Wednesday, 18 November 2009
Carbon Pollution Reduction Scheme Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 [No. 2]; Australian Climate Change Regulatory Authority Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Customs) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Excise) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — General) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 [No. 2]; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009 [No. 2]
That these bills be now read a second time.
I seek leave to have the second reading speeches incorporated in Hansard.
The documents read as follows—
The need for action on climate change
The Government is committed to taking action on climate change.
We accept the consensus view of scientists that global warming is unequivocal and human activities are very likely responsible for most of the observed warming over the last fifty years.
Climate change is real and there will be serious consequences if greenhouse gas emissions are not restrained.
Australia is highly exposed to the impacts of climate change. The effects on Australia's environment – and economy – will be serious. The health of our population, the security of our water and energy supplies, and impacts on coastal communities and infrastructure all face unprecedented tests.
Acting on climate change is squarely in Australia’s national interest.
If we don't act, average temperatures across Australia are expected to rise by over 5°C (compared to 1990) by 2100. To put this in perspective, a 1°C rise in temperature risks a 15 per cent reduction in stream flow in the Murray-Darling Basin, Australia's biggest river system.
Under a worst case scenario, irrigated agriculture in the Murray-Darling Basin would virtually disappear by 2100.
Bushfires are expected to become more intense, and the interval between them will shorten. The mega fires in Victoria in 2009 and Canberra in 2003 are consistent with these expected changes in fire regimes.
The business community in Australia is calling for investment certainty so that they can commit the necessary investment to start to move the Australian economy to a low carbon future.
As Heather Ridout from the Australian Industry Group said in a speech on 15 October 2009, “Many of our members are telling us that they are holding off making investments until there is a greater degree of clarity around domestic climate change legislation.”
Coupled with the Renewable Energy Target of 20 per cent of electricity from renewable sources by 2020, the Carbon Pollution Reduction Scheme (CPRS) will drive around $19 billion in investment in renewables in the period to 2020.
This demonstrates that Australia can take action against climate change whilst continuing to grow and prosper. In fact, modelling done by the Australian Treasury shows we can create 1.7 million jobs to 2020, while reducing carbon pollution.
And from an employment perspective, all major sectors - including the coal mining sector and electricity generation overall - grow over the years to 2020, delivering substantial increases in employment from today's levels.
As the world prepares to gather in Copenhagen to strive towards an international deal, what each country does at home matters. All nations need to keep moving forward, and it is squarely in Australia’s national interest to show up at the negotiating table in Copenhagen with a plan to deliver our targets.
It maximises our chance of playing a constructive role in negotiations and sealing the deal we know the world needs, and it provides certainty that the targets we sign up for internationally will be achieved at the lowest possible overall cost.
To major developing countries, it would send the signal that Australia is serious about delivering the emissions reductions to which we have committed – and therefore encourage action from them.
For all nations, it will help build confidence that, even in one of the world’s most resource-intensive economies, we can start to reduce our emissions while continuing to grow our economy.
I would like to address at the outset some of the major arguments of those who oppose action on climate change.
It is sometimes said that because Australia is responsible for a small proportion of global greenhouse gas emissions, we should not be ‘acting ahead of the rest of the world’ by unilaterally committing to reduce our emissions – that this would impose costs on Australia without solving the global warming problem.
And there is no need to wait until after Copenhagen as there is nothing in the R4221Bill which makes its passage contingent on Copenhagen outcomes.
The CPRS establishes the framework under which Australia’s emissions reduction targets will be achieved and it has been designed for Australia’s national circumstances. The CPRS has also been designed to be sufficiently flexible to accommodate the range of possible outcomes from Copenhagen, so important details such as the scheme caps will not be set until after Copenhagen.
And finally, the Liberals have endorsed the Government’s emissions targets for 2020, including a commitment to reduce emissions by at least 5 per cent compared to 2000 levels, irrespective of commitments by other countries.
This is an ambitious commitment. It is important for the community to know how this will be achieved so that everyone – including business and households – can start down the path of reducing emissions.
So the debate over whether Australia should wait is over. In fact, it should have been over since 2007, when the Howard Government endorsed the findings of its Task Group on Emissions Trading, which recommended that the then Government announce an emissions target ahead of a post-Kyoto agreement and recommended the adoption of an emissions trading scheme to achieve those targets.
Development of the Carbon Pollution Reduction Scheme
Numerous reviews have found that an emissions trading scheme is the best and most efficient tool to achieve emissions reductions – including the former Prime Minister Howard’s Task Group on Emissions Trading and the Garnaut Review.
Both these concluded that market-based approaches that deliver a price on carbon will reduce greenhouse gases at least cost, and that an emissions trading scheme is the best market-based approach.
This is why both major political parties went to the last election committing to establish an emissions trading scheme – and why the Rudd Government has developed the Carbon Pollution Reduction Scheme.
Since the election of the Rudd Government, there has been an extensive process to develop the CPRS.
The core principles of the scheme were clearly articulated as long ago as February 2008.
The Government’s CPRS Green Paper was released for public consultation in June 2008. The Department of Climate Change undertook extensive stakeholder consultation in developing the Green Paper, including meetings and the release of 16 papers on different aspects of scheme design.
Final policy positions were set out in the CPRS White Paper, released in December 2008. In developing these policy positions, the Government considered 1026 submissions on the Green Paper, the final report of the Garnaut Climate Change Review, the results of the Australian Treasury’s comprehensive modelling exercise, feedback from meetings, workshops and one-on-one stakeholder consultation and outcomes from a number of industry workshops.
In March and April 2009, the Government released for consultation draft legislation to implement the CPRS. A number of changes were made to the legislation in light of that consultation.
From this brief history it is clear that the CPRS has been subject to a great deal of public scrutiny. It has also had a great deal of parliamentary scrutiny. Three Senate Committees considered and reported on the CPRS bills, and there was extensive Parliamentary debate on those bills between April and August of this year.
We have conducted a thorough, consultative and transparent policy process over the last two years to reach this final stage.
It is pleasing that the Coalition has now finally come forward with proposals to amend the CPRS and we are looking forward to negotiating in good faith will all parties.
I now turn to consider some of the major elements of the CPRS Bill.
Emissions-intensive trade-exposed industries
The Government recognises that the introduction of a carbon price ahead of effective international action may provide incentives for some trade exposed industries to relocate or source production offshore – so called carbon leakage.
That is why the CPRS bill provides for a program to support businesses producing internationally traded goods which face the most significant exposure to the carbon price.
The features of that program have been clearly stated by the Government.
Assistance, in the form of administrative allocations of permits, will be provided to new and existing firms engaged in emissions-intensive trade-exposed – so called EITE – activities.
Assistance will be targeted to the most emissions-intensive trade-exposed activities. From the first year of the CPRS, highly emissions-intensive activities will have an effective rate of assistance of almost 95 per cent, and less emissions-intensive activities will have an effective rate of assistance of 66 per cent – rates of assistance endorsed by the Opposition through their support for similar arrangements under the Government’s Renewable Energy Target legislation.
Unlike the EU Scheme or the schemes proposed in the US Waxman-Markey and Kerry-Boxer bills there is no overall cap on free permit allocations. And as assistance will be directly linked to output, this means that if production doubles the allocation of permits doubles. This is important to cater for the expansion of Australian industry, and is the key reason why the Australian arrangements are more generous than the EU and proposed US schemes.
Notwithstanding the generosity of these arrangements, the design of the EITE program ensures that even these firms face the full carbon price and have the same incentives as all other industries to find opportunities to reduce their emissions. Assistance is calculated based on historical, industry baselines of greenhouse intensity and assistance reduces by 1.3 per cent per year. This ensures that the most efficient producers in an industry, and the producers that become more efficient over time, are rewarded for their efforts.
The Government is confident that its EITE program reduces the risk of carbon leakage, while promoting efficient production decisions and ensuring that all industries make a contribution to the national effort to reduce carbon emissions, without risking jobs.
In order to provide clear and detailed rules about how much assistance will be provided, the detail of activity definitions, rates of assistance and other matters will be set out in regulations.
A significant proportion of the relevant regulations have already been tabled in draft form. It is, of course, unusual that draft regulations be released for public comment ahead of the passage of legislation. The Government has taken this extra step to make available as much information as possible to parliament when considering the CPRS bills.
Coverage of the CPRS
One important design principle that the Government has adopted in developing the CPRS is breadth of coverage.
The CPRS has broad coverage, as it applies to approximately 75 per cent of Australia’s emissions.
This is consistent with the approach of former Prime Minister Howard’s Task Group on Emissions Trading, which said:
“The efficiency and fairness of a national abatement effort will be increased to the extent that all sectors contribute to greenhouse gas reductions. The broader the opportunity to identify and implement abatement opportunities, the lower will be the costs to the economy of meeting any given abatement task. In addition to achieving abatement efficiently, comprehensive coverage has an important equity dimension: it ensures the abatement task is shared broadly across sectors of the economy...”
For these reasons, any proposal to exclude or carve out sectors from the CPRS must be examined very carefully. Any benefits have to be weighed up against the increased burden on other industry sectors, the loss of opportunities for low-cost emissions reductions, and the possible loss of permit revenue to assist households.
Agriculture is not currently in the CPRS, but the Government has not ruled out including it in the future - from 2015 at the earliest.
The CPRS Bill does however provide for domestic offsets for reforestation.
This is a crediting mechanism - to encourage reductions in carbon pollution before the scheme starts, proponents of approved reforestation projects will be eligible to receive emission units for increases in carbon sequestration taking place from 1 July 2010.
These emissions units will then be available for purchase by liable entities – the large emitters and fuel suppliers – as an alternative to reducing their emissions or purchasing emissions units from other sources.
Given that there has been some discussion about including additional offsets in the CPRS, it is important to keep in mind the following points.
First, offsets should only be available for sectors that are outside the CPRS. There would be double counting if offsets are provided for abatement that would also be recognised through reductions in CPRS obligations.
Second, offsets should count towards Australia’s international commitments. Otherwise, Australia would need to tighten its scheme cap, with a cost to industry and consumers, or purchase Kyoto units on the international market, costing taxpayers.
Third, practical issues of measurement and administration have to be considered.
Electricity Sector Adjustment Scheme
Free permits will also be issued, on a once-off basis over the first five years of the CPRS, to investors who purchased or constructed coal-fired generation assets prior to the Commonwealth Government’s announcement of its support for an emissions trading scheme.
While such a policy change could have been foreseen prior to this announcement, the Government considers it appropriate to partially recognise significant losses of asset value experienced by investors that were committed to such investments prior to a clear announcement by the Commonwealth Government of its support for such a scheme.
It is estimated that the free permits to be provided to generators will be worth approximately $3.8 billion. This assistance is focused on the most emissions-intensive generators as these generators are likely to experience the largest losses in asset value.
While individual electricity generators argue for increased assistance, what the whole electricity sector requires is certainty around the regulatory environment. It is only once they have that certainty, through the passage of these bills, that they can make the necessary investments in lower-emissions technologies.
This is another reason why we must act now.
Assistance for the Coal Sector
The Government recognises that emissions-intensive coal mines do need transitional assistance to adjust to the introduction of the Carbon Pollution Reduction Scheme.
The Government has said it will target assistance to the most gassy mines, and has on the table a $750m package to assist these mines investigate and implement abatement opportunities and ease their transition to the introduction of a carbon price.
The Government believes this formulation will allow the coal sector to play its part in emissions reductions whilst providing assistance for the mines most affected by the introduction of a carbon price.
Australians have made it clear they want action on climate change.
The Australian Government believes it is critical to take action on climate change now.
Business want the certainty that will allow them to invest.
And on the eve of the Copenhagen conference, the world is watching.
The time has come, after 12 years of inaction, to provide business certainty and to act on climate change.
The Government is determined to meet this challenge and make this important reform.
The Government welcomes the Opposition’s proposals and looks forward to negotiating in good faith with all parties.
It is up to the Leader of the Opposition to now show how his proposals are environmentally and fiscally credible and commit to voting on the CPRS this year.
The Bill seeks to amend 11 Acts and one set of regulations.
National Greenhouse and Energy Reporting
The most significant amendments relate to the National Greenhouse and Energy Reporting Act 2007.
This Act provides the existing national framework for the reporting of information on greenhouse gas emissions, energy consumption and energy production. To maintain the Government’s commitment to the streamlining of reporting of greenhouse and energy data, the Act will be the starting framework for monitoring, reporting and assurance under the Carbon Pollution Reduction Scheme.
A number of changes are proposed to strengthen the Act and align it with the requirements of the Scheme, as outlined in the Government’s White Paper titled Carbon Pollution Reduction Scheme: Australia’s Low Pollution Future, which was released on 15 December 2008. Under the amendments, one report will satisfy an entity’s reporting requirements for the Scheme and current reporting requirements under the National Greenhouse and Energy Reporting Act 2007.
Coverage of synthetic greenhouse gases
The Carbon Pollution Reduction Scheme covers synthetic greenhouse gases. As some of these gases are already regulated under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989, amendments will be made to that Act to align it with the Scheme.
The bill contains a number of consequential amendments relating to the establishment of the Australian Climate Change Regulatory Authority.
As well as administering the Carbon Pollution Reduction Scheme, the new Authority will take over administration of both greenhouse and energy reporting and the renewable energy target. This necessitates a number of legislative amendments to replace two existing statutory bodies – the Office of the Renewable Energy Regulator and the Greenhouse and Energy Data Officer – and transfer their functions to the Authority.
The creation of the Australian Climate Change Regulatory Authority also gives rise to a number of other consequential amendments – for example, to apply financial management and accountability requirements to the Authority.
Measures to prevent market manipulation and misconduct
Australian emissions units and eligible international emissions units are to be financial products for the purposes of the Chapter 7 of the Corporations Act 2001 and Division 2, Part 2 of the Australian Securities and Investments Commission Act 2001. The bill amends these Acts accordingly.
These amendments will provide a strong regulatory regime to reduce the risk of market manipulation and misconduct relating to emissions units. Appropriate adjustments to the regime to fit the characteristics of units and avoid unnecessary compliance costs will be made. The Government has committed to consulting further on those adjustments and recently released a discussion paper on this issue.
As required by the Corporations Agreement between the Commonwealth, States and Territories, the Ministerial Council for Corporations has been consulted about the amendments to the corporations legislation and, to the extent necessary, has approved those amendments.
Taxation treatment of emissions units
Schedule 2 of the bill amends various taxation laws to clarify the income tax and Goods and Services Tax treatment of emissions units.
The main consideration in designing the tax treatment of units is that the tax treatment should not compromise the main objectives of the Scheme. This means that tax should not influence decisions between purchasing, trading and surrendering units or alternatively reducing emissions. The preferred tax treatment will help implement the Scheme and reduce compliance and administration costs for taxpayers and the Australian Government.
For income tax, the amendments establish a rolling balance treatment of registered emissions units which is similar to that for trading stock. The result of the treatment is that the cost of a unit is deductible, with the effect of the deduction generally being deferred through the rolling balance until the sale or surrender of the unit.
The proceeds of selling a unit are assessable income with any difference in the value of units held at the beginning of an income year and at the end of that year being reflected in taxable income. Any increase in value is included in assessable income and any decrease in value allowed as a deduction.
The Bill also amends the Goods and Services Tax law. It characterises a supply of an eligible emissions unit or a Kyoto unit specifically as a supply of a personal property right and not a supply of or directly connected with real property. The amendments will promote certainty about the application of the normal GST rules to Scheme transactions.
The consequential amendments contained in this bill are important for the efficient and effective operation of the Carbon Pollution Reduction Scheme. The amendments seek, where possible, to streamline institutional and regulatory arrangements and minimise administrative costs with the Scheme.
AUSTRALIAN CLIMATE CHANGE REGULATORY AUTHORITY BILL 2009 [NO. 2]
This bill would establish the Australian Climate Change Regulatory Authority – a new statutory authority that would be responsible for administering the Carbon Pollution Reduction Scheme.
It is one of a package of bills to establish the Scheme.
The Authority will be responsible for auctioning and allocating emissions units, maintaining a national registry of emissions units and ensuring that firms comply with their obligations under the Scheme.
The Government’s intention is to establish an effective, efficient and independent regulator.
The Authority will be a body corporate headed by a Chair and between two and four other members. Through the Chair, it will employ Australian Public Service employees on behalf of the Commonwealth.
It will have a modern set of information-gathering, inspection and enforcement powers, conferred on it by the Carbon Pollution Reduction Scheme Bill 2009.
The Authority will be at arm’s length from Government. As with other independent regulators, the Minister will only be able to provide directions on general matters and there are limited grounds on which a member of the Authority may be removed from office.
