Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Wentworth has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the related bills before the House. I support this bill, having followed the member for Canning in his contribution to this debate. It was interesting listening to the member for Canning’s contribution because it was a reflection of where the opposition is in relation to climate change. He started by questioning the timing and so forth and then he made the incredible leap that what was required was a global solution. I am not quite sure how that is inconsistent with the legislation before the House at the moment, but he concluded that we need a global solution. After reaching that conclusion, he said, ‘We don’t need to do anything else until there is a global solution that we can join.’ That was the logic that the member for Canning brought to this debate.

But it got worse. He then went on to say that ratifying the Kyoto protocol was a mistake—it was wrong. One has to ask: how, when you are arguing for a global solution, you can on the one hand say, ‘That’s what we require and we won’t do anything until that happens,’ and on the other hand say that, where there is an international treaty opportunity, namely Kyoto, it is a mistake to ratify it? It clearly shows the schizophrenic nature of the opposition. The member for Canning was able to illuminate us in terms of all those multiple personalities in one speech, which is quite an achievement.

The time for action is now. It is not a time to put up another excuse as to why we cannot act against climate change. It is not a time to say that things are too difficult; we need to move ahead and make sure that Australia plays a role in dealing with climate change. We need to do it for future generations, we need to do it for our children, we need to do it for our communities. I have only just come from the Main Committee, where I was speaking on the very timely bipartisan report of the Standing Committee on Climate Change, Water, Environment and the Arts entitled Managing our coastal zone in a changing climate. When one reads the recommendations of the report, one asks where the opposition’s commitment to tackling climate change has gone. One of the key recommendations, recommendation 2, is:

The Committee notes the importance of mitigation measures in addressing climate change impacts and accordingly recommends that the Australian Government continue to take urgent action to ensure that Australia can best contribute to a reduction in global greenhouse gas emissions

Almost every recommendation in the report is, ‘It’s time to act now.’ The importance of the report is that it takes the debate away from the theoretical and brings into play real-life situations, like in my electorate of Dobell, where communities are actually now being threatened by climate change. This report is so important because it puts a human face on what is happening to climate change.

My electorate is subject to far more than the frequent storm surges that it has seen in the past. In fact, in June 2007 a storm surge came up the east coast, washing away lots of the sand on the beaches but also going up through The Entrance into the Tuggerah Lake system, flooding much of the residential area around the Central Coast and causing over 1,000 people to be evacuated. These are some of the practical, real situations that are happening as a result of climate change, and that is why this report is so important.

I made two submissions to this inquiry. The committee visited the Central Coast as its first port of call. It is not as if these are once-in-50-year storm surges. We had a further storm surge since that 2007 event, which is why I made a supplementary submission—in the time that this inquiry was taking place, there were two significant events, both washing away beaches and affecting the community on the Central Coast. In the most recent storm surge, we saw people’s backyards being washed out to sea. We saw people’s houses with only part of the porch left because the rest had been washed out through the storm surge. One gentleman, at North Entrance, was telling me that he estimates he lost four to five metres of his backyard through the actions of this storm surge. This is real evidence of climate change affecting communities now. This is why the Australian government is acting. This is why this parliament should act to tackle climate change—because in electorates like mine the effects are being felt now.

The Central Coast is one of the most beautiful places in Australia. I do not think that anyone here would disagree with me when I say that. But it is a fragile environment, an environment that is prone to the elements, and as climate change affects our world it affects some areas more than others. We are prone to bushfires. We are prone to floods. We are prone to beach erosion. We are also prone, surprisingly, to a lack of water. It was only two years ago that the water supply on the Central Coast reached levels of only 13 per cent. We were having to buy and pump water from the Hunter down to the Central Coast because of the low levels of rain that were falling on the Central Coast.

These are real examples of real communities that are being affected by climate change and for the opposition to say these things are too difficult, they do not exist, we need to wait, we need someone else to lead, we need to take a different tack is really to ignore the problem. It is a difficult thing to deal with the effects of climate change. It is difficult to change people’s habits and behaviour, but it has to be done. We owe it to our communities. We owe it to the world to make sure that is in fact what we do. Anyone in this debate who is trying to run some political argument should get out and read this report and look at the good work that is being done, particularly by the chair of the committee, the member for Fowler, and the deputy chair, the member for Moore, who was able to agree with the government members of this committee as to the effects of climate change and the need to act quickly after seeing the evidence.

This debate today is about taking action while we can, taking action to ensure that we live in a better world and taking action to make sure that we are able to reduce the effects of climate change on our communities. I do not want to be the member of an electorate that finds itself some way out in the Pacific Ocean, which is a real threat to my electorate. The F3 going up to the Hunter is the western border of my electorate on the mountain range, but below it are the lagoons, the lakes and then the beachfront. All of these areas are incredibly vulnerable to climate change, and if we do not act now and sea levels rise then we are in all sorts of trouble on the Central Coast. That is the picture up and down the coastline of this great country.

We are taking strong action to tackle climate change by introducing this Carbon Pollution Reduction Scheme, while also making sure the targets we put in place are appropriate and responsible given the need to support our economy and jobs during this global recession. The Carbon Pollution Reduction Scheme will ensure Australia invests in industries of the future like renewable energy—solar energy and wind farms—and in jobs using new technologies, like clean coal and geothermal energy, thereby creating thousands of new, low-pollution jobs. The Rudd government will establish the $75.8 million Australian Carbon Trust to help all Australians to do their bit to reduce Australia’s carbon pollution and to drive energy efficiency in commercial buildings and businesses. We will also take into account the contribution of individual households that purchase accredited GreenPower in setting Carbon Pollution Reduction Scheme caps.

Time has run out for those who are opposed to this scheme. There are no more excuses. Carbon pollution is causing the world’s climate to change, resulting in extreme weather, higher temperatures, more droughts and rising sea levels. I have already spoken about the effects of this in my community and in my electorate. Everyone needs to do their bit to tackle carbon pollution and by introducing the Carbon Pollution Reduction Scheme Australia will be a part of the solution, not just part of the problem. With one of the hottest and driest continents on earth, Australia’s environment and economy will be one of the hardest and fastest hit by climate change if we do not act now. Australia pollutes at high levels for a country of our size. In fact, on a per capita basis we are the sixth largest polluter in the world. We need to act in terms of climate change. That is what this bill is about and that is what we need to do. I commend the bill to the house.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the amendments to the Carbon Pollution Reduction Scheme put forward by the Leader of the Opposition. The amendments relate to concerns surrounding the timetable for a vote on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2], the effectiveness of the scheme before the House and the impact that the scheme is likely to have on Australian people and Australian businesses. The government’s CPRS plans have created significant debate not only in parliament but also in my electorate of Swan. People on both sides of the climate change debate have been contacting me by email, by phone and on my website. As a member of parliament, my job is to reflect the views of my constituents on this matter. With conflicting views, one needs to be objective when considering the problem and any potential solutions.

When addressing the issue of climate change in a 2003 submission to the Western Australian Government Greenhouse Taskforce, Mechanical Building Services Consultants said:

While the efforts so far are mostly well intentioned, from our work with the ABCB, it has become obvious that improvements in energy efficiency can only ever result in a reduction in the rate of increase and will never deliver an actual reduction in net energy consumption with resultant greenhouse gas emission reductions. The simple fact appears to be, as long as our primary energy sources are fossil fuel based, all our best efforts to reduce consumption will not deliver a net reduction in greenhouse gas emissions and will have a negative economic impact.

In order to achieve a significant reduction in greenhouse gas emissions without seriously damaging the economy and degrading our lifestyle, we must de-link energy use from greenhouse gas emissions and the only way of achieving this is to source most of our energy from renewable sources.

They go on to say:

Of all the renewable energy sources for electricity generation to emerge so far, such as solar, wind, tidal and hydro, none will ever be able to meet base load electricity demand as none are globally applicable or are capable of continuous output. Nuclear power could, but is not a serious global option as it is not renewable and is politically unpalatable.

What we need is an entirely new, unlimited, renewable, environmentally benign, sustainable energy source to meet all our electric, heating and transport energy needs, indefinitely.

… One fact with geothermal energy is indisputable: there is enough geothermal energy stored and naturally generated in the earth to meet mankind’s energy needs for all time.

These words should resonate with every member in this place.

The fact is that if we concentrated more on developing and pursuing renewable energy in this country there would be no need for us to be having this debate today about amendments and about CPRS, or ETS as some people like to refer to it as. Instead of debating the merits of a carbon tax—and it is a form of carbon tax; there is no doubt about that—we could be debating how to make Australia the hub of a future renewable energy industry. This is the approach I take to climate change and I make no apology for it. I accept the premise that climate change exists and that greenhouse gas emissions are contributing to the accelerated rate of climate change. There is evidence to support this and I lend my weight to those arguments. Climate change is something the world has had to cope with since the beginning of time. I believe the best way to tackle climate change is through the relentless pursuit of renewable energy. Australia’s future energy needs can be catered for by renewable energy. I will declare to the House that I am a shareholder in renewable technology, wave power to be exact, and I believe it has a future.

I first began taking an active interest in the WA geothermal energy industry several years ago when running my air-conditioning business. At the time, technology for air conditioners linked to geothermal energy were being discussed by the industry. My company promoted the concept and the product into Western Australia in the early 1990s. Unfortunately, at the time, the technology was not cost effective and there was little appetite for it. This situation is, however, evolving and this year UWA and Green Rock Energy announced a joint venture to tap into the geothermal potential of the Perth Basin and replace up to a third of UWA’s air conditioners with geothermal powered absorption chillers. If the project is successful the program could be expanded across the Perth metropolitan area. According to Professor Hui Tong Chua at UWA, a test drill has already dug to a depth of 200 metres near to James Oval and the eventual project will dig directly below the campus. This is just one of many exciting recent developments in Western Australia, with a partnership between the Liberal-National WA government, several local and national geothermal companies and universities such as UWA and Curtin, in my electorate, being forged.

UWA’s Western Australian Geothermal Centre of Excellence, WAGCOE, is building an international reputation in studying the potential of both hot dry rock and low-temperature hydrothermal systems. Hydrothermal technology usually involves a well being dug into permeable sediments. The UWA project is a hydrothermal project and the process is explained by an ASX announcement from Green Rock Energy on 2 July:

Green Rock Energy will drill two geothermal wells to a depth of approximately 3,000 metres to provide geothermal water 100 degrees Celsius to power a 5MW absorption chiller. One well, a production well, will be used to access and obtain the hot geothermal energy and the other, an injection well, will be used to return the cooler geothermal water following the extraction of the geothermal energy, in the form of heat, by the absorption chiller. By replacing conventional compression chiller plants that use electrical energy, large commercial buildings, including universities, hospitals, hotels, airports, data centres and shopping centres, can be air conditioned using geothermal water as the principal power source. This is particularly so in Perth, which sits on a deep sedimentary basin up to 15km deep with multiple heated aquifers.

Hydrothermal systems generally target lower temperatures which are more accessible and reduce overall costs. The WA government last year allocated 495 lots between Kalbarri and Dunsborough, which can be leased for geothermal exploration. According to Green Rock Energy, the Perth Basin is a 1,000-kilometre-long geological rift containing sediments up to 15 kilometres deep. It contains thick sequences of permeable aquifers containing hot geothermal water with sufficient temperature and water flow capacity at depths considered to be economic for electricity generation.

Along with UWA, a number of companies including West Perth based Green Rock Energy, Austral Ion, AAA Energy, Granite Power, New World Energy Solutions, Geothermal Power, Torrens Energy and Thermal Resources were also granted exploration permits, so the future of geothermal technology in Perth looks good. Energy Minister Norman Moore said at the time that the expected expenditure for geothermal exploration for the 36 permits in the Perth Basin is more than $560 million in the next six years.

A second technique with some potential is hot-fractured-rock technology, which is the only known source of renewable energy with the capacity to carry large base loads. Hot rock energy involves tapping into a high-heat-producing granite via a heat extraction system. The Australian Geothermal Energy Association, which is representative of major geothermal explorers, developers and service providers to government and other stakeholders classifies Australia as the ‘leading pioneer’ in enhanced geothermal systems. However the process of harnessing energy from hot rock is highly challenging. The key impediment to further growth in this field is the start-up costs. AGEA estimates that on average $30 million is required for a proof of concept, whilst the total support available from the federal government is much less. Statistics provided by AGEA show that 48 companies have geothermal exploration licenses, 10 hot-rock companies have ASX listings, and there are 363 licenses on a variety of plays. AGEA have also estimated that current work programs from 2002-13 nationally are worth more than $1.5 billion. The good news is that Western Australia has some significant hot-rock potential also.

So, when I am considering the CPRS, which is before the House today, I ask the question: how will this help the transition to a renewable economy in Australia? The renewable energy component of the legislation has been decoupled and passed the House. Will the rest of the bill really help support a future geothermal Perth? Many on this side have raised the issue of household and domestic costs rising under an ETS. We have heard from Ian MacFarlane that the CPRS legislation will have widespread and substantial impacts on the Australian economy, on business, on consumers and on jobs. He has told us that electricity prices will rise by close to 20 per cent in the first two years of the scheme. If this transpires our small businesses will pay a heavy price. Is it all worth it for a scheme that will cut emissions by only 5 per cent? These amendments acknowledge the problems with the current scheme, they acknowledge the concerns about trade exposed industries, they acknowledge concerns about Australian farmers and they acknowledge concerns about high electricity prices.

Much has been made, over the last two years, of the timing of the scheme and I accept we have spent two years debating this. If we spent all this time and effort on turning Australia into the renewable hub of the world our emissions would surely fall by a much more significant amount over the coming years. At the moment negotiations are taking place between the government and the opposition over a number of amendments to this legislation and it is rather unusual that we should be debating such a matter before we know the outcome of these negotiations. However, I would urge my colleagues and the members of the government benches to consider the points which I have raised today about geothermal energy. Let’s focus on the positives, not on the negatives. Let’s give all Australians what they want, which is a real solution to climate change and not just a carbon tax which will do nothing but drive business offshore and cost Australia jobs.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

It is great to be back here going in to bat, for the second time around, on this legislation. It is critical that we now enter the endgame for this legislation. The circumstances have changed since the last time I spoke, in that we are now, thankfully, engaged in true negotiation with the coalition, and I certainly welcome that. It is great to finally have the flywheel engaged. It has been two years spinning on an axis and it is great to get down to business.

I am deeply disturbed by the comments we have heard, to great note, in the media and around the country from many of the members of the Nationals. This is deeply concerning when we consider that these people are supposed to represent the interests of farmers and our people in the regions and in rural Australia. What a disservice they do to them through their opposition!

I will come back to that, but firstly I would like to say that my region, Eden-Monaro, continues to embrace the science and to do something about this issue at a local level. Just recently it was a great pleasure for me to be at a fundraiser for a film which will be shown at the Copenhagen conference by a group of filmmakers from the Merimbula area in my region—in particular, Toni Houston and Bettina Richter, who have worked together with natural history filmmaker Tina Dalton and the Emmy award-winning cinematographer David Hannan on the Great Barrier Reef. They have also had the assistance of Professor Ove Hoegh-Guldberg from the University of Queensland. This is a magnificent documentary of 75 minutes—and piece of art in addition to that—which traces, explains and illustrates beautifully the impact of climate change on the Great Barrier Reef and reef systems worldwide and the risks we run through not dealing with this issue and meeting this challenge.

In particular, at the heart of this is the issue that, at the current rate of climate change, reefs worldwide may be dead as soon as 2050. This would be a great tragedy. Their work has been acknowledged by the Danish government and their film, Aqua, will be the only Australian event to be included in the official cultural program of the Copenhagen conference, known as COP15. It will be shown in Copenhagen on 16 December. A short version—15 minutes—will be screened at the biggest music venue in Copenhagen in the Pumpehuset. It will be a live, multi-screen, immersive audio and visual experience which will also be supported by the Australian Embassy in Copenhagen. So I really do salute Bettina, Toni and all the team who have worked on Aqua. I hope to be able to stage a screening of that film here in Parliament House in November before the final vote is taken on this legislation and before we head off to Copenhagen.

I would also like to highlight some of the initiatives at the grassroots level that are going on in my region. It is just amazing to see how widespread that has been. One of our solar power companies, Pyramid Power, has had a great initiative, which basically involves rounding up a group of, say, 30 people, who will sign up to a group purchase of solar panels on their homes, as a consequence of which Pyramid Power undertakes to install a 1.5 kilowatt system on a community asset. That can be a church, a rural fire service station or any of these types of assets. It has been so well embraced that our area, I believe, has one of the largest take-up rates of solar panels in this country, through this process.

Most inspiring for me was the fact many of my constituents used that $900 cash bonus to engage in these schemes and purchase solar panels. It was incredibly inspiring to see that. They did not lash out on consumer goods et cetera; they applied it to this scheme. It was wonderful to see this community response. It sends a message that, if anyone wishes to contest Eden-Monaro in the future, they will have to show their credentials on climate change. That is the strongest message. I think that message is resonating around the country in many key seats. It is well to take that message on board.

I want to come back to this issue of the Nationals: some of the comments we have seen from them and the irresponsibility of those comments. Just recently—last week—Senator Barnaby Joyce was in my electorate in Cooma. He got some coverage in the very fine local paper down there, the Cooma Monaro Express. I was really disgusted to see the line he took. I am very fond of Barnaby. He is a great bloke, but on this issue I am extremely disappointed in him. We all know that our farmers are under great stress at the moment. There is a real mental health issue in the bush because people are dealing with the consequences of climate change and drought. Certainly, most of my electorate is under exceptional circumstances status. It is a real concern to me that no greater burden, in terms of anxiety, be added for the farmers. But there was Barnaby coming down and saying that he took exception to the coalition involvement in the negotiations. He said:

I was ashamed about it.

Those were his words. He also said that the government’s emissions trading scheme was going to ‘send people in the room tonight broke’. He completely denied that any aspect of climate change was occurring and told farmers that they were about to be ruined and sent into bankruptcy by these schemes. This is really disturbing, because I do not understand why Barnaby, as someone who represents farmers, would want to spread this sort of fear and anguish amongst them. I think it is cruel, given all they are going through at the moment. Farmers are the one sector of our community and economy who stand to lose the most from climate change inaction.

I have seen this firsthand in my work in the portfolio to which the legislation is relevant—in relation to the water issues. It is relevant all up and down the Murray-Darling Basin, in places like Moree, Griffith, Deniliquin, Shepparton, Mildura and Renmark. It is really a crying shame to see something like the magnificent rice mill at Deniliquin—the largest in the southern hemisphere. It has been lying idol for a few years and 400 jobs are unable to be exploited by that facility.

Farmers continue to suffer from the effects of climate change. They are the ones who stand to lose the most so it is imperative that we act on climate change for their benefit. Why do not the Nationals see that? The key point to notice is that agriculture will not be included in the scheme at all before 2015, and the government has not made a decision on whether the sector will be included at all. That final decision will be left until 2013. I feel it is legitimate for Nationals and people who represent farmers to try to get the best deal they possibly can for farmers but it should be understood that it is in their interests to participate in the scheme on the credit side. There are a number of aspects of the CPRS legislation which would facilitate that for the benefit of farmers.

The key is that we still can, and must, pursue reductions in emissions in farming. There are many ways in which that can occur and ways in which that will improve farmers’ productivity. I have been in discussions with proponents of schemes that would assist farmers—schemes that already exist and are working well in other parts of the world. In Germany, for example, using biogas techniques utilising the emissions and the waste products from the livestock industry, they have now managed to provide six to seven per cent of their base load electricity from this biogas source using livestock. Farmers in Germany are diversifying, using the opportunities of renewable energy to divide up their land so that in one corner of their paddocks they might have solar panels and in other areas they might be growing crops or grazing cattle. The opportunities are there and are already being exploited overseas. Farmers are obtaining greater productivity as a result of measures taken to reduce emissions in that sector. We can also achieve that sort of productivity and drive forward our farming industry.

This has been well evident in my region in particular. Renewable schemes and projects in my region include the Capital Wind Farm near Bungendore—$300 million worth of investment, great jobs and a great contributor to our renewable energy objectives. That scheme will be dwarfed by the Boco Rock project near Nimmitabel which will be twice that size—another few hundred million dollars coming into the region. There is the exciting new Dyesol solar technology industry happening in Queanbeyan; and Lloyd Energy in Cooma is doing great things in new schedulable solar-thermal technology which I believe has great potential and is creating spin-off jobs in industry in other parts of the region. There is also Eraring Energy and, of course the granddaddy of all the renewable project in this country—the Snowy hydro scheme, which is certainly a key employer and economic driver in the region. Other companies I have mentioned include Pyramid Power, who started with five employees. They now have 60 and are expanding rapidly throughout the region. We also have solar companies around this area, including Solartech, in Queanbeyan, and there are many more.

Farmers everywhere will stand to gain from participating in the credit side of the scheme, such as planting trees—we have heard that mentioned. I took on board the comments of the member for New England in relation to where this will drive our agricultural industry. The bottom line is that, with market forces, if there is a shortage of food then certainly the price of that food will make that a more competitive crop to grow. It is not as though you will see the situation where all farmers will devote all their land to one particular product such as forestry, or growing trees. This will give farmers the opportunity to diversify so that they minimise their risk during rough times for particular crops. It is not a question of one aspect of their industry overtaking another.

Barnaby also mentioned in his speech at Cooma that we have no influence in the world and that our efforts in reducing carbon pollution would make no difference. This is simply not true. I really think that Barnaby not only is betraying our farmers but also is selling our country short. The influence of Australia has been reflected in the way that the Prime Minister has driven his influence, and Australia’s influence, in world affairs through the utilisation of the G20 mechanism. We also have recognition of his status globally, and Australia’s status, in his appointment as ‘friend of the chair’ in Copenhagen by the Danish Prime Minister. I think Barnaby is completely wrong. As a large country with an economy highly dependent on carbon emissions it is important that we show leadership. Our leadership will be recognised and will help to drive the objective forward at Copenhagen and afterwards.

Basically, it is important that we get a market mechanism in place now to drive the changes that we need. Whatever happens at Copenhagen, every nation will need a tailored solution. We are producing our tailored solution: it suits our economy, it suits our national dynamics and it suits our geography and other aspects of our country that are unique.

Finally, the attitude of the opponents of this scheme reminds me of a past age which I recalled recently at the celebrations of the 60^th anniversary of the Snowy hydro scheme at Adaminaby the weekend before last. At the launch ceremony for the Snowy scheme 60 years ago there was a Labor Prime Minister in Ben Chifley, a Labor state Premier in New South Wales in James McGirr, the local federal member was Labor’s Alan Fraser, and the state member was Labor’s Jack Seiffert. It was an all-Labor affair and it was the vision and boldness of those Labor leaders that brought on the Snowy scheme. At the time, the ceremony was boycotted by the Liberal Party, as Robert Menzies opposed the scheme. It was, in fact, just before the 1949 election.

It is that same blinkered ignorance that we can see in some sections of the coalition today. We do not need shallow political opportunism and scaremongering. What we need is the boldness and vision of that great generation to help this country navigate the challenges that lie ahead.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Before calling the next speaker, I say to the previous speaker that I understood that his references to a senator were good natured, but it would assist the decorum of the House if references to senators were by calling them Senator with his or her surname.

Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise in this debate to support the second reading amendment that was moved by the Leader of the Opposition at the beginning of the debate today on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2]. The Leader of the Opposition outlined in great detail the alternatives, the improvements and the amendments which would make a flawed scheme much better. That goes to the nub of this debate and why we are debating this Carbon Pollution Reduction Scheme legislation now. In the time available I will cover some of those areas that you would naturally expect are particularly relevant to my electorate of Casey. Mr Deputy Speaker Andrews, as the member for the adjoining seat of Menzies, you will understand because we have very similar electorates.

The first point of the amendments and the point that the Leader of the Opposition made and has been making consistently, as we all have, is that finalising legislation ahead of Copenhagen is foolhardy. That should be self-evident to the members opposite. The Copenhagen conference will be over in less than 50 days. For the Prime Minister and the government to finalise the design of an Australian emissions trading scheme ahead of that conference is foolhardy. They are determined to do so. In that context the opposition has put forward significant amendments which would very much reduce the damage that this rushed scheme, if finalised before Copenhagen, would have on the Australian economy. At present, the United States has legislation that has been through their House of Representatives and is entering their Senate. The Copenhagen conference will determine, you would hope, the shape or the beginnings of a shape of a global agreement. There have been lots of attacks from those opposite about the issue of climate change. All of us want to see an environmental improvement and reduction in emissions, but the obvious point is that this can be effective only if it is done globally. Those opposite know that in their heart of hearts. They know it very well.

The Leader of the Opposition this morning gave a good example with respect to coal, and I will come back to that. But if Australia acts alone ahead of a global agreement it not only damages jobs, investment and exports but actually exports emissions, and those opposite know that. In fact, the one export those opposite will be assisting is emissions. Many have said that when you export emissions you simply transfer them from one country to another, quite obviously; it has no effect on total global emissions. Of course, that is right. There are circumstances, as my colleague the member for Farrer would know, where if you transfer emissions from Australia to another country you can actually increase global emissions because the very production in that other country may not be as clean as it currently is in Australia. But those opposite know that, and that is why finalising this legislation ahead of Copenhagen is foolhardy. The Leader of the Opposition mentioned the example of coal. If there is a reduction in coalmining here and a corresponding increase in another country, the emissions are transferred. In some cases they may be increased because of the technology that is not used in those other countries.

Our amendments that have been put forward this morning—and they are the subject of good faith negotiations at present—would fix a number of very obvious flaws. I will not, in the time available, go through all of those, but I will focus on two in particular. One is the treatment of agriculture. The previous speaker, the Parliamentary Secretary for Water, defended the treatment of agriculture in the government’s legislation before the House. The government is proposing that agriculture be included down the track in around 2015. We have said agriculture should not be included. We know from the US legislation that they will not include agriculture. For those opposite to think that the US legislation will not have a major influence on the final design of a global agreement is, of course, ridiculous. We know the US legislation will not include agriculture. We are saying agriculture should not be included, but on top of that we are saying the agricultural sector should have access to the offsets that will assist and encourage them in environmental improvements and practices.

The other area where we have made some major recommendations by way of amendments is to do with electricity generation and specifically price rises in electricity costs. I want to focus particularly on the small business sector. The small business sector is not subject to any compensation under this legislation. What this legislation proposes is sharp rises that will affect them deeply. We have put forward an alternative model that we think is better. It will have less of a price effect on small business but it will have a good environmental outcome. We have said to the government that they should consider this, but if they, after releasing all their material and in consideration of those negotiations, do not agree with this path then they are duty bound to produce an alternative that will not harm the small business community in the way their current legislation does.

I have mentioned agriculture. My electorate of Casey includes significant agricultural areas and agribusinesses that are the backbone of the rural area in the Yarra Valley. The number of small businesses in the outer east and in the Yarra Valley is significant and I will always stand up for those businesses, which are the backbone of that local economy. Across Australia we have more than two million businesses employing around four million people. They are the backbone of the national economy. In the electorate of Casey those small businesses—a diverse range of businesses stretching from the metropolitan areas out to the rural areas—are the backbone of that local economy.

In conclusion, the government should consider these amendments. The government should be accepting these amendments. The government should be acknowledging that its legislation is flawed and if passed unamended will severely damage the Australian economy. The reason that the government is not finalising this after the Copenhagen agreement is the same reason why this government does so many things. It is the price of the Prime Minister’s vanity. I note the Parliamentary Secretary to the Prime Minister is at the table. He would see this up-front and personally on a daily basis.

Anthony Byrne (Holt, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

What’s that? Do you want me to make a comment on that?

Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The price of the Prime Minister’s vanity is very high, very high indeed. We have seen over nearly the last two years the government seeking to implement a range of measures that they had spoken about before the election. It has been nearly two years since the election and we have seen Fuelwatch, we have seen GroceryChoice and we have seen them try to reform employee share schemes. Compared with the legislation that we are dealing with today, those were minor matters, but nevertheless matters on which the government demonstrated incompetence. I say to those opposite that they would know that on something much bigger, where the detail is much more important, the track record of this government speaks for itself. Those negotiations are ongoing. The amendments that have been moved in the second reading amendment that embody the suggestions of the opposition are something that the government should take seriously. If they do they will improve what is a flawed and rushed piece of legislation.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Carbon Pollution Reduction Scheme Bill 2009 [No. 2]. It was only a few months ago that I rose to speak in this House on this cognate bill, when I spoke about the importance of its passage through the parliament to the people of Newcastle, whom I represent, the people of Australia and indeed the people of the world. Unfortunately, as we recall, its passage was blocked by the opposition, an opposition that does nothing but delay, meander—and I think that was quite clear from the speech previously given by the member for Casey—and stall a clear decision on the CPRS while the inexorable march towards environmental catastrophe forever increases in pace.

The opposition have put forward their amendments today—more excuses as to why we cannot act now to fight climate change. While I will not go into the detail of the amendments, I will say that, given their words ‘defer’, ‘artificial’ deadline, ‘moderated’ and ‘excluded’, the opposition need to get their heads out of the sand and into reality. They need to be proactive in the face of such an important issue. I do not usually quote Crikey or rely on it at all, but I do note a comment by Bernard Keane that I think is fairly relevant to today’s debate. He says that bickering about the finer points of an ETS, an emissions trading scheme, is like arguing about who sits where in a car as it is going over a cliff. That is a pretty good analogy. If we do not act now, we are going to set the course for an environmental disaster of catastrophic proportions.

