House debates

Wednesday, 28 October 2009

Carbon Pollution Reduction Scheme Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 [No. 2]; Australian Climate Change Regulatory Authority Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Customs) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Excise) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — General) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 [No. 2]; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009 [No. 2]

Second Reading

Debate resumed from 22 October, on motion by Mr Combet:

That this bill be now read a second time.

9:16 am

Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | | Hansard source

I move this second reading amendment to the Carbon Pollution Reduction Scheme Bill 2009 [No. 2]:

That all words after “That” be omitted with a view to substituting the following words:“the House:

believes that the Government’s proposed emissions trading scheme is flawed and in its current form will cost Australian jobs and investment, and simply export rather than reduce global greenhouse gas emissions:
supports the Coalition in again calling on the Government to defer consideration of this legislation, which will impose the single largest structural change to the Australian economy, until after the Copenhagen Climate Change Summit has concluded in less than 50 days time;
notes that as the Government remains determined to keep an utterly artificial and self-imposed deadline of this Parliamentary year and as such before the world meets to address the important issue of global action, the Coalition has proposed changes to the Government’s ETS to ensure the following critical matters are addressed:
that emissions-intensive trade-exposed industries remain on a level playing field with competitors in other advanced economies;
that agriculture is excluded from the scheme, rather than included after 2015, and farmers have access to agricultural offset credits;
that the impact of higher electricity prices on small businesses be moderated;
that the coal industry is required to reduce fugitive emissions as technically feasible, but not be unfairly financially penalised:
that transitional assistance to coal-fired electricity generators is sufficient to ensure that electricity supply security is maintained and the generators remain viable; and
that complementary measures such as voluntary action and energy efficiency are encouraged”.

There are varied opinions within the community about the causes and the consequences of climate change but most scientific opinion holds that our planet is warming because of human caused emissions of CO2 and other greenhouse gases. Therefore as leaders around the world have held for many years, starting with Margaret Thatcher nearly 20 years ago, prudence requires that we give the planet the benefit of the doubt and move as a globe to reduce the emission of these greenhouse gases. Most economists and policymakers agree that a well-designed emissions trading scheme is the most economically efficient means of reducing greenhouse gases. 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. It is why both the coalition and the Labor Party went to the 2007 federal election promising to implement an emissions trading scheme. But it is important to note that whether this emissions trading scheme, or indeed any emissions trading scheme, is effective will depend on its timing and its design—above all its design. It will depend on the availability of low-emission technologies and cost-effective carbon sinks. In other words, an emissions trading scheme is a piece of economic plumbing to be assessed objectively and pragmatically and practically for its effectiveness in reducing emissions without destroying Australian jobs.

Now caps and emissions trading schemes are emerging as a key instrument for emissions abatement in other advanced economies, and obviously we have seen prototypes of the ETS here in Australia already, in New South Wales in particular. The European Union implemented an emissions trading scheme in 2005 and is currently in the process of widening its coverage and greatly increasing the proportion of emissions permits to be auctioned rather than given away. The United States has also been considering a national emissions trading scheme, and there are schemes operating in a number of its states already, with the Waxman-Markey bill already passed by the United States House of Representatives and the Kerry-Boxer-Graham bill going through committees in the Senate.

On 13 August this year the coalition joined with all the other non-Labor senators to vote down the Rudd government’s emissions trading scheme in the form of the Carbon Pollution Reduction Scheme legislation. The reason for our stance was very clear. As it was designed the CPRS was flawed and it would unnecessarily harm Australian exports, jobs and investment. The introduction of the scheme would simply lead to emissions being exported rather than reduced at the global level. This is the key problem that we face in reducing greenhouse gas emissions in Australia. It is unlike other forms of environmental action where there is an immediate local, tangible benefit. Reducing pollution in a river, for example, has an immediate tangible benefit and is not dependent on action anywhere else in the world. What if the only consequence of reducing greenhouse gas emissions in Australia is that the industry which produces them ceases to operate in Australia and operates somewhere else—to give the most graphic example which has been the subject of so much debate?

If the consequence of this scheme is that less coal is mined in Australia and so there are fewer coalminers’ jobs in Australia, less investment in coalmining in Australia, less exports of coal from Australia, less revenues at every level—private sector, public sector—from coalmining in Australia but demand for coal globally remains the same and more coal is mined in Colombia, South Africa or Indonesia then there has been absolutely no benefit at all to the level of global greenhouse gas emissions. In fact, if one assumes that the environmental standards overseas are not as rigorous as they are in Australia or the mine from which the additional coal is produced in Indonesia, for example, is more gassy than a mine in Australia then it may actually be a net increase. So therein lies what Ross Garnaut described as the ‘diabolical problem’ of managing climate change. Nothing will be effective without a global agreement.

We had some discussion in the House yesterday about the recent report, by the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts, on the impact of rising sea levels and other consequences of climate change on coastal communities. I have looked at the report. It appears to be a very good piece of work, as one would expect with a very experienced chair and the deputy chair, the member for Moore. But the fact is that, even if Australia were to reduce its emissions to zero, unless that is matched by action elsewhere it would have absolutely no impact. So the critical issue—we are told about the critical need for action on climate change, and I accept that call to action without hesitation—is that unless it is global action it will be ineffective.

The government is bringing the bills back now, obviously in search of a double dissolution trigger. The government is committed to having the bills voted on before the end of the year, prior to the Copenhagen summit, so that the Prime Minister can go to Copenhagen with a completed statute. The United States of America, unquestionably the most influential player in this whole global debate, followed closely by China, will be going to the conference without concluded legislation. A lot of work has been done and the US House of Representatives has obviously passed a bill but there will not be concluded, finalised legislation from the US prior to Copenhagen. The Prime Minister himself has said that this is no disadvantage; it does not create any problems for President Obama. But apparently the lack of a statute will create a great problem for the Prime Minister of Australia. The inconsistency there is obvious.

The coalition still believes that the government’s emissions trading scheme is flawed. For that reason, last week, we proposed a set of common-sense amendments to the scheme and we are currently engaged in good faith negotiation with the government on them. The member for Groom, as the shadow energy minister, is leading our efforts in those negotiations with Senator Wong. These proposals demonstrate that Labor’s emissions trading scheme can be improved to better protect jobs and investment, without sacrificing environmental objectives.

The most important amendments and changes that we are advocating are, firstly, placing Australian emissions-intensive trade-exposed industries—the EITEIs—on a level playing field with their competitors abroad; secondly, excluding direct agricultural emissions from the scheme and providing a mechanism for farmers to earn offset credits when they abate carbon; thirdly, ensuring Australian coal producers reduce their fugitive emissions but are not unfairly financially penalised compared to their competitors; fourthly, moderating the impact of higher electricity prices on small businesses; fifthly, providing more assistance to the coal fired electricity generators to ensure they remain financially viable and the lights stay on; and, finally, encouraging complementary abatement measures such as voluntary action and energy efficiency in buildings. With these changes, the CPRS could deliver exactly the same environmental outcomes—the delivery of the bipartisan carbon abatement targets that the Rudd government will take to the Copenhagen climate change talks in December—with much less economic cost and dislocation.

I will now address these areas in a little more detail, turning firstly to the question of the EITEIs—the emissions-intensive trade-exposed industries. It has always been our view that the response to climate change must be part of coordinated global action. If we put a price on carbon in Australia without a comparable cost being imposed on the countries that our export industries and trade exposed industries compete with, the simple result is that we end up exporting Australian jobs and the emissions—economic pain, no environmental gain. It is that simple. That is why we have proposed these changes to the way that the CPRS treats the EITEIs. This would involve combining the two levels of assistance proposed in the CPRS into a single band, slightly lowering the emissions intensity threshold for assistance and continuing assistance to Australian emissions-intensive trade-exposed industries at a steady rate until 80 per cent of their international competitors also implement carbon abatement measures. What we mean by that is that, if you take any given Australian industry at the point where the Productivity Commission determines that 80 per cent of the market for that particular product is subject to a comparable carbon price or carbon constraint—it does not have to be by way of an ETS; it could be some other mechanism—the level of protection can start being wound down.

There is a powerful argument in relation to these trade exposed industries—LNG is a very good example. While we all understand that we propose to have national caps because only governments can impose the regulations and laws that enforce them, nonetheless, with these trade exposed industries, in an ideal world—and this is certainly what the government should be working towards; it is certainly what the member for Groom and I were working towards when we were part of the previous government—we should have sectoral agreements so that these industries, as global industries, have their own targets and their own carbon constraints. Plainly, if you take the case of LNG, for example, the more LNG we produce in Australia the more greenhouse gases are emitted by the LNG industry here, but the savings of greenhouse gas emissions elsewhere in the world are stupendous and outweigh by a factor of eight any emissions in Australia because, naturally, that is a cleaner fuel that replaces burning coal in the markets where it is introduced.

These changes we are proposing for the treatment of the EITEIs are not designed to provide Australian industry with a new form of assistance. We simply seek to ensure that Australian workers and firms are treated comparably with those in trade exposed industries in the United States and the European Union, given the assistance envisaged under the proposed United States and phase 3 European Union emissions trading schemes. Some of the industries that would be assisted by our proposals include steel, aluminium, natural gas, primary food processing and cement, to name just a few.

I will now turn to agriculture and green carbon. Our proposals protect farmers by exempting agriculture from the scheme rather than including it after 2015, as Labor has proposed. This is the only logical approach to agriculture given the current absence of viable abatement technologies for most of this sector, which accounts for about 16 per cent of Australia’s total emissions. Exempting direct agricultural emissions also brings Australia into line with decisions in other advanced economies, such as the United States and the European Union, to exempt direct agricultural emissions from the emissions trading schemes and instead address agricultural emissions in different ways—with regulation. On the other hand, the coalition’s proposed changes would also include agricultural offsets, including carbon sequestration in soils and vegetation, where there is the opportunity for enormous financial and land management benefits in the rural sector. This is a win-win for farmers and the environment and again brings the Australian scheme more closely into line with the proposed United States and phase 3 European Union schemes.

I have long argued that Australia’s greatest opportunity for low-cost abatement lies in exploiting our comparative advantage—that is, our enormous land area. The existing CPRS treatment of afforestation and reforestation activity is just the first step in recognising this opportunity. Contributors to the climate change policy debate—ranging from Tim Flannery on the one hand to the National Farmers Federation on the other and including the Wentworth Group of Concerned Scientists—all agree, as do the drafters of the Waxman-Markey and the Kerry-Boxer-Graham legislation in the US House and Senate respectively and the phase 3 EU ETS. All of those envisage providing farmers—and other landholders, of course—with offset earnings from a very long and comprehensive list of offsets. I will quote from a recent paper that was sent to both the Prime Minister and me, and no doubt to others, by the Wentworth Group of Concerned Scientists. As the House knows, this is as distinguished a group of environmental scientists as one could find in Australia. This is what they said about what I have called green carbon, what have been called elsewhere agricultural offsets and what they call terrestrial carbon. They say:

The power of terrestrial carbon to contribute to the climate change solution is profound.

At a global scale, a 15% increase in the world’s terrestrial carbon stock would remove the equivalent of all the carbon pollution emitted from fossil fuels since the beginning of the industrial revolution.

The multiple public policy benefits for Australia in adopting full terrestrial carbon offsets are enormous, but there are also significant risks of an unregulated … carbon market to other areas of public policy.

In a report recently commissioned by the Queensland government, Analysis of Greenhouse Gas Mitigation and Carbon Biosequestration Opportunities from Rural Land Use, CSIRO estimate that the Australian landscape has the biophysical potential to store an additional 1,000 million tonnes of CO2e in soils and vegetation for each year of the next 40 years.

If Australia were to capture just 15% of this biophysical capacity, it would offset the equivalent of 25% of Australia’s current annual greenhouse emissions for the next 40 years.

The literature on this is gigantic. I will make one other reference. The Garnaut review itself estimated that just improved management practices on Australian cropping and high-volume grazing land had the potential to remove around 350 million tonnes of CO2 per annum for 20 to 50 years.

This is a gigantic opportunity, but it needs appropriate economic incentives via offset credit creation. You can understand a government that sees an emissions trading scheme as a beaut new tax being a little bit sceptical about this, because if the credits are created by farmers the money will go to the farmers rather than to the government. Instead of buying a permit from the government, they will be buying a credit from a farmer. We on our side say there is a massive national interest in investing in the health and the productivity of our landscape. I say, as I have said many times to those who are sceptical about the science of climate change, if at the end of 20 or 30 years from now the science has been disproved but we have invested billions of dollars into making our landscape healthier, greener and more productive, that will have been money well spent.

A key part of this—and this is a point that we made at extensive length earlier in the year, in January, and the Wentworth Group of Concerned Scientists have made this point too—is that it is absolutely vital that the Australian government ensures that all of these agricultural offsets are included in the successor to the Kyoto protocol because many of them are not at the moment. The United States congress is making no bones about it. I will not read this into the Hansard but I refer honourable members to section 733 of the Kerry-Boxer-Graham bill in the US Senate and to section 503 of the Waxman-Markey bill in the House. The list of proposed agricultural offsets there is comprehensive but is not exhaustive. So this is plainly an area where currently the Rudd government’s CPRS is not simply out of step with the science but out of step with what the major comparable developed economies are doing, most notably the United States. I simply ask the House: how can the government possibly defend giving Australian farmers less opportunity to abate CO2 emissions than the United States or the Europeans are proposing to give their farmers? It is indefensible.

Let me turn now to fugitive emissions from coalmining. Fugitive emissions—meaning essentially the methane that is released through ventilators as coal is mined or as coalmines are prepared for mining—are a very challenging part of the current debate. The government has excluded the Australian coal industry, our largest exporter, from emissions intensive trade exposed industries, or EITEI, assistance because most direct emissions from coalmining arise at a handful of gassy mines and the majority of mines would not need assistance. The coalition understands that reasoning. But at present the CPRS requires coal producers to purchase permits for fugitive emissions. While fugitive emissions have been excluded from the European and proposed US schemes—although it is worth noting that in each of those jurisdictions they account for a lower percentage of overall emissions than they do in Australia—there are nonetheless several feasible abatement technologies currently available to the owners of gassy mines, but they are costly. Unless these mines are assisted, most of them are likely to close.

The approach that we have taken, which would put coalmining in exactly the same position as it is in America and Europe, is simply to exclude fugitive emissions and then regulate fugitive emissions in such a way that over time we will achieve a massive reduction in fugitive emissions—a 30 per cent reduction by 2020. My colleague the member for Groom, who obviously, because of his background in energy, is very familiar with this area, has worked very closely with the coal industry and reached a position which they support which will have the result of achieving a much greater reduction in emissions from coalmining than is proposed for the rest of the economy. We do not believe coalminers should be given a free ride in terms of the emissions reductions targets. Where they currently capture and use methane in an economically useful manner, they should do so and, as better technologies come forward, they will be encouraged to adopt those methods. Our proposals are practical and they will achieve the objective of a dramatic reduction in emissions.

Let me turn now to electricity prices. In August the coalition, together with the Independent Senator Nick Xenophon, commissioned research on the economic impact of the Rudd government’s emissions trading scheme by the respected consultants Frontier Economics. I know they have been the subject of some criticism from the government side, but it is worth noting that Frontier Economics have designed and completed one more emissions trading scheme than the Department of Climate Change. Their expertise is unquestioned. Their study showed that the government’s emissions trading scheme would unnecessarily drive up electricity prices, hurt regional Australia and unnecessarily expand the size of government. They put forward an alternative: a revised emissions trading scheme which was greener, cheaper and smarter. The proposal suggested that deeper cuts in emissions were possible at a lower economic cost and with a far less severe increase in retail electricity prices—two to four per cent over the first two years rather than the 21 per cent forecast by the Treasury to result from the CPRS. The work by Frontier suggested that with modest changes, especially in the way the ETS treats electricity generation, Labor’s proposed scheme could be made far less harmful to jobs, investment and the broader economy.

So far, the government has failed completely to respond in any detail at all to these proposals other than to indicate its disinterest in pursuing the Frontier model. We will continue to advocate an intensity based cap-and-trade approach to the electricity sector, as this more than halves the initial increase in electricity prices, greatly reducing the economic costs of achieving emissions cuts. If the government refuses to consider the intensity based approach, it must clearly explain why and release the complete details of any Treasury or Department of Climate Change modelling of the Frontier alternative approach to the cap-and-trade scheme proposed by the government. If it will not accept Frontier on any basis, it also has to demonstrate that it has an alternative strategy to cushion the initial impact of higher electricity prices on small businesses, who are the hardest-hit electricity consumers under the currently proposed CPRS.

I turn now to the compensation for electricity generators. The coalition believes—and this was certainly the policy set out in the Shergold report—that the incumbent coal fired generators must be fairly compensated for the loss of value they experience from the CPRS. This is to ensure security of supply, to equip those firms to transition to lower emission energy sources and to address the sovereign risk perception, which will arise from an arbitrary change in the rules that destroys value in existing businesses. The CPRS offers coal fired generators 130 million permits over five years, worth $3.6 billion. Yet three respected private sector analysts estimate their losses at three times that amount. In the absence of access to the government’s secret Morgan Stanley report on this question, which should be published, the coalition’s best estimate of a fairer level of generator compensation is assistance of 390 million permits over 15 years. Assistance should be allocated to all generators in proportion to the losses they suffer.

I turn now to the complementary measures. By including voluntary measures, by creating genuine incentives for voluntary action, the environment will benefit from individuals, businesses and community groups who develop their own initiatives to reduce greenhouse gas emissions. The coalition favour increased incentives for energy efficiency. This is the lowest of the low-hanging fruit in terms of reducing greenhouse gas emissions. We favour the creation of a voluntary offset market in advance of the introduction of the CPRS—and we set that out earlier in the year. We support the principle that genuine voluntary abatement should lead to a lower overall level of national emissions.

In light of the fact that the Copenhagen conference is only a month away and new information about the likely design of a US scheme and phase 3 of the European ETS continues to emerge at a rapid rate, the coalition has argued for some time that it would be premature to finalise the design of an ETS prior to Copenhagen. All of these issues will be just as relevant after Copenhagen as they are now—and of course we should be working and negotiating—but why should we finalise the design prior to Copenhagen?

The government, nonetheless, control the timing of this debate, and it is clear that they are determined to force a vote before parliament rises for the year. It is nonsense to suppose that, whether or not the scheme is passed this year, the parliament’s vote on it will be the last word. It is inevitably going to be simply the first step in what is likely to be a long process of refining and modifying the nation’s policy response to climate change in response to evolving international developments and agreements, progress on our own understanding of the science, practical experience of the operation of the ETS and the emergence of new technologies.

Given the government has made it clear that it will insist on pushing these bills to a final vote before Copenhagen, the coalition has engaged constructively in the debate, regardless of our very deep misgivings on this timing. We hope the government will accommodate our common-sense proposals and amend its scheme. They will protect thousands of Australian jobs and in addition and in particular, by reason of the comprehensive inclusion of agricultural offsets, provide the greatest opportunity, as the Wentworth Group of Concerned Scientists and indeed American legislators have recognised, for a substantial reduction in greenhouse gas emissions while at the same time improving the health of our landscape.

In conclusion, I will quote the Leader of the Opposition in the United Kingdom, David Cameron, who published a paper on the low-carbon economy earlier this year. He said:

Our starting point in thinking about the low carbon economy is hope, not despair. We are talking about a technological transformation that will enable us to fulfil the aspirations of our people for a rich, varied and prosperous life with vastly reduced dependence on hydrocarbons.

                  …              …              …

… they will pay dividends even if the gloomier predictions about global warming are not fulfilled—dividends in the form of more stable energy costs, improved economic competitiveness and increased energy security.

All of those goals will be advanced by the government’s adoption of our amendments.

Photo of Arch BevisArch Bevis (Brisbane, Australian Labor Party) Share this | | Hansard source

Is the amendment seconded?

Photo of Ian MacfarlaneIan Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | | Hansard source

I second the amendment and reserve my right to speak.

9:47 am

Photo of Graham PerrettGraham Perrett (Moreton, Australian Labor Party) Share this | | Hansard source

I would like to quote the member for Wentworth back to him. He said, ‘I accept the call to action,’ but he is going to do so by not acting. Never have I seen such a gap between words and actions. He needs to understand that if you care about something you need to do something—caring is doing. Caring without action is the same as indifference. You may as well be the member for O’Connor when it comes to climate change if you are not going to actually do anything.

On this side of the House I am proud to voice my strong support for theCarbon Pollution Reduction Scheme Bill 2009 [No. 2] and the related bills before the House. I wish to address my comments not only to those opposite but to their great-grandchildren and to their great-grandchildren’s children. I wish to speak to the descendants of the Leader of the Opposition, Malcolm Turnbull, the descendants of the Leader of the Nationals, the member for Wide Bay, Warren Truss, and the descendants of all of those opposite. When we face an issue as significant as the changing climate of our planet we cannot judge the actions of this parliament by tomorrow’s headlines or even by the decisions of voters at the ballot box in the years ahead.

One hundred years from now we will be long gone but our descendants and those who follow us will face the consequences of our actions—or, more importantly, when you look at those opposite, their inaction. As those descendants read this speech in 2109, I hope they can be proud of the vision and the courage shown by this parliament. I hope they can be proud that as a parliament we put egos and political divisions, expediency and ambitions aside to come together as one on this issue of climate change. I hope they can be proud that we moved to put in place a mechanism to lower our carbon emissions and to help save the planet. This parliament has a responsibility to our children and to our environment to do something about climate change.

Photo of Andrew LamingAndrew Laming (Bowman, Liberal Party) Share this | | Hansard source

It’s not a religion; it’s a policy challenge.

Photo of Graham PerrettGraham Perrett (Moreton, Australian Labor Party) Share this | | Hansard source

I am ignoring those greenhouse emissions coming from the opposition. I am told that every greenhouse gas molecule we pump into our atmosphere today will take 100 to 200 years to dissipate. The lights we are burning now are producing greenhouse gases that will still be in the atmosphere in 100 to 200 years time. So as the descendants of the Deputy Leader of the Opposition, Julie Bishop, read this next century they will be dealing with carbon emissions pumped into the air by her Comcar today. So while this bill will put in place a scheme to reduce our carbon emissions, we have to understand that this ship, HMAS Earth, will take a very long time to change direction. Even if we get all hands on deck today and spin the wheel fully it will take at least a century or so for the effects to be felt on all the decks down to the waterline and below.

