Peter Garrett (Kingsford Smith, Australian Labor Party, Shadow Minister for Climate Change, Environment and Heritage) Share this | Link to this | Hansard source

I rise to speak in the second reading debate on the National Greenhouse and Energy Reporting Bill 2007. The National Greenhouse and Energy Reporting Bill establishes a single national framework for reporting greenhouse gas emissions, emission reduction actions and energy consumption and production by corporations from 1 July 2008.

A greenhouse reporting bill is necessary to underpin a national emissions trading scheme. Federal Labor has a longstanding commitment to implementing emissions trading as a practical, sensible and flexible approach to reducing greenhouse gas emissions. It recognises that this legislation is fundamental to what we believe should be a growing bipartisan approach to tackling climate change. That is why Labor, and the Senate in particular, were surprised and disappointed that, in the first instance, the environment minister introduced such a sloppy bill. Labor recognises the urgent need for progress on emissions trading, but that does not excuse poor process or lack of consultation—

Greg Hunt (Flinders, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

Were you surprised that Mr Rudd didn’t raise climate with George Bush? Were you surprised by that?

Peter Garrett (Kingsford Smith, Australian Labor Party, Shadow Minister for Climate Change, Environment and Heritage) Share this | Link to this | Hansard source

Do you want to listen to the content of the debate or continue to make inane comments across the dispatch box? Labor recognises the urgent need for progress on emissions trading but, as I said before, that does not excuse poor process or lack of consultation. Emissions trading is a significant economic reform, particularly as we address dangerous climate change, and we need to ensure that we get the underlying structures right.

This bill has several shortcomings. A major concern is the provision for the all-powerful Commonwealth reporting power to potentially usurp or marginalise state laws and programs. In the absence of federal government leadership on climate change, state governments have led the way and their efforts should be supported rather than handicapped. This power is clearly unnecessary. Additionally, the thresholds and time lines are loose and slow so as to prevent an ‘as soon as practical’ introduction of emissions trading. Perhaps this was to be expected given the government’s plan for a slow and modest start to emissions trading by 2011 or 2012.

Labor referred the bill, which was introduced with almost no notice, to the Senate Standing Committee on Environment, Communications, Information Technology and the Arts for review. That Senate inquiry heard that this bill was put together without due consultation over a few weeks between July and August. That is not nearly substantial enough time to produce legislation as important as this. We note on our side of the House the hasty and ill-prepared way in which this legislation was brought in for consideration. Extraordinarily, the department admitted that they had not consulted specifically with any of the stakeholders during the drafting of this bill. I guess this should come as no surprise to us given the hasty way in which legislation has been introduced by the minister previously into this House. A notable and well-remembered example would be the Water Bill drafts. Again, not even the National Farmers Federation, farmers groups, environment groups or state governments received an opportunity to look at that bill before it arrived here in the House. It was only when Labor insisted on the necessity of a Senate inquiry as the government tried to rush that bill through the parliament that that extremely hasty process on a matter of substantial national significance was enabled to give at least an amount of consideration to what was contained in the bill. Frankly, the government’s arrogance in basically dumping proposed legislation into the House with very little opportunity for due and proper consideration is a matter of some concern and reflects very poorly both on the government’s approach to general issues of introducing and having us consider legislation and, more particularly, on the minister himself and his approach to his portfolio.

All the stakeholders who gave evidence to the inquiry identified significant problems with this bill. The inquiry heard amongst other things that the bill could deliver unintended consequences, such as significantly raising compliance costs, producing a fractured system which may not include all major emitters, obliging companies to seek judicial review, undermining current and future state laws and programs on climate change which are working, and potentially cutting across other state laws and programs which are not at all connected to greenhouse issues. A number of representations to the Senate inquiry, including from environment organisations, made the point that the reporting thresholds had all the appearance of being too loose and that it was critical that more information be publicly disclosed about the reporting under the proposed legislation.

I note that the Investor Group on Climate Change, which represents some $375 billion of funds under management from those institutions and companies which have a direct or indirect climate change interest, was critical of the fact that the stipulated time frame is so slow. They said that phasing-in of reporting should be accelerated. It was very clear that they had concerns about the levels of uncertainty attached to the government’s approach to climate change generally, particularly the time delay in the establishment of an emissions trading scheme. Those problems were identified and recognised when the inquiry heard from interested parties on the bill.

Additionally, as the bill is now being rushed through parliament, we need to consider the particular reasons it is being rushed through. I think the answer is very clear. Up until this point in time, the Howard government has done virtually zip in addressing climate change. There has been a systemic pattern of denial and inaction on climate change and that systemic pattern goes to, amongst other things, the question of setting up Australian businesses and the community so that we can deal with climate change and have a market within which to operate so emission reductions can have value.