The Authority will take over the functions of the existing Office of the Renewable Energy Regulator and the Greenhouse and Energy Data Officer, so that a single regulatory body will have overall responsibility for administration of climate change laws. This transfer of functions is to be affected through the Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009.
While it will have strong powers to ensure that Scheme obligations are complied with, the Authority will also have an important role in advising and assisting persons in relation to their obligations under the Scheme – something that is formally reflected in the Authority’s functions.
This bill, which is part of the legislative package to establish the Carbon Pollution Reduction Scheme, is one of three technical bills which anticipate the possibility that the charge payable by a person to the Commonwealth for issue of an Australian emissions unit as the result of an auction, or for a fixed charge, is a tax within the meaning of section 55 of the Constitution.
The Commonwealth does not consider that these charges are taxes for constitutional purposes. However, the Government has taken an approach of abundant caution, with the charges bills providing safeguards in case a court reaches a different view on this question.
This bill caters for the possibility that the charges I have mentioned are, in whole or part, both a tax and a duty of customs by providing for the imposition of such a charge under this bill.
This bill, which is part of the legislative package to establish the Carbon Pollution Reduction Scheme, is one of three technical bills which anticipate the possibility that the charge payable by a person to the Commonwealth for issue of an Australian emissions unit as the result of an auction, or for a fixed charge, is a tax within the meaning of section 55 of the Constitution.
The Commonwealth does not consider that these charges are taxes for constitutional purposes. However, the Government has taken an approach of abundant caution, with the charges bills providing safeguards in case a court reaches a different view on this question.
This bill caters for the possibility that the charges I have mentioned are, in whole or part, both a tax and a duty of excise by providing for the imposition of such a charge under this bill.
This bill, which is part of the legislative package to establish the Carbon Pollution Reduction Scheme, is one of three technical bills which anticipate the possibility that the charge payable by a person to the Commonwealth for issue of an Australian emissions unit as the result of an auction, or for a fixed charge, is a tax within the meaning of section 55 of the Constitution.
The Commonwealth does not consider that these charges are taxes for constitutional purposes. However, the Government has taken an approach of abundant caution, with the charges bills providing safeguards in case a court reaches a different view on this question.
This bill caters for the possibility that the charges I have mentioned are, in whole or part, a tax. In those circumstances, this bill imposes the charge, but only to the extent the charge is neither a duty of customs nor a duty of excise.
This bill seeks to establish in legislation the ‘CPRS fuel credit’ measure. It will provide transitional assistance to eligible industries and fuels that will not benefit from the cent-for-cent fuel tax reduction made under the Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009.
The CPRS fuel credit will offset the increase in eligible fuel prices by an amount equal to the reduction in the fuel tax rate. CPRS fuel credit amounts will be adjusted automatically with adjustments to the fuel tax made under the Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009.
The CPRS fuel credit program will give transitional assistance to the agriculture (excluding forestry) and fishing industries for the period 1 July 2011 to 30 June 2014. For the period the Government has fixed the emissions unit charge at $10 per tonne, based on current taxation arrangements, this credit will equal 2.455 cents per litre.
Activities incidental to the agriculture and fishing industries currently receive 50 per cent of the fuel tax credit under the Fuel Tax Act until 30 June 2012 after which they will be entitled to a full fuel tax credit. As these incidental activities will therefore receive a partial benefit from the reduction in fuel tax until 30 June 2012, they will be entitled to a partial CPRS fuel credit until that date. This CPRS fuel credit will be 50 per cent of the full CPRS fuel credit while the reduced fuel tax credit rate applies, and the full
I am very pleased to be able to lead off in this debate, but I have to say it is going to be one of the most difficult debates to prosecute, because the bill before the chamber today, the Carbon Pollution Reduction Scheme Bill 2009 [No. 2], is exactly the same bill that the Senate voted down three months ago. So what we are debating today is a piece of flawed legislation that the Senate has already expressed its views on.
But we are told by the media that there will be amendments to this bill. None of us yet know what those amendments will be. We have no idea of the detail of those amendments but, according to leaks in the press from Senator Wong, there will be an amendment about agriculture. Certainly the coalition has been very keen to see the issue of agriculture addressed in the CPRS Bill—the so-called CPRS Bill, I might say, because it is really an emissions trading scheme wrongly named the Carbon Pollution Reduction Scheme by the Labor Party. We know, of course, that carbon dioxide is essential for this planet. Trees will not grow without it, so it is always amusing to me to think that carbon pollution is being reduced. But that is by the way. We are pleased to see that the government has eventually followed the call from the Liberal Party and, I think, the National Party to include agriculture in the bill. That is, of course, endorsed by the National Farmers Federation and by all of the serious farming groups. But we do not know what the detail of that is.
Mr Acting Deputy President, the government’s climate change policy is in complete shambles. You will recall that it was originally all about global warming, and then a few months ago the ‘global warming’ term was dropped and it became ‘climate change’. But nothing in this bill has changed in the three months, so as it now stands I can confidently say that the coalition would be voting against this bill.
When Mr Rudd was first elected, he promised the Australian public that he was going to sort out climate change, and he very quickly went up to Indonesia and ratified the Kyoto Protocol—a protocol, I might say, which had been negotiated by Robert Hill on behalf of the Australian people at those conferences. A lot of people had believed Mr Rudd when he indicated that ratifying the Kyoto Protocol would fix everything. Suddenly climate change would happen no more. That was the impression Mr Rudd gave before the election and certainly in the euphoria of him and Minister Wong when they grabbed the Australian front pages by ratifying the protocol not long after they were elected. But, of course, nothing has changed, and we are back in the Senate today debating the exact same bill that the Senate voted down three months ago.
Copenhagen has been talked about by Senator Wong and Mr Rudd in hushed tones for the last 12 months. Copenhagen was going to fix everything. Everything had to be done before Copenhagen. Australia had to have a legislated position before Copenhagen. Of course, as we on this side all knew, as time has moved on we have found that the Copenhagen process is in a complete shambles, and the recent APEC meeting has let the cat out of the bag and has let the world know that nothing is really going to happen at Copenhagen.
In recent times we have also been alerted to the fact that Copenhagen, according to the Australian government, was going to involve the signing of a treaty that nobody had seen. Just a few weeks ago we suddenly learnt something about this treaty and how horrific it would have been for Australia. Since that was exposed, the treaty seems to have been ripped up by those organising the conference, but I would like Senator Wong to explain in this debate just what part she had in that draft treaty and what the Australian government’s view on it was. Did we support it? Why wasn’t it exposed to the Australian public and particularly to this parliament? I would be very keen to hear from Senator Wong why that treaty was kept so secret and why it now appears to have been ripped up and a new position formed. Was it only because of the pressure brought by the Australian people, the media and indeed the opposition to look at that particular treaty?
My personal position on this whole issue has been very simple right from day one. I have been very consistent about my view. Is the climate changing? Yes, of course it is. It has been changing for a hundred million years. We all know that the earth was once covered by ice. We even know how the climate has changed in my lifetime. I do not think that there is much doubt about the fact that the climate is changing. It has been for a hundred million years; it still is. Is the climate change caused by human activity? Quite frankly, I am not a scientist; I do not know. I have read reports, I have listened, I have been to lectures, I have sat in meetings with dozens of respected scientists around Australia and I have read what scientists right around the world have said on this particular topic. About half of them say that it is the fault of man; the other about half say that it is not anthropogenic. If those scientists who are trained in this area cannot make up their minds, what chance have I got as a layman in this area?
I have always said that if the rest of the world is going to get involved in some sort of emissions trading scheme then I do not think that Australia has an alternative but to get involved at the same time. But why would we do this in advance of the rest of the world when Australia emits less than 1.4 per cent of the world’s greenhouse gas emissions? Even if this bill were passed in its present form, Australia’s emissions to the world would reduce from 1.4 per cent to about 1.2 per cent. I have begged Senator Wong at any number of estimates hearings, in this chamber and in every forum to please tell me what difference a 0.2 per cent reduction in carbon emissions will make to the changing climate of the world. Senator Wong and many Labor Party people have been running around the country, dishonestly saying that the Barrier Reef is in danger if we do not pass this so-called Carbon Pollution Reduction Scheme. What absolute fraudulent claptrap. We all know that a 0.2 per cent reduction in Australia’s greenhouse gas emissions will have absolutely nil impact on the changing climate of the world. So why would we put Australia, its economy, its lifestyle and the jobs of tens of thousands of working families at risk with this particular piece of legislated claptrap just to build, support and assuage the egos of both Mr Rudd and Senator Wong?
Very often the Minister for Climate Change and Water accuses the coalition of doing nothing, yet yesterday in question time she was pointing out—quite rightly, and I am pleased to see that she has at last acknowledged it—that it was the coalition government that set up the first greenhouse office in the world. It was the coalition government that established the Greenhouse Challenge, which actually did reduce Australia’s carbon emissions, and it was the coalition government that ensured that Australia, almost alone, was the country that actually met the targets set by the Kyoto discussion. That all happened under a coalition government. So the coalition understands these issues and is keen to do something about them. But we do not do things that will impact upon the Australian economy.
I sat through two of the four Senate committees dealing with climate change policy. We heard dozens and dozens of witnesses over 14 days of hearings. We heard all sorts of views, but it was quite clear from the evidence presented—and it was evidence that was supported by fact and by research that could be seen and understood—that in the mining industry 23½ thousand jobs would go by 2020 if the Rudd government’s emissions trading scheme were adopted. If you go to 2030, evidence showed that almost 70,000 jobs of Australian mining workers would disappear. In Queensland alone, we would lose about 11½ thousand jobs by 2020 and 35,000 jobs by 2030 in the coal industry. That would of course flow on to all the support industries in Central Queensland. It would flow on to restaurants, shops and taxis. The impact, particularly in my state of Queensland, would be absolutely devastating.
I heard a ridiculous comment from one of the Labor senators—and, I think, from Sharan Burrow from the ACTU—saying that the Bowen Basin coalfields towns, when they lost all their work in the coalfields, would turn into a Silicon Valley. What absolute claptrap. It just shows what ignorance there is around some of the Labor Party. The local member for the biggest coalmining areas, the member for Dawson, James Bidgood, continues to demonstrate the Rudd government’s ill-informed and shambolic approach to the ETS. He said in the debate in the House:
This legislation is absolutely essential to safeguard mining jobs. Yes, we need to cut emissions and we need to have the legislation to do that—because it will save jobs. It will not lose jobs; it will save jobs. The Rudd government is taking responsible and decisive action immediately to tackle climate change by introducing this Carbon Pollution Reduction Scheme.
That just demonstrates how clearly out of touch the local Labor members are with their electorates. Nobody believes that this ill-conceived emissions trading scheme could do other than cost jobs in the coal mining, mineral processing and other essential industries in my home state of Queensland and elsewhere.
I did a survey, randomly picked, up in the north of Queensland—Cairns, Mt Isa, Bowen, Clermont, Moranbah, Rockhampton, Mackay, Collinsville and other parts of the Dawson electorate: 27 per cent of respondents supported the government’s ETS; 88 per cent of respondents had little or not much knowledge of the government’s proposed ETS. Most of them wanted to know more; 74 per cent of respondents want the government to wait until after Copenhagen before it determines its final position. I am not here to help the Labor Party, but I think the Labor Party should know that, of those who did indicate in my survey their voting preferences—and I have to concede it was not the majority—and of those who indicated that they were Labor voters, only 50 per cent supported the ETS; 17 per cent were against it and 33 per cent did not know. Of Labor Party voters, 41 per cent said to do it before Copenhagen and 33 per cent said afterwards. Across the board, for those who did not indicate party preferences, the results were overwhelmingly against Copenhagen—and that was by the highest margin—and against the ETS proposed by Mr Rudd.
The challenges facing Australia are ensuring that our economy keeps going, our lifestyle continues and we keep jobs. The Great Barrier Reef will adapt if we do the other measures like water quality and such that we are doing in the Reef Rescue package. The essential thing for Australia is to develop food security. It is not to increase electricity prices from anywhere between 40 to 50 per cent and 200 per cent, depending upon which of the people who gave evidence to our committee you believe—and if you look at the evidence you could believe both of them. That is how much the ordinary household electricity price will go up.
Next Friday at James Cook University in Townsville I will be attending the launch of a new technology that with the help of sunlight converts CO2 into algae which can then be used for food, cosmetics, synthetics or diesel fuel, and it is a workable scheme. It is being launched by the Queensland Premier. That is what we should be concentrating on to reduce carbon dioxide emissions. We should look at new technologies to move ahead rather than try to destroy the Australian economy in the way this bill does.
What is Europe doing? Why are we not treating our farmers and coalminers the same as Europe? Why are we not treating our coalminers, aluminium producers, bauxite miners and mineral processors in the same ways as our competitors? There is no doubt, and the evidence to the Senate committee showed, that investment in Australia’s mining and processing will continue to fall if this legislation goes through. It will all move offshore to Indonesia, Columbia and South Africa, where they do have adequate supplies of coal and where they can compete against us because our coalminers will have a tax on them which their competitors will not have. Why the Europeans—always holier than thou, the Europeans—do not have as many greenhouse gas emissions is that countries like France have 70 or 80 per cent of their power coming from nuclear energy, and yet you mention nuclear energy to the Labor Party in Queensland or, it seems, at Commonwealth level and they all go to water. Why are we not using nuclear energy if the Labor Party is so concerned about greenhouse gas emissions?
We keep hearing about the Americans. We have said it time and time again from this side of the House. We have been laughed at by Senator Wong, belittled and derided. But, of course, everybody knew the Americans would not go to Copenhagen with a legislated response to climate change. There is a great deal of doubt whether they will advocate anything that is meaningful in their reduction and the tortuous passage of legislation through the American congress clearly demonstrates that there is no immediate result at hand.
I have always said when China, India, the United States, Russia, Columbia, Indonesia and South Africa get involved in an emissions trading scheme then so should Australia. But until that time all we are doing by getting involved in the sort of scheme proposed by Mr Rudd is destroying our country, destroying the jobs of Australian working families and destroying our lifestyle. And if there were a purpose in that—if it were going to achieve anything—you could say that perhaps that is what we have to do. But this legislation proposed by the Rudd government, will do absolutely nothing for the climate change of the world. It will not fix the Barrier Reef. It will not fix the occurrence of cyclones and fires. It will not do any of that. It will do absolutely nothing. What it will do is cost Australian jobs, the Australian economy, for no benefit at all. Unless the Rudd government can accept all of the conditions imposed by the coalition—the suggestions we have made for improvements—then I do not see this bill going anywhere. But, as this bill now stands, I will do as I did three months ago and vote against it.
The Greens will not be supporting this legislation, because it has failure written right across the top of it. This is an age where the best thinkers on the planet, in their vast majority, looking at the science which our God-given brains tell us to use in our guardianship of this planet which is, so far as we know, the only place that supports and can support our life and life in general in the universe, are impelling us to set global targets where the wealthier countries reduce greenhouse gases by 40 per cent by 2020 over 1990 levels, not by the 25 per cent and certainly not by the five per cent, which is inherently written into this legislation and which the opposition would even further have weakened in its trajectory in tackling climate change. At the outset, I therefore move a second reading amendment to the Carbon Pollution Reduction Scheme Bill 2009 [No. 2]:
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.
There will never be more important legislation and a more important duty in front of this parliament than tackling climate change in terms of the long-term security of this nation. It is incumbent upon parliament, after decades of studied delay and ignorance, not only to tackle climate change but to do so in a responsible way commensurate with the best science of Australian scientists and global scientists of the day. This legislation manifestly fails to do that. It does not come within a bull’s roar of the responsibility we have on our shoulders to tackle climate change for the reality that it is with a vigour that would enable Australia to be a world leader in getting out of the catastrophic potential which climate change has not just for humanity but for the biosphere.
In 1896 Arrhenius, the great Scandinavian scientist, predicted that the atmosphere might warm due to the pollution coming from humanity. We have had our own scientists in this nation warning us about this since the 1960s. In 1988 the cabinet of this country under the Hawke government decided that there ought to be a greenhouse gas emission reduction of 20 per cent between 1988 and 2005 with the rider that it did not harm the economy. In 1992 at the Rio Earth Summit there was general agreement that global warming was a massive threat to the planet. And in 1995 more than 1,000 of the world’s top scientists including 111 Nobel Prize winners warned political leaders that we had to change direction if we were going to sustain life on this planet without a massive threat to species, including our own.
