Senate debates

Thursday, 25 February 2010


Economics Legislation Committee; Proposed Reference of Carbon Polution Reduction Scheme Bill 2010 and Related Bills

12:02 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | Hansard source

in which case the coalition decided that it was not going to support the changes. Those changes were negotiated by the coalition with the government. So if Senate Abetz does not understand them now then it demonstrates that he was going to vote for something he did not understand, which is a reflection on how he deals with legislation.

The fact of the matter is that the changes that were negotiated by the then shadow minister for resources and energy, Mr Macfarlane, with Minister Wong made the legislation even more flawed than it had been previously. As we know, it was the coalition that insisted on an increase in the compensation to the coal fired generators, which went up from some 25 per cent to 75 per cent as a result of the coalition’s changes. There were many other changes, and some of them were just ridiculous in the sense that the compensation for the emissions-intensive trade-exposed industries went on for 10 years. There were all sorts of unjustified changes, and I come back to the fact that there is no economist anywhere who believes that there is economic justification for the compensation levels that were agreed to with the coal fired sector. As Professor Garnaut said recently, they are an ‘abomination’ in terms of public policy.

That is one of the reasons why the Greens do not support this legislation in its current form. We do not support the government’s low targets in the legislation agreed to by the coalition. They are very well argued and canvassed. They have been to numerous inquiries. The 5 per cent to 25 per cent target range is one of the reasons why Copenhagen failed, because the developing world pointed out, quite rightly, that the level of ambition from developed countries like Australia was not high enough. In the Copenhagen Accord, which is now on the table and was in part Australia’s construct, there was a deadline of 31 January for countries to sign on with obligations. That is now a soft deadline. Even people who agreed with the Copenhagen Accord now seem to be pulling out of it, and there is no certainty about where that is going to go. Indeed, with the recent resignation of Yvo de Boer from the UNFCCC, it is very hard to see where and what progress is going to be made globally in the next 12 months coming into Mexico, let alone after Mexico.

The Greens have said all along that the government’s legislation was flawed. It became even more flawed after the deal with Mr Macfarlane, and it is our view that it is unsupportable. It is unsupportable because its targets are too weak and because it locks in failure. It locks in those weak targets and the lack of transformation in the Australian economy into the future. It locks in the fact that Australia’s energy sector is not going to reduce its emissions until 2034, if ever, because the target of 2034 is based on an assumption that carbon capture and storage will be in place by then, and the reality is that it is hardly likely to be. So Australia’s energy emissions would go up while we were supposedly reducing our emissions by importing permits from overseas. But we ought to be reducing our emissions at home.

There are many reasons why the legislation is flawed, but, fundamentally, it does not drive the transformation to the low-carbon economy, to renewables and away from the old fossil fuel sector. It does not do it in many areas and it does not meet the scientific imperative in terms of the targets. That is clear to everybody. You take one position or another in relation to this. We do not need another inquiry to go over this ground over and over again. The ground has been clearly debated. I think the minister said in her contribution to this debate that there had been 15 inquiries. I have not actually counted them, but I think she is probably correct—at the least there have been very many Senate inquiries by various committees. All these aspects have been looked at and, more particularly, the coalition seemed satisfied with the arrangements it made and seemed to understand the changes it made to the bill as a result of the government’s discussions with Mr Macfarlane. Suffice to say, we will not be supporting this motion or the amendment proposed by Family First. I do not think we need the Productivity Commission to come back with yet another model in the scheme of things or, indeed, that it would be able to complete that in the time frame we are talking about.

The Greens have said that our fundamental problem with the legislation is the targets. They are too low and the reduction in emissions is dependent on the import of overseas permits. We want to see transformation of the Australian economy and that is why we have put an interim measure on the table to defer the issue of targets until the international scenario is clearer. Let us adopt an interim carbon price so that we actually put a price signal in for the longer term, and then wait to see what the target should be when it becomes clearer internationally. But we do need a price signal in the economy in order to start driving the transformation. The advantage of what we have put on the table about an interim measure is that it gives certainty for the long term that there will be a carbon price. It is a hybrid measure whereby we can put the price in via the architecture of an emissions trading scheme so that the architecture is in place. When we agree on targets as a result of the international scheme becoming clearer, then we can push the button and transfer from an interim carbon price set in this way to trading. You would be able to make a relatively seamless transition if you have the architecture in place to do so.

