Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

Climate change is happening. There is no longer any doubt. The science is completely certain that humans are causing an increase in global temperatures. We can have a debate about how quickly it is happening and we can have a debate about the consequences, although even in relation to that the science is becoming clearer. But it is totally certain that humans are causing an increase in global warming and that the future of the world as a consequence of that is grave. So, more than any other debate that we have had in this place, as we stand here in the House of Representatives on this day, having this discussion, we are uniquely custodians for millions of Australians who are yet to be born, who in decades to come will look back at what we said on this day and at what we did or did not do when we had a chance. That is a responsibility that we cannot avoid, whether we want to or not.

My electorate is based on Geelong, in Victoria, where the consequences of climate change are predicted to be very severe. Industry in my electorate hugs the coast. Our existing coastline is the basis of our tourism industry. If we do nothing, the prediction is that sea levels will rise dramatically over the next century, rainfall will decline and droughts and bushfires will increase. Already we have had water restrictions for 6½ of the last 11 years. Our storage levels on this day are at 18 per cent. Two years ago they were at 14 per cent. They are the two lowest levels recorded—and yet Geelong is a very carbon dependent city. Our transition to a post-carbon world will be as big as that of any other place in Australia, and that is because of our industrial base.

Let me be clear that Geelong’s industry has contributed greatly to the social and economic wellbeing of Geelong. Ford has been making cars in Geelong since 1925 and employs 2,000 people. Shell has been refining oil since 1954, supplies half the petrol to the state of Victoria and employs 500 people plus contractors. Blue Circle Cement produces 700,000 tonnes of cement every year and employs 145 people. Alcoa has been operating for 40 years, supplies 30 per cent of Australia’s aluminium and employs 1,200 people out at Point Henry. When you look at what Geelong faces if we do nothing on carbon, and when we look at what Geelong faces if we do something on carbon, we are unquestionably the town in this country which is at the front line of this debate.

The aim of the government’s policy in relation to the CPRS is to make Australia a credible and robust international player in forming the kind of international agreement we need so that we can change the way humans are impacting upon the global environment. But we need to do that in a way which changes the behaviour of industry in Australia, not in a way which gives rise to carbon leakage or sees industry go overseas.

Placing a price on carbon in our economy through a market mechanism which achieves all those aims is an enormously difficult task of public policy, but it is a task with which the Rudd government has proceeded with a quiet determination which began during the election campaign. That saw us sign up to Kyoto in the immediate aftermath of the election. It saw the Garnaut report last year, the green paper in August, the white paper in December and the Senate inquiry through the first part of this year. All of this has been an exhaustive consultative process requiring a rigorous approach that has led us to this point. We have proposed to the nation a cap and trade scheme which will take us to a target of reducing carbon emissions by five per cent by 2020 no matter what. If the rest of the world moves, we will reduce carbon emissions by up to 25 per cent, leading to a total target of reducing our emissions by 60 per cent by 2050. The scheme puts in place significant compensation for emissions-intensive trade-exposed industries and will provide for the money raised through the selling of carbon permits to be used to help transition our economy and our households to a post-carbon world.

In Geelong we have also had an extensive consultative process which began on 11 August last year with a community forum of all the interested players around climate change. I have spoken extensively with the Committee for Geelong, the G21 Geelong Region Alliance, the Geelong Chamber of Commerce, the Geelong Manufacturing Council, the Geelong Trades Hall Council and the City of Greater Geelong. I have spoken with businesses and unions, including Russell Caplan and Huck Poh at Shell; Alan Cransberg, Paula Benson, Tim McAuliffe, Brendan Foran and Kate Betts at Alcoa; Ian Campbell at Blue Circle Cement; and Paul Howes, Cesar Melham, Brett Noonan and Jim Harper from the Australian Workers Union. I am indebted to every one of those people for helping me to understand how an emissions trading scheme would change life in Geelong and how it would have an impact upon people in Geelong. I am also very indebted to the Minister for Climate Change and Water, Penny Wong, who has come to Geelong twice during that time. She has listened intently to what people have had to say and she has explained admirably this very complex problem that the government is dealing with.

I have little doubt that the consultative process that we undertook in Geelong led to the Prime Minister’s announcement on 4 May this year which saw a delay in the introduction of the CPRS by a year, to 1 July 2011. In that first year we will have a set price of just $10 for carbon permits, which is roughly, analysts think, about 25 to 30 per cent of what the market rate will eventually be. We have seen the highest tier of compensation, which was 90 per cent, increase to 94.5 per cent and the next tier of compensation, which was 60 per cent, increase to 66 per cent. I think, as a result of these changes, the scheme that we put before the House today is much more robust. It is an example of the way in which the Rudd government, through Minister Penny Wong, is engaging with the community so that we come up with a scheme for all Australians.

When you look at where we have landed the scheme now, we are getting significant support out there, not least from industry in Geelong. On 5 May this year, Russell Caplan said:

So, while there are important issues still to be resolved in the CPRS, notably how we manage the competitive disadvantage of applying a carbon price in Australia before our trading partners, I believe it is important that we do resolve them, and that our representatives pass this legislation.

Tim McAuliffe, Alcoa’s General Manager Corporate Affairs and Carbon Strategy said to me last night:

We do not, at this time, support throwing out the existing CPRS and starting again—our strong preference is for the Government and Opposition to work together and find a balance that deals with the environmental imperatives but also supports economic and social benefits of Australian industry.

While we have been doing this, where have the opposition been? To put it simply, this is an issue too big for those on the other side of this House to come to terms with. Their response to the whole issue of climate change has been: ‘We’ll get back to you. We’ll get back to you after the Garnaut report, we’ll get back to you after the Treasury modelling and we’ll get back to you after the white paper, the Pearce report and the Senate inquiry. Why don’t we have a productivity inquiry? We will get back to you after Copenhagen.’

What it has meant is that one of the major political movements in this country has left the table of this debate. As we are trying to actually come up with a bipartisan position, where everyone in this country can provide a stable regulatory environment for the future, the opposition have absolutely disappeared. In the future, in decades to come and when people look back at what the opposition have done on this day, they will stand condemned. At best, these are the ostrich parties: the people who have found the nearest sandpit in order to plunge their heads into it. At worst, in the deep dark recesses of their hearts, they are climate change sceptics, which is such a dangerous position to hold in public policy at this moment. Just as they have in relation to the global economic recession when the heat has come on with this key piece of public policy, they have gone absolutely missing. Business needs certainty. That is why AiG and the BCA are crying out for us to pass this—and, by the way, so are the ACF and the Climate Institute.

There is undoubtedly a moral question in dealing with this issue for the future generations of Australia. For the people of Geelong, this is the smart thing to do. Of course it is impossible to guarantee every single job under the CPRS, but what you can absolutely guarantee is that if we are the last country in the world to move in relation to climate change then we will have no industry at all. An industrial town like Geelong has a great industrial future but only if we come to terms with and deal with the issue of our carbon dependency. We have a bright future in manufacturing in Geelong if we can come to terms with our carbon dependency. But, if we do not, we will find that industry will leave. You just need to look at Alcoa, who has the Point Henry smelter. They have a smelter twice the size in Iceland based on hydropower, with virtually no carbon footprint, and they have it on the books to build a geothermal powered plant there, again with very little carbon footprint at all. If that is not an indication of where we need to go as a country then nothing is. We need to help our industry get past the carbon dependency it has. If we do that, this country has a bright future and Geelong continues to have a very bright manufacturing future. That is why it is absolutely essential that we pass the CPRS and why I commend this legislation to the House today.

Andrew Robb (Goldstein, Liberal Party, Shadow Minister for Infrastructure and COAG and Shadow Minister Assisting the Leader on Emissions Trading Design) Share this | Link to this | Hansard source

Significantly reducing the global level of CO2 in the atmosphere is an issue of great consequence. What we do, the consequences, who is with us, how well thought through any scheme may be and what we need to do to get it right is all important. Sadly, the development of an emissions trading scheme has been very badly mishandled by the Rudd government, just as Mr Rudd has mishandled the nation’s finances and saddled Australians with massive debt.

As with the government’s response to the global financial crisis, the government has had too much of an eye on the politics of their emissions trading scheme and not enough of an eye on what is best for Australia, what is workable and what will protect jobs while reducing emissions. Selfish political considerations are overshadowing sensible policy imperatives. In its panic to get to an early election before the community sees the depth and extent of its financial ineptitude, the government is stampeding the flawed bill through this parliament. Before the last election, Mr Rudd promised deep cuts in emissions without disadvantaging our export and import competing industries. Yet the government scheme fails on all counts. It will cost tens of thousands of jobs; it will kill major investments and do little or nothing to reduce CO2 emissions. The scheme is deeply flawed. Mr Rudd’s scheme is testament to the fact that his promise cannot be delivered if other major competitors are not also taxing their emissions. Mr Rudd’s response is to stick with a proposal so ill considered and so awful that it cannot be supported by anyone—not by the Greens, the cross benches or the coalition.

Mr Rudd wants to go to an early election claiming he tried on climate change but blaming his inaction and his incompetence on everybody else. This is all about politics for the government, not the environment. At least the Rudd government was mugged by reality and forced to delay the start date by 12 months. The government should use this delay to see what President Obama does during this year in finalising his all-important legislation, to see what the world decides at Copenhagen and to do the work necessary to correct the many flaws in Australia’s scheme. Common sense dictates that the vote on this legislation should wait until the new year. It is why the coalition is moving to amend this bill to ensure that it is deferred until then.

Now that the coalition has provided the government with a truly Australian position on targets to be taken to and negotiated at Copenhagen in December, there is absolutely no reason to seek to ram this flawed scheme through this parliament. This was confirmed last week when the executive secretary of the UN organising committee for Copenhagen, Mr Yvo de Boer, revealed that the UN does not expect countries to have legislation in place before Copenhagen. There is no urgency or reason to rush this legislation.

The government’s emission trading scheme has been designed for a world where every country has such a scheme and where every country has a price on carbon—a level playing field. If the world were moving on this contentious issue, all the contentions issues surrounding the government scheme would largely disappear. If our competitors were also imposing a price on carbon, our own industries would remain strong, competitive and innovative while reducing their carbon footprint. In this regard, everyone acknowledges that, with Australia producing just over one per cent of the world’s emissions, there is no unilateral Australian solution, only a global solution. It is why the government’s claim that for a dollar a day their scheme will save the Great Barrier Reef is so wrong and disingenuous. This is the totally false impression given to the community by the government’s very misleading presentation of the Treasury modelling. If this were the real cost, why wouldn’t you put up your hand in support?

The public have not the foggiest idea what an emissions trading scheme is. The government has not explained it in 18 months and the public have not really engaged because they have been told that there is no personal cost to them. They have been duped. For most Australian families the annual tax that the government will impose on electricity and other energy-intensive industries will result in a 30 per cent to 40 per cent increase in power bills and indirect increases in the price of most services and items purchased. It will be equivalent to increasing the GST from 10 per cent to 12½ per cent.

Without the rest of the world engaging in some form of carbon reduction scheme, Australia’s actions will have absolutely no impact on the Great Barrier Reef or on the environment generally. In fact, global emissions could actually increase as investment and jobs, especially in major regional centres like Geelong, leave Australia and go to developing countries, where less-efficient factories pump out much more CO2 than in Australia. Without our major competitors engaging in some form of scheme, the cost to Australians will be much greater. This cost will be measured in the premature closure of many coalmines, cement works, coal powered generators and fuel refineries and the loss of major investment in new smelters, metal refineries, LNG projects, cement works, exploration and much more. There will be significant direct and indirect costs added in tax on agriculture and manufacturing businesses that compete against foreign products which have no such tax applied. For example, the average dairy farmer will face a $9,000 tax and have no capacity to offset this cost.

The scheme will see tens of thousands of jobs at risk, the permanent and serious shrinkage of major regional centres and the loss of major investments, yet have little or no impact on CO2 emissions. A $4 billion investment to extend an aluminium smelter in the Hunter Valley will be shelved. This project alone will see the loss of 15,000 construction jobs and 3,000 permanent jobs. It is why Australia must not find itself effectively going it alone. We can and should influence and assist the world to respond, but we cannot get too far ahead of our major competitors. Australia is only one of five countries in the world that will meet its 2012 Kyoto target for emission reductions. This result and leadership was delivered by the former government, along with setting up AP6 and the global forest initiative.

Putting a multi-billion-dollar new tax on our businesses many years before our competitors do likewise will get us too far ahead of the world. That is why the critical debate that we are having is all about how, not whether, we transition to lower carbon emissions. It is about how we calibrate that transition to be broadly in step with the willingness of our major competitors to do something similar in terms of putting a tax on carbon. How we deal with the next 10, 15, 20 or more years of transition is critical. If the transition is mishandled, if we go it alone, if we get too far ahead of the world, we will see the great strength of our economy wantonly undermined and damaged for no good environmental outcome.

The design of the Rudd scheme assumes that our major competitors will put in place a major new tax on carbon in the early years. But what if China, India, Indonesia, the Middle East countries, South American countries and many other competing developing countries do not apply a tax on carbon for 15, 20 or more years? Why wasn’t Treasury required to test such scenarios? It has been seven months since the Treasury modelling was released and there is still no such analysis—not a whiff of it. All they had to do was change some assumptions and run the model again. They have refused.

A major independent analysis conducted by the Centre for International Economics concluded that we know nothing of the 20- to 30-year transition period because there is no analysis of different scenarios concerning delayed start dates by major competing countries during that 20- to 30-year transition period. There is no analysis of the impact of the global financial crisis. There is no empirical analysis of alternative approaches to achieving a reduction in CO2 emissions. If passed in its current form, the biggest deliberate structural change in our history would be more a product of blind faith and pig-headedness than rigorous analysis. Is the design of this scheme robust enough to deal with the scenarios that have not been modelled where our competitors take 10, 15, 20 or more years to adopt a price for carbon?

We have moved an amendment requiring the Productivity Commission to do over the next six months the missing analysis identified by the Centre for International Economics, to do the necessary work, so that we know whether this scheme can protect our jobs while moving us towards a lower carbon economy. This call has been supported by ACCI, the Cement Industry Federation, the Minerals Council of Australia, the Master Builders Association, the Chamber of Commerce and Industry in Western Australia, Woodside and others.

The deliberate failure of the government to require such analysis has meant that individual companies and organisations have been forced to commission such research. In so many cases this research has shown that many years of going it alone will severely weaken key industry sectors in our economy. In the end it all translates into jobs. Over recent months company after company has indicated the cost of this proposed scheme in terms of lost jobs: the Minerals Council, Rio Tinto, Xstrata, Alcoa, Exxon, BlueScope, OneSteel, Hydro Aluminium Kurri Kurri, ZeroGen, Envirogen, Ford, Woodside, Chevron and many others. Research commissioned by the New South Wales government, and suppressed by the federal government, into the regional impacts of the government’s scheme found that regional centres across Australia, such as Gippsland, Geelong, central-west Queensland, the Hunter Valley, central Western Australia, the Kimberley region, Whyalla and Port Pirie, would shrink by over 20 per cent under the government’s scheme.

How stupid we would look if in 10, 15 or 20 years time our major competitors still have no scheme in place or have protected their trade-exposed industries and we have been imposing these costs and more because of the built-in annual reduction in free permits. Such stupidity is already being exposed as the details of a future Obama emissions trading scheme takes shape in the United States. Specifically, the draft United States bill now provides for 100 per cent protection for all US export and import energy intensive industries until 2025 and continuing levels of such assistance if competitors have no such scheme in place. As well, the Obama draft bill provides for assistance for US electricity generators through until 2030. By comparison, the assistance provided to the Australian electricity sector will be far less and will be phased out by 2016. This emphatically confirms that the Rudd scheme will see Australia effectively going it alone. It is all about design: design features which give you the robustness and the capacity to manoeuvre to play a part in all of this but not get too far ahead of the rest of the world, not go it alone.

In addition to our concern about undermining our competitor’s position, the bill contains other major deficiencies. It is my observation that existing large emitters are the companies best placed to lead Australia, and its industries, to a low CO2 environment as long as their balance sheets remain strong enough to fund the billions of dollars to finance the necessary technology and innovation to lead that transition. Yet the balance sheets of some companies will see half or more of their average profitability over the last eight years taken up with the effective tax that they are going to be forced to face or see a loss of uncompensated asset value of billions of dollars. The other balance sheet issue is the existence of large numbers of free permits on a balance sheet. When investors are approached to fund a 40-year energy or resource project and they see a balance sheet with a large number of free permits that are reviewable in five years and are there solely at the whim of the government of the day, they will become concerned about sovereign risk. Projects are already facing this financial dilemma, including a new gas-fired power generation plant.

This relates to the third issue, the problem of churn or recycling of billions of dollars of taxpayers’ money through the system at the government’s discretion. Each year the sale of permits will see the federal government reap a huge new tax revenue—$13 billion in the second year, growing rapidly to $20 billion a year by 2020 or thereabouts. The government intends to recycle some billions of these dollars to compensate low-income earners for the 30 to 40 per cent increase in electricity costs. This will see millions of cheques continue to be mailed to Australian households each year. This government is addicted to mailing out cheques, and it is not hard to see why. A huge administration will be set up to churn billions of dollars back through the economy, with the government picking winners as to who gets compensation and who does not. No new energy or resource project will get off the ground without companies coming on bended knee to get a quota of free permits from the government to make their investment competitive.

Finally, in our view the government has not looked at the significant low-cost opportunities or complementary measures that are available. Too much is being expected of an emissions trading scheme in the absence of global action. Complementary measures should be directed at capturing carbon in soil, at reducing energy usage especially in commercial buildings, at other biosequestration and at recognising the efforts of individuals and families in reducing emissions. All of these have the potential to quickly deliver very significant cuts in emissions without putting at risk tens of thousands of jobs and the fabric of many major regional centres. All of these possibilities have been largely ignored in the government’s scheme, ignored in the government’s rush to be seen to be punishing the big emitters and ignored in the design. It is a design issue. The design of the scheme is deeply flawed. We as a country are exposed with this scheme.

All of these complementary possibilities, in concert with a major focus on promoting renewables, provide an opportunity to minimise the risk of putting too much onus on an emissions trading scheme when the intended actions or inactions of the rest of the world are still not clear. It is why the coalition has proposed the establishment of a government authorised voluntary carbon market from 1 January 2010 based on the Chicago Climate Exchange. This would enable the immediate involvement of individuals and communities, agriculture and biosequestration, the commercial building sector, energy efficiencies by business and other complementary measures in creating bankable offsets. It would be a legitimate and genuine attempt to make an immediate start on significant reductions in CO2 emissions while we get the design of the scheme right, while we find out what the rest of the world is going to do and while we find out what Barack Obama, the president of the leading country in this issue, will do over the next six or nine months. These voluntary measures would enable immediate action on achieving Australia’s 2020 targets and would create an opportunity for individuals, communities and firms to help deliver greater abatement than the government targets will do once a full scheme is in place. As to the government’s argument that this scheme must be passed now to provide certainty, the comments of the CEO of Anglo Coal reflect the view put to me by so many other companies. He said, ‘We don’t want the certainty of a bullet.’

The government’s rushed scheme, as designed, puts major industries, and the jobs that go with them, at great risk for little or no environmental gain. Commercial realities have been ignored and President Obama’s plans have been ignored. The scheme is deeply flawed. We have to better understand the prospects and the implications of Australia effectively going it alone with this scheme before we make any decisions about finalising a scheme—all at a time when we will need the energy and resource sector and other businesses to play a very big part in getting on top of the mountain of debt accumulated so rapidly by the Rudd government. It is a time for prudence, careful policy making and common sense. It is not a time to gamble with people’s livelihoods and their futures in the cause of political expediency. The government’s scheme is in no shape to be passed and the vote must be deferred until after Copenhagen and when the Obama scheme is clearer. There is no plan B if the rest of the world does not follow suit on this government scheme. This is the biggest deliberate structural change to our economy ever. We must get it right.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

It is with great pleasure that I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills and in opposition to the coalition amendment. If there was one issue that matched the intensity of the Work Choices debate in 2007 in my electorate, it was climate change. If there was one thing that I was sent into this place for, with the words ringing in my ears, it was to, ‘Do something about climate change.’ That message from my electorate was loud and clear. The depth of that feeling within my electorate was illustrated by the widespread acceptance of the agenda of the Clean Energy for Eternity movement. They have led the charge and they are leading the charge to demonstrate what a local community can do. Certainly it made very clear my mission in this place.

I am also closely involved with meeting the climate change challenge in my new role as Parliamentary Secretary for Water, where I am greatly privileged to be working with Minister Wong and my colleague Parliamentary Secretary Greg Combet. In fact, I suppose you could say that Greg is working on the CPRS and involved with consequence prevention while I am involved with consequence management in relation to the impacts of climate change on our most vital resource, water.

In relation to our water situation, the IPCC reported in 2007 that reduced precipitation and increased evaporation are likely to lead to water security problems in southern and eastern Australia. For example, annual stream flow in the Murray-Darling Basin is likely to fall to a bracket of 10 to 25 per cent by 2050 and somewhere between 16 and 48 per cent by 2100. Changes in the seasonality of rainfall are likely to further exacerbate annual stream flow. In five of the eight catchments in the southern Murray-Darling Basin the last 10 years has seen inflows around or worse than the CSIRO’s worst-case projections for 2030. The last three years represent the worst three-year period for the River Murray since records were first kept. Inflows to the Murray over the last three years represent just 54 per cent of the previous worst three-year period in more than 100 years of record keeping. Recently the Bureau of Meteorology indicated that rainfall deficiencies for the 21-month period from June 2007 to February 2009 have occurred against a backdrop of decade-long rainfall deficits and record high temperatures that have severely stressed water supplies in the east and south-west of the country. The combination of record heat and widespread drought during the past five to 10 years over large parts of southern and eastern Australia is without historical precedent and is at least partly a result of climate change. These facts the hypocrites on the other side who talk of concern for the regions should think on.

This understanding of the water situation is one of the reasons why taking action on climate change is a key priority of Water for the Future, the Australian government’s strategy to secure the long-term water supply for all Australians. I have seen firsthand the consequences of climate change on rural and regional Australia, and it is so evident in Eden-Monaro, where almost the entire region has exceptional circumstances status. I have watched the growing concern of the community as the Snowy River has suffered, along with the continuing decline in the Snowy Hydro storage dams, particularly at Jindabyne and Eucumbene. I have talked with the farmers across the region as they struggle to adapt to these drier and hotter conditions, and I have sat down with councils struggling to ensure the survival of towns like Bombala and Nimmitabel, whose traditional water resources are dwindling. Our winter tourism industry in the high country knows that we will also be under threat, and we are all determined to keep the Snowy Mountains, not see them become the ‘sandy mountains’. My farmers know that the price of doing nothing on climate change will be annihilation. That is why they are starting to come together in groups like the Monaro Farming Systems to work with the CSIRO on planning and adapting.

