Senate debates

Thursday, 30 October 2014

Bills

Carbon Farming Initiative Amendment Bill 2014; Second Reading

6:05 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

I am not sure that I was on the speakers' list, but I am always happy to debate any particular motion before the Senate. The Carbon Farming Initiative is another initiative of the Abbott government. I have quite a bit to say on this, but if there was someone who was listed to speak and who wants to take over, I will happily give up some of my time for that person to continue. But this particular piece of legislation has come to this parliament through a fairly torturous set of circumstances, I might say. It really all started with a promise made before the 2010 election by the then Prime Minister, Ms Gillard, and that promise was:

There will be no carbon tax under the government I lead.

Mr President, as you and I—and indeed, everyone in this chamber—know, a lot of people voted for Ms Gillard and her party in 2010 on the basis that the Labor Party, if elected, would not introduce a carbon tax. We know that, not long after the Labor Party was—by a strange series of circumstances—re-elected as the government of Australia, no sooner did that happen, the government of Ms Gillard did what it said it would not do, and that is to introduce a carbon tax. That then set in train a series of events and legislation and different things that happened that you could say almost culminate with the bill before us today. Over a long period of time the coalition said to the Australian people, 'We know this carbon tax is a bad tax. We know it is bad policy. Not only does it not collect any money, but it doesn't do anything about the environment.' And most Australians could understand that—you did not need to be an economic genius to work that out. Our side of politics had promised that we would abolish the carbon tax if we were successful at the 2013 election.

But we do acknowledge that the world should try to reduce carbon emissions for its particulate consequence, as well as every other consequence. So, at the election, we promised not only would we abolish the carbon tax but we would also introduce a Direct Action policy which would do more for the world's carbon emissions than any of Labor's carbon taxes ever would. But the Direct Action policy will not cost Australian jobs; it will not send Australian manufacturing overseas; it will not export Australian jobs. The initiative that we are debating today is part of the suite of measures that involves Direct Action and is part of that whole process. It is a policy which clearly I support, and which I would certainly hope that all senators would support, as well.

I have a lot more that I could say on this. If I might say so myself, I am well versed on the Carbon Farming Initiative and the amendment bill. But I see that Senator Singh, who is listed to speak and to lead the debate, is here in the chamber. So, in deference to her and to the good order and management of this debate and recognising that there is a limited amount of time to debate these issues today, I will cut my speech short and defer to Senator Singh.

6:11 pm

Photo of Lisa SinghLisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | | Hansard source

I rise in opposition to this Carbon Farming Initiative Amendment Bill 2014, but before addressing the amendments that are contained within it, I am making it crystal clear that Labor is extremely supportive of the Carbon Farming Initiative. We have strongly supported it since we set it up as a means of enabling the land sector to engage in carbon abatement activities. It allows farmers to diversify their practices by using soil carbon sequestration to abate carbon and to sell that abatement to the government. It has offered an alternative revenue system for drought-affected farmers. This bill amends Labor's Carbon Farming Initiative to use the CFI's structure of crediting and purchasing carbon emissions for other industries under the government's Emissions Reduction Fund.

I urge the current participants in the Carbon Farming Initiative to contact the minister immediately and get his guarantee that their projects will be funded out of the $2.55 billion that is apparently available in abatement funds. Do not be satisfied with the minister's promise, because we all know the government's attitude to its promises these days. Imagine being the Minister for the Environment whose only thanks comes from those he is paying to pollute the environment. It is not even ironic; it is sad. We have all noticed the minister describing his limp little deal as a tremendous outcome of the government. He never says, 'This is a big win for the environment,' or 'What great news for the country!' and we know exactly why—because Direct Action is a program built on begging big polluters not to pollute. It addresses the problem of climate change with all the sincerity you would expect of someone who once declared that climate change was 'crap'.

In 2007, I was impressed by Senator Brandis's proud description of the Howard government's emissions trading scheme as:

…the most comprehensive scheme in the world. …This world-leading scheme will cover 70 to 75 per cent of total emissions or almost 100 per cent of industrial energy and mining emissions.

I accepted the now Treasurer's comments in 2009 that:

Our very strong view is, we were the initiators of an emissions trading scheme, and we believe in a market-based approach.

I remember how offended the now Leader of the House sounded when, in 2009, he said:

The idea that somehow the Liberal Party is opposed to an emissions trading scheme is quite frankly ludicrous.

And I agreed with Malcolm Turnbull when he referred to the coalition's direct action policy as 'a con, an environmental fig leaf to cover a determination to do nothing'. But today, reflecting on the government's dreadful budget, with numerous broken promises, I agree with Malcolm Turnbull now more than ever that the coalition is open to the charge that it is without integrity.

Direct action is a pointless policy with no discipline on pollution whatsoever. The Treasury's advice to the coalition in the aftermath of 2010 was clear. A market mechanism can achieve the necessary abatement at a cost per tonne of emissions that is far lower than alternative direct action policies. We know when it comes to climate change that the position the government takes is very much ideological. Direct action is not a policy based on science, economics or evidence, and it saddles our nation and our children with a climate debt burden that is unsustainable. To paraphrase the Prime Minister, every year we are still polluting is a year we are running up a very heavy bill for our children and grandchildren to meet.

This morning on the radio the environment minister pushed back direct action's so-called safeguards mechanism to mid-2016. So all they would offer Australia now and for the next two years is a slush fund of a tawdry tuxedo that will chuck taxpayers' dollars at big polluters, begging them to maybe start reducing their pollution. Make no mistake: as the Leader of the Opposition has said, this destructive policy will cost Australia dearly into the future. It will cost our country more and it will achieve less—just like the minister's review of an emissions trading scheme with which he bought off the member for Fairfax. The best justification we have heard for this review is that, 'There's no harm in having a review.' On such a pathetic foundation this government's policy is built and taxpayers' money is wasted.

There are three elements to the ERF: credit emissions reductions, purchasing emissions reductions and safeguarding emissions reductions. The government does not intend to introduce the safeguarding element—the most important part of the ERF for some time. This is the only element that is actually designed to monitor carbon dioxide pollution from big business, but it is in the too-hard basket. Yet once they manage to get the safeguards in place they will not use them. The minister does not expect they will be necessary, begging the obvious question: why impose such unnecessary red tape? They have replaced Australia's cost-effective policy with the most expensive, ineffective climate policy they could ever devise. In fact, the Prime Minister's Direct Action Plan will have a net cost in the end to the taxpayer. You would almost think they wanted it to fail.

A recent Senate inquiry into direct action did not hear any evidence that suggested direct action will achieve its goal of a five per cent reduction to Australia's emissions by 2020. The Senate committee recommended that the government not proceed with the emissions reduction fund, as it is fundamentally flawed on the following grounds: there is no legislated limit or 'cap' on Australia's emissions in line with emissions reductions targets, there is insufficient funding to be able to secure enough abatement to meet Australia's emissions targets now and into the future, and there is a lack of a robust safeguard mechanism with stringent baselines and penalties for exceeding baselines. But the minister blithely keeps saying that he believes and expects that direct action will reduce Australia's emissions by the vanishingly timid margin of five per cent. He says this, though, with absolutely no evidence. His department has done no modelling, but he believes, he has expectations, that it is all going to be okay. Of course, it does not matter what the minister believes, expects, hopes or guesses, because reducing emissions is very much a secondary goal of the coalition's policy. If they wanted to reduce emissions they would pursue a policy that works—not a program for boondoggles. It is not me saying this; it is almost everyone who knows better than this.

I refer to a report in the Sydney Morning Herald on 28 October 2013 where 35 prominent university and business economists were polled. Only two believed direct action was the better way to limit Australia's greenhouse gas emissions. Thirty, or 86 per cent, favoured the then existing carbon price scheme. But, because those expert economists and expert scientists are not big business grandees and are not climate change sceptics like Maurice Newman and Dick Warburton, the government has been ignoring these experts in favour of advice that is more 'business friendly'. Professor Ross Garnaut, who literally wrote the book on climate change policy in Australia, dismissed the Prime Minister's promise to limit the cost of direct action by capping funding. Professor Garnaut dismisses the Prime Minister's promise not because the Prime Minister tends to break promises for fun but because the cost of emissions reduction will blow out into the future and if—and that is a big 'if'—the government wants to keep up with the international standards that will emerge from the 2015 United Nations Climate Change Conference in Paris. The objective of that conference is to achieve a binding and universal agreement on climate from all the nations of the world, despite the Abbott government's inevitable cobra strikes at global climate science consensus.

The Prime Minister has capped the fund at $2.55 billion and not one cent more. But to reach our five per cent target, direct action will actually have to spend $4 billion to $5 billion of taxpayers' money every single year on paying polluters to start to reduce their carbon pollution, rather than having an emissions trading scheme that actually makes the polluters pay. So already their policy is underfunded.

Where is the government going to find this $5 billion every year? It isn't. How could it? It is not even going to look for it. That budget hit is just to meet our present commitments. The logic baffles. The hypocrisy staggers. A conservative government that wants a price signal to discourage sick people from going to the doctor rejects a price signal to discourage polluters from polluting. This is the noxious hypocrisy of a government that refuses more-ambitious emissions reductions unless the big polluters, like China and India, take action to control their emissions yet ramps up its coal exports to those countries because it is concerned about electricity poverty. In fact, Direct Action rejects action. It is a licence for big polluters to carry on polluting. We know how excited the Prime Minister gets about exporting coal. So by his definition the more coal we export to China and India the less likely we are to implement effective climate change measures.

Senator Cormann interjecting

Photo of Lisa SinghLisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | | Hansard source

There is not one serious commentator who agrees that the government's direct action policy will achieve the bipartisan minimum target to reduce carbon pollution by five per cent by 2020. In fact, a recent report about this from RepuTex, an expert modelling firm, reported that the direct action policy would fall about 70 per cent short of the five per cent target. Of course, we all know this, no-one more clearly than the Minister for the Environment, Greg Hunt, himself, who spent 19 years of his life and most of his political purpose arguing that a price on carbon was the best way of reducing carbon pollution. Yet this government will carry on spruiking direct action, action rejected by economists and scorned by climate scientists, and will stumble in shame to the Paris climate conference next year wearing only its fig leaf to camouflage its actual purpose as a wrecking ball to global climate change consensus.

Where does that leave Australia's reputation in its wake? They have already started their cobra strike and the world has already noticed. Australia has fallen sharply this year in international green economy rankings, coming last out of 60 countries for performance on political leadership on climate change and 37th overall. According to the 2014 Global Green Economy Index, since the change of government our performance lags behind developing nations such as Kenya, Zambia, Ethiopia and Rwanda. In the 2012 index Australia came second out of the 27 countries for political leadership and 10th overall for its growing economic performance. Look how far we have dropped under this Abbott government. So much for leadership and so much for courage. This legislation will see billions of taxpayers' dollars wasted. The Emissions Reduction Fund is a feeble and redundant slush fund. Its failure will be this environment minister's legacy to Australia, the sum total of his political career, and, let us not forget, it is in complete contradiction to his PhD. Labor's position is clear. Labor supports a floating price, an emissions trading scheme with a firm legal cap on carbon pollution, and then letting business work out the cheapest and most effective way to operate below that. We do not support this amendment to the CFI framework, because it will facilitate an embarrassing and inferior way of dealing with climate change.

In conclusion, Labor have strongly supported the carbon farming initiative ever since we set it up as a means of enabling the land sector to engage in carbon abatement activities. We still stand by the carbon farming initiative as it was originally set up. However, this bill, as it amends Labor's carbon farming initiative to use the CFI structure of crediting and purchasing carbon emissions for other industries under the government's Emissions Reduction Fund, will not have the support of the opposition. I urge all of those current participants in the CFI to contact the minister immediately to get an assurance from him that their projects will be funded out of this $2.55 billion of taxpayers' money that is apparently available for the abatement funds of the ERF. With that, Labor will not be supporting this bill. I move:

At the end of the motion, add: but the Senate notes:

(a) that since the election of the Abbott Government in 2013, Australia's international reputation on climate change action has been profoundly damaged by Australia becoming the first nation to move backwards on climate change while the rest of the world, including China and the US, is moving forward;

(b) the need for the Abbott Government to establish an Emissions Trading Scheme to place a cap on carbon pollution and drive a clean energy future for Australia, instead of their current policy of an Emissions Reductions Fund paid for by taxpayers rather than big polluters;

(c) the need to fully examine the range of changes proposed to the Carbon Farming Initiative (CFI) and the impact this will have on the existing land sector projects; and

(d) the lack of robust and defensible assurance from the Government about the ability of the CFI amendment and the Emissions Reduction Fund to achieve Australia's emissions reduction target.

