Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The original question was that this bill be read a second time. To this the honourable member for Kingsford Smith has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

It is a great privilege to speak on this very important bill. The National Greenhouse and Energy Reporting Bill 2007 establishes a single national framework for corporations to report greenhouse gas emissions, energy consumption, energy production and greenhouse gas reductions, removals or offset projects from 1 July 2008.

In July this year the Prime Minister announced a significant policy. In my view, one of the most pressing issues of the 21st century is the fight to reduce greenhouse gas emissions. The emissions trading scheme, which will commence no later than 2012, is the most comprehensive emissions trading scheme in the world. In his second reading speech, the Minister for the Environment and Water Resources said it would be:

... broader in coverage than any scheme currently operating anywhere.

Approximately 70 to 75 per cent of total emissions will be covered by this legislation. Industrial energy and mining emissions will be almost entirely covered, and the scheme will include large emitters as well as transport and other fuels.

The emissions trading scheme is a significant strategy and part of the government’s $3.4 billion funding package to address climate change. The bill lays the foundation for an emissions trading scheme that requires robust reporting of emissions liabilities to ensure that informed decisions can be made in the lead-up to the implementation of the scheme’s commencement. In particular, it will inform the development of a permit allocation and incentive for early abatement measures. Importantly, from July next year it establishes a single national framework for reporting greenhouse gas emissions and abatement actions by corporations.

One of the fears that many in the industry have had was that the state and territory governments might develop systems to manage greenhouse emissions which would result in a highly undesirable hotchpotch of systems with a great deal of duplication of effort by those required to report. Already, multiple reporting programs have been developed in isolation and each has slightly different requirements. In some cases corporations are preparing reports for eight different programs. This inflicts a high cost on the Australian economy—an unnecessary cost that will not do anything to deal with the problem of greenhouse gas. This difficulty will be eliminated under this bill while still achieving all the necessary outcomes to reduce greenhouse gas emissions. Earlier this year, the Council of Australian Governments agreed to streamline the reporting obligations of corporations, and this bill gives effect to that decision. Ultimately it eliminates duplicative reporting and reduces red tape that such a fragmented system would indeed impose.

For some time, major corporations of Australia have expressed a strong preference for a system to be developed sooner. I think this is in recognition that corporations must look to future investment decisions and, by establishing a single national system, corporations will be able to base their future investment decisions on greater certainty. This should also drive investment decisions that use existing and new low-emissions technology—particularly important for large industries that have considerable investment in plant and equipment.

Addressing climate change will require careful and staged management, but there is little doubt that it will present opportunities for adaptive and new industries to emerge and provide new employment opportunities. There is no doubt in my mind that this will be the case. Our near neighbours, for example, are keen to learn from and use Australian technology and know-how. This opens up great opportunities for Australia to export new products and new technologies. On each occasion I have met with senior leaders in China they have asked me: ‘How can Australia help? We want to clean up our industries. We want to be more efficient in our energy use. What can we learn from Australia?’ So I do believe there will be many opportunities.

I was reflecting on this bill because there are some people who feel somewhat panic stricken about the changes that must necessarily come about if we are to deal with greenhouse gas emissions. I was thinking what a terrible time it must have been for some when we moved from the horse and buggy to the motor car and how, for others, it opened up fabulous opportunities for new technologies, new development and new enterprises. So I think it is with this change that we are undertaking. It is a very major, very significant change, but we need to be thinking ahead rather than lagging behind.

Under this legislation, assessment results of the trials monitoring are to be verified around 2010. Australia will then introduce full-scale trading and establish links with other emissions trading systems. I believe that will produce many opportunities for Australia, although I can understand the anxiety that some in industry feel about having to report and reduce greenhouse gas emissions. There are some 700 companies who are expected to report on the greenhouse gas emissions, energy use and energy production outlined in this bill. They will be required to register with the scheme and report annually if their energy use or emissions are over a specified amount. An online system for comprehensive activity reporting will assist in this requirement, and this system is being developed for the government’s Greenhouse Challenge Plus Program. This bill provides for the creation of a new statutory position, that of a greenhouse and energy data officer to administer the scheme.

As we have seen, the government is highly committed to deepening international cooperation with a view to developing common approaches on emissions trading and offsets. While there have been early undertakings for cooperation between Australia and New Zealand around emissions trading in the two countries, we have now seen, as a result of the Prime Minister’s leadership, some of the major emitters agreeing to action and further meetings to determine future action. Australia has committed $60 million for 42 projects in the first round of action plans focusing on clean energy technologies. These projects include research into enhanced coal bed methane postcombustion capture at coal-fired power stations and carbon capture in storage.

Australia is also a key player in the Asia-Pacific Partnership on Clean Development and Climate, known as the AP6 group. The AP6 partnership includes Australia, India, South Korea and the United States. These countries account for almost half of the world’s population, gross domestic product and greenhouse gas emissions. They also bring together a mix of developed and developing countries. Australia is also pursuing bilateral partnerships with major regional partners to encourage the adoption of low-emissions technologies. The coordination group will provide strategic guidance and impetus to ongoing cooperation between Australia and China on clean coal and will play a leading role in negotiations in the United Nations Framework Convention on Climate Change.

Domestically, the government has committed $2 billion to address practical climate change initiatives, and these include investment in the Low Emissions Technology Demonstration Fund, including support for the world’s largest carbon capture and storage project, and supporting solar innovation through the Solar Cities project. I am sad to say that Western Australia recently missed out—it was not for lack of trying on the part of the member for Hasluck, me and other members and senators from Western Australia, but it was a highly competitive process for these projects and we did not make it on this occasion. It is an excellent program. Some of the other projects include: incentives to farmers to reduce emissions and avoid land clearing, saving 1.3 million tonnes of emissions; a $3 billion commitment to renewable energy by 2010; a phase-out of inefficient light bulbs, saving four million tonnes of emissions; and the introduction of the mandatory renewable energy target.