Once again I urge those who lead the opposition, not just the rabble on the back benches, to consider the significance of the bills on the table today. To be honest, I will not waste my breath talking to the climate change sceptics on that side of the House. My plea is to the intelligent people, those who understand the science—like Dr Mal Washer—and who genuinely want to do something meaningful to address climate change. As the apostle Paul wrote to the Corinthians:

When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put childish ways behind me.

The time has come for the opposition to put aside their childish ways and to man up—I am not sure if I can say that, Minister for the Status of Women—and work together to tackle climate change because it is not five minutes to midnight on the climate change clock; it is one minute to midnight. The clock is ticking and the time to act is right now.

Media outlets this week revealed a British report that suggested it may already be too late for Queensland’s Great Barrier Reef. As coral bleaching rips through the World Heritage reef, some scientists are coming to terms with the fact that the damage may already be beyond repair. Joe Kelly reported in the Australian on Monday that the Zoological Society of London is planning the world’s first coral cryobank. Samples of each species will be preserved in liquid nitrogen to enable them to be used in the future. Has it come to this? The greatest living organism in the world is going the same way as Walt Disney’s head.

Once the reef is gone, I imagine it will be of little comfort to know that the genetic information of corals is retained in a freezer somewhere in London. This natural wonder is the source of some $5 billion in tourist revenue, especially in Queensland, and fishing. The Intergovernmental Panel on Climate Change tells us that an increase in sea surface temperature between one and three degrees will completely wipe out our coral reefs. Rising acidity levels will turn our tropical paradise into a Petri dish.

I wish to tell you a tale of two little boys—two men, actually—who are both connected with the town of St George in south-west Queensland. The first boy from St George was an accountant and a rural banker and is now a National Party senator. The other boy became a teacher and a lawyer and is now a Labor backbencher on Brisbane’s south side—that is me, obviously. The first boy is an unbeliever and has been beating the drum in the bush, saying climate change is a fantasy. The other is a believer and is passionate about delivering real and workable solutions to climate change. The first boy, the accountant, talks about fear and taxes, while the second, here today, talks about hope and opportunity. It is amazing how this one small country town, which will no doubt suffer the effects of climate change, could produce two such disparate responses to climate change. I find it even more amazing that the National Party has not taken a lead role in the fight against climate change.

The National Party masquerades as a party of the bush, representing mostly rural farming communities, yet they are completely at odds with Australia’s farming community on climate change. They have even attacked the National Farmers Federation—one of the bush’s best spokespeople. Australian farmers well understand the consequences of climate change, better than almost anyone else on the coastline. They have worked the land for years, they have looked after it and they have witnessed climate change right before their eyes, in places like the Mallee and Western Queensland. They have seen drought slowly and heart-wrenchingly grind their livelihood to dust; they have seen storms and cyclones and even fire destroy their crops in a heartbeat; they have seen flood up in the Gulf area. Yet still, sadly, too many people in the National Party refuse to acknowledge that climate change even exists. National Party senators like Ron Boswell, who sits in his inner-city high-rise office in Brisbane—

Photo of Arch BevisArch Bevis (Brisbane, Australian Labor Party) Share this | | Hansard source

This had better be a point of order and not a point of debate.

Photo of John ForrestJohn Forrest (Mallee, National Party, Shadow Parliamentary Secretary for Regional Development) Share this | | Hansard source

Mr Deputy Speaker, I rise on a point of order—standing order 92, which goes to your responsibility to prevent quarrelling amongst—

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Deputy-Speaker) Share this | | Hansard source

There is no point of order. You will resume your seat.

Photo of John ForrestJohn Forrest (Mallee, National Party, Shadow Parliamentary Secretary for Regional Development) Share this | | Hansard source

I am asking you to enforce standing order 92—

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Deputy-Speaker) Share this | | Hansard source

I have just said there is no point of order and you will resume your seat. You will not try to intervene in the debate by taking frivolous points of order.

Photo of John ForrestJohn Forrest (Mallee, National Party, Shadow Parliamentary Secretary for Regional Development) Share this | | Hansard source

I am asking the member to be relevant to the bills before us and get on—

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Deputy-Speaker) Share this | | Hansard source

The debate is clearly relevant to the bill, and you are now testing the patience of the chair.

Photo of Graham PerrettGraham Perrett (Moreton, Australian Labor Party) Share this | | Hansard source

National Party senators, like Ron Boswell, who sits in his inner-city high-rise office in Brisbane, the ultimate Queen Street farmer, needs to get out of his deep leather chair and talk to the real farmers. Imagine the legacy of the National Party 100 years from now as the party from the bush that sells out the bush on climate change, if that is their legacy. We cannot continue to ignore the science that excess carbon pollution is causing the climate to change in dramatic and previously unseen ways. Extreme weather events, higher temperatures, more droughts and rising sea levels are happening. In Australia, our environment and climate are particularly vulnerable to climate change. Apart from Antarctica, we are the driest continent.

This bill will help drive down emissions by introducing a cost on carbon pollution. The bill establishes the Carbon Pollution Reduction Scheme. The Australian Climate Change Regulatory Authority will issue a limited number of emission units which will be available for purchase. Companies will compete to purchase these units at auction or in a secondary market. The price will be fixed at $10 per tonne before full market trading gets underway from 1 July 2012. The scheme applies to all greenhouse gases under the Kyoto protocol, including CO2, methane, nitrous oxide, hydrofluorocarbons and others. It includes energy, transport, industrial processes, waste, fugitive emissions from oil and gas production and forestry. For some entities it will be cheaper for them to reduce emissions than buy units, which is an aspect of the scheme that those opposite seem to ignore. Of course, this is the whole idea of the CPRS. It will provide the motivation that industry needs to invest in renewable energies, like solar and wind, and build the momentum needed to get new technologies like clean coal and geothermal out of the science laboratory and into the practical solutions to climate change. As well as creating alternative energy sources, these emerging industries will also be a source of thousands of new low-carbon green jobs.

This bill introduces a massive shift in the Australian economy, but it also includes appropriate measures to protect Australian jobs and shield our trade-exposed industries. The last thing we want to see is vital Australian industries shipped overseas to high-polluting countries. We achieve nothing by simply shipping the emissions overseas. We fully understand this. That is why the scheme will allocate some free permits to firms in emissions-intensive, trade-exposed activities. Permits will initially be provided at a 90 per cent rate for the most emissions-intensive activities and at a 60 per cent rate for activities that are moderately emissions intensive. The rates of assistance per unit of production will be reduced by 1.3 per cent per year to ensure that emissions-intensive, trade-exposed industries still share in the national reduction of carbon pollution over time.

An additional global recession buffer for trade-exposed industries will also apply for at least five years at a rate of five per cent for activities receiving assistance at the 90 per cent rate and 10 per cent for activities receiving assistance at the 60 per cent rate. All industries will face new costs for carbon, but those impacted the most will receive the most assistance. This bill establishes a $2.75 billion Climate Change Action Fund to provide targeted assistance to business and community organisations. This bill sets Australia on a course to a low-pollution future.

I know there are some people still coming to terms with whether or not climate change exists who want us to wait or do nothing, and there is this strange conundrum of ‘I accept the call to action by not acting,’ which seems to be the Leader of the Opposition’s policy. However, inaction is inflationary. To do nothing will cost more later. There are others who think that our targets do not go far enough. I understand their concerns. However, the bill before the House delivers a reasonable and responsible approach. The Rudd government is committed to reducing carbon pollution by five per cent by 2020. We also know that we can achieve 15 per cent if other major economies come on board. We hold out hope for the talks in Copenhagen.

One of the modern world’s greatest scientists, Stephen Hawking, said of Galileo Galilei that perhaps more than any other person Galileo was responsible for the birth of modern science. We have all heard of Stephen Hawking and how important his praise is and obviously at school we would have studied Galileo Galilei. Nevertheless, the Catholic Church had some problems with this great Italian renaissance scientist. Galileo was first tried by the Inquisition in 1615. He had to renounce his heretical theory that the earth revolved around the sun, and yet it moves still.

Sadly, Galileo Galilei ended up spending the end years of his life under house arrest. One month after I made my first speech in parliament, last year in 2008, the Catholic Church proposed to complete a rehabilitation of Galileo by erecting a statue of him inside the Vatican walls. Also, in December of last year, during events to mark the 400th anniversary of Galileo’s earliest telescopic observations, Pope Benedict XVI praised his contributions to astronomy. So it only took one of society’s oldest institutions—the Catholic Church—nigh on 400 years to admit that it might have got things completely wrong about Galileo’s theory about the earth revolving around the sun. Not that the Vatican’s timing really mattered, with all due respect to Papal infallibility—the earth kept on revolving around the happy old sun, irrespective of any Papal bull from Rome.

Sometimes it takes time to turn the big ships around. But we do not have 400 years to get it right. We do not even have 40 years. We need to listen to logic. We need to listen to the scientists. We need to listen to the voices of our unborn great-grandchildren. For heaven’s sake, please listen. For the earth’s sake, please listen. The time for those opposite to talk to their friends and colleagues who inhabit that other place over there is right now. I commend the bill to the House.

10:01 am

Photo of Ian MacfarlaneIan Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | | Hansard source

I rise today to speak on the government’s Carbon Pollution Reduction Scheme (Charges-Customs) Bill 2009 and the associated amendments. Can I state from the outset that the coalition is absolutely committed to reducing greenhouse gas emissions by the target of five per cent and—in the event of international agreements—by 15 or even 25 per cent. It remains a fact, in this House, that the coalition has done more to achieve that, in its time in government, than this government. In fact, this government has yet to achieve any measure that has reduced carbon pollution or carbon dioxide emissions in the last two years. It is a fact that there has been a lot of talk on that side but not much action.

The fact of the matter is—as was highlighted the Australian newspaper about three or four weeks ago—it is the Howard government that put in place the practical measures and the first step towards an ETS. It put in place the practical measures to reduce greenhouse gas emissions—to lower the intensity, for instance, of emissions generating a kilowatt hour or a megawatt hour of electricity. So we are supportive of the target. We have the record of achieving gains in lowering emissions.

We set out in this process to negotiate, in good faith, the amendments to the Carbon Pollution Reduction Scheme. We have indicated all along that we will conduct those negotiations with the goal of achieving a bill that will not destroy the jobs and the industries that exist in Australia today. We should be absolutely clear, though, that the reason we are doing this is not—as the member for Moreton wants to attest—to delay the passage of this bill. It is to fix the multitude of flaws that are in this bill; the multitude of flaws that will cost Australians their jobs and will cost future Australians their jobs and will cost Australia our future competitiveness.

We need to ensure that we fix this bill. We need to ensure that this is not, instead of being a blueprint to reduce greenhouse gas emissions, in fact a blueprint to destroy jobs in Australia. I am interested to read the speakers list, Mr Deputy Speaker, and am interested to see that the member for Flynn, the member for Dawson, the member for Throsby and the member for Hunter are not on this speakers list.

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party) Share this | | Hansard source

I am here!

Photo of Ian MacfarlaneIan Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | | Hansard source

The member for Cunningham is here. In fact, the member for Cunningham, the member for Newcastle and the member for Capricornia are the only ones who are going to speak on this bill from that side and explain to the coalminers in their electorates why they are going to lose their jobs. As I say, there is a list here that is absent of some people who represent electorates where there is coal, industry LNG and power stations—where people will lose their jobs.

That is why the coalition is saying that we should delay this bill until we know what the rest of the world is doing. We are currently flying completely blind. I was at a briefing yesterday where representatives of DFAT made it very clear that there is absolutely no expectation—none whatsoever—that any country in the ASEAN pact will introduce a carbon price in the foreseeable future. One of our biggest trading partners and trading competitors will not have a carbon price. Tell me how, in the absence of that—and without knowing what the Americans will do, without knowing what the Japanese will do, without knowing what the Canadians will do, without knowing what the Europeans will do—we can put in place legislation to ensure that our workers and our industries are not placed at a disadvantage as a result of this legislation.

It is crucially important that we protect our economic assets, both the people who are employed, who are an enormous economic asset, and also the industries that they work in. We also need to ensure that we protect one of the hearts and souls of our economy, and that is small business. Small business has been left unassisted, uncompensated, under this current legislation. Small business will face, for instance, a huge spike in the electricity price in the first two years of this scheme, probably of around 20 per cent. That is why we are moving these amendments. These are not insignificant issues. They are major issues that go to the heart of Australia’s future competitiveness, our future economic security, our future standard of living. They deserve the time and the detail and the understanding and the knowledge of what our trade competitors will do if we are to ensure that they are addressed properly and that our economy, our way of life and our lifestyle are preserved. Everyone wants to reduce emissions. Every Australian that I talk to says we need to reduce our emissions. We need to clean up our waterways even more. We need to ensure our air is clean. But we need to do it in a way that is effective. Doing it in isolation from the rest of the world, doing it without a global agreement, is simply wasting our jobs and our energy.

We in the coalition set about to ensure that we had a close understanding of what the issues were in this process. I have a background in farming. I have a background where I understand climate. I have a background where I have worked for industry and the resources sector as a minister in the Howard cabinet for six years. But the member for Goldstein and I went back to all of those industries and carefully worked through their concerns in a methodical and sensible way to ensure we produce a practical result as we try to amend this legislation to ensure that jobs are not lost in Australia as a result of the undue haste of running to this false deadline the Prime Minister has put in place of the Copenhagen conference. What we found from those discussions was that this CPRS legislation lacked any analysis of the immediate costs to many of the industries that were going to be affected, that there was some broadbrush economic modelling put in place that did not really go to the heart of individual industries. We have worked through that in a methodical way, as I said, and we have come out and articulated nine principles around which our amendments have been built.

The coalition at every step of the way have been clear and consistent. Our amendments are practical. They are reasonable. But, most importantly, they will save jobs. There is no point in losing a coalminer in the Hunter Valley simply to see a coalminer employed in Colombia. We need to understand that many of our industries, in fact nearly all our industries, are at world’s best practice now. There is no point in slugging the coal industry with a $1 billion tax every year if there is not the technology to lower those emissions in the first place. We need to ensure that whatever we do here in Australia has a global effect, that it in fact lowers emissions. So we also set out to try and guess—because it is an educated guess—where the Waxman-Markey bill will settle now it is in the US Senate. Where will that come out? Where will the Europeans decide to target their industries? France has already announced that it is going to introduce a carbon tax, and there is a good reason behind that. I know that those opposite do not want it explained too clearly, but it is because France made the sensible decision some time ago to introduce nuclear—that baseload, zero emission electricity producer—to ensure that they are able to lower their emissions in a way which of course Australia cannot. As we go forward we are seeing these variations, so we set out nine principles and the amendments to go with them.

The first on that list of principles is, of course, the exclusion of agriculture. It is simply not feasible to include agriculture in this scheme. Not only can you not measure the emissions coming from agriculture but you cannot stop them. There is no technology to stop a ruminant animal, a cow or a sheep, from burping out methane. No other country is including agriculture in their scheme. The Canadians are not. The Americans are not. The Europeans are not. Our major trade competitors have said this is too hard, and yet the CPRS includes it. We want to ensure farmers, the custodians of the earth, the custodians of the soil, are able to participate in offsets, and so we have said there needs to be an offset scheme, particularly in the area of soil carbon and opportunities that are being proven up as we speak covering biochar. We need to ensure also as we go forward that this is a process where that carbon is locked away in an internationally recognised scheme.

Another area that we are very concerned about, and one which I am more than familiar with, is the coal fired electricity generation sector. The changes that are being put in place will cost that industry billions, if not tens of billions of dollars. We have said quite clearly that the assistance measures being offered by the government are insufficient to ensure that sector even keeps generating. Lose one turbine, one generator, in one power station in Victoria and that state will be plunged into blackouts—no ifs, no buts, no maybes. The industry is running above its safety margin in terms of its reserve power. It is generating its heart and soul out, but at the same time under this scheme it will be forced to skimp on its maintenance and place at risk its generating capacity. We need to ensure that that energy security issue does not become real, that we are in fact ensuring the electricity sector is able to maintain its generating capacity. That is why we have proposed increasing the number of permits from 130 million over five years to 390 million over 15. We are perplexed as to why the government is hiding the Morgan Stanley report. We know that report, at least in a draft form, exists. We know it must contain the numbers that back up the other reports that have been released, numbers which say the industry should be compensated by in the vicinity of $10 billion. As we go through this negotiation we will be asking why we have not seen that report and what the numbers actually say.

More important than electricity generation—although it is hard to believe—is the management of electricity price increases. Everyone accepts that under any emissions trading scheme there needs to be a market signal, a signal to industry, through the electricity price, through the coal price or through the fuel price, which then pulls technology through into that business. But increasing the price of electricity to small business by 20 per cent in the first two years of this scheme is simply going to destroy the viability of thousands of small businesses. There are two million small businesses in Australia. They are the largest private sector employer in our economy. Yet here we have a process which is driving the electricity price up so quickly, by the admission of the government, in a way which will give small business a shock. Small business will not be able to contend with a 20 per cent increase in costs. Who will be affected? The local milk bar will be, running refrigerators with electricity bills for thousands of dollars suddenly rising by another thousand dollars or more. Where are they going to pull that margin from? The reality is that electricity  prices can be managed and those increases can be done in such a way that we convey the market signal but, at the same time, do it in a more adjusted and lower trajectory. The end point will be the same. That is why we have put up our hybrid model, our carbon intensity model. The government’s plan, quite unashamedly, is to force a large price rise onto small business, and small business simply will not be able to contend with that.

Moving through the other areas of concern and towards the issues in particular of the trade-exposed industries, we need firstly to deal with food processing. Australia has the cleanest food in the world. It is internationally renowned and also obviously favoured by our own consumers. Our consumers want to have food made here. That is why we have said that, because of its close association with agriculture and because of its high level of trade exposure, food processing, including the meat and dairy industries, needs to be protected, to be compensated, to be assisted in this transition, to ensure that food processing industries are still here in 10 years time, to ensure that first-class, safe food, which we rely on and our overseas customers rely on, is maintained.

A key area which we are addressing and which the amendments really cut to is trade exposure. Australia is a naturally export-oriented country. We have a small population who have, by tradition, exported the majority of our goods. We have simply not enough people to consume them. No other major economy which we trade with has this same scenario. In the United States about half the number of industries are trade exposed, as a percentage of their economy, compared to what we have in Australia. For example, the US have about 14 per cent; in Australia it is closer to 30 per cent. We are talking about industries like Leave not granted; we are talking about the smelters which export our raw materials; we are talking about the aluminium smelters; we are talking about industries which, again, employ thousands and thousands of Australians in regional Australia. We need to ensure that they are assisted through this transition. We are not saying they will not pay a carbon price—quite the contrary. We are not saying that initially they will not be disadvantaged against the rest of the world, because they will be. No-one else will have a carbon trading scheme when we do. We are saying that they need to be put in a position where they will be long-term competitive.

I will never understand why we are slugging the LNG industry when it is one industry which will lower global emissions probably more than any other. For every tonne of LNG sold overseas, for every tonne of carbon dioxide it produces, there will be a saving of four to nine tonnes from generating electricity from the traditional source, which is coal. So we should be assisting that industry. We need to ensure that the coal industry itself is protected. As I mentioned earlier, where are the people from Flynn and Dawson, from Throsby and Hunter protecting coalminers’ jobs, which are going to be slugged so heavily under the proposal from the government? The coalition will work to protect those coalminers’ jobs and ensure that they have a job into the future. We will also empower business and community groups to participate in voluntary measures and directly contribute to the reduction of greenhouse gas emissions through measures such as energy efficiency.

The coalition is absolutely committed to lowering greenhouse gas emissions. We have the track record in lowering greenhouse gas emissions. We believe there should be an emissions trading scheme but it should protect Australian jobs, in step with the rest of the world, and it should understand the economic impacts on individual industries. We need to go to Copenhagen with a commitment but we do not need to go with legislation which is going to cost jobs here. We will continue to work to ensure that Australia is in line with the world economies like the US and the EU and that we are not disadvantaging our industries against major trading partners like ASEAN countries, China and India. We have to understand that we need to do it with the full knowledge of what is going on in the world. That is why it is so crazy to be doing this before Copenhagen. That is why it is so crazy for Australia to be putting its jobs at risk through this absolute mad rush by the Prime Minister to pass this legislation. Our amendments are designed to protect jobs. Our amendments are designed to protect industries. Our amendments are designed to protect Australia’s future.

10:21 am

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party) Share this | | Hansard source

I thank the member for Groom for acknowledging that as a representative of the coal industry I was in House during this debate. I also point out to him that the member for Throsby actually spoke when this bill was first introduced into the parliament. So we are both more than happy to talk on this bill with regard to how it affects our own particular region. As a follow-on from that, obviously this is the second time that the bill has been introduced to the House after it was first defeated in the Senate. I want to acknowledge that the opposition has provided the government with some proposed amendments to the bill and that the negotiations are currently underway in order to see if we can find a sensible, mature and agreed solution within a time frame that allows us to start taking action and not just talking about the issue.

The Carbon Pollution Reduction Scheme Bill 2009 [No. 2] establishes a framework under which Australia’s carbon emission reduction targets can be achieved. It is important to acknowledge that it is time for action now. We have debated this for a long time. There have been a number of discussion papers out in the community and there have been extensive consultations across Australia with all the affected sectors. We should realise that we are one of the driest continents on earth. Our environment and our economy will be one of the hardest and fastest hit by the reality of climate change if we do not act now. To some extent I thought this was a debate that we had settled in this country. Climate change is projected to increase the severity and frequency of many natural disasters. Indeed, over recent years, people only have to watch the news cycle to understand that the impacts of bushfires, cyclones, hail storms, flooding and drought are already increasing in their severity and frequency and require this parliament to take action.