I have said it before in this House and I will say it again: the science of climate change can no longer be argued. The need to act, decisively and quickly, cannot be argued. It is predicted that if no action is taken to combat climate change, average temperatures across Australia can be expected to rise by over five degrees by the end of the century. A rise of this magnitude would have disastrous ramifications. Just to put this in context, a rise of just one degree Celsius would see a streamflow reduction of 15 per cent in the Murray-Darling Basin. Without action, the Murray-Darling would disappear completely by 2100. Yesterday, on the front page of the Sydney Morning Herald you could read—and we did—about the effect that even a tiny rise of just 20 centimetres in sea level would have on low-lying areas of Australia. This article followed the tabling of the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts report Managing our coastal zone in a changing climate: the time to act is now. It was tabled by the chair of the committee, Jennie George, in the House on Monday night. I congratulate her, the members of her committee and the secretariat on a wonderful report that gives strength to our arm in this argument and certainly gives us more and more courses of action and the reasons to take those courses of action urgently. So I congratulate Jennie for her work. She has been dedicated to the environment for a long time. This report looked at the issues relating to climate change and environmental pressures experienced by Australian coastal areas, particularly in the area of coastal population growth. It found that thousands of kilometres of the Australian coastline have been identified as being at risk from the threat of rising sea levels and extreme weather events due to the impacts of climate change.

The Hunter region, my region—Newcastle is at the mouth of the Hunter River—is the second most densely populated and developed coastal strip in New South Wales. Any sea level rise or coastal storm events are likely to have a significant impact on the region, on its infrastructure and on our communities, exacerbating the risk of coastal erosion, inundation of low-lying areas and loss of our beautiful beaches. A study undertaken by Risk Frontiers identified the Lake Macquarie area, Newcastle and Port Stephens as among the local government areas in Australia most vulnerable to coastal inundation. Even a cursory glance at the extreme weather events of recent times is enough to set alarm bells ringing: the February bushfires in Victoria; the historic June 2007 storm in Newcastle that saw the Pasha Bulker washed up on Nobbys Beach and, unfortunately, hundreds of people washed from their homes; the recent bushfires in Rockhampton—an area that historically has never suffered from those sorts of severe bushfires; the giant dust storm that struck the east coast of Australia last month; and the unseasonably warm weather on the east coast in early spring. Indeed, by 2050, temperatures in the Hunter region are projected to be hotter over all seasons by one to three degrees, and with many more hot days. An increase in the number of hot days is expected to increase heat related illnesses and death, especially among the elderly.

The physical damage of these extreme weather events is enough in itself; but, when taking into account the financial cost surrounding any such damage, we truly do reach the definition of catastrophe. And it is just a taste of what is to come. These are individual examples from our country alone of what is truly a worldwide issue. I am amazed that members opposite, who I know have travelled very widely, have not learnt from some of their experiences. On a recent visit to Mongolia, which I have previously recounted to the House, I learnt that 24 people had died in 10 days because of excessive rainfall in their capital, while the Gobi Desert continues to extend. Desertification is a real issue there. Recently, in Timor Leste, I was sitting in a forum with parliamentarians when an earthquake struck. It was just a shake at that stage but they said that it happens all the time now. Indonesia has experienced tsunamis and our Pacific neighbours have had typhoons et cetera. This week the ambassador of Switzerland spoke to me about the glacial melting in Switzerland and also said that the receding permafrost is a real problem for his country. It is imperative that we act now. Everywhere around the world, leaders and public representatives of countries, like us, are aware of the problem and want to act.

There has been a lot of discussion recently surrounding the impact of a CPRS on jobs in the coal and other relevant industries. I note that today the member for Groom, Ian Macfarlane, made some comments about me being one of the only Labor members from a seat dependent on the coal industry prepared to speak on this bill and explain to coal workers why they are going to lose their jobs. I am paraphrasing his comments. I am very pleased and also very proud to stand here today and speak to this legislation. This is good legislation and I support it. I and my government are committed to providing support for local jobs and the economy, particularly for the coal industry. The sort of misguided argument put forward by the member for Groom has had some traction in the Hunter region lately, given the incredible campaign by the Australian Coal Association’s ‘Cut emissions not jobs’. I have received many emails saying that this campaign is about cutting profits for the Coal Association rather than its concern about cutting jobs or concern for the mining industry.

Tony Maher, the head of the CFMEU, had an interesting view on this campaign. I quote from his opinion piece published in the Newcastle Herald on 7 October:

The Australian Coal Association, its state counterparts and the Nationals have done nothing for decades when confronted with job cuts due to downturns in mineral prices, or when member companies simply work out a way to get more production with fewer workers (such as long working hours and extreme rostering).

When that happens we are lectured that it’s all due to the “market” and we must cop the job cuts and the fall in working conditions.

But when it comes to the CPRS, suddenly it seems that jobs are all-important

The real issue for the coal association is company profits and maintaining them at the highest level possible.

But coal companies know there is no public sympathy for protecting profits, so they are using a jobs scare instead.

What the Coal Industry will not tell you is that the coal industry—

in Newcastle and the Hunter—

is going from strength to strength —

especially in my electorate of Newcastle. Already we are in a strong position, employment wise, with the latest figures showing an unemployment rate of 4.4 per cent, which is well below state and national averages

I am, after all, the granddaughter of a coalminer. I take this opportunity today to thank the Clerk of the House of Representatives, Ian Harris. He is originally from the coal-mining area of Kurri in the member for Hunter’s electorate. I wish Ian well in his next reinvention. He has such a wonderful depth of knowledge and understanding of the parliamentary processes and I hope that it will be extended further after he leaves us. Ian is very fondly regarded in my electorate, particularly by our university, and I wish him a great deal of success.

We in the Hunter know and value our history just as much we value our present and our future. The Rudd government will continue to support local jobs in the coal industry. We have already seen over half a billion dollars from this government go towards improving the coal chain between the Hunter Valley and the port of Newcastle to increase our export capacity. With the construction of the third coal terminal, the NCIG terminal, almost complete and the plans for a further coal terminal by Port Waratah Coal Services, we know that there is expansion ahead. The third coal terminal is expected to load its first shipment of coal next year. With that expansion, revenue from coal exports in our region is expected to grow by about $6.5 billion per year by 2016. The coal industry is still in very good shape—from 100 million tonnes to 300 million tonnes exported per annum—and it will remain so under an ETS. In Newcastle we are blessed with a cleaner coal, a black coal, a thermal coal. It is the coal that is fuelling some of the growth and development of the developing nations in our region. It is not only the coal industry that will grow under the CPRS. The clean energy sector in Australia will grow in leaps and bounds, with direct benefits for the people of Newcastle and the national economy.

There is already a global boom in the clean energy industry. The global low-carbon and environmental goods sector is now valued at $6.1 trillion. In 2008 alone, US$155 billion was invested in new clean energy sources—a fourfold increase since 2004—for the first time outstripping investment in fossil fuel technologies. You can only imagine what will be invested when globally we are united in the knowledge and certainty of the need to address climate change and there are policy settings that will encourage further investment. Worldwide the renewable energy sector already employs an estimated 2.3 million people, more than the total number employed directly by the oil and gas industries around the world.

This trend is just as true in Australia. Modelling published by Treasury has shown that, even with significant cuts in carbon pollution, Australia’s economy will continue its strong performance, with continued growth in employment and wages. CSIRO has found that, if Australia becomes carbon neutral by 2050, total employment in Australia over the next two decades would increase by 2.7 million jobs.

Just yesterday an excellent article appeared in the Newcastle Herald by Clare Martin, CEO of the Australian Council of Social Service. Ms Martin spoke about the opportunities that the CPRS holds for the people of Newcastle. She spoke of the diversification of Newcastle’s economy that has already taken place to adapt to and thrive in the clean energy sector, something I have stood before this House and spoken of many times before. Ms Martin detailed the work of the CSIRO Energy Centre, with its Energy Transformed National Research Flagship, and the University of Newcastle, with its clean energy research centre, and the leading role these institutions would play in a low-carbon economy. Ms Martin outlined the findings of the Centre of Full Employment and Equity that the clean energy sector could create over 10,000 jobs in the Hunter-Wyong region alone, without taking into account any wind or solar energy manufacturing jobs.

Newcastle is already positioning itself at the leading edge of the clean energy sector. In Newcastle you will find the Clean Energy Innovation Centre, a Rudd government initiative, helping small to medium sized businesses become more energy efficient; the Australian Solar Institute, producing groundbreaking research in solar energy; and the CSIRO Energy Centre and flagship, providing a focal point in Australia for energy research in the fields of sustainable energy, environmental impacts of energy, and cost-competitive and environmentally acceptable fossil fuel research and development. We are building a critical mass of capacity around clean energy, and that will certainly stand our economy in good stead.

It has also been shown in a clear-cut way that the CPRS will increase industry confidence. According to the Australian Industry Group, there has been hesitance from some of its members about making any investments until there is a degree of clarity around domestic climate change legislation. The government does recognise that emissions intensive coalmines do need transitional assistance to adjust to the introduction of the Carbon Pollution Reduction Scheme. The government has always said it will target assistance to the gassiest mines—those which are the most methane intensive—and has on the table a $750 million package to assist such mines to investigate and implement abatement opportunities and ease their transition to the introduction of a carbon price.

We also recognise that by leading the way with the CPRS, with the introduction of a carbon price ahead of effective international action, trade exposed industries may be encouraged to relocate. But that is why the CPRS Bill will provide a program to support businesses producing internationally traded goods, like coal and aluminium—such as our aluminium industry in the Hunter—which face the most significant exposure to the carbon price. So our legislation contains that assistance, and it will be targeted to support the most emissions-intensive trade-exposed activities. From the first year of the CPRS, highly emissions intensive activities will have an effective rate of assistance of almost 95 per cent and less emissions intensive activities will have an effective rate of assistance of 66 per cent.

It is definitely time for global action. I have heard members opposite saying we should not be doing this before the Copenhagen conference. I can only congratulate the Prime Minister on his determination and the recognition internationally of the role he can play in bringing about an international solution, as hard as that task might be. Action is needed to combat the effects of climate change. If unmitigated, climate change will fundamentally alter the planet and the way that we live our lives. This is change that we will begin to see in our own lives, but its full impact will not be realised until it is in the hands of our future generations. It is to our future generations that we must look when we consider the CPRS, for it is they who will judge us on how we act today and it is they who will suffer if we do not act now. I commend the bills to the House.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

I rise today to address the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and associated bills. As I have previously said, reducing the global level of CO2 and other emissions in the atmosphere is an issue of great concern and consequence to all of us. Personally, these are unchartered waters for me; on climate change, I am neither a sceptic nor a denier. I have read widely and talked to scientists, but I am not a scientist. Maybe climate change is cyclic? I do not know, because there are too many subjective opinions in this argument, each proffering a different expert perspective.

Perhaps Michael Smith’s editorial on 4BC on 13 August demonstrates a way to understand the magnitude of the Prime Minister’s Carbon Pollution Reduction Scheme and climate change:

Imagine one kilometre of atmosphere that you want to clean up. For the sake of the discussion, imagine you could walk along it.

The first 770 metres are Nitrogen.

The next 210 metres are Oxygen.

That’s 980 metres of the 1 kilometre. Just 20 metres to go.

The next 10 metres are water vapour. Just 10 metres left …

9 metres are argon. 1 metre left out of 1 kilometre.

A few gases make up the first bit of that last metre.

The last 38 centimetres of the kilometre—that’s carbon dioxide. …

97% is produced by Mother Nature. It’s natural.

Out of our journey of one kilometre, there are just 12 millimetres left. … Just over a centimetre.

That’s the amount of carbon dioxide that global human activity puts into the atmosphere.

And of those 12 millimetres Australia puts in .18 of a millimetre.

Less than the thickness of a hair. Out of a kilometre.

As a hair is to a kilometre—so is Australia’s contribution to what Mr Rudd calls Carbon Pollution.

Imagine Brisbane’s new Gateway Bridge, ready to be officially opened by Mr Rudd. It’s been polished, painted and scrubbed by an army of workers till its 1 kilometre length is surgically clean. Except that Mr Rudd says we have a huge problem, the bridge is polluted—by a human hair. We would all laugh ourselves silly.

It continues:

There are plenty of real pollution problems to worry about. It’s hard to imagine that Australia’s contribution to carbon dioxide in the world’s atmosphere is one of the more pressing ones. And I can’t believe that a new tax on everything is the only way to blow that pesky hair away.

Perhaps we all need to just take a few deep breaths.

They were words well said. All scientists have agreed that humans have an impact on the climate. The issue is: what is the magnitude of this effect at a global level? Why pay more in tax when there is little, or next to no, environmental benefit? Instead, it is the individuals, the small business owners, the coal industry, the aluminium industry and the farmers—to name a few—that will be adversely affected.

I am the elected member for Paterson. Keeping in touch with local issues is very important to me, as I campaign for the rights of those individuals who elected me to represent them in this federal parliament. I accept that there are differing views about climate change, particularly amongst my constituents, who, if this legislation is passed in its entirety, will be adversely affected. I understand that Australians, including my constituents, want their elected leaders to protect their jobs while acting on climate change.

Over the past month or so I have received hundreds of emails and letters from concerned constituents worried about the impact a flawed ETS will have on their business, their home and their life. I would like to indulge you with some of the comments from constituents of Paterson. One states:

Dear Mr Baldwin, Please don’t allow the PM to push his own agenda to only get recognition for himself with other leaders so he can be the first to say that he has done it and stuff Australians, anything we can save in a year will be undone by other pollutants in a day or so …

Another one reads:

Dear Mr Baldwin, I encourage you to exercise extreme caution regarding this very sensitive subject, and to act in the interest of the people in your local area, that includes families and communities alike. Similar to many others, I personally would be very much affected as I am an employee of the local coal mine & know many other people & families who also work for local coal mines, or whom rely on the service industry that support the coal mines in our local area. I agree, emissions need to be cut—not jobs, I think the Government’s proposed tax is unfair.

It is certainly clear that the constituents of Paterson are very concerned about the impact this legislation will have on their livelihood. When I travel throughout the electorate I ask quite openly for their opinions on the CPRS and the impact on their business and livelihood. Many are well informed; however, most still do not understand and have been clearly hoodwinked by the Rudd Labor government’s spin and dishonesty in the presentation of the government’s case. I am extremely concerned that the Australian people are still in the dark about what the Rudd Labor government claims is the most important economic reform in a generation.

I truly believe that the proposed CPRS fails in the basic task of protecting jobs. This scheme is so flawed and badly designed that it will only transfer emissions and jobs overseas, destroying Australian businesses, with absolutely no benefit to the environment. As a nation which emits less than 1.3 per cent of the world’s greenhouse gases, nothing Australia does in advance of the rest of the world will make any difference to changing the climate of the world.

I truly believe that this legislation is not about climate change. This legislation is purely a new source of taxation revenue for the Rudd Labor government and a leg-up for an ambitious and opportunistic Prime Minister onto the world stage. The Rudd Labor government plans to impose potentially crushing costs on businesses and consumers, disguised as environmental responsibility.

The CPRS is a tax. It is a tax that our Prime Minister hopes no-one will notice. The emissions trading scheme is being misused to buy off some vocal sections of a more widely concerned Australian community. The tax effect of the CPRS as it stands is, according to commentators, the equivalent of increasing the GST from 10 per cent to 12.5 per cent. The difference is that it will be added all the way down the line, unlike the GST which is rebated to be export free of GST or until the end user if consumed in Australia.

The design of the Rudd Labor government’s CPRS assumes that our major international competitors will promptly move to put into place a major new tax on carbon across their economies, including their export and import competing industries in the early years, yet we know that our major trading partners are not ready to do this. Again I ask the Rudd Labor government: what is the goal of this legislation? Is it to genuinely reduce greenhouse gas emissions or, as I believe it is, is it another tax grab from Australian families and businesses, who are already having to pay for Labor’s reckless spending? I would also like to ask again: how much of the $13 billion that will be collected from affected businesses under this scheme in the first year will be spent by the Rudd Labor government in reducing greenhouse gas emissions?

I will now address the coalition’s amendments. The coalition has unveiled a plan to mitigate Australian job losses and limit increases in electricity prices for small businesses through common-sense amendments to the Rudd Labor government’s flawed and rushed emissions trading scheme. The coalition has undertaken a considered evaluation of the government’s legislation and measured the legislation against its impact on jobs and emissions.

I will now address the trade-exposed industries. The Rudd Labor government’s flawed CPRS as it currently stands will have dire consequences in the electorate of Paterson and the Hunter region. In 2008-09 the Hunter Valley Research Foundation, in conjunction with the Hunter Business Chamber, undertook an initial assessment of the potential impact that the CPRS would have on some of the key industries found in the Hunter region, including in the electorate of Paterson. The analysis found that industries potentially most affected by a CPRS included aluminium, iron and steel, coalmining, electricity generation and supply, beef and dairy cattle, meat products and road transport.

The silence on this CPRS legislation from the member for Hunter, Joel Fitzgibbon, is absolutely deafening. His website boasts that the main industries and products of the area include aluminium smelting and coalmining as well as having both Liddell and Bayswater power stations in the electorate of Hunter. I am amazed that the member for Hunter has not made one speech for or against this legislation. Why is Mr Fitzgibbon not supporting this legislation? Why is he not out there fighting for the industries of his electorate? Because this legislation is ultimately flawed and because, with a 15.8 per cent Labor safe seat, he does not need to fight for his constituents’ votes—he can take them for granted.

The Rudd Labor government’s current emissions trading scheme poses a significant threat to the continued competitiveness of Australian businesses operating in those trade-exposed industries. The aluminium sector is the most emission-intensive exposed sector in the region. Australia has seven alumina refineries and six aluminium smelters, employing over 12,000 full-time workers and a further 3,000 contractors. Australia’s second largest smelter, Tomago Aluminium, is just outside Paterson in the electorate of Newcastle. It currently employs almost 1,400 workers, most of whom reside in the Paterson electorate. Hydro Aluminium’s Kurri Kurri smelter is also just outside my electorate in the seat of Hunter. It currently employs 500 workers and a larger number of contractors, who also reside in the electorate of Paterson.

The coalition recognises the impact that the CPRS will have on this industry. The coalition, therefore, are amending the CPRS to provide a single level of assistance for emissions-intensive trade-exposed industries at 94.5 per cent until 2015 and 90 per cent thereafter. We are also seeking to lower the threshold for assistance under the CPRS from 1,000 tonnes of CO2 per $1 million of revenue to 850 tonnes of CO2 per $1 million. The coalition will also provide assistance to Australian EITE industries at 90 per cent until 80 per cent of their international competitors have also implemented carbon abatement measures.

As the member for Paterson, I am honoured to represent such a vast electorate including rich and diverse farming land. Historically, the Hunter region is known as an important agricultural region. We know that our farming communities have had it tough for far too long. As recently as 2007 the Hunter and Lower Hunter regions were declared areas of exceptional circumstances for drought assistance. The flawed CPRS could be the final blow for many farmers that have barely survived the financial impact of drought. Cutting emissions is not new to the agricultural industry. The sector has reduced its emissions by 40 per cent since 1990 through various measures—some voluntary; some involuntary.

Two-thirds of Australian farm produce is exported. If agriculture is covered by a CPRS—which the Rudd Labor government is proposing—Australian farmers would be left out in the cold while other developed countries, including the USA, Canada, European nations and Japan, will not cover agriculture under an emissions trading cap. Australian cattle farmers are already battling against the billions of dollars of subsidy paid to the USA and Europe, and would be further disadvantaged under a CPRS. Dairy farmers have also been hit hard by the recent global financial crisis. The price that they will get for their milk this year has fallen to the lowest level in a decade, after a commodity collapse on the global markets in late 2008.

Therefore the coalition aims to protect farmers from the scheme by exempting agriculture altogether. By allowing agricultural offsets, which include carbon sequestration in soils and vegetables, there is an opportunity for financial and land management benefits in the rural sector. This is, and will be, a long-term benefit for farmers and for the environment.

We all know that coal plays a pivotal role in the success of the Australian economy. Coal is Australia’s No. 1 export earner, responsible for approximately $55 billion worth of export revenue in financial year 2008-09 alone. The coal industry employs 30,000 Australians directly and another 100,000 indirectly, most of them in regional areas such as the electorate of Paterson and the surrounding Hunter region.

It is interesting that only recently Greg Combet, the junior Minister Assisting the Minister for Climate Change, mentioned that Australia’s coalmining industry can afford the cost of carbon reduction proposed by the government’s climate change legislation. That is interesting, considering that the Rudd Labor government is planning to reap more than $14 billion in additional taxes from the coal industry over the next 10 years under the scheme—as well as not offering any rebates. If the coal tax is to proceed as proposed, it would likely see 16 mines close prematurely, with annual coal production of 22 million tonnes below business as usual. It is projected that 3,300 direct jobs will be lost in the first 10 years as well. Therefore the coalition would amend the legislation to exclude coalmine fugitive emissions as well as to provide the minister with the authority to use regulation to control fugitive emissions, with the objective of achieving a 30 per cent reduction by 2025 as technology and international best practice allows.

The impact the Rudd Labor government’s CPRS will have on the purse strings of Australian households and small businesses is a major concern to those in the coalition. I have received many letters and emails from concerned constituents that this increase in electricity prices will finally put them over the edge. There has been little or no acknowledgement by the Rudd Labor government that individuals, households or small to medium businesses will face unprecedented rises in energy costs associated with the introduction of this scheme.

I was speaking to a small business owner at Salamander on the weekend who indicated to me that this proposed legislation comes hot on the heels of the New South Wales state Labor government’s 20 per cent electricity price rise. This rise has increased the bill at their business from $1,300 for two months electricity to $1,700—all that before an ETS is introduced. If you add the proposed ETS you are looking at an alarming rise in power costs, not just for small business but also for the punters at large. Under the CPRS, retail electricity prices will rise by an additional 20 per cent in the first two years. For small businesses—they are looking at shrinking margins in such a volatile retail environment—these rising costs will impact everyone and hurt the poorest people in our community. Across the board a tax of $20 per tonne of CO2 will produce approximately $2,000 a year in extra costs for the average family of four, with what benefit to the environment? Next to nothing. But it will drive grocery prices up by 5 per cent, costing some households hundreds of dollars per month.

The coalition will continue to advocate an intensity-based cap and trade model for generators. This delivers the same emissions cuts as the CPRS but with much smaller increases in electricity prices. This will greatly reduce the burden on small- and medium-sized businesses, which will receive no compensation for higher power bills under the Rudd Labor government’s proposal. Under the coalition’s intensity approach, retail electricity prices would rise by less than five per cent in the first two years. The coalition’s amendments will cushion the impact of power price increases on small businesses and households, cutting them by at least half.

The impact one individual can have on the planet, and collectively, is important when dealing with the environment. Actions by individual Australians or families to reduce emissions can have an impact; however, currently the design of the scheme means that any action will do nothing to reduce Australia’s contribution to climate change. The coalition will negotiate for a national ‘white certificate’ energy efficiency scheme, so households and businesses can earn credits for efficiency measures and contribute to reducing national emissions. By including voluntary measures, the environment will also benefit from initiatives that are developed by individuals, businesses and community groups.

Coal-fired generators must be better compensated for loss of value they experience from the CPRS, to ensure security of electricity supply and enable them to transition to lower emission energy sources. The CPRS offers coal-fired generators 130 million permits over five years worth $3.6 billion. Yet analysis has been conducted estimating their losses at $9 billion to $11 billion. Assistance should be increased to 390 million permits over 15 years—or about $10 billion. Assistance should also be allocated to all generators in proportion to the losses they suffer.

In conclusion, the coalition have consistently argued that it is reckless for the Rudd Labor government to rush ahead with legislation that is ultimately flawed before the Copenhagen summit in December and before we know what the rest of the world is committed to. It is reckless for the Rudd Labor government to insist that Australia locks in its emissions trading scheme ahead of the rest of the world, in particular the biggest emitters, such as China, India, the US and the European Union. It is reckless to ignore that this legislation is being rushed through to meet the Prime Minister’s politically motivated deadline, which was highlighted in reports in the media today, that he would be anointed as the ‘Friend of the Chair’ in Copenhagen, proving that rushing this bill through the parliament is all about the Prime Minister’s personal interests and not those of our nation. He is reckless to ignore the widespread and substantial impacts that this legislation will have on the Australian economy, on business, consumers and jobs. It is reckless to ignore that the CPRS legislation is purely another tax grab whereby it can destroy industries, sacrifice jobs and increase power prices for small business and households with no benefit to the reduction of greenhouse gases.

It is now up to the Rudd Labor government to make the correct choices for the Australian community and for the Paterson community. I would like to conclude by quoting from two emails that I received yesterday from concerned constituents:

Dear Mr Baldwin,

Thank you and your party for taking the Rudd Government to task regarding this emissions trading scheme. Don’t let up on it. I am one of the millions of Australians who the government keeps saying is in favour of the emissions trading scheme. I am not in favour of what they are doing.

Kindest regards, Harry

And:

Dear Mr Baldwin,

This new tax is ridiculous. It is just not the answer for this ever growing and high profile problem. There has to be another way so that people, jobs, the local communities and the economy of this fair and great country of ours are not so adversely affected.

This government needs to sit down and look at the amendments being proposed by the coalition. If those amendments proposed by the coalition are endorsed then I am sure they will get the support of the coalition. To fail to do so does not penalise the coalition; it actually penalises our nation.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I congratulate the member for Paterson on his contribution! Once again he has gone on to demonstrate how out of touch he is in his electorate. No wonder his margin took such a slashing at the last election. After 20 minutes he could not actually tell us whether he supported an emissions trading system or not. Sure, he alluded to the amendments, but he still has not gone on to say whether he supports it. He may be one of those—which is the majority, as I understand it; the climate change sceptics on that side of the parliament—hoping like hell that the member for Groom’s negotiations with Senator Penny Wong break down. That would allow them at least an escape route.

Acting on climate change frankly is in the national interest, despite what is being said consistently now on the other side of the House. The government is committed to taking action on climate change and is committed to ensuring the future sustainability of our industries and our people into the future. Furthermore, there is a commitment to act on and respond in terms of our economic planning. We understand the needs of our communities and we certainly understand the needs of business. Mr Deputy Speaker Georganas, you would know the views of the Business Council of Australia et cetera. These organisations are coming out now saying they want some definition as to what is occurring. They want some certainty.

Bear in mind that this country is one of the hottest and driest continents in the world. Its economy is one that will be the first and hardest hit in terms of the devastating effect of climate change should we fail to act. We must ensure the health of our growing population—and bear in mind this week we have heard a lot of discussion in this place about our population being likely to exceed 30 million over the next 50 years. We need to ensure that our waterways, our energy supplies, our coastal communities and our infrastructure are all able to face the tests as required as we take this argument forward. We need to ensure, in other words, their sustainability.

In the face of the current economic crisis, a clear direction in terms of the Carbon Pollution Reduction Scheme I believe is absolutely essential. It provides business with certainty about the government’s plan to tackle this issue of global warming. Australia is faring reasonably well in comparison with our global neighbours. We are still mindful of the fact of the potential impact on jobs. Therefore, various aspects have been dealt with within this legislation. That is not an issue that is being raised directly in the member for Paterson’s electorate, particularly if you look at those areas involved in coalmining, which are very proactive in looking at a sensible, sound and sustainable solution to protecting those jobs. I will come briefly to the issue of coalmining a little later on.

This government has put forward an economically prudent proposal to support the jobs of today while simultaneously putting in place a scheme that will value the low-pollution-generating jobs into the future. Modelling by the Australian Treasury has found that 1.7 million jobs can be created over the period to 2020 while still tackling this very important issue. Maybe unlike other members of this House, I have had a period of time before coming here where I was involved in the renewable and sustainable energy industries. I happen to know a bit about how hard it is going out there and raising funds on the stock market to develop and commercialise technologies. I understand that. That is why companies that are developing these technologies absolutely do need the leadership, do need to see the system, so they can actually go to the markets and raise capital to develop these technologies. That is occurring. What we want to do is accelerate it. The environmental protection is often thought to come at the cost of economic growth. However, I do not think there is anyone in this place who genuinely believes that the cost of taking the steps under the CPRS far outweighs not taking any action.

Going back before the last election our attention was drawn to these matters. We saw the Stern report out of Britain and more recently in Australia the Garnaut report, with current emission trends and their respective costs on various areas of our community. I will not walk away from the fact that agriculture is certainly one of them, as are areas of infrastructure, iconic environmental assets and tourist destinations et cetera. For instance, it is said that the Great Barrier Reef generates around $5 billion of tourism revenue and about 50,000 jobs. No-one seriously believes that those areas will not be impacted. I believe that the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] is providing the necessary balance between stable economic positioning and a stable environmental endeavour, for our current generation to act responsibly in terms of the legacy which we will bequeath to future generations in this country.

Last week in the second reading speech, the Minister Assisting the Minister for Climate Change pointed out that irrigated agriculture in the Murray-Darling Basin provides employment to 90,000 Australians—I know this is significant to your own state, Mr Deputy Speaker Georganas—and is at risk of totally disappearing by the year 2100. I understand further that a rise of one degree centigrade could reduce inflows to the Murray-Darling by 15 per cent. We cannot sit back and do nothing. This will have a direct impact on jobs in those irrigated, agriculture based industries which will be at the forefront of those being affected.

