House debates

Wednesday, 25 May 2011


Carbon Credits (Carbon Farming Initiative) Bill 2011, Carbon Credits (Consequential Amendments) Bill 2011, Australian National Registry of Emissions Units Bill 2011; Second Reading

Debate resumed on the motion:

That this bill be now read a second time.

11:07 am

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

The coalition supports the science and agrees to and supports on a bipartisan basis the targets that Australia has set but disagrees clearly, strongly and absolutely with the primary mechanism brought forward by the government to deal with this issue. Their approach is a tax that will increase the cost of electricity by 25 per cent in the first three years, increase the cost of gas by 10 per cent, increase the cost of petrol and increase the cost of groceries. It will have an overall cost-of-living impact of $863.

On the opposition side, we have a clear alternative. That alternative involves incentives rather than taxes; incentives for people to do real things, such as to clean up waste coal mine gas, to clean up landfill gas, to clean up—potentially, if these are the lowest cost changes—some of the oldest and dirtiest power stations, which otherwise will run, according to the words of their owners, until well into the 2030s under the government's scheme. Under the government's scheme, these power producers will simply pass on the cost and consumers, small businesses and manufacturers will pay the difference while business as usual will be practised in terms of the sources of emissions. That is the difference.

On the one side, we have a practical alternative that deals with these things and in particular allows for direct action to capture carbon in our soils, in our trees and in our vegetation. It is against that background that the government has developed its carbon farming legislation in response to the coalition's direct action proposals, a set of proposals that the government originally mocked but that it now seeks to try and replicate. They are the approaches that define the differences between these two parties.

The Australian public is increasingly rejecting the idea of a carbon tax because, contrary to everything that has been said by the government, they will pick up the bill and they know it. That bill will be $863 per annum on a $30 per tonne basis. And whether it starts there or starts lower, it will be north of there before 2020 because, as the Minerals Council of Australia has said through the report prepared on its behalf, it is expected that the price will be approximately $50 to $52 per tonne. What that means is that families will have skyrocketing costs of living, with skyrocketing electricity, gas and grocery prices. And that is all unnecessary. This system will raise $114 billion on Treasury's own estimates between now and 2020. Our alternative, which is funded and costed, will start with $300 million, $500 million and $750 million over the first three years. Those are the alternatives. That is the choice available to Australians: an increased cost of living—and every member on the government side knows it—versus a system based on incentives to reduce emissions, which is a system based in large part on the successful water market model.

Having said that, let us give a fair reading to this legislation. Its objective is to help Australians reduce greenhouse emissions by contributing to the bipartisan five per cent reduction on 2000 emissions by 2020. It seeks to create incentives for farmers and landholders to undertake voluntary land sector abatement projects. These are principles that we in the coalition have set out, so the principles in this legislation are in agreement with those that we have put on the table. It seeks to give farmers some sort of incentive. Against that background, let me say this: we support the principle, but we have some significant issues with the construction and design of this and in particular that which is missing from these three bills. During the Senate process, we will be looking at a Senate committee report—which I understand is due at the end of this week—that responds to a series of issues. The Senate committee has taken significant soundings, representations and submissions across a range of areas. We will reserve our judgment but look on with interest at the recommendations in that Senate report.

In particular, firstly, we want to know what measures will be put in place for the protection of prime agricultural land; secondly, we want to know what measures will be put in place for the protection of Western Australia from what the Western Australian government outlines as the effective expropriation of crown land usage rights as an unintended consequence of the bill; thirdly, we await the completion of key regulations, which is an issue that I wish to follow in this House; fourthly, we also want the inclusion of soil carbon in a constructive way from the outset; fifthly, we want the risk of rorting—as occurred in Europe, where there were no adequate protections, and as was reported on the front page of the Australian of 19 May 2011, only last week—satisfactorily addressed; sixthly, we want the construction of an acceptable set of rules around permanence; seventhly, we want the construction of an acceptable set of rules around additionality; and eighthly, we want to examine any other amendments that the Senate Environment and Communications Legislation Committee report on the bills identifies.

We approach these bills with a constructive heart, attitude and intent. But it is absolutely clear that at this stage there are real risks of inadvertent consequences and there are very clearly areas of great inadequacy and incompleteness. In that context I want to make a point about what we are not going to do in the House of Representatives, the people's chamber in Australia. We will not be providing a blank cheque for this legislation, having lived through the home insulation program, which we were told at the outset was predicated on the basis of, 'Trust us: we will get the detail right.' They did not get the detail right. We warned them. We set out the problems. We did it repeatedly, right throughout July, August, September, October, November and December of 2009. It is amazing how government members, no matter where they are, drop their eyes, read their papers and look rightfully ashamed at any reference to the home insulation program—at any reference to an example of failed governance on a grand scale that in and of itself should have been enough to have seen the government's commission terminated. But we go beyond that.

We go beyond the Home Insulation Program to the Green Loans Program, the school halls program. On each of these occasions the government said, 'Trust us, we will get the detail right.' What has been shown is that without adequate supervision, without adequate detail, without complete scrutiny, it is not appropriate to trust this government with issues which run the risk of perverse and unintended consequences. That has been a systemic failure.

Lest it be thought that this is a problem of the past, in this precise area the government took three policies to the election: no carbon tax, a citizens assembly and—my favourite of them all—a cash-for-clunkers program, which we recognised within five minutes would be strangled before it saw the light of day. We were told it would be fine, that they would get the details right—and, inevitably, it was strangled before the light of day. It was the one good decision that the government have made in the last year—to listen to what we said: that a program which cost $400 million for one million tonnes of emissions reduction was a clunker in and of itself.

What we see is a fundamental pattern of legislative and administrative incompetence. Against that background we hold to the principle of no blank cheque. We want to see the regulations in detail. We saw a skerrick from the parliamentary secretary today, and I thank him for that, with his release of the 'savannah burning' guidelines. But what that shows is the government is capable of producing the full range of detail and materials before this bill is addressed. It is right and proper and appropriate that we do not vote on the basis of a blank cheque.

In that context, whilst we strongly support the principle, our experience has been that giving the government a blank cheque on issues such as the Home Insulation Program, the Green Loans program and school halls program—just for example—has not been rewarded with good governance in the interests of Australia, and in particular in the interests of people who pay their taxes such as nurses, plumbers, shop assistants, teachers, police officers and firefighters, and expect value for money. Against that background we make this point: a great deal of the substantive elements in the bill exist within regulations and methodologies which are yet to be seen. The experience to date, across all of the elements of this government's legislative agenda, has been, 'Show us the detail; give us the examples'—and they do not exist at this point in time.

For that reason I will be moving, on behalf of the opposition, an amendment in the House declining to give the bill a second reading until the regulations giving effect to the provisions of the bill are laid before the House. In that context, I move:

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

“the House decline to give the bill a second reading until the terms of the regulations giving effect to the provisions of the bill are laid before the House”.

That is an appropriate, prudential mechanism. The reason we ask for that is the government should have nothing to hide. If there is nothing to hide, if there is nothing to worry about: provide the regulations, provide us with the detail, provide us with the elements that are missing from what is otherwise merely a skeleton. A skeleton bill without the flesh is not something that this House should lightly pass. So we support the principle, but we do not accept bad legislative practice. The detail must be provided. The regulations must be provided. The facts must be provided. And, in their absence, we will not allow the government to repeat the risks and errors of the Home Insulation Program, the Green Loans program, the school halls program and any other number of disasters that are awaiting Australia, such as the unfolding issue of the NBN rollout.

In particular, let me make this point: there are, at this stage, deep deficiencies. So a bill which has great potential is not yet ready. We want the detail. And if the government have nothing to hide, why would they deny the House the ability to examine the regulations? Let me repeat that: if the government have nothing to hide, if they are fully confident with their methodologies, if they are fully confident with the regulations, if they believe it is ready to go—show us the detail. If you have nothing to hide, show us the detail. Because, I say to the government, the last time you did not provide that detail, we saw the Green Loans debacle, we saw the Green Start debacle, we saw the Home Insulation Program debacle. Form fits this government as being legislatively and administratively incompetent.

So that is where we stand. The coalition support biosequestration. We believe strongly in the process. As the CSIRO set out in their recent report, the potential is there, on a conservative estimate from a conservative scientific agency, for 20 per cent of our emissions to be offset over 40 years using trees; revegetation, through mallee and mulga; soil carbon; and other forms of reducing emissions—landscape and agricultural management. That is a view which is more prospective than our own estimates, but it is the view set down in writing by the CSIRO, by Dr Michael Battaglia, no less than the head of the Sustainable Agriculture Flagship of the CSIRO. His position, and the CSIRO's position, is that the very methods we have outlined as being of considerable and fundamental importance to the direct action plan offer up to 20 per cent reductions in Australia's emissions for a period of 40 years—significant, fundamental and important. Against that background, this legislation also needs to be viewed within the broader context. We want the regulations and we want to see how the legislation links in with the proposed carbon tax. Let me remind the House that this legislation is fundamentally linked to the carbon tax and that this government went to the election with a pledge from the Prime Minister. On Monday, 16 August 2010, at the beginning of the last week of the election campaign, the Prime Minister of Australia took her policies to the people of Australia to seek a mandate upon which to govern and said on Channel 10: 'There will be no carbon tax under the government I lead.' I just repeat that: 'There will be no carbon tax under the government I lead.'

Then, on the day before the election, on election eve, on the front page of the Australian on 20 August 2010 the Prime Minister said: 'I rule out a carbon tax.' Lest there be any doubt as to what that categorical statement could possibly have meant, the government's express, clear and absolute policy was that there would be no carbon price of any form until the citizens assembly had produced a deep and lasting consensus. So the government has then tried to say, 'I was only kidding about the carbon tax; I actually meant an emissions trading scheme.' The fine print was provided by the government and that was in their climate change policy which was a citizens assembly of 150 people randomly selected from the phone book and they would need to show that there was a deep and lasting consensus. As things stand, there is no deep and lasting consensus around the government's carbon tax or around the general notion of providing an increase in prices of electricity, gas, petrol, groceries, Australian-made cars and houses, for example.

Let me deal with the way in which there is a conflict between the two approaches as evidenced by this legislation. The nature of the carbon tax is intended to increase prices. Contrary to what the government is leading Australians to believe, its goal is to increase the price of electricity. Its structure, its purpose, its intent is to drive up electricity prices in the hope that people would use less of an essential service. This fundamental idea is flawed at its very heart because, as the Independent Pricing and Regulatory Tribunal of New South Wales has set out over the last five years, we have had over a 50 per cent rise in electricity prices in New South Wales but barely any change in the demand per capita. We see that electricity is one of the most fundamentally inelastic goods available to consumers and householders in Australia. It is a very similar experience in the United States and Europe.

Electricity is an essential service; therefore, driving up the price simply forces people to substitute it for other goods in their life. For a pensioner it could be the once-a-month restaurant meal that they forgo. For a self-funded retiree it could be the gifts to grandchildren that they forgo. For a family it could be the swimming lessons for their kids that they forgo. For a small business owner it could be the expansion of the small business which they forgo. Let it be made absolutely clear that the economic history of Australia, the United States and Europe is that electricity is a largely inelastic good. In human terms that means it is an essential service and what that means in practice is that driving up the price of electricity is just a tax, because people pay more but they barely change their consumption at all. I am not alleging perfect inelasticity in economic terms. I am saying that the real world history of the last 30 years—

Mr Perrett interjecting

I will come to that, matey.

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

Order! I have given the member for Flinders a great deal of latitude and debate on this bill. I think it is time we got more onto the carbon farming initiative.