It is important to identify that the CSIRO and the Bureau of Meteorology produced Climate change in Australia: technical report 2007 in which they particularly identified this issue. They said that the projections for Australia include increases in the frequency of heatwaves; the frequency and length of drought conditions, especially in the south-west of the nation; hail risk over south-east coastal areas; and that the proportion of intense tropical cyclones and substantial increase in fire weather risk in south-east Australia all were issues of concern. That was the CSIRO in 2007. Here we are at the end of 2009. I think it is important that we at least acknowledge that the costs of inaction are serious and real to this nation and require us to get on with the job that we gave commitments to in the 2007 election campaign.

I see the member for Throsby has joined me. I will assure her that I defended her against the member for Groom’s claims that she had not participated in this debate and told him that she had in fact debated this previously in this House—and that neither of us were afraid of this debate in our local communities.

Photo of Jennie GeorgeJennie George (Throsby, Australian Labor Party) Share this | | Hansard source

Absolutely not.

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party) Share this | | Hansard source

It should be noted that at the last election the current opposition actually did endorse an emissions target for 2020, irrespective of the actions of other countries. Indeed, the Howard government at the 2007 election proposed the establishment of a 2020 target and proposed that an ETS should be used to achieve those objectives. So one is a bit surprised sometimes to get to this point, after two years in the cycle, to hear that we still have some on the other side—not all, I will acknowledge—arguing about the science and about the solutions that we put in place.

It is important to also acknowledge in terms of the need for action that the business community is sending the same message. In particular I want to acknowledge that a range of senior business organisations and individual businesses have been saying this. Indeed, there are very few in the industry sector who claim that the science is not proven or that action does not need to be taken. Russell Caplan, the Chairman of Shell Australia, in only August this year said:

… we believe a far greater risk is that Australia misses the opportunity to put a policy framework in place to deal with this issue. This would create a climate of continuing uncertainty for industry and potentially delay the massive investments … required …

Heather Ridout, the Ai Group CEO, in May this year said:

Business also needs to be making some very big decisions if we’re going to be able to make the transition to the CPRS, and to do so they need certainty. Uncertainty is death for business.

Finally, Katie Lahey, from the Business Council of Australia, in May of this year said:

To drag on the debate whilst we have got this global financial crisis is just one more complexity that business has got to factor into its planning cycle, and for some businesses it could be the straw that breaks the camel’s back.

So the industry sector itself understands the importance and challenges that this nation faces and understands that in the globally competitive industry environment they are not immune from action being taken at a global level. They understand that that requires businesses and industries across the globe to be taking affirmative action in terms of putting in place the amendments they need to the means of production and to actually be able to do that within a settled environment in the nation in which they are established.

I also want to acknowledge that other members, in opposing or expressing concerns about these views, talk about the impact on jobs. First of all, I want to point out that there actually is great opportunity in the job sector arising from taking action on climate change. The Treasury estimate was that 1.7 million jobs would be created at the same time that we are reducing carbon emissions. Indeed, there has been much evidence of new and emerging industries. Indeed, on a parliamentary delegation to the United States only a couple of weeks ago we met with several significant businesses, such as Chevron, Google and some other major business organisations, who were very keen to show us some of the advancing and new technologies that they are ready investing in. We also met with research and venture capital organisations that indicated they were searching for new opportunities both in terms of new energy sources, new energy management techniques and efficiency measures. I think it is important that we recognise the globe is moving towards those new developments and that we need to be part of that.

I want to keep my comments fairly short because I understand that many people want to speak on this debate and we have some time limits—quite reasonably, since we want to get this thing actually moving and have it in place. I want to take the final few minutes to talk about my own local area of the Illawarra. It is an area which has a diversified economy but there is no doubt that a significant part of that economy is the coal and steel industry.

I want to point out that the member for Throsby and I have had significant numbers of emails from local people as part of the Australian Coal Association campaign. On the website the campaign gives people the opportunity to put their own paragraph of comment within the email that is predeveloped by the Australian Coal Association. I have reviewed those—there have been about 220 come into my electorate office—and the vast majority of people have quite clearly said, ‘I want action on climate change. I just want you to do it in a way that provides protection for jobs.’ My response to them has been that that is exactly what we are doing. In the process that we are going through many of these companies are discussing with the government the best ways to utilise and provide the protections that they need. Certainly in an area like my electorate with a significant number of underground mines that are quite gassy we are very determined to get that targeted assistance right so that mines elsewhere do not get windfall profits at the expense of providing support to our mines. We have been in discussions with the government on behalf of the industry and the workers about that.

The industry associations are quite rightly pressing a case on behalf of themselves and their shareholders, and that is a legitimate interest. But I get a bit annoyed when they claim their major interest is jobs. I do not think that is actually what they are on about. We had the national president of the mining division of the CFMEU come to our region and he made it quite clear that, if you wanted to talk to somebody whose major concern was protecting jobs, then you would talk to the union. The union’s view is that we do need this scheme in place and that we do need to be taking action. He said:

… the ACIL Tasman Report, commissioned by the Australian Coal Association, and the Concept Economics Report, commissioned by the Minerals Council of Australia—generated headlines proclaiming the loss of 20,000 or more mining industry jobs.

               …            …            …

… in the context of ongoing negotiations for compensation it is a little less alarming. Yet that is little comfort for those workers … and their families reading the papers and wondering what will become of them. Such doomsday reports model growth forgone not a decline. In mining, they are the difference between staggering growth and extremely good growth. They are not job losses.

I think it is important that, whilst advocating to provide quite reasonable consideration to the views of companies in our area, we do that within a settled and sensible environment, not in one of scaremongering. Jennie George, the member for Throsby, and I have made our views very clear on that.

I just want to finish on this: the reality is that Australians understand climate change. They understand the impacts of climate change. They understand it whenever they see the increasing ferocity and regularity of bushfires, droughts, hailstorms, thunderstorms and all of those things that we increasingly see on our news. They want us to take action. It is quite understandable that we have to get those details right. For the coalition to be constantly delaying and delaying and setting new goalposts saying that we cannot do it until this or that happens is not what the Australian people expect. We need to get this bill through this parliament and get on with taking action.

10:30 am

Photo of Ms Julie BishopMs Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | | Hansard source

The great American statesman Abraham Lincoln once said:

You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.

The Prime Minister should take into account those words as he forces Australians into an emissions trading scheme that will cost jobs, that will harm industries, that will send industries offshore and yet will do nothing to reduce global greenhouse gas emissions. This Prime Minister’s approach to emissions trading has nothing to do with the environment or climate change. This debate at this time is not about reducing greenhouse gas emissions. The Prime Minister does not have an environmental agenda; he has a political agenda.

This government’s fundamentally flawed emissions trading scheme, which has been presented to the House today, was rejected by the parliament in August. Every non-Labor person in the Senate voted against it—the Liberal Party senators, the National Party senators, the Greens senators and the two Independent senators, Xenophon and Fielding. Publicly and privately many businesses and community leaders have criticised the gaping flaws, the fundamental problems, in the government’s scheme. Yet here we have precisely the same legislation back in the parliament with not one change, not one alteration, not one amendment. The government has refused to countenance any suggestion that its flawed scheme required improvement. It has produced precisely the same scheme that was rejected by all the senators from the Greens to the Liberals, the Nationals and the two Independent senators. It refuses to learn from its mistakes.

The coalition has come up with a number of substantial amendments that reflect the grave concerns in the Australian community about the potential loss of jobs, the likelihood of sending industries offshore, the increased electricity costs particularly for small business, the increased cost of living and the fact that the government’s scheme will not reduce global greenhouse gas emissions. The Leader of the Opposition has detailed those significant amendments in his speech to this House.

But the Prime Minister apparently believes that he has achieved perfection at his first attempt at an emissions trading scheme. That is so typical of this Prime Minister, whose view of the world is not to be questioned, who bridles at any suggestion that anything he says or anything he does can legitimately be challenged. So Australians are entitled to ask, ‘What game is this Prime Minister playing?’ It is purely politics. The Prime Minister simply wants a trigger for an early election. That is why the bill is in the House today. No doubt he has some internal polling showing that the Australian people are increasingly tiring of his spin over substance. The Prime Minister wants to rush off to an early election before the Australian people can judge the full impact of his disastrous economic policies that will push up interest rates and increase taxes, or judge Labor’s massive debt and wasteful spending or Labor’s chaotic border protection policy.

While the Prime Minister’s tactics might reveal his political strategy, they also reveal this Prime Minister’s contempt for the Australian public by trying to lock Australia into a flawed emissions trading scheme. The Prime Minister appears more than willing to sacrifice jobs, he appears to have ignored all warnings to date about job losses. He appears more than willing to cause serious and long term damage to the Australian economy—and he is on track to do just that with his scheme—while having no impact on reducing global emissions. It is clear that the Prime Minister wants to rush through this bill, and that he wants to avoid a detailed debate or discussion about the implications of his emissions trading scheme, so that he can turn up at the Copenhagen climate change conference with a piece of legislation and strut the world stage as part of his job application to be the Secretary-General of the United Nations. He will do all this without putting the interests of Australians first.

The Prime Minister described climate change as the greatest moral challenge of our generation. One would have thought that it would require one of the greatest debates of our generation. But, no, the Prime Minister is insisting that it is his way or the highway. We know that the emissions trading scheme will fundamentally restructure our economy over time. It will have a fundamental impact on the Australian economy. According to a recent poll, while the vast majority of Australians want action on climate change, only about five per cent said they knew what an emissions trading scheme was. The Prime Minister of this country is cynically trading on that lack of understanding. There has been no public education program to inform the Australian public of what an emissions trading scheme is, or a what a carbon pollution reduction scheme is. There has been little detailed analysis of Labor’s scheme. There has been virtually no information provided by the government on what it will cost Australians in terms of increased energy costs, or increased electricity costs, or the increase in the overall cost of living for Australians. This is a deliberate Labor strategy to suppress information that would reveal the failings of Labor’s scheme and reveal the cynical politics behind the introduction of this bill into the parliament today.

According to a recent international report, Australia is the country most likely to be disadvantaged by the transition to a low carbon economy. That is because our economy has been built on cheap and plentiful energy derived in the main from the burning of coal. About 80 per cent of our electricity comes from the burning of coal and that is why, for Australia to transition from an economy where 80 per cent of our energy comes from the burning of coal to a low carbon economy, we must be very careful to get right the design of any emissions trading scheme that impacts on the coal industry. We must be very careful to get the design right. That is why we need to know how our major trading partners, our major competitors, the major emitters, the major economies of the world intend to reduce greenhouse gas emissions. We need to know how they will transition their economies to low carbon economies and whether there will be any sort of global agreement reached at the United Nations Copenhagen climate change conference that is to be held in just a matter of days. I think the Australian public is entitled to be extremely cynical about a government that refuses to wait even a couple of days to find out what the rest of the world intends to do before locking Australia into an emissions trading scheme.

When I say Australia will be one of the most disadvantaged countries, it is pertinent to note that a country like France that gains almost 80 per cent of its energy needs from nuclear power—a virtually zero carbon form of energy—will not have the difficulty transitioning to a low carbon economy that Australia has. Would it not be sensible and rational to listen to what other countries in the world are doing and adjust our emissions trading scheme accordingly? The government is insisting that this parliament vote on its flawed scheme now, prior to the Copenhagen conference, but it is failing to provide any rational reason for doing so.

In fact, the Prime Minister, in an extremely rare moment of candour, admitted in an interview that he gave overseas that he did not actually need a legislated scheme in order to prosecute a case for global reductions in greenhouse gas emissions at Copenhagen—that he did not actually need a legislated scheme. So he has been exposed. Why does he then insist that there must be a vote in this House on an emissions trading scheme prior to the climate change conference? You see, the timing of this debate is for the government’s base political purpose of obtaining a trigger for an early election. If this legislation were so urgent why did not the government re-introduce it in September? If this legislation were so urgent why did not the government re-introduce it in October? It has made no amendments to the scheme—it is exactly the same documentation as was rejected by the Senate in August.

The government is contriving a vote in this House on Monday, 16 November. That is precisely the timeframe required under our Constitution to trigger an early election. It is not only the cynical timing of the government that should cause Australians so much concern. It is the lack of appropriate scrutiny and public discussion. If anyone questions the Prime Minister or challenges him on any issue to do with climate change, they are immediately denounced as climate change deniers, or climate change sceptics. It is this vicious suppression of debate that should so concern the Australian public. Alternative views are not permitted in this Prime Minister’s world.

If the government were serious about, for example, Australia’s capacity to substantially reduce its greenhouse gas emissions, why has it not considered alternative forms of energy? Its entire strategy is based on replacing the burning of fossil fuels over time with clean coal technology, a technology not proven and certainly not capable of providing baseload power. Has the Prime Minister been up-front with the Australian people and informed them that his entire strategy is based on an unproven technology? Why hasn’t the government considered a transition to natural gas? I come from Western Australia so I know there is plentiful natural gas in Western Australia, yet the government has not considered transitioning our economy to a natural gas economy.

Why hasn’t the government considered nuclear power as a component of a low-carbon economy? I am informed that, of the 20 countries that make up the G20 Forum, 19 have embraced nuclear power as a component of their capacity to reduce greenhouse gas emissions. And which country has refused to even acknowledge the capability of nuclear power to contribute to a low-carbon economy? It is Australia, in the form of the Labor Party. Consider the following. A 500-megawatt coal-fired power station produces almost 320,000 tonnes of toxic waste per annum, while a comparable nuclear power station produces about 20 tonnes per annum. The coal-fired facility will release into the atmosphere 4.38 million tonnes of carbon dioxide, while the nuclear power station will release 87,600 tonnes. The coal waste will include 2.6 tonnes of uranium and 6.4 tonnes of thorium. Now wouldn’t you think that these are some of the facts that ought to be injected into a debate about how to reduce Australia’s greenhouse gas emissions? The issue of nuclear power was not even canvassed in the Garnaut report. The Garnaut report, which was meant to canvass all possibilities of an alternative energy future for Australia, ruled out nuclear power. The green paper which was meant to consider all options had only one option: the Prime Minister’s. Yet we see that in the major economies of the world—the major emitters, our major trading partners—nuclear is under consideration. In the United States Senate there is a bill being supported by Senator John Kerry, amongst others. Writing in the New York Times, Senator Kerry, who is the influential Democrat chairman of the Senate Foreign Relations Committee, had this to say:

Nuclear power needs to be a core component of electricity generation if we are to meet our emission reduction targets.

That was said in the United States, the major emitter and the major economy in the world. Why would we not wait to hear what the United States says about its plan to reduce greenhouse gas emissions? As the major economy and as the major emitter, what the United States does will dictate what the rest of the world will do. But, no, our Prime Minister, with his hubris and arrogance, believes that he is the only one with the answer.

There has been no logic or rational thinking behind the government’s flawed emissions trading scheme. This bill is flawed. That is why the coalition put forward a series of amendments yet, without even a completion of the negotiations on those amendments, the government has forced this House to consider its flawed bill. I urge the government to put the interests of Australian jobs, the interests of Australian industry and the interests of all Australians first and not force this House to a vote on its flawed scheme and to go to Copenhagen with an open mind that perhaps other countries around the world who are the major emitters, our major trading partners and the major economies, actually have something to contribute to this debate. The Prime Minister might learn something if he were to listen to what other countries say they will do because it is a global solution that is required. Australia could reduce to zero its greenhouse gas emissions but, if the rest of the world were not to act, all that would do would be to destroy Australian jobs and industries and have no impact on the environment. I urge the government to pass and so adopt the amendments put forward by the coalition.

10:50 am

Photo of Bernie RipollBernie Ripoll (Oxley, Australian Labor Party) Share this | | Hansard source

While this is one of the greatest debates of our time—and I do not think there is any question about that—it is has been taking place in the community for a decade. This is not new and this is not something that has just appeared and landed on their desks, as the opposition try to make out. This is something that has been with us for many years. Mr Deputy Speaker Thomson, you would be aware of that and of the debates over many years and the range of issues that have been dealt with in the community, this place and business circles. But today is the start of a critical juncture in the climate change debate. It is a critical juncture in terms of our future. We are just 40 days away from the United Nations Framework Convention on Climate Change Conference in Copenhagen, something that many people look at as being D-day, in a sense, when the world has to make up its mind. But for the world to make up its mind and for economies to make decisions, they need to be prepared. Today is part of that preparation, part of that work, part of making sure that what Australia does in terms of a carbon pollution reduction scheme and emissions trading schemes is in our own best interest, in the national interest, done in a way which we control and is not subject so much to the decisions of other countries.

Australia has waited a long time for action on climate change but now is the right time to act. I believe there are no more ‘good’ excuses or excuses of any type not to do so. It is our opportunity to make some decisions that will have a significant impact on our environment, on our economy, on jobs, on investment and on regulations. They can have impact in all those areas in a positive way. As the world changes, we must change. With that change, we must provide the single, most important critical element in that process, and that is certainty. It is certainty about where we are going, certainty about the rules, certainty about the business environment, certainty about the economic environment and certainty about the jobs environment. That is what we are trying to achieve with this bill. There is no question that we must act. We must act now because the cost of inaction, as we have heard, is far, far greater than the cost of any action that we will take.

I want to talk firstly about how industry will be impacted. The South-East Queensland region, my home state and the area in which I live, is a good example of the compounding effects of drought and a booming population. This region has the prospect of continuing irregular rainfalls due to current variability in the climate and, of course, long-term climate change. Not only does this area experience drought and extremes of drought; it is also experiencing floods and extremes of floods. This area has a vibrant regional economy, which is driving an annual population increase of around 50,000 to 60,000 people. This is producing increasing demands on resources—water, energy and all the other things that come with population growth. The drought has exposed the vulnerability of the region’s water supplies, which were previously thought to be secure, to support long-term growth. With current water use being less than 75 per cent of the available yield assessed from historical records, there are significant problems in this region. If we do not take some form of action on these problems, they will become problems for our farmers and agriculture in the region. We need to take action. A substantial proportion of the Queensland agricultural industry is at risk from rising temperatures and extreme weather events. Agricultural commodities are valued at more than $8 billion in Queensland alone. If we do not something about climate change and the extreme weather events, it will mean the loss of thousands of jobs and Australian exports.

Climate change is not just about what will happen in the future; it is about what is already happening today. In fact, Queensland is likely to experience some of the most intense effects of climate change, such as tropical cyclones. We have heard of and seen the sorts of property damage that these events cause, whether it is out in the bush in remote rural areas or on the Queensland coastline. Wherever such events might occur, the impact is undeniable. The effects are there for everyone to see. They are more extreme than they have ever been. New maximum and new low temperatures are being recorded. We are experiencing more extreme droughts, more severe droughts, more extreme floods and more irregular floods—there are more extremes at all ends. Such extremes have never been recorded before—certainly not in the time that substantial populations have been on this planet and records have been kept.

What are we to do about all of this? Do we sit by and watch it happen around us? Do we just accept for a fact that this is climate change? There is no question about climate change itself. In my contribution, I do not want to deal with the evidence of climate change because I think it is irrefutable. There is so much evidence out there that there is no point in me, in the short period of time that I have to speak on this legislation, to go into such facts and information. Instead, I put the case forward that, if we do not act, we will put ourselves at the mercy of the environment. We need to fight and do everything we can to make sure that our economy and our population can minimise the impacts of climate that we are going to face.

There are a number of people who do not believe in what is taking place. They are often referred to as sceptics. I will put them in a slightly different category from others. They are the people who are always shopping around. They are always desperately searching for any reason or any little bit of information to delay a decision on climate change. Unfortunately, in these debates, you will always find something. There is always a little bit of information that, taken on its own or in isolation, can prove anything you want it to prove. They are the people who talk about shadecloth in outer space or a shadecloth over the Great Barrier Reef. Unfortunately, there are those who will continually look for any piece of evidence to back up their argument, like the great sceptics throughout history, in the face of overwhelming evidence, logic, common sense—the large bulk of evidence that exists all around us.

I feel sorry for those people but, in a way, I understand them. The great sceptics have always existed because they have their own barrows to push. They have their own reasons. You will never convince them. No number of fact sheets, no amount of debate or placing things right in front of them will convince them otherwise. We heard the member for Moreton talking about Galileo and the sceptics of that day who believed that the earth stood still and everything else revolved around it. No amount of reasoning or logic would ever convince them. It is only through the passage of time that we really look back and understand the folly of our ways. In a way, this debate has much of the same elements to it. Future generations—and I think generations that are not too far away; in fact, the next generation—will look back at the folly of the governments and nations of today for not acting sooner. They will say, ‘But in the face of all the evidence that was right there in front of you, that you knew was there because of everything that was happening around you, why did you not act? Why didn’t you just do something?’

We are doing something, and that is why we are debating this legislation today. It is why I want this parliament to pass the bills that are before it. I do believe that will be difficult but I remain hopeful, of course. However, there are some people in this place who will never support anything. Some will never support the legislation because it is just not enough. I tend to think of the Greens in that light. Our policy will never be green enough. No matter how good it is or how far it goes, it will never be green enough for the Greens. And there are others who just think that anything we do is too much. We will never convince those people. If the parliament and if the opposition—if the collective minds of those who have the power in their hands to make a difference—look at the collective good, the national interest, I think we can get through this.

The Carbon Pollution Reduction Scheme we are putting forward will ensure a number of things. It will ensure that Australia invests in industries of the future—like renewable energy, solar energy and wind farms—and jobs that use new technologies like clean coal and geothermal energy. It will actually create thousands of new, innovative and low-pollution jobs. We are not alone in this. Australia in fact is part of a large group of countries that are implementing or considering emissions trading schemes. There are 27 European Union countries that already have emissions trading schemes and other countries and regions are also developing or considering schemes. These include the United States—and they might have been slow coming to this debate but they are certainly catching up with us and the rest of the world—Canada, New Zealand, South Korea and Japan. The fact is that in the next few very short years we will see massive change around the world in these new terms. In fact at the G8 meeting this year in Italy global leaders confirmed emissions trading as the most effective way to reduce emissions. Why did they do that? Why did they confirm that? They did that because they understood that they must take some action.

