordinary disservice to one of the biggest food bowls of this nation. People are just walking away and using the politics of this as an excuse to lash at the government. I think the government is doing the same thing in its relationship with the mining industry. Garnaut designed something and it has been butchered like Alby Schultz on a good day.
He is an old meatworker—and he is not that old. The Garnaut report came out with a whole range of recommendations. There have been shifts and breezes blowing. Now we have a five per cent nonsensical target. It will mean nothing. The Leader of the Opposition is quite right: it means nothing. That is why he is creeping towards it. Their argument is to shift the five per cent target to the other side of Copenhagen and then make a decision. Given that the government is aiming at a five per cent target, I do not disagree with the opposition’s argument. I think we would be better off to defer making a very important economic decision on this until we can get the politics right because, at the moment, this five per cent arrangement is a sheer nonsense.
As I said earlier, there is soil science in terms of biochar. I am not a soil scientist, but I think we should be putting a lot of research into that. Soil sequestration is another issue. An issue we have not addressed and that is very significant in relation to agriculture in my view is the question of what will happen if agriculture does come in. We are still asking agriculture to supply food to other parts of the world because we oversupply this nation—we oversupply by 80 per cent. Because of our geography in the world, we are a long way away from the people who want our food in many cases. What will happen when a carbon footprint—and the member for Parkes would be well aware of this, as this is in his electorate—is placed on a farmer from Walgett, for instance? There will be the carbon footprint caused by getting the grain from Walgett to the port and from the port to the Middle East. Then we will exchange that money for energy and there will be another boatload of carbon coming back. You cannot get a train to Walgett anymore so the fuel will be carted back to Walgett by trucks so that the farmer can go around and around in circles again to produce food to send over there to exchange for energy. What will that mean in this system? How will that fit in? Who will pay for that?
The very article that they will have transported is starch. Part of the make-up of grain is starch. Starch is carbon. So we will have exported a boatload of carbon. We will have done that for two reasons. We are oversupplied in this nation; we need to export. And we need energy from somewhere else because we are undersupplied in energy. Surely a nation of this magnitude can look at those two things together and look at the options in renewable fuels. I know some people will think, ‘Oh, here he goes with ethanol again.’ I noticed that even in the budget there is money for research into cellulosic ethanol. The minister for energy is almost frightened of talking about grain based ethanol—’Oh, no, we’ve got to use our grain to grow food so we can send it over there to buy energy to bring it back again’—but he does not go into how this cap-and-trade system will impact in 2015 if agriculture comes in. There is no mention of that. He does not really embrace some of the renewable energy resources that are out there. There are opportunities in solar, wind, geothermal et cetera.
Mr Deputy Speaker Secker, you are a farmer. You would be well aware of this. You are an excellent farmer, I am told. There is going to be an argument in a carbon economy about food versus fuel, about profitability and sustainability. There are a number of collision points in these arguments. What if it is more profitable for that farmer at Walgett to grow switch grass, for instance? That is the original prairie grass in America. It is very deep rooted. It does not require a lot of nitrogen, so the nitrous oxide issue is not there. It can sequester carbon at depth in the soil. There is no disturbance of the soil, so there are other impacts and upper level soil carbon issues. There are a whole range of nutrient issues and water infiltration issues.
What if that crop, which is not a food crop, is harvested and converted into cellulosic ethanols? There is funding in the budget for research into that very thing. The land—the minister and others would argue against it at the moment—that should be used for food production, even though it will have a higher carbon footprint, will be then used for fuel production. Are we going to develop land-use policies in this building for this nation that then say to the farming community: ‘No, you can’t grow that, you’ve got to grow food because people are starving to death. And, yes, they can’t pay you anything for it, but that doesn’t matter. You’re an exporter, remember, and you’ve got to grow this product to send to them.’ We have got an extraordinary example in the Sudan. It could produce 600 per cent more food than we can if it used that same Walgett technology, which the member for Parkes would be very familiar with. The Sudan could produce enough food for Africa. So we have got this nonsense that we are going to have to carry on this long way away food producing, food security stuff, when we are doing nothing at all to help or encourage people in some of those areas where they have much more arable land of equal status.
I raise that issue because I think it is important on a number of levels. If we develop a market mechanism now and then bring agriculture in at a later date, no-one has talked about the issues of how that would work and how it would relate to the options that agriculture may have. In that fairly simple example, the option of using land to grow fuel is much better in terms of the carbon-accounting processes than using land to grow food, which is a negative in terms of carbon accounting. And we have this absolute nonsense where animals, for instance, that are used for food in this world are being considered for taxation. I just cannot believe or comprehend that anybody would even suggest that we take a key protein source off the map by way of taxation. But if we go down that road, that is exactly where some of these things are going to come from. Some would say, ‘No, if they go to cellulosic ethanol, for instance, we’ll use taxation policy to stop that.’ Are we seriously going to use taxation policy to stop carbon sequestration at depth, to stop soil erosion, to get organic matter going in our soils? (Time expired)
It is always good to follow such a good speaker for regional Australia as the member for New England. He is a prime example of the difference between somebody who gives good representation and leadership in this important issue of carbon pollution reduction as opposed to those people who claim to represent regional Australia but are showing the woeful leadership both in this House and out in the general public, that I think in the long term will be the end of them.
The Carbon Pollution Reduction Scheme Bill 2009 and related bills currently being put forward to deal with climate change are some of the most important bills that have come before the parliament. Whether you agree with the concepts put forward for the global warming argument or you are still sitting on the fence, which we know some are, you would know that change occurs, and when natural change occurs we as a nation have to be prepared to face it head on and ensure that we can adapt to that fickleness. In designing the Carbon Pollution Production Scheme, the government’s primary objective has been to look at getting the balance right. We need to reduce carbon pollution, but not forget that at the same time we need to support economic growth. There has been much discussion around the world, and the general opinion of both those fully in favour and those still sitting on the fence is that we should do something. The argument then comes down to when, and that is what seems to be in dispute.
I must say I am very surprised at the Greens in this debate. To oppose a carbon pollution reduction scheme on the basis that the targets are not high enough is nonsensical. For pity’s sake, we need a scheme. If and when they get into government, they could set a greater target. In the meantime, let us get the scheme ready and operating. The coalition is obviously not going to do anything. By opposing it, the opposition sets the plans back years, if not decades.
At this stage we need to have a practical target, as we must consider the impact on jobs, especially during these difficult economic times. That is why the Minister for Climate Change and Water and the Prime Minister have decided to delay the start of the scheme for one year and commit to a fixed-price phase from 1 July 2011 to 30 June 2012. This gives a trial period, if you like; a period when industry can work out the best way to deal with this legislation and make properly informed decisions. Industry needs that certainty so they can plan investments in new technology and they need a time line so that they can bring it into operation as the targets come into full force.
Australia has done a lot to be a leader in many fields. We have the opportunity now to set the agenda in dealing with climate change in many areas. In clean coal technology, for example, the Prime Minister has set up an institute which many countries around the world are joining. We do not want to crawl after other nations. We want to drag some of them up with us and forward with us, and probably to sell them some of our technology and create new jobs into the future. So Australia should go to Copenhagen from a position of strength and certainty, with strong targets but ones that we can deliver.
For trade-exposed industries the government will be providing free permits to guard against the risk of carbon leakage and, of course, to support their jobs. It will also provide a global recession buffer as part of the assistance package for emissions-intensive trade-exposed industries for the first five years of the CPRS. It will also provide an additional five per cent free permits for the EITE activities eligible for 90 per cent assistance and an additional 10 per cent free permits for EITE activities eligible for 60 per cent assistance. And there will be ongoing assistance for those companies to ensure that there is a smooth transition while they remain fully productive.
Change happens, whether it be climate related or not, and it is sensible to plan for the future. I know from my work with my House committee—where we have an inquiry going on that relates to the rural industry and climate change—about all the issues that come before us which we need to deal with. The rural sector is taking the issues very seriously now as it is the farmers who are facing the front line of climate change. They are looking to manage risk through renewing farm management practices, by improving seasonal forecasting and by spreading risk to sectors better adapted to climate change. It is clear that we need more accurate data and we need to be able to fund more research into rural and regional areas. I believe we need government to be aware of the need for training and modern communications to get the research to those who are struggling to make the necessary changes to improve their viability and productivity. As one of the submissions states:
Australian agriculture has a long history of resilience and innovation, adapting to one of the world’s harshest and most variable climates while supplying dynamic global markets.
Climate change is no stranger to the man on the land but we require constant and ongoing assistance in the form of research and development to ensure we continue to be competitive.
Going back to the business environment, if one starts delving into the direction of many companies, we find that they have already factored climate change considerations into their business plans. Renewable energy has been around for some time now. In Tasmania we have had renewable energy since 1914. We are the ultimate green, renewable energy state. Hydro Tasmania, originally the Hydro Electric Department, was established in 1914 when it was given the task of developing the Waddamana Power Scheme in the Lyons electorate to oversee the general electrification of Tasmania. All over Australia wind power is now being developed through wind farms, and a few wave power projects have also been trialled. I think that the south-west coast of Tasmania would be an ideal place for some of the trialling to occur. I understand that the wave movement there is what they look for in these trials on wave power.
Many are looking for alternatives to the petrol engine too—not just diesel or gas, but also electric cell cars, either powered by traditional electricity, or partly fuelled and partly powered by electricity, or even of course hydrogen power and fuel cells splitting water. None of these are out of the question now. The time has come to really produce alternatives both in transport power and the types of energy required for domestic, commercial and industrial use.
I know we have not got long to go so I will say that there is no option but to support these bills. We must get these bills through both houses of the parliament so that communities, businesses and industries have a baseline from which to work in lowering carbon emissions across our nation. I support the bills.
I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills. The debate around the Carbon Pollution Reduction Scheme is, for me, the high watermark of Labor’s triumph of sound bites over sound public policy. We have sat here and we have listened to Labor speaker after Labor speaker trying to completely distort the position of the opposition, trying to point to symbolic issues that are related to, but not at all addressed by, the content of the bill, and trying to have a rerun of some argument that was never factual in the first place. It suggests that for base political purposes the Labor Party wants to push the view that the Liberal and National parties are not interested in climate change and are not prepared to tackle the challenge that is ahead of us.
Nothing could be further from the truth, and one of the things that we need to do is deal with the fiction that is being perpetuated around this debate so that we have some clear air to deal with the fact that under the Howard government Australia was positioned to be one of only a handful of countries that would actually fulfil its obligations and responsibilities under the first accounting period of the Kyoto protocol. For our 1.4 per cent of global emissions, unlike virtually any other country you could mention who participated in the Kyoto framework, we will actually meet our responsibilities. That is a record of strength and a position of credibility that Australia as a nation should be taking forward into the Copenhagen negotiations. Instead, we have a government, for base political reasons, trying to erode that record of credibility and achievement in order to try to create some fictitious argument that only they on that side of the House have any interest in this subject, and that is completely inaccurate and a quite dishonest portrayal of the opposition’s position.
I for one have for more than a decade argued that this is a priority, an issue that we need to address—that the activities of humans on the face of the planet have had an impact on our climate and will continue to do so, and that we need to change our ways. I also recognise that there is no scientist who can give a reliable, robust and accurate correlation of what certain volumes of emissions will mean in terms of consequences for the climate. No-one can do that. No-one can do that, but what we do know is that humans have made a difference and it is up to us to make a positive contribution at this time of climate change.
What is not agreed, though, is that simply bandying around a piece of legislation with an extraordinary name, the Carbon Pollution Reduction Scheme Bill 2009, is somehow a substitute for practical action. We do not agree with that. Those on this side of the House recognise that to bring about change you need a coordinated, collaborative international effort whereby we as Australia and as Australians do our share and then some. But alone we cannot bring about the outcome we may all desire. At 1.4 per cent of global emissions, we are in fact a cork bouncing around on an ocean of greenhouse gas emitting activity. We can do our bit on our cork, but bringing about change relies on many others making a commensurate contribution—because the atmosphere does not care where emissions come from; it is about the molecules.
While we might feel self-righteous that we are doing something that no-one else is doing, if our goal is to bring about an improved emissions performance for the globe and reduce the pressures of human activities on climate change, we will not bring about that change. Yet, if you listen to those opposite, by subscribing to this bill—this Orwellian titled bill, the Carbon Pollution Reduction Scheme Bill—somehow that will, overnight, make the rivers run again in Australia, bring rain to the great state of Victoria, enable us in a civilised world to actually water our gardens, have some sort of prospect that our trains will run and all those kinds of things, and mean that the Great Barrier Reef will not be subject to any kind of pressure and the world will fall back into a peaceful, calm state of environmental equilibrium. That is not true. What we need to do is do our share and then some.
This bill is so devoid of the action elements that are required to make an emissions trading scheme work that it could at best be described as a framework. It could more accurately be characterised as a crayon drawing, so devoid is this bill of the meat of the detail of the policy calibrations and settings that will bring about change. And it is not just the opposition that is making that point. The Parliamentary Secretary for Climate Change, Mr Combet—having been recruited in to bring with him his union background and his capacity to monster anybody who disagrees with him—is out there telling business, ‘Take this or you might get a worse outcome.’ What an extraordinary proposition to put forward. As he tries to salvage some kind of relationship with a business community terrified by this bill, he stands in this place and says that there is so much of this that can still change, that is still up for negotiation, that is still to be worked through. Yet we are told that this bill must pass this House before the end of the week—for certainty.
The only thing we can be certain about is that what eventually happens may have very little relevance to what we are discussing now, because the detail will be in the regulations, the way in which this crayon drawing of emissions trading machinery may work at the end of the day: the accommodations that are afforded to those that risk having their industries shut down as activity moves offshore to countries without carbon constraints, the way in which those at the less well-off end of society can cope with the cost impact on their energy bills, the way in which we may make decisions as a nation or the way in which we shape investment and employment opportunities for the future. There is nothing in this bill about those things, yet they go to the heart of actual action. They are the elements of sound public policy, but that is not what we have before the parliament tonight.
We have government member after government member talking about issues removed and remedies that will be delivered miraculously, like a soothsayer coming to town with magic potions, and all we have got is a crayon drawing of a scheme that asks more questions than it actually answers, and we are being told to fall in line. The government is demanding that we fall in line on something that is so devoid of detail, action and information about implementation that it barely deserves the time that it has been given in this parliament. And some of the reasons why the opposition has concerns have been very well articulated.
There is, in the United States, the Waxman-Markey bill, which you have all heard about. The Waxman-Markey bill does not put just a crayon drawing in place; it actually talks about clean energy, how to promote renewable sources of energy, carbon capture and sequestration technologies, low-carbon transportation fuels, cleaner electric vehicles, smart grids and improving the performance of electricity transmission. It goes to energy efficiency: how to improve energy efficiency across the US economy, in buildings, appliances, transportation and industry. It also lays out some targets, things that are not in this bill.
So fundamental are such things—what the ambition is, what we are trying to achieve—to the negotiations in Copenhagen, so crucial are they to building an international consensus, so important are they for our negotiating position, and the bill before the parliament does not even go there. But we are told that, with the passing of this bill, Kevin Rudd and his entourage will jet into Copenhagen and be so much more credible than they might otherwise be—a complete fiction.
The Waxman-Markey bill also talks about transition issues, where the objective is to protect the US economy and jobs, to promote additional green jobs and to support a transition to a clean-energy economy. They all sound like good things to examine. Most of those are not even contemplated in this bill. And those discussions in the United States that will shape and create the momentum for an international consensus are not resolved. As it stands in the United States, there are even other bills circulating. I think it is Congressman Larson from Connecticut who has a bill that focuses on some of the energy issues. He has got that proposition there. As this is worked through, there are other bills circulating in the US congress.
In the name of credibility the government should recognise that what it has been trying to sell the Australian public about this bill is a complete fiction—that in terms of Australia’s contribution we must make our effort, we must make our contribution and then some. But to take this government on its word, that somehow this crayon drawing of an emissions trading scheme is the answer, is to be very generous indeed. When you look at tangible actions, you see Prime Minister Rudd, when he was opposition leader, promised this great building, the parliament building, would be powered by green power. We learnt in Senate estimates that it will not be; it may reach 10 per cent.
When the opposition puts out there a voluntary carbon market proposal that will embrace all the good efforts of good people wanting to share in and be a part of this national effort, it is scorned by this government—while industry says, ‘No, this is a good move.’ In individual action and community action, in agriculture, in the commercial building sector, in forms of biosequestration and in energy efficiencies there are gains that can be made.
I commend to the House the opposition’s amendments. They are sensible and they are considered. They try to inject into this debate some analysis, some public policy debate, some weighing up of options. And they are designed to make sure that, as a cork on the ocean of international emissions, we are not swept away or bouncing off in some direction when the tide is going in the other direction. That is the sensible thing to do. We are well placed with a bipartisan position on targets. We have credibility in that we will meet our obligations under the first accounting period, thanks to the Howard government. We know that there is work ahead of us. We should get to work and get past this fiction and this fantasy that somehow this legislation will bring about the change government members are trying to suggest to this parliament that it will.
