Senate debates

Thursday, 13 August 2009

Carbon Pollution Reduction Scheme Bill 2009; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009; Australian Climate Change Regulatory Authority Bill 2009; Carbon Pollution Reduction Scheme (Charges-Customs) Bill 2009; Carbon Pollution Reduction Scheme (Charges-Excise) Bill 2009; Carbon Pollution Reduction Scheme (Charges-General) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009

Second Reading

Debate resumed from 12 August, on motion by Senator Faulkner:

That these bills be now read a second time.

upon which Senator Milne moved by way of amendment:

At the end of the motion, add:

provided that the Government first commits to entering the climate treaty negotiations at the end of 2009 with an unconditional commitment to reduce emissions by at least 25 per cent below 1990 levels by 2020 and a willingness to reduce emissions by 40 per cent below 1990 levels by 2020 in the context of a global treaty.

9:58 am

Photo of Scott RyanScott Ryan (Victoria, Liberal Party) Share this | | Hansard source

I wish to briefly conclude the comments I was making last night with respect to these bills. The final comment I wish to make is with regard to the government’s abject refusal to discuss the contents of these bills and to consider negotiations with other parties and senators in this place. It represents the very height of arrogance for the government to continue to come up with excuses and reasons to avoid discussions and negotiations about the contents of these bills, because this place knows that negotiation improves legislation. Such significant reforms of our national economy, such significant legislative programs, are always improved by negotiation because they develop a national consensus. Similar changes to our economy in recent years have always been done with a national consensus.

Indeed, when the previous government introduced its historic tax reform it sat down with members in this place despite the then opposition’s refusal to countenance the mandate given to that policy. It sat down with people in this place and negotiated its passage through the Senate. It is the height of arrogance for the government to refuse to do so and it shows its contempt—indeed, its historic contempt—for such discussions and its historic contempt for the Senate.

As I said last night, this debate is about the legislation before us. It is about the government’s proposed CPRS. It is not about climate change and it is not about the science underpinning climate change. This legislation will cost Australian jobs, it will not achieve its stated goals and it represents a massive power grab and a massive tax grab by a government obsessed with its own spin and with increasing its role in our national life rather than listening to the genuine concerns of the Australian people. This legislation will be opposed by the coalition for those very reasons.

10:00 am

Photo of Steve FieldingSteve Fielding (Victoria, Family First Party) Share this | | Hansard source

Until recently I, like most Australians, simply accepted without question the notion that climate change was as a result of increased carbon dioxide emissions. I believed the media when they told me repeatedly that human caused carbon dioxide emissions were to blame for the changing temperatures on this planet. In fact, I listened to radical environmentalist groups when they protested about the damage we were causing to this earth and to our future generations.

I remember the enthusiasm surrounding former US Vice President Al Gore’s movie The Inconvenient Truth. In many ways it was the precursor to the obsession now with climate change. Climate change stopped being a topic of conversation only for scientists and radical green groups and suddenly became an issue discussed around the kitchen table. It was as if all of a sudden climate change hit centre stage and carbon dioxide was the main actor. Carbon dioxide was the new villain which needed to be caught and punished.

But all throughout this time one thing was missing, and that was genuine debate—debate on whether the science behind climate change as a result of human activity was even correct. The one question that needed to be properly explored was ignored. The crucial piece in the climate change puzzle was thrown to the side. Instead, scientific ambiguity was treated as if it were a fact. I am not saying that no-one ever questioned whether climate change was caused by something other than carbon dioxide emissions, but there are many experts who have called for a proper debate on the issue because of serious questions in the science which climate change alarmists have relied on. But until now the scientists who believe that carbon dioxide emissions are not the major driver of climate change have been labelled ‘sceptics’ and dismissed out of hand without real debate.

To question the science has meant public ridicule. To even question the science has carried a stigma and had you labelled as a sceptic. This is not a debate. Scientists who question the science behind climate change have been maligned in the media as fearmongerers and backwards. Their views have been treated with contempt. Anyone who dares to so much as even question the issue of human induced climate change is shouted down and discredited. Free and fair debate, the very thing which we as a democracy thrive on, has been stifled on the climate change issue. I will be making a challenge to the media towards the end of my speech in the second reading debate.

When someone told me recently that carbon dioxide emissions have skyrocketed since 1995 but that global temperatures have remained steady I was dumbfounded. I seek leave to have a chart incorporated into Hansard. Each senator already has a copy of this chart. It is the chart that shows carbon dioxide going up and global air temperatures staying relatively the same. Each senator has seen that chart. I have distributed one to each senator over the last couple of weeks.

Photo of Gavin MarshallGavin Marshall (Victoria, Australian Labor Party) Share this | | Hansard source

It is actually difficult to incorporate a chart. It will be subject to the technical capability required for such an incorporation.

Photo of Steve FieldingSteve Fielding (Victoria, Family First Party) Share this | | Hansard source

I have had some advice saying that it is probably technically possible, but I will leave it to Hansard to work that out. It is a chart that has been circulated to senators.