We have also recognised that, by putting in place an interim carbon price now in the absence of international trading, you do not import permits from overseas, so the transformation would have to occur in Australian industry. It is absolutely critical to the Greens that the transformation begins here at home and is not dependent on the import of foreign permits. That is a critical issue; the targets are a critical issue. Our proposition avoids having to deal with the target issue until it becomes clearer into the future and it overcomes the difficulty we have at the moment of a lack of a clear price signal—and people cannot make investments in the absence of a clear price signal.

For people who say that the renewable energy target issue—the wind farms et cetera—would be fixed if we had the emissions trading scheme in place, that is clearly not the case. The industry itself will says that it would not make an iota of difference. You actually need to fix the renewable energy target flaws in order to drive the kind of transformation we are talking about. Let us not hear any more nonsense that we do not need to fix the renewable energy targets because if the CPRS were passed it would overcome the problems for wind farms. That is simply not the case. The government cannot continue to arrogantly state that the renewable energy target is fine and not flawed and so on—it is flawed. People are losing their jobs as we speak, for instance in Tasmania at the Musselroe wind farm. There was an announcement in South Australia of no new wind farms until the RET is fixed and an announcement in Victoria at Portland that people will be losing their jobs by the end of the month. They have been on enforced leave for the last couple of weeks and, if this matter is not resolved by the end of the month, those people will be facing redundancy.

Come on now. This is an opportunity for the government to admit that what I said in the debate on the renewable energy target and what the industry said at the time has come to pass. Although the government pretended that they got it right, their modelling was wrong. The criticism made at the time has come to pass and it needs to be fixed. I plead with the government to fix this problem as quickly as possible because it is an issue concerning the transformation to renewable energy, and that is a critical strategic issue for Australia into the future. But at the moment this is about jobs. This is about livelihoods in rural and regional Australia, and you cannot just keep saying it is not happening—because it is happening. Profit results and industry results will be out this week saying that there will be no further investment. What a tragedy that is when it is simply a matter of a minister and a government just admitting that they got it wrong and that they will move to fix it. They said they got it wrong on insulation—that was obvious to all and sundry—and are now moving to fix it. I am not confident that the fix that is in place will be enough, but at least it is a start. They need to admit they got the Green Loans Program wrong and move to fix it. And now they need to admit they got the renewable energy target wrong and move to fix that. But, in the absence of that, we are going to see people unemployed by the end of the month, in addition to those in Tasmania who have already lost their jobs because the Musselroe wind farm is stalled. It is directly attributable to a failure of federal government policy. You cannot look at it any other way.

To conclude, as far as the Greens are concerned with this inquiry, we would like to see the proposal that we have on the table as a way forward considered. The opportunity that we are offering to broker a compromise position to get a carbon price in Australia as soon as possible should be taken up because there is no prospect of the Carbon Pollution Reduction Scheme being passed in the Senate. That has been obvious time and time again. I do not think another inquiry is going to change what people think, because nothing is changing in terms of the fundamental architecture of the scheme as was proposed by the government in the first instance and nothing is going to change on the targets or the way that the compensation provisions are constructed. There is no way that the Greens are going to support a piece of legislation which locks us into low targets and a failure on the science and locks us into not transforming the Australian economy but keeping the old coal sector, the fossil fuel sector, longer than is necessary and actually preventing the transformation that we desperately need. So, as soon as the legislation comes back, we will not be supporting it for all the reasons we have articulated time and time again. We do not think there is a need for another inquiry, because we think the ground has been covered many, many times.


Josef Tadich
Posted on 10 Mar 2010 10:44 am (Report this comment)

Great speech from Christine here, as someone who works in the renewable industry, she's definitely cut through the key issues of the RET and CPRS. These are complex issues, and clear action is required rather than more stalling tactics.

Proud to hear some salient and intelligent speeches in the senate!