Pat Conroy (Charlton, Australian Labor Party) Share this | Hansard source

I will begin my remarks by pointing out the inherent contradictions in the previous speaker's comments. He claimed that Direct Action was broader than the current architecture and then nominated two projects that are under the current architecture. The two biogas projects that he nominated are currently under the Carbon Farming Initiative and are accruing credits that are being sold to liable entities under the carbon price right now. The previous speaker, the member for Hume, contradicted himself and yet again demonstrates a complete misunderstanding of carbon pricing and climate change policies.

To begin on the legislation before us, the Carbon Farming Initiative Amendment Bill 2014, this legislation is built on a lie. It is built on a lie that the government is taking climate change seriously. It is built on a lie that this government cares about the future of our children and our children's children. This government is betraying future generations of Australians as we speak with this legislation. This legislation is being debated as the rest of the world moves further down the road of carbon pricing. Over one billion people right now, and by 2016 three billion people, will live in nations or provinces where a carbon price or an emissions trading scheme operates. Our top five trading partners have ETSs at national or subnational levels. Another eight of our top 20 trading partners have ETSs at national or subnational levels. That means that 13 of our top 20 trading partners have emissions trading schemes right now applying to their economies.

The total clean energy investments around the world exceed $244 billion per annum, and we saw the landmark initiatives by the United States government earlier this month, which set a 30 per cent reduction target in emissions from coal fired power in their economy—a huge initiative—and left it up to the states to decide how to achieve these hard reductions, with most states probably going down the route of an emissions trading scheme. President Obama has stated that his preference is for an emissions trading scheme at a national level. Unfortunately, it has been stymied by the Tea Party Republicans in the houses of congress—exactly the same Tea Party economic illiteracy we see from the government. These are all the facts which make their legislation a lie. This legislation also betrays the traditional Liberal values of a commitment to a market based economy, instead emphasising a return to Soviet command and control direction of an economy that would make Lenin or Stalin very, very proud.

The truth is: the carbon price is working. Economic growth is solid, inflation is under control, Whyalla has not been wiped off the map and the carbon price is actually working to cut emissions. Emissions from the National Electricity Market have fallen by 17.2 million tonnes, or 10 per cent, since the carbon price began. Let me repeat that, because people on the other side repeat an untruth that the carbon price is not working: there has been a 10 per cent cut in emissions from our electricity sector in less than two years. On the government's own projections, in the first two years of the carbon price, emissions in Australia will be 40 million tonnes less than they would otherwise be, because of the carbon price. Labor makes no secret of the fact that we would prefer to go to a flexible price emissions trading scheme now. That was our policy at the election. That was our policy in 2007. It is only because of the populism that the other side pursued in 2009 that we do not have a fully flexible emissions trading scheme right now.

Let us not forget that in 2007, 149 of 150 successfully elected members of House of Representatives supported an emissions trading scheme on their election platform. Yet this government is intent on replacing an efficient market mechanism with a giant slush fund—a giant slush fund which it has yet to find a single reputable economist to support. A Fairfax media survey of 35 prominent business and university economists found that only two of those 35 preferred Direct Action to a market-based mechanism to reduce carbon emissions. Thirty of the economists supported the current carbon pricing scheme. Of the two economists they could find to nominally support Direct Action, one of them supported it because he did not believe in climate change, so he thought Direct Action would do nothing and, so, would do less harm. The other one had his own crazy hybrid scheme that he wanted to pursue. This is a scheme that is friendless. This is a scheme which not a single reputable economist will back. And they do not back it because it will not work.

Treasury's own modelling demonstrates that the Emissions Reduction Fund will not hit the target. It will not hit the minimum five per cent reduction target. Independent research modelling undertaken by SKM MMA and Monash University's Centre of Policy Studies shows that the Emissions Reduction Fund will actually see pollution increase by eight to 10 per cent above 2000 levels by 2020. It will reduce pollution by nearly one-third less than Labor's policy and it will require significant additional investment, of between $4 billion and $15 billion, to achieve the 2020 target of minus five per cent. That is the minimum target. This research says the scheme will need an additional $15 billion just to hit that minimum target, and the scheme will see both costs and pollution increase over time. Even with spending increasing to around $88 billion, pollution would still increase by about 45 per cent over the period from 2014 to 2050. It would also subsidise pollution by businesses who do not make changes, with these public subsidies calculated around $50 billion to 2020.

This research is not alone in finding this. One of Australia's pre-eminent economists, Professor Ross Garnaut, has found that the ERF would need to have an additional $5 billion per annum just to hit the minimum five per cent target. And, as the shadow minister for climate change mentioned in his remarks, RepuTex recently predicted that the Emissions Reduction Fund will be completely ineffective and will actually result in emissions at 16 per cent above 2000 levels by 2020.

We cannot even find in their budget papers their committed allocation. The forward estimates in the budget papers have only $1.15 billion allocated to this scheme. Yet the Minister for the Environment keeps repeating untruths that they have committed $2.5 billion across the forward estimates. Well, it is nowhere in the budget papers.

This is an incredibly inefficient mechanism to reduce emissions, for a number of reasons. Firstly, it does not provide a price signal for those who do not win at the auction. Those who either do not bid or are unsuccessful in bidding have no financial incentive to reduce their pollution. Secondly, even if you accept that this is a grant tendering scheme—and that is still up for debate—these have a very poor track record. According to the Grattan Institute, a similar model, the British Non Fossil Fuel Obligation scheme, produced far less capacity than it had been contracted for, because successful bids were never delivered. And the Howard government's own Greenhouse Gas Abatement Program was a spectacular failure. So these schemes have a track record of constant underdelivery.