It is a matter of record that, on a number of occasions, the government had the opportunity to consider emissions trading. That includes receiving cabinet submissions on that very matter which were rejected. As they now find that climate change is a matter of real interest to the Australian community, that the question of a framework within which to address climate change is a matter of real concern for companies in Australia and that there is a European emissions trading scheme operating out of Kyoto, which the government still do not want to have anything to do with, the government realise that there is a huge gap in their public policy position. As a consequence, they now have to get legislation into the House which shows that they are reacting in some way to the deficiencies of the past as a consequence of them not being willing to embrace emissions trading as a way of dealing with climate change.

As a consequence, the politics behind this are particularly ordinary and so was the drafting of the bill as it was put forward. The circulated amendments bear out the fact that this was a poll driven, last-minute effort, because there are amendments coming from the government at the very last minute on the basis of the Senate inquiry, which identified all the shortcomings in the legislation that was being proposed by the government in the first place.

I guess a sloppy bill like this really tells us pretty clearly that, at the time it was introduced, perhaps it was the case that the environment minister did not even have a chance to have a look at it. As a consequence, we have eleventh-hour efforts to draft and rush this bill through parliament. This process is undertaken at the expense of good governance and the responsibilities that we have in this House to look closely at legislation that is proposed by the government, but, as I said, it is consistent with the government’s record of delay and inaction over the past 11 years or so.

Rather than reducing uncertainty for industry, the bill in its current form has the potential to increase uncertainty due to unintended consequences including the introduction of legal ambiguities in relation to some of the clauses proposed. I note that the government circulated amendments yesterday. It is good that the environment minister finally found some time—in what I know has been a fairly busy last couple of days—to give some attention to his portfolio responsibilities. But, true to the arrogant form that we consistently see from the Howard government, the House has been given less than 24 hours to review the amendments, to undertake appropriate consultation and to seek the necessary advice. This is completely unacceptable. It is completely unacceptable that we should have less than a day to consider and review these amendments and to seek the necessary advice on these matters. The approach of the government and the minister is to ram it through, get it into the House and never mind the details. It is particularly disappointing with this bill because it has some significance to it—it will underpin significant economic reform in years to come. Labor reserves the right to move further amendments in the Senate depending on further scrutiny of and advice on this bill and on the government’s amendments.

I want to go for a moment to the issue of the government’s approach to climate change and the inconsistencies in their approach in general, which we saw only too well in question time yesterday. Just yesterday in relation to the government’s position on issues to do with the ratification of Kyoto the environment minister said during the debate on a matter of public importance:

Kyoto may be amended, and we hope it will be. We will be part of that. We want to amend Kyoto.

That was what the Minister for the Environment and Water Resources, Mr Turnbull, said yesterday in a debate in the House. What an extraordinary statement from the minister. I do not think I have heard anything like it. If I have been hearing the government correctly for the last 11 years, it has been all about bagging Kyoto. It has been all about talking about the Eurocentrism of this multilateral agreement that is already underway. It has been denying—and decrying those who claim—that Kyoto has an important role to play in addressing climate change. And now we have Minister Turnbull saying: ‘Kyoto may be amended, and we hope it will be. We will be part of that.’ How does the minister propose to be part of it if we are not going to ratify it? That really is the essential question that the minister has to answer: how is he going to be part of the process of amending Kyoto when he and Mr Howard refuse to ratify the protocol and therefore cannot take a place at the table and vote on the protocol itself? The government has got itself into an extraordinary, illogical, preposterous and ridiculous situation on this issue. It absolutely beggars belief. No wonder international commentators and international political leaders look upon the position that the Howard government has taken on the Kyoto protocol with some bewilderment. We are aware of the fact that they wanted to ratify it in the first place, but now they have got themselves into such a tortured, convoluted and contorted position. We had the environment minister saying here in the House yesterday: ‘We will be part of that. We want to amend Kyoto.’

I reckon I have heard just about everything from the Howard government on climate change, but this beats everything we have heard up to this point in time. No other statement so clearly shows the total illogicality of the position that the government has taken. Just to bear this out, in the other place, the Senate, Senator Minchin was saying at the very same time, and I quote:

Kyoto is a failed doctrine. ... Therefore, by definition, it is doomed to fail.

That was the government’s old position—that it is a failed doctrine and therefore by definition it is doomed to fail—but yesterday Minister Turnbull had a new position. He said:

Kyoto may be amended, and we hope it will be. We will be part of that. We want to amend Kyoto.