10:04 am

Photo of Kerry O'BrienKerry O'Brien (Tasmania, Australian Labor Party) Share this | | Hansard source

by leave—The government senators have seen this. We are not sure that it is technically possible for it to be reflected in Hansard. We would certainly consent to its being tabled, but at this stage we would like advice on capacity before we take the next step of conceding to incorporation. We will not grant that leave until we have that advice. We would be prepared to revisit it, but we would certainly grant leave to table it.

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | | Hansard source

by leave—I would suggest that we can move on on the basis that leave be granted in the event that it is technically possible, and others more advised in these matters than senators will be able to make that determination.

Photo of Alan FergusonAlan Ferguson (SA, Deputy-President) Share this | | Hansard source

Senator Fielding, would you simply like to table the document?

Photo of Steve FieldingSteve Fielding (Victoria, Family First Party) Share this | | Hansard source

I seek leave according to the way that Senator Abetz has just spoken about—if it is technically possible then leave should hopefully be granted by the chamber for it to be incorporated and not tabled.

Photo of Kerry O'BrienKerry O'Brien (Tasmania, Australian Labor Party) Share this | | Hansard source

We agree to that.

10:05 am

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

by leave—I would like some clarification. My understanding is that to date we have not had photographs, charts or anything else in Hansard. I would just like some clarification on whether at any stage any of us can move to incorporate photos, marks, charts or whatever. I would just like to clarify that because, if that is the case, it opens that up as an option for all of us. I just want to have clarity about that because I would be more than happy to have some charts put in Hansard myself. I would appreciate some clarification on what is normal procedure for Hansard in terms of incorporation of illustrative material.

Photo of Alan FergusonAlan Ferguson (SA, Deputy-President) Share this | | Hansard source

I am advised that, from time to time, things other than words have been incorporated into Hansard, but that happening is subject to technical ability. Yes, it has happened to a limited extent based on the technical capabilities. Are you objecting to leave on the condition that Senator Fielding sought?

Photo of Alan FergusonAlan Ferguson (SA, Deputy-President) Share this | | Hansard source

There is no objection to Senator Fielding seeking leave with that condition attached.

Leave granted.

The document read as follows—

10:07 am

Photo of Steve FieldingSteve Fielding (Victoria, Family First Party) Share this | | Hansard source

When someone told me recently that carbon dioxide emissions have skyrocketed since 1995 but that global temperatures have remained relatively steady, I was left dumbfounded. How could I, as a federal senator, vote for something that will carry such a high price for all Australians and have such significant consequences and not be able to answer such a simple question? If carbon dioxide is a problem, why have global temperatures not been going up as predicted in recent years?

I went out and spoke to a cross-section of scientists and quickly began to understand that the science on this issue is by no means conclusive. I even went on a self-funded trip to Washington to investigate further the science and facts behind climate change, and I listened to both sides of the debate. I heard views which challenged the Rudd government’s set of so-called ‘facts’—views which could not be dismissed as mere conspiracy theories but which were derived using proper scientific analysis. I went on a journey to discover the truth about climate change and it is a journey that other Australians have now also gone on, perhaps not in a physical sense but certainly in an intellectual sense. Take, for example, a letter I received recently from a constituent, Karyn, which states:

Thank you for standing up and asking questions of the government about climate science. You have convinced me to also investigate questions of climate science orthodoxy.

Over the past weekend these are some impressions that I garnered from searches and discussions. I have learnt that the standard of ‘peer review’ for climate science is poor if compared with ‘peer review’ for pharmaceutical/medical papers and genetic research papers. In these fields the science is expected to be repeated and so original data is freely available, methodology is clearly stated and the results are openly and vigorously debated.

I also learnt that the IPCC reports would not pass a ‘due diligence’ test if they were a business proposal seeking investors. On that basis I will keep an open mind and refuse to be bullied by fear and ridicule.

Once again Senator, thank you. Your actions spurred me out of complacency, thank you. Let’s hope the debate opens up and can be carried on in a respectful, enquiring way.

During my trip to the US I met not only with scientists who were questioning the science but also with climate change experts on the other side of the spectrum. This included members of President Obama’s administration who are driving the US’s climate change policies.

As an engineer, I have been trained to listen to both sides of the debate on the science in order to make an informed decision about climate change. Any scientist worth their salt will tell you that in order to form a conclusive view about any topic you need to properly explore all available possibilities. All of this is nothing more than basic due diligence. Most people who are going to buy a house will first do some simple checks to make sure that everything is okay. That is due diligence. They will check to see that the gas and electricity are working, that the water is running and that everything in general is in order. That might include getting experts to come along to conduct an inspection or asking some simple questions. How much more so, then, should we be engaging in a debate on the science of climate change when implementing an emissions trading scheme would cost the economy several billion dollars and hurt Australian families?

When I came back to Australia I had a meeting with the Minister for Climate Change and Water, Senator Wong; the Chief Scientist; and Professor Will Steffen. I put to them three questions about climate change. These were questions that I believed needed to be answered in order to establish that climate change is a result of human-made carbon dioxide emissions. They are three questions that every senator needs to be able to answer themselves. The questions were not designed to trick anyone. They were three simple questions which went to the heart of the climate change debate. The first question I asked was whether it is true that carbon dioxide increased by five per cent since 1998 whilst global temperature cooled over the same period and, if so, how can human emissions be to blame for dangerous levels of warming?

