Thursday, 16 June 2011
Carbon Credits (Carbon Farming Initiative) Bill 2011; Second Reading
Before debate is resumed I remind the House that it has been agreed that a general debate be allowed covering 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.
Debate resumed on the motion:
That this bill be now read a second time.
to which the following amendment was moved:
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'.
Before my remarks to the House last night were abruptly terminated by the procedural requirements of this place, I was coming to the third of the three principal points I want to make, which was that in so far as the necessary details for this legislative scheme have been provided, one of the requirements made clear in the legislation appears to be unnecessarily rigid and impractical and therefore not likely to contribute to the success of the scheme and its fitness to farmers and other private sector interests in being incented to behave in the way the scheme is intended to incent for them to behave. I refer to the requirement that sequestration must be permanent to be eligible under the scheme. The bar for permanence has been set very high. The requirement is that the sequestration must be effective for 100 years.
It seems rather unclear as to the basis on which this 100-year requirement has been set and it appears to be a matter of considerable contention as to whether that figure has any particular scientific basis or whether it has been based upon a bureaucratic stroke of the pen. Quite a number of interested parties have appeared before both the Senate and the House inquiries into this matter, including Carbon Farmers of Australia and the Australian Plantation Products and Paper Industry Council, who have identified concerns with this particular provision.
In conclusion, we say on this side of the House that this particular measure is good in concept but, sadly, is poor in execution. Until we see the details, we are not in a position to support it.
I rise to speak in support of the Carbon Credits (Carbon Farming Initiative) Bill 2011. I will restrict my comments to the interaction of the bill with native title. It is a complex issue, as acknowledged on page 44 of the explanatory memorandum, where it says at paragraph 4.51:
Given the practical and legal complexity of the interaction of the scheme with native title, the Government intends to undertake further consultation with a broad range of stakeholders and complete detailed legal analysis before reflecting a considered approach in amendments to the bill.
It is good that the government is doing that because, from what I have read so far, I am concerned about the restrictive nature of the interaction of native title with this bill. On page 39 of the explanatory memorandum, paragraph 4.18 it says:
To be eligible to apply for a project, native title holders must hold the legal right to carry out the project and, in the case of sequestration projects, the carbon sequestration right.
They then go on to say at 4.19:
It is not clear whether native title could include a right to carbon sequestration. This is because native title rights are sourced from traditional laws and customs, which may not include the recently identified right to benefit from carbon stored in the land. As a result, native title holders may need to seek a court determination (or a consent determination) to confirm their carbon sequestration right before they could participate in the scheme. This is likely to be difficult, costly and time consuming and any court decision would be unlikely to have universal application to other native title holders. Demonstrating the legal right to carry out a project may present a similar hurdle.
It then goes on to say at paragraph 4.20:
To address this barrier, the bill will take the registered native title body corporate to be the project proponent where the project area is determined exclusive possession native title land, as long as:
What we then do is restrict it to exclusive possession. With the greatest of respect, Mr Deputy Speaker, the Wik case is a classic case where you do not need exclusive possession to be found to be a native title holder. What I am worried about here—and it is something that has been raised by people before the House of Representatives Standing Committee on Climate Change, Environment and the Arts that has considered this matter—under non-exclusive possession is that you cannot rule out their ability to participate in this bill before us. I think there is a concession there, but they are in effect saying that we still have to work on it.
Recently we had a number of agreed native title determinations in the Northern Territory and Western Australia for vast areas of land. In the Northern Territory there was 16,500 square kilometres. In terms of the settlement of Australia and the titles, as you go west, particularly in Western Australia, there are many leaseholds with reservations for Indigenous people. The threshold should be that, if you are a native title holder and a determination on native title has been made, you are able to participate in the scheme, all things being equal.
We have had a number of lectures recently by the former Prime Minister Paul Keating. He gave the Lowitja O'Donoghue oration for the Don Dunstan Foundation at the University of Adelaide on 31 May 2011 about reversing the burden of proof. Indeed, back on 9 July 2008 Justice French also talked about how difficult it is to prove a continued connection. He talked about some modest proposals for the lifting of the burden of native title.
I congratulate the government because they have not been conclusive in what they have determined in this bill to date. They have left open the question of consultation. I am saying that we should be a little more generous. It is right that non-exclusive holders could go to court and have a determination on this matter, but why should they be put through the expense? In my view, if you are native title holder, there should be a presumption that you are able to participate in this scheme. If there is any hint that says, 'If it is non-exclusive possession you are going to lock us out,' we will have another situation where Indigenous people have to go to the High Court for a determination.
This is a scheme that we should be encouraging people to participate in. We talk about bridging the gap. We should be saying that, if you are a native title holder in exclusive or non-exclusive possession, you should have an opportunity to participate in this scheme. I accept that in a number of instances non-exclusive title holders might not fall into the category of being able to participate in this scheme, for whatever reason, but I notice that the Parliamentary Secretary for Climate Change and Energy Efficiency made a speech also on 8 June 2011 where he said:
While the interaction of the Carbon Farming Initiative with the Native Title Act is complex, the Government has developed a creative solution to allow holders of exclusive possession of native title easy and direct access to the scheme.
The Government is continuing to engage with Indigenous stakeholders and others about appropriate consent rights to project on land that is subject to non-exclusive native title. Consent rights will allow the native title holders to negotiate a share of the benefits of sequestration projects on their land.
That is exactly the point I am trying to make—there is engagement taking place. I urge and encourage the government to go the extra yards on non-exclusive native title to encourage participation by Indigenous people. This was the subject of an advisory report on the bills by the House of Representatives Standing Committee on Climate Change, Environment and the Arts, with Mr Zappia as the chair and Dr Mal Washer as the deputy chair. Anna Burke, Jill Hall, Nola Marino, Wyatt Roy and Kelvin Thomson were also on that committee. On native title, they said at paragraph 2.82:
The Committee does have concerns about the treatment of non-exclusive native title in the bill, but understands that continued consultations and discussions with Indigenous groups are planned by the Department of Climate Change and Energy Efficiency—
(Quorum formed) It is not an accident that the person who took the quorum call was the member for Paterson, who is well known as Paterson's curse. I do not think it is an accident that I was actually talking about reducing Indigenous disadvantage, which his leader rabbits on about but at every opportunity they never come to the table. We are talking about carbon farming, native title, exclusive and non-exclusive possession and the opportunity to bring Aboriginal people into a project that might advance them. So what do we get? We get a quorum call by the member for Paterson. It is not for me to comment on him; it speaks for itself. He can take as many quorum calls as he wants for the next 2½ years because he is over the other side. That is what we have had for the last six or seven months. We have had a bitter and twisted opposition who do not accept the fact that they got done over in the last election, we formed a government with assistance from the Greens and Independent members of this House and we are going to get on with business. You can call as many quorums as you want, but it exposes you for the small-minded person that you are.
In relation to carbon farming, the government have left it open to talk to Indigenous groups about non-exclusive possession. I am welcoming that. I have said, and I repeat, my position is that we should be generous. We have had two speeches, one from the former Prime Minister, Mr Keating, and one from the current Chief Justice of the High Court, Chief Justice French, who is a former President of the National Native Title Tribunal. In effect they are saying that we should revisit the way we do business in relation to native title. In relation to this matter we do not have to revisit it. What we can do, because it is an evolving thing, is be more generous. We have done that by opening negotiations. That is where I am coming from.
The other question in relation to the matter before the House that Indigenous people are worried about is the question of additionality. In the submission to the House of Representatives committee from Centrefarm dated 15 April, they say on additionality:
The adoption of the 'addition' provision in the CFI as it currently stands will significantly impair the rights of Aboriginal people to participate in carbon markets. There are a range of carbon projects that could be or currently are being undertaken on Aboriginal land that may well fall into the 'business as usual' category.
For example, Indigenous Protected Areas: if an agreement with the Australian government exists that Aboriginal land will be managed for conservational purposes, and then funding is provided to develop and implement a management plan for these; any cool season fire management carbon abatement initiatives could be considered 'business as usual' and be disqualified.
