Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's advisory report, incorporating a dissenting report, on the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and six related bills, together with the minutes of proceedings.

In accordance with standing order 39(f) the report was made a parliamentary paper.

by leave—The seven bills that were investigated by the committee in its inquiry build on the Clean Energy Act 2011.

The Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012, and six associated bills, provide the framework for Australia's emissions trading scheme to link with other schemes, contributing to the development of a global carbon market.

The provisions will facilitate a one-way link with the European Union emissions trading scheme from 2015, through which Australian entities can acquit up to 50 per cent of their annual carbon liability with eligible international carbon units. A two-way link between the Australian and European schemes will commence from 2018.

The committee's inquiry focused on four issues raised by the bills: the implications for Australia of linking with international emissions trading schemes; the removal of the floor price; the surrender limit on Kyoto units; and the treatment of natural gas.

Following its inquiry, the committee believes that linking the Australian emissions trading scheme to other schemes will help deliver the government's overarching policy objective to foster a low-cost transition to a low-carbon-pollution future. Witnesses generally supported the concept of linking emissions trading schemes to this end. The committee also believes that the process of formally linking with other schemes provides the government with the opportunity to participate in treaty negotiations to ensure Australia's interests are promoted.

To facilitate a link with the EU ETS, the government agreed to remove the floor price for carbon units. These amendments provide for that. Evidence presented to the committee in its inquiry corroborated that the government's approach was sound in this regard, and the link to the EU ETS should present carbon price stability to the Australian carbon market in the absence of a price floor.

A limit on eligible Kyoto units was another condition of the linking arrangement, which the amendment bills also provide. The committee believes some limitation on Kyoto units is necessary to ensure the integrity of the linked schemes and for this to help foster a transition to a low-carbon economy in Australia.

The committee further found that the amendments relating to the coverage of the natural gas sector were necessary to give effect to the original policy intent of the Clean Energy Act 2011. These amendments aim to ensure that liability for carbon pollution is realised as high as possible in the natural gas supply chain and that the principle of universal coverage for all liable entities applies. The committee was satisfied that the remit of the amendments was limited, and was encouraged by the proposed consultation arrangements with the natural gas sector.

There exist a number of carbon markets around the world. Individually, these markets work in a localised way to reduce pollution, but linked they can create an international marketplace that fosters least-cost abatement and helps contribute to a global solution to climate change. The amendment bills before the House facilitate this and the committee supports the provisions in them. It recommends that the House of Representatives pass the bills.

Finally, I would like to thank the submitters and witnesses who appeared before the committee at its round table hearing in Canberra and my colleagues and the staff from the secretariat for their contribution to the report.

I commend the report to the House.

See this speech in context