6:29 pm

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

The fact of the matter is that the world is facing a climate emergency. We are on track for at least four degrees of warming. We are already seeing tipping points being exceeded. We are seeing it with the Antarctic icesheets, for example, where disintegration is occurring and it is now a matter of when, not if. Whether it is decades or longer—hundreds of years—the fact is that it is irreversible. We have seen the record Arctic ice melt. And now the latest science is showing that the wind systems around the Arctic have changed, which will lead to really extreme winters in Europe. We are going to see more excessive flooding in the UK, for example. Here in Australia, we are going to see more extreme weather events. We are going to see the heatwaves that lead to catastrophic circumstances for many people, with death rates going up. We are also going to see more extreme bushfire days.

We are not prepared for this. That is why, under the last period of government, the Greens worked with the Labor Party to deliver a clean energy package to bring down Australia's emissions. The reason we implemented an emissions trading scheme was that a market mechanism is the cheapest way to bring down emissions, and it can be scaled up. The reality is that Labor and the Greens could not agree on what the cap should be—that is, how fast and how deeply Australia should bring down its emissions. That is why we set up the Climate Change Authority, based on the similar authority in the United Kingdom. We said, 'Let's set up a professional body which will look at the science, at what is happening around the world and at what Australia's appropriate carbon budget should be.' We said that it would report in early 2014 and then the parliament would move to implement that as a flexible price, with the cap. The cap that the Climate Change Authority recommended was 40 to 60 per cent by 2030, with at least 19 per cent to be implemented now. The default was actually 19 per cent.

Yet this government, together with the Palmer United Party, decided to abolish the existing emissions trading scheme, which was working to bring down emissions, particularly in the electricity sector. That is the area where we desperately need to drive change, to get out of coal fired generation and into renewable energy as quickly as possible. The Greens are committed to 100 per cent renewable energy as soon as possible. That is why we celebrate the fact that the renewable energy target and the programs we had implemented were bringing down emissions and rolling out jobs and projects across Australia. It was and is something to celebrate and it is why we will not compromise to bring down the renewable energy target to facilitate coal.

Not only did we have an emissions trading scheme, a renewable energy target and the Climate Change Authority; we also had the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, ARENA. The Clean Energy Finance Corporation is again driving a mega rollout of jobs. I would be most appreciative if either the Palmer United Party or the government could tell us what the deal has meant for the Clean Energy Finance Corporation and ARENA. According to the papers today, the deal actually makes it worse for them. Far from saving them, according to today's papers, the deal is that you will put off bringing in the abolition bills until December this year, therefore implying that the Palmer United Party and the government are happy for those abolition bills to come back here early next year. How is that saving the Clean Energy Finance Corporation? You have just put a huge pall of uncertainty over both those organisations after, again, the government and the Palmer United Party got together to take $717 million out of ARENA over the forward estimates. You have taken away the ability to fund new projects. There is an attack on every good thing that was achieved in bringing down emissions and rolling out jobs, especially investment in rural and regional Australia.

I now come to the Carbon Farming Initiative. We set that up with the Biodiversity Fund, and why? The rural sector has been saying to us for years, 'If you want us to help preserve biodiversity, to deal with feral animals, to do the right thing and to steward the land as we would like to, you need to help us financially.' That is why we set up both the Carbon Farming Initiative and the Biodiversity Fund. I condemn the fact that the Rudd government destroyed and abolished the Biodiversity Fund. That was disgraceful. It was part of the agreement and they abolished it. The Carbon Farming Initiative was a way of giving farmers an income for making certain that they invest in projects which bring down emissions or secure carbon in the landscape, and it is essential that we do that. Now we are seeing an attack on that as well.

We have a hideously expensive, ineffective Direct Action Plan, which the Leader of the Palmer United Party had described as 'an ineffective policy and a waste of money at a time when families, pensioners, young Australians, stay-at-home mums, single parents and our Indigenous communities are facing unfair measures in the budget'. That was after the Leader of the Palmer United Party also said that he would not pass Direct Action unless the government accepted his emissions trading scheme.

Let me put to bed any idea that anything like the emissions trading scheme which he proposed was actually one, when in fact you are having an emissions trading scheme when you are not actually having one. It was zero cap and zero price and it was not to come into effect until all the trading partners had an emissions trading scheme and we had a global emissions trading scheme—that is, never. Just to add to that, India was added to it just to make sure that it would never happen. It was a sham and a shonk from the start, and everybody could see that. But, nevertheless, it was the price that he wanted the government to pay to accept the deal. And what a pathetic situation we now have where, far from accepting the emissions trading scheme, the Climate Change Authority is having an investigation over the next 18 months, which the government says it will take no notice of. That is where Clive Palmer's deal ended up.

Why would the Palmer United Party accept such a rubbish outcome, knowing full well that it is a waste of money? This is one thing I mentioned this week in relation to the late Gough Whitlam. He always said that when you don't know where somebody is coming from, just back self-interest, because it is always trying. That is absolutely the case here when it comes to this policy, because we have seen the government and the Palmer United Party tear down a scheme which required the polluter to pay—and that includes Mr Palmer's own companies which had to pay the carbon price, and it was a multibillion-dollar bill for the Palmer United Party leader.

Now the reverse is occurring. Not only did he tear down that the polluter pays but he is now putting in place that the polluter gets paid via the taxpayer. What a perfect outcome. The big polluters can now put up their hand for taxpayers' dollars in order to be paid to do something that they should have been doing anyway and probably would have been doing anyway, with no requirement on additionality that makes any sense. They are going to hang back and wait to be paid.

Economist Frank Jotzo at the Australian National University Centre for Climate Change Economics and Policy said:

The proposed Emissions Reductions Fund under the Direct Action Plan amounts to a scheme of project-based subsidies, funded by taxpayers. The Emissions Reductions Fund approach could be useful to support particular emissions reductions activities, insofar as the budgetary costs can be justified. But it is not a suitable instrument for long-term, broad-based climate change mitigation action.

The effectiveness and cost-effectiveness of an Emissions Reduction Fund will be limited by fiscal costs and fiscal constraints, by private incentives to overstate emissions savings and to hold back investment unless subsidised, by the relatively short proposed time horizons for payments, by the instrument being confined to specific eligible activities, and by the relatively large administrative burden. It could also encourage continued lobbying by potential beneficiaries …

Of course it will.

We have a scheme that cannot be scaled up to meet the kind of emission reduction that is required. Let's say it is 60 per cent by 2030, which is where Australia should be aiming. This will not even deliver five per cent by 2020. I asked the minister today: where is your modelling? Have you done any to suggest that the Direct Action deal is going to give us anywhere near five per cent? RepuTex has said it will give you 20 to 30 per cent of the five per cent. Sinclair Knight has said it will not do it; it cannot do it—the money is not enough to go anywhere near it. Also, when you look at the budgetary allocation, yes, it is $2.5 billion, but what has been allocated over the forwards is $1.15 billion out until 2017-18. This is not going to do anything to bring down emissions.

Not only is the government talking through its hat when it says, 'Oh yes, it will.' There is no evidence, no modelling base, not one single economist, not one single scientist—you cannot stand up with any legitimacy and suggest this is going to be something other than just handouts to the big polluters. Just like John Howard, the former Prime Minister's scheme, the Greenhouse Gas Abatement Scheme, was judged to be a complete waste of money, so too will this be. Malcolm Turnbull was right when he said that it was fiscal irresponsibility on a grand scale. He also described it as the big polluters getting their sticky fingers into taxpayers' pockets, and that is precisely what it is going to do.

I want to go to the safeguards, because this is the fig leaf that is being proposed: at some point in the future—we are pushing it out to 2016; we will bring in some kind of safeguards measure. But the Prime Minister has been hoisted with his own petard. He said, 'Axe the tax', 'No tax', 'Cannot have a carbon tax'. For a credit scheme to work, you have to have realistic baselines; when the big polluters exceed them, they pay. That is a tax. We know that the government has no intention of having any rigour around baselines at all.

I want to come to native forests. This is devastating for campaigners around Australia. We had a prohibition under the carbon farming initiative from being able to get a carbon farming project registered, if it involved the harvesting or clearing of a native forest or the use of materials obtained as a result of clearing or harvesting a native forest—prohibited.

Now, because the native forest logging industry is on its knees—they cannot get any money for their woodchips—they have been lobbying hard to be able to keep on logging; get paid to log to feed native forests into forest furnaces to sell energy. That is going to be the fate of Tasmania's forests, Victoria's forests, Western Australia's forests—right around the country. They are lining up a deal that you will get paid by the taxpayer to knock down native forests and feed them into forest furnaces.

That is the deal that Clive Palmer and Tony Abbott, the Prime Minister, have actually lined up. It is disgraceful. I am going to be moving an amendment on that during the committee stage. I would hope that if people do not want to see native forests knocked down and fed into forest furnaces they will support that amendment.

Finally, there are several other amendments I intend to put through. There has been a disassociation with NRM plans, for example, which is important to stop the abuse of water and the use of another round of MIS schemes, which is entirely possible under this. And of course there is ridiculous ministerial discretion being provided here in relation to the Carbon Farming Initiative.

I am also going to be moving a second reading amendment. I will be asking that the Senate note that, if we continue without change, Australia will use its entire 2050 emissions budget within 16 years and the world will warm by at least four degrees by 2100, destroying Australia's Great Barrier Reef, destroying agricultural industries and creating massive vulnerabilities in public health and national security. Secondly, I will ask the Senate to note that it is of the opinion that there is no time to waste on an ineffective, expensive direct action policy that allows unlimited pollution, hurts our global competitiveness and gives taxpayers' money to the biggest polluters with no guarantee of emissions reduction. That is precisely why we should be voting against Direct Action. It is a sham of a policy.

I will put this in the global context of where we are now and where the world is starting to move to, which is recognising that we have to address global warming. We have just had the United Nations summit in New York where Secretary-General Ban Ki-moon invited countries to put more ambitious targets on the table. Not only did our Prime Minister not go but our foreign minister put our lousy target of five per cent by 2020 on the table. The room was virtually empty. Australia was humiliated.

We have the G20 coming up. The G20 leaders are going to arrive in Australia just as this parliament will have rammed through the shonkiest deal ever, a hideous waste of taxpayers' money, with no cap whatsoever on the big polluters, which are all lined up with their hands out to get paid taxpayers' dollars for whatever they can scheme and scam the system for. The G20 is going to be meeting just as this news starts to permeate, especially ahead of the news about logging native forests for forest furnaces. Then we will go into the Lima talks and head towards Paris next year.

It is a complete joke for the government or the Palmer United Party to argue this is some sort of basis for heading towards Paris. It is nothing of the kind. Australia has to put its post-2020 target on the table in the first half of next year. In fact, it has been invited to do so by the end of March, but no doubt as laggards we will not. There is no process from this government to talk about what our post-2020 target should be. The European Union has just put 40 per cent on the table. That is a target of a 40 per cent emission reduction by 2030. That is their opening bid. They know they will have to go up from there—not down, but up. What is Australia's bid? Nothing. There is nothing on the table post 2020, and this policy will not guarantee it.

We now have a need to take real action on climate change, stop wasting taxpayers' money and stop rewarding the big polluters, the big donors in the fossil fuel area, who are now laughing their heads off as they got massive windfall gains and now want more out of the taxpayer. We need genuine action on global warming. That is why the Greens stand here today saying that this is exactly what we will continue to campaign for—to keep the renewable energy target at 41,000 gigawatt hours out to 2020 and go for 100 per cent as fast as we can get there to shut down some coal fired generators and actually get this country moving.

