Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise today on behalf of the Greens to support this National Greenhouse and Energy Reporting Amendment Bill 2008. As has been indicated in the second reading speech and as Senator Johnston just said, it is a bill which is making some technical amendments to a larger piece of legislation which has previously passed the Senate, and of course it is giving more detail around the accounting that is going to be implemented for an emissions trading scheme.

I would like to go to the first point of thresholds. I am disappointed that the threshold for the reporting for the Australian emissions trading scheme is going to be 25,000 tonnes. It seems to me that that level is somewhat too high especially since the European emissions trading system is going to require mandatory auditing and reporting at 10,000 tonnes, and that is going to apply in phase 3 of the European emissions trading scheme starting in 2013 to 2020. So, if we are actually going to think about a globally consistent emissions trading regime, then it would be eminently sensible to be looking at mirroring what the EU is doing in terms of reporting. I would like to know from the minister—and I presume Senator Carr is the minister who is going to be responding to this so I hope he is listening to what I am saying here and not talking over there in the background—why the government has chosen to stay with 25,000 tonnes and not go down to 10,000.

I would have thought that it is in the interests of the companies concerned to start the process. I know quite a lot of detail is required and companies would have to make a real commitment to do it. But, essentially, many of the companies producing between 10,000 and 25,000 tonnes are public companies and they are reporting to their shareholders. Their shareholders are going to want to know the exposure risk of the company to an emissions trading scheme, so they are going to want to know the greenhouse gas footprint of the company, the footprint of the sources of the inputs for whatever they are manufacturing or doing and their exposure to increased costs through an emissions trading system. Essentially, as I understand it, the principles that any company should be looking at in greenhouse gas accounting are: firstly, the relevance of what is being accounted for—defining the boundaries that reflect the greenhouse gas emissions of the organisation and the decision-making needs of the users of whatever the product is; and, secondly, consistent methodology and measurement. You would want to make sure this is happening across all companies—transparency; consideration of all relevant issues in a factual and coherent manner; a clear audit trail; accuracy in reporting so that there is real integrity in those greenhouse gas measurements; and reporting to shareholders on the exposure to emissions trading and price signals.

I will be very interested to hear what the government has got to say about why they decided on the 25,000 tonne threshold and not 10,000 tonnes. I did consider moving an amendment in relation to this but I am interested to hear from the government first as to what the rationale is. I think it is only a matter of time before Australian companies are going to be required to do this anyway. Every year that Australia allows our regulatory system to be less rigorous and less comprehensive than the Europeans is a year closer to Australians being less competitive in a global economy. As was very clear when we talked about luxury cars, when you set very high and transparent reporting and auditing standards and so on then you get a more efficient operation and you get higher quality, cheaper prices and you outdo your competitors who have been more lax. That has been the story. That is in fact why a number of companies are not competitive anymore. It is because we have not set high enough standards. It means they do not invest in new plant and equipment. They let the old equipment run down, making it easier for them to move offshore, which has occurred in many cases.

In relation to the accounting standards, it is important that they have integrity. I am fully aware that greenhouse gas reporting does not include the forest industry sector. We have supported land use, land use change and forestry being left out of an emissions trading system because we do not believe that the accounting is anywhere near adequate at the moment to reflect the real nature of the greenhouse gas emissions. That is not to say that they should not be included in different ways, through regulatory environments and so on. I put the government on notice that the Kyoto accounting rules do not accurately reflect greenhouse gas emissions from land use, land use change and forestry, and will not stand up in any assessment of how much greenhouse gas emissions are going into the atmosphere. We desperately need a new accounting system that separates out the emissions that come from forestry operations in particular compared with the uptake of carbon dioxide in the flux process. So you need to separate those two out to get a realistic view of how to cut emissions. That is why, of course, we are arguing too that there should be a protection of carbon stocks. The issue of integrity and accuracy in accounting is very important.

In the second reading debate the last time the main bill came before the Senate, we argued that there also needs to be transparency at the facility level. It is not clear to me, Minister, in this particular bill—and I will be interested to hear your explanation of this as well—whether we are now going to have transparency at the facility level. I notice that the Treasurer, Minister Swan, does say that the amendments proposed by this bill go beyond the existing policy in the area of public disclosure. The problem before was that public disclosure was not at the facility level, and that is something the community deserves to have. I do appreciate that there is now in this bill better public disclosure than previously but, Minister, I would like a response about whether the public disclosure amendments cover individual facilities.

The reason I want to know that is this: the plant in South Africa that is the equivalent of the proposed liquefied coal plant in Victoria is the largest point source of greenhouse gas emissions in the world. This one plant, this liquefied coal facility, in South Africa is the largest individual point source. If Victoria goes ahead and tries to rival South Africa as having the largest point source of greenhouse gases in the world, then the community needs to know precisely what the greenhouse gas load from one individual facility actually is. I will be keen to hear the response to that.

In terms of the way the thresholds operate in this legislation, it is looking at two things—individual facilities and also corporations. While the thresholds for corporations scale down, those for individual facilities do not appear to. I would like an explanation from the minister as to why, in that two-stage process, we have not got an equivalent phasing down of the thresholds for individual facilities as we do for the corporations in the second range of thresholds set.

Essentially, what we are seeing in this bill is an improvement to the National Greenhouse and Energy Reporting Act 2007. It is giving more detail around that and it is getting Australia ready to be able to account properly in the lead-up to the implementation of an emissions trading system. We welcome that. However, I want to put on the record here my concern that when the Rudd government was elected its undertaking was to bring in an emissions trading system, and people assumed that meant an emissions trading system to reduce emissions, but it is now not clear to me that that is the case. It is clear to me that the mechanics of an emissions trading system will be introduced by 2010, in a federal election year. But I am certainly not persuaded, from the signals that are coming from the government, that an emissions trading system will actually deliver a reduction in emissions because for that to occur you would need a reasonable cap on greenhouse gas emissions, therefore driving a reasonable carbon price and therefore actually driving a reduction in emissions.

So I would like to have some reassurance from the Minister for Innovation, Industry, Science and Research, when he responds to the speeches in the chamber, that the intention of the government with an emissions trading scheme is to actually reduce emissions, not just set in place the mechanics of an emissions trading system. I also remind the minister, since he was speaking with another member of the House when I originally asked these questions, that I want to have an answer about what the rationale is for the 25,000 to 10,000 and an answer on public disclosure at individual facilities. The third question I would like an answer to is whether at the individual facility level there is a ramping down as there is at corporations level. But, yes, the Greens support the bill.