Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Hansard source

I rise in support of the National Greenhouse and Energy Reporting Amendment Bill 2008 and the amendments that go with it. The relationship between being able to accurately measure greenhouse gas emissions and therefore put in place an effective trading scheme is crucial. I think at times we underestimate just how difficult it will be. I had the opportunity to present the Julius Kruttschnitt lecture to AusIMM, and today, as part of expressing my concerns about the implementation of the Rudd-Wong ETS—as distinct from a properly designed emissions trading scheme—I will quote quite extensively from that speech. The Rudd-Wong ETS is seriously flawed. It needs to be accepted that just signing Kyoto and implementing an ETS are not by themselves climate change silver bullets. The Rudd government have yet to explain how signing Kyoto and implementing their ETS can lower greenhouse gas emissions without there being in place the emission-lowering technology to generate enough clean energy to keep Australia’s economy growing. No matter how controversial coal may be now, or how out of favour with the green movement and celebrity Labor frontbenchers like the member for Kingsford Smith, the simple truth is that the development driven by our reserves of both black and brown coal has provided this nation with the basis for steady and, in recent years, spectacular growth.

Australia also has other energy resources, with reasonable supplies of high-quality oil combined with abundant natural gas. We also cannot forget uranium. It is just as unpopular as coal with the Greens and with Labor politicians but, if you believe British economist Sir Nicholas Stern, it is an energy resource that will save mankind and the earth. We have more of it than any other country, yet we use it the least. Along with literally powering a nation, Australia’s energy resources are now an economic powerhouse for the world. We are a critical part of the global supply chain for energy and resources, particularly in the Asia-Pacific region. Most importantly, with new technology Australia’s efficient production of our resources wealth gives us the potential to be a global supplier of clean energy and clean energy technology, improving the global environment and lifting the living standards of billions of people. But, in doing so, there is no room for ideology or hypocrisy. For example, there is Labor’s hypocrisy in allowing sales of uranium all over the world to fire nuclear power stations that save, just from Australian uranium, 395 million tonnes of CO2 a year relative to black coal, yet it is still refusing to consider nuclear power in Australia under any circumstances. How can you ignore evidence that the cumulative carbon savings from nuclear power over the three decades to 2030 will exceed 25 billion tonnes? Yet they still claim that they are credible on an emissions reduction policy.

On the trade front, Labor’s hypocrisy of allowing sales of our uranium to China but not to India on the same terms is a foreign affairs disaster that is costing Australians jobs and exports and causing strains on the growing trade relationship with this huge potential market. It also brings into question how Australia can call on rapidly developing nations like India to lower their emissions yet thwart their efforts to move away from coal fired electricity. The Rudd government is fond of trumpeting that the ETS will be the most comprehensive in the world, but on present form it is also the most scant-on-details scheme in the world. The potential economic impact of this scheme not only on the resources and energy sector but across all facets of the economy simply cannot be overstated. The interests of Australia, its businesses, its export industries and its residents will be best served by a rational and reasonable approach to addressing climate change in Australia and the world’s carbon emissions. We need to bring some rationality and natural caution to this debate. Rationality and caution have not been there so far.

The carbon debate has been emotional, sometimes irrational, but always political. Carbon dioxide is a colourless, odourless, non-toxic inert gas that makes up less than 0.05 per cent of the world’s atmosphere. According to experts, any significant increase will cause more floods, more droughts and the end of civilisation in some parts of the world. Anyone who dares question this prediction is immediately branded a sceptic and subjected to scorn and ridicule by political opponents, sections of the media and self-professed experts of all types and backgrounds. I know because those opposite, the Labor Party, were quick to brand me a climate change sceptic. For the record, I am not a climate change sceptic, nor have I ever been. As a former farmer, the son of a farmer and a scientist, and the grandson of a geologist, I have always followed the evolution of the world’s climate very closely. You do not have to sift through too much information to see a clear pattern of ups and downs in the global temperature over the course of the history of our planet.