My suggestion to overcome that is that the additionality provisions should not apply to Indigenous people. We can justify that on the basis that what we are trying to do is advance Indigenous people's position in Australia today. We talk about closing the gap and this is a method whereby we can make an exception in relation to additionality if it makes it harder for Aboriginal people to participate. It should be welcomed by those opposite because it actually falls within the racial discrimination convention of positive treatment. It falls within that area that allows us to do this. So I commend that proposal to the government as a way of overcoming the problem. (Time expired)
I rise today to speak on the Carbon Credits (Carbon Farming Initiative) Bill 2011. Right from the very start I must rule out this perception the government is trying to put forward that the coalition do not agree with achieving the same targets in CO2 reductions in the same time frame. In fact, the coalition have a bipartisan view on achieving a five per cent reduction on 2000 emissions by 2020. Just the means by which the coalition will go about achieving the outcome are different to those of the government. The coalition do not believe that you need to hinder, impede or penalise people with a tax; what you need to do is incentivise and create opportunities for people to put into practice measures that will reduce emissions.
In producing this bill the Prime Minister expects the coalition to trust her with the missing regulations. The Australian people have already had proven to them that they cannot trust this Prime Minister, that her word and her leadership mean nothing. On Channel 10 on 16 August, the Prime Minister said:
There will be no carbon tax under the government I lead.
Four days later, in the Australian, she said:
I rule out a carbon tax.
Here we now have a government, led by Prime Minister Gillard, that have put forward a bill without regulations and that says, 'Trust me, we will get it right.' The coalition is very mindful about giving this government blank cheques because, based on their track record—and we only need to look at the Home Insulation Program, Green Loans Program and school halls program—their programs have not been delivered with good governance. Why should the taxpayers, the community at large or the coalition support this government when they say, 'Trust us'? They have shown through their ineffective management they cannot be trusted.
As I said, the coalition in essence agree with the principle of this bill—a bill which lacks the detail of regulations. The coalition's direct action plan, also as I said before, agreed to reduce emissions by five per cent by 2020, but we agreed to do it by creating a fund to buy back greenhouse emissions through more tree planting, better soils and utilising smarter technology. This is the way to go.
This bill was referred to the Senate Environment and Communications Legislation Committee and that committee's report contained a dissenting report by the coalition, signed off by Senator Richard Colbeck. I will quote the opening comments in this dissenting report:
The Coalition is strongly supportive of the practice of storing carbon in our soils and landscape.
A Coalition Government will implement a climate change strategy based on direct action to reduce emissions and improve the environment.
Direct action on soil carbon will be the major plank of our strategy, supported by other direct action measures that will reduce CO2 emissions by 5 per cent by 2020 based on 1990 levels and deliver significant environmental outcomes – without the need for a great big new tax.
To facilitate direct action, a Coalition Government will establish an Emissions Reduction Fund to support CO2 emissions reduction activity by business and industry.
Through the Fund, we will support up to 160 million tonnes of abatement per annum by 2020 to meet our 5 per cent target. This is a once in a century replenishment of our soil carbon.
Significantly improving soil carbon also helps soil quality, farm productivity and water efficiency, and should be a national goal regardless of the CO2 abatement benefits. Through the Emissions Reduction Fund a Coalition Government will commit to a ‘once in a century’ replenishment of our national soils and farmlands.
The dissenting report is worth reading. It is worth adhering to because there are ways and means of achieving outcomes without introducing a great big new tax. The principal coalition concerns raised in this Senate inquiry included:
I thought it would be pretty important to have all the information available before this government asked the House to commit to legislation without knowing the details of regulations. The other concerns included:
This government is asking the parliament to put on a blindfold, ignore reality, ignore its past performance and just pass a piece of legislation which will give an open slather to this government to destroy any ounce of credibility or direction in relation to reducing emissions, because it has obviously not thought through the whole process. There is no need to rush through legislation without the supporting regulations. I am sure the member for New England would agree with that, as he is someone who quite rightly questions and reviews regulations in relation to farming practices from time to time. I am sure he would be uncomfortable in passing legislation without the detail that is required for this to have an ounce of credibility.
As I said before, we only need to rely on the Prime Minister's own statements when she guaranteed there would be no carbon tax under the government that she led. The Prime Minister not only has misled the people but also is a hypocrite. How can we be assured that through this legislation the detail will not change through regulation and the impact will not be distorted?
I believe the carbon tax is bad news for Australia. It is bad news for industry. In this House in the last few weeks, I have quoted from the Tourism and Transport Forum report which said that the introduction of a carbon tax would lead to some 6,400 job losses in the tourism industry. The majority of those job losses would occur in regional and rural Australia—in areas like Cairns. Cairns is struggling to survive under the perfect storm that has affected tourism: the floods, the cyclones and the high dollar. These things have had a dramatic effect on the tourism industry in Cairns. Would it be able to sustain the additional cost pressures of a carbon tax, particularly when page 4 of that report says 'outbound tourism will be the beneficiary of this carbon tax'?
I have to be honest and add that the Tourism and Transport Forum has said it will support a carbon tax provided it gets exemptions. It would seem that the people who are supporting a carbon tax are those who are seeking exemptions. In that regard, I only need to quote Paul Howes, the industrious union leader, who said that a carbon tax was fantastic and then had to turn around and qualify that by saying, 'As long as there is not one job lost and as long as you provide exemptions for my steel industry.' We are now seeing a raft of politicians on the government side agreeing to a carbon tax as long as their community is exempt—much like the tourism industry report last week that said that they will support a carbon tax provided they are exempt or that certain sectors are compensated.
I want to go through a few employment figures in relation to the Hunter Valley. Employment in the Hunter Valley will be directly affected by a carbon tax, yet we have heard nothing from the members from that area. For example, the member for Newcastle's electorate has an aluminium industry and Tomago Aluminium directly employs 1,070 people and employs 250 contractors. There has not been one word from the member for Newcastle seeking exemptions under a carbon tax for the aluminium industry. Port Waratah Coal Services in her electorate employs 395 people, and particularly 16 apprentices. Her electorate also has the major coal export port in the Southern Hemisphere, but there has not been one word in support of that industry from her. The Forgacs Group, who are building a lot of the modules for our air warfare destroyers, employ 540 permanent employees and 38 casual employees—that is, 578 people employed in shipbuilding and heavy engineering in her electorate, but there has been no word in support of those people whose jobs will be at risk. The member for Newcastle also has One Steel based at Mayfield in her electorate. All of these industries, just to name a few, will be massively impacted by the introduction of a carbon tax. But she has become the 'Silent' Billy Jack of politics in relation to standing up for her constituents. But she is not alone.
The member for Hunter has not only the broad majority of coalmines in his electorate but also Hydro Aluminium Kurri Kurri that has 537 direct employees and about 2,000 indirect. When has he stood up for his constituents, all of whom are at risk of losing their jobs? How do you compensate a person whose job is gone? You can say, 'They can retrain or they can go into other industries,' but the best thing you can do for any individual is to give them a job. Give them a rewarding career and provide them with an adequate income for what they do. Time and time again, we are seeing Labor members backing up their Prime Minister—who delivered policy contrary to what she said just days before the election—to the detriment of the people whom they represent. The members for Newcastle and Hunter are not alone. The member for Shortland, Ms Hall, also has coalmines in her electorate. In addition, Mr Combet, the Minister for Climate Change and Energy Efficiency, the architect of a carbon tax, has coalmines in his electorate. These members are all prepared to sell their people and their industries up the river to push forward a policy that they rejected prior to an election.
A report that came out this week said that there would be massive job losses in the coalmining industry. In fact, there was talk of some 18 mines closing and 4,000 jobs going. Even Minister Ferguson, the Minister for Resources and Energy, confirmed that there would be job losses and that coalmines could possibly close. But nowhere do they detail which mines and from which regions those job losses would be effected. As they go forward with these proposals and this legislation, it is incumbent on ministers and governments to state clearly whose jobs will be affected. The easy position would be for everyone to agree to a carbon tax provided they are exempt—and that is all that has happened. People who are agreeing to the carbon tax in industry are saying, 'We will support this provided we get exemptions, provided we get compensation.' How does that change that effect?