In stark contrast to the help farmers in the Murray-Darling Basin and beyond are getting from the Rudd government, the coalition made farmers pay the price of meeting Kyoto targets through reliance on land clearance restrictions without enabling them to at the same time obtain income from this. Under our scheme, farmers will be able, through reafforestation, to voluntarily generate emission units for increases in carbon sequestration from 1 July 2010, creating economic opportunities for them in trading these units.

The CPRS and the associated renewable energy target legislation soon to be introduced into this House will also drive a diversified regional economy, providing more employment options for our kids and a much-needed injection of investment. In Eden-Monaro we are seeing this already, with the huge Capital Wind Farm at Lake George providing jobs for people in and around Bungendore. This 63-turbine farm will generate 400 gigawatt hours per year and represents a $220 million investment, which surely even the member for Hume would also welcome. Also in my region we have seen the setting up of the Dyesol company, an exciting new solar technology; the Lloyd Energy solar thermal project, which promises to deliver schedulable electricity in Cooma and spinning off other industries in Moruya as well; the grandaddy of all renewable energy schemes, Snowy Hydro; the Eraring hydro scheme; the proposed Boco Rock 127-turbine wind farm at Nimmitabel; the planned solar farms in the Bega Valley; and the biogas pilot plant that we are seeking to set up also to deal with our methane emissions, which is generating huge baseload potential in Germany, the United States and New Zealand. Biogas plants will also be complemented by biomass generation from our timber industry, which is a large part of the economic success of our region, and certainly there is huge potential in that resource for further distributed energy generation. Wave energy at the Port of Eden is also being explored. And we are in negotiations with an exciting solar cell manufacturing company called Spark Solar. These are just some of the projects that will bring jobs and prosperity to regional Australia.

But business needs certainty, especially at this time, and moving ahead with the CPRS now will provide investors and business with the basis they need to plan, organise and manage the transition to a lower carbon economy and, yes, to take advantage of its opportunities. Hear what Nathan Fabian had to say on this issue. Nathan Fabian is the Chief Executive of the Investor Group on Climate Change, which speaks for some of Australia’s major institutional investors, including super funds, insurance companies and private sector fund managers, including AMP Capital and Colonial First State. It represents $500 billion in funds under management. In an interview on 28 May on Radio National he said:

Our members are concerned about delays in the emissions trading scheme, they are concerned about the trajectory of the change in the economy between now and 2020 and beyond. And their view is that we should be smoothing the transition as much as possible, smoothing what is a significant adjustment in the economy, to spread the impact on their investments.

Our members would rather get going with the scheme.

Single digit earning impacts are expected for most of the emissions intensive trade exposed companies. And those figures reduce when the current compensation scheme is taken into account. So they are not overly concerned about short to medium term.

Our investors expect companies to plan, to spread risks and to manage a transition over the long term. Our investors can see that climate change is a long-term investment risk that they must manage. They feel that they’ve got no choice. Some of our investors are super funds that have a 20 to 40 year horizon for their members. Superannuants like you and I and they, know that they must think about long term risks. Facing that reality, they want to start to manage the risks as soon as possible.

Fran Kelly asked:

So just finally then what’s your response to this delay we are seeing likely to occur now that the Coalition will delay the Bill?

He replied:

Yeah, well, that’s the concern, it’s curious to target for a high target in 2020 but a later start. Clearly that will lead to greater volatility in financial markets and we’ve just had a pretty serious experience of what that can be like to the economy.

The Rudd government, in contrast to the potentially disastrous coalition attitude, wants through these bills to take action now that will provide certainty in these challenging economic times. Placing a price on greenhouse gas emissions—carbon pollution—is key to ensuring that strong economic growth can be sustained while we reduce greenhouse gas emissions. The creation of a robust carbon market will provide information on the carbon price now and into the future. It will provide a powerful incentive for consumers and business to switch to lower-carbon products and production techniques, change investment patterns and encourage greater efforts in new and innovative areas of research and development. Using a market-based approach to imposing this price will make it easier for business to plan for the future. Providing business with the tools to manage carbon risk will also ensure the policy response is sustainable over the decades ahead.

The government has listened to Australian households who have raised concerns that their individual efforts to reduce emissions will not be adequately taken into account under the CPRS. The government will take into account additional GreenPower purchases above 2009 levels in setting future scheme caps. A range of other indicators of voluntary action may also be taken into account. The minister will be required to report annually to parliament on reasons for her recommendations in relation to caps and gateways and as a matter of policy will set out how voluntary action has been taken into account. The more individuals contribute to carbon emission reduction, the more ambitious can be the caps set by the government. The government has committed to reinvest every cent it raises from the CPRS to build the low-pollution economy of the future and help Australian households and businesses adjust. Revenue raised by the sale of emissions permits will be used to help householders adjust to a carbon price. The Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009 delivers a household assistance package that includes cash assistance, tax offsets and other measures to help low- and middle-income households adjust to a low-pollution future.

The introduction of an emissions trading scheme has been discussed in Australia for more than 10 years. The government has consulted extensively with industry, has considered over 1,000 submissions and has taken into account the outcomes of workshops with industry, technical and legal experts, a review of the legislation by the Solicitor-General and, I am proud to say, forums that I have conducted in my own electorate. There have been 10 years of talk about establishing an emissions trading scheme. It has been a long road to reach this point. Now is the time for action. The bills are here; the time is now. I say to the coalition: support these bills or forever stand condemned.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

The Carbon Pollution Reduction Scheme Bill 2009 and related bills seek to impose on Australia the most radical economic change in memory. In the name of addressing climate change, Labor plan to implement their version of an emissions trading scheme, which they have named the Carbon Pollution Reduction Scheme. The scheme is like no other in the world and its impact on industry in Australia will be dramatic—costing hundreds of thousands of jobs—but its benefit to the global environment will be negligible and probably negative. Labor’s CPRS is friendless. It has been rightly criticised by industry for destroying their viability and international competitiveness and by environmental groups for not delivering real climate benefits. Both are correct, and that is why the Nationals oppose Labor’s scheme.

Australia produces just 1.4 per cent of the world’s CO2 emissions, and that share is going down. We are not even among the top line per capita emitters. We cannot repair the world’s climate by ourselves. Government spin implying that their CPRS will save the Barrier Reef, flood the Murray and stop bushfires is simply dishonest. Climate change issues are global issues and require a global response. Australia must be willing to play its part and, indeed, accept a leadership position. But our efforts, no matter how painful and devastating to Australian industry, will be puny if they are not part of a genuine global action—from not just the developed countries but also the developing countries. The Prime Minister, when he is talking about Australia’s financial problems, excuses himself by blaming the rest of the world. But, when it comes to climate change, he asks us to believe that he can do it all himself. But he has never been able to explain why a 100 million tonne decrease in Australia’s emissions will counter a 10 billion tonne increase in China’s emissions.

In the middle of his recession the Prime Minister plans a major cost imposition on Australian people and our industry. He knows not how many jobs will go or where, because no modelling has been done. Perhaps the biggest reductions in emissions will come from factories that close. But Australia will not stop buying the products; we will import them from countries that do not have the extra cost of a CPRS and where environmental and emissions standards are less demanding. Global emissions will increase when Australian industry closes. There will be no benefit to the environment. Aluminium smelted in China will emit 60 per cent more greenhouse gas than aluminium smelted in Australia. Food production in Australia will emit less CO2 than food from Asia. Making cars in Australia will do less damage to the environment than making cars in Korea.

Senator Williams provided this excellent example. Australia produces 10 million tonnes of cement each year. Each tonne emits 0.8 tonnes of greenhouse gases. If Mr Rudd’s ETS taxes carbon at $30 per tonne, it will cost the Australian cement industry $240 million a year. This will put it out of business. Our 15 plants will close, with the loss of 1,870 jobs in regional Australia. We will then have to import all of our cement from China, which produces one billion tonnes of cement annually, each tonne emitting 1.1 tonnes of greenhouse gases. The result will be that the 10 million tonnes Australia uses will produce 11 million tonnes of greenhouse gases or three million more than now.

Labor’s CPRS will export emissions with the jobs. The products we import will not be subject to the carbon taxes, but what we produce locally will. So job losses will cascade and the trade balance will obviously deteriorate. The coal industry has estimated that 66,480 jobs will go in their industry by 2030. Where are the Labor members for Flynn and Dawson and for electorates in the Hunter and the Illawarra when they should be defending local industry and workers?

The best that anyone can say about Labor’s proposed emissions scheme is that it should be passed so there is certainty. This is being mouthed by a few rapacious bankers, some barely affected sectoral figures and multinational companies who will simply move their investment overseas if Australia introduces a CPRS—and they want to make that decision early. We all like certainty in an uncertain world. Let us not confuse the claims of those who see some political or financial advantage from the passage of this bill with the grim reality of its effect upon the vast bulk of Australian people. As Seamus French, the chief executive of Anglo Coal Australia, said, ‘We do not want the certainty of a bullet.’

Surveys show that most Australians believe our country should have an ETS, even though less than 10 per cent of Australians say they know what an emissions trading scheme is. It says something about the stampede mentality that has developed around this issue that three-quarters of Australians are in favour of something they do not even understand. Put simply, an emissions trading scheme is designed to change consumer behaviour by increasing the cost of goods and services that are considered to be damaging to the climate. Such schemes therefore increase the cost of electricity, transport fuel, mining, waste disposal and industrial processes so that we will use them less.

Labor is not levelling with the people. A CPRS cannot be painless and still work. Indeed it has to be very painful if it is going to change behaviour. For instance, I am not convinced that Australians will turn off their air conditioning on a sweltering day even if it costs twice as much to run. People may well go without other things, like entertainment or even food, but they will want to stay comfortable for the day. People do not stop driving their cars when the price of petrol goes up. So people should not think that the CPRS only hurts others—big business, miners or workers in other towns. It will hurt everyone.

To win public support for the CPRS, the government offers compensation to the poor and the disadvantaged within the community and to some industries that are adversely affected. All workers will be expecting compensating pay rises, but the compensation package undermines the consumer incentives that the scheme was designed to implement. If householders do their bit to lower their emissions under Labor’s CPRS, they get no rewards. They just allow somebody else to emit more.

The CPRS also includes exemptions—free permits or concessional arrangements. In reality, of course, no-one is truly exempt, as we will all have costs passed on to us. But each of these concessions creates anomalies. The more sectors that are exempt, the heavier the burden that must be borne by others. Perhaps most serious of all is that, if Australia has a harsh CPRS and other countries do not, investment activity and industries will migrate with their jobs to non-participating nations. Other countries know that. Canada and New Zealand have delayed their schemes and the USA is proposing an ETS which is tied to mesh with global progress on climate change. The Nationals believe Australia should do the same.

After the failure of the world to agree on very modest reforms in the Doha talks, it is likely to take a long time to achieve genuine global emission reductions, especially in our sector of the world. If we rush blindly ahead with the world’s harshest ETS now and others do not, our economy will be in ruins and the climate will be not one degree cooler.

Labor’s CPRS is artificially contrived. How an industry is affected depends on how the government writes the rules, and the government is asking for this legislation to be passed before the regulations have even been written. A simple change of words can cost billions but may not have any environmental benefit. The CPRS does not reward measured improvements to the environment as much as it rewards or penalises compliance with the rules they write. As with the Kyoto accord, the winners are the lobbyists and lawyers—not the environment.

Why are emissions from sheep and cattle eventually to be counted but not those from kangaroos or humans? Why is carbon sequestered in trees credited, but not what is sequestered in pastures, sugar cane or the soil itself? A simple change in the rules—in the words—to count all sequestration would dramatically reduce the burden of Labor’s CPRS and make it fairer without creating artificial distortions in environmental investment.

Labor is offering concessions to some industries. But, if they changed the rules and offered the same concessions to other industries, the outcomes would be different—maybe even better. Coal, cement, power and others will be given some free permits, not because they have any special environmental merit but because the government has decided these industries should be allowed to survive a little longer. Labor is picking winners not to achieve the best and fairest environmental outcomes but to respond to powerful lobby groups, the noisiest unions and other mates. Less powerful industries or those who do not enjoy Labor’s patronage, like farmers, will just have to endure the costs of the CPRS or cease to exist.

Labor’s CPRS will in fact affect some of the most efficient of the nation’s transport sectors. I will use a couple of examples from the transport industry because it is my portfolio area. Rail, coastal shipping and aviation will face much higher carbon taxes, while less greenhouse-friendly transport measures will be tax free. Electric passenger rail services will be slugged with new taxes on the electricity they use, but those who drive their own car to work will not. Those who fly to North Queensland for their holiday will pay Labor’s new emissions tax, but if you go to Vanuatu, Fiji or the United States you will not—great news for our tourist industry!

If you need the Royal Flying Doctor Service to take you to hospital, you will pay the new tax, but if you go by ambulance it will be tax free. If you put a container on a diesel truck from Melbourne to Sydney, you will get an ETS exemption, at least for a year, but if you put it on a coastal ship you will not, even if the ship is on an international voyage. If you live in remote Australia and need to fly to the city, you will be taxed, but if you can drive to the shops it will be tax free. The CPRS that Labor has designed for Australian transport could actually see greenhouse emissions go up rather than down.

Labor are great taxers, and the more I read about this proposal the more it looks to me like a way to raise vast amounts of new tax revenue rather than to deliver real environmental benefits. Labor’s scheme is planned to collect $13 billion by year 2, growing to $20 billion by 2020, much of which will be churned into compensation payments at the government’s discretion, or, I suspect, used to pay off its debt. There will be a major new bureaucracy to support it. Governments should never be allowed to lose sight of the primary objective of emissions trading. It is not intended to be a new tax. It is supposed to deliver a better environment for us and for future generations.

I know there are many people, particularly in regional areas, who ask why we are bothering with an emissions trading scheme at all. Many even question whether global warming is real. I note that even the government now tends to use the words ‘climate change’ rather than ‘global warming’. The government refers to a Carbon Pollution Reduction Scheme, as though carbon is dirty and evil, rather than something that is also an important promoter of life. The Garnaut report acknowledges, right at the beginning, that there are reputable scientists who question the majority view that climate change is real and that the consequences are serious. I receive documents from qualified people almost every day arguing that their fellow scientists have got it wrong, that the planet is actually cooling, that CO2 emissions are good for us or that climate change is just a normal part of the weather cycle. I have to say I find it amazing that scientists cannot agree on seemingly obvious measurements like: is the temperature going up or is it going down; are the icecaps getting bigger or are they getting smaller; is it raining more or less?

While I know there are doubters, it is beyond dispute that the majority of scientists believe the world is warming and that the potential applications are horrendous. If the icecaps of the Himalayas melt, 40 per cent of the world’s population, in countries like China and India, will go thirsty. If the Arctic Circle’s icepack melts, it will not only affect polar bears but ocean levels will rise, drowning some countries entirely and flooding parts of most Australian cities. Surely, if we are able to do something to prevent such a catastrophe, we should, even if our action has some cost.

If you want a more expert judgement, Professor Garnaut summarised it in this way:

The outsider to climate science has no rational choice but to accept that, on a balance of probabilities, the mainstream science is right …

But, for those who still have doubts that we should be taking action to combat climate change, let me remind you that we all take out insurance policies, even though we hope we will never need them. In the words of Rupert Murdoch, ‘the planet deserves the benefit of the doubt’.

The Liberal and National parties are committed to a comprehensive response to climate change issues in partnership with the world’s major emitters. In July 2007 the former coalition government outlined a major agenda to address climate change. We were prepared to provide leadership and to do our part, but we were also determined to ensure that we did not prejudice the competitiveness of Australia’s trade-exposed emissions-intensive industries.

An emissions trading scheme, even if applied globally, is not a total or adequate response to climate change. Our plan was more comprehensive. In government we invested $3.5 billion in actions to address climate change. In 1998 we became the first country in the world to establish a separate climate change agency, the Australian Greenhouse Office. We were on track to meet existing Kyoto emissions reduction targets. We funded projects from the $500 million Low Emissions Technology Demonstration Fund and put another $500 million towards technology to support the management of emissions from coal. We provided $1 billion to support renewable energy projects and established the world’s first mandatory renewable energy target, which generated $3.5 billion in renewable energy investments. We committed to funding a national research institute for geothermal energy, the CETO wave energy project and the phase-out of incandescent light globes, and we developed the National Framework for Energy Efficiency, the hot rocks geothermal demonstration commercialisation project and the Moomba Carbon Storage project. We have been active and we have delivered significant progress.

The Nationals are a practical party, made up of practical men and women from regional Australia. We are concerned with what is happening in our communities, not mindless symbolism. We believe that Australia must play its part in addressing climate change issues, but an emissions trading scheme is not an end in itself and can only ever be a part of a comprehensive response. We believe there are practical measures that should be taken now. The CPRS should be set aside and a redesigned ETS developed when it can complement an agreed global scheme. Such a scheme needs to deliver emissions reductions without destroying Australian jobs.

Australia should continue to act to implement practical CO2 emissions reduction measures such as soil carbon sequestration, revegetation of marginal land, biochar, clean coal technology, carbon capture, the use of algae et cetera; open a voluntary carbon market to encourage the immediate recognition and involvement of individuals and communities, agriculture and business in sequestration, with bankable offsets; support energy savings initiatives in households, industry and transport to reduce emissions; support more energy-efficient vehicles and more widespread use of alternative fuels; and engage the commercial building sector in improving the energy efficiency of city buildings and residential housing. These measures have the potential to deliver greater reductions in emissions than Labor’s CPRS, without the massive economic cost and job losses.

The nations of the world are committed to meet in Copenhagen later this year to develop an appropriate global response to climate change. They deserve to be given a chance. The coalition has offered the government bipartisan support for an unconditional reduction of five per cent in emissions from 2000 levels by 2020 and a reduction of up to 25 per cent if there is a comprehensive global agreement.

All along, the government’s approach to policy since the election has been all about doing something rather than doing the right thing. The Nationals and the coalition are determined to do the right thing. Now, in a recession, is not the time to introduce an emissions trading scheme ahead of the rest of the world—but neither will it be the right time when we are struggling out of recession. The government should put aside this legislation until after Copenhagen. The Nationals cannot support an extreme ‘go it alone’ approach to emissions trading which will actually not deliver environmental benefits.

Ms Catherine King (Ballarat, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the Carbon Pollution Reduction Scheme Bill 2009 and associated bills. This is in fact one of the most important debates that we are having in this parliament. This is a debate about the future of our children—and I see in the gallery some of the kids from a primary school obviously in someone’s electorate. This is a debate for these children and their future.

These bills bring into effect the government’s election commitment to introduce an emissions trading scheme. This legislation represents the government’s commitment to take strong action to tackle climate change, while also making sure the targets we put in place are appropriate and responsible, given the need to support our economy and jobs in the context of the global recession. Reducing the carbon pollution that causes climate change requires the most significant transformation of our economy that we have ever seen. To achieve this transformation, we have to move from being the most carbon-intensive developed country to a low-pollution economy. It is a huge transformation and not one that will occur overnight. This bill, establishing a emissions trading scheme, alongside our legislation to increase the mandatory renewable energy targets and direct support for the development of renewable energy, is a significant start.

I do not in this debate want to go into the detail of all of the elements of the scheme, but I do just want to briefly outline some of them and then address a couple of points that have been raised by some of the critics. This bill establishes carbon pollution reduction targets—an unconditional commitment to reduce carbon pollution by five per cent by 2020; a commitment to reduce carbon pollution by 15 per cent by 2020 if there is agreement where major developing economies commit to substantially restrain emissions and advanced economies take on commitments comparable to Australia’s; and an ambitious reduction of 25 per cent by 2020 if the world agrees to a global deal to stabilise levels of CO2 equivalent at 450 parts per million or lower.

The scheme includes assistance to emissions-intensive trade-exposed industries—and I will talk more on that issue later, as I know this is one of the more divisive issues. The assistance recognises that there are some industries that, due to the very nature of what they produce, will be significantly affected by the introduction of the scheme. Recent revisions to this assistance have also been made to recognise that there are industries that, due to the global recession, will be less capable of adapting to the scheme. The scheme now provides a stronger recognition of voluntary contributions to the reduction of carbon pollution.

The bill establishes the Australian Carbon Trust, with $50 million for the Energy Efficiency Trust and $25.8 million for the Energy Efficiency Savings Pledge Fund. In addition, we will take additional GreenPower purchases above 2009 levels into account in setting Carbon Pollution Reduction Scheme caps. I certainly commend the government for recognising voluntary contributions to these measures. I do think there is more work that can be done to measure other forms of voluntary action to build on and give effect to the measures included in this bill.

In recognition that there will be an increase in energy costs as a result of the introduction of this scheme, the bill introduces a household assistance package. This assistance is particularly designed to assist low-income households. The bill also introduces the Climate Change Action Fund, designed to help business, the community sector, workers, regions and communities to transition to a low-pollution economy. The fund is for business and community organisations that do not receive EITE assistance but do have significant energy costs to take action to reduce emissions.

These elements constitute the main measures of the government’s CPRS. These, along with the MRET, will drive investment in the renewable energy industry and over time reduce our carbon pollution. We face an incredibly complex challenge. On this side of the House we know unequivocally that carbon pollution is causing the world’s climate to dramatically change, with extreme weather, higher temperatures, more droughts, bushfires and rising sea levels. We know that carbon pollution is caused by human activity. We know that if we do not act we are dooming our children and our grandchildren to clean up our mess.

Unfortunately, the same cannot be said of the coalition. The coalition have stated that they intend to vote against this legislation unless we delay it. The decision by the coalition has nothing to do with the Leader of the Opposition’s concerns about this legislation; the issue is that the Leader of the Opposition has been unable to forge a consensus in his party room and is seeking an extension of time. It is intended to distract from the fact that the National Party, no matter what, are utterly opposed to this scheme or any scheme and that many in the coalition remain sceptical about climate change. Anyone interested in this debate who wants to hear more on that point should turn to the Leader of the National Party’s speech which we just heard in this parliament—a speech which basically said, ‘Because this is a really hard problem, we should not do anything.’ That is basically the summary of his speech. It is for these reasons that Howard failed to act in the 11 long years he was in office.

In what is a complex debate, the public discourse often revolves around a few core arguments, and I want to address two of them. The first is the assertion that it is wrong to provide transitional assistance to big polluters. The second is the issue of targets. The arguments put forward in favour of less assistance to industry and higher targets sometime fail to grapple with the economic realities of the transformation we need to set in train. Firstly, these arguments do not recognise that, if we just put a cost on carbon with no assistance, it would quite simply result in jobs and emissions being exported to countries overseas. That is not in anyone’s interests.

Whatever you may think of these so-called big polluters, the fact remains that many Australians are employed in these industries. I note that some have claimed that I should not be too worried about that, as none of the jobs are in my own electorate. The proposition, frankly, is simply not true. Many of the manufacturing jobs in my electorate—far too many of which have been lost of late—are heavily reliant on industries that are classified as big polluters. Many of the industries in my electorate use products produced by these big polluters, and in any case the argument is based on the premise that Ballarat people or their children never leave the electorate to work in mining, energy or aluminium or steel production. In fact many people, particularly those in Bacchus Marsh, travel to the western suburbs on a daily basis for work in these very industries. I do and should care about jobs across Australia. I care deeply about the plight of working-class people, whether they live in Ballarat or beyond. I have spent my entire working life trying to create better opportunities for people on low incomes to gain and keep their jobs, to educate their children and to emerge from poverty.