Our planet’s climate is changing and warming and has been doing so since the last ice age more than 10,000 years ago. I am a pragmatist who accepts that, based on the weight of scientific evidence, combined with the democratic view of the vast majority of Australians, we cannot take the risk that CO2 is not causing the earth to warm more rapidly. We have heard from the Prime Minister predictions of droughts every one or two years, rising sea levels, flooding homes and the destruction of natural assets such as the Murray-Darling system, Kakadu and the Great Barrier Reef. It is a disaster scenario just short of helpings of fire and brimstone. Former Queensland Premier Peter Beattie was even reported as saying that tsunamis were caused by global warming; of course, they are caused by movements in tectonic plates.

In this emotion charged environment, it seems that, unless you are prepared to offer full-blown acceptance of every single new claim presented by climate change alarmists, you are nothing short of a lunatic, a heretic or, as the member for Isaacs made the point, a denier. These attacks on free speech are unscrupulous and deceitful. Yes, Australia should take climate change seriously. I certainly do. But the question must be asked: whose interests are served by running a ruthless scare campaign that depicts scenarios of doom and destruction and attacks people in such a derogatory and personal way?

The Australian public are asking for more information. This was highlighted recently in an article by Dennis Shanahan. He highlighted the fact that a Newspoll survey had shown that 40 per cent of those surveyed between the ages of 18 and 34 were unaware of climate changes before human existence or of the dramatic changes—that is, ice ages—since humans were but a pinprick on the earth’s surface. Not even Al Gore suggests that humans are entirely responsible for climate change, yet the Rudd government is planning the most momentous reform of the Australian economy with one-third of the voting and taxpaying population completely misinformed. If we are to go forward with the most effective least-risk path, we need to put this angry and divisive debate behind us and start focusing on the science and common-sense solutions. Away from the cameras and opinion polls, this relentless attack on fact and the debate on climate change are beginning to be questioned. The unavoidable truth is that an emissions trading scheme has the potential to hit our economy very hard and not just at the top end of town. It will impact on every family and every household—on electricity bills, petrol bills, water bills and grocery bills from Toorak to Townsville, from Brisbane to Broome. It will impact on all industries and all businesses, from BHP Billiton to the corner store.

An ETS must also be put into the context of the compounding massive risk posed by the Rudd Labor government’s other emission-lowering policy, the 20 per cent MRET, the same policy that was described by the AiG chief, Heather Ridout, as:

… an ill-advised and risky policy proposal that is likely to significantly increase the cost of greenhouse gas abatement in Australia.

Furthermore, she said that it would have an adverse impact on households and businesses throughout the economy. The Business Council of Australia has also painted an alarming picture of life under a Rudd-Wong ETS, which would see trade exposed industries shut or be sent offshore. President Greig Gailey will say in his speech tonight:

Australia would lose valuable export earners. Jobs and investment will be lost.

I might also add that a number of these industries are located in regional centres where the opportunities for alternative employment will be limited and the effect on working families could be devastating.

Against this backdrop of far-reaching consequences, Australians are starting to put into context what will happen in terms of a carbon trading scheme and what Australia can actually do when we make up only 1.4 per cent of global emissions. We are now realising that, whatever we do, no matter how severe our cuts to carbon and the economy are, our attempts to slow global warming will have no effect at all if they are not embraced by the vast proportion of the rest of the world. This point is driven home by the fact that China and the US emit more in a month than Australia does in a year.

The ETS will have a greater impact on Australia than any other economic reform in our history. There is growing unease in the community about where to go from here and the capacity of the Rudd government to manage this process safely. It is little wonder that, with rising interest rates and plummeting business and consumer confidence, the Australian public is getting jittery. That all begs the question: what confidence can the community, business and industry groups have that the outcome will be any different on the emissions trading scheme than what we have already seen with solutions to rising petrol prices and the Murray-Darling? In fact, we have to wonder what the outcome will be when this debate is being driven by weather forecasters, economists and politicians. We know how accurate weather forecasters are, and economists were just put here to look good. Perhaps in this place I should not comment too much on politicians—I will leave it to those listening to this broadcast to decide.

