Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Hansard source

The Minister for Social Services is staying, such is his commitment to good climate change policy.

I rise in opposition to this bill but before addressing the amendments that are contained in the bill I want to make a few remarks about the Carbon Farming Initiative, to which essentially the government is seeking to attach at least the Emissions Reduction Fund component of their Direct Action a policy. I want to be particularly clear on behalf of the opposition that we have a very high level of support for the Carbon Farming Initiative. It has been a well-supported initiative from the Labor Party both in the climate change portfolio but also in the Agriculture portfolio, as a means of enabling the land sector to engage in carbon abatement activities—reforestation and a whole range of other things; soil carbon as an emerging opportunity for carbon abatement—and to have that abatement credited through ACCUs, carbon credit units, and to sell those units under approved methodologies either to liable entities under the existing carbon price mechanism or to companies that might be engaged in voluntary offsets programs, for example, airlines and the like.

For the very relatively short time I was the minister for climate change—only a matter of some weeks before we moved into caretaker mode before the last election—I had a very good level of engagement with stakeholders from the carbon farming sector, peak organisations, but also a range of people working on the land to incredibly innovative stuff to participate in the Carbon Farming Initiative. I greatly enjoyed that. I think it is fair to say, and I think I am right in saying this, that this is probably the only area of the broader clean energy package that the former government put in place where there is a level of bipartisan support. The Carbon Farming Initiative and the Carbon Farming Futures program to drive research and development in the land sector is the only area of bipartisan support. I think it is notable that this bill seeks to attach a policy—Direct Action, or particularly, the centrepiece of the policy, the Emissions Reduction Fund—to a system or a framework in the Carbon Farming Initiative that has such a high level of support. One can only infer that the government is seeking to attach its hopelessly discredited Direct Action policy to the Carbon Farming Initiative in the vain hope that there will be some reflected glory, that there will be some credibility that accrues to Direct Action that has been completely unable to attract over the last four years, simply by virtue of being associated with this very, very good program. May I say—through you, Deputy Speaker—to the government that nothing will give Direct Action credibility and nothing will give the Emissions Reduction Fund any credibility. In one of his more colourful moments, my leader, the Leader of the Opposition, said yesterday at a press conference that Direct Action is a 'smelly bag of fish' as a policy. It does not matter how much Brut 33 you spray on a smelly bag of fish, it remains a—slightly better—smelly bag of fish.

The policy that this bill seeks to facilitate, the Emissions Reduction Fund, reflects the generally dismissive attitude that, particularly, this Prime Minister has about the challenge of climate change. There have been a number of other opportunities to speak about climate change policy in a broader sense this week and there will be a heavily curtailed opportunity to talk about climate change policy in this place tomorrow, but I do very briefly want to address the attitude that this Prime Minister, particularly, has to this area of policy, because it fundamentally underpins the policy that is being facilitated by this CFI amendment bill.

The lack of commitment this Prime Minister has to strong and sensible action on climate change rests on a number of myths about climate change that he has peddled—and continues to peddle—across this continent since he was handed the leadership by Senator Minchin. The first myth is that the science of climate change is not settled, that the jury is still out on this and that the Intergovernmental Panel on Climate Change is wrong when it expresses a 95 per cent level of certainty about global warming being a fact and being caused overwhelmingly by human activity. This is a myth that the Prime Minister continues to peddle across the nation, in company with a number of other MPs in the coalition party room.

The other myth that the Prime Minister has been peddling now for three or four years is that, to the extent that there was some global warming over the course of 20th century, it largely stopped at the end of the 1990s. Indeed, the Prime Minister is on record a couple of times saying that, if anything, the world is getting cooler—slightly cooler but cooler nonetheless—and has been since the late 1990s. Earlier this week, the Prime Minister's senior business adviser, Maurice Newman, wrote another op-ed in The Australian newspaper, indicating that warming had stopped since September 1996, apparently—a new date, pushing it back further and further. That is a statement that flies in the face of any number of pieces of advice from the World Meteorological Organization, the WMO; from NASA; from our own Bureau of Meteorology; and from the CSIRO—all those hotbeds of left-wing conspiracies. It flies in the face of all of that scientific advice.