I rise to support the Carbon Pollution Reduction Scheme Bill 2009 and related bills this evening. Can I say in response to the previous speaker’s comments: if he describes the government’s legislation as a ‘crayon drawing’, I suggest that the coalition’s position is more like the famous Rorschach test, where you have an inkblot thrown on a piece of paper and every individual is asked to look at it and tell us what they can see. It seems that their position as a coalition is one of individuals looking at unrealistic drawings and trying to dream up something that comes out of their imagination, rather than dealing with the real issues of climate change.
I support this legislation because the sooner that we face the economic reality of climate change the better. It is something that I have believed for a long time—and, indeed, was very strongly supportive of as an election commitment during the election campaign. But I do also support the changes in this legislation which accept the reality of the global economic recession and actually put in place a scheme that delays the start by one year, and reduces the price per tonne of carbon to $10 for one year, in acknowledgement that while we are going through difficult economic times our business community, and in fact the whole community, needs a greater period in which to transition towards this scheme.
But for the reason why we need this scheme I need go no further than my own electorate of Bonner, an electorate that is right in the south-eastern suburbs of Brisbane, the fastest growing area in Australia, and a significant part of what makes up the third largest capital city in the country. I often describe the electorate of Bonner as the lungs of Brisbane. It contains some of the most beautiful environmental areas that you would find in any major capital city, particularly at Moreton Bay and on Moreton Island, which is in the bay. It also contains beautiful environmental areas that have been protected over time. It is part of the Koala Coast. It has wonderful creek catchments that provide very significant environmental areas for that local community, all bordered by the Brisbane River. At the same time the electorate of Bonner contains some of the fastest growing suburbs in the city. It has seen suburbs in areas like Gumdale, Wakerley and Manly West that have grown rapidly—by 3½ thousand people in three years in one suburb. It also contains the port of Brisbane and Australia Trade Coast.
So what my electorate shows is a snapshot of the challenges that we face—the lifestyle, both environmentally and socially, that we want to protect within our cities but also the challenges that we meet through population growth and the need to continue to stimulate economic activity and provide local employment. That is why I am very pleased to see the government take the initiative of introducing the Carbon Pollution Reduction Scheme.
But what I cannot support is the amendment that has been put forward by the Leader of the Opposition. I think if you look at this amendment you will see that it demonstrates what we are really debating in this House tonight. We are not debating the need to protect our environment; we are actually still debating whether climate change exists. We are still debating the fundamental science, even though it is now the prevailing view of experts across the world that climate change is a reality, that it has been speeded up by human activity but that it can actually be reversed by human action—and that is what we want to see happen. But, instead, on this day, 3 June 2009, we in Australia are still debating whether climate change even exists and we are still responding to the majority of climate change deniers who exist on the benches opposite within the coalition.
What we are also obviously really dealing with is the massive division that exists within the coalition parties—indeed, I suspect that even within the individual parties, the Liberal Party and the National Party, there are major divisions. So we are listening to speaker after speaker talk about political divisions, denying a fundamental issue, when we should be debating how we can move this country forward to support a global solution on climate change. We must remember: this is the party that would not sign Kyoto.
As a result of those discussions, and as you listen to the debate, particularly from those opposite, you will see many smokescreens put up by those who desperately want to see action on climate change but who are obviously being held back by the forces within their own parties that will not even accept the need to move. So we hear a lot about voluntary action, about the need for environmental initiatives—’Let’s put money into renewable energy; let’s recycle; let’s get people to change their light bulbs; let’s get people to save water.’ But we are not just talking about small changes in human behaviour to deal with environmental issues; we are actually dealing with a massive economic challenge, and that is why the Carbon Pollution Reduction Scheme must be supported.
The reality, as I have said, is that climate change is real. Although individuals and households throughout this country have deserved much praise for the change of behaviour that we have seen—from our children up we have seen a whole range of ways in which people are taking individual initiatives to reduce their carbon footprint—the reality is that we need an economic strategy, because unless we start to fundamentally change the way that our industries operate and the way that we do business we will not get the sorts of reductions in emissions that we need to preserve our planet and to continue our sustainable lifestyle.
We also know that there is international action on climate change: there is legislation before the United States; there are 27 governments that have employed emissions trading schemes; there are all sorts of initiatives across a number of countries, both western and indeed even in the Asian economies, which are in their own way acknowledging that industry has to change its behaviour if we are really going to deal with this issue.
Because of what is, I think, a redundant debate—a lot of time spent on diversions around whether or not climate change exits—we are not as a parliament and as a community actually having the sort of debate on this legislation that we really should be having. What should we be debating? We should be debating the achievable and realistic targets that we can set. We should be debating what the best way is to give certainty to businesses about this change, in terms of introducing a trading scheme, so that they can start to plan for the transition that will be required within their own businesses and for the whole of us as a community to in fact move this scheme forward.
We should be debating what is the best bargaining position that we can take to the table at Copenhagen. I love this argument put forward by the opposition that we should wait and see. They said, ‘Let’s wait and see,’ on the economy; we actually said, ‘No, we need to take action now to buffer us against the impacts of a global recession.’ And I think that the figures released today have demonstrated that when governments take action, acknowledge a problem and deal with it, you actually get positive results. If we had waited to see what was going on as the opposition leader wanted us to do, we would be in a very different economic position today.
The same applies with climate change and the Carbon Pollution Reduction Scheme. We cannot go to an international bargaining table without a position. We cannot walk in and say, ‘We want to take leadership on this; we as a country are desperate to participate in the global solution to this problem,’ without even being able to put a real position on the table. By the way, this is a lot more than a crayon drawing and definitely not just an ink spot on a screen saying, ‘You tell me what you see in that picture.’ We have got some real details. We need to present them to the international community.
I say in conclusion that I think it is a shame that this debate is still at such a basic level and that we as a parliament cannot actually rise to have a real genuine debate about detail. I think it is a major shame that the opposition party in this parliament can create a furphy such as this amendment to justify their own political divisions.
In conclusion, I do support this legislation. This legislation is of course focusing on the very significant green issues that we must face as a country and as a globe. Can I also say: go the Maroons!
You certainly know your place as the new kid in town when your speaking slot is right on kick-off for the major event for the evening. I have a different view to the previous speaker and hopefully we will get to see some of the game later tonight. The most important issue of the evening is the most important piece of legislation proposed during my short time of eight months in this place and, I suspect, one of the most important pieces of legislation for even the Father of the House, who has been here for over 30 years—the Carbon Pollution Reduction Scheme Bill 2009. This is a fundamental shift in both environmental management and economic management in this country. It is a reflection of some global truths and some national truths that we need to address. Therefore, I will be speaking about some of the underlying principles and possibly some options to improve the package before us.
Not only am I disappointed that probably everyone’s TV channel in this place is on a different station, so not many people will be listening, but also I am disappointed at the way this bill is being rammed through this House today and tonight. I think it is an unfortunate reflection on this place that here we have one of the most historic pieces of legislation to go through this parliament and all members of this chamber have been told to talk for no more than 10 minutes each or it will be guillotined. That is not the way to put through historic legislation that the government should be proud of and that the parliament deserves to debate at length. All private members have obligations to the community and, from a process point of view, I think this is a disappointing reflection on government. It picks up on a theme when this same method was attempted with the fiscal strategy response, with the debacle that that turned into for 48 hours. I once again make the point to the executive that respect needs to be given to this chamber and to this parliament and respect is shown by giving full time to private members and a full opportunity for all members to make a contribution on behalf of their communities.
This is a substantial piece of legislation with over 400 pages and, on a rough count, around 20 completely new concepts, each of which could trigger a debate within this chamber amongst friends let alone amongst adversaries. It is somewhat unique that we are having a debate about something that has such a long-term nature in any of the benefits, and I think that makes a lot of room for short-term political gains in fear campaigns and for just about everyone in this place to take a preferred short-term political position because of the long-term nature of the debate and the discussion that we are having. But having listened intently to everyone who has debated this topic today—including the Leader of the Opposition, who I thought last night made a considered contribution—I do think the debate so far has not reflected well on the House of Representatives. It has not reflected well on the adversarial style of this chamber. The debate on the detail of the bill has focused on, for want of a better term, kicking the stuffing out of the other side in some sort of poor man’s Gladiators episode where we have the so-called job destroyers on one side and the so-called climate change sceptics on the other. Neither of those is true.
I hope everyone is trying to find a way through this legislation and a way through what is a national and international problem that we face. But, to date, the language from the Prime Minister to the Leader of the Opposition down has been more about political positioning than about really dealing with the truths around this scientific problem and the solutions that we could possibly put forward, and this very point is the thrust of my argument that I put before the House tonight. Every now and again something comes along that is too big for the political process and, in all reality, too big for politicians. The climate change issue and our response is an example of such a moment. The battle for the moral high ground, the battle for populous positions, the battle to appease vested interests, the battle for the ballot box and the battle for possible future election mandates all reflect poorly on our collective ability to handle this topic. This language has woven its way into the speeches of everyone from leaders down and says our collective state of mind is such that, to pinch a line from a movie, we simply can’t handle the truth. If we talk about the truth of this topic, we talk about unpopular problems and unpopular solutions. No-one likes the situation we as a country or we as a world find ourselves in. No-one likes having to be more efficient in the way we behave in life or in business. No-one likes those truths and, as a consequence, no-one likes the process to date. No-one likes the scientific evidence that is in from the IPCC. No-one likes what Ross Garnaut has told us. No-one likes what we are doing this evening—debating changes in charges, excise levies, taxation and possibly more costs to consumers on goods and services. No-one likes this, just like no-one in their right mind likes taking medicine because it means we might have a headache or a sickness in our body. We might not like the truth, but we cannot sidestep the truth, and the truth is that we have a headache, we have a sickness and we need some medicine both as a globe and as a nation. It is uncomfortable to admit it and it is uncomfortable taking the medicine, but take it we must. I implore everyone in this chamber to recognise that we need help and I implore everyone to take their medicine. It needs to be medicine, not the political poison that has been continuing to spew out of this chamber today.
I am extremely concerned about the number of times in the explanatory documents, for example, we see referrals to possible election mandates, as if this is the only prism through which this scheme should be viewed. I am extremely concerned about the number of times the Bills Digest refers to this as a Rudd government commitment type issue, and I strongly agree with one of the final comments made last night by the Leader of the Opposition in his response that this is not a political issue but a scientific issue and an economic issue, and I encourage him to stick to that position and hope that he is being fair dinkum in that view.
With that in mind, let us try and put some heads together on this. Point (a): we have both leaders of both major parties indicating an ETS is inevitable. I have heard it throughout today on a regular basis from backbenchers from all sides that the ‘do nothing’ strategy is not an option. Except for but a few, we have common territory amongst all sides on these issues. This is in step with the vast majority of the international community. Point (b): everyone recognises that this is not just an environmental issue but an economic one. It has as much of a foundation in a shift in our economics as it does in responding to some environmental problems nationwide and globally. Point (c): through logical steps I hope I am on safe territory to say that the vast majority within this place recognise the underlying principle of a market based response to the greatest natural resource management issue of our time. This scheme is a market based response, so any alternative scheme that may or may not be offered by the so-called neocons—I am not sure what they are referred to in the Monthlyor neoliberals would be and should be mightily similar in its ultimate design and its starting principles. Yes, whilst it is an irony I hope it is an irony we can all see of a Prime Minister encouraging the market to rip on emissions trading. I would hope this is a point of unity shared across the chamber rather than some cheap debating point about January musings on neoliberals.
Point (d): if we are to accept that we are going to deliver a market based response to this natural resource management issues, as I see it the points of division—if we are being fair dinkum—are not the underlying principles but the politics, which include the many ministerial discretionary issues tied into these 400 pages and the many executive government decisions to be taken on some of the key questions within the scheme. If we stop and think about this, why, if we have agreement on everything else, are we not considering what I want to put before the House tonight—the lessening of ministerial power and the lessening of the control of the executive; the lessening of that authority in any future scheme over many of these market based questions—and allowing the market to rip? Why can’t we increase the independence of the decision-making processes and increase the independence of the discretionary processes so that we can truly let this natural resource response do what we want it to do efficiently?
The question that I put before everyone is this: isn’t our role to build a framework based on underlying principles? That has been done. Isn’t it then our role to hand over control of and authority over the detail of that framework so that decisions are made for the right scientific and economic reasons—which is not what seems to be happening to date—rather than for the wrong political reasons? This has been driven home with the backdown by the Prime Minister, the Treasurer and the Minister for Climate Change on 4 May when we saw substantial changes to the nature of the scheme. We now have delays. We now have unknown revenue consequences, which are identified in the financials of three of the bills in here tonight. It is openly stated that the financials are unknown at this stage.
This has been driven home by much of the debate that we have seen today, which has all been about trying to tag the other side. This has been driven home by the media coverage of this issue as some sort of Senate negotiation process, with a possible double dissolution trigger. This has also been driven home by the Financial Review today, which ran what I thought was an excellent story about the different positions that business is taking in its lobbying of government compared to its commentary to shareholders. We are potentially building a scheme that has politicians behaving badly and business is behaving badly as a consequence, because of its influence and the power of vested interests within the political process. This has been driven home by the lack of consideration of security of tenure issues raised by a scheme of such significance.
If this is to fly in the long term—for this to work—we need to bring all parties together. No-one is going to invest in something like this with a divided parliament and potentially a divided community. I would not put a zack into any scheme that potentially in 18 months might change substantially. I have heard no discussion about and no consideration of security of tenure issues, which are now getting wrapped up and lost in the political process that we are seeing unfold before us.
There has not been one single mention—none that I have heard—of some of the fundamental concepts that we are supposed to be talking about tonight. They are detailed and difficult concepts to grapple with. I would be interested to have an honesty test on this: how many people have sat down and read this legislation? We would all be in for a rude shock if the truth were to come out.
Some of the concepts that we are debating here to do with market considerations are about who sets environmental objectives. The national emissions trajectory and targets are being set by government. Reporting and compliance is largely a government exercise. The nature of the Australian emissions units—Kyoto units; non-Kyoto units—are all being shaped by ministers and government. The auctioning process is a government process. The cap is a government process, along with any assistance, tax and accounting issues, household assistance, complementary measures, the climate change action fund, pricing, fixed pricing for a year, leakage, trade exposure and the impacts of global influence and other jurisdictions. Any new scientific findings are the bailiwick of government to deal with, along with the scope and coverage of the scheme, any fuel credits, the management of charges, the ratification reviews, greenhouse gas definitions, greenhouse gas thresholds, emissions covered, the obligation transfer numbers and the liability transfer certificates, the synthetic greenhouse gas destruction arrangements, carbon sequestration rights and reforestation units—including amendments that were passed around today on reforestation units and limits. There has been no consideration of, but there should be, the biodiversity impacts of carbon sequestration and reforestation. Then there are forest maintenance obligations, windfall gain tests, power system reliability tests and caps and gateways. I hope that I have made my point.
We are talking about some fundamental concepts and issues that all of us as of today are leaving in the hands of a minister and an executive. They will have huge power and influence over the running of the market. My argument tonight is that we should be designers and then let the market be independently run and controlled. Tomorrow morning or tonight, depending on when the moment is, I will be moving an amendment exactly along those lines to establish independence for this process. We have a Reserve Bank that delivers monetary policy at arm’s length from government. This concept is no different. There will be a need for unpopular and difficult decisions to be made. A political process, based around the logic of populism, is not the place for those decisions to sit. We will get a lesser outcome as a community if we allow that to happen.
I hope consideration overnight by all sides is given to that. Part of that will be getting rid of some of those divisive issues—the cap setting; the targeting—which are the root cause of the divide in the parliament and starting to get some unity on the issues that bring us together. It is a market based response. The principles behind it are right. Therefore, we should be able to get a framework out of this place so that we can then, hopefully, for years to come see some good work delivered for the community, for our nation and for the world. I hope that that amendment is considered.
I almost feel like one of the last Mohicans in that I think Ross Garnaut is right. It is disappointing that he has been dropped, like a disobedient girlfriend or boyfriend, by the government and that his role and his eminence in delivering a lot of the work over the past 12 months is not reflected in what we are seeing tonight. I feel like I am on a very similar page to him. He commented, I think only last month, that you could go either way on this one now, that it is a ‘one way or the other’ type issue, and that is how I feel. Personally, I could just as easily oppose this scheme as support it. The position I will be taking, though, is to try to get some amendments up to make it a beautiful, wonderful scheme—if that fails, I will still be supporting the legislation, based on the principle that, hopefully, over time, we can improve it. It is not an endorsement of where we are today; it is a hope and a dream—to pinch a president’s line—about where we might take this scheme in the future.
I have consulted widely in my community on this, and there is not a good understanding of the detail contained in the 400 pages. But I think I share a similar view to those who are across it. Tony Doherty, the president of the Manning branch of Climate Change Australia, sent me a very strong email saying, ‘Yep, the current scheme is horrible, but it is a framework that we can work with, and it is much better to have a starting point than to get rid of it altogether.’