For practical reasons agriculture and land-use emissions will be excluded from this legislation; although energy use in agriculture will be captured under these provisions. The farm community that I represent will be pleased at the way in which this is being developed, because the Australian Greenhouse Office will undertake research and development in partnership with industry to consider ways to reduce methane from livestock systems and nitrous oxide from land management systems. According to the Australian Greenhouse Office, agriculture is Australia’s largest source of methane and nitrous oxide emissions. The Australian Greenhouse Office lists the emissions that primarily come from agriculture: methane from enteric fermentation in livestock, nitrous oxide from inefficient use of nitrogen in agricultural soils, methane and nitrous oxide from the burning of savannas, and small contributions from manure management, rice cultivation and the field burning of agricultural residues.

As the Australian Greenhouse Office points out, emissions from livestock and agricultural soils represent a loss of valuable carbon and nitrogen resources. For example, it is estimated that methane emissions from livestock represent a loss of up to 15 per cent of potential energy that could otherwise be used for animal production. Similarly, the loss of nitrous oxide from soils represents a loss of valuable nitrogen that could otherwise be used for plant production. Reductions in agricultural emissions will therefore also lead to productivity benefits for agricultural industries and provide a win-win for agricultural production and environmental sustainability. The Australian Greenhouse Office is working with industry to research and develop ways to reduce greenhouse emissions from agriculture. That seems the most sensible course of action.

I am aware that the majority of farmers are very keen, of course, to develop contemporary practices that abate greenhouse emissions, as they realise that future productivity and profitability rest in finding and implementing improved agricultural practices which contribute to the reduction of greenhouse gases, thereby avoiding worsening weather conditions and adverse situations. Most farmers are conservation minded and they recognise that investment in good environmental management is important to the future of farming.

I saw that firsthand when I recently visited the farm of the Hardie family in Williams, in my electorate. I saw the work that they have done—work which they have meticulously documented. They have taken a very scientific approach to conserving water by using the contours of banks, replenishing local streams and making sure that the land they have continues to be productive and not affected by salt encroachment. It is very impressive work. I think many farmers demonstrate their interest in good farm management.

The agricultural sector is vulnerable to the impacts of climate change such as the increased risk of heat stress for intensively housed animals, the reduced annual average rainfall over much of the Australian continent, the increase in mean annual temperature and atmospheric carbon dioxide concentrations, the increased frequency of extreme weather events such as flooding and drought, and the altered distribution and survival of pests and weeds, which are likely to have a significant impact on agricultural production in some regions. Again, I thank the Australian Greenhouse Office for this information. Most farmers are well aware of the role they play.

I think the way the government is structuring this—leaving agriculture out but looking at other measures—is a very sensible way to go. The next step, following the tabling of this bill, is that the government will conduct further consultations with industry, state and territory governments and other stakeholders on the detail of the regulations and other legislative instruments. Regulation to underpin the administration and technical arrangements of the legislation will be developed well in advance of the scheme’s commencement to provide industry with certainty as to their obligations under the bill. I think that is what industry are really calling for. Industry frequently have to make fairly long-term decisions on some very big cost items, and it is much better for them to have certainty as to what their obligations will be in the future to reduce greenhouse gas emissions. I think this will give them that greater certainty. There will be ongoing work to ensure the scheme is linked closely to the future Australian emissions trading scheme, to enable companies to meet their reporting obligations under the relevant government programs, including the Energy Efficiency Opportunities program.

I notice that, in the second reading speech by the Minister for the Environment and Water Resources on this legislation, he said:

In keeping with the need for the reporting system to underpin emissions trading, the bill allows for a range of enforcement approaches, including criminal offences for corporations which provide false information. It establishes a system for monitoring compliance with the scheme, including a system of infringement notices and enforceable undertakings. These provide a range of possible alternatives to heavy penalties.

I note, further, that the minister said:

It is anticipated that corporations will improve their reporting processes over time. The emphasis of the compliance and enforcement regime in the initial years of the scheme will accordingly be on encouraging compliance, rather than on punitive measures.

And he said:

As the scheme matures, a more stringent approach will be appropriate, particularly with regard to data that will inform emissions trading.

I think that is a responsible way for government to work.

There has been some criticism of the government by the opposition, who say that we are slow to react to climate change. I do not believe that is the case at all. The Prime Minister established the Australian Greenhouse Office very soon after the government was elected in 1996, and I think they have done an outstanding job. There has been a continuous flow of measures addressing environmental issues. I notice that the Leader of the Opposition is looking to impose a 60 per cent unilateral cut in greenhouse gas emissions by 2050. As we all know, the member for Griffith has a habit of making statements that sound plausible as headlines but have little substance. There is no realistic way of making them work in practicality—or at least we have not seen any evidence of that. I listened recently to a speech by Bill Clinton and I am reminded that he said he wished that he had spent more time looking at trend lines rather than headlines. I think the opposition are very good at creating headlines, but I do not think they are able to provide the Australian public with a realistic way of making these headlines work in practicality in relation to the abatement of greenhouse gases. I think that, for the Australian public and for industry, it is very reassuring to have a government that is willing to be patient, to consult with all the necessary parties in order to get an efficient, reliable and accountable system, and to set environmentally and economically responsible targets. This bill is another example of the Howard government’s commitment to tackling climate change. I support these measures.

Debate interrupted.