The minister also drew attention to the gains which can be made through increasing investment in renewables. The CPRS is expected to drive $19 billion of investment in this sector by 2020. As I said, having worked in that area I know what it is like to construct a business model, to gain shareholder or investor support to put money into developing and commercialising technologies. They need this. They need to develop and commercialise the technologies which can be deployed to reduce emissions in this country.

I recall very vividly over the course of the last parliament the then Prime Minister, John Howard, saying that it was not that we needed to sign Kyoto; what we needed was to develop the technology. All the technology developers out there were looking for a business model which would support the development of technologies and commercialising those technologies, but that just did not occur during the 12 years of the Howard government.

In December this year, the world will come together to reach, hopefully, a global agreement on climate change. I am not going to say for one minute that that is going to be an easy task, but the world is coming together and the debate in Copenhagen will be solely on the issue of climate change. Unlike some of the climate change sceptics on the other side of the House who obviously are legion, Australia needs to go to Copenhagen with a position of strength—with strong targets—and show some leadership. That is very important. It seems the cultural cringe on the other side of the House is that you have to sit back and see what everyone else does first. I would be fearful for what would have occurred for the French and the English if we had sat back to see what everybody else was going to do in the Second World War. We took steps then; we need to take steps now. This is as vital as getting involved and showing that leadership, not having the cultural cringe and waiting to say, ‘We’re going to wait and see what everyone else does.’

We are not acting alone in this. There are 27 EU countries, the United States, Japan, Canada, New Zealand and Korea all of which have—or, if not, they are developing—cap-and-trade emission trading systems as we speak. It is imperative that all nations continue to move forward. In that, I think Australia should be prepared to roll up its sleeves and take a role in it. It is not just us standing out the front and being able to show leadership on this; it is also our Australian industries which are developing these technologies, such as energy development. This is a new and emerging base of industries with which we can be at the forefront. We must consider the support which those industries get in developing their technologies, not simply for abating and reducing emissions in this country; their technologies will be essential for doing the same in other countries which are similarly concerned about reducing their emissions.

Earlier I referred to the Business Council of Australia. I have just found a quote from them which says:

In the interests of business certainty, the BCA calls on the Senate to pass the legislation this year to establish a Carbon Pollution Reduction Scheme.

The only point I draw from that is that businesses are saying that they want certainty. They know there has been a debate, they know what occurred last election and they know what we took to the electorate in 2007. They know what the contest was at that stage and they knew—maybe they did not know—why John Howard would not sign Kyoto, but they knew precisely what it meant to elect a Rudd Labor government. Industry at large, as well as the community, are saying, ‘We want some degree of certainty out of this.’ Therefore, enacting a carbon pollution reduction scheme is not just the way to go because there has been a mandate for it; this is now overdue. There is no doubt about it: we are loosing the fight in terms of climate change. We have a lot of catching up to do. Maybe this does not turn it all around but this is putting a line in the sand from which we must move forward. In Copenhagen, this is an area where this country can show some strength and take some leadership.

For those reasons, and for many others, I will be commending the bill to the House. But I cannot help but be drawn back to the position of all the renewable energy and sustainable energy companies out there which are looking to make their mark on the world at this stage. They will be going out and playing their role. They see this as critical for establishing this new and emerging group of industries. There is no walking away from the importance of coal in this country. It is our greatest export. One of the things we must be is the world’s best developer of clean coal technology. The $2 billion for the carbon capture and storage technology is very important.

There is no point going out there and signing all these contracts and selling all this coal unless we are leading the development of these technologies. There are things we are doing in areas such as the Otway Basin and elsewhere. At the table is the member for Brand, whose own area of Western Australia, his old stamping ground up in the North West Shelf, is leading the way in terms of geosequestration. These are things which are becoming particularly Australian. Our experts are particularly Australian in this regard. We are developing those industries out here and exporting them around the globe. The time is right now to proceed with this legislation. I do take a degree of comfort in the fact that the member for Groom is entering into the negotiations in good faith with the Minister for Climate Change and Water, and I wish those negotiations well. A heck of a lot depends on this. We actually do want a bipartisan position when it comes to something so critical that affects all of us not only now but into the future. Therefore I commend these bills to the House.

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I rise to speak against the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and accompanying bills in this cognate debate. The Australian people are now only just starting to focus on what the Labor federal government has in store for them with its CPRS Bill, the bill that imposes a new broadbased consumption tax to be known as the emissions trading scheme, or ETS, tax. The ETS tax, unlike the GST, is a tax on everything, including food. It is a tax on our basic means of heating, lighting and cooking, and that is electricity. Food prices will rise, it is said, by up to seven per cent. There is to be a massive tax on the commodity that provides 75 per cent of our electricity—that is, coal—which means that the cost of electricity will reportedly double. The tax will also fall on coal exports—our largest single export earner—all forms of transport, building materials, wheelchairs and even Vegemite. This package of bills envisages that agriculture will become subject to the scheme as well, resulting in a tax on all sheep and cattle, which will simply force dairy farmers and other farmers off the land and into possible bankruptcy. Senator Barnaby Joyce has had estimates done which show the cost of a family roast could be $150.

Climate change, which has obviously been going on for millions of years, has a new element: human beings are now said to be, by some, the cause of the changes in climate. The same people who advocate this can be called many, but there are also vast numbers growing every day who just say it is part of the continuum. Professor Roger Short, who holds an honorary position at the University of Melbourne as professorial fellow in medicine, in the zoology organisation at its Parkville campus, has made the most astonishing statements showing how extreme the antihuman brigade is. In an interview on ABC radio 702 last Sunday, he said:

We already have available the pill, which will stop global warming. Isn’t that fantastic? The single most cost-effective way of controlling global warming is to make the contraceptive pill available to as many million women, particularly in the developing world, who are denied access to it. We could, for $7 outlay per person, reduce the CO2 emissions by one metric tonne. Controlling global population will be No. 1 on the list, you can take it from me, in December when the world climate change conference opens in Copenhagen.

But he is consistent. In a media release in 2002 he is quoted as commenting on the statement by the founder of the World Wildlife Fund, who said:

At the end of the day, we could have saved more wildlife if we had spent all WWF’s money on buying condoms for humans.

His comment was:

He was right, and human overpopulation is ultimately the greatest threat to wildlife.

A genuine human-hater. Professor Short is attending the Prime Minister’s science awards dinner here in Canberra in this Parliament House tonight.

The Labor federal government’s response to climate change is a fudge. It pretends to lower emissions. It does not. It merely imposes this new tax, the ETS tax. This is how it works. There is no cap on the actual emissions Australia can make now or in the future. There is only an allocation made for Australia under the Kyoto protocol, and when Australia exceeds that allocation Australians have to pay billions of dollars to other countries for them to reduce their CO2 emissions by the amount we exceed ours. This is done by buying permits from Third World countries, hoping they will plant trees or otherwise abate, or by buying from other countries who have spare capacity—that is, they have not yet reached their own targets.

Treasury modelling shows that Australians’ actual emissions will remain way above the 2000 levels, even though Australia might agree to cutting the Kyoto allocated targets by five per cent by 2020 and 60 per cent by 2050. By 2020, emissions will be up by 11 per cent—that is, over the allocated target. By 2050 they will be nearly double the allocated targets. But where the cap does become relevant is domestically, where these bills impose a cap on how much CO2 can be emitted by industries and enterprises all over Australia. Once this cap is reached, the enterprise can go on emitting but has to pay a tax by way of purchasing permits from a body newly created by this legislation, called the Australian Climate Change Regulatory Authority—get used to it; it is going to be a big name. This body issues the permits and collects the billions of dollars paid by Australian businesses. Note the tax is not paid into consolidated revenue, as is normal, but to the authority, which in turn will churn some of the tax receipts into payments for pensioners and others who cannot afford to pay the increases in costs of living because of the tax.

The authority will also issue free permits to those industries lucky enough to be allowed to escape up to 95 per cent of the tax. Many of those industries will be ones which have been lured to Australia because of cheap energy sources and, once the price goes up, will simply leave the country and go to one where there is no such tax. But the government can increase the tax any time it likes by lowering the cap. It becomes a ready cash cow for government, without any restriction. It is estimated that there will be unallocated revenues worth $50 billion from 2015 to 2025. Let’s compare that to the GST. The GST, a broad based consumption tax which excludes food and many other things, cannot be raised except by agreement of all states. But the ETS tax can be raised at the will of the federal Labor government, which has already plunged this nation into hundreds of billions of dollars of debt.

Small business and farmers will be the big losers—but so will all of us, being forced to pay more and have a drop in our standard of living. Whether it is Whitlam with the illegal overseas loans, or Keating with 17½ per cent interest rates, Labor always manages to wreck our economy—and then we the coalition have to come in and clean it up, just as we did in 1996.

The Minerals Council of Australia—and, I note, it is on the government’s own admission—points out that China’s thirst for our minerals and energy resources has allowed our economy to receive the fillip that it has indeed received. That Minerals Council is opposed to the scheme. It points out that it is out of step with the rest of the world and will impose the world’s highest carbon costs. The Minerals Council also points out that the modelling by Concept Economics showed 24,000 jobs would be lost from the minerals sector by 2020. All this at a time when high levels of immigration are saying we are headed for a population of 35 million by 2050. This is not a time to be cutting jobs; this is a time to be creating jobs.

This tax is hugely complicated, and all recent polls show that Australians are starting to realise the impact it will have on them and their families. The respected Lowy Institute poll states:

Climate change continues to drop as a priority for Australians. In 2007, Australians ranked … climate change as the equal most important foreign policy goal… This year it ranked 7th out of ten possible goals—down ten points since last year and 19 points since 2007.

Global warming as a threat to Australia was down 14 points since last year. And 53 per cent of people, in a Newspoll a month ago, said nothing should be done before the Copenhagen meeting, when the rest of the world meets to debate this issue.

The Canberra Times reported this week that four in 10 voters said they did not have a clue when asked their view on the Labor government’s emissions trading scheme. Essential Research, who conducted an online poll, showed 38 per cent of people polled had no idea whether the ETS was good or bad. Of 25- to 34-year-olds, 49 per cent did not know if the ETS goes too far in favouring business, the environment movement or has the balance right. Michael Stutchbury wrote in the Australian in August 2009:

Australia’s raucous democracy can impose political penalties on governments held responsible for even small reductions to household incomes, particularly for middle-class families. So Rudd’s main pitch at the 2007 election was to ease the squeeze on household budgets from higher interest rates, petrol prices and grocery prices.

Yet support for climate change action among battlers is likely to quickly dissipate once it touches the hip pocket nerve. That’s partly why governments prefer to disguise the carbon “tax” in the form of a cap-and-trade system.

A tax is what it is. There is plenty of evidence that this Labor lot has tried to hoodwink the Australian people into accepting the ETS as a benign instrument to combat climate change. It is not. It is a tax. There is now more evidence that people are awakening and starting to realise this complex tax is not in their interests.

The case is becoming plainer and plainer that this tax is one which is designed to reap revenue for the government which it thinks it can use to redistribute income and to help to start paying off the massive debt that it has racked up. It is a hoax on the people. It will not change the emissions in this country one iota. It is just a tax. Accordingly, I oppose this package of bills.

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

I rise to add to this debate today on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. I am going to build on my comments on 3 June 2009, and I would encourage members who are interested in my broader thoughts on this to read that second reading debate speech when this issue was first introduced into the parliament. I want to add to those comments with this legislation coming back, because it is particularly important legislation in my electorate of Leichhardt, the home to the Great Barrier Reef and the home to the wet tropics rainforest. To us it is not only about protecting the environment and making a difference in terms of the reef; it is also about jobs in the tourism industry. We have over $2 billion in economic activity in the region based around tourism and there are 35,000 direct and indirect jobs. So when we talk about jobs and the need for us to take action on climate change, we are talking directly about regions like mine and the importance of tackling climate change.

The science is in. There is no doubt that there are real risks to the Great Barrier Reef, the wet tropics rainforest, the Murray-Darling and the agricultural sector. The report brought down this week also highlighted the risk to coastal communities. I am proud to represent the Torres Strait Islands. Mayor Gela, representing the outer islands, is very concerned about the long-term impact of climate change and sea level rise on islands such as Saibai, Boigu and some of the central island group as well. It highlights how out of touch the opposition are when Mr Abbott in comments this week on the doors when asked about the report being released said that sea levels had risen 20 centimetres along the coast of New South Wales and nobody had really noticed it. The reality is that a 20-centimetre rise in sea levels in a place like the Torres Strait could mean that we would have to look to move people from islands like Saibai and Boigu. Members opposite making contributions like that in this debate really do not understand how important this issue to communities like those in the Torres Strait. Indigenous Australians are really struggling and thinking about the long-term future of those communities.

I heard the member for Mackellar’s comments earlier. They struck as being quite different from the overall view that I thought the Liberal Party brought to this issue. The reality is that the Labor Party took to the last election a commitment to introduce an emissions trading system and we are now debating our emissions trading system, the Carbon Pollution Reduction Scheme. The member for Wentworth, the current Leader of the Opposition, made it clear that he supports an emissions trading scheme. As the environment minister in the former Howard government he introduced legislation into this parliament. There was discussion about it going to the former coalition caucus and being supported. The reality is that the Leader of the Opposition is on the record as saying that he supports an ETS. We heard the member for Mackellar say that basically she does not support this legislation and does not support an ETS, like many other members over there.

But we have heard from the leadership of the Liberal Party that they do support this proposal for an emissions trading scheme. They might not like our particular emissions trading scheme, but they do support an emissions trading scheme. We are negotiating in good faith with them. But that sounds quite different from some of the comments from their back bench.

The business community supports an emissions trading scheme. The Business Council of Australia and the Australian Industry Group support one. The National Farmers Federation reckon that we need to have an emissions trading scheme. They are saying—quite differently from the National Party—that they support an emissions trading scheme. They want to have the emissions out but they want to be able to take the benefits of the abatement. So there is a broad coalition that supports an emissions trading scheme. The NFF says that they want to see an emissions trading scheme. They want to see the benefits of abatement go to the agriculture sector. I come from an agriculture and farming background. I talk to local people in my part of the world in the sugar industry, and they see real benefits from being involved in getting the abatements that will flow if the Carbon Pollution Reduction Scheme, an emissions trading scheme, passes through the parliament.

There is a broad coalition of people who want to see the government take action on climate change. There is international agreement. The American President has made it clear that he supports an emissions trading scheme. The Europeans already have an emissions trading scheme. There is a broad coalition of support that we need to get an emissions trading scheme in Australia through the parliament. We are negotiating in good faith with the opposition, but we are quite confused about where the opposition really stands on this issue.

The Leader of the Opposition is saying very clearly that he now wants this legislation delayed until after Copenhagen. The reality is that Copenhagen is going to be important in terms of setting the levels of international targets. This legislation will be different, no doubt, from the American legislation and different from the European legislation—that is understandable; we have different economies. What we need to do is agree on the targets, and that is what Copenhagen is about.

We and the Australian community are tired of listening to the Leader of the Opposition and other members opposite continuing to delay this debate and not making a decision. That has been their approach to this issue. I do not believe, and I do not think that anybody sensible who has been watching this debate, would believe that this is about them making a decision. This is about internal problems in their party. The member for Mackellar and a range of other members have made it very clear that they do not actually believe that climate change is happening. They are very sceptical about it. That is why they cannot make a decision on this issue.

They were going to make a decision after the Garnaut report and tell us what their policy was. They were going to make a decision after the Treasury modelling and tell us what their policy was. They were going to make a decision after we had put forward a white paper and tell us what their policy was. They had their own Pearce report that would inform their policy and give us an idea about where they stood on this issue. Their opposition spokesman on this issue, Mr Robb, said that after the Senate inquiry we would get a clearer understanding of their position. And according to the Leader of the Opposition we would get a clearer understanding after the Productivity Commission report. Delay, delay, delay. It is not about the fact that the Leader of the Opposition does not support an emissions trading scheme; it is about the fact that he cannot get his own side of politics all together and into the room to agree.

The Australian people are tired of it. They want a government to take action; they want this legislation through the Senate. We want to be able to go to Copenhagen with legislation that has passed the parliament and is very clear about how we can go about achieving our targets. We know that there are members opposite that support the view that getting this legislation through the parliament and through the Senate before Copenhagen is important. We want to show leadership to the international community. We want to make sure that we can get a good deal and set a high target so that we can keep carbon levels at or below 450 parts per million, which we need to do to make a real difference in terms of things like protecting the Great Barrier Reef.

I mentioned Mr Abbott earlier on and some of his comments that indicated that he was out of touch with places like the Torres Strait and the impacts and threats of rising sea levels. But even Mr Abbott has made it clear that getting this legislation through the parliament will assist us in our negotiations in Copenhagen. In the Australian on 19 October 2009 in an opinion piece, Mr Abbott, talking about getting the legislation through, said:

It could indeed help the outcome of the Copenhagen climate change talks if Australia agreed in advance not only to a carbon emissions target but also on a mechanism to deliver it.

The mechanism to deliver it is the Carbon Pollution Reduction Scheme. I, representing communities in the north and an area including the Great Barrier Reef and wet tropics rainforest, plead with the opposition to come together and make a decision. The Leader of the Opposition said a month ago that he was going to effectively stake his leadership on this issue. He needs to take shadow cabinet’s position—his position—after the negotiations to the party room and say, ‘This is the best deal that we could get from the government.’

The government is prepared to sit down, through Minister Wong, and come away with a compromise if necessary to get this legislation through the parliament. But the Leader of the Opposition needs to stand up in his party room and take on the sceptics and get a deal on this issue so we can get it through the House and get it through the Senate and take to Copenhagen a plan to take action on climate change. People in my community in Cairns and Far North Queensland are demanding of the Australian parliament that we come together and come up with a solution to deal with the issue of climate change.

Jobs are on the line in Far North Queensland in the tourism sector, if we do not take action. It might not be tomorrow but over the medium to longer term. My pleading and my call to the opposition is to come together and stare down the sceptics, stare down the National Party and come to an agreement with the government so that we can get this legislation through the parliament and take action and make a difference to the world in terms of our response to climate change.

Danna Vale (Hughes, Liberal Party) Share this | Link to this | Hansard source

I oppose these Carbon Pollution Reduction Scheme bills because they are driven by fantasy and deceit. Even the very name of this legislation is a deceit upon the people of Australia. Carbon is not a pollutant. It is a potent fertiliser and up until now a free fertiliser at that. At the outset I say that it is madness and morally reprehensible for the Rudd Labor government, and indeed for the well-fed Western democracies, to take actions that intend to limit, capture and bury a free fertiliser like CO2 and thus deny the billions of undernourished people in the developing world a free 20 to 50 per cent increase in food production as well as increased rainfall in a world that is experiencing water shortages as populations increase.

Carbon dioxide, or CO2, is the building block of the universe. All scientists agree that it occurs naturally. It is invisible, odourless and non-toxic and is emitted by all animal life. It is also necessary for all plant life for photosynthesis. My constituents will often hear the term ‘greenhouse gases’ used synonymously with CO2 and it is presented as a pollutant. They should be alerted to the fact that greenhouse gases make it possible for humans to live upon the earth and that CO2 is but a small component of greenhouse gases. They may be surprised to learn that water vapour and clouds make up 97 per cent of greenhouse gases and CO2 about two per cent, with methane and other gases making up the remaining one per cent.

This means that exhaled breath, fluffy clouds and cow belches are presented as pollutants. Water is the main driver the greenhouse effect. Of this very small CO2 component of greenhouse gases, human beings contribute about three per cent and soil and vegetation about 53 per cent, with the remaining 44 per cent coming from the oceans. We here in Australia contribute about 1.5 per cent of total global anthropogenic emissions.

This legislation aims to reduce our national emissions by five per cent by 2020 at the cost of great disruption to the Australian economy and the potential to lose tens of thousands of jobs. To give you a picture, Mr Philip Wood of Intec Ltd said that this means that this legislation aims to reduce the world’s greenhouse effect by the equivalent of one footstep in a walk around the equator.

Yet there are now unchallenged scientific findings that tell us that CO2 will not cause future catastrophic climate change. Indeed, with all the resources available to the Rudd government, the government must be aware that, based on recent scientific discoveries, a doubling of CO2 will cause a barely perceptible 0.2 to 0.25 degree temperature increase over a century. The benefits of this for humanity will far outweigh any costs. Yes, that is the extent of it: barely perceptible.

In truth, these bills before us today are really tax bills. They are the most pernicious pieces of legislation that we have had come before us in this parliament, not least because they are based on misinformation, scientifically disproved theories, Orwellian doublespeak and, as evidenced by their title, outright deceit. These bills will not provide any protection for our environment but will serve to vandalise our economy, undermine our system of law and threaten the very fabric of our free society.

There are several issues involved in this legislation, and in the short time allocated to me I need to clarify my position on some of them for the benefit of my constituents. These issues include climate change itself, the degree of the impact of human activity on climate change—which is often referred to as anthropogenic global warming, as propounded by the Garnaut report—the government’s response to that report in presenting this legislation and the likely impact of this legislation upon the lives of the people of Australia.

First, we all understand that the climate of the Earth changes over time. We know that the Earth has had ice ages in its distant past as well as times of thaw and times of warming. It is the rhythm of the Earth. Some of my constituents may have heard of Skara Brae, a Neolithic stone settlement in the Orkney Islands near the north coast of Scotland, which had been covered by grassy dunes for thousands of years. It was revealed in 1850 after a major storm and extremely high tides. Archaeologists found that the Neolithic people who settled Skara Brae had lived there for over 600 years. But as the weather patterns changed the people abandoned their village. It had become progressively wetter and colder and fish could no longer be found in the increasingly colder ocean currents: climate change.

From the evidence found of human occupation on the planet, we know that human beings prove to be the highly resistant survivors, being able to readily adapt to the circumstances of their environment. Scientific observation proves that advances and retreats in Greenland glaciers and the Arctic ice are cyclical and entirely natural. They provide us with another example of Earth’s climate rhythms. During the mediaeval warming period, which started around 1,000 AD, global temperatures were around two degrees higher than they are today. Viking seafarers following the Pole Star across the western Atlantic discovered Greenland and called it green because it was green. However, around 1,400 AD, as the Little Ice Age enveloped the world, the Vikings were forced to abandon Greenland. The Little Ice Age ended only a century ago: another example of climate change.

From the early mists of time up to the beginning of the Industrial Revolution around 350 years ago, the evidence of climate change upon the Earth is irrefutable. Yet there is no human industry that contributed to greenhouse gases before that time. The Industrial Revolution did not occur until around the late 18th century. Yet today the scientists at the CSIRO and the Bureau of Meteorology inform us through the Garnaut report that CO2 produced by human industry will cause future catastrophic climate change if we do not act urgently to seriously reduce its impact. It begs the question: what, then, caused the climate to change in the past if, as the scientists at the CSIRO and the Bureau of Meteorology tell us, CO2 is the problem today? Further, where is their observational or empirical evidence?

This brings me to my next concern: the question of evidence against CO2. As a lay person, it is my understanding that in science observation always trumps theory. In my reading for preparation on these bills, I was concerned to learn that scientific observations published in two recent peer reviewed scientific papers disprove two key climate theories incorporated in the version of the CSIRO-Bureau of Meteorology computer climate model—that is, the Garnaut model—used to provide the theoretical forecasts for temperature and other climate changes that were used as input in the Garnaut climate change review report. And as we are all aware here, the Garnaut report is the driver for the justification of these bills.

For the edification of the House, and hopefully also for the Minister for Innovation, Industry, Science and Research and for the chief executive officer of the CSIRO, to whom I have also written seeking clarification on this point, these two recent peer review scientific papers are published online. The first is a paper by Garth Paltridge, Albert Arking and Michael Pook entitled Trends in middle- and upper-level tropospheric humidity from NCEP reanalysis data published on 26 February 2009. The second is by Frank J. Wentz, Lucrezia Ricciardulli, Kyle Hilburn and Carl Mears called, How much more rain will global warming bring published in Science Express on 31 May 2007. I have written to the minister seeking his assurance that the climate theories incorporated in the Garnaut version of the CSIRO-Bureau of Meteorology computer model were in accordance with the observed climate principles clearly evident in the findings made by Paltridge et al and Wentz et al respectively.

I take the time to point out that the findings of these two scientific peer reviewed papers indicate that anthropogenic CO2 emissions will likely cause some global warming, but it will be an imperceptible increase of around 0.2 to 0.5 degrees spread over a century—hardly catastrophic and hardly necessitating the response by the Rudd Labor government of these draconian taxation bills, which will create a huge new government bureaucracy to administer, regulate, accredit and enforce, and create a new market commodity in trading permits to emit, and impose a new tax on everything. The Garnaut version was either based on climate theories that have since been disproved by Paltridge et al and Wentz et al retrospectively, or it was based on the climate principles clearly evident in the Paltridge and Wentz findings. It is not a difficult question for the scientists at the CSIRO and the Bureau of Meteorology. It is either yes or no, but we need to know. It would be reckless in the extreme for members of this House to vote on these bills before we have a specific and unequivocal assurance from the minister—and I respectfully call on the minister for this assurance—that the Garnaut version was indeed based on the climate principles clearly evident in the recent discoveries made by Paltridge and Wentz respectively.

There are many other aspects of this bill which would cause my fellow Australians great concern. Many would not be aware of the corrosive impact this legislation will have on our economy. Nor would they be aware of how it will undermine certain rights we value in our legal system. The explanatory memorandum points out that the grand new bureaucracy created by this legislation is to be called the Australian Climate Change Regulatory Authority, but it will be known by the Orwellian name of the ‘Authority’. The ‘Authority’ will administer this trading system and the reporting regime. It will determine the renewable energy targets and decide on the issuing or withholding of permits to emit to the Australian industry. Orwellian discomfort continues when we learn that the ‘Authority’ can abolish the right to silence and the right to self-incrimination. There are provisions that reverse the onus of proof, and we can all forget about any privacy protections. The ‘Authority’ will have the right to pass private information on to anyone it likes, including the United Nations and foreign governments.

Alongside these concerns, I am highly suspicious of the undue haste, the huge political push to pass this legislation before the windy debates in Copenhagen. I utterly reject the political urgency that suffers no opposition, the personal ridicule meted out to those of us who dissent from the ordained mantra of those prophets of the received wisdom, whom I call the ‘Profits of Doom’. The fervour of their arrogance and their ferocity in the face of my scepticism is easier to understand when we learn that the dogma is driven by dollars in what has already become a fevered research industry, bent on doing whatever it takes to convince the world that the devil is in CO2, despite knowing that a doubling of CO2 will green the planet with bountiful plant growth and despite knowing that the recent peer reviewed discoveries disprove their pernicious and false theories.

In an interesting paper by Australian researcher Joanne Nova called Climate money published online, the author points out:

… over the last 20 years, by the end of fiscal year 2009, the US government will have poured in $32 billion for climate research—and another $36 billion for development of climate-related technologies.

Ms Nova goes on to say:

These are actual dollars, obtained from government reports, and not adjusted for inflation. It does not include funding from other governments on the global industry.

Most importantly, Ms Nova says:

The most telling point is that after spending $30 billion on pure science research no one is able to point to a single piece of empirical evidence that man-made carbon dioxide has a significant effect on the global climate.

In this present situation, where the usual scientific method of sceptical inquiry has been abandoned for an unfounded, unproven religious dogma, I hold a very real apprehension that this process of deceit, haste and verbal abuse by those ‘Profits of Doom’ of the received wisdom is something akin to a bloodless coup d’etat against our democracy, our standard of living and our Australian way of life.

Ms Nova also says:

The intimidation, disrespect and ostracism leveled at people who ask awkward questions acts like a form of censorship. Not many fields of science have dedicated smear sites for scientists. Money talks—

she concludes. And there are those of us non-believers on this side of the House that cop a right verbal walloping every now and again from the Prime Minister and his frontbench whenever they feel like there is a need to launch an invective or two across the parliamentary divide. Apparently, the Prime Minister still believes the false IPCC endorsed theory—that warm, moist air rises but when you apply more heat it slows down and rises more slowly—that Wentz has disproved, otherwise he would not be putting forward these bills. Personally, I would be terrified if I was in a hot air balloon and the Prime Minister was in charge. Every time an obstacle loomed he would turn down the burner and we would crash. When the time came to land, he would turn up the burner and we would drift up, to be carried by the winds into oblivion. There can only ever be one voyage with this Prime Minister, and it would end in disaster.

However, my real concern here is that in this legislation truth is the first casualty. This legislation is based on a false premise. It is based on a lie. As John Reid pointed out in his article in this month’s Quadrant Online:

When a political structure is set up which is based on a lie, we can expect further lies to proliferate.

The truth is that this legislation will do nothing for the environment. All this legislation will beget is a new bureaucracy and a new tax, and it will be a tax on everything. This legislation will establish an engorged bureaucracy that will regulate emissions of CO2 through its oversight of just about every aspect of our lives. We all use energy, and access to the use of energy will be drawn under tight government control, through an administration that will have, as John Reid aptly described, ‘monitoring and accreditation structures of Byzantine complexity’.

We have all been warned. My constituents should heed the words of the Hon. Ian Callinan AC QC, Justice of the High Court from 1998 to 2007, quoted in the publication Back to the 19th Century, printed by the Lavoisier Group in September this year. His Honour Justice Callinan stated:

Emissions regulation offers government an irresistible opportunity to centralize and control every aspect of our lives; on our roads, on our travels, in our workplaces, on our farms, in our forests and our mines, and, more threateningly, in our homes, constructed as they will be compelled to be, of very specific materials and of prescribed sizes. It is not difficult to foresee a diktat as to how many lights we may turn on and when we must turn them off: the great curfew. The new regime has the capacity to make the wartime National Security Regulations look like a timid exercise of government restraint.