6:48 pm

Photo of Sue LinesSue Lines (WA, Australian Labor Party) Share this | | Hansard source

Watch out Australia as the Abbott government's wrecking ball hits us once again. This time it will hit our environment. It will hit our children's and grandchildren's future. The wrecking ball has already been through our economy and our social security systems and now it is the environment's turn with this pathetic deal the Abbott government did behind closed doors yesterday with the Palmer United Party. Or perhaps it was done a couple of weeks ago when they had the two-day meeting up in Brisbane with Senator Cormann, as the media would have us believe. The best the voters of Australia will get to understand this bill is a handful of speakers who oppose the bill in this Senate tonight. There is no transparency and no openness, just a sneaky deal with the Palmer United Party as the Abbott government wrecking ball now hits our environment.

Just yesterday we saw the Abbott government make this dirty deal with Clive Palmer and the Palmer United Party. Senators in this place do not know what deal was struck. Certainly the Labor Party does not know what deal was struck. But I do know that deals are never one sided, because that is why you make a deal—to benefit both parties. We have no idea what the benefit is to the Palmer United Party. We can speculate, but we have no evidence before us because the deal was done in secret.

I say once again that it will not be a one-sided deal. I think the only reason the government is saying that it is a good deal is because it means it can tick something off the very short list of commitments it gave to the Australian people before the election. It is only a good deal in that regard—that it meets an election promise. It is one of few. You could count them on one hand. Make no mistake—the Labor Party knows and I know that this is not a good deal for our environment. It is not a good deal for my children and it is not a good deal for my grandchildren and future generations of Australians. It is the most shocking deal you could deal out to our environment.

The Palmer United Party has traded $2.55 billion of taxpayers' money for a report that could have been done by a high school student with access to the internet. It has done this deal in secret with the government and that deal is not transparent or open and it will cost—and has cost—the Australian taxpayers $2.55 billion. We hear in this place every day from this government about how it has to be fiscally responsible, and yet it has done this secret deal with the Palmer United Party that we are signed up to without our consent, that we know nothing about and that impacts generation after generation of future Australians. I say: it is a shame and a disgrace. The Abbott government is showing itself to be a government of big surprises—of constant surprises—and now a government that does these dirty deals with anyone that will take it up.

There will be no public scrutiny of this bill—none—other than the handful of speakers on this side of the parliament who will vehemently, loudly and continually protest this bill. There will not be a public inquiry, as there would normally be through Senate processes. There will be no opportunity for a Senate committee to call before it experts who have a different view than the government's political will; or environment groups who will have a different view to the government's political will; or farming groups—who the Abbott government keeps trying to tell us they represent—will have a different view; or business groups who have a different political view to the government. They will not be invited to have scrutiny over this bill, because no-one other than Mr Clive Palmer has been given scrutiny.

I, for one, know that that is not nearly enough scrutiny of something that is going to cost Australian taxpayers $2.55 billion and will impact on the lives of future generations of Australians—a secret deal done behind closed doors. The Palmer United Party, Labor believes, has been dealt a pup. Mr Abbott and certainly the environment minister, Mr Hunt, today have ruled out ever introducing an emissions trading scheme. I heard Minister Hunt this morning say in the media that he will never introduce an emissions trading scheme. And so what is that deal that Mr Clive Palmer has not only made on behalf of himself and the Palmer United Party but for all Australians who will not be given an opportunity to see true scrutiny of this bill. I remember when Mr Palmer stood next to Al Gore, promising an emissions trading scheme, but obviously that was a stunt. I might point out that Mr Palmer at that time went on and on about his wish, his desire, to introduce an emissions trading scheme. In fact he wanted to reintroduce the emissions trading scheme which Labor had but which he and the Abbott government trashed in this place. This is someone who now holds in his hand the future of our environment and future generations of Australians. That is clearly not good enough. It is not good enough that the Senate not to have proper oversight of this bill and not to be given time to scrutinise this bill. There is no need to be rushing this bill through the parliament—no need at all. Certainly, a responsible government—an adult government, which the Abbott government clearly is not—should be open and say, 'This is a significant expenditure of taxpayers' money and we will be open to scrutiny.' But they are not saying any of that. They have done their deal behind closed doors, and so be it. Perhaps over the next couple of months as the policy is rolled out, we will start to see all of the elements in that deal.

That dirty deal has been cooked up by Minister Hunt, Mr Palmer and senators in this place who will support that bill. It is hopelessly flawed. Direct Action will still pay billions in taxpayers' dollars to big business to reduce their pollution, rather than making the polluters pay. I am sure you will hear in this place tonight speaker after speaker who is opposed to this bill make that point. That point cannot be argued—it is the truth and it is what this policy does. Mr Abbott's promise to include safeguards that prevent any reductions in carbon pollution being offset by increases in carbon pollution elsewhere in the economy has been exposed as nothing more than a mirage. What we end up with is a situation where Mr Abbott will hand billions of dollars of taxpayers' money to some polluters, while others will be free to increase their pollution levels with impunity. We will have a scattergun effect across the country. There will be no thought-out policy and no clever strategy—just giving away tax payers money with gay abandon. That is what this deal is ultimately about.

As Labor has said over and over, since the inception of the direct action policy we have not had any experts come out and support the policy. Expert after expert has agreed that Direct Action has no chance of achieving meaningful reductions in Australia's carbon pollution levels. That is because we do not have a government in power right now that is genuinely committed to reducing our carbon footprint. We have had minister after minister in the Abbott government stand up and say they do not believe in climate change. What we have in the Abbott government is a bunch of climate sceptics who realise the Australian public are way ahead of them on protecting our environment, our community and our way of life. They figure they have to do something, and so they have developed this 'no direct action' policy, which is supported by absolutely no-one other than themselves, like many other of their policies.

You will hear, I am sure, senators who oppose this bill stand in this place and say, 'Australia will look foolish,' and there is no doubt about that. We were once leading the world in this area; we were ahead of our time; we were bold and charging ahead. All of that has gone. We are chickens, we have run off and we are risking our environment and our future to a policy which is supported by no experts at all. When we go to international forums, we will continue to look foolish. Let us see the government front up to those forums and try and convince world leaders that this is a good policy. For example, let us see what will happen at next month's in G20. We know that countries such as the US and China have very serious plans in place to tackle climate change, and what do we have? We have a joke of a plan—a 'no direct action' plan is what we will front up with; a scattergun plan and a plan which will waste $2.55 billion worth of taxpayers' money. It is a secret plan got up in a deal with the Palmer United Party, headed up by Mr Clive Palmer. Maybe at the G20 we will get to hear a bit more about this plan, because we are certainly not going to hear very much of it tonight in this place—because the deal, in secret, has been done.

In relation to the Palmer United Party amendments, Labor of course respects the work of the Climate Change Authority and has been very firm about keeping the Climate Change Authority in place and not allowing the Abbott government to trash the Climate Change Authority. But what all of us who believe in climate change agree on, no matter what our political persuasion, is that we simply do not need another report. We certainly do not need another report to describe what is happening in the rest of the world. We need action, and we have seen this failure by the Abbott government to take that action. We need an emissions trading scheme and we need it now—not a report but action, and we need that emissions trading scheme.

Instead, what do we have? We have a farcical situation where the Climate Change Authority will be asked to do another report, and it is farcical because we already know, without the report being written, what the outcome will be. The environment minister has been very clear and has told us that he is not going to introduce an emissions trading scheme. If the need for an emissions trading scheme is the conclusion the report comes to, as no doubt it will, it is not going to be implemented anyway because the minister has been very clear in the media that he is not going to do it. So what the point of this? The point is that it is part of the deal that Clive Palmer struck. We do not know the rest of the deal, but we know he struck that bit. Instead of the ETS Mr Palmer insisted that he was going to force the Abbott government into introducing when he had that huge fanfare with Al Gore and made all of those promises, which he has now broken, following in the footsteps of the Prime Minister, I might say—following the broken promise pathway—Minister Hunt has said there will not be an emissions trading scheme introduced. So why put the Climate Change Authority to the bother of doing a report? And, as I said, we do not need another report; we need action.

Just today, we have had a report from RepuTex, who confirmed that the deal done yesterday between Mr Palmer of the Palmer United Party and Mr Abbott at best will deliver 20 to 30 per cent of the emissions reduction that is needed to get Australia to the five per cent target by 2020. Yet, as usual—and, again, I heard him say this himself—Mr Hunt is categorically stating that we will meet our targets. Somehow Direct Action will achieve this, or perhaps it will happen by magic. Maybe he has a wand that he can wave to get to the targets or maybe they can reinvent the figures. We can all be a bit creative with figures. Perhaps that is how he will get to the targets, because the report today by RepuTex says that this deal simply will not.

This is a devastating report by RepuTex. It confirms that the secret deal, the dirty deal done by the Abbott government and the Palmer United Party, led by Mr Palmer, announced yesterday, is utterly hopeless for Australia's future. It just shows the inability of the Abbott government to be a forward-looking, bold government. It is a wrecking-ball government as it takes its wrecking ball to our environment on behalf of future generations of Australians. For that, it should be ashamed. What it means is that, just to get to the five per cent target, the Australian government—Mr Abbott—is going to have to spend, on Ken Henry's estimate, $4 billion to $5 billion per year between now and 2020. Or else it means—and this is, I suggest, the more likely outcome—the Prime Minister is going to have to give up on any substantial attempt to reduce Australia's carbon pollution. Perhaps he will pretend that we do not have the problem that we currently have, because we know that the Abbott government is very good at inventing things that do not exist. The Carbon Farming Initiative has been trashed, and we now have a new acronym: one for the Emissions Reduction Fund—so many acronyms, but so little action from the Abbott government in partnership with the Palmer United Party.

The report from the Senate Environment and Communications References Committee was damning of the direct action policy. The report finds that Direct Action is no substitute for Labor's comprehensive climate change policies and is unlikely to be successful by any indicator you care to put forward. The Senate committee recommended that the government not proceed with the Emissions Reduction Fund, as it is fundamentally flawed. The committee made that recommendation on the following grounds: there is no legislated limit, or cap, on Australia's emissions in line with emissions reduction targets; there is insufficient funding to be able to secure enough abatement to meet Australia's emissions targets now or into the future; and there is a lack of robust safeguard mechanisms with stringent baselines and penalties for exceeding those baselines. Even the government's own department is not confident of Direct Action, repeatedly telling Senate estimates that they were unable to confirm that the policy will reach its targets. Once again, the Abbott government—in a dirty deal with the Palmer United Party—present us with a deal which is fundamentally flawed, and which will harm our environment and future generations of Australians.

7:09 pm

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

I join Leader of the Australian Greens, Christine Milne, in rejecting this appalling policy—this expensive joke of a policy—that has been cooked up in a deal done between a coal billionaire and the Prime Minister, who believes coal is good for humanity. This policy means that Australia—instead of being one of the global leaders in addressing climate change—will become a global joke on climate change. What more can you expect from a party that, fundamentally, are climate change deniers? There is no other way of looking at it. If you were really serious about climate change, why would you get rid of an effective package that was addressing climate change, building jobs and bringing down carbon emissions?

We are told that this deal will save the Clean Energy Finance Corporation. If memory serves me correctly, we saved that previously. Apparently this deal has saved ARENA. How do you save a body established to promote renewables and invest in renewables when you take $700 million out of it? That is not saving it. That is hobbling it while pretending to save it so that you can hold a media conference to say, 'Look, what we've done,' while forgetting to tell everybody that you have supported the government to rip $700 million out of it.

If PUP had supported the Climate Change Authority and stood with the Australian Greens and the Australian Labor Party, we would not have needed this flawed legislation to save the Climate Change Authority; we have saved it before, and we could save it again. This is a strategy to make Australia think that PUP have achieved something, when all they have achieved is facilitating Tony Abbott to wind back effective mechanisms to address climate change. PUP say that they support the RET, but, of their three senators, at least one does not support the RET. So you cannot believe that statement either. We have been told that all those things have been achieved by this deal, when really all that has been achieved is billions of dollars, in the long-term, going into the pockets of the polluters and the big end of town.

I want to remind people about what climate change is and what it will do to our planet and to future generations. What this government is doing by failing to adequately address climate change amounts to intergenerational theft: theft of their future, loss of food security and loss of species. Climate change will have fundamental impacts on our economy and on our marine environment. It will lead to increasing pests and diseases; health impacts, which we are only just starting to understand now, which are only going to escalate; and threats to our agriculture. This government is so bad that, when it released its green paper on its competitive agriculture policy, climate change was not even addressed—it got a mention twice, and one of those mentions is in a reference. The government has no strategies in agriculture for adequately addressing climate change.