We are embarking on an economic transformation to create the low-pollution jobs of the future, but it is a transformation that will take time. To try and claim that it is possible to make such a significant change to our economy without assistance is simply wrong. The assistance measures have been deliberately designed to provide strong incentives for those industries to reduce their emissions, to adopt emissions-reducing technologies and processes and to fully factor in the carbon price when considering new investment opportunities. The amount of assistance will be reduced over time.

I am also confident that, with the changes to MRET and the support we have given to the renewable energy sector, my electorate will be and is in a good position to benefit from renewable energy jobs. It is my hope that over time many of those employed in heavily polluting industries will transition into these jobs, but it is not going to somehow magically happen overnight—not without an enormous effort in our local community to train and reskill people and to work with our manufacturing sector to modernise and innovate.

The second argument has been around the targets we have set to reduce Australia’s carbon pollution by 2020. In particular, I am aware that there are groups who believe that, through voting this legislation down, there will somehow be the opportunity to increase targets. People who know me will know that I sit on the side of this debate that wants high targets to ensure that we can play a strong role in Copenhagen at the end of the year, but unfortunately we have come to this debate very late, meaning that we have locked into emissions growth. I wish it were otherwise, but it is not. To use the words of the minister, ‘We have a very big ship to turn around.’

Today we face a choice. We can do nothing and lock in more emissions growth. Current projections show that emissions would be 20 per cent higher by 2020 than they were in 2000 if we choose not to act. The longer we wait to start reducing emissions, the more difficult and costly it will be. I am concerned that those who think that there will be a better opportunity to revisit targets and redesign the scheme if this legislation is voted down have simply failed to read the politics of this debate. We have already moved to boost momentum in the global negotiations by adding the target of 25 per cent by 2020 to our scheme, and make no mistake: as the Prime Minister has made clear, we stand ready to increase our post-2020 targets even further in the context of strong global action. This includes considering a deeper 2050 target should it become necessary to play our part alongside commitments from both developed and developing countries. But Australia cannot play its full part unless we introduce this scheme. A decision to defer this scheme until after Copenhagen would be a clear sign to the rest of the world that Australia is not serious about getting a global agreement.

It is time these bills were passed. The detail and design of the government’s scheme has been known for some time. It has been examined in detail, inquired into and, to the government’s credit, changed to reflect the concerns of both business and environment groups. Business is now calling for it to be passed. The Australian Industry Group stated on 4 May:

Ai Group supports the passage of the CPRS legislation this year … This is critical to establish the degree of certainty business requires in assessing medium and longer-term investment decisions. It is particularly important in the current context because of the central role that business investment needs to play in recovery from the recession.

Environment groups are calling for the bills to be passed. The Southern Cross Climate Coalition—made up of the WWF, the ACF, the Climate Institute, the Australian Council of Social Service and the ACTU—said on 4 May:

… the CPRS should be supported so business can get on with investing in the clean energy and other low-carbon jobs …

I commend these bills to the House.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

Regardless of what the government would have people believe, the commitment of the coalition parties to bipartisan targets for the reduction of CO2 emissions is genuine. It should be the benchmark that we design an emissions trading scheme that delivers real reductions and does not have the effect of sending emitting industries overseas, where they will contribute as much or more carbon, providing no benefit for the environment. Clearly the proposed scheme under the Carbon Pollution Reduction Scheme Bill 2009 and cognate bills offers a high chance of delivering just that outcome.

There is no doubt that, if we as an opposition had not raised the genuine concerns of major industries and the employees of Australia, the government would have implemented an emissions trading scheme based on the white paper. Since then the government has made further alterations before tabling the legislation. There is no doubt that, if the opposition had not highlighted the flaws, we would have been saddled with that version. Still the government fiddles at the edges of this flawed scheme, with the latest tinkering on 4 May. The scheme does not need tinkering; it needs major surgery. Unfortunately, the government is far more focused on political victories in this area than on a scheme which will give genuine reductions in emissions and keep Australian businesses in business.

The opposition is doing exactly what it should. It is unearthing flaws in what will be one of the most intrusive and complex pieces of bureaucracy ever visited on Australian business. Make no mistake: the new industry that will spring from the trading scheme proposed will offer the biggest market opportunity for the financial services sector in a generation. This is for the sector which is the preserve of the neoliberals whom the Prime Minister decries in his 7,000-word diatribe in the Monthly magazine’s February issue. These terrible predators are to be given a whole new playing field, courtesy of the man who thinks they are responsible for most of the ills of the world.

Now the government has announced the later start-up date. That means there is no need to rush the legislation. Without the urgency, the government should defer the legislation and request a full investigation of the impact on industry and jobs by the Productivity Commission, focusing on making sure that neither Australian jobs nor emissions are exported, which would lead to worse environmental outcomes for the world and certainly a worse outcome for Australian workers and their families.

In just the last few weeks the US has announced legislation in congress to establish an emissions trading scheme. Whilst the US economy has lost some of its lustre, it is by far the biggest and most influential in the world. Whatever we all think of the US legislation—whether it is the best way to address carbon emissions, whether it will protect American jobs or export them, whether it will offer full protection to their agricultural industries or whether it will allow unencumbered imports from non-participating nations, thus enticing American consumers away from products which have paid the price to reduce their carbon emissions—it will inevitably become the single most important piece of legislation in this field in the world because of the size of the American economy. The US economy is three times the size of the Japanese economy and four times that of China’s, and it is the most influential economy in the world by a large margin.

The Waxman-Markey bill currently before the US congress does one thing that the coalition has been calling for since the start of this national debate. It legislates for something which was an integral part of the proposed emissions trading scheme that the previous government took to the last election. If passed in its current form it will deliver something that the Rudd government has steadfastly refused to do—that is, it will give full exemption for exporting industries and import-competing industries. We can safely assume that, if the US adopts a scheme that gives full protection to its trade exposed industries, if it gives full compensation to its farmers, all the economies around the world which are yet to commit to a scheme but have signalled an intention to do so will take a great deal of notice of what the Americans have done.

Canada, a country that is often compared with Australia, has deferred all decisions on the design of its ETS until it sees what the economic giant on its border does. Thinking that we as the 14th largest economy in the world, with just 1.4 per cent of total world carbon emissions, can forge a path through the sheer complexity of an emissions trading scheme and expect the rest of the world to follow us indicates a disconnect from the rest of the world.

Recent modelling by the New South Wales government has found that the impacts of the proposed scheme on regional communities will be far worse than on the rest of the economy. It should come as no surprise that the impact on regional Australia will be greater—after all, that is where most of the heavy emitting industries are. But a prediction that regional economies will shrink by 20 per cent would devastate any regional economy. Population decline, empty schools and cheap housing—we have seen it all before and, after the excitement and growth of the Howard-Costello years, we hoped that we had put it behind us. It should come as no surprise that I hold grave concerns about the impact it may have on the people in my electorate of Grey.

The Nyrstar smelter at Port Pirie is often described as a lead smelter. In fact, that description wildly undersells the capacity and role of this plant, which is the primary provider of jobs in the Port Pirie region. It is a complex smelter that produces lead, copper, zinc, gold, silver, cadmium and sulphuric acid. It provides, directly and indirectly, almost 2,000 jobs in a city of 14,000 people. Nyrstar have shown themselves to be good corporate citizens and have invested heavily in reducing the impact of the smelter on the environment and the citizens of the city. They are only interested in running a clean, profitable and engaged industry. A commitment to stay will require long-term investment plans. As with all our refining and export industries, the collapse in world markets has had a severe effect on Nyrstar’s bottom line. Piling on what is effectively a new tax can only threaten their viability. It should be made clear that industry will pay a net $3 billion a year in taxes under this scheme—that is, after the government has paid compensation at varying rates across different sectors. Let us call this the winners and losers market.

The proposed scheme is enormously complex, and industries that were expecting to get 90 to 95 per cent of their permits for free are finding that their production is being broken down into segments, all attracting different rates of compensation. Each and every segment of their operations will have different carbon accounts operating on different rules. This complexity alone will lead to a ramping up of costs.

Now let us take the case of the steelmakers, in this case represented in my electorate by OneSteel. As with Nyrstar in Port Pirie, OneSteel is the prime generator of jobs in Whyalla—nearly 2,000 directly and another 2,000 indirectly. If Whyalla were to lose its steel-making industry, it would make the withdrawal of shipbuilding from the city more than 30 years ago, which led to 30 years of depression, look like a picnic by comparison.

There are a few things that I am not sure the government understood when they designed this scheme. If we look at the steel industry, we can see that more than 70 per cent of carbon emitted in the steel-making process is incurred by the use of coke in the blast furnace. You cannot turn iron into steel without using coke in the furnace. Steel needs carbon. Why, then, did we design a scheme which in effect raises the cost of using coke in the steel-making process as an incentive to seek an alternative? There is no alternative. All this can do is raise the cost of production, favouring overseas competitors.

Plainly put, any new tax which our competitors will not have to pay could well be remembered as the straw that broke the camel’s back for these industries. There are flaws in this scheme. We have time to rid ourselves of these anomalies, but not if the government persists in ramming the legislation through in this ill-considered way. The government now does not intend to introduce the scheme until 2011. So let us pause and have a look at what the US does and at the outcomes of Copenhagen and, as the world’s 14th ranked economy, not get our ambitions mixed up with our capabilities.

My electorate of Grey has a large agricultural base. Outside the industrial cities, it is the economic backbone of the greater community. The emissions trading scheme allows for agriculture to be exempt from trading but offers no relief from the increase in costs associated with the scheme, estimated by the Australian Farm Institute to be six to eight per cent and by ABARE, a government agency, to be 20 per cent. It also does not offer any incentives for farmers to participate in carbon capture and storage.

So here we have landholders in control of more than half of Australia’s landmass, which has been identified as one of the great potential carbon sinks, and we are closing the door on incentives to participate. We should be establishing a voluntary carbon market in which farmers can make managerial decisions to store carbon if they wish to and industry can buy the credits from them. It was alarming to me to find out as a result of Senate estimates hearings that the Treasury modelling had not even considered the impact on agriculture. In an effort to play catch-up, this week the climate change and agriculture ministers have invited farming groups to come to Canberra once a fortnight to contribute to the formation of climate change policy as it affects agriculture. It is about time. But guess what? Those fortnightly visits to Canberra for at least six months would all be at the participants’ expense. That’s very handy if you happen to live in Adelaide or Perth! The government is saying, ‘We value your opinion but it’s going to cost you thousands of dollars and many days away from work.’

If the government is willing, we can now address these underlying flaws in the proposal. It is time to bring the parties together and get this right. A focus on remedies that provide positive signals, such as investment in low-emission electricity generation, biosequestration of carbon in agricultural soils, including biochar, and redesign of buildings to reduce energy demands all offer positive answers that will not cost us thousands of jobs, particularly in regional communities.

We will almost certainly have an ETS, and we in the coalition, as I have said from the outset, will support the government’s targets. We can design a scheme that will not disadvantage us in comparison to our competitors by making sure we are largely in step with them. It makes sense to now pause and see what the biggest economy in the world is going to do, to ask the Productivity Commission to assess the impacts of the scheme on our economy and to take into account the question, ‘What if the rest of the world does not come on board?’ which is something the Treasury modelling has not considered.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

On this, the 17th anniversary of the Mabo decision, I acknowledge the traditional owners of our country and thank them for their continued stewardship. It is amazing how that one High Court decision changed the future of Australia. It is in that spirit and with a great sense of hope for the future of our planet that I rise to support the Carbon Pollution Reduction Scheme Bill 2009 and related bills.

This legislation sets Australia on a course of global leadership in our response to climate change. Not since Billy Hughes and Doc Evatt strode the world stage after the world wars have we had the opportunity to lead the world. When it comes to climate change, the overwhelming majority of people I meet want the government to act, and they want us to act now. Wherever I go in my community—to schools, aged-care homes, shopping centres and other places of business—I hear strong support for Minister for Climate Change and Water Penny Wong and the Rudd government’s leadership on climate change. There is also widespread recognition that our excess carbon pollution is causing the climate to change in dramatic and previously unseen ways. Extreme weather events, higher temperatures, more droughts and rising sea levels are happening.

Australia’s environment and climate are particularly vulnerable to climate change. Folks in South-East Queensland know this better than anyone—we know it damn well. We went down to 16.7 per cent in our dams. We are now at over 72 per cent. This change happened in the blink of an eye. We recognise that we all have a part to play in our response to climate change. I have spoken in this place before about how the people of Brisbane and South-East Queensland responded to the challenge of the drought—we stepped up to the crease. Over the last five years we have completely changed the way we use water, to the point where none of us will return to the bad old days of having long showers and hosing concrete pathways. Before the drought, Brisbane people used, on average, 277 litres of water per person per day. However, in response to the drought, our water use dropped by more than half to less than 130 litres per person per day. I am sure that every Queensland MP has an egg timer in their parliamentary house shower to regulate what they do down here in Canberra; unfortunately, mine broke this morning.

Thanks to unseasonal autumn rains, the long drought is officially over and Brisbane dams are now much healthier. We got through it, but it took some incredible leadership from the Beattie and Bligh Labor governments and every single one of us doing our bit and taking responsibility for the impact we were having on the environment. We learned that water is liquid gold and that there is a price to pay if we use it and waste it. In the same way, we understand that carbon comes at a significant environmental cost and that the best way to ensure a sustainable future for our children is to put a price on carbon.

We Queenslanders also know the catastrophic effect the changing climate is having on our greatest natural asset—the Great Barrier Reef. This natural wonder is a source of some $5 billion in tourist and fishing revenue. Climate change is already impacting the reef. Coral bleaching in 1998 and 2002 affected more than half of the reefs, and the intergovernmental panel on climate change tells us that an increase in sea surface temperatures of between one and three degrees will wipe out coral reefs. Higher sea temperatures will also impact the unique biodiversity of the Great Barrier Reef, as many species of bird and fish will be unable to survive. This is the cost of inaction. This parliament has a responsibility to our children and our children’s children and to our environment to do something about it.

As the sixth-largest per capita polluter in the world, Australia must also not shirk from our international responsibility to reduce our emissions. New Zealand and 27 countries in Europe already have carbon reduction schemes in place. Canada and some states in the United States are on their way. But the coalition say, ‘Wait.’ They waited 12 years in the government to act and did nothing, and they want to go on waiting. We should not wait for the world economy to improve before we commit to action because now, more than ever, Australian businesses need certainty. I heard the head of Santos saying it yesterday. They do not need to be left in limbo while the coalition dither. We should not wait for the United States to act, as the Liberal and National parties would have us do. I know the coalition when it was in government was content to follow President Bush on most issues, but that is not our style. We do not need a deputy sheriff. Sometimes a man’s got it do what a man’s got to do, and this is that time.

The Rudd government prefers to act in the national interest. The fact that the coalition party room cannot come to an agreement on a response to climate change is shameful. It seems as though every coalition member has their own individual policy on climate change. Their leader cannot even convince the shadow cabinet climate change exists, let alone produce a coherent party policy in response to it. While the coalition whinge, we work. We are getting on with the job of responding to climate change.

This bill before the House will help drive down emissions by introducing a cost on carbon pollution. The bill establishes emissions trading within the Carbon Pollution Reduction Scheme. The Australian Climate Change Regulatory Authority will be set up to oversee the scheme. Starting from 1 July 2011, the regulatory authority will issue a limited number of emissions units which will be available for purchase. Companies will compete to purchase these units at auction or on a secondary market. The price will be fixed at $10 per tonne before full market trading gets underway from 1 July 2012, which is less than 25 months away. The scheme applies to all greenhouse gases under the Kyoto protocol, including CO2, methane, nitrous oxide, hydroflurocarbons and others. It also includes energy, transport, industrial processes, waste, fugitive omissions from oil and gas production and forestry.

For some entities it will be cheaper to reduce emissions than to buy units, and of course this is the whole idea behind the Carbon Pollution Reduction Scheme. It will provide the motivation that industry needs to invest in renewable energies like solar, wind and geothermal and build the momentum needed to get new technologies like clean coal out of the science laboratory and into the NEM. As well as creating alternative energy sources, these emerging industries will be a source of thousands of new, low-carbon, green jobs—the green-collar jobs that have been referred to previously.

The Rudd government made a clear election commitment to implement a carbon trading scheme, and that is exactly what we are delivering. This scheme has been shaped through the green paper and white paper processes, and this legislation has also gone through very wide consultation with industry. In fact, every step of the way, the government has listened and responded to the views of industry and other stakeholders and calibrated accordingly.

This bill introduces a massive shift in the Australian economy, but it also includes appropriate measures to protect Australian jobs and to shield trade exposed industries. The last thing we want to do is see vital Australian industries shipped overseas to higher polluting countries. We achieve nothing by simply shipping emissions overseas. That is why this scheme will allocate some free permits to firms in emissions-intensive trade-exposed activities. Permits will initially be provided at a 90 per cent rate for the most emissions intensive activities and at a 60 per cent rate for activities that are moderately emissions intensive. The rates of assistance per unit of production will be reduced by 1.3 per cent per year to ensure that emissions-intensive trade-exposed industries still share in the national reduction of carbon pollution over time.

An additional global recession buffer for trade exposed industries will also apply for at least five years, at a rate of five per cent for activities receiving assistance at the 90th percentile rate and 10 per cent for activities receiving assistance at the 60th percentile rate. All industries will face new costs for carbon, but those impacted the most will receive the most assistance. Coal fired electricity generators will also share in $3.9 billion in permits over five years. Obviously, we must preserve peak load until other forms of energy can take up the slack. This bill establishes a $2.75 billion Climate Change Action Fund to provide targeted assistance to business and community organisations.

This bill sets Australia on a course to a low-pollution future. I know there are still some people coming to terms with whether or not climate change exists who want us to wait or do nothing—that is, the coalition party room. There are others who think our targets do not go far enough—that is, the Greens and many concerned people in my electorate. But this bill offers a considered, reasonable and responsible response to climate change. The Rudd government is committed to reducing carbon pollution by five per cent by 2020. This is a significant reduction in Australia’s carbon pollution and will help turn the tide on climate change. We also know that we can achieve 15 per cent if other major economies come on board.

But I stress that this is ‘only the beginning’—to borrow the words of the wonderful singer Deborah Conway. Five years ago the government of the day was not even talking about climate change. Today we have practical plans on the table. I hope future governments and future generations will amend this scheme as new technologies and emerging industries make higher reduction targets possible. I sincerely hope this for my children’s sake. Once again, I thank the Minister for Climate Change and Water and the Treasurer for introducing this legislation to the parliament. I am proud to be a part of a government that has the courage to implement this scheme. We are strong in will. We will strive and we will find and we will not yield. I commend the legislation to the House.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, imagine the entire roof above us here as an illuminating light. If we put four of these clocks up on the roof and said, ‘No light will illuminate this room because we have put those four clocks up there,’ that would be like what we are saying about global warming. We are saying that the equivalent of one square metre in an area of over 2½ thousand square metres is going to warm up the world because the rays will not be able to bounce back up again. The proposition is ridiculous—it really is.

I am not a sceptic; I am an ‘anti’. Don’t call me a sceptic—I am an anti. But, having said that, even an anti like me says: ‘Well, there is a huge rate of increase here. We should pull back a bit.’ If you want to go to one of the half-a-dozen leading authorities in the world, go to Katharina Fabricius at the Australian Institute of Marine Science—and it sure would be nice if someone in this place ever did any scientific research, because there has not been one single neuron of scientific contribution in any of the debate up to date, and I have been listening to all the speeches. Please, fellas, just do a little bit of science and think about it: four clocks on this huge roof are going to stop the room from illuminating! That is your proposition. It is a ridiculous proposition. But there is a huge increase, so even an anti—not a sceptic, but an anti like me—says we should take a bit of a pull on the reins. I am going to wheel a breaker here and the horse should be going at a gallop, but I am saying: ‘No, I might get killed if it goes at a gallop. We should pull back a bit here.’

If you go to Katharina Fabricius, one of the world’s leading authorities at the Institute of Marine Science—one of the four leading institutes of marine science in the world at Townsville in North Queensland—she will tell you about carbon dioxide going into the water. You will get some sort of idea if you listen to speeches here that the sun’s rays go through and kill the reef. I am sorry—that is not the danger here. The danger here comes from carbon going into the water and forming a very mild carbolic acid. Sea water is in fact alkaline and the seashells and even the little plankton have shells, and they are mainly calcium carbonate, which, for those of you who know your chemistry, is alkaline—a base. If you acidify the water, it becomes difficult for the plankton to form their shells, and they do not. There is a diminution in the bottom of the food chain in the oceans. So there is a situation in the oceans which scientific analysis will tell you creates a problem. So even an anti like me says, ‘Yes, there is some reason why we should have a look at this.’ We should not go crazy mad like we are doing at the present moment, wiping out jobs all over Australia.

I have got to agree, very strongly, with the Leader of the Opposition on this when he says that all of our industries will be put at the gravest disadvantage. Do you want all of your industries to start on a handicap? They are handicapped now because all the other countries have tariffs and subsidies. In agriculture, the average subsidy tariff level is 49 per cent. The figure in Australia is four per cent. They are the OECD figures, not mine. It is much worse in manufacturing. Does Barack Obama worry about WTO rules on free trade when he says all steel from now on will be American steel in every single government job? Does he worry about that when he gives $43,000 million dollars to the American company GMH? Does he worry about that? No. These are all subsidies. But we do not do that in Australia; we go in the opposite direction. We place a handicap on all of our industries.

A very serious a problem arises in the mining fields. I represent the biggest mining province in the world, the north-west mineral province, which produces pretty close to $15,000 million a year of product. We have already lost 2,000 jobs. We need our unions to come forward on this because it is their members that are taking the knock. I am not going to nominate the mines because I do not want to scare the horses, the banks and everyone else but there is not a single person living in north-west Queensland who does not know that there will be another 2,000 jobs to go and there will be another four or five mines that will close if you put this cost imposition upon them.

I pay very great tribute to the member for Batman, the Minister for Resources and Energy, who is in the House, because he has acted to deliver to us a reduction in our cost of production and we are very appreciative. In the budget, it says that we will have a true national grid and that the north-west mineral province and the Pilbara will be brought onto the national grid. Minister, we must say a very sincere thank you on behalf of the people of Australia, not just the people of my electorate, because, if we do not get that, there will be another 2,000 jobs gone. But if we do get that and we do not have this imposition upon us, I think that, even in the current climate, we will create another 2,000 jobs. Mr Gutnick’s phosphate mine at Lady Annie, I am sure, will go ahead. He has said publicly on many occasions that, regardless of the financial crisis—of course the Indian government is heavily involved here, God bless them—he will go ahead with the project that will be worth somewhere between $1,500 million and $3,500 million dollars a year to the Australian people.