In closing, I see a lot of school children up in the gallery. They will probably agree with me on this if they think back. I have three teenage children and I quote this example quite regularly. My teenage children understand the need to make a difference and they talk to me all the time about climate change. I believe climate change is real. If it was not, you would not have coal, you would not have gas and you would not have oil—all products of climate change. But can I get my teenage children to turn off their bedroom lights, their computers, their bathroom lights or the television? The answer is no. They understand the need but the actions do not match the rhetoric. What we need to do is provide greater education so that people know that individually they can make a difference. That is what the coalition's direct action plan is about—individuals making a difference to reduce CO2 emissions. I cannot support this bill because it has no detail nor any substance.
The statement that was just made by the previous speaker, the member for Paterson, in relation to young people understanding the need but not prepared to do anything about it, I think actually reflects more on the coalition than any young people. If you actually engage with young people, they do understand that there is a serious issue to be debated here and I think they would like this parliament to be serious about the issue.
The bills before the parliament are in relation to the carbon farming initiative, and some people, particularly in the agricultural community, have given the imprimatur that this is about farming. It is not just about farming; it is about utilising or sequestering carbon in a number of areas that can involve the landscape, that can involve the farming community but it does not necessarily have to be in relation to the farming community. So a few of my remarks will be about the landscape and land abatement, particularly soil carbon and the way in which it may or may not be part of a process to actually abate carbon or greenhouse gas emissions. Some of my remarks will be related to the carbon tax, to emissions trading schemes and to ways we can address greenhouse gas emissions.
I am pleased to see the member for Wentworth in the chamber. He is one of the few people out of all of us, myself included, who has some real credibility on this issue. I congratulate him for that. Some parts of the debate might not have been easy for him over the last few years, but he has shown a degree of consistency that I think people have appreciated—even those who may not have agreed with him at various times. The rest of us probably do suffer some degree of guilt for understanding the need but not being prepared to follow through—and I again include myself in that.
There has been a lot of talk about the role of soil carbon. No-one in this building has a greater love affair with soil than I do. Soil is one of my great loves. As a young farmer in my 20s I was involved with the development of what is now called no-till farming, or conservation tillage farming—there are a number of variations to the theme. In those days we were having difficulty with root development in sunflowers. Sunflowers have a taproot and, if they can access subsoil moisture in the better soils, obviously the need for rainfall is heavily reduced. We were having difficulty getting the sunflower root to develop through the hardpan created by conventional tillage methods. Little did we know at the time that those methods were doing a lot of damage, but the issue at the time was how to get a better root development so we could utilise the moisture stored in the soil. When I was about 25 I built an implement to go on the back of a four-wheel-drive tractor to rip a trench every 30 inches early in the season before the rainfall occurred, and then plant over that trench later on. That sounds farcical now, but it actually did work. However, I did not need to do that to achieve the right outcome. What I did need to do was keep machinery off the land and change the technology to what is now called no-till, or conservation tillage, farming.
That change in technology did a number of things. It created a greater income, for one thing. It also created some unique features in the soil. Some of these heavy clay soils—podzols, chernozems—were comparable with the best soils in the world, in the Ukraine, parts of Africa, small parts of America and the Darling Downs and the Liverpool Plains of Australia. I have moaned in here about the coal seam gas industry and others invading these areas, and I will mention that again if I have the time. These soils have the capacity, under current technologies, to hold quite massive amounts of water. It is proven technology now that if you do go down the no-till pathway not only do you increase the infiltration rate of the soil but also you improve the microenvironment within the soil. When you relate that to the residue of the previous crops, you see that it has an impact on humus and organic matter, which is soil carbon.
The debate about whether soil carbon can be held in those soils and about the rate at which it accumulates in those soils is ongoing, but it is a debate that needs to occur—and it is part of the carbon farming initiative issue. These technologies, and grazing technologies as well, do have an impact not only on the productivity of the pasture but also on the productivity of the microenvironment within the soil. Many people are looking at soil carbon, or humus and organic matter, as a saviour. But whether soil carbon can go into a market or not is almost irrelevant to me, as a practising farmer. The money is in the productivity. The money is in soil environment improvement; it is in water quality and environmental improvement; it is in the reduction of soil erosion. That is where the money is. There has been too much preoccupation with this as a snap-your-fingers exercise and all of a sudden the farming community will be making a lot of money out of selling soil carbon. To sell something you have to be able to deliver it. Particularly with some of our cracking soils and soils subject to drought, there are no guarantees that, while you may have the carbon there one year, you will have it the next year.
There is a lot of research on soil carbon, and that is why I do support this initiative. Some research will come out of it, as it will come from other measures being debated in parliament, too. There may well be areas of improvement in the future. Prairie grass from the United States, which we call switchgrass, has the capacity to develop a very deep and fibrous root system. You cannot throw a blanket over all our soils because some of them will not sequester much carbon at all, and this is particularly the case in Australia, but switchgrass has the capacity to sequester carbon at depth. In that circumstance we may well end up with something that is a marketable commodity in some sort of carbon market. One of the initiatives that the Carbon Farming Initiative is actually trying to get to is not mentioned in so many words but it is drought proofing. It is about looking at ways in which we can encourage technologies that reduce the impact of drought—for instance, no-till farming in those black soils that I was talking about. That change in technology is measured by the impact of getting an additional six to eight inches of rainfall a year. In a 24-inch rainfall area, that is very significant. If that is not the greatest adaptation to potential climate change that you can have in the food production sector, I do not know what is. It is a simple change of technology, going from conventional farming through to no-till farming. All those other benefits that I talk about, which have a productivity effect—water quality, erosion, infiltration rates, soil structure, soil texture, increased yield, increased productivity in terms of income— are actually drought proofing. That is an important part of the capacity to farm carbon. Government policy at all levels has to encourage all those sorts of activities.
The other side of this debate concerns biodiversity issues. For instance, if we plant trees to sequester carbon we would probably be able to enter a market much more successfully, because the carbon is potentially held in the residue of the tree for far longer than in some of our soils. But if you look at the way in which that would occur and at the five cent target that the coalition currently has for reducing greenhouse gas emissions you will see that it would take about 20 million hectares of trees to achieve the five per cent reduction by 2020. We only have 26 million hectares of arable land in this country and many of those areas are marginal where the capacity to grow trees is significantly reduced. So relying on planting trees as a direct activity to sequester carbon—I am not against planting trees; I plant trees myself—will not achieve the outcome that members of the coalition are talking about.
If anybody took the time to look at the report of the Productivity Commission and some of the other documents that are currently out there, by far the cheapest way of achieving that outcome, if Australia determines that it wants to address that outcome—and I do not think we really have determined that yet—is through some sort of pricing mechanism, an emissions trading scheme preferably or through the so-called dreadful carbon tax with an entry period, with a flexible price, into an emissions trading scheme with international linkages. If we decide to go down that path, there is no other real choice. Under the cash-for-clunkers scheme that the government put in place, carbon abatement was $400 a tonne. Many people embraced that and said, 'That's good, it's encouraging people to get rid of their junk cars.' But it did very little to address the substantive issue.
The Productivity Commission looked at some of the other direct activities or policies, and I take issue with a couple of the areas in the report, particularly on the life cycle analysis of biomass and biofuels and also the sort of odd economic argument the commission has that the removal of a tax that does not exist is in fact a subsidy on that industry. I will not take the time to go into that.
There are a number of issues that are out there. It is very obvious to me that if Australia decides to go down this path—and I think this is where, in a sense, the member for Wentworth has been a leading light; it has been obvious to him from the word go—if we are serious, and I think a number of people are, and we can structure something correctly then the only way to achieve the outcome that we are really after is through some sort of pricing mechanism, whether that be entry into an emissions trading scheme through a carbon tax or directly into an emissions trading scheme, which would be my preferred option.
I would like to touch briefly on some other issues, including coal seam gas. I intend to introduce a private member's bill into this chamber. There is an enormous amount of evidence out there now that we do not know enough about the impact of coal seam gas exploration and mining activity on our soils, our landscape and our groundwater systems.