Quite simply, scientists for climate change have been declaring that it is carbon dioxide emissions which are driving up global temperatures. According to this logic, global temperatures should be increasing, not decreasing. However, since 1995, temperatures have remained relatively steady while carbon dioxide emissions have been going up rapidly each year. The minister and her team of scientists were unable to answer this question. They insisted on rephrasing my question and they gave me an answer that left me no more convinced than I was before I had started. Their response was that I should not pay attention to the trend in global air temperature, which has not been going up in the past 14 years as predicted, but that I should be looking at the heat content of the climate system. In particular, I should focus on the temperature of the ocean. All of a sudden, the temperature outside was no longer important; it was ocean temperature that I needed to be looking at.

Those same scientists, only several slides earlier in their presentation, had been harping on about the rise in air temperatures, and now they were telling me that this was no longer important. The same scientists who had even provided me with graphs of the changes in air temperatures were telling me that their own material was not an appropriate indication of the science. That is odd. Most amazingly, those same scientists who were telling me that the answer to my question lay in the rising temperatures of the ocean had clearly not read their own IPCC report. If they had, they would have seen that one of the working reports accepted by the IPCC stated:

Limitations in ocean sampling imply that decadal variability in global heat content, salinity and sea level changes can only be evaluated with moderate confidence.

It further stated:

There is low confidence in observations of trends in the meridional overturning circulation.

What this means in laypersons’ terms is that the measuring and modelling of ocean temperatures is unreliable. Even Professor Steffen admitted that ‘we did not have good measures of ocean temperatures in the past’. In effect, I was being asked to rely on data which the scientists themselves believed to be unreliable.

The second question I asked was whether it was the case that the rate and magnitude of warming between 1979 and 1998—the late 20th century phase of global warming—was not unusual in either rate or magnitude as compared with warmings that have occurred earlier in earth’s history. Furthermore, if the warming was not unusual, why is it perceived to have been caused by human carbon dioxide emissions and, in any event, why is warming a problem if the earth has experienced similar warmings in the past? What I was essentially told was that changes to the climate which had occurred in the distant past were not relevant to contemporary climate change. Apparently, it was irrelevant that we had had dramatic changes to the climate in the past, such as the ice age. This time it was different. According to Professor Steffen, past changes to the climate were triggered by natural events, such as changes from the sun and its level of solar irradiance. However, for some strange reason, they refused to accept that any of these past factors could be the reason for climate change now.

The third question I asked was whether it was the case that all GCM computer models projected a steady increase in temperature for the period 1990-2008—whereas, in fact, eight years of warming were followed by 10 years of stasis and cooling. Furthermore, why is it assumed that long-term climate projections by the same models are suitable as a basis for public policy making? On this question I was assured by the scientists that the global climate models are getting better all the time and that even better models are in the pipeline. So the minister and her scientists basically conceded that the climate models which had been used to formulate public policy on this issue, and that will cost billions, were in fact flawed. So after emerging from this meeting and having also received a written response to my three questions, the fundamental question is: am I totally convinced that climate change is a result of human carbon dioxide emissions? I am not totally convinced. I am not sure how anyone can be convinced on the basis of the responses. I am yet to receive conclusive evidence that climate change is occurring because of human activity. At this stage there is far too much uncertainty over the science of the climate change issue.

However despite my concerns about the science, Australia may be forced to adopt an emissions trading scheme irrespective of the actual science of climate change. Why? Already an emissions trading scheme is up and running in Europe. The United States is still in its draft legislation stage and is still to finalise the details, and they will change. Most importantly, it is likely that the US scheme will ultimately end up with a type of tax on imports from high-carbon markets. Outrageous as it seems, an import tax is coming back in the US. A similar measure may also be introduced in Europe and other countries where emissions trading schemes are operating. Why is America doing it? Because they know it will cost jobs.

This will mean that in order for Australia to remain competitive on the global scale, an emissions trading scheme may be unavoidable. It is for this reason that I do not rule out voting for an emissions trading scheme of some kind. But I stress that we should wait until Copenhagen and that it is economically reckless to do so before that. However at this stage it is merely speculation. The details of what is happening around the globe are still very unclear. Most importantly, the details will continue to remain unclear until at least December, after Copenhagen. As a result, I cannot at this stage support the introduction of an emissions trading scheme in Australia.

An emissions trading scheme will have a dramatic effect on the Australian economy and on Australian households. The Rudd government has tried to sugar-coat its effects by saying that it will create a brand new low-carbon economy. However they have carefully disguised the most important aspect of this scheme. They have refused to call it what it really is. This emissions trading scheme is really a multibillion dollar tax on businesses and on Australian working families. Do not be misled. This tax will need to be paid by someone, and it will be millions of ordinary Australians who will end up footing the bill. It is a tax that will devastate industries across the entire economy and lead to thousands of hardworking Australians losing their jobs and being sent to the dole queue.