The third myth that the Prime Minister peddles regularly and peddled during his trip to Canada and other places over the last several weeks is that the rest of the world is either not acting at all on climate change or, as he said in Ottawa, I think, actually reversing action on climate change. I do not propose to talk about this at great length—I prefer to talk about the bill—but, again, it is a myth that flies in the face of a whole range of things happening in very important jurisdictions, including, most importantly perhaps, in China and in the United States. The Prime Minister's scepticism about this area of policy, or lack of commitment to taking action on climate change, is by no means his alone. As I indicated, it is an attitude that is very broadly shared in the coalition party room. I am sure we will hear more of it during the debate on this bill. The emergence of that position over the last four years is essentially why the parliament finds itself in the position it finds itself in generally this week—not only about this bill but about the bills that will be debated tomorrow. That is why we are in here debating these bills as the government and the opposition, while the member for Fairfax is another part of this building, holding a joint press conference with a former Vice President of the United States.

The positions I have outlined—the myths that the Prime Minister has been peddling for some years and continues to peddle—were not always the positions of the coalition. You do not have to go too far back in time to find a very different position on this area of policy than the one that is enunciated by the Prime Minister and so many others in his coalition party room now. Only some years ago, the coalition had very clearly rejected the sort of so-called direct action approach that is fundamental to this piece of legislation. The Shergold report, for example, commissioned by Prime Minister Howard in 2007—from Peter Shergold, the then head of the Department of the Prime Minister and Cabinet—indicated that a direct action approach 'would impose a far heavier burden on economic activity' than an emissions trading scheme. That attitude of Peter Shergold was reflected very centrally in the election policy that John Howard took to the election in 2007. Those views were very proudly proclaimed by members of the coalition party room who are now very senior members of this government.

I will just pull out a few quotes from that time. In the endgame, if you like, of the Howard government, as an ETS was being proclaimed and promoted by Prime Minister Howard and his government, Senator Brandis said in the other place, in September 2007, about the coalition scheme:

This will be the most comprehensive emissions trading scheme in the world, broader in coverage than any scheme currently operating anywhere. This world-leading scheme will cover 70-75 percent of total emissions, or almost 100 percent of industrial, energy and mining emissions.

That was the proud proclamation of Senator Brandis about what was then coalition policy.

The now Treasurer, the member for North Sydney, a couple of years later, while the coalition were in opposition, said on Q&A in February 2009:

Our very strong view is, we were the initiators of an emissions trading scheme, and we believe in a market-based approach, and Malcolm Turnbull as Environment Minister actually put in the framework for an emissions trading scheme.

That was the view—in 2009, at least—of the now Treasurer.

The now Leader of the House stated on countless occasions the coalition's proud advocacy of a market based approach, particularly in the form of an emissions trading scheme. In July 2009, some time after this had been put forward by Prime Minister Howard, he said:

Let's not forget it was the Opposition—

that is, the coalition—

that first proposed an emissions trading scheme when we were in government. The idea that somehow the Liberal Party is opposed to an emissions trading scheme is quite frankly ludicrous.

That is what the member for Sturt, now the Leader of the House, said. Earlier in that year, he said:

By leading on solutions to the issue of climate change, the new generation of Liberals—

which I assume he considered himself a part of—

can demonstrate that they believe progress is in the interests of the party and the country …

Thus was the position of the coalition, not for a short period of time but for some years.

The member for Wentworth, who became the Leader of the Opposition, the leader of the coalition parties, in 2008-09, in accordance—obviously; it has been clear—with his own personal philosophy but also with a clearly stated party position that had been taken to the election of 2007 by coalition candidates, engaged with the then Rudd government to seek to deliver the nation a bipartisan emissions trading scheme. He engaged in good faith, it must be said—I remember—with the government of the day to seek to put in place an emissions trading scheme with bipartisan support that would give business certainty, that would give investors certainty.

But of course it is now very clear in hindsight that the member for Wentworth did not reckon with Senator Nick Minchin, then a senior player in the coalition in the Senate. The member for Wentworth often gets up in question time and quotes the latest film or goes back to Shakespeare or a Greek tragedy, but it is quite clear that the member for Wentworth should have paid much closer attention to the 'lean and hungry look' of Senator Minchin at the time. The now Minister for Social Services, as I recall, was also a part of the shenanigans in the coalition party room at that time. It is quite clear in hindsight that, in spite of those proclamations of policy purity that we heard from Senator Brandis, from the now Treasurer and from the now Leader of the House, Senator Minchin and some others in the party room were nursing their denial of climate change and ultimately ambushed the member for Wentworth at the height of the negotiations I talked about around an emissions trading scheme.

Senator Minchin, as he has been very adept at doing—as a South Australian, I know this—for many, many years, was able to collect the numbers to defenestrate the member for Wentworth and dangle the party's leadership before all of the candidates who put themselves forward to replace the member for Wentworth. He dangled the party's leadership before those candidates on the basis that they would reverse the party's clearly stated election commitments around an emissions trading scheme and move to a position of deep scepticism about climate change.

