Josh Wilson (Fremantle, Australian Labor Party, Shadow Assistant Minister for the Environment) Share this | Link to this | Hansard source

On behalf of the Standing Committee on the Environment and Energy, I present the committee's advisory report, incorporating dissenting reports, on the National Greenhouse and Energy Reporting Amendment (Transparency in Carbon Emissions Accounting) Bill 2020, together with minutes of the proceedings.

I am pleased to make some remarks upon the tabling of the committee's report from the inquiry into the private member's bill as described. At present, Australia's system of greenhouse gas accounting and reporting is structured to be in compliance with agreements that flow from the United Nations Framework Convention on Climate Change. Within this system, participating nations are responsible for measuring and reporting certain emissions data, covering what are called scope 1 and scope 2 emissions. In Australia, that happens under the National Greenhouse and Energy Reporting scheme, the NGER scheme.

Contrary to the thrust or purpose of the bill under consideration, the Climate Change Authority, among others, persuasively argued that the collection reporting of scope 3 emissions should not be required at this stage under the NGER scheme. That doesn't mean that the scope 3 emission is without value in the broad conversation about the global task of achieving emissions reduction in order to prevent catastrophic climate change; it's just that there is no clear additional value and some clear redundancy in reporting scope 3 emissions under the current framework.

I'll make three further brief points. Some inquiry participants pointed to the fact that, when claims are made in relation to the role that Australian coal and gas exports might play in reducing emissions in other countries, by virtue of the comparatively lower emissions intensity that is claimed for these fuels, any such assertion does depend on some form of scope 3 estimation. Labor members of the committee, namely me and the member for Macnamara, believe this could have been more strongly reflected in the report.

The second point is in relation to the fact that a number of Australian companies do currently disclose scope 3 emissions voluntarily. On that basis, it seems important to observe that doing so is clearly possible and affordable. When considering the evidence from the Department of Industry, Science, Energy and Resources that it couldn't be sure about the rigour of these estimates, it seems there would be some value in undertaking a limited assessment of the method, cost and accuracy of such voluntary scope 3 disclosures.

Finally, some contributors to the inquiry raised concerns about the timing and regularity of National Greenhouse Gas Inventory reporting, and, specifically, the release of quarterly emissions data by the responsible minister. As an example, the Australasian Centre for Corporate Responsibility gave evidence as follows: 'Needless to say, there will be a diminution of public trust and confidence where the action of ministers or the outcome of some other part of governmental process involves unnecessary delay, inconsistency, a lack of transparency and the release of information in circumstances where it is less likely to be noticed or attract attention and proper scrutiny.' That is consonant with other evidence provided to the committee that building and maintaining public trust in Australia's system of greenhouse gas accounting and reporting is vital, and it does appear there are improvements the government could consider. These matters are covered in the additional comments that I and the member for Macnamara provided as part of the inquiry report.

I thank all those who made submissions or gave evidence to the inquiry and acknowledge, as always, the work of the secretariat and my fellow committee members, particularly the chair, the member for Fairfax.

Report made a parliamentary paper in accordance with standing order 39(e).

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

I am delighted to speak today on the report of the Standing Committee on the Environment and Energy relating to the National Greenhouse and Energy Reporting Amendment (Transparency in Carbon Emissions Accounting) Bill 2020. I thank the deputy chair for tabling the report on my behalf.

The committee concluded not to support the passing of a bill that was put forward as a private member's bill by the member for Clark. In looking at the evidence, it was very clear that the two parts of the proposed bill should be rejected. The first part of the proposed bill suggested that the minister should report on Australia's Greenhouse Gas Inventory quarterly in the parliament. What we saw in the evidence was that the minister already presents information on quarterly and annual bases to the parliament and the public, and thus the committee decided to reject that part of the bill.

The second part of the bill referred to scope 3 emissions. It suggested that scope 3 emissions be included in Australia's emissions reporting obligations. For those who may not be familiar with them, scope 1, scope 2 and scope 3 greenhouse emissions are the typical categories considered. Scope 1 and scope 2 emissions refer to the emissions that an organisation, in some shape or form, controls. Scope 1 typically refers to direct activity that a company might undertake and the emissions it gives rise to through its own operations. Scope 2 can refer to more indirect emissions, such as the purchase of electricity. Scope 1 and scope 2 emissions can be controlled by the company; they can be controlled by an organisation.

Scope 3 emissions, the very emissions that the proposed bill seeks that Australia report on, are not controlled by the organisations who would be required to report on it. Thus the committee concluded that it should not support the passing of that part of the bill on three grounds. First, it is too costly. Second, it's too complex. Third, it is inconsistent with our international reporting obligations.

You can imagine the cost and complexity if a company were to try to track and calculate all of the emissions upstream and downstream of its own activities. They would have to look at the end-to-end value chain in which it plays internationally, to try to calculate what emissions might be generated. Not only would that be resource intensive and highly complex but it would also represent double counting in the system. As the deputy chair, Josh Wilson, outlined, the international system, as it is applied today, does not support scope 3 emissions being included in calculations. It would represent double counting. What's more, it would be inconsistent with the Paris Agreement and other obligations to which Australia has already signed.

I too wish to thank the other members of the committee, the secretariat, those who submitted and those who were witnesses. However, I do wish to put on the parliament's horizon that I reject deputy chair Josh Wilson's suggestion in his speech that, as some Australian companies currently seek to calculate scope 3 emissions, it would not be costly. There is no agreed methodology in Australia for how they're calculated. I believe that is a false conclusion.

What's more, there's the fact that the International Energy Agency recognises that coal to gas represents a transition approach. Where we export our gas from Australia, it can reduce emissions by 50 per cent, on average, where end users had previously been using coal. This sort of conclusion by this committee does not take away that fact, and nor should it. In conclusion, I do not commend the bill to the House, but I am very happy to commend the report of the Standing Committee on the Environment and Energy.

Josh Wilson (Fremantle, Australian Labor Party, Shadow Assistant Minister for the Environment) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Tony Smith (Speaker) Share this | Link to this | Hansard source

In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made in order of the day for the next sitting.