Malcolm Turnbull (Wentworth, Liberal Party, Minister for the Environment and Water Resources) Share this | Hansard source

We will not be investing in clean development mechanism investments because we are not part of Kyoto—this will be from our own efforts. I notice that the member for Kingsford Smith derides land clearing. Let me tell the member for Kingsford Smith that 20 per cent of CO emissions come from deforestation alone. As Sir Nicholas Stern said today in his speech at the Press Club, and as he said in his report, tackling deforestation is one of the greatest challenges that we face in dealing with global warming.

Yet one of the curious things about the Kyoto protocol—to which the Labor Party is so attached—is that many very knowledgeable people believe that the Kyoto protocol is actually promoting deforestation. Only a few weeks ago I received a letter from—and I had a meeting with—Michael Kennedy, Director of the Humane Society International, which works very closely at looking at the destruction of rainforests and natural habitats in South-East Asia. He wrote to me, and he consented to my quoting from this letter:

Nowhere else is the contradictory nature of the current UNFCC policy framework—

the Kyoto framework—

more evident than in large areas of the Indonesian and Malaysian forests.

He pointed out that, because of the anomalous way Kyoto deals with forestry and land clearing generally around the world, it in effect gives countries that want to buy clean development mechanism credits an incentive to plant biofuels—palm oil, for example, in tropical countries—and there is no disincentive to mow down vast areas of rainforests and destroy the peak forests which sequester so much carbon. He observed:

The Kyoto protocol, through this clean development mechanism funding, is effectively financing the industry that is contributing to massive amounts of greenhouse gas emissions.

That is the Kyoto protocol. That is the protocol that the member for Kingsford Smith wants us to sign.

Let me deal with another aspect of the clean development mechanism. The member for Kingsford Smith wrote an article in the Sydney Morning Herald extolling the virtues of carbon trading and the clean development mechanism. He reminded me of that character from the Austin Powers movies, talking about trillions and billions of dollars that could be won in carbon credits. He was so excited about it. There are billions of dollars going around the world in carbon credits, but let me tell the member for Kingsford Smith exactly what is happening. Thirty per cent of the projects under the clean development mechanism are in China and are for the purpose of eliminating a very active gas called HFC23, which has 14,000 times the potency of CO. HFC23 is a by-product of refrigerant gases.

It is so potent that, in most countries, it is simply not legal to emit it. But in China it apparently is. For a few million dollars you can install a scrubber, stop the gas from being emitted and then, by virtue of this mechanism that the member for Kingsford Smith is so enamoured of, you sell those credits—not for a few million dollars, not for a few hundred million dollars but for billions of Euros. This HFC23 scam is such a scandal that Michael Ward, of Stanford University, in a study that was published in the 8 February 2007 edition of Nature magazine, estimates that over €4 billion have been spent on these HFC23 credits in excess of the abatement cost—that is, in excess of the actual cost of reducing them.

If we had been part of Kyoto, if we had signed up to the Kyoto protocol, some of those billions of Euros would have been coming from Australia. Instead of Australian businesses investing in reducing their greenhouse gas emissions in Australia, taking action under the greenhouse-friendly program of the Australian Greenhouse Office, working with the Australian government, being part of MRET, being part of Solar Cities, being part of the Low Emissions Technology Development Fund and being part of our $2 billion program that has delivered real results, real achievements and led the world in the fight against climate change, we would have seen them sending their money off to China, where it would have gone to line the pockets of—who knows?—bankers, lawyers, governments or accountants. It would simply have been a nice little loophole in that billion dollar scheme—or trillion dollar scheme, according to the member for Kingsford Smith.

The member for Kingsford Smith says that we should have signed up to Kyoto—to what is clearly a fatally flawed mechanism—and been part of this scheme. The Australian government has done exactly the right thing in respect of putting a price on carbon. We have put a price on carbon. Of course we have. That is what subsidies do. That is what MRET does. When you give $100 million towards a clean coal project, as we did the other day, that is putting a price on carbon. That is subsidising it. We have worked in a very careful, targeted way. We have not rushed into an emissions trading scheme, and it is just as well we have not. The Europeans have made the most monstrous, incredibly expensive mistakes and, as we have seen from the material I have presented to the House, they have not only made errors in the design of their scheme but contributed to—not worked against but contributed to—global warming, to the destruction of the peat forests that sequester so much carbon. The Australian government deals with climate change practically, responsibly, and we act always in the best interests of Australia, recognising our global obligations but using practical measures to achieve substantial results.

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