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

All right, I will complete the point and follow your ruling, Mr Deputy Speaker. The real world history of the last 30 years is that electricity prices go up, demand barely changes, people pay more and the consequence is that their cost of living is higher and their quality of life is lower. That is what this government is proposing along with—and I just give this last simple example—an impact on Australian-made passenger vehicles.

In the report prepared by PricewaterhouseCoopers for Australian automotive manufacturers it was found that there would be a $412 increase in the price of Australian-made vehicles under a $30 per tonne carbon tax. A question for the government: how much would imported vehicles rise by? Answer: nothing. So the simple example, which I ask anybody to explain to me, is that Australian-made vehicles would rise by $412 under a $30 per tonne carbon tax, which we will get to if not in the first year, in the second, third or fourth, on its way to $50 per tonne by 2020. How can you have a $412 increase in Australian-made vehicles but nothing on imports? What is the logic, the sense, the reason or the justification for that disparity, where we punish Australian manufacturers and reward foreign-made vehicle importers? That is the example that summarises the structural flaws in the government's entire approach.

Against that background we have set out very clearly an alternative for Australia in an approach which will foster genuine carbon farming by decreasing emissions through capturing carbon on an incentives basis in soil, in our trees, in our vegetation, in other forms of landscape change, as well as in reducing emissions through cleaning up waste coalmine gas, cleaning up landfills, potentially converting some of our oldest and dirtiest power stations from the worst forms of emissions to cleaner forms of emissions, but without having an impact on electricity prices, because that would be dealt with in our program. That is the choice available. Against that set of considerations, let me give a summary. Our approach is incentives; their approach is tax. They have sought in part to adopt a measure that we are proposing in this bill. We are not opposed to the principle. We welcome the belated interest on the government side in reducing emissions through landscape carbon capture and storage. That is a good thing. But, as has been the case with the Home Insulation Program, with the Green Loans program, the Green Start program and the school halls program, if there is no detail, if there is no accountability and if there is a blank cheque, what we see is failure.

We would like, ultimately, to be able to pass this legislation and we will seek to move amendments pending the outcome of the Senate report across that range of seven areas which I identified. But, right now, we ask the government to make sure that it ends the practice of hiding the detail. If you have nothing to hide, produce the regulations. If you have nothing to hide, produce the detail. If you have nothing to hide, put flesh on the skeleton. Against that background, we have moved a second reading amendment simply to ensure that the House receive the full terms of the regulations giving effect to the provisions of the bill. That is an appropriate legislative practice. We ask for those details. We ask why the government is afraid to provide them. We ask why the government has not completed its work. We support the principles, we have outlined the principles and we would like to complete this bill. In its current form, it is not ready, but give us the detail, give us the regulations and, if you will not do that, say why you are afraid to provide the details.

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

Is the amendment seconded?

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | | Hansard source

I second the amendment and reserve my right to speak.

11:31 am

Photo of Mark DreyfusMark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | | Hansard source

I rise to speak on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and cognate bills. As the Minister for Climate Change and Energy Efficiency outlined in his second reading speech, the carbon farming initiative fulfils an election commitment to give farmers, forest growers and landholders access to carbon markets. By doing so, the carbon farming initiative will create new real and lasting economic opportunities for regional communities in this country. Farmers and landholders will be financially rewarded for their actions to reduce or store carbon pollution. This is a very important step forward for regional and rural Australia. It is important for farmers and landholders and for the families and communities that are dependent on a sustainable productive and competitive agricultural sector.

Australia has amongst the highest agricultural emissions of the developed countries, around 23 per cent of national emissions, but we also have significant opportunities to increase carbon storage in our landscape. The carbon farming initiative presents an opportunity for Australia to address these high emissions and for the agricultural sector to be part of the solution to climate change. This is important because the agricultural sector is likely to be one of the most strongly affected by climate change. Farmers and landholders are right to be concerned about the economic challenge that climate change will pose for their futures and Australia's food security. Notwithstanding the development of advanced farming techniques, climate change threatens to do great harm to our grain, pastoral and livestock industries. There is clear evidence that Australia's climate has already changed. Farmers have always had to live with Australia's variable weather. They are no strangers to the extremes of drought and floods and the ongoing challenges that our climate presents to agriculture.

Australian farmers and landholders recognise the benefits of protecting the land because for them the land represents their greatest resource. The carbon farming initiative will create incentives to protect our natural environment and adopt more sustainable farming practices as well as mitigate climate change. The practices of increasing carbon storage in agricultural soils to improve soil health and productivity, revegetation to help restore degraded landscape and protect biodiversity and tree planting to help address salinity and reduce erosion will all be rewarded under the carbon farming initiative.

Today I am releasing for public comment the first methodology to go through the domestic offsets integrity committee process. I note that the member for Flinders has welcomed the release of that methodology. This methodology will allow Indigenous land managers across the remote regions of the north of Australia to earn carbon credits for improving fire management. The development of this methodology is a world first and represents a unique combination of traditional ecological knowledge, cutting edge modern science and the emerging carbon economy of the future. Projects such as that already being trialled in western Arnhem Land could save over 100,000 tonnes of carbon pollution each year and reward Indigenous landowners with $2 million to $3 million of revenue a year if they sold the credits for $20 each. These are the types of opportunities Indigenous Australians are telling us they need to benefit from the low carbon economy of the 21st century.

The carbon farming initiative is not a government grant program. From the speech he has just given to the House, the member for Flinders seems to have misunderstood the nature of the carbon farming initiative almost entirely. The references and comparisons he made seemed to suggest that his understanding is that this is an initiative that might involve the expenditure of government funds in the form of grants. I stress again that it is not a government grant program.

It is not a program that relies on bureaucrats picking winners. The legislated scheme will allow sellers to deal directly with buyers and leverage the opportunities of the marketplace. Such a marketplace allows companies to invest in local land sector abatement through long-term contracts and partnerships with farmers and landholders. Markets are not new to farmers nor are many of the things which can save or store carbon, trees and soil. What farmers need is a mechanism to add value to their actions and decide whether or not to invest. Participation in the carbon farming initiative is voluntary. Farmers and landholders are free to participate if they see a way to benefit. They can also exit the scheme by handing back an equivalent number of credits if they no longer wish to be part of it.

The carbon farming initiative will create a new industry for rural Australia. By 2020 the carbon farming initiative could be channelling hundreds of millions of dollars into rural communities each year. Farmers and landholders will be paid for reducing or avoiding emissions, for example, through capture and destruction of methane emissions from landfill or livestock manure, or through removing carbon from the atmosphere and storing it in soil or trees by, for example, growing a forest or farming in a way that increases soil carbon. By financially rewarding farmers, the carbon farming initiative will begin to unlock the significant long-term potential for land sector abatement.

Just as the lack of certainty over carbon pricing stopped the long-term investment in our electricity generation sector necessary for energy security, the lack of a framework for rewarding the abatement offered by the land sector has substantially lessened the opportunity for the land sector to be part of the solution to climate change. Investment in land sector abatement needs a long-term framework for the full rewards to be delivered and for the climate to benefit. A grants based approach cannot provide any long-term certainty. That, of course, is the vice of the whole approach that the opposition has brought to this subject with its so-called direct action program. The carbon farming initiative will move the land sector forward by establishing the framework for crediting savings both within and outside international accounting rules. The ability to sell credits to the domestic voluntary market and internationally also allows the carbon farming initiative to be independent of the debate over a broader carbon pricing mechanism. However, to get the most out of this legislation the government intends the carbon farming initiative to link with the carbon price, providing additional demand for abatement and a larger source of revenue for farmers and landholders.

I wish to address one of the criticisms of this initiative now. The government does not accept that Australia's food producing regions and prime agricultural land are threatened by the proposed carbon price or by this carbon farming initiative. The government has excluded agricultural emissions from liability and placed significant safeguards in the carbon farming initiative. Safeguards include the additionality test, which excludes short-rotation commercial forestry and takes into account natural resource management plans. Projects with perverse outcomes will be excluded by regulation and there will be a requirement to comply with state and territory laws. I note that the Department of Climate Change and Energy Efficiency has published preliminary estimates of abatement under the initiative which assume that less than 35,000 hectares of carbon plantings would occur annually.

This package of bills creates a legal framework which will provide certainty for private investment in carbon abatement. The carbon farming initiative provides a framework which is grounded in the science of climate change and provides clear economic value to actions which store or reduce carbon pollution. I should say in relation to the observations that have just been made by the member for Flinders about supposed lack of detail, there has been very extensive consultation around a draft bill which the government published. The comments that have been received as part of that very extensive consultation have been taken into account in formulating the bills that are before the House. The government is also happy to provide further information on such matters as the indicative positive and negative lists, which are a feature of this legislation. The government is happy to provide a briefing on the indicative positive and negative lists and on other details of this carbon framing initiative to the opposition and to the crossbenchers. That is well known to those opposite.

We have a problem in that the opposition has regrettably approached this legislation, as it has so much other legislation, with typical negativity, which has become its hallmark. The speech we heard from the member for Flinders, who is the opposition spokesman in this area, did not go to the detail of this legislation. This is legislation that is well worked through. It has been the subject of extensive consultation. It is entirely clear in the principles which it sets forward, and the mechanism of putting legislation before the House with regulations to follow is an entirely standard mechanism. That is the mechanism that is being followed here. What we see from those opposite is an opposition that does not wish to take meaningful action on climate change and an opposition that has no credibility in this area. That is regrettably reflected in the approach that it appears is being taken by those opposite in relation to the carbon farming initiative. I commend the bills to the House.

11:43 am

Photo of John CobbJohn Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | | Hansard source

I rise to speak on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and related bills. I have to say at the outset that just because it has the words 'carbon farming' in the title it does not necessarily mean that farmers will be able to gain any traction out of it. The legislation is incomplete, misleading and certainly open to distortion by the carbon tax and an emissions trading scheme. I have to say that we thoroughly support direct action and we thoroughly support carbon farming and the opportunities that it can give agriculture, but this bill is mutton dressed up as lamb. For those who are unacquainted with the phrase or are vegetarians, that really means a 50-year-old trying to dress up like a 20-year-old. The term sounds good and you would imagine the legislation is but, as the shadow minister said, there are no ground rules within this legislation. There are no fences. We do not know what we are dealing with apart from the fact that it is a carbon farming initiative bill.

The Labor government want parliament to vote on a carbon farming scheme despite there being no detail and, while the coalition most definitely supports carbon farming and direct action, there are serious flaws. For example, the bill is reliant on regulations which are yet to be presented and will be done at Labor's and the Greens' pleasure. We will not support legislation that does not provide adequate detail or that leads to perverse outcomes for farmers unless, perhaps later in the Senate, the government can come up with amendments which deal with all these issues—and there are a lot of them. How are they going to do that when we do not know what the situation is regarding a carbon tax or an ETS in the future?

Under the direct action plan, the coalition will reduce CO2 emissions through biosequestration in general and, in particular, the replenishment of our soil carbons. Under our plan, farmers will be entitled to tender for additions in soil carbon. Significantly improving soil carbons also helps soil quality, farm productivity and water efficiency and should be a national goal, regardless of the CO2 abatement benefits. However, under the government's approach, the carbon farming offsets bill will be completely skewed by the legislation that may follow. It will undoubtedly lead to the wholesale conversion of prime farming land from agriculture to trees. We do not know the details of the tax or the ETS, so how can we assess this bill on whether it can be modified to account for the impact of it?

The offset bill allows for the creation of Kyoto and non-Kyoto credits. As only Kyoto credits will be recognised—in other words, eligible—for trade in an ETS, the voluntary market for non-Kyoto credits, the most attractive to farmers and the ones supported by the coalition's direct action plan, will be worthless and will collapse. Voluntary offsets are currently at about 15c per tonne on the Chicago exchange. Under an ETS with a fixed carbon price the CPI, like managed investment schemes, will skew the market in favour of trees which will be shut up and can never be harvested.