I fear that these words will prove prophetic. In California plans are already afoot to ban ordinary citizens from using wide-screen TVs because of the energy they consume. In Australia, incandescent lights have already been banned.

The new authority will hold ultimate control over Australian industry. It will strike at the heart of our energy industry, particularly at the economic viability of our coal-based power stations. It will eventually force up the cost of energy to Australian families as Australian businesses flow through their costs of compliance to all markets. The creation of a new market in emissions trading permits issued by the authority will provide effective leverage for government control of price in this new carbon market. It is hard to see how there will be any certainty for business and industry in all this. Just look at what capricious and self-interested changes to government policy have cost Telstra shareholders.

This legislation, in creating a new market of tradeable property rights in emission permits, will certainly attract speculators and the usual other suspects, who are already sniffing the wind. But the Australian taxpayer will not be aware of the reach of this legislation until it is too late. While the banks and financial institutions are aware of the prospect of a new trading commodity, a new industry will already have been created by the time this new tax system begins to bite. There will be little, if any, prospect of any repeal. Unlike an old-fashioned consumption tax, this new tax system is a trading system. It will soon become an industry, and it will be almost politically impossible to repeal. I say this because it will very quickly become another government industry focused entirely upon its own preservation. And this is not without precedent. The federal government’s methadone program is a good example. Once this new carbon regime is in place, it will be almost politically impossible for it to be repealed. Carbon trading promises to be big, real big—even bigger than oil. Already there is a stealthy gathering of bankers and investors sniffing the lucrative trade winds of a massive new market.

One other point that must be made at this juncture is that, if CO2 really was the driver of catastrophic global warming and a certain nation knew that there were large deposits of uranium lying within its sovereign soil, why is the Rudd Labor government deafeningly silent on the obvious nuclear solution for Australia? France derives almost 80 per cent of its baseload power from nuclear energy. It also sells it to neighbouring countries so they can supplement their supplies of green energy to keep the light on when there is a lull in the wind and to meet their baseload requirements. In truth, if CO2 was the real culprit in climate change, nuclear energy is the natural, clean, green solution for Australia.

Instead, we are bullied, browbeaten and abused so that we accept this legislation, which threatens the political, social and legal fabric of our nation. And the tragedy is that today it can be clearly shown there was no need for it in the first place. The opening statement in the explanatory memorandum of this legislation is fanciful at best and outright fraudulent at worst. It hysterically portends a catastrophe of epic proportions that is based on the Garnaut report, which depended heavily upon theoretical forecasts on regional climate change for Australia that have now been proven to be incorrect by Paltridge et al and Wentz et al. So I await the minister’s assurance. Surely the scientists at the CSIRO and Bureau of Met would want to respond to the findings of Paltridge et al and Wentz et al because, as ethical scientists, they would be aware that the scientific world, and indeed every Australian, will be expecting their response in the light of these new discoveries. In the world of science observation always triumphs over theory eventually, and ethical scientists eventually abandon false theories when they have been disproved by observation. However, if ethics has gone the way of the scientific method and evidence based, informed government policymaking, and our response from the CSIRO and Bureau of Meteorology is a deafening silence, I would remind both these organisations of one thing: truth is the daughter of time. In the absence of any assurance from the minister in this regard, I have no option but to reject these bills for the fraud they are upon the people of my country.

Mark Dreyfus (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

The Carbon Pollution Reduction Scheme, which is contained in Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills, is a means to a low-carbon-emissions future; it is a means to a low-carbon-growth trajectory for Australia. The Carbon Pollution Reduction Scheme is not an end in itself. Anyone listening to some of the contributions to this debate from those opposite, including the hysterical contribution we have just heard from the member for Hughes, could be forgiven for thinking that it was an end in itself to introduce in Australia a carbon pollution reduction scheme—which is of course an emissions trading scheme, no different indeed from emissions trading schemes which have been introduced already in a number of countries, notably in the United Kingdom, where there has been a carbon trading scheme in operation since 2004.

I mention this at the start of my remarks about the legislation simply to make the point that there are a range of means available to reduce carbon emissions just as there are a range of strategies and means that are needed to deal with the effects of climate change generally. Part of the government’s approach to the dangerous climate change we know to be occurring is reducing carbon emissions from Australia. Another part of the government’s strategy is to take adaptation measures to unavoidable climate change. A third part of the government’s strategy to deal with climate change is working to craft a global response, a global solution, to the problem of dangerous climate change.

The Carbon Pollution Reduction Scheme is one means that can be taken to reduce carbon emissions. There are others, and of course the government has already embarked on a range of measures which are also directed to reducing carbon emissions. I include in those the renewable energy target, on which the government has acted to increase very substantially the renewable energy target after years of inaction in that area by the Howard government. I include the massive investment, contained in the last two budgets, directed at encouraging the development of renewable energy sources in Australia. I refer also to the large investment that the Rudd Labor government has made in developing viable carbon sequestration, which of course is directed at allowing the continuing use of coal in our country but with much lower emissions.

I spoke on the Carbon Pollution Reduction Scheme bill when it was first introduced back in June—I spoke immediately after the Leader of the Opposition. One of the things I referred to in my speech on 2 June was the long list of excuses—repeated excuses—that the opposition had used in order to suggest that there was some reason or other for this House not dealing with legislation to introduce an emissions trading scheme for Australia. It is very pleasing to be able to say that the opposition no longer takes that position. Earlier today the Leader of the Opposition spoke on these bills. He gave a bit of history which put the debate in context and must make anyone in Australia wonder what on earth the opposition have been going on about for the last several months. He said:

Most economists and policymakers agree that a well-designed emissions trading scheme is the most economically efficient means of reducing greenhouse gases.

He went on to say:

That is why in 2007 the Howard government commenced work on an Australian emissions trading scheme. It was based on the Shergold report, the report of the committee chaired by the then permanent head of the Department of the Prime Minister and Cabinet, with other secretaries represented as well as industry.

He followed that by saying:

It is why both the coalition and the Labor Party went to the 2007 federal election promising to implement an emissions trading scheme.

As the Leader of the Opposition correctly points out, both the former government and the then Labor opposition, the present government, went to the Australian people saying that an emissions trading scheme was necessary. Since the 2007 election we have had backsliding, retreat and a long litany of excuses from the opposition.

When one listens to the member for Hughes one can only feel sorry, deep sympathy indeed, for the Leader of the Opposition as he attempts to marshal the bizarre attitudes that have been expressed by members opposite in relation to even the existence of climate change, let alone the hysteria that we heard from the member for Hughes to this effect: threatening the legal and social fabric of our nation. That came at the end of a speech in which she had suggested that carbon emissions were going to be responsible for a beneficial greening of the planet. Whoever heard such nonsense? So again I say, one can only feel sympathy for the Leader of the Opposition as he attempts to bring some rationality to bear. He did this in his speech earlier today, when he quite correctly noted the fact that the former government and the then opposition, the Labor Party, took to the people at the last election a proposal for the introduction of an Australian emissions trading scheme.

It is also pleasing that the opposition is engaging in negotiations with the government over the detail of the Carbon Pollution Reduction Scheme. That is not before time. Many of the details of the Carbon Pollution Reduction Scheme have been on the table since the government’s white paper in December last year. One could go back earlier than that and look at the debates which we have now been having in this country for some years about what an emissions trading scheme would look like.

I indicated in the speech I gave on 2 June that I was about to go to a climate change conference organised by the Commonwealth Parliamentary Association in London. I did attend that conference, which was attended by representatives of almost all Commonwealth countries and by invitation a range of representatives from other developing countries. These included, notably, Mexico, which has made a tremendous contribution to negotiations at the world level in developing a response to climate change. What was striking about that conference was that I heard very clearly and very directly voices from developing countries which have not been fully heard in the debate in this country. Regrettably, I go back to the member for Hughes to say that in listening to her contribution to this debate one might think that there had been no consideration of this issue around the world; that there had been no work done by the Intergovernmental Panel on Climate Change—not just in the last year but over the last 10 years. That of course is not the case. There has been an immense amount of work done by scientists, there has been an immense amount of work done by governments and there is an immense amount of concern being expressed by developing countries about the effect on their countries of dangerous climate change.

The President of the Maldives attended this conference organised by the Commonwealth Parliamentary Association in London. His country, located as it is almost at sea level in the Indian Ocean, is at risk from rising sea levels. The message that he gave to all of the representatives of the Commonwealth who were present at that conference was, very directly, that his country was going to suffer the consequences of dangerous climate change caused by human activity in developed countries which, of course, is producing a situation where the consequences will be most directly borne by countries like the Maldives. Other developing countries are in a very similar position. They are looking to the developed world, of which Australia is a part, to take action to reduce carbon emissions and to take that action now.

At the Commonwealth Parliamentary Association conference we heard also from representatives from Bangladesh. They sent a large delegation to this conference because Bangladesh is one of the countries in the world that is also very low lying, particularly in its delta areas, and it has experienced already the direct results of extreme weather events that are part of the dangerous climate change phenomenon. The particular recent catastrophic weather events that have been experienced by Bangladesh include what they referred to as two ‘super-cyclones’, which produced the result that, as at the date of this conference, which was in the first week of July this year, there were still some three million Bangladeshis living on levee banks as a result of flooding that had not subsided being caused by the two super-cyclones that occurred over the Australian summer, which was the monsoon season in Bangladesh, at the end of last year and the start of this year.

I mention those examples simply to make the point that it is not just about Australia; it is about the contribution that Australia can make to the rest of the world and to the wellbeing of developing countries—in particular, developing countries from the Commonwealth, who are all looking directly to Australia as a developed Commonwealth country to take action and, indeed, to lead and assist in the negotiations which are about to take place in Copenhagen in December, less than 50 days from now. There is no doubt, the longer we wait the greater the cost will be.

We on this side of the House are going to keep explaining the clarity of the science, how this scheme is intended to work and the need for it. I, with the member for Moore, assisted in arranging a visit last week of a group of climate scientists to provide information to members of this parliament. Listening to the member for Hughes, I can see that there is going to be an ongoing need for good science to provide answers to the sorts of myths and bad science that are propagated by climate change sceptics, which appear to include the member for Hughes.

The efforts that seem to be now being made by part of the opposition—I cannot say the whole of the opposition; but, happily, the leadership of the opposition—to negotiate changes to this legislation are to be welcomed. It is a matter of continuing regret that there has been a complete failure on the part of the National Party part of the opposition to take climate change at all seriously. That represents a complete failure to look after that part of Australia which I had always thought the National Party claimed to be their constituency, namely rural Australia, who it is accepted are those Australians who will be massively affected by dangerous climate change in the form of reduced rainfall, higher temperatures and all of the other effects that other speakers have spoken about.

Finally, I would mention the need for business certainty. The Business Council of Australia, the Australian Industry Group and a whole range of other industry groups and industry leaders are calling for this legislation to be passed. They have seen that in the United Kingdom in the European community emissions trading legislation has been passed. It has not led, to use the hysterical words of the member for Hughes, to a ‘disruption of the legal and social fabric’ of their nations and nor will it lead to even a threat to the legal and social fabric of our nation. Instead it will lead to certainty. It will lead to Australia being able to join in with the rest of the world in grappling with climate change. It will lead to an improved negotiating position for Australia at the Copenhagen conference because we will be able to speak with the authority of a nation that has enacted legislation. And, to go back to my last point, in relation to business certainty it will provide to the business community of our country certainty going forward upon which they can rest business decisions and certainty as to where the business environment in which they operate is going to be in five and, we hope, 10 years time. I commend the legislation to the House.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

It is with pleasure that I rise to speak this evening on this important legislation, the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. I follow a contribution which, I must say, I am very disappointed with from a member who, before the last election, talked up what an intellectual contribution he would make to this place. But instead he spent at least seven minutes at the start of his speech attacking the member for Hughes’s speech and then spent a large part of the rest of his speech talking about the effects of climate change in different parts of the world. He actually did not speak at any point about this legislation, the details of the legislation, its effect on the Australian people or the reasons we should support it. It is very disappointing, but I guess it is not so surprising that he has not been promoted, as he believed early on that he would be.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! I ask the honourable member to come to the bill.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

I will now move back to the content of the bill, Mr Deputy Speaker. This is the second opportunity we have had in several months to speak on this bill and I appreciate the fact that the minister responsible for the bill in this place, the Minister Assisting the Minister for Climate Change, is at the table. I hope for his sake that he does not have to sit through the whole debate from beginning to end, but it is very good that he is here this evening. It is an important bill for us to consider in detail and there are in this place rightly a range of views on the impact of this bill. I for one support the democratic right of people in this place to have a different perspective on this important legislation. I think the minister at the table has said that it is probably the biggest change to the country’s economic infrastructure in some time, at least since the introduction of the goods and services tax; therefore, it is important that we do have a full-ranging debate. Obviously, we have had two opportunities to have this debate in the last three months. That three-month timing is coincidental of course.

I rise tonight to speak in support of the amendments to this bill that were described so eloquently this morning by the Leader of the Opposition. They are vast in their coverage and important in their impact. This bill is badly flawed and the government obviously recognise that to the degree that they are entering into negotiations with the opposition on appropriate amendments in an attempt to try to move it through the parliament. We have amendments which demonstrate that Labor’s CPRS can be cheaper and smarter and can protect more jobs. We have done the work. We have shown that their scheme is deeply flawed. Even the Greens agree with us on that. They voted against it in the Senate back in August and I think they have shown that they will vote against it again if it is not amended.

The Rudd government’s current proposal, if implemented, would jeopardise thousands of Australian jobs. It would compromise the international competitiveness of our trade exposed industries. If accepted by the government, our amendments will prevent shutdowns in important industries and save tens of thousands of jobs in those industries. Key export industries, including coalmining, food processing, natural gas and aluminium, will be better protected, saving thousands of Australian jobs that are under threat from Labor’s scheme. The proposals will cushion the impact of power prices on small businesses and households, which are very much the core constituency of the Liberal Party. They always have been and they always will be. Small businesses and families are very much who we stand for, who we stand with and who we will protect at all times.

We also include in our amendments voluntary measures which will give businesses and, importantly, farmers and community groups opportunities to reduce greenhouse gas emissions through their own initiative. We will advocate an intensity based cap-and-trade approach to the electricity sector, as this more than halves the initial increase in electricity prices to small businesses and households, reducing the economic cost of achieving emissions cuts. Again, I make the point that we have done the work through the modelling of Frontier Economics, a consultancy that the Labor Party attack today but have used in the past. As the Leader of the Opposition pointed out, they have designed one more ETS than the Department of Climate Change.

One of the key issues that we pursue in these amendments is the exclusion of agriculture, with offsets like forestry and internationally recognised soil carbon included in the scheme. This morning the Leader of the Opposition and the member for Flinders, the shadow spokesman on the environment, pointed out very clearly how this green carbon will work and become an important part of the mitigation attempts of this scheme. Voluntary action in energy efficiency will be recognised. Again, this is another important area in which we are negotiating with the government to make important changes to what is currently a flawed and inappropriate scheme. We believe that these realistic and achievable amendments will meet the objective of reducing Australia’s carbon emissions and at the same time remove the shadow of potential industry closures and large-scale job losses. The government must explain why it would reject these commonsense amendments, which will save Australian jobs, protect Australian small businesses from sharp power price rises and have the same environmental benefits by achieving the same reductions in greenhouse gas emissions.

We also maintain that we should be waiting for the international conference in Copenhagen, which is now but weeks away. One of the reasons for the pursuit of this legislation so soon after it was initially rejected is of course the Prime Minister’s vanity, which requires that he take this scheme to the Copenhagen conference. That is a dangerous thing and a rushed decision based on the political interests of the Prime Minister rather than the economic and environmental interests of our country. So we very much stand in the corner of the Australian people to ensure that this bill and this scheme will operate effectively and will not just be pushed through this parliament to ensure that the Prime Minister of the day looks like he has achieved something great at Copenhagen.

We are very much of the view that this should be delayed until after the Copenhagen conference, but of course the government are the government and, as they have moved this bill today and with votes in the next two sitting weeks of parliament both in this place and in the Senate, we have indicated that we will be part of those negotiations. We are doing so as I speak. I am sure the member for Groom is speaking regularly with the Minister for Climate Change in that respect. The member for Isaacs in his remarks made the point that this is a global issue and has global ramifications, and we could not agree more with that point. This is a global issue and we must be part of the global response. That is why the conference in Copenhagen in December is an important occasion for us to see what the world will do together to address this issue.

We also know that a bill, the Waxman-Markey bill, is being debated before the US senate today and is likely to be finalised in some way in the near future. We do not know what will come out of that process. We know that there will be a result and we presume that the result will introduce some sort of cap and trade scheme in the United States.

However, the Minerals Council make the point that, even if our amendments to this bill are adopted, our scheme will still be the toughest in the world, in particular compared to the EU, but also in comparison with what is before the US senate. Therefore it is important that we get our scheme right to ensure that we do not sacrifice this at the altar of the Prime Minister’s ego with a rushed decision just to prove that he was able to get a scheme through before the conference.

We agree that Australia needs to be part of the solution. Those of us on this side of the House agree that we need to take reasonable action to address what are serious issues in the Australian community. We do not seek to say, to the same level as some on the other side, that climate change will destroy the earth in a short period of time. However, what we do say is that the evidence is there and it is substantial and it is prudent of us to take action, as Margaret Thatcher said, as an insurance policy. I support that view. This is a reasonable approach; it is something that we have previously said that we will do. However, it is a fair thing in this place that all sorts of views are outlined. That is the very nature of this place.

In conclusion, the government is engaging in negotiations with the opposition and we are very pleased about that. We think that they should support our amendments as they make a lot of sense. They prove that you can have a cheaper and smarter ETS that protects more jobs. We think the government has been rushed in its decision making and it will have severe consequences for our economy. We have seen that with other decisions they have made in relation to the economy and we are seeing that with this bill as well. We hope that the government takes our amendments and negotiations seriously and that they stop playing politics on this important issue. We ask that they come to the table, make some appropriate changes and make this a better bill than it is today.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I rise tonight to support the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills because they are critical to building the low-pollution economy Australia needs for our future. Tonight I have a pretty simple message: the time for dithering, the time for delay and the time for denial is over. The previous member was talking about these bills being rushed. I would hate to see him if he were really rushed. They have been at least 12 years in the making. There has been two years of intense work from the government and that follows a commitment that both parties took to the last election for action on an emissions trading scheme—and they talk about ‘the rush’. The fact is that there is an urgency about these bills but the government has dealt with them in a methodical way. We have presented a green paper; we have presented a white paper; we have presented legislation; and, there has been extensive scrutiny. We have been through one of the most comprehensive legislative processes in our history—and so it should be, given just how important this legislation is. Climate change is real and, of course, the economic and environmental consequences for Australia are real. We need to act now.

Australia is one of the hottest and driest nations on the planet. It is highly exposed to the impacts of climate change. If we are to protect our nation’s interests we must not delay any longer. To begin with, the business community in Australia is absolutely desperate for investment certainty. Our business leaders need certainty so that they can continue to invest with confidence. They do understand the need for a low-pollution economy and they know that this type of transformation requires long-term planning and strategic business investment decisions right now. This is a view that has been expressed by many business leaders. In a speech on 15 October, Heather Ridout from the Australian Industry Group said:

… many of our members are telling us that they are holding off making investments until there is a greater degree of clarity around domestic climate change legislation.

That is just commonsense. Then there is the following quote from Fiona Reynolds, the CEO of the Australian Institute of Superannuation Trustees. She said that the passage of legislation:

… will provide a clear signal and measure of certainty around which long term institutional investors like superfunds can begin to base investment planning and decision.

Industry is crying out for certainty. Just this afternoon the Minister for Resources and Energy and I attended a roundtable in the north-west of Queensland on renewable energy. We talked with investors, not just from this country but from around the world, about what can be done and what we can achieve, not just through our CPRS but also through our RET, if we just manage to get this legislative framework right and provide the degree of certainty that capital requires so that we can move forward with certainty. But that is not there and of course those opposite continue to deny the need for certainty. Business certainty is absolutely important in this debate.

At the end of the day what it means to the average Australian is jobs. Business investment is all about jobs and, most particularly here, the jobs of the future. There are very strong employment and growth reasons for acting now. The scheme is designed to help support the jobs of today, while creating the low-pollution jobs for the future.

Treasury modelling shows that Australia can achieve strong trend economic growth while making deep cuts in emissions through the CPRS. From an employment perspective all major employment sectors grow over the years through to 2020, substantially increasing employment from today’s levels. National employment is projected to increase by 1.7 million jobs from 2008 to 2020 and by 4.7 million jobs by 2050 while carbon pollution emissions allocation levels are projected to fall at least 60 per cent from 2000 levels by 2050. Average income is projected to increase by $4,300 per person over the 12 years from 2008 to 2020 with strong trend growth in GDP and GNP.

Treasury modelling also projects that by 2050 output in the renewable energy sector will be 30 times larger than it is today. This means jobs. Treasury modelling also shows that economies that act early face lower long-term costs—around 15 per cent lower—than when everybody acts together. So the case in terms of jobs is strong, but the case is also strong in terms of environmental impact.

On top of the economic advantages there is the environmental imperative. The Garnaut review found that current emissions trends would have severe and costly impacts on agriculture, infrastructure and iconic environmental assets in tourism destinations such as the Great Barrier Reef. Without action on climate change the Garnaut review showed that by 2030 the value of agricultural production in the Murray-Darling Basin will shrink by 12 per cent—and by 49 per cent by 2050. Likewise, the intensity and severity of bushfires are expected to increase so that, in the regularity of them, they will decimate our landscape and threaten lives and property.

We do understand that there needs to be an adjustment as we introduce the CPRS. The CPRS will reduce emissions, helping avoid those environmental impacts. Importantly, the scheme we have put forward does so in a way that protects low-income Australians. This support, I believe, undermines the scare campaign the opposition are trying to run on price increases. The government is committed to providing assistance to households to adjust to the introduction of the CPRS in three key ways. Upfront support will be provided to low- and middle-income households from 2011-12, through a package of direct cash assistance and tax offsets. All households will receive support to take practical action to reduce their energy use and save on electricity bills. Motorists will be protected from higher fuel costs by the application of cent-for-cent reductions in fuel tax for the first three years.

The compensation will fully meet the additional costs of pensioners, seniors, carers, people with disability and low-income households, and will help meet the costs of middle-income households. Around 90 per cent of low-income households, or 2.8 million households, will receive assistance equal to 120 per cent or more of the expected overall increase in their cost of living due to scheme. For middle-income families receiving family tax benefit part A the government will provide assistance to meet at least half of the expected overall increase in their cost of living from the scheme. The assistance package has also been welcomed by ACOSS. ACOSS said:

… ACOSS welcomes the Government’s commitment to provide cash compensation for low income households through the tax and payments systems to cover the expected energy price increases.

That brings me to small business, because here again the opposition are trying to run a scare campaign on the effects of the CPRS. Small businesses and self-employed people—like builders, plumbers or accountants—will not have to buy permits under the CPRS because they will not generate enough emissions to be liable parties under the scheme. These business people may face higher costs for some of their inputs—in particular, higher energy costs—but for most small businesses the impact of these price increases is expected to be modest, with the precise impact dependent on their energy intensity. The government will provide assistance here as well.

The fuel tax credit means that petrol prices will not rise due to the CPRS for the first three years of the scheme, and small business will be one of the key beneficiaries of the Climate Change Action Fund, which will provide $2.75 billion in assistance. The Climate Change Action Fund will assist small businesses, communities and regions to adjust to the CPRS. The government will also support larger businesses who would be most affected by the introduction of the scheme. The government is providing almost $4 billion to the most emissions-intensive electricity generators through the Electricity Sector Adjustment Scheme. This assistance is designed to assist coal-fired electricity generators with the introduction of the carbon price, and support investment in the Australian electricity sector.

Our generous assistance for emissions-intensive trade-exposed businesses will help guard against carbon leakage and provide some transitional assistance that will help support jobs. Energy-intensive trade-exposed industries will receive an initial free allocation of approximately 27 per cent of all permits. Free permits will initially be provided at a 90 per cent rate for highly emissions-intensive activities, and at a 60 per cent rate for activities that are moderately emissions intensive.

In addition, the global recession buffer will be applied for the first five years. Industries eligible for 60 per cent assistance get an extra 10 per cent, taking their rate to 66 per cent in 2011. Industries eligible for 90 per cent assistance will get an extra five per cent, taking their rate to 94.5 per cent in 2011. The CPRS white paper also explains that because the majority of coal mines are not emissions intensive it would be inappropriate to provide the whole industry with energy-intensive trade-exposed assistance. The government will instead provide $750 million over five years to assist the most gassy coal mines. This will provide associated benefits for the communities that rely on these coal mines for employment and economic activity. The delay in the start of the CPRS by one year and the $10 fixed price first year will provide the coal industry with significantly more time to prepare for the introduction of a carbon price.

Another scare campaign that the opposition like to run relates to farmers. The government has not made a decision on the inclusion of the agriculture sector in the CPRS. We have commenced a comprehensive consultative work program with 25 leading agricultural industry bodies and technological examination to look at possible future government policies in this area. Accordingly, the impact of the CPRS on farm incomes is expected to be small relative to annual variability in farm incomes and offset by productivity gains in the industry. The government is providing a number of measures to assist farmers. Agricultural producers will receive the cent-for-cent reduction in fuel excise for the first three years of the scheme, and agricultural producers may also qualify for funding under the $2.7 billion Climate Change Action Fund.

The final scare campaign that the opposition use is that Australia should not be acting ahead of the rest of the world. The reality is that something like 27 EU countries, the US, Japan, Canada, New Zealand and Korea have, or are developing, cap and trade schemes. Our critics, many of whom sit opposite, also say that we should wait until after Copenhagen. This is the same sit-and-wait attitude and approach they advocated during this global recession. It was the same sit-and-wait attitude that they put forward when they opposed tooth and nail our economic stimulus which has been absolutely essential to keeping this country out of the global recession.

The reality is that those opposite have never faced up to a hard decision. They can never absolutely face up to the decisions that go to the core of our economic prosperity. Whether it is taking the tough decisions in the middle of the global recession or facing up to the challenge of global climate change, they simply are not up to it. They have demonstrated it in this House time and time again, particularly during this debate. At their very core, they are simply climate change sceptics. They cannot bring themselves to join the modern world and face up to the challenges that each and every one of us has the responsibility to face up to as a representative of the Australian people so that we can pass on to our children an economy which is more prosperous and an environment which is more sustainable. That is something they simply do not understand because they are not up to understanding the challenges of modern government.

At the 2007 election, both major political parties put forward the establishment of an emissions trading scheme—both of them. Both of them put forward that proposal. The fact is that the commitment they made during that campaign has now been conveniently forgotten. It is absolutely clear that Australians want action on climate change and this government believes it is critical to take that action and to take it now. It is clear that business leaders want the certainty that will allow them to invest with confidence so that this economy and society can transition to a low-carbon future. They want action; they need it now. How rare a thing it is for a Labor government in this House to have the support of the business community, and the wider community. Those parties opposite that from time to time pretend they are somehow representative of the other side of politics or the business community once again are completely out of step with what is good for the economy in the long term and what is good for society.

The opposition has said that they are going to come to the table and negotiate in good faith. I am told that, so far, that is coming along. We welcome a detailed examination of their proposals. We look forward to negotiating with them in good faith, but I do have to say that the sort of commentary I have heard on the floor of this House during this debate would indicate to me that there are many members, including members of the front bench, that remain deeply sceptical about taking any action or about having an meaningful negotiation. Nevertheless, we on this side of the House will not be deterred from doing what is right for the country. And what is right for the country is the passage of this legislation through the House of Representatives and through the Senate. I commend the bills to the House.

John Cobb (Calare, National Party, Shadow Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

There is one question—I think I have said this before but I will say again—that I want to pose to all Australians and people around the world and that is: where do we think our food comes from? Without doubt food and water security are or will become the defining issues of the 21^st century. The Rudd government’s ETS legislation is a debacle as far as the future of Australia goes. The Treasurer just talked about the long term future—I am not sure what sort of a one we will have with the Rudd government ETS. It is a tax on production, pure and simple, that will drive businesses and jobs offshore. It is an opposite to the GST. Instead of relieving the pressure on production it puts the pressure on it. It will achieve an export system, all right—an export of carbon emissions.

Electorates such as mine which are exporting, wealth-generating electorates will bear the brunt of the cost of the Rudd government’s ETS. It is nothing more than a new tax with another name. The effect of this Carbon Pollution Reduction Scheme legislation will be felt much more brutally in regional Australia than in the capital cities. Yet those opposite have done nothing to negate the effect of this legislation, as it stands, on the agricultural sector or the regional sector. Whether it is the current drought or future climate change, the result is a drier weather cycle. To put it simply, nobody can actually eat a computer-generated climate change model.

What we need is a 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 can tolerate drier conditions. Yet all we have got from the Rudd government is massive cuts to research and development in this year’s budget. Our farmers have already been forced into producing more with less; in particular, less water and less arable land. Without increasing public expenditure to dramatically increase productivity there is a very real possibility of Australia becoming a net importer of many foods at a time when the world’s population is set to double within the next 30 years. In all of this time the ravages of global warming are meant to hit us. The biggest issue arising will be food security and how we increase food production—indeed, where will our food come from?