In the mining industry alone, it is projected that 23,000 fewer people will be employed in the sector by 2020 if an emissions trading scheme is introduced. That is 23,000 people with families to care for, with mortgages to pay and with hopes and dreams to live for. It is not just a random number; it is one person plus one person plus one person—23,000 times. In places such as Latrobe Valley, where thousands of people are employed in the coal-fired electricity sector, communities will be shattered if an emissions trading scheme is implemented. Four out of five power stations could be forced to close down if the scheme is put in place.

State governments too will face a massive hole in their budgets as a result of the scheme and will be $5.5 billion worse off by 2020. That means less money for schools, less money for hospitals and less money for social services which so many Australians rely on. Australian families will also be hard hit under the Rudd government’s proposal. Electricity prices are forecast to soar, with households set to face a 20 per cent increase in their electricity bill. Council rates will be affected and will go up under the current plan. The Rudd government’s ETS has the potential to cripple our economy and send families, with their backs already against the wall, tipping over the edge.

It is therefore hard to comprehend the Greens saying that this scheme does not go far enough. Perhaps economic suicide has become a new vernacular of the Greens. The Rudd government has already delayed the introduction of the scheme, and there is no plausible reason why this vote cannot be delayed until after Copenhagen. Even the executive secretary of the United Nations Framework Convention on Climate Change, Yvo de Boer, said last week that it did not matter if Australia arrived in Copenhagen without a scheme in place.

Given this is the biggest decision since Federation, I challenge the television networks to give the science of climate change a fair hearing. We have seen various debates over the years on our television sets on the big issues affecting this country. But to date I am yet to see the scientists on both sides of the debate thrash it out on TV. It is an important issue for people to get their heads around. It is important to have that debate at the national level and to have the issue debated fairly and openly. This challenge is not exclusive to television networks either. I challenge the print media to run full-page unedited spreads in every capital city covering both sides of the debate from a science perspective on whether man-made carbon dioxide is the main driver behind climate change. For far too long those who have simply questioned the science have been shot down and dismissed in the media. Journalism is supposed to be about balance, but over the last few months this balance and fairness have been lost because the government’s propaganda machine has gone into overdrive. Fair and open debate is essential because this decision on the government’s CPRS will significantly affect ordinary Australians. As I have said, thousands of people will be made redundant by the Rudd government’s CPRS, while electricity prices will skyrocket by more than 40 per cent, not to mention local councils passing the buck on to ratepayers as councils’ costs rise.

I am happy to revisit the issue following the outcome of the Copenhagen conference. But until that time I cannot support a multibillion-dollar tax on our economy when the government cannot even provide me with sufficient evidence to suggest that we need to be reducing carbon dioxide emissions at all in the first place.

10:23 am

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | | Hansard source

The Senate is currently considering the Carbon Pollution Reduction Scheme or an emissions trading scheme. There is no doubt that the Carbon Pollution Reduction Scheme Bill 2009 will have significant ramifications. It will be the biggest change to our economy ever driven by deliberate government policy. There will be literally tens of billions of dollars worth of churn, and by that I mean the collection and redistribution of tens of billions of dollars in the Australian economy—and all undertaken by the government. This legislation will impact on every single grocery bill in this country. It will impact on every single power bill in this country. It will impact every single Australian. It is therefore absolutely vital that we examine this legislation very thoroughly and not rush it. It is therefore vital that we have free and open examination of the legislation, and if one undertakes that examination one realises the huge and fatal flaws within it; flaws that make it unacceptable to the coalition. But first let me briefly, wearing my hat as shadow science minister, make a few comments about the science.

I have engaged with scientists on, as most people would say, both sides of the debate. Can I say that to summarise the debate as only having two sides is not to understand it; I would say, with scientists on all sides of the debate, because there are very many nuances, very many differences of opinion, even amongst those that have similar beliefs. So all I would say is that science in the past has welcomed, and should continue to welcome, scepticism. It should welcome questioning. It should welcome probing. Can I simply say that I believe there are good men and women on all sides of the scientific debate that are highly qualified and I do not seek to denigrate them because I accept that they hold their views very genuinely.

But can I say this: Labor’s response to those that question some of the scientific paradigms has been shrill, extreme and doctrinaire. Their approach has been so scientifically rigorous, so intellectually robust as to label these people that ask questions as deniers! Can I say to the minister and the Labor government: to do so has not endeared them to the Australian people, and that is why I think there is some flagging support for the approach that the government have been taking. It is an immature, churlish and arrogant approach. This government does not accept any alternatives whatsoever. The coal industry itself was menaced by Mr Combet. And of course we all remember that, after Senator Wong’s debacle of the draft legislation, Minister Combet was brought in and he then had to introduce the actual legislation into the House to avoid the embarrassment for Senator Wong of having to show all the mistakes that had been in her original draft legislation.

There is within this country a regrettable culture of fear. We know how the Prime Minister acts if he does not get his hair dryer or his favourite snack on the VIP flight. Guess how he behaves when somebody dares to question the impact of his Carbon Pollution Reduction Scheme on their job or on their industry! So there is, unfortunately, this culture of fear.