I was listening to the member for New England, who ran some arguments very similar to mine. He is opposing this legislation. For the same arguments, I will be supporting the legislation. The government have done good work in building the framework and the underlying principles, but, with the trade-offs, the exemptions, the allocation of various free permits and the five per cent target, we can do better than that as a country and as a parliament. I certainly hope there will be consideration of the amendment. (Time expired)
If there is any single issue on which members of the electorate of Hindmarsh write, telephone, lobby, campaign, invest their own hard-earned savings or simply express their opinion in virtual unison, it is our need as a nation to collectively tackle the causes of climate change. Again, if there is any single issue on which the constituents of Hindmarsh speak as one, it is our need to do what we can to leave our world for future generations in a state of which we can be proud.
My electorate of Hindmarsh—and I am sure it is the same with everyone else’s electorate—is not shy about expressing itself. Whether it is through surveys completed during the days of the previous government or during subsequent years—with hardly a blip on the radar to suggest an alternative interpretation—the issue of climate change has consistently been the most concerning and important issue identified by constituents around the electorate as requiring government action. The community has said in no uncertain terms that it does not just want action on climate change; it demands action on climate change. Nothing could be clearer.
As the elected member responsible for representing the good people of Hindmarsh, I am here today to express their views and to represent their desire and their demand that Australia bite the bullet and get on with a substantial and comprehensive plan and framework with which to decrease the pollution we have been spewing out into the environment for so many years. We need to get on with the legislation to guide the Australian community away from increasing pollution—on which the global scientific consensus is that it is contributing to global warming and the resultant climate change and intensified climatic variability, of which we already have so much alarming evidence. The evidence we are hearing of is now regularly, almost invariably, worse than the worst-case scenarios projected by use of the scientific modelling applications available around the world.
Members of my electorate of Hindmarsh hear this. Members of the communities within Adelaide’s western suburbs hear this. Members of communities all around Australia read this and take it on board and, in good faith, resolve to adopt what measures are accessible by them, to support what actions are known to them, and to invest their confidence in a commitment to genuinely reshape the Australian energy market to decrease our national carbon pollution to the levels required for a sustainable future for ourselves and successive generations.
Over recent weeks, one fact has become crystal clear: no Australian can expect any national action to decrease climate-changing pollution from anyone other than the Australian Labor Party. We know that energy demand will be met under Labor’s framework for tackling climate change, and it will be met responsibly, with due regard for the state of our nation, our evolving economy, our fragile agriculture sector and our natural landscape. Energy demand will be met by Australian inventiveness marrying natural and sustainable resources—in which we are so rich—and by the private sector making the strategic investments that will position our economy and our society well for the benefit of future generations. This is a period of our nation in which 20th century technologies, last century’s technologies, are increasingly replaced with the more advanced, effective, efficient and reliable technologies being developed now for the future.
Opposition to action on climate change comes as no surprise. Elements of the energy sector have campaigned on what they have described as the ‘loss of jobs’ that they say will result from the carbon emissions trading scheme. Recently, there was a report that stated as much, but it contained figures that revealed strong and ongoing growth in jobs within their own employment projections. The claims of calamitous ruination are unfounded, pronounced as a device, a tactic, to try and position themselves for unwarranted public assistance. Such assertions clearly deserve no further consideration. Similar campaigns have attempted, and will no doubt continue to attempt, to dissuade the public from continuing their support of action against climate change. Attempts to generate fear of economic penalties among the most vulnerable in our society—those on fixed incomes and government benefits, for instance—and assertions that all the financial incentives to reduce carbon emissions will be passed on to consumers, who will be financially penalised for companies’ continuing reliance on coal, for instance, are equally disingenuous.
Key to Australia reducing our carbon footprint is the domestic sector—the households throughout the nation who consume power in the course of living their everyday lives. The government has included in the architecture of the Carbon Pollution Reduction Scheme a system by which households will be compensated for anticipated increases in the cost of power. The Minister for Families, Housing, Community Services and Indigenous Affairs introduced the bill written to cover the increasing power bills of those Australians needing additional support. As the minister said:
This bill delivers on the government’s commitments, that:
- pensioners, seniors, carers, veterans, people with a disability, the unemployed, students and others will receive additional support, above indexation, to fully meet the expected overall increase in the cost of living flowing from the scheme;
- low-income households will receive additional support, above indexation, to fully meet the expected overall increase in the cost of living flowing from the scheme; and
- middle-income households will receive additional support, above indexation, to help meet the expected overall increase in the cost of living flowing from the scheme.
This is what the government promised low- and middle-income earners, this is what the government has delivered in the legislation here before us now and this is what the government will ensure accompanies the Carbon Pollution Reduction Scheme, protecting those in our community who need the protection of the government from power price increases.
It is not just Centrelink and Veterans’ Affairs clients and low-income and middle-income families that the government is committed to assisting. Self-funded retirees are front and centre in Labor’s positive thinking and action on this issue of assistance. The senior Australian tax offset will be adjusted to compensate self-funded retirees for future power price increases—those who have worked and saved throughout their lives, dedicated their working lives to saving and investing more than they consume and who are preparing to provide for their own retirement. These are savvy Australians and they will continue to be rewarded for their efforts by this Labor government through the increase in the senior Australian tax offset, which will rise to a level whereby, from 1 July 2011, eligible senior Australians will have no tax liability until their income reaches $31,474 for singles and $27,680 for each member of a couple. From 1 July 2012, eligible senior Australians will have no tax liability until their income reaches $32,948 for singles and $29,547 for each member of a couple.
The domestic sector is vital for the effective decrease in national carbon emissions. Households represent a highly substantial portion of the national energy consumer market, and they are the sector that is capable of making the most substantial, most immediate and most affordable contribution to decreasing our overall power requirements and consequent greenhouse gas emissions. The federal government has already shown its commitment to assisting Australian households to decrease emissions through numerous measures including, but certainly not limited to, the $1,600 subsidy in home insulation purchase and installation. It has been terrific to witness the development of complementary schemes coming from state governments. In South Australia, the Residential Energy Efficiency Scheme has been steadily taking shape with the specific aim of assisting households increase their domestic power efficiencies using less power, smarter. As similar schemes roll out around the nation, we continue to see an amazing uptake of federal government assistance in the purchase and installation of photovoltaic power cells to increase households’ energy self-sufficiency.
It is not just young, green idealists that are active in this area. If there is one group of people within the electorate of Hindmarsh who passionately embrace photovoltaic and similar technology, who are most passionate about making their own personal contribution towards decreasing our national dirty power consumption, it is the 50-plus years age group. Just the idea that their commitment and investment in renewable energy generation may somehow make it easier for the big polluters to continue polluting our world, that their decreasing pollution may just increase the extent to which others can pollute, riled and angered these people and they have demanded political action. Labor is in the business of decreasing greenhouse gas pollution, not just in swapping one sector’s portion for another. The electorate is clear about their expectations, clear in their support for action against climate change and the pollution that contributes so much to it, and clear in their belief that Labor will stick by our principles and commitment to chart a course into a system that will serve us and future generations well for many, many decades to come. I commend the bills to the House.
I believe this is the most important piece of legislation that parliament has ever had to consider. I have been listening to the debate last night and today on the Carbon Pollution Reduction Scheme Bill 2009 and cognate bills, and I am somewhat disappointed in the simplistic terms in which we are debating such an important issue.
I believe that this legislation has been presented in such a form that it was designed to be defeated, so that going to the next election we can have a campaign based on climate change. That distresses me. This legislation has the potential, if it is passed in its current form, to make the global economic crisis look like a walk in the park. It is damaging and ill-conceived and has been brought into this place with undue haste. Quite frankly, I have taken quite a deal of offence at the comments that have been made to the effect that anyone who dares question this legislation is a climate change denier or a sceptic. The member for Lyne talked about self-interest. I will put my hand up for self-interest, because this legislation as it stands will have a higher detrimental effect in regional Australia than elsewhere. As I am here to represent the people of my electorate, that is my self-interest.
We are dealing with things that may or may not happen. I heard the member for Isaacs, the opening batsman for the government on this, talk about sea levels rising and whole suburbs of Melbourne disappearing. That may or may not happen with climate change. But this debate is not about climate change; it is about this Carbon Pollution Reduction Scheme. And while many of the points that have been raised may or may not happen, I can tell you one thing that will happen for sure: the day this scheme is enacted, the cement plant in Kandos in my electorate will close. This is a plant that has been there for 100 years. There will be no recognition of the generations of people who have worked there or the fact that the whole culture of the town is based around that cement plant at Kandos, and the lime plant further down the road at Charbon, or the fact that the community of Kandos are great supporters of the Labor Party and have been great supporters of their union. At a time when they are most are looking for some sort of help, they are being cut free. It has been said to me, ‘For the sake of expediency, you should pass this and then let the government deal with it.’ I cannot pass something, regardless of where it positions the coalition at the next election, if it is going to damage my community. Not only that, I would have to explain to the people of Kandos why I did not support them and explain to the coalminers in Gulgong, Mudgee, Gunnedah, Boggabri and Narrabri why I did not go into bat for them and the communities that they represent.
Not only does it affect the mining community; farmers are also being left out of the loop. I was a farmer for all of my life until I came to this place. I come to this place with practical experience and knowledge of the environment. I do not come here reading speeches that have been prepared by others to toe a certain line. What concerns me is that the farmers of my electorate—like the people of Kandos who are now producing cement much more efficiently with much lower emissions than they were 20 years ago—are producing more food with fewer inputs of fuel and water, and are storing more carbon in their soil than ever before. The great work that they have been doing over decades is not taken into account in this. Indeed, if the carbon that was stored in the soil in my electorate alone—in the black soil plains where at the moment they are planting their wheat crops, because of the way they manage their soil through no-till farming—was taken into account, our balance sheet would look much better. The idea that we should support a scheme and then the detail will be fixed up later is the second oldest lie in history—that is, ‘If you sleep with me tonight on carbon, I’ll love you in the morning.’ They expect the Australian people to have the same amount of trust for that as they expect support and votes for a concept that is very thin on the ground.
We have an accurate measurement of our emissions, but we do not seem to be, as a country, taking into account our positives, our sequestration. As I said, the amount of carbon stored in soil is huge. In an effort to get a better understanding of what was available, I visited a group in the Atherton Tablelands about six weeks ago. They are scientifically measuring wood lots that they have planted along waterways and fence lines in that high rainfall area of the Atherton Tablelands. They know exactly how much carbon they are sequestering in farm forestry without impacting on the productivity of their farms. We are not taking any of that into account. While I was in North Queensland, I went to James Cook University and I visited Professor Rocky de Nys. Professor de Nys is working on algae and the ability that it has to sequester carbon. Algae grows by 20 per cent a day, so every five days it doubles its mass. At the moment there are plans to co-locate an algae plant with the Loy Yang power station in the Latrobe Valley in Gippsland. That is something that is innovative, that we should be looking at. The algae can be processed for biofuels, for other oil uses. The dry matter can be a high protein feed or can even be fed back through to the power station. We should be looking at innovative ways; we should be backing Australian innovation to overcome this problem. Government legislation and bureaucracy will not fix a problem as complicated as this.
The other question I would like to ask is: how are our Australian manufacturing companies going to adapt to a low-emissions future if they are being severely impacted financially? If they have had to pay 10, 20, 30 per cent tax on top of what they are paying at the moment, how are they going to have the scope or ability to adapt to a changing emissions scheme? The other thing: if we are taxing energy to change our behaviour, how are we going to explain to our elderly in aged-care homes next summer or the summer after that they have to turn the air conditioning off? At the moment we do not have an alternative. We are taxing energy and we do not have an alternative. We are going to create two Australias. We are going to create an Australia of affluence that will just pay the tax and go on regardless—I do not know anyone in the eastern suburbs of Sydney that will change their lifestyle; the people of rural Australia, our elderly, our disadvantaged, the ones who cannot pass this tax on, are going to be severely disadvantaged.
With respect to my colleagues who are following, I would leave with this thought: we do not need to rush into this. We do not need to have a moral fight across this House on this. This is far too important. I would ask this House and the government to back Australia, back its innovation, back its resourcefulness and let Australia solve this problem in a positive way rather than using the bureaucratic sledgehammer.
It is nice to see you in the chair, Madam Deputy Speaker Vale. It is a great pleasure to rise in support of this historic piece of legislation, the Carbon Pollution Reduction Scheme Bill 2009, and the cognate legislation. I am mindful of the request of the Leader of the House that we keep our remarks on this debate as brief as possible, so I will try to comply. In the time available, I want to make a few basic points about the science, economics and politics of climate change as I see them, but first a few words of history. I am not a newcomer to this subject. More than five years ago, in March 2004, I made one of the many speeches I have made on the environment in this place and urged that the government snap out of its apathy and make a serious commitment to take action against the threat that climate change poses to our society and economy. I am pleased people have stopped using the word ‘denial’ in relation to climate change. I think that was an unfair characterisation of people who disagree with my views on climate change.
I pointed out that, in my view, there was a threat to the health of the Great Barrier Reef, Kakadu and alpine regions and tourist industries that depend on those great natural assets. I notice the member for O’Connor is here. A number of years ago when there were big floods all over eastern Europe I was making a speech and we had a dispute in the chamber over whether this was due to climate change. In my speech of March 2004, I asked why supporters of the previous government seemed to care so little about the 60,000 people whose jobs depend on the health of the Barrier Reef. I pointed out the damage that would also be done to agricultural industries, particularly wheat growers, by the projected increase in temperatures over the next 20 years. I remind members of the National Party, who are so bitterly opposed not only to this bill but to any bill aimed at reducing carbon pollution—which would seem to give the coalition a great deal of difficulty in formulating policy in the future—that an increase of one degree Celsius in average temperatures and the associated decline in rainfall would reduce wheat yields by 10 per cent. I would be interested to know whether the member for O’Connor regards that as a fact.
Sadly, the previous government paid no attention to my words—of course, I did not expect they would—but I hoped they might pay attention to the warnings of the overwhelming majority of climate scientists, both in Australia and overseas, who urged them with increasing urgency that time is running out for action against climate change. It was only at the end of the term of the previous government, when the honourable member for Wentworth became Minister for the Environment and Water Resources—as the member for Bradfield, who was in the chamber a few moments ago, would remember—that the former government began to take it seriously. That, of course, is why it is very disappointing to see that the minister, now the Leader of the Opposition, is unable to get the coalition to support this very moderate effort by the Rudd government to deal with the issue.
As I said, climate change is a scientific issue, an economic issue and a political issue. Let me comment on each of these three elements. In my view, the basic facts about climate change are no longer a matter of controversy. The evidence is overwhelming that the earth is warming and that human activity—namely, the generation of greenhouse gases—is contributing to that warming. Let me quote Australia’s Chief Scientist, Professor Penny Sackett, a highly respected physicist as well as our full-time scientific adviser. Last month she spoke at a seminar in this building and said:
… some elements of the global climate are now changing at a rate considerably faster than previously thought. When world political leaders … meet in Copenhagen in December … they will … hammer out a global protocol to meaningfully reduce the greenhouse gas emissions that are responsible for climate change. If they do not act … and act quickly and decisively, the effects will be devastating. The newest science, based on more, better and a larger spectrum of data, illustrates clearly that the earth is reacting more quickly to greenhouse gases, tracking along the worst case scenario of the IPCC report.
Those who oppose Australia acting to curb greenhouse gas emissions like to argue that as Australia is only responsible for 1.2 per cent of the world’s emissions it does not matter much whether we reduce our emissions or not. There are several points to this argument that I would like to tackle. First, there are more than 190 countries in the world and we rank 18th in the table of greenhouse gas emitters. So we are in the top 10 per cent of emitters in absolute terms. There are only three countries which are individually responsible for more than five per cent of emissions: the United States with 22 per cent, China with 18 per cent and Russia with six per cent. Curbing greenhouse gas emissions requires urgent action by all countries, not just by the two or three biggest emitters.
The second point is that Australia, the world’s driest inhabited continent, has more at stake in this than most other countries. Some of our most vital industries, such as agriculture and tourism, will be ruined if climate change continues unabated. I wonder if National Party members really understand that, if we continue the way we are going, agriculture in the whole of inland Australia south of the tropics will probably become unviable over the next 50 years. If the Murray-Darling system dies, the Barrier Reef dies and tropical diseases and pests expand their range, huge sections of our economy will be destroyed. That is what is at stake for Australia and what we face in our campaign to fight climate change.
The third point flows from this. We have too much at stake in this to join in the game of waiting to see who will go first. Since we have more at stake, we must act first and act decisively so that others follow our example. Last week, the Indian High Commissioner to Australia, Her Excellency Sujatha Singh, said quite bluntly that India would not act on emissions until Australia did. She said:
You cannot have an agreement whereby countries that reach a certain standard of … development, turn around and tell the rest of the world that what we have … you can’t even aspire to.
we need to grow if we are going to give our 600 million people who live under $2 US a day a decent standard of living. Our per capita emissions will increase, there’s no doubt about it. But I am assuring you that they will never increase to what you yourselves are emitting.
So you have an incentive to bring it down. Bring it down, we’ll match it, we won’t exceed it.