And yet the government is not willing to ratify the protocol. As they say in popular culture: go figure. The question that we need to ask ourselves in the House and that Australians need to ask themselves is: which is it? Which is the Howard government’s position? There is total confusion now on this issue of the ratification of the protocol. Is it a ‘failed doctrine’ or should we commit ourselves, as Minister Turnbull has, to amending Kyoto? The plain fact is that these views are completely incompatible with one another. A senior minister in the Senate, an acknowledged climate sceptic, is in complete opposition to a senior minister in the House who is trying to run a line now on Kyoto which suggests in some ways that he actually thinks there is merit in the protocol after all. I must say that I somewhat suspected it.

There is one more thing that needs to be pointed out in terms of the recent Sydney declaration and the government’s position on climate change. In July last year, in a speech to the Committee for Economic Development of Australia, the Prime Minister said:

A central flaw of Kyoto is its reliance on a distinction between developed and developing countries which makes little sense when translated into global emissions.

But last Sunday the Sydney declaration—the Howard government’s latest and, I have to say, pretty heavily confected climate change triumph—actually put the view and said specifically:

The future international climate change arrangement needs to reflect differences in economic and social conditions among economies and be consistent with our common but differentiated responsibilities and respective capabilities.

That is the Kyoto approach. That is the specific Kyoto approach. Article 10 of the protocol says that all parties should act:

... taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances ...

This has become one of the most farcical public policy positions that any federal government has ever held. It is being exposed day after day, minute by minute it seems, by the contradictory statements of ministers such as those we have witnessed over the last 48 hours about Kyoto. Additionally—notwithstanding the fact that the Prime Minister had been hostile not only to the idea of ratification but also to the notion that it would be the UN Framework Convention on Climate Change that would be the appropriate pathway to build multilateral agreement on climate change treaties into the future—we now have from the Sydney declaration a specific recognition that the UN framework is the acknowledged and accepted pathway for future global climate change negotiations and formulations.

There is one other thing to note in this debate on the National Greenhouse and Energy Reporting Bill 2007. That is, as a consequence of the government’s public policy position, there has been an economic impact on the Australian economy. If it were not for the fact that we have seen some robust economic activity taking place in the well-endowed resource states, particularly Western Australia and Queensland, I believe there would have been much greater attention paid to the economic consequences of not only the government’s failure to embrace clean and renewable energy here in Australia but also, by being so blind minded and blind eyed on the issue of Kyoto ratification, its denial of the opportunities that Australian companies could have and should have to be involved in clean development mechanisms, joint initiatives and other measures that are linked to the protocol.

The fact is that renewable energy companies have voted with their feet. In August 2006 Vestas Nacelles announced it would close its wind turbine assembly plant in Northern Tasmania. The cost was 100 jobs; 100 Tasmanian jobs went as a result of that decision. In February 2007 Pacific Hydro announced it was investing $500 million in Brazil because Australian renewable energy projects had been stalled by the government’s refusal to ratify the Kyoto protocol. That is a direct economic impact and a direct economic burden on our country, Australian workers and Australian industry as a consequence of the government’s position. Vestas has subsequently announced its Portland factory will close in December 2007 because further investment cannot be viable in current market conditions. The reason it cannot be viable in current market conditions is that the government has not established a market to enable these companies to operate and to provide the necessary services for reducing emissions and providing energy at the same time that many other countries have begun to. There is no market here for us to do it. As a consequence these companies are stranded and stuck, and the investment goes offshore and the jobs go with it. It is very clear that there is a strong business case that lies with us accessing the Kyoto protocol. The lost opportunities associated with emissions reduction projects are estimated to be hundreds of millions of dollars, if not billions. There are lost opportunities associated with the clean development mechanism in other countries.

The minister is fond of coming in here and criticising the clean development mechanism because of some of the difficulties that it has experienced and some of the anomalies that have resulted after its implementation, conveniently ignoring the fact that the clean development mechanism is a major producer of investment in reducing greenhouse emissions—some $US6 billion is attached to the CDMs. But Australia and Australian companies continue to miss out. There is opportunity for Australia to become a regional leader in the CDMs by establishing low-carbon projects in Australia that can generate carbon credits to other countries. And there is an opportunity for Australia to become a regional hub for a global power carbon market—which is what many Australian businesses would like to see, particularly, I know, business leaders in Sydney and Melbourne. All of these opportunities have gone begging as a consequence of the Howard government’s obduracy in respect of climate change and ratifying the Kyoto protocol.

As I said at the beginning of my remarks, we reserve the right to move further amendments. 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:

(1)

notes that:

(a)

the Bill was hastily drafted without any genuine consultation with stakeholders, including state governments, industry groups and environment groups;

(b)

the Bill was hastily drafted and introduced so as to prevent due public and parliamentary scrutiny; and

(c)

significant government amendments were circulated less than 24 hours before the second reading debate so as to prevent due public and parliamentary scrutiny;

(2)

is concerned that the Bill does not reflect the urgent need to establish an effective emissions trading scheme; and

(3)

therefore demands that:

(a)

the Government amend the legislation according to the unanimous recommendations of the Senate inquiry’s report”.