There was a lot of very positive engagement in relation to the report on the Murray-Darling Basin, but one of the red lights that was being waved at us, whether we were on the Darling Downs or Liverpool Plains or in other areas, was the lack of knowledge of the coal seam gas industry and, in particular, how it could relate to these very soils we are talking about that we want to use for long-term food production and how they relate to water quality and the broader basin issues that this parliament is also dealing with. When I introduce a private member's bill, I would encourage the parliament as a whole to take that issue seriously. It is a serious issue out there. The fact that the current Minister for Sustainability, Environment, Water, Population and Communities had to put 300 conditions on a coal seam gas proposal in Queensland means that there is something dreadfully wrong with the process. (Time expired)
I rise before the House to speak on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and cognate bills. The bill before the House is an attempt to provide incentives for farmers to establish carbon abatement processes. The coalition supports this aspiration in principle. However, typical of this government, there is a startling lack of detail in the bill before the House. Again, the coalition is attempting to have this oversight rectified through the amendment put forward by the member for Flinders. This government has proven it cannot be trusted with public finances, so no blank cheques. However, the Carbon Farming Initiative Bill is a piecemeal component of the government's overall carbon dioxide emissions reduction policy. The introduction of a carbon tax in July 2012 will be the centrepiece of the carbon reduction policy of this Labor-Greens government, a policy which will destroy jobs while at the same time compounding the already huge cost-of-living pressures faced by Australian families.
Carbon abatement measures, such as the Carbon Farming Initiative, mirror the direct action climate policy the coalition took to the 2010 election. A central component of the coalition's policy to help achieve a five per cent reduction in greenhouse gas emissions from year 2000 levels by the year 2020 is to provide voluntary financial incentives for farmers to abate carbon dioxide emissions. Measures such as biosequestration—the capturing of carbon emissions in soils, trees and other biological matter—is part of this coalition policy objective. Dr Michael Battaglia of the CSIRO's Sustainable Agriculture Flagship, in the report titled Greenhouse gas mitigation: sources and sinks in agriculture and forestry, outlined the great potential for biosequestration to reduce greenhouse gas emissions. In this report, Dr Battaglia also found that:
We can potentially increase these stores in our rural lands and perhaps store or mitigate enough greenhouse gases to offset up to 20% or more of Australia’s emissions during the next 40 years.
The findings in this report by the CSIRO not only support the climate abatement feasibility of the coalition's direct action climate policy but contrast greatly with outcomes this government is foolishly accepting from the Renewable Energy Target scheme.
I have previously raised in the House the issue of the proliferation of wind turbine construction in the electorate of Hume. There are two major issues of contention with respect to wind turbine construction that are worth incorporating into this debate. The first is the misguided funding this government is providing for the construction of wind turbines through the Renewable Energy Fund and the second is the choice farmers and rural landholders are being forced to make with respect to the imposition of wind turbines on their properties. The most recent Productivity Commission report, titled Carbon emission policies in key economies and released on 9 June this year, made this statement on page XIV under the heading 'Key points':
Emissions trading schemes were found to be relatively cost effective, while policies encouraging small-scale renewable generation and biofuels have generated little abatement for substantially higher cost.
This statement by the Productivity Commission comprehensively slams the farcical claims by wind turbine industry bodies such as the Clean Energy Council that wind turbines are a viable and reliable alternative energy source to replace fossil fuels.
Wind turbine technology has proven to be neither cheap nor efficient when compared with our baseload coal technology or, as now illustrated in the CSIRO report, when compared with the potential for biosequestration to abate up to 20 per cent of Australia's total emissions over the next 40 years. According to a report this year by the Victorian Auditor-General, the cost per megawatt hour for wind turbine technology was between 80c and $1.20. This compares with a cost for brown coal of 35c—so wind is more than three times as expensive. Wind turbine developers are saying that they are going to supply enough clean electricity to power up to 180,000 homes in the electorate of Hume, preventing up to a million tonnes of greenhouse gas pollution from entering the environment. That was in a 17 May 2011 press release from the wind farm at Rugby. What the developers and operators cannot and will not tell you is how they are going to produce that kind of energy when it has been proven that wind turbines operate at 30 per cent efficiency—and that is when the wind is blowing.
Biosequestration offers a serious carbon abatement alternative for the Australian government to pursue. That is why the coalition took this measure to the last election under our direct action policy and why we support this bill in principle. But a measure such as the Carbon Farming Initiative provides more than just another alternative for the Australian government; it provides landholders in the electorate of Hume with a real alternative to the construction of industrial wind turbines. I have been advocating on behalf of landholders and families in my electorate for an immediate moratorium on wind turbine construction throughout New South Wales. One of the aims of the moratorium is to give landholders in the sights of wind turbine developers a reprieve from disgraceful, predatory practices, such as orders of property acquisition and intimidation into signing confidentiality agreements, which some of these wind developers are subjecting landholders to.
After being subjected to 10 desperate years of drought, it is understandable that farmers in electorates such as mine are looking for a reliable source of income with the added benefit of contributing to the abatement of greenhouse gas emissions. This bill seeks to create incentives for farmers and landholders to undertake voluntary land sector abatement projects. The government will provide saleable Australian carbon credit units in return for eligible carbon offset projects. Carbon farming would have additional environmental benefits such as reducing salinity and erosion, protecting biodiversity, regenerating landscapes, improving water quality and improving agricultural soil productivity. It may come as a surprise to many latte- sipping inner city bureaucrats on the left of the political spectrum that farmers in Australia have been managing and implementing sustainable soil measures for decades.
A biosequestration carbon farming initiative is in principle a sensible way for farmers and landholders to derive income from carbon abatement measures such as capturing and destroying methane emissions from landfill or livestock manure, or removing carbon from the atmosphere and storing it in soil or trees—for example, by growing a forest. Sensible and sustainable abatement measures such as these have the potential to abate 20 per cent of Australia's total greenhouse gas emissions over the next 40 years and mean farmers do not have to go down the destructive path of allowing the construction of industrial wind turbines on prime agricultural land. As a consequence of the misguided implementation of the Renewable Energy Fund, there has been an explosion of wind turbine applications in electorates such as mine. This would not be a problem except for the fact that government planning regulations in states such as New South Wales have failed to keep pace with the blitz of development applications. This failure to adequately regulate the implementation of green schemes effectively is the coalition's primary concern in supporting the government on this bill. Furthermore, this is why the member for Flinders has sought to amend this bill by requesting that the detail of the Carbon Farming Initiative bill be included in the legislation, rather than by regulation after the bill has been enacted.
Throughout my 23 years in both state and federal parliaments, I have adhered to a very simple principle: don't listen to what Labor say; look at what they do. Before the last election we had the Prime Minister declare, 'There will be no carbon tax under the government I lead,' only to trash this commitment for political expediency and survival. The Treasurer claimed that the members of the coalition were making wildly hysterical claims in warning the Australian people that the Labor Party could not be trusted and that a carbon tax would be high on the government's agenda if re-elected; yet, aside from the untruths and deceit contained within the opaque words of this illegitimate government, it is their actions that cause the greatest consternation. This abject lack of policy detail is why Labor's carbon tax is being totally rejected by mainstream Australians. Without policy detail, why would the opposition even consider supporting this huge impost on Australian families already struggling with increasing cost-of-living pressures? The government's carbon tax will hit every Australian household. A carbon tax will unnecessarily lift electricity, grocery and petrol prices, and attack jobs in our key industries. According to recently released Treasury calculations, if the government decides to impose a $30 per tonne carbon price, the cost impact on households without petrol tax concessions would be $863 a year.
The Wollondilly region in the north of my electorate relies heavily on the jobs created by the coalmining sector. The chief executive of Australia's second largest metallurgical coal exporter, Anglo American Metallurgical Coal, has warned that a $25 per tonne carbon tax could put at risk 3,000 regional jobs in Queensland and New South Wales, as well as put at risk up to $2 billion in planned investment. A carbon tax of $26 a tonne would mean that 16 coalmines—some of which are in my electorate—would close, 23,000 mining jobs would be lost and 45,000 jobs would be lost in industries like steel, aluminium, cement, glass, chemicals and motor cars. To add further insult to Australian families, Labor's 2011-12 budget fails to give any details on the impact the carbon tax would have on cost-of-living pressures on families. The budget does, however, contain a $13.7 million taxpayer funded pro-carbon advertising blitz. The only details we have of the financial impact of the government's carbon tax is not the price per tonne nor the impacts on the costs of living but how much the government believes it needs to spend to ensure the carbon tax does not destroy its re-election chances.