But here we are in 2009 with a prescription for failure from the government being undermined further as the government and opposition engage in discussions to conjointly get legislation through the parliament in the run to the global conference on tackling global warming at Copenhagen in Denmark next month. Let me make it very clear that the Greens in this parliament intend to continue to work for the outcome that the scientists tell us is responsible, is warranted and is urgently required if we are to save this nation, our children and their children from massive problems, economic, employment and environmental, including lifestyle, which will injure their time on the planet. That is not just the Leader of the Australian Greens in this parliament speaking. I point to Professor Ross Garnaut, the prodigious adviser to the government on this issue, who finished his report and delivery to the public on 30 September 2008 with these words:
If we fail, on a balance of probabilities, the failure of our generation will haunt humanity until the end of time.
If we fail, failure will haunt humanity until the end of time.
I want to go to the work of the head of the NASA Goddard Institute for Space Studies in the United States, Professor James Hansen, who is also adjunct professor in the Department of Earth and Environmental Sciences at Columbia University and—he will not mind me saying this—generally acclaimed as the godfather of climate science. He addressed Congress in 1988 and warned about the danger of climate change. Twenty years later, with a tinge of despair, this great global thinker of our time went back to Congress on 23 June and I will read part of his delivery which followed that 20 years of inaction by the elected democratic representatives in the United States. Under the heading ‘The coming storm’ Professor Hansen told the congress:
What is at stake? Warming so far, about two degrees Fahrenheit over land areas, seems almost innocuous, being less than day-to-day weather fluctuations. But more warming is already “in-the-pipeline”, delayed only by the great inertia of the world ocean. And climate is nearing dangerous tipping points. Elements of a “perfect storm”, a global cataclysm, are assembled.
Climate can reach points such that amplifying feedbacks spur large rapid changes. Arctic sea ice is a current example. Global warming initiated sea ice melt, exposing darker ocean that absorbs more sunlight, melting more ice. As a result, without any additional greenhouse gases, the Arctic soon will be ice-free in the summer.
More ominous tipping points loom. West Antarctic and Greenland ice sheets are vulnerable to even small additional warming. These two-mile-thick behemoths respond slowly at first, but if disintegration gets well underway it will become unstoppable. Debate among scientists is only about how much sea level would rise by a given date. In my opinion, if emissions follow a business-as-usual scenario, sea level rise of at least two meters is likely this century. Hundreds of millions of people would become refugees. No stable shoreline would be reestablished in any time frame that humanity can conceive.
Animal and plant species are already stressed by climate change. Polar and alpine species will be pushed off the planet, if warming continues. Other species attempt to migrate, but as some are extinguished their interdependencies can cause ecosystem collapse. Mass extinctions, of more than half the species on the planet, have occurred several times when the Earth warmed as much as expected if greenhouse gases continue to increase. Biodiversity recovered, but it required hundreds of thousands of years.
Under the heading of getting to 350 parts per million—and that is not, I might add, in the bailiwick of either the government or opposition in Australia in 2009—Professor Hansen says:
The disturbing conclusion, documented in a paper I have written with several of the world’s leading climate experts, is that the safe level of atmospheric carbon dioxide is no more than 350 ppm (parts per million) and it may be less. Carbon dioxide amount is already 385 ppm and rising about 2 ppm per year. Stunning corollary: the oft-stated goal to keep global warming less than two degrees Celsius (3.6 degrees Fahrenheit) is a recipe for global disaster, not salvation.
These conclusions are based on paleoclimate data showing how the Earth responded to past levels of greenhouse gases and on observations showing how the world is responding to today’s carbon dioxide amount. The consequences of continued increase of greenhouse gases extend far beyond extermination of species and future sea level rise.
Arid subtropical climate zones are expanding poleward. Already an average expansion of about 250 miles has occurred, affecting the southern United States, the Mediterranean region, Australia and southern Africa. Forest fires and drying-up of lakes will increase further unless carbon dioxide growth is halted and reversed.
Mountain glaciers are the source of fresh water for hundreds of millions of people. These glaciers are receding world-wide,—
I emphasise there the use of the present tense: this is not some future scenario. I go back to Professor Hansen—
These glaciers are receding world-wide, in the Himalayas, Andes and Rocky Mountains. They will disappear, leaving their rivers as trickles in late summer and fall, unless the growth of carbon dioxide is reversed.
Coral reefs, the rainforest of the ocean, are home for one-third of the species in the sea. Coral reefs are under stress for several reasons, including warming of the ocean, but especially because of ocean acidification, a direct effect of added carbon dioxide.
That is, greenhouse gas. He continues:
Ocean life dependent on carbonate shells and skeletons is threatened by dissolution as the ocean becomes more acid.
And finally, in this part of his delivery Professor Hansen said:
Such phenomena, including the instability of Arctic sea ice and the great ice sheets at today’s carbon dioxide amount, show that we have already gone too far. We must draw down atmospheric carbon dioxide to preserve the planet we know. A level of no more than 350 ppm is still feasible, with the help of reforestation and improved agricultural practices, but just barely–time is running out.
I might add that in the last week we saw the opposition gain a concession from the government to exclude change in agricultural practice. In today’s press one estimate of the transferred cost of that on the rest of the economy is $7 billion. But according to Professor Hansen it is essential that we help reforestation and improve agricultural practices because time is running out.
This is a warning to we homo sapiens, we 6.8 billion people on this planet—this large mammal with an intelligent brain which occupies this Senate. It is a challenge to our intellect and to our morality that is at stake here. We may, like several government ministers and opposition leaders, be coerced by the self-interested lobbying of the coal industry, the logging industry, the cement industry, the metals manufacturing industries and other sectional big end of town interests—the big polluters. If we do, we will fail.
We get laughter from Senator Macdonald who, a moment ago in his delivery said, ‘the Great Barrier Reef will adapt’, so we have a presentation of nonsense non-science in a debate where we are expected to confront reality—not duck from it—and to act in the widest interests of this nation, not the sectional interests of those who already have the money and the power.
Instead of that, under the prime ministership of Kevin Rudd we have a prescription for polluters. We have through this legislation a $16.5 billion handout to those people who are causing the problem above and beyond other citizens—$16.5 billion over four years going to polluters on the basis that the more that you pollute, the more you get. It is an extraordinary failure in the responsibility of the Rudd government to this nation and its 20-plus million people—going on 35 million people by mid-century, we are told—its environment, its amenity, its economy and its employment prospects. We know from wiser counsel like Sir Nicholas Stern, ex-World Bank, adviser to the British government and eloquent speaker to both the big parties here in Canberra. They have ignored him and turned their backs on the issue.
Those economies which become environmental trailblazers will be the strongest economies in the years ahead. Instead we are held back by the powerhouses across the road from this parliament: the Minerals Council of Australia, the coal miners and the National Association of Forest Industries—lobbyists who corrupt the process of decision making in this parliament; who have an open door to prime ministerial and opposition leaders’ offices, that of the Minister for Climate Change and Water and those of the ministers several; and who make this parliament now move towards a prescription for failure in this legislation to tackle arguably the greatest challenge the nation faces in the 21st century. People in the future will look back at this failure as a studied failure, because we know the consequences and we know the responsibilities we have on our shoulders. And we know the avenue to fixing it and gaining from it is being ducked studiously by the Prime Minister, by the cabinet and by the opposition, all under pressure from vested interests who want more money to pollute, as they have done in the past, under a prescription which says, ‘The difference you will have to make will be marginal.’
It will not be commensurate with what the scientists tell us we have to do if we are going to be save the Great Barrier Reef. I remind members of their failure to come and listen to leading scientists yesterday—there were eight people from this parliament of more than 200—who told us the Great Barrier Reef is already worth $5.6 billion to the economy each year and 66,000 jobs depend upon it.
Here we have Senator Macdonald and his colleagues, who do not have the common sense to be able to respond to a prescription for saving the Great Barrier Reef and those 66,000 jobs. Why? Because, working with the government, billions more dollars are to be allocated to fast-track the export of coal out of the Bowen Basin and the Hunter Valley to be burnt elsewhere on the planet to more rapidly increase greenhouse gas emissions from this nation, which per capita has the highest greenhouse gas emissions of all the industrialised countries. If you take into account that export of fossil fuels, you can double it.
We have members of the opposition interjecting from a position for which, I remind them, they take the responsibility. It is on their shoulders. They take the responsibility, along with members of government, for this failed prescription we have before this Senate.
We do not have the amendments which may or may not come from a government-opposition get together. We know it will further weaken it, but it is going to be marginal. What we have here is a failed prescription. What we have from the Greens is a prescription commensurate with responsible scientific and economic advice and common sense. We will stand by it and we are pleased to be giving that option to this parliament and the people of Australia.
I rise to speak against the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and the series of associated bills that are now before the Senate. On 13 August 2009, some three months ago now, I, along with all other non-government senators, voted down the Rudd government’s so-called Carbon Pollution Reduction Scheme. Why did we do this? The reason was very clear: Labor’s legislation was fundamentally flawed. If it had passed, this is the effect that it would have had: it would have harmed Australian exports; it would have harmed Australian jobs; it would have harmed investment in Australia; and, almost worse than that, it would have harmed the environment through carbon leakage. Whilst it may have may have resulted in a decrease in domestic emissions it would also resulted in an increase in overall global emissions.
But do these fundamental flaws in this legislation mean anything to Rudd Labor? No, of course they do not. And we have proof of that: in summing up the case before the Senate in August 2009, this is what Senator Wong said:
… these bills may be going down today, but this is not the end.
… … …
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 …
and that is what we have today. Labor have brought the exact same legislation back to this Senate. Have Labor listened to any of the serious concerns raised in relation to this legislation? Quite simply: no. As Senator Macdonald so eloquently said when he addressed this chamber, what we are speaking to today is that same legislation that was comprehensively rejected by the Greens, the coalition, Senator Xenophon and Senator Fielding some three months ago. It is back in the parliament with not one alteration or amendment. That is the absolute height of Labor arrogance.
We are now just weeks away from the Copenhagen climate conference, and what we have before us is a Labor government that is frozen in time, a Labor government that refuses to acknowledge its serious mistakes with this legislation. We have a government that is currently asking the Senate to pass legislation that it knows, if passed, will result in action being taken at the expense of the Australian people and is likely to achieve the perverse outcome of increasing global emissions. Labor is asking the Senate to support legislation that manifestly fails to achieve its stated objectives.
But does that stop the self-engrossed, self-obsessed, international egotist Mr Rudd? No, of course not. Mr Rudd has told the parliament that, regardless of the legislation’s consequences, regardless of the fact that there will be no positive benefit to the environment, regardless of the recent events at APEC and the fact that the Copenhagen conference commences in approximately two weeks, Australians must have the Rudd Labor ETS no matter how flawed. Does this man’s arrogance know any limits? Clearly not.
As was reported in the Australian newspaper yesterday, Mr Rudd told the parliament on Monday that the clock is ticking on climate change and he has vowed to press ahead with the CPRS legislation before the conference. The only clock that is ticking is Mr Rudd’s dream to be a hero on the world stage, and that is a dream that is fading rapidly. What we have before us today is legislation that is nothing more and nothing less than political convenience aimed at portraying Mr Rudd in a positive light internationally at the expense of the Australian people. That is shameful and it is un-Australian.
In contrast, however, the coalition has listened to the serious concerns of industry, employers, employees and Australian families and has put forward a number of substantial amendments to this flawed legislation that will address the potential loss of jobs, the likelihood of sending industry offshore, increased electricity costs, the outstanding issues raised by agriculture and increased cost of living.
What do we have from Rudd Labor to date? We have the announcement that it will exclude agriculture from its scheme. What a concession! That was always a major flaw in this legislation. If there is to be a scheme, agriculture should never have been mooted for inclusion, in line with what has gone on in Europe and the United States. The fact that Labor had the audacity to moot agriculture for inclusion shows just how flawed this legislation actually is.
We all know that Labor specialises in spin over substance, and it was interesting to read Mr Swans’s contribution to this debate in the House of Representatives. In his contribution he said:
At the end of the day what it means to the average Australian is jobs … The scheme is designed to help support the jobs of today, while creating the low-pollution jobs for the future.
Well, Mr Swan, let us now look at the evidence that has been put forward in the Senate inquiries and see if what you have said is factual or whether it is just more Labor spin and rhetoric. The evidence given to the Senate inquiries is quite clear. In asking the Senate to pass this legislation before the international community has collaborated, the Rudd government is going to impose on Australian industry a massive taxation burden and one that our competitors will not bear. So what we have is the Treasurer of Australia supporting legislation that will seriously damage our competitive position, harm Australian jobs and see CO2 emissions rise.
Time and time again, in inquiry after inquiry, the Senate heard evidence that the bottom-line impact of the Rudd Labor scheme is that it will cost Australia jobs, contrary to what Mr Swan has told the parliament. The Minerals Council of Australia has stated that the CPRS legislation in its current form will cost over 66,000 jobs. The Access Economics report commissioned by none other than the state premiers, all but one of whom are Labor, said that it will cost no fewer than 13,000 jobs in my home state of Western Australia alone. I will continue to stand up for the interests of Western Australia, even if those Labor senators opposite will sell it out to a spin driven political timetable of convenience.
Mr Swan also said in his contribution:
The reality is that those opposite have never faced up to a hard decision. They can never absolutely face up to the decisions that go to the core of our economic prosperity.
If that is not spin over substance, I do not know what is. Mr Swan knows that the reality is that when Labor came into government it inherited no debt, billions of dollars in the bank and the best financial regulatory system in the world. Mr Swan in his role as Treasurer has destroyed it all. Now Mr Swan is asking the people of Australia to believe that he is part of a government that is going to take responsible action on the environment. The public are not fools, even though Mr Swan and Labor would treat them as though they are.
Labor with its spin and rhetoric has, over the last 18 months, conveniently stifled any real debate on the issue of climate change. I agree with Professor Bob Carter from James Cook University, who recently said:
The current public “debate” on climate is not so much a debate as it is an incessant and shrill campaign to scare citizens into accepting dramatic changes in their way of life in pursuit of the false god of preventing dangerous global warming.
If you dare to question the impact of Mr Rudd’s legislation, you are derided as a sceptic, no matter how valid your concerns might be. God forbid you bother to read the legislation, as I have done, and then raise questions about its impact on the Australian economy and on Australian jobs. Mr Rudd derides you as a climate sceptic. God forbid you read the legislation, as we on this side have done, and you then raise concerns about the potential for carbon leakage and an increase in global emissions. Mr Rudd derides you as a climate sceptic. God forbid you raise concerns about the potential for industry to move offshore. Mr Rudd again derides you as a climate sceptic.
Well, Mr Rudd, despite your deliberate attempt to disguise and shroud the true nature of this legislation, the Australian people will not be conned. They are awake to the nasty little surprise that Rudd Labor have in store for them. It is a nasty little surprise in the form of a tax, a tax on the Australian people—the ETS tax. Yes, that is right: mums and dads of Australia, if this legislation passes in this form, everything that you touch will be tainted by Labor’s tax. Every time you turn your lights on, every time you buy something, every time you cook a meal, Labor’s tax will be there staring you in the face. You will pay for Labor’s arrogance and incompetence, with no benefit to the environment. It is proven that Labor’s scheme will push up electricity prices. Guess who invests most of their money in paying for electricity and in paying for energy? The poor and the elderly. The poor and the elderly will pay the price under Labor’s legislation.
For those of you who say, ‘But we will not know the real impact of the scheme until after it is brought in,’ let us look at the recent analysis of the EU emissions trading scheme prepared by the TaxPayers’ Alliance, which reveals the high costs being imposed on British and European consumers by the EU emissions trading scheme. Their report says:
The burden on consumers since the scheme was introduced on 1 January 2005 has been significant.
At page 3 of the report it is estimated that the ETS cost British consumers nearly £3 billion in 2008 alone, equivalent to around £117 per family, by increasing the cost of energy. Too bad if you are poor or elderly in that country. This figure increases to £132 per family if you look at the cost of the scheme on consumers from its introduction to the end of 2008 in all ETS participating countries. So, mums and dads, if this legislation passes, prepare for a hefty increase in your household energy costs.
But that is not the only nasty little surprise that the Labor Party have in store for the people of Australia. As part of their so-called action on climate change they have conveniently hidden from the people of Australia the details of the current Copenhagen draft treaty which, if you read it, effectively gives complete power over the Australian economy to a committee of unelected UN carbon regulators controlled by those claiming climate compensation from Australia. So much for open and transparent government. The question for advocates of this scheme is: how could any thinking person acting in the national interest actually endorse such flawed legislation? The answer to that is: perhaps because this legislation is being run to a political timetable as opposed to one that underpins good public policy. That is why those opposite are so keen to see the Senate pass this legislation next week.