I can understand. I accept the fact that this is difficult; change always is. This is globally monumental change. But that does not mean we should not do it. That does not mean we should not make the hard decisions. Australia ought to be a leader in this area. We have great opportunity to do that. It is not surprising that the G8, that 27 EU economies and that other countries in the world are very rapidly moving to this position. That is because it makes sense on just two simple fronts: one, the environmental front; and, two, the economic front. Climate change, like the global financial crisis, is all about change. It is about change in the way we think, it is about change in the way we act and it is about change in the way we deal with jobs and the economy. The Rudd Labor government is conscious of both of those. This is exemplified in the transition and growing acceptance that green jobs are now an emerging industry in their own right. The CPRS gives us a tremendous opportunity to secure support and grow the jobs of today and the jobs of tomorrow. There will be substantial assistance throughout the implementation and transition to a new carbon economy. The Rudd government has structured a plan to deal with these issues. You hear the other side talk about jobs and agriculture. Yes, there will be an impact across everything. That is why the government has put in train a number of measures to deal with that.

I want to also note that NAB modelling indicated that the CPRS has the potential to stimulate as much as $6 billion in annual investment in Australia over the next 40 years. The very same modelling also showed that the average year-on-year investment created by the CPRS could be as much as 60 per cent greater than that committed for infrastructure in this year’s budget of $20 billion over six years. There is urgency, though. There is a great urgency, and that is to do with certainty, with Copenhagen and with our national interest. As I mentioned earlier, Australia has an opportunity to act in its own national interest as well as its and the world’s best interests. I want to quickly put on the record comments by a few notable Australians. Russell Caplan, Chairman of Shell Companies in Australia, said:

… we believe a far greater risk is that Australia misses the opportunity to put a policy framework in place to deal with this issue.

Heather Ridout, from the Australian Industry Group, said:

Business also needs to be making very big decisions if we are going to be able to make the transition and to do that they need certainty. Uncertainty is death for business.

We want to provide that certainty. Katie Lahey, the Chief Executive of the Business Council of Australia, said:

To drag on the debate whilst we have got this global financial crisis is just one more complexity that business has got to factor into its planning cycle, and for some businesses it could be the straw that breaks the camel’s back.

And there is a list of other people who say why this is so urgent. I want to make note of another important person in this debate—that is, the Leader of the Opposition, Malcolm Turnbull. He used to believe in a domestic emissions trading scheme and the CPRS, but he has been captured—or you could say geosequestered—by the National Party and by the sceptics in his own party. He is more interested in certainty within his own party than he is in the certainty that this scheme could bring to Australia. Australia has set some very strong and in fact ambitious targets, and we are committed and determined to meet them. The CPRS will have an impact on households. In fact, it is expected to cause household prices to rise by 0.4 per cent in 2011-12 and 0.8 per cent in 2012-13. Hence the government has put forward a household assistance scheme of up to 120 per cent of costs to ensure that people can afford any changes that come. Will it create jobs? Of course it will. Will it have an impact on jobs? Of course it will. But it can have a positive impact. It can be good for the economy and it will be good for the economy. That is why we have a number of assistance measures in place.

We have factored agriculture into the scheme, and that is why agriculture is not included in the Carbon Pollution Reduction Scheme. It is not in the bill before this parliament. That is something that those in the National Party and others speaking on this issue keep omitting. We have looked at the potential impact on small business and have made sure that there are assistance programs to the tune of $2.75 billion for them as well. Mr Deputy Speaker, I want to thank you and the House for the opportunity to speak on this very significant and important bill. I commend the bill to the House.

11:06 am

Photo of Warren TrussWarren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | | Hansard source

Today we are again debating the government’s proposed Carbon Pollution Reduction Scheme, in the Carbon Pollution Reduction Scheme Bill 2009 [No. 2]. It is the same legislation that the Nationals, the Liberals, the Greens and most Independents rejected just a few months ago. The only friends of this legislation are Labor. None of them are ever prepared to go outside and defend its implications and its contents. Yes, they come in here, as the previous speaker did, to talk about the impact of climate change on the weather. But no-one will explain how Labor’s CPRS will actually fix the problem. No-one is out there defending the clear deficiencies in this legislation. No-one is explaining how Labor’s CPRS will actually reduce CO2 emissions or how Labor’s CPRS will actually make a positive difference to the environment.

I know that there are many government members who know that this is bad legislation, but they are too afraid of their party bosses to speak out and tell the truth. These are the same bills that use regional Australia for target practice. They destroy jobs and investment and do nothing to benefit the environment. Indeed, this legislation as it stands, with Australia acting alone on a CPRS, will increase global emissions. This legislation will actually increase global emissions, not reduce them, as industry deserts Australia and goes to other parts of the world which do not impose these new taxes and new costs.

In contempt of the parliament, Labor have reintroduced these bills even though they know that they contain drafting errors. They have not even fixed the drafting errors, yet they bring them back into this House, treating the members of this parliament like fools by expecting them to vote for things that they know are technically deficient. I wonder how government members can explain to their constituents why they are voting for legislation which they know contains drafting errors. They will not even fix those. The reality is that this legislation is not about the environment at all. It is simply a political stunt.

This bill will establish a massive new bureaucracy with draconian powers, powers that the tax office does not even possess. Executives will require a lawyer by their side virtually every time they make a decision. It reverses the onus of proof in relation to a whole range of issues, should someone offend the sensitivities of this bill. There will be thousands of pages of new regulations. We have not seen them yet, but we are being asked to trust the government when it says that these regulations will be drafted in a sensitive and appropriate way. But they are being designed by people in the environment department, people who have no understanding of industry, people who do not know how mining and agriculture and commerce and transport actually work. There are some ministers—like the minister at the table perhaps, the member for Rankin—who could make a constructive contribution to drafting the regulations, but departments like his or the minister for industry’s are not included in this process. It is being done by the environmentalists, and everyone therefore has concerns about the practicalities of the result.

Ninety per cent of Australians admit that they do not understand Labor’s CPRS, yet no-one from Labor is trying to explain how the CPRS will actually work and what its real benefits will be. Frankly, I think the other 10 per cent of Australians are lying. This bill is so complicated, so massive, so self-contradictory and so full of new concepts and regulations that it is impossible for anybody to have an accurate understanding of its implications.

Prime Minister Rudd does not need this legislation to go to Copenhagen. No other country is going to the UN climate conference with a legislated CPRS—no other country. All the UN is asking is for countries to come with targets, and Australia agreed to those targets many months ago. The Prime Minister has everything in his kitbag that he needs now. He does not need to have legislation which no-one else in the world will have and which no-one else in the world is interested in. It is completely ridiculous to suggest, when our Prime Minister turns up in Copenhagen with this legislation in his pocket, that the US, the Europeans, the Africans and the Chinese will all say: ‘Wow! That’s what we’ve got to have. Let us all sign up to your legislation.’ The reality is they will be completely disinterested in it and it will make no impact.

Everyone also knows that, when and if there is an international agreement, this scheme will be irrelevant. The world is not going to adopt a scheme that looks anything like Labor’s CPRS. Even if we have an emissions trading scheme, even if we have commitments to reduce CO2 emissions, they are not going to come through a scheme like Labor’s CPRS. So Australia will be out there by itself with a scheme no-one else is interested in, thereby ensuring that this scheme will never achieve any of its objectives.

The government have been very keen to isolate industries which have any opposition to their proposal. I was asked to speak about 12 months ago at a Food and Grocery Council dinner, because the Prime Minister had decided not to go. Maybe it had something to do with the fact that the Food and Grocery Council were drawing attention to the fact that the CPRS Bill would have a significant effect on Australia’s food prices, the cost of processing food in this country and our capacity to feed our nation in generations ahead. A few weeks later, the mining industry also had the Prime Minister suddenly withdraw his agreement to speak at an event and so the Deputy Prime Minister came along. At one stage in her speech, she asked her Labor colleagues who were present at that gathering to stand up to show their support for mining, and only two did.

So that is where the Labor government is coming from with its CPRS. It has no understanding of agriculture or the food processing sector. Labor is proposing the only emissions trading scheme in the world which will include the mining sector. This is the only scheme anywhere in the world that includes and imposes heavy costs on mining. The European scheme exempts them. The proposed US legislation exempts them. But Labor is proposing to impose billions of dollars in taxation on this sector.

Is it any wonder that coalmining companies see this as the end of 10,000 or more Australian jobs? At least 16 mines are likely to close, but there will also be ramifications in other sectors. The Australian mining sector, the proud leader of our economic growth, will suffer seriously from the cost implications, and as a result the Chinese, the Japanese and others will buy their coal from Indonesia, their iron ore from Brazil or from any other country in the world that does not impose these taxes. In fact, they can get it from the United States and it will not impose these taxes. Even the Europeans, who are often put up as the world leaders in their concern about CO2 emissions, do not impose these sorts of taxes on their mining sector. Only Australian Labor’s CPRS will impose these costs.

There are many fundamental difficulties with designing an ETS. Labor’s proposals make that obvious. An ETS cannot be painless, as the federal government likes to pretend when it is talking to pensioners, consumers and low-income Australians. If it is going to work, it has to be painful—in fact, very painful, so painful that people stop doing the things that they want to do that are assessed as damaging the environment and do without. Will they turn off their air conditioners on a hot day so they can reduce their CO2 emissions? Frankly, I do not think Australian people are likely to do that. They may go without food or without a visit to their relatives, but they are going to want to keep cool on a hot day or keep warm on a cold day.

If, in fact, the government does as it says it is going to do—as part of its CPRS package provide compensation to people who have to meet the higher costs of electricity, food and the other things they buy in this country—that is another reason why they would not switch off their air conditioners. They will be subsidised to run them. Other people whose wages are dependent on CPI rises will have their higher costs flow through into their wage structure and, therefore, also will lose the incentive to change their behaviour. So the reality is that the scheme will not of itself deliver reductions in CO2 emissions.

Emissions trading schemes always include exemptions, free permits and concessional arrangements. This scheme includes them as well. In reality, of course, no-one is truly exempt, because the increased costs flow through to them and will inevitably be passed on to consumers. However, each concession creates anomalies. You have birthday cakes all over the place. You have some industries that are in and other industries that are out. The more sectors you exempt, the harsher you have to treat those that are being taxed if you are going to raise the revenue that the government obviously has in mind resulting from this scheme.

Last Thursday Don Argus, one of Australia’s leading businessmen, had some things to say about the emissions trading scheme, which I think are very important. Friday’s Australian reported his speech in this way:

Now, when a banker of legend who is the titular head of Australia’s global resources house starts telling you, unequivocally, that unfettered markets will not always work, then it might be wise to listen.

                  …              …              …

Argus acknowledged the admirable intent of the scheme: to use market pricing to effect a reduction of our carbon footprint.

But he insists that all the emissions trading schemes, as currently designed, will fail. The idea that the markets will fix a real price for carbon and consumers will manage their demand accordingly was “great in theory”, Argus said. “But there are some very smart guys who will make a buck and I am sure they will not be worrying about CO2 emissions.”

The problem is that the price of carbon is inevitably going to vary across international constituencies and that will create arbitrage which will, in turn, fuel a new, hyperactive market for carbon permits and a whole new set of derivatives.

Traders, says Argus, have quite different objectives to governments and global warming bureaucrats. “A trading mentality will not get CO2 out of the atmosphere,” Argus said. He warned that not enough had been done to appreciate or anticipate the “unintended consequences” of a market-based solution.

“We haven’t learned the lessons of the financial system,” he said.

Here is the Labor government, which has been vocal in its criticism of world financial markets, now advocating the establishment of a giant new trading scheme. The reality is that an emissions trading scheme will deliver rich traders but a poorer environment. Simply shuffling paper, selling bits of paper time and time again, will not reduce CO2 emissions. A trading house on the top floor of a capital city building is so remote from the person being asked to switch off their light bulb 1,000 kilometres away that the impact will simply be nonexistent.

This is a scheme that is backed by the bankers and the traders, but the environmentalists, industry and Australian workers will be the losers. Labor talks a lot about green jobs. I can tell you where the green jobs are going to be. They are going to be in the houses of emissions traders, in the houses of the bankers and of course in Work for the Dole schemes.

Initiatives like MRETs, compulsory inclusion of ethanol in fuel, incentives for energy efficient buildings, alternative energies and sequestration will actually deliver real results. A trading scheme will not. These days many markets are global and with an increasing proportion of production exported to other parts of the world. If the purpose of an ETS is to change consumer behaviour, why not impose the tax on the consumers rather than the producers?

Many of these other options have never been properly debated or considered by this parliament or by the government. They are simply dismissed out of hand. Anyone who raises an alternative suggestion is not met with a rational argument as to why that is inappropriate, they are just accused of being dinosaurs or climate change sceptics. You are not a climate change denier if you advocate a different system of reducing CO2 emissions than the one being proposed by the government. You are not a climate change denier if you want to address these environmental issues in a different way. The way this debate has been treated by the government is insulting to the Australian people and insulting to those who want to address these issues with goodwill.

This scheme is full of anomalies and none of those anomalies have been corrected in this legislation. Why do you tax some of the energy efficient transport sectors more intensely than those that are less energy efficient? Why should electric passenger rail services be slugged with new taxes on electricity but those who drive their car to work will not be taxed, at least in the initial years? If you fly to North Queensland for your holiday, you will pay an emissions tax but, if you go to Vanuatu, Fiji, Dubai or the United States, you will not. If you need the Royal Flying Doctor Service to take you to hospital, you will incur a new tax but, if you go by ambulance, you will not.

It is simply inevitable that Australia’s do-it-yourself CPRS will be flawed—probably fatally flawed like its European predecessors. Like the Kyoto accord, it is artificially contrived and therefore ripe for manipulation and will produce few, if any, real environmental benefits. Labor’s obsession with signing Kyoto should provide lessons for the CPRS debate. Kyoto has not saved a single polar bear, or the Great Barrier Reef, and it has not filled the Murray, as Labor claimed it would before the last election. But it has now meant that Australia cannot undertake a whole range of carbon mitigation measures and sequestration that nonsignatories to Kyoto can.

A US farmer can get credit for sequestering carbon but an Australian farmer cannot. The Chinese can generate electricity from gases in a disused coalmine but in Australia you cannot, yet an Australian industry can buy those credits from China and use them in Australia. What sort of a scheme is this? It is a load of nonsense and it is an example of how environmental objectives were used as an excuse to effectively transfer industry from countries like Australia to developing countries like China and India and Korea. But it also ensures that the very things that we could be doing today to reduce CO2 emissions in fact are unaccredited under the Kyoto process. Labor needs to explain why it is that Australians are not able to undertake carbon sequestration activities which are known to work and which almost every other country in the world can do, but which are not going to be allowed for Australians. This is a really odd policy if it is designed, as the government claims, to actually do something about the environment. What sort of an environmental treaty is it that actually prevents Australia from undertaking CO2 reduction projects which nonsignatories can undertake, yet we can buy the credits from them? This is simply a nonsense and it is one of many examples of how Labor has not thought through the impacts of its emissions trading scheme.

We should not accept an ETS that is just a guise to raise vast new tax revenues rather than deliver environmental benefits. There is a $50 billion-plus bonanza of tax revenue in this scheme for the government. That is why they are interested in it—a bankrupt government with big spending projects in mind and its eye on the $50 billion of revenue. This is about taxation. It is not about the environment, and Labor has been dishonest in the way in which it has portrayed the scheme to the Australian public.

The Nationals have had a consistent view that the government has been more concerned about creating new money-shuffling bureaucracies and a gigantic new drain on taxpayers’ wallets than actually helping with the environment. We have consistently regarded Labor’s scheme as particularly harsh on regional Australia. Indeed, regional Australia will cop it in the neck. Regional Australia is where our energy is produced and our exports created. We are the people who will lose the jobs. We are the people who can create emissions credits, who can do the work, but we are being denied the opportunity under Labor’s scheme.

It is hard to believe that the successful passage of this bill will make any difference to global emissions. The government’s resource minister admitted as much when he said that China was building so many new coal fired power stations that the impact of Australian efforts will be almost nonexistent. So this scheme is of no value. There are proposed amendments that may well improve the scheme and we will be prepared to support those that are of value. But this is the bill that we were asked to vote on three months ago. It has not changed. We voted against it then and we will be voting against it now. (Time expired)

11:26 am

Photo of Yvette D'AthYvette D'Ath (Petrie, Australian Labor Party) Share this | | Hansard source

Today I rise to speak in support of the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills before the House. Through these bills Australia will establish a carbon pollution reduction scheme by which, if the international agreement reached meets the conditions the government has set out, Australia will agree to reduce our national emissions to 25 per cent below 2000 levels by 2020. The Rudd government’s target of 25 per cent below 2000 levels by 2020 provides strong support to ambitious global action to minimise the risks of dangerous climate change.

It is also one of the most ambitious emission reduction targets in the world. It represents a 32 per cent reduction on our Kyoto target. If there is a fair contribution from all emitters around the world to take strong action to reduce the risk of dangerous climate change by restraining atmospheric concentrations of greenhouse gases to 450 parts per million, that reduces the average emissions of every Australian by almost a half over the next 10 years. If the world is unable to reach agreement on a 450 parts per million target, this government will reduce emissions in Australia by between five and 15 per cent below 2000 levels by 2020. The government has already introduced the renewable energy target legislation to complement the CPRS. Through this legislation the government has set a renewable energy target of 20 per cent by 2020.

And the alternative? We have heard today from the Leader of the Opposition, the member for Wentworth, that they have called for delays again. This is certainly not the first time. The Liberals and the member for Wentworth have called for delays seven times. They have promised to make a decision on their policy on climate change and seven times they have delayed. In December 2007 they said, ‘Let’s wait for the Garnaut report.’ In September 2008 they said, ‘Wait for the Treasury modelling.’ In September 2008 they said, ‘Let’s wait for the white paper.’ In December 2008 they said, ‘Let’s wait until the Pearce report.’ In April 2009 they said, ‘Let’s wait for the Senate inquiry.’ In May 2009 they said, ‘Let’s wait for the Productivity Commission,’ of course forgetting that the Productivity Commission had already made a submission on emissions trading to the Howard government’s Shergold report. Then they said, ‘Wait for Copenhagen and for President Obama’s scheme.’ For 12 years the Liberal Party have failed to act. They went to the election with a promise to implement emissions trading but they stand here today again asking for delays.

This has not always been the case. The member for Wentworth used to believe that an emissions trading scheme would strengthen Australia’s position going into Copenhagen. Mr Turnbull said in the Sydney Morning Herald opinion piece on 9 July 2008:

… our first hand experience in implementing … an emissions trading system would be of considerable assistance in our international discussions and negotiation aimed at achieving an effective global agreement.

Turnbull also used to believe in domestic action come what may. The member for Wentworth, on Lateline on 9 July 2008, said:

… 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.

               …            …            …

John Howard decided and the Cabinet decided last year that we would move on an emissions trading scheme come what may.

It is certainly different to what we are hearing today.

Of course, I have to say in relation to the Nationals and the member for Wide Bay that at least the Nationals have been consistent from day one. They oppose a carbon pollution reduction scheme, they have since the beginning and they continue to now. They may be wrong in their approach, but they have been consistently wrong. I acknowledge that. Of course, what is more important is that there are others out there in the international community who do believe that it is better that Australia go forward to Copenhagen with a firm position. Mr Yvo de Boer, the executive director of the United Nations Framework Convention on Climate Change secretariat, was reported in the Sydney Morning Herald of 6 August 2009 as saying, ‘I think it helps Australia’s credibility to say, “This is the target Australia is willing to commit to and this is how we are going to achieve it.” That will be good for this country’s credibility, yes.’

Of course, we know the science. We know that the science says that the globe is warming. Warming of the climate is unequivocal and is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea levels. Continued greenhouse gas emissions at or above current rates would cause further warming and induce many changes in the global climate system during the 21st century that would very likely be larger than those observed during the 20th century. These are widely held views across the mainstream of climate change scientists across the world, including the Intergovernmental Panel on Climate Change, which released its most recent report, the Fourth assessment report, in 2007, touching on all of these elements.

I also touch on the House of Representatives Climate Change, Water, Environment and the Arts Committee’s report that they released yesterday in relation to the effects of climate change on coastal regions. I acknowledge their great work. I was part of that committee during 2008, and I congratulate them on releasing this report. Petrie is a coastal electorate, with Moreton Bay and the Redcliffe Peninsula. These are low-lying areas. There are many homes and businesses along these coastlines. What this report clearly shows is that there will be significant impact. Climate change, as noted in the report released yesterday and tabled in this House, impacts on coastal zones, including through rising sea level, more intense storms, larger waves and storm surges, altered precipitation and run-off and ocean acidification. This has been reinforced by the climate change committee’s report yesterday, but of course it has been widely spoken about and put into reports by climate change scientists across the world.

We have heard from the opposition about jobs and business, but it is businesses out there that are asking for certainty. Russell Caplan, chairman of Shell Australia, was reported in BRW on 6 August 2009 as saying:

… we believe a far greater risk is that Australia misses the opportunity to put a policy framework in place to deal with this issue. This would create a climate of continuing uncertainty for industry and potentially delay the massive investments that are required.

Heather Ridout from the Australian Industry Group said on Sky News on 5 May 2009:

Business also needs to be making very big decisions if we are going to be able to make the transition—

to the CPRS—

and to do that they need certainty. Uncertainty is death for business.

Katie Lahey, the Business Council of Australia CEO, was reported in the Age on 6 May 2009 as saying:

To drag on the debate whilst we have got this global financial crisis is just one more complexity that business has got to factor into its planning cycle, and for some businesses it could be the straw that breaks the camel’s back.

These are the things that we need to be dealing with. These are the reasons why we need to act now.

We have heard a lot of misinformation, including from the member for Wide Bay, who has spoken on these bills today, about the impact on households. Yes, we have said that the CPRS is expected to raise household prices by 0.4 per cent in 2011-12 and 0.8 per cent in 2012-13. Electricity prices for households could rise by around seven per cent, around $1.50 per week on average, in 2011-12. Gas prices could rise by four per cent, around 60c per week on average, in this same time frame. Food prices could contribute around 0.1 per cent of the 1.2 per cent overall increase in household prices. The Treasury modelling found that the CPRS scenarios show a one-off rise in the CPI of one to 1½ per cent.