The Gillard government's unilateral step to tax carbon dioxide emissions will send jobs offshore and hurt Australia's economy without improving the world's environment. By contrast, the coalition's Direct Action climate change policy will reduce emissions in a way that is economically responsible and that will not cost Australian jobs. The coalition's Direct Action plan will reduce emissions by five per cent by 2020 through creating a fund to buy back greenhouse emissions, through planting more trees and through better soils and smarter technology—principles that we support in this bill. However, the disastrous record of policy construction and implementation by the Rudd-Gillard governments is astounding. This is why, in good conscience and for the sake of good governance, the coalition could not allow this bill to go forward without the proposed amendment.
The Carbon Farming Initiative bill contains very little substantive policy detail, relying instead on regulation that will be outlined after the bill has been enacted. This is simply not good enough. The coalition will not be handing the most incompetent government in Australia's history a blank cheque to pay for another disastrous Home Insulation Program or to fund rorts such as those allowed under the Prime Minister's own school halls debacle. For these reasons, the coalition's amendment declines to give the bill a second reading until the regulations giving effect to the provisions of the bill are laid before the House.
I rise to support the Carbon Credits (Carbon Farming Initiative) Bill 2011 and cognate bills and to oppose the three amendments that are on the table. I start by saying that this is important work for those who do believe in land and place within Australian public policy. It is by no means the entire answer, but it is certainly one part, one chapter, one step along the journey to more productive land, both on-farm with food productivity and off-farm with biodiversity outcomes. For those in this chamber who value food production, who value Australia's unique ecosystem and who recognise the opportunities for co-benefits from legislation such as this and the overall push to see a price on carbon, this is an important step in telling the story—through this chamber—that land and Australia are important in policy development.
We are living at a time when all around the world there is a grappling with a science question, which is also an economic question. The economic question which hangs off the back of the much talked about science is the economic shift from labour productivity to resource productivity and how we move to an era, begrudgingly or otherwise, of maximising in a sustainable way productive outcomes from the resources. It is an era that will be about driving better environmental outcomes to achieve better economic outcomes. It is not about killing growth, it is not about killing economies and it is not about killing all the flow-on social benefits that come as a consequence of economic growth. It is about trying to grapple with the challenge that is before us as to how to maximise environmental outcomes in a sustainable way with the resources that we have to achieve that economic growth and the whole range of social benefits that come as a consequence.
As for this legislation in particular, I think Australia has a really valuable contribution to make in regard to the challenges and those economic questions that are before us as to how land, land mass, biodiversity and the storage of carbon in all its various forms, in a biological sense, can play a role in contributing to an overall response to both the economic question and the science question that are being put to every single country in the world. I think that, as Australia has a large land mass with degraded soils and older soils, this is an area in which Australia can lead and should not be afraid of leading, so making this the Australian contribution to the questions that are being put before all of us.
I have just had the opportunity to go and look at New Zealand 12 months into their emissions trading scheme with a large agriculture based economy. I expected to get some assistance in this area from them but what I found was that their gift to the global economic challenge has nothing to do with agriculture at all. It is about accrual accounting techniques and actually having their emissions trading scheme and the fiscal responsibilities that go with it on a budget so that everyone in the New Zealand community is very aware that one way or the other there will be a cost by not taking appropriate environmental action. Either you pay for it through an emissions trading scheme, with some sensible policy development in that area and some behaviour change amongst the heavier polluting industries, or that becomes a budget item and everyone gets whacked through their taxes. That is a sensible contribution to the economic and science questions that are being put before us. It is not what I expected to find.
What Australia's contribution really can be is in this land sector, particularly in the area of soil carbon. This is one possible contribution to that overall story from Australia. I do think we are progressing significantly in both the understanding of soil science and the accounting of soil science. There is definitely more work to be done but we are very close to not only the science being in but the accounting being in as well. These are potentially very exciting days if that work can progress well. But that should not necessarily shape policy now. I think this piece of legislation ticks the boxes. It is sound on the science, it is open to being sound on the questions of additionality and permanence; it certainly does not challenge those and it is certainly a transparent model, one with integrity. If we are looking to build a framework for the potential outcomes that we are looking for, a transparent accounting tool with integrity that deals well with the science and is very aware of and not challenging those two key questions around additionality and permanence, then I think we are building something that is a contribution to better policy for this country and for this topic.
I really do think it is in the soil and the land sector that we in Australia have a great opportunity, and it is for that reason that over the last six months I have been personally holding land use forums in this parliament and talking to a whole range of people who have been wanting to contribute to those discussions. It has been incredibly valuable for me and for policy development and, hopefully, for the debate that is currently unfolding before us. I would like to thank some of the participants in those forums. I will list some of them just to highlight the fact that there are a lot of people from a diverse range of community and business sectors who are really wanting to see this place deal with this issue in a sensible, strategic and efficient way. I refer to people such as Arek Sinanian from Parsons Brinckerhoff, who has been a champion on this topic for over 30 years. I have been in this chamber since 2008 and feel like I have been spilling blood all over the place on this topic for three years. I know there are others who have been fighting this for five years to 10 years, but people such as Arek have been hot on this topic for over 30 years. We need to at least listen to the valuable contribution that people such as Arek have to make. I refer also to Molly Harriss Olson, who is, I think, on the business roundtable that government has set up as part of pricing carbon. She has been an excellent contributor to policy outcomes in this area. The advice has been of great value. There is also Andrea Koch from the United States Studies Centre at the University of Sydney. Her work in soil science has been world leading in the way that she has pulled together soil science conferences, the latest one having been in February, I think, this year. So world-leading advice is now coming from the University of Sydney in the area of soil science. I thank her for her advice as well. There are two more significant people that I would like to mention. One is Vincent Lange from Centrefarm Aboriginal Horticulture. I strongly urge those who believe in economic development on Aboriginal lands to have a look at the work that Centrefarm is doing just near Alice Springs. It is the regional development we all talk about in action. They are very strong in wanting to see some policy outcomes, not only through the Carbon Farming Initiative but through a suite of land use packages that can really start to value-add to the work that they are doing in a credible way right now.
The other person I would like to mention is Major General Michael Jeffery, along with the Wentworth group and Outcomes Australia. They have been very hot over a long period of time in identifying the importance and benefits for Australia of our developing policy in the area of land and soil science. I want to thank Major General Michael Jeffery, the Wentworth group and Outcomes Australia for their support and contribution as well.
So there are plenty of advocates in the field wanting us to do something strategic, efficient, smart and logical. This is the start of the journey. It is time for us all to have that bit of a wake-up call. I think the coalition's direct action policy is an attempt to identify this as an important area for Australia. I appreciate that. I therefore am a tad surprised that there is this want to oppose this legislation. I would have thought this legislation is complementary to the direction that the coalition policy conceptually wants to go in. I hope there will be some consideration about that. This is an opportunity for them to actually value-add rather than divide on the issue of the importance of soil science, land use and land management in Australia.
This is the start of the wake-up call. This is a recognition that soil does underpin life on planet Earth. It is a reality that we can quite often forget. We have all heard about peak oil. The term 'peak soil' is now entering the public policy debate. The soil science suggests that 100 years is what we have before topsoil is gone or threatened. With food production as one of the key issues globally, this is therefore an issue of great importance, for a number of different reasons. The five major issues that humanity faces are energy security, water, food, the environment and poverty. All five of those are directly or indirectly connected to the importance of soil. I hope that this is the start of Australia understanding that and starting to place a public policy benefit on that.