If we have that transmission line running as the minister has got in the budget—and we thank him most sincerely as this is truly something that is significant that the government has done—and that electricity is carried out to that north-west corner where our electricity is costing us an absolute fortune and where in two years time we will not have the enough to supply demand out there—and the minister may tune in here. Minister, could you tune in here. I know Mr Billson is a very intelligent person but—

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Order! Through the chair, please.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, along this transmission line—and we will be coming to see you, Minister—as it turns out, the state government has already put $23 million into a solar plant at Cloncurry. It is the logical place to put it as it is the hottest town in Australia and, except for four years, we have had under 10 inches of rain a year for the last 40 years. According to the latest National Geographic, they want to duplicate the Acciona plant which boils water during the day with the sun and uses geothermal energy, which is right next door at Julia Creek, to boil the fluid—I will not say water—of an evening. The state government has already put in $23 million. That gives you, at the start of this transmission line corridor, 70 megawatts—Australia uses about 40,000 megawatts, but we use about 350 megawatts out there—of extremely valuable electricity.

In the next town, Julia Creek, there are 6 million hectares of prickly acacia tree infestation—60 Minutes is going to do something on it shortly. There are 60 million hectares infested with this dirty, filthy weed. But it is a tree so they are going to burn it and create renewable power. So at Julia Creek there is renewable power. You have got to understand, Julia Creek has got the biggest vanadium deposits in the world. It is very low grade but they are the biggest deposits in the world. They have the fourth biggest oil shale deposits in Australia. We have two per cent of the world’s uranium in the north-west corner, which, in spite of the Queensland government, will be mined in the not too distant future. That is for absolute certain. We have 500 million tonnes of reserves of iron ore in the area and we have not drilled for it yet; we just happened to stumble across 500 million tonnes of it.

None of these things have been touched and there are two major phosphate deposits, including Joe Gutnick’s. He has already put a lot of money into this project. We are talking now about a clean energy corridor. We have solar energy in Cloncurry, we have the burning of the prickly acacia tree at Julia Creek and we have a major biofuels project at Pentland. That biofuels project will have a dam which will produce hydroelectricity. We will have 100 megawatts of hydro. Then it will burn the sugar cane fibre after the sugar is taken out to be converted into ethanol. It will turn that fibre into 300 megawatts of electricity every year forever. Minister, because of your initiative with this, people will write you down in the history books because the transmission line—there is a little bit of luck as well as good management in here—happens to be a clean energy corridor with 700 megawatts of clean energy along that corridor.

The clean energy corridor finishes at Ingham, just north of Townsville, where there are four sugar mills that burn their sugarcane fibre to get rid of it. They produce no electricity from it at all. With a little bit of assistance—and I am not talking about big money here; it might be $40 million or $50 million at the very outside—they can convert over to 200 megawatts of clean energy for forever. So there are some 750 megawatts of clean energy that will forever come out of that initiative. With the transmission line, we now have the north Australia clean energy corridor coming into existence and we are getting a very positive response from the government and we are very pleased with that. We thank the government very sincerely.

But we must emphasise this to the government: please, you have to pull back. We appreciate the Prime Minister postponing for two years but it will be absolutely deadly for every mine out there if the government pushes ahead with this. What we are saying is this: we can give you 750 megawatts of clean electricity every year and five per cent of Australia’s petrol as a clean renewable—ethanol. Unlike corn ethanol—I am not knocking it; I do not want to antagonise my New England friend here—we simply cut sugar cane. We do not have to plough every year; we do not put the steel through the ground. They have a 29 per cent benefit; we have a 190 per cent benefit for the environment because all we do is just mow it every year. That is all we have to do; it just keeps growing. It is a grass. So we would say that the government can do practical things here. The trading scheme is just going to give the Goldman Sachses and the Macquarie Banks an extra $7,000 million worth of securities to trade. They are in their silk suits in Sydney rubbing their hands together. But you could go ahead with the north Australia clean energy corridor, and you could add solar hot water systems to that.

When I was the mines and energy minister in Queensland, I did not want to build a fourth power station in Queensland. It was going to cost $1,000 million and I would have had to go on my knees to Treasury. I did not want to do it for a host of reasons. We found out that if we converted all the government owned houses in Queensland to solar hot water it would be a big contract and we would get the solar hot water systems very cheaply. We felt there would be an extra 10 or 15 per cent of other homes that would come in on the contract. We found out that we would be able to postpone the building of that power station by 10 years. So, if you like, one-quarter of the carbon that was going up into the atmosphere in Queensland was removed by simply putting solar hot water systems on the roofs. Forty per cent of domestic energy consumption goes on the heating of water—that is from Szokolay’s book on the solar home, which is gospel as far as these things go.

If we go to 25 per cent ethanol, it will not only make the industries in the New England area and in the Kennedy area internationally competitive but we will have the cleanest fuel in the world. 60 Minutes did a marvellous show on Sao Paulo, the dirtiest city in the world. They introduced ethanol and they did it to help the farmers. It was also done in America, but they did not do it to help their farmers at all. They did it to clean up the pollution in New York—it was the air quality control act. It had nothing to do with helping farmers. People were dying because of the pollution. Sao Paulo is a city with a bigger population than Australia’s—over 21 million people live in Sao Paulo. It is arguably—this is the claim of 60 Minutesthe cleanest city on earth. The air above Sao Paulo is the cleanest of any city in the world. Petrol with 25 per cent ethanol is compulsory, but because ethanol is also cheaper than petrol—it has been cheaper for the last three or four years now—there is 50 or 60 per cent ethanol in petrol.

I must again pay credit here—and it seem that I am being nice to everybody today, which is a bit out of context! This time, I pay credit to the Leader of the Opposition. We have a big landmass in Australia; we are almost as big an area as China or America. We are not quite as big as Russia or Canada, but they are half ice. If you take them away we have the biggest landmass of anywhere in the world and we are not using it. The Leader of the Opposition quite rightly talks about the use of bacteria fertiliser—not all, but 30 or 40 per cent bacteria fertiliser. We have no carbon in the soils in Australia—we are one-fifth of the average for every other country in the world. Bacteria fertiliser will lock up 50 tonnes of carbon per hectare in the soil. If you can put solar hot water systems in and give us agricultural offsets the same as America is doing then we can do that as well.

Let me come back to another issue. There is a problem that will arise in the oceans. It is not there now but it will arise. Please ring up Katharina Fabricius, a very articulate person, and discuss it with her. By the same token there is a little element of ‘Chicken Little’ here. Those of us who are my age will remember the Club of Rome, which said we were all going to starve to death by 1984. Ironically, 1984 saw the biggest collapse in agricultural prices in human history because we had such massive overproduction. The Club of Rome may have scared us into overproduction! And then there was the hole in the ozone layer and we were all going to die of cancer. And now there is cattle flatulence. No-one is game to get up in public and say cattle flatulence is causing global warming, but it is in all the studies. Just to give you some idea of how much science is going on here, the greenie movement say each cow’s flatulence is equal to 54 cars, and they have convinced everyone. And the government papers say each cow’s flatulence is equal to 54 cars. Sorry about that, but in the latest scientific study they simply had a big shed, fully enclosed, full of cows. They monitored the percentage of carbon dioxide in the air going in, they had the moo cows inside and they monitored the air going out. I do not know why—maybe the cows had a good day—but, instead of representing 54 cars, each cow represented only eight cars. Those cattle contained themselves very well. They must have been northern cattle!

In conclusion, the minister has done a brilliant here and has fought very hard to secure in the budget the critical statement that we will have a true national grid. As he has said on many occasions, all of our metals—we are arguably the biggest metal producing and processing country in the world—are in the top third of the country but there is no power. There is not even access to base load power in the top third of the country, namely, the north-west mineral province and the Pilbara region, both of which are designated in the budget. Minister, you have been very lucky because you will go down in the history books as the founder of the north Australia clean energy corridor as well, but you may not have entirely deserved all of that praise.

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

This is the second time in two days that I have followed the member for Kennedy in debate, which is vaguely troubling. Firstly, I want to pay tribute to all the community groups—GetUp!, the climate action groups like the Moreland Climate Group in my own electorate of Wills, the Climate Institute and so many others—who have been drawing the attention of climate change and global heating to us politicians so forcefully and passionately. Global heating is the moral challenge of our time. I have no doubt about it. You would have to go back to the end of World War II to think of a more important international event than the Copenhagen Climate Change Conference to be held in December this year. Australia cannot go to that conference with empty hands. We must go to that conference and tell other countries that drastic action is needed to cut carbon emissions in the coming decades. We cannot look at the leaders of other countries in the eye and demand that they cut their emissions unless we are cutting ours. That is why this Carbon Pollution Reduction Scheme Bill 2009, and related legislation, is so important and must be passed.

At present we are not cutting our carbon emissions. They are going up. I repeat: they are going up. Just yesterday, we learned that Australia’s total greenhouse gas emissions in 2008 were 1.1 per cent higher than in 2007. A rise in excess of one per cent has been happening every year throughout this decade. We are tracking for carbon levels 20 per cent above the 2000 levels by 2020. It is both government policy and opposition policy to cut carbon levels by between five per cent and 25 per cent by 2020 compared with the year 2000. That represents a turnaround between 25 per cent and 45 per cent compared with what we are tracking for now over an 11-year period. To meet it, we have to turn around our emissions by two per cent, three per cent or four per cent every year. I believe this is achievable, but the change must be dramatic to do it. Firstly, emissions must be stopped from going up. We must stabilise our emissions during 2009 and 2010. How on earth is this going to happen without this legislation being passed? The opposition say, ‘Let’s delay, let’s wait until after Copenhagen.’ I put it to the House that they always have a reason for delay. They never say, ‘Let’s act now.’

This has been going on for 20 years. Twenty years ago scientists were telling us that action needed to be taken. In 1990, the United Nations Advisory Group on Greenhouse Gases said that temperature increases beyond one degree Celsius may ‘elicit rapid, unpredictable and non-linear responses that could lead to extensive ecosystem damage’. We were told 20 years ago to keep temperatures down to a one-degree Celsius rise, and sea level down to a 20-millimetre per decade rise. Over 10 years ago the Liberal and National parties started saying action was needed. In September 1998, a federal parliamentary inquiry into greenhouse gas emissions, chaired by a National Party MP, recommended a trial emissions trading scheme in Australia, saying that a scheme should include as many carbon sinks, emissions sources and greenhouse gases as possible, be national, be underpinned by national legislation and be integrated with an international trading regime. In 1999—again 10 years ago—the Howard government’s Australian Greenhouse Office announced that it was undertaking a feasibility study on the introduction of a national emissions trading scheme. The Liberal government and a National Party chaired parliamentary committee undertook this study over 10 years ago and still those opposite say that now is not the right time. It will never be the right time for them. They are totally and utterly insincere on the issue of global heating. They prevaricate and they come up with every excuse in the book. It is all spin, rhetoric and cant—anything and everything except action.

The second thing that caught my eyes in the news yesterday was General Motors in America going into bankruptcy. For years, General Motors in America has been a dinosaur, building petrol-guzzling vehicles and opposing efforts to mandate vehicle fuel efficiency standards. Now it is bankrupt because it failed to see where petrol prices were going and it failed to see where consumers were going. It simply stuck its head in the sand. I urge Australian car manufacturers not to do this. People claim that tackling climate change will cost jobs. The truth is that there are tens of thousands of jobs in cutting our carbon pollution and moving to the low-carbon economy. Our car manufacturers should think seriously about manufacturing cars that run only on electricity. China, Israel and Denmark are. Australia should also think about this. Shai Agassi is a former senior executive at the international software giant SAP. He has produced a business plan involving the construction of car battery recharging stations at parking spaces and billing motorists online for the electricity they use. Fully charged cars would be able to travel around 160 kilometres, and for longer trips motorists would pull into stations resembling car washes and exchange their spent batteries for new ones.

Shai Agassi is head of the Silicon Valley based company Better Place. He has raised $200 million and entered into agreements with Israel, Denmark and a number of United States governments such as Hawaii. Under these agreements, Renault-Nissan will provide electric cars to Israel, using the Better Place business model by 2010. Under the Better Place model, consumers can either buy or lease an electric car from the French auto maker Renault or the Japanese car maker Nissan and then purchase miles on their electric car batteries from Better Place the way people purchase mobile phone time from a mobile phone carrier. Cars would be sold at a relatively low price and owners charged operating fees. The total cost of owning an electric car, including the up-front prices and ongoing operating expenses, is expected to be less than that for a conventional car.

China has moved to become the leading producer of hybrid and all-electric vehicles within three years. China is, of course, behind the United States, Japan and other countries when it comes to making gas powered vehicles, but it is skipping the current technology and hoping to get a jump on the next one. China plans to create a world-leading industry producing jobs and exports, reducing urban pollution and decreasing its dependence on the Middle East for oil. Australian car manufacturers should be looking at this technology and governments should encourage them to do so. Indeed, there is scope for governments to assist an electric car infrastructure rollout. This is one infrastructure rollout which would reduce carbon emissions.

People may worry about electric cars producing carbon. Of course our present methods of electricity generation produce massive carbon emissions, but by moving to solar, wind, geothermal and other carbon-free methods of producing electricity this would not be so. Drivers would be freed of petrol price fluctuations, and Australia would get cleaner air, a sustainable future for our car industry, dramatically reduced carbon emissions, an improved trade balance and energy independence. It is a no-brainer, and it is just one example of how we should be planning to change to a low-carbon economy. There are many others. In forestry and biosequestration—with people like Rob Gell leading the way—energy efficiency, solar power, wind power and geothermal power there will be jobs and there will be prosperity in making this change.

The jury came in years ago on climate change and it keeps on returning its verdict—through droughts and bushfires in Victoria and floods in Queensland and New South Wales. It has already claimed thousands of lives around the world, and millions are now at risk. There has been deadly flooding in India, cyclones and storm surges in the Pacific islands, typhoons in Korea, heatwaves in the south of France and drought in Ethiopia and in African countries leading to mass starvation. Back in 2007 the Intergovernmental Panel on Climate Change warned that global greenhouse emissions must peak by 2015 and thereafter rapidly decline. It said any delay—I stress ‘any delay’—will considerably increase the risk of species extinction, water scarcity, food shortages, extreme weather, major health risks and swelling numbers of climate refugees. That is the legacy those opposite would have us leave our children and our grandchildren. How ironic it is that our farmers are now leaving an arid land rendered useless by the policies pursued by the very people they elected to represent and look after them. I urge the House to support these bills.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and the series of cognate bills that are before this House. This is a very important debate, a debate that if not properly handled will negatively impact on our future generations. Rushing a scheme or introducing a badly thought through scheme will be a disaster for our future. I support the sound position of the Leader of the Opposition. I support the amendment moved by the Leader of the Opposition in his high-quality speech to this House last evening. It is a position that makes sense and it was a speech that made sense. I believe an emissions trading scheme is one of the policy levers that can be used to change the energy mix in Australia. An ETS will be, by definition, a price on carbon. An ETS is not the only lever, and it is a lever that should only be pulled in conjunction with other major emitters around the world. It cannot be done on our own; it cannot be done in isolation from the rest of the world.

With the election of the new President of the United States of America there has been a tidal change on the approach of the United States to addressing climate change. Later this year in the Danish city of Copenhagen the world will come together to discuss the way forward on climate change. It will seek to set targets for reducing carbon emissions in our atmosphere. In my view, because of the political capital carried by the new US President, an agreement will be reached. What that will look like is yet to be seen. In addition, the US congress has a piece of legislation before it which seeks to implement an emissions trading scheme, but in its current form it is a scheme that seeks to protect the jobs of those in the United States—unlike the approach of this bill. What the final product of the US congress will be is anyone’s guess, but it is unlikely to stupidly sacrifice the jobs of those in the United States to make a political point. So it makes no sense at all for a country that produces less than 1.5 per cent of the world’s CO2 emissions to go it alone, to move ahead of the world. Without the United States participating and without the Chinese on board, it would simply be economic suicide.

It makes no sense when all the Australian government needs in its arsenal at Copenhagen is a set of targets—targets this side has already agreed to; targets, I might say, that are not contained in this bill. Copenhagen is the world stage, not a political platform for our Prime Minister’s vanity. You might ask why this legislation is being rushed, reducing members of this place to half their time allocated to speak, forcing this bill through. It is because the bill before this parliament has been designed with politics in mind, not with the future of our economy at the forefront or a serious attempt to tackle the issue of climate change navigating this bill. It is a bill designed to get the Prime Minister to an early election so he avoids being answerable for the massive debt he is leaving our children. This policy is so flawed it basically remains friendless. It is flawed in its structure and it is flawed in its timing. We sit in this place each day and listen to the Prime Minister preach about the global economic downturn and its subsequent effects on our economy but yet he insists for the purpose of politics on implementing a policy that will destroy jobs.

It is always interesting to watch those on the other side defend a policy that will cause so much damage to their own constituents. The best the member for Corio—who we know has a significant concern about this issue—could do this morning in his speech was to attack this side for being sceptics. As someone who formerly represented workers, he knows this scheme will be a disaster for his electorate and for the workers in his electorate. Introducing an emissions trading scheme will be one of the most significant changes in our economic history. It will change the structure of our economy and it will, by its very nature, impact on costs. Inevitably, the coal industry—and, in particular, the workers in that industry—will be the industry that suffers the most. Prior to this sitting week, I was visited in my electorate office by Ms Clare Savage from the Energy Supply Association, who undoubtedly understands what the impact on her members will be and the significance of the ETS. She made it clear in our meeting that, while her members wanted to move forward with an ETS for certainty, the impact of this legislation on her members would be catastrophic.

This brings me to the motives of those on the other side. There are two groups on the other side: those who are believers and those who are political opportunists. Some of those on the other side talk about climate change with a religious zeal. Others, like the member for Corio, see the dangers to our economy but understand the politics of the issue. The prophets, including the Minister for Climate Change and Water, talk as if we are in the end of days. One prophet of climate change, the Minister for the Environment, Heritage and the Arts, talks of the imminent death of the Great Barrier Reef and irreversible changes to the Murray-Darling Basin. The minister suggests that the simple act of introducing an ETS will miraculously save these two great symbols of our country. He uses these emotive symbols to scare Australians into his religion. But the truth is that using climate change as an excuse means the Rudd government can avoid taking the hard decisions necessary in the Murray-Darling Basin.

The minister for the environment—the least relevant and effective minister for the environment this country has ever had—talks the climate change rhetoric like an apostle of doom. This is a minister for the environment who is now so irrelevant that, when the Prime Minister decided to give the minister for climate change a helping hand on this issue, he looked to the member for Charlton. So this is a minister for the environment with no responsibility for climate change. Simply put: he is irrelevant to this debate. He and those other believers on that side talk in religious terms—about end of days—in an attempt to make it impossible for anyone to question the approach of the government to climate change. But the truth is that it is healthy to have members of this House and the Senate raise questions and issues about policy directions and decisions, particularly on an issue as big as this. Never before have we had so much abuse directed at members for daring to suggest they might not believe. The word ‘sceptic’ has been written into the speeches of those opposite by the hollowmen, because this is about politics—that is, spin doctoring, not serious policy. They want the legislation passed without even the release of the regulations that implement the policy. That move itself highlights just how political this bill is.

But this does not stop the Labor Party trying to jackboot this bill through. We saw the unprecedented behaviour by the Parliamentary Secretary for Climate Change last week, when he told the Minerals Council that their position of opposing this legislation was unsustainable and said they should get on board or the government would remove any industry assistance. It appears his union training has come in handy. That speech I understand led to some in the audience booing the parliamentary secretary as he left. This was followed up by another verbal assault by the Deputy Prime Minister at the Minerals Council dinner, a speech that has been widely interpreted as a direct attack on the MCA because they have been vocal critics of this government’s approach. Clearly, those on the other side prefer the approach of the AiG, who can be guaranteed to say whatever the government wishes when they make policy announcements.

I believe strongly that we should be part of a global approach to addressing pollution in our atmosphere. We should also look to act locally in protecting our great environment. That starts for me with addressing the disaster in the Lower Lakes, something an emissions trading scheme will simply not do. It means making the tough decisions throughout the Murray-Darling Basin to ensure we can sustain food production at the same time as we rescue the basin from disaster. The truth is that I, like so many on this side of politics, believe in conserving our natural resources. I am hopeful for an agreement at Copenhagen later this year. I am positive about the opportunities for renewable and less carbon intensive energy in our country. I am positive about the opportunities for natural gas in our energy future. I am positive about new technologies such as hot rocks, tidal power and biochar in contributing to our future energy mix and carbon reduction methods. I also understand that this will mean the Australian public will pay significantly more for their energy requirements, something this government attempts to sweep under the carpet. I also understand the Australian people want us to take this issue seriously. But what the Australian people do not want us to do is to sell them short. We can do better than this legislation. We can do better than selling out our country for politics.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

The previous speaker, the member for Mayo, talked about sceptics on the other side of the parliament and I think he may fit into that category. He also impressed me as a person who takes a small picture approach to the issues that confront the Australian electorate. He is not prepared to address the causes; he will just look at the problems. It is all too hard, and the easiest way out is to just pretend that climate change does not exist. The Carbon Pollution Reduction Scheme Bill 2009 and related bills are landmark legislation. This signals the start of a new era, an era where the Australian government recognises that carbon pollution is causing climate change. The Rudd government accepts the scientific data—and I say ‘scientific data’ for the sceptics on the other side—that climate change is a reality and that we must act now. Unfortunately, the opposition is still bickering within its party room and trying to decide whether or not it will accept the scientific data. It is difficult to know whether it is the climate change sceptics or the Leader of the Opposition driving the opposition’s climate change agenda. I suspect that it is the climate change sceptics, and the speeches that we have heard in this parliament this morning attest to that.

If we need a little bit more support for that we only have to go to the comment of Barnaby Joyce on the ABC’s AM program on 14 January this year, when he said:

There is no issue about climate change. It’s the extent that humans are affecting it is a debate that I believe is going to go on.

There was also Senator Minchin, who said:

There remains an ongoing debate about the extent of climate change, about the extent of human activity’s role in the climate changing.

So there are obviously senators who do not accept the fact that climate change actually exists. They do not want to change. They want everything to go along the way it is. It is much, much easier to bury your head in the sand and pretend that something does not exist. The only thing about that is that it is not good for Australia and it is not good for the planet that we live on.

As I previously mentioned, the evidence supporting that climate change is caused by carbon pollution is indisputable. We have higher temperatures—the 12 hottest years have been in the last 13 years. There will be more droughts—there will be a 20 per cent increase in droughts over Australia by 2030 unless we act now. There will be more extreme weather conditions—cyclones and floods. I think that what has been happening in that area is very self-evident. We will be confronted with rising sea levels. Those will be impacting on coastal regions, regions like the one I represent in this parliament. Lake Macquarie Council has already prepared a plan that details the impact that climate change will have in that area, and it is quite devastating. Low-lying Asian megacities will be impacted, along with islands in the Pacific. There will be serious impacts on food production and water supply. There are threats to the Great Barrier Reef, Kakadu and the Murray-Darling Basin, as has already been mentioned. There will also be enormous health implications associated with climate change, both in the types of diseases and the impacts that climate change will have on people in the community.

