Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Defence Personnel, Materiel and Science and Minister Assisting the Minister for Climate Change. How is the government providing certainty to business so they can commit the investment needed to transform the economy to a low-carbon future under the Carbon Pollution Reduction Scheme?

Greg Combet (Charlton, Australian Labor Party, Minister Assisting the Minister for Climate Change) Share this | Link to this | Hansard source

I thank the member for Brisbane for the question. Providing certainty for business investment is a critical element of the government’s response to climate change. In the Business Review Weekly just a week or so ago, on 6 August, the Chairman of Shell Australia, Mr Russell Caplan, said delays in putting in place the Carbon Pollution Reduction Scheme would ‘create a climate of continuing uncertainty for industry and potentially delay the massive investments that are required’. The point there is that a delay in the implementation of the Carbon Pollution Reduction Scheme will create uncertainty for business.

The CPRS, as the House is aware, will be voted upon in the Senate tomorrow, and that is an opportunity for the opposition to take responsibility and support this important reform. Instead, as I think is evidenced by some of the questions in question time today, the opposition is still holding onto the report released earlier this week by Frontier Economics to justify further delay in its opposition to the Carbon Pollution Reduction Scheme. As we know, that report is not even coalition policy and it is flawed. I would like to draw the attention of the House to one particular example contained in the report, and that is its treatment of coal fugitive emissions. The member for Goldstein has been reported as saying that Frontier’s scheme would give 100 per cent protection to coal for their emissions. We can only interpret that comment as implying that all emissions would receive 100 per cent free permits. But when one looks at the Frontier Economics report, it says that the 100 per cent protection is at a best-practice benchmark, and that is that all mines get the same rate of assistance at the best-practice benchmark—somewhat inconsistent with what the shadow minister has remarked.

I think it is a safe assumption that best practice means the lowest level of methane emissions in a coalmine, but the report is unclear on this question. If best practice is the least gassy mine, that would represent a carbon liability of just 2c per tonne of saleable coal. The fact of the matter is that some mines have over $20 per tonne of saleable coal in their carbon liability. The question therefore posited is: is it being proposed by the opposition that a gassy mine facing a cost of over $20 per tonne of saleable coal would simply get the baseline 2c assistance? Of course, that would leave many coalmines with a substantial carbon liability. The alternative, if a higher benchmark were set, would be that there would be windfall gains for the least gassy mines.

The fact of the matter is that the Frontier report is not transparent on these questions, costs are not provided and it will create more uncertainty. The government’s position in relation to this issue delivers certainty for the coal industry. In these circumstances, it is little wonder that the Business Council of Australia is quoted in the Australian today as saying that the scheme proposed by Frontier Economics would ‘bring with it a substantial cost that will impact on business operations and particularly government revenues’. Other businesspeople have been in the media today critical of the Frontier report for this reason—it generates further uncertainty in the investment environment.

On the verge of the vote in the Senate, I urge the coalition once again to support the government’s legislation to tackle climate change and to contribute to the generation of certainty for the business community in the investment environment by doing so.