With the figure of about 40 per cent of global agricultural land seriously degraded, and with land degradation costing Australia alone probably about $3 billion per annum, we need to do some public policy push-back. Again, I hope that this is the start of the journey. The science can now predict soil carbon sequestration and stabilisation. There are recent advances in mathematical models that give reliable estimates. The interactions between the microbial communities in soil with carbon and the impacts on soil carbon pools are now being much better understood. The partitioning between the stable carbons of 100 to 10,000 years and those that will leach within 10 years is now being better understood, and the accounting tools are now in.
I re-emphasise the point that we can do this. The model is there, the science is certainly there and the mathematical and accounting tools are there. This is by no means the magic bullet. As I said at the start, this is one step, only one part of what I hope to be a suite of measures that is now starting to, in a public policy sense, recognise the shift of labour productivity to resource productivity that is the challenge before all economies, including ours.
For those that do believe that Australia matters, that land matters, this is the start of the opportunity to address that and place a value on that. I look forward to seeing more legislation of a similar nature pass through this parliament soon.
This is a debate that we should be having in Australia, and indeed globally, regardless of the discussion that is also raging about climate change. We all know that we have declining productivity in our soils, we have declining biomass and we have biodiversity problems right across the globe. There is no doubt that we must address problems that have been brought about by inappropriate farming techniques, by urban encroachment or by bad public policy right across the globe.
Today, though, we are particularly debating 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 problem is that this government just does not seem to be able to get it right when it comes to doing the hard work behind what should have been sensible moving-forward policy that delivers a better Australia. We have legislation before us with no regulations spelt out. We are told simply: 'Trust us. Sign this set of bills through and you'll find the details in the wash sometime down the track.' Unfortunately, Australians from a whole range of sectors no longer trust this government enough to simply say, 'We'll tick the big boxes and hope it all works out in the fine print.' That is not the way, we have discovered, that we can trust this government. We have seen a whole range of problems, from things which should have been small, like the pink batts program, through to things like Building the Education Revolution, where the outcomes could have been great but instead were a long litany of no real value for money and people's aspirations and communities being trampled for the sake of expediency and political opportunities.
Here we have legislation which describes how it is going to improve Australia's carbon sequestration, but it is very light on how that might happen. We fear it will in fact have very perverse outcomes. The coalition, of course, does have an alternative strategy and one which will make sure that we have a future of higher productivity for food and fibre production in our country. After all, as the previous speaker said, there is a major concern about the quantity and quality of food available for the growing global population, and Australia is very well positioned to lead in the production of food, both domestically and globally.
What have we got? We have a bill which seems to be fixated with growing more trees. All farmers know the value of protecting remnant vegetation, growing additional vegetation for biodiversity, protecting from soil erosion, providing supplementation as well as shade and shelter. No farmer willingly goes out and simply destroys vegetation without understanding exactly what the impact is for their bottom line and the environment. After all, the two are totally interrelated: a farmer's bottom line and the condition of their soils, water resources and air quality in terms of dust suppression and so on.
I grew up on the great treeless northern plains, known as the Tragowel Plains. There were only trees along the watercourses. That was not a consequence of farmers going out and cutting down everything that stood still; it was a consequence of, no doubt, hundreds, if not thousands, of generations of Indigenous use of that landscape—the burning regimes—and of natural phenomena. In 1836, Major Sir Thomas Mitchell described the area where I grew up as a treeless plain. Today, if you go there, you will see trees from horizon to horizon—in fact, there are trees all along the fence lines, the roadways and the channel check banks. Those trees were planted for salinity management and control. Some of them were effective; some were not. But the fact is that farmers will and do respond to what they are advised, and where they can see that tree planting is effective in improving landscape values and productivity.
But what we have in this bill are the sorts of suggestions and incentivisations which lead us instead to think about the old managed investment schemes. We all saw the disasters in parts of Victoria, particularly western Victoria, in parts of New South Wales certainly, and in parts of Western Australia where tree planting was incentivised on a commercial basis but at a huge cost to biodiversity. Disease was a serious risk where huge monocultures were established. In Tasmania, the same things were happening. We found that, once these enormous new forest tracts were planted, they were minimally managed or in some cases just airily sprayed from time to time, with serious consequences for neighbouring landscape. We do not want to see a monoculture of forestry established right across the Murray-Darling Basin, which is what the CSIRO has predicted might occur if a bill like this got through.
What we need is a whole raft of sensible strategies that lead to greater carbon farming initiatives and carbon sequestration. They would include things like biochar, no-till farming, perennial pastures and, of course, better feral animal control. Much of that control is on range lands and public lands, which farmers do not have immediate responsibility for. There will be many contributions from new genetics development, which will no doubt range from plant to animal genetics. In the future it will help that crops and animals can thrive in different seasonal regimes from those that we have now.
We want to see a whole range of strategies developed and supported in this country that deal with greenhouse gas emissions and, at the same time, improve our environmental sustainability and productivity. The two can go hand in hand. In fact, we have to walk down the path of a win-win scenario. Unfortunately, the rules in relation to carbon sequestration and carbon credits detailed in Labor 's bill indicate that you cannot have a business-as-usual scenario. You have to do something new and different or extra in order to get recognition for your efforts. What if you have been doing your no-till farming for a number of years? Is it just the very late adopters of that practice who will be rewarded for their late adoption? That is a nonsense. What if a whole range of new strategies, processes or methodologies that were developed by our excellent research and development organisations came up in the future? Under this legislation, we understand that farmers will have to lock themselves into a 100-year initiative. They will have to sign up to undertake, for example, a particular strategy or plant a particular range of forestry product and not disturb it for 100 years. How absurd! What farmer, what individual, what business can do that? And why would they do that, when they know that there is a very fast evolution of best practice, always, particularly in Australia, which is known for its innovative agricultural practice?
It is very distressing and concerning for our farming population to see an opportunity like this missed, to see another well-meaning, no doubt, but misguided attempt to try and do right for this country. We have examples of what can go very wrong when we incentivise the wrong systems in this country—for example, agriforestry through MIS schemes. We know that there is absolutely no room in Australia for further disturbing our capacity for groundwater regeneration. We know that a lot of additional tree planting does disturb or use up groundwater accessions. We are concerned about who is going to manage our landscape if a lot more fuel load is in that landscape for wildfires. We already have in the Barmah Forest, for example, some of the biggest black water evidence events on record, which were man-made as a consequence of bad public management of the biggest red gum forest in the world. That was a consequence of mismanagement of agriforestry resources and a lack of understanding about how to manage controlled burns and grazing in that forest. There is not, unfortunately, in Australia a history of governments, especially Labor governments, doing the right thing by agribusiness. The farming community in my region is very conscious of the need to farm effectively. We know about environmental sustainability. We know about landcare. For example, my region pioneered a lot of the early landcare and soil conservation works. It is a tragedy that those programs have been defunded. Our volunteers are exhausted after years of drought and now flood, but there is no government support for their facilitators to manage Landcare volunteers and that is a tragedy. We hope with a change of government and a return to the coalition that we will be able to restore the remnants of the Landcare movement. We hope, too, that the work of the Natural Heritage Trust—which did such excellent work in biodiversity protection, in weed control and in helping with Indigenous Protected Areas—will recommence with a government that understands and cares.
We cannot as a coalition support this bill. We have amendments and we urge this government to look at those amendments. We want this country to have a farming regime which involves very much greater carbon sequestration. We want our farmers to participate in the carbon credit trading which may evolve as time goes by. We are very conscious of what has happened in New Zealand. New Zealanders are our closest brothers and also our competitors in the commercial world of exporting. We know that those farmers are already suffering thousands of dollars per year in loss of competitive advantage because of poor policy in their country.
We urge this government to look harder at what they are trying to do here. I acknowledge it is well meaning but, unfortunately, it is misguided. It is not good legislation. It leaves the detail to regulation. We cannot trust this government to get regulation right. We need to see the i's dotted and the t'scrossed. There is so much at stake. We cannot expect any sector of our society to lock itself into any practices for a 100-year stretch. That is just a nonsense. It flies in the face of all we know about the evolution of science and best practice.