I do not blame India at all for taking this attitude. The global climate crisis, like the global economic crisis, was created by developed countries and we must accept the primary responsibility for fixing it. We must of course help China, India and Indonesia to curb the growth in their emissions, particularly with technological advice, but we cannot expect them to listen to our lectures if we are not prepared to do something about it.
This brings me to the bill before the House today. The bill takes the first essential step along the road to an effective response to climate change: it puts a price on carbon. We are one of the most carbon dependent economies in the world. Our economy is built on cheap carbon. This must change, and the start of that change is to put a steadily increasing price on carbon so that industry and consumers have an economic incentive to move towards sources of energy which do not involve burning carbon.
This legislation is an essential first step. Domestically, by placing a price on carbon, it sends an essential signal to industry and consumers that we are serious about reducing our emissions. Internationally, it sends a signal that we are willing to take a lead so that at Copenhagen we can argue with some credibility for more ambitious targets. The defeat of this legislation would be a disaster for Australia, economically and politically. It would send a signal, domestically and internationally, that we are not serious about climate change, that we are not prepared to do any of the hard work needed for an effective global response and that we value our short-term comfort over our long-term livelihood, and indeed our very survival if the scientists are right, not only of this country but of the world.
Opponents of this legislation harp on its possible effects on employment and investment in carbon-intensive industries such as coalmining, aluminium smelting, electricity generation and cement manufacturing, particularly those which are trade exposed. At a time of rising unemployment, I agree that this is a powerful consideration. Of course, employment is something that people in the Labor government take seriously. The people who work in those industries elected a Labor government to safeguard their employment, not to be put at increased risk.
There are several things to say about this. The first is that the government has been at pains to design legislation which provides as much assistance as possible to enable these industries to adjust to a world where carbon has a price and to remain viable and competitive. The government’s modelling shows that the economy will continue to grow. The second is that the transition to a carbon-neutral economy will generate many new green jobs. We are investing massively in renewable energy, in carbon storage technology for coalmines and power stations—and many people have mentioned the role of the member for Batman in geosequestration and other forward-looking technologies like this—in building energy-efficient homes and in designing and building green cars. This week we heard the chairman of Holden, Mark Reuss, talk about the exciting new wave of energy-efficient cars his company is developing. All of these areas are generating jobs now and will generate more in the future.
The third point, however, is that there is no painless way to decarbonise the Australian economy. Those who tell us that they can reduce our greenhouse emissions without any cost to anyone, through some magical solution like clean coal or biochar, are simply trying to avoid the responsibility for making tough choices in the hope that someone else will do the work and bear the political cost. It is clear that if we fail to take even that essential first step we will pay a heavy price and future generations will play an even heavier one.
I believe that the Leader of the Opposition and his environment spokesperson, the honourable member for Flinders, genuinely understand the urgency of this issue. The time has come for them to face down the climate sceptics in their own party, as well as the Nationals, and join with us, here and in the Senate, in passing this vital legislation.
I invite the member for Melbourne Ports to remain in the House, because I think he is a genuine man, and listen to how the problems he identifies can be corrected. The Carbon Pollution Reduction Scheme legislation before this House is a misnomer because it provides no guarantee of carbon dioxide pollution reduction, which the government says is necessary to prevent further climate change. It is in fact a front for another screen-jockey derivative scheme called the emissions trading scheme, or ETS, based upon the trading of certificates of rights to pollute. Let me repeat that claim: this legislation provides for the selling of $11 billion worth of certificates by government to a captive market to continue to pollute the atmosphere in the vain hope that the cost will influence some of them to cease polluting—no punishment, just pay. It also provides to gift a large quantity of these certificates to pollute to the largest of Australia’s polluters if their business is deemed to be trade exposed. However, the legislation provides no information as to when or to what extent these free certificates will be issued to individual companies and businesses that qualify. We are told it is necessary to pass this legislation before the government will enlighten Australian businesses and workers as to how many certificates they must purchase or obtain for free.
The parliament is therefore being asked to buy a pig in a poke on behalf of the Australian people in terms of both the future level of emissions permitted in Australia and, on the other hand, the number of jobs that will be lost as investors and business leaders decide that the cost of these certificates will impose an impossible burden upon their particular business and it is therefore necessary to relocate overseas to nations whose emissions management is loose or simply more generous and/or, as I will cover in the latter half of my speech, have implemented pollution reduction measures that apply no extra cost to their businesses and possibly provide cheaper energy.
The free-market United States is already discussing much more generous exemptions in its draft ETS legislation than is inferred in Australia, whilst the centrally managed Chinese economy is investing heavily in nuclear power, hydro and wind energy, and, as we speak, is investing in the first of a series of 2,000 kilometres of high-voltage DC electricity transmission lines to dramatically reduce the carbon pollution involved in the inefficient AC and gas pipeline transmission of energy that now applies in Australia.
In my opening remarks I stated that the CPRS legislation gives no guarantee of pollution reduction. This is because many of Australia’s polluters have the simple option of buying the certificates and passing on the cost to the obvious captive consumer markets that exist in such areas as retailing or electricity and motor fuels. The government recognises this effect on low-income families and promises cash refunds. Just how does that influence consumption and pollution?
Then there are the trade-exposed businesses which, as I have mentioned, must either be allowed to continue to pollute through free certificates or will deliver the ultimate pollution cut for Australia by closing down or relocating as they cannot compete internationally from within Australia. No-one in the world yet knows what sweeteners or downright claims for Third World exemption will arise at the world conference in Copenhagen, yet our TV junkie of a Prime Minister wishes to entangle Australia in this ETS spider web, which will give him personally the only reason to be relevant as the representative of one per cent of world pollution when surrounded by those who each produce approximately 30 per cent and whose financial capacity to protect their industries and their jobs exceeds Australia’s by a multiple of thousands.
This legislation provides no guarantees of pollution reduction, but it certainly provides the opportunity for the international hedge funds and screen traders responsible for the present financial crisis to find a respectable means of making profits and passing them on to the workers and businesses of Australia through higher certificate values. Even at its low-level start-up—of which the Greens complain—it certainly threatens thousands of jobs.
The alternative is for a government initiative of substance aimed directly at pollution reduction, and those opportunities abound. The government should not be chucking a lousy billion at research; it should be investing in known technologies. A representative of Santos has claimed at the current APPEA conference in Darwin that the national gas industry could alone reduce Australia’s emissions by 20 per cent by 2050, presumably by the fact that gas reduces emissions to half when compared to coal, but there are a number of options that could be introduced by 2020 which provide no emissions and/or greatly reduce energy losses. Had the Rudd government applied the $24,000 million worth of $900 cheques to this problem by investment in a widespread high-voltage DC transmission system, as the Chinese are, and a significant component of extra renewable energy generation—particularly using the tides of the Kimberley—a real reduction of 20 per cent in overall emissions would be achieved without this tax.
Australia’s present practice of transmitting energy over long distances through highly inefficient high-voltage AC transmission lines and natural gas pipelines would, if reformed, add greatly to be available energy and reduce the pollution associated with these forms of transmissions. The Dampier-Perth natural gas pipeline emits approximately 700,000 tonnes of CO2 per annum simply by the process of using approximately 250 megawatts of energy to pump the gas over the required distance, as do all our other gas pipelines. Yet when the gas arrives in Perth—and, I believe, many other destinations—30 per cent of it is then converted to electricity and transmitted back along that same pipeline route in highly inefficient, energy-losing, high-voltage AC power lines to northern consumers.
All future renewable or gas or coal fired energy should be produced as close as practical to source and transmitted to centralised consumer locations by HV DC transmission, incurring very low energy losses. The Europeans, the Africans and now the Chinese do this already. In Australia, only the Victoria to Tasmania Bass Link utilises this technology—there are a few shorter bits of connection—and that is primarily because it is a system that will operate under water and does not need a series of wasteful transformers along the way.
Were WA connected to the eastern states across the desert, and WA’s northern demand centres and natural gas production hubs were also serviced with an HV DC system, all Australia could benefit by a massive growth in cleaner gas generation, thus diluting the effect of coal but not closing it down. Once the transmission system reached the Kimberley-Browse gas hub that is currently proposed for development, the local gas generation system could then be supplemented from the gigantic, perpetual, renewable and predictable tidal resources of the Kimberley region. You would start off bringing down gas-fired electricity, not using huge amounts of energy to pump the gas and then bringing it back as electricity. So there are huge savings just of that nature, and of course you get more energy for your buck.
As this additional energy comes on stream, Australia could tolerate, in pollution terms, the economic benefits of our cheap and available coal, as no country anticipates a nil emissions scenario. Furthermore, the additional low-pollution or no-pollution energy provided would enhance the introduction of pollution-free electric and hydrogen fuel cell cars and transport vehicles, providing further substantial reductions towards a 50 per cent target. The initial investment of government funds would be self-funding over time—a longer time than business might expect—and thus represents an appropriate borrowing for economic stimulus, not just throwing it into the ether. Above all, it would guarantee low-cost secure energy for future generations, considering the volatile regions from which Australian imports its motor fuels. Australia can then meet its international obligations with pride, without imposing costs upon its business sector, jobs market and energy consumers, and certainly does not need to sell government certificates to pollute to achieve this purpose.
I rise to support the Carbon Pollution Reduction Scheme Bill 2009 and related legislation. In my 11 years in parliament this is some of the most seminal legislation I have had to talk to; this legislation will impact on our environment, our country and indeed our globe more than other legislation I have had to speak to. The only other legislation I can relate as being as important as this was the time we did not get to debate legislation when the Howard government sent us to war. The Rudd government understands that climate change is real. We understand and accept mainstream scientific opinion in respect to this issue. We understand the consequences of a failure to rein in greenhouse gas emissions and the implication that it may have for future generations. We have a responsibility to the Australian people and to future generations to act on climate change and to act now. That is why we have designed the Carbon Pollution Reduction Scheme, a scheme that gets the balance right between reducing carbon pollution and supporting economic growth.
In the lead up to the 2007 federal election we made it clear that once in government we would do what is in the national interest and take action on climate change. That is exactly what we are doing with the introduction of this bill into parliament. It is clearly in the national interest to get on with the job of tackling climate change; it is in the interests of business, the economy and above all the environment to move forward with the implementation of the scheme and that begins with the passage of this legislation.
Much has been said by the opposition recently about the debt and the burden we will place on future generations by our borrowings to sustain the economy at the moment. What all of them have failed to talk about is the debt and the burden they are placing on future generations by failing to pass legislation dealing with climate change. They have failed to admit that, in their 12 years in government, they did nothing on this and they are passing on the burden of that neglect to future generations. If we do not get it right we will be the first generation to leave behind a scenario that is worse for the generation to follow than the scenario we inherited.
Climate change is an issue that has resonated on a local level with the average citizen across Australia and this is certainly the case in my electorate of Chisholm. People are genuinely concerned about this issue and they want to see their government introduce reform to bring about change. They want to see change to a lower pollution and a lower carbon economy that reduces Australia’s contribution to climate change. In many instances members of the public are showing tremendous initiative and proving that we can all individually make a difference in the transition to a greener economy.
Whitehorse 2 Solar is a group that covers the City of Whitehorse, one of the local councils in my electorate. Whitehorse 2 Solar is an excellent idea, enabling individual environmental conscious households to join together and significantly reduce solar panel costs, making solar energy more affordable to working families in the community. This group was an initiative of two Whitehorse locals, Maria Anastasi and Lea Caasari, who must be commended for the initiative displayed in their efforts to promote solar energy within the community. Caring for our environment is a responsibility of each and every one of us and the current times of financial hardship have not dented or deterred people from making an effort to reduce their impact on climate change. Whitehorse 2 Solar is an example of how ordinary people are making a real difference in our community by channelling a passion for the environment into practical ideas.
Just last week I had the pleasure of presenting a petition to the parliament from one of my constituents Mary Whiteside, who is a passionate advocate for the environment and a real grassroots campaigner. She is steadfast in her quest to promote clean energy and of the need for both the government and individuals to take action on climate change. She spent considerable time doorknocking house to house in Box Hill and surrounding suburbs, inviting people to sign her petition which calls for the development of alternative energies to support the move to a low-carbon economy. Mary is not part of an established group; she wanted to demonstrate that individual citizens are concerned about this and need to stand up for the environment.
Many of my constituents have shown a strong interest in the government’s generous incentives for households to embrace environmentally friendly initiatives. My office has been inundated with inquiries about energy efficient homes, a key feature of our Nation Building and Jobs Plan that offers government funded ceiling insulation and rebates for solar hot water systems. These are practical measures from the government aimed at setting Australia up for a low carbon future. They are initiatives that have proved highly successful due to public demand and public support for change. The success of this scheme is reflective of the community sentiment that climate change is real and that it is imperative we act to mitigate its effects.
Many of my local schools are embracing environmental education and doing their bit on a practical level to move towards a greener future. Syndal South Primary School has undertaken several projects which reflect their commitment to establishing, maintaining and promoting sustainable environmental practices in the community. The school is fortunate to have large grounds, which have been enhanced through years of planting trees and undertaking environmentally appropriate projects. One of the school’s great environmental features is a large greenhouse supported by a water tank with a solar powered pump and a capillary-fed watering system. The greenhouse is used by students to propagate vegetables and native plant seedlings for the school ground. They also use two other large 10,000-litre tanks that collect rainwater to help establish native plants. As a result of the school’s commitment to environmental education they have gained recognition within the wider community and have been promoted through the Monash Sustainability Centre at Monash University.
So too has the Glen Waverley Campus of Wesley College, which is a proud participant in the Sustainable Schools Program. Initiatives such as paper, glass, plastic and aluminium recycling, planting noni trees and using calico shopping bags are second nature at the campus. They also collect rainwater to water the plants propagated in their greenhouse, which they then use to regenerate the school grounds. Wattle Park Primary School recently received a Sustainability in Schools award from their local council for their proven commitment to the environment. Students from all levels of school have been involved in planting and looking after a vegetable garden, the produce of which is sold back to the school community. Grey water is collected from drinking taps and piped directly to the vegetable gardens whilst student toilets are supplied with rainwater. The school also uses solar panels, which have significantly reduced its electricity costs. They are implementing a number of initiatives which have reduced packaging and rubbish.
Individual schools and community groups in my electorate are taking action to sustain our environment and highlight the implications of climate change. They are thinking globally by acting locally. It is time for this parliament to ensure that public sentiment is reflected on a national scale. That can happen with the implementation of the Carbon Pollution Reduction Scheme before the parliament tonight. This overwhelming public sentiment to act on climate change is something shared by the Rudd government. We have a clear-cut position: to implement a scheme that will reduce net greenhouse gas emissions by a minimum of five per cent by 2020 with a capacity to increase that to 25 per cent if there is an ambitious global agreement to achieve the 450 parts per million goal.
Our proposed scheme is also very mindful of the potential impact on jobs, particularly during these difficult economic times and this is reflected through the industry support and various other measures detailed in this legislation. Our position supports jobs today whilst putting in place a scheme that will create low-pollution jobs for the future.
Treasury modelling shows that all major employment sectors in the economy will continue to grow out to 2020 as we reduce our emissions through this cap-and-trade scheme. Importantly, the government will provide sustainable assistance to emissions-intensive trade-exposed industries, particularly in the first five years of the scheme, which will include additional assistance in the form of a global recession buffer. According to the Treasury modelling, this will ensure that employment in these industries will continue to grow once this scheme is implemented. We can play our part in reducing greenhouse gas emissions while continuing to grow the economy.
Contrast the certainty of the government’s position with the huge confusion and disarray of the coalition. The inconsistencies we have seen from the Liberals and Nationals in regard to this climate change policy stem from one core factor: they have a coalition littered with climate change sceptics, climate change deniers and climate change uncertainty. Whilst the government is getting on with the job of legislating a scheme to mitigate the effects of climate change, the coalition are having a very public debate about whether or not climate change even exists. In doing so, they are ignoring mainstream scientific opinion and conventional logic and rationale. More importantly, however, they are ignoring the economic cost of inaction, failing to provide business with any certainty and damaging the chances of a global deal at Copenhagen in December.
Indeed, as we in the government have said time and again, the cost of inaction will have a greater impact on jobs and the economy than reasonable action on climate change. Treasury modelling has again demonstrated that economies that defer action face long-term costs around 15 per cent higher than those that take action now. We also know the potentially devastating effect inaction will have on our iconic environmental assets such as the Great Barrier Reef and the Murray-Darling Basin. We cannot afford to run the risk of allowing that to happen.
Indeed, the Australian today reports that the Leader of the Opposition made it quite clear on the Insiders that an emissions trading scheme will come into effect one day. He made it quite clear he is hoping and praying that the US administration will get their scheme up; somehow that will lead the way for the opposition to make a decision. I think it is poor policy, on something as vital, something of such national significance and importance, to sit back and wait and hope and pray that, somewhere, somebody else will lead the way and somehow we can just follow in their wake. I am reminded of when we went into the war in Iraq. Again we watched and prayed and then went the way of the US, as opposed to standing on our own two feet and making our own decision based on how that initiative impacted on our nation at that time.