Minister Wong’s claims that the legislation must be passed to provide momentum to the crucial UN negotiations in Copenhagen in December are absolutely absurd given the events of the last week. Based on what has now happened at the APEC conference in Singapore, based on what we now know is the likely outcome of the Copenhagen conference, is the minister still so deluded to actually believe that the world is waiting with bated breath to see what Australia, with a mere 1.4 per cent of global emissions, is actually going to do to tackle so-called climate change? I think not. Let us not forget that this is the minister who tirelessly trumpeted a 2010 start date because the world was going to end. Then what happened? A political decision was made by her leader and, guess what, the start date became 2011. She then appeared in this chamber as if nothing has happened and trumpeted a 2011 start date.
Consistency of argument will never ever get in the way of those on the other side when they are trying to sell Mr Rudd’s message of the day. Mr Rudd and Minister Wong need to understand that, while they may delude themselves over their own self-importance, the world leaders at APEC have dismissed their delusional state of mind and have made it very, very clear that they have not fallen for their ETS stunt. Our international competitors must be rubbing their hands with glee at Mr Rudd’s insistence at strutting the world stage and promoting himself rather than protecting Australian jobs.
As a senator for Western Australia I have to again put on the record that Western Australia is being short-changed by the current legislation. Why? It is a failure by those on the other side to recognise the disparity between the national electricity market and the Western Australian electricity market in relation to the Electricity Sector Adjustment Scheme. This failure and the resulting detrimental impact on Western Australia will see electricity generators in WA pay more for the price of their electricity.
This detrimental impact is not new. It has been raised time and time again by Griffin Energy and by senators on this side of the chamber with the minister over the last 18 months. Griffin Energy have even provided the Labor Party with the appropriate amendments that would actually rectify this appalling situation. What have the Labor Party done to date? Absolutely nothing. They have done nothing to rectify a serious issue in relation to a flaw in this legislation that will detrimentally impact upon Western Australia. Labor senators from WA on the other side should hang their heads in shame at their failure to stand up for Western Australia, to stand up for industry in Western Australia and to stand up for jobs in Western Australia. Prior to the 2007 election Prime Minister Rudd, as the then opposition leader, said:
In taking the lead before an effective international agreement is in place, it is also vitally important that a domestic scheme does not undermine Australia’s competitiveness and provides mechanisms to ensure that Australian operations of energy-intensive trade-exposed firms are not disadvantaged.
That is nothing more and nothing less than Ruddspeak for, ‘The Australian people are fools and that is the way I am going to treat them.’ The Rudd Labor CPRS fails on all counts. It will cost Australians their jobs, it will kill investment in Australia and it will do very little, if anything, to reduce CO2 emissions. The bill that we have before us is absolutely self-defeating. It is not good public policy and under no circumstances should it be supported.
The presentation of the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills in this place at this time is the height of hypocrisy and if passed could visit on the Australian people a scourge of the highest taxes, the greatest loss of jobs, the worst impact on our economy and the most severe assault on our way of living and, if you believe credible experts and government advisers alike, all for no benefit to the nation or indeed the world. The proposed legislation is the demand of a Prime Minister who seeks self-gratification well ahead of the wellbeing of this nation he has the responsibility to lead. He does not care at what expense it will be to our country and our people, and he demands that this bill be passed less than 20 days before world leaders are to debate the very issues covered by the legislation knowing that it will impact on Australia and that the outcomes should be taken into account in framing our eventual position.
I will address three key issues in my contribution: the timing of this debate and the vote, key environmental issues and, of course, community engagement. The Prime Minister wants to lock Australia into a position on carbon emissions trading or taxing before he goes to Copenhagen next month. He wants the legislation passed now, yet it is not due to come into effect until July 2011, some 19 months away. He has not explained to the Australian people or to this chamber why it is so necessary to deal with this legislation in advance of Copenhagen when it is not coming in until July of 2011. Nobody in the media has challenged him on this question. Australians have the right to know why it is that none of our major trading partners or our competitors are committing to a position prior to Copenhagen and yet we have to, for whatever reason.
This global gambler, the very person who recently lectured his political opponents on the finer points of the game of poker quoting from the Kenny Rogers song, went on to state:
You’ve got to know when to hold ‘em, know when to fold ‘em.
Know when to walk away, know when to run.
Indeed, he wants to run to Copenhagen. He wants to wave our cards in front of the world community before they have even picked theirs up off the table. On this issue, the gambler’s advice from that song continues, and it is a shame the Prime Minister did not go a bit further in the quote himself because it goes on to say: ‘You shouldn’t count your money ‘til the dealin’s done,’ and the deal is certainly not yet done, neither here nor in Copenhagen. One can only hope that the Prime Minister’s reference to this song is no guide to the way that he is attempting to run this economy or indeed to run it down.
It was on 8 November that his Treasurer Wayne Swan, in a speech in Edinburgh after the G20 finance ministers’ conference leading up to Copenhagen, said:
I would regard it as premature for us to be putting forward a figure in total in the absence of some knowledge about the likely nature of the agreement—
and the institutional mechanisms that go with it.
The G20 finance ministers meeting in Edinburgh that weekend wanted consensus and they did not get consensus. The European ministers, of course, want the G20 nations to commit to an expenditure of, if you do not mind, A$180 billion per year as an incentive to developing countries to emission reductions. Even the Danish Prime Minister, who will host the group in Copenhagen, went on to say that the climate change meeting in Copenhagen could now not lead to a legally binding agreement. Yet we are being asked in this place, in the next two weeks, to do just that. The most senior ministers in this government are totally confused. We have a Prime Minister who wants us to pass this legislation this week and a Treasurer, quite rightly, preaching caution on Australia’s financial exposure in the face of spirited pressure. But I suppose he too, like the rest of us, is a coward and therefore is not being listened to.
The Europeans hold a very strong hand when it comes to carbon emissions and to the debate. Why? Because, of course, they rely heavily on low-carbon nuclear energy for generating their electricity. France generates 80 per cent of its electricity from nuclear reactors. The UK, another Labour government, only last week announced that they are constructing 10 new power stations. Indeed 19 of the G20 nation countries have nuclear energy in their power mix, so of course they are very, very happy to be wedging us. They are low-carbon emitters because they have a form of energy that we will not even talk about in this country. How is the Prime Minister going to play our cards in this situation? How can he commit Australia when he does not even know what our trading partners, or, worse, our trading competitors, are going to do? Those who ignore the lessons of history are doomed to repeat them. We know very well that the Europeans have always sought to benefit themselves first and this round will not be any different. Anyone who wishes to dispute that need look no further than the tariff protection of their agricultural trade over the last 40 years.
I come now to the question of environmental sustainability in this question of climate and the deliberate confusion being spread about carbon. The core issue in the minds of business and community leaders is a sustainable environment. This is where the focus should be in this debate and not on carbon dioxide. If I can use a medical analogy, carbon dioxide and greenhouse gases are not diseases. They may or may not be symptoms of disease. So what is the disease? It is the deterioration of the environment, here in Australia and internationally, and most reasonable people would accept that the deterioration of the environment is due to human impact. That is where the attention should be. Using my medical analogy, a headache, like carbon, is not a disease. If the clinician rushes in to treat the symptoms, whether it be with a carbon tax or an aspirin, they will fail because they have failed to diagnose the cause of that headache or that disease. Get it wrong and it will have been wasteful or indeed could make matters worse. This flawed carbon tax—and of course the word ‘flawed’ will now incur the wrath of the thought police—will create far more than a headache for the Australian people well into the future. The emphasis needs to be on fixing the environment and not demeaning carbon dioxide.
But what is this government’s commitment to investment in a sustainable environment and minimising the impact of humans? Once again we see a track record of empty rhetoric and absolutely and utterly no performance. Let me give you just a few examples. Water management is one. This is the driest continent on earth. Would you not think that we would be at the fore? My Israeli colleagues have said to me: ‘Why is it that your country is so far behind and we are so far to the fore in water management?’ Why is it that water in the Thames River travels through people seven times from its point of origin to the ocean, and yet we in Australia are so far behind? What action have we taken over time as a community, as households and as businesses on the billions of litres of potable water wasted in industry, in households and by governments? No action has been taken in this area.
I look at the river systems. There is a total failure in river system management. The Murray-Darling is an absolute disgrace for this country—for federal and state governments and anybody else associated with this inactivity. I look at land use, particularly in my state of Western Australia. In one area alone in the northern wheat belt the equivalent of a football field per hour is lost to salinity. It is not just agricultural land. There is creeping salt in the towns as well. It is a catastrophic problem, and yet we learnt recently there is no money to control salinity.
Then there is power generation and distribution. This government was forced kicking and screaming by Western Australian parliamentarians from our side to recognise LNG as a viable and lower-carbon alternative to coal. They were unwilling to do so, despite the fact they were very happy to go over there and have their photos taken beside Chevron and their partners in Gorgon, the Browse et cetera. Let us see some action in this whole debate. Why are we not seeing it? There is a lack of vision, no leadership and empty rhetoric. Look at power distribution. The rest of the world has high-voltage direct current power distribution. It is phenomenal. We could link up eastern Australia to Western Australia. Some of our Treasury officials in an inquiry recently did not even know there is no grid linking up the east to the west. We could go further with our distribution chain with high-voltage DC and we could link up to Asia. The Chinese are into it and the Europeans are into it; we are doing nothing. The $900 per head would have been far better spent on that sort of activity than the way it was wasted.
Madam Acting Deputy President, I remind you again that 19 out of 20 of the G20 countries are indeed using nuclear means. We have, I think, the third highest level of reserves in this country. I am not advocating nuclear at this time, because fortunately Australia has coal and it has LNG in abundance, but in 20 to 30 years time we need to be looking at this issue. This government needs to be taking leadership in it. It has some senior ministers who have the nerve to get up and say so. It needs a lot more and it needs the Prime Minister.
I continue with Land and Water Australia. What is more important in this country than Land and Water Australia? Yet after years of excellent research we see Land and Water Australia is being abandoned and effectively even now has been neutered down to nothing. There is also the Desert Knowledge CRC. Why do I mention it? Simply because it is also to be the subject of the knife. Only recently were you on the east coast reminded of the impact of desertification and feral animals when half of the east coast, including the city of Sydney and this city of Canberra, was covered in dust. What a shame the dust storm did not come before the decision to cut off the funding to the Desert Knowledge CRC. The list simply goes on.
I come to the third of my points, and that is community engagement. What hand has this Prime Minister dealt to the Australian people? Can the gambler know what the cards are by the way he holds his eyes? What have we been told about emissions trading as a community? The man on the street knows very little. Recent surveys of business people—people who should be across this—have brought out comments like: ‘I’m not proud to admit it, but I don’t know anything about the ETS.’ ‘Sorry, I can’t even put two sentences together,’ said one person. ‘I know nothing about it,’ said a second. A third tried to indicate it might have something to do with ‘polluters buying credits from tree growers’, for example, but could not say much more. A fourth person said: ‘Sorry, I don’t know what ETS stands for. Should I look it up?’
The government has set new records in spending taxpayers’ money boasting about the so-called education revolution—which in the building sense, as I have said, is not going to add one iota to the learning of any children—and the fair work laws, but there has been nothing on emissions trading or a carbon tax. Why aren’t they engaging with the community? Why is the community so confused? Do the community want to see some action? Of course they do. What do they want to see it on? Nobody actually knows, because this government has simply not addressed it.
There is an old saying: ‘awareness brings action which brings results’. Well, it starts with awareness, and the government have done nothing. I ask why. Is it because they cannot tell the people that it will be the largest taxing issue most Australians will face in their lifetimes? Or is it because they know the carbon tax will have no impact on world carbon dioxide levels, that it will drive jobs away from Australia, and that it will drive businesses and industries into the hands of our competitors—in so doing probably making the world carbon problem worse?
I look now to the CSIRO—and it is a shame the minister has just left the chamber. In 2008, Senator Carr very sensibly gave the CSIRO a new charter to protect academic freedom, stating that Australian scientists should be able to contribute their personal opinions to public debate. Unfortunately, what happened when respected CSIRO scientist Dr Clive Spash tried recently to question the emissions trading scheme? He was gagged by the CSIRO senior management on the basis of the same charter that Senator Carr had given them on the grounds that Australian scientists should be able to contribute their opinions. His contribution to the debate was to argue that economic theory underpinning emissions trading is far removed from the reality of market permits. I will quote him:
While carbon trading and offset schemes seem set to spread, they so far seem ineffective in terms of actually reducing GHG’s … Despite this apparent failure, ETS remain politically popular amongst the industrialised polluters.
He could have added banks. He went on to say:
The public appearance is that action is being undertaken. The reality—
according to Dr Spash—
is that GHGs are increasing and society is avoiding the need for substantive proposals to address the problem …
He is one of our most respected scientists and he wanted to say that publicly. He was gagged from doing so. Where is the cowardice in that? What we have to know is that this emissions trading scheme, this bill, will not change anybody’s behaviour and will have no improving effect on world carbon, greenhouse gas or, indeed, importantly, environmental sustainability.
In my contribution to this debate in June, I pointed out that the government had refused to release any Treasury modelling on what the impact would be on Australia if our trading competitors and partners did not participate. I simply do not believe that professional Treasury officials did not do that modelling. If they have not, they are derelict, but this government must now demand they do it and they must release it. I call on them to do so. Some Treasury data was, of course, recently made available for the community to scrutinise. The bottom line is that its own modelling shows that the ETS will have little or no impact on the coal-fired electricity generation industry in our lifetime.
The Australia Institute CEO, Dr Richard Denniss, hardly a person from our side, stated:
doesn’t tell us is that her CPRS, complex and impenetrable as it is, does not actually result in the reduction of greenhouse gas emissions from our coal-fired power stations.
He went on to say:
The CPRS is complex, expensive and ineffective. The government’s strategy—
and these are his words—
is to suggest to voters that they are taking significant action on climate change while simultaneously allowing them to assure industry that they aren’t really doing anything. It may or not turn out to be a well-designed political tool, but as a policy tool it is an enormous distraction.
So then we have the issue of what the Prime Minister is doing about it. Who is he protecting, and for how long? He says he is going to protect low-socioeconomic families but he does not tell them openly that it is only for a two-year period. What is he doing for self-funded retirees? And who is missing out again on any sort of support in this ill-considered legislation? Who will bear the burden of it? It is, naturally enough, the engine room of this economy: small business people and middle-income Australians. They are the ones who provide the employment and take the risks out of their own pockets and in their own businesses. They are the ones who will be slugged on this occasion.
In June of this year I made a comment in this place. It has recently been picked up by community leaders and economists. Bill Evans, the senior economist from Westpac, said only recently that if Australia ‘genuinely wants to reduce global carbon emissions, we should be investing heavily in research and development in those areas where we can make a difference’. He agreed with me that Australian research organisations and industry have a strong record in this area. The results of that R&D could be sold to wealthy countries to recover and invest further and could be given by Australia as a wealthy country to the developing countries as our contribution. The point being made is that this will have a far greater effect on the 1.5 per cent.
I conclude with reference to the fact that it is a remarkable coincidence that this conference in December is to be held in Copenhagen, the spiritual home of the fairytale teller Hans Christian Andersen. We all know of the fable The Emperor’s New Clothes. For those who need reminding, it is of the emperor who cares for nothing but his own wardrobe. He hires two so-called weavers—swindlers—and they promise to make him the finest suit of clothes. The only problem is that it is invisible. The emperor sends his ministers along to see how the job is going. The ministers think, ‘Well, I can’t possibly stand up and say there is nothing there; I will go back and I will join in the rort.’ He sends advisers and the advisers do the same thing. As we all know, what ends up happening is a parade. All the people want to see this wonderful exercise. The people cheer, hoot, carry on and clap and only one little boy in the crowd says to his dad, ‘The emperor has no clothes.’
What is the plot? It is an arrogant emperor who placed his own vanity ahead of national interests, two swindlers who saw him for what he was, demand by them for resources that would rob the people of their assets, sycophantic advisers and colleagues who perpetuated the myth, a crowd looking for leadership and an innocent bystander who himself was not a coward. We all know we need change. I am here to say that this bill will not deliver that change.
It gives me pleasure to be here this morning to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. I was a participating member on both the Carbon Pollution Reduction Scheme inquiry and the climate change inquiry, one of which you, Madam Acting Deputy President Hurley, presided over as chair. What we tend to end up losing as a result of the lack of participation and contribution by the opposition towards this bill is employment, tourism, the Great Barrier Reef, successful farming and agriculture industries, and beautiful beaches. This is just a glimpse of what we stand to lose in the sunshine state of Queensland, which I represent, if those opposite do not support the Rudd government’s fight against climate change. Queensland is known for its sunshine, its beaches and, most importantly, the Great Barrier Reef, which stretches 2,100km along the Queensland coast from Bundaberg to the tip of Cape York. It covers close to 350,000 square kilometres and is the only living organism visible from space. The Great Barrier Reef is of great significance to Queenslanders and Australians. It is protected as a marine park and has been a World Heritage area since 1981. The seagrass beds and mangrove forests of the reef are home to more than 4,000 mollusc species, about 1,500 fish species, most of the world’s marine turtle species, the dugong, dolphins and whales. If we delay the implementation of the Carbon Pollution Reduction Scheme, we will lose the Great Barrier Reef, one of the seven natural wonders of the world.