The Rudd government thinks so little about where our food will come from that agriculture was the only sector which is not receiving free permits, nor does it have a $500 million clean coal fund or a multi-billion clean car fund. Despite what the Prime Minister might believe, you cannot eat coal. If we are going to feed the nation then agriculture has to be put at the forefront of this debate. If the government wants to talk about high moral grounds, Australia has led the world for a long time in the production of clean, green food, but they are now severely curtailing our ability to lead the world in this sphere.

This government has no idea what its emission tax will cost mums and dads. It has never engaged in an honest debate about the real cost of its carbon tax. Let us not be cute about it: the government’s attempts to hoodwink the Australian people into thinking it is not a tax have been quite extraordinary. The Orwellian doublespeak-sounding Carbon Pollution Reduction Scheme is quite scary.

Only a couple of weeks ago on 2UE Sydney radio program Mornings with Steve Price, Minister for Climate Change and Water, Ms Wong, tried to claim the ETS was not a tax. Steve Price said:

Do you really think the voters when they went to the election last year had this at the forefront of their mind when thinking about voting and understood that this was going to be a new tax?

The senator said:

Well, it isn’t a new tax…

It is a new tax…

No, it’s not, Steve…

It’s taxing, you’re punishing people for emitting carbon.

No.

Well, if you are not, I would be very interested to know what you call it.

It is time for this government to be honest. The legislation before us makes it very clear that money collected under this legislation—namely, from the sale of carbon permits—is a tax. The bill states:

Imposition of charge

Auction

(1)  If:

(a)  an amount is payable by a person to the Commonwealth by way of a charge for the issue to the person of an Australian emissions unit; and

(b)  the unit is to be issued as the result of an auction; and

(c)  the charge is taxation within the meaning of section 55 of the Constitution;

There is quite a lot more which points out the same thing.

It is not just Minister Wong who is deliberately misleading the Australian people. The minister assisting the minister, Mr Combet, who is still sitting in the chamber, in his speech in the second reading debate on this bill claimed:

The Commonwealth does not consider that these charges are taxes for constitutional purposes. However, the government … has taken an approach of abundant caution, with the charges bills providing safeguards in case a court reaches a different view on this question.

In Rudd speak, this translates to, ‘Yes, we know it’s a tax and our claim that it isn’t would not stand up in court, but we want to keep fooling the Australian people into believing it is something else.’ You have to wonder about a government that is quite happy to mislead the Australian people. What else is the Rudd Labor government prepared to mislead us about?

The latest ABARE report on the cost of the Rudd government’s CPRS states:

Even if the agriculture sector is not a covered sector under the CPRS, agricultural producers will face increased input costs—

against what the Treasurer just said—

associated with the use of electricity, fuels and freight and may face lower farm-gate prices for their goods from downstream processors.

Of course they will. Processors which have increased charges have a great history of passing that back to those who cannot pass the costs on, and that is primary producers. These will have implications for the economic value of farm production, and every study that has been done seriously has shown that. They will be enormous ones for the beef industry and enormous ones for the cereal industry, who both have huge inputs.

The increase in the price of electricity is estimated to be 6.9 per cent in 2011, and it is going to go up by up to 40 per cent. In New South Wales we have already had 20 per cent via the kind auspices of our state Labor government. Federal Labor is set to double it again. When you see this 20-odd per cent your electricity bills are going up by, you will realise just what incredible charges processors of agricultural production, which are high-energy users, will feel. You do not have to be Sherlock Holmes to figure out just about every bit of food and fibre grown in Australia has some form of processing, manufacturing and/or transport before it is eaten or worn. Agriculture, without doubt, will suffer far more than most industries the flow-on effects of a carbon tax, CPRS or the Rudd government’s ETS—call it what you like. They are not putting it in the ETS at the moment because it is impossible to do so. You cannot measure agriculture in terms of negative and positives with any degree of accuracy, nor will you be able to at any time over the next decade or so. It is impossible to put in. That is not the real issue. The real issue is the cost that it is going to have passed on to it.

Let me say this to the Rudd government, the climate change minister, the assistant minister or whomever. We know they want to get agriculture. Sixteen per cent of the emissions come from agriculture, according to the figures—about the same as transport. We know they want to get us. They cannot get us by the normal inclusion, but if they try to do it by imposing regulatory charges then let me tell you that is not on. To include agriculture and penalise it by the back road, by a round-the-corner system of putting a regulation on, will not be accepted. We are not stupid. We know they want to do something like this. There was a story in the Australian this morning about having regulatory charges instead of putting agriculture in the ETS, in the same way as they intend to do with energy and other heavy-duty production. I do not doubt for a second that that is in their minds. But to include agriculture in the ETS by a backdoor way is not on. I do not believe we on this side of the House will be stupid enough to fall for any such trick.

It does not really matter whether you look at this from the point of view of what the Americans will do, what the Europeans do, or what any other country does. When you look at America, yes, they have put a bill up that has gone through congress which is probably an imposition on America of about one-fifteenth or one-twentieth the imposition that the Rudd government wants to put on Australia. That is before it goes to congress, when it will be mitigated quite a lot more. That may not happen for 12 months. It may not happen for 18 months. It may not happen until after the next American election. The Treasurer spoke about emissions trading schemes in other parts of the world. None of them come within cooee of the imposition on production of the tax the Rudd government intends to bring on.

What has happened in Europe to this point in time is more of a clayton’s ETS than anything serious. It is far less than even the Americans are proposing. Most of the biggest emitters in the world—be it China, be it India, be it South America—are not even seriously looking at having one. But the Treasurer talked a while ago about how we have to get in front of the game and be there. Yes, big business do want to know what is going on. They want to know so they can make an early decision, if the Rudd government does impose a serious carbon tax, to get out of Australia and not invest in Australia. That is why they want to know early.

Why in heaven’s name would any government want to impose a tax on its own country that no other country is imposing? We are not within cooee, to use a country expression, of what any other country is doing. Is it because Kevin Rudd’s ego wants to get him to Copenhagen saying, ‘Look at what a good boy I am’—he and his new mate, the Prime Minister of Denmark, or one of those countries. I think the Prime Minister is now advising them. I hope the Prime Minister does not advise them to act to the detriment of their countries in the way he wants to penalise this country.

Agriculture, be it in eastern Australia, in Western Australia, in the Territory or in South Australia, cannot afford a carbon tax and the effects of it—or a regulatory regime to include it by the backdoor—such as is being proposed at this time, in this place, in this country.

John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. Mr Deputy Speaker Adams, as you know, the Rudd government is committed to reducing Australia’s carbon emissions. These bills outline the government’s proposed measures to fulfil this commitment. The Minister for Climate Change and Water, Senator the Hon. Penny Wong, has warned that these bills are crucial to our nation’s economic and environmental future. Respected economists such as Professor Garnaut also warn that continued inaction will be far more costly in the future if we do not take action today. In fact, based on treasury modelling, future generations will pay 15 per cent more for inaction compared with those nations who take action now. Treasury modelling also suggests that under this scheme output will increase, real wages and jobs will increase, and GNP and GDP will also increase. It is imperative that these bills be passed without further delay, not only to protect our beautiful environment but to ensure a prosperous, sustainable economy too.

As you know, Mr Deputy Speaker, the CPRS will measure the quantity of greenhouse gas emissions of liable entities and put a price on those emissions. The CPRS includes transitional assistance measures to ensure a responsible approach, supporting businesses, jobs, community organisations and households. The CPRS and our renewable energy target will encourage and support businesses and jobs through the investment in future industries such as renewable energy. This is a very good thing. Thousands of new low-polluting jobs will be created through new technologies like clean coal, geothermal energy and increased investment in renewable energy such as solar, wind and tidal power. I repeat: this is a good initiative.

Households will also be assisted through the household assistance package, to help our citizens meet or offset the increase in energy costs. The devastating effects of extreme weather conditions, increasing temperatures, rising sea levels and more droughts will be far more damaging to our economy in the long term if we do not join in a willing effort to mitigate the effects of climate change now.

I take this opportunity to applaud the member for Throsby, who led the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts inquiry and its report: Managing our coastal zone in a changing climate: the time to act is now. This is a fantastic report. It really reveals the seriousness of the issue that we are debating here in this House tonight. If you do not believe me in relation to this report: I have never seen such a response in the media as in yesterday’s paper. Look at page 1 of the Sydney Morning Herald: ‘Make evacuation plans’. Full marks to the environmental editor of the Sydney Morning Herald, Marion Wilkinson, for putting this story on page 1. If you have a look here on page 7 there are a number of articles which deal with the serious issues associated with climate change. And then in the Age, page 1 again—

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! I point out to the member for Lowe that newspapers are prohibited from the House.

John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

I am only making the point—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! I am making the point of the standing orders, honourable member for Lowe.

John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

I understand the point you are raising. I will also draw to the attention of the House the publicity that appeared on page 1 of the Australian and page 1 of the Canberra Times in respect of the committee’s report. I commend that particularly to opposition members. They will find that they will be better equipped to participate in this debate. This is a very serious issue that we are debating tonight. As an island nation the report makes it very clear that Australia will be hard hit if we sit on our hands and do nothing. Homes, businesses, important infrastructure, trade and livelihoods are all at risk. My electorate of Lowe enjoys beautiful foreshores. It is very relevant to the people whom I represent in this place that extreme weather conditions and rising sea levels could affect the areas that so many of them call home.

At a local level, the City of Canada Bay has taken the initiative to tackle climate change. Canada Bay is not sitting on its hands. It has some of the most extensive foreshore of any local government area in Australia. And well done to the Mayor of Canada Bay, Councillor Angelo Tsirekas; the other councillors; and the general manager, Mr Gary Sawyer, and his staff for supporting this initiative. I take this opportunity to also congratulate Canada Bay council and the community, which recently won gold at the United Nations endorsed International Awards for Liveable Communities. The council won gold in the Whole City Awards and was the overall winner of the Environmentally Sensitive Practices project award. The awards recognised the council’s future vision, including targets for carbon neutrality, the climate change action plan, its own greenhouse gas targeted projects and the water savings action plan and other environmentally sensitive initiatives. Well done to the City of Canada Bay Council. Canada Bay has shown us how we can lead the world in our efforts to tackle climate change at a local level.

The world is moving on in its efforts to mitigate the effects of climate change at all levels of responsible government. While those opposite are still arguing the science of the matter, our government is taking responsible action. I know that the vast majority of my constituents in Lowe support this position. My constituents’ concerns are warranted. It is a fact that Australia is the hottest and driest inhabited country on earth. We have experienced a series of the hottest years on record in the last 10 years, with drought affecting much of our land. The Murray-Darling Basin, referred to as Australia’s food bowl, could well see irrigated agricultural production drop by almost 90 per cent by the end of the century. This is alarming.

Australians are rated among some of the worst polluters in the world. If we are part of the problem, we must be working hard to be a part of the solution. It is simply not reasonable to be one of the worst polluting countries and demand action from other nations without a clear commitment from our own government. As a developed nation, we should be showing leadership in reducing our carbon footprint and fostering low-polluting industries. That is the very thing that this government is doing with this legislation.

The government is sensitive to the current economic climate. While there is a need to ensure we set emission targets, we must also protect jobs and the economy. As previously mentioned, Treasury modelling indicates that the measures contained in the CPRS in fact assist in increasing jobs, output and GDP. This will be assisted by the substantial assistance outlined in the bills. The bills provides substantial assistance to firms engaged in emissions-intensive trade-exposed activities, with the allocation of free permits and transition periods as well as the creation of the Climate Change Action Fund to assist community sector organisations and businesses with the proposed changes.

The CPRS will monitor, report and audit the greenhouse gas emissions of liable entities. It will encourage major industry to invest in more sustainable technology and practices. As I said, this is a good thing. The funds raised through the CPRS will be redistributed to households to assist in the transition to ensure that the changes are affordable for families. The introduction of the CPRS will encourage the redirection of investment in low-carbon industries and businesses. It is estimated that the renewable energy sector will grow 30 times its current capacity by 2050 and create thousands of new jobs.

While the opposition is running a scare campaign that Australia would be alone in adopting a CPRS, this is simply not true. There are 27 European countries already operating a scheme, more than 20 states and provinces in the USA and Canada are introducing emissions trading initiatives to reduce carbon pollution, and our close neighbour New Zealand is too. If we do not act now we will be delaying progress on a low-pollution economy, delaying low-polluting jobs creation and delaying improvements to our environment, to the detriment of future generations.

Unlike the opposition, the government has maintained its commitment to crucial reform to address the serious challenge posed by climate change. As some of my colleagues have already highlighted in the debate today, the opposition continues to change its position on the environment and climate change. That was in evidence with the previous speaker, the member for Calare. Now is the time for the opposition to seize the opportunity and support the legislation. Now is the time for the opposition to show us that they are serious about the environment and being part of the most significant economic and environmental reform in Australia’s history.

There is a strong cross-section of support throughout the community for the scheme. The President of the Australian Conservation Foundation, Professor Ian Lowe, said of the scheme:

It puts Australia in a leadership position along with the EU in relation to developed countries targets which will be crucial for a sound Copenhagen outcome.

The Chief Executive of the Australian Industry Group, Heather Ridout, who has called for this scheme to be passed by the end of the year, said:

AI Group has consistently called for the legislation to be passed this year. This is critical to establish the degree of certainty businesses require in assessing medium and long term investment decisions.

As I have previously noted in my support for action on climate change, the Business Council of Australia, the Australian Conservation Foundation, the Climate Institute, the Australian Council of Trade Unions and the Australian Council of Social Services are all in support of the proposed scheme. The diverse interests of the organisations mentioned indicates the widespread business support for the implementation of this scheme. In the current economic climate the last thing Australian businesses need is business uncertainty. In light of the current economic situation, the actions of the opposition do not assist in providing business certainty.

These bills address what is the largest economic and environmental challenge we face today. The issue of climate change was well contested at the last election and the public spoke volumes about their desire for the government to take action. There were 11½ years of inaction by the former government and I hope that we do not see further delays. The reforms seek to reduce carbon emissions while simultaneously supporting jobs and low- and middle-income earners and businesses make the important transition to a low-carbon economy. Each section of society and each industry will be a part of this endeavour to make our world a better place for future generations. I again thank the Minister for Climate Change and Water for her efforts in coordinating these bills. It is undoubtedly a very serious challenge for Australia and, indeed, the world to face and it is time to take action now. I therefore encourage the opposition to show the courage needed to address this challenge. I commend the bills to the House.

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and cognate bills. In joining the debate I feel compelled to state my ongoing disappointment with the government’s handling of this issue. I agree with one thing said by the previous speaker, the member for Lowe, and that is that this is a very serious and very complex issue. But I fear that the government is pursuing a political strategy rather than an environmental strategy. Everything from the timing of the proposed legislation before the House to the comments of the Prime Minister and the ministers themselves is about achieving some form of political advantage on the back of community concerns over the forecast impacts of climate change. I fear that the government has become so obsessed with its political strategy that it has turned its back on Australia’s national interest.

I will be supporting the amendments being put forward by the coalition and the negotiations which are currently underway with the Minister for Climate Change and Water in an attempt to try to minimise the damage that this scheme can do to the Australian economy. I make the point, however, that it makes absolutely no sense whatsoever to pursue this legislation before we have a clear understanding of what action, if any, our major trading partners and the rest of the world are prepared to take on the environmental challenges we are faced with. I fear that without a global agreement we are voting to give foreign companies a competitive advantage over our own companies. We are voting for more expensive power and transport costs. We are voting for more expensive food. We are voting to increase costs for all our small businesses. We are voting for a massive new tax on every part of our lives.

I believe the government has failed to make the case and answer some of the most basic questions in relation to the CPRS. It has not come clean with the Australian public and been honest about how much extra it is going to cost to build a house in a new CPRS environment. How many jobs in regional areas will be affected by this legislation? How does Australia’s cutting its emissions without any global consensus actually achieve any global environmental outcomes? I fear that the government has developed a strategy for spinning this issue to the broader Australian public, but it has not trusted the Australian public with a full explanation of the complexity of this scheme. I appreciate that it is a very complex scheme, but the government has not even tried to explain it in clear language, and in fact I think it has embarked on a course of deliberately hoodwinking the Australian public into believing that this is the answer to their concerns about climate change. The government has failed to explain to the Australian public how this legislation threatens their job security without achieving, as I said before, significant global environmental benefits.

As Australians have come to understand this legislation, it has been a bit like when you leave a prawn out in the sun. The prawn looks fine at first, but when you leave it out there for a bit longer it starts to smell. This legislation is a bit like that. It looks fine at first, but the more you look at the scheme the more it starts to stink. I think the Australian public is just starting to understand now that there is a lot more to the CPRS legislation than originally met their eyes. My concern is that the government has embarked on this strategy, deliberately taking advantage of the goodwill of the Australian public. There is goodwill out there to try to take action for sustainable environmental management, but I do not believe that the government has taken the Australian public into its confidence and explained exactly what the impacts of the scheme will be.

My disappointment with the bills before the House and the government’s strategies is consistent with the views of many Gippslanders who have contacted my office. To begin with, the government has not been honest about how Australia’s setting a target of a five per cent reduction in CO2, when its total emissions are 1.4 per cent of total global emissions, is going to save the Great Barrier Reef and Kakadu National Park, as the Prime Minister quite often states in this place. How does Australia, when we are talking about a five per cent reduction of a 1.4 per cent total, achieve what the Prime Minister refers to as such a massive environmental achievement? It is an enormous con and it does not stand up to any scrutiny whatsoever. The member for Mackellar was right earlier this evening when she described it as a hoax. It is a cruel hoax and it is a betrayal of the goodwill of the Australian public. There is support, as I said, for action on climate change, but Australians are being conned into believing that this is the answer. There is no Australian solution to climate change in isolation. There needs to be a global commitment.

Another disappointment I have is that the government has not told the Australian public what the CPRS will cost in the impacts on each region. That is one of the great frustrations for the people of my electorate, particularly the Latrobe Valley, where the absence of any regional impact statement has made it almost impossible for the community to get an understanding of the cost-benefit ratio of this legislation. My electorate is one of the most exposed to this policy of any community in Australia—perhaps even the most exposed when you consider the existence of the Latrobe Valley brown coal power generators, the oil and gas industry, quite a large dairy industry and the Macalister Irrigation District. The power industry in the Latrobe Valley is the most important industry to my community bar none. I have previously informed the House that the Latrobe City Council has commissioned its own analysis, an independent report, on the economic importance of the Latrobe Valley coal and electricity industries. The report was prepared last year and showed that the coal and electricity sectors provide $802 million per year or 21.2 per cent of the gross regional product of the Latrobe Valley. There are 125 people employed in the coalmining sector and 1,705 people employed in the electricity supply sector. The flow-on impacts or flow-on benefits from these industries provide enormous opportunities for private contractors and the overall wealth of the Gippsland Latrobe Valley region and the broader Victorian economy.

The broader Gippsland impacts could be enormous if industries in my region are disadvantaged as a result of the Carbon Pollution Reduction Scheme. I fear that several thousand jobs will be at risk in my electorate over the next 10 to 15 years under this scheme. Unfortunately, that is my back-of-the envelope assessment because the government, as I said, has refused to be honest with the people of Gippsland and actually undertake the modelling and let us know the costs and benefits of its plans.

We had the Australian Chamber of Commerce and Industry’s report earlier this year, which found that rural and regional areas will be adversely affected and could lead to increased urbanisation. It was interesting when the Treasurer was in here before speaking about the support from business. The Australian Chamber of Commerce and Industry put out a statement at the same time as it released its report in June this year. The organisation represents some 280,000 small and medium sized enterprises. The statement said:

The study argues that SMEs—

small and medium sized enterprises—

particularly those involved in manufacturing, face prices set in international markets due to import price parity. As a consequence, trade-exposed SMEs have limited opportunities to pass the costs on to their customers, but most are not eligible for assistance under the proposed CPRS transition package.

Increases in energy and transport costs will impact directly on SME employment and profitability … the study finds that the CPRS in its current form will generate additional costs that would erode firm profitability between 4 and 7 per cent on average.

The Treasurer likes to tell us that businesses would not face significant impacts because they are not among those large emitters. But there you have the Australian Chamber of Commerce and Industry indicating a drop in profitability of between four per cent and seven per cent, which the government would know, if anyone on their side actually ran a business, is a very significant concern for them indeed. The New South Wales government tabled a report which found that regional areas could have a 20 per cent decline in economic activity. So there are some of the reports that have looked at the impacts on rural and regional communities of the CPRS legislation before the House.

In my electorate we have key industries that will be impacted directly by the CPRS, including the electricity generation, the dairy industry and the oil and gas activities in Bass Strait. These are the jobs that we have now. I take up the contribution from some speakers on the government side who have suggested that there are thousands of new jobs to be created. Well, Gippslanders would rather have the jobs they have in hand right now than some airy-fairy promise about jobs which may come down the track. There are major plans for expansion of the gas production in Bass Strait, but the industry has several concerns with how it will be affected under the government’s plans. Some of those concerns the government has failed to address, which the industry has brought to my attention, include the fact that, in the absence of the details, it is not possible for the industry to have clarity as to the eligibility or levels of assistance included in the scheme under debate. Therefore, it is not possible to have any confidence that the competitiveness of Australian based industry will be maintained relative to our international competitors.

In terms of the treatment of the emissions-intensive trade-exposed industries, one of the consequences of the government’s proposed two tiers of assistance of 60 and 90 per cent is that the Australian emissions-intensive trade-exposed industries will bear costs associated with the CPRS that are not borne by our international competitors. That will result in the potential for the Australian industries being priced out of the global market. Keep in mind the gas industry is trading into a global market and some trade exposed industries may not qualify for any assistance whatsoever. It does make a mockery of the Australian Labor Party’s 2007 election commitment to:

Ensure that Australia’s international competitiveness is not compromised by Australia’s response to climate change [and to] Ensure that Australian operations of emissions-intensive trade-exposed firms are not disadvantaged by emissions trading.

Clearly the oil and gas industry is one which has grave concerns about whether the government is true to its election promise in that regard.

I do recognise that there could be future opportunities in my electorate related to the opportunity for renewable energy technology, clean coal and capture and storage. But these are jobs in the future which may or may not develop as the areas of technology are developed. There are real concerns in the Latrobe Valley region, for example, regarding clean coal and capture and storage: we are talking about decades down the track, rather than the jobs which are just around the corner. We would look at an initiative such as wind energy, which has been the subject of much debate throughout the broader Gippsland region, and there have been constant calls from the community for more control for local communities to have their say on the siting of what is an industrial activity on agricultural land.

Given the seriousness of the issues before the House, you would have thought we would have had a very mature level of debate in this place, but many times in the past six months I have been disappointed with the juvenile level of debate and the attempts to typecast members as either true believers or as climate change sceptics. This is a place where I believe there is room for robust debate and for dissent on issues of significance to the Australian economy and the Australian community in general. But the government has been deliberately divisive in the way it has treated the whole issue of the emissions trading scheme and climate change in general. We have seen the propaganda advertising campaigns of last year which have been designed to scare people, particularly children, and it does no credit to the Prime Minister or his government that it embarked on this course, which I believe is a political strategy much more than an environmental strategy.

Not for a second do I want anyone to believe I am anything other than a committed environmentalist; I am very much a pragmatic and practical environmentalist. I am a member of Landcare and Watermark—a group committed to sustaining the Gippsland Lakes and protecting our local waterways. I believe in practical environmental work, rather than some of the posturing we have seen from members opposite as they lecture us on what is appropriate in our communities. It is ironic that we are having this debate on the environmental future of our nation when, at the same time, the government has cut funding to the professional facilitators involved in the Landcare organisation. So I am one who believes in sustainable management of the environment, and there is not a single person in Gippsland who will disagree with me about the need for practical environmental measures. But, as I said earlier, I believe this is more of a political strategy being driven by the government than an environmental strategy.

The CPRS before the House poses a far greater risk to the future of Australian agriculture than much of the climate change forecasts we have talked about. I certainly support efforts by the coalition to have agriculture excluded and recognise the opportunities for future abatement, which will have great potential for our rural sectors in the future. I have said previously that I was disappointed with the way the government has sought to divide our nation in its treatment of the CPRS legislation and by its constant attacks on people who raise any concerns about the CPRS. It really is driving a wedge between Australians who are instinctively uncomfortable with some of the extreme green religion and doomsday scenarios that are out there. There are many people in my electorate who are committed to working hard to protect the environment, they are doing the work right now on the ground, and I am frustrated by the way the government has sought to typecast people as believers or sceptics when we have so many people who are prepared to volunteer their time and effort to help create a sustainable environment in our own electorates.

Gippsland is at the pointy end of this debate. It is one of the region’s most exposed in Victoria and possibly Australia, but the government still has failed to inform us what the impacts will be on our key industries: the brown coal power generation, the oil and gas industry and the agriculture sector. The Latrobe Valley in particular should be proud of its contribution to the wealth of our nation over many decades, but it has been vilified by this scare campaign and the divisive nature of the government’s campaign in relation to climate change.

In the Latrobe Valley we have massive reserves of brown coal, which has underpinned economic development in Victoria for many decades, and we will still depend on that brown coal for a reliable and secure baseload energy supply in the future. We need the Latrobe Valley power generators to remain commercially viable and to invest in the research and the technology required for a cleaner coal future, which I referred to earlier. The government has offered generators $3 billion in compensation, but the loss in asset value is more likely to be in the vicinity of $10 billion. It has been left to John Brumby, the Premier of Victoria, to stand up for the generators because no-one in the Rudd government has been prepared to do so. I refer to an article in the Age on 23 October headlined ‘Brumby in cash plea for polluters’. It said:

Senior Federal Government sources told The Age that Premier John Brumby had this year become “the leading advocate” for more compensation for coal-fired plants.

An industry consultant agreed, saying: “I think Brumby and a couple of his ministers do more lobbying than the industry.”

The source suggested the Premier was concerned about the financial shock of the scheme causing generators to close, disrupting power supply.

“If you’re the Premier and the lights go out, well, your lights are going to go out pretty soon afterwards,” he said.

That just about sums it up. Welcome to the real world, members of the government who think you can implementation these changes and inflict this massive loss on the asset values of Latrobe Valley power generators without any impact whatsoever. If the power generators are not financially viable under this government’s CPRS, we are all in for a shock in terms of the reliability of our baseload power supply in this nation.

Yallourn power station management has already indicated that it has reduced its maintenance. Once you have a power station reducing its maintenance workload, it is inevitable that the reliability of supply will be affected. I have said it previously in the House and I will say it again tonight—to paraphrase Rupert Murdoch and many others—I am one who is prepared to give the planet the benefit of the doubt in relation to the issue of climate change, and I do accept that we are going to need changes to the way we manage our economy into the future, but we need a strong and sustainable economy to deal with some of the challenges presented to us. The mitigation measures which have been talked about by others, if sea level rises occur anywhere near the levels predicted, will require vast amounts of infrastructure to be moved or protected, and we are going to need to do that from a position of economic strength. That is important for the government to consider in its handling of this issue.

That gets us to probably my biggest disappointment with the government’s handling of this issue, and that is that it has been prepared to place Australia’s national interest second in its pursuit of a political strategy. I fear that there is a risk of Australian jobs being lost as a direct result of implementing a scheme which puts us at a competitive disadvantage in terms of our trading partners. Under the Rudd government’s model before the House, we run the risk of jobs being exported from Australia to nations which do not have a comparable scheme. A fear that is regularly expressed to me in my electorate is that we will send jobs offshore—we will also export our carbon emissions to those nations—and the net result will be a deterioration in the world’s environment because the nations which take the jobs will have less stringent environmental protocols than Australia. Any scheme which transfers jobs in high-emitting industries from Australia to foreign nations is likely to result in a poor environmental outcome. I fear that this scheme will add to economic uncertainty in Australia and export jobs to foreign nations, resulting in increased global emissions.

In conclusion, I will come back to where I started. Proceeding, ahead of negotiations in Copenhagen, to lock Australia into any scheme is premature at best and likely to result in negative economic consequences. I say ‘likely to result’ because, quite frankly, the government has failed to do its homework in terms of the economic modelling and has refused to be honest with the Australian public and outline the full impacts of this scheme. We have not seen any modelling on the impacts on individual regions, particularly in the context of the deterioration in the global financial situation over the past 12 months. It simply lacks common sense to proceed down this path without full knowledge of where the rest of the world is prepared to go and without knowing what our major trading partners and some of the biggest emitters are prepared to do. The bills before the House are flawed and represent a massive breach of trust with the Australian community. Even the most fervent climate change advocates will acknowledge that Australia acting alone will not have a significant environmental impact. The government is prepared to inflict enormous economic pain on regional areas like Gippsland and the Latrobe Valley for insignificant environmental gain.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

Here we go again. The last time the House debated the Carbon Pollution Reduction Scheme it had a somewhat surreal air because we knew then that, as heartfelt and well-reasoned as our contributions might be, the fate of the bills really lay in the hands of the Senate. We all know the outcome of that and the ultimate futility of that exercise thanks to the inability of the coalition to actually arrive at a position on the scheme.

Here we are again, each saying our piece in the chamber, all the while knowing that the debate that really counts at present is the one going on between the Minister for Climate Change and Water and the member for Groom on behalf of the coalition. It is encouraging to hear the feedback from both sides of the negotiating table that the discussions are proceeding in good faith and that both parties remain committed to finding a way to work through the outstanding issues.