As a parent of young children you get the joy of going to some very amusing animated films. The most recent one I went to was Monsters vs Aliens. One of the funnier jokes in that involved a prehistoric sea creature who had been taken out of the ocean and locked up in the bowels of some great bunker by the US for years and years, and suddenly he was allowed out to fight the aliens. He jumps out of the tank and he says: ‘Oh! The earth is warming. That’s a convenient truth!’ The adults in the audience all thought it was amusing and laughed. The children did not get it, but they get climate change. They get that the environment is warming and they get the fact that if we do not do something now their future is in jeopardy.
In this the 21st century, in the year 2009, it is time for our generation to begin to live on environmental interest instead of the environmental capital on which we have lived, particularly since the beginning of the Industrial Revolution and, more recently, since the 1970s. There are, however, a number of facts which I think need to be introduced into this debate on the Carbon Pollution Reduction Scheme Bill 2009 and related bills, which has been characterised more by emotion in the media and the broader community and, I dare say, even in the parliament.
The first is in terms of science. I cannot recall in my life a scientific issue where there has been such a large minority of scientific opinion—most of it credible scientific opinion—questioning the broad consensus of the majority, upon which this legislation is based and which it is intended to meet, and upon which much but not all of the world is intending to act. The second is that for us as parliamentarians, as legislators, whatever our background—and in my own case it is as a medical graduate, which is not in itself a scientist—our responsibility is to accept the broad consensus of scientific opinion whilst observing and noting that there is a growing minority of scientific opinion which contests the consensus of the IPCC.
That having been said, Australia’s emissions currently represent 1.4 per cent of global greenhouse gas emissions. On current trends, by halfway through this century, China and India will be emitting one-third of global emissions. That is more than the United States, the European Union, Brazil, Japan, Canada and Australia combined—by which time Australia will represent, on current trends, about one per cent of global emissions.
This country is currently the world’s largest exporter of coal, the largest producer and exporter of alumina, the third largest exporter of aluminium, the second largest exporter of uranium and the fifth largest exporter of LNG. For those who hear that data and think it might be trivial in some way, just reflect, for example, on today’s national accounts and the fact that they are the way they are by virtue of Australia’s trade and trade balance.
The next thing that is important for us, I think, is a matter of principle. We need to proceed with caution. As speakers on both sides of the debate have said, this is the most significant government-imposed change to the economic architecture of this country, certainly, in my lifetime and I think the lifetime of all of us in this parliament. There are, in my opinion, five principles upon which we should proceed. The first is that we have to make a proportionate contribution to addressing climate change—no more, no less. I am a human being, I am a global citizen, but I am an Australian and I am a member of the Australian parliament. It is my responsibility to stand up for my country and see that we carry our fair share—no more and certainly no less.
The second principle is that we have to do so while maintaining the strength of the Australian economy. I have obligations to my great-grandchildren and subsequent generations to give them a planet in good working order. But I have responsibilities to my children to see that they carry the reasonable prospect of having a job and enjoying a standard of living of which I can be proud and in which they can have confidence.
The third principle for us is that we have to see that this country continues to provide affordable, low-emissions, cost-effective energy to Australian households and to Australian industry.
The fourth principle is that we have to continue to provide resources and energy to the rest of the world.
The fifth principle, I think, is that this country should be putting as much effort into preparing for the inevitable and unavoidable consequences of climate change as we should into actually trying to stop it.
The reality of the environment that we are in now is that the Prime Minister and the government—to their credit, in my view—have accepted the need to postpone the implementation of an emissions trading scheme. But they are not yet going as far as they should. So, too, I am very pleased to see that significant members of my own party have recognised the importance of delay. That is something that is also to be welcomed.
But there are a number of issues that I think we need to be particularly focused upon. If Australia emitted absolutely nothing we would make no difference whatsoever to climate change. In fact, if we reduced our emissions by 60 per cent by 2050 we would reduce global emissions by 0.653 per cent—in other words, close to nothing. The Chinese are constructing a new coal-fired power station on average every five days. If India, China and the United States are not committed to act and to act in a proportionate way, not only on a country basis but on a per capita basis, then Australia will be conducting an exercise in utter futility—in fact, far worse than that, we will be committing a form of economic suicide for no appreciable environmental gain at all. What is it in this country that has led us to become a collective of intellectual lemmings? It seems that much of this debate is characterised by a religious, evangelical zeal that has you either at one extreme end of this debate or at the other.
In my electorate of Bradfield, on the upper North Shore of Sydney, adjusting to climate change in most but not all cases is an inconvenience—solar panels on the roof, a 30 per cent increase in your electricity bill, maybe buy a Prius, adjust your behaviour, turn off a few TVs in your two-storey house. But the further you go from my electorate, out into the more typical socioeconomic parts of this country, it is going to be about survival. It is going to be about feeding, housing and clothing your children; being able to decide whether you can afford to run a car and, if you own one, to actually drive it; and whether you can afford to remain on the land, be it in dairy, wheat or any other kind of agricultural activity in this country. There are many people who live in the inner suburbs of our cities who seem to think that in some way you are being an environmental vandal by not supporting this. What they fail to understand is that cement manufacturing, sugar refining, petrol refining, electricity generation—all of those things that they so often take for granted—are the industries that are going to be most directly affected by this.
I have confidence in Treasury—to a point. But one of the reasons we are moving the amendments we are—in particular for the Productivity Commission to spend six months having a look at this—is that the Treasury, in my view, has made implausible assumptions about the capacity of Australian industry to adjust to this and to adjust within the time frame it has assumed. Its estimates of the international price of gas and electricity are unrealistically low. It also has taken no account of the impact of the global financial crisis. I might also add that this is the same Treasury that, after Centro reported it could not refinance its $1.3 billion and issue a share dividend in December 2007, apparently failed to appreciate the economic tsunami that was coming towards us. It is the same Treasury that in 2007 underestimated the size of the surplus by 59 per cent and overestimated economic growth by 37 per cent. I apologise to Treasury in this sense, but I do not believe the assumptions upon which this legislation is based and is being presented.
We also think that it is very important—I was of this view last year; I remain of it—that we see that we are part of a global response. In terms of changing our economic architecture, of effectively in the first year increasing the GST from 10 per cent to 12½ per cent—that is the economic impact in 2013 under this legislation—we must make sure that the United States, China and India in particular are committed and are going to act and that we make a response based on that as much as anything else.
I am also deeply concerned about the idea that we are going to have our emissions-intensive trade-exposed industries pay a net effective tax of $12 billion over the first five years of this program. In the end it is the constituents of members here who represent low- and lower middle-income communities in this country who will pay for it.
I believe, in concluding, that most Australians will, with good leadership on both sides of the parliament, accept by a bare majority higher energy costs, higher transport costs—even less job security. But they will not, nor should they, accept those under any circumstances if the rest of the world, particularly the United States, the Chinese, the Indians and others are not making their fair contributions. The Prime Minister has couched this, sadly, very much in political terms. I will be very interested to see the Labor members prosecute this argument to many of their constituents, when they realise that Kyoto was not something on a Japanese restaurant menu but rather a formal agreement—and, further, what the rest of this is going to mean. It is time for us to put our country’s interests first. That is why the amendments moved on this side should be supported by the government. And I think the government, if it were considering the advice of the wiser people within it, would find some way of accommodating them.
I begin my contribution on the Carbon Pollution Reduction Scheme Bill 2009 and related bills by asserting that climate change is real. You only need to pick up a newspaper and read regular stories about the impacts of climate change. Just yesterday in preparing my notes for this speech, I noted in the Herald that scientists were warning that rising CO2 emissions are turning oceans acidic in an irreversible process that threatens coral reefs and food security.
I believe that the community understands that climate change is a serious global issue requiring a global response. In the words of Sir Nicholas Stern:
It is the greatest market failure the world has ever seen. …
He points out that the costs of stabilising the climate are significant but manageable if we take early action, whereas delay would be dangerous and much more costly.
Our government has the challenge to find the means of reducing emissions at the lowest possible economic cost. That is why we have an integrated approach to reducing carbon pollution by putting a price on carbon through the CPRS, by promoting investment in renewable energy, by promoting energy efficiency measures and by investing heavily in low-carbon-pollution technologies.
In designing the CPRS, as encompassed in these bills before us, the government has endeavoured to get the balance right—that is, to reduce emissions while continuing to manage economic growth into the future. The legislation proposes a package of assistance for emissions-intensive trade-exposed firms both to guard against carbon leakage and to support existing jobs in the process of transition. I want to address my remarks in the short period tonight to this part of the bill in particular.
Bluescope Steel is the largest employer in the Illawarra region. About 4,700 people work directly for the company and up to several thousand contractors regularly rely on its operations. With the multiplier effect the company sustains about 12,000 Illawarra people in employment. This company also contributes $2.1 billion to the gross regional product and generates $909 million in wages and income from direct and indirect employees. In fact, Bluescope Steel is the largest manufacturer and exporter of manufactured products in my state of New South Wales. More importantly, it is the lifeblood for about 12,000 people and their families and it underpins our regional economy in the Illawarra. So the wellbeing of our community is intimately tied up with the fortunes of that company.
Furthermore I want to state on the record that I am an unapologetic advocate for a viable domestic Australian steel industry both now and into the future. It is in Australia’s national interests. A competitive Australian steel industry is an important foundation for a competitive Australian manufacturing sector. Australian made steel is a key input for a large range of domestic manufactures, including the automotive sector, white goods, machinery, building products and, into the future, I believe, for our renewable energy sector in areas like wind, solar and water conservation infrastructure. It is not surprising therefore that I have brought the concerns of Bluescope Steel, the workers who work there, the union and other stakeholders in my region to the highest levels of government. I would have failed in my responsibilities if I had not done so.
I want to also acknowledge the fact that the Minister for Climate Change and Water and other members of government have gone to great lengths to understand and deal with these concerns. Presently, Bluescope Steel is facing bleak times as a consequence of the global financial crisis. The Secretary of the Australian Workers’ Union described it as the:
… worst crisis ever in the entire history of making steel in this country.
Production has halved, steel orders have fallen and naturally enough workers and their families are worried about future employment prospects. The company committed $372 million to the reline of the number 5 blast furnace, which is now completed, but the furnace will not be restarted until market conditions improve. Some of the hundreds of contractors may be employed on the upgrade of the sinter plant, but hundreds of others who worked on the reline will have no work. The company has managed these difficulties in a collaborative fashion with the unions, avoiding retrenchments while workers exhaust their existing leave entitlements.
In this climate the company was anxious about the introduction of the CPRS. The company and I differed about a doomsday scenario that they advanced, which I believe was the result of conflating the impact of the global crisis and the introduction of a CPRS. In my view, that analysis unnecessarily spread panic and anxiety among the workforce and throughout the region generally, particularly so at a time when concerns such as these were weighing heavily on people at all levels, including senior people in our government.
The predicament facing emissions-intensive trade-exposed industries like steel is well understood by the government, and we saw that reflected in May this year when the Prime Minister announced a delay in the start of the CPRS for one year to manage the impacts of the global recession. The phasing in of our scheme from 1 July 2011 will see a one-year fixed price for permits at a cost of $10 per tonne, with the transition to a full market trading system from 1 July 2012. As people would be aware, a new global recession buffer will be provided as part of the assistance package for emissions-intensive trade-exposed industries. Industries eligible for 60 per cent assistance will receive a 10 per cent buffer and those eligible for 90 per cent will receive a five per cent buffer. So it is clear that the government listened and the government acted.
Our minister has consistently argued that there was no purpose in imposing a carbon price domestically if it resulted in emissions and production transferring internationally for no environmental gain, and I wholeheartedly agree with that. Maintaining the competitiveness of Australian industries like steel and preventing carbon leakage was always a priority for the Rudd Labor government. Trading internationally in steel we are up against countries such as Brazil, Russia, India and China, who produce half the world’s steel but do not impose carbon costs on their industries and have no plans to do so in the foreseeable future. So, as I said earlier, avoiding the risk of carbon leakage has been a constant in our considerations and a key consideration in determining at what level permits will apply.
As people would be aware, in the white paper the rate of assistance for integrated iron and steel making is 90 per cent free permits. However, as we know, the number of free permits provided will depend on the precise definition of the activity being conducted. BlueScope has raised with me that a narrow definition could result in reduced levels of assistance. To assist in this process of activity definition, an expert panel headed by Dick Warburton will advise the government on activity definitions, which will then be reflected in draft scheme regulations. BlueScope has the opportunity to have its arguments properly considered and evaluated in this process, but I will continue to argue for an activity definition that I believe best takes account of the industry’s needs. The company has also raised with me concerns about scope 3 emissions being passed on—in particular, the carbon cost from its coal suppliers being passed on to the company. The government is aware of these matters as well and will continue to engage with BlueScope on these and related matters.
I congratulate the Obama administration for their commitment to deal with climate change in the midst of their profound economic circumstances, which are much worse than the situation applying in our own country. But they too are proposing a cap-and-trade emissions scheme, together with a raft of energy efficiency measures and other environmentally friendly measures which will form part of that package. So moving to a carbon constrained economy confronts the United States as much as it does Australia and they, too, will have to deal with a range of what they describe as ‘trade vulnerable industries’. In that regard, I note the varying analyses of the context of the Waxman-Markey bill and the level of protection to be afforded to comparable industries like steel for industries located in America.
As a matter of principle, I believe that Australian workers deserve no less protection than that which will ultimately apply in the United States, which after all is the world’s largest economy. That will be the position that I will continue to advocate on behalf of the workers and their families whose livelihoods depend on a competitive and viable steelmaking capacity in the Illawarra region. The Minister for Climate Change and Water has argued that our scheme, a cap-and-trade scheme, as encompassed in this bill, ‘has been designed to link in with existing Kyoto mechanisms and to eventually link with other international schemes as these schemes are implemented and mature’. The Rudd Labor government is committed to playing its full and fair part in the global efforts to address climate change.
Before I get into the debate on the Carbon Pollution Reduction Scheme Bill 2009 and related bills, I want to pose a question to all Australians and particularly to the Labor government: where do you think our food comes from? I strongly believe food and water security will become one of the defining issues of the 21st century, if it is not already. The legislation we are debating tonight is a debacle and should be voted down. It is nothing but a tax on production that will drive businesses and jobs offshore and all it will achieve is a new export in carbon emissions.
Electorates such as Calare, which are exporting, wealth-generating electorates, will bear the brunt of the Rudd government’s emissions trading scheme, which is nothing more than a new tax with another name. The effect of this legislation will be felt much more brutally in regional Australia than it will be in the capital cities. Yet those opposite have done nothing to negate the effect of this legislation on our agricultural sector. Agriculture is the only bright light in our economy and the only sector to record any growth in the last quarter of the last calendar year. It also recorded major growth in exports in the first quarter of this calendar year, which led to that small growth which kept Australia out of recession in the last figures. And it has been ignored by the Rudd government.
Whether it is the current drought or future climate change, the result is a drier weather cycle. To put it simply, we cannot eat a computer generated climate change model. What we need is government investment into research on practical measures which will allow our farmers to increase productivity. For example, this involves investment in new plant varieties which are disease resistant and which can tolerate dry conditions. Yet all we have got from this government is massive cuts to research and development in this year’s budget. Having slashed R&D funding, it was the height of hypocrisy for the Minister for Agriculture, Fisheries and Forestry, Tony Burke, to swan around Europe as an observer to the G8+ Agriculture Ministers Meeting in April, where he claimed in a media release:
Australia has a major role to play in meeting the global food shortage and boosting global food security … We believe investment in agricultural research will be essential …
If only his actions matched his words. Our farmers are already being forced to produce more with less—less water through drought, and less arable land due to the expanding population—and without increasing public expenditure to dramatically increase productivity there is the very real possibility of Australia becoming a net importer of food when the world population is set to double within the next 30 years and the ravages of global warming are meant to hit us.
In a joint media release the Minister for Foreign Affairs and the Minister for Agriculture, Fisheries and Forestry recently stated:
… there are already 925 million people around the world who are malnourished and for the first time since 1973 the world is facing the combined impact of record oil and food prices.
One hundred million of the world’s most poor and disadvantaged risk being driven deeper into poverty by the recent escalation in food prices.
Yet the Rudd government is spending less money on researching and developing new plant varieties and farm management practices to increase food production than it is on promoting and popularising its economic stimulus package. In fact, the Rudd government thinks so little about where our food will come from that agriculture is the only sector which is not receiving free permits; nor does it have a $500 million clean coal fund.
The Minister for Agriculture, Fisheries and Forestry has been very slow in releasing information about the impact that the Rudd government’s emission trading scheme will have on agriculture and food production, manufacturing and processing. The government has no idea and nor does it care about the effect of this legislation on agriculture. Despite two reports from his own department finding that the ETS will have a major negative impact across all commodities whether agriculture is covered under the scheme or not, the minister for agriculture keeps on saying that farmers will simply reorganise their businesses. If anything shows his total lack of knowledge of his own portfolio and the people who are involved in it, the farmers, that statement does.