The biodiversity vulnerability assessment conducted by the Department of Climate Change states that climate change is the greatest long-term threat to the reef, with implications for nearly every part of the ecosystem. Its projections show that the sea and air temperatures will increase, the sea level will rise, the ocean will become more acidic, intense storms and rainfalls will become more frequent and ocean currents will change. This will affect the beautiful marine life which our fishing and tourism industries rely on. In fact, the Great Barrier Reef’s tourism and fishing industries bring $6.9 billion to the Australian economy annually, and the reef’s existence supports more than 53,000 jobs. Talk about jobs! Yesterday we heard from Senator Macdonald in this chamber on a disallowance motion on a proclamation of the Coral Sea conservation. He was talking about jobs and the loss of jobs in deckhands. What is he going to say in this chamber when we end up with the loss of 53,000 jobs in this area as a result of voting against this Carbon Pollution Reduction Scheme Bill?
One species which is threatened by climate change is the green sea turtle. The Marine and Tropical Sciences Research Facility state that climate change will skew the sex ratio towards females, which will lead to reduced nesting space and will modify their exposure to cyclones. James Cook University PhD student, Mariana Fuentes, who has been hired by the Marine and Tropical Science Research Facility, states:
Sea turtles are particularly vulnerable to climate change, because they have life history traits strongly tied to environmental variables and nest in coastal areas vulnerable to sea level rise and cyclonic activities.
Research was conducted on the largest green sea turtle population in the world, which nests in the northern Great Barrier Reef and the Torres Strait. According to the research of Ms Fuentes, the sex ratio of hatchlings produced by this population will skew towards females by 2070 and 38 per cent of available nesting areas across all rookeries may be inundated due to sea level rises. This is an example of just one species which is already endangered and will be greatly affected by climate change. It is important that we step up and vote for legislation which will be able to reduce the effects of climate change to save species like the green sea turtle, which is, as I have already mentioned, the largest population of this species in the world.
The biodiversity vulnerability assessment also points out coral bleaching to be another problem which will greatly affect the Great Barrier Reef. High water temperatures exceeding the long-term summer maximum by as little as one to 1.5 degrees Celsius for six weeks can lead to widespread coral mortality. This is alarming because many ecosystems and species depend on coral for food and habitat. While the reef is changing because of climate change, the effect on the coral will depend on the magnitude of climate change and if nothing is done today the results will be disheartening.
On a recent visit to the Reef and Rainforest Research Centre—and I pause to commend them for their involvement and efforts in the Cairns region—I was given the chance to hear and understand firsthand what steps can be taken to save our beloved reef. The Marine and Tropical Sciences Research Facility—MTSRF—has been implemented by the centre at a cost of $40 million as part of the Commonwealth Environment Research Facilities program. It has been established to understand the threats the reef is facing. Some of the threats I have been advised of are climate change, loss of biodiversity, a decline in water quality and unsustainable use. They also stress that we do not have the freedom of time and that we must act quickly. As we face climate change, I was advised that only corals which are healthy and resilient can absorb shocks and recover from stress without loss of biodiversity or complexity. Researchers from the University of Queensland, James Cook University and the Australian Institute of Marine Science, funded by the MTSRF, are investigating the genetic basis of a common coral species to see if they would survive if water temperatures were to increase.
Areas with tolerance would be able to survive if the temperature was to rise up to two degrees, but with the Intergovernmental Panel on Climate Change predicting a three-degree increase in the next 90 years we are at risk of losing the reef. The Climate change in the Great Barrier Reef: a vulnerability assessment report, which was put together in 2007 by the then Department of the Environment and Heritage, states that since the mid-18th century the concentration of greenhouse gases in the atmosphere has definitely increased because of human activity. This concentration results in the heat being trapped, thus causing temperatures to rise. Rising temperatures lead to rising sea levels and, according to the Australian Academy of Science, sea levels are estimated to rise by 50 centimetres by 2100. This is science backed up just yesterday morning at the FASTS breakfast on the effects on the Great Barrier Reef. While half a metre does not sound very threatening on a large scale, it will have detrimental effects on our neighbours living in the Pacific islands.
I was privileged to have a delegation from three Pacific islands come to my electorate office: the Reverend Tafue Lusama from Tuvalu, Pelenise Alofa Pilitati from Kiribati and Marstella Jack from the Federated States of Micronesia. They brought to my attention the effects of climate change which they are feeling and seeing now. Rising sea levels are causing their islands to decrease in size and be swallowed up by ocean, and flooding is becoming all too familiar. Because of this, their water is being contaminated by salt water and their farming industry, which many of the islands rely on to survive, is being greatly affected.
The Australian Academy of Science also believes that rising sea levels will have a detrimental effect on our coastal lands, something which concerns me about the state of Queensland, as we are known for our golden beaches and coastline. According to the academy’s modelling, if sea waters rise by 100 centimetres then coastal beaches could retreat by 100 metres. This is a significant amount of beach to lose, and those who live on the coast would be greatly affected by this.
A report released on Saturday by the Minister for Climate Change, Senator the Hon. Penny Wong, outlines the infrastructure, services and industries at risk in coastal communities from climate change. The report, Climate change risks to Australia’s coasts, states that 157,000 to 247,600 existing residential buildings will be at risk from a sea level rise of 1.1 metres, and our airports and ports could be affected by cyclones and ocean acidification. This report is one of many telling us we need to act on climate change. As a senator from a state which boasts a magnificent coastline, I urge everyone to support the CPRS legislation.
The CPRS is the Rudd Labor government’s initiative to fight climate change today. Our commitment is to reduce carbon emissions by 25 per cent below 2000 levels by 2020 if the rest of the world agrees to stabilise greenhouse gases at 450 parts per million CO2 equivalent or lower by 2050. The CPRS has set the challenge of Australia reducing its carbon emissions by five to 15 per cent below 2000 levels. By implementing the emissions trading scheme, Australia will be able to adjust to become a more environmentally friendly country.
The government understands that this will not be an easy task, but it is something we need to do to ensure we do not lose our precious Great Barrier Reef, which is worth billions in tourism and employment and is home to many different species of marine life which would not be able to thrive without the reef. The Rudd Labor government has engaged in a number of consultation processes for the CPRS, and I was privileged to be included in the Senate Select Committee on Climate Policy. Ten hearings were held around the country and 188 witnesses presented their views on the CPRS. Witnesses came from all walks of life, including government departments, industrial associations, businesses, trade unions, community organisations, leading scientists and economists. There were also representatives from mining, industry, farming, energy supply, financial and commercial interests. More than 8,000 submissions were received from organisations and individuals.
The result of this committee was not unanimous, with coalition senators disagreeing with the CPRS. This decision is detrimental to our nation’s fight against climate change. The position of the government senators on this committee—Senator Doug Cameron, Senator David Feeney, Senator Louise Pratt and me—is that action must be taken as soon as possible. After years of inaction by the previous government, it is up to us to implement the CPRS to reduce Australia’s carbon emissions and therefore save the environment.
With many scientists here and abroad advocating the view that climate change is caused by human activity, I wonder why those opposite do not believe climate change is occurring. After all scientists were invited to present their views at these committee hearings, not one climate scientist with qualifications and experience disputed this view. If the scientists, those who study climate change for a living, believe that climate change is caused by human activity and that it is potentially damaging to the state of this planet then who are we to dispute this?
According to the Garnaut review, put together by Professor Ross Garnaut, economist and former adviser, if we sit here and do nothing then the expected rise in temperature would be damaging to our environment and to our economy. In our report handed down after the inquiry we, the government senators, found that inaction would cause temperatures to soar and that this, combined with a decline in rainfall, would greatly affect agricultural production. We would see the Great Barrier Reef destroyed by mid-century and our snowfields and beautiful beaches would be just a distant memory. This would put an end to our tourism industry and the many travellers flocking to Australia to dive in our reefs and relax on our golden beaches.
Along with the physical damage to our country, we as humans would be greatly affected by the effects of climate change. Soaring temperatures would affect those sensitive to heat, including our ageing population. Tropical diseases and pests would spread across the country and would be detrimental to our health. An article yesterday in the Age indicates that this year we saw the second warmest winter in Australia since records began, 1.33 degrees hotter than the average from 1961 to 1990. Beyond this nation—it is not just in Australia—monitoring by Britain’s Met Office and the Climatic Research Unit at the University of East Anglia found that around the world, on land and at sea, June, July and September were the third hottest in 160 years of records.
Consultation was an important process for the government, and once the green paper was released about 1,000 submissions were received. We also conducted a number of industry and non-government organisation roundtables to enable everyone to voice their opinions. The Garnaut review, which consulted extensively, was also established and Senator the Hon. Penny Wong, Minister for Climate Change, and other ministers held meetings with stakeholders. Many regional and city based forums were also held once both the green and white papers were released. For those who have been sceptical about the consultation process, there is your answer. The Rudd Labor government went through many avenues to allow as many people as possible to have their say on this very important piece of legislation, which is needed to cut our carbon emissions and therefore prevent irreversible damage to our environment.
In Climate change in Australia: technical report 2007, the CSIRO and the Bureau of Meteorology projected that Australia would also be subject to more hailstorms, intense cyclones and fire risk. This would cost the insurance industry millions of dollars. The Insurance Council of Australia stated in 2008 that 19 of the 20 largest property insurance losses since 1967 were weather related.
The Carbon Pollution Reduction Scheme is about cutting emissions as well as keeping people in jobs. According to CSIRO Sustainable Ecosystems senior science leader Dr Heinz Schandl, a greener economy would see a boom in employment. At a hearing of the Senate Standing Committee on Economics on Wednesday, 25 March 2009, Dr Schandl said that a greener economy would bring about 2.5 to 3.3 million jobs for Australians, with 230,000 to 340,000 high-impact environmental jobs in energy, transport, agriculture and construction sectors—and he is not alone. According to Treasury modelling, all business sectors will continue to grow while emissions are falling, employment will rise by 1.7 million jobs by 2020 and the average income is expected to rise by a minimum of $4,300 per person. Even more jobs are expected to be created, with a projection that the renewable energy sector will be 30 times larger than today. With Australia trying to become a greener economy, more jobs have already been or will be created.
A study conducted by the Climate Institute states that already $31 billion worth of greener projects, either established or in the works, have boosted jobs and are expected to bring about 2,500 permanent jobs, 15,000 construction jobs and another 8,600 jobs in support. All of these figures are on top of the large number of jobs already created by the Rudd government’s energy efficient programs, including the Energy Efficient Homes Program, which I saw firsthand at the CSR Bradford Gold insulation plant in Brendale near my electorate office in Queensland. Because of the expected demand for insulation, the plant decided to extend its operations to 24 hours, seven days a week, providing more jobs for the locals and up to 80 jobs in total.
As well as keeping people in jobs, according to Treasury modelling, the quicker we act the better the Australian economy will be. The cost of implementing the Carbon Pollution Reduction Scheme, according to the report Australia’s low pollution future: the economics of climate change mitigation, will cost the nation much less than inaction and letting irreversible damage to this country occur. As you can see, it is imperative that the Senate pass this important piece of legislation which is key to saving our environment, critical for job creation and retention and, from the information I have been presented, the right thing to do. I urge all fellow senators to vote for the Carbon Pollution Reduction Scheme so that we may reduce our carbon emissions into the atmosphere and begin our next era as an environmentally sustainable country and ensure our future generations do not pay for our mistakes.
I rise to make a contribution on this package of bills related to the government’s so-called Carbon Pollution Reduction Scheme, which I shall hopefully more appropriately refer to throughout the course of my remarks as an emissions trading scheme. I speak noting that there is some difficulty in addressing these issues today because, of course, negotiations between the government and the opposition about the details are still continuing and are some distance from being finalised. But I want to take this opportunity to outline my approach to these issues and what I hope will ultimately emerge from the government’s approach to them, from the discussions and negotiations and from the consideration by this chamber.
I want to start, however, by revisiting some of the comments I made in my 11 August speech on this same package of bills, the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. Back then I noted that I do not know whether climate change is real. I do not know whether human impact on climate change is real. I am not a climate scientist. I have never pretended to be so. I also note that, so far as I am aware, nobody in this place or the other place pretends to be a climate scientist or qualified in such fields. I note that many come to this debate with opinions that are doubtful of the veracity of climate science. And, as I said back then, I hope that they are right, because if they are right then the future for the planet looks much rosier than it does for those who take a far dimmer view of what climate science and climate change could possibly mean.
I recognise and respect the opinions of all of those who come to this debate, from whatever diversity of views they come to them. I personally accept that the overwhelming opinion of scientific study and research around the world suggests that there is change. It suggests that human activity is having an impact on that change and that the impacts of such change could be mitigated by reducing emissions of greenhouse gases. Furthermore, I believe today, as I did when I made my first speech to this place, that, with the exponentially increasing global population of people around the world, all of whom quite rightly aspire to have ever-improved lifestyles, we must be aware that this growth of populace and growth of consumption with it will of course have some impact on the environment in which we live. I am reminded of Newton’s old law of motion: that for every action there is always an opposite and equal reaction. In my mind, continually emitting ever-increasing volumes of any one chemical compound into the atmosphere must ultimately have some impact, whatever that may be.
For these reasons I believe, as I said in my previous contributions on these bills, that we should give the planet the benefit of the doubt and opt for action ahead of inaction when it comes to climate change mitigation. It is, however, a case of making sure that we get that action right. I believe that my opinion on these matters is one that is shared by the vast majority of Australian people—people who I speak to in schools, at shopping centres, when doorknocking and at community functions—who made some of their views known at the last election. They think that climate change is an issue that should be addressed, but I know that they also believe it should be addressed responsibly and appropriately.
These are also opinions that are shared worldwide. While I acknowledge there are people—and they exist right around the world—who question the science around climate change, it is equally true to say that leaders of the world have discussed and supported action around climate change over many, many years. Some, of course, would say too many years. Indeed, Margaret Thatcher, a great leader and a great woman, spoke at the Second World Climate Conference on 6 November 1990. Margaret Thatcher said at that stage:
The danger of global warming is as yet unseen, but real enough for us to make changes and sacrifices, so that we do not live at the expense of future generations.
The classical definition of sustainability is encapsulated there in the words of now Baroness Thatcher. Her modern-day successor as leader of the Conservative Party, David Cameron, has equally taken a very strong line when it comes to climate change and the need for action. Just this year, indeed just last month, on 8 October, David Cameron said at the Conservative Party conference:
... to be British is to have an instinctive love of the countryside and the natural world. The dangers of climate change are stark and very real. If we don’t act now, and act quickly, we could face disaster.
To paraphrase David Cameron, to be Australian is also to have a love of country, but it is a love balanced by an understanding of the dangers and fragility of our country—for ours is a country that is, yes, full of fabulous wonders, profoundly rich in resources and yet also dogged by inhospitable elements. It is, I think, both this love of our country and the understanding of its fragility, made evident through a range of other environmental challenges we face, such as salinity, the scarcity of water, the effects of erosion and the threats to our biodiversity, that guide the Australian instinct to adopt at least a precautionary approach in responding to the threats potentially posed by climate change.
This balance of scientific opinion and the global acceptance of it will, I hope, ultimately lead to a global agreement to act. Global action is essential, for unilateral action by Australia will not make any notable difference. A fact that it is important to understand is that Australia contributes 1.4 per cent, it is estimated, of global greenhouse gas emissions. On a per capita basis our contribution is high but on an overall basis our contribution is quite low, and we could, as some like to say, shut Australia down tomorrow and it would be of no difference to the impact of climate change in the longer term if no other country took no other action. Global agreement is not easy and the pathway or processes towards it are messy, and we have seen that in recent weeks in the lead-up to Copenhagen.
Recognising there is a problem is always one thing but agreeing on how to respond to such a problem is proving to be somewhat more difficult altogether. It is clear that developed countries need to agree to reduce the extent of their emissions and that there are some positive signs. In the United States we have seen positive signs from the Obama administration, and just in the last 24 hours President Obama has once again made strong and encouraging statements on this issue from China. We see similar legislation—although I would say better than this legislation—before the US congress that hopes to address these issues. In the EU we see that a scheme similar to this has been in place for some period of time, albeit with varying degrees of success and many lessons that need to be learned in the implementation of an emissions trading scheme in Australia.
