Kate Chaney (Curtin, Independent) Share this | Hansard source

This bill sets up the Net Zero Economy Authority, outlines its functions and then gives it the ability to do some specific things. I'm going to talk about four topics here. They are why the intent of this bill is so important, how the functions of the authority fit with the intent of the bill, an example of transformation being done well in Western Australia and what's missing in the authority's real powers under this bill.

Firstly, on why the intent of this bill is important. The objects clause of this bill says it has three aims: to promote an orderly and positive transition to a decarbonised economy, to work towards our emissions reduction targets and to support workers and regions in the transition. I was elected because, in part, my community wanted to see more action on climate. Each of these three aims is essential if we want to see more action on climate.

Firstly, promoting an orderly and positive transition to a decarbonised economy. I'm fascinated by the research produced by the Investor Group on Climate Change which says the cost of an orderly transition is about one to two per cent of global GDP, the cost of a disorderly transition is about five per cent of global GDP and the cost of doing nothing is about a 10 per cent reduction in global GDP due to the impacts of climate change. An orderly transition will save money and can make us more of a leader than a laggard.

We can't rely entirely on market forces to drive this transition because we don't put a price on carbon. It's known as a negative externality in economics. We all pay for carbon pollution, but the producer of the pollution doesn't pay. Government is in the unique position to assist in the coordination and integration required across the economy and the community to transition to net zero. To diversify our economy away from mining and gas production and towards energy sources that are less damaging for the planet, we need to set up the right rules and frameworks to guide investment into low carbon industries and energy production. So the first purpose of driving an orderly transition is vital.

The second purpose of the bill is to work towards our emissions reduction targets. The objects clause doesn't specify which targets, but I hope it's applied flexibly so that any target—which I hope will become more ambitious over time—will guide the authority's activities. As the Business Council of Australia points out, the scale, breadth and complexity of the transition means that unnecessary delays in project implementation and deployment will be the difference between Australia meeting its nationally determined contributions between 2030 and 2050 in an orderly and positive way, versus sacrificing energy security, energy affordability, international competitiveness and real wages growth over the longer term. We are not going to meet our targets without some careful coordination, and only government—or entities established by government for this purpose—can play this role. The third purpose is supporting workers and regions in transition.

We currently face our current greatest economic challenge of this generation—shifting to a low-carbon economy—and like with any larger transition, people will need to change jobs. When cars became affordable, there were huge shifts in our economy. Roads suddenly needed to be smooth, horse-and-buggy drivers were out of jobs, no-one had the newly needed driving skills and people could live further from their workplaces. So much changed. We didn't resist cars because they would put the horse-and-buggy drivers out of a job; we navigated the transformation. Similarly, here, old jobs will disappear and new jobs will emerge, and we'll need to provide training and support to help minimise the impact and maximise the benefit of this transition.

Secondly, I want to talk about how the functions of the authority fit with the very necessary intent of the bill. The authority's functions include: consulting and cooperating with persons, organisations and governments to support Australia's transition to a net zero emissions economy; facilitating public and private sector participation and investment in net zero transformation initiatives; supporting workers in emissions-intensive industries to access new employment or improve their employment prospects; and supporting and delivering educational and promotional initiatives about the transition. These functions are pretty broad, but they're also soft—consulting, cooperating and facilitating. It does have a more active function in supporting workers, and the bill goes into some detail about what that support looks like—I'll talk about this more in a bit—but most of the functions are soft.

For me, there is an elephant in the room. I'm very interested to see what role the authority will play in relation to decisions made by government that are inconsistent with our path to decarbonisation. Getting off gas will be an essential part of how WA and the world decarbonise. A few weeks ago the government released its future gas strategy. Despite the fact that we know the world needs to use as little gas as possible for as short a time as possible, this future gas strategy reads like an expansion plan, not a transition plan. There's a jarring inconsistency between the future gas strategy and every other action the government is taking to decarbonise. Alan Kohler, as he so often does, applies a bit of commonsense and asks: what is the point of all the other work we are doing to reduce emissions when it's all undone by these huge gas projects?

So what will the authority do when it sees these inconsistencies? I suppose it will consult, cooperate and facilitate. It's going to take a lot of consulting, cooperating and facilitating to work through the mixed signals we're sending on gas. Without stronger functions in relation to these long-term planning inconsistencies, the government will have to be accountable for these decisions and mixed signals. I hope that the authority is able to speak independently and freely to the government and to the public about the difficulties we're creating for ourselves and the impact gas expansion will have on our ability to play our part globally and hit our emissions reduction targets.