The latest ABARE report to come out of the minister’s department, titled The effects of the Carbon Pollution Reduction Scheme on the economic value of farm production, finds that agriculture will be hit hard from day one under the Rudd government’s ETS. Interestingly, this is the first time that ABARE has admitted that there will be severely negative impacts on agriculture as a direct result of the legislation that we are debating now. The ABARE report states:
Even if the agriculture sector is not a covered sector under the CPRS, agricultural producers will face increased input costs associated with the use of electricity, fuels and freight and may face lower farm-gate prices for their goods from downstream processors. These will have implications for the economic value of farm production.
Farmers know that whatever the people above suffer in costs they will take off what they are willing to pay. You do not have to be Sherlock Holmes to figure out that just about every bit of food and fibre grown in Australia has some form of processing, manufacturing and/or transporting before it is eaten or worn. Yet none of our manufacturers will be eligible for free permits to offset the cost of the ETS. The report finds that graziers will be hit particularly hard and producing beef will be next to impossible, with returns expected to drop by 22 per cent. Producers of wool, mutton and lamb are also set to take a whopping 17 per cent cut to their income. These are from the figures of the minister’s department, not from others that show far worse effects.
I fail to understand how the Rudd government believe anything that breathes and breeds can be polluting our environment. The amazing thing about this is that we are going to destroy our beef industry, yet the global warming zealots are not interested in doing anything about India, which has a cow herd of over 250 million—over a quarter of a billion—while to those zealots Australia’s 28 million obviously pose a huge threat. I cannot see the Hindus allowing their sacred cows to be slaughtered to contain emissions. An interesting but little known point is that people who have a balanced diet, including red meat, emit less noxious greenhouse gases than vegetarians, who eat a diet heavy in pulses and beans. The Prime Minister should take note.
Grain growers are not missed, either, with their income predicted to fall by 14.5 per cent. The dairy industry, already struggling because of low export prices, will lose another 11 per cent of the bottom line because of the emissions tax. Every family needs a farmer to survive, but no farmer can survive the Rudd government’s 20 per cent cut of their bottom line. We are finally starting to see some figures on the cost of the ETS to food production, and even the government’s own modeller cannot hide the shocking effect that its ETS will have on farm productivity. Where does the minister for agriculture, Tony Burke, and the Prime Minister, Kevin Rudd, think that their food will come from when all our primary producers have been sent broke? The simple fact is that food and water security will be the defining issue of the 21st century.
The opposition’s amendment to defer this legislation until after the Copenhagen conference is sensible. Not only do we need to know what the rest of the world is proposing but we also need to know whether there will be changes to accounting and measuring tools under the current Kyoto agreement. If there are no changes to the accounting rules, then positive and practical measures such as no till cropping, biochar or voluntary carbon markets will simply not happen. They will not count towards the greenhouse gas inventory accounting for the Kyoto target.
The Rudd government’s emission trading scheme is not only biting the hand that feeds it but gnawing the hand off up to the elbow. As I asked at the start: where do you think, Prime Minister, your food will come from under this scheme? For the minister for agriculture to stand here a day or so ago and say how much worse agriculture would be because of global warming if we do not do this totally ignores the fact that no-one else in the world is proposing a scheme like this at the moment. The minister for agriculture talks about less rainfall and less water and how farmers will be hurt by it if we do not fix it. But nobody else wants to fix it in the same way Kevin Rudd does.
It is with great pride that I rise to support the Carbon Pollution Reduction Scheme Bill 2009 and related bills, which will progress this nation’s efforts to confront the challenges of climate change. On reflection, I look back just a few years ago. I recall in my previous occupation as a solicitor being required to undertake some research in relation to this thing called an emissions trading system. I recall undertaking some research on the internet. I went to the website of the Australian Greenhouse Office. I was stunned to see that going back to the 1990s there were some serious discussion papers in relation to the establishment of an emissions trading scheme.
It begs the question why, when so much work had been undertaken at such an early stage, when we consider the international environment and the debate and negotiations that led to Kyoto, it took so long for this nation to move to the next stage, the stage that we have now reached. The Rudd government is introducing a series of bills, a package of legislation, that does what should have been done many years ago, and that is to introduce something in the nature of an emissions trading scheme—in this case, the Carbon Pollution Reduction Scheme.
It says to me that there was, over the 12 lost years of the former government, a lost opportunity. At a time when we as a nation were benefiting so greatly from the boom in commodity prices and the international economic expansion throughout that period—a time of great prosperity—what a lost opportunity it was that we did not seize that opportunity to introduce the sort of economy-wide, society-wide reform that is contained within these bills, to set our country, our economy and our society up for the challenges that we face in tackling climate change and adapting our economy to meet the changes associated with that transition. Unfortunately, there was a lot of delay. Upon coming to office, we had a commitment to delivering those commitments that we had made prior to the last election.
There has been a deferral of the introduction of the scheme as proposed within these bills. I have to say that I am very supportive of the amended proposal that sees a delay in the start date. I think it is the appropriate thing for us to do in the context of the current economic challenges that we are facing, when the international economy is facing the steepest, most protracted, most synchronised global recession in 75 years. With that comes some challenges and also some opportunities. On the one hand, the challenge is that to introduce a massive reform of this scale at this point in time is something that many of us would baulk at. I think there is some concern in the community that in the current climate we need to be responsive to the needs of industry and to those areas of the economy where jobs may be vulnerable. But, on the other hand, there is a great opportunity, the opportunity that comes with undertaking, through this period of international economic crisis, some of the hard yards, the serious reforms, that will restructure our economy. The reforms that we are proposing fit in very nicely with our broader agenda of investing in the nation-building infrastructure that will set our economy and society up for the future, to take advantage of the recovery phase when we as a nation have moved through the economic challenges we are currently facing.
The government is taking strong action to tackle climate change whilst also making sure that the targets that we put in place are appropriate and responsible given the need to support the economy and jobs during this global recession. The Carbon Pollution Reduction Scheme, as proposed in these bills, is proposed to commence in 2011 and will, for the first time, put a cost on carbon pollution. That will no doubt encourage major polluters, indeed polluters right across the spectrum, to lower their emissions. As part of the scheme, a large part of the funds raised by the issue of permits will be used to assist households as they seek to grapple with the transition to the new set of arrangements that will set our nation up for a low-carbon future. Combined with this is an investment in green technologies, those technologies that will also help us take advantage of what I think is now an inevitable move across this globe towards recognising our obligations to protect our global environment and to reduce our emissions.
I would like to spend a few moments on how these bills might have an impact on my local community. As I move throughout my local community and discuss with many local residents the issue of climate change, many of them say to me, ‘Look, I don’t really understand how this affects me.’ I try and explain to local residents why I think it is important, why I think it affects people in my community, me and my family. I have found some of the information provided on the climate change website very useful. There is a particular fact sheet that I often make available to local residents because it provides information that is very specific to my local community. I read from one of those documents:
If the pre-industrial concentration of greenhouse gases in our atmosphere doubles over the coming decades, New South Wales could expect more flooding.
As someone whose electorate is divided down the middle by the Hawkesbury-Nepean River, flooding has always been a central concern. The document goes on to conclude:
For example, a 1-in-100 year flood would become a 1-in-44 year flood for the upper Parramatta River—
Well, that is not that far away from my electorate, but a 1-in-100 year flood would become:
a 1-in-35 year flood for the Hawkesbury-Nepean …
That is of great significance to people in my local community. There are many homes located within the floodplain. The greater Penrith region has been settled since the first days of white settlement in this country, and there are many established properties, many homes, that have been located on flood prone land. Clearly the impacts of climate change and the increased likelihood of floods arising from the Nepean River will have an impact on families within my electorate.
I also want to make the point to people that our community in the greater Penrith region is one of the hotter parts of the Sydney metropolitan area. This was brought home very starkly several years ago when, as the Mayor of the City of Penrith, I led a campaign to put Penrith on the weather map. We succeeded in that campaign, but one of the by-products of that is that now, every night on the television news when Penrith appears, it is very clear that the temperature in Penrith is much greater than in most other parts of the Sydney basin. Clearly, as a hot and dry part of our hot and dry continent, we will be one of the regions that will feel the impacts of climate change very starkly. Of course, there is the Blue Mountains heritage area, and in my local community we face the threat of bushfires. The prospect of future bushfires will only increase as a result of climate change continuing to take hold.
There are many reasons why we need to tackle climate change, but one area I would like to focus on covers the important elements within this legislation that address the issue of household assistance—whether it be providing assistance to our pensioners, our seniors, our carers, people with disabilities, self-funded retirees or our low- and middle-income families, of whom there are many in my electorate. I am pleased to stand up on their behalf and to acknowledge that, whilst it is important for us to take these steps, we need to make sure that those who are vulnerable are not left behind as we make the transition to a low-carbon future. In relation to fuel tax, there will be a 10 per cent reduction for the first three years of the scheme. As a community that is very car dependent, that is a protection that is of great significance to local residents in my community.
I could go on for much longer, but with time running short I would like to say that I think in framing this scheme the government has struck the right balance. It is a balance between taking the important and urgent action that is needed to tackle climate change and set our nation on a path to a low-carbon future while, on the other hand, ensuring that the impact on our economy, industry and jobs is minimised to the extent that they can be, so that the transition is less painful than it might otherwise be. I conclude by making the point that I started with: had this nation grappled with this issue seriously earlier, then we would have been set up to take advantage of the economic prosperity that I am sure our nation will face in the future, but instead we now find ourselves tackling these challenges at a time of great global economic challenge. I support the bills.
The Carbon Pollution Reduction Scheme signals Australia’s arrival at a major intersection in its political, economic and social history. When approaching any major intersection, you need to know when to go, when to stop and when to proceed with caution. This is such an occasion. Decisions that are made in this place today will have far-reaching consequences for the future. To borrow a phrase from Lewis Carroll, it is curiouser and curiouser. Like Alice, our consciences, if not our suspicions, are aroused. In this instance, it is by the unseemly haste with which the government is pressing this legislation through the parliament. I know it will not take effect until 2011. The Copenhagen climate change conference does not meet for another six months, and the United States is still finalising the shape of its carbon trading scheme. The question remains, then: why is this complex and far-reaching legislation being rushed through parliament?
Australia’s contribution to world CO2 emissions is 1.4 per cent and, while Australia has a great contribution to make, there is no Australian solution to a global reduction in CO2; there is only a global solution in which we can be participants. The government has said it needs to give certainty to business, but this bill does not achieve that aim. Until Copenhagen, three possible outcomes rest on the table: reduce emissions by 25 per cent if there is a universal agreement; reduce them by 15 per cent if the agreed targets are between 510 and 540 parts of CO2 per million; or reduce them by five per cent against our 2000 emissions if there is no universal agreement and Australia must go it alone. The coalition offers bipartisan support for the carbon abatement targets. Yvo de Boer, the Executive Secretary of the United Nations Framework Convention on Climate Change, has revealed that the UN does not require countries to have legislation in place before the Copenhagen meeting. So why not wait until Copenhagen? Then Australian businesses can have greater certainty. To supplement the mandatory targets, the coalition would immediately set up a voluntary carbon scheme to take effect on 1 January 2010. This would provide real incentives to begin action on a wider front now. It will allow for credits over and above the targets agreed to in Copenhagen.
In a forum I organised in my electorate, ‘Our Patch, Our Planet’, it was abundantly clear that men, women and children wanted to participate in reducing their carbon footprint. Such a scheme would allow individuals to act and ensure the results count in the total global goal to reduce emissions. Further, the coalition will be vigorous in pursuing a clean energy revolution, making Australia a solar continent, building energy efficiency in commercial and domestic buildings, and improving the vast Australian landmass quality through revegetation, re-afforestation and increasing soil capacity. This further underpins our carbon reduction scheme domestically. Writing for the Monthly, Tim Flannery said:
The Government has been lulled into the belief that effective climate policy and an effective emissions trading scheme are one and the same thing. They are not … A falsely ambitious scheme has been developed.
As the Leader of the Opposition said in his speech to the House last night:
The legislation is distinguished by the fact that it has almost no supporters.
Views expressed across industry could be best summarised by the quote from Woodside’s managing director, Don Voelte, who said:
We clearly encourage the Government to continue to look at this, to get it right. It’s not right yet.
Personally, I am not a climate change sceptic or a denier. Having read widely and talked to scientists, I accept that while there are differing views about climate change, most vary not on the science but on the degree and speed of climate change. Taking the most modest calculations, there is a clear case for risk management. For many years biologists, geologists, physicists, oceanographers, astronomers, statisticians and other researchers have been studying and measuring in an effort to better understand the impact of CO2 on the earth and its climate. Across the sciences, they have arrived at similar conclusions: there is a threat to human life if we continue to emit at the current rates and above.
Personally, I feel the weight of responsibility to make an informed contribution to this debate and to steer away from the path of crude politics and scare campaigns. In a change of this magnitude, disruption and cost is inevitable; but to do nothing will extract a much higher price in human and in economic terms. I think this was a sentiment expressed earlier by the member for New England—that is, it is not an easy decision. But frankly, the time has come to debunk the theory that economic growth is wholly dependent on environmental degradation. We have the capacity to adapt and carve out a cleaner future in new enterprises and services and to be filled with a sense of the possible.
Restraining catastrophic global climate conditions calls for major changes in human behaviour, surpassed only by the need for new technological innovations. Encouragingly, both can be observed in rapidly escalating proportions. Amory Lovins, Chief Scientist of the Rocky Mountain Institute, provides a clue to achieving this by separating applied hope from theoretical hope when he says:
Applied hope comes from taking specific actions and making specific choices that create a world worth being hopeful about.
For the free market system to work, signals must be strong and resolute so as to drive best practice in energy efficiency and conservation and to build a renewable energy industry. Curbing the profligate use of energy is the responsibility of every individual, every corporate entity and of every government in every country on the globe. To establish and maintain confidence in a carbon reduction scheme, it must be soundly based. This bill has many flaws, and they need to be examined and addressed in detail. If we do anything less, we risk derailing a robust carbon reduction scheme in the future. In that respect, I stand in this place and strongly support the amendment moved by the Leader of the Opposition.
When it comes to legislation as significant as the Carbon Pollution Reduction Scheme Bill 2009, the first question is: why? Why are we taking action to address climate change and why are we acting by way of a cap-and-trade emissions trading system? The fundamental answer to those questions is that the government is doing what governments are always asked to do. Sometimes there are areas of policy that are articles of faith for one side of politics or the other, where policy is influenced by the core values that underpin a political party’s existence and reason for seeking office. But this issue does not go to the ALP’s reason for being; it is one that simply has to be confronted as part of putting up our hand to lead the country. When faced with problems, governments seek advice, analyse the problem and weigh up the options for solving the problem. Judgments are ultimately made about the best way to proceed and, in consultation with stakeholders in the broader community, a course of action is determined and implemented. This government’s acceptance of the science of climate change and our commitment to reducing carbon emissions through an emissions trading scheme falls into that category. This is not an ideological crusade for us. It is a reasoned, albeit fraught, response to a challenge that comes with the territory of leading this country in and preparing this country for the 21st century.
I accept the science that tells us the earth is experiencing out of the ordinary warming. The Intergovernmental Panel on Climate Change fourth assessment report noted:
… an improvement in the scientific understanding of the influence of human activity on climate change—
… the warming of the climate system is unequivocal, that there is a greater than 90 per cent chance that the global average net effect of human activities since 1750 has been one of warming.
It is hardly radical or unreasonable for a government to take heed of the IPCC’s findings and for a government to accept its share of responsibility to address the causes of the problem identified in the scientific data. This is not an article of faith for me, or indeed for the Labor Party. The government is not about ignoring credible evidence either, which brings me to the next point about the science.
When we weigh up whether or not to accept the science indicating the existence of climate change, part of that judgement involves understanding and evaluating the consequences of climate change. What is at stake if we get our judgement on the science wrong and that leads to us doing nothing? Mainstream science is telling us that, if climate change of the magnitude suggested by the IPCC is in fact taking place, the consequences that can be predicted are of concern. Plenty of other speakers have run through what this might mean for Australia in terms of more extreme weather events, damage to the Great Barrier Reef, threats to the viability of agriculture in parts of the country and so on. I do not want to dwell on the detail of that, but there is enough even in the most moderate projections to tell me that there are risks in doing nothing.
Accepting the science, the next question is: why an emissions trading scheme to bring about a reduction in carbon emissions? The first point is that an emissions trading scheme is the centrepiece of a much bigger and many-pronged response. The government is making massive investments in energy efficiency and renewable energy that will benefit households, small and medium businesses and industry, and create opportunities for new industries. For example, the investment that Mackay Sugar is making in cogeneration will create a new source of much-needed revenue for cane farmers in my electorate. We are also intensely engaged in international efforts to achieve a global agreement, something that everyone agrees is the best solution and that is at the forefront of the government’s efforts here in securing the passage of this legislation before the crucial negotiations at Copenhagen later this year.
An emissions trading scheme is hardly a radical policy response from the fringes of economic theory. It was the Liberal-National coalition government that set up the task force on emissions trading, which after extensive public consultation recommended that an emissions trading scheme should be implemented in Australia. We know that the Leader of the Opposition, Malcolm Turnbull, argued strongly for such a scheme when he was a cabinet minister in the Howard government. As Minister for the Environment and Water Resources, Malcolm Turnbull referred to the National Greenhouse and Energy Reporting Bill 2007 as the ‘first major step in establishing the Australian emissions trading scheme’. And, on 31 May, just last weekend, the Leader of the Opposition stated that he has no doubt that Australia will have an emissions trading scheme.