Photo of Michael McCormackMichael McCormack (Riverina, National Party) Share this | | Hansard source

You can't eat pine trees!

Photo of John CobbJohn Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | | Hansard source

You cannot export them in the ground either. The current legislation introduced into the parliament following the recent consultation paper on the CFI highlights the endemic lack of policy skills in the current government. While the bill introduced into parliament does attempt to address the financial additionality clause—'additionality'; that's a new one—it seems the government has learnt little from the consultation process. Perhaps the consultation process gives us some clues as to why this bill is totally inadequate, as it stands, for dealing with this issue. I am amazed that a bill that is supposed to provide opportunities to farmers only had consultation opportunities in capital cities. That may be okay for the green lobby groups but, in case the government has not noticed, there are not many farms in capital cities. This is symptomatic of Labor's failure to turn rhetoric into good, positive policy and substantive action.

There needs to be much more certainty in this legislation before we can even consider it. The absence of key information is extremely concerning. Farmers and regional communities deserve some answers before this legislation is considered. There are still no positive and negative lists—what is in and what is out—for carbon activities. How do we ensure that Labor does not rule out all the good offset opportunities through regulation? It will have the Greens, who are in power, also pushing. How can we pass a blank cheque, as the shadow minister said? If we do this we are passing a blank cheque, which will then give Labor and the Greens an opportunity to decide the future of agriculture.

At Senate estimates, officials confirmed there is not yet a definition of 'common farming practice'. This is a very important issue. We are also told that what is deemed as common practice in farming may well be determined on a region-by-region basis. Yet the department could not say how this would work and what size the regions would be. In other words, they do not have a clue. They have not even set their minds to it. We know that without the detail on common practice the Greens and others will move to exclude farming practices and ensure tree planting that closes down agriculture is the only option for farmers. Anything that has been done once could be deemed as common farming practice and therefore excluded from the provisions, and so excluded will be the opportunity for farmers to make a buck when the rest of the community demands something. In this case, a minority government demands something.

We have no idea yet what the methodologies for carbon abatement are going to be. There is a major imbalance in the methodologies. What exists for tree planting assistance needs to be given to the farming sector to develop methodologies for genuine farm carbon abatement activity to help meet the rigorous requirements of the offsets integrity scheme.

Another concern is the duration of abatements. The 100-year life of credits also gives rise to problems when carbon stores are prematurely disturbed by natural on non-natural events, where proponents are required to re-establish or regenerate the carbon store or relinquish carbon credits. Over a 100-year life cycle it is highly probable that carbon stores will be affected by an event which releases the carbon store, leaving the proponent liable for them. Those wishing to take part may be unaware of the long-term implications of signing up for these abatements so there needs to be an education program for those wishing to participate, advising on pitfalls and the implications of 100-year offsets. Farmers have a history of signing up for schemes, such as certain banks did 20 or 30 years ago in offshore money, and they came a cropper on it. I am not going to vote for something that does not make these things clear. I am not going to vote for something unless—and this is the biggest if in the parliament—they can come up with amendments to take care of all these concerns. We are not going to give a blank cheque to the Green-Labor alliance to decide the future of farming. There is no detail on any such education program from the government. Further, ABARES says its work on the CFI is due next month, after the legislation is supposed to be voted on. That will be handy! How can the government and stakeholders consider important data from ABARES when the study commissioned by the government is not complete. Perhaps the government does not want us to see it.

The government arrogantly expects us to deal with this legislation before we have any understanding at all of how it will be quantified or any impacts it will have on the agricultural sector. I am sure the farmers in the Hunter will be thrilled to know that the studies being done on their behalf will be made available after the legislation becomes fact. Labor's plan will cause the wholesale transfer of food production land to trees in Australia's best farming areas—trees which cannot be harvested in any form. We will see big companies coming in to regional communities, buying up highly productive farmland—for example, in the Hunter Valley or Gippsland—and shutting it up for trees.

This is much worse than commercial forestry as no employment will be required, and the flow-on impacts of job losses will be huge. With a global population predicted to be nine billion people by 2050 the world will need more food, and Australia is well placed to provide it. We do not want to become the carbon tip of the world so that other countries can continue to prosper. Let us not make any mistake: we believe in the opportunities, particularly for marginal land, to take advantage of this type of situation. We believe in direct action but we do not believe in an open cheque to allow Australia's best farmland to no longer be productive.

A leaked CSIRO report featured in the Sydney Morning Herald claims that a carbon price of $36 a tonne is likely to see the whole lower Murray-Darling Basin converted to trees, starting with a carbon price as low as $11 a tonne. That needs to be out in the public for consideration before the bill is considered. Tree planting is good and there has to be a place for it in the direct action plan, but there must also be appropriate controls to ensure that large tracts of good food-producing land are not lost for it.

Australia is a big country and there is plenty of scope to plant trees in marginal country where farming is less viable and where there are co-environmental benefits in relation to salinity, erosion and woody weeds. Tree-planting has a place if there is a mosaic reafforestation that is compatible with farming. But this legislation does not address those issues. This is a blank cheque. After the consultation process, Labor has said that, in the interests of local communities and the nation's future food security, food-producing land will be protected and issues such as interception from forestry will be addressed. We have heard all this before, though, in relation to the Basin Plan, where I think the current government policy is not just affecting farmers. Like this legislation it has the ability to totally devastate farming communities—wholesale. The government say they consider the economic and social impacts of their actions, but they are playing games and only paying lip service to these issues. In the Basin Plan the government said that removing a third of our irrigation would result in the loss of only 800 jobs. They do not care for agriculture. When they bought Toorale Station at Bourke, that was a hundred jobs in one hit, and all they bought was 13,000 megalitres.

They do not care for agriculture and would like to see Australia become the carbon tip of the world, with large multinationals buying land which is cheap by world standards and taking it out of production while they continue to pollute. I do not trust this government to get it right. They have made so many mistakes with so much taxpayers' money in 3½ short years—in fact, in about 2½ years they ran up a bigger net bill than Hawke and Keating could run up in 14 years.

Why would we want to hand a blank cheque to Labor and the Greens to decide the future of farming? I will reserve my final judgment until the Senate hands down its report but, as it stands, this bill is most definitely not in the interests of rural communities.

11:58 am

Photo of Ed HusicEd Husic (Chifley, Australian Labor Party) Share this | | Hansard source

The Carbon Credits (Carbon Farming Initiative) Bill 2011 and related bills are an important measure for moving Australia towards the new low-emissions economy. They are part of a range of measures that the government has announced and will introduce in coming years in order to meet our international obligations, to reduce our emissions of greenhouse gases. Under the Kyoto protocol, Australia's target is to limit greenhouse gas emissions over the first commitment period to 108 per cent of the levels they were in 1990. That means our emissions need to be just eight per cent more than they were 19 years ago. Carbon farming will be an instrumental initiative in helping achieve the targets that have been set. These bills will create the incentive for the land sector to adapt their land use methods to unlock abatement opportunities and will provide them with the opportunity to generate and invest in saleable carbon credits.

While the move towards a low-emissions economy presents a number of challenges for the land sector, who currently account for 23 per cent of Australia's emissions, this bill opens the door for farmers, forest growers and landowners to access domestic and international carbon markets. That is something I want to reflect on later, demonstrating something that has been done quite uniquely in Western Sydney to contribute to this overall effort. In its submission to the Senate inquiry which examined the impact of this bill, the National Farmers Federation gave its in-principle support:

The NFF has always stated its broad support of the concept and intent of the CFI.

Despite the uncertainties that abound in the area of carbon mitigation, the progress of the CFI demonstrates the positive role agriculture can play in mitigating against carbon emissions through on-farm management.

The submission went on to say:

The Government deserves credit for listening to the farm sector and modifying its proposal to ensure that genuine abatement opportunities under the CFI are not unnecessarily overlooked.

The bill fulfils Labor's commitment to having legislation in place by 1 July this year in order to provide certainty to those who have previously invested in abatement projects or those who are looking to invest in the near future.

When the opposition party room decided to do an about-face on the issue of climate change and backed away from its agreement with the government to pass the Carbon Pollution Reduction Scheme, a number of projects previously supported by the Greenhouse Friendly program were jeopardised. Among these were forest sequestration and landfill waste projects. The Australian Landfill Owners Association, in their submission to the Senate inquiry, said:

ALOA supports the introduction of the Carbon Farming Initiative Bills. Over the last four months the landfill industry has worked co-operatively with the Department of Climate Change and Energy Efficiency to develop methodologies for the landfill component of the Carbon Farming Initiative (CFI). The industry is keen for the scheme to start as soon as practicable, and the proposed date of July 1st is firmly supported.

Later, they said:

ALOA therefore encourages the early implementation of the Carbon Farming Initiative to provide the certainty required for landfill operators to invest in new or additional landfill gas capturing equipment. The extent and simplicity of the available abatement will make this scheme an outstanding success and was the reason for our early press release on the 9th of February which was followed up on March 25th …

One particular submission received by the inquiry which I was most interested in was from the not-for-profit environmental charity Greenfleet, who since 1997 have established 450 forests and planted over 6.8 million native trees to offset the carbon emissions of our motor vehicles. Their submission pointed out:

Greenfleet’s approach to carbon forest projects was approved under the former Greenhouse Friendly™ standard and Greenfleet brings significant expertise as one of the few organisations in Australia with direct experience in establishing and managing biodiverse forests for carbon offsets.

They went on to say:

Greenfleet supports the CFI as it will allow accreditation and recognition of additional Australian biodiverse forest sink abatement. Furthermore it will overcome the current situation whereby overseas abatement is recognised in Australia but local abatement is not.

It is certainly a pressing point that at present we have no domestic credits—I repeat: no domestic credits whatsoever—for Australian companies to buy until this bill is passed. Significantly, the bill allows for backdating of credits to 1 July 2010 to account for those projects which had previously relied on the Greenhouse Friendly scheme, provided that they meet the new standard and have appropriately measured the abatement.

An important part of this group of bills is the Australian National Registry of Emissions Units Bill, which will provide a legislative framework for the registry, which was established under Commonwealth executive powers in September 2009 to meet one of Australia's commitments under the Kyoto protocol. The registry is an electronic system which is used to ensure accurate accounting of the issuance, holding, transfer, acquisition, cancellation, retirement and carry-over of emissions units under the Kyoto protocol. Since the registry opened in September 2009, organisations and individuals have been able to apply to open accounts and participate in the domestic and international trade of Kyoto units.

The bill will allow the government to modify the registry so that it can track the location and ownership of the units under the Carbon Farming Initiative and meet our ongoing obligations under the Kyoto protocol. The registry would then be maintained by the administrator of the CFI in order to avoid any duplication in account opening and operating procedures as well as to keep implementation and transaction costs down. For the reasons I have just outlined, the Australian National Registry of Emission Units Bill is necessary to support the Carbon Farming Initiative and to allow persons to trade in credits.

I am confident that these bills will help to tie together the good work that so many people—individuals, groups, corporations, volunteers and professionals—are currently doing to minimise and abate their carbon footprints. I want to take this opportunity to highlight other actions being taken by local communities in Western Sydney to help play their part in offsetting carbon emissions by establishing their own carbon forests.

Back in March, I, along with the member for Greenway—and I note her presence in the House—had the great pleasure of attending a special event, a ceremony to mark the completion of the Regenesis project and the launch of the Regenesis Toolkit at Mujar Bija Reserve in Blacktown, in an area that I grew up in. The Regenesis project grew from a partnership between a city council and a regional counterpart—between Blacktown City Council and Liverpool Plains Shire Council—made possible through a $2 million grant from the NSW Environmental Trust.