Climate change will have untold impacts on our economy. It will have untold impacts on the species that will be lost due to climate change. We have already had so much impact on species, particularly here in Australia. We have already lost a number of species; Australia has the highest rate of mammalian extinction in the world. Because we have cleared so much of our country already, species will not be able to move to address climate change; they are losing their refugia. So even more species will be lost.

One of the biggest losses is to the renewable energy industry, which this government seems determined to rip down. They are ripping money out of the bodies that facilitate and promote the industry, and they are stopping projects that are just about to get underway. Where the transition has started from the old fossil fuel industries and energy sources to the new renewables that are creating jobs, providing employment into the future, providing research and development, not only in the construction areas, this government is clearly undermining those new industries.

Can you imagine what it would have been like if that is what they had continued to do for technology that had been developed? Can you imagine what would have happened if they had said, 'No, we'll stay with the horse and buggy, thank you very much'? In fact, there were some people that opposed changes and wanted to keep the horse and buggy, and they have been consigned to history. This government will be consigned to history for the impact that they are having. Generations ahead will look back and say, 'Actually, they did start addressing climate change back then. They had good measures in place and the Abbott government came in, tore them up and decided to support the big end of town, decided to support the dinosaur industries, the fossil fuel industries.'

This legislation is flawed. It will not work. It invests billions of dollars into plans that are clearly flawed and will not work. It is a short-term fix. It is incapable of being scaled-up to meet our emissions reductions challenges without a massive burden on public expense. It will cost taxpayers billions of dollars to meet even mildly—and I use the word 'mildly'—higher aspirations under an international agreement that will be negotiated in the future. The world expects Australia to do its fair share in limiting global warming to two degrees. The policy that is embedded in this legislation cannot get us anywhere near that requirement. There are huge commercial opportunities, currently, for countries that are transitioning from a high pollution-intensive economy into an efficient low-carbon and prosperous one.

The Carbon Farming Initiative Amendment Bill 2014 takes away any competitive advantages that Australia is currently developing and, instead, encourages business to be wasteful in its resources, or to rely on government subsidies for its profitability. This is from a government that pretend they are economic geniuses. Instead of the marketplace driving the innovations and productivity gains across multiple sectors of the economy, this bill will make government decision makers responsible for choosing those advantages in very limited sections of the economy. As I said, this is from the people that claim they are economic geniuses. They are undermining the advantage that Australia has by moving to renewable energy, moving to ensure that we have a future based on renewable energies. Not only could we have those renewable industries here, but we could then be selling the technology that we have been developing. It will not drive the transformational change necessary for Australia to prosper in a carbon constrained world faced with a climate change emergency.

There are many reasons for that, and I will go through some of the main ones. It is too narrow to achieve the lowest cost emissions reductions. The bulk of the grant scheme will be focused on energy efficiency. Despite the minister's assurances, energy generation, mining and transport will be cast aside from direct action. Carbon farming will only be competitive if the integrity of the scheme is completely abandoned by giving absolute discretion to the minister to vary the relevant methodologies. It is unfinancial because the grants are so small, contracts are limited to five years, payment is available only on completion, and the prices on offer are so low that it falls far short of being investment-grade. Finance institutions and banks will not waste their time to finance a project under the Emissions Reduction Fund. It is optional so that there is no incentive for polluters to participate. The scheme will be underutilised by all except for those best placed to receive easy subsidies. Low participation increases the cost of reducing emissions because of less competitive pressure. Furthermore, any reductions in emissions in one area of the economy will be lost by gains in another unregulated area.

It is costly because it requires a huge bureaucracy to administer the scheme. There will be very little emissions reductions for the amount of public money required to administer these expensive tasks. This is from a government who continue to say that they want to reduce red tape. It is economically illiterate because to achieve enough abatement to reach the government's paltry five per cent reduction target would require a carbon price of between $20 and $40. Under the existing budget the scheme could only pay $3.60 per tonne. It is pointless because the projects that are most likely to succeed under a reverse action will be low cost and will have a short payback period, meaning that they are most likely to happen anyway without the government's corporate welfare on offer.

In addition to these fundamental design flaws is the significant weakening of the methodologies that calculate how much carbon can be sequestered in the land. The overreliance on soil carbon as a silver bullet is flawed. Like the entire direct action policy, the mechanical framework has been painfully contorted in order to achieve superficial political objectives. In this case the government's political objective is to make funds for carbon farming competitive against energy efficiency or capital upgrade projects. To achieve this, carbon farming rules have to be massively weakened in order to get public money out of the door and into forestry projects similar to those driven by the managed investment schemes under the Howard government—and we know how many of those ended!

The wide discretion this bill provides to the minister to allow projects to generate credits removes any guarantee that a tonne of carbon paid for does not end up in the atmosphere. This would result in the worst of both worlds: public money spent on abatement projects that have no identifiable environmental benefits. To meet the UNFCC Kyoto rules, Australia's policy framework must be rigorous. Giving the minister huge discretion to undermine methodologies makes our compliance highly questionable and may make carbon credits ineligible in international markets.

Another area of serious concern is the removal of the prohibition, in section 27(4)(j) of the Carbon Credits (Carbon Farming Initiative) Act 2011, on a project earning credits from clearing native forests or using material obtained from clearing a forest. It is to be replaced by a requirement for the minister to simply 'consider' any adverse environmental impacts. The concern is that that would breach the Kyoto rules. The intention of the bill is to offer desperately needed revenue streams to the failing native forest logging industry. That is very clear.

The Greens are concerned by the weakening of the additionality rules—the changes to the permanency requirements that allow 25 years of sequestration instead of 100. In short, 25 per cent of the time still gets you 80 per cent of the value. That is an extreme concern, as is the delinking of projects from natural resource management plans. We have an amendment to address that. Natural resource management plans are extremely important documents. They are the documents that guide the strategic approach to landscape-scale repair. It is a complete joke that this scheme would be delinked from natural resource management plans. The fact that the government does not want to use these carefully-thought-out strategic approaches to landscape-scale repair again makes you question whether the government is at all serious about this issue.

All of these major flaws in the scheme show that the government is not serious about addressing climate change. It only wants to be seen to be addressing it—while at the same time helping the big end of town. This scheme will have a massive impact on taxpayers for no gain, or at least no gain other than political gain.

This brings me to Direct Action, the government's pathetic, ill-defined excuse for climate action. The original Carbon Farming Initiative and the Biodiversity Fund—initiatives of the Greens and Labor—created jobs for farmers, Aboriginal communities and landfill operators. They generated more than 150 projects around Australia. The Abbott government, in combination with coal billionaire Clive Palmer, have destroyed these jobs and are causing the axing of investment in renewable energy. They are foreclosing on a clean green future for Australia, they are foreclosing on leading-edge research and they are foreclosing on our ability to constrain greenhouse gas emissions.

This is a flawed policy. It is a flawed approach to addressing climate change. Climate change will cause more extreme weather events, adverse health outcomes and, unfortunately, more deaths. We will see impacts on our agriculture and on our marine environment. We will see the loss of entire species as a result of climate change. This has fundamental implications for our planet—and, therefore, our economy. This is a serious backwards step.

We oppose this legislation but we will continue to campaign on climate change. We will continue to campaign for renewable energy. It has now been clearly demonstrated that we can achieve a 100 per cent renewable future. That is the future of our country. That is the future I want to see for my grandchildren and for their children. This condemns future generations. Not addressing climate change, I say again, is intergenerational theft and we will not support it. We will not be part of it. We will be part of the continuing campaign—because Australians want action on climate change. We will continue to campaign for a different approach, for a different future for our planet and for our country.

7:24 pm

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

I oppose the Carbon Farming Initiative Amendment Bill 2014, which is just another piece of destructive legislation to add to this government's long list. They continue to dismantle, one bill at a time, the six years of good work done by the last federal Labor government. This bill is the vehicle for introducing the Abbott government's so-called Direct Action Plan, essentially a $2.55 billion taxpayer funded slush fund for polluters—polluters like Mr Clive Palmer's nickel refinery, which may well be eligible for grants from the Emissions Reduction Fund the bill establishes.

The Carbon Farming Initiative Amendment Bill will do nothing to advance Australia's climate change credentials and very little, if anything, to reduce Australia's harmful carbon emissions. Everybody knows that Direct Action is a dud. Scientists, economists and experts everywhere tell us that it will not deliver on Australia's emissions reduction targets and that it will cost the taxpayer more than Labor's plans to reduce harmful carbon emissions.

Prior to the 2013 election, Labor fulfilled our international responsibilities and our responsibilities to future generations. We did our part for climate change abatement by setting achievable emissions targets, by building the policy infrastructure and by investing in our future. Under Labor, wind power generation in Australia tripled. Under Labor, the number of jobs in the renewable energy sector tripled. Under Labor, the number of Australian households with rooftop solar panels increased from less than 7½ thousand homes to almost 1.2 million. Under Labor's carbon price legislation, carbon emissions were reducing. It was working. But Palmer and the Abbott government voted to get rid of the carbon price, and now they have colluded to rip off taxpayers with the dud scheme contained in this bill.

The bill seeks to amend the previously successful Carbon Credits (Carbon Farming Initiative) Act 2011 to establish an emissions reduction fund by allowing for a broader range of activities to be eligible to earn greenhouse gas offset units—Australian carbon credit units—under the Carbon Farming Initiative by reducing regulatory requirements associated with the development of methodologies under the Carbon Farming Initiative and allowing for the Clean Energy Regulator to purchase greenhouse gas emission offset units from qualifying projects on behalf of the Commonwealth. It also makes minor amendments to the Australian National Registry of Emissions Units Act 2011 and the National Greenhouse and Energy Reporting Act 2007 and provides transitional provisions for projects earning greenhouse gas offset units under the Carbon Farming Initiative arrangements.

These amendments will not be enough to do anything meaningful about Australia's climate change and harmful carbon emissions. While the rest of the world moves towards a carbon restrained and hopefully carbon-free future, Australia is embarrassingly languishing behind. Far from making positive headlines, as the Labor government used to do in the environment sphere, the Abbott government is being touted internationally for being the first country in the world to remove an existing successful price on carbon. And now we have this Direct Action joke—a grubby deal between the Abbott government and Clive Palmer, a deal that pays polluters and has no sanctions that will stop polluters from polluting.

Currently over one billion people are living in nations or provinces where a carbon price or emissions trading scheme operates. It is expected that within the next two years three billion people will be living in a nation with such a scheme. Our top five trading partners have ETSs at national or subnational levels. Another eight of our top 20 trading partners also have ETSs at national or subnational levels. That means that 13 of our top 20 trading partners have emissions trading schemes applying to their economies right now. And then there is us, for whom things seem to be going from bad to worse. We are going from the widely accepted path of genuine emissions reductions—a price on carbon—to a scheme that will not work. What kind of a joke will Australia be at next month's G20? As a signatory to the Kyoto Protocol—the United Nations Framework Convention on Climate Change—we were required to nominate a greenhouse gas emissions reduction target. Australia's target for the period 2013 to 2020 is a reduction in emissions of five per cent compared with 2000 levels by 2020. Admittedly for some people that target was not enough. But, as I said at the beginning of my speech, it was a responsible target.

Yesterday's news of this dirty deal between the government and Clive Palmer is terrible news for the environment and puts our commitment to the protocol at risk. RepuTex's report confirmed that the deal struck between Mr Hunt, the Minister for the Environment, and Mr Clive Palmer will, at best, deliver 20 to 30 per cent of the emissions reduction needed by Australia to get to that five per cent target by 2020. An independent analysis confirms that the deal announced yesterday is hopeless for Australia's future. The government is going to have to spend, on Ken Henry's estimations, $4 billion to $5 billion per year between now and 2020 to meet the five per cent reduction—either that or we give up entirely on any substantial attempt to reduce Australia's carbon pollution.

While the United Nations has said that climate change should be the No. 1 priority for all leaders to consider and that it is the defining issue of our time, Mr Tony Abbott and his colleagues on the other side of this chamber continue to overlook the evidence, continue to disregard the scientists and experts, and continue to ignore the statistics. The President of the United States, Barack Obama, says that climate change is one of the most significant long-term challenges, if not the most significant long-term challenge, that the planet faces. But Mr Tony Abbott, the Prime Minister of Australia, does not believe it is an important issue.