In adopting an emissions trading scheme, the government has built on years of expert deliberation, consultation and economic modelling that has concluded that an emissions trading scheme represents the lowest cost way to make the change to a less emissions intensive economy. The government has also been influenced by international developments that have favoured cap-and-trade schemes. The CPRS is designed so it can integrate with international schemes as more and more countries make the move towards reducing their carbon emissions. Of course, a change as big as the one anticipated in these bills—the introduction of a carbon price into our economy—has raised concerns in sections of the community. The government is certainly not blind to the challenges presented in the CPRS for some industries and regions. For that reason, the government has been careful to develop the CPRS step by step—green paper, white paper, draft legislation, regulations. We have gone back to industry and other stakeholders to continue consulting and negotiating and to work through the issues that have emerged at each stage.
Contrary to what the opposition would have people believe, this has not been a rabid ideological crusade on the part of the government, devoid of reference back to the real-world consequences of this legislation. There are some things we will not back away from. Yes, we have an election commitment to reduce carbon emissions—an election commitment that we took to the Australian people in 2007 and which they supported. Yes, we are committed to doing that by means of an emissions trading scheme. But within that broad framework the government has taken a pragmatic and cooperative approach to working with industry to achieve those policy aims. Evidence of that is the government’s decision announced early last month to delay the start of the scheme, to fix the price of carbon at $10 for the first year and to increase the assistance given to emissions-intensive trade-exposed industries. The government is sensitive to the circumstances of industry. We want to work with them to meet this challenge, recognising that we absolutely must get the balance right between environmental imperatives and economic reality.
I have seen this approach in action as I have helped businesses in my electorate to negotiate their way through the process from our stated policy in opposition to the green paper to legislation and regulation. Among other businesses, my electorate is home to QMAG, a company with a magnesite mine and a processing plant on the outskirts of Rockhampton. The management of QMAG have been very proactive in making their case to me and the government about the company’s situation and what the company needs to make the transition to operating under an emissions trading scheme. As soon as we announced the policy we would take to the 2007 election, I was invited to the plant so that I could understand the processes it uses, the products it makes and especially the nature of its emissions.
QMAG’s concern, which I shared, was that it is a comparatively small player in the resource sector and could not rely on a peak body or a team of lobbyists to guide it through this process. But, as I said, the management were very proactive and fought hard to make sure that their voice was heard. They met my colleagues when they were shadow ministers, and that process of engagement has continued since the election and throughout the development of the emissions trading scheme. QMAG has been recognised as having emissions-intensive trade-exposed status and consequently is expected to be eligible for free permits for over 90 per cent of its emissions once the CPRS commences.
The initial activity definition for those parts of QMAG’s operations that will be covered by the free permits was not satisfactory to QMAG’s management, so once again I worked with them to make sure that they were fully engaged with the consultation process. They have succeeded in achieving a wider activity definition that more accurately reflects their operation. There is still an issue outstanding with the activity definition that QMAG intend to pursue through the independent panel headed by Dick Warburton, and they have my support in making that case. I do not pretend to speak for QMAG and I have no doubt that there remain aspects of the CPRS that they would prefer to live without, but, from my experience of helping the company through the policy process, at no stage were they fobbed off with rhetoric or unyielding ideologically based spin. Instead, there has been a genuine attempt to understand the business and to work out the best possible fit between the government’s objectives and the interest of QMAG. They have had access to the Minister for Climate Change and Water and the parliamentary secretary as well as advisers and departmental staff to listen to their concerns and to work through QMAG’s suggestions for change.
This process has been repeated for other businesses and industries in my electorate, and it has been my top priority throughout this process to keep meeting with affected industries and to advocate their position and their concerns to ministers and to the Prime Minister. Of course, there are still matters to be resolved, so I am still all over Parliament House making the case, and I can tell the House that doors are open, meetings are happening and issues are being worked through. Chief among these are those affecting the coal industry. It goes without saying that the government recognises the vital importance of the coal industry as our biggest exporter, a major employer and a driver of economic growth. We give real and meaningful support to the coal industry through the investments we are making in clean coal technology, including $100 million to accelerate the deployment of carbon capture and storage projects globally through the Australian led Global Carbon Capture and Storage Institute and, most recently, the announcement of $2.4 billion to get commercial scale carbon capture and storage projects operating in Australia. On that front, it is important to acknowledge the efforts that the industry itself initiated through COAL21 to raise substantial funds to invest in the technology that will secure the future for the industry.
In addition to those programs there is also assistance to the industry under the CPRS—three-quarters of a billion dollars in transitional assistance. The immediate challenge is for the government and the industry to allocate that money to the mines with the highest fugitive emissions and therefore the highest carbon permit liabilities. The complexities of this process are well known due to the discrepancy in emissions intensity from mine to mine. For example, in its announcement in May of the proposed project at Alpha in Central Queensland, a coalmine worth $7.5 billion that will generate 6,000 jobs, the President of Waratah Coal said, ‘I don’t think that the CPRS is going to have enough of an impact to present insurmountable problems.’
For his part, the National President of the CFMEU, Tony Maher, has said the industry’s own figures show that the Queensland mining industry will grow 120 per cent between now and 2030. On behalf of his members employed in the industry he has called for the scare campaign to stop and the work on compensating gassy mines to start. I want the compensation targeted to those mines with the highest methane emissions. The parliamentary secretary Greg Combet had the chance just a few weeks ago when he was in Rockhampton to speak directly to the operators of coalmines in Central Queensland, so he understands exactly how important it is to get this right.
I will close my remarks there, because in some senses the public posturing on these issues is not getting the job done. It is time to get down to the serious business of working through, mine by mine, what is needed and what allocation should be made to compensate them for the costs of the CPRS. The delayed start to the scheme is recognition that all industries are suffering from the global economic downturn, and it will give mining companies in particular time to regain their profitability as demand and coal prices recover. In the meantime, the uncertainty surrounding the fate of this legislation is not helping any business to make the decisions it needs to make or to attract the investment it needs to attract. Further delay and confusion on the part of the opposition serves no-one. They should join the government in passing this legislation and turn our national focus to securing an effective international agreement.
As I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills, I do so wondering whether the debate is being driven by alarmists or scientists. Are we debating this subject from a scientific standpoint or are we being caught up in the emotion of the times? We do live in an uncertain world and it is understandable why it can be easier to accept statements at face value rather than questioning what we are being told. I have been reading Professor Ian Plimer’s book on his response to the global warming debate. It makes for very interesting and illuminating reading, and I would recommend it to any member entering the debate on global warming.
When the matter of carbon trading came up last year, I took the opportunity to have the matter debated publicly in Nowra. We held an open forum in Nowra. I approached the University of Wollongong to suggest someone eminently qualified to act as an independent moderator. They suggested Professor Sharon Beder, who is a visiting professor in the School of Social Sciences, Media and Communication at the University of Wollongong. Professor Beder knows her subject and expressed serious doubts about the government’s carbon reduction policy, even then. Professor Plimer is of the same view. According to Professor Plimer, the Intergovernmental Panel on Climate Change’s view, upon which much of this debate relies, was based on a single study which has since been discredited. It is a paper from which an alarmist climate warming movement has grown and whose central theme is the global warming doomsday message.
Amongst its notable adherents is former US Vice President Al Gore. Al Gore relied on it and, in conjunction with many others in show business, promoted the fallacies it contained. It seems numerous climate warming proponents relied on the IPCC work without due and diligent scientific rigour to question its now discredited assertions. That the IPCC process is related to environmental activism, politics and opportunism is something I will not disagree with. I do agree, however, that it is unrelated to science. But the damage has been done and now we have been placed in the invidious position of perpetuating those fallacies by being forced to accept some very dubious scientific assumptions on which this legislation is based.
This bill is not about debating the issues of global warming and the impact of carbon dioxide on the environment but how much we are prepared to mis-spend on a questionable outcome. However, I do concede, as does my electorate, that there is much to gain in reducing man-made pollution, but this bill is not about that. Mr Rudd promised before the election to introduce an emissions trading scheme which would produce deep cuts in carbon dioxide emissions but would not disadvantage Australia’s export and import competing industries. So, what proposal do we have before us now? We have a proposal that has negligible impact on CO2 emissions in Australia in the overall scheme of things, a proposal that imposes yet another cost to employers and, ultimately, a threat to jobs. The immensely complex white paper, already based on some suspect research, offers no practical answers, yet this government has jumped on the bandwagon, ostensibly to please the world audience in Copenhagen later this year. It seems to be developing into an exercise in tokenism. This government wants to take another $13 billion off the bottom line so that companies can buy permits to pollute. Are we again being set up for long-term pain for short-term expediency?
On 9 May this year, the Australian said:
The Rudd Government’s emissions trading scheme will cost 23,510 mining jobs over the next decade—almost half of them in Queensland—according to new modelling released as parliament prepares to decide the fate of the controversial climate change legislation.
The mining industry has a huge presence in the Illawarra. It creates and feeds many jobs and is vital to the national economy. It is vital to the New South Wales economy and it is certainly vital to the economy of the Illawarra, as the member for Throsby stated tonight. So I hope that it was discussed at Mr Rudd’s jobs forum that he recently held in the Illawarra to which we in Gilmore, part of the Illawarra, were not invited. Is the Prime Minister going to say in Copenhagen: ‘I’m so serious about this that I am prepared to sacrifice the jobs of thousands of Australian miners’? If this government is prepared to sacrifice jobs for minimal return, then what is the real agenda? There is a sweet irony in this. Multinationals have always been the target of the union movement, and their very own party, the supposed party of workers, is going to cut them adrift. We on this side of the House are not prepared to cop this and we will fight for workers, not just pay lip-service.
We believe the government is going about this the wrong way. The problem is global; therefore the solution must be global. And, even then, an emissions trading scheme is only a small part of the extensive and diverse approach necessary to tackle the problem if we are genuine about this. But this is not the approach being taken; the approach being taken is flawed and bungled in the rush to be at the table in Copenhagen. No-one outside the government supports this scheme. Industry opposes it. The Greens oppose it. Even within the Labor Party, many of its acolytes murmur discontent. Even the Prime Minister has started to make compromises. The ABC reported last month: ‘Prime Minister Kevin Rudd says the government’s emissions trading scheme is being delayed until 2011. He has also cut the price of carbon from $40 to $10 a tonne for the first year of the scheme.’ The Minerals Council of Australia has apparently described the changes as ‘tinkering at the margins’, according to the same report. Even the author of the Garnaut report said on Four Corners last month he was ‘disappointed in the scheme’. Professor Sharon Beder, whom I mentioned earlier, commented in an online article on the Green Left website. Her opening statements were:
Why do we put so much faith in the market to solve environmental problems?
Why do we assume that increasing the cost of fossil fuel emissions will reduce their use rather than just increase everyone’s cost of living?
This legislation is nothing more than appeasement for the benefit of the Prime Minister on the world stage with an eye to his future career prospects.
It was reported in the Australian on 23 April this year that Australian industry expressed their discomfort with the approach to a Senate inquiry. Let me quote from the article:
BlueScope chief executive Paul O’Malley and his OneSteel counterpart Geoff Plummer yesterday made a joint appearance at a Senate select committee on climate policy in Melbourne.
… … …
Both Mr Plummer and Mr O’Malley said there was a clear danger the emissions trading scheme would fail to meet the government’s environmental and economic objectives. Their arguments centred on the danger of driving Australian manufacturing overseas and the potential cuts to profits.
Rupert Murdoch suggested that Australia’s emphasis should be on practical solutions. He said:
The ultimate solution is not to punish the Australian economy by imposing standards that the rest of the world will never meet. It’s to take the lead in developing real alternatives to solve the problem by offering clean, cheap energy to meet the growing demand.
Let me reiterate that we are not opposed to an emissions reduction scheme per se. It is just that we are opposed to this one because, contrary to what the minister might say, this bill is economically irresponsible, it is reckless and it is largely pointless.
The Prime Minister says the delay in the scheme, originally slated for introduction in July 2010, is to help Australian companies manage the impacts of the global recession. I suspect the real reason for the delay is to push this contentious issue into the background until well after the next election—perhaps a double dissolution election. We need to wait and see what the rest of the world is going to do. Copenhagen will do that, and that is just six months away. In addition, the acute downturn in the global economy will contribute considerably to a reduction in the output of CO2. Some commentators have suggested that we will gain a few years towards this target in actual output reduction as a result. So it begs the question: why the rush?
I do not support this legislation, because it is flawed. I do support the need for another approach to tackle polluting emissions. Climate change is best tackled from a position of economic strength. To effectively meet the huge cost of tackling greenhouse gas abatement requires people in jobs, business performing strongly and a cashed-up economy. As a country producing only 1.4 per cent of the world’s CO2 emissions, there is no Australian solution to climate change. There is only a global solution. Everyone agrees that only coordinated global action to put a price on emitting or storing CO2 will have any impact on reducing the concentration of CO2 in the atmosphere. As such, the design of any Australian emissions trading scheme must be responsive to the existence, or the absence, of a global agreement.
There are stark differences emerging between the Rudd government legislation and the legislation endorsed by US President Obama. What is more, the Obama draft bill now says that a reduction in protection of US export and import competing industries will only occur after 2025 when more than 70 per cent of global output for that sector is produced or manufactured in countries that have a scheme equivalent to that operating in the United States. This is a wake-up call of monumental proportions for Mr Rudd and Senator Wong. If an emissions trading scheme does not take account of what is happening, or not happening, in other countries then the design of the scheme is deeply flawed. Such a flawed design will seriously damage the competitive position of many of our industries and see Australian jobs, investment and CO2 emissions being exported to countries where no price is being imposed on carbon. The government’s emissions trading legislation is deeply flawed in this way. Our economy will be badly affected, and a badly designed scheme is worse than no scheme at all.
The coalition will offer bipartisan support to the government for the carbon abatement targets Australia takes to the Copenhagen conference in December. The coalition will therefore move in the parliament to defer a final vote on the government’s proposed ETS until after the Copenhagen meeting. In order to enable immediate action on climate change, the coalition proposes the establishment of a government authorised voluntary carbon market from 1 January 2010 based on the Chicago Climate Exchange. This will enable the immediate involvement of individuals and communities, agriculture and biosequestration, the commercial building sector, energy efficiencies by businesses and other complementary measures in creating bankable offsets. This will allow the Productivity Commission to assess the efficacy of its proposed scheme and its impact on jobs, regions and agriculture if competing economies adopted comparable measures many years later than expected. The coalition will augment its support for emission reduction targets with a significant renewable energy support package in the near future. In closing, in a telling retort to the government’s line, I understand Professor Plimer has written another book, titled Emissions Trading—Why Bother, and I cannot wait to read that one.
I rise tonight to speak on the Carbon Pollution Reduction Scheme Bill 2009 and its associated bills. It is impossible to cover all of this important legislation in 10 minutes, but in the time allowed I want to make some important points relevant to the legislation and to the electorate of Flynn. My government, the Rudd Labor government, has strengthened the Carbon Pollution Reduction Scheme because we believe that it is the responsible thing to do. On this side of the House we believe that it is in the national interest to pass this legislation this year. On this side of the House we believe that we have a responsibility to the Australian people and to our future generations to act now on climate change. And on this side of the House we believe that the business community, environment groups and the Australian people expect that the parliament will do the right thing and pass the CPRS this year.
A range of major industries and businesses in Flynn are calling for certainty on the CPRS so that they can plan investments. As I have said—and I will repeat it—major industries in my electorate of Flynn want certainty. I have met with many of them, often many times. They are all responsible corporate citizens. I have listened to their concerns and I have argued their case for them. It was and is right to preserve and protect jobs now and in the future while striking a balance with the need to protect our children and grandchildren, including their jobs in the future.
I believe that despite the CPRS future investment will continue to flow into industry in Flynn, including into the coal industry. For example, recently in May just gone we heard an announcement from Waratah Coal that a proposed coalmine in Alpha, in my electorate of Flynn, will generate 6,000 jobs and is worth an estimated $7.5 billion of investment. When asked about the effect of the CPRS on this project, the President of Waratah Coal, Peter Lynch, said, ‘I don’t think the CPRS is going to have enough of an impact to present insurmountable problems.’ So there you have it: another new 6,000 jobs and another $7.5 billion investment in the coal industry in Flynn.
I congratulate Minister Penny Wong and Parliamentary Secretary Greg Combet. Both of them have been to the electorate of Flynn, both of them have listened to my electorate’s concerns. Minister Wong has visited both Gladstone and Biloela; Mr Combet, Gladstone. I thank them both.