Can I say in relation to Senator Fielding and others who want to engage in the question of the science—is it true; is it not true?—that I have drawn a line under all that discussion. I have just asked a very simple question: does this legislation deliver that which it aspires to deliver or says it will deliver? The fundamental answer, on any analysis, is a big resounding no. So you do not even have to engage in that very interesting discussion that Senator Fielding engaged in to say that this legislation is fatally flawed and deserves to be defeated. Why do I say that? Well, there are real problems for those involved in the coal industry. I confess I am not that concerned about the industry per se as much as I am about the workers that get their livelihood and sustain their families from the jobs that that industry and other industries provide. You can go through the coal sector, the aluminium sector, the pulp and paper sector, the cement sector, food manufacturing—and the list goes on.

But also, very interestingly, it will impact negatively on the recycling sector, something that every Australian is now actively engaged in. They believe that by being engaged in recycling they are making their own personal contribution to the world environment. I am sure all honourable senators got the letter from the Visy on 24 July saying the government’s proposed Carbon Pollution Reduction Scheme ‘will seriously disadvantaged recycling and leave the jobs and the recycling companies high and dry’. As they say, ‘... recycling is the simplest way Australians can reduce their carbon footprint, and 96 per cent of them already do it.’ So it is not very well thought out when recycling companies come to us with this sort of message.

But of course that is not the only area where people are seeking to make a difference for the benefit of the environment. Solar panels—what has the government done on that?

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | | Hansard source

Not a lot, indeed, Senator Cash. What have they done when people want to change the fuel used in their motor vehicle from petrol to LPG? We introduced the scheme, which is very popular. They have cut the rebate. If they were genuine about these matters they would be fully supporting recycling, fully supporting the solar sector and fully supporting the conversion of motor vehicles to LPG. But not so.

This government is so arrogant and so full of hubris that it will not even consider genuine alternatives. Frontier Economics has put out a very considered study. What was Minister Wong’s great intellectual contribution to their study? She rejected out of hand before she had sighted it. That is arrogance and hubris writ large. It is an indication that this government has a political agenda on this and not an environmental agenda. It is not willing to listen to any alternative approach. Of course what hurts deeply is that the conservative side of politics, with the assistance of Senator Xenophon, was able to commission a report that came out and said, ‘We can do this in a greener, cheaper and smarter way, with 40 per cent less churn in the economy and for 40 per cent less cost.’

Why would you not at least read the report before condemning it out of hand if, as was claimed during the last election, global warming is the greatest moral challenge that we face and we need action now? Remember all that mantra? Mr Howard’s scheme that was only going to be introduced in 2011 or 2012 was immoral and irresponsible, and that is why we had to kick Mr Howard out of government. Guess what: this government has now deferred the implementation—until when? Until 2011, getting into the timetable that Mr Howard and the coalition were talking about.

Having said that, we have not closed our minds to the possibility of alternatives and we have been continuing to look at what is happening around the world, and there is no doubt that we as a nation should wait to see what happens in Copenhagen. The minister, with all her incantations and commentary in relation to climate change and the urgency of it, has been blown out of the water by the UN itself, because in a news article we had from Mr de Boer this comment:

Asked whether it mattered if Australia arrived in Copenhagen for climate change talks in December with an ETS in place

                        …                   …                   …

Mr de Boer replied:—

and this is a word that is often missing from the minister’s answers—

“Quite honestly, no’.

Did you hear that word ‘honestly’ in there? He said, ‘Quite honestly, no.’ That is the reality. The most expert man in relation to the UN scheme is saying that we do not need this legislation before Copenhagen, completely and utterly debunking the nonsense of Mr Rudd and Minister Wong and of course now, the sidekick, Mr Combet.

And what has another country said in relation to this. The US Deputy Special Envoy for Climate Change, Jonathan Pershing, appointed by Barack Obama, said, ‘You can have a deal without having the legislation.’ Indeed this legislation’s implementation will be delayed until 2011 in any event, so why the rush before Copenhagen? It does not make any environmental sense and it makes no economic sense. Possibly it makes political sense if you are willing to play politics with this issue which, we have been told, is the greatest moral issue confronting our country.

But what does it say about a government that seeks to ride the horse of high morality and then play politics with it? That is what we are now being exposed to as this debate is getting into its final stages. You see, the discussion about the design, and that is what is so important here, is a discussion about Australian jobs, Australian wealth and, indeed, the world environment. Everybody concedes that it will not make one jot or tittle of difference to the world environment if Australia goes it alone. Why should we have in place a regime which would prejudice Australian jobs and see the wholesale export of Australian jobs, Australian wealth and Australian manufacturing to countries that do not have the environmental standards of Australia? What that means is that, instead of Australia producing, for example, in the zinc industry—and I have a zinc plant in my home state of Tasmania—about two tonnes of CO2 per tonne of zinc manufactured, it will be manufactured in China, where today they produce zinc at a cost of six tonnes of carbon dioxide per tonne of zinc manufactured. Is that what we really want for the environment? That is what will happen under this legislation.

