Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

Taking action on climate change has been described as dealing with a problem that represents a tragedy of the commons on a global scale. It is truly a wicked policy problem. It is wicked and complicated because of the interdependency of all the different actors involved. It is a global challenge in which all of our actions affect everybody else. It's no surprise that one of the key texts on this, written by the Nobel Prize winner who was a leading developer of integrated assessment models, is a book titled Managing the Global Commons.

This is an incredibly difficult challenge that requires countries and communities around the world to take action. Not only is it complicated; it is a problem that requires a solution. It is not just complicated but necessary that we take action, because in the absence of action this planet will become far less livable. Societies and communities around the world will see their living standards collapse.

While it is necessary for us to take action, it is also an opportunity for us when we take action. It is an opportunity in the sense that we will be improving our environment, investing in new technologies and investing in our long-term quality of life. That is why there is a transformation going on around the world. That is why countries all around the world are embracing abatement, adopting standards and taking action together. There is a revolution going on that is technological, social and regulatory, and we have stood on the sidelines of this revolution for too long. For a decade, we have used trite, mealy-mouthed statements like, 'We're going to adopt the Australian way'—meaningless statements which really described inaction rather than anything which reflected true Australian values. We used trite comments like 'the adoption of technology rather than taxes', when in fact we've wasted a decade with no real, meaningful regulatory change.

What we see from those opposite during this debate is a claim that they now recognise that action needs to be taken, belatedly, but what they say is that whatever particular solution we put forward is all too hard or won't work. Whether we put forward legislated net zero, 43 per cent or a strengthened safeguard mechanism, those opposite are simply left saying that it won't work or it's all too hard. They've gone from saying we don't need to take action to saying we can't take action. The last speaker just gave us a litany of reasons why it's all going to be so hard. It's a ridiculous approach to a problem where the solutions are out there and where people in government, civil society and corporations are fighting for solutions every day but where we need to strengthen our regulatory arrangements to make it easier for them. Those opposite have gone from being ostriches to being defeatists, and both approaches are inappropriate given the challenges that we face.

I want to just lay out a couple of general principles, because these are absolutely critical when it comes to dealing with this problem and laying out the right regulatory response. The first principle is that, when we are undergoing a technological, social and economic challenge and transformation as big as this, it's always better to start early—to start as early as possible. The later you leave this, the harder it is going to be. Second, if we're going to get the best outcomes, it's going to be by leveraging investment through certainty in regulatory arrangements, leveraging investment in research and development and leveraging investment in capital. Third, integrity in regulatory arrangements is absolutely critical. Fourth, abatement should occur broadly across the economy. As a general principle, it is going to be less costly the broader abatement is and the more sectors it touches on. It will be more costly if you focus more narrowly. Fifth, abatement, where possible, should be at least cost.

This government's first major approaches in this area, at the beginning of this term, were to legislate net zero and to legislate 43 per cent by 2030. That goes right to the heart of a couple of those principles that I laid out just then—first, that you need to start early. We came to government after 10 years of complete inaction when it came to setting targets, so the first thing we did was to set a target. We didn't really want to start where we were. If somebody were giving us directions to get to net zero, they probably would have said, 'I wouldn't start where you are.' But we are where we are, and the best thing we can do is to start as early as possible. The second thing is leveraging private-sector and public-sector investment with certainty, and that's exactly what we did by legislating net zero and 43 per cent. So we, right from the start, have been approaching this problem with those core principles in mind.

Now we go to the safeguard mechanism, which is going to see abatement from 215 of our largest polluters—just under 30 per cent of total emissions—setting up an arrangement where they will abate their emissions by roughly 4.9 per cent per year until 2030. That is absolutely critical in terms of reflecting those other principles I laid out—that abatement should be broad. We don't want all the abatement on just one part of the economy. We can't achieve 43 per cent if we achieve abatement just through energy production or just through transport or just through one sector. It's going to be better for our economy, for our society, for our standards of living, if we achieve abatement broadly across the economy. It's entirely appropriate that the safeguard mechanism is going to be strengthened so as to bring in these over 200 large emitters. Under the previous government, there had been a safeguard mechanism of sorts but it didn't bite. It may as well not have been there for most of the firms within it. It didn't offer the breadth of abatement that our strengthened scheme will.

The other key thing is that abatement should be least-cost where possible, and that's where offsets are so important. The previous speaker gave some examples of where he thinks certain types of offsets may be difficult in practice, but is he seriously arguing that we shouldn't have offsets or is he arguing that somehow every other country is moving towards net zero but it's going to be oh-so-hard for us: 'We're only one per cent, we're different, let's not bother.' It really is a crazy argument, particularly given where our society have said they want governments to take them. But abatement at least-cost is going to require offsets, and that's why it's such a critically important part of this scheme that offsets be set up in a rigorous way. I'll deal with the offsets regime and how it's been supported by a rigorous report later on in my contribution.