The Labor Party’s approach to those negotiations is consistent with the approach we have taken to climate change all along. We just want to get the job done. We went to the last election promising to introduce an emissions trading scheme and we have an obligation to honour that promise. We have sought to honour that promise in a reasoned and consultative manner, giving business especially ample opportunity to be involved as we work through the design of the scheme. Along the way we have shown that we are prepared to be flexible when it comes to getting the design and timing of the scheme right. Earlier this year, when the impact of the global financial crisis on Australian companies became apparent, we announced a delay in the start of the scheme and a fixed price of $10 per tonne of CO2 for the first year, as well as increasing the assistance payable to emissions-intensive trade-exposed industries.

As I emphasised in my previous speech, we do not see the challenge of responding to climate change and designing a means to reduce our carbon emissions as a partisan political crusade. Rather, we recognise it simply as a problem that would be confronting any government who found itself leading Australia at this point in time. In fact, if the coalition had won the 2007 election, they would have been the ones implementing the promise they took to the Australian people during that election to introduce an emissions trading scheme by 2012. As it happens, it is this Labor government that has accepted that responsibility as part and parcel of governing Australia at this time.

When we started on this exercise, we quite reasonably regarded it as something that should enjoy bipartisan support. After all, it was John Howard who initiated the Task Group on Emissions Trading and the coalition who took a policy promising an emissions trading scheme to the last election after the current opposition leader prevailed inside the coalition cabinet. This used to be a problem that was recognised by both sides of the parliament, and, especially at the time that Malcolm Turnbull took over the leadership of the Liberal Party, we reasonably expected that it would be a problem that would be worked through in a spirit of agreement on the broad principles and negotiation on the details. If Malcolm Turnbull manages to restore his authority over his own party, perhaps we can return to that position. It is in that vein that we have said all along that we welcome amendments from the opposition, and we continue to work through their proposals.

Last time I had the opportunity to speak on the bills, I spoke at some length about the rationale for the Carbon Pollution Reduction Scheme. I answered the fundamental questions: why are we taking action to address climate change and why are we acting by way of a cap-and-trade emissions trading system? I referred then to the science that has informed decision makers around the world of the existence of climate change and to the current and predicted consequences of that rise in temperatures. I pointed to the general experience and acceptance of countries around the world—including 27 EU countries, the US, Canada, Japan, New Zealand and Korea—that an emissions trading scheme is the lowest cost way to make the change to a less emissions-intensive economy.

So I will not go through all of those matters again. Rather, I want to touch on a couple of specific points that came up during the recent visit to Rockhampton of the Minister for Climate Change and Water. One stop on her schedule was a roundtable meeting with representatives from the local media to give them the opportunity to get an understanding direct from the minister of what we were trying to do with the CPRS and why. It was obvious from the start that there was a feeling amongst the participants that doing nothing was an option. The focus in the discussion was very much on the potential costs that the CPRS represented, as if action on climate change would bring costs while opting out of such action would come at no cost. If only it were that easy. If there were a simple get-out-of-jail-free card on this issue, we would grab it, but there is not. Unfortunately, there is sufficient evidence available to the government from scientists and economists that says there will be a cost involved if we choose the business-as-usual option and allow the consequent temperature rises and associated weather events to stay on their present trajectory.

To pick just one example of that evidence, the CSIRO and Bureau of Meteorology report from 2007 titled Climate change in Australia contains modelling predicting increases in the frequency of heatwaves, the frequency and length of drought conditions, a higher proportion of intense tropical cyclones and a substantial increase in fire weather risk in south-east Australia. That all adds up to significant loss of infrastructure, disruption and dislocation of major industries and threats to the wellbeing of people in many parts of Australia. We could ignore that evidence, I suppose, as some in the debate ask us to do, but I do not think that would be discharging our responsibility as the government of this country. We would have to justify taking that risk on behalf of the people of Australia—both present and future generations—and I do not think we can. As the previous speaker said, in quoting Rupert Murdoch, ‘I think we have to give the earth the benefit of the doubt in this case.’

The people around the table at that meeting with the minister also had the view that we should wait until after the Copenhagen meeting before enacting the CPRS. I believe that this was a misconception of the nature of the CPRS and the aims of Copenhagen but an understandable one given the way that the opposition have tried to hide behind Copenhagen as a way of avoiding taking a position on the CPRS. There is nothing in the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills that makes their passage contingent on the Copenhagen outcomes. The international meeting in Copenhagen will be about setting targets and caps for emissions reductions. The CPRS is the framework under which those emissions targets will be met and it has been designed for Australia’s national circumstances. The CPRS has also been designed to be sufficiently flexible to accommodate the range of possible outcomes from Copenhagen. Important details such as the scheme caps will not be set until after Copenhagen. In the meantime, if agreement can be reached with the opposition and this legislation is passed through the Senate, businesses in Australia will have the certainty they need about the mechanism by which we will meet whatever targets are agreed at Copenhagen.

If the opposition thought that nothing could be agreed on emissions reductions in Australia until after Copenhagen, why did the opposition leader say on Lateline in July last year:

… the Howard Government’s policy last year was that we would establish an emissions trading system not later than 2012. It was not conditional on international action …

And why did the Liberals endorse the government’s emissions target to reduce emissions by at least five per cent compared to 2000 levels irrespective of commitments by other countries? The ‘wait until Copenhagen’ catchcry is a recent political formulation to buy the opposition and particularly its leader time to get its climate change policy in order.

One thing I did talk about in my previous speech that I will return to here is the coal industry. As I said back in June, 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. That will not change any time soon, according to the latest Treasury modelling that shows the coal industry growing by at least 50 per cent by the year 2050. That has not stopped the Coal Association from spending up, telling people in my electorate that the CPRS will cost jobs in the coal industry. What they do not say in those ads is that the majority of coalmining in Australia is not emissions intensive. Half of all coal production in Australia will have a liability for their fugitive emissions of 80c or less per saleable tonne of coal. To put that in some perspective: coal is currently selling for upwards of $70 per tonne in export markets, and state government royalties that increased in Queensland last year are up around the $10 per tonne mark. There were no reports of the sky falling in on the coal industry when the increase in royalties took effect.

Having said that, we do take seriously the concerns for those gassy mines at the end of the spectrum where the carbon permit liability will be highest. That is why the CPRS includes a compensation package of $750 million. We want to work with those mines most affected to allocate that compensation in a way that helps them reduce their emissions where possible and otherwise ease their transition to the introduction of a carbon price. I detailed in my previous speech my experience of working with the minister and the management of Rockhampton’s QMAG plant as QMAG grappled with the potential impact of the CPRS on their operations, particularly their efforts to make changes to the activity definition. They were successful in achieving that. I had a similar experience when it came to finding a way in the renewable energy legislation to assist those companies in my electorate with interests in waste coal seam electricity generation. I mentioned those examples to show that the government worked with those industries. We are willing to work with the coal industry, and there is money on the table—there is three-quarters of a billion dollars on the table—to do that.

I can tell the House that there is not money for the government to put full-page ads in the newspapers and run television commercials in order to counteract the Coal Association’s scare campaign in mining communities. What there is, however, in the pages of those same newspapers is the real story about the future of the coal industry in Queensland. I spent really just a few minutes on my way out to question time this afternoon thinking off the top of my head of some examples in my electorate. I asked my staff to go through the newspapers and find some of those examples. As I said, I just rattled off a few on the way out the door to question time. Here is a snapshot of some of the things that are happening in Central Queensland. First of all, there is the Abbot Point Coal Terminal expansion. The North Queensland Bulk Ports Corporation have just put out their draft voluntary environmental assessment for that, dated October 2009. This is a major expansion of the Abbot Point Coal Terminal at Bowen. The introduction to this document says:

Coal terminal expansions have recently occurred or are being studied in the ports of Hay Point—

near Mackay—

Gladstone and Abbot Point. All of these expansions are required to meet the predicted future export needs of the Queensland coal mines.

Turning to the Rockhampton Morning Bulletin, an article on 30 September states:

Tony Maher, president of the CFMEU’s mining and energy division … pointed out that 74 mining, energy and minerals processing projects worth $80 billion were in advanced development.

‘These will create tens of thousands of jobs and the reality is that the biggest problem is skill shortages—not job losses.’

The Daily Mercury of 20 October had a banner headline which read ‘Gear for growth: mining boss’. The article states:

THE future of our mining jobs and the region’s business confidence are all but guaranteed, according to the managing director of Rio Tinto.

Again from the Daily Mercury, on 28 August 2009 we see the headline ‘Interest firms up as new growth shoots’. The article states:

MORE than $45.7 billion worth of projects are ear-marked for the Mackay, Whitsunday and Coalfields regions;

          …            …            …

Representatives from four major projects spoke at the event including Waratah Coal vice-president of exploration David Campbell who discussed the China First project, a proposed rail link between the company’s mines and Abbott Point.

Returning to the Rockhampton Morning Bulletin, a report of 21 October states:

A BILLION-dollar coal export terminal at Port Alma could be operating by 2014 …

The project, proposed by Xstrata Coal, would serve the Wandoan Coal project, which has the potential to become Australia’s most productive coal mine.

          …            …            …

When it was operational the terminal would provide 100 full-time jobs and could export up to 100 million tonnes of coal.

I also have a media release from the Hancock Alpha coal project, which is 500 kilometres west of Rockhampton. Nearby is the Galilee coal project at Alpha, which I mentioned in my speech in June. It is a coalmine worth $7.5 billion that will generate 6,000 jobs. In the announcement in the Rockhampton Morning Bulletin in May, the president of Waratah Coal said, ‘I don’t think the CPRS is going to have enough of an impact to present insurmountable problems.’

And, because my staff are incredibly efficient, they went beyond those newspaper articles and gave me a list from the Queensland Department of Mines and Energy of Central Queensland coal development projects, listing some 50 projects in the exploration or early development stages.

All of that tells me that there is a lot of faith out there in the future of the coal industry and a lot of companies are just getting on with it. Yes, there is work to do on getting the coal industry ready for the CPRS and understanding what it means mine by mine. So let’s get to work on that quickly so we can get back to the other issues that are going to cause headaches for the industry soon enough when all of this expansion and investment comes on stream—things like infrastructure, skills and building liveable mining communities.

Speakers on both sides have pointed to the need for effective international action to truly make a difference when it comes to mitigating climate change. That is very true, which is why I want to see the current negotiations between the Minister for Climate Change and Water and the spokesperson for the coalition succeed. I want the legislation to pass and I want Australia to go to Copenhagen with a position to drive an outcome that is good for our environment and our economy into the future.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Link to this | Hansard source

On 13 August this year, the coalition joined with all other non-Labor senators to vote down the Rudd government’s proposed version of an emissions trading scheme. The reasons for this were that, as designed, the Carbon Pollution Reduction Scheme was flawed and would unnecessarily harm Australian exports, jobs and investment. The scheme would simply lead to emissions being exported rather than reduced at the global level and the CPRS represented a tax grab, disguised by the fact that the government published only one year of estimates of the full fiscal impact of the scheme.

Today, with the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the related bills, we consider important amendments, and I want to outline them: (1) placing Australian emissions-intensive trade-exposed industries on a level playing field with their competitors abroad, (2) excluding agriculture from the scheme and providing a mechanism for farmers to earn offset credits when they abate carbon, (3) ensuring Australian coal producers reduce their fugitive emissions as technology allows but are not unfairly financially penalised compared to competitors, (4) moderating the impact of higher electricity prices on small businesses, (5) providing assistance to coal fired electricity generators to ensure they remain financially viable and the lights stay on, and (6) encouraging complementary abatement measures such as voluntary action and energy efficiency in building.

My electorate of Farrer in southern and western New South Wales is very much in the spotlight as regards this legislation. So I want to particularly talk about agriculture and the Carbon Pollution Reduction Scheme. Whatever we do to this particular legislation it will still remain a dog. We went to the last election with an ETS policy—many have forgotten that fact. The coalition had a well-designed policy in 2007. Even if all of our amendments get through, the policy will still be a shocker. But when constituents approach me and ask, ‘Why are you supporting the amendments and not simply turning your back completely on the possibility of this ETS?’ I say to them, ‘While ever there is the remotest chance that Australia could finish up with Mr Rudd’s ETS, I and my coalition colleagues have to do all that we can to mitigate those effects and try to make the ensuing scheme less bad—because we cannot deliver from opposition what we once might have delivered from government.’

People who are naturally offended and shocked by this scheme—people who have worked out the sums and seen the effect it will have on their households, their lives and their farms—are coming to us and saying, ‘Please do something.’ I feel enormous frustration that my hands are tied and that we cannot implement the changes we know are important. But, in the amendments that we are proposing, we are doing the best we can.

I was at the Henty Machinery Field Days in my electorate a few weeks ago and a Riverina farmer came up to me and showed me a calculation that he had made from the website of the Australian Farm Institute. They are good people and they had put out a very well researched calculator about what the Rudd ETS would cost farming. Speakers from the government have said, ‘We are not putting the ETS on agriculture just yet,’ but in the same breath they are saying that they want agriculture to be responsible for its emissions. So we know that three years after this comes in in 2015 the full weight of it will land on Australia’s agricultural producers, and we do not accept that possibility. But I go back to the farmer at the Henty Machinery Field Days. He was able to show me how the Rudd government’s ETS would add $42,000 to his bottom line—$42,000 in a modest wheat-growing enterprise in the Riverina. I said to him: ‘I have got two choices. I can just say that this is awful, I am turning my back on it and I am not going to propose any amendments along with the Liberal and National parties, but I do not think you want me to do that. I think you want me to try and get the best deal for you.’ He agreed with me, and others I have put this argument to have responded similarly. None of us are happy with it, none of us like what is being presented to us, but we are not running the agenda, we are not in government and we are not trying to grandstand at Copenhagen, which is what Mr Rudd is doing. I certainly do not believe that anything needs to take place before Copenhagen because whatever Mr Rudd succeeds in passing in this place will not be the final design of the scheme we get in 2012 because that is just too far away. We have really little choice but to accept the argument that it is a grandstanding exercise.

I see in today’s media that Mr Rudd has been made one of the Danish Prime Minister’s special friends and has been given the imprimatur to work closely on designing an ETS and a global agreement. That worries me because I feel that that will give the government added impetus to push this through, not in Australia’s interest, not in the national interest and not in the interests of farmers. I often say that there is no such thing as a postagriculture economy. Think about it: if there is no agriculture, there is no food, there are no people and there is no world. But what we see from this government is a focus on an economy that does not depend on agriculture. The CPRS is not the answer, but do not look at farmers and agriculture as the producers of emissions. Look at farmers and agriculture as the producers of food.

Australia exports 65 per cent of its farm produce. Our food producers are exposed to global competition, which has critical implications for Australian jobs, economic activity, export markets, food supplies and net global emissions. What has this government done? It has placed agriculture in a position of increasing uncertainty leading up to the beginning of its scheme, not knowing whether three years after that it will come under the ETS and have to pay figures like the one I just quoted—$42,000 for a modest wheat-growing operation in the Riverina. Whatever we can do to make this ETS less bad, we as an opposition are bound to do.

I was horrified to hear earlier speakers talk about food industries, because under the government’s scheme food industries are not considered emission intensive and trade exposed. I appreciate that it was with some sympathy, but when the member for Eden-Monaro spoke about the biggest rice mill in the Southern Hemisphere that has closed down in Deniliquin and about other activities along the river—and he has a fair whack of the Snowy Mountains hydro-electric scheme in his electorate—and the importance of that to irrigation he failed to understand that because food producers do not make the EITE cut-off under the government’s scheme they get nothing; they get no help at all. So we quite neatly and cleanly export our food-producing industries overseas.

We heard shocking evidence to Senate inquiries from food producers, particularly in the dairy industry. The dairy industry, as we know, has been through tough times. Murray Goulburn Co-operative operates in Victoria and southern New South Wales and it had this to say:

… MGC will receive no assistance under CPRS even though we are highly trade-exposed.

MGC will not be able to pass on the cost of increases due to the CPRS because of the price setting nature of world markets.

Consequently dairy farmers will pay the costs of CPRS via reduced milk income. At $23 and $40 per tonne for CO2 this represents an average cost of about $5,000 and $9,000 respectively per farming family per year.

Why would you bother? Let me remind people that New Zealand’s emissions trading scheme maintains the link between farm and food processing, recognises the connected nature of the supply chain and its trade exposure and provides 90 per cent free permits to food producers. I have said before in this place that, if we are not careful, we will be airfreighting our milk in from New Zealand. Under Mr Rudd’s ETS, we will definitely be airfreighting our milk in from New Zealand. The CPRS does not cover imports, so of course our food-producing industries will be exported overseas and we will be importing our food. There might not be a world postagriculture economy, but it looks like we are heading for one here in Australia.

I want to mention the horticulture industry, because it is very important to my electorate. It welcomes the opposition amendments permanently excluding agricultural emissions from the CPRS, obtaining government agreement to introduce an agricultural offset scheme in line with similar offset schemes being introduced in comparable economies, such as the United States and the European Union, and our explicit recognition of energy efficiency and voluntary action. That is important.

Speaker after speaker from the government has talked about the impact of climate change on the Murray-Darling Basin, and I have a substantial part of the southern Murray-Darling Basin in my electorate. The horror stories that we have heard are all about reduced in-flows and no water for irrigation. I just point out that there is not any water for irrigation at the moment because the Minister for Climate Change and Water has bought it all and is storing it away for environmental flows that go straight past all of our food producers struggling with the drought in order to water wetlands—which may be important but not necessarily more important than food production. I do not want to hear another government member talk about the effect of the ETS in the southern Murray-Darling Basin and on irrigated agriculture as if they care, because they do not care. Members opposite really ought to realise the nature of farming and of food production and what that means, and develop, if they possibly could, a serious agrifood policy because at the moment they have absolutely no idea.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the cognate bills. This legislation is important. It is legislation that has arisen in response to the most credible scientific advice available to the government. It is scientific advice which suggests that climate change is real and it presents humanity with one of the greatest moral, environmental, economic and social challenges it has ever faced and it is advice which suggests that the cost of doing nothing far exceeds the cost of acting. For each day that we delay action on this very matter the cost of mitigation or adaptation escalates.

I am a member of the House Standing Committee on Climate Change, Water, Environment and the Arts, which only yesterday presented its completed report on the inquiry into the effects of climate change on our coastal areas. The report is titled Managing our coastal zone in a changing climate: The time to act is now. I had the benefit of hearing from and questioning some of Australia’s leading scientists. I had the benefit of actually seeing some of the costs that we as a nation are already incurring as a result of climate change. I had the benefit of speaking to people who well understood the impacts of future climate change on this country and on the world. I heard what the impacts are likely to be and I saw the damage for myself.

The fact is that the costs right now facing this country as a result of climate change run into the billions of dollars. Other speakers have spoken about the impacts of water shortages, but we saw only this year the impacts of drought and the impacts of flood. In addition to that we constantly have cyclones affecting other parts of Australia. Those events are not just part of the normal climatic process. On the best scientific advice available, those events are likely to occur far more frequently, and with each one of them comes the cost of restoring the damage that has occurred.

This legislation is consistent with legislation being proposed by many other governments right around the world. The legislation is consistent with, albeit not be identical to, legislation that is currently before the US senate, and it is consistent with legislation before many European parliaments. The legislation was carefully crafted after a long period of public consultation in which the broader community was consulted and, in particular, in which industry was consulted. This legislation ultimately gets the balance right. It provides assistance to emissions-intensive trade-exposed industries in Australia to the tune of somewhere between 66 per cent and 94.5 per cent, depending on the nature of the industry. It provides assistance to householders and to motorists and it defers a decision on the farming sector for several years. The legislation is flexible enough to ensure that we get a 25 per cent reduction in greenhouse gas emissions, based on the year 2000 levels, by the year 2020.

Only last week a number of Australia’s leading scientists came to Parliament House, making themselves available to not only provide a brief overview and presentation of their views on the science that drives climate change around the world but also to answer questions on matters that other members of this House have raised here today—even though they did not take the time to come the function last week and ask the questions of the scientists, who would have been able to provide them with the advice. The scientists came to parliament to stress the urgency of action on climate change not only by the Australia government but by governments from around the world. It is an urgency that I share.

The members opposite have been raising, almost constantly—it has become a common theme in their contribution to this debate—the point that we do not need to act now and that we ought to wait until after Copenhagen. Let me tell you why it is important that we act now. It is important that we act now because we made a commitment to the Australian people almost two years ago, in 2007 in the lead-up to the federal election. It is important that we act now in order to provide business in this country with certainty about what is going to happen with respect to a carbon pollution reduction scheme. Might I say in respect to businesses that I have not heard too many businesses say that they do not accept that climate change is real or that we do not need to have a scheme in place. They may well differ in terms of how the scheme should be structured but at least there appears to be broad consistency amongst them that a scheme is necessary.

It is important that we act now in order that we have some credibility when we go to Copenhagen in December. If the government cannot deliver a scheme in Australia what confidence will the international community have that we will be able to deliver on any agreement reached at Copenhagen? It would seem to me that our credibility when we go to Copenhagen stands entirely on the ability of this parliament to implement a scheme of its own and then take that to Copenhagen as a demonstration of our commitment to doing something about climate change. Anyone who thinks that we can go to Copenhagen and listen to what everybody else is saying and then put our two bobs worth on the table with any sense of credibility is fooling themselves.

As I said earlier, with each day of delay the cost of mitigation becomes higher and more difficult. It is also true that there is a greater expectation on Australia when it comes to the conference at Copenhagen. There is a greater expectation because no-one denies that the implementation of this scheme does not come at a cost. There are costs involved. But it is a fact that Australia is in a much stronger economic position than most other countries around the world and it would therefore be expected that we would show some leadership when it comes to this matter, given the fact that we have the capacity to do so.

Let me turn for a moment to the position of the coalition members on this issue. It is interesting to read their contributions to this debate. I have read the contribution from the Leader of the Opposition and I have also read some of the contributions from the members for Groom and Curtin, who I would consider to be pretty much the leadership team of members of the coalition. It is interesting that it is accepted by them, in their contributions, that climate change is real, that greenhouse gas emissions or carbon is a critical component of what is causing climate change, and that a carbon pollution reduction scheme of some sort is the best strategy with which we can respond. What is also interesting is that when I read the Leader of the Opposition’s contribution I found that he talks about scientific opinion and economists and he mentions Margaret Thatcher but he never articulates his own opinion on this matter. The fact that he does not articulate that opinion is clear in the amendment that he has moved. It is an amendment without specifics—just generalisations—and, once again, is a deferral in making a decision. That deferral means that this is now the ninth time that this matter has been deferred by coalition members.

The debate on this issue commenced two decades ago, culminating in the Rio summit. I think that was in 1992. It then went to Kyoto, some five years later. We are now, in 2009—almost 20 years later—still talking about what we need to do about what is accepted as climate change and what is accepted as causing major problems for the world. We cannot and should not continue to defer. Deferring for another 45 or 50 days, as is the suggestion from the opposition leader, is not simply a matter of days; it is a matter of months, because having gone to Copenhagen there is no guarantee that a universal agreement will be reached, which means that the matter will then be deferred even further. And there is no guarantee that after Copenhagen this parliament will immediately pass any form of legislation.

So the process just gets dragged on and on—a process which I believe most voters out there want this government to finalise, once and for all. I accept that most voters out there are getting a little tired of the debate. They want the matter resolved, once and for all. That is certainly what they are telling me. They want to know where they stand. They want to know, if they run a business, just what other obligations and commitments they have ahead of them.

I want to finish with a quote from the spring edition of Living Ethics. It is from an article by Simon Longstaff. He finds similarities between this debate and the debate that took place when Wilberforce brought forward, in the House of Commons, his bill to abolish the slave trade. He compares the ETS debate with the slave trade debate and says:

… the arguments are eerily familiar: the prediction of economic ruin, the loss of commercial advantage, the relocation of business to easier jurisdictions.

He goes on to say:

The similarities in the debates of then and now are just too remarkable to be ignored.

He further says:

It is the scale of the disaster that might befall us that raises the issue of global warming to the same level as the abolition of slavery.

I will finish on this quote, which is from the same article, where Simon Longstaff quotes the President of the Federated States of Micronesia, Emanuel Mori, who said:

We will all be drowning in our own backyards if leaders of developed nations do not take swift action to reduce greenhouse gas emissions.

This bill needs to be passed by this parliament, and it needs to be passed now.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the cognate bills. Climate change is no doubt a significant issue wherever you sit on the political spectrum. It is important to remember, though, that it is a scientific and an economic issue. It is not about zealotry nor religious fervour. Whether Australians believe that mankind is causing climate change or not, the role of any member of parliament is to do all in the best interests of our nation to contribute in a positive way to managing our planet and to ensure we do not leave future generations burdened with debt or damaged land.

I am not a scientist. I have to take the evidence on face value. Despite the growing data to the contrary, I have to give the planet the benefit of the doubt. Consequently, the climate change debate is fundamentally now about managing risk. Thus, wherever people sit on the debate, surely the goals of any coordinated strategy—such as less or zero reliance on Middle Eastern oil, cleaner air, higher organic content of soil to achieve higher crop yields, and greater reliance on renewable energy to ensure our own domestic security—are worthy goals.

Surely, if, in 20, 30 or 40 years time the issue at hand is found to be erroneous, if we have achieved those outcomes it will have been worth it. It is about managing risk. The reality, though, is that the US carbon reduction legislation—the Waxman-Markey bill—will set the benchmark across the globe. Remember, the US economy is almost as large as the next four largest economies combined. Considering that the US legislation will be largely completed within the coming months when the world gathers at Copenhagen to begin thrashing out a new global deal, surely it makes sense to wait until after these two events before Australia shapes its legislation.

However, as we all know, our Prime Minister wants to go forward with an emissions trading scheme—a scheme which aims to reduce our emissions of carbon into the atmosphere—before the US has finished its legislation and before the world decides on the way ahead. We all know that a poor ETS has the potential to destroy the Australian economy. Surely, when the stakes are so high it would be obvious that we should take as much time as we need to get the best outcome. Surely, it is obvious that we should wait 50 days until the US and Copenhagen have outlined, in broad principle, the way ahead.

We have asked for the ETS to go to the Productivity Commission for a full and frank disclosure of exactly what the impacts will be. Mr Rudd has refused to do this. The question is: why not be open to scrutiny from the Productivity Commission? We have provided the government with the most important thing prior to Copenhagen bar none—bipartisan support on reducing targets by five per cent, increasing to 25 per cent if there is indeed a worldwide agreement.

It is important to note that the opposition supports an emissions trading scheme as one of the tools in a climate change toolbox. Indeed, it was the emissions trading scheme proposed by the Howard government, based on the Shergold report, that was the first such proposal for this country. But it is only one of the tools in a broad toolbox. Other issues that should be considered include carbon sequestration, a voluntary carbon market, the use of biochars and implementing a green cities initiative with advanced depreciation to achieve efficiencies in energy use. These combined strategies will address the climate change risk we face without sacrificing the nation on the altar of an ETS expediency so that our PM can look good in Copenhagen.

However, if the Prime Minister wants to go blindly forward regardless—and by virtue of the debate this evening that would seem his intent—then we will be constructive, we will engage in the debate and we will sit down and seek to negotiate with the government. That is why I rise to support the Leader of the Opposition’s amendment to this bill.

The government’s proposed emissions trading scheme is flawed in its current form. It will cost jobs, it will cost investment and it will simply export rather than reduce global greenhouse gas emissions. Our preferred aim is that the government defer consideration of the legislation, which will impose, as the leader said, the single largest structural change to the Australian economy. We would prefer that he defer consideration until after the Copenhagen climate change summit has concluded in just 50 days. But clearly the PM cannot wait 50 days. Therefore, we will act in good faith, noting that we do not want to export our problems, noting that we do not want to disadvantage our nation, noting that we do not seek to redistribute wealth amongst nations or create a funding stream for a world body like a UN. So we will enter negotiations, as the Hon. Ian Macfarlane, the member for Groom, is now doing with the minister—sitting down and going through, line by line, the key amendments we would like to see to protect the economy, jobs and our way of life.

The six key matters that we are encouraging the government to consider in our amendment are quite simple. The first is that agriculture is excluded from the scheme, rather than included after 2015, and that farmers have access to agricultural offset credits or green carbon or carbon sequestration credits. One of the great advantages we have as a continent is over 700 million square kilometres of land or thereabouts. Allan Yeomans has written a book called Priority One in which he says that we could pull out all of the carbon dioxide we have put into the atmosphere just through increasing the level of organic material in our soil. Let me quote directly from him:

Soil humus and soil organic matter is mainly decomposed plant life and is 58% carbon. The only source of carbon for life on the planet is the carbon dioxide in the air. We have to turn atmospheric carbon dioxide into humus as cheaply and as efficiently as possible. We are then recreating soil fertility, a process that has been happening for years. We just help the process instead of hindering it.

He continues:

It is simple and easy to increase the organic matter content of soil and so sequestrate carbon dioxide from the air. Our world’s agricultural land areas are more than ample to return atmospheric carbon dioxide levels to normal. We have to raise the organic matter content of the world’s soils we cultivate and manage by 1.6% and the greenhouse problems now destabilising world climates and weather systems will vanish.

He continues:

If just the US grain belt was somehow managed throughout the next decade to recreate deep soil with a 20% organic matter content, the carbon dioxide in the atmosphere of the entire world would be returned to a safe pre-industrial era level.