This legislation is more extreme than the Waxman-Markey bill, the legislation of a major competitor of ours in world markets. We will be putting Australian manufacturing at a disadvantage in comparison to the European scheme and the proposed US scheme. That is why it is so vitally important that we make sure that whatever we do within this country dovetails, meshes, with whatever the rest of the world does, because if we do not we will see the wholesale export of jobs and a worse outcome for the world environment. Make no mistake about that. So if you are absolutely concerned about the environment and you look at this legislation, you have got to come to the conclusion that it will not deliver for the world environment that which it sets out to do, because you will have wholesale carbon leakage out of Australia into other countries that have not signed up to such a scheme.

I was able to be at a Carbon Sequestration Leadership Forum meeting in recent times—very interesting. It was great to see India there. But do you know who was missing? Brazil, Russia, China, South Africa—the list goes on. If they are not committed, China, for example, will increase their CO2 emissions within nine months by what we in Australia produce in a year. That will be just their increase. If we mug our economy with this scheme—and make no mistake; it will be a huge mugging of our Australian economy—I would at least want to see an environmental dividend delivered to the world. But the fact is, even if we mug our economy, we will not be delivering a dividend for the world environment; we will in fact be making it worse. That is why we as an opposition have said this legislation should be delayed until we have the option of seeing what is actually delivered at Copenhagen.

We have also said that a few fundamental principles need to be considered. Before going on to those fundamental principles, I remind honourable senators—and I make no excuse for this; I am very concerned, and the Frontier Economics study has shown this to be the case as well—that the major impact of the Carbon Pollution Reduction Scheme as proposed will be in rural and regional Australia. Where are your smelters? Where are your food manufacturers? Where are your cement plants? They are in rural and regional Australia. So there will be a greater adverse impact in rural and regional Australia.

I remind honourable senators as well that the state Labor governments, having funded the original Garnaut report—remember all that hoo-ha before the last election?—are now coming out with their own studies. You do not have to rely on the federal opposition for this; you can rely on state Labor premiers and territory Labor chief ministers to tell you that research prepared for them shows that 126,000 full-time jobs will be lost or forgone—in my own home state of Tasmania, some 2,000. This is what Labor premiers are saying, those who supported Mr Rudd and funded Professor Garnaut and then of course found out what the real cost would be.

So what is the coalition alternative? We have said that at all times we should keep Australian jobs, Australian wealth, Australian families and the world environment in sight. What does this legislation do? It mugs all of them. It fails on every single count. We say that an Australian emissions trading scheme should offer no less protection for jobs, small business and industry than the American ETS. We say that there must be an effective mechanism, such as a regular review by the Productivity Commission, to ensure that the Australian ETS does not materially disadvantage Australian industries and workers relative to American industries and workers. This is all perfectly reasonable, I would have thought, but it was condemned outright by the Minister for Climate Change and Water and Mr Rudd.

We say that we should ensure that an Australian ETS does not simply result in futile carbon and production leakage. Our industries should at least be on a level playing field with the US. We believe that fugitive methane emissions from coalmining should be treated in the same way as they are in the United States and Europe—and why aren’t they? As in the Waxman-Markey bill, agricultural emissions should be excluded from the scheme and agricultural offsets should be included. General increases in electricity prices should be no greater than in comparable countries. Electricity generators should be fairly and adequately compensated for loss of asset value to enable them to invest in new abatement technology. We want effective incentives, and there must be adequate incentives for voluntary action. Because the legislation does not cover off on all those matters, we as a coalition are determined to vote this legislation down.

10:43 am

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | | Hansard source

I thank senators for their contributions to the debate and the Senate for its consideration of the Carbon Pollution Reduction Scheme Bill 2009 and related bills, bills which are crucial to Australia’s economic and environmental future. At the outset and at the conclusion of this debate I would like to acknowledge the enormous amount of work that has gone into getting us to this point. I would like to thank my colleagues in the government for their commitment to tackling climate change, consistent with our election commitment. I want to thank my department, the Department of Climate Change, for their tireless work and the many dedicated officials across government who have played such important roles in developing Australia’s response to climate change and have served both governments, governments of both political persuasions, so professionally.

It is important to acknowledge the considerable work that was done, despite the lack of political will to do so, before the Rudd government was elected and before I had carriage of this reform. Work on emissions trading in this country has been going on for more than a decade. Prime Minister Howard received numerous reports on climate change and emissions trading before finally agreeing, before the 2007 election, to implement cap-and-trade emissions trading. So what we have been debating has actually had bipartisan support. Under the most conservative Prime Minister since Robert Menzies, there was bipartisan support for a cap-and-trade system—for what the Senate has been debating.

When I say we have been debating climate change, that might be somewhat generous. While many senators in this place have prepared thorough and researched contributions, you would have to say that some of the contributions in recent days have been very disappointing indeed. Some senators have been looking to the future, but others have resorted to fear and extraordinarily cheap shots. Let me quote just one, Senator Bushby, who said of me:

If she were allowed to, I suspect she would like to burn at the stake all who dare question the truth of the science behind climate change.

Senator Bushby and others, including Senator McGauran, who made similar remarks, really are letting their side down. When they say that about me, what they are in effect saying is that all Australians who believe that climate change is a serious problem are extremists. I suggest these senators should look around behind them. Have a look behind yourselves. What they would soon see is that mainstream community opinion, just like mainstream scientific opinion, is simply not with them.