Those opposite, as I said, have shifted their rhetoric from, 'It's not really necessary,' to, 'It's all too hard.' But their rhetoric doesn't reflect that of any major segment in our society or any major set of stakeholders, whether it be business, civil society, the scientific community or, frankly, the electorate more broadly. Let's look at what the Business Council of Australia said:

But without policy certainty and policy realism, we run the risk of another five to 10 years of delay and inaction.

When they say 'another 10 years of inaction', I know very clearly which 10 years of inaction they're referring to—the 10 years we're just coming out of. They're saying that, if we don't take realistic action that strengthens our regulatory arrangements, we are at risk of repeating the disastrous 10 years we're just coming out of:

We support the reform Safeguard Mechanism's objectives to achieve a net zero emissions economy which delivers new industries, new exports, new jobs, new opportunities and better living standards.

The Business Council of Australia backs in all the objectives this strengthened arrangement sets out.

What about the Australian Industry Group:

We want this mechanism to work as it's important to industrial investment and emissions reduction.

Again, clearly alluding to the fact that, unless we set up stronger regulatory arrangements, we are not going to have the certainty necessary for investment, and, secondly, that if we're going to have least-cost abatement we are going to have to abate broadly across the economy and have to do so in a way where offsets are possible.

The coalition's decision to vote against changes it had previously proposed and the reported Greens positioning once again make Australia look incapable of reaching agreement on how to utilise assets and build economic success. The unholy alliance that might be occurring—the trainwreck that might be occurring right in front of our eyes—between those who don't believe and those who want perfection over any realistic solution might again put us back in a situation where, despite the result at the last election, we might be faced with another 10 years of inaction. That would be a disaster for our environment, for our economy and for our society.

What about Amanda McKenzie, the Climate Council CEO:

The Federal Government's reform of the Safeguard Mechanism is a critical opportunity to deliver the right policy settings to help future-proof industries, protect Australian manufacturing, and reduce harmful carbon pollution.

Again, we need to strengthen the safeguard mechanism from the form it took under the previous government, where it wasn't biting. It wasn't leading to abatement. It wasn't doing what it was supposed to. It wasn't spreading abatement more broadly across the economy because it wasn't leading to change across a wide range of stakeholders.

This takes me to carbon offsets and carbon credit units. It is important to recognise that the task of abatement will not be equal across all of those 215 firms. So we recognise that it is critical that there be mechanisms whereby offsets can be purchased where it's not possible for firms to achieve abatement on site within a certain period of time. That is absolutely standard, rigorous, best-practice regulatory policy.

I want to take us for a moment to the Chubb report, released in December 2022, which has made very clear when it comes to the integrity standards of offsets that are being proposed that they stack up. Firstly, I want to talk about the fact that the method for determining the integrity of offsets has six elements: there must be additionality; there must be measurable and verifiable removal of emissions; it has to be an eligible carbon abatement; it has to be evidence based; any material emissions that are a direct consequence of carrying out the project should be deducted from the project's net abatement; and any estimates should be conservative. So it's a very strong framework that we're talking about. And what we find is that the human induced regeneration, the HIR, method is found to be sound. It meets the OIS, the offsets integrity standards, that I just described and is a rigorous way of achieving offsets. This is absolutely critical.

Secondly, when it comes to accounting for carbon sequestration in the human induced regeneration method, the Chubb report says:

The current model-based estimation of carbon sequestration using FullCAM is a suitable basis for estimating aggregate carbon storage in native vegetation, when applied appropriately at the project level.

I do think it's important to stress that the offsets mechanism that is being proposed is rigorous. It will lead to real abatement. But it is also critical to acknowledge that it is necessary because not all of the firms in this scheme are going to have the same potential to produce abatement in the next two, three, five or whatever number of years. This is exactly the kind of scheme that the economy needs. It's going to spread abatement, but it's also going to move towards a system where abatement is more least-cost.

This is an absolutely critical and overdue reform. What we are facing is one of the great regulatory and environmental challenges the world has seen in modern times, certainly in the times of modern human civilisation. It is a diabolical problem, because it's affected by all countries and there are all sorts of regulatory challenges, including coordination challenges and free-rider challenges. That's why it's so critical not only that governments regulate abatement within economies but also that governments of goodwill negotiate with each other internationally and take coordinated action globally.

What this government has done since taking office less than 10 months ago is that we have set upon the task immediately of putting in place an overarching architecture. We have put in place a net zero commitment in legislation. We have put in place a 43 per cent target in legislation. That will provide certainty. That will provide the earliest possible start. This is going to be built on by the safeguard mechanism, which is going to provide abatement that is spread more broadly across the economy and abatement that is least-cost. This is the action that our society and our economy need.

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