I would like senators to cast their minds back to 2009, when Mr Malcolm Turnbull composed an opinion piece for the Sydney Morning Herald entitled 'Abbott's climate change policy is bullshit'. Five years later, absolutely nothing has changed—except that the person Mr Turnbull was referring to is now the Prime Minister of Australia. The policies and the views are still the same, and if Mr Abbott's own party members can write opinion pieces so dead against his views, why should Australians be subject to them?

The truth of the matter is that the carbon pricing scheme that was in place was working. Economic growth was solid, inflation was under control and emissions were actually being cut. People do not want Direct Action, and neither does business. In fact, a Fairfax Media survey from this time last year of 35 university and business economists found that only two believed that Direct Action was the better way to limit Australia's greenhouse gas emissions. I am not sure whether one of those was Mr Clive Palmer! Thirty, or 86 per cent, favoured the former carbon price scheme—Labor's carbon price scheme. And a Senate inquiry into Direct Action did not hear from one single expert who could support the government's plan or show any confidence in its capacity to reach Australia's emissions reduction targets. The Senate committee recommended: that the government not proceed with the Emissions Reduction Fund, as it is fundamentally flawed. The committee recommended this on the grounds that there is no legislated limit, or cap, on Australia's emissions in line with emissions reductions targets; that    there is insufficient funding to secure enough abatement to meet Australia's emissions targets now and into the future; and that    there is a lack of a robust safeguard mechanism with stringent baselines and penalties for exceeding baselines.

Even the government's own department is not confident in Direct Action, repeatedly telling a Senate estimates hearing that they are unable to confirm that the policy will reach its targets. The government, however, keeps declaring their unwavering confidence in the direct action policy, despite having no evidence to support their position. The government continues to fail to produce any research or modelling to underscore their confidence. Independent modelling has proven the government's climate change policy will cost billions of dollars more than Mr Tony Abbott claims and has no chance of meeting Australia's emissions reduction target. Their policy is a con, an environmental fig leaf to cover a determination to do nothing meaningful or systemic to address climate change. All of the experts are agreed—and probably aggrieved. Mr Tony Abbott's and Mr Clive Palmer's policy con will not reduce carbon pollution but will cost households more. With all the experts once again lining up, when will the government listen and start moving forward on climate change instead of doing grubby deals and moving backwards?

Since before the 2013 election, Labor have argued that the most effective way to reduce Australia's carbon pollution is to put a cap on emissions that decreases over time and let business work out the best way to operate within that cap. There has, again, been much discussion about emissions trading schemes in the last few weeks. While the scope, size and linkages with other schemes can vary, the fundamental principles of an ETS—the cap on pollution and underpinning price mechanism—are the most widely supported climate policy measures across the world. If Labor had been elected last year, Australia would be operating within a system like that right now. Instead, the Prime Minister is making Australia the only country in the world to take reverse action on climate change and to stop doing anything worthwhile about climate change at all. My colleagues in the Labor Party and I will not let this legislation pass without a fight. I am speaking not only on behalf of myself and the Labor Party but also for my constituents, for my state and for the future of Australia's environment and children. However, it seems that no matter how many of us speak against the government's position on the environment and its weak position on climate change, the Prime Minister is not willing to listen. It is with great sadness that, at some point tonight or tomorrow, this bill will pass, but I will be pleased to have on record my opposition to it.

7:39 pm

Photo of Janet RiceJanet Rice (Victoria, Australian Greens) Share this | | Hansard source

I rise to speak in opposition to the Carbon Farming Initiative Amendment Bill 2014. I am speaking tonight on behalf of the majority of Australians, who want serious, powerful, urgent action on climate change. Australia has been a leader in acting on climate change, and we have rapidly moved to the bottom of the pack. We are facing serious problems. The world is going to be a different place, if the climate change that is currently foreshadowed occurs. Currently, we are on track for four degrees of warming and more. The extreme weather events that that will result in are going to have huge implications for Australia and the world. The rising sea levels will have massive implications for billions of people around the world and for people in Australia, like my mother, who still lives in Altona, which will not exist if sea levels rise a meter. There will be a loss of species, because of that amount of warming. There will be an impact on our food supplies. I think that people who are not serious about taking action on climate change have not understood what the implications are.

The implications are that our wheat growing areas in Australia will no longer be able to grow wheat, when the climate of Dubbo, for example, becomes the climate of the central deserts. With four degrees of warming, it will not be possible to grow food crops in the tropics, and that will impact on the world, on refugee movements and on billions of people. It will impact our water supplies, increasing droughts. There will be loss of lives due to more intense bushfires spreading over a longer period of time, affecting more people more widely. Hundreds of people died in the heatwave that preceded the 2009 Black Saturday bushfires in Melbourne. Then over 100 people died in the bushfires themselves. This will become the new norm.

I am here speaking on behalf of people who understand this reality, particularly young people and people who have understood the science and said, 'Yes, this is a very scary situation that we are looking at,' but realised that they can take action to change these things. Restoring a safe climate for us all—for humans and all the species which we share this planet with—is something that we can do. We know that it is possible, but we have to take serious, important action. The very sad thing is that Australia was on track to be doing that. We had the architecture set up. We had an emissions trading scheme. We had measures in place that were the beginning on which to build to create the reduction in carbon emissions necessary for Australia to play its part and to be a world player in reducing carbon emissions. We were heading towards a future of zero carbon emissions, so that we could restore a safe climate for humans and all the other species that we share this planet with to live in.

I have spoken to people across Australia who are disturbed and distressed by the actions and backward steps that Australia is taking on climate change. They look at what other countries are doing and think, 'Well, there is a saving grace: with Australia being a laggard and completely left behind, at least other countries are taking action.' They look at the actions that are being taken in the European Union and their very ambitious reduction targets. They look at the fact that coal in China is about to reach its peak and is going to be declining. They look at the massive rollout of solar energy in India. Then they look back at Australia and think, 'Poor, poor Australia, we are being left behind.' They know that it is not just an environmental issue; it is both a social and an economic issue. We know that all of the international agencies, the World Bank and the International Monetary Fund have done the reports. They have said that it makes more sense economically to be taking urgent action on climate change now rather than leaving it to the future.

The government's Carbon Farming Initiative Amendment Bill and Direct Action Plan are a fig leaf. We have already heard today from my colleagues how little it will impact on our carbon emissions. The RepuTex report estimates that it will achieve a 20 to 30 per cent of the five per cent cut in emissions by 2020—that is, a one per cent reduction in Australia's emissions. In fact, we were already well on the way to doing that with the emissions trading scheme and the price on carbon that was initiated, which has now been scrapped.

We need meaningful action. We know that Direct Action, as well as being ineffective, will be massively expensive. I hear the government benches, day after day, say that it is important that in a budget emergency we have to be careful how we spend our money. Yet $2½ billion will be spent and which will achieve so little. What is worse is that the $2½ billion that will be spent will go into the pockets of the big polluters, to be doing something that they probably would have been doing, anyway.

In repealing the clean energy future package, we have dismantled infrastructure that will have to be reconstructed again in a very short time period because direct action will not work. In doing this, there will be a significant cost to Australia in lost time, money, innovation and competitive advantage. We need to be working towards an economy and a society that is powered by 100 per cent renewable energy. This direct action is taking us backwards in that regard. We need to be putting infrastructure together that will enable us to phase out coal.

The very sad thing is that, when we finalise this debate, we will have the summing up done by a government that says that coal is good for humanity and that makes ridiculous quotes about the support for coal that Bob Brown once had in 1981. I expect that is what we will hear from Senator Cormann in his summing-up. It is just inane and the people listening to it will know that it is inane.

In order to be taking real action on climate change we need to phase out coal. We know that it will be in Australia's economic interest to do that. We need to be saying no to increasing coal exports through the Great Barrier Reef; saying no to unconventional gas, including coal seam gas; and to be saying yes to renewable energy.

Our emissions trading scheme was an important, efficient and effective way of doing this, backed by the Clean Energy Finance Corporation and ARENA. We now know, having just received the details of the bill that is coming up tonight, that the Clean Energy Finance Corporation and ARENA are said to be abandoned at any time after December, in two months time. Critical parts of the infrastructure are there and the uncertainty that has been put in place will just create further devastation for any remnants of action on climate change that was being taken.

The government is sticking its head in the sand. My message to the government is: Direct Action is not the climate action that Australians are looking for. We want decisive, effective and fast action. Direct Action is a slogan, not a real policy. And it comes from a government whose only real priority is propping up its friends in the big end of town. These friends of the government are people who are still misguidedly living in a parallel universe where, supposedly, burning fossil fuels can continue unabated. The government is addicted to fossil fuels. It is trying to drag the dirty coal fired industries of the 20th century with us into the 21st century, instead of helping us transition to a clean energy future.

Direct action is not a viable replacement and it is vastly inferior to the carbon-pricing mechanism we had. We had a world-leading scheme to price pollution and to drive down dangerous global warming emissions. It is inevitable that pricing carbon pollution will become a permanent feature of the global economy. Even Clive Palmer, with his emissions trading scheme, recognises that. He knows that people around the world know that an emissions trading scheme is the most effective way to get effective action.

Under this government Australia is totally out of step with international trends and efforts to address global warming. We are not just out of step; we are stepping backwards fast. Direct Action is a high-cost, narrow, government-controlled scheme, the intent of which was to replace the existing market driven, economy wide, lowest cost method of reducing harmful greenhouse gas emissions. What this dodgy direct action scheme consists of is voluntary grants that will just allow the polluters to get their sticky fingers into taxpayers' pockets.

Mr Clive Palmer and his Palmer United Party senators is a good example. We now know why Clive Palmer has been interested in supporting the government on abolishing the carbon tax: he did not have to pay tax for his carbon emissions but now he stands to potentially benefit from Direct Action.

Another thing that makes me sad, knowing that this is such an important policy and that we are going backwards on the most serious issue that faces humanity today, is the secrecy and the haste. We are voting tonight on a bill where even the Palmer United senators did not know their own party's amendments until this morning. This is not the way to do business, it is not the way to do government and it is not what the people whom I represent want to see happen. They have got expectations that we will be considering important pieces of legislation such as this seriously, with due regard and due respect, paying proper attention to what all the implications mean. Yet we know that we will have sent Australia backwards on our journey towards acting on climate change by the time we rise tonight.

A very important impact of this policy that has only just become evident this evening is the impact on our forests. The Carbon Farming Initiative, as it stands, had a prohibition on the clearing of native forests or the use of products that come from native forests being eligible under the carbon farming initiatives. But we now learn that that prohibition is no longer in this bill. So we now know that there is the potential for the clearing of our native forests and the use of wood products that are harvested from those forests to be considered as eligible carbon farming initiatives. This is opening the door to be logging our native forests and to be burning the products from those forests in forest furnaces for so-called clean energy. At a time when we have the native forest based industries on their knees in Australia because they do not have a product for their woodchips on the world market, and at a time when the majority of Australians want to see protection of our native forests, it is going to be opening the door for logging of those native forests—and getting further subsidies for doing that—and destroying our native forests by burning them in forest furnaces for energy.

This is very indicative of how sad and how debased this debate has become and of how out of touch our policies in this parliament are with what Australians want. We know that the majority of Australians want to see serious action on climate change. Every poll shows that is the case. The majority of Australians want to see protection of our native forests. But tonight we are serving the interests of environmental destruction and serving the interests of the biggest polluters—and paying them excessive amounts to do it.

The Greens, as you know, are going to be standing up and doing our best to bringing attention to how we are going backwards in this debate. I am proud to be here tonight as part of a party that is standing up for the environment, is standing up for serious action on climate change and is standing up and wanting to do something to get answers and to get protection for our future. I have two children and I hope to have grandchildren one day. I want them to have a planet that is liveable. I want them to have a planet that allows them to be healthy and allows them to have the same quality of life that I have had. Under the prospect of dangerous climate change, I feel frightened for them. I really think that, unless we come to our senses and join other governments around the world in coming to our senses, it is a really a bleak future.

The positive side of this, however, is that I know that there are things that can be taken; there are solutions. It is in our power as a parliament to be taking action that will set us on a path of a positive future—a path of 100 per cent renewable energy and one that creates jobs and supports those renewable energy industries that are burgeoning across Australia and across the world. I know that we can be transitioning to a zero-carbon economy and that it will be cheaper for us to do. But, instead, tonight we are going backwards. And I think that is a very, very sad place to be.

