Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's advisory report, incorporating a dissenting report, on the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and six related bills, together with the minutes of proceedings.

In accordance with standing order 39(f) the report was made a parliamentary paper.

by leave—The seven bills that were investigated by the committee in its inquiry build on the Clean Energy Act 2011.

The Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012, and six associated bills, provide the framework for Australia's emissions trading scheme to link with other schemes, contributing to the development of a global carbon market.

The provisions will facilitate a one-way link with the European Union emissions trading scheme from 2015, through which Australian entities can acquit up to 50 per cent of their annual carbon liability with eligible international carbon units. A two-way link between the Australian and European schemes will commence from 2018.

The committee's inquiry focused on four issues raised by the bills: the implications for Australia of linking with international emissions trading schemes; the removal of the floor price; the surrender limit on Kyoto units; and the treatment of natural gas.

Following its inquiry, the committee believes that linking the Australian emissions trading scheme to other schemes will help deliver the government's overarching policy objective to foster a low-cost transition to a low-carbon-pollution future. Witnesses generally supported the concept of linking emissions trading schemes to this end. The committee also believes that the process of formally linking with other schemes provides the government with the opportunity to participate in treaty negotiations to ensure Australia's interests are promoted.

To facilitate a link with the EU ETS, the government agreed to remove the floor price for carbon units. These amendments provide for that. Evidence presented to the committee in its inquiry corroborated that the government's approach was sound in this regard, and the link to the EU ETS should present carbon price stability to the Australian carbon market in the absence of a price floor.

A limit on eligible Kyoto units was another condition of the linking arrangement, which the amendment bills also provide. The committee believes some limitation on Kyoto units is necessary to ensure the integrity of the linked schemes and for this to help foster a transition to a low-carbon economy in Australia.

The committee further found that the amendments relating to the coverage of the natural gas sector were necessary to give effect to the original policy intent of the Clean Energy Act 2011. These amendments aim to ensure that liability for carbon pollution is realised as high as possible in the natural gas supply chain and that the principle of universal coverage for all liable entities applies. The committee was satisfied that the remit of the amendments was limited, and was encouraged by the proposed consultation arrangements with the natural gas sector.

There exist a number of carbon markets around the world. Individually, these markets work in a localised way to reduce pollution, but linked they can create an international marketplace that fosters least-cost abatement and helps contribute to a global solution to climate change. The amendment bills before the House facilitate this and the committee supports the provisions in them. It recommends that the House of Representatives pass the bills.

Finally, I would like to thank the submitters and witnesses who appeared before the committee at its round table hearing in Canberra and my colleagues and the staff from the secretariat for their contribution to the report.

I commend the report to the House.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

by leave—I rise to speak on the House Economics Committee report on the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and other related bills outlined by the chairman of the committee. We Liberal members of the committee lodged a dissenting report, and there were a number of reasons why. First of all, we saw on at least 11 separate occasions this government repeatedly stating that it was committed to a floor price on the basis of providing business certainty when it came to the government's carbon tax. We saw in fact as recently as seven days prior to the joint announcement between the Minister for Climate Change and Energy Efficiency and a representative from the European Union a restatement that this Labor government is committed to the $15 floor price. So it is little wonder that we Liberal members of the committee heard anecdotal examples, as well as concerns raised by stakeholders and others, about the fact that this government, in less than seven days, went from solidly supporting a carbon floor price to saying, 'No, we are abandoning the $15 floor price and effectively embracing the European spot price.' The opposition members on the committee had concerns about that.

In addition to that, we were also concerned about the ridiculously tight time frame the committee was given to lodge this report. Bear in mind that we are talking about a $24.4 billion tax—a major structural change to the manner in which this government is dealing with a carbon tax worth $24 billion—and this government gave the committee one day for hearings. It is inexplicable and inexcusable that the Labor government has become so arrogant with power that Liberal members of the committee were attempting to scramble, with basically a week's notice, to undertake a one-day round table on a $24 billion legislative package. For that reason we also dissented on the time frames involved, because frankly it puts paid to any notion that this parliament is holding the executive accountable when the executive is prepared to simply walk away from any kind of real scrutiny by a House of Representatives committee that was established to undertake exactly this role.

In addition, we Liberal members of the committee had concerns about some of the proposed changes that were contained within the legislative package—for example, the cap that was put in place when it comes to international permits and, in particular, domestic abatement. The government say they are so concerned about the impact that man and, in particular, Australians are having on climate change that they have foisted on us the world's greatest carbon tax. But what they are doing is limiting opportunities for Australian businesses to abate their greenhouse emissions by purchasing international permits. The reason this is important is that we saw from testimony on the day that it is more expensive to produce abatement measures in Australia than it is to obtain them from offshore.

If the real goal here is to abate carbon emissions then surely whether they are abated within Australia or outside Australia would not really have much impact. Last time I checked, carbon emissions do not stay only in our airspace. Last time I checked, carbon emissions tend to go all over the globe. But when it comes to the policy rationale of this government we silo ourselves: 'CO2 is only going up into Australian airspace.' For this reason we saw the government making the absurd proposition as part of this legislative package that they would limit opportunities for international abatement. This has two effects. The first is that it artificially increases the cost of CO2 abatement, which in turn means that businesses and individuals in Australia have to pay more as those costs are forced down the line. In addition to that, those internationally who have the opportunity to provide carbon abatement now have less scope to do it. We heard from witnesses that, when it comes to CO2 abatement, new farms, new forests and those kinds of things were becoming uneconomic in developing nations because of the limits that have been put in place. So that was another concern that was raised.

But the most significant concern of all was the unwillingness of the government to provide, through Treasury, the impact on the budget as a consequence of the reduction of the floor price. We know Treasury said that the government have modelled $24.4 billion of revenue, based on a $29 carbon tax. We know that the European price is low—below $10. Yet the government wants to maintain that, even though it has modelled in the budget papers that the carbon price is $29 a tonne and raises $24 billion, if the price happens to go below $10 a tonne it will not tell us how much money it is going to raise, yet it still claims it will keep the budget in surplus. I sought to have that information tabled and it was not provided to the committee. That is a disgrace for a government that calls itself transparent. For that reason we are opposed to the recommendation made by the Labor members of the committee.