It is equally clear that developing countries need to contain their emissions as much as possible. The importance of India and China cannot be understated in this debate, as the two most populous countries on this earth and the two countries which are aspiring to the higher standards of living that I spoke of earlier. But, once again, China joined with President Obama in his comments in the last 24 hours around the need for strong global action, and that follows on from comments made by President Hu at the UN General Assembly just a few months ago.
The upcoming Copenhagen discussions are very important, critical, to such an agreement. Personally, I welcome the abandonment over the last week of the draft treaty that had been circulated—a treaty that I believe was clouding the issues, clouding the prime objectives of the conference and certainly exacerbating concerns, mistrust and mistruths worldwide. My hopes lie in an agreement being produced from Copenhagen nonetheless, but an agreement that produces a clear and simple heads of agreement between the developed and developing countries at Copenhagen to both reduce and contain emissions to ensure that they produce something that can provide or lead to clear targets for all countries within a quick period of time, enabling each country to take, as is appropriate for its circumstances, the unilateral action that is necessary to work within a defined multilateral framework.
Some say it is better to wait until after Copenhagen to discuss this legislation and for this parliament to make its decision. Personally, I would prefer that that were the case. It is sad that this government have sought to force upon the parliament very cynical timing in the consideration of their legislation relating to an ETS. Their desperation to create a trigger for an early election by, firstly, forcing a vote on this legislation back in August, just on four months from the Copenhagen summit, and, secondly, by bringing it back to this place for these last two sitting weeks of the year, exactly three months later, smacks of exactly what it is: rank political opportunism. Dealing with this in January or February would have provided for a far more preferable outcome. Hopefully, it would have provided for far more informed debate. But that is not a choice the government has given us.
We face the choice of either voting this down again, and risking that the government will ultimately get its way through a joint sitting enacting a flawed ETS that would be harmful to so many sectors of Australia, or attempting to fix this legislation to get the fundamentals of the scheme right, knowing that its real enactment in a practical sense will come with the setting of targets that will flow from Copenhagen in any agreement that is made there rather than from the simple passage of this legislation in this place. Anyone who understands the ETS framework and how it works should recognise that it will be the targets the government sets to reduce emissions that matter the most in the practical impact the ETS will have on Australia in the years to come. What we need to get right at this time in this place are the design principles and the framework within which those reductions can ultimately be achieved if global agreement can be reached.
Some question the commitment of the coalition to action on climate change—and, to be fair, some within our ranks have questioned whether we should be committed to action—but I am happy to let our record in this area be judged by our actions in this area. The Howard government very early in office established the Australian National Greenhouse Office. It was an action undertaken by one of my South Australian predecessors in the Senate, Robert Hill—a good friend and former boss—as the then environment minister. The Australian National Greenhouse Office went on to establish the Australian greenhouse challenge, which through much of the nineties was responsible for voluntary action in reducing emissions by thousands of large, small and medium businesses around Australia.
The Howard government introduced the first mandatory renewable energy target in Australia, a target that we committed to increase at the last election and a target and a legislative framework that this government used to introduce its policy, supported by the opposition, of increasing in just the last few months. The Howard government supported a range of clean energy initiatives, such as support for solar installations around the country. The solar industry is an area that was so well supported by the Howard government and that has been stuffed around so much by the policies of today’s Labor government.
The Howard government supported international action. It may not have ratified Kyoto—and that may have proven to be a political mistake if not possibly also a policy mistake—but it nonetheless supported very strong international action, brought together major emitting countries in the Asia-Pacific region and was particularly focused on the very important area of combating deforestation, a leading contributor to global emissions. And, yes, the Howard government was committed to developing an emissions trading scheme. On 10 December 2006, the then Prime Minister announced the establishment of a joint government business task group to report on an ETS. On 31 May 2007, Prime Minister Howard received from the then head of the Department of the Prime Minister and Cabinet, Dr Peter Shergold, the Shergold report on emissions trading.
On 3 June 2007 at the Liberal Party Federal Council, the first federal council that I attended as a member of this place, Prime Minister Howard said:
I announce specifically that Australia will move towards a domestic emissions trading scheme, that’s a cap and trade system beginning no later than 2012.
That was a clear-cut commitment made by the then Prime Minister. He followed that up a month later on 17 July announcing the establishment of an implementation group within the Department of the Prime Minister and Cabinet that would be responsible for key design features and administrative arrangements for this crucial piece of national economic architecture. Then on 20 September 2007 the first piece of legislation important to the introduction of an emissions trading scheme was passed by this parliament. The National Greenhouse and Energy Reporting Act 2007 passed through this place on 20 September 2007—I note, without so much as a division being called.
A Liberal Party government, had we been re-elected, would have proceeded to implement an emissions trading scheme in line with Mr Howard’s commitments that he took to the election, but we would clearly have protected Australian jobs under such a scheme. Our scheme would have been one that minimised the impact on the Australian economy and on Australian families. It would have also minimised the risk of carbon leakage—the risk of shutting down industries in Australia and pushing their carbon emissions offshore to less protected countries.
That is why the opposition have launched into good faith negotiations with the government. We have done so to try to fix their scheme, to try to ensure that it better reflects what we hoped to achieve had we had the opportunity to be the ones to implement an emissions trading scheme in the life of this parliament. If accepted by the government, our amendments will prevent the close-down of important industries and will save thousands of jobs in trade-exposed sectors, such as aluminium and natural gas. Our proposals will also cushion the impact of power price increases on small businesses and consumers in particular, cutting them by at least half and ensuring that the churn of money through this ETS is minimised. We would ensure—and I welcome the fact that the government has flagged this—that agriculture is excluded and offsets like soil carbon are allowed. That it is a win for farmers and the potential offsets provide a greater win for the environment. We would recognise voluntary action and ensure that it is encouraged and facilitated within the scheme.
I hope that our sensible, sound amendments to fix this legislation are accepted—because, ultimately, I hope to be voting for this legislation. I hope the government will agree to change their plans—to save jobs, to reduce the economic impact and to provide for more mechanisms to reduce the level of carbon in the atmosphere—because I hope to ultimately be voting for action on climate change.
I recognise that a number of my colleagues have different views on this matter. I for one have always been proud of the right of Liberals to vote according to their conscience, unlike those opposite. I have always championed this right and I know that one day I may feel the need to exercise it myself. I therefore respect the rights of my colleagues to vote according to their conscience and if, on this issue, we ultimately find ourselves voting on different sides of this chamber, I will respect their right to have done so. I hope the government recognises the importance of the changes we propose. I hope we see them implemented and I hope that that potentially leads to the passage of this legislation if the government insists on a premature vote. I remain optimistic of the future in this area.
I again return to the comments of David Cameron and note that he has said in the past that he wants to recapture climate change from the pessimists. He recognises that there are huge challenges and that the issues are complex, and he says:
But when I think about climate change and our response to it, I don’t think of doom and gloom, costs and sacrifice. I think of a cleaner, greener world for our children to enjoy and inherit. I think of the almost unlimited power of innovation, the new technologies, the new products and services, and the progress they can bring for our planet and all mankind. And I think of the exciting possibilities that may seem a distant dream today—changing the way we live to improve our quality of life. We’ve all got to get positive about climate change.
I hope that is what we see from the government through this process. (Time expired)
I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. Only recently, Prime Minister Rudd described everybody who did not agree wholeheartedly and with unquestioning enthusiasm for this Carbon Pollution Reduction Scheme, as heretics and deniers. He was not saying that just those who question the science are deniers; he was talking about everybody who raised questions about the design of his CPRS or who were doubtful about how it would work.
That was then. Since then the government has compromised by conceding that agriculture will be permanently excluded. Until a day or so ago anybody who sought this permanent exclusion would have been labelled a dangerous heretic and denier by our Prime Minister. The coalition’s negotiations with the government are continuing to try to reach a far more acceptable and realistic outcome on this package of bills. Labelling those who have concerns as ‘heretics and deniers’ does nothing to achieve consensus. I can only wonder whether Prime Minister Rudd would include his Labor Party colleagues the Labor premiers of Queensland, New South Wales, Victoria and South Australia as heretics and deniers. They, with others, have commissioned work showing that an unamended CPRS would cost 126,000 jobs by 2020. Is his own Treasury department full of heretics and deniers because it has produced the conclusion that under an unamended CPRS coalmining output will be 35 per cent lower than it would otherwise have been?
I want to make it very clear today that I am committed to supporting a realistic and effective emissions trading scheme for Australia. The wisdom of the coalition’s earlier decision to reject this package of bills has been shown by the amendments that the government has already agreed, even if they are not in the legislation that is before us today. However, despite the agreed amendments—and I sincerely hope that there will be plenty more to protect job-creating businesses—the CPRS is a clumsy mechanism. But it is the only option on the table, and it should be passed, hopefully with a package of amendments that will not unfairly and unnecessarily put businesses and industries in Australia at an unfair disadvantage and destroy Australian jobs. It would have been preferable, in my view, simply to have taxed carbon emissions and to have compensated vulnerable sections of the community where necessary. But the fact is that Labor’s clunky scheme is better than no scheme at all if we are to make some progress on climate change in the national interest and in the global interest.
I am convinced by the overwhelming scientific evidence that the damage that is being caused may well not be reversible if we do nothing—if we simply just wait and watch and warm. We must admit that it is time that we got past the short-termism of underpricing the damage that our use of resources in the world causes. In the past we behaved as if the air could clean itself, but increasing pollution and the hole in the ozone layer taught us we were wrong. We acted for decades as if water was free until we almost ran out of it. Well, energy production is not free either, in terms of its effects, and we must act now.
I would like to see the package of bills passed, and there is no reason why we cannot pass them ahead of the Copenhagen climate change conference next month if the government accepts fair, reasonable and timely amendments. Last weekend, the 21-nation APEC group meeting in Singapore decided to scrap their 200-page draft agreement that had been negotiated by the diplomats and instead use the Copenhagen conference to seek a framework agreement under which countries would agree to cut emissions contingent on others taking similar action. This is no insignificant group. As we know, it includes the US President and the Chinese President.
Subsequently, the Danish Prime Minister, who will chair the Copenhagen conference, has said that following the Singapore meeting there is little prospect of the Copenhagen meeting producing a formal agreement on reducing carbon emissions. This need not necessarily be the serious issue some consider it to be in terms of the timing of legislation through the Australian parliament. Last night there appeared to be renewed hope that the Copenhagen conference might achieve real progress, when the US and Chinese presidents agreed, according to media reports, to ‘aim for a comprehensive accord to take immediate operational effect’. Nothing meaningful is going to happen globally unless the US and China—the world’s biggest emitters of greenhouse gas—contribute to action on climate change. They need to agree to commit to a legally enforceable successor to the Kyoto protocol when it expires in 2012, but just what the specifics are of the US-China accord which has apparently been agreed remain to be seen.
But there is reason for hope and there is a need to act—to act responsibly!—and being derided as heretics and deniers is not going to weaken our resolve to push for responsible amendments. It is not leadership to indulge in a personal ego trip. It is not leadership to grandstand and to try to berate and blackmail the parliament into passing a bill that needs significant amendment.
Two days ago opinion polling by Essential Research showed Australians are concerned about climate change and they want it addressed. They want it done without any indecent rush because that is a recipe for mistakes and errors that could have a disastrous impact. The poll that was conducted between November 9 and 12 showed that 38 per cent agreed that Australia did not need to make decisions about the scheme until after Copenhagen. Thirty-three per cent thought the decision should be taken prior to the conference. A total of 29 per cent were unsure. This poll was taken before the Singapore APEC meeting which ruled out precipitate action. When the realisation of that is fed into the national psyche, I am sure the numbers of those believing that caution and care is far preferable to panic and grandstanding will only continue to grow.
The world has never been confronted with such a challenge, so it is important that we get the response right. The decision by APEC leaders in Singapore not to adopt the draft agreement is not a failure. It will not stop the momentum for global action. Similarly, if there is no definite decision in Copenhagen, it will not slow the global momentum. There is a world consensus shared by Australians that there has to be action, but essentially that consensus is that there is no need for the frantic rush that is being demanded by Prime Minister Rudd. With or without international agreement, there is much that can be done and should be done.
The International Atomic Energy Agency estimates that improved energy efficiency can contribute close to 60 per cent of the reduction in global emissions by 2030. The head of IAEA’s energy efficiency unit, Nigel Jollands, who was in Australia recently, has said:
With or without an international agreement on climate change, energy efficiency is going to need to be a major component of government policies. You can do it not just because of climate change but because it makes sense for the economy.
There have already been initiatives in Australia, including subsidies for home insulation and solar panels, although under the current Labor government these have been badly administered. The IAEA suggests revised building codes requiring lower levels of standby power for appliances and electrical equipment, lower emissions lighting, more efficient electric motors for industrial use, fuel-efficient tyres and mandatory fuel efficiency standards.
... that the Australian landscape has the biophysical potential to store an additional 1,000 million tonnes of CO2e in soils and vegetation for each year of the next 40 years.
The group concludes that if we:
... were to capture just 15% of this ... capacity, it would offset the equivalent of 25% of Australia’s current annual greenhouse emissions for the next 40 years.
To further quote the Wentworth Group:
This represents a gross investment potential of terrestrial carbon in Australia of between $3.0 billion and $6.5 billion per annum.
It is good news for Australia. It lowers the ... cost of achieving Australia’s emissions reductions, and makes it possible for Australia and the world to adopt deeper emission cuts.
The Wentworth Group has thrown out a challenge to every Australian government, saying that:
If we plan wisely, terrestrial carbon presents an economic opportunity of unparalleled scale to address a range of other great environmental challenges confronting Australia—
repairing degraded landscapes, restoring river corridors, improving the condition of our agricultural soils, and conserving Australia’s biodiversity.
All of this requires commitment, hard work and intergovernmental cooperation.
Prime Minister Rudd and the government would do much more to protect Australia and make a meaningful contribution to the global cause by accepting this challenge rather than making their near-hysterical demands that this legislation be passed immediately in its flawed form. The opposition’s amendments to this package of bills flow from six fundamental principles that must be addressed. We believe that Australian emissions-intensive trade-exposed industries must be on a level playing field with their competitors abroad; that agriculture should be excluded and that there should be a mechanism for farmers to earn offset credits when they abate carbon in the way suggested by the Wentworth Group; that Australian coal producers should reduce their fugitive emissions as technology allows but should not be unfairly penalised compared to their competitors; that the impact of electricity prices on business must be moderated—we cannot lose our small and medium enterprises because of the unfair competition they face; that assistance should be provided to coal fired electricity generators to ensure they remain financially viable and that the lights literally stay on; and that complementary abatement measures, such as voluntary action and energy efficiency in buildings, should be mandated.
The government has made the concession to permanently exclude agriculture, and I believe that all businesses—not just agribusiness—should be treated equally. The President of the National Farmers Federation, David Crombie, in a statement on October 28 made the valid point:
Of course, indirect costs will still go up. They are going ... up for every sector in the economy and be passed on to every household in the country. We are trying to minimise the cost but to say we can get out of all costs if there is a CPRS would be ingenuos. That’s just the reality.
And it is a refreshing grasp of reality. It puts into sharp perspective the complaints of those who demand that there be no CPRS at all because the cost of their energy will go up or because the cost of their fuel will go up. The fact is, as Mr Crombie freely acknowledges, there will be costs and they cannot all be avoided. Yes, there will be cost—that is the whole idea. Higher prices equal lower energy consumption, which equals lower carbon emissions. What we have to ensure is that those costs do not fall disproportionately on one particular sector. But to suggest that there should not be an emissions trading scheme because it will increase costs is, to my mind, an immoral proposition. We must do something to ameliorate climate change.
Last month, an important report, commissioned by the Queensland government and prepared by KPMG, the Carbon outlook final report, was released. The report concluded that the CPRS was expected to directly affect around 1,000 Queensland businesses, although the indirect or flow-on effects would be felt by all businesses. It noted that small and medium enterprises, which generally will not have to buy permits, will still feel the effect through the supply chain and from consumer pressures. The survey concluded that only 11 per cent of businesses had a full understanding of what the CPRS meant for them, while 45 per cent admitted to not fully understanding what the impacts would be and 23 per cent thought that there would be no impact on them. In general, business has a realistic outlook. I quote from the report:
While businesses were keen to understand climate change, the CPRS and opportunities for implementing clean technologies, it was clear that the focus of business is on the bottom line. The proposed CPRS is seen as a financial issue with the impact measured by small and medium business enterprises in terms of the additional cost to business rather than the impact on the environment.
The report continued:
While businesses generally acknowledge that the environment and being ‘green’ is important, it was almost universally cited as a secondary issue behind the financial well-being and on-going sustainability of the business. Hence, reducing emissions is important, only as long as it does not increase costs.