Kim Wilkie (Swan, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

I second the amendment.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I have always wondered why the member for Kingsford Smith decided to give up the law for a rock singer’s career, but the illogical arguments he put to this place today probably demonstrate how few people wanted to get him to draw up a contract on their behalf. He claims as illogical the statements of the Minister for the Environment and Water Resources and the Minister for Finance and Administration when of course he overlooks the fact that in any business—and when your business constituency happens to be the people of Australia—you do not sign contracts until they are written in a fashion which you find acceptable. The minister for the environment says, ‘We would like to see the Kyoto arrangements amended,’ and Mr Garrett suggests that that is impossible unless you have already signed up to unacceptable amendments. No, you can say to those who are reviewing that thing, ‘If you want us as a signatory, these are the matters that must be included.’ That is how a government operates in the interests of its people. It becomes party to a contract or a treaty when the contents of that particular treaty are in the interests of the Australian people. And what a farce has been Kyoto. It says the largest and most populous emitters in the world should be excluded because they have low per capita GDP.

I thought we were talking about emissions—the stuff that goes up into the atmosphere. As those of us who travel across Australia by air know, when you get up there at flight level the winds are running at 200 or 300 kilometres an hour and they do not stop when they get to India and say, ‘Oops, we are not allowed to go here; we do not want their emissions on board.’ The fact is that this is an international situation and the issue is emissions.

Today we are debating the National Greenhouse and Energy Reporting Bill 2007, which is designed to set up a reporting mechanism and, as the explanatory memorandum reminds me, lays the foundation for the Australian emissions trading system—it will provide the data upon which a trading system may be created. This was announced by the Prime Minister on 17 July 2007. Robust data reported under this bill will form the basis of emissions liabilities under emissions trading and will inform decision making during the establishment of the emissions trading system, including with regard to permit allocation and incentives for early abatement action. Why would that be the purpose of this legislation? The first thing is that we might learn from the mad rush of the European Union to get into a trading system that collapsed. At one stage there were so many certificates issued—for whatever reasons, possibly including corrupt activity—that they traded down to nought. We were urged throughout that period to get with the strength—to have a system that lacked a proper database and was consequently a waste of time. So there is a process. Without a database collected over a significant period of time, any trading system is bound to be a failure.

I note also that, after talking up the fact that this bill lacked substance, the member for Kingsford Smith put forward a pious amendment. There is not a word in it suggesting how the bill might be improved technically—just talk. He might have put it to music. The reality is that the government—presumably to some extent in response to the Senate committee—has already proposed amendments that will be debated at a later stage, and their excellence will be properly defended in due course by the minister.

I wrote down the points made by the member for Kingsford Smith. Coming back to the Kyoto agreement, he said, ‘Oh, they do not think it is a failed document,’ but of course it is a failed document. It is a document that, as I said, ignores completely the emissions of what is now the world’s largest emitter. Also, as he read a section of the Kyoto agreement, he made some interesting but illogical arguments about what ‘economic effect’ means. But you can read that in two ways: either as giving special privilege to those of low per capita GDP or the economic effect on a developed economy like Australia’s is a reason for care and caution and preferential treatment—otherwise, this country and this government could find itself destitute because it will have signed away its right to export and utilise its own natural resources.

It is also interesting that the member for Kingsford Smith started to give us a list of the 100 or so jobs that have been lost because certain manufacturing activity has gone elsewhere. The manufacturers have gone elsewhere to get a bigger subsidy than they could get out of the Australian taxpayer. These are not productive jobs. These are not self-sustaining jobs. They are jobs that rely heavily on cross-subsidy, and that of course always visits upon the consumer. We all know that governments of the opposition’s persuasion have a long history of creating tax subsidised jobs, with the obvious problem that in each case they add to inflation because they have no foundation in productivity. In Western Australia the state government has apparently created 18,000 new jobs since it came to office, but none of them are in the service sectors of hospitals, schools or the police force. I can only come to the conclusion that they are people who are employed in capacities like that which we are discussing today whose principal task is to tell you what we are not allowed to do any more. We wonder why a table was published the other day in the Sunday Times newspaper pointing out that, since 2004, Australia has sunk to No. 8 as a desirable location for mining investment and is now below Namibia and Botswana. Why might that be? It is certainly very obvious in Western Australia, where environmental departments are preventing development of mining activities that are very essential to my electorate. What is more, a mining activity that was conducted in 1968 without destroying certain flora is now prevented from acting because it might destroy the flora. Mr Deputy Speaker, I draw your attention to the foolishness of that. We of course propose an emissions trading system, but it had better be a good one.