7:56 pm

Photo of Anne UrquhartAnne Urquhart (Tasmania, Australian Labor Party) Share this | | Hansard source

I rise to oppose the Carbon Farming Initiative Amendment Bill 2014. The government is seeking to amend the Carbon Credits (Carbon Farming Initiative) Act 2011 to allow for the Emissions Reduction Fund to be administered and to allow its fundamentally flawed direct action plan to start.

Firstly, I would like to say that Labor is very supportive of the Carbon Farming Initiative—as we always have been. But we do not support the direct action dud of a policy. Well, what a day of surprises we saw yesterday! We saw both the government and the Palmer United Party backflip on their promises. PUP's promise to the Australian people and to legendary climate hero, Al Gore, for an emissions trading scheme to be legislated went by the wayside. His commitment to reject the appalling direct action policy was unceremoniously dumped. The government's promise to shut down the Climate Change Authority was promptly overturned. Amongst the ever-growing list of broken promises by this government, this is one that I can support.

So, now, we have a very curious situation. We have a government that has done absolutely everything in their power to tear down Australia's climate change. They have abolished the carbon tax, making Australia the only country in the world to be moving backward on climate change. They have shut down the Climate Commission. They want to axe the Clean Energy Finance Corporation despite the fact that it has made a positive return to government finances. They are trying to shut the doors on the Renewable Energy Agency.They commissioned a climate sceptic to launch an inquiry into the Renewable Energy Target, with the excuse that the RET is pushing up power prices.When the inquiry found that the RET will actually reduce electricity prices in the medium term, they still ploughed on with attempts to reduce the RET by 40 per cent.

This is a government that is single-mindedly focused on demonising renewable energy while praising dirty fossil fuels. This is a government that is belligerently holding Australia back fro m the vital transition to a low- carbon economy. And this is a government that is turning its back on Australia's responsibilities as a global citizen to contribute to reducing global emissions. We have heard the Prime Minister , Tony Abbott , say :

Coal is good for humanity …

He has accused the executive secretary of the UN framework on climate change of, and I quote :

… talking through her hat.

He has refused to attend both the international Climate Summit in New York and international climate change negotiations in Warsaw.

We saw the Prime Minister try and fail to organise a global alliance of climate denying countries to turn back the tide on climate change action. W e have listened to the Prime Minister's climate change denying side kick , Mr Joe Hockey , bemoaning that wind farms are ' utterly offensive ' . Despite all this, the Abbott g overnment is launching an inquiry into emissions trading schemes. But worse: they have already promised they will do nothing about it, regardless of what the inquiry finds. In fact, Minister Hunt has said the inquiry was given to the Climate Change Authority because, and I quote :

… they might as well do work.

What a dismissive and demeanin g thing to say about these hard working experts and their important work. And w hat a terrible shame that the government is too arrogant, too stupid or too conflicted to listen to their expert advice.

In about 18 months, we know the inquiry will tell the government what scientists, economists and policy experts across the world already know. That is, that the government needs to implement a market based mechanism to tackle climate change. This is sound advice indeed, which the government will promptly ignore. What a strange world we are living in!

We in Labor know that all evidence shows that the most efficient, lowest cost means to achieve carbon abatement is through market mechanisms like emissions trading schemes. We also know that the government is absolutely determined not to do anything to address climate change. The bill before us today is not so much about carbon farming as about the Abbott government's direct action policy. Direct action is bad policy, direct action is expensive policy, and direct action is ineffective policy. It will not achieve its goals and it will cost the Australian taxpayer $2.55 billion in the process. The truth is that direct action is little more than a multibillion dollar slush fund for polluters. It has received scathing reviews from the scientific community, which knows that it will not meet its carbon abatement targets.

Economists have pointed out that the Abbott government is pursuing one of the most expensive means of carbon abatement around. This is particularly hard to swallow when you consider that those opposite are blatantly wasting money while they are lecturing the country that they can no longer afford appropriate funding for health, education and our welfare safety net. This is quite simply outrageous.

Direct action throws away the fundamental principle of polluter pays in favour of a government funded slush fund for big polluters. Pollution is an output of business, like any other, and it should be levied as such. Environment Minister Greg Hunt knows that this is a key principle of achieving low-cost carbon abatement. In fact, he is an expert in the area, after penning his honours thesis which was entitled 'A tax to make the polluters pay'. On the issue of reducing pollution, Mr Hunt's thesis argues:

Ultimately it is by harnessing the natural economic forces which drive society that the pollution tax offers us an opportunity to exert greater control over our environment.

I do not know about you, Madam Acting Deputy President, but it sounds very much like a solid argument for an emissions trading scheme to me.

As we all know, those opposite, who are normally the greatest champions of free market solutions over subsidies, have taken a very bizarre path on climate change. They are throwing away market mechanisms in favour of direct and substantial government subsidies through their direct action policy. Perhaps the only member of the government who has been honest about the direct action policy is the member for Wentworth, Mr Malcolm Turnbull. In December 2009, Mr Turnbull penned a piece for The Sydney Morning Herald calling Tony Abbott's climate change policy an objectionable word that I cannot use in this chamber. In this article, Mr Turnbull wrote:

… as we are being blunt, the fact is that Tony and the people who put him in his job do not want to do anything about climate change.

…   …   …

Now politics is about conviction and a commitment to carry out those convictions. The Liberal Party is currently led by people whose conviction on climate change is that it is "crap" and you don't need to do anything about it. Any policy that is announced will simply be a con, an environmental figleaf to cover a determination to do nothing.

That is what Mr Turnbull said. Then, on 8 February 2010, Mr Turnbull reinforced his justifiable disgust for the policy, telling the parliament that direct action would be:

… a recipe for fiscal recklessness on a grand scale.

This perspective is borne out by the recent Senate inquiry into direct action which could not find one single witness willing to support it as a credible stand-alone solution to address climate change. During the May 2014 estimates, the environment department itself admitted it was unsure of the policy's chances of success due to its incomplete state.

There are some glaring fundamental concerns with the direct action policy. Firstly, as I have mentioned, it is highly unlikely to meet its emissions reduction targets. Recent research from RepuTex shows that even if the full $2.55 billion is used to buy abatement the government will fall 300 million tonnes short of its carbon emissions reduction targets. To meet our commitment of reducing Australia's carbon output by five per cent by 2020, the government has allocated $1.55 billion over three years. But work done by SKM MMA and Monash University shows this falls $4 billion short, even using the most generous parameters.

Similarly, former Treasury Secretary Ken Henry and leading Australian economist Ross Garnaut found it is likely to cost up to $5 billion to reach the target with the proposed Emissions Reduction Fund. We also know there are serious concerns about the design of the program. The Emissions Reduction Fund is supposed to be based on the principles of lowest cost emissions reduction through a reverse auction and genuine emissions reduction. However, the definition means that projects that were going to go ahead anyway will qualify.

Another flaw is the fact that baselines will be enormously difficult and incredibly burdensome to administer. There is a lack of a robust safeguard mechanism with stringent baselines, especially when no historical data exists, nor do penalties for exceeding baselines. Even if there were an effective safeguard mechanism, the government only expects around one or two hundred companies to be subject to it, covering only around 52 per cent of Australia's emissions. Industry representatives also criticised the difficulty in setting benchmarks and enforcing emissions reductions.

But it gets worse. Not only are there industry benchmarks, but the government's dodgy direct action policy does not even include a cap on emissions. This is a virtual admission from the government that they have designed the program to fail from the beginning. Also, the Emissions Reduction Fund, as designed by the government is an entirely voluntary program which businesses can choose to participate in or ignore on a whim.

For so many reasons, this is a deeply flawed policy. It will not only give big polluters a free run, it will actually pay them for the privilege. At a time when the world is moving toward coordinated action, this dodgy deal represents a serious threat to our global credibility and to global action on climate change. I am proud to be standing on this side where we will oppose the bill.

8:07 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

At the outset of my speech on the Carbon Farming Initiative Amendment Bill 2014, I would like to thank Minister Hunt and his advisers, Temay Rigzin and Alex Caroly, for the many, many hours they have spent discussing this bill and the government's policy with me. I appreciate their time and the good faith in which we negotiated on this legislation. It would also be remiss of me, despite her protestations, not to thank Hannah Wooller, my senior legislation and policy adviser, who has worked very, very hard on this and has provided valuable advice and shown a great commitment to improving this piece of legislation.

I also want to make my position very clear: I am a strong believer in anthropogenic climate change, and I consider it to be one of the biggest challenges we face as a nation and as part of the global community. And for those who are sceptical, I urge that they heed Rupert Murdoch's salutary warning that we need to give the planet the benefit of the doubt.

I believe we need to take real and urgent action to address the environmental and economic challenges before us. I supported the repeal of the former government's carbon tax because I believed, as I still do, that it had significant economic impacts due to its enormous revenue churn, impact on power prices, unnecessary compensation and its tax interaction effect without the commensurate environmental benefits in return.

I also still have concerns about the current government's direct action policy, and with the shape and operation of the Emissions Reduction Fund. But my greatest concern is that, if this legislation does not pass, we will be left with nothing—nothing to support the reduction of Australia's emissions; nothing to provide investment certainty, let alone investment incentives for businesses engaged in abatement or related activities; nothing to meet our international obligations; and nothing to protect our future.

I also want to emphasise the need to pass this bill as soon as possible. I do not and will not support motions to gag the debate. But I do believe that there are genuine reasons to give this bill priority, and I was happy to support the extended sitting hours to ensure that this is the case.

If this bill does not pass, the existing projects under the Carbon Farming Initiative will face collapse. The main market for credits generated by these projects has been companies looking to offset their emissions under the carbon tax, and, now that the tax has been repealed, the CFI projects face the loss of their main market. There are currently 171 projects registered under the CFI. The failure to pass this bill will mean the loss of hundreds if not thousands of jobs and the end of these projects as the carbon tax legislation obligations are completely wound up in February next year. We will also lose the abatement that these projects are achieving, which will seriously impact our ability to reach our 2020 target, as modest as it is.

We are already being left behind many other developed countries in terms of our policies and activities. I have no desire to see that gap widen. And I suspect that early next year the United States and China will announce significant and ambitious emissions reduction targets, which will be the subject of debate at the Paris conference at the end of next year.

One of the most important factors in achieving environmental outcomes and successful emissions reduction is investment certainty. We are, however, now facing a situation where investors are simply turning away from Australia because they just do not know where things will be in a few months, let alone a few years. And that means a lack of clear direction doesn't just hurt our environment; it hurts our economy.

The establishment and then the repeal of the carbon tax, the uncertainty and lack of clear policy regarding Direct Action, the attempt at the dismantling—still thwarted by the Senate, fortunately—of the Clean Energy Finance Corporation, ARENA and the Climate Change Authority have all created disincentives for investment. And of course there is the whole issue of the RET.

Since 2008, over 100,000 jobs have been lost in the Australian manufacturing sector. Even more are set to go as Holden, Ford and Toyota wind up their manufacturing arms. This will hit particularly hard in Victoria and in my home state of South Australia, where job losses from Holden may well set off a chain reaction of more losses from component manufacturers, particularly if the government's reckless policies in respect of gutting the Automotive Transformation Scheme are implemented. These are policies I will resolutely oppose.

Renewable energy and other innovative technologies could at least partially fill the gap left by these closures and create more jobs. And part of that support required is the government signalling a long-term commitment to growth and investment in the area. In my view, the ERF is not an ideal scheme. But it is the scheme that we have before us, and I believe there are ways to make it work much better than was proposed just a few months ago.

My biggest concern with the legislation as it stands is the lack of a safeguard mechanism. I acknowledge that the government's direct action white paper outlines the intention to introduce a safeguard mechanism in separate legislation before 1 July next year, but I cannot see that date being realistic, and nor is there a guarantee that it would be legislated in any subsequent legislation. That is why these amendments have been brought forward.

Also, without a hard legislative trigger to require the introduction of the mechanism by a certain date, it is a very real possibility that the harsh realities of this Senate and the political environment may mean the safeguard never really happens. If the government is intent on creating a scheme that relies solely on taxpayer funds to reduce emissions, then they have a clear duty to ensure that those funds are appropriately spent and represent true value for money, as well as achieving a credible environmental outcome. There is no point in handing out billions of dollars to reduce carbon emissions only to have those gains offset by increases in emissions elsewhere in the economy.

