Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Hansard source

It gives me great pleasure to give bipartisan support, on behalf of the federal opposition, to the Ozone Protection and Synthetic Greenhouse Gas Management Amendment Bill 2010. This bill fits in the context of bipartisan action on matters relating to our global atmosphere. There will be many areas of bipartisanship and some of disagreement. This falls squarely within the area of action which is jointly agreed upon to address a problem which is jointly agreed upon using a mechanism which is jointly agreed upon and which has a long bipartisan history.

I want to begin briefly with the background and history of the bill. Secondly, I will deal with the amendments and, thirdly, with the steps forward. When we look at the background, what we see is a successful example of the international community working, over a period of many years, in the relationship between science and policymakers. There was an identification of the risk posed by the release of ozone-depleting gases: the hole in the ozone layer, the potential for it to further expand, the impact on human life and the impact on human agriculture. These were real and profound and were identified early. They led over time to the creation of the Montreal Protocol on Substances that Deplete the Ozone Layer. That protocol has been in many ways a model for cooperative and effective international action. The protocol has a history which includes Australian support on both sides of politics.

Let us identify the source problem. The source problem is largely related to the refrigeration and cooling industries, although it is broader than that, examples being refrigeration and air conditioning; fire protection; foam blowers; solvent manufacture; fumigation; and aerosol. All of these sorts of human activities relied upon gases which subsequently proved to have been ozone depleting in many cases. There was a recognition that this was a contribution to a global problem. It passed through the classic case and circumstance of the tragedy of the commons, and there was a recognition of a need to respond. That in turn led to the creation of the Montreal protocol and to the creation in Australia of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989.

This bill was supported on both sides. It represented an effective step forward. It prohibited, in large part, the import, export and manufacture of chlorofluorocarbons and related products—ozone-depleting gases—without an essential uses or used substance licence. It also set in place a restrictive regime and a licensing regime for general ozone-depleting gases. The coalition’s subsequent role in government was to ensure that there was a review of the Ozone Protection and Synthetic Greenhouse Gas Management Act by Environment Australia and then, beyond that, that there were amendments in 2003 which dealt with and advanced the causes—in particular where there were synthetic greenhouse gases that were used as a replacement. Those different elements of the history show bipartisan cooperation in this space.

Now we come to this particular bill. It is fairly simple in what it seeks to do. It seeks to ensure that the protective regime is enhanced and expanded but that the compliance measures include civil rather than just criminal penalties. So the strict liability regime and the nature of the penalties is being adapted so as to recognise that there can be inadvertence and that a ‘one size fits all’ penalty may not be appropriate in this space. That is the direction and the nature of what we are doing here. It ensures that we are working towards management of our ozone-depleting gases. In that context, what it shows—and here I go to the future—is what the work that I did in my own thesis in 1990, just after this bill was passed, showed: that there are a number of different ways in which an effective regime for addressing a global environmental issue can be implemented. It can be effective through regulation, of which this bill is a prime example. It can be effective if the right economic modelling tool is used. It can be effective through education.

Economic modelling tools can take two completely different formats. They can take the form of a production tax on all of the elements which have been eliminated. In the case of the North American sulphur dioxide markets this was quite effective because there was a ready replacement. That was a very effective means of addressing the acid rain problem in the north-east.

Or the tools can be ineffective if there is no ready replacement. They will simply drive up prices on inelastic goods if demand remains constant or close to constant and no ready substitute is available. In that situation you can use abatement purchasing or buybacks such as that which is proposed by the government in the water market. The government’s intention in the water market is to buy back on a lowest-cost tendered approach.

Our approach to greenhouse gas management between now and 2020 is to operate a carbon buyback, which we have shorthanded as ‘direct action’. But that again is an economic instrument based on lowest-cost abatement tendering. In short, we will find the cheapest greenhouse emissions reductions in Australia and then we will acquire them rather than raising an inelastic good’s price dramatically, as we have seen with the 60 per cent price rise for electricity in New South Wales that has had almost no impact on consumption. Demand management through massive price increases on an inelastic good is classically not considered to be an effective mechanism. Abatement purchasing is, however, a very effective mechanism.

This bill is an example of an effective regulatory bill. The sulphur dioxide markets in North America are examples of an effective emissions trading scheme. It is about having the right tool for the right problem. That is where this bill fits in and that is where our approach on greenhouse gas management fits in through trying to choose the right tool for that problem.

I am delighted to offer bipartisan support for this bill on behalf of the opposition. We will take a constructive approach but we will not be co-opted into having to agree with everything. Overwhelmingly, we seek to find common ground where possible. I thank the government and in particular the advisers from the department for their good work. It is a good bill. It is an important action that seeks to improve our capacity to limit ozone-depleting gases.

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