During the life of the project, which spanned three years, 220,000 native plants across 100 hectares of land in 33 biodiverse carbon forests have been grown in line with the carbon trading requirements established under the Kyoto protocol. It secured this impressive achievement by engaging business, land managers and agencies such as catchment management authorities, as well as community members and organisations. Ten of the forests are privately owned, 21 are council owned and two are on crown land.

The Regenesis project is a cleverly conceived and executed project—the first of its kind for local government in New South Wales, perhaps even Australia. I have no doubt that this project could be the blueprint for other local governments and that it can ultimately help set up the trading of carbon offset certificates through carbon emissions trading schemes. I hasten to add that it is not an emissions trading scheme, but it can provide a model for planning and planting reafforestation projects to create revenue for landholders to set up and maintain native vegetation. It is a powerful combination of commercial benefit with environmental gain, particularly in Western Sydney, where we are working so hard to preserve in an active way so many elements of Cumberland Plain woodland and bushland that have been slowly eroded through the development of Sydney. I note that in 2008 various emissions trading schemes and markets combined to form an industry worth more than $118 million. The Regenesis program got communities and businesses to team up and work to supporting improved biodiversity—and sequestering carbon. Over three years community, school, religious and business groups attended 99 community tree-planting events on Regenesis sites throughout the City of Blacktown, some events attended by as many as 200 individuals. Blacktown City Council has done a tremendous job in this regard by advertising these tree-planting events, encouraging the community to get involved, planting trees and actively making an improvement in our environmental contribution and also creating green space amongst our built space.

In the Liverpool Plains shire, 10 landowners partnered with Regenesis to plant locally native carbon forests on their land. All of these Regenesis initiatives provided local environmental benefits, including erosion control. So it is not just about a project trying to address carbon emissions as they have achieved other important environmental objectives including improved soil quality and creek health, reduced soil salinity, creation of windbreaks and shelter for grazing stock as well as enhanced biodiversity through increased habitat.

I was particularly pleased about the work at Mujar Bija reserve because it saw the rehabilitation and enhanced used of land that had once been a disused brickworks site. I can testify, as one who had much skin grazed off my knees as I grew up in that area, that what became a bike park used by local teenagers close to Mitchell High School has now been transformed into a local forest that is a tremendous asset to the Blacktown City Council area. We often hear from those who are only concerned with fear campaigns about how expensive life will become under this new low-emissions future. They play on the unfounded belief that people from lower socioeconomic areas, like the areas that I am proud to represent in Chifley, are not concerned at all about the environment and will therefore oppose such measures. Not only are the people of Chifley concerned for the environment; they are actively working at reducing and abating their impact.

Now other communities and local government areas are being encouraged to get involved, with the City of Blacktown and the Liverpool Plains Shire Council launching the Regenesis Toolkit, as I mentioned earlier. It is providing a very useful guide to establishing locally native mixed species of carbon forests in urban and rural environments. I was particularly struck by the sense of community that it has helped foster amongst those involved. To quote the words of 12-year-old Jamison talking about his role as one of the first seven members of the new Tregear Reserve Bushcare Group, established in the electorate in October 2008 as a result of the first Regenesis & Try Bushcare planting day:

"It's awesome. I like planting the trees. We do that cos it helps nature. I love digging the holes. The other people in our Bushcare Group help me when I ask. It is good teamwork. When I grow up, I want to be a gardener."

I congratulate him and the community of Tregear for their involvement in this project. It is a landmark project that is setting the standard for other communities. I congratulate them for the positive impact that they have made on their local environment.

The government owes it to the people of Australia, who are doing their bit to abate carbon emissions, to pass these bills to provide the formal mechanism for converting this work into useful carbon credits available to Australian businesses to invest in. I wholeheartedly commend these bills to the House.

12:11 am

Photo of Dan TehanDan Tehan (Wannon, Liberal Party) Share this | | Hansard source

As I rise to speak on the Carbon Credits (Carbon Farming Initiative) Bill 2011, I would like to state at the outset that to me the key component of this bill is to make sure that the government is not introducing a scheme which will artificially distort markets in respect of agricultural land use or impose barriers on food and fibre productivity output. That is the key test for this bill: what is the government seeking to do? If it is seeking to change land use away from productive purposes then this bill either needs serious amending or should not be supported at all.

On the weekend I went to a farm near Beaufort of 6,000 acres in what is prime sheep and cropping country. Three thousand acres of that property had trees put on it. That should not have happened. The land is not suitable for that. There are some areas that are suitable for trees to be grown on but there are some areas that are not suitable. But there is a scheme that distorts land use and it has led to large areas of agricultural land being put to trees. So what we have is a small businessman, a farmer, having bought those 6,000 acres, now having to spend a considerable amount of money on uprooting all those trees, burning them and trying to put that land back to productive use. As he goes about doing that he will have to go into debt. He is doing that because he believes that in the future there will be a need for Australian food and fibre.

I take my hat off to him and his family for doing that because there are going to be global shortages of food and fibre and we have to make sure that we do everything we can to maximise the efficient use of our land. You do not do that by distorting the way that land is used. You let the market dictate how that land should be used. So if this bill in any way seeks to distort land use I will have considerable concern about it. That is why I am very worried that the bill has been introduced without us seeing any of the regulations, because the regulations will hold the key to whether this will be land distorting or not.

I will go to three or four points on this matter. Natural resource management plans will be a key component, and we have to make sure that these natural resource management plans are done on a regional basis because we have to ensure that the impacts on regional communities, water and biodiversity are taken into consideration when plans are put in place to dictate land use. At the moment the bill dictates that the minister will have ultimate control over regional land use. To me, this is dangerous. A minister sitting in Canberra dictating what regional land use policy should or should not be is the wrong way around. Those organisations on the ground who know intimately the resources in their areas should be the ones who are dictating.

The Glenelg Hopkins Catchment Management Authority recommended in its submission on the design of the Carbon Farming Initiative:

… Regional NRM bodies (eg CMAs in Victoria) should be provided with sufficient resources to develop the appropriate “natural resource management plan” that would involve regional decision making on land use planning and priorities. This plan would take into account environmental, water and biodiversity impacts in determining the applicability of eligible activities to appropriate subregions.

I support this idea wholeheartedly. It is important because currently in Victoria there are no state regulatory requirements for farm zoned land that would need to be assessed as part of any approval process for the CFI, so potential impacts of the carbon offset projects would not be assessed on a state or a regional basis.

Notwithstanding the coverage of the scheme, the Minister for Climate Change and Energy Efficiency may exclude projects that could have significant adverse impacts on water availability, food production, local communities and conservation of biodiversity or employment. These impacts may be in, or in the vicinity of, the project area or any of the project areas for that kind of project. The intention is that 'the vicinity' may be interpreted broadly, including water resources availability in associated catchments. This is all good in theory, but it is the minister who has the ultimate say; it is not the regional communities. And it is the regional communities that should have the say. They should be resourced to put the plans together and they should then be asked to provide advice to the minister.

There are also issues with this bill regarding the international dimension. There is uncertainty about the international rules that Australia will be operating under—for example, whether Australia will include additional land management activities such as forest management towards future mitigation commitments. For the first commitment period under the Kyoto protocol, between 2008 and 2012, some of the land sector forestry activities such as management of forests, crop lands and grazing land are voluntary. That is article 3, at point 4. This means that countries can decide if they will elect to take on additional commitments for the sector. Australia has chosen not to include emissions or removals from any article 3(4) activities and hence has not elected to be subject to article 3(4). This means that actions to increase soil carbon or reduce logging sit outside accounting for Australia's Kyoto target for the first commitment period.

What are we doing for the second commitment period? I will use this opportunity to ask: what are we trying to do to get some international movement in the whole area of climate change? We seem to have completely gone to sleep at the wheel with our diplomatic initiatives to get any future international action in this area. The more we focus domestically on introducing this insidious carbon tax, the less we seem to be doing internationally to get international agreement so that the globe moves forward. So I use this opportunity to ask the government to get back on track with focusing on where the international negotiations are and to make clear what its policy will be for the second commitment period in this area. While uncertainty lies around that, this bill remains something that we on this side will not be able, in all good conscience, to support.

There is also the issue of permanency. While acknowledging the importance of permanency, my view is that it should be treated in a flexible manner in order to properly promote abatement. Just saying that we are going to lock areas away for 100 years seems completely nonsensical to me. If we get more carbon abatement from growing timber in the first 30 years, why then after those 30 years should we not be able to harvest that timber and then start again, replanting and locking timber away for another 30 years? The idea that we should just lock something away for 100 years and not look to get any productive output from it just seems completely nonsensical to me. It also goes back to the key component that I mentioned at the start that what we want to see in this Carbon Farming Initiative is that government is going to encourage the productive use of agricultural land and not impose barriers on food and fibre productive output. Also, what we need to see—and once again it is not clearly spelt out in the legislation as it was put to us today—is what the actual compliance costs are going to be to our farmers. Are we going to reach a situation where the offsets and the benefits that the farmers will get will be outweighed by the compliance costs of measuring the offsets? What will be the cost to the farmers of the on-farm auditing? How onerous will it be? How much paperwork will be involved? How much red tape will be involved? None of this is clearly spelt out in this bill. Given that this government has increased compliance-cost red tape in the four years that it has been in power, we need some serious statements from the government that the compliance and administrative costs to farmers of participating in this program will not outweigh the benefits of doing the right thing by putting more carbon in soil, or by other measures they undertake.

I would also like to see what this legislation will mean for biochar and biomass. For a start we need to see greater work on research into options such as biochar for carbon sequestration. Biochar is a stable form of charcoal produced from heating natural organic materials in a high-temperature, low-oxygen process. In some cases biochar can remain stable in soil for hundreds or thousands of years. So biochar is an important use of technology that recognises that carbon is not a negative factor in our environment but actually enriches the land. Biochar could be used to enrich soil, simultaneously improving soil productivity and storing carbon. What will this legislation do to continue to help us to encourage the use of biochar and biomass as a way of getting more carbon into our soil? I will be looking to the regulations to ensure that it is going to benefit our efforts to increase our biochar and biomass industries.

In summing up on the Carbon Credits (Carbon Farming Initiative) Bill 2011, what we have before us is not a bad idea in principle. As a matter of fact it is pretty much a carbon copy of the ideas of our direct action plan, which the coalition put forward at the last election. But, sadly, like everything this government does, the implementation leaves a lot to be desired. From where it stands now it is a bit of an unmitigated disaster. We have no regulations before us. We have no faith that this government could implement anything, and yet we have to come in here now and speak on this bill in blind faith. Well, on behalf of the farmers in my electorate, I cannot give this government the benefit of the doubt on anything. We have been bitten too many times. For this bill, it will be a matter of waiting to see what the regulations are, what the Senate report comes out with, and looking at what I think will need to be significant amendments that will be necessary to make this a working document. Then we can decide which way we need to go. But as it stands now I have grave, grave, grave reservations about this bill.

12:26 pm

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party) Share this | | Hansard source

Once upon a time in a country far, far away a world leader stood up and discussed three environmental challenges that faced the world: acid rain, the hole in the ozone layer and greenhouse gases. The first, a nation solved through an innovative approach, an approach the member for Flinders championed in his honours thesis. It was a market based approach, which was the same market based approach George Bush Snr put into place, that made companies pay for the privilege of putting noxious gases into the air. The results of market based mechanisms tend to be better than are envisaged by policy makers at the outset. Industries put in place innovative solutions to ensure that the economic cost is minimised and the environmental problem is solved.