There are some other important points that I wish to make tonight about this legislation. The Rudd Labor government’s commitment is to use every cent it receives from the sale of pollution permits to help Australian households and businesses adjust to this scheme and invest in clean energy options. Passage of the legislative package is sought this year to provide business and investment certainty and to aid in the development of an international agreement to tackle climate change in Copenhagen later this year. There will be assistance to ensure households continue to receive the support they need. Households will be protected from higher fuel costs through a mechanism to provide cent-for-cent reductions in fuel tax for the first three years of the scheme’s operation. In addition, the government has introduced measures to ensure that households will receive support to take practical action to reduce energy use and save on energy bills.
As you know, Flynn is a large rural and regional seat. Climate change may affect life in regional Australia more than in our cities. Many rural and regional Australians depend on the land and are more likely to feel the impacts of drought, flood and extreme weather. Regional Australians in low- or middle-income households will be eligible for higher payments and lower taxes to help them adjust to the Carbon Pollution Reduction Scheme. Agriculture will take a measured transition into the scheme following extensive consultation with industry. Agriculture will enter the scheme no earlier than 2015, with a decision on coverage to be made in 2013. Agricultural and fisheries industries will also benefit from the new CPRS fuel credit payment for the first three years of the scheme. The amount of the fuel credit payment will be equal to fuel tax reductions provided to motorists. Heavy vehicle transport will also receive assistance through the new CPRS fuel credit scheme, which will offset carbon costs for the first year of the scheme’s operation. This will benefit rural and regional communities, who rely significantly on road transport industries. In addition, coverage of landfill emissions is focused on major facilities, and policy changes since the white paper will reduce coverage of small rural facilities.
The government’s commitments on targets are: (1) an unconditional commitment to reduce carbon pollution by five per cent by 2020; (2) a commitment to reduce carbon pollution by 15 per cent by 2020 if there is an agreement where major developing economies commit to substantially restrain emissions and advanced economies take on commitments equivalent to Australia’s; and (3) a new, ambitious ‘25 per cent by 2020’ target if the world agrees to an ambitious global deal to stabilise levels of CO2 equivalent at 450 parts per million or lower. The introduction of mandatory obligations under the CPRS will commence on 1 July 2011 to allow the economy more time to recover from the impacts of the global financial crisis. Assistance in the form of administrative allocation of permits will be provided to new and existing firms engaged in emissions-intensive trade-exposed activities, and assistance will be targeted to the most emissions-intensive trade-exposed activities. There will be free permits worth around $3.9 billion over five years for the most emission-intensive coal-fired power generators. The government will separately establish the Australian Carbon Trust to help all Australians do their bit to reduce carbon pollution and to drive energy efficiency in commercial buildings and businesses. The Climate Change Action Fund will provide $2.75 billion to help businesses, community sector workers, regions and communities transition to a low carbon future. The scheme is a cap-and-trade scheme and to create an incentive for reforestation free Australian emissions units will be issued for net greenhouse gas removals that occur after 1 July 2010.
In summary, the Rudd Labor government is taking strong action to tackle climate change. The CPRS will ensure Australia invests in industries of the future like renewable energy—solar energy wind farms and in jobs using new technologies like clean coal and geothermal technology and energy—creating thousands of new, low-pollution jobs. Everyone, each of us, needs to do our bit, and Australians understand that. We the Rudd Labor government are making sure that the targets we put in place are appropriate and responsible, given the need to protect our economy and jobs during this global recession.
It should be noted that schemes are already operating in 27 European countries, and 28 states and provinces in the USA and Canada are introducing emission trading to reduce carbon pollution, as is New Zealand. US President Obama has committed to establishing a cap-and-trade system with the target of reducing carbon emissions to 1990 levels by 2020 and to 80 per cent of 1990 levels by 2050. The Carbon Pollution Reduction Scheme will help us to tackle climate change to ensure our kids and future generations are not left to clean up the mess. If we do not act, Australia’s economy will be left behind, meaning we will not create the low-pollution jobs of the future. Treasury modelling released in October 2008 demonstrates that economies that defer action face long-term costs that are around 15 per cent higher than those that take action now.
Malcolm Turnbull has walked out of the room. The Liberal Party are divided and still debating whether climate change even exists. The National Party are opposed to climate change policy and are climate change deniers. The Rudd Labor government is committed to sound policy to deal with climate change, and I commend the bills to the House.
I have not been able to listen to the eloquent speeches that have been delivered in this House apart from the last one. I was very interested to listen to the member for Flynn and note his failure to mention the jobs that are going to be lost in his electorate and his lack of understanding of the effect of the CPRS on the power stations in his electorate, but I assume at some stage it will be pointed out to him. I missed the speech by the member for Charlton, although I have seen plenty of press reports about how he deals with the coal industry if they do not keep quiet—and I have obviously missed the speeches of the member for Throsby and the member for Capricornia and no doubt the member for Dawson and other members who represent coalminers in their electorates.
I should have also been here, I guess, to listen to the member for Solomon, who has an LNG plant in his electorate, but I was actually up there campaigning against him today in Darwin, speaking to people who want to make investments in that electorate, people who are part of the multibillion-dollar LNG industry in Australia and want to build another LNG plant in Darwin but of course are now wondering if that investment should not be placed somewhere else in the world due to this incredibly stupid scheme that is being introduced through the Carbon Pollution Reduction Scheme Bill 2009 and related bills before the House tonight.
I have been all over Australia in the last few weeks and I have not been anywhere where industry and power stations, gas producers and coalminers or aluminium smelters and manufacturing industries have not expressed concern about what this emissions trading scheme is going to do to them, to their jobs and to their future—and not only their future but the future of their children. This is a rushed and reckless scheme, and anyone who listened to some of the transcripts coming out of the APIA conference in Darwin would know that, as would anyone who has travelled through the Hunter. I am sure the member for Charlton has, but it was interesting that, when the minister for finance was up there, not once in a 14-minute interview with the ABC did he mention the emissions trading scheme. Is he that ashamed of it that in the home of the coal industry in Australia he does not dare speak its name? If you travel through the Hunter and you talk to the coalminers about their concerns about the costs of emissions trading to their business then you would know this scheme is going to do so much damage to Australia’s economy that we may never recover from it.
This is madness. This scheme will have grave consequences for industry, confidence, investment and jobs. If we spend less time in the rarefied air of Canberra and more time away travelling around Australia, we see that there are ample examples of that—examples, I am sure, that those who sit on this side of the House, such as the member for Gilmore, whose speech I caught the end of, and our leader and the shadow minister for emissions trading, will have highlighted during their addresses to this House.
There is a need for an emissions trading scheme. Few of us doubt that. I am certain of it, and I have been certain of it longer than the member for Flynn. I remember quite vividly John Howard ringing me and saying, ‘I think we’re going to have to have an emissions trading scheme.’ In 2007 I had already realised that. We worked to introduce an emissions trading scheme and in fact took an emissions trading scheme to the last election. The stark difference between that scheme and this flawed and reckless Carbon Pollution Reduction Scheme is that our scheme would have protected trade-exposed industry, the exporters and the importers who make the jobs in this country, from unfair competition from countries that do not have an emissions trading scheme.
I assure those who sit opposite that, when they go back to their electorates, they will need to look the coalminers in their electorates in the eye when they ask, ‘Why is Kevin Rudd going to cost Australia jobs when President Obama is rushing to save jobs in America?’ The Obama scheme will protect jobs. This scheme will cost us jobs. This scheme will strip away the natural advantage that Australian industries have in our competitiveness and our creativity, and this flawed plan will wreak havoc on our economy. It seems to me that there is no regard paid by those who sit opposite to the absolute trashing that this is going to cause to jobs and to the economic growth of this nation.
Report after report has highlighted the tens of thousands of jobs that will be lost in the resources industry alone as a result of this scheme. In the industry area, how is a car industry in Australia, already battling to survive, going to use Australian made steel with a carbon price and compete against American cars made with steel protected from a carbon price? How is that going to happen, when the parents of those companies will be wanting to export cars to Australia, as they do already? How is industry in Australia going to compete with other nations that are taking sure but careful steps towards an emissions trading scheme but at the same time ensuring they do not expose their workers and their economies to the devastation that we will see from this ridiculous scheme?
In the resources industry alone we have seen figures from the Minerals Council of Australia of 23,500 jobs being lost. That is on top of the 12,000 jobs that have already been lost in that sector as a result of the downturn in the resources industry. We have already seen 16 coalmines identified—one I know is in the electorate of Flynn. How is the member for Flynn going to face those workers in three, four or five year’s time when they lose their jobs? The export coal industry may survive but the domestic coal industry, because of its association with the power industry, is going to find it very difficult. I would suggest that, if the member for Flynn was in Darwin today, he would have seen the gas industry rubbing their hands together with anticipation and glee as they foresaw the demise of coal-fired electricity in Australia as a result of this scheme, and the opening up of whole new opportunities for domestic gas—at the cost of workers in his electorate.
We need to be realistic about this. We need to make sure that whatever we do on the environment has an effect, that whatever the cost to our economy, whatever the personal cost to households in Australia, whatever the cost to this nation’s future, it actually brings a result. If we emit 1.4 per cent of the world’s emissions, how will cutting ours ahead of the United States, ahead of Japan, ahead of Korea—ahead of those developed nations, let alone ahead of the developing nations—make a difference? How are the thousands of people on the unemployment queues going to think that what has been done to them by the Rudd Labor government has actually made any difference? The reality is that the coal that is not mined in the electorate of Flynn will be mined in Indonesia, it will be mined in India or it will be mined in China—and it will still be burnt.
The other industry that can actually reduce the amount of coal that is being mined is of course the LNG industry, the liquefied natural gas industry. Yet it is being slogged by this government as well. We hear figures that through the graciousness of this government that industry will receive 66 per cent effective compensation. But can I tell the member for Charlton—I am sure he has already been told—that those industries today told me that their compensation was in many cases less than 20 per cent. So here we have an industry, involving one of the clean, transitional fuels of Australia, that will take Australia and the world to a cleaner energy future, and this government is going to tax it out of competitiveness. For every tonne of LNG that we export we save between 4½ and nine tonnes of CO2. That is a fact: for every tonne of CO2 we produce here with that LNG, we save 4½ to nine tonnes. Yet they are going to tax them. It is a tax; it is nothing else. These companies are using the best technology in the world. They cannot be more efficient producing LNG. They cannot be better to the environment producing LNG. They have not alternative but to pay this tax, a tax that will simply see that LNG produced somewhere else or more coal burnt in the world.
It makes absolutely no sense to anyone with a practical bone in their body to make a decision about the future of Australia’s emissions trading scheme before we see what our major competitors and trading partners are going to do. We do not know what is going to come out of America. We already have a fairly good idea, but it has to go through the congress, it has to go through the Senate and it obviously has to have the President’s support. It just makes simple, logical sense to make sure that our scheme fits in with their scheme, fits in with the European scheme, fits in with the Japanese scheme, fits in with the Korean scheme and perhaps in time even fits in with the Indian and Chinese schemes, if we do get them to that point. It makes no sense to rush this debate, but we are. We are being told that we have to finish it tonight. This is the biggest single economic change we will see in this nation in our lifetimes and this House is being restricted to a little over a day’s debate on it.
In conclusion, there are many ways to reduce CO2 emissions. The Howard government allocated $3 billion to that challenge. That is never acknowledged by those who sit opposite, never greeted with the same nod that I greeted the money that was put into the zero emission coal-fired electricity industry by this government—one of the few good things in that budget. But that $2 billion is small beer compared to what will have to be spent for the technology to be produced that will actually make a difference to the emissions that we make without costing Australians jobs. No-one is more concerned about this issue than we are. We started this. We were the ones who first highlighted the need to spend money on reducing carbon with new technology. The facts are there to show it. What we never did, and what this government is determined to do, was cost Australians jobs.
I rise today to speak on the Carbon Pollution Reduction Scheme Bill 2009 and associated bills. I am pleased to be able to contribute to this debate. It is important for Australia, it is important in an international sense and it is also very important to my own electorate of Corangamite. This debate includes a range of bills, focusing around the Carbon Pollution Reduction Scheme Bill 2009, which contains the detailed provisions of the emissions trading scheme.
As we all know, this bill is about tackling climate change. It is about how we turn around the terrible legacy of unfettered carbon emissions that now threatens to engulf whole island nations through sea level rises, a legacy that threatens to decimate biodiversity and that is leading to creating firestorms and flooding events of an unprecedented level and scale.
The point of this legislation is to finally put in place some real social and environmental rationality and values into our society’s future development. We are putting a price on carbon and creating a market that will hopefully lead to the development of new industries that are much less polluting or to substantial modifications to existing high-carbon-pollution industries.
This bill is the start of a great industrial transition here in Australia. This bill has clear aims and targets. The government’s commitments on targets are an unconditional commitment to reduce carbon pollution by five per cent by 2020. We are making a commitment to reduce carbon pollution by 15 per cent by 2020 if there is an agreement where other major developing economies commit to substantial restrained emissions and advanced economies take commitments comparable to that of Australia. And there is a clear target of reducing carbon pollution by 25 per cent by 2020 if the world agrees to a global deal to stabilise levels of CO2 equivalent at 450 parts per million or lower.
I want to say something about Australia’s role in the world generally on this question and talk about the consequences in my electorate. First, I want to say how good it is to see an Australian government that is leading on this question. We are now, thankfully, a world away from the previous government, which was stuck in official denial and did not care. That was their policy. The signing of the Kyoto treaty was a great thing and that signified a great change in Australia. I do believe that Australia has an overwhelming moral obligation to lead on this issue. I am also pleased to be a part of a government that is now leading the world on this matter.
Australia is one of the most developed countries in the world with one of the highest carbon pollution footprints on this planet per person. Victorian MPs, particularly, have a moral obligation on this matter. Per head Victorians are the world’s worst polluters because of our dependency on coal power. Australians and of course Victorians achieved our highly developed status at the cost of being one of the biggest contributors per head to changing the world’s weather patterns. So we absolutely do have an obligation.
But the whole world must contribute now. There is no escape for anyone on this question. It is up to all of us. I can understand less developed countries pointing the finger at countries like Australia. I can understand them saying, ‘We are not going to be stuck as poor undeveloped countries, because you have done nothing.’ But the fact is that unless the whole world acts the whole world will be poorer for it. Millions of people will be starving and dislocated because of climate change unless we act as an international community. Much of the beauty and the richness of our planet will be lost. I congratulate the Rudd government on the way that it is conducting negotiations to try to develop a new international agreement on this question.
I think the bill is a good mixture of leading and of providing business certainty and a clear transition that takes account of Australian jobs. The legislation goes all of this way whilst offering incentives for higher-level cuts to emissions across the world.
Before I go more to the detail of this bill let us look for a moment at what climate change will do in my own electorate of Corangamite. The impacts on Corangamite will be severe. One of the engine rooms of my local economy is of course the tourism industry and this industry could be devastated. With sea level rises the Great Ocean Road will be breached, possibly in place after place. Whole chunks of my electorate, particularly along the Bellarine Peninsula and the Surf Coast, will be inundated. The important sections of the Queenscliff Peninsula and areas from Breamlea to Barwon Heads will be severed from the mainland and become isolated islands. More important pieces of public recreational infrastructure will also be inundated. Hundreds of private homes will be inundated. Public land will be lost. The Great Ocean Road surrounds the foreshore environment of the Otways and that is of course now highly vulnerable to firestorm events. Many local farmers are already struggling with climate change. The cost of mitigation will be hundreds of millions of dollars and livelihoods and lives may all be lost. Major industries such as Shell, the Port of Geelong and Alcoa are threatened. Nobody on this planet is unaffected by climate change. We have to act.
I appeal to the opposition to stop playing political games with such an important decision in the nation’s history. Businesses need certainty. Australian businesses need certainty so that they can fully participate in responding to climate change.
The less developed world quite rightly wants to see the credentials of our government and commitments from countries like ours to take full consideration of the mess that we have left the planet. It wants certainty. It does not want a message of ‘no commitments until others commit’. The less developed world quite rightly wants countries like Australia, a benchmark country in many regards, to show where they stand. The rest of the world know that Australia is culpable and they know our record. They are looking to us for commitment and—dare I say—inspiration. Australia must take a stand. We have to show the world our credentials, and that is what we are prepared to do on this question. I believe that through this well-crafted legislation we are making that commitment.
The introduction of mandatory obligations under the Carbon Pollution Reduction Scheme will commence on 1 July 2011 to allow the economy more time to recover from the impacts of the global financial crisis. Liable entities will be required to meet their emissions liabilities from 2011-12, with emissions units being surrendered for the first time in December 2012. As a transitional measure, in 2011-12 an unlimited number of permits will be available at a fixed price of $10 per tonne. These permits will not be able to be banked or used in future years. Full trading will commence in 2012-13.
I would like to finish my contribution with a couple of simple but fundamental questions for the opposition. With Australians being some of the highest polluters per head in the world, don’t you believe we have a moral obligation to lead on this question? And if you all wait and see now how do we go forward? Finally, when you are finished up with this place and you are older, what will you say to your children about how you dealt with your responsibility to respond to climate change? What are the opposition’s answers to these fundamental questions?
This legislation is critical for establishing business confidence and of course for reducing carbon dioxide emissions. I commend this legislation to the House.
Debate (on motion by Mr Albanese) adjourned.