These businesses must be protected or we destroy the employment engine room of Australia, particularly in the current circumstances as we are beginning to recover from the problems of the global financial crisis.
Small and medium businesses operate on very thin margins. In some sectors, such as tourism, they make up around 80 per cent of businesses. The issue of financial stability is critically important to those SMEs.
Again I quote from the report:
With the average pre-CPRS EBITDA margin at 9.1 per cent (with a range of -18 per cent to 64.6 per cent) and one-third of the businesses operating on margins of less than five per cent, the potential value at risk for the proposed CPRS is significant for a large number of businesses operating on thin EBITDA margins.
These businesses are vulnerable to cost movements and they are very significant employers, especially in rural and regional areas. They must be given every consideration and every opportunity to be competitive.
The Chief Executive Officer of the Australian Industry Group, Heather Ridout, said only on Monday of this week that the decision to permanently exclude agriculture from the scheme would put more pressure on other sectors if we are to meet our emissions reduction targets. She said that the exclusion of agriculture meant that over the longer term industries covered by the scheme would have to find and fund 20 per cent more abatement than would otherwise have been the case.
In her foreword to the report commissioned by AIG, Gearing up: business readiness for climate change, Ms Ridout said:
There are plenty of very encouraging signs that businesses have begun to take active steps to measure and manage their carbon footprints.
That report, dated July this year, also said:
Businesses are not yet well informed about the Commonwealth Government’s proposed Carbon Pollution Reduction Scheme (CPRS).
Four months on, people are even less well informed. We have before us the same legislation that we had in August and yet we all know that this is not the legislation on which we will be voting. So, four months on, ‘well informed’ is not a term we could use; ‘ill informed’ is the situation that the government’s cynical manipulation has left us in.
When the final bill is settled and passed, there will need to be a huge information project so that Australians understand what the provisions are, what the processes are, what the reasons are and what the outcomes should be. The government has to make a firm public commitment that it will monitor the impact of the legislation when it is enacted and respond quickly and sympathetically when there are severe or unintended consequences on our businesses.
I would like to note, as did Senator Birmingham, the comments of one of the great conservative leaders of the world, former British Prime Minister Margaret Thatcher. Speaking at the second world climate conference in 1990, Mrs Thatcher said:
The danger of global warning is as yet unseen but real enough for us to make changes and sacrifices, so that we do not live at the expense of future generations.
Twenty years on that comment is as legitimate now as it was then. We must amend this legislation and we must pass it not only in the national interest but in the global interest.
I stand to speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills. At this juncture I wish to comment on the process and to indicate that my position with respect to these bills has not changed since I shared that with the Senate on 11 August 2009. With respect to the bills before us, they are in exactly the same form as they were three months ago. We are standing here in this chamber debating a bill that we debated some three months ago and we are not aware of the amendments that are agreed or are proposed and will be agreed between the parties. We simply do not know. It may be days or it may be longer until we actually do know. So we are actually in a way speaking underwater and in the dark.
It is very troubling and difficult to be forced to try and make a sensible and meaningful contribution on such an important and impactful piece of legislation—in fact, one of the most impactful pieces of legislation ever to come before the Australian parliament—without knowing exactly what the government has in mind. What we know is that this bill before us is flawed—that is what we know. Even the government now recognises that in its public statements with respect to the bill in its current form. They know that it needs to be amended and fixed. The opposition have, consistent with public statements by Mr Turnbull and others, put forward through Ian Macfarlane six fundamental principles and put forward some amendments for consideration.
What we also know is that up until very recently agriculture had not been excluded. What we know from past research is that, based on the current bill, farming communities around Australia would have been disadvantaged big time by the government’s proposed legislation. That is what we know. Based on research undertaken by Frontier Economics some months ago, a typical dairy farmer would face an extra cost of $8,000 to $10,000 per year. We know that the rural communities throughout Australia would be adversely affected and disadvantaged by the bill before us. We understand that the government has agreed to exclude agriculture, but there is much that we do not know.
The other thing that we know from the research to date on the bill before us is that small and micro businesses—whether they have under 100 employees, under 20 employees or under five employees—will be adversely impacted. The compensation provisions to take their interests into account have to date not been adequate and comprehensive. We also know that families will be affected, whether it be through their power prices or through the costs of goods and services. Remember that the legislation is effectively a tax on goods and services. It is to reflect the damage done by CO2 emissions and the effects of those emissions on our environment.
But the ETS and the legislation before us is poorly framed. It is flawed. It is too important to rush. Sadly, the government is rushing this legislation for political purposes. That is one thing that we know and that is on the record. The Rudd Labor government are doing this for purely political purposes rather than trying to get it right for the sake of Australia and for the sake of the globe. We must get this legislation right. It is too important for us not to. The Frontier Economics report was made available publicly some three months ago and is out there for all to see.
What we support—and certainly what I support—is a properly framed and carefully put together emissions trading scheme along with other measures to ensure that the consequences of and damage to our environment from our CO2 emissions are taken into account. I am certainly happy to put that on the record. I note that when the Frontier Economics report was delivered, that proposal was said to be—not just by the authors but by others—greener, cheaper and smarter. That is perhaps enough on the process.
I would like to say that it is pleasing that this parliament a short time ago supported the amendments to the renewable energy legislation to provide strong support for the renewable energy sector. We have a target of 20 per cent of renewable energy by 2020. That is something that I strongly support as a Tasmanian senator. Tasmania is the renewable energy state. That is well known. I am proud of it. Over 95 per cent of our power is renewable energy, whether that be hydro or wind. We also know that Hydro Tasmania is in fact the largest generator of renewable energy in Australia.
In my neck of the woods—I live in north-east Tasmania—we have the Mussel Road Bay wind farm development, a $350 million wind farm development, ready to proceed. In fact, I am hoping that it will get under way in the very near future. It will deliver jobs, growth and development to north-east Tasmania and renewable energy to Tasmania and to the mainland via our Bass Strait cable. So there are some good things there in terms of renewable energy. That legislation has recently passed. That is part of the solution to the climate change issues before us.
But what the government should be is really serious about responding to climate change and reducing greenhouse gases. To do that, it should be considering the nuclear option. It is in Australia’s best interests to build on our strengths. To do that, Australia needs to be engaged in a constructive debate on the nuclear option. The take-up of nuclear power around the world is already happening and is inevitable. There is no country of Australia’s economic size or larger without nuclear power. We would stand alone among the 25 top economies in excluding its use for base load power supply in an era of climate change concern. In fact, I have held the view that nuclear power should be an option for many years and have more recently—more than a month ago—raised this matter with my leader and indeed in the party room. There is no good reason for nuclear power not to be considered an option for Australia.
Federal Labor’s reasons for opposing the nuclear option have been politically driven, with a campaign before the 2007 election in a dozen marginal coalition seats under the guise of ‘not in my backyard’. That was part of the campaign that they ran, which shows double standards. On the one hand, they are saying that greenhouse gas emissions are a real problem and that we must address them via their CPRS and the emissions trading scheme, but, on the other hand, they are saying no to the nuclear option. That is duplicity and double standards at their worst.
According to the World Nuclear Association’s Nuclear Power in the Today report of March 2009, there are now some 436 commercial nuclear reactors operating in 30 countries providing about 15 per cent of the electricity as continuous and reliable base load power. They say 56 countries operate a total of about 250 research reactors and 220 reactors power ships and submarines. Further, 16 countries depend on nuclear power for at least a quarter of their electricity. France gets around three quarters of its power from nuclear energy, while Belgium, Hungary, Lithuania, Slovakia, South Korea, Sweden, Switzerland, Slovenia and the Ukraine get one third or more. Japan, Germany and Finland get more than a quarter of their power from nuclear energy, while the USA gets almost one fifth.
Even the federal Minister for Resources and Energy, Martin Ferguson, has said ‘nuclear power globally is part of the climate change solution’. Surely, then, nuclear power should be part of our armoury to combat that change. That is my view: it should be part of that armoury.
Thank you, Senator Cormann, for your support on that view. Most Australians want the government to do the best job to reduce the growth in greenhouse gas emissions, noting that Australia has amongst the highest level of greenhouse gas emissions per person in the world. So how can we build on our strengths as a country and be part of the solution? Well, one of Australia’s great assets is uranium. Australia supplies 20 per cent of the world’s demand for nuclear power and has an estimated 40 per cent of the most easily accessible uranium. Surely it is hypocritical to, on the one hand, be exporting uranium for the purposes of nuclear power being developed in overseas countries—whether it be France, other European countries, Japan, the US or elsewhere—and yet, on the other hand, be doing nothing at home in Australia, where we have a federal minister saying nuclear power is part of the solution to combating climate change, using his words. And yet they are doing nothing about it in Australia. I say it is hypocritical. It is two-faced. It is duplicitous. And it is time for the government to come clean, stand up, show they are serious about these issues and make the change—bring on the debate about nuclear power. It is madness in the extreme that federal Labor have refused to consider nuclear as one of the weapons to combat greenhouse gas emissions.
A recent report showed that Australia’s population is expected to almost double to 35 million by 2049, while at the same time we are proposing to reduce greenhouse gas emissions by an estimated 80 per cent. How is that going to happen? Dr Ziggy Switkowski has said that there is no country of a similar size to ours that is not using the nuclear option to combat the climate change problem around the world. On page 4 of today’s Australian he says that Australia should build 50 nuclear power stations by the middle of the century, doubling the size of the sector he outlined to John Howard three years ago. That is his view. Three years ago he recommended 25 nuclear power stations. He says that, instead of the 25 civil reactors he called for in his report to the former coalition government, to produce one-third of the electricity supply by 2050 Australia should build 50 nuclear plants, generating up to 90 per cent of baseload power. He goes on to say in a report—and I understand in his address that will be released today:
It gives us clean energy. It gives us baseload electricity. It will be the lowest-cost option for Australia from the 2020s.
We know that in the past the cost option has been prohibitive, or has been limiting, in terms of nuclear power—and that is understandable. But now we are moving into a carbon constrained world. Surely it should be considered seriously as an option. In terms of developments and efficiencies: yes, there was a 15-year time frame to get a nuclear power plant up and running, but now that has been brought back to closer to 10 years. So the first nuclear power plant could be commissioned within a decade. That is in the report. That is a major report.
What do the Australian people think about this? Interestingly, I did not realise until the Age produced a report on 13 October 2009, on the front page, headed ‘Australians warming to nuclear power: Opponents now in minority, poll finds’. The article states:
An Age/Nielson poll found 49 per cent of Australians believed nuclear should be on the nation’s list of potential power options, while 43 per cent were opposed …
This is amazing, because we have not even started the debate! Federal Labor have said, ‘No, it is not an option’, so there has been no debate about the merits of nuclear power. And yet you have half the population saying it should be considered as a serious option. Hello! Wake up Labor! Bring on the debate about nuclear power and the merit of it in Australia. The article went on:
… the Rudd Government … restated its total opposition to—
using nuclear power—
to help Australia meet its future carbon reduction targets.
Ziggy Switkowski, who currently chairs the Australian Nuclear Science and Technology Organisation, said at that time:
… Australia was the only developed nation that believed it could make deep cuts to carbon emissions without resorting to nuclear power. [We must] provide for the next generation of baseload electricity generation with clean energy. The only way to do that is with nuclear power.
Obviously, Mr Rudd and the Labor members and senators in this parliament think differently. But the Australian people are warming to it, with nearly half the population now saying yes, it should be considered seriously—and I am right with them. Let us bring on the debate so that we know the pros and the cons.
It is happening all around the world. Why not in Australia? There are some 450 new nuclear power plants planned or under construction globally, which will double the current number. The UK Labor government announced only last week that it would fast-track approvals for nuclear power plants at 10 sites, with the aim of a nuclear share of its total power demand increasing from 15 per cent to around 30 per cent by the end of the 2020s. Historically, nuclear power has been far more expensive—between 20 and 25 per cent more expensive—than coal. But of course that is now changing, and changing fast—as I just noted from Dr Switkowski’s comments. It is becoming close to equivalent in cost in the new carbon constrained world that we are heading into. One of the benefits of nuclear power is that it can produce a dependable baseload electricity supply—and, of course, the use of nuclear energy results in the generation of almost no greenhouse gas emissions after the plant construction is complete. So you can see it has huge benefits in that regard.
Of course, there is a public perception that uranium and nuclear power is dangerous and that its waste seeps into the community and causes cancer and other unintended consequences. That is a perception that has been held over many decades, but that is changing based on the facts and on what we know to be true. We have had major incidents such as the Three Mile Island disaster of 1979 and the Chernobyl disaster of 1986, but, interestingly, I have noted more recently that the National Secretary of the Australian Workers Union, Paul Howes, supports nuclear energy as an option—good on him—as indeed do Bob Carr and other Labor luminaries. Paul Howes has said:
People are worried about nuclear waste, but they are only now beginning to consider the environmental costs of coal. There are new generation reactors being developed which will largely eliminate radioactive waste.
The Howard government made it clear that it had not ruled out a nuclear future and in 2006 commissioned Dr Switkowski to lead a task force to prepare a study into the future feasibility of nuclear power generation in Australia. The report concluded that:
The challenge to contain and reduce greenhouse gas emissions would be considerably eased by investment in nuclear plants. … The greenhouse gas emission reductions from nuclear power could reach 8 to 17 per cent of national emissions in 2050.
By providing 15 per cent of the world’s electricity, nuclear is already making an important contribution to constraining global greenhouse gas emissions. The International Atomic Energy Agency estimates that nuclear power annually avoids more than two billion tonnes of CO2 emissions that would otherwise have been produced through burning fossil fuels. There is no mistaking that nuclear power has enormous capacity to replace greenhouse-gas-emitting power generators.
Do we in this country want to retain and improve our standard of living and quality of life in this carbon constrained future that we face? If we do, nuclear should be considered as part of that future. So I say to the Rudd Labor government and, indeed, to the public: let us bring on the debate about nuclear power. Let us consider the merits of it. It should be considered as a serious option. The people—nearly half the population of Australia—say so in a recent poll. Nuclear should be considered as a serious option. Bring on the debate.
The legislation before us today is a complete fraud. The process the Senate has been asked to engage in today by the government is a complete farce. This legislation is a fraud perpetuated by the Prime Minister on the Australian people. The Prime Minister is taking advantage of people’s goodwill towards the environment. The Prime Minister wants people to believe that this legislation will help reduce global greenhouse gas emissions and that it is strong action on climate change when he knows very well that it is nothing of the sort.
The Prime Minister knows that this legislation will not help reduce global greenhouse gas emissions, yet he is happy to impose significant sacrifices on people across Australia without giving them a proper explanation of what he seeks to achieve in terms of actual reductions in global greenhouse gas emissions. This process today is a farce because we are being asked to debate legislation when we have not yet been told by the government the form this legislation will be in by the end of next week, when the government ultimately wants it passed. We are starting debate on legislation that we already know will not be in the same shape by the end of next week if the government has its way.
Today is the one-month anniversary of the government’s commencement of discussions and negotiations on a range of amendments put forward by the coalition—amendments which clearly expose the many flaws in this legislation. The government has been negotiating for a whole month. If that were a good faith negotiation, the government would by now have told the Australian people and the coalition which of the amendments it can agree with and which of them it cannot so that the opposition and the Senate could have a proper debate about the merits of the final shape that this legislation will take. Instead we are having a debate here about legislation that everybody in the Senate other than the Labor Party agrees is deeply flawed and we know that the legislation that is ultimately going to be put to a vote if the government has its way is going to take a totally different shape.
So the government is not conducting this process in good faith. It is certainly not acting in good faith with the Senate. This emissions trading scheme legislation is not strong action on climate change. It will not help reduce global greenhouse gas emissions. In the absence of an appropriately comprehensive global agreement, this emissions trading scheme will push up the cost of everything. It will cost jobs. It will put pressure on the economy. It will put our energy security at risk. It will have a particularly bad impact on regional Australia. Yet it will do nothing to help reduce emissions. Why, I would ask, is that a good idea?
Let us reflect on what is being proposed. The government is proposing to impose a price on carbon which is supposed to change behaviours. An emissions trading scheme in Australia could be—could be—an effective way of helping to reduce emissions globally if it were part of an appropriately comprehensive global scheme. Indeed, when the Howard government announced an emissions trading scheme and even when the Rudd government first went through the process of developing one, those schemes were always based on the assumption that they would be part of an appropriately comprehensive global scheme. We now know that this is very far from being a reality moving forward. In fact, it is highly unlikely that this will be a reality moving forward. Surely, then, we need to reassess whether this really is the best way that Australia can help reduce global greenhouse gas emissions.