What those on the other side fail to acknowledge is that what these bills do and what the government has promised is that the government will provide up-front support to low- and middle-income households from 2011-12 through a package of direct cash assistance, tax offsets and a 10 per cent reduction in the fuel excise tax to help adjust to a lower pollution future. Direct assistance through the tax and transfer system will fully meet the expected overall increase in the costs of living under the CPRS for low-income households and will help to meet the increase for middle-income households. Around 90 per cent of low-income households, or 2.8 million households overall, will be eligible for assistance equal to 120 per cent or more of their cost of living increase over the first two years of the CPRS. Around 97 per cent of middle-income households will receive some direct cash assistance in 2011-12 and 2012-13. Motorists will be protected from higher fuel costs from the CPRS by 10 per cent reductions in fuel tax for the first three years. The government has also made a commitment that each year it will review the adequacy of the household package in the context of the budget. In 2011-12 the level of assistance will be adjusted to align it with lower estimated cost of living impacts resulting from an initial fixed $10 per tonne carbon price.

The Liberal Party’s time is up. They need to stop making excuses, support the CPRS and provide certainty to business and the broader Australian community. This is certainly what my local community wants. As Australia is one of the driest continents on earth, its environment and economy will be among the hardest and fastest hit by climate change if we do not act now. The evidence on the economic effects of climate change is widely known. The environmental impacts are widely known. The future that our children, our grandchildren and future generations face if we do not act now is widely known. The longer we wait to act on climate change, the more it will cost and the worse its effects will be. I commend these bills to the House.

11:37 am

Photo of Greg HuntGreg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | | Hansard source

I rise to address both the Carbon Pollution Reduction Scheme bills before the House and in particular the amendments put forward by the Leader of the Opposition and also the broader question of climate change. Let me begin with a very clear statement. This debate must be addressed from a position—as the Leader of the Opposition said—of hope, not despair; of giving people the opportunity to foresee a future, not to push them into a position of fear, not to push them into a position of paralysis, not to push them into a position where their economic life as well as their sense of social wellbeing is crushed as they look forward. We must look at this responsibly. We must look at this from a position of opportunity and hope and aspiration. We must give people a sense that their lives can be better, that we can deal with the problem and that it will not be a terminal condition for humanity.

So I want to address this in three simple phases: firstly, a clear statement, as I see it, of the problem; secondly, how the coalition responds to the issue of climate change; and, thirdly, the specific amendments which have been put forward by the Leader of the Opposition to reduce emissions in a more efficient way, to keep down prices within the electricity sector and to ensure that jobs are not lost along with emissions simply being exported to China, India and other countries so as to have no impact on the problem.

Let me then turn to the problem. The problem of climate change is a simple concept, although it is of course—and as it should be—disputed. There are 40 billion tonnes of CO2 or equivalent gases which are emitted globally on an annual basis. That means that Australia, with about 560 million tonnes of emissions, represents 1.4 per cent of total global emissions. The simple conclusion from that, as was stated this morning by the Leader of the Opposition, is that if we were to eradicate all emissions from Australia, if we were to close down Australia, we would still see that global emissions would continue to rise, that our 1.4 per cent would be replicated by Chinese expansion within a period of about eight months and that there would be no net impact of any significance unless there were comparable global actions.

I accept, and have accepted for 20 years—from the period when my university thesis was on precisely this topic of looking at the different options available, of regulation versus emissions trading versus carbon taxes, to deal with the question of climate change—that there is a real and profound issue of climate change. It has been part of the work of my life. I have never resiled from it, but nor am I who believes we should declare those two million Australians who take a different view to in some way be heretical. They have not just a right to present their view, albeit counter to my own. They have a duty, a responsibility, to do so—and a right to do so with freedom from being declared and denounced as heretics or being impressed upon as having failed a moral task. In a responsible society there is a duty to allow scientific debate and to let the weight and quality of that debate determine the outcome, rather than to denounce, deride and bring down those who would present a counter view. So I am of the view that the problem of climate change is real and significant and profound, but I am equally of the view that we must have robust scientific debate. People should never be criticised for taking a different view, and two million Australians should not to be pushed aside as if their views do not matter.

What then, as we look at the global problem, is the conclusion from this notion that there are 40 billion tonnes of CO2? The simple conclusion is this: that we must have a global agreement and that unilateral action will not just be ineffective but could in fact be counterproductive. How can it be counterproductive? By moving emissions and moving jobs to India, China and other unregulated economies where methods of production—whether of recycled paper or bauxite or different forms of metal processing—are not as well regulated, we could actually see a net increase in global emissions. Therefore, there must be a comprehensive global agreement.

The only thing that the planet knows is the total tonnes of CO2 emitted per annum which translates to the total parts per million of CO2 or equivalent gases. The IPCC has identified 450 million parts per million of CO2 or equivalent as a 50 per cent likelihood of a two-degree increase in global temperatures. At present we are at 387 parts per million of CO2. When you add in equivalent gases, that rises to about 460. When you take away the effect of aerosols, that drops to about 390. That is why we use the position of 387 to 390 parts per million of CO2. We know that a 20 per cent increase would take us to 450 parts per million and we are at present on track to reach that without global action. Therefore, as our first step we need global action in terms of a comprehensive global agreement. We have set down bipartisan support on targets. All that the planet knows is the total parts per million of CO2. So the debate about mechanisms is not about where we end up; it is simply about how we do that in a way which most effectively reduces emissions at the lowest cost whilst protecting Australian jobs and in particular protecting mums and dads, farmers, pensioners and small businesses from unnecessary price rises in electricity and similar goods.

Having said that, the second of the international elements that we need in order to deal the 20 per cent, or eight billion tonnes, of the 40 billion tonnes of CO2 or equivalent gases globally per annum is a global rainforest recovery program. In the next five years it is quite possible to reduce by half the eight billion tonnes to four billion tonnes of CO2 from deforestation in the Amazon and in Indonesia, in Papua New Guinea and in the Solomons, in Malaysia and in the Congo. It is quite possible, through the right mix of incentives, to save four billion tonnes per annum out of 40 billion tonnes, with enormous ecological benefits. That would be the single biggest, fastest thing the world can do over the next five years. The government has, sadly, dropped the ball on that issue, that approach, that task, that momentous responsibility, which was begun by my good friend Alexander Downer, by the now Leader of the Opposition, Malcolm Turnbull, and by John Howard, the then Prime Minister, whilst we were in government three years ago.

What we do know is this. That will then lead to domestic action as well. We have a role to play, but if our role is unilateral, it is of no effect and can, in fact, be counterproductive due to carbon leakage or the export of jobs and emissions to China and India, to which I have referred previously.

We have three pillars to our domestic approach. First, and most importantly, most urgently and most immediately, is the adoption of green carbon approaches and practices. What is green carbon, Mr Deputy Speaker Scott? As a man of the land, you would know that green carbon is about the use of nature’s own lungs—trees, mallee and mulga revegetation—and in particular the extraordinary opportunity to improve the carbon-carrying capacity of soils within Australia. It is not our view; this is the view of leading Australian scientists, whether you talk about David Lindenmeyer or the work of Professor Flannery. Only last week, the Wentworth Group of Concerned Scientists put out a report which said that Australia had the capacity to save, at the upper limit, 1,000 million tonnes of CO2 per annum through green carbon measures. Yet these measures have been almost exclusively left out of the government’s system.

The single thing which we could do on a fast rapid basis has been omitted from the government system in large part. That is not acceptable, it is not reasonable. It is not the work of people who are concerned about reducing emissions; it is the work of people who are focusing on an approach to attacking the industrial base of our society rather than reducing Australia’s net emissions. That approach to green carbon must be adopted in Australia. It is our first pillar. We have taken a very conservative view—15 per cent of that put forward by the Wentworth Group of Concerned Scientists or 150 million tonnes per annum . That is what we believe could be saved through adoption of green carbon measures in Australia, by providing incentives, support for our farms and our farmers, to improve soil quality, to improve the water retention and water efficiency of land and, in so doing, to improve the ability to naturally sequester CO2 within the carbon cycle of our land.

The second of our pillars, after green carbon, is the clean energy revolution. There are two elements to the clean energy revolution. The first is supply. We supported the 20 per cent renewable energy target. We drove the 20 per cent renewable energy target when the government wanted to hold it hostage to this legislation. What we saw instead was a government which was never serious about its own renewable energy legislation. It was a political tool, but we drove it, we threaded the needle and we managed to get it passed. That will lead to a very prospective way forward, so long as certain problems at present within the renewable energy credits market are dealt with. This is important stuff and we are proud to support the vision of solar, geothermal, tidal and wave, the great new energy sources of the future.

We must also have a movement which increases the adoption of combined cycle gas in Australia. If you want to look at the single biggest thing we could do over the next 10 years in Australia in order to reduce emissions, it would be to lift the level of combined cycle gas, which would provide a very useful source of baseload electricity, at a low cost, with great benefit to Queensland, also reducing our overall emissions profile on a grand scale.

On the demand side of electricity, we need a white certificate program. We need incentives to deal with some of the perverse barriers to adoption of lower energy consumption practices in the commercial, the domestic and the rental sectors. That would be an extremely important step forward. In good faith, we have put forward, through the Leader of the Opposition, amendments to that effect. We have not heard from the government. It is hard to understand why they have not adopted them. They form an important initiative which would reduce Australia’s total emissions in an energy efficient way and in a way which would help to usher in the clean energy revolution.

The third pillar is the most controversial—some form of carbon pricing. The fundamental flaw in that which is proposed in this legislation, the Carbon Pollution Reduction Scheme Bill 2009 and allied bills, is that it relies upon driving up the price of electricity as far and as fast as possible to bring about change. It relies upon behavioural change from driving up the price of an inelastic good, yet we know that the net effect will not be the same as that which is desired, proposed or intended. People will simply substitute out of other discretionary items whilst maintaining a reasonable level of electricity consumption. Electricity consumption in the domestic sphere—less so in the industrial sphere—is a very heavily inelastic good and people in essence will not drop or change their consumption behaviours enormously. Therefore, our amendments seek to deal with this fundamental flaw.

We have proposed six amendments and this brings me to what Malcolm Turnbull has dealt with. Firstly, most importantly in some respects, that there is a level playing field for our trade exposed sector, that we will not put our sector at disadvantage until 80 per cent of global sectors—whether it is in zinc, aluminium or bauxite, whether it is in paper recycling or comparable products—are brought within a global regime. It is sensible, it is prudent.

Secondly, as I have set out elsewhere, that agricultural offsets are included in the system from 2010, which would provide incentives and income for farmers. It is potentially a $3 billion a year income stream for Australia’s rural sector while improving our biodiversity and our emissions reduction. Why the government have not adopted this is beyond me. I think it is critical that they do that while omitting direct taxes on our farmers for belching cows.

The third thing is that we have to have a very clear transitional path which does not destroy the balance sheets of our power sector. I say that as a Victorian and as an Australian. We have put forward a proposal that deals with the fact that there is $50 billion worth of unallocated permits. It is revenue neutral and it is responsible. It is designed to ensure that Victoria and other states do not face power outages as the balance sheets of the power companies go belly up.

The fourth thing is the amendments in relation to small business. In relation to small business, the point is very simple: we want to ensure that there is a model which means that, instead of the power price being driven up by 30 to 40 per cent, we dramatically reduce that rise by ensuring that power companies are provided with incentives to have as lower emissions as possible but not having to carry the cost of a tax which is extraordinary. At present the government is proposing $120 billion. We would bring the total tax regime down over the next decade to close to $70 billion. That will keep power prices down whilst at the same time providing incentives for direct transition of the power sources.

The fifth area is to ensure that there is a direct incentive for using our waste coalmine gas. At present that gas will just go up into the air. We are providing a regulatory approach which would mean that we would clean up that gas. We use that gas from the rich gassy mines where it can be captured for electricity, and if we use that methane then we will reduce our CO2 profile. The proposal we have will maintain jobs in the coal export sector whilst at the same time dealing directly with the emissions which would not be dealt with directly by the government.

Finally, our sixth amendment is in the area of the voluntary sector. We are saying here that there must be energy efficiency and there must be support for the green energy sector. We have said simply that the voluntary actions taken by individuals in Australia should be on top of, not included within, our national targets. The government do not accept that principle. They are wrong to do so. It discourages voluntary action.

The last thing I want to do is deal with two myths within the government’s scheme. Firstly, the scheme is predicated on the view that electricity prices must be the highest possible. Because it is an inelastic good, that just means we will be imparting pain without reducing emissions. We want a scheme which has direct action—which directly reduces emissions. That is why our amendments are aimed at reducing emissions for agriculture through voluntary action and through what we would do with waste coalmine gas—real changes with real effect.

The second myth is that the timing of the legislation must be now, must be this day. Under our approach or under their approach the legislation would commence on the same day. That is a critical difference. The legislation would commence on the same day. They are not honest. They have not acknowledged that. If we finalise this after we know what the rest of the world is doing in Copenhagen, action will not be delayed one single day. The real system would commence on 1 July 2012 under our proposal or theirs, and the carbon tax for one year would commence on 1 July 2011. There would not be one day of delay under what we are proposing, but much greater protections for Australia, much greater direct incentives for action for our farmers and much greater direct incentives for action for the voluntary sector. That is why I commend the amendments put forward by the Leader of the Opposition. I thank him and the member for Groom for their work. We are offering real action for Australia but at lower cost in terms of electricity and at the same time preserving jobs.

11:56 am

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source

I rise to support the Carbon Pollution Reduction Scheme Bill 2009 [No. 2]. It is a critical bill both for Australia’s future and progress towards an international agreement. I do just want to take up one point that the member for Flinders made. He says that it would be wrong to act unilaterally and that we should wait for the world—we should wait for an international agreement. But that is not what we have done in other areas of public policy. If, for instance, we had adopted that approach to trade, we would still be sitting behind a tariff wall in this country. We would not have the moral argument that we have now in international trade forums, where we can say that we are a free-trading country because we acted unilaterally and we lowered our tariff barriers. That meant that jobs went out of some areas like textiles, clothing and footwear but it liberated other industries and it meant that investment in mining and other areas was forthcoming. It was the government acting in the national interest and not waiting for the world, not waiting for international agreements. So I do not think the argument that we should wait for the world, that we should not act unilaterally, really cuts much mustard. We really have to get on and act so that when we go to Copenhagen we have some moral power in our arguments. We can say that we have led by example; we have our cards on the table. The pressure then comes on developing countries to also come up with a deal, to also come up with an act, because just as Australia can say, ‘Our emissions are minimal; they don’t make much difference to the rest of the world,’ so can provinces in China. They can make exactly the same argument—or Europe, or Africa, or any other continent. This is an international problem, but it does require nations to actually put their cards on the table and act, because if we do not start acting then we are going to be in strife.

The consequences of climate change are profound. Last year I read a book called The End of Oil: On the Edge of a Perilous New World by Paul Roberts. It is a book that really focuses on resource depletion—in particular, oil and gas on the one hand and climate change on the other. There is no doubt that it is pretty frightening reading. Resource depletion and climate change are profound international challenges. If we get them wrong the consequences can be pretty horrific. The consequences in Australia, according to the Australian Climate Change Science Program, which is managed by CSIRO and the Bureau of Meteorology, is that by 2030 temperatures will rise by about one degree over Australia—a little less in coastal areas and a little more inland—and later this century, warming depends on the extent of greenhouse gas emissions. If emissions are low, it is somewhere between one and 2.5 degrees Celsius by about 2070. The best estimate is about 1.8 degrees Celsius. But under a high-emissions scenario, the best estimate of warming is 3.4 degrees Celsius, with a range between 2.2 and five degrees Celsius. That is a pretty horrific consequence of not acting.

The other findings include that droughts are likely to become more frequent, particularly in the south-west; evaporation rates will increase, particularly in the north and the east; high fire danger weather is likely to increase in the south-east; tropical cyclones are likely to become more intense; and sea levels are likely to rise. In my electorate which borders the coast in South Australia, places like Port Parham, Middle Beach and Port Wakefield would not really want the seas to rise too much—particularly Middle Beach, which is already prone to tidal movements. So the consequences can be quite profound for Australia. Internationally, for our neighbours, they can be even worse.

The Contribution of Working Group II to the fourth assessment report of the Intergovernmental Panel on Climate Change notes that the consequences for Asia are things like:

Glacier melt in the Himalayas is projected to increase flooding, and rock avalanches from destabilised slopes, and to affect water resources within the next two to three decades.

Freshwater availability in Central, South, East and South-East Asia, particularly in large river basins, is projected to decrease due to climate change which, along with population growth and increasing demand arising from higher standards of living, could adversely affect more than a billion people by the 2050s.

Coastal areas, especially heavily-populated megadelta regions in South, East and South-East Asia, will be at great risk due to increased flooding from the sea and, in some megadeltas, flooding from the rivers.

It also says:

It is projected that crop yields could increase up to 20% in East and South-East Asia while they could decrease by up to 30% in Central and South Asia by the mid 21st century. Taken together, and considering the influence of rapid population growth and urbanisation, the risk of hunger is projected to remain very high in several developing countries.

So that will obviously have profound impacts on our neighbours. We would be fools to think that we can isolate ourselves from it because we are an island or that we can put off acting because we will be immune to the consequences. We cannot. We have been putting off acting on climate change—the world has—for a very long time. Since 1990 we have been putting off taking real and effective action. We are now at D-day. We are now at the point at which we have to run onto the beaches. And the opposition just says, ‘Well, let’s just give it a little bit more time.’ I do not think that is the way forward. I think what we need to do is go to Copenhagen and get a deal.

My experience in the union movement—and I am sure this will get the member for O’Connor excited—is that you were nearly always better off dealing with an employer and getting a deal than remaining pure and fighting for a hundred per cent of nothing. You were always better off getting 50 per cent of something than 100 per cent of nothing. I think this is the big challenge for the opposition. They are now in negotiations. They are proceeding in good faith from both sides. I commend the parliament and those participating in the discussions. But the real test will be when the deal goes back to the party room. I am optimistic. I think there will be some form of deal. But the great challenge for those in the party room will be to not succumb to the myth of being pure, getting 100 per cent of nothing, and to actually do a deal in Australia’s interest. It is a profoundly important thing to do. It will not be without some gnashing of teeth, I am sure, but it is a test of leadership and, I think, a test of maturity for the opposition.

I do not have much time left, but I would say that the most important bits of these bills, really, for my constituents are that we are acting and that there is compensation for those who are on low and middle incomes—those people who are poor. ‘Poor’ is not a word that gets used much anymore. The compensation in this bill and related bills is particularly important. The cost of living is estimated to rise by 0.4 per cent in 2011-12 and by 0.8 per cent in 2012-13. That is a result of the price of carbon, which will move from a fixed price of $10 per tonne to a flexible price in that period. In response to that, the government will be compensating low-income and middle-income households through a package of cash assistance, tax offsets and other measures. It will do that using revenue raised from the auction of carbon pollution permits under the scheme. For the pensioners, veterans and people on Newstart allowance—those on fixed incomes in my electorate—this is a particularly important aspect of the bills. We want to make sure that those at the lower end of the income spectrum are not adversely impacted by our attempts and our efforts to combat climate change. That, I think, is pretty important.

The other thing that is very important to my electorate is agriculture. There will be a lot said about this. Farmers have given me a lot of feedback in my electorate. One thing I have noticed is that there is a tremendous drive for innovation amongst Australian farmers, and they are already getting on with adapting to climate change. In my electorate under the FarmReady program there have been a couple of projects which I want to highlight before I conclude. The Gilbert Agribusiness Group is using a $200,000 grant to calculate the emissions from different farming systems in the lower north, determine the carbon footprints of farm businesses and prepare farmers to adapt to the impact of an emissions trading scheme. So that is a sign of positive local action on climate change and people adapting to a new environment. I have every confidence that farmers will be able to adapt to both climate change and an emissions trading system.

In conclusion, this is a tremendously important bill for the parliament. It is a tremendously important moment for the nation. And I think, as we enter Copenhagen, with our Prime Minister playing a lead role, it is time to put aside the partisan bickering—and the persecution complex of those who call themselves climate sceptics. I have never seen anything more ridiculous than some of the rhetoric that sceptics are somehow persecuted. It is an utterly ridiculous proposition. They are in the paper every week, they are in this parliament every week, talking about their beliefs—and so they should. But to say that anybody is trying to silence them is, quite frankly, ridiculous. We should have the debate, but we should also act in the national interest. And the time to do that is now.

12:08 pm

Photo of Wilson TuckeyWilson Tuckey (O'Connor, Liberal Party) Share this | | Hansard source

The member for Elizabeth—

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source


Photo of Wilson TuckeyWilson Tuckey (O'Connor, Liberal Party) Share this | | Hansard source

Wakefield, and that population centre called—

Photo of Nick ChampionNick Champion (Wakefield, Australian Labor Party) Share this | | Hansard source

Mr Champion interjecting

Photo of Wilson TuckeyWilson Tuckey (O'Connor, Liberal Party) Share this | | Hansard source

Don’t lecture me on the geography of South Australia—I’m married to a South Australian! There is an assembly line, a huge employer, in Elizabeth called the Holden Motor Company. As we speak in this House there are vehicle assemblers and manufacturers around the world, and more particularly in the Asia region, that are cheering on for Australia to put Holden out of business in Australia. When this bill delivers higher electricity charges, when this bill makes BlueScope Steel virtually uncompetitive—and I assume Holden would then import steel—when the Americans have fully government-funded their manufacturing sector including the parent of Holden, and the GM boardroom look at their costs of construction and assembly and say, ‘Why are we putting up with Fair Work in Australia’—as, I might add, Bridgestone Tyres have just done; I would love to have been in their boardroom—‘when we have much more simplified legislation in America? We need the extra business; why don’t we just put the vehicles on a ship and send them to Australia?’ That could be from Thailand, who are not going to have an emissions trading tax. It could be from India, with a massively growing industry. They now own Jaguar. They are not going to have an emissions trading tax. And there is China. A constituent of mine rang the other day. He asked how he could get over all the hurdles such as safety and everything to bring in trucks from China which he can retail for $48,000—big trucks. How would the people of Elizabeth and their jobs survive were this piece of legislation to pass this House?