The second of those problems—the hole in the ozone layer—was resolved through nations being good global citizens, acting in the knowledge that other nations were acting, as well. That process culminated in the Montreal protocol and has seen the hole in the ozone layer gradually shrink over recent decades.

On the last challenge, this leader in a land far, far away, Margaret Thatcher, pledged to make drastic cuts to her nation's greenhouse gas emissions and set up a centre for research. Thanks to the work of centres such as the Hadley Centre for Climate Prediction and Research, there is a consensus among climate scientists that dangerous climate change is occurring and that dangerous carbon pollution is the cause. Yet many of those opposite continue to be silenced by those who do not accept the scientific evidence. The Minister for Climate Change has on many occasions put on record the comments of the sceptics opposite. Indeed, yesterday, on the very day the Climate Commission was meeting in this building to outline the scientific consensus, the likes of Senators Joyce and Macdonald were in Senate estimates challenging the Bureau of Meteorology on climate change.

Anthropogenic climate change is of course backed by the Australian Academy of Sciences, the Bureau of Meteorology, CSIRO, NASA, the US National Oceanic and Atmospheric Administration and the vast majority of climate scientists. Yet there are many in the coalition party room who still cannot accept the overwhelming scientific evidence.

If the Leader of the Opposition is the political love child of John Howard and the member for McKellar, then Margaret Thatcher would surely be his political godmother. Yet Margaret Thatcher accepted the scientific evidence for climate change as far back as the 1980s. The UK Conservatives—the political cousins of those opposite—have accepted there is no debate about the science of climate change and the necessity of acting. The British Tories have accepted this. They are using a market based approach to secure the environmental future of Britain and the globe. The bill before the House is part of the government's commitment to act on dangerous climate change to secure our future so that future generations can continue to enjoy our golden soil and wealth for toil.

A creed of the farming sector is to ensure that farmers leave the land in better shape than that in which they inherited it. Our farmers are some of the most passionate advocates for environmental protection. The Carbon Credits (Carbon Farming Initiative) Bill creates opportunities for farmers, foresters and landholders to access carbon markets and help to reduce emissions. We know that Australians are among the highest per capita emitters in the developed world. We also have among the highest agricultural emissions. Protecting biodiversity, helping to regenerate landscapes, improving soil quality through increased carbon storage and helping to address salinity through tree planting are just some of the opportunities available to Australia's Farmers.

Some of these things are not new, but this bill will help us to drive innovation, to find better ways of using our agricultural and land assets to reduce our emissions. The bill will help us to create a market for carbon permits and provide investment certainty. Credits will be given for every tonne of carbon stored. Schemes will need to go through an approval process that will ensure the integrity of the abatement being undertaken. We are balancing regulatory simplicity with environmental integrity.

Projects will need to be recognised. The offset methodology will need approval. Projects will need to be done in accordance with the approved methodology and any other eligibility requirements. Once project managers have reported on the projects, they will be issued with Australian carbon credit units, or ACCUs. These units can be used to offset emissions or can be traded on the market. To ensure the integrity of the abatement, an expert committee, the Domestic Offsets Integrity Committee, has been established to make sure we get real and verifiable abatement.

Other elements of the design of the scheme to ensure the integrity of credits include issuing credits after the sequestration or emissions reduction has actually occurred; tracking credits through a central national registry—that is included in the registry bill; transparency provisions, including the publication of a wide range of information about approved projects; appropriate enforcement provisions to address noncompliance; and a robust auditing scheme based on the National Greenhouse and Energy Reporting System.

The scheme has received backing from a range of organisations. CSIRO experts told the House of Representatives Standing Committee on Climate Change, Environment and the Arts looking at the bill:

… industry and community individuals and groups as well as the private sector have much to offer in terms of innovative ideas on greenhouse gas abatement.

Carbon Neutral said:

This initiative has the potential to drive funding into rural communities, increase green collar jobs and improve the natural environment whilst simultaneously contributing to domestic climate change adaptation and mitigation measures.

Greenfleet, who have established 450 forests and planted more than 6.8 million native trees since 1997, said:

We believe that carbon forestry projects are unlikely to displace high-value agricultural production on the nation's most productive soils. We believe that carbon forestry projects are and will remain peripheral to prime agricultural production and in fact may improve, but not replace, sophisticated farming systems.

The scheme is also backed by the Wentworth Group of Concerned Scientists, named after William Wentworth, whose name seems to crop up quite frequently on the science based side of the climate change debate.

Today the Minister for Agriculture, Fisheries and Forestry and the Parliamentary Secretary for Climate Change announced that Indigenous land managers across remote regions will be able to earn carbon credits through improving fire management under the government's carbon farming initiative. The methodology is a world first and represents a unique combination of traditional Indigenous ecological knowledge, cutting edge modern science and the substantial economic potential that is emerging in carbon markets as governments around the world take action on climate change. This world action is also reflected in part of these bills today. The Australian National Registry of Emissions Units Bill 2011 is part the government's commitment under the Kyoto protocol. The registry will help ensure accurate accounting of emissions, consistent with the Kyoto protocol.

But those opposite continue to deride action on climate change. They miss the fact that the world is moving. They miss the fact that 32 countries now have emissions trading schemes. They miss the fact that India and China, despite having far lower emissions per capita than Australia, are making substantial investments in renewable energy. They miss the fact that the UK, as part of the European Union, is engaged in emissions trading.

At the same time, we are listening to the economists just as we are listening to the scientists. We are recognising the benefits of market based mechanisms over command and control. I think it is often recognised in this place that there is an overwhelming consensus among scientists, but the overwhelming consensus among economists is sometimes missed. Allow me to quote from two senior economics professors. John Quiggin wrote in his blog on 10 May:

I had a call from a local business organization asking if I would talk at a breakfast about the carbon tax to be held in a few weeks. The date was fine, so I said yes, then came the kicker—they wanted an economist on each side of the issue. The organizer said they had plenty of economists willing to speak for the tax, but they couldn't find any willing to speak against it. I gamely offered to present the case for an emissions trading scheme as opposed to a tax (even though, at the moment, I lean to a tax). But they wanted an actual opponent of any kind of carbon price, who was also an economist. This has proved to be impossible, which is pretty impressive testimony to the quality of the Queensland economics profession, and to the underappreciated fact that economists are among the strongest supporters of good environmental policy.

Joshua Gans, currently at Melbourne Business School and shortly moving to the University of Toronto—Canada's gain and Australia's loss, I have to say—wrote on the website of The Drum on 7 April:

Sadly, there are plenty of people who aren't climate change scientists who are comfortable disbelieving the general consensus from climate change scientists.

But perhaps it is more disturbing when people—especially politicians—ignore or deny the evidence on how to actually achieve lower emissions. Why is that more disturbing? Because it could be that politicians want to actually reduce emissions but instead advocate policies that are likely to do the opposite.

Of course, when I am talking of advocating opposite policies I am talking mainly, but not exclusively, of the Federal Opposition. What they want to do is take direct action. It's not big on specifics but it will cost a lot of money ($10 billion plus) and will award that money to people who claim they are going to do good things in reducing emissions.

Joshua Gans goes on to say:

It is ironic that on climate change policy, politics are in the bizarro-world where the supposedly anti-market Greens side with Hayek while the supposedly pro-market Coalition sides with Lenin. The economic evidence strongly suggests that the Greens policies match their goals while the reverse is true for the Coalition. I can't parse the dual hypotheses that either the Coalition just deny economic evidence or that they actually want more emissions and handouts to business. Perhaps one of their number can enlighten us.

Finally, I want to go to the amendment moved by the member for Flinders. As I have noted in my speech, the government's legislation will create new, real and lasting economic opportunities for regional communities. Stakeholders in the land sector are desperate for a mechanism to credit their actions to reduce and store carbon pollution. Farmers and landholders want access to carbon markets worth hundreds of millions of dollars each year for regional and rural Australia. But the coalition are currently holding them back.

With the amendment moved today, the member for Flinders has essentially told farmers that the coalition wants to delay the farmers from receiving these benefits. He is signalling that the coalition would rather play politics than support farmers. Farmers and landholders want politicians to end the gamesmanship so that they can know the framework that they will be working under. They want us to resolve the detail and put in place a framework that measures the savings that they are making.

There has been extensive consultation on this initiative over a number of years. It builds on the work of other offset mechanisms. Let us look at what key groups like the National Farmers Federation submitted to the House inquiry. They said:

The legislation addresses NFF concerns around potential perverse outcomes in relation to food production, water, local communities, environment and biodiversity as well as reduces some of the uncertainty and administrative costs surrounding crediting periods, reporting timeframes and offsets compliance.

They also said:

the government deserves credit for listening to the farm sector and modifying its proposals to ensure that genuine abatement opportunities under the CFI are not unnecessarily overlooked.

The government's carbon farming initiative is based on the science of climate change but developed with a key focus on practicality. The department is releasing over the next few weeks a number of the first detailed methodologies showing in practical terms how particular landholders can put projects together. We have been consulting extensively on the regulations to establish the positive and negative lists. We will be providing details of those lists shortly. The regulations deal with technical matters required to be based on independent advice from the Domestic Offset Integrity Committee. It is essential to the credibility and value of the offsets credit that are created by the initiative. The coalition's amendment is for a scheme in which the activities added and credited are based on politics rather than science. That approach has not credibility in carbon markets and no credibility in the community. The government calls on the coalition to stop playing politics and to support the government's efforts to reward farmers who are taking action on climate change.

In closing, I observe the sad fact that, as scientists often note, climate change can be dominated by tipping points—sudden moments like the melting of polar icecaps, at which point the progress of climate change, the warming, becomes more rapid. Perhaps the best example of a tipping point was the Leader of the Opposition's one-vote ousting of the member for Wentworth as the Leader of the Liberal Party in 2009. That tipping point moved us from a path on which the coalition were, as they had been in the 2007 federal election, advocating market based mechanisms supported by sensible conservatives around the globe. That moved us into a bizarro world in which the current Leader of the Opposition advocates command and control policies, policies unsupported by serious scientists or serious economists. That tipping point has left the Australian debate over carbon pricing well adrift from what you see in mainstream debates all around the globe. Even when I go into schools in my electorate I find young children in Australia deeply concerned by the lack of willingness to act on climate change and deeply concerned at the fact that at the moment carbon pollution is free and that the opposition is attempting to block the government's sensible and practical move to put a price on carbon pollution. (Time expired)

12:41 pm

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

The coalition have been active supporters of carbon farming initiatives for many years. Implemented correctly, carbon farming initiatives can help to sequester or abate carbon and address concerns arising from global CO2 emission increases. They can also deliver a new income source for farmers but also deliver broader environmental objectives, including improved water quality and reduced salinity and erosion. They can promote biodiversity and regenerate landscapes as well as improve productivity.

Carbon farming was a key ingredient of the coalition's direct action plan, and still is. We highlighted the potential for carbon farming. We demonstrated its practical ability to deliver results. We announced a direct path to fund real action to make sure that the initiatives put in place delivered broader results.

Farmers have been saying for as long as anyone can remember that the climate is changing. They have noticed the differences in the weather cycles and often comment about how things are not the way that they used to be. It is true that most of them are sceptical about the doomsday predictions of the so-called experts. They certainly strongly oppose Labor's carbon tax and CPRS. They say quite bluntly that they cannot see how a new tax or a trading scheme can change the temperature. They are angry with the Prime Minister, who did not tell the truth before the election about her intentions in relation to the carbon tax. They do not trust the government. They despair that Labor does not respect the vital role that agriculture plays in assuring our food supply and at the cavalier approach that it takes to protecting and supporting our nation's food security.