In the processes of the Kyoto agreement, they have Conferences of the Parties, with the acronym COP. It is an interesting fact that, by the time they got to COP6, the biggest interest and lobby group in attendance was the financial institutions. Do you think they were particularly interested in the fact that carbon was being emitted into the atmosphere with dire climatic consequences? No. It was a new deal; they could swing the bookies bag on another arrangement that of course would bring them great profit and great deals.

The purpose of carbon trading, as I understand it—notwithstanding in my mind that it will add to the cost of energy and other items that we utilise, such as transport et cetera—is that the trading mechanism will make certain other investments more viable. But when we settle down to these things—when we bemoan the fact as the member for Kingsford Smith did that a wind generator plant in Tasmania closed for lack of new customers—it is time we looked at the effectiveness of wind generation as it applies to a grid system.

We are well aware that you can generate electricity with the wind. No doubt if we were to go into the entire song repertoire of the member for Kingsford Smith, we would probably find he has sung something about the vagaries of the wind. And that is the problem. In New Zealand there is 170 megawatts—two fields actually, but closely adjoining—of rated wind generation capacity that is experiencing variations of 100 megawatts over five-minute intervals. I am told the distribution network has more problems when that generation capacity revives and goes up than it does when it is coming down. Any middle manager and worker in the power distribution and generation industry will tell you that, where that baseload power generation happens to be coal or coal fired type capacity, there is no immediate responsive capacity to accommodate those particular circumstances other than maintaining, if you like, steam pressure at a level that allows for the baseload station to take over the entire generating capacity, even momentarily, of the wind generating system. In other words, they are still burning the coal but they are frequently exhausting the steam because it is not needed at a particular moment.

If you get down into my electorate, at Hopetoun we have a little twin generator system there providing wind power backed up by a couple of diesel genera-tors. I would like to tell you a bit more about the problems of that town, which has just had a nearly $3 billion mine built there. The state government has not yet built a water treatment plant for the people who want to live there, so half of them are flying in flying out when it is a very desirable location. But that system is saving a lot of diesel because of the responsiveness of the diesel generators that can tick over on idle and then boost up to achieve demand for whatever reason, including a failure of the wind generators to meet their rated capacity. I might add on the installation of the second one, which was subsidised significantly by this government, I suggested that maybe the surplus energy that comes off those wind generators—it just happens to be a fact of life that the wind usually blows strongest when the lights are out—might be converted by the simple schoolboy act of electrolysis to fuel one of those diesel motors or in fact a gas motor if anybody wanted to take a short cut. The minister thought that was a good idea, but his public service, the greenhouse people we currently employ, tried to tell me that you could not store hydrogen. I do not know what NASA have been doing all these years and how they have managed when the weather is against a launch and they have 1,000 tonnes of liquefied hydrogen sitting on a tank.

People get carried away by the songs of the member for Kingsford Smith and do not look at the practical application. I might add, in the case of both solar and wind generation, if it were utilised as I have proposed—for instance, on farming properties to create hydrogen as the fuel to drive the machinery of that farming property—that could be a very positive application of a renewable nature. But neither solar nor wind fit in the grid pattern and I sincerely hope, when this reporting system comes to bear, that we will ask the liquefied natural gas industry of my state to report on the emissions associated with their liquefaction processes because they burn 10 per cent of the equivalent of their gas exports in the liquefaction process.

The government chortled the other day about signing an agreement with the Chinese over the Browse field, which is as yet totally undeveloped. To achieve the targets similar to that export, it has to have a 900-megawatt electrical generating power station. That is of course the size of a nuclear power station. Their proposal is to burn gas when on their doorstep is a huge tidal resource that could not only provide that energy in a renewable sense but would allow for an extra 10 per cent of exports of gas.

It is all right for us to keep preaching that gas is a clean form of energy. It just happens to be cleaner than coal. It is a hydrocarbon and as such there is a representative emission standard. Most natural gas in varying quantities has a component of CO₂ in its makeup. In fact for that reason the Gorgon people must put their liquefaction plant on Barrow Island where they have access to used-up gas and petroleum bores and they can pump down something like 14 per cent of CO_{2 ,}which naturally occurs in gas. That is fine, but the reality is that these things have to be recognised.