When the government, and the Prime Minister in particular, had difficulty in describing the workings of his emissions trading scheme, and the benefits it might bring to the community and to the globe, he changed the name—he rebadged it. It is funny, I was just talking about motor cars. He rebadged a lemon and called it a Carbon Pollution Reduction Scheme. I have not heard one speaker from the government benches—and I will not hear one before this is over—describe how they can guarantee that a pay-to-pollute system of operation will necessarily and measurably reduce emissions of this nature. That is what an emissions trading scheme is. An emissions trading scheme is a process by which the government either sells or gifts the right to keep polluting. And when the Holden factory, or the working family, experience a 20 to 30 per cent increase, as predicted, in their electricity bill, are they paying that to save the planet? No, they are not. They are paying that so that their electricity generator can be compensated for the increased costs of production by their paying the government for the pollution they generate.

An emissions trading scheme is a pay-to-pollute system. But it divides the economy of Australia into two groups. There are those, such as electricity generators, with a captive market. You cannot bring electricity in from overseas, so you either buy it at the price that is available or you go without—and, of course, in industry you cannot go without. One of the great things about Australia is that we do have a better standard of living. We do manage to afford air conditioning, electric stoves and all the conveniences in a household. I have heard people say, ‘Oh, I will pay more for electricity.’ Obviously, they have the capacity to do so. I will not describe them as a demographic group, but there are a few names that are applicable. They say, ‘I will pay more to save the planet.’ But they are not paying more to save the planet. They are paying more so that their electricity generator, their fuel supplier and all those other carbon related industries can go on polluting. What is the purpose of that? The member for Wakefield and other speakers this morning have said, ‘Don’t worry about working families. When we put the price of electricity up, we the government will give them a subsidy to cover that.’ In the first instance one might wonder what then happens to the market signal that is supposed to encourage them to tell the kids to turn the lights out, and of course not to turn the air conditioner on, to suffer the heat.

That is the first question. But the second question is: how long will the subsidy last? The Howard government thought it reasonable to assist people to protect their health and the health of their family through private insurance and gave them a rebate on their private health insurance premiums. At the last election, the Rudd opposition promised faithfully to maintain that system. And what has happened? We have been fighting them to the death as they proceed to take it back. There is an interesting aspect of Treasury’s attitude to compensation: they always put it on the expenditure side of the budget, as they do with fuel rebates to the farmers. Why do they do that? Because Treasury is constantly putting out press releases advising the Treasurer of the day that if they want to save a bit of money, here is how expenditure can be reduced. So why would anyone believe that they will be immune from this thing and that they will be in constant receipt of free certificates?

And what an outrageous system that has become. The carpetbaggers in business are all running around saying to us, ‘Don’t worry about that mob, but you’ve got to give free certificates; we’re special.’ In conversation with one group the other day, it became apparent that if they got the free certificates they would have a competitive advantage over another carbon involved industry—creepy-crawly stuff.

As we speak, who is up on the Gold Coast at Macquarie Bank? The spin doctors, the screen jockeys and all of those kinds of people are salivating over the profits that they are going to make trading these certificates. A profit is always at somebody’s loss. It has been said that we are about to see a new tax system that will be decided by the private sector. The cost of your electricity will be driven in the same way that the cost of motoring during that boom period was driven: not by supply and demand—there were adequate fuels available—but by the derivative traders. How much do you want to pay for your electricity when this scheme gets going?

These are the realities. It is a process by which you will pay to pollute and if you have any political clout you will be able to get more free ones when you want to. That is the experience in Europe. They have so many certificates flooding the place that at one stage they traded at seven cents. Every time someone walked into a government office and said, ‘Give me more free certificates or I’ll turn the lights out,’ what did they do? Gave them more. The member for Deakin might like to enlighten the House on where in this scheme there is a guarantee that when this market based system comes in more free permits will not be given out. The Prime Minister recently chose to blackguard the free market system in a 7,000-word essay. All of a sudden, a market based system is going to deliver a miracle overnight.

The coal fired generating sector, which gives Australia a competitive advantage at Holden and at many other places, has no solutions that it can switch on like that to fix the problem. And we are going to tax them into poverty and then say that they should find a billion or two to clean up their mess. What have they done already? They have said to the government, ‘Compensate us or we’ll close down and go.’ And that is in an environment in which the Treasury secretary got up and said, ‘The Australian population’s going to grow by 50 per cent in 20 years.’ Where will the electricity come from? We saw that the Tokyo or some other car show the other day featured electric cars. How much further demand is that going to put on the generating sector? When one talks of renewable energy targets, it has already been said that there is probably insufficient capacity technologically and economically within Australia at the moment to even reach those targets. One starts to wonder what we are on about when we are expecting a population boom with all of the demands that that will put upon us.

Those are my criticisms of an emissions trading scheme. I have not entered the debate as to how Australia, by unilateral action, can save the Great Barrier Reef. I can tell the member for Wakefield and the member for Deakin that when the Prime Minister gets to Copenhagen, possibly with his piece of legislation—and the legislation is huge, and we are supposed to debate it in 10-minute speeches—all the other countries will be laughing behind his back. The Indians and the Chinese have done a deal: no ETS. The American Senate is still 16 votes short of getting the thing on the agenda to talk about. And 44 Democrats, not withstanding the popularity of their leader, voted against it in the House of Representatives, where it passed by seven votes out of 431. The Europeans have only got one thing out of their cap-and-trade scheme. It is now developing as a nice non-tariff barrier as the world has backed them into a corner on other issues. There is minimal trading between polluters and massive trading between financial institutions. And I mention again the circumstances that arose with petrol and diesel as a result of that activity. Those are my criticisms. It is the wrong response to a perceived problem—and I have not got time to give examples of how long the beaches that I visited 70 years ago have been eroding and rebuilding with the seasons.

There are solutions. There are means to deliver measurable responses to reduce carbon emissions and they are all available in modern technology. As ABB Australia, the old ASEA Brown Boveri company and probably the world’s largest manufacturer and installer of large electrical technology, has shown me on a graph which is on my website——the Australian electrical system from start to finish is 20 per cent efficient: 100 per cent energy in, 20 per cent out. The technology exists to raise that to 40 per cent. A lot of that is in the transmission system that we operate in this country. It is called AC, and it can be high-voltage AC—HVAC. The chosen technology for transferring electricity throughout long distances today is high-voltage DC. We happen to use that to cross Bass Strait for the simple reason that if you tried to transmit AC over that distance there would be no electricity left.

Let me give you the best possible example of comparison I can. The Europeans are looking at the potential for solar power to be generated in the Sahara Desert. That is another issue: when you look at renewables and you want solar power, you go to the hottest possible place you can find. There was a study to look at how that solar power would be transmitted to Europe. The study involved practical manufacturers and others, who came to the conclusion, considering that they were talking about a 3,000 kilometre journey, that HVDC was the answer to that problem. Why? Because over 3,000 kilometres they would lose 10 per cent of the energy provided at source. Had they used high-voltage AC current the loss would have been 45 per cent. And guess what the major source of transmission within Australia is: AC.

But it goes further than that. We are told a lot about natural gas. Yes, if you put it in a gas turbine or if you burn it in the stove the emissions related to that activity will be less if it is measured at that point in time. But when, as occurs in many parts of Australia, we are serviced by 25,000 kilometres of gas pipeline, the equation changes significantly. The gas pipeline that delivers gas to Perth from the Pilbara uses 225 megawatts, the equivalent of a typical Australian power station, to pump the gas that distance. That produces 700,000 tonnes of emissions. The simple act of ceasing to generate electricity in Perth from that resource and putting the generators in the Pilbara and bringing that power at a cost of about $1.1 billion down into the sou’west network would produce a massive reduction in emissions and a massive increase in the energy that arrived where it could be used from the same energy that was generated. That network could then be interconnected with the eastern states network—and the South Australian and Victorian networks are now interconnected by underground HVDC lines.

For $4 billion or $5 billion—a fraction of what this government is proposing to waste on a National Broadband Network that will probably be redundant by the time they get it in the ground considering the rapid evolvement of other technologies in broadband, and it appears they have to steal the Telstra network from its shareholders prior to being able to do it—the government of Australia could invest in a high-voltage DC network which would deliver measurable and significant savings and deliver whatever benefit was consequently available to the network.

Most Asians are polite; they laugh at you behind the back of their hand. They will be laughing when Kevin Rudd, the Prime Minister, goes to Copenhagen—Korea, Japan, Thailand, Malaysia and India. And China is building a 2,000 kilometre HVDC line at the moment to get its hydropower from the western regions into its east coast manufacturing sector. China is going to stick its chest out at Copenhagen because it will be able to identify measurable reductions in carbon. China is going to say to Rudd, ‘Where are your figures proving how you are going to make your contribution?’ And he will say, ‘I have an emissions trading scheme!’ (Time expired)

12:28 pm

Photo of Mike SymonMike Symon (Deakin, Australian Labor Party) Share this | | Hansard source

I speak in favour of these cognate bills before the House and would like to thank the member for O’Connor for his lecture on electrical transmission theory. Efficiency is one of the measures in energy transmission that can certainly help what we do in the future to reduce our emissions.

In one sense, however, I am disappointed to be rising to speak today in this cognate debate on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and cognate bills before the House. We are debating an ETS once again because of the unrest, division and disunity in the coalition’s ranks. We are still talking about climate change but we are not acting on climate change, purely and simply because the coalition cannot sort itself out. There are so many reasons to act to reduce the rate of climate change and to act now.

I do not want to go into the foundational argument that some members of the opposition are still engaged in—the futile debate about whether or not climate change actually exists—because it is quite clear to me that the overwhelming majority of scientists have engaged in the most rigorous of assessment processes and their outcomes have faced the stiffest of peer reviews. These are scientists who are the experts in their fields and are respected around the world for their contributions. So in my view there is no doubt the continued and increasing emission of CO2 and other greenhouse gases are causing change in our climate. The majority of these emissions are caused by the actions of human beings, and so it is our responsibility to act now to ensure that our children and grandchildren are not left with a planet less inhabitable than we all enjoy today.

There are so many reasons to act and to act now. The review by Sir Nicholas Stern and the work of Professor Garnaut following that have concluded that acting now will cost us significantly less than remaining at the status quo and leaving the responsibility of acting on climate change to future generations. As the CPRS white paper states, that would be the least responsible thing to do.

Furthermore, and picking up from the white paper, acting now on climate change gives us a competitive advantage over our neighbours in developing new industries and new jobs. The impacts of climate change on our environment will be disastrous. We can expect to see the devastation of our natural ecosystems—rainforests in the Daintree, the Great Barrier Reef, and, closer to my electorate in Victoria, Phillip Island, which is home for a whole colony of fairy penguins, and a very popular beachside resort. They are just a few examples. Our alpine regions will be ruined and our deserts, which have their own delicate and intricate ecosystems, will also be badly affected. As I mentioned before, beaches, which we all currently enjoy, could well be destroyed by a rise in sea levels.

Rainfall patterns are changing and many once productive agricultural areas are being more frequently hit with rainfalls lower than the long-term average. We will struggle to find enough water to drink and to support our communities, and that is already happening here and now. There are many communities on water restrictions that have been on them for many years. Many organisations, government and scientific, are predicting increases in natural events like bushfires, extreme weather and extended droughts. And not only will there be an increased incidence in these events, but they will also be more intense events. It is likely we will see greater devastation more often.

Climate change will affect jobs—there is no doubt about that. But we have a choice: we can sit on our hands and wait and watch as jobs go down the drain, or we can act now and help to protect and create jobs into the future. Businesses are crying out for certainty because the global financial crisis and climate change create risks into the future. If they do not know what they are dealing with then they will not invest. They need to be able to plan to invest, and not acting on climate change just adds one more risk factor to an already complicated business situation.

The Carbon Pollution Reduction Scheme is, as has already been outlined by the minister and by previous speakers, a cap-and-trade emissions trading scheme. It aims to reduce our carbon emissions by regulating the amount of carbon businesses and other entities emit. It will fulfil our international obligations on climate change under the United Nations Framework Convention on Climate Change and the Kyoto protocol. It will place Australia in a leadership position in the ongoing international development of a global emissions trading scheme. And, most importantly, it will assist Australia to meet our own greenhouse gas reduction targets. It will encourage businesses to invest in more energy efficiency options. And it will encourage more investment in renewable energies and less polluting, less emission-intensive activities.

We know that the ETS will impact on some businesses and households. The government is expecting electricity prices for households to rise by approximately $1.50 per week in 2011-12 and by $2.80 a week in 2012-13. That is why the government has included a range of assistance measures for households and businesses in the ETS. Low- and middle-income earners will receive upfront support from 2011 through a package of measures including direct cash assistance, tax offsets and a cent-for-cent reduction in the fuel excise tax. Low-income earners can expect assistance from the government to fully meet the overall increase in the cost of living as a direct result of the scheme, while the government will assist middle-income earners with their increased costs.

Furthermore, the government has committed to reviewing the assistance measures every year to ensure that they are adequate and within the context of the budget. The government will also assist small businesses to deal with increased costs due to the scheme through the Climate Change Action Fund to the tune of $2.75 billion. This assistance will help small businesses adapt through investment in energy efficiency measures, information and structural adjustment assistance. The government intends to roll out $200 million from the Climate Change Action Fund in the 2009-10 financial year to help businesses and households prepare for the ETS in advance.

The electricity industry will receive assistance from the government through the Electricity Sector Adjustment Scheme to help it adjust to the carbon price and to support investment in the sector. The government also realises emissions-intensive trade-exposed businesses will require some assistance to adjust to the Carbon Pollution Reduction Scheme. That is why we are including measures that will help guard against the risk of carbon leakage and providing transitional assistance to support jobs. While the government’s view is that all industries, including those that are classified as emissions-intensive trade-exposed, should share in the task of reducing our carbon emissions, we recognise that some businesses will need that assistance to adjust. That is why there is an initial allocation of 25 per cent of carbon units for free. The government is also including a global recession buffer for the first five years of the scheme, and Treasury modelling shows that the government’s assistance package for these industries will ease the transition to a low-emission economy while also maintaining incentives for emission reductions.

I would like to address the opposition’s previous claims that we should wait to see what the rest of the world does before we act. If that attitude was followed by the rest of the world then nothing at all would ever happen, as every country would sit and wait, with everyone fighting to get to the back of the queue, just like the Liberal Party. Of course, the National Party would not be sitting and waiting, as they do not even believe that climate change is real.

While it is great that acting now will make us a global leader in the ongoing development of an international scheme, it is more important to me that we, as a community and as a nation, take responsibility for our carbon and other greenhouse gas emissions. This has to happen no matter how large or small they may be compared to those of other nations. The fact of the matter is that we in Australia produce more than our fair share of greenhouse gas emissions on a per capita basis and it is our responsibility to reduce those emissions as much as possible.

The government is negotiating in good faith with the coalition on the Carbon Pollution Reduction Scheme, and I am very interested to see how genuine the divided coalition will reveal itself to be during these negotiations. However the government is determined to pass the legislation this year. It is vital to Australia. While I recognise that it is hard to hear the opposition spokesman say that the coalition are delaying the legislation not because they do not believe in climate change but because they want to fix what they claim are a multitude of problems with the legislation, it would in my view have been much productive for them—and made it much easier for me to believe them on this point—if they had taken the opportunity to negotiate these bills the first time they were presented to the House. Australia has waited too long for action on climate change. We need to act now. I commend these bills to the House.

12:39 pm

Photo of Alby SchultzAlby Schultz (Hume, Liberal Party) Share this | | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2], a bill that threatens Australia’s jobs and competitiveness in almost every industry in Australia, particularly in the agriculture, mining and manufacturing sectors. The CPRS bill sets up an emissions trading scheme as part of a framework allegedly designed to reduce the pollution caused by emissions of carbon dioxide and other greenhouse gases, collectively known as GHG emissions.

The primary purpose for the reintroduction of this bill now, though, is so that this Prime Minister can continue to strut the world stage and boast to the Copenhagen conference that Australia is taking a leading role in saving the planet from suffocation from CO2 emissions. A Labor policy document from the 2004 election campaign stated on 7 October 2004 that a federal Labor government would ratify Kyoto and introduce an ETS that would be operational no later than 2010. These themes were carried over into the 2007 election campaign where ALP policy was to introduce an ETS commencing in 2010. During the 2007 election campaign the then Labor opposition stated:

A Rudd Labor government will:

  • Ensure that Australia’s international competitiveness is not compromised by the introduction of emissions trading.
  • Consult with industry about the potential impact of emissions trading on their operations to ensure they are not disadvantaged.
  • Establish specific mechanisms to ensure that Australian operations of emissions intensive trade exposed firms are not disadvantaged by emissions trading.

We are now in 2009 and the Rudd Labor government are hell-bent on having this bill approved without properly ensuring that these three key 2007 election campaign commitments have been thoroughly investigated. I will quote from a comment by one of my sons:

The Prime Minister’s ETS is brilliant policy for Australia if you wish to destroy industry and shut down agriculture. Australia will of course cease producing greenhouse gas emissions as a result of this policy and make us the greenest country in the world. We will, however, be dependent on the rest of the world for everything we consume.

The scheme is rushed and bungled. It is deeply flawed because it has been rushed to suit a political timetable and an insatiable appetite for new taxes needed to reduce $315 billion of government debt.

Even the architect of the Prime Minister’s report into the effects of climate change on Australia, Professor Ross Garnaut, is now considering the validity of this legislation. There is one constant surrounding the global warming debate: there is no shortage of self-styled climate experts to make diabolical predictions and cast shadows of doom and gloom. The climate change debate is not new. On 4 June 1940, Sir Winston Churchill warned of the perverted science of national socialist ideology when he uttered the words:

… the whole world, including the United States, including all that we have known and cared for, will sink into the abyss of a new Dark Age made more sinister, and perhaps more protracted, by the lights of perverted science.

That is just as applicable today to the perverted science of global warming. Based on the prophetic projections of some experts, Professor Ross Garnaut has accepted that Australia, being a relatively dry continent, is particularly exposed to global warming. The reasoning goes that projected higher temperatures will increase evaporation and thus further the drying of the continent. Never mind that higher temperatures will also increase evaporation from oceans at a rate of about seven per cent for every degree celsius, increasing the water vapour available in the atmosphere for precipitation. The more than 100 years of Australian climate records suggest an inverse correlation between rainfall and maximum temperature—years of widespread good rainfall are cooler than drought years. The recent dry decade and the pressure of overcommitted water resources on the Murray-Darling Basin have galvanised public attention to the need for sustainable utilisation of the limited and highly variable rainfall. However the argument that a reduction in carbon dioxide will somehow prevent future drought, or even increase rainfall, is entirely spurious.

In tackling future climates, planners and policymakers have two options: they can learn from past climates, tempered by known uncertainties about the causes of variability and slow change, or they can commit their destiny to the projections of computer models. Variations in past climate have been natural and little influenced by humans. The hazards of climate, including drought, flood, rains, storms and killing frosts, are well known and destructive. The past, augmented by rational science, is an excellent guide to the future. Knowledge, planning, structural design and early warning are effective tools that are used to reduce loss of life and destruction of property associated with severe events. The suggestion that future hazardous climate events could in any way be mitigated by the control of carbon dioxide emissions is absolutely in the extreme.

I will not support a bill that will directly affect the agricultural sector or, for that matter, which will directly affect and threaten the livelihoods of the constituents that I represent. The electorate of Hume encompasses the rural areas of the Southern and Central Tablelands of New South Wales as well some of the Riverina. One of the main sustainable industries in the electorate is agriculture, including the farming of beef cattle. As many as 25 per cent of Australia’s cattle producers could be forced out of business by 2030 if agriculture is included in the CPRS.

Respected Central Queensland University resource economist Professor John Rolfe, who is also a beef farmer, has done some serious research, using calculated emissions from grass-fed cattle operations, into how an annual carbon permit system in the CPRS would affect beef producers. Present science indicates that methane, or flatulence, from beef cattle accounts for about 7 per cent of Australia’s greenhouse gas emissions—adult beef cattle emit about 74 kg of methane each per year, dairy cattle emit about 115kg each per year and sheep about 6.6 kg each per year.

Using a central Queensland cattle enterprise running 1,000 breeders and 850 calves as a case study, Professor Rolfe said these animals would emit about 134 tonnes of methane in a year, which is about 2,817 tonnes of carbon dioxide. Using an initial introductory annual carbon permit cost of $10 per tonne, buying a permit in the first year would cost such an enterprise $30,000. This is just one example of how such a flawed design will seriously damage the competitive position, and indeed the viability, of many of our industries, not just agriculture. We will see Australian jobs, investment and CO2 emissions being exported to countries where no price is being imposed on carbon.

In his report, Professor Garnaut said that in Australia, while coal makes the second largest contribution to climate change, enteric fermentation provides the largest contribution. Being a former meatworker, I was interested to learn where this particular issue was taking us in this climate change debate. Enteric fermentation is the process in ruminants’ digestive systems which produces methane gas. The main ruminant livestock are cattle, buffalo, goats, sheep, deer and camelids—camels, alpacas, llamas et cetera. Non-ruminant livestock—horses, mules and asses—and monogastric livestock—swine—have relatively lower methane emissions because much less methane-producing fermentation takes place in their digestive systems.

Professor Garnaut proposed that as our predominant ruminants—cattle and sheep—produce the bulk of the methane, their population could be cut by about 24 per cent and 39 per cent respectively to help Australia reduce its emissions. Based on current numbers, this represents a reduction of approximately 29 million cattle and 93 million sheep. Australian Bureau of Statistics data shows that in 2007-08 the total value of beef exports was $4.42 billion and of lamb exports $824 million. Around 65 per cent of Australian agricultural production is exported and exports of agricultural products account for about 18 per cent of total Australian merchandise exports. Those are ABARE figures from 2008. If we reduce these herds does Australia reduce meat exports or reduce its meat consumption?