On this side of the House we accept the fact of climate change, as I have already said. This was apparent right from the beginning of this government. The first act of the Rudd government was to sign the Kyoto agreement, because it recognised the importance of climate change and the need to act globally—unlike the Howard government, which buried its head in the sand. The Rudd government has adopted a thorough approach to the CPRS legislation that we are debating today. I am really pleased that the Parliamentary Secretary for Climate Change, the member for Charlton, is in the chamber as I am making this speech because he has made an enormous contribution to the legislation that we have before us today.

The process started with the Garnaut report. The Garnaut report found that current emission trends would have severe and costly impacts on agriculture, infrastructure and iconic environmental assets and tourism destinations such as the Great Barrier Reef, which I have already mentioned. It also concluded that the cost of inaction would have a greater impact on jobs and the economy than responsible action on climate change. What we have before us today is legislation that highlights responsible action on climate change.

Australia has adopted a three-pillar approach to climate change: reducing greenhouse gas emissions, adapting to climate change we cannot avoid and helping shape the global solution. The Rudd government believes that a CPRS is the most effective way to reduce carbon pollution whilst minimising the impact on businesses and households. The Rudd government believes that you have to have the strength to put in place a carbon reduction scheme, because it is the responsible thing to do. It is in the national interest to pass this legislation. We have a responsibility to the Australian people and to future generations to act on climate change now. The business community, environmental groups and the Australian people expect the parliament to do the right thing and pass the CPRS this year. I emphasise that to the members on the other side of this parliament. This legislation gives business certainty and will enable Australia to go to Copenhagen from a position of strength, with the strong targets we need to deliver through the CPRS.

This legislation, put simply, places a limit or a cap on the amount of carbon pollution industry can emit and it requires affected businesses to buy pollution permits. The mandatory obligations under the Carbon Pollution Reduction Scheme will commence on 1 July 2011. The scheme will encourage action to reduce carbon pollution from 2010. The government will also delay for one year the provision of transitional assistance under the electricity assistance adjustment scheme, the emissions-intensive trade-exposed assistance program, the household assistance package and the fuel tax adjustments. Elements of the Climate Change Action Fund and investment grants for businesses and community organisations will be rolled out from 2009-10.

The scheme includes all greenhouse gases included under the Kyoto protocol. Emissions from stationary energy will be covered from the start of the scheme. The scheme will cover around 75 per cent of the emissions. Assistance in the form of administrative allocation of permits will be provided to new and existing firms engaged in EITE activities. Permits will initially be provided at a 90 per cent rate for the most emissions-intensive activities and at a 60 per cent rate for activities that are moderate emissions intensive. Eligibility thresholds for the assistance are defined in terms of emissions per million dollars of revenue or emissions per million dollars of value added. The rate of assistance per unit of production will be reduced by 1.3 per cent per annum to ensure that EITE activities share in the national improvement.

The global recession buffer will apply to the allocation baseline emissions per unit of output for activities. It also recognises voluntary action, and there is the household assistance package that is covered in the legislation before us today. This legislation is essential to Australia’s future. Treasury modelling shows that Australia can continue to achieve strong trends in economic growth while making cuts through the CPRS. Almost all industry sectors across Australia will continue to grow. Treasury modelling released in October 2008 demonstrates that economies that fail to act now face long-term losses of around 15 per cent higher than those that do act now.

If Australia wishes to be influential in fighting climate change globally, we must pass this legislation and join the 27 European countries, the 28 US states, Canada and New Zealand. Once this legislation is passed, Australia can go to Copenhagen as a global leader in the fight against climate change. I urge the sceptics on the other side of the House, those that are averse to change, to join with the government in support of this legislation and send a strong message to the rest of the world.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise to make a contribution to the debate on the Carbon Pollution Reduction Scheme Bill 2009 and related bills. I believe all Australians, and many of my own constituents in Maranoa, would like us to ensure that we limit any harmful impacts we have as humans on the earth and on our environment. While I believe that the emotive images and the apocalyptic slogans have affected our ability to have a truly rational debate on carbon emissions, I think most people would agree that whether you believe in human-induced climate change or not, it pays to be good to the planet.

In his haste to stand on the winner’s platform, our Labor Prime Minister, Mr Rudd, is rushing ahead with a flawed ETS, which will threaten the viability of trade-exposed industries, threaten our national economy, cost jobs and ultimately threaten our prosperity and security as a nation. The Prime Minister made his ETS promise when Australia’s economy was strong, thanks to the legacy that he inherited from the successful management by the former Liberal-National coalition government, which paid off the previous Hawke-Keating Labor government’s $96 billion debt and returned the budget to surplus. Now the world economy is experiencing a very difficult time. Treasury modelling on the Labor Party’s ETS did not factor in the global financial crisis. It would be economically suicidal for Australia to race ahead of the rest of the world in implementing a cap-and-trade scheme, particularly if our fellow global citizens are not on the same page. This scheme proposed by Labor would further tilt the already unlevel playing field against our exporting industries, including agriculture.

For over a year Labor talked up their green credentials and talked down the economy. That was how they came out of the starting blocks when they became the government of this nation. Australians responded and started to get concerned about the dark economic clouds that were gathering in the distance, so they stopped spending. Then the Prime Minister announced at a press conference in December last year that he had spent half the budget surplus, and then he took some cash from the bank to throw around willy-nilly. Now, as every Australian knows, we are confronted with a $300 billion debt, a $58 billion budget deficit and a personal debt of $9,000 for every man, woman and child, including babies born today.

The Prime Minister wants to impose another tax on the Australian people. Under Prime Minister Rudd’s ETS, export- and import-competing industries will effectively be taxed an extra $12 billion over the next five years. What the Labor Party is doing is sacrificing Australian jobs at the altar of this deeply flawed ETS. Australia produces only 1.4 per cent of the world’s carbon dioxide emissions, yet the Prime Minister wants to beat his chest at the global climate change summit in Copenhagen later this year and say: ‘Look at me. We are taking a great lead. Aren’t we great in Australia?’ This really is no laughing matter.

Treasury modelling on the ETS was undertaken with the assumption that the rest of the world would sign up to be part of a carbon emissions scheme. If we sign up to an ETS before the rest of the world, Australian jobs will go. Industry will go offshore and relocate into other manufacturing countries. The Minerals Council of Australia estimates some 66,000 jobs will go. Xstrata predicts that between 5,000 and 10,000 jobs will go. Research done by ABARE—the Australian government’s own Bureau of Agricultural and Resource Economics—shows that the economic value of farm production in broadacre industries could decline by between 0.3 and 1.9 per cent in 2011.

The dairy farmers in the south-east corner of my electorate around Warwick, Millmerran, Crows Nest, Kingaroy and north of Dalby will be hit with a $9,000 cost if this flawed scheme is introduced, without any chance to offset that cost. The beef industry will see a $60 million tax passed back in the price that they receive for their cattle. The grains industry will face an annual indirect cost of more than half a billion dollars, with no chance to offset that under this flawed model put up by the Labor Party.

This is a flawed scheme which will penalise even those who can help reduce our emissions. For example, for every tonne of greenhouse gases associated with the production of LNG in Australia, between 4.5 and nine tonnes can be avoided in the Asia-Pacific region when this gas is substituted as an energy source for coal. Up to 180 million tonnes of carbon dioxide could be saved each year, but under the emissions trading scheme proposed by the Labor Party the LNG projects which would help prevent these carbon emissions will not go ahead. In my own electorate, between Dalby, Chinchilla, Miles and Roma is the Surat coal basin. There are billions of dollars to be invested in the LNG projects there. Some 35,000 holes alone will be drilled to tap into this coal seam methane, creating thousands and thousands of jobs. All those jobs will be at risk if this scheme passes both houses.

What has concerned me throughout this whole debate on climate change is the focus on agriculture and the methane emissions from farm animals. Sure, we can cut carbon emissions, impose a carbon tax or even reduce our animal husbandry, if that is what the Prime Minister would like, to reduce carbon emissions from animals. But the problem is: where will we get our food? Who will produce the bread, the bacon, the steak, the eggs, the milk and the cereals that our families eat? Where will the fibre—the wool and the cotton—come from for our daily clothing needs? Successful farmers are businesspeople. They are not just farmers; they are owners of food- and fibre-producing businesses. They know how to treat the earth, and they have been doing it for more than 200 years in this country. They know that the environment has a direct impact on the success of their businesses. They have been willing to come to the table on climate change since day one. Yet, for all the rhetoric from this city-centric government, the Labor Minister for Agriculture, Fisheries and Forestry, Tony Burke, has cut funding for rural research in the latest budget. That is the Labor Party’s vision for agriculture: cut agricultural research in the budget and hit farmers with a new tax.

This flawed ETS will have a significant impact on my electorate of Maranoa. In the far west of my electorate lies the Cooper Basin, Australia’s largest mainland oilfield. Above the ground graze cattle which are owned by Australia’s largest cattle companies. Further east lies the enormous Surat energy resource province, Australia’s next Bowen Basin. The towns of Chinchilla, Dalby, Miles and Roma are set to experience significant economic benefit from the development of this Surat coal seam methane basin.

There are three coal-fired power stations in my electorate. I am sure you would be aware of them, Mr Deputy Speaker Slipper. One of them is Tarong, at Nanango, near Kingaroy. That baseload power station is owned by the Queensland government. No wonder the Queensland government want to sell it with this emissions trading scheme coming forward under the Labor Party. As we hear today, they are going to privatise everything they can find that is publicly owned. The Tarong, Wivenhoe and Tarong North power stations, the Meandu coalmine and the Glen Wilga coal resource employ some 417 people. All those jobs are at risk. The Kogan Creek power station, another baseload power station which is just near Chinchilla, has a permanent workforce of 40. The Kogan Creek mine, which fuels the power station, has a workforce of 50. The Millmerran power station employs 50 people directly and 150 people indirectly, when you include the employees and subcontractors of the coalmine itself. So there will be job losses if this Labor Party’s flawed scheme has a successful passage through both houses.

We do not have to rush into this. Let us wait to see what happens at Copenhagen. Let us see what the United States does. Even the Canadians and the New Zealanders are saying, ‘Let’s see what happens in Copenhagen.’ They were proceeding down a path, but they have put that on hold. Sensible governments there are thinking of the world economic circumstances and worried about their own economies, so they say, ‘Wait till Copenhagen.’ Even the United Nations does not require countries to have legislation in place before the Copenhagen summit, so why should Australia run the risk of getting it wrong when we can wait, watch and then take a rational, considered and smarter approach to carbon emissions?

The coalition have tried to get the Labor Party to come to the table and talk about our ideas for reducing our global footprint. These include the pursuit of clean coal and renewable energy, biochar, developing agricultural lands in arid regions, boosting the energy efficiency of commercial buildings and homes and revegetating marginal lands. We also propose a government authorised voluntary carbon market, based on the Chicago Climate Exchange, which would allow for the immediate involvement of individuals, communities, industry and business to create bankable offsets.

Let me be clear: we should take all steps to reduce our global footprint. To do nothing is not an option. But to do what the Labor Party would have us do would be to destroy jobs, kill off industries and, at the end of the day, cost this nation dearly. I will be joining my colleagues in supporting the amendment put forward by the opposition. I will not be supporting the flawed emissions trading scheme of this arrogant Labor government.

Mark Butler (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

It will be interesting to see how long the member for Maranoa supports the opposition leader on this question. The Carbon Pollution Reduction Scheme Bill 2009 is the most important piece of legislation that most of us will ever speak on. It is without a doubt, in my view, the key challenge for our generation of people who are lucky enough to represent Australia in this place. No-one underestimates the degree of difficulty involved in dealing with the challenge of climate change, partly because it requires a level of sacrifice now for the benefit of future generations, and that is always a hard argument to make, but also because the question of climate change is based largely on predictions. Yes, there is some evidence already about the impact of climate change globally and here in Australia, but largely we are trying to respond to predictions about the impact of climate change in coming decades.

I say for the record that, although cognisant of both of those challenges, I am comfortable with both of them as well. Like many in this place, for some years I have read widely on this question and I am convinced about the integrity of the different IPCC reports. There have been four assessment reports so far, all of which broadly agree that a tipping point of 450 parts per million of carbon dioxide equivalent gases in the atmosphere is something that we need to avoid. Even that will involve a temperature increase over the course of this century of about two degrees Celsius. Anything above that temperature increase, which in and of itself would have significant impacts on Australia, would have impacts that would be far more catastrophic not only for Australia but for the globe. In addition to impacts on weather patterns, agriculture, water resources and the like, any temperature increase above two degrees Celsius or a quantity of carbon dioxide equivalent gases of more than 450 parts per million in the atmosphere puts us at risk of major events such as the melting of the Greenland icesheet, the reversal of the Gulf Stream along the east coast of the United States of America and the collapse of natural carbon sinks such as the Amazon forest.

The time for talk about these issues has finished. There has been lots and lots of talk. It is now almost 20 years since the first IPCC assessment report was handed down in 1990. The Australian Greenhouse Office, as the Parliamentary Secretary for Climate Change reported in his second reading speech, first published proposals for an ETS some 10 years ago. The states and territories, in the face of recalcitrance by former Prime Minister Howard, formed an ETS task force five years ago and now the national parliament has the chance to act—and act it should.

These bills result from extensive consultation by this government going back to the Garnaut review, which undertook very detailed consultations and studies in the 12 months from about April 2008. Those resulted in a green paper that was published with very wide, very detailed proposals for action in June 2008. That was followed by hundreds of meetings and many hundreds of submissions being received by the government. All that in turn was followed by a white paper published in December 2008. It was very detailed in its scope. In March 2009 draft legislation was published which by and large, with the addition of some modifications announced by the Prime Minister on 4 May, is the legislation that the parliament is considering today.

The CPRS is based on a cap-and-trade model. I am convinced, and our side of the parliament is convinced, that this is the right model, particularly as the response to very significant increases in petrol prices over the last few years has convinced me that a carbon tax as proposed by some in the community is not the right model. What is needed is a mandated cap on emissions, and that is what the CPRS delivers. The trade element brings in market mechanisms to ensure that emissions are reduced in the economically most efficient way possible. On a more pragmatic level, the other reason for adopting the cap-and-trade model is that that is the model being adopted around the world. Twenty-seven nations of the European Union already work to a cap-and-trade model. Legislation is well underway in New Zealand and, as we have seen in the last week or two, in the US based on a cap-and-trade model.

The critical ingredient is the cap. Should this legislation pass through this parliament, for the first time ever Australia will regulate how much carbon and other greenhouse gases are put into the atmosphere from this country. The cap covers CO2, methane and a number of other greenhouse gases and covers about 75 per cent of all emissions from stationary energy, transport, industrial processes and the nastily worded ‘fugitive emissions’ from oil and gas production. These are able to be covered by identifying, as I understand it, only about 1,000 liable entities, which shows the efficiency with which this scheme can be implemented, in contrast, for example, to the way in which the GST had to be implemented across many hundreds of thousands of entities.

The question as to the core controversy is: what is the cap? That will be the subject of the debate leading into the Copenhagen conference. Kyoto uses 1990 as the benchmark, being the year that the first assessment report of the IPCC was delivered. The government is largely using 2000 as the benchmark, although the figures also reflect calculations based on 1990. Those two figures are largely the same because of the big reduction in our emissions through the cessation of the clearing of large tracts of land in Queensland during the 1990s. Kyoto established a target of 108 per cent of 1990 emissions by 2008-12 in Australia, and the minister’s recent releases show that we are on track to achieve that or even better that. But the targets for 2020 will be where the rubber hits the road. We know that a business-as-usual assessment of Australia’s emissions would see our emissions by 2020 reaching about 120 per cent of 2000 or 1990 levels. Instead, we need to look at aggregate emissions benchmarks against those years being reduced.

There are three possible targets set out in the legislation which depend in large part on the outcome of the Copenhagen conference in December: an unconditional five per cent reduction against 2000 levels or four per cent against 1990 levels; a 15 per cent target against 2000 levels—or 14 per cent against 1990 levels—in the event that Copenhagen yields an agreement for comparable reductions by advanced economies and that developing countries commit to substantially restraining their emissions; and the more recent government commitment to the more ambitious target of 25 per cent against 2000 levels if Copenhagen yields a global agreement to stabilise emissions at 450 parts per million, an agreement which includes major developing countries agreeing to slow their emissions with a target for them to peak and then to commence to decline. We would want to see a collective reduction of more than 20 per cent against business-as-usual emissions by 2020 in major developing nations as well as a comparable reduction in emissions from advanced economies to the 25 per cent target.

I also ask the community to put the Australian targets in context. These targets are very significant measured as per capita reductions—more significant than reductions which look, in an aggregate sense, to be more significant in Europe and Great Britain because of the population increases that have taken place since 1990 in Australia. That is not the final word. At the end of the day, the environment will recognise aggregate emissions, not per capita emissions. But it is an important part of the story about Australia’s general response.

There is a great deal of detail which I could talk about and I would be keen, if I had the time, to talk more about how the proposed scheme operates; the phase-in and the global recession buffer which are incorporated into the legislation; the impact on households and the way in which the government will recognise voluntary action by households; and, because of a number of industries located in my electorate of Port Adelaide, including power generation and cement, the impact on emissions-intensive and trade-exposed industries. But time does not allow me to do that.

It is a very real pleasure to speak in favour of this legislation. I am confident that it will be the most important piece of legislation I have the honour of speaking in favour of in whatever time I might end up spending representing Port Adelaide in this place. In closing, I would like to pay a particular tribute to the Minister for Climate Change and Water, who has worked with one of the most significant public policy challenges any minister has had in front of him or her in the history of this federation. I think she has done an absolutely outstanding job. I commend the bills to the House.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

I rise today to speak on the Carbon Pollution Reduction Scheme Bill 2009 and associated bills. Significantly reducing the global level of CO2 and other emissions in the atmosphere is an issue of great concern and consequence to all of us.

Let us be absolutely clear about it—these are uncharted waters for all. These are uncharted waters for me because I am not a scientist. But one thing that is abundantly clear from the evidence presented is that humankind is definitely adding to the problem—by how much I do not know because there are too many sides to the argument, all proffering different opinions. On one side, we have Professor Ian Plimer, who is disagreeing with the theory of human induced climate change. On the other side, we have the United Nations Intergovernmental Panel on Climate Change stating that:

There is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities.

What I do know, though, is that prior to the 2007 election, the Prime Minister promised to introduce an emissions trading scheme that would produce deep cuts in CO2 emissions but would not disadvantage Australia’s export and import industries. The Prime Minister’s other election promises included establishing an ETS by 2010 and setting a target of a 60 per cent reduction by 2050 from 2000 levels.

However, we now see that the government’s scheme is in disarray. It is rushed. It is bungled. It is deeply flawed because it has been rushed to suit a political timetable and the Prime Minister’s political agenda. It even fails to contain regulations for the operation of this scheme. Failing to wait just six months for the outcome of the Copenhagen conference will see the Rudd government export thousands of Australian jobs, many from my region.

It should be noted that it was the former government that spearheaded the campaign to develop and transfer low-emitting technology to developing countries through the establishment of the then AP6—the Asia-Pacific Partnership on Clean Development and Climate. This partnership came out of the 12th meeting of the ASEAN Regional Forum in Laos and was formally launched in 2006. This is the only international agreement which involved the US, China and India. It also contains South Korea, Japan and now Canada, with all seven countries involved having a history of close bilateral and multilateral cooperation on clean development, energy and climate change efforts.

Unfortunately, for purely political reasons, the Rudd government hindered this program and partnership. Australia on its own, however, will not revolutionise the climate change world. It is an undisputable fact that Australia is responsible for 1.4 per cent of the world’s emissions of greenhouse gases. Australia represents but a tiny sliver on the global greenhouse gas emission pie graph. Any action the government takes on committing Australia to a climate change solution must be carefully considered. Neither families in my electorate of Paterson nor any other Australian working family can afford to shoulder a disproportionate share of the global burden of addressing climate change. With Australia producing just over one per cent of the world’s emissions, there is no unilateral Australian solution—only a global solution. Voting on Rudd’s emissions trading scheme would put Australians in the position of shouldering that burden alone.

What we, the coalition, propose to do is work with the largest emitters, such as China and the US, and come up with a holistic approach. As the world’s largest emitter of greenhouse gases, the US has developed a very clear strategy to address their own carbon emissions and to implement their own carbon trading scheme. It is clear that the Waxman-Markey bill currently before the congress offers substantial and considerable protection to US businesses engaged in trade-exposed industries. Their bill provides 100 per cent protection to US export and import competing industries in any future emissions trading scheme until 2025.

There is obviously a stark difference emerging—with far greater protection for the US than what is on offer for Australian businesses in the Prime Minister’s emissions trading scheme. Under the Rudd government’s current proposals for an emissions trading scheme, Australian businesses will be left out in the cold, Paterson’s businesses will be left out in the cold and Australian exposed businesses will be left disadvantaged against other competing countries in the market. Forcing through the current proposal would be to forego common sense and would subsequently be the marker of massive risk and uncertainty for Australian businesses over the next 20 years.

Australian trade-exposed businesses will not be on a level playing field with their competitors. The current ETS proposal poses a significant threat to the continued competitiveness of Australian businesses operating in those trade-exposed industries. The CPRS is expected to result in a 30 to 40 per cent increase in electricity prices alone, and this will flow through many everyday products and services.

The tax effect of the CPRS is equivalent to increasing the GST from 10 per cent to 12½ per cent. The difference is that it will be added all the way down the line, unlike the GST, which is rebated until the end user, if consumed in Australia, or rebated so that exports are free of GST. They will not be free of the CPRS. The design of the Rudd government’s CPRS assumes that our major competitors will move to put in place major new taxes on carbon across the economy, including on export- and import-competing industries in the early years.

When we consider all of the information that has been put before us, it is prudent to ask government if the goal of this bill is to genuinely reduce greenhouse gas emissions or if it is aimed at taking another tax grab from Australian families and businesses, who already have to pay the cost of Labor’s reckless spending. Of the $13 billion that will be collected from affected businesses under this scheme in the first year, how much of that money will be spent by the government on actually reducing emissions? How much will be used to pay off the Rudd Labor government’s $315 billion debt? It is also important to note the recent comments by industry bodies that agree with the coalition on this position. For example, the Minerals Council of Australia statement on 26 May 2009 stated:

The Minerals Council of Australia cannot support the legislation in its current form and therefore backs efforts that will lead to a better, simpler emissions trading scheme that won’t cost tens of thousands of mining jobs.

The only certainty created by the Rudd government’s emissions trading scheme is the certainty of unemployment.