As US President Theodore Roosevelt once said, the key to diplomacy—and therefore, presumably, the key to negotiating with large emitters—is to speak softly and carry a big stick. In this case, the safeguard mechanism needs to be the big stick to the ERF's gentle encouragement. I am also concerned that the ERF is too dependent on the budget. There is little to no incentive to encourage emissions reduction activity outside the reverse auction process to be established by the government.

At this point in time, that may not necessarily have a significant impact. It is generally acknowledged that Australia is well on the way to achieving the bipartisan agreement of five per cent reductions on 2000 levels by 2020, as modest and unambitious as that is. But the Paris conference is just 12 months away, and we might—or at least we should—be facing much tougher targets in the near future. There is just no way in the tough financial times the government tells us that we are facing that we can make the necessary financial outlay to meet those potential targets. Instead of just focusing on 2020 and the forward estimates, we need a longer term scheme that can operate independently of government funding. We need to know what the next steps are going to be beyond the next election cycle.

I readily admit that the ERF is not my ideal scheme for reducing emissions reductions. I made a secret in saying that I still support the scheme drafted by Frontier Economics for then opposition leader Malcolm Turnbull and me in 2009. I take this opportunity to thank the tremendous work, the integrity and the credible work that Danny Price from Frontier Economics, Matt Harris and others that work with them have done over the years. I thank them for their prescient advise in relation to having a credible emissions trading scheme. But given the political context, both domestically and overseas, I have tried to take a pragmatic view. We must not let the perfect be the enemy of the good.

A few weeks ago, I circulated draft amendments aimed at addressing my particular concerns in relation to this legislation. I asked for feedback from peak bodies, industry groups and other interested parties, including my colleagues in this place. I would like to take this opportunity to thank the many organisations that took the time to provide their feedback on these draft amendments. I think it is fair to say that most of these responses were generally supportive, although many believed the proposed amendments could go further. I foreshadow that I will be moving the final version of these amendments during the committee stage, but I will take this opportunity to outline them in brief.

There are five sets of amendments in total, with the most complex being those that aim to establish a safeguard mechanism and a strategic reserve. After the release of the direct action white paper and the ERF legislation, my biggest concern was the lack of detail surrounding the safeguard mechanism. In my view, without that the legislation is nothing more than a grants program. In that sense, Clive Palmer MP was right a few months ago. As much as it pains me to say that I agree with Mr Palmer, he was right in respect of that. I acknowledge that his approach a few months ago was a good one. He acknowledged that it was just a grants program.

There is no mechanism to make sure that emissions reductions in one area are not outweighed by increases in another. There is nothing to set baselines for operation or to ensure they are abided by. While all of these things were discussed in the white paper, there is nothing to guarantee they will be put in place. My proposed amendment puts a framework in place to require the minister to establish safeguard rules by 1 July 2016—that is, to operate from that date. This date itself is a compromise, given that the proposed date of 1 July 2015 is unlikely to be met.

The amendment requires the rules to cover reporting duties, the establishment of baselines and how emitters can reduce their emissions. It also makes it a breach of the law not to abide by the rules. The amendment also requires the minister to establish civil penalties through regulation. These penalties must ensure that an emitter does not benefit by breaching their baseline—that is, that the penalties are a true disincentive. This framework is consistent with the proposal outlined in the government's white paper. What it does, however, is provide some certainty by signalling the introduction of the rules and what shape they will take. I note that Minister Hunt has said that any penalty will not be going into a general revenue, but that does not mean that you could have a system in place whereby an emitter that exceeds the baseline must purchase carbon credit units. I would have preferred to have the mechanism established by the 1 July 2015 deadline, and for the baselines and rules to be much stricter than is likely to be the case. But there is a framework in place that is credible and workable.

I have also circulated a proposed amendment that introduces the capacity for a strategic reserve to be created. The aim of such a reserve is to allow the regulator to purchase international units to assist Australia in meeting the 2020 target, if required. The amendment puts the creation of a strategic reserve at the minister's discretion, but does require the minister to consider certain matters before directing the regulator to purchase units. For example, the minister needs to have regard to    Australia's obligations under international climate change agreements, Australia's undertakings concerning the reduction of greenhouse gas emissions that Australia has given under international climate change agreements,    the total amount of carbon abatement contracted by the government under the Emissions Reduction Fund, Australia's current and future climate change targets, and ensuring the value for money of funds expended under the strategic reserve.

The reserve is capped at $500 million to 2020, which is a maximum of 20 per cent of the current amount allocated for the proposed fund. The regulator is also restricted in the kind of units it can purchase to ensure only high-quality units make up the reserve. In the longer term, the existence of the reserve would also provide a pathway for broader international trading for Australian entities. However, the government appears to have taken an obdurate, ideological stance to the concept of a strategic reserve and, as such, will oppose these amendments. I urge the government to reconsider and to listen not only to environmental groups that believe this reserve is essential to achieve higher targets but also to key business groups. For instance, I am grateful for the strong support of Innes Willox from the Australian Industry Group for a strategic reserve, as proposed in these amendments. I would urge him and his colleagues in the business community to continue to encourage the government to see common-sense on this proposal.

I have also drafted amendments to extend the standard contract duration from five to seven years. Similarly, a further proposed amendment requires the Emissions Reduction Assurance Committee—ERAC—to review the crediting periods for each methodology one year before the crediting period of the first project registered under that methodology expires. The purpose of the review is to require the committee to recommend to the minister whether the crediting period under the methodology should be extended. If that is the case, projects already registered will have their crediting periods extended in line with the committee's recommendations.

This is a good thing for certainty and particularly for those bigger projects in emissions abatement. This will help to support and encourage projects with longer term abatement capabilities, and to signal to investors that this scheme has the potential to operate beyond the initial budgeted period. An extension of crediting periods will also help to support a market for units outside the government's reverse auction mechanism. In turn, this could assist in transitioning the scheme away from its dependence on government funding and towards operating independently.

The final proposed amendment proposes a change to the objects of the act to ensure that agreements entered into post-Kyoto will be taken into account. This amendment is based on section 55(3)(b)(ii) of the existing act and will not have any additional impact other than to be a point of clarification. Again, the aim here is to signal the long-term operation of the ERF and to help to provide certainty to a sector that has borne the brunt of short-term policymaking by successive governments. Together these amendments will also provide a solid foundation and the architecture to enable future governments to meet the increased targets that I believe will be inevitable after the Paris conference. Any future changes will of course require the approval of the parliament.

I would also like to take this opportunity to acknowledge that the final version of these amendments does not differ substantially from the draft, despite the constructive and detailed feedback I received in response to these exposure drafts. Unfortunately, despite many hours of negotiation, the government was not willing to concede to any but one of these proposed changes, and I will be asking for more details of their positions during the committee stage of this debate. I do still believe that these amendments are worthy, however, and that they represent a significant improvement on the bill as it stands. I also take this opportunity to call on the government to ensure that the relevant aspects of this legislation are thoroughly and constructively discussed with industry and environmental groups.

This is not a perfect scheme, but if the proposed amendments pass it will be a good scheme. I also call on the opposition to give their support to the amendments and to the legislation, because an indication of bipartisan support will go a long way to providing further investment certainty to Australian industry. I look forward to debating these matters further in the committee stage, and I hope that we can conclude this bill this evening.

8:23 pm

Photo of Bob DayBob Day (SA, Family First Party) Share this | | Hansard source

This year will see the world enjoy its greatest grain crop on record. Let me say that again: this year will see the world enjoy its greatest grain crop on record. After the world food crisis in 2007, which saw civil unrest in some countries, it is fantastic to see that in just seven years we are producing record amounts of food for a growing world population. The US Department of Agriculture recently raised global crop predictions for corn, soy and wheat. Yet the World Bank indicates that over the last 10 reporting years the percentage of agricultural land worldwide has not changed. So, what is driving this world food production boom? Plants and crops are thriving on the extra carbon dioxide in the atmosphere. A recent study showed that climate modellers overestimated the amount of carbon dioxide that would remain in the atmosphere. Lo and behold, they have now discovered that plants are soaking up the additional carbon dioxide and growing more vigorously. Plants, trees and crops will absorb 130 billion tonnes more carbon dioxide this century than expected. It is called the carbon dioxide fertilisation effect. This is not just a benefit to food crops; it is a boon to native vegetation, from the ancient forests to desert scrub that environmental activists have been trying to preserve for decades.

And there is the latest science on how the oceans are absorbing carbon dioxide, with plankton growing faster than previously thought. So why is this government spending billions of dollars to reduce this airborne saviour of vegetation and food crops? I am stunned by the number of politicians who are either ignorant or wilfully misleading the public on this subject. A whole political industry has developed around new, arcane language to describe what we have known for centuries about producing food and improving our environment. A whole false economy has developed, fuelled by taxpayer funding through an Emissions Reduction Fund, an Emissions Trading scheme, Renewable Energy Targets, the Renewable Energy Agency, the Climate Change Authority, climate change departments and so on.

We are told that this bill also seeks to subsidise activities because they have so-called co-benefits. Well, if there are benefits in activities that also arguably help the environment, people should be doing them anyway, without massive taxpayer subsidies, just as landfill operators have been doing—and I commend them for doing so over the years. They have been capturing gas emissions from landfills, until the rent-seeking, carpetbagging, bootlegging crony capitalists jumped on the climate change bandwagon to suck money from the taxpayer. With the carbon tax, families felt and could clearly see for the first time the direct impact on their personal budgets from spending money to reduce carbon dioxide in the atmosphere. This Emissions Reduction Fund is no different, but by sleight of hand people will be less able to see how their taxes will need to stay higher than they should be in order to pay for this scheme. Taking money from low-income families and spending it on dodgy activities with a spurious scientific basis punishes the poor, rewards the rent-seekers and churns money in taxes, grants and rebates.

Australia cannot afford this Emissions Reduction Fund during what the government has told us is a budget emergency. While many families struggle with the cost of living, while mums and dads struggle to find jobs to make ends meet, the government spends their money appeasing high-income elites who are enthralled by this latest cause, championed by celebrities, self-promoting 'experts' and certain elements in the media. Rent-seekers, like wind tower companies and solar panel manufacturers, get paid handsomely, and advocates in the climate change industry are living very nicely off the system—flying around in private jets, irrespective of whether these schemes improve the environment or human living conditions. This is $2.5 billion of taxpayers' money to be spent on reducing carbon dioxide to stop so-called global warming while Arctic and Antarctic sea ice is growing—growing, not shrinking. It is bizarre.

I am dismayed that honest, intelligent people in this place can sit mute and watch this blatant trashing of both science and economics. I have a science background, but any high school student can tell you that carbon dioxide is not a pollutant. CO2 in the atmosphere is not pollution. I know there are colleagues in this chamber who agree with me but feel they must toe a party line on this issue, but I, for one, am not so constrained and perhaps I speak for them also in saying that I will not sit mute and support this nonsense.

Minister Cormann told this place just two days ago: 'Coal is good. Coal is good. It is at the heart of our economic prosperity here in Australia and around the world. It has helped lift living standards for people right across the world. It will continue to help lift living standards around the world.' Minister, if colleagues in this place believe in all good conscience that this bill is wrong, then I urge them to speak up—don't be scientific girlie-men. I will oppose this bill.

8:31 pm

Photo of Glenn LazarusGlenn Lazarus (Queensland, Palmer United Party) Share this | | Hansard source

As Leader of the Palmer United Party in the Senate, on behalf of my party and my colleagues Senators Lambie and Wang, I would like to confirm our support for the Carbon Farming Initiative Amendment Bill 2014 and also inform the Senate that we have circulated amendments to the bill to further improve and strengthen the intent, integrity and impact of this bill.

Palmer United is committed to a clean future, a future where we power our needs using clean, renewable energy. We only have one planet and we must do all we can to protect, preserve and take care of it. It is for this reason that we have convinced the Abbott government not to dismantle the Climate Change Authority. The Climate Change Authority was established in 2012 to provide independent advice on the operation of Australian government climate change initiatives. Australia needs this authority to provide integrity and transparency around Australia's actions, efforts and results in relation to climate change—and, more broadly, our country's commitment to the appropriate management of our environment.