To his credit, apparently the now Treasurer resisted that temptation. To his enduring credit, he resisted that temptation on the basis of his deep commitment to a market based mechanism to deal with a very real challenge of climate change—such is the reportage, anyway, that we mere mortals from the Labor Party have to rely upon. But there was no such constancy, it must be said, from the member for Warringah, the now Prime Minister. There was no such constancy from him. Maybe he had read his Julius Caesarand, in addition to Caesar's concern about the 'lean and hungry look' of Cassius, he also wanted to avoid Caesar's habit of being as 'constant as the northern star'. You can accuse this Prime Minister of many things, but you certainly cannot accuse him of being as 'constant as the northern star'. He admitted himself that he is something of weathervane on this issue, and frankly, as we have found through this budget, he is a weathervane on many, many issues besides.

It is now historical fact that the Prime Minister was very well rewarded for his willingness to turn his back on Prime Minister Howard's election policy of 2007, a policy to which the member for Warringah committed himself as a candidate at that election. The reward for the member for Flinders, the now Minister for the Environment, was perhaps not so sparkling: what he got was to lose his summer holidays over 2009 and 2010 to write at least some modicum of a policy to deal with climate change. It was Direct Action, a policy which largely went unaltered from the 2009-10 summer up until the coalition parties took government last year.

The member for Wentworth does have a way with words, and I am still not sure that there is any better description of the Direct Action policy than the descriptions that the member for Wentworth memorably put into the Fairfax newspapers after his defenestration. He called the Direct Action policy a 'fig leaf to cover a determination to do nothing'. He belled the cat on this being a 'fig leaf to cover a determination to do nothing' because, in his view, as Senator Minchin had put it to him, a majority in the coalition party room simply did not accept the science on—or, to use the language sometimes used on the other side of this place, did not believe in the idea of—human induced global warming. Later on, in a debate in this place, the member for Wentworth described Direct Action as 'a recipe for fiscal recklessness on a grand scale'. Those two descriptions are as good, as pointed and as accurate as any descriptions I have read about this policy.

It is also a matter of record that this policy has failed to get any significant support whatsoever over its four-year life. Peter Shergold, who had been asked by Prime Minister Howard to develop a climate change policy for the Howard government and recommended an ETS, a recommendation that was accepted, wrote in The Australian Financial Review in 2010 about the Direct Action policy. He wrote that it was a 'more expensive and less effective response to climate change'.

Even if I had three or four hours, I would not have time to go through the very long list of experts, commentators, businesspeople, academics and economists who have scathingly rejected the premises and the detail of the direct action policy. I will give just perhaps two more in the lead-in to the election to illustrate the point. Just before the election, in August 2013, the AECOM consultancy conducted a survey of a very large number of businesses and found that only seven per cent of them supported the direct action approach to dealing with climate change. A short while later Fairfax conducted a survey of leading business and academic economists and found that 86 per cent of them supported a market-based mechanism, a market-based price on carbon. I think maybe one of the economists surveyed supported the direct action approach. Hopefully, that illustrates the point sufficiently.

Direct action failed to attract any serious support even in its fullest form, the form that the member for Flinders, the now Minister for the Environment, wrote over that quite tumultuous summer of 2009-10. It failed to attract any significant support whatsoever even in its fullest form. What we have seen since, particularly over the last 12 months, is the minister being forced to backtrack, backtrack and backtrack again and be left with a vastly stripped back version of the original policy.

From having a look at the key element of direct action, which is the so-called clean air plan, as described by the minister, you get an idea of the degree to which there has even been roll back on what was an inadequate policy in its fullest form. The clean air plan has as its centrepiece the Emissions Reduction Fund, which is the fund that seeks to be facilitated by this legislation. In addition to that, there was the solar roofs plan. One million solar roofs were to be funded with the $500 million that was promised in the 2010 campaign, a promise reiterated on many occasions by the now minister through that term of parliament, 2010 to 2013, and reiterated following the election of the coalition parties last year. That $500 million was gone in a puff of smoke in the budget. There was no explanation as to why—whether the government had reached the view that it was no longer a worthy policy. The minister was just pushed out the door and told to announce to the community, which he had reassured so many times before, that this policy was simply gone. The $100 million to fund solar towns and solar schools was whittled down to $2 million. So from $600 million we saw the delivery of $200 million. In percentage terms I am not quite sure what that is—I think it is probably a 99.8 per cent loss. It clearly illustrates the degree to which even the Direct Action Plan has been whittled down.