Only recently did the shadow minister for energy and resources, the Hon. Ian Macfarlane, and I meet with local companies in my electorate, including Tomago Aluminium, Bloomfield Collieries and Gloucester Coal, which manage the Stratford and Duralie mines, to talk about the impact that this scheme would have on their businesses. Specifically, I would like to draw to the attention of the House to Tomago Aluminium company. Tomago Aluminium currently employs almost 1,400 workers, who reside in and around the Paterson electorate, many actually living in the Paterson electorate. The company operates the second-largest smelter in Australia. One of the most significant challenges facing Tomago Aluminium is uncertainty—and the possibility, therefore, of jobs going offshore—as to what to expect from the Rudd Labor government, who were trusted by the Australian people not to subject our trade-exposed industries to undue hardship and disadvantage. If the CPRS is not handled carefully, jobs will go offshore to more competitive markets with less environmental restrictions.

I would like to make it clear: the coalition will support an emissions trading scheme, but we believe Australia is going about it the wrong way in the design of the process. The CPRS is not the only option to reduce greenhouse gas emissions. It is also not the best way. It is important to note that there exists a wide suite of practical and effective approaches that could be employed to reduce the levels of CO2 in the atmosphere, approaches that are currently being ignored by the Rudd Labor government, such as: boosting energy efficiency, especially in the commercial building and housing sectors; developing agricultural land in the arid regions; biochar; revegetating marginal land, including reforestation; clean coal; and renewable energies.

The coalition announced in January 2009 that, as a part of the green carbon initiative, we aim, by 2020, for additional annual reductions of at least 150 million tonnes of carbon dioxide equivalent, encompassing such measures as previously stated. What is astounding is the fact that no other approaches aimed at establishing a price of carbon have been modelled or properly debated. We take this proposed legislation seriously. The coalition has evaluated the government’s legislation and has measured the legislation against the impact on jobs and emissions. The coalition commissioned its own independent review of the government’s white paper by the Centre of International Economics, a review which received nearly 50 industry and organisational submissions.

In conclusion, the Prime Minister is on a downward spiral on emissions trading, running the enormous risk of going it alone for little or no global environmental gain. The Rudd government’s scheme as it currently stands puts major industries such as our coal industry and Tomago Aluminium, and the jobs that go with them, at considerable risk. It is not a time to gamble with Australian jobs just to gain political mileage. It is time for forethought, careful policymaking and common sense. The government’s scheme is in no shape to be passed, so I ask: why do we need to rush this legislation? The vote must be deferred until later this year, when we have seen the intentions of the rest of the world at Copenhagen and when the US scheme is clearer. This is one of the biggest structural changes to our economy, and we must get it right. We, as the elected federal representatives of our electorates, have the responsibility of getting it right the first time.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

It gives me great pleasure today to rise to speak to the Carbon Pollution Reduction Scheme Bill 2009 and related legislation. Like speakers before me, certainly on our side of the House, it gives me great encouragement that we really do understand the need to progress something along the lines of the Carbon Pollution Reduction Scheme. We went to the last election, in fact, with the resolve that we would act on climate change—and we were given that mandate. Climate change is one of the greatest economic, social and environmental challenges of our time. Climate change is real and is having an impact. The government is committed to tackling the climate change challenge through policy and programs that are contemporary and informed by the latest science and policy developments. The government is also working with industry, business and the community to implement a response and policy that will reduce greenhouse gas emissions and build resilience to climate change impacts.

The government went to the last election outlining our agenda for climate change, including the introduction of a carbon emissions trading scheme. I remember well that the now opposition were also planning to implement an emissions trading scheme. What we see now is an opposition divided. They are divided into two groups: the climate change believers and the climate change sceptics. It gives me some encouragement that there are those on the other side of the House who do believe in the way forward and in what we are doing as a government. However, as the coalition they are certainly, on every occasion, talking the need for this legislation down and saying that it should be put on the backburner until they have more information.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Mr Robert interjecting

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

The member for Fadden interjects there, basically agreeing to that position. Information is always important but, unless we actually start the dialogue in a legislative framework, we cannot advance this. We have the scaremongers right across the board, and certainly on the coalition benches, continually talking down the need to make a move right now. The government is getting on with the job.

As a concession, given our concern about the opposition that is being put forward, the government did make a decision to delay the Carbon Pollution Reduction Scheme to allow the Australian economy more time to recover from the impacts of the global recession. However, we have committed to having a system begin by 1 July 2011.

It is worrying though that the coalition continually put up a fear campaign. It is always about fear—fear, fear and more fear. In fact there are contradictions in most of the statements that are made by the opposition. The member for Paterson spoke about a range of concerns and issues. The coalition get almost to the point of agreeing with the need to move forward, but then it becomes, ‘Let’s wait and see. Let us sit back and wait for something else to happen.’

I will give a very good explanation on the ground. When we look at our nation-building activities and programs, you can go back some 40-odd years to a time when the City of Brisbane, a major capital city, was unsewered and there were the well-known thunderboxes in the backyards. The then Labor Lord Mayor, Clem Jones, determined that Brisbane needed to borrow quite substantially to move forward and put in that sort of infrastructure, and the Liberal opposition at that time said it would send the city broke and they needed to sit back and wait and decide.

We all know the outcome. After borrowing, the city moved forward and we now have a very modern city in Brisbane with all amenities. But at the time a tough decision was made—and it was certainly economically based—to move forward and get some infrastructure built.

The issue of legislation concerning the reduction of carbon pollution is a similar situation. We must act. We must get something in a legislative framework that we can take forward. All those issues—certainly by the member on the other side of the House who has been interjecting—are being debated to allay some of those concerns and give a legitimate way forward so that we are able to debate this in a framework that is declared and where many other stakeholders can get involved. It simply takes it away from the discussion that we have in this particular House.

I would also like to refer to comments that were made by the member for Wide Bay, the Leader of the Nationals. They have shaped themselves up to be the greatest deniers of climate change. I see the contradictions: on one hand quoting Garnaut and talking about the imminent concerns that we will be confronting as a country, yet turning around and then saying that now is not the time, that we cannot go forward now. To say that now is not the time is just not good enough. We do need to advance and we need to advance with a full understanding of the economic considerations.

How do we do that? We must move forward in a legislative framework to be able to consider the options and the economic drivers and opportunities that exist. If you talk to the Leader of the Nationals and his colleague in the Senate, Senator Joyce, it is an interesting discussion. Senator Joyce talks as an expert on climate change to the point that he denies that it is actually occurring. He is a man who has no science background, a man who has for all intents and purposes probably a good accountancy background. But to become the spokesperson for the National Party in the Senate on climate change is laughable. The fact is there is so much information that needs to be put on the table for discussion.

I had the privilege just a week or so ago of opening a conference on the Gold Coast where 200 scientists had come together to talk about biochar and the pyrolysis process that allows matter to be reduced to carbon, to a charcoal base, and then put back to replenish the soil to increase its quality. Many people in the House would be aware of that technology—and I see that the member for Fadden is nodding. It is a technology that we understand can be of use. But we must get this dialogue going and give certainty to scientists generally, or to the scientists in CSIRO, and show some understanding that this may be one of the solutions that will reduce our carbon footprint.

I spoke in the House here on Monday about our nation-building programs and how as a government we had made the decision in severe economic conditions to determine that stimulus to the economy was all about planning and building for our future. I said on that occasion that there was a joke going around the House about how you confuse the coalition over nation building and the joke went something along these lines. We were talking about shovel-ready projects where you put three shovels against the wall and you tell the coalition member to take their pick. That comment was made to me and I repeated that anecdote in the House.

One particular disenchanted member of the coalition said something that was quaintly funny. He then said, ‘How then do you confuse the coalition on climate change?’ I gave a few examples. I said that maybe sequestration would do it and asking them questions about their understanding of the technologies. He said no. I said, ‘What about biochar production?’ and he said no. I was rather confused by this and he said, ‘Look, you don’t have to ask them anything, because they are confused.’ It is clear from the statements that they make in this House and by their lack of support for what we are trying to do that they are confused. We cannot hold off moving forward in this particular legislation.

In my electorate, like all other electorates, we have certain businesses and operations that can be affected if we do not work well towards finding the economic solutions. There are a number of major players—those in agriculture and in meat production certainly. There were a number of positions that they put to us to help us understand their concerns. They understand what we are trying to do as a government in those packages that we are proposing to put forward to support businesses. They are all moving forward and they say to us as a government, ‘Please give us some certainty. Please simply say whether it is on or not on.’ We as a government are saying that it is on, but it is up to the opposition in the Senate whether they ultimately support our move forward.

It is concerning of course because this is all about vision. While we can talk about nation building—and we will on other occasions—unfortunately the coalition lacks vision, and they certainly lack the leadership to take those visions forward. As a government we have proved that we have vision and the tenacity to take these issues forward, and climate change is one of those options and issues that we have stated firmly we need to move forward. The scare tactics are really concerning because, if we do not act now, we all understand that it will be too late to find economic solutions. This will cost us more in the future if we do not make those decisions, and you have heard our Prime Minister mention that on many occasions. I will not repeat the examples that he gives, but it is clear.

The international community is working towards solutions and, yes, the Copenhagen conference will be very important. As a government we want to have something hard-fixed in terms of our position in going forward. The detail, to a large degree, will be worked through over the next few years in terms of how we as a government, along with the industry and business sectors, find the best solutions not only to reducing the carbon footprint but also to finding economic solutions. On those considerations and on that basis, I commend the legislation to the House.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills and to reiterate the call by the Leader of the Opposition for caution and delay before moving to the vote. The issue of climate change is no doubt a significant issue, wherever you sit on the spectrum. It is, though, a scientific and an economic issue. It is not about zealotry and it is not about religious fervour. I remind the member for Forde that terms such as ‘deniers’ and ‘sceptics’ add little to the debate.

Mr Rudd wants this to be a political issue. Mr Garrett wants this to be an issue of fervour and hype. I would rather—and I know the coalition would rather—that we focused on the science. I would rather that we identify what we do know and, importantly, what we do not—that we identify our knowledge gaps, that we seek new information where we have a paucity and, importantly, that we manage risk where we do not know. Whether Australians believe that mankind is causing climate change or not, the role of this parliament is to do everything it can in the best interests in our nation, to contribute in a most positive way to managing our planet and to ensuring we do not leave future generations burdened down with either enormous government debt in cash terms or a damaged land in environmental terms.

In considering the information we have today—what we have now—notwithstanding the growing body of dissent, what we know now is that the planet must be given the benefit of the doubt and we must respond to the science we have in front of us. I say to our nation: regardless of whether you believe that climate change being caused by mankind is true or not, surely, the goals of any coordinated strategy—such as less or zero reliance on Middle Eastern oil, cleaner air, higher organic content of soil to achieve higher crop yields and a greater reliance on renewable energy to ensure our own domestic energy—are worthy goals, regardless of where you as an Australian sit on the spectrum in respect to climate change.

The coalition’s record on climate change is strong. We established one of the first greenhouse offices in the world. Over the last 12 years, Australia has reduced its greenhouse gases by over 85 million tonnes of CO2, allowing Australia to be one of only a few countries out of 178 states to meet its Kyoto targets. Former Prime Minister Howard may not have signed up to Kyoto, yet he was one of only few world leaders that actually met its targets. What is best—to vainly sign a document with no intention of meeting it, or to stand by your principles and do what is right? In the last 12 years the coalition led and funded a global initiative on forests and climate. We introduced a renewable energy development fund to support emerging technologies and we provided support for individuals and community groups taking action through programs such as the solar rebate, Solar Cities, solar hot water rebates, community water grants and green vouchers for schools initiatives. The coalition has much to be proud of in respect to its record on climate change.

Yet Mr Rudd seems intent on rushing in where even fools have dared to tread. He now wants this parliament to vote on an ETS, even though, of his own admission, it will be not be implemented for at least 18 months as a minimum and more likely for two years. He wants this parliament to vote on an emissions trading scheme even before the United States of America, which contributes 30 per cent of greenhouse gases, have their bill finally worked out and we know what they are going to do. The Waxman-Markey bill is currently being negotiated in the US House of Representatives in the Congress as we speak. And, whether we like it or not, the US legislation will set the benchmark across the globe, as you would expect it to, cognisant that its GDP is of the same size as the GDP of the next four largest nations.

The US will set the standard, yet Mr Rudd seems to have the arrogance to think that we should go ahead first, regardless of what the US is doing—even though they will set the standard. I am sure that may be good for Mr Rudd’s aspirations to be Secretary-General of the United Nations, but it makes no sense whatsoever in the debate on climate change. Mr Rudd wants to go forward with an ETS, notwithstanding that it is to be not only before the US do but before even the Copenhagen meeting to thrash out what the environment looks like post-Kyoto. Copenhagen should spell out the direction for the global community as to how global agreements will move forward. Mr Rudd wants an ETS before those global agreements are even decided upon.

We have suggested that the ETS must go to the Productivity Commission for a full, frank disclosure of exactly what the impacts will be. Mr Rudd does not want this. He is hiding from the Productivity Commission. If you have to hide something, may I suggest, there is something to hide. If you look at the ETS bill of over 400 pages, there are eight pages on the mechanics of the ETS—only eight pages; that is it. How the ETS will work out across industry and what the impact will be upon hundreds of thousands of jobs is apparently to be worked out by regulation, with the bill before the parliament simply giving a framework. Mr Rudd is telling us to take him on faith.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! I would remind the honourable member for Fadden that, under standing order 64, he ought to refer to the Prime Minister by his title.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

The Prime Minister is simply asking us to take him on faith. Well the nation took him, and his health minister, on faith when he said three times in unequivocal statements that a Labor government would not change the 30 per cent rebate for private health insurance; but that is exactly what they have done. This nation is sick and tired of taking the Prime Minister on faith. We have provided the government with bipartisan support to take to Copenhagen the most important thing required: support on reducing targets by five per cent, increasing to 25 per cent if there is indeed a worldwide agreement. The opposition supports an emissions trading scheme as one of the tools in a climate change toolbox. Other issues that should be considered include carbon sequestration, a voluntary carbon market and the use of biochar—and, of course, the Leader of the Opposition has spoken about a green cities initiative with advanced depreciation to achieve efficiencies in energy use. All of these together are strategies needed to manage the risk of climate change. Everything should not be sacrificed on the altar of ETS expediency so the Prime Minister can look good at Copenhagen.

It is also important that as a parliament we learn from the mixed results coming out of the European Union’s experience with their ETS and acknowledge the dire consequences of not getting it right. The European Union’s emissions trading scheme is the largest multinational emissions trading scheme in the world. It is a major pillar of the EU climate policy. Their ETS currently covers more than 10,000 installations in the energy and industrial sectors, which are collectively responsible for close to half of the EU’s emissions of CO2 and 40 per cent of their total greenhouse gas emissions. Yet the British think tank Open Europe has this to say about the EU’s implementation of an ETS. They say:

The first phase of the EU’s Emissions Trading Scheme (ETS), which runs from 2005 to 2007 was a failure. Huge over-allocation of permits to pollute led to a collapse in the price of carbon from €33 to just €0.20 per tonne, meaning that the system did not reduce emissions at all.

Worse still, since some countries (such as the UK) had set tough quotas on emissions, and others set lax targets, the system acted as a wealth transfer mechanism, effectively subsidising polluters in states which were making little effort by taxing states with more stringent allocations. Overall there are about 6% more permits than pollution. However the UK has to buy about 22 million tonnes worth of permits a year, while firms in France and Germany could sell off a surplus of around 28 and 23 million tonnes respectively.

Finally, the ETS in phase one was not a real market—instead of auctioning off permits to pollute, member states allocated them free of charge to companies based on how many the government believed they needed.

This created severe distortions—to the point where emissions covered by the ETS rose 3.6 per cent in the UK and by 0.8 per cent across the EU as a whole. What an amazingly effective ETS that was! The world’s first great implementation should teach us lessons. The Prime Minister should learn them. The Leader of the Opposition has moved amendments to defer the vote on the bill until after Copenhagen, until after the Productivity Commission has done a full and frank a review, and, importantly, until after the US legislation which will set the global benchmark is known. I urge the Prime Minister to heed some sound and simple common sense.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I am really pleased to make a contribution on this very important legislation. For the record, scientific concern, so often demeaned and criticised by many opposite, about the build-up of carbon dioxide in the atmosphere started way back in 1861. Improvements in technology allowed for more precise measurements of the level of greenhouse gases in the atmosphere in the latter part of the 20th century and this accelerated this earlier concern. At the beginning of this century the effects of such a build- up, as predicted by the scientific modelling, were being increasingly observed—such as increasing average global temperatures, sea level rise, accelerated glacial melting, intense and prolonged droughts, and increased storm severity. The projected environmental and consequent economic and social impacts of continued adverse changes in these areas are severe to catastrophic. They form the premise for this legislation and the need for significant and coordinated global action to mitigate and reverse these trends. The fourth IPCC report of 2007 further reinforced this case.

The Rudd government is proposing a three-pronged approach, which I believe will set us on the course required. Firstly, we must reduce Australia’s emissions to turn around the impact that we, each and every one of us, is having on the environment. Secondly, we must adapt to the changes we are already seeing in our environment and limit the impact here for the future. Thirdly, and finally, we must play our part in the international community. Indeed Australia is currently responsible for only about 1.5 per cent of global GHG emissions. But, as Professor Ross Garnaut points out, we suffer the full effects of global warming arising from emissions of other countries. Hence we have a strong interest in seeing effective global policy action to address climate change issues. We are one of the largest per capita emitters in the world and therefore have a global responsibility to mitigate our emissions.

The Carbon Pollution Reduction Scheme is a central pillar of reducing Australia’s emissions, and the main part of this is the cap and trade emissions trading scheme. The scheme will create a market price for emissions and an incentive to reduce and control these emissions. It will take us into the 21st century economy that values low-pollution outcomes rather than just low cost and high production. The CPRS will give us a target to aim for and something tangible to work with and measure our progress. The scheme will give us a cost on carbon and provide an incentive for our major polluters to progressively step up to the mark. It will also provide the Rudd government with a means to help reduce the impact on everyday Australians, who cannot be made to carry an uneven amount of the burden. Tackling climate change will cost everyone somewhere, but the Rudd government is determined to make sure that this cost is shared equitably. The Carbon Pollution Reduction Scheme will also serve to inspire and support those innovators who will further lead us into a new renewable energy future. This can create a raft of low-pollution jobs in new and emerging technologies, from solar and wind through to geothermal energy.

In my backyard we have already seen the economic stimulus that wind energy can create, with the benefits of the major Woolnorth wind farm still being felt in some parts of my electorate. Unfortunately, the huge potential of the wind industry was cruelly cut short by the former government when it failed to support further development of renewables, allowing its renewable energy targets to grind to a halt. This is something that will soon be addressed by this government, but one can only wonder what difference a vibrant and innovative renewable sector may have made to my electorate in these current, difficult times had it not been starved back in 2004.

Fortunately, interest in this sector has not been totally devastated, and I await with keen interest some anticipated developments. One significant operator raising funds to support renewable energy in my electorate tells me that the main influence of the CPRS on the renewable energy sector is on the stand-alone, long-term viability of the sector. I quote:

Without the CPRS, a large majority of renewable energy projects will fail to attract equity and debt, as the expanded RET will only take the projects through to 2030. The carbon price in the CPRS is designed to eventually drive the price of electricity to a point where renewable energy projects can stand on their own without any subsidy. Without the CPRS, the renewable sector will have another instance where there is uncertainty in investment in the sector thus making it more difficult to attract debt and equity.

Because most wind resources are in remote locations and wind energy technology will be the dominant technology to be deployed in meeting the expanded RET, this means that regional areas that could have benefited from such an investment will lose out on such investment and jobs.

This is a great example of the benefits to regional Australia that will flow from this legislation. Taking action on climate change will see the renewable energy sector grow by 30 times its current size by 2050. This can only serve as a reminder of the value that is contained within this legislation. As a result of this, more than 48 per cent of the electricity generated in Australia will be from a renewable energy source by 2050. But the government will not just be hoping that the market picks up on the renewable energy future. Through initiatives such as the Climate Change Action Fund it will be stimulating industry to invest in overcoming climate change.

For those in the street, the hyperbole from the deniers opposite has questioned the need for a scheme. They have made it sound to the uninitiated as though a trading scheme would be a world-first move into the unknown, but let me remind them that schemes are already operating in 27 European countries and that 28 states and provinces in the US and Canada are introducing emissions trading to reduce carbon pollution, as is New Zealand. This is vital in helping us take on climate change now rather than leaving a mess that our kids and grandkids will have to clean up or, possibly, be unable to clean up.

I have already mentioned that taking on the climate change battle will be something that touches everyone’s lives. Prices will change in a number of ways, but the overall increase in the cost of living is expected to be modest. The Rudd government is determined to do everything it can to help people and manage any impact. Pensioners, seniors, carers and people with a disability will receive additional support to help cover increases in the cost of living. Extra support will also be provided to low- and middle-income households as they make their way into the climate ready world. These measures include helping to protect these groups from higher fuel costs and other increases in the cost of living. Our white paper indicated that about 90 per cent of low-income households will receive assistance to 120 per cent or more of the cost of living increases. Along with that, 97 per cent of middle-income households will receive some direct cash assistance and about two-thirds will receive further assistance. Fuel taxes will be reduced on a cent-for-cent basis to offset the price impact of introducing the scheme, with a cut made across the board on currently taxed fuels.

Those in rural and regional areas like my own, along with feeling the direct result of global warming, are expected to feel the impact of the move to tackle climate change more than their urban counterparts. The government has recognised this and will look to provide greater support to regional and rural Australia as we work together towards the challenge. It will also delay the impact on agriculture and fisheries, which are the lifeblood of many regional economies, including mine. Agriculture will enter the scheme no earlier than 2015, giving the sector time to prepare and establish a planned response. Key measures to assist these sectors include measures to help offset fuel costs to heavy vehicle users and transport, recognising their need to use significant amounts of fuel from day to day. I can think of many examples in my electorate where this will be vital to keeping industry vibrant and active while recognising that every one of us has a responsibility to mitigate climate change. The Rudd government is in no way rushing into this, as evidenced by the recent move to delay its introduction by one year to help Australian companies manage the impacts of the global recession.

Delivering crucial reform will help tackle the long-term threat. Protecting our economy and jobs during the global recession is part of getting the balance right. We care about jobs today, and this has been reflected in many parts of the proposed legislation. These include the allocation of free permits to firms involved in emissions-intensive trade-exposed activities. Energy providers are also recognised in the $3.9 billion Electricity Sector Adjustment Scheme. The $2.75 billion Climate Change Action Fund will provide further targeted assistance to businesses, as well as community sector organisations, workers, regions and communities. The government will also establish the $75.8 million Australian Carbon Trust to help all Australians do their bit to reduce Australia’s carbon pollution and to drive energy efficiency in commercial buildings.

For 12 years those opposite have neglected the issue and failed to act. Action during their more than a decade in government would have made for a much easier transition to the new low-pollution economy today. Only the Rudd Labor government has had the courage to step forward and act on climate change. The time for talk is over; it is in the national interest to pass the legislation this year. We make no apology for starting the Carbon Pollution Reduction Scheme with reasonable and responsible targets. Given the global recession, this is the most responsible course of action. Our five to 15 per cent targets amount to every Australian making the same emissions reductions as Europe is asking people to make. This government is determined to meet the climate change challenge, to do everything it can to protect the Australian way of life and to see us prosper into the future. We have a responsibility in this parliament to the Australian people and to future generations.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

The religious phase of this debate on the Carbon Pollution Reduction Scheme Bill 2009 and related bills is over, yet listening to those across the chamber that have spoken before me throughout the course of this day, you would think it was still going on. This is not a debate about religion; it is not a debate about belief; it is now a debate about action—the action we need to take—and not about whether we need to take it. Labor do not actually want that debate. Labor do not want a debate on what they are proposing to do. They want to have a debate about these broader philosophical questions.