The carbon farming initiative can be a win-win. It can meet the expectations of those who want to address concerns about global warming. And it can help farmers to improve productivity and profitability and help improve our environment. But these bills are fundamentally flawed and cannot be supported at this time. They are quite lengthy bills. But most of the fundamental detail will be revealed only in the regulations. And the previous speaker acknowledged that the regulations have not even be drafted. This will be the world's first nationally legislated carbon farming initiative. Attempts to implement farm carbon trading in places in Europe and even in Australia have failed in the past. The Chicago Climate Exchange closed late last year. There is no example anywhere in the world, no international experience or proven model, for this legislation. But this parliament is being asked to vote for the bill without even seeing the regulations, without even knowing how it is going to work.

The House of Representatives are being asked to vote on the bill before the Senate have even reported. The Senate have received a lot of information, raising significant concerns about how this legislation would actually work, but the House of Representatives have not been given the opportunity to even see the Senate committee's report. We are being asked to vote on and deal with this issue right now. And this is happening in an atmosphere where the government have no credibility in this area. Their carbon tax and their emissions trading scheme have been on-again, off-again, on-again. Indeed this bill does not stand alone; it presupposes there will be a Carbon Pollution Reduction Scheme. Yet we do not have the legislation to deal with that either.

Farmers are concerned that they have been let down by the Labor government in the past and now they are being asked to trust the government with the regulations at some stage in the future on the understanding that Labor and the Greens will put together a deal that will not shaft the Australian farming sector. Frankly, farmers do not have that confidence. Labor have not won their confidence because they have not behaved honourably in the past. We have been told by the Prime Minister that farmers will be excluded from Labor's carbon tax. But they will have to pay much more for fuel, transport, fertilisers, chemicals, manufacturing and machinery, and the processing of their products. All that is going to add to their costs. Indeed, I note that in New Zealand, where farmers are exempt in that country's scheme, the local dairy industry are saying that they already pay $2,700 a year extra and that they expect the cost for every dairy farmer in New Zealand to rise to $17,450 by 2015. That is from a farming sector that is exempt.

Can we believe a government that say they are going to exempt farmers when they also said that there would be no carbon tax in the first place? They have no credibility. Farmers do not trust Labor and the extreme Greens to honour their promises to exclude agriculture let alone to deliver a new carbon farming initiative which treats them fairly. The only reason that Labor are not imposing these penalties on farmers now is that they know it is technically impracticable to measure emissions. It cannot be done, and that is the finding of nearly every country in the world. But as soon as Labor find a way, even if it is done slapdash, there is not much doubt that they will want to make sure that farmers are included in their tax. Surely farmers have a right to see what is being proposed before being asked to vote. This is an initiative about farming but most of the consultation has occurred in the cities. There has been little willingness to take on board the concerns of practical people involved in industry.

Soil carbon stocks currently are estimated at about 2.3 trillion tons—that is, three times the amount of CO2 that is in the atmosphere. The Rodale Institute says that regenerative agriculture globally has the potential to sequester up to 40 per cent of the world's CO2 emissions. This is important. This is potentially a significant initiative. Carbon farming techniques like the use of biochar, no-till farming, changed grazing practices, perennial pastures, feral animal management, new genetics that produce plants that sequester more carbon and plantstones on sugar cane and a whole range of other products offer real potential.

There are many reasons that Australian farmers will not participate in this scheme. The first issue concerns the introduction by the government of the word 'additionality' into this. Unless what farmers are doing is additional to what is happening at the present time, it does not count; it has to be extra to normal practice. Things like no-till farming and perennial pastures et cetera are common practice, so farmers will not get credit for the things that they can actually do to deliver real results. It cannot be something that is already normal practice within their farming operations. It all has to be extra. So only the risky ideas will be left—the things that are not proven—for farmers to be able to participate.

The scheme will be incredibly bureaucratic and will take days and days of office work to register something for the scheme. In addition to that, farmers have to sign up for 100 years—that is, three to four generations. What new techniques might come along in 100 years? What new varieties will there be? What things will be done better than they are being done now? Farmers will be locked in for 100 years. There may be new ways to address climate change. Surely over 100 years we are going to make some progress, but farmers will be locked in for a hundred years. I have not yet heard of a forest that has not been burnt or flooded once in a hundred years, but farmers have to take responsibility for keeping fires and pestilence—for example, myrtle rust or whatever other diseases might come into the country—out of their farming operations for a hundred years.

The Kyoto commitment is about to expire. What is going to happen next? It is quite clear that other nations are showing no interest in being involved in trading schemes. China, the US and others are more interested in direct action schemes. Let me quote from Michael Kiely from Carbon Farmers of Australia, a group strongly supportive of carbon farming. He said:

We think permanence is a major barrier ... I personally don't know of any farmer who would be willing to sign up for a hundred years.

That is clearly a major issue which has not been addressed in this legislation. Also, real and practical on-farm measures will only be entitled to second-class credits. Under the Kyoto protocol clean development mechanism, only afforestation and reforestation are eligible to be certified as emissions reductions. Avoiding deforestation is not eligible and agricultural carbon sequestration is not recognised. So under Labor's legislation only tree planting credits will be supported by Kyoto, which is also consistent with Labor's proposed carbon tax.

Farm based credits will be restricted to voluntary, non-mandatory markets and will be essentially worthless. The real things that farmers can do will not be credited. The truth is that this is just another subsidised tree planting scheme—an MIS on steroids. Do not take my word for it; let me refer to some of the experts in the area. In a recent article in its ECOS magazine, the CSIRO writes:

Forestry and forest-related options are well placed for inclusion in the CFI, according to Dr Michael Battaglia, a scientist with CSIRO Sustainable Agriculture Flagship. Modelling done by Dr Battaglia and his team for the Queensland government found that forest carbon sinks make up about 75 per cent of the total figure attainable for agricultural carbon abatement in Queensland from 2010-2050.

The article goes on to say:

Andrew Macintosh of the ANU’s Centre for Climate Law and Policy says ‘Most rural land managers are concentrating on soil carbon and reforestation projects, but personally I think that credits for preserved regrowth on deforested land units … and forest management credits will dominate the Australian scheme.

Charles McElhone from the NFF, who was quoted by the previous speaker, said:

Based on experience with managed investment schemes, we’re urging particular caution around new forestry impacts on food provision, biodiversity, water supply, employment and other community effects.

So it is quite clear that the MIS tree planting schemes have been a disaster for many rural communities. They have cost jobs in the agricultural sector and they have damaged regional economies. These often bankrupt and uneconomic tree plantation schemes are dreadful next door neighbours. They are a haven for pests and diseases. There is no management. They are a likely source of future bushfires. They affect the water table and the run-off into local streams. These mass tree planting schemes have been an environmental and economic disaster for many parts of Australia.

Yet the CSIRO tells us that a carbon price of just $36 a tonne would be high enough to convert Australia's best farmlands to forestry and $11 a tonne would be enough to trigger widespread planting, which will therefore reduce food security. So this is a scheme that will promote widespread tree planting on some of the best farming lands in our nation. The government is talking about some kinds of protective measures to preserve farmlands for the vital purpose of guaranteeing our nation's food supply, but the regulations have not been written. The government is asking us to trust it to put up something that will really work. But farmers have lost their trust in this government because of its failure to consult with them, to act with them and to listen to them when issues of concern are raised.

I support carbon farming initiatives, I believe that they have great potential for the future of our country, but I cannot support this bill while so many questions remain unanswered. It needs to be delayed at least until after Labor's carbon tax legislation, if they are determined to proceed with that, because in its present form it will disadvantage Australian agriculture. It will produce perverse and unhelpful environmental outcomes and do nothing to reduce CO2 emissions or improve the global environment.

12:56 pm

Photo of Stephen JonesStephen Jones (Throsby, Australian Labor Party) Share this | | Hansard source

I am pleased to be speaking on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and cognate bills because they are part of a comprehensive series of measures to deal with dangerous climate change. Those measures include putting a price on carbon. At the same time, we will be providing relief to industries that cannot reduce their carbon emissions because of the nature of their production processes and we will also be providing relief to households during the transition. It is also about improving carbon storage by using our natural advantages, such as our vast tracts of land—farmland and other land—which are available for carbon storage and sequestration. It is about investing in research and development and putting in place renewable energy targets. It is a comprehensive policy because, unlike those opposite, we believe there is no silver bullet to deal with this important issue—which is probably the most important issue this parliament is going to have to deal with.

I would like to contrast our position with the coalition's approach, which stems from their attitude to the science. Depending upon what week of the year you catch him on, the Leader of the Opposition will be giving a nod to the science on one day and then a nod to the deniers on the next day. He will be giving a wink to the Left of his caucus on one day and then a wink to the Right of his caucus on the next day. In fact, he has so many positions on this and is nodding in so many directions that it is no wonder that some days he looks like he has policy whiplash.

The second approach of the coalition is all about huffing and puffing, and we will see why in a moment. We saw the ridiculous pantomime this week while the Leader of the Opposition was wandering around the state of New South Wales. One day he popped up in a Weet-Bix factory and made the outrageous claim that somehow a carbon price is going to make kiddies choke on their Weet-Bix. When the facts get out we will realise that if it has any impact at all it will be less than 0.000—in fact, there are so many zeroes we can hardly get to the cost. We then saw him pop up in a fish market, amidst the oysters and the caviar, making claims about how the carbon price will lead to an outrageous rise in the cost of fish. Little did he know that there is going to be no cost impost at all. I am very pleased that over the last week he started to be called out on these issues and brought to account for the outrageous claims he is making. We can understand why he is all huff and puff because his strategy is to say to the Australian people, with this great distraction, 'Look over there, because while you're looking over there, I've got my hand in your back pocket to the tune of about $750 per annum. I'm going to use your money to pay the big polluters. I'm going to use your money to subsidise the big carbon emitters in this country,' such as those confirmed by the shadow environment spokesperson overnight. He wants to reach into the pockets of Australian taxpayers, take that money out of their wallets and give it to what are, in many instances, overseas multinational companies, to assist, to implore, to encourage them to reduce their carbon emissions. So let us not be fooled by the huff and puff of the Leader of the Opposition. It is a pleasure today to speak on what are a comprehensive series of measures to deal with catastrophic and dangerous climate change.

The Carbon Credits (Carbon Farming Initiative) Bill fulfils Labor's election commitment to give farmers, forest growers and landholders access to carbon markets. In doing so, the bill provides opportunities for the agricultural sector to participate in abatement measures which will complement the other measures being advocated by those on this side of the House—and indeed by some on the other side of the House who weekly start to question the madness, lack of conviction and contradictions in the policy of the Leader of the Opposition. The legislation will provide opportunities for farmers and landholders to participate in the domestic and international carbon offset markets, and that is an important point. The carbon farming initiative provides landholders with access to an additional and diversified source of income.

It is interesting that we see people in this parliament who once upon a time represented the rural sector and farmers who criticise this policy. Through the crafting of its policy, Labor has excluded the farm sector from the Carbon Pollution Reduction Scheme and the carbon tax on the one hand; on the other hand, it is providing them with a potential revenue stream. If those on the other side, including the Deputy Leader of the Opposition and Leader of the Nationals, who just spoke, truly did represent the rural sector, they would be rushing out here and saying, 'This is great legislation and we will be supporting it because it will provide an important revenue stream for our constituents.'

What sort of revenue stream? Eligible activities under the framework outlined in this bill include emission reductions from fertilisers and increasing carbon sequestration, which avoid greenhouse gas emissions and/or increase carbon storage. Carbon farming and the initiative outlined in the legislation before the House today, in effect, is the legislative framework that in large part represents what the coalition are currently proposing in relation to climate change. The key difference is that our legislation and this initiative is part of an overall package of many measures because we understand that there is not one silver bullet.