The Garnaut report estimates the increased cost on meat production of a $40 a tonne carbon permit. The cost of sheep-meat production would increase by 67c a kilogram and beef by 96c a kilogram. Professor Garnaut predicts that households would move away from these products, because of higher prices, and would move to less emissions-intensive meat, such as chicken and pork. Some who advocate switching to kangaroos from sheep call for this to happen in the sheep rangelands rather than on higher rainfall cropping land. This would mean that the 70 per cent of Australia’s livestock, that is, 18 million cattle and 69 million sheep, that lives outside this area would not be affected. Far from being a kangaroo farming operation, harvesting would occur from a wild population. For example, the kangaroos would be owned by the Crown with harvest quotas allocated to properties. There would be no need for fencing, yarding, fodder, parasite control, purchasing new genetic material or other animal husbandry costs. One wonders how in these circumstances a farmer might improve his earnings through skill, planning and hard work? Given the way state governments currently operate their crown land responsibilities, it is difficult to believe that this quota system would be anything more than a tax grab, with little or no assurance that kangaroo health, location and numbers would be appropriate to the harvest needs.

A 2008 article by Wilson and Edwards suggested that kangaroo numbers would be allowed to rise from 34 million at present to 240 million by 2020 along with a gradual de-stocking of sheep and cattle. There would also be an increase in the kangaroo harvest rate to 22 per cent of the total population, from 15 per cent at present, and males would be the target of the harvest. How many of these preferred animals will it take to produce the same amount of meat? For the purposes of this calculation only the domestic consumption of meat was used, not export quantities. Assuming an average carcass weight of 247 kilograms a head for beef cattle, 20.5 kilograms a head for sheep and 12.5 kilograms a head for kangaroo, and assuming a total carcass weight of 786,000 tonnes for beef cattle and 288,000 tonnes for sheep, we can estimate that there were approximately 3.2 million beef cattle slaughtered and 14 million sheep and lambs slaughtered for meat. The total tonnage of mutton, lamb and beef consumed in Australia in 2006 was 1.074 million tonnes. Substitution of this quantity of beef, lamb and mutton with kangaroo meat would require 86 million kangaroos, 15 million pigs and 565 million chickens or a combination of those three. To achieve this ETS-induced nonsense by 2020, the shape of farming and harvesting would need to undergo a remarkable change in the next 12 years.

On a more practical note, Australia produces 1.3 per cent of the world’s greenhouse gas emissions. India produces 5.3 per cent, Russia produces 5.5 per cent, the USA produces 20.2 per cent and China produces 21.5 per cent. China alone relies on coal as a primary source of energy; it is opening two new coal fired power stations every week with another 500 under construction. By 2030 China’s emissions will grow by 139 per cent and make up 26 per cent of the world’s CO2 emissions. So much for Australia’s commitment to reduce its emissions. China has no intention of signing or introducing an ETS, nor do Australia’s coal-exporting industry competitors, Indonesia, South Africa and Colombia. According to mining industry sources, an ETS would jeopardise 23,500 jobs in the resource industry alone. It is also estimated that electricity costs alone will increase by between 26 per cent and 46 per cent and increases in food prices are yet to be identified.

As a rural based member representing rural Australians, I am not prepared to support an ETS which places Australia’s agriculture sector at a disadvantage to the rest of the world and puts rural and regionally based industry jobs at risk, be it now, in the short term or, indeed, in the long term.

Removing our competitive advantage, either individually or as a nation with a high-taxing, job-destroying piece of legislation, is most certainly not on my agenda. Carbon dioxide, for the information of the House, feeds plants. It is a potent fertiliser—we can thank the extra CO2 in our atmosphere for increasing plant growth by about 15 per cent over the last century. Market gardeners pump extra CO2 into their greenhouses to increase their crop yield—and we are not talking about a piddling two parts per million extra a year. It is like asking, ‘Will we double CO2 or increase it fivefold?’ In other words, there are people alive today thanks to extra carbon in the atmosphere. The only certainty about climate change propaganda is that government funded committees will keep going long after their use-by date.

I want to use the time available to me to quote from a very interesting book I read, Unstoppable Global Warming, by S Fred Singer and Dennis T Avery. I will read part of the prologue to put on record the facts behind so-called climate change:

When Eric the Red led Norse families to settle on Greenland at the end of the tenth century, he had no idea that he and his descendants were about to demonstrate dramatically the Earth’s long, moderate climate cycle.

Sailing their longships west from Iceland in circa 985, the Vikings had been pleased to find a huge new uninhabited island, its shores covered with green grass for their cattle and sheep, surrounded by ice-free waters where codfish and seals abounded. They could grow vegetables for their families and hay to feed their animals through the winter. There was no timber but they could ship dried fish, sealskins, and tough rope made from walrus hide to other Norse ports to trade for what they needed. The colony thrived, growing by the year 1100 to three thousand people with twelve churches and its own bishop. The initial settlement split into two: one on the southwestern coast and one further north also on the west coast.

The Vikings did not realize that they were benefiting from the Medieval Warming, a major climate shift that lasted approximately four hundred years that made Northern Europe about 2 degrees C warmer than it had been previously. Nor did they realize that after the warming ended, their grassy domain was doomed to five hundred years—the Little Ice Age—of icy temperatures unmoderated by the Gulf Stream that warmed the Norse settlements in Norway and Iceland.

As the Little Ice Age progressed, the colonists were increasingly hard-pressed to survive. The pack ice moved closer to Greenland. Supply ships had to take a more southerly route to avoid the deadly ice. Less and less hay could be harvested in the shorter, cooler summers to feed the livestock through longer and colder winters. The storms got worse.

In closing, may I quote from a very eminent Australian, the Hon. Ian Callinan AC QC, who was a Justice of the High Court from 1998 to 2007, because I think it is pertinent to this discussion. He 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 wartime National Security Regulations look like a timid exercise of government restraint.

I leave that to the thoughts of my constituents and the rest of Australia. Thank you for your tolerance, Mr Deputy Speaker.

Photo of Sid SidebottomSid Sidebottom (Braddon, Australian Labor Party) Share this | | Hansard source

It is always given. Thank you for your contribution.

12:57 pm

Photo of Bob DebusBob Debus (Macquarie, Australian Labor Party) Share this | | Hansard source

I rise to support the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. At this time in history, we are dealing with some astoundingly hard issues. The world, and particularly the Australian government, has dealt well with the most acute economic crisis for the last 75 years. But the crisis of our environment, exacerbated by climate change, is much more difficult and will take much longer to deal with. We have known nothing like it. The Commonwealth Science and Industrial Research Organisation has estimated that global warming could result in rainfall in the southern Murray-Darling Basin declining by 10 per cent in the next 25 years, but the really frightening figure is that that will lead to a fall in run-off of 40 per cent, with appalling implications for irrigation, farming and biodiversity. In the recent Steffen report, our best natural scientists, I am afraid to say, quite contradict the member for Hume. They say:

Over the next 100 years Australia could well experience changes in ecosystem type and distribution at least as great as those associated with the transition from the Last Glacial Maximum to the present, a period of at least 5000 years. The rate of climate change—a similar transition in only 100 years—is almost surely unprecedented for the last several million years—

and in fact may not have occurred for 40 million years, at which time there were rainforests in Antarctica.

The CPRS may not be sufficient for our response to this problem, but it is essential. Though I make no presumption at all about the benefit of free-market policy prescriptions, I am certainly persuaded of the critical benefit of carefully thought out, evidence based market instrument schemes for the control and reduction of pollution.

In New South Wales, where I was Minister for the Environment from 1999 to 2007, market based approaches, including emissions trading schemes, were first proposed over 15 years ago to address problems like nutrient pollution in the Hawkesbury-Nepean River, saline discharge in the Hunter River and controlling air and water emissions from heavy industry across the state. In the first half of the 1990s, community reaction was often negative. A lot of people argued that trading schemes were a licence to pollute or a sell-out of the environment. The argument went that, since pollution is bad, it should simply be banned like theft or vandalism. That was of course unrealistic for economic and social purposes and quite ineffective environmentally. Nevertheless, this is again the position that many in the Greens party are taking. The CPRS is just a licence to pollute, they say. At the other end of the spectrum, conservative Liberal Party and Nationals members in this parliament are saying that the CPRS is just a tax with no environmental benefit. I hold, on the basis of real and relevant experience, that both of these groups are quite wrong.

Looking back over the last 10 years, the track record of environmental achievement from the application of emissions trading in New South Wales and the complete turnaround in the community’s attitude to it is remarkable. In the Hunter in the early 1990s, discharge of excess saline water from mining and power stations was causing such a significant impact that the river was becoming too salty for agriculture. In turn, this inspired community outrage and very strong opposition to further industrial growth. It had the potential to prevent hundreds of highly paid jobs being created in regional New South Wales. Under the Hunter River Salinity Trading Scheme, developed by the New South Wales government in partnership with industry, farming groups and environmentalists, this has been completely turned around. Discharges now never cause the river to be more salty than 900 microsiemens per centimetre, which is actually fresher than bottled mineral water. At the same time, the scale of industry has more than doubled.

There are three important stories from the implementation of this scheme that are highly relevant for the consideration of the CPRS. The scheme imposed a total cap on allowable emissions. No discharges were permitted unless the discharger surrendered a sufficient number of the scheme’s 1,000 discharge permits. Companies needing permits are able to purchase them from periodic government auctions or from other companies who do not need them from time to time. That is the same as in the CPRS.

My first story concerns how the establishment of the scheme created the incentives and the framework for industrial enterprises to work together to reduce emissions. In one case there were two mines separated by a hill. One mine had a chronic surplus of salty water; the other a shortage of water. The wet mine was regularly seeking to discharge salty water into the river. The dry mine typically purchased considerable river water to use for dust control. Both were causing undesirable environmental impacts which, in turn, led to problems with the regulatory authorities and the community. Once the scheme came into place, the two mines realised that, if they ran a pipe over the hill to connect with each other, the wet mine could stop discharging and the dry mine could stop extracting river water and both could sell their excess discharge permits to other parties. So, by capping total emissions and putting a price on discharge, the scheme stimulated great improvements in industry efficiency, cost savings and environmental improvement. That is what the CPRS will also deliver for Australia.

Before the scheme I am speaking of in the Hunter began, the only solutions seemed to be very expensive pipelines to the sea, inland desalination plants or shutting down industry. Once the emissions trading scheme was put in place, completely unexpected and lower cost solutions were brought forward voluntarily. This is something that also happened with the sulphur dioxide scheme in the United States, which fixed acid rain at one-tenth of the cost that fear-mongering industry had lobbied for. In that case, the solution was to rail in low-sulphur coal, whereas industry had been arguing that only very expensive flue gas desulfurisation would do the job. So the lesson for the CPRS is that it will create the incentives that will make carbon pollution reduction much cheaper than would otherwise be possible, and that means more jobs and greater emission cuts than would otherwise be possible.

The second story concerns the way that emissions trading schemes changed the overall attitude of industry to joint action on environmental protection. In this case, one mine chose not to invest in appropriate saline water storages to acquire sufficient tradeable discharge permits. With its storages nearly full, the mine operators contacted the state EPA and asked for special dispensation for an unauthorised discharge. The EPA was told that, if approval was not forthcoming, several hundred miners would be stood down—a typical blackmail. This clearly placed intolerable pressure on the EPA and before the scheme began the rest of the industry would have had very little interest in this poorly prepared mine’s success or failure in dealing with the EPA. On this occasion, where discharge could lawfully take place only if the discharger purchased sufficient permits, the situation was completely different. Other mines who were holding excess discharge permits for sale heard of the one mine’s lobbying. They interpreted that action as simply using lobbying as a cheaper alternative to entering the market and buying the necessary permits. Thereafter, the EPA was not on its own. Large numbers of other mines actively lobbied to make sure that the one mine complied with the rules.

The public policy importance of this dynamic is obvious for the CPRS. By capping total emissions and issuing fixed numbers of permits, the CPRS will create a powerful constituency that will be arguing against any relaxation in controls on emissions or compliance. Indeed, there will be a whole class of businesses that will benefit from higher permit prices every time total allowable emissions are reduced. So instead of lobbying against a cap, as we see otherwise responsible corporate citizens shamelessly doing now, we will see powerful businesses on the same side as the environment and the community arguing for emission reduction.

A third observation relates to the initial allocation of permits. With the Hunter River Salinity Trading Scheme coming up to its 10th successful year, we can see that the initial allocation of permits is not nearly as important as getting the cap, and the ability to ramp it down over time, right. In the Hunter, permits were initially allocated for free to incumbent dischargers. Some argued that was too generous to industry. However, the approach was a key to the successful change of practice. Under that scheme, every two years one-fifth of the permits expire and are replaced with new 10-year bundles of permits. These new permits are sold at auction. Now, after 10 years, there are almost no grandfathered permits left and almost every permit has been purchased on the open market. So the New South Wales government used a gentle transition to bring industry along to the fully commercial world that matches the expectations of the community. Hence, the CPRS is not ‘compromised’ because it seeks to avoid bludgeoning old polluting industries and the people they employ into an early grave.

The third lesson that has been clearly demonstrated is that a well planned transition, where requirements are expressed using commercial disciplines, but where change happens gradually and with thoughtful assistance, can achieve all the environmental goals we aspire to at a reasonable cost.

On another matter, who can seriously doubt that Australia’s credibility in negotiations at Copenhagen will be enhanced if we have a CPRS passed through this parliament and in place? I have heard people say that our position does not matter at Copenhagen because we are only responsible for 1.5 per cent of the world’s greenhouse emissions. Well, that still leaves us as the 14th country on the list. Anyway, Ross Garnaut has shown that President George Bush found it very useful when John Howard, alone in the world, refused to sign up to the Kyoto Protocol. More than that, we in Australia have the second highest per capita output of greenhouse gas in the world after only Malaysia, which has been so heavily clearing tropical rainforest. If that does not create some sort of ethical obligation, the fact remains that Australia is one of the worst affected countries in the world and it would be simply crazy for us not to take the highest possible profile at Copenhagen.

The opposition frequently claim that the commitments made by other countries at Copenhagen will impact on Australia’s scheme design, but that is completely wrong. The CPRS bill itself does not set a cap on emissions; that will be determined in regulations which will be made after Copenhagen. In the first half of 2010, the government will announce scheme caps for the years 2012-13, 2013-14 and 2014-15. Minister Wong has pointed out that this will provide ample time to take into account progress actually made at Copenhagen. I do know that there are negotiations underway with Minister Wong and the opposition at the moment but I certainly hope that the Liberal Party stops confecting reasons to delay action on legislation that has been on the table since March. In any event, Australian businesses need certainty for investment, which is why both the Business Council of Australia and Australian Industry Group have called for a CPRS to be established this year.

I want finally to say something also about agriculture, because I am so deeply concerned about the apparent refusal of the National Party to take the issue of climate change in any way seriously. Of course, the government has made it entirely clear that no decision will be taken about the inclusion of the agricultural sector in the CPRS one way or another before 2015. The government will continue to negotiate in good faith with the opposition in this area and will of course also talk to interested industries. But I am reminded that climate change does not at its heart present us with an economic problem. We can afford to deal with it. There are a number of Treasury projections to show us that our country is likely to become vastly richer over the next several generations as it has over the last several generations. The real problems are political and institutional.

However, like the Leader of the Opposition, I draw the attention of the House to the recent report of the Wentworth Group of Concerned Scientists, which demonstrates the extraordinary possibilities of improving carbon sequestration in the soil to provide a new source of income for farmers and other land managers to look after our landscapes in a sustainable way while at the same time helping Australia to adapt to climate change. The report argues that investment for storing carbon in the soil can be targeted to produce multiple environmental and economic benefits: improving soil carbon in agricultural landscapes, which helps address both climate change and improve the conditions of our agricultural soils, which have been in slow decline over the past two centuries; we can restore native vegetation along the nation’s rivers, wetlands and estuaries, which would produce two landscape benefits—improved water quality and reconnection of native vegetation across our vast fragmented landscapes—thirdly, it could be targeted to expand the habitat to create viable populations of threatened species, which is a foundation stone for their long-term survival. We are talking here about policies that will assist farming and food security and also restore our degraded natural landscape.

The government has an extensive research program underway to ensure that farmers can be rewarded for land management practices that decrease emissions and increase carbon levels in the landscape. I should, though, also point out that the government seeks in the meantime to negotiate new international rules which will ensure that farmers cannot be liable for emissions over which they have no control, like bushfires and drought. We will also have to be sure that sequestration measures are implemented in this context within management guidelines that guard against adverse consequences of an unintended nature on the environment.

This is an example of the great hope that we can hold for the future if we get our policies right. I commend this bill to the House as an important and urgent step along way to doing so.

1:14 pm

Photo of Tony WindsorTony Windsor (New England, Independent) Share this | | Hansard source

I am pleased to be here today before such a large gallery to make this contribution to a very important debate. The Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and cognate bills, which we are addressing here today, is a very significant challenge, and I think we are all very much aware of that. I was interested to hear the member for Macquarie comment about agriculture in his concluding remarks. Part of what he was saying—and I do not disagree with the content of what he was saying—was that one of the difficulties in terms of agriculture and this debate is that the bills make no allowance for agriculture. The bills suggest that a decision will be made at a later date but, as the member for Macquarie highlighted, there are a number of things out there that could be very interesting and could be part of the solution to the problem.

The farm sector has an issue with that sort of process. They are being asked to engage in a process, which is essentially about heavy emitters, with the commitment that at some time in the future soil sequestration and other issues such as vegetation et cetera might be included in some sort of credit system that has not yet been devised. Everybody keeps saying that everybody wants some certainty in relation to this but the agricultural sector has no certainty at all. It has just been pushed off to the side: ‘The decision will be made later. Support this because it’s good in principle and we’ll look after you because we’ll be negotiating in good faith with the opposition at some future date.’ I do not think that is good enough and I will be moving an amendment, which I will speak a little bit about later.

I believe that there is human induced climate change. I believe it is something that we should do something about. I am not one of the sceptics. I do not have absolute scientific proof that what I believe is right. I take a fairly simple view of the scientific evidence that is out there. If the climate scientists are right the electorate of New England will be severely affected. The Murray-Darling system will be severely affected and our capacity to produce food will be severely affected. So when people say that the CPRS will have a great impact on agriculture, I think they should go a little bit further than that and look at what the impact will be on food production, on jobs and on the Murray-Darling system if the climate scientists are correct.

So my fairly simplistic view of this is in terms of risk assessment, because I think we will all be dead by the time that we know whether the climate scientists were actually right or wrong. If the risk is assessed as being a problem we should do something about, I would rather be arguing on that side of the debate and actually trying to do something about it so that people did not look back in 100 years time and say, ‘They were given evidence but did nothing.’

That is not to suggest that I will support this particular piece of legislation. I think there has to be some fairly substantial amendment to this legislation. I think there is great confusion out there—quite deliberately perpetrated by some in the political arena—which indicates that if you do not support CPRS you are a climate sceptic. I am not, and I think people would have some knowledge of the private member’s bill that I introduced into this House prior to the CPRS, which looked at climate protection. It looked not only at the emissions debate—the carbon, nitrous oxide and methane emissions debate—but also at many of the other impacts that could be ameliorated through measures outside a market mechanism, which this legislation is essentially about. It is imposing a market mechanism on a problem. It has ruled out some sectors of the community—agriculture being one of those—because there are issues there: it does not have to come in yet; the measurement of carbon in various soils is difficult; and what we should do about methane, which is a natural process of ruminants. So it is convenient to say that it does not quite fit in a market mechanism, and it is not accepted by Kyoto anyway, so we will just push it to one side, but hopefully everything will work out well into the future.

The five per cent target that this legislation aims for is a nonsense. It does nothing about the issue. It puts in place an economic structure which will achieve not much more than people stopping cleaning their shoes, in terms of saving emissions. This will rearrange an economy—and people have stood up and said that this is quite a dramatic attempt at leadership at a government level to address this issue—but then when you look at the detail you find that the target is five per cent.

I do not think the Leader of the Opposition even mentioned the five per cent this morning. He is aiding and abetting this process with a whole range of amendments, but still the five per cent is sitting there. I know that if Copenhagen goes well there are possibilities of increasing that five per cent to some other level but the legislation essentially rearranges the economy with a five per cent target in mind. I find that almost offensive.

I was in Europe recently on a study tour. I was looking at the various components of climate change and the way in which various countries are addressing it. It made Australia look ridiculous. There was enthusiasm expressed in a number of countries about renewable energy—geothermal, wind, water and solar. There is scientific work being done on renewable fuels and on molecular cell breakdown in wheat and barley stubbles, for instance, that could be used in biofuels. There is work being done in relation to carbon capture and storage issues. One geothermal plant that I visited was producing electricity from water that had not boiled—98 degree water producing electricity—because the scientific work that they had done in terms of adding salts achieved that same effect as pressurised steam.

We are doing nothing. We have some poor fellow out in the middle of South Australia whom we have given $5 million and a tent to and we have wished him well. We are doing nothing. The messages coming from government policy in terms of renewable energy are dreadful. The messages from the previous government were pathetic. We are not serious about this issue and a five per cent target shows how serious we really are.

While I was in Copenhagen—I had a series of meetings—I heard that apparently 10,000 bedrooms were cancelled for next month’s meeting. Copenhagen will fail. There will be words, and they will be like Doha Round trade words—words that get you to another year, another two years, another decade or another 20 years. The word on the street was that the globe, particularly the Americans, the Chinese and the Indians, is not interested. And here we are with our five per cent. We are really interested in doing something about it!

The Leader of the Opposition has fallen quite neatly into the trap set by the Prime Minister, as he tends to do from time to time, by coming in with a range of amendments. I personally agree with some of them, but he has not got to the root cause of the issue at all, which is: are we going to do something about climate change or not? The rush by the government to have some sort of political document come out of the building before Copenhagen is also ridiculous. When the debate was on in June, I could understand that there would be time to build some sort of argument and structure with an improvement on the five per cent. But a month out from Copenhagen, it is quite ridiculous to suggest that we need to rush this through now to show leadership at Copenhagen, particularly when those who are much more involved than I am are suggesting that it will fail anyway.