Labor wish to arrogantly assert to this parliament, to our fellow Australians and indeed to the world that there is only one solution to addressing our shared commitment to reducing carbon emissions. I stress ‘our shared commitment’ because, in a rare gesture in the history of this parliament, we have a bipartisan position on the carbon reduction targets that have been put forward and offered by the coalition for the government to take to the conference in Copenhagen. But, no, the government has made it quite clear that they believe there is only one solution—the solution of Reverend Rudd—and this position is the one that must be followed or we will go down the path of eternal damnation. This is the language that suits the arguments being put forward by the government, because it does not suit them to have a debate about the specifics of the action that they are putting before this parliament—I should say ‘not putting before this parliament’, because the devil in the detail sits in the regulations. What we are seeing in this bill is a request from the government for a blank cheque—a blank cheque to put this system in place—and ‘Just trust us’ on the details that will determine the future of Australian jobs.

There are a suite of tools we need to embrace to reduce emissions. I believe an emissions trading scheme, in one form or another, is one of those tools. Placing a price on carbon, as the Leader of the Opposition has said, is inevitable. However, when and how we do this as a nation is the question. The timing is critically important. Just like in surfing, if you move too early on that wave it will crush you; if you move too late you will miss a genuine opportunity. So this is a debate about the specifics of action, not the question of action, and it is a debate about the sense of judgment on timing.

We must be realistic about the future we embrace and the facts that we are faced with as a nation. Any action will not do in addressing this challenge. It must be the right action. We cannot allow Australians to pay the price with their jobs and their livelihoods for an ineffective and indulgent scheme driven by guilt rather than reason. Australia needs an ETS that suits our circumstances and addresses our needs, a scheme that will cut, not export, emissions and a scheme that will protect, not export, Australian jobs.

The facts are these: we produce 1.4 per cent of the world’s carbon emissions. Our competitive advantage as a nation over more than a century has been built upon our natural resources advantages and our relatively cheap cost of energy as a result. We simply cannot throw that away on some sort of whim or as some form of gesture. The future of carbon trading also will be determined elsewhere. As a small emitting nation these schemes and the future of these schemes will be determined principally out of the scheme to be determined in the United States and in other places. So there is no need for our scheme to be finalised before the Copenhagen conference, which is just six months away. We have committed to the targets which enable the government to go and participate constructively in the debate in the position of leadership that the coalition has afforded them by taking a bipartisan position on this, but there is no need for the details of our scheme to be in place before that conference. This is a delusional view on behalf of the government and particularly the Prime Minister about his own level of significance and influence on these matters rather than anything based on any genuine need that is in Australia’s interests. It is not in Australia’s interests for our trading scheme to be finalised before Copenhagen. The government’s scheme is not intended for introduction, as we just heard from the previous speaker, until 2011, and for actually trading in 2012. There is no rush; there is no need. There is no need for this bill to be pushed through this parliament at this time other than for the vain and political motives of a Prime Minister who has simply lost control of his own ego.

These are the things we need to know in order to consider this scheme. We need to know the final design of the US scheme. We need to know the cost of going it alone, and that is the substance of the coalition’s amendments which were put forward by the Leader of the Opposition last night. This is information we need to know to make good decisions in the interests of all Australians. We need to know what the impact of this scheme will be on our growth as a nation for the next five years, 10 years, 20 years. Why? Because if you look at the budget papers you see that this government has forecast an economic miracle—12 years of miracle growth to pay off their absolutely unbelievable yet true level of debt. The government needs to provide the information which answers this question: if we introduce this and we go it alone, what is the impact going to be on those economic growth forecasts and how much longer will Australians have to pay off Labor’s debt—how many years, how many generations—as a result of the introduction of this scheme in the way that it is currently designed?

We have some major problems with this legislation. We have a problem with its failure to afford appropriate protections to Australian jobs and export-intensive industries, as has been provided in the US under their scheme—far more generous arrangements. We have a problem with an overly complex scheme that will incur significant compliance costs, which will trap business in an ETS compliance bog where they are forced to count every gram of carbon, which is not required under all schemes—there are alternatives. The scheme, as it has been designed, will undermine corporate balance sheets—as outlined by the member for Goldstein. It will introduce in this nation—this of all nations!—the idea of sovereign risk of investments. Who would have thought that, in a country like ours, which has, arguably, the most stable democracy of any in the world, this government could actually come up with a way of introducing a higher level of sovereign risk for major resource investments in this country? No wonder those who are responsible for resources and energy in the government are so sceptical of this scheme. This scheme also fails to provide additional complementary measures to reduce carbon emissions. Renewable energy initiatives—and the Leader of the Opposition has highlighted the issue of green carbon and green depreciation issues such as biofuels and algae as areas of offsets—provide important opportunities, but they are not addressed by this scheme.

In my electorate there are two big issues: the issue of oil refineries—with Caltex who are based in Kurnell—and also the issue of the aviation industry. In my electorate, I have a very high proportion of people who are employed in the aviation and related industries, but particularly in Qantas. My electorate has the highest proportion of Qantas employees of any electorate in the country. Caltex employ 541 employees at the refinery at Kurnell and more than 200 contractors—and often many more than that—who regularly go out and service the site. In their submission to the Senate Select Committee on Climate Policy, Caltex argue that the competitiveness of emissions-intensive trade-exposed industries must be maintained. They say:

Caltex’s two refineries will emit in total about 2.5 million tonnes of carbon dioxide equivalent … annually when the CPRS is in operation. At the CPRS-5 price scenario—

A price of carbon to achieve a five per cent reduction in carbon emissions—

this will result in a permit cost of about $25 million pa in the early years of the scheme, increasing to about $35 million pa (in $2005) by 2020. At the CPRS capped price, the permit costs would be $40 million pa and $60 million pa respectively.

…            …            …

These permit costs will not be recoverable because the prices of petroleum products from Caltex’s refineries are based on import parity and none of the overseas refineries that are our direct competitors … seem likely to adopt equivalent carbon costs for the foreseeable future.

…            …            …

In order to fully maintain international competitiveness, Caltex proposes that activities such as oil refining where prices are completely aligned with import parity should receive a free allocation of permits equal to 100% of Scope 1 and Scope 2 emissions, until such time as all significant import competitors face equivalent carbon costs.

These competitors would include Singapore, India, Korea, Japan and China. And, as we heard from the Leader of the Opposition last night, this is exactly the level of opportunity and protection which is being considered in the US scheme—that, until the rest of the world catches up, the US government is not going to risk US jobs.

In the area of aviation, the Qantas submission to the Senate Select Committee on Fuel and Energy said that the government’s ETS did not recognise aviation as emissions-intensive trade-exposed industry or strongly affected industry and ‘would have airlines pay for 100 per cent of their carbon permit obligations immediately’. Qantas further stated in their submission:

Unlike many other emissions intensive industries, aviation will not be given transitional assistance.

It is the view of Qantas that the impact of the CPRS on domestic aviation ‘will be extensive, as the ability to offset the introduction of a carbon cost is limited’. Qantas said:

The introduction of an emissions trading scheme would effectively increase the cost base of airlines, just as the rising cost of fuel has, with associated negative implications for regional communities and the tourism industry.

This legislation is just not done—it is not ready; it is undercooked. It is not ready to go, and it should not be supported. The government should heed the advice of the opposition. Commonsense should prevail. They should put jobs first and they should ensure a scheme such as this reduces emissions and does not just export them, as is the plan.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I congratulate the member for Cook on his contribution on the Carbon Pollution Reduction Scheme Bill 2009 and associated bills. I think what he has done for the rest of us is confirm that, under no circumstances, are they on that side of the House in a position to move forward to address the issue of climate change. I guess he is sitting in hot company, with all the various climate change deniers, which I am happy to refer the member to—although he knows them; he sits in the party room with them. He understands that at this stage they remain climate change sceptics. His selective quoting from submissions to the Senate was done for one reason: to try to buy them time.

There are those of us who well remember the election of 2007 and issues such as Work Choices. But what issue was up there with Work Choices? It was climate change. We have a responsibility to the Australian public in that regard. We have a responsibility to future generations to act on climate change and act now. That was the mandate that was given. Maybe the member for Cook and his colleagues over there did not understand what occurred last election. You reckon they would have, although seeing how they have acted on Work Choices ever since and how they wanted to water down the passage of the Fair Work bill yesterday just goes to confirm that there is no environment right for doing things, according to the opposition. And, once again, they are consistently saying that now is not the right time to act. The simple fact is that we are in one of the hottest and driest continents on earth. Australia’s environment would be one of the hardest and fastest hit by climate change if we did not act.

In the face of the current economic crisis, the Carbon Pollution Reduction Scheme is an effective mechanism through which to provide business certainty about this government’s plan to tackle the issue of global warming. We have been very mindful to protect jobs, particularly in these difficult economic times. One way we have sought to do this is through the proposed one-year buffer. The one-year buffer proposed by the government allows business to weather the current global recession while simultaneously being able to plan for their future investments in more sustainable business practices. Again, that is consistent with the dialogue that we have had with industry. We have sought to support the jobs of today while at the same time putting in place a scheme that will create the low-pollution jobs of the future. That is the responsible activity of government. I cannot believe that we are still having this argument, but the cost of inaction will have a far greater impact on jobs and our economy than any responsible action taken on climate change now.

Our approach is in contrast to the great climate change sceptics on the other side of the House. I would like to note a few recent comments—there is a pattern which emerges here. It was only last week that the member for O’Connor was cited from an interview at the doors as indicating that the majority of those in the party room were against taking action. As a matter of fact they did not believe that climate change was a factual event.

Senator Cory Bernardi said this:

But exactly what is causing climate change and what—if anything—should we be doing about it should remain the subject of debate? … We need to question the prevailing orthodoxy of belief …

That comes from the good Liberal Party senator from South Australia, only to be matched by Senator Abetz from Tasmania—a senior office holder in the Liberal Party as I understand it, and also on the opposition front bench in the Senate:

There is no doubt that weeds pose … a challenge much clearer, more present and possibly more serious than the unclear challenge which climate change may or may not pose to our biodiversity …

That could hardly be the comment of anything but a climate change sceptic. Following on this pattern, when John Howard led the government, the science and technology committee—I forget what the actual topic was that they handled—had a majority of Liberal Party members. They had a report authored by the member for Tangney, Dr Jensen. He indicated that there was no real substance to the issue of global warming. He went on to cite what was occurring on Pluto and Mars and other places throughout the universe to try and back his point up. They actually included that in a report presented before this parliament when they were in government, just before the last election. It is absolutely fanciful for anyone to take seriously that over there there is not a paddock full of climate change deniers.

We know that they are locked into their way and now they want to delay, delay and delay. Less than 12 months ago, the Leader of the Opposition said he would, ‘move on emissions trading schemes come what may,’ and he emphasised that his position on climate change was, ‘not conditional on international action’. Notwithstanding that, he reckoned at that point in time that we must consistently move forward in this country.

To some extent that is consistent with the views he expressed when he was the environment minister in the Howard government. But now we know that he has been forced in his own party room to delay any decision on climate change. He is now arguing that Australia should wait until after the passage of bills on emissions trading in the United States and wait until after Copenhagen in December, where other countries are going to sit and determine what they are going to do. No wonder people in this country have a cultural cringe. Here is the Leader of the Opposition and he wants to talk about anyone doing anything provided it is not us. If you look at all his commentary to date you will find he wants to wait for the passage of the US bills and wait for Copenhagen—that, by the way, is the last in a long line of about six or seven excuses as to why we should not take any action when it comes to climate change.

It is true that the world is going to come together and attempt to deal with things cohesively and collaboratively in December of this year. But if we are going to have a real voice there, we cannot go there on the basis of just wait and ‘suck it and see’. That is what we have been asked to do. It is a little bit like what the former opposition spokesman on Treasury wanted to do about the international global financial crisis and its impact on us here in Australia. I do not have the exact quote but I am sure I am not far off the mark that at that stage he said, ‘Let’s wait and see what happens.’ We did not want to wait and see how deleteriously the Australian economy could be impacted. They did not want to be looking at stimulus; they did not want to be creating demand; the opposition wanted as a policy position: ‘Let’s wait and see what happens.’ If anything, this has got to be the party of inaction, inertia and incompetence.

The opposition may refuse to acknowledge how important it is to provide certainty in relation to the position on CPRS. When they do that they are certainly not reflecting the views of the business community. This bill’s importance has been recognised by various areas within the business community and principally by those at the sharp end of this. Companies such as Santos, Shell and BP—companies that I have had an association with in the past when I worked in the hydrocarbon-based industries—have acknowledged the importance of it. The business community generally, together with the environmental groups and the Australian public, expect this parliament to do the right thing and pass this CPRS legislation and do it now. Delaying the passage of this legislation will directly undermine investment certainty at a time when business least requires that to occur.

In closing, I would like to refer to the comments of the Business Council of Australia in a recent media release:

In the interests of business certainty, the BCA calls on the Senate to pass legislation this year to establish a Carbon Pollution Reduction Scheme …

It is regarded as a necessary step to enhance future profitability and investment confidence that we establish this scheme and we do it now. Not only does this bill provide the crucial balance between economic stability and environmental sustainability but it is an act of responsible behaviour on the part of our current generation.

There are many other things I would like to talk about but time is now going to be against me. I would like to conclude by saying the Carbon Pollution Reduction Scheme Bill 2009 and its associated bills create an essential national emissions trading scheme to meet Australia’s commitment to its objectives under the United Nations Framework Convention on Climate Change and the Kyoto protocol. This period of economic uncertainty has presented the opportunity for effective, efficient future planning. That is what these bills do and I commend them to the House.

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Mr Deputy Speaker, before I begin my contribution, I would like to make an announcement to the parliament. The Maroons will win the State of Origin tonight and the Cockroaches will be flogged.

This bill is called the Carbon Pollution Reduction Scheme Bill 2009 but the subtext is that 1,870 Townsville jobs are at risk. That is the subtext for me as the member for Herbert, representing Australia’s largest tropical city. I am fed up with the politics of the Rudd government’s emissions trading scheme. The focus has to be on what is best for Australia, what is workable and what will protect jobs while reducing emissions. The focus must not be on the politics of this.

For these reasons, the coalition has a different approach to a CPRS. We are not focused on spin and political advantage. We are doing something that is hard. We are focused on delivering the most sensible public policy position. Even under the former Prime Minister, the coalition supported the adoption of an ETS. I hear this constant claim from the government that we are climate change deniers. I remind the parliament that, even under John Howard, our policy was to have an emissions trading scheme. We still have that policy and no amount of Labor spin can alter our resolve. No one will alter my resolve to protect jobs in Townsville.

We are not climate change deniers but what we are is a party that wants to get the best outcome for our country. Rather than rush headlong into this, we want to get the best outcome. The best outcome only comes when you know what the United States is going to do, and when you have certainty about the US position, because the rest of the world will follow the US. If we jump in too early, we may end up with a scheme that in fact disadvantages our trade-exposed industries. What is the sense in that? How can the government argue against a position that best protects Australian industry and Australian jobs?

The only way they can argue is on the basis of getting some kind of political advantage. The government knows that they have bipartisan support in going to Copenhagen to say that Australia will support an emissions target and that both sides of politics support the same target. They know that. There is no downside in going to Copenhagen not having this legislation passed. The upside for the government is to say to the electorate, ‘We are working on climate change and the opposition is delaying.’ The opposition is not delaying; it is just being sensible. I hope that the Australian public will understand that.

The Minerals Council of Australia report about job losses under ETS predicts that Townsville will lose 1,870 jobs by 2020 and the total job losses for North Queensland will exceed 3,500. We have got to be very careful of that as a parliament. The Leader of the Opposition was right to observe that this legislation has almost no supporters. The business community have almost unanimously complained about its job-destroying provisions, while the environmentalists, on the other hand, have complained that it does not go far enough and is not effective in reducing emissions.

It is a poorly conceived scheme. It was poorly put together in haste, with inadequate analysis and consideration. It is therefore vital that climate change is approached in a fair and balanced way. This bill shows that the Rudd government does not have that commitment. Their position will cost Australian jobs and send businesses offshore. If Labor’s emissions trading scheme goes ahead in its current form, the Minerals Council of Australia estimates that by 2020 over 23,500 mining jobs will be lost. These are unionists. This is the Australian Labor Party—a branch office of the union movement of Australia—telling people, ‘Sorry, you have lost your job.’ Queenslanders will suffer most, with 11,440 job losses by 2020. This is almost half the total number predicted and a great burden on Queensland. In its haste to implement this Carbon Pollution Reduction Scheme, the Rudd government are ignoring the devastating effect it will have on North Queenslanders.

Australia produces only 1.4 per cent of the world’s carbon dioxide emissions. It is clear that the Australian solution does not solve the world problem. There must be global effort and a global agreement. I do not think anybody would disagree with that. But this is why the coalition is committed to providing support to the government in the targets that Australia takes to the climate change conference in Copenhagen in December. The government can represent a united Australian position at this meeting for a reduction in emissions of five per cent from 2000 levels by 2020 and up to 25 per cent reduction with a global agreement. The Copenhagen conference is only six months away; Australia must wait until global efforts on climate change can be assessed. It is the sensible thing to do and would ensure that Australia can get its emissions trading scheme right. A vote on the scheme should be deferred until after the Copenhagen conference.

When the Treasury modelling on the ETS was released, it did not consider the effects of the global financial crisis. It assumed all countries would be part of a global agreement. The modelling was only on Labor’s ETS; it did not consider alternative schemes. We in the coalition are very concerned that the full impact of the Rudd government’s ETS has not even been considered. I think I will have colleagues on the government side of the parliament who feel for this point that I make and will be privately concerned that the government’s ETS has not been properly considered.

This is a concern that has been echoed by the Australian Chamber of Commerce and Industry. They have said that they see no reason for the CPRS legislation to be rushed through parliament this year. They caution that it is more important to first fully consider the financial impact of the scheme. The government should take this advice.

The government’s emissions trading scheme legislation is flawed. In its current form it will negatively impact on regional Australia. The beef and sugar industries will see a $60 million tax through the price they receive for their products. The grain industry, with low levels of emissions, will be forced to absorb indirect costs of half a billion dollars every year. This would be in addition to the tariffs they must pay in other countries, ranging from three per cent in the United States to 45 per cent in the European Union and 70 per cent in Japan. This ETS would place an additional burden on the Australian grain industry.

The government are attempting to rush this legislation through the parliament without a thought for the dramatic economic consequences it will have. This is unsurprising from a Labor government which has committed Australians—again, without thought—to $315,000 million of debt. Australia is seeing reckless spending the likes of which we have never seen in the history of our country: $315,000 million—extraordinary.

Mr Rudd’s emissions trading scheme does not consider the impact of the global financial crisis. It will cost Australian jobs and will hurt the economy. The scheme places an effective $12 billion tax over five years on Australian import and export industries. Are you really going to vote for that? Mr Rudd and Senator Wong announced changes to the scheme on 4 May—my birthday; I am 23! These changes do little to correct the problems with the ETS and merely increase its complexity. The Rudd government are rushing a flawed scheme for their own political purposes.

Because it is vital for there to be a global agreement, it is important to look around the world. In the United States the draft legislation on emissions trading fully protects US import and export competing industries until 2025. This protection will not be removed until 70 per cent of global output in the industry occurs in countries which have a similar emissions trading scheme. The Rudd government are not considering the position of the United States. In doing so they demonstrate the flaws in the ETS we are talking about today, and they put our industry at a disadvantage vis-a-vis other world industries.

The Centre for International Economics review of the government’s white paper on their emissions trading scheme reveals that it will tax Australia’s largest employers and risk Australian jobs. Labor has not considered any alternatives, even in light of the GFC.

The coalition’s Green Carbon Initiative announced by Malcolm Turnbull in January aims to achieve additional annual reductions of a minimum 150 million tonnes of CO2 equivalent by 2020. The coalition is committed to considering a full range of measures which will not have the high cost of Labor’s scheme. This initiative shows how committed the coalition is to climate change and how out of touch the Rudd government is when it comes to economic management and business interests.

The Rudd government are getting it wrong. The Senate Select Committee on Fuel and Energy released its report on 7 May and found that the proposed CPRS will not succeed in reducing global emissions and will cost Australia jobs. That is a wake-up call for the government. Australia needs effective legislation that provides real solutions. The government’s CPRS does not achieve this. It is a reckless and rushed bill which will hurt the Australian economy, it is a reckless and rushed bill which will hurt industry in Townsville and it is a reckless and rushed bill that will prejudice the jobs of 1,870 good families in my home city of Townsville. For those reasons I cannot support the legislation.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

One thing that is certain, when we talk about the opposition and their position on emissions trading, is that they are not on the same page. We had the Leader of the Nationals’ contribution today where he was virtually saying, ‘Look, this is such a hard decision we shouldn’t make a decision; we should just leave it.’ We had the Leader of the Nationals in the Senate saying they are not even supportive of an emissions trading scheme whatsoever. We had the member for O’Connor saying that two-thirds of the Liberal Party do not even believe in climate change, let alone an emissions trading scheme. So we have inconsistency from the opposition; they are not on the same page.

But I think we probably have them reading from the same book, and that would be a book called 1,000 Reasons Why We Shouldn’t Act in relation to Climate Change, because, no matter which story we are hearing from which faction or subfaction of the opposition, we are hearing something consistent, which is: ‘We don’t want to do anything.’ That should not be a surprise to the Australian people; we have had 12 years of them not doing anything in relation to this. But the Rudd government made a commitment to the people of Australia at the last election that we would act in relation to climate change, and that is what we have done, and that is what this legislation, the Carbon Pollution Reduction Scheme Bill 2009 and related bills, is all about.

Climate change presents many challenges for the planet and the country that our children are going to inherit. It also brings specific challenges to the electorate that I represent. For the electorate of Dobell, rising sea levels; the predicted increased occurrences of east coast lows, bringing more extreme storm events; and increased bushfire activity and water shortages have the potential to cause major problems for our region. Dobell extends along the coast just north of the Terrigal Lagoon through to Norah Head. Areas such as the Wamberal beachfront and The Entrance North have been identified as being particularly vulnerable to rising sea levels and greater storm activity. When the House committee on climate change and the environment began their inquiry into the effects of climate change on coastal areas, the first place they visited was my seat of Dobell. Both of those suburbs have recently experienced severe beach erosion that has eroded the yards of private properties, and destroyed fences and decking. We also have a lake in the middle of the electorate that, in the last five years, has suffered two major floods. These were meant to be floods that happened once in 50 or 100 years; we have had two in five years.