We know that our country can be one of the great food providers for this and following centuries. We want to do the hard work. We have already moved to change the malpractice suggested in the guide to the Murray-Darling Basin Plan, a suggestion to end irrigated agriculture in the Murray-Darling Basin as we know it. This government is already responding positively to an alternative plan which will not simply decimate irrigated agricultural communities. I put to them that they should look at these bills again, look at the realities, take advice from the CSIRO, consider the work of the Australian Farm Institute, look at the best practice among our farm families in Australia today and do not handicap them as they compete domestically and internationally. Make sure that we can do our best to deal with climate changes and Australia's seasonal variability and also that we can do our best as good global citizens. What is proposed here is simply paying lip-service to what is a very complex problem and it is simply not going to serve the needs of our nation or our global systems. It is simply going to leave our country once again with bad policy and inadequacy. Quite frankly, our country deserves and must have much better.
I am very please to speak in support of the Carbon Credits (Carbon Farming Initiative) Bill 2011 and against this amendment. This is a subject I am extremely passionate about, representing a region where this issue is going to land most significantly. My own family have been dairy farming in the Eden-Monaro region for 160 years and have done it tough through the recent drought and the tough times, as I know a number of members have experienced and understand. Yesterday, the member for Gippsland was expressing concern for me as to whether or not I was stepping up to the plate on these issues and having to tow the party line. I really appreciate the concern of the member. He is a good bloke, but let me reassure him that this is a subject I am passionate about and I am sincerely advocating a bipartisan approach to this issue. I really believe it is an issue on which we can be bipartisan. We do not want political point scoring—this is just too important for our farmers, for the nation and for the world.
It has been a great privilege for me to have listened to the contributions by the member for New England and the member for Lyne, both of whom represent the voices of reason in this chamber. They are obviously amplified in the current circumstances and that is a good thing. The member for New England has great expertise, as a farmer himself, and when you hear him talk on these issues, you are not hearing a partisan political point of view; you are hearing the voice of reason. We should heed that voice of reason because now is the time for us to act.
This Carbon Farming Initiative is a policy intersection. A lot of issues come together here—food security, the carbon price and the future of our farming in the way we deal with drought and productivity in the agricultural sector. In the coming weeks we have a serious meeting of the G20 agricultural ministers, followed by a very important FAO meeting in Rome, as well as the gathering of the Global Research Alliance ministerial summit. That in particular is highly relevant to the discussion we are having here.
People are trying desperately internationally to come to grips with food security. It is one of the most serious challenges the world faces with growing population, the effects of climate change and the loss of arable land. The Global Research Alliance is looking in particular at agricultural greenhouse gases. We have been a very active participant in that process and certainly through our own carbon farming research and through the processes of the climate change research program we have played a very vital role in the elimination of nitrous oxide emissions—a highly significant contributor to our overall emissions story. Coming to grips with it will aid our position and also the world's efforts as we contribute our ideas and the outcomes of our research to this issue.
Australia needs to be part of this story. We have been part of the international agricultural story through our foundation participation in the FAO. So obviously there is a great story to be had here. This is something the coalition members who purport to represent regional areas and the rural sector of this country need to understand. I know there have been issues raised about accountability, management of this system and prevention of speculation et cetera. A vast range of safeguards are built into this framework. We have the administrator, who will manage the processes of the Australian carbon units, which will represent a tonne of emissions, and the depositing of those units into regulated accounts. That will be complemented by the Domestic Offsets Integrity Committee, which will manage the process of approving the methodologies. That is the dual responsibility involved in this process. The Department of Climate Change and Energy Efficiency is managing the establishment of the market processes and the Department of Agriculture, Fisheries and Forestry will also contribute its input on methodologies. Those methodologies will be subject to the sign-off of the Domestic Offsets Integrity Committee in advising the minister—so the minister must take the advice of this committee.
In addition to the safeguards that are in-built in that respect, there will be auditing of this program put in place. It will be a robust auditing framework, providing buyers with confidence that the offsets are genuine abatement. That will be established under the National Greenhouse and Energy Reporting Audit Act. All audits required by the legislation must be undertaken by greenhouse and energy auditors who are registered under that act, so there will be very significant safeguards built into this process.
When we talk about this issue, as the member for New England highlighted, we are talking about productivity gains. There are many challenges out there in the landscape at the moment. We have seen people trying to come to grips with this—and the member for Lyne mentioned Major General Jeffery—through the natural sequence farming initiative. But there needs to be understanding of how important some of these measures are for productivity. For example, revegetation is something that a lot of our farmers have taken up, understanding that devegetation and deforestation have caused significant deterioration of their properties. Revegetation can assist in building windbreaks. It will help contravene erosion of the soils. (Quorum formed) I can understand why a quorum would be called in the middle of these very essential points: they embarrass the coalition because they are so important to the people whom they purportedly represent.
I was talking about the importance of some of the measures that will be accredited under this regime, including revegetation. Revegetation is important for building windbreaks on properties, it is important for combating erosion of the soil, it is important in providing shade for livestock and it is important for improving the quality of water catchments on properties. These are investments that are going to improve land as well as leading to abating carbon emissions and earning credits under this regime.
We have heard a lot of talk about carbon sequestration in the soils. This offers huge potential for us as well. We are at present commissioning and promoting a lot of research into these things. We have over 70 different types of biochar under analysis, and there will be great potential in that, as Mr Garnaut has highlighted. Even if we realise only a part of that potential, it will be an enormous contribution to this story. There is some concern about soils possibly losing that storage. But under this scheme that risk for the farmer is entirely eliminated due to the risk reversal buffer system whereby five per cent of the ACCUs issued will be held in security against the loss of carbon in those soil situations. Of course, farmers would lose the income from that stored carbon and would be required to re-establish the stores, but they would not be penalised for any loss of carbon in that respect.
We know that carbon is very important for the health of the soil. We know that carbon helps retain moisture in the soil and is a key nutrient. A lot of the farming practices that have been adopted over the last few centuries have been counterproductive to the health of the soil because they have denuded carbon, and therefore we need to take dramatic action to stop that. Under this system farmers will have tradeable credit. I heard reference to the fact that there were issues to do with Landcare. Well Landcare has been a high priority for this government and Landcare is going to be at the heart of helping to deliver this scheme. As this process unfolded we had a forum earlier this year in March where we had 56 Landcare facilitators who were being trained in the concept. Since that time we have been developing a training regime for those Landcare facilitators and now we have 85 people involved in that program who will be associated with the 56 natural resource management regions. They will be deployed to conduct a wide range of workshops with landholders out to 2014 as soon as this legislation is in place. Those facilitators will be out there helping farmers to aggregate and to deal with carbon-trading companies to diversify their income base as well as gain these productivity benefits. They will be associated in that process with other experts.
We have seen, as Mr Garnaut said, that this is essential for farming. It offers the potential to make a large contribution to our emissions reductions, but Mr Garnaut also highlighted the possibility and the potential that this sector could achieve from a carbon farming initiative, which could be the equivalent of a new wool industry. Mr Garnaut highlighted that there is potential for a $2.25 billion industry based on this. I certainly would not claim this is a panacea for all the issues that face our farmers, but the National Farmers' Federation have certainly understood how important this is and fully endorse it. They have stated that:
The legislation has also addressed NFF concerns around potential perverse outcomes in relation to food production, water, local communities, employment …
The concern has been raised about the possibility of driving the uptake of arable land for use in revegetation. We know that will not happen. The managed investment schemes have been listed in the negative lists and will not be part of this scheme. Also, all proposals have to be in line with the natural resource management plans for regions, which is the mechanism by which communities can have input into that process. The minister himself can analyse each and every methodology and proposal in relation to the consequences they will have for issues of water management and management of arable land. Bear in mind that this government is also in the process of developing a national food plan, which will also intersect with determinations in this respect.
The issue of taking up arable land for carbon sink uses and revegetation is simply not a concern or a risk. It will be managed within the context of the scheme. It is an issue that has been raised in the process of developing the framework. So this is a spurious issue. It is highly hypocritical of the coalition to raise it as an issue when we know as a fact that their own proposals for inaction—they call it direct action, but in reality it is inaction—would in fact take up 20 million hectares of the Australian landmass, which is 63 per cent, most of our arable land, and be totally unsustainable in that respect. It is entirely hypocritical for them to raise that issue in this context. It will be well and truly catered for. The coalition members opposite who purport to represent the men and women on the land in this country need to come on board with this legislation. It needs to be done now for the future of farming in Australia.