It has been more than a hundred years since the first realisation that the earth’s climate might be sensitive to atmospheric concentrations of gasses, creating a greenhouse effect. The IPCC’s fourth assessment report, the largest assessment of climate science ever undertaken, concluded that warming of the climate system is unequivocal and it is 90 per cent likely that this warming is caused by human activity. The impact that this is having on our environment and on our economy is not something we can simply brush aside. By the end of this century, climate change could see irrigated agricultural production in Australia’s food bowl, the Murray-Darling Basin, drop by more than 90 per cent. By mid-century, heat related deaths could increase by 5,000 a year. We know what this could mean if nothing is done for the rest of the world.

If senators want to take this huge gamble with our future, with the future of our children and those who come after us, they should explain it to the Australians who put them here. Those on this side of the chamber believe Australia’s future is worth too much to take that risk. Others have made extreme and scaremongering claims about the impact of this legislation—extreme claims about thousands of jobs. In many places, some who made these claims—and I notice one has just walked into the chamber—made them not because of a serious concern for jobs but in an attempt to gain credibility for their discredited ideas around the denial of climate change science.

What we know from the Treasury modelling is that under this scheme real wages increase, jobs increase, output increases, GNP increases and so does GDP. The Treasury modelling reminds us what we already know to be true from all the work that has been done by others, including Professor Garnaut and Lord Stern, and that is that the costs of inaction are greater than the costs of responsible action now. The Treasury modelling also shows that economies that act early to reduce their emissions face lower costs than those that act later. Economies that defer emissions pricing become relatively more emissions intensive and eventually, when a global emissions price is introduced, they will face even higher costs. You know what? That explains why the world is moving. That explains why the world’s leading economies are moving.

Many senators have made reference to developments in the US and have urged the government to effectively photocopy the assistance that is offered under the current United States legislation. They say this is about protecting jobs. I again remind people of the facts. The Carbon Pollution Reduction Scheme, in the bills before the Senate, is already more generous in its treatment of emissions-intensive trade-exposed industries than the legislation which is before the United States congress. So if senators want a scheme that supports jobs by offering the right level of assistance to our industries while we transition to a low-carbon future then they should be voting for these bills. We have tailored these bills to Australia’s circumstances, just as the United States will tailor their bill to US circumstances.

One important thing that the bills in the US and here have in common is that they are both for a cap-and-trade system. In fact, this is what the world has in common, and last month’s G8 declaration made that clear. In implementing emissions trading, some countries are ahead of us and some are behind us. Many are gaining on us. People who look to the future understand that this is the new economic race—to develop low-pollution goods and services, to enable the world’s economies to grow while maintaining our environment. This is not a race we can win from the grandstand and we cannot win it from the commentary box. Australia did not sit back and wait for the full force of the global recession to hit us. We took early and decisive action, and the results of government action to stimulate our economy are clear. Climate change is no different. We have to give ourselves the best chance, which means starting the transition to a low-carbon future now and doing what is right in Australia’s national interest.

There are others in this debate who have made extraordinary claims about the impact on prices. Senator Macdonald, whilst claiming that climate change was not about delivering what Australia wants and engaging in a personal attack on me and others, claimed yesterday that electricity prices would increase by 200 per cent. His approach, I think, reflects an unfortunate tendency in this debate: if you do not like something, do not worry about the facts; just use whatever fact or figure you want in order to try and scare people. The fact is that electricity prices are likely to rise by about $1.50 a week in the first year of the scheme and $2.80 in the second year. The fact is that, to reflect this, the government is providing very significant assistance to low- and middle-income Australians.

We have always been upfront about the fact that tackling climate change will have an effect on prices, but we are not alone. Let us remember what Prime Minister Howard said:

... the idea that you can bring about changes that are needed and which many people have advocated, without there being any impact at all at any time on the cost to the consumer, is quite unrealistic.

It is quite unrealistic, but that is precisely what those opposite are trying to peddle to the Australian people. What Mr Howard was saying is that, fundamental to tackling climate change, those goods and services which worsen climate change will cost relatively more than those which are low carbon. Despite the fearmongering from those opposite, the overall impact on prices is modest. The CPI impact is about 1.2 per cent over the first two years.

In this debate we have also had quite a lot of discussion about agriculture and the impact of the CPRS on agriculture. I do not know if those opposite have not read the bill or are simply being wilfully mischievous, because agriculture is already excluded from the scheme until at least 2015. It is not in the bills before the Senate, and I am not sure how we could exclude it any more. A number of senators have also made the erroneous claim that we are moving ahead of the rest of the world. Well, as I said, some countries are ahead of us, some are behind us and many are gaining on us.

Climate change policy is the one and only area where the Liberal Party have been consistent. Through their years in government and in opposition their efforts to divert and to delay have been consistent. Their most consistent mantra has been: ‘We should wait until after Copenhagen. We should not be rushing. We should see what the rest of the world is doing.’ The reality is—and I think Australians are aware of this—these excuses have nothing to do with taking stock at Copenhagen and have nothing to do with looking at what the rest of the world is doing; this approach is all about avoiding the hard decisions, debate and division inside the Liberal Party. That is what this position is all about.

