Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Hansard source

The opposition understood that this motion was going to proceed to a vote on formality rather than being the subject of debate, so we are a little surprised that this debate is taking place at this time. Therefore, I will be brief in confirming what we have advised the mover of the motion, Senator Milne—that is, the opposition will not be supporting this motion.

We are currently engaged in an inquiry, chaired by Senator Siewert through the Senate Rural and Regional Affairs and Transport References Committee, into aspects of the fuel chain. It is particularly inquiring into peak oil and alternative fuel sources. So, to an extent, we are already proceeding down paths that one feels would also be dealt with by the proposed inquiry.

An extensive inquiry is proposed. It would address a variety of energy issues: greenhouse gas abatement targets, existing and emerging technologies that might contribute to reducing greenhouse gas emissions, the mix of energy supply, and energy use efficiency options that could feasibly meet Australia’s energy intensity requirements. Of course, some matters have been placed on the record in the inquiry before the Senate Rural and Regional Affairs and Transport References Committee which indicate that Australia is an energy rich nation. Australia is rich in coal and uranium, the solar and wind resources that are available to us are abundant and work is being done on developing technologies for carbon sequestration. That sort of evidence is already before the Senate inquiry and I expect that we will take more evidence.

Labor has of course been in the process of developing its policies in relation Australia’s energy sector and a number of contributions have been made which I would like to place on the record in the context of this debate. It is a fact that in our domestic economy both electricity and gas investor sentiment will be timid until some certainty is delivered on the question of greenhouse gas emissions, and that means signing up to Kyoto and implementing a national emissions trading system.

While it is often said that Australia’s per capita emissions of greenhouse gas are amongst the highest of all industrialised countries, we should not forget there are reasons for that. Australia’s relatively high energy intensity has to be considered in the context of the size of the country and its relatively low population density, its climate, its heavy reliance on coal for power generation and the presence of energy intensive industries which form the backbone of the nation’s productive capacity. For example, the country’s large size increases transport energy use, with the transport sector accounting for 40 per cent of the final energy consumption in Australia—and the last date I can refer to is 2003. Per unit of gross domestic product, our transport consumption is nearly 40 per cent higher than the average of the 26 International Energy Agency countries.

That does not mean there is no room for Australia to reduce its energy intensity and improve its energy efficiency. There is, and doing more to develop efficient public transport systems in urban areas and more to promote efficient vehicles and fuels is essential both economically and environmentally. Our high energy intensity does mean, however, that there are many issues to be resolved in designing a carbon allocation and trading system and particularly how to deal with our energy intensive export industries. But the need to resolve these issues is no reason to bury our heads in the sand and do nothing. The challenges ahead of us will not go away and they will be much higher than those facing us in meeting our first Kyoto target. We will simply have to be smarter about how we handle these challenges.

At the moment Mr Howard and Minister Macfarlane are doing what they do worst: they are picking technology winners. The potential cost to the economy of this approach far outweighs the ordered introduction of a market measure with policy makers setting the cost of carbon and the market participants deciding the best way to minimise it. The Kyoto protocol and the Asia-Pacific Partnership are not inconsistent strategies for dealing with global climate change. One involves binding targets for emissions coupled with the initiatives like the clean development mechanism and another involves encouraging the development and adoption of new environmentally friendly technologies and clean energy sources. They are complementary strategies. The last thing we want to do is disadvantage our energy intensive industries, many of which are already operating on a world’s best practice basis with respect to emissions. And to drive them offshore to countries with lower standards is not an end we would seek to achieve.

The reality is that to protect our own economic future we have to be part of the solution to the environmental impact of economic growth in our region dominated by China and India. It is here that the Asia-Pacific Partnership really comes into its own, offering Australia an opportunity for its own economic growth and an opportunity to be part of the solution to the environmental consequences of what is happening in our region—one of the most rapid expansions of economic activity that has occurred in world history. There are many impressive members of the partnership, including the United States and Japan and the world’s two fastest growing economies, China and India. By any measure the six countries in the Asia-Pacific Partnership—Australia, the US, Japan, China, India and South Korea—represent a regional partnership of great significance and even greater opportunity. Together they constitute 45 per cent of the world’s population, 49 per cent of the world’s gross domestic product and 48 per cent of the world’s energy consumption. By the same token, they are responsible for 48 per cent of global greenhouse gas emissions. As growth in energy use and related greenhouse emissions will be far steeper in China and India than anywhere else in the world for the foreseeable future, we need to bear that in mind.

This is a regional grouping of countries that, working in partnership, has within its gift the capacity to make a serious global impact on patterns of energy use and greenhouse emissions, and it is important that Australia is part of it. We are fortunate in having abundant and relatively cheap natural gas, coal seam methane and high-quality clean coal resources to meet domestic power needs today and for decades to come. Many other countries are not so fortunate. This gives Australia an enormous competitive advantage as a trading nation, providing energy resources, energy technology and energy services to the global community, in particular the Asia-Pacific region.

Let us not forget that at least 20 per cent of Australia’s exports come from energy resources, and that statistic is growing. We are already the world’s largest exporter of coal, accounting for 30 per cent of world coal trade; and we are a clean supplier, with Australian coal generally at the higher end of the quality spectrum. Around three-quarters of our coal exports go to countries within the Asia-Pacific Partnership. We supply six per cent of the world’s liquefied natural gas, currently around eight million tonnes, and this is expected to grow to more than 21 million tonnes by the end of the decade. Again, our key markets for LNG are those countries within the Asia-Pacific Partnership.

We supply almost a quarter of the world’s mined uranium and export to three countries within the partnership—Japan, the United States and South Korea. As senators will know, the government recently announced the commencement of negotiations with China towards a bilateral agreement to ensure that any Australian uranium supplied to China will be used exclusively for peaceful purposes. The federal Labor Party welcomes that announcement because if the government is serious in its desire to export uranium to China then a nuclear cooperation agreement is a critical first step. China is of course already a signatory to the Nuclear Non-Proliferation Treaty.

It is important for me to indicate that we are very keen to be involved in the debate about Australia’s future sustainable and secure energy needs. We are also keen to be involved in a debate which does not minimise Australia’s opportunities as a trading nation. We do not believe that this is the time for this inquiry. It is an inquiry which we expected would be the subject of a vote today, and we were not going to vote for it. I do wish that we had been given an indication that the matter would be debated, and so I simply seek to put those matters on the record to give some indication of Labor’s position generally on energy. We will not support this reference at this stage.