As sea levels rise, and storm events and surges become more severe and potentially more frequent, it would be not unexpected to lose a number of homes within these areas. Last Friday I was at North Entrance, talking to homeowners who have seen the boundaries of their properties consumed by the sea. A couple told me that they have lost seven metres of their backyard, which have been taken away by the severe weather conditions that they experienced only last week. It really brought home the reality of the importance of what we are talking about today—when you see half a backyard disappearing into the ocean. When I was there I saw footpaths hanging out over the edge of a cliff because there used to be a backyard there. This used to be the back path going down the backyard. It has disappeared. This is such a recent event that, when the environment committee visited the exact same spot only 12 months ago, there was a backyard there. It has now disappeared, as with all of these houses at North Entrance.

Carbon pollution is contributing to changes in the world’s climate, resulting in extreme weather, higher temperatures, more droughts and rising sea levels. Everyone needs to do their bit to tackle carbon pollution, and by introducing the Carbon Pollution Reduction Scheme Australia will be a part of the solution, not just the problem. We are taking strong action to tackle climate change by introducing a Carbon Pollution Reduction Scheme while also making sure that the targets we put in place are appropriate and responsible, given the need to support our economy and jobs during this global recession. The community expects the government to make tough decisions in tackling climate change. Tough decisions in this context means substantial structural changes to the way our economy operates. The government’s CPRS is consistent with these community aims.

After 12 years of climate change scepticism and neglect by the former government, this government is stepping up to the plate and making a number of important changes. These include putting a cost on carbon pollution, which will encourage major polluting businesses to lower their emissions; using the funds raised to assist households to adjust to the scheme, making sure Australian families do not carry the cost of climate change; and building on our investment in renewable energy to create the low-pollution jobs of the future in solar energy, wind farms and jobs using new technologies like clean coal and geothermal energy. Taking action on climate change will see renewable energy targets grow to 30 times their current size by 2050, creating thousands of new green-collar jobs.

These types of schemes are already operating in 27 European countries and 28 states and provinces of the United States and Canada. They are introducing emissions trading schemes to reduce carbon pollution, as is New Zealand. US President Obama is committed to establishing a cap-and-trade scheme to reduce carbon emissions, with targets of reducing emissions to 1990 levels by 2020 and 80 per cent below 1990 by 2050.

The Carbon Pollution Reduction Scheme will help us tackle climate change to ensure our kids and future generations are not left to clean up the mess. This is the Labor approach: ensuring our kids and our future generations are not left with the economic and legislative structures that are not suitable for the grave environmental challenges that we face. The coalition approach can only be described as the collective sticking of heads in the sand.

It has been well over a decade since the Kyoto protocol was adopted. It has been a year and a half since Kevin Rudd ratified this protocol on behalf of Australia. The Australian community has moved over a relatively long period of time to a clear-cut position that substantive climate change action is required. The coalition still fail to hold even a resemblance of a unified, consistent position on whether climate change actually exists, let alone a plan to tackle it. The coalition are doing the political equivalent of putting a pillow over their head and hoping that the problem of not having a consistent position simply goes away. For 12 years the coalition neglected the issue and failed to act. Action under the former coalition government would have made the transition to a low-pollution economy now that much easier.

My constituents in Dobell are already facing the prospect of increasing prices because of the impact of climate change. Gosford and Wyong councils have been given permission to increase rates of pay to pay for securing water supplies for the future. Dam levels have now only just risen to 32 per cent of capacity, after being close to empty in 2007. Without increased capacity, water storages will always be vulnerable in any lengthy dry spell. With predictions of a new El Nino weather event, the residents of the Central Coast will be looking at extended periods of water scarcity.

Energy Australia has been given permission by IPART to increase energy costs for customers. This reflects the need for increased spending to ensure energy supplies in the future. The Central Coast is lacking in public transport infrastructure, and most residents are forced into their cars for work and/or leisure. Yet many businesses, aware of the prospect of increased energy and fuel costs under a CPRS, are now investing in energy and water saving measures that will mitigate the costs of any price rises. Unfortunately, many of my constituents are not able to do this. Although some residents are utilising rebates under the Energy Efficient Homes program, for many residents on fixed and low incomes, the ability to implement water and energy saving measures is limited. Under the CPRS, residents of my community will benefit in a number of ways: those on pensions and low incomes will be compensated for increased costs associated with the CPRS; business and industry will be looking to offset carbon emissions through such things as community projects around emissions reductions; and through the creation of green jobs.

Importantly, the government will provide substantial assistance to support the jobs of today through an allocation of free permits to firms engaged in emission-intensive trade-exposed activities; the $3.9 billion Electricity Sector Adjustment Scheme, which will provide a fixed allocation of permits to coal-fired electricity generators over five years; and the $2.75 billion Climate Change Action Fund, which will provide further targeted assistance to businesses as well as community sector organisations, workers, regions and communities. If we do not act Australia’s economy will be left behind, meaning we will not create the low-pollution jobs of the future. Treasury modelling released in October 2008 demonstrated that economies that defer action face long-term costs that are around 15 per cent higher than those that take action now. So the longer we delay the more likely Australia will miss the boat on the potential to be a world leader in green-collar industries. The longer we delay the more my constituents, many of whom have the least ability to pay, will be paying for the costs associated with climate change.

The government is taking responsible and decisive action to ensure that our kids and future generations are not left to clean up the mess. The demarcation between Labor and the conservatives is clear: from the government there is decisive action to seriously tackle the challenges we face; on the other side there is nothing but confusion and division. I commend the bills to the House.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

With the Carbon Pollution Reduction Scheme Bill 2009 and related bills currently before the House the ALP is embarking on an ideological indulgence. Given the fact that the scheme is not due to come into effect for a considerable period of time, there is absolutely no reason for this indecent rush to put legislation on the statute books. Consequently, I cannot support the bills in their present form and I do in fact support the amendment moved by the Leader of the Opposition when he spoke in the parliament recently.

Let’s look at what the Leader of the Opposition is suggesting should occur. He is saying that these bills should be deferred until a number of things have happened—things that are really quite reasonable in all the circumstances. Firstly, the bills should be deferred until the Copenhagen climate change summit at the end of this year has concluded and, secondly, until the Barack Obama administration in the United States has clarified its intentions in this area. He also pointed out in the amendment that consideration of the legislation should be deferred until the government has referred its Carbon Pollution Reduction Scheme to the Productivity Commission so that it may conduct a six-month review to assess the national, regional and industry sectoral impact of the CPRS in the light of the global financial crisis; to assess the economic impact of the CPRS in the light of other countries either not imposing a price on carbon comparable to that proposed for Australia or imposing such a price after different assumed periods of delay; and to conceptually and empirically examine the relative costs and benefits, including emissions reductions, of the key alternative scheme designs against the CPRS. Finally, consideration should be deferred until the Productivity Commission’s reports on these topics have been publicly released.

The government is bringing in legislation that will disadvantage Australia, Australians, Australian industry and Australian jobs all in the heat of the moment because the government wants to be seen to be doing something. It is bizarre to consider that the government of Australia is seriously considering a carbon reduction scheme that will (a) have virtually no impact on the global pollution levels and (b) cause massive cost increases for business and many job losses.

The government cites and re-cites as a mantra that it is the party of jobs. This legislation, if implemented, will destroy jobs. Given that as far as emitting nations and polluting nations are concerned we are well down the scale, you would think that the government would be waiting to see what the world is doing, particularly as our own scheme does not come in for a considerable period of time. I listened very carefully to what government spokespeople have said in relation to this and I have to say that their response is clearly uninspiring and unconvincing. I do not know what the rush is. Everyone accepts that, as a good corporate and world citizen, Australia must do something to reduce carbon emissions. No-one denies that. But our scheme is not going to come into effect for a considerable period and in between there will be a number of world decisions made, including decisions at Copenhagen and decisions by the Barack Obama administration in the United States of America, and those decisions, whatever they are, could well impact on what we as a country should do as part of our response. This legislation is absolute tokenism—or, more correctly, would be absolute tokenism if it were not for the very serious economic and jobs impact that this legislation will have.

I am advised that the scheme drawn up by the US administration does in fact have built-in protection for jobs. However, here in Australia the government does not seem to be sufficiently concerned to have a rethink about the scheme. It is not prepared to rejig its stance so as to reduce the negative impact on Australians. I find as I go around the electorate of Fisher—and I am sure as other honourable members find this as they travel around the country—that, clearly while there is a desire in the community for us to do what we can to combat climate change, there is a very real concern that if Australia goes forward ahead of the rest of the world we might in fact be imposing substantial disadvantages on this nation while not seriously having any impact on global pollution levels.

No government in the world other than this government has been prepared to risk jobs in the way that this government is. The government would like us to wave the legislation through, but the Liberal-National opposition cannot sit back and allow the government to rush headstrong into introducing such a scheme without our standing up on principle and making clear the concerns felt right around the country on the impact that this scheme would have on Australia. The only conclusion we have is that the government is not able to think on its feet. The government is woodenly proceeding down a path that is to the serious disadvantage of the Australian community.

On a recent television program debating action on climate change the studio audience seemed to go noticeably quiet when discussions turned to whether or not they would support the scheme if it meant losing their jobs, and I can understand why any audience would go quiet when asked: ‘Well, yes, climate change action is a good thing, but would you want it if it cost you your job?’ particularly when any action that Australia takes unilaterally will have virtually no impact on global pollution levels. So people in Australia, people in that studio audience, risk losing their jobs as a result of the ideological action of this government. It is an action by this government that will have virtually no impact on global pollution levels. To me that seems downright stupid.

Australia produces just 1.4 per cent of global carbon dioxide emissions, and the introduction of a radical trading scheme here will have little global impact in the real sense unless it is accompanied by the introduction of similar schemes by the world’s major polluters. Unless other countries are prepared to implement schemes, Australia will be hanging itself out to dry and this legislation will be on the statute books. I represent a regional area, and the impact on regional communities of an emissions scheme is a telling concern. Research says that some regional communities could expect an impact of 20 per cent on their livelihoods. If that extrapolates to a 20 per cent rise in unemployment in those communities, is the government prepared for that burden? I am advised that the average dairy farmer can expect an increase in costs of between $6,000 and $9,000, and this follows the challenges faced by the industry due to deregulation which resulted in numerous farmers leaving the land and taking their expertise with them. Are we prepared and are we able as a nation to afford the loss of more dairy farmers, possibly increasing our reliance on imports?

The Liberal-National opposition will offer bipartisan support to the government for the carbon abatement targets Australia will take to the Copenhagen climate change conference in December. This means, as has been pointed out by others in the opposition, that the government can go to the conference with a united Australian position strengthening its hand considerably. They will try and paint us as climate change sceptics, as people who are wreckers and destroyers, who are not interested in combating pollution of our environment. But we are not saying that we ought not to have a scheme. We believe that Australia ought to have a scheme and yet Australia as a polluter to the extent of only 1.4 per cent of the world’s problem ought not to be putting its neck on the chopping block until we know what the rest of the world is doing. We want to defer a vote on this legislation until after Copenhagen. That is a very important step forward. We will also augment our support for emissions reduction targets with a significant renewable energy support package in the near future.

This is a topic on which one could talk virtually forever. When one looks at the range of organisations in the community attacking the government’s suicidal approach, one wonders why the government does not react to community concern. So I strongly support the amendment moved in this place by the honourable Leader of the Opposition. If that amendment is not backed by the government then I will have absolutely no hesitation in voting for the Australian economy, voting for Australian jobs and making sure that Australia does not hang itself out to dry, that we do not cut our head off to somehow play to world opinion.

Melissa Parke (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

I speak today in support of this historic, necessary and carefully designed suite of bills that will establish in Australia a comprehensive carbon pollution reduction scheme. These bills together represent the first major step taken by an Australian government to deal with the greatest market failure in history—namely, the failure to attribute a cost to carbon pollution.

There are several reasons for that failure. For a long time governments, business and the scientific community simply did not appreciate the effects and the costs of a steeply rising concentration of carbon in the earth’s atmosphere. While the concept of greenhouse gas has been with us since the 18th century and while there is no argument that the human production of greenhouse gas has been increasing exponentially since the Industrial Revolution, the logically consequential notion of anthropogenic climate change has taken longer to arrive.

Now, in the 21st century, we have reached a point, however belatedly, where the strong scientific consensus is that climate change is occurring and that it is being caused by carbon pollution for which we are responsible. Accepting and acting on this scientific consensus does not mean there is no room for debate or for further scientific investigation of the issue and its consequences. Indeed, debate and study are needed now more than ever. Nevertheless, there is a sound and growing body of scientific work that sets out the kind of scenario we are likely to face if climate change continues unabated. These include: a significant rise in the earth’s average surface temperature—an outcome which an article in the May issue of the Lancet described as ‘potentially the biggest global health threat in the 21st century’; a significant rise in ocean temperatures, which would, among other calamities, greatly accelerate the destruction of the Great Barrier Reef; a significant rise in ocean levels, which would displace millions of people worldwide; and an increase in extreme weather events like cyclones, floods and weather related fires.

In the face of a scientific consensus regarding consequences that are as grave as this, the only reasonable course of action is to first stabilise and then ultimately reduce carbon pollution in the earth’s atmosphere. That is why governments around the world are acting to confront this challenge. It is why the Kyoto protocol agreement came into existence. It is why there are already emissions trading schemes operating widely in Europe and planned to operate in New Zealand and Japan and within more than 25 states and provinces across the United States and Canada. It is also why the Rudd government will keep perhaps its most significant election promise and, with these bills, implement a carbon pollution reduction scheme in Australia.

Those who oppose the CPRS fall into two broad categories. In the first are those who oppose it altogether—those who do not accept the scientific consensus or who think that any action by Australia must only come after the rest of the world is on the way to fixing the problem for us. In the second category are those who understand the necessity of action to reduce carbon pollution but who believe our measures are not sufficient. There are a number of individuals and groups in my electorate, for example, who would prefer to see a much steeper and immediate reduction in carbon pollution. I am not without sympathy for that point of view but I urge those people to recognise the size of the task that confronts us all. This is the beginning and, while for some our proposed CPRS does not go far enough and for others it goes too far, nevertheless the passage of this legislation will deliver two historic and unprecedented achievements: first, the introduction of a trading system in Australia that puts a price on carbon emissions and, second, the commitment to a minimum, unconditional five per cent emission reduction trajectory.

In keeping an election promise to introduce an emissions trading scheme, the government is not fixed on an inflexible, dogmatic approach. This is evidenced by the changes to the scheme that reflect, on the one hand, the circumstances of the global recession and, on the other hand, amendments that will ensure that the efforts of households and individuals to reduce emissions are appropriately reflected in a further reduction of set cap limits. I welcome this latter change in particular because I recognise that the most important driver of change on this issue is the Australian community.

Professor Garnaut, when he delivered his final report of the climate change review, said:

This is a diabolical policy problem, but it has a saving grace. And that is that the extraordinary interest of Australians gives the government a base of support that has not been there in any comparable degree for other major structural changes in the economy under the reforms of the past 30 years.

We have to keep faith with the Australian community on this issue. My own position was certainly reinforced at a climate change forum that I hosted in my electorate late last year. My constituents want to see action taken by their government, both on their behalf and in support of their own efforts to reduce emissions, and to pursue a low-carbon future for their children.

It is unfortunate that on an issue as important as climate change we have not in this place been able to approach the reduction of carbon pollution and the creation of a green and renewable energy future for Australia as a shared objective, with the contest between political representatives confined to the necessary argument about the details and the methods of reaching that objective. It is unfortunate that the coalition is so divided on this issue, with only one consistent line involving scaremongering about the effect that an emissions trading scheme will have on economic activity in Australia.

It is a fundamentally false dichotomy to frame this as a choice between the environment and the economy. The climate change that is occurring—and that will only accelerate if we do not reduce carbon emissions—can be measured just as easily in terms of economic damage as it can in terms of environmental damage. Indeed, there is a bumper sticker that sums up very well the absurdity of pitting the health of the environment against our own material wellbeing. It says ‘No jobs on a dead planet’. This black and white simplification—that the economy and the environment are somehow opposite values and that human prosperity can only occur through the consumption and destruction of the natural world—not only is self-defeating but ignores the possibility of making a paradigm shift to another view altogether. There is a widespread view in my electorate of Fremantle that says we can be both economically productive and sustainable. This is a view that sees the significant economic upside to being a country of innovation and a world leader in renewable energy, in energy efficiency and in carbon abatement technology. The Rudd government says, quite reasonably, that it can help the environment and the economy.

Taken altogether, the government has committed $13 billion to clean energy, solar and energy efficient homes programs that will drive the creation of low-pollution jobs, products and services. Working in combination with these initiatives to support a vertiginous growth in green industries and green jobs, the CPRS will provide the fundamental framework of opportunity for Australian scientists, inventors, innovators and entrepreneurs who want to take Australia and the world towards a low-carbon and renewable energy future.

I want to take a couple of minutes to talk about the global challenge of addressing climate change. The CPRS is the first major step taken by an Australian government towards meeting Australia’s obligations under the UN Framework Convention on Climate Change and the Kyoto protocol. It will be the strong basis on which we go to Copenhagen this year to further participate in international efforts to address climate change. The issue of responding to the threat of climate change raises squarely one of the great ongoing tasks that confront humankind, and that is to find ways to cooperate effectively as a global community. The consequences of unchecked carbon pollution, to which we give the name ‘climate change’, are a global problem. The atmosphere is shared by all of us; the sea is shared by all of us. Climate change is not something that nations can or ought to confront within their borders alone.

Let us keep in mind too that climate change is not separate from the factors which cause civil and geopolitical conflict. The terrible events in Darfur, which have led to the displacement of more than four million people, are regarded by the UN Secretary-General as having begun with ‘an ecological crisis, arising at least in part from climate change’. We also know that there is a crisis coming in terms of millions of people being forced to migrate, temporarily or permanently, as a consequence of climate change.

In the end, it is accurate to say that appropriate, precautionary action to address carbon pollution and its consequences is in the self-interest of individuals everywhere. Professor Garnaut expressed it very well when he stated:

… there is a solution to the diabolical problem. It is a global solution, to which Australia has much to contribute, and in the achievement of which Australia can make a difference. It is not an easy solution, for Australia or for the rest of the world. There is a chance, just a chance, that humanity will deal with this matter in a way that future generations judge to be satisfactory. So much is at stake, that it is worth a large effort to take that chance. If we fail, on a balance of probabilities, the failure of our generation will haunt humanity until the end of time.

In the final analysis, after making the argument for action, it is worth contemplating the alternative. It is argued by those opposite that we should wait for other countries to take action before committing ourselves to addressing what the overwhelming weight of scientific opinion tells us is a real, imminent and serious threat of catastrophe. But if all nations adopted this reasoning, nothing would occur. It is argued by those opposite that we should wait because our contribution is comparatively small, even though our per capita emissions are among the highest in the world. It is argued by those opposite that we should do nothing because of the cost involved in action, even though all the modelling indicates that the longer we do nothing the more it will cost, even though the business community is calling for certainty and even though, as reported on the front page of today’s Australian Financial Review, Australia’s largest institutional investors have found in an independent assessment that the impact of the government’s CPRS on most companies will be minimal.

This government rejects the position of the opposition, which is based on doing nothing or waiting and which creates fear and puts individual self-interest ahead of the public interest. The Rudd government was elected with a mandate to act on the greatest market failure in human history and a mandate to act on the greatest policy challenge of the 21st century. With these bills, we will act to create a carbon pollution reduction scheme for the benefit of Australia and as part of the global effort to face the diabolical problem of climate change. I commend the bills to the House.

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Link to this | Hansard source

When this parliament takes any decision there are impacts on individuals and impacts on families. It is the role of the parliament to weigh up its decisions, always keeping in mind what will be the impact on Australian families, the impact on workers and the impact on individuals. I find it extraordinary that we are being asked to consider this carbon pollution reduction legislation for a scheme that will begin in 2012, in 2½ years time—a scheme which has already been delayed—without some very important information.

The world will gather at the end of the year in Copenhagen to come up with a global response on climate change, on how the world will act post 2012. Australia contributes only 1.4 per cent of carbon emissions. There is no Australian solution to climate change; it has to be a global solution to climate change. I find it extraordinary that we have not been told what the impact of this scheme will be on jobs. Anyone who saw the Minister for Climate Change and Water fudging around this issue on Lateline would have been horrified. She was simply unable to say what will be the impact, when we expect that there will be one million Australians out of work over the next two years.

Other people have looked at this. Concept Economics modelling has shown that there will be 23½ thousand jobs lost across Australia’s minerals industry by 2020, and 66,480 by 2030, as a direct result of this emissions trading scheme. That is why we believe it is prudent to have the Productivity Commission look at what will be the impacts of this scheme on our national economy, by region and by industry. We believe it is important to know what will be the shape of the global agreement coming out of Copenhagen. We believe it is important to understand what will be the nature of the United States scheme going forward. And we believe it is important that everyone has a very clear idea of what will be the economic impacts of this scheme.

There is no doubt there is enormous community opinion in favour of acting on climate change—there is no doubt. But we need to get the response right, because a badly designed emissions trading scheme would be worse than no scheme at all. One of the most important areas to consider is the energy-intensive trade-exposed industries. They have been glossed over in this legislation. They are exposed to trade and they are a very important part of the Australian economy. A wide range of voices right across the spectrum have been warning of the damage that this scheme will do to Australia’s economy and to jobs.

One of the things about this government is that they talk the talk on jobs but they do not walk the walk on jobs. When it comes to changing our workplace relations framework, they simply will not say what the impact will be on jobs. When it comes to an emissions trading scheme, which will have an impact right across the economy, they will not say what the impact will be on jobs.

I also reject this notion that the Liberal and National parties did nothing in the area of climate change. We were one of the first governments anywhere in the world to establish anything like the Australian Greenhouse Office. We were actually one of the initiators behind the Asia Pacific Partnership on Clean Development and Climate. We had a big role in coming up with ideas like reforesting rainforest in South-East Asia—a direct, practical contribution to reducing the amount of carbon pollution in the atmosphere. In opposition, we have come up with a lot of practical suggestions, including the use of biochar, greater use of geosequestration and looking at the notion of a voluntary exchange. There are a whole range of ideas. I would like to congratulate the shadow minister for climate change and the environment for the ideas that he has been offering.

We have said that the government is free to go to Copenhagen with a bipartisan position to reduce our emissions. But what we do not want to see is a poorly thought-through emissions trading scheme which will have a detrimental impact on working Australians, on working families and on Australian jobs. It is about taking a balanced and prudent approach which will protect the environment but also protect Australian jobs and working families.

The opposition are in favour of an emissions trading scheme but we are not in favour of a poorly designed emissions trading scheme. A poorly designed emissions trading scheme would be worse than no scheme at all. It is for that reason that we moved an amendment asking that consideration of this legislation be deferred until we have had the Copenhagen summit, until we have some idea of what the Obama administration will be doing in this area and until we have had the Productivity Commission give us a very clear idea of what the impact will be on the economy, on the regions, on industries and, most importantly of all, on jobs.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being approximately 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.