A reporting system, as proposed in this legislation, is going to separate a lot of the myth from the reality, and the government is to be congratulated on that. There are wonderful opportunities for the government for a hydrogen economy in Australia. The government should be doing more to encourage foreign firms to bring in their expertise in that regard. The Ford company broke a record the other day; I think they hit 207 or 270 kilometres an hour with a fuel cell car. I have reminded this House previously of an initiative of the Richard Court government to order three fuel cell buses. They have been running around Perth, as they do around London and other places in the Northern Hemisphere, and they are both efficient and absolutely clean, because their only emission in operation is steam. I have been behind them. I have visited their workshops; I have visited their workshops in London. All the reports I have had are that they are very viable. On the resource of hydrogen that some use, London people import it liquefied from France. They just might be producing it with the 250 megawatts of tidal power they have produced at La Rance for the last 40 years. I just do not know how, if the Public Service of Australia believe you cannot store hydrogen, they manage to get it across the English Channel. There are all sorts of options of this nature, particularly with the foundation of a proper reporting system.

In looking at some of the so-called clean, green energy, for anybody who wants to assess a wind tower or any other sort of clean energy provider, the first test is this: how much energy of other natures did you use to make it? All of these things should be looked at closely. I do not contest the issue of climate change. I do not think it is even worth arguing about. Australia is fortunate in having some of the best, largest, ‘greenhouse with grunt’ types of renewable energy resources in the world. I have not had time to mention hot rocks, which has a future because it is compatible with grid distribution. All of those things will be tested by this reporting system, and it is a good and cautious government that takes that step first. If you want to deny that the EU treats Kyoto as a non-tariff barrier then you do not know what you are talking about. Their trading system is the joke of the world. Of those who agreed, signed up and ratified that agreement, hardly one has ever met the targets to which they committed. They have been unable to meet those targets. (Time expired)

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I usually follow the member for O’Connor in discussions about the wheat industry. I draw the conclusion that he knows more about the wheat industry than he does about emissions trading. The National Greenhouse and Energy Reporting Bill 2007 is all about emissions trading. Do we need emissions trading? Absolutely. The globe has a very serious problem with climate change, with global warming. In pre-industrial times, levels of carbon in the atmosphere were around 280 parts per million. They have now risen to 380 parts per million, and they are tracking upwards to 500 parts per million and beyond. The implications of this for our global weather systems are many and varied. Some are unpredictable, some are unknown, but those which we can see and can measure are of great concern: melting polar caps, melting glaciers, rising sea levels through thermal expansion and increasing and more severe extreme weather events, such as floods, storms, cyclones and bushfires. In Australia we see its manifestation in drought, we see its manifestation in the spread of tropical disease and we see its manifestation in coral bleaching on the Great Barrier Reef. Unquestionably we have a major problem.

We have been treating the earth as a business in liquidation, and we need to put a price on carbon. People who think that putting a price on carbon is going to be a costly business need to consider the alternative. We have ongoing drought in Victoria. The agriculture minister was reported this morning talking about the need for the continuation of drought relief and exceptional circumstances. These are not exceptional circumstances; this has been going on for years. There is the impact of these storms, floods and cyclones on insurance companies, on our economic activity and on our agriculture. Last year the Stern report made very clear that the economic consequences of not acting would be more serious than the economic consequences of taking action and, in particular, of taking action sooner rather than later. But what has this government been doing? It has been doing nothing. It has been sitting on its hands. We have lost years in procrastination. The issue of emissions trading has come before the government and has been under consideration on a number of occasions. It is well known that as far back as 2004 there was a cabinet submission on emissions trading, which the Prime Minister simply knocked on the head. We have had years wasted by a government that has refused to listen to the evidence, refused to listen to the science and refused to listen to the community. The community has been crying out for years for action on global warming. Recently I have had renovations in my office, and I have had occasion to go through lots of old files. I came across a speech I did back in 1990 that talked about the global warming issue. The climate change treaty, the Kyoto protocol, was negotiated through 1996 and 1997. Australia signed it and then reneged and refused to ratify it. Government MPs are now scratching their heads about the opinion poll results. At the moment they sound like Kamahl, when he asks: ‘Why are people so unkind?’ The fact is that this government has arrogantly been saying to the Australian people: ‘We don’t care what you think about climate change. We know best. We’re not going to ratify the Kyoto protocol.’

For the past decade they have failed to put a price on carbon; they have failed to introduce emissions trading. It is the same with issues like Iraq and the AWB scandal. The government arrogantly ignores the views of the electorate, pats them on the head and patronisingly says, ‘We know best; we are going to do this our way.’ And now they are walking around gnashing their teeth and bemoaning the fact that the electorate is not listening to them. Well, if you are not prepared to listen to the electorate then do not be too surprised when they stop listening to you. Most people lose interest in a conversation if it seems like the other person wants to do all the talking and none of the listening.