I have real concerns with the Prime Minister’s approach. He has the typical bureaucrat’s approach. He is our chief bureaucrat here in Canberra. He wants to tick the box. ‘Australian people, you are concerned about the environment, you are concerned about climate change; I have the solution for you: this ETS’—tick, done, irrespective of whether it is actually going to make a difference. This is going to make it worse. If we are going to do something that is ineffective and make people believe that we have fixed the problem, we are going to end up in a worse situation than the one we started with.
What is the actual problem? We are part of a global trade environment. If we impose on businesses in Australia costs that are not faced by our competitors in other countries around the world, this will have an impact on our international trade competitiveness. If we reduce emissions in Australia in a way that will result in increased emissions in other parts of the world, we will have done nothing for the global environment. If we make overseas polluters more competitive than even the most environmentally friendly equivalent businesses in Australia, we will have done nothing to help reduce global greenhouse gas emissions. If emissions overseas increase by more than we can reduce them in Australia as a direct result of the way this ETS is structured, we will have done nothing to address climate change and we will have done nothing to help reduce global greenhouse gas emissions—but we will have imposed significant sacrifices on people right around Australia, sacrifices which the Prime Minister to this day has not explained to the Australian people. He has not explained the benefit either.
I was Chair of the Senate Select Committee on Fuel and Energy, and we had a series of departmental officials in front of us providing explanations about what the emissions trading scheme would and would not do. I asked a senior official of the Department of Climate Change a very simple question: what is the target in terms of a net reduction in global emissions to flow from a proposed Australian emissions trading scheme? The official was not able to answer. Of course he was not able to answer. Some say that is an unfair question, that he could not possibly know, because it depends on what happens in other parts of the world. Exactly—it depends on what happens in other parts of the world.
In the report of the fuel and energy committee we made this counterintuitive observation: if we are really serious about reducing global greenhouse gas emissions—if that is the target, if that is our objective—it may well be in the best interests of the world for Australia to increase emissions in certain areas if it helps to reduce emissions by more in the world overall. I will explain. If we want to expand our LNG industry in Australia, we will increase emissions. But, for every tonne of additional emission-producing LNG in Australia, we will be able to reduce emissions in China by 5½ to nine tonnes if that LNG displaces coal. We will be able to reduce emissions by four tonnes if it displaces coal in Japan. That is a net positive effect for the world environment. Australia should be having a debate about how we as a nation can best contribute to a reduction in global greenhouse gas emissions; we should not be having a debate about an ETS as an end in itself. The ETS was only ever seen as a tool, an instrument, that could help us achieve a particular objective. If the global circumstances change, we have to be adult and mature enough to say: ‘Okay let’s reassess. Let’s remind ourselves what it is we are actually trying to achieve. Then let’s see if there are better ways we can achieve our objective.’
Much has been made of the argument that the coalition took an emissions trading scheme to the last election—and we did; there is absolutely no doubt about it. But since then a lot has changed. Firstly, we had the Garnaut review. We had the green paper, the Treasury modelling and the white paper. We had five Senate inquiries. We have a much better understanding now about what an emissions trading scheme can and cannot achieve—particularly in the absence of an appropriately comprehensive global agreement. The assumption was that the Australian ETS would be part of an appropriately comprehensive global scheme—which is much less likely now. Furthermore, the objectives for Copenhagen were set after the 2007 election. We had the Bali conference in December 2007—Senator Wong’s first foray onto the international stage. That is when they set the objectives for Copenhagen. We know that in Copenhagen developed nations from around the world were supposed to commit to emissions reduction targets. Even the Prime Minister is now conceding that that is not going to happen. So should we just press ahead no matter what it means in terms of reducing emissions around the world, no matter what it means in terms of jobs, the cost of living or energy security? That would just be completely irresponsible.
The government likes to simplify this debate into a debate between climate change believers and climate change sceptics. I think that is a completely simplistic way of handling the debate. The government had its own doubts a little while ago. Let us reflect on this. When Kevin Rudd was elected to government, first-up he said: ‘We’ve got to take urgent action. This is the highest moral challenge of this century. Those that don’t agree to take urgent action’—which is this ETS—‘are climate change deniers, climate change sceptics.’ He was into name-calling. But I remind the Senate that on 12 February this year it was the government—it was the Treasurer Wayne Swan—who commissioned a ‘new’ inquiry into the choice of emissions trading. It was to be chaired by Mr Craig Thomson MP, the chair of the House of Representatives Standing Committee on Economics. I remind the Senate of the terms of reference—this is in February, after the green paper, after Treasury modelling, after the white paper and after the draft legislation was put out there:
The Committee will inquire into the choice of emissions trading as the central policy to reduce Australia’s carbon pollution, taking into account the need to:
a) reduce carbon pollution at the lowest economic cost;
b) put in place long-term incentives for investment in clean energy and low-emission technology; and
c) contribute to a global solution to climate change.
What a sensible set of terms of reference. But do you know what happened? A week later, the inquiry was cancelled by the Rudd government. The reason it was cancelled would have been because there would have been a battle going on inside the Rudd cabinet between those who thought, ‘Hang on, let’s just see whether this is really the most sensible way to go’ and those who were blindly following ideology, who had committed themselves to an ETS as an end in itself, who had lost sight of what we were actually trying to achieve and who thought it would be a loss of face to question the choice of an ETS as the way forward at this late stage.
On 4 May, Minister Wong and the Prime Minister made an extraordinary announcement. They announced the delay of the implementation of an emissions trading scheme by 12 months. If anybody else had put that forward a little while earlier, they would have been accused of being climate change deniers, climate change sceptics, and they would have been called all sorts of names.
I also draw to the attention of the Senate the secrecy with which the government has been handling all of this. Important information around the economic modelling conducted by Treasury has been kept secret. The Senate has used all of the powers and procedures available to it to force the government to release significant information related to the economic modelling into the CPRS. To this day the government has refused, on very weak grounds. Of course, we have the government-commissioned Morgan Stanley report, about the impact on electricity generators, which the government to this day is keeping secret. I remind the Senate that the Rudd government, in its economic modelling about the impact of the CPRS, incredibly, assumed that there would be a seamless transition from a high-carbon to a low-carbon electricity generating industry—which is not an appropriate assumption to make.
I also remind the Senate of the controversy in the lead-up to the last election, when Peter Garrett came out and said, ‘Well, yes, Australia might go it alone. Australia might commit to targets even if China and India do not come on board.’ Remember that? The Prime Minister had to essentially pull Peter Garrett back into line, and then of course Peter Garrett was subsequently demoted. I quote from the Australian on 30 October 2007:
Peter Garrett’s political credentials were in tatters last night after Kevin Rudd forced his environment spokesman to issue a humiliating clarification of Labor’s greenhouse gas policy.
At the core of that argument was, of course, that any Australian ETS needed to be part of a comprehensive global scheme in order to achieve its intended objectives, which are to help contribute to a reduction in global greenhouse gas emissions.
The Treasury modelling, which is to assess the impact on our economy, on jobs, et cetera, assumed that the US would have a scheme in place by 2010, that China and the richer developing countries would have a scheme in place by 2015, and that India would have a scheme in place by 2020. That is not going to happen. The Prime Minister knows it is not going to happen; everybody knows it is not going to happen. Isn’t it then in the national interest for us to reassess the most appropriate way forward? Of course it is.
I have argued publicly, and my views are well and truly on the record, that I do not think that we should be finalising this legislation before Copenhagen and before we know what the rest of the world is prepared to do in relation to emissions trading—in particular the US. The reason for that is that, if we go ahead with a scheme that is not in sync with the rest of the world, it is going to have bad impacts on our economy and there will not be any environmental benefits. The Copenhagen conference is three weeks away. The Prime Minister and Minister Wong have already delayed the implementation of the scheme by 12 months. They have delayed the reintroduction of this legislation into the Senate by three months, for their own political reasons. Why is it then not in the national interest for us to wait another three weeks to find out what comes out of Copenhagen so we can make a sensible decision, in the national interest, early in the new year about the best way forward in terms Australia maximising our contribution to the world in terms of reducing global greenhouse gas emissions and doing it in an economically responsible fashion?
If the government are serious about wanting to reduce global greenhouse gas emissions, there are a whole range of things that they could do that would have a net beneficial effect. Previous speakers have already mentioned that if we were serious we would go down the nuclear path. The UK has just announced 10 more nuclear power stations. The President of China, when he spoke on climate change before the United Nations a few weeks ago, outlined a series of strategies: renewables, energy efficiency, more trees and nuclear. Countries around Europe that previously had been reluctant about nuclear are all going down the nuclear path, because they recognise that nuclear has to be part of the solution if we want to responsibly achieve dramatic reductions in greenhouse gas emissions in a way that does not compromise our economic prosperity and our energy security moving forward.
If the Prime Minister was serious about climate change and about reducing global greenhouse gas emissions, he would show some leadership towards the Labor state governments and the Labor opposition in Western Australia—who, to this day, have backward, old-fashioned policies in relation to uranium mining. Australia has got 40 per cent of the world’s known resources of uranium. One very effective strategy to help reduce global emissions would be for Australia to expand our uranium exports and essentially help supply nuclear power stations around the world that would displace coal-fired energy. Why is the Prime Minister not calling on state premiers who are resisting this? Why is the Prime Minister not picking up the phone to the leader of the opposition in Western Australia?
I am about to run out of time, but the short point that I want to make is that this legislation is a fraud. Prime Minister Rudd is performing a complete con on the Australian people. He is taking advantage of people’s goodwill towards the environment. He wants people to believe that this will be effective in helping to reduce emissions, when he knows that this is not true. This is going to be bad for the economy and bad for the environment. (Time expired)
It is challenging to rise and speak on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills at this time—timing arising from the government having brought on these bills in this chamber now while good faith negotiations are taking place between the Minister for Climate Change and Water, Senator Wong, and the Hon. Ian Macfarlane to consider significant concerns that the coalition parties have. We are concerned that this legislation does not provide adequate protection for the economic security of this country. In so doing, it does not protect jobs and provide economic certainty for all Australians.
Notwithstanding the timing of this second reading debate, I do rise to join this critically important discussion on an issue that has polarised the nation. The Prime Minister is intent on attending Copenhagen with an Australian policy. He seeks to position himself as a world leader on climate change. Such is the effrontery of the man, he believes that Australia, whilst ranked the 14th largest economy in the world and the 15th most competitive nation, according to the World Economic Forum, will be able to influence the direction of the United States, the EU, China and even India. What a joke that assumption is predicated upon. This is the prime minister who has so badly handled the policy of border security protection that he has seriously threatened Australia’s important relationship with Indonesia. In the last few weeks, we have witnessed unprecedented ineptitude in handling the flood of asylum seekers to Australia. We have been told that an agreement was made with President Yudhoyono when obviously discussions that took place were not as definitive as the Prime Minister inferred they were. The Prime Minister stood in the other place and said that no special deals had been made when clearly special deals had been made. Such is the concern of the Indonesian government that the Indonesian President’s personal visit has been indefinitely postponed. Whilst the Australian people are still waiting for full disclosure, it is clear that there is now increasing tension between the two countries.
Sadly, this reminds me of the influence that Mr Rudd has had on our diminishing relationship with China. From the moment that Mr Rudd chose to lecture Chinese students in Beijing on human rights issues in China to the recall of the Australian ambassador for a meeting on 20 August, our relationship with China has been fraught. It is abundantly clear that Mr Rudd should focus on the daily challenges of Australians rather than walking the world stage continuously looking for photo opportunities, yet that is what he is seeking to do in Copenhagen in December through this bill.
The consideration of this bill should not be influenced by the Prime Minister’s determination to attend it with a finite commitment from Australia regardless of whatever any other country might agree to do. Notwithstanding my grave reservations about his motives, and while we are engaged in the second reading debate at this time, I join the debate to give voice to the many concerns that have been raised with me not only up here but by many of those back in Victoria. When I spoke against the Carbon Pollution Reduction Scheme Bill 2009 and cognate bills on 12 August, I did so because the proposal is a flawed scheme that has no regard for the protection of Australian businesses and industry. This bill, in its current form, is a scheme that would harm Australian exports, jobs and investment. Industry after industry has sought discussions with the coalition and asked us to negotiate amendments so that this bill can be improved. In its current form, the bill will simply destroy viable local business and, in effect, export business and the related emissions overseas.
Without an understanding of what other countries will do, to be the first country off the block not only is premature but smacks of not having one’s own country’s interests at heart. We have no real full appreciation of the fiscal impact of this scheme and the modelling that has been presented is limited at best. Despite the inherent weaknesses in what the government has sought to do here, I strongly support the negotiations that are taking place to ensure that this bill is finally presented here with Australia’s economic surety as a primary consideration. This is too critical to muck up. Our economy has contracted, as we know, during the last 12 months and, as also we know from experience and history, it is at such times that carbon emissions also contract due to lesser industrial activity, regardless of whether we have an ETS or not. An emissions trading scheme must take into account what is happening in other countries or the scheme will be doomed from day one and certainly will not be giving the considerations of all Australians the No. 1 priority they deserve.
The Liberal Party support the Copenhagen process. We also support the fact that we want to join in the collaborative discussions to achieve the best collective outcome. However, we do not support the design of this current scheme and the unnecessary rush to implement it. I have to say, the fact that we debated this in August and it is now back before the chamber smacks of questionable political expediency. There seems to be uppermost a political agenda on the table in this second reading debate. If we come back here after Copenhagen, we could have a more informed debate. Action on climate change is wanted by many. It is a message that many of us are hearing loud and clear. I am not opposed to emissions trading in general, as the government continually suggests so many of us on this side of the chamber are meant to be. I simply do not believe that this is the only tool in the box that can be used to act on climate change. Carbon trading is not the only answer.
The Liberal Party believe in individualism not collectivism. We know, accept and appreciate that individuals have different opinions. When it comes to climate change there are indeed many viewpoints in this party, views which do not necessarily match the zealotry of the black and white approach of those on the other side of the chamber. We enjoy and are very lucky to be in a party that supports democratic principles, where we all have the capacity to share and express our individual views. It is something we all strongly support and it is one of the reasons that we joined the Liberal Party. I have great respect for the views expressed on this side of the chamber because it is those differing views that we applaud in the Liberal Party. Under the Howard government, the coalition provided stronger governance of this country through a diversity of views that led to the policy development at that time.
We need to take a step back from this overheated debate and talk honestly about what we can realistically achieve together. This is a position that more and more Australians agree with. We have read about the shift in perceptions in the newspapers. I am talking about those who share everyday concerns for their families, who still want to have a job and be employed so that they can support their families, who want to give their kids every opportunity in life and who want to provide for their education and health. We do not want to stymie the opportunities for all Australians. We have to make sure that we protect their interests in whatever is decided in this place. We have seen a shift in perceptions, as evidenced through the various Newspoll results.
Interestingly, the Senate Select Committee on Climate Policy came to a very similar conclusion. In their majority report, the committee urged the Rudd Labor government to go back to the drawing board. They said that Treasury should model the short-term costs of the scheme, the effect on jobs and in particular on regional Australia, and the comparative costs of a raft of vastly different ways of imposing a carbon price. This is a recommendation that I fully support.
Why do we need to be pushing this through right now? These questions have not been responded to by Minister Wong. Perhaps the answer is a simple one. Current estimates say that the CPRS will impose costs on electricity and other energy-intensive industries. This could easily lead to a 30 to 40 per cent increase in power bills and indirectly increase prices for most services and items purchased. Yet, from a political point of view, it is far less troublesome to impose what essentially will amount to a carbon tax for all consumers and introduce an ETS than another instrument. As politicians, we all know that any taxes are very unpopular. But it will not just be the big polluters that will have to pay the price for an ETS; it, of course, will be households—the consumers, the mums and dads.
The unrealistic assumptions about the world’s action on climate change and the Rudd Labor government’s approach to this have demonstrated that they have not done their homework when designing the CPRS. There has been very little modelling done on this. There has been no suggestion of how many jobs the scheme will destroy or how it will affect industries or regions, or even whether it is the most cost-effective option for Australia to reduce CO2 emissions. What will the cost be in the next 20 years in lost competitiveness and lost jobs? It hardly comes as a surprise that most businesses have absolutely no idea what is in the pipeline for them when the legislation is introduced. We are seeing that in the communications we are receiving from so many people. They are imploring us to seek clarification on this. As we know, the devil will be in the regulations. So we must ensure that the framework for this is the most comprehensive and thorough one possible. A KPMG poll showed that more than three in 10 businesses say they have no knowledge of the key elements of the government’s scheme. They have expressed concerns about the direct cost of the scheme on their businesses, how they will be able to absorb those costs and the way in which the scheme will impact on their ability to retain their workforce. The only interesting insight we have received from the Treasury modelling to date is one that the Rudd Labor government surely—