Carbon farming measures alone, without a commensurate reduction in carbon pollution, will not bring us to the emission reductions that are urgently needed. This was confirmed by the Climate Commission yesterday and has been repeated in numerous forums by eminent scientists, including those from the CSIRO. On this side of the House, we recognise that it is important that the agricultural sector begins the work of adapting to a low-carbon future and these bills assist in that journey.

The Gillard government knows that there are abatement opportunities waiting to be taken up and that it is important that the framework puts this in place. However, we would never be so foolish as to think that this one measure alone, carbon faming, could achieve anywhere near the magnitude of what we need to achieve a cut to our carbon emissions. Let me explain this.

The government's targets are to lower emissions by five to 25 per cent below 2000 levels. Even at the five per cent reduction target, which I understand is bipartisan, this will be no easy task and we cannot do this without all sectors of the economy including industry, agriculture, households and manufacturing all working together to the same end. That is to say, carbon farming alone is not the answer.

Experts have described the coalition's policy as being so environmentally ineffective that it will deliver only 25 per cent of the required carbon pollution abatement. So for the coalition to meet the bipartisan target of minus 25 per cent, they need to find somewhere another 75 per cent of carbon pollution abatement. Advice from Treasury to the coalition said that these:

... measures alone cannot do the job without imposing significant economic and budget costs. Moreover, many of the direct action measures cannot be scaled up to achieve significant levels of abatement, and for those that can be scaled up, the cost per tonne of abatement would rise rapidly.

The Leader of the Opposition has shown no signs of being able to grasp the magnitude of what, as a nation and an economy, we are dealing with here. We know that if Australia takes no action by 2020 our carbon pollution could be 20 per cent higher than in 2000, not five to 25 per cent lower.

We simply cannot achieve cuts to our carbon pollution by relying on tree-planting initiatives, as the Leader of the Nationals has said, and better fertilisers. The coalition's policy is not practical or effective. We need to ensure that our most productive land continues to be used for food production and is not diverted into tree planting for the purposes of trading carbon credits. That is one of the concerns that arose during the extensive consultation process that accompanied the drafting of this legislation. he risk of the coalition's policy is that this is exactly what would happen. No-one can therefore take it seriously as an alternative policy. And what about the financial impact? Those opposite like to talk about waste as if they were speaking from a position of economic purity, but the reality is far from that. I could not explain the cost of the coalition's policy better than by using the exact same words the member for Wentworth used last week in his Lateline interview:

The coalition's policy, as laid out by Tony Abbott and Greg Hunt, involves spending taxpayers' money—taking out of the budget so many billions of dollars to pay farmers in particular ... it is a multi-billion-dollar exercise.

And he went on:

But the way it works is that the taxpayer— the taxpayers' money—would be used to buy carbon offsets from farmers, so that as industry pollutes, the government would then spend taxpayers' dollars to buy carbon offsets to offset that pollution.

We know that the coalition's policy, as I have described it, is a publicly funded licence to pollute. It would cost over $30 billion rather than the $10.5 billion that has been outlined. That is because the coalition would need to purchase about 75 per cent of the required abatement from international permit markets at a cost of about $20 billion, for which no funding is currently available. So it does not appear that anyone over there even has the policy courage to think all of this through. The coalition's policy is confused and contradictory. Like much from the other side of the House, it is a reflection of that fact that they simply lack conviction in this area.

Just last night the member for Flinders, the opposition spokesperson, told the ABC that a coalition government would pay large brown-coal-fired electricity generators to reduce their pollution by switching to gas-fired generation. As natural gas is far more expensive for generating electricity than brown coal, the coalition's policy would see either electricity prices rise, with no assistance to households, or the coalition having to subsidise the electricity generators. Those subsidies would cost taxpayers billions of dollars and would have to continue for decades, given that electricity-generating plants are long-lived assets. The only way to avoid rises in electricity prices under this scenario would be through indefinite taxpayer subsidies to the generators.

If the coalition's publicly funded pollution licence ever came into being, the average Australian family would be slugged at least $720 per annum. They would be worse off by 720 bucks per annum. So this publicly funded licence to pollute is a policy folly that Australia cannot afford either financially or environmentally. We need all sections of our economy working together. We urgently need our top 1,000 polluting companies to be playing their part and doing what they can to become more environmentally friendly.

The introduction of a carbon price will be a historic measure for this country. It will be a historic measure for this parliament too when legislation that reflects this country's resolve to deal with climate change becomes law in this place. I acknowledge that a significant reform like this is not easy. Building a consensus for a major change is never an easy task. However, if you are entrusted by the electorate to form government, you have a reciprocal obligation to act responsibly and to do what you believe is in the national interest. There is simply no other option.

If those opposite were truly serious about doing something to reduce carbon emissions, were serious about taking advantage of our natural assets and were serious about doing something in the most cost-effective way and the most efficient way, they would get on with our package of reforms—a package of reforms which includes these bills before the House today. These bills will enable farmers and the forestry sector to engage in the carbon abatement measures described in the legislation and to receive a financial reward for it and to play a part in the overall national effort. That national effort will require reform of all industries and all sectors of the economy, and an effort by households as well, to do what we need to do to play our part in an international effort to reduce carbon emissions and to avoid dangerous climate change. I commend the legislation to the House.

1:11 pm

Photo of Mark CoultonMark Coulton (Parkes, National Party) Share this | | Hansard source

I have been a little astounded sitting here listening to some of the presentations from the government side on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and related bills. I am just wondering: what does the member for Throsby tells his constituents, the ones working in the fine industrial city of Wollongong? Does he tell them that he is in here selling out their future and their jobs and that he has lost sight of the best interests of the people he represents in a bid to earn favour from the Greens and the Independents?

Listening to this debate this morning, I have heard some remarkable contributions from members of the government. While I might not be as quite as eloquent as some, I do come to this place with dirt under my nails. I have spent a large part of my life involved in agriculture and I can see when something is practical, when something will work, and I can see when it will not.

I do believe in the great potential of regional and rural Australia to play its part in the sequestration of carbon. I do believe that soil carbon is indeed one of the most unrecognised and misunderstood, or less understood, aspects of farming. In my early days of farming, my brothers and I, along with Monsanto, did some of the early trial work in zero-till farming when Roundup was first developed by the local New South Wales Department of Agriculture. The benefits of improving organic material in the soil by leaving crop residue on top of the soil were quickly seen. Basically, carbon is organic material. Anyone who knows anything about soil knows that you can tell a healthy soil by picking it up, by feeling it in your hands, by smelling it and by looking at the microactivity and the earthworms et cetera. Where this policy falls very short is with the idea of additionality. For someone who did not know any better, listening to the presentations from members of the government would have you think that Australian agricultural areas were a barren landscape on which a mob of uneducated, redneck farmers were raping the soil and that there was wonderful potential to show them the error of their ways through wonderful government programs. The government could help them see the great benefits of soil carbon and they were going to make a fortune.

The reality is that the government—and, quite frankly, the rest of the world—is behind the Australian farmer. The Australian farmer worked out the value of carbon many years ago. The irony is that under this legislation the farmers with the most carbon already stored in their soils will be exempt. To gain credits under this scheme, you have to prove that you are increasing the sequestration from this point on. That pretty well excludes a large number of the farmers in my electorate.

We have heard members say they understand because they have been involved in local community groups building tree lots and things like that. I am talking about large-scale farming. I have one farmer in my electorate who grows 200,000 acres of wheat. If you look at the amount of tonnage of carbon that is stored under a business of that size, you see it is of great magnitude. One of the problems is that that soil carbon is not recognised under Kyoto. Indeed, efforts in the past to trade that carbon have largely failed and we have seen the demise of the Chicago carbon exchange.

We have a long way to go to recognise what has already happened. The complexity of agronomy and agriculture is not done any justice by this bill. There is no recognition of the extra carbon that has been stored under grazing lands by the changes in management. One of the greatest changes that I have seen in improving the fertility and health of soil has been the introduction of the dung beetle. Dung beetles might not be the sexiest thing to talk about but they have done an enormous job in improving the fertility and the organic material in large tracts of grazing land right across Australia. Indeed, in my own case, I have seen a combination of manual soil works and the introduction of dung beetles turn severely eroded, badly scalded soils into productive and healthy soils. None of that is recognised.

If you look through this bill you see that the only real benefit that farmers can gain is by planting trees. The previous speaker spoke about protecting prime agricultural land, but there are no regulations in the bill to say what is prime agricultural land. If credits are going to be paid by the amount of biodiversity that will be grown, it is obvious that people looking to have offsets will want to plant trees in the most productive, fertile soil that they can because that is going to grow the largest biomass in the shortest amount of time. The problem is that those soils are exactly those that we need for our food security.

I have already seen large tracts of what were productive farms being planted down to trees to gain offsets in schemes outside this one. It has led to a reduction in the productivity of those areas and contributed to depopulating rural Australia. I believe that this legislation, brought in in an incomplete form without proper scrutiny and without waiting for the report from the Senate, is the trojan horse to lull the farmers of regional Australia into the next stage, which is the carbon tax, to be followed ultimately by an emissions trading scheme.

The member for New England, after Professor Garnaut visited his electorate, was making noises about the great benefits for farmers under a carbon tax regime. This is the sticky paper. Once farmers get on it, they are drawn in. Under the proposals first put up in the original emissions trading scheme of Prime Minister Kevin Rudd, one of the farmers in my electorate, on a medium-sized farm, worked out with a calculator that the scheme would cost his enterprise an extra $70,000 a year. Since then, agriculture has supposedly been exempted. Previous speakers from the government have said that since farmers are exempt here is an opportunity to raise income.But what are not exempt are the inputs. Agriculture relies heavily on fuel—as examples, electricity for running irrigation pumps, and diesel. A number of our inputs contain a high level of fossil fuel. Fertiliser has a large amount of energy in it. Many of the commonly used farm chemicals are based on fossil fuels, such as Roundup and Amine. I believe the inputs will always blow away any opportunity for farmers to be in front, so we need to be very careful here. While I understand the concept— and I think I have more practical understanding and experience of what this bill is about than others—this bill is incomplete. There are serious concerns and we should not accept this bill without seeing the regulations, particularly around the issue of additionality. With regard to 100-year sequestration, if all of us cast our minds back 100 years, we should all be thankful to our forefathers for putting in legislation enshrining land use rights for now.

One hundred years ago the internal combustion engine had only just been invented. Farmers were farming with horse teams. There was certainly very limited understanding of the complex agronomic information that is now available. To lock our landscape into something for 100 years, I believe, is a very risky move. What happens if it is destroyed by fire or something like that? Where is the cost in all that? We need to be very wary of this legislation. Professor Garnaut, in his original report prepared for the Rudd government, indicated that regional Australia would have an economic downturn of 20 per cent under an emissions trading scheme. I have not seen any information that says otherwise.

We have heard some wonderful speeches during the emissions trading debate. That great alarmist, the member for Isaacs, had half of his electorate under water. Those on that side made some wonderful contributions about their knowledge of what other people could do. When we start looking at tackling climate change, how about looking at some of the schemes that some of the metropolitan areas may introduce, rather than allowing regional Australia to carry the burden for the grand gesture of Australia being the world leader in attacking climate change? The people of regional Australia understand and can smell a bad deal when it is put at them. They think that this carbon tax coming up stinks and that this legislation is a forerunner for that. Much of the intent in this legislation is quite valid but, at the moment, it is unpalatable. Unless I see some serious changes coming through the inquiry in the Senate, this bill will not be getting my support.