On the issue of emissions trading, the government continues not to listen and to treat the Australian electorate with contempt. It now says it is going to set up an emissions trading regime, but it will not announce a target for emissions reduction. It says it will do this after the election. What a contemptible way to treat the electorate. It must think that the Australian people are all fools. The only way an emissions trading regime can work is if we set a future target for our greenhouse gas emissions and enforce it. Labor has set such a target, based on the science and the work of the Intergovernmental Panel on Climate Change—a 60 per cent reduction from 2000 levels by 2015. It is an ambitious target; there is no doubt about that. But it is the kind of target that scientists are telling us that we have to achieve if we are not to see this planet’s climate alter in unpredictable ways and ways which will almost certainly cause suffering and hardship for our children and our grandchildren, who will in turn condemn us for our selfishness and lack of foresight.

But this government seriously proposes to go to the election with no greenhouse gas emissions target. It says it will come up with a target after the election. What a con job. Imagine a political party proposing to alter the private health insurance arrangements but saying it would let everyone know the details after the election. No-one would stand for it; nor should they. Imagine a political party proposing to alter the school funding arrangements between government and non-government schools but saying it would let everyone know the details after the election. All hell would break lose. But that is precisely what the government is trying on here. It says it is going to introduce an emissions trading regime but no-one can gain the faintest idea of what its impacts will be. Indeed, its failure in this regard is so great that many in the business community are privately utterly dismayed with the government’s dithering and are increasingly publicly calling for greater certainty and transparency. The Insurance Council of Australia, for example, has been quite clear about the need for action on emissions trading and the setting of targets. Insurance companies depend on being accurate in their predictions of the risk of future climate disasters such as storms, cyclones and floods. Their money is where their mouth is and I think it is far more likely that they are getting it right than the government’s climate change sceptics, such as the member for Tangney and the member for Solomon.

The government’s failure on emissions trading was also glaringly obvious at APEC. There is much to be gained from getting countries to actively work on an international emissions trading system. There are lots of business opportunities for Australian companies once international emissions trading gets off the ground. We need to get other countries into reducing their emissions. Global warming, to state the obvious, is a global problem. There was plenty of hype before the APEC meeting about how we were going to make big strides in tackling climate change. I got a letter from the Minister for Foreign Affairs. I do not know whether the other members here did; perhaps he wrote just to me. The letter said, ‘The Prime Minister has made climate change a key focus for this year’s APEC leaders summit.’ But what did we get? The Sydney declaration! It is a joke. It talks about aspirational targets. Well, what are they? Where are they? They are nowhere to be seen. Ten years after Kyoto and we are going backwards.

One of the government’s arguments for not ratifying the Kyoto protocol is that its targets are too modest and that they will not cut the world’s carbon emissions by much. Well, at least they cut them, and that is a start. The Sydney declaration has no targets and cuts no greenhouse emissions whatsoever—zippo! So a serious opportunity to make progress on the emissions trading front has gone begging, and domestically the government’s dithering is leading to chaos. The states are all coming up with their own plans for carbon reduction and emissions trading. This is entirely understandable. There is an absence of national leadership, nature abhors a vacuum and the states are stepping into the vacuum. But the trouble with this of course is the railway gauge problem—businesses do not want to deal with different arrangements in different states. It is ridiculous and embarrassing for Australia that, whereas the European nations have produced one emissions trading scheme, we, a single nation, have a multiplicity of them.

In late August the Department of the Prime Minister and Cabinet held public consultations around the nation on the issue of emissions trading in general and the bill before the House in particular. It might have been more helpful if it had held these consultations before it introduced the bill. If I have time I will come back to that later. Clearly, what we have before the House is an eleventh-hour, rushed, patch-up job from a government which, after 11 years of sitting on its hands over global warming, is desperate to be seen to be doing something.

I went along to the Melbourne consultation session on this bill because I am very interested in the emissions trading issue. There were a lot of people there. I did not count them but I think there would have been at least 150 people there, reflecting the great interest of the business community in this issue. There were a couple of features of the Department of the Prime Minister and Cabinet presentations which I found to be very significant. First, the department said that its present projections are for Australia’s carbon emissions to be well up on their present levels by 2020. While this has been said before—the Australian Greenhouse Office has projected that by 2020 we will be 27 per cent above our 1990 levels—it is very significant that the Prime Minister’s own department says that we are not on track to reduce our carbon emissions in the future; we are on track to increase them. It reveals the government’s frequent mantra, ‘We are on track to meet our Kyoto target,’ for the shameless spin that it is.

One of the alibis the government give for not ratifying the Kyoto protocol is that some of the poorer countries which have ratified it do not have any targets in the first commitment period. They say, ‘We are not going to get on board the Kyoto train because there are so many hypocrites on it.’ Well, Prime Minister, there is always room for one more. Australia is monumentally hypocritical in complaining that other countries either do not have targets or are failing to meet them, when in fact we are tracking for a 27 per cent increase in our carbon emissions by 2020.