Just three days ago, on the eve of this vote, the opposition released a new proposal produced by a consulting firm. It was an approach which would replicate the failed Canadian experiment, to the severe detriment of the Australian economy. Mr Turnbull described it as cheaper, greener and smarter. It is not cheaper to increase uncertainty across the economy. It is not cheaper to undermine investment and jobs by pretending that uncertainty does not matter. It is not cheaper to throw away opportunities to reduce carbon pollution in Australia. It is not cheaper to exempt emissions-intensive trade-exposed industries from playing their part in reducing carbon pollution.

There is nothing cost-effective about giving electricity generators so much assistance that they make windfall gains. There is nothing cost-effective about making low- and middle-income households worse off by scrapping their compensation. There is nothing cost-effective about increasing budget risks if the poorly designed alternative cannot deliver the targets we sign up for at Copenhagen. I remind those opposite about these comments from the Business Council of Australia:

We are very concerned there is the potential for increased electricity demand to breach the national cap and for the government to then have to intervene and buy international permits ... this could put real pressure on future budgets.

So much for fiscal responsibility; so much for economic responsibility!

It is not greener to toy with a scheme that gives away the opportunity to deliver lower cost abatement in Australia than what is provided under the government’s scheme. It is not true to claim that to deliver an unconditional 10 per cent reduction by 2020 is greener when the government’s plan delivers cuts of as much as 25 per cent by 2020. And it is not smarter to avoid a decision today to allow Australia’s carbon emissions to continue to rise. It is not smarter to pretend this will not leave us isolated from the rest of the world and it is not smarter to undermine our transition to a low-pollution economy.

Opposition Senators:

Opposition senators interjecting

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | | Hansard source

I remind senators that this proposal still does not represent coalition policy, and I hazard a guess to say that it is highly likely that it never will. I have said time and time again—and I will say it again in this place—the government will consider any serious credible amendment to these bills that is put forward in the national interest and that is put forward with the support of the opposition party room. I have made that offer time and time again, but there is not a single amendment on this enormous challenge. On this very substantial economic environmental reform, you have not had the wherewithal and the strength to put one single amendment before this chamber.

Opposition Senators:

Opposition senators interjecting

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | | Hansard source

There has been no policy from those who claim to be the alternative government. There is no recognition of the serious need to act now to preserve Australia’s national interest in the face of climate change.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | | Hansard source

It’s not too late to pull it and start again.

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | | Hansard source

There appear to be some in this place who believe Australia to be so irrelevant that what we do on climate change does not matter.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | | Hansard source

This is a dud scheme and you know it.

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | | Hansard source

Let me assure you that the world is watching.

Opposition Senators:

Opposition senators interjecting

Photo of Judith TroethJudith Troeth (Victoria, Liberal Party) Share this | | Hansard source

Order! The level of interjection from those on my left is becoming unsustainable. It is difficult for the minister to be heard. I ask that you accord her the respect of someone speaking on these bills.

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | | Hansard source

Thank you, Madam Acting Deputy President. As I was saying, there are some in this place who appear to believe that this nation is so irrelevant that what we do on climate change does not matter—well, you are wrong. Indeed, an article in today’s Wall Street Journal describes Australia’s action on climate change as a case study for where the action is overseas. To others who look to developed nations like Australia to take leadership on climate change and to the Australian people, who have made it clear that they want action on climate change, on behalf of the government I have one simple message: these bills may be going down today, but this is not the end. We may lose this vote, but this issue will not go away, because we on this side understand Australia cannot afford for climate change action to be unfinished business, and we will not let it be.

Other senators may fail to take the responsibility on climate change, but this government is not going to give up. We will press forward and on with this reform for as long as we have to. We will bring these bills back before the end of the year because it is the right thing to do. We will bring these bills back before the end of this year because it is the responsible thing to do. We will bring these bills back before the end of the year because we on this side understand we have to start the economic transformation we need. We will bring these bills back before the end of the year because, if we do not, this nation goes to Copenhagen with no means to deliver our targets. If we do not, the message to Copenhagen would be that Australia is once again going backwards on climate change.

This Senate is supposed to represent the Australian people. The question for every senator in this place who votes today for Australia’s carbon pollution to keep rising will be this: are you really doing what the Australian people want? Australians expect this government to deliver on climate change and Australians will expect the Senate to do the same—and it should. It is important for all of us to remember this: the chance for us to avoid any climate change at all is gone; it is lost to us. What we do have is a window to lessen its impact. We have a window to reduce the risk, and that is a window of opportunity which is closing.

That is why we will bring these bills back. We will give this Senate the opportunity to do better. We will give this Senate the opportunity to do the right thing. We will give this Senate the opportunity to do what Australians expect it to do. That is what the Senate should do, because anything less shows an arrant disregard for the demands of Australians today and the inheritance of Australians tomorrow. I commend these bills to the Senate.

Question put:

That the amendment (Senator Milne’s) be agreed to.

Question put:

That these bills be now read a second time.