What if we pass this legislation with this minuscule target and there is failure at Copenhagen? Do we end up with an economic structure, a new market mechanism, based on five per cent that becomes part of our economy for the future? I think we are better to wait until after Copenhagen before we put in place some overarching strategy based on a five per cent target with potentially no agreement from others in the world. That does not mean that you cannot go there with the good of the globe at heart. I think in a lot of ways it would be just common sense.

I will be introducing an amendment that looks particularly at food. Unless food is ruled out of the global emissions trading debate now, it has the capacity to derail anything the globe may do in the future about emissions. I would just like to elaborate on that if I could. If the globe, theoretically at least, embraces an emissions trading scheme and food is included—notice I am saying food, not necessarily agriculture—in that market mechanism, we will potentially end up with three markets. We are trying to solve this problem with a market mechanism. We have got the carbon market, we have got the energy market and we have got the traditional food market. In a global carbon market the competition for land that we traditionally grow food on will either drive people out of food production or drive the price of food up because of the competitive aspects of these two other economies

Even these bills, and the amendments that the government itself brought in back in June after the bill had been circulated in the community for quite some time, incentivise a shift in land use from food to agroforestry, to trees, for carbon purposes. It seems as though the carbon economy may take some degree of precedence over the food economy. Land that was used to grow food may well shift towards agroforestry for the carbon market. Land that was traditionally used to grow food, in a carbon economy, may well shift into biofuels. There has been great argument about this. We have seen that one of the drivers of this shift was what George Bush did with ethanol policy and the Brazilians did in relation to sugar to ethanol by taking the incentives for food production out and substituting them with incentives for the production of a renewable energy source.

Renewable energy might start to tick some boxes in the carbon economy but cross some boxes in the food economy. We are talking market mechanisms here so we cannot suddenly come in with some sort of, ‘Oh yes, we want a market mechanism to solve all these problems but, by the way, we are going to put a regulatory framework over you,’ so that the farmer can never make any money out of this because he has got to grow food because he has always done that. There are some real complications in that.

If you transpose even this document to a global CPRS where you incentivise land use shift away from food into other market areas, you could see some quite dramatic shifts. There is going to be a collision of these three economies in relation to land use. If people are serious about wanting a global emissions trading scheme that actually does something, they have got to exempt food now. If you are worried about refugees in this world and if you are worried about people who cannot feed themselves leaving their nation’s soils then you cannot apply a market mechanism to those three areas of carbon, energy and food and expect food to come anywhere else but third. It is a significant issue.

I am a farmer and, under this sort of an arrangement, as soon as lignocellulosic ethanol comes out it will go straight to energy because what we do in this land is grow wheat. We grow too much wheat so we have to sell it somewhere. We get it to port, which has a carbon footprint; we put it on a boat to go to the Middle East, which also has a carbon footprint; the starch in the grain is carbon and so that has another footprint. It is all negative, negative, negative in the carbon world.

We cash in the grain with a little bit of help from Arabs and ex Wheat Board people and then go and buy some energy, some oil, down the road and then put that on another boat and bring it all the way back. That is another carbon footprint. Why wouldn’t the wheat grower, when all those negatives are going to be perpetrated against him, move out of that and move into something like prairie grass? It is a deep-rooted plant that is planted once and harvested annually. It has a lower carbon footprint, is a renewable fuel and has less nitrous oxide—tick, tick, tick. The poor old wheat grower had to pour nitrogen in to get protein into the grain so that he could achieve a premium in the marketplace. Why would you do that? All he is doing that for is to produce money to buy energy so that he can go around in circles again.

There are a number of market signals that the farming sector will pick up on with this. I have mentioned the renewable energy one. There is also the carbon issue of planting trees, agroforestry, and those sorts of things. What are our scientific bodies doing? Nothing. I questioned the CSIRO the other day. They could produce only one example of the potential for land-use shift under different carbon prices—only one example—but it is being peer reviewed. Yet here we are making major decisions. There was an example in South Australia of a sheep/wheat farm where, at $20 a tonne for carbon, they would move out of sheep/wheat into trees.

We have to do more work on this and I think the globe has to really consider what we mean when we say we are going to include agriculture in an emissions trading scheme. That does not mean there is not a whole range of ways in which we can reduce emissions. The farm sector can play a valuable role such as in biochar that the Leader of the Opposition has mentioned. We need more science done on soil sequestration. We have done very, very little in terms of the science relating to soil carbon. A lot of the new farming technologies, conservation tillage et cetera, are moving forward in terms of not only carbon units and organic matter but also reducing the need for other resources including fertiliser in some cases. So there are a number of aspects out there where the farm sector can really make a positive contribution.

The final message is that this is not just about creating a new economy. It is not just about applying a market mechanism to an issue. That might be part of the resolution to this issue—and five per cent in my view is a pathetic part. We have to look a lot broader at this and to what can happen. We need to start doing some more work with geothermal energy, solar energy, wind energy and wave energy. These things may be uneconomic at the moment but, if you get price shifts in other economies, there may well be a basis for progress to be made. In conclusion, unless there are significant changes to this particular piece of legislation, I will be doing exactly as I did back in June and will be opposing the bill.

1:33 pm

Photo of Kelvin ThomsonKelvin Thomson (Wills, Australian Labor Party) Share this | | Hansard source

I have a great deal of respect for the member for New England and I generally pay very close attention to what he has to say. I think in this instance he is very wide of the mark. He suggests that we should delay passing this legislation and delay action until after the Copenhagen conference on climate change. The truth is that, when countries go to Copenhagen, regrettably, there is a tendency for each country to try and get away with doing as little as it possibly can and asking other countries to carry the load and do as much as they possibly can. If we go to Copenhagen and suggest that other countries need to act—and indeed we should do that, and members of the opposition who said this is a global problem that has to be addressed globally are correct—to reduce their carbon emissions, they will say to us, ‘What are you doing?’ If we do not have this legislation through this place, through this parliament, we will be essentially going to Copenhagen empty-handed. Other countries will say, ‘That is very interesting,’ and they will move on. If we are to have credibility in Copenhagen we need to have the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills through the parliament. Those who think that it is okay to postpone this debate, and who seek to postpone the debate in the Senate, are doing the planet a great disservice because they will be contributing to the prospective failure of talks at Copenhagen.

When the member for New England said that we are potentially losing land from food production towards agroforestry, it is true. We should be mindful of the need to retain land for food production, but in that context I draw to his attention and to the attention of the House just how much potential land for food production is being lost as a result of urban sprawl, expanding cities, in Australia and throughout the world and the need for us to be mindful of the increased size of our cities and the impact of that on food production.

It is my view that Australian forests and other parts of the Australian landscape need to be acting as carbon sinks by soaking up carbon that would otherwise be released into the atmosphere. Retaining and re-establishing vegetation will help ameliorate the effects of global warming. I am pleased to see initiatives in this bill that go to that issue. Carbon emissions from deforestation account for some 18 per cent of global greenhouse gas emissions. That is a very substantial amount, so we need to look to addressing this issue.

The CPRS bill enables Australian liable entities to offset 100 per cent of their emissions through the purchase of international credits, such as those that may be available through what is known as the REDD mechanism, the reduced emissions from deforestation and forest degradation. That REDD mechanism is currently being negotiated at the United Nations Framework Convention on Climate Change. The government has said that it will be able to achieve five per cent of the potential 25 per cent emission reduction target for 2020 from international offsets such as REDD.

The Humane Society International have pointed out that deforestation and forest degradation is responsible for a quarter of global greenhouse gas emissions, and they are very supportive of a REDD market mechanism as a means to address it. But they have expressed concern that negotiations for this mechanism have been going badly off track and noted that the negotiating text for REDD presented at the Bangkok negotiating session just recently made no mention of forest protection and instead risked REDD becoming a massive carbon subsidy for continued industrial logging, an activity that gives rise to a lot of carbon emissions.

I believe this is an issue that needs to be addressed because there is a role for forests and vegetation as a carbon sink, and that role ought to be one not only of being a carbon sink but also of protecting wildlife. Just in the last couple of weeks, we have seen scientific studies released about the extent to which Australian native birds and other wildlife are in serious decline, and that is from a combination of land clearing and habitat destruction and climate change, prolonged droughts and things of that nature dramatically reducing their numbers. For example, in Victoria a 12-year study has indicated that there are reduced numbers of well-known species such as the kookaburra, honeyeaters, thornbills, lorikeets and so on. Right around Australia there is this pattern of wildlife destruction and habitat loss. I think that the REDD mechanism, which is proposed as part of the climate change negotiations, ought to be having regard to that.

I want to issue a plea to those opposite to stop the undermining, the white-anting of action on climate change. I have talked frequently in this House about climate change. I have talked about it as a scientific issue and as a moral issue. I listened to debate from those opposite this morning and it is clear to me that they are not interested in having regard to these matters, so I want to ask them to look at the politics of this issue. When the coalition was beaten in 2007, the key issue was unquestionably Work Choices. The second most significant issue was the decade of inaction on climate change. Only a couple of days ago, research was put out by the company Essential Research, going to the question of, ‘Which party do you think is best at handling each of the following issues?’ On the topic of climate change, 35 per cent said that Labor was best and 17 per cent said that the coalition was best. So more than twice as many people supported the Labor Party’s handling of climate change issues than supported that of the coalition. They also asked, ‘Do you think the federal government’s emissions trading scheme goes too far in favouring big business, goes too far in favouring the environment movement or has the balance about right?’ Thirty per cent said that they thought it went too far in favouring big business; 17 per cent said they thought it went too far in favouring the environment movement.

What is the coalition’s response to this? They suggest more concessions for big business. They are completely out of touch with the views of the electorate. This was a key issue in costing them the 2007 election yet they continue on a path that is totally at odds with the views of an electorate which understands that we need action on climate change and understands that we need to put a price on carbon in order to change the extravagant and wasteful practices of the past and take us down a renewable energy path. I heard the remarks of the Leader of the National Party this morning when he said that people will not turn off their air conditioners. I am the first to acknowledge that we have been extravagant, but after all the debate in this place has the Leader of the National Party not heard of renewable energy? The direction in which we need to move is wind power, solar power and geothermal power. We need to move to electric vehicles. It is not a question of whether we turn off the air conditioner on a particular day or go back to some more primitive lifestyle. It is a question of coming up with renewable, sustainable energy sources, and that is what this legislation is all about.

We need to take this legislation to Copenhagen. It is regrettable that the opposition does not understand the need for action on this matter. It is to their political detriment that they failed to act on this matter. We have the National Party being pushed off the coast. It has lost the electorates of Dawson, Lyne, Page and Richmond. That is because it has no affinity with people living on the coast who understand these climate change issues and the need for action in relation to them. Why am I offering free political advice to those opposite? It is because this is important. This matter is more important than the fortunes of my political party or the political parties of those opposite. If we do not take action on climate change, and scientists are telling us that the next 10 years are critical, we will see a world progressively in a state of global breakdown.

On the news all the time these days there are stories of conflict, war, terrorism, boat people—you name it. Some of the proximate causes of those issues are things like religious fundamentalism, but underlying this is a contest for scarce resources, which are being rendered more scarce as a consequence of overpopulation and climate change, and these things are in turn driving conflict, terrorism, boat people and the like. This global breakdown that we are seeing symptoms of every day will get worse in coming years and decades if we do not act. So this issue matters. I urge the opposition to stop the white-anting, stop the undermining and get behind the need for legislation to put a price on carbon, to enable us to start reducing our emissions. Last year our emissions went up by one per cent. We need to start tracking towards an emissions reduction path of 60 per cent or, better yet, 80 per cent by 2050. We need to start getting emissions down. The way to do this is to put a price on carbon; therefore, I urge the House to support the bill.

1:45 pm

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | | Hansard source

In speaking on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2], I would like to point out that any carbon pollution reduction scheme must be the best it can possibly be without damaging the Australian economy, destroying industry and jobs. If this really is the most important piece of legislation in Australian peacetime, why not take the time to get it right? The Rudd scheme has been flawed, haphazard and rushed from the very beginning. Driven by political ambitions, the Prime Minister’s overzealousness to make his mark in Copenhagen has him forging ahead—alone, mind you—at the cost of Australian jobs, costs to working families—and you do not hear Labor talking much about working families these days—and drastic impacts on exports. Just to top it off, under his model there is no real abatement of emissions and there are no real incentives for industry to clean up its act.

If the government is serious about addressing climate change, it will take heed of the amendments that have been put forward by the coalition. The bottom line is that the coalition’s amendments make the scheme better and cheaper, saving thousands of jobs. We are committed to negotiating in good faith and expect the same from the government. If it does not, Labor must explain why it would reject common-sense amendments which will save Australian jobs, protect Australian small businesses from sharp power price rises and yet have the same environmental benefit by achieving the same reductions in greenhouse gas emissions. We want to keep power bills affordable for Australian families: a $50 increase is far better than a $280 increase in their power bills.

There is no reason why we cannot wait until after Copenhagen, but I suspect the Prime Minister has already picked out his best suit and tie for that event. Our amendments keep emissions-intensive, trade-exposed industries on a level playing field with our competitors in other advanced economies; see that agriculture is excluded from the scheme and that farmers have access to agricultural credits; see that the impact of higher electricity prices is moderated; and see that the coal industry is required to reduce fugitive emissions as technically feasible but not be unfairly financially penalised. Ours is the only country in the world which is talking about taxing fugitive emissions. Australia still gets around 80 per cent of its energy from coal and we have the most to lose from a poorly constructed scheme, with 32 per cent of Australia’s emissions generated in the production of exports. The coalition encourages ordinary Australians taking matters into their own hands and being rewarded for making a contribution to reducing national emissions. Good things start at home and the coalition supports the creation of voluntary incentives that lead to a lower national level of emissions.

This is the Prime Minister’s decision. This rushed legislation is his initiative. We are giving the government the choice to take a sensible, united Australian approach to Copenhagen in a number of weeks. It is Labor’s ego and Mr Rudd’s big-noting agenda that has us rushing the scheme through this week. But the reality is it is unlikely any deal will be reached at the summit—so no global agreement with binding targets. Some of Australia’s major competitors may not have a comparable scheme for many years. Obviously, that would be putting Australia at a disadvantage. No-one but Mr Rudd expects Australia to have an agreement in place before Copenhagen. For example, the head of the United Nations climate agency, Mr Yvo de Boer, has stated that there is no expectation or requirement that Australia have legislation in place by the Copenhagen talks in December. It will be on Labor’s watch if this scheme costs Australian jobs, so this will be sheeted home to them. Unlike the Prime Minister, we are interested not in playing games or saving face but only in protecting jobs and achieving something that can make a real difference without costing hardworking Australians the earth.

In reality the CPRS is just another tax. The CPRS provides a substantial financial windfall for the government. Labor’s scheme is set to raise $12 billion in its first year. That is more than $400 contributed by each Australian, compared to $57 per American under their country’s own proposed scheme. I refer to a recent article by Terry McCrann which I recommend that everyone should read and, by the way, I have sent it out to my electorate. It calls the proposed CPRS what it really is: a tax. Mr McCrann says:

It starts out in 2012-13 raising about a quarter as much as the GST. … Almost $12 billion in its first full year, 2012-13.

It is the equivalent of increasing the GST from 10 per cent to 12.5 per cent in that year.

          …            …            …

Imagine the uproar if the government had proposed raising the GST to 12.5 per cent. That’s 12.5 per cent, in year one, with it able to go to 15-20 per cent or higher, as events, not parliament, then took it.

It’s the same old high-taxing Labor! Mr McCrann makes a good point that perhaps it would have been easier for us to sell the GST if we had called it a goods and services scheme. Realistically, the CPRS is the biggest tax grab in history. Companies pay to pollute, as the member for O’Connor has been saying for ages. All this scheme does is allow polluters to pollute if they pay. There is no incentive for them to reduce pollution if they can afford to pay for it. Those large so-called ‘rich’ emitters will take the cost on board and keep polluting. Those that cannot meet the cost will move operations offshore to countries where there are no schemes in place—for example, Indonesia, which can pollute at will because it is called a developing country—and they will take Australian jobs with them and make an even greater contribution to global emissions. That is a lose-lose situation for us and for the rest of the world.

Global warming requires a global solution—experts agree, the global community agree and I agree. Australia has performed better than most developing countries in containing greenhouse gas emissions. In fact, Australia’s 1990 and 2000 levels were almost identical. That is equivalent to a five per cent reduction on 1990 levels. We were one of the few countries meeting Kyoto targets. Remember the Prime Minister racing off to sign Kyoto when we were already achieving the Kyoto targets and those who had signed Kyoto were not even reaching the targets? Without the high-emitting countries getting on board, any scheme that Australia adopts can do anything and everything but it will make little difference to the global situation.

Australia accounts for only 1.3 per cent of global emissions, making it 16th on the list of top emitters. By 2050 Asia will need twice as much energy as it does today. Not surprisingly, China is the biggest player in the Asian market, accounting for 60 per cent of Asia’s emissions alone. It must come to the table. China tops the list of global emitters, accounting for 21 per cent of global carbon emissions compared to Australia’s 1.3 per cent. Emerging countries like China expect the rest of the world to make dramatic cuts by 2020 to accommodate their expanding economies. If the richer countries are prepared to do that, there must be some concessions.

Obviously, India is on the rise too, contributing 5.3 per cent to global emissions. India is rapidly increasing its emissions and population. It is likely to rival China in the emissions stakes. We have China and India as high emitters but they do not want to be involved in any reduction scheme. Among the top 10 emitters are the USA, Russia, Japan, Germany, the UK, Canada and South Korea. In fact, you have to pass by Italy, Iran, Mexico, South Africa, France and Saudi Arabia before you get to Australia. To put this in perspective, essentially the combined emissions of China, the USA, Russia and India make up half of the global emissions from the burning of fossil fuels. The top 10 countries made up 67 per cent of emissions on 2006 figures. So many of the countries that I have just mentioned do not have to comply with any targets because they are considered to be developing economies. Mr Rudd is kidding himself if he thinks that Australia should be the world leader on reduction schemes and penalises Australia as a result.

Protecting key export industries means protecting jobs. Under the coalition amendments, key export industries, including coalmining, food processing, natural gas and aluminium, will be better protected, saving more than 20,000 Australian jobs under threat from the CPRS. Obviously, with many people in my Canning electorate working in alumina mining and refining, job protection is a huge concern to them. Should the industry be forced offshore to cheaper countries where there are no emissions schemes, I would estimate that more than 5,000 Canning jobs would be lost. And, as I said, Australia would also be exporting the pollution to countries such as our near neighbour, Indonesia, who does not have to comply.

Australia is the only country to indicate its consideration of a direct carbon cost on the gold sector, for example. In terms of gold production, Australia is behind China, the US and South Africa. A carbon cost on gold would impact on the re-established Boddington Gold Mine. Boddington Gold Mine will be the largest gold producer in Australia, and it is in my electorate. It will mine one million ounces of gold a year. Under the CPRS, costs may be increased by as much as $15 million to $40 million per year, or by about $40 per ounce of gold mined at Boddington. When jobs are cut, the flow-on effects to families, local businesses and small towns are devastating. At a time when we can least afford job losses, the coalition is adamant that any carbon scheme cannot cost Australian jobs.

Renewable energy and energy efficient technologies accounted for nine million jobs in 2007, and experts say that up to 37 million jobs could be created in the next 20 years. At a site just south of Pinjarra and Lake Clifton, the Lower Lesueur Carbon Dioxide Geosequestration Study is being undertaken to look into storage of carbon dioxide in the southern Perth basin. LNG will continue to be the fuel of choice. This is great news for Western Australian exports. The $50 billion Gorgon gas project off the coast of Karratha will make WA a leader in the storage of greenhouse gases. The project will create 600 full-time jobs and it will be a leader in geosequestration technology. It is estimated that three million tonnes of CO2 will be captured and stored per year for the next 40 years. The CO2 will be separated from the gas and injected into a saline reservoir 2,000 metres below Barrow Island. This will cut the project’s emissions by 36 per cent.

The best place to start any emissions reductions is in your own backyard. By including voluntary measures in a scheme, the environment will also benefit from individuals, businesses and community groups who develop their own initiatives to reduce greenhouse gas emissions. Canning local governments have been proactive at a community level. The City of Mandurah has installed a 2.1 kilowatt solar photovoltaic system on the roof of the Falcon eLibrary and Community Centre. It is estimated to generate around 3,720 kilowatts of electricity and save approximately four tonnes of greenhouse gas emissions each year. The City of Armadale aims to achieve its own reductions of six per cent per capita from 2006-07 levels by 2012 and up to 20 per cent from 1998-99 levels by 2022. The City of Armadale was part of the award winning South East Regional Energy Group ‘Switch Your Thinking’ initiative. This initiative was designed to get the local community involved in achieving regional emissions reduction of 15 per cent by 2010. Partnerships and community promotions have helped to cut greenhouse gas emissions by more than 250,000 tonnes of carbon dioxide equivalent.

It would be irresponsible to pass flawed legislation for an Australian ETS, particularly as it will not take effect until 2011, before we know what sort of global agreement will emerge from Copenhagen and from the US.

Photo of Bruce ScottBruce Scott (Maranoa, National Party) Share this | | Hansard source

Order! Would those members entering the House do so quietly and not hold a conversation in the corridors. The member for Canning has the call and should be heard in silence.

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | | Hansard source

I do not expect the Labor Party to want to listen to anyone else’s point of view. The coalition is putting forward a viable alternative, with the interests of all Australians front and centre. The ball is in Labor’s court and history will judge Mr Rudd on this decision and the quality of his legislation.

In conclusion, this legislation should not be designed to cost Australian jobs, to export Australian jobs, to export Australian income or to export pollution to other countries who are not obliged to comply with the same stringent regulations that we are putting in place.

Photo of Harry JenkinsHarry Jenkins (Speaker) Share this | | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.