I am not a scientist; I cannot comment on Mr Yeomans’s analysis or statistics in Priority One. His contention is that if we raise the organic matter of the world’s soils by 1.6 per cent the problem can be solved. Even if he is out by 100 per cent, it is only raising the organic content by 3.2 per cent. What it does point out without being too prescriptive is that whatever we do must include agricultural offset credits. It must include the ability for our farmers to reap the benefits through better farming practices and to sequester carbon. It is far better to lead a donkey with a carrot than to beat the living daylights out of it with a stick. There is an opportunity to provide an incentive for our farmers to lead the way through sequestering carbon into the soil by raising the organic content of the soil. It is fundamental that agriculture is excluded from the scheme and that farmers have the ability to use their land and have access to offset credits. Frankly, it just makes sense.

The second key part of our negotiation with the minister is that emissions-intensive trade-exposed industries, EITEs, remain on a level playing field with competitors in advanced economic countries. It only makes sense that we do not want to disadvantage our industries relative to similar industries across the world. We need to amend the legislation to provide a single level of assistance for EITEs. We need to lower the threshold for assistance from the proposal of a thousand tonnes of CO2 per million dollars of revenue to 850 tonnes. We need to continue to provide assistance to our EITE industries at 90 per cent until 80 per cent of their international competitors have also implemented carbon abatement measures.

Clearly we need to include primary food processing, such as dairy and meat, in our EITE schemes and allow industries that include a series of sequential or parallel production processes to have them assessed as a single activity in determining assistance. We need to protect our industry not because we want them to keep spewing out carbon dioxide into the air but because we do not want to disadvantage them relative to the rest of the world.

Thirdly, we need to moderate the high impact of electricity prices on small businesses. Let us not forget in this place that small business employs 46 per cent of all Australians, the single largest employer group in the country. The cost of any electricity impact on small business will be passed on to consumers. The Frontier Economics work that the coalition commissioned has raised the issue and provided alternatives the government needs to look at. We have already seen electricity prices go up over the last few years as errant Labor state governments have mismanaged retail privatisation or indeed mismanaged assets. The Bligh Labor government in Queensland is a classic case. The Premier stood there and said that the retail contestability would not see electricity prices rise at all. The next year, up they went by almost 15 per cent. The sheer incompetence of that is staggering.

Fourthly, the coal industry will be required to reduce fugitive emissions, mostly of methane, as technically feasible, but it should not be unfairly financially paralysed. There are not that many gassy mines emitting large amounts of methane from either test drilling or indeed operation of the mine. They cannot be punished. We need to go about it sensibly as technology allows.

Fourthly, transitional assistance to coal-fired electricity generators needs to be sufficient to ensure, frankly, that the lights stay on and our generators remain viable. We cannot have tens of billions of dollars wiped off the balance sheet of our generators without some degree of compensation.

Lastly, complementary measures such as voluntary action and energy efficiency should be encouraged. We acknowledge the problem on this side of the House. We acknowledge that we need to act. It is errant to say that this side is full of sceptics and to use other great religious language. We believe in the need to act. Indeed, we are the ones who tabled an ETS in the first place in 2007. We are the ones who began the action. But we need to act sensibly. We need to ensure we are walking in step with the rest of the world. We need to be an aggressive follower of Copenhagen and the US model, not the world’s single aggressive leader. That only serves one man’s ego. We want to serve the nation’s interests. There is a significant difference between the two.

Melissa Parke (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills, a legislative framework that is designed to move Australia forward in our effort to combat dangerous climate change, a legislative framework that seeks to address one of the greatest market failures of all time—namely, the failure to put a price on carbon pollution. As a federal representative, one has the opportunity to speak on a wide range of matters, to speak on issues large and small, national and local and, to be fair, of varying importance. But today we are speaking on an issue whose significance gives way to few, if any, matters of more gravity. What we debate today is Australia’s first comprehensive scheme for ensuring a reduction in national carbon emissions. It is a scheme that establishes a structure within which carbon pollution must be reduced and under which the market will find the most efficient and cost-effective way of achieving the set reduction target.

In Australia, as in other nations proposing or operating emissions trading schemes, the CPRS is not of course the end of the problem; but it is the beginning of the solution. It is not the whole solution; but it is an important part of the solution for reducing emissions, other parts including the development and support of renewable energy sources, sustainable cities, agriculture and whole-of-society energy efficiency measures.

This Carbon Pollution Reduction Scheme is the result of an extensive consultation and policy development process. The widest range of stakeholders has been consulted, and all parts of the community and political spectrum have been given the opportunity to participate. The reasons for passing these bills are numerous and compelling. They are that harmful climate change presents a very grave threat to the wellbeing of the living inhabitants of this planet both now and into the future; that the precautionary principle requires the human race, through national governments and multilateral organisations, to take appropriate pre-emptive steps rather than waiting for the worst to occur; that the Australian community wants its government to take action on that basis; that Australian business wants government to provide certainty on this issue; that all the analysis suggests that, the longer we wait, the more it will cost to shift from a high-carbon to a low-carbon economy; that acting now will only impose a cost increase to Australian households in the order of half of one per cent in the first two years of the CPRS; and that the global community cannot deal with this problem if individual nations take a ‘you-go-first approach’. On this point, I mention the ridiculous argument that Australia need not act considering the relative scale of our emissions. The truth is that relatively speaking Australia punches well above its weight, as we are fond of saying in other contexts, when it comes to per capita carbon pollution emissions.

That Australia stands to be disproportionately affected by climate change is again made clear in the report of the inquiry into climate change and environmental impacts on coastal communities, which was delivered on Monday. The report details our vulnerability to a rising sea level and to increased storm surge activity. It notes that 80 per cent of our population lives in the coastal zone and that more than 700,000 households are within three kilometres of the sea.

Our place as a developed nation, with a comparatively high standard of living and a comparatively high capacity to take the necessary action to reduce carbon emissions, provides an additional moral imperative, if such were needed, to be a leader rather than a follower in the global response to climate change. This is an even greater imperative for Australia than for some other developed nations when you consider the region in which we exist, a region with a large number of nations under severe threat from the effect of sea level rises, a region with a substantial population that will look to Australia for action now and will look to Australia for greater and greater assistance if this terrible problem goes unchecked.

Finally, the science in relation to climate change, over the course of the two years since this government was elected, has become clearer and more alarming. If anything, the science and the scientists are swinging towards a bleaker view of the situation we find ourselves in. Last Wednesday, Climate Scientists Australia, a newly formed group of some of Australia’s most eminent climate scientists, conducted a briefing here in Parliament House to emphasise the need for urgent and substantial action to reduce carbon emissions. I commend the members for Isaacs and Moore for their part in hosting that forum.

The worse-case scenarios, as they stand, are very grave. Dr Andrew Glikson of the Climate Change Institute at the Australian National University is one of a number of highly reputable scientists who strenuously assert the need for urgent action on climate change and the need to get ready to do considerably more than we perhaps now contemplate. In his submission to the Senate Select Committee on Climate Policy, Dr Glikson argues:

The unacceptable consequences of a continuation of human business-as-usual inertia in terms of extreme weather events—droughts, fires, cyclones and sea level rise—require urgent deep cuts in carbon gas emissions and fast track development of alternative energy utilities and carbon down-draw technology aimed at a reduction of atmospheric CO2-E levels to below 350 ppm.

Robert Correll, the Chairman of the Arctic Climate Change Impact Assessment, said the following:

For the last 10,000 years we have been living in a remarkably stable climate that has allowed the whole of human development to take place … Now we see the potential for sudden changes of between 2 and 6 degrees Celsius [by the end of this century]. We just don’t know what the world is like at those temperatures. We are climbing rapidly out of mankind’s safe zone into new territory, and we have no idea if we can live in it.

As the representative of a constituency that is highly engaged on this issue, I would say to all my parliamentary colleagues that the political divisions on this issue, particularly the divisions within the opposition, are not reflective of the views of the wider community. Indeed, I would say with confidence that there are thousands upon thousands of households across this country, from Fremantle to Wentworth, from Denison to Solomon, who want their parliamentarians to engage on the question of addressing dangerous climate change. That is a fact recognised by this government, which fully understands that the twin principal vectors of change at the last election were the abolition of Work Choices and the need to have a national government that took climate change seriously.

This government has engaged Australian households in debate on climate change and in practical measures to reduce carbon emissions, increase energy efficiency and increase the production of renewable energy at the household level. We have facilitated an open and thorough public consideration and debate of the issues involved through Professor Garnaut’s green-paper/white-paper process. The Minister for Climate Change and Water has worked tirelessly in consulting with stakeholders across the spectrum, from business to environmental groups to community and welfare organisations.

This has culminated in the Carbon Pollution Reduction Scheme Bill which, despite its vocal critics, stands to create for the first time a mechanism for reducing Australia’s carbon emissions in keeping with a unilateral reduction commitment. The government has already been successful in passing its renewable energy target legislation, which will appropriately support and boost this burgeoning and critical sector. We have done all these things on the basis that the weight of scientific evidence clearly indicates that anthropogenic climate change is occurring, and that if left unchecked it will have potentially catastrophic consequences for life on earth. Like governments around the world, we are planning and acting on the best evidence available and according to both the precautionary principle and common sense.

To many of those opposite, whose conservative creed might lead them to feel that doing nothing, or doing very little, is the best approach, I would suggest they consider the fact that caution is not always shown by inaction but rather by careful action. When you are driving a car into the desert and you get the feeling the fuel gauge is not working, and you realise there is not enough water on board, it is time to turn around. You do not keep on driving in those circumstances; you take precautionary action. In this case, when we act as a nation, and as a global community, we will not only be addressing the problems of climate change; we will also be taking steps to prepare ourselves for the inevitable time when our hydrocarbon economies literally run out of gas. We will also be taking steps towards a cleaner, healthier, more humane and more diverse environment; and steps towards a way of living on this planet that is truly sustainable.

The ratification of the Kyoto protocol was the government’s first official act, and it set the tone and the standard for our further action on this issue. The real question in this debate is: how will political representatives in the national parliament respond to, and match, the engagement that is already occurring at the community level? In Fremantle, I have never been in any doubt that the electorate I represent is impatient with government at all levels to match their readiness to take action. I am contacted on an almost daily basis by constituents who express this view. Sometimes they ring or email to say that they welcome a particular program or initiative—but, to be honest, it is usually to say, ‘This might be good, but you can do more.’ I am listening to that message and I am voicing it on their behalf. All the best evidence, all the logic and all the common sense tells us that we must act to prevent further, more damaging climate change from becoming an entrenched, irreversible climate trend. The Australian community is asking its representatives, its governments at every level, to take that action. The onus is squarely on us to do so.

I want to conclude by quoting the words of Martin Luther King, who spoke wisely in another context about the dangers of inaction when he said:

We are now faced with the fact that tomorrow is today. We are confronted with the fierce urgency of now … Over the bleached bones and jumbled residue of numerous civilizations are written the pathetic words: ‘Too late’.

Climate change policy and the legislative proposals that implement that policy should be vigorously developed, contested and debated, but they should not be the subject of political game-playing. While I am happy to acknowledge the overwhelming probability that the CPRS Bill is not perfect, I utterly reject the argument that until everyone agrees on the perfect response to dangerous climate change, or until the rest of the world solves the problem for us, we in Australia should meander endlessly through a fog of political indecision and a smokescreen of political obfuscation. With this bill this government is responding to the clear onus placed upon it by the voters of Australia. We have conducted an open and extensive policy consultation and development process. We have engaged the opposition, the Greens and Independents on this issue. Now it is time to take action, before it is too late.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to speak on the government’s so-called Carbon Pollution Reduction Scheme (Charges—Customs) Bill 2009 [No. 2] and related bills that are before us. From the outset I want to make it very clear that I am strongly opposed to what I regard as the Rudd government’s proposals to implement a carbon tax, a new and complex tax in my view that will add to the size and scope like no other measure in Commonwealth history. You ought not to take my word for it. Terry McCrann, in his article of 8 August 2009, says that the ETS is a tax. He warns all Australians omniously:

It’s not called a tax, but if it waddles like one, quacks like one, and most pointedly raises money like one, it’s a tax. And not just any old tax—it’s a huge and continually growing tax.

For those who are concerned about the Liberal Party’s position in this debate and on this issue, I want to open my remarks by reinforcing in the strongest terms that the coalition joined with all other non-Labor senators to vote down the Rudd Labor government’s proposed emissions trading scheme. We are back here today with the same legislation because of the Labor Party’s determination to use this issue as the great wedge of our time. It is my view that Labor is now playing pure politics with the issue of climate change.

What we know is that the government’s emissions trading scheme is deeply flawed. I accept today that it is true that many people are caught up in the idea that an ETS could solve a perceived problem with climate change caused by humans. It is a thesis that I want to reject today in a number of ways. It is clear from what we have seen from the Rudd Labor government that politics appears to be the goal of the rush with this legislation. What we have seen is that principled operators in this debate, like the Greens in the Senate, have preferred to oppose the emissions trading scheme on the view that it will not achieve environmental outcomes. Indeed, they make a very valid point that going through all of the rigmarole that is involved with this legislation will not produce a demonstrable environmental benefit. In fact, there is a serious body of evidence that suggests that there will be a questionable outcome from the entire scheme.

When you have parties like the Greens saying that this is not an effective scheme and that it will not work the way that the government says it will, the Independents in this place saying that it will not work and the myriad of business and independent voices around Australia saying that they have grave concerns with the way that this legislation will operate, we ought to think very carefully here in this place about what we are doing. We ought to pause, we ought to reflect and we ought to have a debate about it. And yet we have this procession of Labor backbenchers telling us that we ought not to be having a debate; that somehow this is the moral imperative of our time and we ought not to question the detail of the scheme, how it will operate or how it will affect everyday Australians.

But when you look at this legislation—and it is a very big and complex piece of legislation—it is very difficult to drill down to what simply the government is trying to do. It is an oxymoron to say that you can have a simple explanation of the Carbon Pollution Reduction Scheme or the emissions trading scheme when you examine the size and complexity of what they are attempting to do. If you look at the bills in front of us, essentially they are trying to create an overall disincentive for people to emit carbon through the use of taxes, permits and other mechanisms. But the idea is that a disincentive will be created for the emission of carbon in the economy and in the daily lives of individuals by using all of these different mechanisms.

However, there is something that the government has failed to demonstrate. After it collects all of this revenue and tax that will be raised by all of their mechanisms, it will then proceed to subsidise heavy industries, heavy emitters, polluters and what they term low- and middle-income households. By the use of subsidy, they therefore remove the very disincentive that they are trying to create in the first place to reduce the emission of carbon. So you go through this massive churn in financial terms, in legislative terms, in taxation terms to produce an environmental benefit that is questionable and negligible. That is why there is pronounced opposition in the Greens and other parties to this type of scheme. It is one of the reasons why I oppose this scheme as well.

If you look at what the many business organisations and large enterprises consider will be the outcome of this, the Minerals Council of Australia, for example, showed that per capita revenue raised by our Australian scheme compared with similar cap and trade schemes in the USA and the EU, Australia comes out remarkably worse off. For example, a comparison of per capita revenue raised by competing schemes in the first full year of operation of a cap and trade scheme shows that Australia would raise $404 per capita, the United States would raise $57 per capita and the EU would raise just 80 cents per capita. That is $404 per capita compared with $57 per capita and 80 cents in the USA and the EU. As the member for Fremantle pointed out, we are sure punching above our weight in relation to per capita revenue raised.

From the evidence that we have seen, there has been little or no scrutiny of the Rudd Labor government on this scheme and the design of the proposed legislation that is before us. This is a very disturbing problem. From what we have seen, it is clear that the Minister for Climate Change and Water cannot explain the government’s own cap and trade system when asked about it many forums. The minister cannot explain their permit system, the role of voluntary measures in the system and how all of these measures would interact. On this point regarding the system of permits and subsidies, it concerns me greatly that the Minister for Climate Change and Water is not across the detail of how this scheme will operate. This adds to my already great concern about a measure that will give government the most unprecedented boost in its scope and its size in our Commonwealth’s history.

In addressing these bills, it is important for us to ask why we should act before the rest of the world and ask about the experience of carbon trading where it has been developed to date. When you examine what has happened in other places in the world, the European experience with carbon trading has badly backfired. That demonstrates that an artificially carbon trading market has severe problems that quickly undermine the intention of the mechanism: to reduce the emissions of carbon. In Europe, for example, you have a dichotomy. Developing states in Eastern Europe are seeking to expand their economies and therefore in a way hijack the intention of the carbon trading scheme by offering freer and cheaper permits in those states, undermining the whole integrity of the system. In fact, when you look at the European experience, it is completely uninspiring.

It is my view that carbon trading could well represent the biggest distortion of the market and the biggest single intervention in the economy in modern history. There was a great article from Bloomberg on 17 July 2006 by Matthew Carr, who records the following:

When EU officials created a market for trading pollution credits they boasted it was a ‘cost conscious way’ to save the planet from global warming.

Five years later, the 25-nation EU is failing to meet the Kyoto Protocol’s carbon-dioxide emission standards. Rather than help protect the environment, the trading system has led to increases in electricity prices of more than 50 per cent and record profits for RWE,AG and other Utilities

This is a market distortion if I ever saw one. The government created market distortion which ought to frighten every Australian, considering the proposition that an ETS could be good for the economy—50 per cent increases in electricity is nothing to be taken lightly. Bloomberg conclude in the same article that the $44 billion a year market in carbon trading is an environmental and economic failure. That is according to Open Europe, a policy group that assesses the EU’s laws. So let us be clear. We represent 1.4 per cent of the world’s emissions and if we do nothing naturally that will fall to one per cent. In fact, if we shut everything down in Australia, growth in China would account for emissions in just eight months that take a year for Australia. So why would we pursue a policy mechanism that has demonstrably failed in Europe?

Certainly I accept the argument of my colleagues and many people in the community that we ought not be doing anything before Copenhagen and preferably ought not be adopting this system at all. But the Rudd government has had this obsessive mantra about passing a scheme before Copenhagen. It must be asked: why? A government that continually moans about artificial gases is forcing an artificial time frame on us. I believe that Copenhagen, to this government, is about opportunity. I question the motives of the Prime Minister in pushing this scheme before Copenhagen. The government claims it is a world-leading measure, but actually it puts our economy and the jobs and industries of Australians at risk. I do not believe that Australia is well served by being locked into a course of action when the major world emitters are not and when we represent only 1.4 per cent of the world’s emissions. I do not accept the argument of the member for Wills that there is a moral imperative for us to do something when we are so insignificant. If we did not act, it would not of course make any difference to the world’s carbon emissions.

When you examine the impact of how this legislation will affect many sectors in our economy there are great concerns. I highlight some big ones here today, particularly the areas of agriculture—basic areas that have always been so primary to Australia’s role in the world as a producer of food. I think our role as a producer would be seriously threatened under this legislation. I quote Senator Heffernan, my friend and colleague, who has a prescient feel for agricultural issues. He says:

As an opposition it is imperative that a more practical solution be achieved which does not put our nation at a disadvantage nor burden consumers and small businesses with large increases in electricity prices. One of my key concerns about the Rudd government’s proposed legislation was its refusal to rule out putting agriculture into the ETS after 2015. If our farmers were subject to an ETS, whilst the United States and European Union have exempted their farmers, not only would they be at a competitive disadvantage but many would become insolvent overnight, particularly beef, dairy and sheep farmers.

The idea that many farmers would become insolvent overnight is something that the government must take into account in the design of this legislation and what it is proposing. It is a very serious matter that agriculture, so primary to this country’s production, be considered and treated in a way that is not to its detriment.

I want to raise my own area of concern and that is small and medium sized business. To me one of the greatest areas of concern is what will happen to business if this legislation passes this place. It was remarkable to hear the Treasurer come in here recently and say that some businesses may face higher input costs, as he put it. He said they would be modest increases. I feel that displays a rank contempt for small and medium business. Imagine going to many of the small and medium business operators in my electorate and saying: ‘You are going to face an increase in your electricity prices. It will only be modest so don’t worry about it. There will be higher input costs in a range of areas, but you will survive somehow.’ The government does not have an answer for those small and medium enterprises that will face higher input costs and higher electricity costs as a result of this legislation.

We will see a reduction in employment. We will see a reduction in investment. We will see a toughening of the environment for small and medium enterprises. I think it was remarkable to hear the Treasurer of the Commonwealth saying that these simply represent modest increases with no other explanation for small and medium enterprises. In some respects, what would you expect from someone who thinks that entering into $300 billion of government debt was a beneficial thing for our economy?

The Liberal Party has a very different view in relation to small and medium enterprises. The Liberal Party is the party of enterprise and freedom and it is because of our belief in these things that I cannot in good faith support a new tax that will so heavily impact on so many small and medium enterprises across our country. It is these people, many of them in my electorate—self-employed people, people who have worked to create their own businesses, the innovators, the creators and the producers—that this massive new taxation scheme threatens the most. It is this base of self-reliance, ingenuity, innovation and hard work that stands to lose the most from this unfair new tax. I reflect and record very clearly here that my electorate, in contradiction to what some of the members opposite have said, have been contacting me expressing concern mainly about how this massive new taxation scheme will impact on them and their small and medium sized businesses. Mitchell is home to so many small business people who innovate, manufacture, produce and employ. The more people who come to understand an ETS and understand that it really represents a tax, the more they make clear to me their concern with the proposed legislation and their ability to pay any new tax of the nature proposed.

I have no doubt that the Labor Party is using climate change as its most potent political weapon to win elections and it may be that Australia ends up with an emissions trading scheme no matter what any opposition party does. However, it is vital that the government take into account the serious concerns in many sectors of the Australian economy and that those concerns are well founded on costs and the ability of business to survive under such an oppressive regime. There is increasing concern about the science, conflict about the figures and a growing number of people who are concerned that the climate change debate has been deliberately hijacked for political purposes worldwide. We have seen commentators like Janet Albrechtson in her column today highlighting the contribution of Lord Monckton, who was warning that the aim of the Copenhagen draft treaty is to set up a sort of transnational government on a scale the world has never seen. It is a thought that I think should be seriously reflected on at least.

We have seen world leaders like Vaclav Klaus, who wrote a book called Blue Planet in Green Shackles, who essentially started saying that today’s debate about global warming is essentially about freedom and points out that much of the environmental moral imperative that is suggested behind this legislation is coming from a political perspective. We have seen people like Andrew Bolt, perhaps one of the strongest critics challenging populist opinion on this topic, suggest there are serious concerns that ought to be taken into account by many credible and reputable scientists—serious and measured professionals. We have seen works from people like Professor Ian Plimer, who penned a great contribution called Heaven and Earth. We have seen a movie just released in Australia to much fanfare, Not evil just wrong. It makes an important and ongoing contribution to the ordinary debate about the ongoing causes of climate change. And it is good to see that there is a genuine debate that is being considered on both sides of this argument, in short shrift to the contempt that is being shown by some people to other people’s points of view.

We should also heed the warnings of respected figures like the Hon. Ian Callinan AC QC, High Court Justice from 1998 to 2007, who said:

Emissions regulation offers government an irresistible opportunity to centralize and control every aspect of our lives; on our roads, on our travels, in our workplaces, on our farms, in our forests and our mines, and, more threateningly, in our homes, constructed as they will be compelled to be, of very specific materials and of prescribed sizes. It is not difficult to foresee a diktat as to how many lights we may turn on and when we must turn them off: the great curfew. The new regime has the capacity to make the wartime National Security Regulations look like a timid exercise of government restraint.

I read that quote out because I feel it is a very powerful and compelling warning from a respected figure in our nation’s history who points out that his examination and his intelligence teaches him that these proposed bills seriously threaten our freedom.

Governments, in all their forms, have been trying to run our lives one way or the other for all of human existence. Since the advent of capitalism and free markets, governments have been limited and rights for citizens have offered us protection against unbridled government. The true story of Australia’s success since its European settlement is a story of rugged individualism and the unbridled ingenuity of its citizens in overcoming a harsh and brutal climate, a story of hard work and achievement that has produced one of the highest standards of living in the world. This high standard of living now faces a most serious assault from a Labor government determined to use a green veneer to impose a tax on every form of industry, activity and human endeavour in our country.

From the design and intent of this legislation before us, it appears our historical protections are no longer enough to stop government from interfering in an unacceptable way in our daily lives. Under this carbon tax, will you need a permit to conduct your life in the way the government requires? A permit to conduct your business the way the government deems valid? A permit for yourself and your family to exist on the terms the government thinks appropriate? Forcing Australians to apply for permits or live off subsidies from government for working to produce a higher standard of living for themselves and their families is a system I cannot and will not support.

I reject these bills. I reject the premise of these bills: the premise that the government can impose a system of taxation on every sector of our economy that will make a true difference to the climate of the planet. I reject the premise that a Labor government can artificially create a carbon market that will reduce the emission of carbon in a way that will alter the climate of our planet. In fact, every Labor intervention in our economy has resulted in higher taxes and more government. There is no evidence before us to suggest this legislation will be any different. And in rejecting these premises I also reject these bills. I reject the Labor Party’s unprecedented program to expand the size and scope of the Australian government.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

This debate is not about us. This debate has been used by many to try to define themselves or their opponents. Sadly, it has all basically come down to politics. For those who are passionately devoted to the climate change cause, you have a right to be disappointed with what is taking place here. Those who feel equally strongly the other way—and there are many who do—also have a right to feel aggrieved. I believe they have been used in this debate also. The truth on all of these matters always lies somewhere in between. For my sake, and for the sake of my children, I will give the planet the benefit of the doubt. This does not constitute a blank cheque for any action but rather sensible and reasonable action, measured action, balanced action, action that is always looking at the emerging science, action that is always looking at the modifications that need to be made. So I will not allow my good faith towards this issue to be appropriated and to be misused.

But again, it is not about us. It is not about whether individual politicians here in this place, members of parliament, believe in climate change or not. That is not the debate. That is the debate I believe the government wants us to have, and as I have listened to those speaking opposite about this matter, that is principally been the theme of the presentations they have made. The scheme we debate here should not be about even what the government is doing, because ultimately it is about what individuals do, what choices they make, what investment they undertake, what sort of future they envisage and how they plan to get there. It is not just about our decisions here as individuals in this country; it is about the decisions that billions of people around the world are going to make today and in the future and for many years to come.

An ETS, properly designed and calibrated, can send an efficient and effective market signal to encourage and justify investment by individuals in low-emissions technologies and behaviours. This is a true statement. But that is not a blank cheque or a licence for any ETS at all. The question before the Australian people is: what are you as individuals, not necessarily the government, prepared to do? Because it is you, the Australian people, who will be paying the price. The previous speaker, the member for Mitchell, made a valid point: this is a tax. We should call it a tax—it is a tax. It is a tax that is going to be on every grain of carbon that moves through our economy and through our society. As the community becomes more aware of the costs of taking action in this debate to reduce carbon emissions, so too to do their expectations rise of the environmental outcomes they expect. This bill will not meet these expectations.

A false premise has been put out amongst the community over many years as this debate has become intensely popularised. If there are people out there listening tonight that feel that the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills, as proposed, will save the Great Barrier Reef, make the rivers flow, make the tide drop or make the sea levels not rise, they have been sold a falsehood. What we are debating here is some action, a scheme. It is a scheme that has many flaws, and we are debating those flaws in relation to the legislation this evening. But we should not allow Australians to believe that this is a silver bullet, that it is the only action that can be taken to reduce carbon emissions both today and in the future. That is a debate to which we do not know all the answers at present. To imply that all the answers are wrapped up in this tome of bills that we are debating tonight is incredibly misleading to the Australian people and, frankly, takes a loan of them.

I feel that we are cheating the Australian people somewhat with the timing of this legislation before the parliament. We are being asked to sign up to a process when none of us—those who have written this bill, those who have brought this bill into this place, those who have undertaken, I am sure, extensive consultations, those who have made submissions to those consultations and those on both sides of the debate who have laboured over many, many years on scientific research—yet understand or appreciate the issue in its entirety. We do not know what solutions and actions will be effective or what is an appropriate trade-off for undertaking those actions. We simply do not know, and I think anyone who pretends they do is misrepresenting themselves to the Australian people.

There are many aspects of this bill that, if passed, we will all greatly regret. I have no doubt about that. Even if this bill is passed in the weeks that lie ahead, and even with the amendments that we have proposed, there will be things in this bill that will leave a very poor legacy. There are sleepers in this bill that we do not yet understand. There are things that will present themselves in the years, let alone weeks and months, ahead that will drastically change the environment in which these measures operate. I also believe that whatever is passed here is unlikely to survive to its implementation date—such is the fluidity of this issue and how quickly it is moving.

There has been much talk of the event that will take place in Copenhagen when people from around the world will gather in literally tens of thousands and take over that city for yet another international meeting. But we are kidding ourselves if we think that what comes out of that meeting will give us any greater guide, in terms of what the rest of the world is doing, than what we know now. There may be some great emergence of sentiment; there may be some commonality of view. But I am not very optimistic that we will see any great conclusion of matters in Copenhagen. We are, again, kidding ourselves if we think that may inform us greatly.

What we will see in Copenhagen will be yet another step. There have been many steps; there will be more steps. It may begin a process which will take another five years to conclude in terms of the actions that may be put in place. I do not know whether Copenhagen will provide us with much of a guide. But it is an important meeting. It is important for us to frame the decisions we make in this place on the best information available to us. Frankly, I do not believe we yet have that, and I am continually puzzled by the government’s rush in terms of these bills.

