Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

As you anticipated, Senator Milne, the government is not supporting this amendment. Under the government’s scheme, there is a regulation-making power in proposed section 129(7) of the primary bill which enables a regulation-making power to be made outlining what can be surrendered—that is, what international permits can be used domestically. I think you and I have had this discussion before, Senator, but I make this point: we do absolutely believe that part of the plan that will enable the globe to meet this challenge of climate change is to have a properly functioning global carbon market. What does that mean? It means that we get the right market incentive for private sector firms to invest in abatement and we enable that to occur wherever that abatement can be found in the world, because this is a global problem.

If there is a concern about the international CERs—certified emissions reductions—then the international community should have to deal with that. That is an issue of quality, and we are absolutely of the view that these international units must be credible, measurable, reportable and verifiable. We are working closely with Indonesia, for example, on the reducing emissions from deforestation and forest degradation aspect of the Bali roadmap—known as REDD. We have made, I think, two joint submissions—I could be wrong, but my recollection is two—with Indonesia to the international negotiations. So we are serious about working with a developing country on our doorstep to put in place the mechanisms and the systems that ensure that emissions reductions from these activities are ones in which the world can have confidence.

The government disagrees with the Greens on asserting that once that threshold is met there should be some additional requirements placed on the trade in international permits. My view is very simple: if, through this policy, we can give Australian firms an incentive to reduce emissions in developing countries then I think that that is a good thing. We need to ensure that those investments are in relation to emission reductions which are real, transparent and verifiable. But I think that is a good thing because we have to change the market failure that has caused climate change—where people have had an incentive to pollute. Instead we need an incentive to reduce emissions. We are strongly of the view that this is a sensible way forward and we do not support the amendments.