Importantly, we have also convinced the Abbott government to back down on their position concerning an emissions trading scheme. Thanks to the negotiating power of Palmer United, we have convinced the Abbott government to acknowledge the importance of and requirement for an ETS and, as such, have reached agreement with the Abbott government for an inquiry to be undertaken into an emissions trading scheme that is consistent with world's best practice and aligned with our key trading partners. The chairman of the Climate Change Authority, former Governor of the Reserve Bank of Australia Bernie Fraser, will head up the review. This is a significant step forward for Australia and will ensure our country moves down the path of installing a sustainable emissions trading scheme which supports all corners of our country and, importantly, all aspects of our economy.

It is the view of Palmer United that the Carbon Farming Initiative Amendment Bill will do many things for Australia. Firstly, the Carbon Farming Initiative will enable the ongoing viability of existing carbon farms and other projects across the country, which are relying on the ongoing support of carbon credits to continue operations. While we have removed the carbon tax, which has resulted in a reduction in cost of living for all Australians, we need to ensure that projects established to operate with the assistance of credits are properly supported. There are currently around 171 projects in this situation and 44 specifically in my home state of Queensland. These include landfill gas capture, savanna burning and environmental plantings projects. Secondly, the Carbon Farming initiative will provide an incentive based system to achieve a reduction in the generation of emissions across Australia. Thirdly, the initiative will provide certainty to Australian farmers, businesses and others, who deserve and need the support of our country to acknowledge and reward them for supporting our environment through improved and sustainable practices that reduce emissions.

Palmer United's amendments will ensure a regulatory body, the Emissions Reduction Assurance Committee, has the capacity and the power to appropriately manage the operations of the program. This power will include reviewing the methodology by which emissions are calculated and ceasing any methods which generate 'illegitimate' credits. Our amendments will also assist Indigenous Australians by extending the crediting period for savanna burning projects from seven to 25 years. Importantly, our amendments will also ensure emissions reduction projects align with sound environmental management practices. Finally, we have bolstered governance and transparency of the program by negotiating a provision that allows any member of the public to ask the Emissions Reduction Assurance Committee to conduct a review of any project involved in the initiative.

In summary, the Carbon Farming Initiative Amendment Bill, inclusive of the Palmer United amendments, is a good bill which delivers many benefits and should be supported.

8:36 pm

Photo of John MadiganJohn Madigan (Victoria, Democratic Labor Party) Share this | | Hansard source

Some people have accused me of hating the environment because of my opposition to wind farms—and I did vote for the repeal of the carbon tax. But, if we are not saving the environment for people, what is the purpose of environmental changes? I care about salinity; I care about smarter ways to do things; I care about the use of natural gas in our country; and I do care about the protection and preservation of our natural assets.

The Carbon Farming Initiative Amendment Bill 2014 establishes the government's $2.55 billion Emissions Reduction Fund. It will replace the carbon tax and, hopefully, incentivise a host of new emissions-saving initiatives. The Emissions Reduction Fund achieves two objectives: it protects existing projects and it creates opportunities for new ones. There are currently 170 projects across the country, and, in my home state of Victoria, there are already 19 existing projects. These projects are doing the job that they set out to do—whether we like it or not—but they are relying on this $2.55 billion Emissions Reduction Fund in order to continue. These firms and their workers went into this venture and—whether we like it or not—we cannot just turn off the switch.

We have not had any meaningful policy since July of this year. If we do not have some sort of policy soon, people will lose their jobs and people will lose their investments. People have borrowed money against their homes to finance these businesses. More than 170 projects across Australia could ultimately fail, and that means more jobs that will be lost as a consequence. I just cannot accept this, and I do not want it on my conscience. I repeat: 170 projects across Australia could fail if this bill is not passed.

There are about 22,000 forestry workers in my home state of Victoria, and there are more than 70,000 forestry workers across Australia. Earlier today, I asked Mr Hunt what would be the impact on those workers? I honestly thought that the ALP cared about working Australians, and I thought that the ALP cared about working families. Frankly, I do not understand the hypocrisy; how many people in this place actually understand this bill? When you jump on the climate bandwagon and have a hissy fit, you ultimately miss the details; you miss the key points that can decide support or failure. How many people actually understand the importance of this bill to manufacturing and people's livelihoods? How many understand the importance of this bill to jobs and to money on the table for Australian families? How many understand the importance of this bill in helping families pay school fees and mortgages? Whether you like it or not, those are the facts that we are dealing with. For me, this is ultimately not about ideology, and it is not about numbers in a ledger; it is about people and it is about jobs, and I make no apology for that.

I am no fan of managed investment schemes. They consumed valuable farming land and they attracted some dodgy operators. Currently in many areas, MIS trees are being bulldozed and burnt. What a waste and what a failure! How dispiriting for adjoining farmers to live and work next to such agricultural destruction. All of this has distorted farmland values. MIS schemes pushed up land beyond the reach of farmers. This land will ultimately come back onto the market, and prices will drop; this drop will extend to cultivated land. The consequences could be grim, especially for those farmers who are in debt to the banks. The whole MIS episode has been a debacle and remains so. It is my hope the ERF will keep some of these trees in the ground. It is my hope the ERF will bring social, environmental and economic benefits. The ERF will welcome new entrants while supporting more businesses to do more projects.

The government tells business to innovate. The government itself must innovate, and, by so doing, it must take some risks. If the government does not provide leadership, what is the point of having any government? Some would say, 'Let's just leave it to the market'. I say, 'What a furphy,' just like the LRET—another furphy. It is still dishing out renewable energy certificates to ineligible wind farm rorters. These are the same wind farm rorters ripping off electricity consumers.

The carbon tax was a money grab from big polluters who inevitably transferred the cost burden to the public. The carbon tax drove up electricity prices, which ultimately punished families, crippled Australian industry and cost jobs. I hope that this amendment will inspire innovation. I hope that it will encourage responsible behaviour. I hope that it will reward initiatives that result in tangible emissions reductions. This is a more positive, practical and sustainable environmental solution than the toxic carbon tax.

The ERF will promote energy efficiency in households and in retail and manufacturing businesses. The ERF will continue to support the capture of methane from landfills to contribute to the generation of baseload on demand electricity. It will capture the waste gas from coalmines. It will support projects that reduce transport based emissions. Hopefully, Direct Action will achieve the objectives of responsible and necessary emissions reductions. Taking up Direct Action will, hopefully, help clean up our environment. It will, hopefully, reduce energy costs. It will, hopefully, improve business outcomes for Australia's families, farmers and manufacturers.

I have listened to this debate, and I have heard many opinions. What I fear most is when fear is used to try to persuade and cajole people. I say that it is time to use leadership and vision. Do I think this bill is perfect? Nothing in this place is perfect. But, without a doubt, I hope that this bill is a step in the right direction.

8:43 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

On behalf of the government, I thank all senators for their participation in this debate. I thank Senator Xenophon, Senator Madigan, Senator Muir and all of the members of the Palmer United Party for their constructive engagement on the Carbon Farming Initiative Amendment Bill 2014. The government will be supporting a number of the amendments foreshadowed by Senator Xenophon and the Palmer United Party, which will strengthen this bill.

The bill will establish the Emissions Reduction Fund. The bill also streamlines the existing processes of the Carbon Farming Initiative, removing red tape while maintaining environmental integrity. The fund is a major environmental program and demonstrates the government's commitment to achieving a cleaner environment and reduced emissions in partnership with business and the community. The fund will provide positive incentives for Australian businesses, farmers and households to lower their energy use, improve productivity and reduce costs

Our government has removed the carbon tax and has overseen the largest reduction in household electricity prices in decades. Through the Emissions Reduction Fund established by this bill the government will support Australian business, farmers and the community to enjoy the benefits of economic growth, increased productivity and a cleaner environment.

During the debate today a series of comments have been made. There was a complaint about the fact that this policy has not had any scrutiny. The truth is that this matter has had significant scrutiny over many, many years. In fact, the coalition have taken our direct action policy to two elections. This is one of the most scrutinised policies ever in the history of the Commonwealth, and is only overtaken by the level of scrutiny on our policy to scrap the carbon tax. The thing that the Labor Party and the Greens still cannot get used to is that, on 7 September 2013, there was a thing called an election. Elections in Australia are the way that we settle policy disagreements, and the people of Australia have spoken. If the Labor Party and the Greens are concerned that they did not get 100 per cent of the policy we took to the last election, if they would have preferred to get 100 per cent of the direct action policy we took to the last election, then they should have voted for it. What we did, quite rationally and quite pragmatically, was to work, positively and constructively, with those senators in this chamber that were prepared to engage with the government in an effort to find common ground and to make judgements about progress on public policy in the national interest.

Senator Milne raised a question around the Clean Energy Finance Corporation and ARENA and what their status is. I can confirm that the government's policy remains to abolish the Clean Energy Finance Corporation and ARENA. The Clean Energy Finance Corporation does not achieve a return for the budget, as has been erroneously asserted by some during this debate. People have failed to take into account the fact that the capital, which has been put into the Clean Energy Finance Corporation, is 100 per cent borrowed and that there is a cost of borrowings. And, of course, the Clean Energy Finance Corporation has been in place for a very short time and there is absolutely no capacity at all to reliably assess the commercial viability of that particular venture.

Senator Milne had various other complaints. I have to say that I find it difficult to take Senator Milne very seriously when it comes to matters related to the environment because Senator Milne, these days, is fighting really hard to ensure that we have regular cuts in the tax on fuel. Senator Milne's mission in life, these days, is to stand up for those that want to see regular reductions in the real value of the excise on fuel. Senator Milne is standing up for big oil companies and wants to make sure that big oil companies get a windfall from her opposition to our efforts to ensure that the tax on fuel is not eroded by inflation, as it has been over the last 13 years.

There have been various other comments made. Let me make a general point. When Labor and the Greens are complaining about a deal and about the fact that we have reached an agreement with senators on the crossbench, who were prepared to engage positively and constructively with the government, they were really whingeing and complaining from the sidelines about the public policy debate in Australia. They have made themselves completely irrelevant. I said earlier in Senate question time that Senator Milne has led the Greens from the wilderness to the political desert of oblivion. I know that there are people out there in the Greens that are backgrounding exactly that point to journalists in the press gallery. There is one particular Greens member in the House of Representatives—and there are not that many of in the House of Representatives that could fall into that category—who is out there suggesting that he could take the Greens back to greener pastures. I guess these matters will resolve themselves in the fullness of time.

I thought I should quickly comment in relation to an observation made by Senator Day. Senator Day is quite right, I did say the other day that coal is good. Coal is good for humanity. Coal is central to our economic prosperity today because of what it has contributed in the past, and it will be central to our prosperity in Australia and to the prosperity of people around the world in years to come. That does not mean that we should not make serious efforts— (Quorum formed)

I thank Senator Singh for calling that quorum. She was clearly very keen to ensure that I had a bigger audience for the pearls of wisdom I was sharing with the chamber.

I say it again: coal is good for humanity. Coal has been central to our economic prosperity. We owe much of our quality of life here in Australia today to the contribution coal has made to our economic development in the past—and it will continue to contribute in the future, both here in Australia and around the world. That does not mean that we should not make every effort to reduce emissions in a direct, sensible, effective way—in a way that is economically responsible and environmentally effective. That is exactly what the coalition's Direct Action Plan, which we have taken to the last two elections, will do. Having responded to Senator's Day's observation, I commend the bill to the Senate.

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

The question is that the amendment moved by Senator Singh on sheet 7551 be agreed to.

8:59 pm

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

I move the second reading amendment on sheet 7611, as foreshadowed in my speech during the second reading debate:

At the end of the motion, add:

but the Senate:

(a) notes that if we continue without change Australia will use its entire 2050 emissions

budget within sixteen years and the world will warm by at least 4 degrees by 2100,

destroying Australia's Great Barrier Reef, agricultural industries and creating

massive vulnerabilities in public health and national security; and

(b) is of the opinion that there is no time to waste on an ineffective, expensive 'Direct

Action' policy that allows unlimited pollution, will hurt our global competitiveness

and will give taxpayers' money to the biggest polluters with no guarantee of

emissions reductions.

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

The question is that the amendment moved by Senator Milne be agreed to.

The question now is that the bill be read a second time.

Bill read a second time.