Most importantly perhaps, we have seen the government back away from the so-called safeguards mechanism. This mechanism was apparently intended to ensure that beyond those sectors that were actually participating in the ERF, the Emissions Reduction Fund, there would be some control on carbon pollution, so if the government was going to pay for people to stop polluting through the Emissions Reduction Fund the benefit of that payment was not lost through other sectors of the economy, other companies, lifting their pollution levels. Without going to whether that is a particularly good way to deal with this, the point is that that mechanism, which is probably the only element of the policy that could vaguely be argued would have some rigor and some control on carbon pollution across the economy, has simply been kicked into touch.

Commentator after commentator has complained about that. Mr Danny Price, who is a well-known economist in this area and was appointed by the government as the chair of the expert reference group, has called this the biggest threat to the chance that direct action has of achieving its stated objectives. We read of intensive lobbying from different parts of the business community towards the government to simply drop this entirely or, if it is not dropped, to dilute it to the point of meaninglessness. The point is though that it has been kicked into next year. We were told time and time again that it is utterly central to the direct action policy, yet if the government has its way it will not be put in place at all or at least for 12 months after the government has succeeded in dismantling the clean energy package.

The key problem though with direct action is it simply will not work. It will not match up to the stated objectives that have been reaffirmed time and time again by the minister, but not so clearly by the Prime Minister. The Prime Minister has prevaricated on quite what the emission reduction target for Australia under an Abbott government is, but certainly the minister has reiterated time and time again that it remains the government's intention to achieve at least five per cent carbon pollution reduction by 2020 on 2000 levels and that direct action is the way to do that.

The problem for the government is that no expert who has looked at this thinks that this has a snowflake's chance in hell of getting anywhere near the five per cent reduction target. Again the list of independent analyses and modelling about this is far too long for me to go through. I might just mention the RepuTex report that was released only this month that modelled and found that the direct action policy, with its architecture and budget, would fall about 70 per cent short of its emission reduction targets. The Grattan Institute gave evidence to the Senate inquiry into direct action which reported in March 2014:

The Grattan Institute pointed to published analyses—

Because there are many—

Which suggest that 'the target cannot be achieved with the allocated funds, given assumptions of emissions projections, abatement costs and budgetary allocation'.

The Grattan Institute is just one of many organisations that have no faith in the capacity of this policy to do what it intends to do. There is no evidence to the contrary. We asked at Senate estimates and during consideration in detail of the budget whether the environment department or the minister, through some other mechanism, had conducted modelling of the emissions reduction that would be delivered through the Emissions Reduction Fund and we have been given no answer that would indicate the modelling has even been done, let alone that the modelling indicates that what the minister says will occur will actually eventuate.

The other thing about this policy is that it simply will not attract co-investment. That is quite clear. The taxpayers' money the government is going to dole out through this dressed up slush fund simply will not attract any serious coinvestment. The CEO of the Investor Group on Climate Change, Mr Nathan Fabian, testified about this issue at the Senate inquiry I have already referred to. On page 91 he is quoted as saying:

… from what we know of the ERF the scale, duration and carbon prices of deals likely to be on offer will not provide sufficient incentive for investors to participate. We think the banks will take a similar view.

I have read reports in the media of banks indicating they would not touch the Emissions Reduction Fund with a barge pole, to use the words in the report. If that case eventuates, the government does have a mechanism in the Clean Energy Finance Corporation which could be a vehicle for coinvestment in the Emissions Reduction Fund, but if the member for Hume gets his way that will also go the way of the dinosaurs—no pun intended.

Labor's position in this area is very clear. We do not support this bill—this amendment to the CFI framework—because it essentially facilitates a vastly inferior way of dealing with climate change. We took to the election a very clear policy of moving to terminate the carbon tax as quickly as we possibly could, were we elected, and replacing it with 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 within that. That remains Labor's position. It will be the way Labor votes in this place, and in the other place, on this bill and also on the carbon repeal bills that will be before this House tomorrow.

Before I conclude, I propose to move a second reading amendment to the bill. I move:

That all words after 'That' be omitted with a view to substituting the following words:

'whilst not declining to give the bill a second reading the House notes:

(1) the Government’s poor record on environmental and climate change issues;

(2) that payments from the Emissions Reduction Fund need to be financed from the federal budget, and paid for by taxpayers rather than big polluters;

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

(4) 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;

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

(6) the need for the Government to pass an Emissions Trading Scheme to place a cap on carbon pollution and drive a clean energy future for Australia.'

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