1:25 pm

Photo of Tony ZappiaTony Zappia (Makin, Australian Labor Party) Share this | | Hansard source

I take the opportunity to speak in support of these three bills: the Carbon Credits (Carbon Farming Initiative) Bill 2011, the Carbon Credits (Consequential Amendments) Bill 2011 and the Australian National Registry of Emissions Units Bill 2011. The objectives of these bills are, firstly, to help Australia meet its international obligations under the United Nations Framework Convention on Climate Change and the Kyoto protocol to reduce greenhouse gas emissions; secondly, to create initiatives for people to undertake land sector abatement projects; and, thirdly, to achieve carbon abatement in a manner that is consistent with the protection of Australia's natural environment and that improves resilience to the impacts of climate change for our community. The purpose of these bills is to enable farmers, landholders and forest growers to sequester carbon from the atmosphere and store it in soil, plants, vegetation and trees. By doing so, they will receive carbon credits for the carbon that is stored. It is a voluntary scheme and, of course, conditions are attached to it.

Why is the scheme being implemented? It is being implemented because climate change is real and poses a real threat to our future. We now have an abundance of scientific evidence that confirms that the main cause of global warming is the amount of greenhouse gases, in particular carbon dioxide, in the atmosphere. Around 97 per cent of climate scientists accept that. I understand that 192 countries who met in Copenhagen accept that. The European Union accepts that and it already has an ETS in place. From briefings I have had in recent days, India and China accept that and have already embarked on their own projects to reduce greenhouse gas emissions—in particular, carbon dioxide emissions. We have heard that the UK accepts it. It seems to me that the only places where there is still some debate going on about the science are the USA and Australia. That scepticism is abundantly clear when you listen to members of the opposition in this place. We have heard it from many of them not only in respect of this legislation; in recent days and certainly in the last couple of years they have still been questioning the science of global warming.

The reason that I refer to the science of global warming is that it is critical to these bills, and I will come back to that in a moment. There is no doubt that the climate is changing and, as I said, the evidence is overwhelming. As a result of global warming we are also seeing ice being lost from our ice caps and glaciers. Our oceans are warming and sea levels are rising. More greenhouse gases around the earth's atmosphere act like a blanket around the earth and trap in the earth's heat. We have seen, over the last 100 years, an almost-one degree Celsius increase in temperatures—and most of that has occurred in the last 50 years.

The last decade was the hottest on record. We know that oceans store most of the additional heat—something like 85 per cent of the additional heat generated is stored in the oceans. We know that oceans have risen by about 20 centimetres since the late-1800s and are expected, based on projections, to increase by something like half a metre to one metre by the end of the century. Some suggest that it could be even higher than that. We also know that as oceans warm up they also expand and they rise. And we also know that more carbon dioxide in the atmosphere means more is absorbed by the oceans—and once you increase the amount of carbon dioxide in the oceans, you increase its acidity and therefore change the ocean ecology. For all of those reasons we need to act with respect to reducing the amount of carbon dioxide in the atmosphere.

One of the additional matters of real concern—because the science on this is only just coming to light—is that there is about 1,000 billion tonnes of carbon stored in permafrost. So, as the icebergs and the glaciers melt, that carbon dioxide is also released into the atmosphere, compounding the problems associated with melting ice. We have seen in this country—and, for that matter, around the world—not only temperature rises but changes in rainfall patterns; we have seen floods, cyclones, droughts—droughts that in turn, I believe, led to bushfires.

Much of the net carbon dioxide emissions have originated primarily from deforestation around the world. Our challenge is to reduce carbon emissions. To reduce carbon emissions that have already been emitted into the atmosphere you can reduce your output but also by finding methods of taking that carbon dioxide in the atmosphere and safely storing it in the soil, in plants and in trees.

To reduce the level of carbon dioxide emissions in the atmosphere is not possible through any one single solution; it requires a multitude of different actions. It also requires a global response. And that is exactly what is happening around the world right now, including here in Australia, where we are seeing investment in renewable energy, we are seeing efforts being made to cut emissions; and these bills, which would appear to be the first of their kind in the world, I believe, will do a lot towards sequestering carbon in the atmosphere. This is an important measure, and it seems to me that some of the members opposite who have raised their concerns to it are doing so because of legitimate matters that were raised in the lead-up to the preparation of these bills.

There was a very long public consultation process in the lead-up to these bills being drafted. Subsequent to that, the bills were referred to the House of Representatives Standing Committee on Climate Change, Environment and the Arts and the Senate Environment and Communications Legislation Committee. Those committees held simultaneous inquiries into these bills. Because the bills were referred to both committees at the same time, the Standing Committee on Climate Change, Environment and the Arts tried not to overlap the work of the Senate committee. Nor have we seen the Senate committee's report.

But we have seen the report from the standing committee of this House. It was presented by me on Monday. That committee, which is comprised of members of both sides of the parliament, unanimously recommended that these bills be passed by the parliament. I should say, with respect to those recommendations, we held a day of public hearings and we also received 70-odd submissions with respect to these bills. Almost without exception, those people who made submissions to the committee broadly supported the intent of these bills as they currently stand. Yes, they raised some matters, which I hear are similar to the matters being raised by members opposite today; but, broadly, the bills were supported by those people who made submissions.

And the committee came to the conclusion that the bills ought to be supported because, whilst there were still some matters that needed further negotiation and consultation between the government and interested parties, that could and would be done in the establishment of the regulations. Matters relating to additionality, permanency, native title, the NRM plans, methodologies and perverse outcomes were all identified by the committee as matters that required further work. But none of them were serious enough to prevent or delay or defer the implementation of the measures in these bills by passing this legislation in this House. It is my view—and I believe the view of the committee, because it was a unanimous decision—that the sooner we get on with this legislation, the sooner will landowners be able to take advantage of the opportunities that these bills present to them, because reducing carbon dioxide does present landowners with opportunities.

The issues of additionality and permanency—and I note the previous speaker particularly referred to those—are ones that we know may need some additional work done. And, can I say, what is referred to as a 'positive and negative list' of which projects will be eligible and which will not is something that needs to be done. Sure, they might be contentious, but you have to start somewhere. And it does not matter where you start—there will always be someone who will argue that perhaps an additional project should have been included that was not, or one that was included should not have been in the list. What is interesting about this legislation is that, from my understanding, there is no legislation anywhere else in the world that is quite the same. It does, in fact, cover new ground. What is important is that there is also a commitment by the government that this legislation will be reviewed in 2014. At that review, if changes need to be made, of course they can and will be. The truth, however, is that legislation can be amended at any time by the government of the day. If, once the legislation is in place and some of those concerns that were raised prove to be founded, I have no doubt that the government of the day will do the right thing and bring in the necessary amendments. You will not know that until you have the legislation in place.

The question of permanency was also raised by many of the people who made submissions. You could argue that permanency should be 50, 75 or 100 years. I believe the figure of 100 years fits in with international standards. Be that as it may, the issue of the 100 years is not permanent because those people who have the carbon credit units can relinquish those credit units. They can buy them back and therefore relinquish them. Permanency in a sense is only for as long as anybody wants to make it. If they want to get out of the scheme they can do so. Simultaneously, you cannot have a scheme that allows people to be given credits for having sequestered carbon if there is not a degree of security about that carbon being stored. It simply does not make sense to be able to say: 'Well, I'm going to sequester carbon, but next year it won't matter and I'll just walk away from my commitment.' That does not provide the long-term benefits of storing the carbon that are being sought under these bills. The additionality question, as I said earlier, was also important in the minds of many of the people who made submissions. Again, if you are to get credits for what you are currently doing, that then defeats the whole purpose of this scheme. It has to be in addition to the current practices that are taking place.

One of the areas that I will comment on in respect of the submissions made to the committee is that of native title, and we had some very good submissions. I am aware of the concerns being raised by a number of parties in relation to native title and those concerns are quite legitimate. The department and the minister have advised that there are ongoing discussions on the issues of native title. I welcome those ongoing discussions and, for those reasons, I see no reason why these bills should be delayed or deferred. The methodologies, of course, will also be questioned. There is a process in place to ensure that the methodologies used in order to gain carbon credits are legitimate. I have no problems with the process being used. In respect to the National Farmers Federation—and other speakers have made this point—they also broadly welcome this legislation.

It seems to me that, whilst some concerns have been raised, there is no reason why we should not get on with this legislation. Whilst members opposite use the argument that the Senate committee has not reported back on this legislation, can I remind them that the House of Representatives Standing Committee on Climate Change, Environment and the Arts has reported back, and it was a unanimous decision by members of both sides of this House to support this legislation. I commend these bills to the House.

1:41 pm

Photo of Nola MarinoNola Marino (Forrest, Liberal Party) Share this | | Hansard source

The greatest practical carbon sink available to the world right now is that of biosequestration, which is in the world's soils and plants. It is currently the only effective offset. We have spent a great deal of time and money on the alternative, geosequestration; however, the ability to store carbon dioxide deep underground as a liquid or in solution remains commercially unviable. Whilst the optimists continue to pursue it, something I support, there is no guarantee that geosequestration will become an economically viable option

We do know, however, that biosequestration is both practical and viable. Not only that, we have been practising it for generations. We may have called it revegetation, or perhaps agroforestry or plantation farming. We have done it to prevent erosion, to reduce salinity, to improve production, to protect the environment and to retain native species. Governments have done it, farmers have done it, community and environmental groups have done it and lots of private individuals have done it and are doing it. The fact that we can do it is not actually in question. The questions are: how do we increase it; how do we measure it; and how do we make it viable for landholders to engage in?

There are two forms of biosequestration covered in this bill. The first is plant carbon. Sequestering carbon into vegetation such as trees is the easiest to do and certainly the easiest to measure. We know how to plant trees and we know approximately how much carbon is stored in each tonne of wood that grows or in each hectare of plantation. It will range from three tonnes of CO2 equivalent per hectare depending on tree and soil types and the rainfall. The age of trees also matters. A young tree sequesters far more carbon than an older one.

In the south-west of Western Australia the iconic jarrah trees live up to 450 years. Studies of jarrah, karri and other eucalypts across Australia have shown that eucalypt trees rarely exceed 400 years in age. Most of their carbon storage happens in the first 150 years, peaking in years 10 to 30. From 150 to 300 years carbon storage in jarrah trees actually flatlines. In their last 150 years they often contribute more carbon back into the atmosphere than they absorb.

The requirements of the Kyoto agreement restrict measurable carbon to plantings after 1990 on land that was cleared before 1990 and the requirement to leave trees in place for 100 years needs to be considered in this context. One hundred years may be appropriate for many tree species like jarrah but may well be inappropriate for faster growing, shorter lived trees. Those species that only live on average 100 years may only be effective in storing carbon for the first 50 and emitting carbon after 80. If those trees were to be harvested and their carbon stored for the longer term, for example as structural timber, and the area replanted with trees, the amount of carbon stored would be maximised. I note that the CSIRO recently commented as follows:

To achieve the full benefits of carbon storage, carbon forests need to be managed according to natural cycles of death and decay, including the periodic impact of fire. The long term aim might be to manage forests of a range of ages.

Tree planting should not be considered in isolation from other environmental issues. Reforestation of cleared land uses a lot of water and frequently drives water tables down. Whilst this is a good thing, in fact the desired outcome of planting can be to reduce the impacts of salinity, it may have detrimental effects on farming and native forest nearby if it pushes fresh groundwater deeper and out of the reach of drought sensitive species.

Photo of Peter SlipperPeter Slipper (Fisher, Liberal Party) Share this | | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. At that time the honourable member will have the opportunity to continue speaking when the debate is resumed.