Even if they do deliver—which they will not—they provide no handbrake on emissions from other parts of the economy. Without an adequate safeguards mechanism, which is not in this legislation, you cannot cap overall pollution; you cannot guarantee that we will hit our targets. Even if you are paying one polluter to reduce their pollution, another polluter over here might be increasing their emissions. There are no safeguards in this legislation. The government promised it again for next year. They have got a record of promising it on the never-never, and I have serious doubts about whether they will deliver it.

In this legislation the government have also demonstrated a form of economic xenophobia by not allowing international permits in, something that the Australian Industry Group has been a constant critic of their scheme for over the years. Their abatement target will be actually much harder to achieve if they abolish other abatement mechanisms in the economy, such as the Renewable Energy Target. This is a scheme without friends; it is a scheme that is incredibly flawed; it represents a broken promise; and it cannot be scaled up.

We keep hearing talk about a bipartisan minus five per cent target. That is wrong. The bipartisan agreement was for a range of targets from minus five to minus 25 per cent, dependent on the actions around the world. The Climate Change Authority, a group of independent experts supported by legislation that those on the other side want to abolish, have already found that a more appropriate target is 17 per cent. It is a weak, weak argument to say that this will hit minus five per cent. But it is much weaker when you consider that our true target, to play our part in a global solution, is much closer to 17 per cent.

This situation is made much worse by the faulty permanence periods embodied in this legislation. The Carbon Farming Initiative legislation had permanence periods of 100 years. This legislation seeks to amend that by reducing it to only 25 years. So we have no guarantee that the promised abatement post 25 years can be delivered, which will lead to significant national accounting problems for our greenhouse gas emissions further down the track.

Even though the permanence period is only 25 years, they are only paying for five years of that. The Australian Industry Group have made the very good point that projects that promise significant long-term abatement will have to overcharge to recover all their funds in the first five years because they have no guarantee that they will get any further revenue beyond that.

The truth is that the government is a group of environmental vandals. They are doing their best to stop a clean energy industrial revolution. The truth is that the countries that will be able compete successfully in the next century will be those that successfully decarbonise their economies—the countries whose exports have less carbon intensity and which develop the technologies to decouple economic growth from carbon pollution.

Those on the other side are condemning us to being a rust-belt economy of the 21st century by abolishing the carbon price, by seeking to abolish the Clean Energy Finance Corporation, by abolishing ARENA—another breach of an election promise— and by attacking the RET. All these measures perform a very important part of the clean technology innovation chain, and the government seeks to abolish all of them because, in the era of the automobile, they want to return to the horse-and-cart era.

They claim a mandate for this. It is a false mandate, because in 2007 both major parties supported an emissions trading scheme, both major parties went to an election promising one. The CPRS was modelled on the Shergold report that Prime Minister Howard announced, yet in 2009—before the Copenhagen conference; they cannot hide behind that—those on the other side walked away from that in an act of petty populism to knife Malcolm Turnbull in the back. It was Tony Abbott's scheme to undermine their leader. He threw away years of economic agreement that an emissions trading scheme was the most efficient way of tackling climate change. But that is no surprise because the Prime Minister is on the record as being a weathervane on this. He is a weathervane and members on the other side of the chamber are following him down that narrow path.

We have an environment minister who uses Wikipedia to repudiate experts. We have a coalition government that ignores the evidence of 97 per cent of published scientific papers that climate change is occurring and that it is man-made. There is no more important debate in this parliament than how we respond to the challenge of climate change. It is not just an environmental problem; it is an economic problem. As I have said, the countries that will succeed in the future will be the ones that decouple growth from pollution. An emissions trading scheme—a market mechanism—is the best way of doing this.

This legislation is not the best way of doing it. The legislation would embody a Soviet command and control mechanism instead of a market mechanism. I have a lot of sympathy for the public servants and other experts who have been tasked with writing this legislation. If I said that they were trying to put lipstick on a pig I would probably be being too kind to the project they were facing. They have been trying take a faulty 10-page policy document hurriedly put together in 2009 and 2010 and put that into something that the public service could actually administer. I do not think they have achieved it, but I applaud their efforts in following the dictates of the day. That is what a good apolitical bureaucracy does in following the directions of an elected government.

But the truth is that we stand at a crossroads. We can be part of a solution. We can be part of the global effort to combat climate change. As I said, three billion people will live in economies under an emissions trading scheme by 2016. We can take advantage of this or we can go down as international pariahs. We can go down as a country that stuck its head in the sand on this measure.

The vision of the Prime Minister trying to put together a coalition of the unwilling a few weeks ago, when he travelled to Canada, was remarkable. He only found one friend for that measure. His conservative friends in the UK and New Zealand repudiated him immediately because it is a step into the past. But this is the kind of thing we see from this government—this coalition, who are hopeless, populist charlatans. When given the opportunity to act in our national interest and to follow the advice of scientists and economists, this government have instead pandered to cranks and sceptics. They appointed people like Dick Warburton and Maurice Newman to advisory bodies to follow those like Alan Jones in the talk-back ranks to repudiate the science of climate change.

I stand proud to support an emissions trading scheme as the most economically efficient way of tackling climate change. I will be able to look my daughter in her eyes and I will be able to look her children in the eyes and say, 'I did my best to represent the interests of this generation and future generations in attacking climate change.' Those on the other side cannot. They will be condemned by history. I am very proud to oppose this legislation.

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