Another significant point to emerge from the Prime Minister’s department’s presentation was the observation that we need a carefully calibrated emissions trajectory. The statement was made that we need a long-term aspirational goal to act as an anchor for price expectations. It was stated that we need to establish a forward price curve, which would be a function of the aspirational target and international factors et cetera, and that that forward price would drive investment decisions by firms. That all makes good sense to me, and it is unremarkable, except for one thing: it is precisely what Labor have argued and what Labor have done in announcing our 60 per cent target by 2050, whereas the government have not done it—they have not produced a target. As I said earlier, the government want the Australian people to go into the election and vote blindfolded, not knowing what the emissions target is going to be. As one questioner in the audience pointed out, until we see what the target is and what the caps are, we will not get to first base regarding issues of allocation, compensation and the like.

One other point which came through clearly in the questioning afterwards is that there is some concern that forestry and agriculture are not being included in the initial scheme. It is clear that some businesses believe that it would be advantageous to be able to participate in the scheme. One questioner asked whether the exclusion of forestry would create a perverse incentive for landowners to clear forests and vegetation, and claim permits for regrowth. There would, of course, be no greenhouse value in having this happen. The response from the department was that the land based sectors were too hard to measure and that, in any event, state governments such as Queensland and New South Wales had introduced native vegetation clearing controls, which were dealing with these issues. I found this deeply ironic. The Howard government have done absolutely nothing to help the state governments put a stop to land clearing in Australia. Indeed, it has allowed its National Party MPs to run interference on everything the states do to try to protect native vegetation, yet here they are saying, ‘We don’t have to worry about incentives to retain native vegetation because the states are dealing with it.’

As I said earlier, business leaders are agitated about the lack of action and missed opportunities on emissions trading. For example, the global head of sustainability at Lend Lease, Maria Atkinson, has described the failure of the Prime Ministerial Task Group on Emissions Trading to recognise buildings as a key part of the carbon emissions trading scheme as a missed opportunity to drive deep and cost-effective emissions cuts and a lost economic opportunity. According to the Intergovernmental Panel on Climate Change, energy efficient buildings can cut projected greenhouse gas emissions in the building sector by about 30 per cent by 2030. Maria Atkinson says we need a carbon emissions trading scheme that allows commercial property developers and owners to accrue and sell credits for emissions cuts achieved through energy efficiency measures.

The bill before the House establishes a single national framework for reporting greenhouse gas emissions, emission reduction actions and energy consumption and production by corporations from 1 July next year. It is seen to be a necessary precursor to the introduction of emissions trading. It is stated that by the 2010-11 financial year the reporting framework will apply to approximately 700 companies that emit more than 50 kilotons. Essentially, it is being rushed through the parliament so that the government can claim that it has passed primary emissions trading legislation. We have been able to identify, in the very short time we have been given to examine the details of the bill, some serious shortcomings and unintended consequences which may increase the compliance burden for industry such as legal costs to deal with ambiguities, and the risk that the bill may undermine either current or future state based programs to tackle climate change.

Many of those who presented submissions to the Senate inquiry expressed concern about the bill. Major emitters testified that the bill was not consistent with previous positions or agreements made between the states and the Howard government at COAG. Environment groups testified that the reporting thresholds were too high and that more information should be publicly disclosed. The Investor Group on Climate Change and environment groups were of the opinion that the time frame was too slow. Indeed, the state governments opposed the bill in its current form and recommended significant amendments. Of concern to both industry and conservation groups was that the bill leaves many of the practical measures to be determined at a later date by regulation and by ministerial decree. The majority of the submissions to the inquiry expressed concern that too much was left to regulation and, instead, some of these provisions ought to be placed in legislation to provide greater certainty.

It is a view of Labor that we need a comprehensive mandatory greenhouse gas emissions and energy reporting scheme. Mandatory reporting is a critical first step towards the implementation of a national scheme and we have had a longstanding commitment to emissions trading as, in our view, a practical, sensible and flexible approach to reducing greenhouse emissions. However, the slow-start time frame and reporting thresholds that this bill sets out may be insufficient to meet the reporting needs of an emissions trading scheme with the aim of beginning in 2010. We have a Treasurer who talks about debt, deficits and living beyond our means. Global warming is the ultimate example of living beyond our means and leaving the debt to future generations. We have before us rushed, panic stricken, last-minute legislation that is all about being seen to be doing something, not addressing the future. This is a government which has no vision for the future. When the Prime Minister was asked by an ABC reporter this week what his vision for the future was there was an embarrassing pause and silence. There is nothing, so we get this kind of running up and down on the one spot that is designed to generate the illusion of activity.

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.