We have already seen what happened to the EU carbon trading scheme when those three groups got together: the carbon price became uncontrollably volatile. That is the very reason it is imperative that this across-the-board reform is managed carefully and pragmatically and based on technology, not spin. The ETS must be rigorous and meticulous in its design, and all options need to be examined and all groups listened to. It is obvious that there are glaring inadequacies in what is being proposed by the Prime Minister and Senator Wong.

Australia deploys the world’s best technology in building steel plants, aluminium refineries, paper plants and cement plants, and so the list goes on. In short, we give the world the best products it needs, at the lowest carbon intensity. Yet what is being proposed by the Rudd government will take no account of that and in fact will cause what is commonly named carbon leakage, where industries close down here in Australia and are rebuilt overseas with no reduction in carbon or, in the worst-case scenario—but probably the most likely scenario—with higher emissions than they would have had here. The end result will be an ETS that lowers Australia’s carbon footprint, perhaps, but increases the global footprint.

Concerns are coming from everywhere, and not just from the business sector. We saw Paul Howes from the AWU express concerns about how jobs will be lost in Australia if there is no consideration of how to address export exposed or trade exposed industries, particularly energy-intensive trade exposed industries. We have also seen the comments from the member for Isaacs, who said that the Howard government did nothing about emissions trading. For the record can I briefly say what the Howard government did do. We laid out an expenditure program of $3.5 billion to address climate change and lower emissions. Key elements of the program included clean coal; renewable energy technology; energy efficiency programs, including the one we are talking on today; a mandatory renewable energy target, which will see $5½ billion invested in zero-emission technology; a subsequent mandatory clean energy target; and the introduction of an emissions trading scheme that would protect our economy and the jobs of Australians.

We did realise that there had to be collaboration, but the legacy left by the Howard government is not that of the irresponsible carbon polluter that some in the Green movement tried to make out Australia as being. Between 1990 and 2005, the economy grew by 61 per cent but emissions only grew by two per cent. Emissions per head of population and percentage of GDP also fell. Praise came from all over the world, including from Sir Nicholas Stern, who said that Australia under the Howard government was leading the world on zero-emission technology for coal, on solar and on non-volcanic geothermal. Even Ross Garnaut, in his recent speech at the Press Club, said Australia has ‘been punching above our weight on climate change for the last seven years’—seven years! The real effect of the Howard government’s programs is that by 2010 we will be emitting 87 million tonnes fewer per annum of carbon dioxide.

The prudent approach to lowering greenhouse gas emissions is to incorporate a level of risk management into our attempts to reduce carbon emissions, thus ensuring we do not senselessly grind our economy into the ground while the rest of the world watches with a curious smile. In other words, if we are going to take a visionary lead and show the way, it would be reckless not to take out some insurance in case the Rudd-Wong ETS goes to ashes—literally. If we are serious about pursuing clean energy options and not just interested in symbolism and endless manipulation of public perception, we must look long and hard at all the options, and they include renewable energy. They include clean coal, though I note the Minister for Resources and Energy recently said that clean coal was at least a decade away, probably 15 to 20 years away, and he still has no idea of what it may cost or what zero will actually be. In fact, indications are that it will be as much as 500 kilograms per megawatt hour of electricity produced. The cost of zero-emission coal is something that we will need to come to terms with, just as we need to come to terms with what technologies will be able to be installed in the next two years before the introduction of the Rudd-Wong emissions trading scheme.

I have very grave concerns about Australia’s ability to generate enough clean energy from the technology that is currently available. Based on the progress we have seen in those technologies over the last 10 years, I have very grave concerns that we will be able to implement a program that will reduce greenhouse gas emissions from electricity production enough to stop the Rudd-Wong emissions trading scheme from basically sending our economy into a nosedive. I have grave concerns, as someone who has studied engineering, who understands mechanics and who has watched innovation and been involved in innovation. Can I just say that if we continue helter-skelter down this path, without the reality of what is actually physically achievable in low-emission technology, then I think that there is a real chance that not only will the lights go out but so too will the job prospects for many Australians in the future.

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