As I said at the start of my remarks, I believe this is all about politics; I do not believe it is about policy. This debate does not do this issue justice, and I think many Australians are fed up with how it is being pursued. I do not think it endears us to the Australian people. Many Australians in my electorate and right around the country have many doubts on this issue, but a great number also have a great resolve to address whatever is happening out there and are looking for some sort of direction from us in this place. So we will debate these matters, we will negotiate the specifics of these bills, and hopefully that will provide some level of direction. But at all times we must be prepared to ensure that our response, as we consider these things in the weeks ahead and here this evening, is flexible. We must be prepared to admit that none of us have the complete wisdom on these matters and, as we learn more, we should have the humility to come back to this place and fix the mistakes that will undoubtedly be made as soon as we know about them.

The question before us now is: what do we need to fix now? The coalition have engaged in good faith in this debate. We have raised a number of issues, which the Leader of the Opposition in particular outlined in his address earlier today. I would like to focus more specifically on the absolutely critical issues from my perspective. The first is the overall nature of the scheme that the government has put forward. This is a big-government answer to the problem. It very much matches the sentiment and philosophy that the government has had on many issues, which is to put the government at the centre of things. This scheme will put the government at the centre of everything—every living being, every ounce of carbon that finds its way around this planet, particularly in this country. This is a big-government scheme that seeks to control all of that. It seeks to count and tax every gram of carbon, collect all of that revenue and then be the arbiter of who gets that revenue back. By definition, that is big-government tax and spend. That is the model that this government has adopted.

This is not the only model of an emissions trading scheme available. There are many other ways that this can be attacked, and the Frontier Economics report that was released several months ago was very clear about the alternatives. As we look around the world and as, I am sure, will be debated in Copenhagen, many countries are looking at schemes very different to what we are talking about here. There are schemes that have been in place; there are schemes that are yet to be introduced. But the big-government scheme that seeks to count and collect tax on every gram of carbon and then arbitrate as to who gets the revenue on the way back out is very much an old-fashioned Labor scheme.

It will involve enormous bureaucracy. It will generate tremendous churn in processing and compliance, which will put an incredible burden on businesses around the country that as yet is not completely understood. Certainly not understood is the impact it will have on the daily operations of those businesses. There will be, in that process of introducing such a massive scheme, extraordinary transitional costs in getting across the detail of this and in complying with it. I think we are being quite naive in how we are engaging with what is going to be, if passed—if approved by this parliament—the single biggest change in our history to how we do business in this country. But we rush apparently headlong into it with not enough detail, with not enough thorough thought.

I should stress that the concerns about the flawed nature of the scheme and the matters the coalition have raised have been echoed by many outside of this place. The second largest refinery that Caltex operates in this country is in my electorate in Kurnell. They have made submissions on this matter. It goes very much to the heart of their operations. Caltex will be the single largest purchaser of emissions permits under this scheme. They will spend up to $1.6 billion per annum. They said in their submission that the current package of the CPRS legislation was flawed and required substantial amendment to ensure it was environmentally effective, equitable and economically efficient. Caltex believes government should take whatever time is necessary to get the design of the scheme right. There is considerable work still to be done in this regard. They say a substantial amount of regulation should be tabled so that it can be debated and voted on with its enabling legislation.

It is proposed that significant issues—including the treatment of the emissions-intensive trade-exposed industries—be the subject of regulation. Eligible emission units being defined as financial products and deferred to payment arrangements for auction and a whole range of other things should be more the subject of the debate. But those things will not be debated as part of these bills because the regulations sit as completely separate matters. Caltex is the largest business in my electorate and they will be the single largest purchaser of emissions permits, and they are concerned. Hundreds of thousands of jobs will hinge on how effectively this is designed and implemented.

The coalition has argued very strongly that the agricultural sector, in terms of its emissions, should be excluded from this scheme and that the opportunities for abatement should be included. This is a very sensible proposal. It is consistent with international practice. We called on the government to do that. Even before our engagement in the good faith negotiations and up until those negotiations commenced, those calls were rejected. There is an opportunity for the government to do the right thing here and I am hopeful that they will do that. If they do do that, it will not be as a result of their desire or intention to do so when they designed this scheme or because they went out into the Australian community and defended their scheme over many months. If they do it, they will have done so only because of the coalition’s insistence that they see common sense and the best international practice to ensure that our agricultural sector not only is not penalised—and our food production basin is not penalised—but has access to commercial incentives to play a significant role in the abatement opportunities that exist for companies like Caltex. They have hit their heads on the ceiling in what they can do to minimise their emissions in operating with their own plant at Kurnell. The only opportunity they have now is abatement. Without the opportunity for abatement—or to pursue things such as biodiesel or whatever—there will be serious limitations on what the agricultural sector can do to do their bit. They are keen to do their bit, but with the way the scheme is designed in denying them the opportunity for agricultural abatement the government will not allow them to do that.

Others have talked about the emissions-intensive trade-exposed industries and the coalition’s proposals. They are all about putting Australia on the same wicket as our competitors around the world. That again is just simple common sense. The exclusion of fugitive emissions in coalmining is another common sense proposal that I am hopeful the government may see the wisdom of. It is electricity generation that greatly concerns me. The Business Council of Australia just this week released a significant report, which focussed on Australia’s infrastructure challenges into the future and was highly critical of many of the government’s approaches in this area. I have spoken about those on other occasions but tonight I want to focus on the warnings they have given on the government’s emissions trading scheme. They make the obvious statement:

… there is a desire to move from around 85% coal-fired generation to largely emissions-free generation in a short period of time.

They describe this rightly, I believe, as a revolution. It continues:

This revolution raises at least two key questions:

• How will Australia’s electricity market and also reliability of supply cope with the low emission transition challenge?
• What will the effects on Australia’s longstanding international competitive advantage in low energy costs be, and what can Australia do to preserve this advantage?
• The report goes on:
• Given the nature and speed of the desired revolution in our electricity sector continuing reliability cannot be assured …
• The Commonwealth’s coming Energy White Paper needs to address the issue of Australia’s future relative energy costs, the competitiveness implications for Australia and what policy response is required

The report also talks about the increased need to continue with other major energy, particularly electricity, sector reforms. It is quite clear that under the proposals put forward by the government baseload coal-fired power plants that were built for continuous operation will have to run as intermediate plants, and it is unclear whether this is technically possible. At the very least it will be incredibly difficult and not without costs. The value of loss of brown and black coal generators due to the CPRS will be around $10 billion over 10 years. This will reduce their value below their debt and some $19 billion of existing debt will need to be refinanced by the generation sector by 2015.

In short, this simply means that the lights will go out. We cannot expect a transition where our economy literally goes from 85 per cent of coal-fired power generation to effectively zero over a short period of time not to have some significant impact on our coal-fired electricity generators. The balance sheet impact of this issue alone will put extraordinary pressure on these generators to continue to do their job, which is quite simple: to keep the lights on. In the government’s rush to embrace and pursue this agenda, I believe this is an issue they have seriously overlooked. Not only will they have to meet this transitionary challenge but, in addition to that, they will need to meet the rising demand that has taken place and will take place in the years ahead because of our growing population.

Finally, there is the issue of electricity prices. My colleagues have rightly pointed that out, particularly the impact on small business. Also, landfill for the local government sector will be affected by a cap where, above 25,000 tonnes of CO2, there will be a need to buy permits, but there is ambiguity around the issue of proximate sites and whether they will be included. That needs to be resolved.

In conclusion, I am confident that we can meet the challenges, but we must approach the challenge humbly and honestly and be prepared to fix the mistakes that are here. The mistakes that we know today are in this legislation need to be fixed. The mistakes that will be made in the future as a result of this legislation will need to be fixed also. I call on the government to ensure they do that. (Time expired)

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! I know the member for Cook was going to seek indulgence to speak for a moment longer.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker. On indulgence, I am pleased to inform the House that, this evening, Bree Till, the wife of Sergeant Brett Till, who was killed in Afghanistan in March this year, gave birth to their beautiful son Ziggy Phoenix Till. He was born this evening at 7.04 pm, weighing 9.2 pounds and measuring 54 centimetres. My best wishes and prayers go to the Till family. It is a very happy day for them in what has been a very difficult year.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I think the House would share in the sentiment and thank the member for Cook for bringing it to our attention.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I am pleased to have the opportunity to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the related legislation because the transition to a low-carbon economy is one of the biggest challenges in the history of our economy. This process will change the way Australia relates to its trading partners, it will change the way that the government interacts with the free market and it will ultimately lead to changes in the way consumers behave. No industry will be left untouched by Labor’s emissions trading scheme. No family will be able to avoid the consequences of this new tax. Whether they realise it or not, every person in my electorate has an interest in the outcome of this debate.

I am mindful that there are a range of views on the issue of climate change and carbon emissions. Indeed, among my own constituents there are a very wide range of views. I know of some people in my electorate who are so convinced of the dangers of climate change that they have completely changed their lifestyle, and I also represent people who are convinced that the theory of human activity related climate change should be filed alongside Aesop’s Fables. Because of the wide range of views on this subject and the complexity of the issue, I have made a concerted effort to research carefully, taking in literature from both sides of the argument. I have also met with constituents and other stakeholders to hear their views about carbon emissions and climate change. Recently, I met with a group of scientists from Climate Scientists Australia. We had a very informative and constructive dialogue.

The Prime Minister advances his flawed Carbon Pollution Reduction Scheme as the only solution to climate change. However, there are a range of programs and options that may be implemented by the government as it seeks to reduce our national emissions. One option is to use a market based approach, which is the basis for an emissions trading scheme. In a nutshell, an emissions trading scheme works by setting a cap on the amount of carbon that may be emitted by Australian industries each year. At the end of each financial year, liable entities are required to surrender an eligible emissions permit for each tonne of greenhouse gas emitted during that year. In theory, the government can gradually reduce our national carbon emissions by reducing the number of emissions permits that are available each year. This reduction in the supply of permits is supposed to force the price of permits up, which eventually makes it more viable for businesses to invest in low-emissions technology than to buy expensive permits. The ETS solution also supposes that emissions intensive goods and services will become more expensive, which will encourage consumers to favour goods and services that are less carbon intensive.

Another scheme designed to reduce carbon emissions is a simple carbon tax. A carbon tax is similar to an ETS, but, instead of the government controlling the quantity of carbon that may be emitted and allowing the market to control the price, a carbon tax allows the government to control the price of carbon while letting the market determine how much carbon will be emitted. The theory with a carbon tax is that the government can gradually increase the tax on carbon emissions, which encourages industries to invest in low-carbon technology.

Another option available to the government is to mandate the use of low-emission or zero-emission technology. We already see this taking place with regard to the renewable energy target, which was recently passed by the parliament. There is scope to use this type of scheme to reduce our emissions by mandating, for example, the use of gas fired electricity generators to meet a proportion of our electricity needs—no need for a tax; no need for a complicated market based system; just a simple mandate to get a desired outcome. The government also has the option—heaven forbid!—of itself investing directly in low-emissions technology. In certain circumstances, this may well be a more desirable course of action.

Clearly, contrary to the claims of the Prime Minister, there are a range of solutions to the environmental challenges we face. We should not be fooled by government spin and rhetoric that this Carbon Pollution Reduction Scheme is the only solution to the challenges that we face.

Although there are obvious benefits to allowing the market to play a central role in reducing our emissions, I can see that there are significant deficiencies in the government’s current plan. I find it particularly hypocritical for the Prime Minister to be introducing a scheme which is based on free market ideology when he declared himself that the global financial crisis was the ‘culmination of a 30-year domination of economic policy by a free market ideology’. The Prime Minister’s infamous diatribe in February’s edition of the Monthly made it clear that the free market was the sole source of the world’s financial woes. Yet less than 12 months later he is trying to convince us that the free market will be the saviour of the earth.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

A double backflip.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

A double backflip, as the member for Maranoa says. During the first year of the CPRS, the government is proposing that an unlimited number of emissions permits would be sold for $10 each. In the following years, a set number of emissions permits will be auctioned based on a cap set by the government. In theory, the price that emitters are willing to pay for the permits will increase as the supply of permits is reduced. As permits become more expensive, it will be economically viable for emitters to invest in low-emissions technology, and there lies the theory of the matter.

However, the problem is that you will also be able to purchase unlimited permits in the international market. In the absence of an international agreement on carbon emissions, international demand for offsets may remain low and it is likely that emissions permits will continue to be available overseas at relatively low prices. The availability of inexpensive international carbon offsets will seriously undermine the basis of the government’s proposed scheme. In some international markets, carbon offsets are selling for as little as 10 per cent of the government’s asking price of $10 per tonne. Privately negotiated transfers of carbon offsets on the voluntary Chicago Climate Exchange were selling at between US85c and US$1.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

You would buy them there. Why would you pay the $10 the government is charging?

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Why would you pay $10 when you can go down to Nock and Kirby’s and get it for 85c? However, prices on the Montreal Climate Exchange are vastly more expensive. In Montreal you had to pay Can$3 for each metric tonne of CO2 equivalent at close of business on 26 October. As little as a couple of days ago, you could buy for US85c on the US market or, if you went north of the border to Canada, you could get it for Can$3. I am mindful that these offsets are not available for purchase by Australian companies at the moment, but these figures indicate clearly that carbon offsets are available in some markets at a fraction of the price proposed for the cheap introductory offer this government is putting forward of $10 a tonne. The government very clearly expects this price to rise quickly and substantially.

Offsets are currently available through the UN sponsored Clean Development Mechanism—probably a euphemism I suggest. According to industry insiders, the Clean Development Mechanism will be the lowest cost option to emitters. This creates a problem for the government because the revenue from selling emissions permits is earmarked to be used for providing assistance to low-income earners and trade exposed industries. If the government are not receiving the projected income from permit sales, they may be forced to go further into debt—and we know this government are experts in the field of running up debt—in order to finance their household and industry assistance packages.

With all of these factors in mind, we must remember that the emissions trading scheme will not in the end necessarily reduce our emissions. There seems to be a perception in the community that the CPRS will automatically reduce our carbon emissions simply because of its existence. But in reality the CPRS will simply allow for the creation of another tradeable instrument. This link between the finance industry and environmental outcomes may prove to be a very weak link indeed and may prove to be the greatest flaw in the government’s scheme.

Recent comments by BHP chairman, Don Argus, to the Melbourne Mining Club make it clear that traders and the government do not often share the same objectives. Mr Argus said:

… a trading mentality will not get CO2 out of the atmosphere. Already they will be salivating about where they can run derivative products …

He goes on to say:

Now the theory is that the market will fix the emissions trading by setting the price to reward those that are good and challenge those that are not. That’s great theory. I know from a trading desk there are different objectives. And if you do get differential pricing and you leave an arbitrage opportunity anywhere in the world there are some very, very smart guys out there who can make a buck. And I’m not sure that they will be worried about CO2 emissions.

I think that Don Argus has nailed it there. From my experience, I can assure you that traders are hard-wired to make money. The government’s aim is to reduce carbon emissions, but the people it is relying on to make the system work are more interested in making money than they are in reducing carbon emissions.

Another issue of concern to me is the integrity of carbon offsets being sourced from overseas. There have been numerous media reports of problems with carbon offsets and credit projects around the world, particularly in developing nations. It would be particularly galling for my constituents to be paying higher prices under Kevin Rudd’s tax only to find that Australia’s emissions are not being reduced because businesses are buying dodgy carbon permits from overseas. This is an issue that will require particular attention from the government and particular attention right around the world.

Some of the problems I have mentioned would be mitigated, however, by the establishment of a comprehensive global agreement on carbon emissions. An Australian ETS would be much more effective if it were introduced in conjunction with similar schemes around the world. Unfortunately, a global agreement on climate change is looking increasingly unlikely. At a recent conference in China, Senator Alan Eggleston met with representatives from the Japanese, Chinese and South Korean governments, and they all indicated that their respective countries were unlikely to introduce an ETS. The Copenhagen summit is just around the corner, and the major economies of the world still seem to be poles apart on this issue. Without a global agreement on climate change, Australia’s exporting industries will be disadvantaged, and ultimately it is my constituents who will suffer through higher prices and higher unemployment for little environmental benefit.

Most of the talk and debate surrounding the ETS has been on how we are going to help the industries and businesses that will be affected by the scheme. Unfortunately, the people who are forgotten in this debate are the people who will be affected the most by the CPRS. I am talking about the pensioners, the families on low and middle incomes, and small business. These are the people who will struggle to cope with increased prices. These are the people who will struggle with unemployment due to an ETS. Even with the government’s compensation package, life under a Rudd government ETS, under a Rudd government tax, will not be easy for my constituents.

The biggest losers under the Rudd government’s ETS will be small businesses. Small businesses will get no compensation. Even though they will be forced to shoulder the burden of higher electricity prices and higher prices for the goods they buy, they will receive no assistance from the government. Small business faces higher costs and reduced profitability under Labor’s flawed scheme. Small business is the backbone of the Australian economy, and the government should be ashamed that it has not considered the impact of the CPRS on this vital group.

The whole basis of an ETS is that the higher cost of emissions-intensive goods and services will lead people to change their habits towards using less carbon-intensive goods and services. The problem with this assumption is that many pensioners, many low-income families and many small businesses are operating with very limited ability to change their purchasing decisions. In New South Wales the state government has just increased electricity prices by 20 per cent. How are struggling pensioners, after the 20 per cent increase that was just recently introduced, going to be able to afford to pay even more for electricity? What we have seen in the recent price rises in New South Wales is just a curtain raiser to what we are going to see under Kevin Rudd’s ETS.

As I previously mentioned there are a range of ways to reduce Australia’s carbon emissions. An ETS is only one of many possible solutions, and there are many different ways to implement an ETS. It is quite clear that the government’s ETS proposal is flawed and that it will jeopardise thousands of jobs and put at risk the viability of our trade-exposed industries, so the opposition has proposed amendments. They have tried to breathe some life into this dog. The opposition’s amendments will show that it is possible to achieve similar results at less cost and without the catastrophic loss of jobs that this flawed scheme would deliver, at less cost to families, at less cost to pensioners and at less cost to small businesses.

The coalition proposes to increase assistance for trade-exposed industries and include food processing as a trade-exposed industry to ensure that these industries continue to remain internationally competitive. The amendments will permanently exclude agriculture from the ETS—which is a vital change—and will introduce an agricultural offset scheme similar to schemes operating in the US and Europe. This will allow farmers to play a key role in reducing our carbon emissions and mitigating climate change.

The amendments will alter the way the CPRS applies to electricity generation and deliver cuts to carbon emissions with a much smaller increase in electricity prices. This will be a great relief to families and a great reduction in the burden on small businesses. The coalition will amend the CPRS to provide better compensation for coal-fired generators. Also, the amendments will ensure that voluntary action by Australian families and businesses is taken into consideration under the scheme.

Labor’s scheme is a dog. Even with these amendments, introducing the CPRS without a global agreement on carbon emissions is reckless. Australia’s lone action on carbon emissions will make no difference on a global scale. The Prime Minister’s insistence that this scheme must be passed before the end of the year is sheer nonsense and any intelligent primary school child could work that out. It is incredible that the members opposite are not able to come to grips with that very simple fact.

As long as there is no global agreement on carbon emissions and carbon permits are widely available on the international markets, the CPRS will not reduce Australia’s carbon emissions but it will force up the price of everything. Make no mistake: the CPRS is nothing but a tax. Winston Churchill put it perfectly when he said:

We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.

Although spoken more than sixty years ago, Churchill’s argument could reasonably be applied to the situation in which our nation finds itself as the Rudd Labor government attempts to tax us into a better future. It will not work. It did not work 60 years ago and it will not work now. All Labor’s CPRS will do is hurt our small businesses and make it more difficult for Australian industries to compete on the world stage.

The government’s determination to press ahead with this new tax, regardless of the outcome of the Copenhagen summit, is a purely political decision. It is not in the best interests of the nation, it is not in the best interests of the Australians that I represent in regional areas, because regional Australia will bear the brunt of this new tax, regional Australia will lose the jobs and regional Australia will be facing lower growth. Regional Australia will suffer and particularly low-income regional Australians. This tax is an outrage. It is a poorly designed scheme and the government should be condemned for the very poor approach it has to this very difficult problem.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise behind the member for Cowper and endorse some of the very strong points he raised because the Carbon Pollution Reduction Scheme Bill 2009 [No. 2], and the related bills, which we are debating here tonight, are fundamentally flawed. They are nothing more than a revenue raiser that the government is trying to raise against the backdrop of its budget deficits. It is going to ask the people of Australia and the exporting industries of Australia to pay a new tax when the rest of the world have not even come to an agreement as to where they want to go in relation to the issue of carbon emissions globally.

One of the fundamental flaws with this scheme is that it is a new tax and the tax, while it is proposed in this bill will initially be set by the government, it will, under the proposal put by the government, eventually be set by the market—by the traders. To have any market to operate you have got to have fluctuations. When you have fluctuations in the price of carbon—in other words, the price of the tax, which is going to go up and down—it will certainly have an impact across the board.

As the member for Cowper said, you can buy carbon offsets right now in Chicago for 85 cents a tonne. Yet this government proposes to set them at $10 a tonne. There is not even an international comparison.

The Prime Minister seems to want to go to Copenhagen with a legislated ETS that has been passed with a Labor majority in this place and with some others being brought onside in the upper house. He wants to go to Copenhagen in December with legislation in his back pocket. Countries from all around the world are going to participate in Copenhagen and very few of them will arrive there with a legislated position in relation to the way they intend to deal with carbon emissions or reduce global carbon emissions. So why is it that Australia has to arrive with a legislated scheme? We already know that New Zealand is not going to go with one. We understand that Canada is sitting back to see what the United States is going to do. We understand that that United States will not be arriving with a legislated scheme, given what is happening in the senate—there is a disagreement between the senate and the congress. So why do we in Australia have to go to Copenhagen with a legislated scheme? Surely the democratically elected governments—the sovereign nations—have a responsibility to go to Copenhagen and negotiate. That is what this nation should do—negotiate. We should not go with something in the back pocket, but to negotiate.

If there is an agreement reached representatives will go back to their sovereign nations and then bring legislation forward, in whatever form it might take. But, no, this Prime Minister wants to go there with a legislated scheme. Ours would be one of the few countries in the world that would arrive with a legislated scheme. We know from what we have heard globally in the meetings leading up to Copenhagen that there is a diversity of opinion. Some countries want to reduce carbon emissions but certainly do not intend to introduce a tax into their economy. All countries will want to go back and discuss—as I am sure this place will discuss—what happened in Copenhagen. So this scheme that the government is bringing forward, fundamentally flawed as it is, will not be the scheme that is agreed globally by participating countries in Copenhagen. Quite typically, as we have so often seen, this government—and particularly this Prime Minister—is putting the cart before the horse.

One of the fundamental flaws of this legislation—it is one of the problems that I have with it—is the effect on the agricultural sector. I represent probably one of the largest food-producing regions in Queensland. I will not say it is one of the largest food-producing regions in Australia, because my colleague from the Parkes electorate would probably interject. We will talk about that later.

If this ETS is implemented, what we do know is that it will be very hard to reverse. I know that if this scheme is implemented, if we are sitting here in 20, 30, 40 or 50 years time—when we have been living with this tax for decades—there will have been very little headway, globally, in reducing emissions and we will have to ask ourselves what we achieved, apart from introducing a new tax which provided revenue for governments to distribute as they wished in certain sections of the economy.

If we are to reduce emissions and can get an agreement at Copenhagen we should be acting multilaterally, not in isolation, because the process of this bill has the potential to destroy many Australian jobs and make very little impact on carbon emissions here in Australia. The influence we will have in Copenhagen on global emissions—of which we contribute only 1.5 per cent—is going to be negligible.

I know that one of the great challenges confronting this nation and the world today is the global food crisis. That underscores the reason I want to see agriculture not included—as the government proposes it will be by 2013, 2014 or 2015—in an emissions trading scheme. We know—these are United Nations figures—that in 50 years time the world’s population will have reached nine billion people. That is a third more mouths to feed than we have today. At the rate of population growth in the world today, there are another six million mouths to feed every month. That is the rate of population growth globally. That means that by Australia Day next year we will have had a population increase in the world equivalent to the total population of Australia today. Those people will have to be fed, otherwise populations in many parts of the world will be confronting a situation like we see in Ethiopia today—widespread famine.

We also know that by 2050 most of the world will be urbanised. Australia is on the way. Recent figures suggest that by 2050 we will have a population of 35 million people, whereas we now have a population of 22 million. Around 70 per cent of those people will live in urban areas. Already, half the world lives in urban areas and by 2025 there will be something like 29 megacities in the world—cities with populations of more than 10 million. There are 10 of those megacities today and there is going to be something like 30 of them within 15 years. Half of them will be in Asia.

Living standards, we know, will improve. We know that the world’s arable farming lands are going to decline. To feed the world’s nine billion inhabitants and to make sure that they do not go hungry, we will have to increase global food production by 70 per cent. I was very fortunate to join you, Mr Speaker, to meet the Chief Executive of the CSIRO, Dr Megan Clark, who spoke to us two nights ago here in this place. She gave me a startling figure. I asked her to repeat it to me just to make sure I had it correct. She said that we will have to produce, in the next 50 years, the same amount of food that humans have produced since ancient Egyptian times. I said, ‘Could you say that again?’ You might recall that, Mr Speaker. She said that in the next 50 years we are going to have to produce the same amount of food as has been produced since Biblical times—over the last 2,000 years. It is an incredible number; I find it hard to get my mind around it.

During the next 50 years, with the global population increasing and rising living standards, we will have to produce as much food as has been produced since ancient Egyptian times. That is the challenge that is confronting us. Yet this bill, fundamentally flawed as it is, wants to introduce a tax and impose it on Australian farmers. We know that America has already decided, ‘We are certainly not going to tax our agricultural sector; in fact, we are going to take them out permanently.’ That was their proposition as they debated their legislation in the congress, which passed with a very narrow majority. But the bill before this parliament tonight, which was debated a little short of three months ago, wants to include the agricultural sector.

Australia will have a role to play in helping meet the global food challenge. Already, through their own food production and the food that we export to many parts of the world, Australian farmers feed over 60 million people a day. The demand for food is going to grow. The demand on Australian farmers is going to grow. We can play a role in this but it is going to be very hard if the playing field is tilted against our farmers. Other farmers in the world will not have the same tax on their production that is proposed by this government. That is why our amendment to permanently exclude the agricultural sector must be accepted.

I often quote Dorothea Mackellar and her wonderful poem My Countrya country of beauty and terror, droughts, floods and bushfires. This nation has sadly seen them all fairly regularly. Yet our farmers continue to prevail. Ninety-three per cent of the food consumed in Australia is produced domestically. That is a great success in some of the toughest agricultural farming lands in the world, on top of feeding 60 million people a day.

Another aspect of the coalition’s amendment is to allow farmers to participate in voluntary carbon offsets. Our farmers have employed farming methods that have changed over time. I introduced zero tillage on our farm when I was farming in the early 1980s, 25 years ago. It is in widespread use in many agricultural farming areas today. Zero tillage, incorporating residue into the land, reduces nitrogen use. All those procedures and agricultural practices will reduce carbon emissions. We need to allow farmers to participate in voluntary carbon offsets by being able to store carbon in the soil to increase its fertility and its moisture retention capacity. That is why carbon is an important commodity in agriculture and that is why, in the interests of global food security and because of the global challenges ahead of us, we must permanently remove agriculture from the CPRS scheme but also allow farmers to participate in voluntary carbon offsets. We need to put an incentive in place for them to utilise those carbon offsets for the benefit of the soil, which ultimately is of benefit to all Australians.

We know we can measure carbon emissions from motor vehicles, trucks and power stations. But how are we going to measure methane from livestock? We cannot. This bill is going to bring the agricultural sector into the scheme by 2013 or 2014 and apparently we are going to be able to measure emissions from an animal—a living, breathing being. That is why this bill is so fundamentally flawed. If it were not so serious it would be laughable.

We know that the global demand for meat is going to increase by some 80 per cent by 2030. Here is the catch-22, and I am sure you can appreciate it, Mr Speaker. Under Labor’s proposal, do we increase our livestock numbers to meet this global increase in demand, or do we reduce the number of livestock to meet the emissions targets? That is why it is so ludicrous that the Labor Party includes agriculture in this proposal. This goes to the absurdity of this part of the bill.

Our amendment states that our trade-exposed industries should compete on a level playing field. My own electorate of Maranoa, as I said earlier, is a great food-producing bowl, whether it is the pig meat, goat meat, sheep meat or kangaroo meat industries, the beef abattoirs, cotton mills, milk processing plants, peanut processing plants or wineries. All of those are first-stage processing and food production. Most of them supply not only the domestic market but also export markets. Whether they are dairy farmers in the South Burnett and the Darling Downs or kangaroo harvesters in western Queensland, all of those industries, as first-stage food processors, should be taken out of the Labor Party’s proposal.

I have very limited time before the House rises tonight, so in conclusion, whilst I have a great deal more to say on power, the natural gas industry, coal seam methane and the opportunities for a green energy revolution as part of the solution in Australia, can I say that we must wait for an outcome on the negotiations that take place at Copenhagen. To move before that if Labor’s bill is passed will impose a huge impact on Australian jobs. It will not cut emissions. It will tilt the playing field against all our export industries. Ultimately we will see jobs, as well as well as carbon emissions, exported to other countries. I urge the government to listen to what we have said, go to Copenhagen and come back next year when we sit in early February and bring forward legislation in line with an international agreement.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 11 pm, the debate is interrupted.