Next I want to talk about the WA context and a positive example of how transition can be supported. As many of you know, my home state of Western Australia is a key piece of the net zero puzzle. We cannot decarbonise without Western Australia, and Australia will not reach its net zero goal by 2050 without WA. We have a challenge ahead in getting off gas, as I've mentioned, but in WA we do have a great example of how this might be done—by looking at how WA is getting off coal by retiring the WA state-owned coal-power stations in Collie, in our south-west, by 2030. Collie is home to 9,000 people and 1,250 jobs in the coalmining and coal-fired energy industry. In 2019 it was identified that, owing to the uptake in rooftop solar and renewables, Collie's power stations would close progressively between 2023 and 2029. This obviously had huge ramifications for the Collie economy and workforce. The WA state government has been working with Collie using the Just Transition framework, which focuses on supporting workers, industries and communities as the economy changes. An essential part of the Collie Just Transition Plan is deep and considered consultation with the community through working groups comprised of employers, employees and state and local governments. It involves strategic investment in diversifying the local economy. For Collie, this means a more than $662 million transition package with a focus on encouraging tourism to the town. It also means investment in skills, training and career advice for those workers preparing for the next employment opportunity. This plan is ongoing, so it's impossible to label it as a success or failure until the coal-fired power plants are all shut down. But in terms of community understanding and acceptance of the transition, Collie is tracking well. The Just Transition Working Group is crucial to the success of this plan, making sure that community, government, employees and employers are meeting in Collie regularly to make sure communication and education are prioritised. I think Collie is a great example of how government can have a positive impact by guiding big economic change.

Lastly, I want to talk but what's missing in the authority's real powers under this bill. The bill goes into a fair bit of detail in relation to how it can support workers in emissions-intensive industries to access new employment. The authority can enable workers to access new employment or other opportunities, or to acquire skills to improve their employment prospects. I welcome the amendments the government has made in response to the Business Council of Australia's concerns. However, I have two concerns about the scope of the Energy Industries Jobs Plan, which supports workers just like the Collie Just Transition Plan does. The authority's role is only triggered by the closing of a gas- or coal-fired power station, and support is only available for workers in these closing power plants. No other emissions-intensive project, like a mine or other extractive project, is covered by this plan unless there's a power plant associated with the project. My first concern about the scope is that this limitation might expose some workers who are outside the definition but who still will be required to transition to new employment when emissions-heavy industry transitions. My second concern is that there's an argument to broaden the scope so that the authority also has oversight of new transformation areas, particularly those in new renewable energy zones, that will require massive upskilling and diversification. An effective authority should focus on coordinating targeted areas in Australia where there are opportunities to build alternative cleaner energy industries and economic diversification. There's a perfect opportunity for the authority to apply similar leadership to what it will in assisting coal towns transition away from coal to assisting renewable-energy-zone towns to transition to new energy projects. For this reason I'll be supporting the member for Indi's amendments.

The broader issue with what's missing goes back to my point about the Future Gas Strategy. Should the authority be able to call out the government on decisions that make it very difficult for Australia, or the world, to meet our emissions reduction targets? If the authority is not going to do it, who will? Who will point out that it's pointless reducing our emissions in so many other areas if the emissions we avoid are dwarfed by the new emissions from gas extraction and use? Who will point out that approving new exploration licenses that won't be exploited for years sends signals to the gas industry that we're not serious about decarbonisation? Who will warn government of the stranded assets risk we face as our trading partners try their hardest to get off what we're selling them? Because climate is one of the biggest challenges we've ever faced, we don't have a legislative framework to make decisions that prioritise climate action, so we attempt to block massive gas projects by using the imperfect tools we have, such as environmental legislation focused on biodiversity. If the authority isn't going to be the voice of reason in our conflicting decisions about our future, who is?

In conclusion, I believe the Net Zero Economy Authority has the potential to make a positive difference to how Australia decarbonises, and I will be supporting it. But it would have a better chance of delivering on its lofty objects if it could support workers not only to transition out of a career but also into a new decarbonised industry. I will support the member for Indi's amendments on this topic. It would also have a better chance if it could support workers in all emissions-intensive industries and not just coal- or gas-fired power station closures, and, importantly, if it were required to give frank and fearless advice to the government—which includes challenging policies and approaches that are inconsistent with meeting our emissions targets, such as the Future Gas Strategy.

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