As the member for Eden-Monaro was the final speaker, I would like to thank members for their contributions to the debate on the Carbon Credits (Carbon Farming Initiative) Bill 2011, Carbon Credits (Consequential Amendments) Bill 2011 and the Australian National Registry of Emissions Units Bill 2011. I would also like to thank the members for Lyne, Denison, New England and Melbourne for their contributions to the debate on these bills.
The Carbon Farming Initiative is a key part of the Gillard government's climate change agenda. Under this scheme for the first time the federal government will help facilitate the sale of carbon credits on domestic and international markets. The scheme will begin to unlock abatement opportunities in the land sector, a sector which currently accounts for around a quarter of Australia's emissions. It will contribute to improving farm productivity, creating jobs in the regions, providing new opportunities for Indigenous communities, enhancing our biodiversity and building resilience to the impacts of climate change.
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. It will create new, real and lasting economic opportunities for regional communities. Farmers and landholders will be rewarded for their actions to reduce or store carbon pollution. By 2020, the credits that are created from this initiative each year are likely to be worth hundreds of millions of dollars for regional and rural Australia. (Quorum formed)
I take this opportunity to respond to some of the issues raised. There has been much said by those opposite about the threat to prime agricultural land from tree planting. The government is confident that prime agricultural land is not at risk and that the legislative structure will prevent perverse outcomes. First, while permanent tree plantations will be rewarded, these must take into account applicable natural resource management plans. Secondly, all state, territory and Commonwealth requirements must be complied with, including any water entitlements which may be required. Thirdly, managed investment schemes will not be eligible because short-rotation commercial forestry will fail the common practice test, and management investment schemes will be explicitly excluded. Fourthly, the economics of carbon credits are such that land use change is likely to occur on marginal agricultural land, as evidenced by recent estimates of abatement by my department and the CSIRO.
It must also be remembered that the Carbon Farming Initiative is not just about tree planting but also covers a range of agricultural practices which reduce emissions, such as better fertiliser use, manure management and enhancing soil carbon. Many of these practices increase the productivity of prime agricultural land and this initiative will provide a new income stream for those who take up new and more sustainable farming practices.
This bill includes provision to exclude activities that carry a high risk of adverse outcomes on the environment or local communities through a 'negative list', which will be contained in regulations. The government will include activities on the negative list that pose a significant risk for the availability of water, to the conservation of biodiversity, to employment or to local communities. These activities will not be eligible to receive carbon credits under the Carbon Farming Initiative.
The Department of Climate Change and Energy Efficiency has undertaken a first pass risk assessment of carbon forest activities and released this for public comment. The government's position is that the following activities should be on the negative list: establishing vegetation on land cleared of native vegetation since 1 July 2007—this will remove the risk of a perverse incentive to clear native vegetation in order to establish a carbon forest; establishing a known weed species—this will remove the risk that invasive species will be part of carbon projects; establishing forest in conditions where it would risk impacts on the availability of water—this will remove the risk that carbon plantings will affect environmental flows for other water users; establishing a forest as part of a managed investment scheme—this will remove the risk of distortions to markets for agricultural land.
The government recognises the need to monitor issues that may be raised with crediting methodologies and will engage with local government, natural resource management bodies and other stakeholders on whether additional activities should be added to the negative list. The government also recognises the need to act promptly with respect to these issues to ensure that perverse outcomes for biodiversity or agricultural land use are avoided.
Negative list activities, and the circumstances in which they apply, will be tightly defined to avoid prohibiting low-risk projects.
The Carbon Farming Initiative has been designed to minimise the possibility of adverse outcomes from abatement projects. The consultation processes on the regulations will ensure comprehensive opportunities for public and parliamentary scrutiny.
With key regulations and the first methodologies now published, there is no reason to delay the passage of these bills. Investment in further methodologies and the underpinning science is dependent upon stakeholders having certainty that the initiative will actually go ahead. That is why it is essential for this parliament to pass these bills and not continue to find excuses for delay. It is a great shame that the opposition has blown so hot and cold on the Carbon Farming Initiative, having first called on all sides of politics to embrace the proposal and now, at the eleventh hour, capitulating to the views of the Nationals and walking away from that commitment.
The environmental integrity of the Carbon Farming Initiative is essential to the value and credibility of the credits that are created. The government recognises that some types of carbon projects can indirectly cause emissions elsewhere in the economy through the effect of 'leakage'. For example, a project based on preventing logging in part of our native forest estate could lead to an increase in logging elsewhere in the country, if demand for timber remains. If unaddressed, leakage can reduce or even obviate abatement from such projects.
The regulatory framework includes requirements for streamlined accounting treatments for leakage to be incorporated in methodologies. The department is currently developing mandatory guidance to establish the accounting rules for dealing with leakage. This will be based on a discounting approach which identifies the likely risk and extent of leakage for projects based on forecasts about supply and demand in the relevant market. The government will work closely with key stakeholders to develop this guidance.
Another key to environmental integrity is the 'risk of reversal' buffer. The government has recognised the need to keep this under review as further evidence is gathered of the potential risks. The CSIRO is well placed to do further work in this area. Similarly, the permanence requirements, which are relevant only for sequestration projects, will also be monitored in light of international consensus on these issues. It has also been said, incorrectly, that there is little in carbon farming for the Northern Territory. There is in fact a wealth of opportunities for Carbon Farming Initiative offsets in the Northern Rangelands. Australia's rangelands carry significant biodiversity values, but in many cases these have been degraded as a result of overgrazing and the proliferation of feral animals. Restoration of these rangelands will provide carbon as well as biodiversity benefits and create new revenue streams for landholders. Landholders will be able to receive credit for increasing carbon stores on rangelands through increasing soil carbon, establishing new vegetation, protecting existing vegetation by fencing off stock or reducing land clearing and removing feral animals. Reducing numbers of feral animals, including camels, feral cattle and feral buffalo, also reduces methane emissions. These emissions reductions can also generate Carbon Farming Initiative credits.
Management of savannah fires is another significant opportunity to generate carbon credits. The Carbon Farming Initiative will provide incentives for land managers to undertake strategic fire management across the north. As well as reducing emissions, fire management increases biodiversity and will generate jobs in remote communities. The government is committed to ensuring Indigenous Australians can participate and benefit from the Carbon Farming Initiative. The first methodology to be released for public comment under the Carbon Farming Initiative is the one I mentioned: savannah fire management. That is a methodology that could inject over $2 million of revenue each year into projects such as those in west Arnhem Land.
The member for Lyne spoke of the potential importance of the Carbon Farming Initiative to Indigenous Australia. The government is consulting with Indigenous Australians through a working group that I am chairing to work through implementation issues with the initiative. I am committed to ensuring that Indigenous Australians do stand to benefit. To this end, clarifying the consent rights of non-exclusive-possession native title holders will be important.
The government also recognises that other groups may need to be prescribed by regulation as having eligible interests. In particular, those who hold mining leases over an area of land have a legitimate interest in projects involving the same area of land and will be prescribed as an eligible interest. The government also accepts the need to work with natural resource management bodies to improve the consistency of regional planning. The government recognises the need to help build carbon literacy among landholders and has already engaged Landcare facilitators to communicate the benefits and responsibilities involved with the initiative to interested landholders. The government will continue to work with landholders, including Indigenous leaders, to ensure that they have the greatest ability to capitalise on the benefits of this very substantial opportunity for regional Australia.
In conclusion, the bills before the House today will provide real opportunities to regional and rural Australia to be part of the climate change solution. We appreciate that in this sector we need to learn more about the potential abatement opportunities by making a start with the Carbon Farming Initiative and getting projects off the ground.
That the words proposed to be omitted (Mr Hunt's amendment) stand part of the question.
The House divided. [11:45]
(The Speaker—Mr Harry Jenkins)
Question agreed to.
Original question put:
That this bill be now read a second time.
The House divided. [11:52]
(The Speaker—Mr Harry Jenkins)
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.